Company Announcements

Full-year financial report

Source: RNS
RNS Number : 8497L
Experian plc
18 May 2022
 

                                   news release

 

Full-year financial report

Strong performance in our mission to deliver financial power to all

 

7am, 18 May 2022 ─ Experian plc, the global information services company, today issues its financial report for the year ended 31 March 2022.

 

Brian Cassin, Chief Executive Officer, commented:

"We had a very good year with total revenue growth of 17% at both actual and constant exchange rates, and organic revenue growth of 12%. Benchmark earnings per share also progressed strongly, up 21%. Cash performance was very strong, with Benchmark EBIT to operating cash flow conversion of 109%, and actual exchange rates growth of 22%. We have made major steps forward in Consumer Services, which is transforming the shape of our business, and we also progressed materially a series of strategic initiatives in Business-to-Business.

 

"Experian's mission to help people improve their financial health is more important now than ever, with many households facing the challenge of rising inflation. We take great pride in our ability to make a positive difference to people's lives by making it easier, cheaper and faster for people and organisations to access financial services, and I would like to thank my Experian colleagues for their hard work and dedication in delivering on this mission.

 

"For the year ahead, we expect organic revenue growth in the range of 7-9%, with modest margin improvement at constant exchange rates, supported by continuing investment behind the execution of our strategy. While we are closely monitoring the global macroeconomic trends, we are confident in our strong track record of robust and resilient performance."

 

Benchmark and Statutory financial highlights

 

2022
US$m

2021
US$m

Actual rates growth %

Constant rates growth %

Organic growth %2

Benchmark¹






Revenue - ongoing activities3

6,267

5,342

17

17

12

Benchmark EBIT - ongoing activities3,4

1,640

1,379

19

19

n/a

Total Benchmark EBIT

1,645

1,386

19

19

n/a

Benchmark EPS

USc 124.5

USc 103.1

21

21

n/a

Statutory






Revenue

6,288

5,372

17

16

n/a

Operating profit

1,416

1,183

20

19

n/a

Profit before tax

1,447

1,077

34

19

n/a

Basic EPS

USc 127.5

USc 88.2

45

23

n/a

Total dividend

USc 51.75

USc 47.00

10

n/a

n/a

 

1. See Appendix 1 (page 13) and note 4 to the interim financial statements (pages 23-25) for definitions of non-GAAP measures.

2. Organic revenue growth is at constant currency.

3. Revenue and Benchmark EBIT for the year ended 31 March 2021 have been re-presented for the reclassification to exited business activities of certain Business-to-Business (B2B) businesses.

4. See page 14 for reconciliation of Benchmark EBIT from ongoing activities to Profit before tax.

 

 

Highlights

·      Considerable strategic progress and strong financial performance. Q4 organic revenue growth was 9%, to give 12% for the year, with selective acquisition in-fills taking total revenue growth to 17%.

·      Stepping up the pace in Consumer Services with broader and more comprehensive propositions, serving 134 million free members, up 24 million over the past twelve months. Organic revenue +22%.

·      B2B organic revenue growth of 9% supported by data investments, adoption of our innovation platforms, focused expansion in health and addressing new client segments.

·      Very strong organic revenue progress across North America, Latin America, and UK and Ireland, with selective acquisitions to broaden our opportunity.

·      Much improved margin trajectory in UK and Ireland, and EMEA/Asia Pacific. Now taking the next step in our plan to reposition EMEA/Asia Pacific for more sustainable long term operating performance.

·      Benchmark EBIT +19%. EBIT margin +60 basis points at constant exchange rates.

·      Benchmark EPS +21%, at actual exchange rates.

·      Very strong cash performance; with cash conversion of 109% and Benchmark operating cash flow actual rate growth of 22%.

·      Second interim dividend up 10% to 35.75 US cents per ordinary share.

Experian

Nadia Ridout-Jamieson           Investor queries                                    +44 (0)20 3042 4278

Gerry Tschopp                          Media queries

 

Tulchan

Graeme Wilson, Louise Male and Guy Bates                                     +44 (0)20 7353 4200

 

There will be a presentation today at 9.30am (UK time) to analysts and investors via conference call. To view the slides and listen in online please go to www.experianplc.com for the link.

 

Experian will update on first quarter trading for FY23 on 14 July 2022.

 

Roundings

Certain financial data has been rounded within this announcement. As a result of this rounding, the totals of data presented may vary slightly from the actual arithmetic totals of such data.

 

Forward looking statements

Certain statements made in this announcement are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward-looking statements. See note 29 for further information on risks and uncertainties facing Experian.

 

Company website

Neither the content of the Company's website, nor the content of any website accessible from hyperlinks on the Company's website (or any other website), is incorporated into, or forms part of, this announcement.

 

About Experian

Experian is the world's leading global information services company. During life's big moments - from buying a home or a car, to sending a child to college, to growing a business by connecting with new customers - we empower consumers and our clients to manage their data with confidence. We help individuals to take financial control and access financial services, businesses to make smarter decisions and thrive, lenders to lend more responsibly, and organisations to prevent identity fraud and crime.

 

We have 20,600 people operating across 43 countries and every day we're investing in new technologies, talented people, and innovation to help all our clients maximise every opportunity. We are listed on the London Stock Exchange (EXPN) and are a constituent of the FTSE 100 Index.

 

Learn more at www.experianplc.com or visit our global content hub at our global news blog for the latest news and insights from the Group.



 

Part 1 - Chief Executive Officer's review

 

Experian made significant progress this year. We advanced strategically across multiple fronts and our financial performance was strong. This reflects effective execution against our long-term plans, sustained by the investments we have made in new products, in our technology platforms and in new business development opportunities. I am proud of the accomplishments of our 20,600 people around the world.

 

Total revenue growth was 17% at constant currency, while organically we grew 12%. We have made material progress towards positioning Experian as a major brand to help people with their financial health, reaching 134 million free members across our three largest markets. We are helping to democratise credit, making it simpler, faster and cheaper for people and businesses to achieve good outcomes. Our products form part of the critical infrastructure of financial services, health, automotive and many other industries, and our growth opportunities are driven by investments to upgrade infrastructure, digitise platforms, provide better experiences to customers and protect against fraud. We are also taking advantage of a unique market opportunity in Brazil, as well as successfully entering new market segments, such as income and employment verification.

 

Full-year financial highlights

·      Total revenue growth was 17% at both constant and actual exchange rates. At constant currency organic revenue growth was 12%.

·      Organic revenue growth in North America was 13%, 17% in Latin America and 11% in UK and Ireland, including very strong contributions from Consumer Services across all three regions.

·      EMEA/Asia Pacific delivered 3% organic revenue growth with a positive EBIT margin trajectory, reflecting our shift to focus on strategic markets.

·      B2B organic revenue growth was 9%, reflecting strength in data volumes, uptake of new data sources, further adoption of our innovative platforms, progress across fraud and identity management services and expansion in new vertical segments.

·      We made significant progress in Consumer Services, with organic revenue up 22%, reflecting membership growth and expanded consumer propositions.

·      Growth in Benchmark EBIT was 19% at both constant and actual exchange rates.

·      Our Benchmark EBIT margin was 26.2%, up 60 basis points at constant currency and up 40 basis points at actual exchange rates.

·      We delivered growth in Benchmark earnings per share of 21% at both constant and actual exchange rates.

·      Cash flow was very strong, with a conversion rate of Benchmark EBIT into Benchmark operating cash flow of 109%. Benchmark operating cash flow was US$1.8bn, up 22% at actual exchange rates.

·      We ended the year with a leverage ratio of 1.9x, compared to our target of 2.0-2.5x for Net debt to Benchmark EBITDA.

B2B organic revenue growth was 9%:

·      In Data, volumes were generally strong. This reflected economic rebound across most geographies, client take-up of our extensive data assets and successful extension into new client segments. New products and vertical development were also meaningful contributors to our performance. Ascend delivered strong growth. We also benefitted from the uptake of positive data attributes and scores in Brazil, and we added to our data coverage in income and employment data and signed over 100 client contracts for Experian Verify in North America.

·      In Decisioning, we secured new wins for our cloud-enabled decisioning platforms. We also made significant progress across fraud and identity management, as well as across analytics.

·      Vertical markets also contributed strongly. In Health, healthcare providers in the USA are investing to improve digital consumer experiences, and we delivered strong progress across all major product lines in our suite. This included some benefit from one-off COVID-19 related services. Automotive delivered a solid performance reflecting market rebound and a strong contribution from recent innovations.



Consumer Services organic revenue growth was 22%:

·      We now have 134 million free consumer memberships across our three largest markets, up by 24 million year-on-year. During the year we added 11 million free members in the USA, 12 million in Brazil and 1.5 million in the UK.

·      All regions delivered strong growth enabled by increased memberships, scaling of our credit marketplaces, and the addition of new propositions to our ecosystem to help our members save money.

·      We are investing in new verticals such as insurance to further extend our North America insurance marketplace offer for our members, helping to bring them a better insurance customer experience.

 

Environmental, Social and Governance (ESG) highlights

·      We launched Experian Go in the USA in January, which allows credit invisibles to start building a credit profile in minutes. Since launch, 40,000 consumers have connected to Experian Go. We were also delighted to be recognised as a 2022 BIG Innovation Award winner for delivering innovative products that help consumers thrive financially.

·      We reached 21 million people through our social innovation products this year, our programme to deliver societal benefits and improve financial health, bringing the total to 82 million since 2013. This compares to our target of 100 million people by 2025.

·      Our flagship United for Financial Health programme (UFH) has now connected with 87 million people and is on track to meet our target of 100 million by 2024. Through partnerships with NGOs across our regions, it provides financial education to empower vulnerable communities.

·      We pride ourselves in our 'People First' culture and were delighted in surveys that 88% of our employees believe that Experian is committed to creating a diverse, equitable and inclusive (DEI) culture. Currently 33% of our Senior Leaders are female, representing further progress towards our target of 40% by FY24. Our North America and EMEA/Asia Pacific regions (together representing 73% of Group revenues) are led by women, and 36% of our Board are female.

·      Our commitment to working with integrity includes our approach to tax. To enhance our transparency, we are publishing a Tax Report in June 2022, explaining our approach to tax and providing more information on our tax contribution.

·      We are pleased to be recognised as one of the Financial Times' Europe Climate Leaders 2022 for our efforts in reducing our carbon emissions. As part of our journey to be carbon neutral by 2030 in our own operations, we have reduced our Scope 1 and 2 emissions by 44% since our base year 2019. We're engaging with our suppliers in order to reduce our Scope 3 emissions. We were also proud to be named by CDP as a 2021 Supplier Engagement Leader. We are now progressing with our planning toward our Net Zero transition.

 

People

·      On 19 January 2022, Experian's Board announced the appointment of Craig Boundy as Chief Operating Officer and Jennifer Schulz as CEO, North America, both from 1 April 2022. We also announced that Kerry Williams would retire from our Board at the conclusion of the Annual General Meeting on 21 July 2022 and that Craig would be appointed to our Board at that time. We thank Kerry for his outstanding contribution to Experian and wish him well for his retirement.

·      Two of our independent non-executive Directors, Deirdre Mahlan and George Rose, will also retire from our Board at the conclusion of the Annual General Meeting on 21 July 2022, having completed nine years' service on the Experian Board. We wish to thank Deirdre and George for their significant contributions to Experian since joining our Board in 2012.

·      The Experian Board announces that Jonathan Howell has been appointed to succeed Deirdre as Chair of the Audit Committee from 1 July 2022 and that Alison Brittain has been appointed to succeed George as Senior Independent Director and Chair of the Remuneration Committee from the conclusion of the Annual General Meeting on 21 July 2022. Both Jonathan and Alison are existing independent Non-Executive Directors.



 

 

Capital allocation and liquidity

·      Cash generation was very strong, and we ended the year with leverage of 1.9x net debt/EBITDA.

·      Benchmark operating cash flow was US$1.8bn, up 22% at actual exchange rates.

·      We continued to invest in data, technology and new products through capital expenditure, which represented 8% of total revenue. We plan to sustain strong levels of investment to support our growth, and for FY23 we expect capital expenditure to represent circa 9% of total revenue.

·      We invested US$781m through acquisitions and US$32m of investments in support of our strategic initiatives. These investments included:

The acquisitions of Emptech and the trade and assets of Tax Credit Co, as part of the expansion of our income verification business in North America. After the period end, we also completed the acquisition of CIC Plus.

The acquisition of Gabi, to extend our North America insurance marketplace.

In Latin America, we acquired Holding Veloz Investimentos e Participações S.A. (PagueVeloz), a digital payments FinTech in Brazil which will form part of our online debt resolution proposition, Limpa Nome. We acquired a majority stake in Sinacofi Buró, a leading credit bureau in Chile, and we have also signed an agreement to acquire a majority stake in APC Buró in Panama. After the period end, we signed an agreement to acquire a majority stake in MOVA Sociedade de Empréstimo entre Pessoas S.A. (MOVA), a leading credit technology FinTech in Brazil.

·      We are announcing a second interim dividend of 35.75 US cents per share, up 10%. This will be paid on 22 July 2022 to shareholders on the register at the close of business on 24 June 2022.

·      We have completed our FY22 share repurchase programme for a net cash consideration of US$149m, which offsets deliveries under employee share plans. We have also announced that we will commence a net US$175m share repurchase programme in FY23, which will again mainly offset deliveries under employee share plans.

·      During the year we redeemed our £400m 3.50% Euronotes due October 2021. We undertook a bond issue totalling €500m (US$555m) in February 2022. Our bonds, net of derivatives, totalled US$3.9bn as at 31 March 2022 and had an average remaining tenor of six years. Undrawn committed bank borrowing facilities were US$2.6bn as at 31 March 2022 (2021: US$2.7bn).

·      As at 31 March 2022, Net debt to Benchmark EBITDA was 1.9x, compared to our target leverage range of 2.0-2.5x. Following changes in market adoption of IFRS 16 'Leases' our definition of Net debt has been updated to include lease obligations.

 



 

Part 2 - Regional highlights for the year ended 31 March 2022

 

We delivered organic revenue growth across all regions, with particular strength in North America, Latin America and UK and Ireland while EMEA/Asia Pacific returned to growth.

 

 


Year-on-year % change in organic¹ revenue - for the year ended 31 March 2022

 

Benchmark

EBIT

margin²

% of Group revenue³

Data

Decisioning

B2B

Consumer Services

Total

Total

North America

65

9

13

10

21

13

33.5%

Latin America

13

12

21

14

40

17

28.2%

UK and Ireland

14

9

7

8

19

11

22.2%

EMEA/Asia Pacific

8

4

1

3

n/a

3

0.0%

Total Global

100

9

11

9

22

12

26.2%

1 At constant exchange rates.

2 At actual exchange rates.

3 Percentage of Group revenue from ongoing activities calculated based on FY22 revenue at actual exchange rates.

 

 

North America

 

We delivered significant progress in North America. Revenue was US$4,122m, with total revenue growth of 17% and organic revenue growth of 13%. The acquisition contribution includes Tapad, which extends our position in digital marketing services, the investments we have made in Verification Services (Corporate Cost Control, Emptech, Tax Credit Co), as well as the acquisition of Gabi, which adds to our insurance capability within Consumer Services.

 

Organic revenue growth across B2B was 10%. This was driven by volume strength, new product adoption, successful entry into income and employment verification, expansion into new client segments and strong execution across health and automotive.

 

Across financial services, market dynamics have been favourable, with ongoing investment by our clients to drive their digital transformations as well as in new customer acquisition and credit underwriting. This gave rise to strong demand for our innovation-led propositions and for Experian data. Bureau data volumes were strong across more traditional datasets and across our alternative data assets, particularly data which supports short-term lending. Ascend expansion has again been accretive to growth as we add new modules and extend our reach within existing clients. We also made good progress across our decisioning suite, driven by PowerCurve deliveries, including successful expansion into the mid-market. Additionally, we saw growth across fraud and identity management and analytics. We continue to increase penetration across new client segments, including for example the financial platforms of leading technology providers and in the Buy Now Pay Later segment. These factors offset contraction in mortgage volumes due to lower consumer re-financing activity. We expect mortgage to again be a headwind in FY23, of c.1.5% to Group organic revenue growth.

 

We are making good progress towards building our presence in employment and income verification services. Our acquisitions have overall exceeded our buy plan expectations and we have grown our market position through new client wins. We have signed over 100 client contracts for Experian Verify. We also continue to invest in growing the number of employment records we have access to, which reached 42 million by the year end.

 

In Health, our strategy is to provide our clients with access to a broad set of capabilities to help them address administrative complexity and deliver more transparent financial outcomes for patients. There was strong demand for propositions which drive digital patient interactions, for identity management and for propositions which provide payment certainty, some of which included a contribution from COVID-19 linked activity. Targeting delivered good growth helped by market recovery and organic expansion of our product capabilities across digital activation, identity management and analytics. Automotive also performed well, benefitting from market recovery as well as continued expansion of our product portfolio, including our Experian Marketing Engine proposition, a turnkey proposition that helps our automotive customers identify prospective customers.

 

In Consumer Services, we continue to expand our ecosystem of consumer products. Free memberships reached 52 million, up by 11 million year-on-year. It was our fastest growing segment in North America, delivering organic revenue growth of 21%. This reflected free membership growth, upsell into our premium credit and identity offers, strength across our credit marketplace and strength in partner solutions. We are investing in the development of our insurance marketplace and are excited by the potential ahead to bring a better insurance customer experience to our members. This forms part of our plan to increase the depth of the relationships we have with our members, drive engagement, and find new ways to help our members save money. We are also taking additional steps to enrich our premium membership services, for example through the introduction of new privacy features to enhance our identity management offer, as well as services to help our members negotiate lower rates on internet, wireless, cable and home security bills.

 

The strength of our revenue performance across North America translated into Benchmark EBIT up 15% to US$1,381m. Benchmark EBIT margin was 33.5%, down 50 basis points. This reflected our investments in Verification Services, in the insurance marketplace in Consumer Services and the changing mix of our business due to the higher growth of Consumer Services compared to our B2B activities. The reduced contribution from mortgage enquiries also offset margin accretion in the rest of B2B.

 

Latin America

 

We made a lot of progress across Latin America expanding and diversifying our portfolio from a product, geographic and strategic perspective. We delivered revenue of US$791m, with organic revenue growth of 17% and total revenue growth at constant currency of 25%. Acquisitions contributing to our performance included BrScan, which extended our position in fraud and identity management, Sinacofi, which is a new bureau in Chile, and PagueVeloz, which adds to our Consumer Services activities in Brazil. We also recently signed an agreement to acquire a majority stake in a credit bureau in Panama.

B2B organic revenue growth was 14%, helped by economic recovery, new sources of data, expansion of our product portfolio, greater market penetration and diversification into new verticals.

In Brazil, the lending landscape is evolving rapidly following the introduction by the Central Bank of a series of regulatory reforms to improve access to credit to both consumers and to small and medium enterprises (SMEs). This is driving demand for our superior data assets, enhanced scores, sophisticated analytics, and our market-leading platforms. Our positive data product portfolio continues to grow, we delivered new installations of Experian Ascend, CrossCore 2.0 and PowerCurve on Experian One. We are investing to take advantage of new opportunities such as open data, securing our first client wins for our categorisation-as-a-service capability. We have expanded our position in fraud and identity management, and we are broadening our exposure to the agricultural sector, which is a significant component of the Brazilian economy and where there is an opportunity to enhance the efficiency of credit allocation to the broader agricultural community. We have also taken steps towards establishing a presence in the open receivables market with an agreement to acquire a majority stake in MOVA, which helps provide any company, including non-banks, with expertise and technology to perform data-driven credit assessments of their SME end-clients.

Spanish Latin America also delivered strong organic revenue growth. This was driven by volume recovery across our bureaux markets, client adoption of our new product innovations and a very strong performance across our decisioning, fraud prevention and analytics suite.

Consumer Services organic revenue growth was 40%. We attracted 12 million more consumers to our platform this year in Brazil to fulfil on our ambition to provide greater access to credit for all, taking our total free membership base to 71 million. Our debt resolution service (Limpa Nome) continues to be very effective, adding more partners and helping more individuals to negotiate on their debts. Newer propositions such as our credit marketplace are growing at a rapid pace. We are attracting more lenders to our platform and matching more consumers to card and loan offers. Our premium proposition is also starting to scale. We have introduced new features to our premium offers, including a 'lock/unlock' feature which Experian first pioneered in North America, and which helps consumers with fraud and identity management.

 

Benchmark EBIT in Latin America was US$223m, up 27% at constant exchange rates. The Benchmark EBIT margin from ongoing activities at actual exchange rates was 28.2%, up by 70 basis points. Progress reflected revenue acceleration, even as we invested in developing Consumer Services.

 

UK and Ireland

 

Progress in the UK and Ireland has been very good. We are successfully executing our transformation programme and delivered a material uplift in profitability. Revenue was US$847m and both total and organic revenue increased 11% at constant exchange rates. We are now turning our attention to positioning the business for sustained long-term growth through a defined set of growth initiatives.

 

B2B organic revenue growth was 8%. Volume growth was strong reflecting new credit prospecting and loan origination activity by our clients. Our new business performance was very strong, and we gained client mandates from across a wide spectrum, including in traditional banking, FinTech, Buy Now Pay Later and insurance. Clients recognise the superiority of our data assets, where we have placed specific emphasis on expanding population coverage, as well as on enhancing the quality of our data. This increased richness has increased credit visibility, while at the same time enhancing pinning, matching and the performance of our scores. When coupled with our broad analytical capabilities, this has contributed to the success we have seen in securing new mandates and to our improved revenue performance.

 

Organic revenue growth in Consumer Services was 19%. Over the past year we have attracted 1.5 million new free members to our platform to take the total to 11 million in our bid to help our members to master their credit and to help them to make savings. Our credit marketplace has grown significantly in scale, reflecting higher brand awareness and as we have provided unique propositions like Experian Boost. This in turn means we have attracted more lenders to our platform with a wider range of credit offers. We are investing to develop new engaging features to enrich both our premium and free services to sustain growth into the future.

 

Benchmark EBIT from ongoing activities improved considerably to US$188m, up from US$123m in FY21. The Benchmark EBIT margin from ongoing activities was 22.2% (2021: 16.7%). This reflects the progress we have made through our transformation programme, as well as the contribution from revenue growth.

 

EMEA/Asia Pacific

 

In EMEA/Asia Pacific, revenue from ongoing activities was US$507m, with total revenue growth at constant exchange rates of 13% and organic revenue growth of 3%. The acquisition contribution principally relates to the contribution from our bureaux acquisitions, namely the Risk Management division of Arvato Financial Solutions (AFS) in Germany, and Axesor in Spain.

 

Our focus in EMEA/Asia Pacific is to concentrate our portfolio on strategic markets where we can take advantage of scale to drive more recurring revenue and more profitable growth. We continue to make good progress across our larger bureaux, and as we take advantage of the shift towards cloud-enabled solutions, alternative data propositions and open-banking solutions. We will continue to streamline our geographic and operational footprint over the coming year where we lack a path to scale.

 

Our actions have given rise to an improved trajectory for Benchmark EBIT, which for ongoing activities was breakeven for the year compared to a loss of US$(27)m in the previous year. The Benchmark EBIT margin for ongoing activities also improved to 0.0% from (6.0)%.

 

Other financial developments

 

Benchmark PBT was US$1,535m, up 22% at constant currency and 21% at actual rates, after lower net interest expense of US$110m (2021: US$121m). Benchmark net finance costs decreased by US$11m, reflecting a reduction in our average funding cost from debt refinancing. For FY23, we expect net interest expense to be around US$120-125m.

 

The Benchmark tax rate was 25.7% (2021: 25.9%). For FY23, we expect a rate of around 26%, taking into account expected profit mix for the year.

 

Our Benchmark EPS was 124.5 US cents, an increase of 21% at both constant and actual exchange rates. The weighted average number of ordinary shares (WANOS) increased to 914m (2021: 910m), following issuance in the previous year. For FY23, we expect WANOS of circa 914m.

 

Benchmark operating cash flow increased by 22% at actual rates to US$1.8bn and our cash flow conversion was 109% (2021: 106%). The increase is due to the mix of growth, strong control of working capital and some phasing.

 

Foreign exchange translation was neutral to Benchmark EPS in the year. For FY23, we expect a circa -1% impact on revenue, flat on Benchmark EBIT and circa +40 basis points on Benchmark EBIT margin, assuming recent foreign exchange rates prevail.

 

Since 31 March 2022, we have completed three acquisitions for cash consideration of US$221m, and signed an agreement for one further acquisition for US$8m that is subject to regulatory approval.

 



 

FY23 modelling considerations

 

Organic growth

7-9%

Acquisitions¹

1% contribution to growth

Benchmark EBIT margin¹

Modest margin improvement at constant exchange rates

Foreign exchange

c.-1% on revenue

Flat on Benchmark EBIT

c.+40 basis points on Benchmark EBIT margin

Net interest

c.US$120-125m

Benchmark tax rate

c.26%

WANOS²

914m

Capital expenditure

c.9% of revenue

OCF3 conversion

>90%

Share repurchases

US$175m

 

1. Constant exchange rates.

2. Weighted average number of shares.

3. Benchmark operating cash flow.

 

Group financial results

 

Business mix including % change in organic revenue year-on-year for the year ended 31 March 2022

 

Segment

Business unit

% of Group revenue¹

Organic revenue growth %²

North America

65%

13%

 Data

CI / BI bureaux

24%

9%

- CI / BI bureaux, excluding mortgage

20%

16%

- Mortgage

4%

(16)%

Automotive

4%

6%

Targeting

3%

13%

 Decisioning

Health

8%

15%

DA / Other

5%

10%

 Consumer

Consumer Services

21%

21%

Latin America

13%

17%

 Data

CI / BI bureaux

8%

13%

Other

1%

0%

 Decisioning

DA / Other

2%

21%

 Consumer

Consumer Services

2%

40%

UK and Ireland

14%

11%

 Data

CI / BI bureaux

6%

9%

Targeting / Auto

1%

8%

 Decisioning

DA / Other

4%

7%

 Consumer

Consumer Services

3%

19%

EMEA/Asia Pacific

8%

3%

 EMEA

5%

(1)%

 Asia Pacific

3%

10%

Total global

100%

12%

 

1. Percentage of Group revenue from ongoing activities calculated based on FY22 revenue at actual exchange rates.

2. Ongoing activities only, at constant exchange rates.

CI = Consumer Information, BI = Business Information, DA = Decision Analytics.



Revenue by region

 

Year ended 31 March

2022

 US$m

2021¹

US$m

Growth %

Total at actual exchange rates

Total at constant exchange rates

Organic at constant exchange rates

North America






Data

2,033

1,761


15

9

Decisioning

784

694


13

13

Business-to-Business

2,817

2,455


15

10

Consumer Services

1,305

1,075


21

21

Total ongoing activities

4,122

3,530

17

17

13

Exited business activities

-

-


 

 

Total North America

4,122

3,530

 

 

 

Latin America






Data

528

457


15

12

Decisioning

149

92


60

21

Business-to-Business

677

549


22

14

Consumer Services

114

76


49

40

Total ongoing activities

791

625

27

25

17

Exited business activities

-

-

 

 

 

Total Latin America

791

625

 

 

 

UK and Ireland






Data

409

361


9

9

Decisioning

244

220


7

7

Business-to-Business

653

581


9

8

Consumer Services

194

156


19

19

Total ongoing activities

847

737

15

11

11

Exited business activities

-

12

 

 

 

Total UK and Ireland

847

749

 

 

 

EMEA/Asia Pacific






Data

343

284


20

4

Decisioning

164

166


2

1

Total ongoing activities

507

450

13

13

3

Exited business activities

21

18

 

 

 

Total EMEA/Asia Pacific

528

468

 

 

 

Total revenue - ongoing activities

6,267

5,342

17

17

12

Total revenue - exited business activities

21

30

 

 

 

Revenue

6,288

5,372

17

16

 

1. The results for the year ended 31 March 2021 have been re-presented for the reclassification to exited business activities of certain B2B businesses.

See Appendix 1 (page 13) and note 4 to the interim financial statements (pages 23-25) for definitions of non-GAAP measures.

See Appendix 3 (page 14) for analyses of revenue, Benchmark EBIT and Benchmark EBIT margin from ongoing activities by business segment.



 

Income statement, earnings and Benchmark EBIT margin analysis

 

Year ended 31 March

2022

 US$m

2021¹

 US$m

Growth %

Total at actual exchange rates

Total at constant exchange rates

Benchmark EBIT by geography





North America

1,381

1,201


15

Latin America

223

172


27

UK and Ireland

188

123


51

EMEA/Asia Pacific

-

(27)


122

Benchmark EBIT before Central Activities

1,792

1,469

22

22

Central Activities - central corporate costs

(152)

(90)



Benchmark EBIT from ongoing activities

1,640

1,379

19

19

Exited business activities

5

7



Benchmark EBIT

1,645

1,386

19

19

Net interest

(110)

(121)



Benchmark PBT

1,535

1,265

21

22

Exceptional items

21

35



Amortisation of acquisition intangibles

(174)

(138)



Impairment of goodwill

-

(53)



Acquisition and disposal expenses

(47)

(41)



Adjustment to the fair value of contingent consideration

(26)

(1)



Non-benchmark share of post-tax (loss)/profit of associates

(31)

16



Interest on uncertain tax provisions

1

(11)



Financing fair value remeasurements

168

5



Profit before tax

1,447

1,077

34

19

Tax charge

(296)

(275)



Profit after tax

1,151

802

44

23

 

 

 



Benchmark earnings

 

 



Benchmark PBT

1,535

1,265

21

22

Benchmark tax charge

(394)

(328)


 

Total Benchmark earnings

1,141

937

 

 

Owners of Experian plc

1,138

938

21

22

Non-controlling interests

3

(1)



 

 


 

 

Benchmark EPS

USc 124.5

USc 103.1

21

21

Basic EPS

USc 127.5

USc 88.2

45

23

Weighted average number of ordinary shares

914m

910m



 



 

 

Benchmark EBIT margin - ongoing activities



 

 

North America

33.5%

34.0%

 

 

Latin America

28.2%

27.5%

 

 

UK and Ireland

22.2%

16.7%

 

 

EMEA/Asia Pacific

0.0%

(6.0)%

 

 

Benchmark EBIT margin

26.2%

25.8%

 

 








1. Benchmark results for the year ended 31 March 2021 have been re-presented for the reclassification to exited business activities of certain B2B businesses.

See Appendix 1 (page 13) and note 4 to the interim financial statements (pages 23-25) for definitions of non-GAAP measures.

See Appendix 3 (page 14) for analyses of revenue, Benchmark EBIT and Benchmark EBIT margin from ongoing activities by business segment.



 

Group financial review

Key statutory measures

 

We delivered a strong performance in the year through a combination of our innovation-led growth strategy, new business development and recovery as economies emerge from the COVID-19 pandemic. Revenue increased by 17% to US$6,288m (2021: US$5,372m), reflecting the resilience of our business.

 

Operating profit for the year ended 31 March 2022 increased to US$1,416m (2021: US$1,183m) and included a net gain from associate disposals of US$90m (2021: US$120m), offset by a loss on a business disposal of US$43m (2021: US$nil). Impairment charges net of reversals of US$25m (2021: US$67m) and restructuring and other exceptional costs of US$26m (2021: US$58m) were also incurred. Profit before tax increased by 34% to US$1,447m (2021: US$1,077m), assisted by a reduction in net finance costs of US$186m, primarily from financing fair value remeasurements.

 

Cash generated from operations was particularly strong up 25% at US$2,270m (2021: US$1,822m) reflecting improved performance and movements in working capital. Net borrowing outflows were US$12m (2021: US$326m). Acquisition spend increased by US$210m in the year, and cash outflows in respect of net share purchases totalled US$149m (2021: inflows US$19m). Undrawn committed bank borrowing facilities were US$2.6bn at 31 March 2022 (2021: US$2.7bn).

 

Basic EPS was 127.5 US cents (2021: 88.2 US cents). The increase of 45% reflects a mix of factors including a higher profit before tax, a profit from discontinued operations of US$16m (2021: US$nil), a reduction in our effective tax rate and a higher number of shares in issue.

 

The effective rate of tax based on profit before tax reduced from 25.5% in the year ended 31 March 2021 to 20.5% in the current financial year.

 

At 31 March 2022, net assets amounted to US$4,007m (2021: US$3,119m). Capital employed, as defined in note 4(r) to the financial statements, was US$8,145m (2021 restated: US$7,352m).

 

Return on capital employed for the year ended 31 March 2022 increased to 15.7% (2021 restated: 14.9%), reflecting revenue growth and our continued focus on operating efficiency.

 

There was an increase in equity of US$888m from US$3,119m at 31 March 2021 with movements detailed in the Group statement of changes in equity on page 20.

 

Key movements in equity during the year included:

 

•    Profit for the financial year of US$1,167m.

 

•    Currency translation gains of US$35m.

 

•    Remeasurement gains of US$121m in respect of defined benefit pension plans.

 

•    Employee share awards and options cost of US$149m.

 

•    Ordinary dividends of US$444m and a movement of US$151m in connection with net share purchases.

 

 

The UK subsidiary undertaking responsible for distributing dividends under the Group's Income Access Share arrangements has significant distributable reserves, which at 31 March 2022 were US$10.3bn (2021: US$12.0bn).

 

 

Risks and uncertainties

The nine principal risks and uncertainties faced by the Group are summarised in note 29 to the financial statements.

 



 

Appendices

 

1. Non-GAAP financial information

We have identified and defined certain measures that we believe assist understanding of our performance. These measures are not defined under IFRS and they may not be directly comparable with other companies' adjusted performance measures. These non-GAAP measures are not intended to be a substitute for any IFRS measures of performance but we have included them as these are considered to be key measures used within the business for assessing the underlying performance of our ongoing businesses.

Following the implementation of IFRS 16, we have reviewed emerging practice and have updated our definitions of Net debt and Net funding to include lease obligations, to more fully align our treatment with the requirements of investors and finance providers. The definition of capital employed has also been updated accordingly.

The table below summarises our non-GAAP measures and there is a fuller explanation in note 4 to the financial statements.

 

Benchmark PBT

Profit before amortisation and impairment charges, acquisition expenses, Exceptional items, financing fair value remeasurements, tax (and interest thereon) and discontinued operations. It includes the Group's share of continuing associates' Benchmark post-tax results.

Benchmark EBIT

Benchmark PBT before net interest expense.

Benchmark EBITDA

Benchmark EBIT before depreciation and amortisation.

Exited business activities

The results of businesses sold, closed or identified for closure during a financial year.

Ongoing activities

The results of businesses which are not disclosed as exited business activities.

Constant exchange rates

Results and growth calculated after translating both years' performance at the prior year's average exchange rates.

Total growth

This is the year-on-year change in the performance of Experian's activities at actual exchange rates.

Organic revenue growth

This is the year-on-year change in the revenue of ongoing activities, translated at constant exchange rates, excluding acquisitions until the first anniversary of their consolidation.

Benchmark earnings

Benchmark PBT less attributable tax and non-controlling interests.

Total Benchmark earnings

Benchmark PBT less attributable tax.

Benchmark EPS

Benchmark earnings divided by the weighted average number of ordinary shares.

Benchmark operating cash flow

Benchmark EBIT plus amortisation, depreciation and charges for share-based incentive plans, less net capital expenditure and adjusted for changes in working capital, principal lease payments and the Group's share of the Benchmark profit or loss retained in continuing associates.

Cash flow conversion

Benchmark operating cash flow expressed as a percentage of Benchmark EBIT.

Net debt and Net funding

Net debt is borrowings (and the fair value of derivatives hedging borrowings) excluding accrued interest, less cash and cash equivalents. Net funding is borrowings (and the fair value of the effective portion of derivatives hedging borrowings) excluding accrued interest, less cash held in Group Treasury.

 

Return on capital employed (ROCE)

Benchmark EBIT less tax at the Benchmark rate divided by average capital employed, in continuing operations, over the year. Capital employed is net assets less non-controlling interests and right-of-use assets, plus/minus the net tax liability or asset and plus Net debt.

 

2. Foreign currency

Foreign exchange - average rates

 

The principal exchange rates used to translate revenue and Benchmark EBIT into the US dollar are shown in the table below.

 


2022

2021


Movement against the US dollar

US dollar : Brazilian real

5.34

5.41


1%

Pound sterling : US dollar

1.37

1.31


5%

Euro : US dollar

1.16

1.17


(1)%

US dollar : Colombian peso

3,834

3,699


(4)%

US dollar : South African rand

14.85

16.36


9%

 

The impact of foreign currency movements on revenue from ongoing activities is set out in note 5(e) to the financial statements.



 

 

Appendices (continued)

 

2. Foreign currency (continued)

 

Foreign exchange - closing rates

The principal exchange rates used to translate assets and liabilities into the US dollar at the year-end dates are shown in the table below.


 

 

 

2022

 

2021

 

US dollar : Brazilian real




4.78


5.74


Pound sterling : US dollar




1.31


1.38


Euro : US dollar




1.11


1.17


US dollar : Colombian peso




3,757


3,720


US dollar : South African rand




14.56


14.76


 

3. Revenue, Benchmark EBIT and Benchmark EBIT margin by business segment

 

 

 

 

Growth %

Year ended 31 March

 

2022

US$m

 

20211

US$m

Total at constant exchange rates

Organic at constant exchange rates

 

Revenue






Data

3,313

2,863

15

9


Decisioning

1,341

1,172

14

11


Business-to-Business

4,654

4,035

15

9


Consumer Services

1,613

1,307

23

22


Ongoing activities

6,267

5,342

17

12

 

Exited business activities

21

30

n/a



Total

6,288

5,372

16

 


 






Benchmark EBIT






Business-to-Business

1,418

1,184

20



Consumer Services

374

285

31



Business segments

1,792

1,469

22



Central Activities - central corporate costs

(152)

(90)

n/a



Ongoing activities

1,640

1,379

19

 

 

Exited business activities

5

7

n/a



Total Benchmark EBIT

1,645

1,386

19



Net interest expense

(110)

(121)

n/a



Benchmark PBT

1,535

1,265

22



Exceptional items (Appendix 4)

21

35

n/a



Other adjustments made to derive Benchmark PBT

(109)

(223)

n/a



Profit before tax

1,447

1,077

19



 






Benchmark EBIT margin - ongoing activities






Business-to-Business

30.5%

29.3%




Consumer Services

23.2%

21.8%




Total Benchmark EBIT margin

26.2%

25.8%

 

 

 

1. Revenue and Benchmark EBIT for FY21 are re-presented for the reclassification to exited business activities of certain B2B businesses.

 

Appendices (continued)

 

4. Exceptional items and other adjustments made to derive Benchmark PBT

 

 

2022

 

2021


Year ended 31 March

US$m

 

US$m


Exceptional items:





Loss on disposal of business

43


-


Net profit on disposal of associates

(90)


(120)


Restructuring costs

20


50


Impairment of intangible assets

-


27


Legal provisions movements

6


8


Net credit for Exceptional items

(21)

 

(35)







Other adjustments made to derive Benchmark PBT:





Amortisation of acquisition intangibles

174


138


Impairment of goodwill

-


53


Acquisition and disposal expenses

47


41


Adjustment to the fair value of contingent consideration

26


1


Non-benchmark share of post-tax loss/(profit) of associates

31


(16)


Interest on uncertain tax provisions

(1)


11


Financing fair value remeasurements

(168)


(5)


Net charge for other adjustments made to derive Benchmark PBT

109

 

223

 

Net charge for Exceptional items and other adjustments made to derive Benchmark PBT

 

88

 

 

188

 

An explanation of the reasons for the exclusion of such items from our definition of Benchmark PBT is given in note 4(a) to the financial statements.

 

5. Reconciliation of net investment

 

 

2022


2021

 

Year ended 31 March

US$m


US$m

 

Capital expenditure as reported in the Group cash flow statement

508


422


Disposal of property, plant and equipment

(23)


(1)


Profit/(loss) on disposals of fixed assets

4


(3)


Net capital expenditure

489

 

418

 

Acquisitions1

781


583

 

Purchase of investments

32


31

 

Disposal of business and investments

(23)


(151)

 

Distributions from investments

(2)


-

 

Repayment of promissory note and interest

(110)


-

 

Net investment

1,167

 

881

 

1. The consideration for our investment in the Risk Management division of Arvato Financial Solutions (AFS) in the year ended 31 March 2021 was satisfied by the delivery of 7.2m Experian plc treasury shares at market value.

6. Cash tax reconciliation

 

 

2022


2021

 

Year ended 31 March

%

 

%

 

Tax charge on Benchmark PBT

25.7


25.9


Tax relief on goodwill amortisation

(2.4)


(2.6)


Benefit of brought forward tax losses

(1.7)


(2.0)


Other2

2.2


(2.6)


Tax paid as a percentage of Benchmark PBT

23.8

 

18.7

 

2. Other includes the phasing of tax payments in FY22, and an acceleration of tax deductions as a result of US legislative changes in FY21.



 

Appendices (continued)

 

7. Cash flow and Net debt summary

 

 

2022


2021

 

Year ended 31 March

US$m


US$m

 

Benchmark EBIT

1,645

 

1,386


Amortisation and depreciation charged to Benchmark EBIT

484


453


Benchmark EBITDA

2,129

 

1,839


Impairment of non-current assets charged to Benchmark EBIT

-


6


Net capital expenditure (Appendix 5)

(489)


(418)


Decrease/(increase) in working capital

58


(13)


Principal lease payments

(57)


(56)


Benchmark loss retained in associates

10


12


Charge for share incentive plans

149


106


Benchmark operating cash flow

1,800

 

1,476

 

Net interest paid

(121)


(115)


Tax paid - continuing operations

(366)


(236)


Dividends paid to non-controlling interests

(2)


(1)


Benchmark free cash flow

1,311

 

1,124

 

Acquisitions

(781)


(583)


Purchase of investments

(32)


(31)


Disposal of business and investments - ongoing activities

23


151


Distributions from investments

2


-


Repayment of promissory note and interest

110


-


Movement in Exceptional and other non-benchmark items

(19)


(67)


Ordinary dividends paid

(444)


(427)


Net cash inflow - continuing operations

170

 

167

 

Net debt previously reported at 31 March

(3,826)

 

(3,898)

 

Lease obligations

(200)

 

(199)

 

Net debt at 1 April1

(4,026)

 

(4,097)

 

Net cash inflow - discontinued operations

1


-


Net share purchases

(149)


19


Non-cash lease obligation additions and disposals

(35)


(49)


Principal lease payments

57


56


Foreign exchange and other movements

32


(122)


Net debt at 31 March1

(3,950)

 

(4,026)

 

 

1. We have updated our definition of Net debt to include lease obligations, and the opening position at 1 April and Net debt movements in the prior year have been revised to include lease liabilities shown net of accrued interest.

 

 

 



 

Group income statement

for the year ended 31 March 2022


2022

 

 

2021



Benchmark1

Non-benchmark2

Statutory

Total

 

 

Benchmark1

Non-benchmark2

Statutory

Total


 


US$m

US$m

US$m

 

 

US$m

US$m

US$m


 

Revenue (note 5(a))

6,288

-

6,288

 

 

5,372

-

5,372


 

Labour costs

(2,302)

(11)

(2,313)

 

 

(1,965)

(30)

(1,995)


Data and information technology costs

(1,000)

-

(1,000)

 

 

(861)

-

(861)


Amortisation and depreciation charges

(484)

(174)

(658)

 

 

(453)

(138)

(591)


Marketing and customer acquisition costs

(503)

-

(503)

 

 

(417)

-

(417)


Other operating charges

(357)

(88)

(445)

 

 

(295)

(150)

(445)


Total operating expenses

(4,646)

(273)

(4,919)

 

 

(3,991)

(318)

(4,309)


 

Net profit on disposal of business and associates

-

47

47

 

 

-

120

120

 

 

Operating profit/(loss)

1,642

(226)

1,416

 

 

1,381

(198)

1,183


 

Finance income

15

169

184

 

 

12

-

12


 

Finance expense

(125)

-

(125)

 

 

(133)

(6)

(139)


 

Net finance income/(costs) (note 8(a))

(110)

169

59


 

(121)

(6)

(127)


 

Share of post-tax (loss)/profit of associates

3

(31)

(28)

 

 

5

16

21


 

Profit/(loss) before tax (note 5(a))

1,535

(88)

1,447

 

 

1,265

(188)

1,077


 

Tax (charge)/credit (note 9(a))

(394)

98

(296)

 

 

(328)

53

(275)


 

Profit/(loss) for the financial year from continuing operations

1,141

10

1,151

 

 

 

937

(135)

802


 

Profit for the financial year from discontinued operations (note 10)

-

16

16

 

 

 

-

-

-


 

Profit/(loss) for the financial year

1,141

26

1,167

 

 

937

(135)

802


 

 



 

 

 



 


 

 



 

 

 



 


 

Attributable to:



 

 

 



 


 

Owners of Experian plc

1,138

27

1,165



938

(135)

803


 

Non-controlling interests

3

(1)

2



(1)

-

(1)


 

Profit/(loss) for the financial year

1,141

26

1,167



937

(135)

802


 

 



 





 


 

Total Benchmark EBIT1

1,645


 



1,386


 


 

 



 

 

 



 


 

 

US cents

US cents

US cents



US cents

US cents

US cents


 

Earnings/(loss) per share (note 11(a))



 





 


 

Basic

124.5

3.0

127.5



103.1

(14.9)

88.2


 

Diluted

123.6

2.9

126.5



102.3

(14.7)

87.6


 




 





 


 

Earnings/(loss) per share from continuing operations (note 11(a))

124.5

1.2

125.7





 


 

Basic

123.6

1.2

124.8



103.1

(14.9)

88.2


 

Diluted



 



102.3

(14.7)

87.6


 




 





 


 

Benchmark PBT per share1,3

167.9


 



139.0


 


 




 





 


 

Full-year dividend per share1

 



51.75





47.00


 














1.       Total Benchmark EBIT, Benchmark PBT per share and Full-year dividend per share are non-GAAP measures, defined in note 4 to the financial statements.

 

2.      The loss before tax for non-benchmark items of US$88m (2021: US$188m) comprises a net credit for Exceptional items of US$21m (2021: US$35m) and net charges for other adjustments made to derive Benchmark PBT of US$109m (2021: US$223m). Further information is given in note 7 to the financial statements.

 

3.      Benchmark PBT per share is calculated by dividing Benchmark PBT of US$1,535m (2021: US$1,265m) by the weighted average number of ordinary shares of 914 million (2021: 910 million). The amount is stated in US cents per share.

 

 

 



 

Group statement of comprehensive income

for the year ended 31 March 2022

 

 

 

2022


2021

 

 

 

US$m


US$m

Profit for the financial year

 

 

1,167


802

Other comprehensive income

 

 

 



Items that will not be reclassified to profit or loss:

 

 

 



Remeasurement of post-employment benefit assets and obligations (note 15(b))

 

 

121


2

Changes in the fair value of investments revalued through OCI

 

 

5


11

Deferred tax charge

 

 

(22)


(1)

Items that will not be reclassified to profit or loss

 

 

104


12

Items that are or may be reclassified subsequently to profit or loss:

 

 

 



Currency translation gains

 

 

35


70

Cumulative currency translations in respect of divestments reclassified to profit or loss

 

 

14


-

Fair value (loss)/gain on cash flow hedge

 

 

(24)


35

Hedging loss/(gain) reclassified to profit or loss

 

 

26


(33)

Items that are or may be reclassified subsequently to profit or loss

 

 

51


72


 

 

 

 


Other comprehensive income for the financial year1

 

 

155

 

84

Total comprehensive income for the financial year

 

 

1,322

 

886


 

 

 



Attributable to:

 

 

 



Owners of Experian plc

 

 

1,320


881

Non-controlling interests

 

 

2


5

Total comprehensive income for the financial year

 

 

1,322

 

886

1.     Amounts reported within Other comprehensive income (OCI) are in respect of continuing operations and, except as reported for post-employment benefit assets and obligations, there is no associated tax. Currency translation items, not reclassified to profit or loss, are recognised in the hedging or translation reserve within other reserves and in non-controlling interests. Other items within Other comprehensive income are recognised in retained earnings.

 



Group balance sheet

at 31 March 2022

 


 

 2022


 2021

 

Notes

 

US$m


US$m

Non-current assets

 

 

 



Goodwill

13

 

5,737

 

5,261

Other intangible assets

14

 

2,214

 

1,966

Property, plant and equipment

14

 

415

 

469

Investments in associates

 

 

4

 

128

Deferred tax assets

 

 

46

 

86

Post-employment benefit assets

15(a)

 

216

 

102

Trade and other receivables

 

 

133

 

160

Financial assets revalued through OCI

 

 

375

 

245

Other financial assets

 

 

81

 

223


 

 

9,221

 

8,640

 

 

 

 



Current assets

 

 

 



Trade and other receivables

 

 

1,409


1,197

Current tax assets

 

 

37


34

Other financial assets

 

 

7


20

Cash and cash equivalents - excluding bank overdrafts

 

16(f)

 

179


180



 

1,632


1,431

Assets classified as held-for-sale

23

 

41


-



 

1,673


1,431

 

 

 

 

 


Current liabilities

 

 

 

 


Trade and other payables

 

 

(1,744)


(1,543)

Borrowings


 

(57)


(655)

Current tax liabilities

 

 

(109)


(176)

Provisions

 

 

(33)


(27)

Other financial liabilities


 

(22)


(15)



 

(1,965)


(2,416)

Net current liabilities

 

 

(292)


(985)

Total assets less current liabilities

 

 

8,929

 

7,655

 

 

 

 

 


Non-current liabilities

 

 

 

 


Trade and other payables

 

 

(248)


(159)

Borrowings


 

(4,039)


(3,682)

Deferred tax liabilities

 

 

(353)


(361)

Post-employment benefit obligations

15(a)

 

(52)


(55)

Provisions


 

(4)


-

Other financial liabilities


 

(226)


(279)


 

 

(4,922)


(4,536)

Net assets

 

 

4,007


3,119


 

 

 



Equity

 

 

 



Called-up share capital

19

 

96


96

Share premium account

19

 

1,780


1,756

Retained earnings

 

 

20,157


19,207

Other reserves

 

 

(18,064)


(17,978)

Attributable to owners of Experian plc

 

 

3,969


3,081

Non-controlling interests

 

 

38


38

Total equity

 

 

4,007


3,119

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group statement of changes in equity

for the year ended 31 March 2022


Called-up share capital

(Note 19)

Share premium account

(Note 19)

Retained earnings

Other reserves

Attributable to owners of Experian plc

Non-controlling interests

Total equity


US$m

US$m

US$m

US$m

US$m

US$m

US$m

 

At 1 April 2021

96

1,756

19,207

(17,978)

3,081

38

3,119

 

 

Comprehensive income:





 


 

 

 

Profit for the financial year

-

-

1,165

-

1,165

2

1,167

 

 

Other comprehensive income for the financial year

-

-

118

37

155

-

155

 

 

Total comprehensive income for the financial year

-

-

1,283

37

1,320

2

1,322

 

 

Transactions with owners:





 


 

 

 

Employee share incentive plans:





 


 

 

 

- value of employee services

-

-

149

-

149

-

149

 

 

- shares issued on vesting

-

24

-

-

24

-

24

 

 

- purchase of shares by employee trusts

-

-

-

(61)

(61)

-

(61)

 

 

- other vesting of awards and exercises of share options

-

-

(40)

49

9

-

9

 

 

- other payments

-

-

(4)

-

(4)

-

(4)

 

 

Purchase of shares held as treasury shares

-

-

-

(111)

(111)

-

(111)

 

 

Transactions with non-controlling interests

-

-

6

-

6

-

6

 

 

Dividends paid

-

-

(444)

-

(444)

(2)

(446)

 

 

Transactions with owners

-

24

(333)

(123)

(432)

(2)

(434)

 

 

At 31 March 2022

96

1,780

20,157

(18,064)

3,969

38

4,007

 















 


Called-up share capital

(Note 19)

Share premium account

(Note 19)

Retained earnings

Other reserves

Attributable

 to owners of Experian plc

Non-controlling interests

Total equity


US$m

US$m

US$m

US$m

US$m

US$m

US$m

At 1 April 2020

96

1,574

18,826

(18,221)

2,275

6

2,281

Comprehensive income:





 


 

Profit for the financial year

-

-

803

-

803

(1)

802

Other comprehensive income for the financial year

-

-

12

66

78

6

84

Total comprehensive income for the financial year

-

-

815

66

881

5

886

Transactions with owners:





 


 

Employee share incentive plans:





 


 

- value of employee services

-

-

106

-

106

-

106

- shares issued on vesting

-

19

-

-

19

-

19

- other vesting of awards and exercises of share options

-

-

(75)

87

12

-

12

- related tax credit

-

-

2

-

2

-

2

- other payments

-

-

(6)

-

(6)

-

(6)

Shares delivered as consideration for acquisition

-

163

-

90

253

-

253

Non-controlling interests arising on business combinations

-

-

(34)

-

(34)

24

(10)

Recognition of non-controlling interests on acquisition

-

-

-

-

-

4

4

Dividends paid

-

-

(427)

-

(427)

(1)

(428)

Transactions with owners

-

182

(434)

177

(75)

27

(48)

At 31 March 2021

96

1,756

19,207

(17,978)

3,081

38

3,119

 



Group cash flow statement

for the year ended 31 March 2022

 


 

2022


2021

 

Notes

 

 

US$m


US$m

Cash flows from operating activities

 

 

 



Cash generated from operations

16(a)

 

2,270


1,822

Interest paid

 

 

(127)


(119)

Interest received

 

 

6


4

Dividends received from associates

 

 

13


17

Tax paid

 

 

(366)


(236)

Net cash inflow from operating activities - continuing operations

 

 

1,796

 

1,488

Net cash inflow from operating activities - discontinued operations

10

 

1

 

-

Net cash inflow from operating activities

 

 

1,797

 

1,488







Cash flows from investing activities

 

 

 



Purchase of other intangible assets

16(c)

 

(445)


(374)

Purchase of property, plant and equipment

 

 

(63)


(48)

Sale of property, plant and equipment

 

 

23


1

Purchase of other financial assets


 

(32)


(31)

Sale of other financial assets


 

12


24

Distributions received on financial assets held as investments


 

2


-

Acquisition of subsidiaries, net of cash acquired

16(d)

 

(736)


(526)

Disposal of investment in associates

7(c)

 

12


127

Repayment of promissory note and interest by associate



110


-

Disposal of operations



(1)


-

Net cash flows used in investing activities

 

 

(1,118)

 

(827)







Cash flows from financing activities

 

 

 



Cash inflow in respect of shares issued

16(e)

 

24


19

Cash outflow in respect of share purchases

16(e)

 

(173)


-

Other payments on vesting of share awards

 

 

(4)


(6)

Settlement of put options held over shares in subsidiaries



(4)


-

Transactions in respect of non-controlling interests

16(d)


(1)


(10)

New borrowings

 

 

571


1,011

Repayment of borrowings

 

 

(583)


(1,337)

Principal lease payments

 

 

(57)


(56)

Net (payments)/receipts for cross-currency swaps and foreign exchange contracts



(16)


54

Net receipts from equity swaps

 

 

2


6

Dividends paid

 

 

(446)


(428)

Net cash flows used in financing activities

 

 

(687)


(747)

 

 

 

 

 



Net decrease in cash and cash equivalents

 

 

(8)


(86)

Cash and cash equivalents at 1 April

 

 

170


272

Exchange movements on cash and cash equivalents

 

 

14


(16)

Cash and cash equivalents at 31 March

16(f)


176


170



Notes to the financial statements

for the year ended 31 March 2022

1. Corporate information

Experian plc (the Company) is the ultimate parent company of the Experian group of companies (Experian or the Group). Experian is a leading global information services group. The Company is incorporated and registered in Jersey as a public company limited by shares and is resident in Ireland. The Company's registered office is at 22 Grenville Street, St Helier, Jersey, JE4 8PX, Channel Islands. The Company's ordinary shares are traded on the London Stock Exchange's Regulated Market and have a Premium Listing.

2. Basis of preparation

The financial information set out in this preliminary announcement does not constitute the Group's statutory financial statements, which comprise the Annual Report and audited financial statements, for the years ended 31 March 2022 and 31 March 2021 but is derived from the statutory financial statements for the year ended 31 March 2022. The Group's statutory financial statements for the year ended 31 March 2022 will be made available to shareholders in June 2022 and delivered to the Jersey Registrar of Companies in due course. The auditor has reported on those financial statements and has given an unqualified report which does not contain a statement under Article 111(2) or Article 111(5) of the Companies (Jersey) Law 1991. The Group's statutory financial statements for the year ended 31 March 2021 have been delivered to the Jersey Registrar of Companies. The auditor reported on those financial statements and gave an unqualified report which did not contain a statement under Article 111(2) or Article 111(5) of the Companies (Jersey) Law 1991.

The Group's statutory financial statements for the year ended 31 March 2022 have been:

·    prepared in accordance with the Companies (Jersey) Law 1991 and both UK-adopted International Accounting Standards (UK-IFRS) and International Financial Reporting Standards (IFRS or IFRSs) as adopted for use in the European Union (the EU) and IFRS Interpretations Committee interpretations (together EU-IFRS). The financial statements also comply with IFRS as issued by the International Accounting Standards Board (IASB). UK-IFRS, EU-IFRS and IFRS as issued by the IASB all differ in certain respects from each other, however, the differences have no material impact for the periods presented;

·    prepared on the going concern basis and under the historical cost convention, as modified for the revaluation of certain financial assets and financial liabilities;

·    presented in US dollars, the most representative currency of the Group's operations, and generally rounded to the nearest million;

·    prepared using the principal exchange rates set out on pages 13 and 14; and

·    designed to voluntarily include disclosures in line with those parts of the UK Companies Act 2006 applicable to companies reporting under that law.

Other than those disclosed in this preliminary announcement, no significant events impacting the Group have occurred between 31 March 2022 and 17 May 2022 when this preliminary announcement was approved for issue.

This preliminary announcement has been prepared in accordance with the Listing Rules of the UK Financial Conduct Authority, using the accounting policies applied in the preparation of the Group's statutory financial statements for the year ended 31 March 2022. Those policies were published in full in the Group's statutory financial statements for the year ended 31 March 2021 and are available on the corporate website, at www.experianplc.com.

Going concern

In adopting the going concern basis for preparing these financial statements, the directors have considered the business activities, the principal risks and uncertainties and the other matters that could threaten the long-term financial stability of the Group. At 31 March 2022, the Group had undrawn committed bank borrowing facilities of US$2.6bn which have an average remaining tenor of three years.

The directors believe that the Group and the Company are well placed to manage their financing and other business risks satisfactorily, and have a reasonable expectation that the Group and the Company will have adequate resources to continue their operational existence for at least 12 months from the date of signing these financial statements. The directors therefore consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements. In reaching this conclusion, the directors noted the Group's strong cash performance in the year, and its resilience in the face of a viability reverse stress-test scenario.



 

Notes to the financial statements (continued)

for the year ended 31 March 2022

3. Recent accounting developments

There have been no accounting standards, amendments or interpretations effective for the first time in these financial statements which have had a material impact on the financial statements.

Interest Rate Benchmark Reform - Phase 2, Amendments to IFRS 9 'Financial Instruments', IAS 39 'Financial Instruments: Recognition and Measurement', IFRS 7 'Financial Instruments: Disclosures' and IFRS 16 'Leases' were effective for Experian from 1 April 2021 and had no material impact on the Group's financial results.

Phase 2 amendments provide relief from certain requirements in IFRS Standards. These reliefs relate to modifications of financial instruments, lease contracts or hedging relationships due to the transition from interbank offered rates (IBOR) to alternative benchmark interest rates.

If the basis for determining the contractual cash flows of a financial asset or financial liability measured at amortised cost, changed as a direct consequence of interest rate benchmark reform and the new basis for determining the contractual cash flows is economically equivalent to that immediately preceding the change, the basis for determining the contractual cash flows is updated prospectively by revising the effective interest rate.

When changes are made to hedging instruments, hedged items and hedged risk as a result of interest rate benchmark reform, the Group updates the hedge documentation without discontinuing the hedging relationship and, in the case of a cash flow hedge, the amount accumulated in the cash flow hedge reserve is deemed to be based on the alternative benchmark rate on which the hedged future cash flows are determined.

There are no other new standards, amendments to existing standards, or interpretations that are not yet effective, that are expected to have a material impact on the Group's financial results. Accounting developments are routinely reviewed by the Group and its financial reporting systems are adapted as appropriate.

4. Use of non-GAAP measures in the financial statements

As detailed below, the Group has identified and defined certain measures that it uses to understand and manage its performance. The measures are not defined under IFRS and they may not be directly comparable with other companies' adjusted performance measures. These non-GAAP measures are not intended to be a substitute for any IFRS measures of performance but management has included them as they consider them to be key measures used within the business for assessing the underlying performance of the Group's ongoing businesses.

Following the implementation of IFRS 16, we have reviewed emerging practice and have updated our definitions of Net debt and Net funding to include lease obligations, to more fully align our treatment with the requirements of investors and finance providers. The definition of capital employed has also been updated accordingly.

(a) Benchmark profit before tax (Benchmark PBT) (note 5(a))

Benchmark PBT is disclosed to indicate the Group's underlying profitability. It is defined as profit before amortisation and impairment of acquisition intangibles, impairment of goodwill, acquisition expenses, adjustments to contingent consideration, Exceptional items, financing fair value remeasurements, tax (and interest thereon) and discontinued operations. It includes the Group's share of continuing associates' Benchmark post-tax results.

An explanation of the basis on which we report Exceptional items is provided below. Other adjustments made to derive Benchmark PBT are explained as follows:

·    Charges for the amortisation and impairment of acquisition intangibles are excluded from the calculation of Benchmark PBT because these charges are based on judgments about their value and economic life and bear no relation to the Group's underlying ongoing performance. Impairment of goodwill is similarly excluded from the calculation of Benchmark PBT.

·    Acquisition and disposal expenses (representing the incidental costs of acquisitions and disposals, one-time integration costs and other corporate transaction expenses) relating to successful, active or aborted acquisitions and disposals are excluded from the definition of Benchmark PBT as they bear no relation to the Group's underlying ongoing performance or to the performance of any acquired businesses. Adjustments to contingent consideration are similarly excluded from the definition of Benchmark PBT.

·    Charges and credits for financing fair value remeasurements within finance expense in the Group income statement are excluded from the definition of Benchmark PBT. These include retranslation of intra-Group funding, and that element of the Group's derivatives that is ineligible for hedge accounting, together with gains and losses on put options in respect of acquisitions. Amounts recognised generally arise from market movements and accordingly bear no direct relation to the Group's underlying performance.



 

Notes to the financial statements (continued)

for the year ended 31 March 2022

4. Use of non-GAAP measures in the financial statements (continued)
(b) Benchmark earnings before interest and tax (Benchmark EBIT) and margin (Benchmark EBIT margin) (note 5(a))

Benchmark EBIT is defined as Benchmark PBT before the net interest expense charged therein and accordingly excludes Exceptional items as defined below. Benchmark EBIT margin is Benchmark EBIT from ongoing activities expressed as a percentage of revenue from ongoing activities.

(c) Benchmark earnings before interest, tax, depreciation and amortisation (Benchmark EBITDA)

Benchmark EBITDA is defined as Benchmark EBIT before the depreciation and amortisation charged therein.

(d) Exited business activities
Exited business activities are businesses sold, closed or identified for closure during a financial year. These are treated as exited business activities for both revenue and Benchmark EBIT purposes. The results of exited business activities are disclosed separately with the results of the prior period re-presented in the segmental analyses as appropriate. This measure differs from the definition of discontinued operations in IFRS 5.
(e) Ongoing activities
The results of businesses trading at 31 March 2022, which are not disclosed as exited business activities, are reported as ongoing activities.
(f) Constant exchange rates

To highlight our organic performance, we discuss our results in terms of growth at constant exchange rates, unless otherwise stated. This represents growth calculated after translating both years' performance at the prior year's average exchange rates.

(g) Total growth (note 5(e))

This is the year-on-year change in the performance of our activities at actual exchange rates. Total growth at constant exchange rates removes the translational foreign exchange effects arising on the consolidation of our activities and comprises one of our measures of performance at constant exchange rates.

(h) Organic revenue growth (note 5(e))

This is the year-on-year change in the revenue of ongoing activities, translated at constant exchange rates, excluding acquisitions until the first anniversary of their consolidation.

(i) Benchmark earnings and Total Benchmark earnings (note 11)

Benchmark earnings comprises Benchmark PBT less attributable tax and non-controlling interests. The attributable tax for this purpose excludes significant tax credits and charges arising in the year which, in view of their size or nature, are not comparable with previous years, together with tax arising on Exceptional items and on other adjustments made to derive Benchmark PBT. Benchmark PBT less attributable tax is designated as Total Benchmark earnings.

(j) Benchmark earnings per share (Benchmark EPS) (note 11(a))

Benchmark EPS comprises Benchmark earnings divided by the weighted average number of issued ordinary shares, as adjusted for own shares held.

(k) Benchmark PBT per share

Benchmark PBT per share comprises Benchmark PBT divided by the weighted average number of issued ordinary shares, as adjusted for own shares held.

(l) Benchmark tax charge and rate (note 9(b))

The Benchmark tax charge is the tax charge applicable to Benchmark PBT. It differs from the tax charge by tax attributable to Exceptional items and other adjustments made to derive Benchmark PBT, and exceptional tax charges. A reconciliation is provided in note 9(b) to these financial statements. The Benchmark effective rate of tax is calculated by dividing the Benchmark tax charge by Benchmark PBT.



 

Notes to the financial statements (continued)

for the year ended 31 March 2022

4. Use of non-GAAP measures in the financial statements (continued)
(m) Exceptional items (note 7(a))

The separate reporting of Exceptional items gives an indication of the Group's underlying performance. Exceptional items include those arising from the profit or loss on disposal of businesses, closure costs of major business units, costs of significant restructuring programmes and other financially significant one-off items. All other restructuring costs are charged against Benchmark EBIT, in the segments in which they are incurred.

(n) Full-year dividend per share (note 12(a))

Full-year dividend per share comprises the total of dividends per share announced in respect of the financial year.

(o) Benchmark operating and Benchmark free cash flow
Benchmark operating cash flow is Benchmark EBIT plus amortisation, depreciation and charges in respect of share-based incentive plans, less capital expenditure net of disposal proceeds and adjusted for changes in working capital, principal lease payments and the Group's share of the Benchmark profit or loss retained in continuing associates. Benchmark free cash flow is derived from Benchmark operating cash flow by excluding net interest, tax paid in respect of continuing operations and dividends paid to non-controlling interests.
(p) Cash flow conversion

Cash flow conversion is Benchmark operating cash flow expressed as a percentage of Benchmark EBIT.

(q) Net debt and Net funding (note 17)

Net debt is borrowings (and the fair value of derivatives hedging borrowings) excluding accrued interest, less cash and cash equivalents and other highly liquid bank deposits with original maturities greater than three months. Net funding is borrowings (and the fair value of the effective portion of derivatives hedging borrowings) excluding accrued interest, less cash held in Group Treasury.

(r) Return on capital employed (ROCE)

ROCE is defined as Benchmark EBIT less tax at the Benchmark rate divided by a three-point average of capital employed, in continuing operations, over the year. Capital employed is net assets less non-controlling interests and right-of-use assets, further adjusted to add or deduct the net tax liability or asset and to add Net debt.



Notes to the financial statements (continued)

for the year ended 31 March 2022

5. Segment information

(a) Income statement
 

North

 America

 

Latin

America

 

UK and Ireland

 

 EMEA/

Asia Pacific1

 

Total operating segments

Central

Activities2

 

Total continuing  operations

 

Year ended 31 March 2022

US$m

US$m

US$m

US$m

US$m

US$m

US$m

 

 

 

 

 

 

 

 

 

 

Revenue from external customers

 

 

 

 

 

 

 

 

Ongoing activities

4,122

791

847

507

6,267

-

6,267

 

Exited business activities

-

-

-

21

21

-

21

 

Total

4,122

791

847

528

6,288

-

6,288

 

 

 

 

 

 

 

 

 

 

Reconciliation from Benchmark EBIT to profit/(loss) before tax





 


 

 

Benchmark EBIT





 


 

 

Ongoing activities before transfer pricing and other adjustments

1,418

221

179

(23)

1,795

(155)

1,640

 

Transfer pricing and other allocation adjustments

(37)

2

9

23

(3)

3

-

 

Ongoing activities

1,381

223

188

-

1,792

(152)

1,640

 

Exited business activities

-

-

(4)

9

5

-

5

 

Total

1,381

223

184

9

1,797

(152)

1,645

 

Net interest expense included in Benchmark PBT

(note 8(b))

(4)

(1)

(1)

(2)

(8)

(102)

(110)

 

Benchmark PBT

1,377

222

183

7

1,789

(254)

1,535

 

Exceptional items (note 7(a))

6

-

-

(80)

(74)

95

21

 

Amortisation of acquisition intangibles

(110)

(23)

(7)

(34)

(174)

-

(174)

 

Acquisition and disposal expenses

(21)

(7)

(1)

(18)

(47)

-

(47)

 

Adjustment to the fair value of contingent

consideration

(8)

(20)

4

(2)

(26)

-

(26)

 

Non-benchmark share of post-tax loss of associates

-

-

(26)

-

(26)

(5)

(31)

 

 

Interest on uncertain tax provisions

-

-

-

-

-

1

1

 

 

Financing fair value remeasurements

-

-

-

-

-

168

168

 

Profit/(loss) before tax

1,244

172

153

(127)

1,442

5

1,447

 


 

 

 

 

 

 

 

 











 


North

 America

 

Latin

America

 

UK and Ireland

 

 EMEA/

Asia Pacific1

 

Total operating segments

Central

Activities

 

Total continuing  operations

 

Year ended 31 March 20213

US$m

US$m

US$m

US$m

US$m

US$m

US$m

 









 

Revenue from external customers








 

Ongoing activities

3,530

625

737

450

5,342

-

5,342

 

Exited business activities

-

-

12

18

30

-

30

 

Total

3,530

625

749

468

5,372

-

5,372

 






 



 

Reconciliation from Benchmark EBIT to profit/(loss) before tax





 



 

Benchmark EBIT





 



 

Ongoing activities

1,201

172

123

(27)

1,469

(90)

1,379

 

Exited business activities

-

-

(2)

9

7

-

7

 

Total

1,201

172

121

(18)

1,476

(90)

1,386

 

Net interest expense included in Benchmark PBT

(note 8(b))

(5)

(2)

(1)

(2)

(10)

(111)

(121)

 

Benchmark PBT

1,196

170

120

(20)

1,466

(201)

1,265

 

Exceptional items (note 7(a))

112

(1)

(63)

(13)

35

-

35

 

Impairment of goodwill (note 7(a))

-

-

-

(53)

(53)

-

(53)

 

Amortisation of acquisition intangibles

(90)

(14)

(7)

(27)

(138)

-

(138)

 

Acquisition and disposal expenses

(16)

(4)

(1)

(20)

(41)

-

(41)

 

Adjustment to the fair value of contingent

consideration

-

-

-

(1)

(1)

-

(1)

 

Non-benchmark share of post-tax (loss)/profit of associates

 

-

-

(3)

-

(3)

19

16

 

Interest on uncertain tax provisions

-

-

-

-

-

(11)

(11)

 

Financing fair value remeasurements

-

-

-

-

-

5

5

 

Profit/(loss) before tax

1,202

151

46

(134)

1,265

(188)

1,077

 























1.   EMEA/Asia Pacific represents all other operating segments.

2.   The decrease in Central Activities Benchmark EBIT in the year ended 31 March 2022 is primarily attributable to increased employee share incentive plan and bonus costs.

3.   Revenue and Benchmark EBIT for the year ended 31 March 2021 have been re-presented for the reclassification to exited business activities of certain B2B businesses.

Additional information by operating segment, including that on total and organic growth at constant exchange rates, is provided within pages 3 to 11.

Notes to the financial statements (continued)

for the year ended 31 March 2022

5. Segment information (continued)

(b) Revenue by country - continuing operations


 2022


2021

 

US$m


US$m

USA

4,121


3,529

UK

843


744

Brazil

692


546

Germany

93


81

Colombia

68


60

South Africa

57


55

Other

414


357

 

6,288


5,372

Revenue is primarily attributable to countries other than Ireland. No single client accounted for 10% or more of revenue in the current or prior year. Revenue from the USA, the UK and Brazil in aggregate comprises 90% (2021: 90%) of Group revenue.

(c) Disaggregation of revenue from contracts with customers

 

North

America

Latin

America

UK and Ireland

EMEA/

Asia Pacific

Total operating segments

Year ended 31 March 2022

US$m

US$m

US$m

US$m

US$m

Revenue from external customers

 

 

 

 

 

Data

2,033

528

409

343

3,313

Decisioning

784

149

244

164

1,341

Business-to-Business

2,817

677

653

507

4,654

Consumer Services

1,305

114

194

-

1,613

Total ongoing activities

4,122

791

847

507

6,267

 





 

 





 

 

North

America

Latin

America

UK and Ireland

EMEA/

Asia Pacific

Total operating segments

Year ended 31 March 20211

US$m

US$m

US$m

US$m

US$m

Revenue from external customers

 

 

 

 

 

Data

1,761

457

361

284

2,863

Decisioning

694

92

220

166

1,172

Business-to-Business

2,455

549

581

450

4,035

Consumer Services

1,075

76

156

-

1,307

Total ongoing activities

3,530

625

737

450

5,342









1.   Revenue for the year ended 31 March 2021 has been re-presented for the reclassification to exited business activities of certain B2B businesses.

Total revenue comprises revenue from ongoing activities as well as revenue from exited business activities. Revenue in respect of exited business activities of US$21m (2021: US$30m) comprised UK and Ireland Data revenue of US$nil (2021: US$12m), EMEA/Asia Pacific Data revenue of US$8m (2021: US$3m) and EMEA/Asia Pacific Decisioning revenue of US$13m (2021: US$15m).

Data is predominantly transactional revenue with a portion from licence fees.

Decisioning revenue is derived from:

•     software and system sales, and includes recurring licence fees, consultancy and implementation fees, and transactional charges;

•     credit score fees which are primarily transactional; and

•     analytics income comprising a mix of consultancy and professional fees as well as transactional revenue.

Consumer Services revenue primarily comprises monthly subscription and one-off fees, and referral fees for credit products and white-label partnerships.


 

Notes to the financial statements (continued)

for the year ended 31 March 2022

5. Segment information (continued)

(d) Revenue by business segment

The additional analysis of revenue from external customers provided to the chief operating decision-maker and accordingly reportable under IFRS 8 'Operating Segments' is given within note 6. This is supplemented by voluntary disclosure of the profitability of groups of service lines. For ease of reference, we continue to use the term 'business segments' when discussing the results of groups of service lines.

(e) Reconciliation of revenue from ongoing activities

 

North

 America

 

Latin

America

 

UK and Ireland

 

EMEA/

Asia Pacific

Total ongoing activities


US$m

US$m

US$m

US$m

US$m

Revenue for the year ended 31 March 20211

3,530

625

737

450

5,342

Adjustment to constant exchange rates

1

(1)

(9)

(5)

(14)

Revenue at constant exchange rates for the year ended 31 March 2021

3,531

624

728

445

5,328

Organic revenue growth

464

105

77

13

659

Revenue from acquisitions

127

54

1

46

228

Revenue at constant exchange rates for the year ended 31 March 2022

4,122

783

806

504

6,215

Adjustment to actual exchange rates

-

8

41

3

52

Revenue for the year ended 31 March 2022

4,122

791

847

507

6,267

 

 

 

 

 

 

Organic revenue growth at constant exchange rates

13%

17%

11%

3%

12%

Revenue growth at constant exchange rates

17%

25%

11%

13%

17%

1.   Revenue for the year ended 31 March 2021 has been re-presented for the reclassification to exited business activities of certain B2B businesses.

The table above demonstrates the application of the methodology set out in note 4 in determining organic and total revenue growth at constant exchange rates. Revenue at constant exchange rates is reported for both years using the average exchange rates applicable for the year ended 31 March 2021.

(f) Balance sheet

 

(i)   Net assets/(liabilities)

North

America

Latin

America

 

UK and Ireland

EMEA/

Asia Pacific

Total operating segments

Central

Activities and other

Total

Group

At 31 March 2022

US$m

US$m

US$m

US$m

US$m

US$m

US$m

Goodwill

3,546

760

694

737

5,737

-

5,737

Investments in associates

4

-

-

-

4

-

4

Right-of-use assets

83

14

24

27

148

5

153

Assets classified as held-for-sale

-

-

29

-

29

12

41

Other assets

2,191

674

528

619

4,012

947

4,959

Total assets

5,824

 1,448

1,275

1,383

9,930

964

10,894

Lease obligations

(105)

(17)

(25)

(30)

(177)

(3)

(180)

Other liabilities

(1,129)

(327)

(300)

(364)

(2,120)

(4,587)

(6,707)

Total liabilities

(1,234)

(344)

(325)

(394)

(2,297)

(4,590)

(6,887)

Net assets/(liabilities)

4,590

1,104

950

989

7,633

(3,626)

4,007

 

 

North

America

Latin

America

 

UK and Ireland

EMEA/

Asia Pacific

Total operating segments

Central

Activities and other

Total

Group

At 31 March 2021

US$m

US$m

US$m

US$m

US$m

US$m

US$m

Goodwill

3,133

611

718

799

5,261

-

5,261

Investments in associates

4

-

61

9

74

54

128

Right-of-use assets

89

12

32

34

167

5

172

Other assets

1,880

483

471

681

3,515

995

4,510

Total assets

5,106

1,106

1,282

1,523

9,017

1,054

10,071

Lease obligations

(113)

(14)

(34)

(37)

(198)

(4)

(202)

Other liabilities

(881)

(196)

(311)

(457)

(1,845)

(4,905)

(6,750)

Total liabilities

(994)

(210)

(345)

(494)

(2,043)

(4,909)

(6,952)

Net assets/(liabilities)

4,112

896

937

1,029

6,974

(3,855)

3,119



 

Notes to the financial statements (continued)

for the year ended 31 March 2022

5. Segment information (continued)

(f) Balance sheet (continued)

(ii)     Central Activities and other comprises:

 

2022

 

2021

 

Assets

Liabilities

Net assets/

(liabilities)

 

Assets

Liabilities

Net assets/

(liabilities)

 

US$m

US$m

US$m

 

US$m

US$m

US$m

Central Activities

682

(155)

527

 

583

(245)

338

Investments in associates

-

-

-


54

-

54

Net debt1

199

(3,973)

(3,774)


297

(4,127)

(3,830)

Tax

83

(462)

(379)


120

(537)

(417)

 

964

(4,590)

(3,626)


1,054

(4,909)

(3,855)











1.   Total Net debt comprises Net debt included within Central Activities plus lease obligations, net of interest, included in operating segments of US$176m (2021: US$196m). We have updated our definition of Net debt to include lease obligations and Net debt for the year ended 31 March 2021 is restated accordingly (note 4).

 

(iii)    Capital employed

 


 

 

 

2021

 

 

(Restated)

 

2022

(Note 4)

 

US$m

US$m

North America

4,590

4,112

Latin America

1,104

896

UK and Ireland

950

937

EMEA/Asia Pacific

989

1,029

Total operating segments

7,633

6,974

Central Activities

527

392

Add: lease obligations in operating segments

177

198

Less: accrued interest on lease obligations in operating segments

(1)

(2)

Less: right-of-use assets

(153)

(172)

Less: non-controlling interests

(38)

(38)

Capital employed attributable to owners

8,145

7,352







The three-point average capital employed figure of US$7,774m (2021 restated: US$6,901m), used in our calculation of ROCE, is determined by calculating the arithmetic average of capital employed at 31 March 2022, 30 September 2021 and 31 March 2021.



 

Notes to the financial statements (continued)

for the year ended 31 March 2022

6. Information on business segments (including non-GAAP disclosures)

 

 

 

 

 

Business-to-Business

 

Consumer Services

 

Total business segments

Central

Activities1

 

Total

 continuing operations

 

Year ended 31 March 2022

 

 

US$m

US$m

US$m

US$m

US$m

 






 

 

 

 

Revenue from external customers



 

 

 

 

 

 

Ongoing activities



4,654

1,613

6,267

-

6,267

 

Exited business activities



21

-

21

-

21

 

Total



4,675

1,613

6,288

-

6,288

 

 





 


 

 

Reconciliation from Benchmark EBIT to profit before tax



 


 

 

Benchmark EBIT





 


 

 

Ongoing activities before transfer pricing and other adjustments



1,409

386

1,795

(155)

1,640

 

Transfer pricing and other allocation adjustments



9

(12)

(3)

3

-

 

Ongoing activities



1,418

374

1,792

(152)

1,640

 

Exited business activities



8

(3)

5

-

5

 

Total



1,426

371

1,797

(152)

1,645

 

Net interest expense included in Benchmark PBT (note 8(b))


(6)

(2)

(8)

(102)

(110)

 

Benchmark PBT



1,420

369

1,789

(254)

1,535

 

Exceptional items (note 7(a))



(74)

-

(74)

95

21

 

Amortisation of acquisition intangibles



(145)

(29)

(174)

-

(174)

 

Acquisition and disposal expenses



(34)

(13)

(47)

-

(47)

 

Adjustment to the fair value of contingent consideration



(26)

-

(26)

-

(26)

 

Non-benchmark share of post-tax loss of associates



-

(26)

(26)

(5)

(31)

 

Interest on uncertain tax provisions



-

-

-

1

1

 

Financing fair value remeasurements



-

-

-

168

168

 

Profit before tax



1,141

301

1,442

5

1,447

 

 

 

 


 

 

 



Business-to-Business

 

Consumer Services

 

Total business segments

Central

Activities

 

Total  continuing operations

Year ended 31 March 20212



US$m

US$m

US$m

US$m

US$m






 


 

Revenue from external customers





 


 

Ongoing activities



4,035

1,307

5,342

-

5,342

Exited business activities



30

-

30

-

30

Total



4,065

1,307

5,372

-

5,372






 


 

Reconciliation from Benchmark EBIT to profit/(loss) before tax



 


 

Benchmark EBIT

 

 



 


 

Ongoing activities



1,184

285

1,469

(90)

1,379

Exited business activities



9

(2)

7

-

7

Total



1,193

283

1,476

(90)

1,386

Net interest expense included in Benchmark PBT (note 8(b))

(8)

(2)

(10)

(111)

(121)

Benchmark PBT



1,185

281

1,466

(201)

1,265

Exceptional items (note 7(a))



35

-

35

-

35

Impairment of goodwill (note 7(a))



(53)

-

(53)

-

(53)

Amortisation of acquisition intangibles



(118)

(20)

(138)

-

(138)

Acquisition and disposal expenses



(40)

(1)

(41)

-

(41)

Adjustment to the fair value of contingent consideration



(1)

-

(1)

-

(1)

Non-benchmark share of post-tax (loss)/profit of associates



-

(3)

(3)

19

16

Interest on uncertain tax provisions



-

-

-

(11)

(11)

Financing fair value remeasurements



-

-

-

5

5

Profit/(loss) before tax



1,008

257

1,265

(188)

1,077












1.   The decrease in Central Activities Benchmark EBIT in the year ended 31 March 2022 is primarily attributable to increased employee share incentive plan and bonus costs.

2.   Revenue and Benchmark EBIT for the year ended 31 March 2021 have been re-presented for the reclassification to exited business activities of certain B2B businesses.

Additional information by business segment, including that on total and organic growth at constant exchange rates, is provided within pages 3 to 11 and within Appendix 3 on page 14.

 



 

Notes to the financial statements (continued)

for the year ended 31 March 2022

7. Exceptional items and other adjustments made to derive Benchmark PBT - continuing operations

(a) Net charge for Exceptional items and other adjustments made to derive Benchmark PBT

 

 

2022

2021

 

Notes

US$m

US$m

Exceptional items:


 

 

Loss on disposal of business

7(b), 13(a), 22

43

-

Net profit on disposal of associates

7(c)

(90)

(120)

Restructuring costs

7(d)

20

50

Impairment of intangible assets1

7(e)

-

27

Legal provisions movements1

7(f)

6

8

Net credit for Exceptional items

 

(21)

(35)


 

 


Other adjustments made to derive Benchmark PBT:

 

 


Amortisation of acquisition intangibles

 

174

138

Impairment of goodwill1

 

-

53

Acquisition and disposal expenses2

 

47

41

Adjustment to the fair value of contingent consideration1

 

26

1

Non-benchmark share of post-tax loss/(profit) of associates

 

31

(16)

Interest on uncertain tax provisions

 

(1)

11

Financing fair value remeasurements

 

(168)

(5)

Net charge for other adjustments made to derive Benchmark PBT

 

109

223

Net charge for Exceptional items and other adjustments made to derive Benchmark PBT

 

 

88

188


 

 


By income statement caption:

 

 


Labour costs

 

11

30

Amortisation and depreciation charges

 

174

138

Other operating charges

 

88

150

Loss on disposal of business

 

43

-

Net profit on disposal of associates

 

(90)

(120)

Within operating profit

 

226

198

Within share of post-tax loss/(profit) of associates

 

31

(16)

Within finance expense

 

(169)

6

Net charge for Exceptional items and other adjustments made to derive Benchmark PBT

 

 

88

188

1.     Included in other operating charges.

2.     Acquisition and disposal expenses represent professional fees and expenses associated with completed, ongoing and terminated acquisition and disposal processes, as well as the integration and separation costs associated with completed deals. Of the total, US$9m (2021: US$2m) is recorded within labour costs in the Group income statement, and US$38m (2021: US$39m) is included within other operating charges.

(b) Loss on disposal of business

During the year we have ceased the operations of a small UK subsidiary undertaking whose principal business activity was the provision and support of decision analytics software to corporate clients in Russia. As a result of recent geopolitical tensions we no longer continue to operate in the region, and consequently the related business and assets have been written off, resulting in a loss of US$43m.

(c) Net profit on disposal of associates

On 4 February 2022, Vector CM Holdings (Cayman) L.P., an associate undertaking, completed a merger with the CM Group involving its Cheetah Digital business. As a result of the merger, the Group no longer has significant influence over Vector and accordingly our interest in this company has been recognised as a trade investment from that date. We recognised a fair value gain on the associate disposal of US$95m and the promissory note and associated interest due to Experian of US$110m were also repaid.

We no longer have significant influence over our Russian associate United Credit Bureau, and consequently have recognised a disposal, writing off our investment, recording a loss of US$17m.



 

Notes to the financial statements (continued)

for the year ended 31 March 2022

7. Exceptional items and other adjustments made to derive Benchmark PBT - continuing operations (continued)

(c) Net profit on disposal of associates (continued)

In the year ended 31 March 2021, the Group disposed of its 18.6% interest in Finicity Corporation for US$127m recognising a gain on disposal of US$120m. During the year ended 31 March 2022 further consideration of US$12m was received in respect of earnout arrangements, the payout of which was not anticipated at 31 March 2021.

(d) Restructuring costs

Costs of US$20m have been recognised in the year associated with a strategic review and early planning for restructuring, and the refocussing of activities, in EMEA/Asia Pacific. Of the charge, US$2m was labour related, and US$18m is included within other operating charges in the Group income statement. The associated cash outflow was US$14m.

A charge of US$50m was incurred in the year ended 31 March 2021, in respect of a transformation programme principally in the UK and Ireland, with a related cash outflow of US$39m. Of the charge, US$28m related to redundancy costs, and US$22m related to other restructuring and consultancy costs included within other operating charges in the Group income statement.

(e) Impairment of intangible assets

During the year ended 31 March 2021 internally generated software assets with a net book value of US$27m were identified as requiring impairment due to the upgrade of our technology estate.

(f) Legal provisions movements

During the current and prior year there was an increase in provisions in respect of a number of historical legal claims, some of which are in the process of being settled.

 



 

Notes to the financial statements (continued)

for the year ended 31 March 2022

8. Net finance costs

(a) Net finance costs included in profit before tax

 



2022

2021

 


US$m

US$m

 

Interest income:

 


 

Bank deposits, short-term investments and loan notes

(14)

(11)

 

Interest on pension plan assets

(1)

(1)

 

Interest income

(15)

(12)

 

Net non-benchmark finance income1

(169)

-

 

Finance income

(184)

(12)

 

 

 

 


 

Finance expense:

 


 

Interest expense

125

133

 

Net non-benchmark finance expense1

-

6

 

Finance expense

125

139

 

Net finance (income)/costs included in profit before tax

(59)

127

 







1.     Net non-benchmark finance income and expense comprises financing fair value remeasurements and interest on uncertain tax provisions.

(b) Net interest expense included in Benchmark PBT

 


 


2022

2021


US$m

US$m

Interest income

(15)

(12)

Interest expense

125

133

Net interest expense included in Benchmark PBT

110

121







9. Tax - ongoing activities

(a) Tax charge and effective rate of tax

 

2022

2021

 

US$m

US$m

Tax charge1

296

275

Profit before tax

1,447

1,077

Effective rate of tax based on profit before tax

20.5%

25.5%

1.     The tax charge comprises a current tax charge of US$314m (2021: US$195m) and a deferred tax credit of US$18m (2021: charge of US$80m).

In the normal course of business, the Group has a number of open tax returns with various tax authorities with whom it is in active dialogue. At 31 March 2022, the Group held current provisions of US$293m (2021: US$350m) in respect of uncertain tax positions.

During FY22, Experian was in discussions with the US Internal Revenue Service and Her Majesty's Revenue and Customs to seek clarity on Experian's transfer pricing and financing related issues. The net decrease in recognised provisions during the year was driven by agreement of open tax issues in North America and adjustments to our provisions on the utilisation of historical UK tax losses.

Liabilities relating to these open and judgmental matters are based on an assessment as to whether additional taxes will be due, after taking into account external advice where appropriate. The resolution of these tax matters may take many years. While the timing of developments in resolving these matters is inherently uncertain, the Group does not expect to materially increase its uncertain tax provisions in the next 12 months, however if an opportunity arose to resolve the matters for less than the amounts provided, a settlement may be made with a corresponding reduction in the provision.

(b) Reconciliation of the tax charge to the Benchmark tax charge


2022

2021


US$m

US$m

Tax charge

296

275

Tax relief on Exceptional items and other adjustments made to derive Benchmark PBT

98

53

Benchmark tax charge

394

328


 


Benchmark PBT

1,535

1,265

Benchmark tax rate

25.7%

25.9%



 

Notes to the financial statements (continued)

for the year ended 31 March 2022

9. Tax - ongoing activities (continued)

(c) Tax recognised in other comprehensive income and directly in equity

Other comprehensive income of US$155m (2021: US$84m) is stated after a deferred tax charge of US$22m (2021: US$1m), relating to remeasurement gains on post-employment benefit assets and obligations.

A tax credit relating to employee share incentive plans of US$nil (2021: US$2m) is recognised in equity and reported as appropriate within transactions with owners. This amount comprised a current tax charge of US$1m (2021: credit of US$5m) and a deferred tax credit of US$1m (2021: charge of US$3m).

10. Discontinued operations

There have been no material divestments of subsidiaries during the year ended 31 March 2022. The profit from discontinued operations of US$16m comprises the release of historical tax provisions relating to the disposal of the Group's comparison shopping and lead generation businesses in FY13, with the likelihood of any residual tax liability now considered remote, plus the expected net benefit on conclusion of an enquiry into our email/cross channel marketing business (CCM) which was disposed of in FY18.

The cash inflow from operating activities of US$1m (2021: US$nil) relates to the disposal of CCM.

11. Earnings per share disclosures

(a) Earnings per share (EPS)

 

 

 

 

 

 

Basic

 

Diluted

 

 

2022

2021

 

2022

2021

 

 

 

US cents

US cents

 

US cents

US cents

 

Continuing and discontinued operations

 

127.5

88.2

 

126.5

87.6

 

Less: profit from discontinued operations

 

(1.8)

-

 

(1.7)

-

 

Continuing operations

 

125.7

88.2

 

124.8

87.6

 

Add: Exceptional items and other adjustments made to derive Benchmark PBT, net of related tax

 

(1.2)

14.9

 

(1.2)

14.7

 

Benchmark EPS (non-GAAP measure)

 

124.5

103.1

 

123.6

102.3

 

 






 

(b) Analysis of earnings

(i) Attributable to owners of Experian plc

 

 

 

 



 

 

 

 

 

 

2022

2021

 

 

 

 

 

 

US$m

US$m

 

Continuing and discontinued operations

 

 

 

 

1,165

803

 

Less: profit from discontinued operations

 

 

 

 

(16)

-

 

Continuing operations

 

 

 

 

1,149

803

 

Add: Exceptional items and other adjustments made to derive Benchmark PBT, net of related tax

 

 

(11)

135

 

Benchmark earnings attributable to owners of Experian plc (non-GAAP measure)

 

1,138

938

 

(ii) Attributable to non-controlling interests

 

 

 

 

 


 

 

 

 

 

 

2022

2021

 

 

 

 

 

 

US$m

US$m

 

Profit/(loss) for the financial year attributable to non-controlling interests

 

 

2

(1)

 

Add: amortisation of acquisition intangibles attributable to non-controlling interests, net of related tax

1

-

 

Benchmark earnings attributable to non-controlling interests (non-GAAP measure)

 

3

(1)

 

(c) Reconciliation of Total Benchmark earnings to profit for the financial year

 

 


 

 

 

 

 

 

2022

2021

 

 

 

 

 

 

US$m

US$m

 

Total Benchmark earnings (non-GAAP measure)

 

 

 

 

1,141

937

 

Profit from discontinued operations

 

 

 

 

16

-

 

Loss from Exceptional items and other adjustments made to derive Benchmark PBT, net of related tax

 

11

(135)

 

Less: amortisation of acquisition intangibles attributable to non-controlling interests, net of related tax

 

(1)

-

 

Profit for the financial year

 

 

 

 

1,167

802

 

 

 

 

 

 

 


 

(d) Weighted average number of ordinary shares

 

 

 

 

 


 

 

 

 

 

 

2022

2021

 

 

 

 

 

 

million

million

 

Weighted average number of ordinary shares

 

 

 

 

914

910

 

Add: dilutive effect of share incentive awards, options and share purchases

 

 

7

7

 

Diluted weighted average number of ordinary shares

 

 

 

 

921

917

 












 

Notes to the financial statements (continued)

for the year ended 31 March 2022

12. Dividends on ordinary shares

(a) Dividend information


2022


2021


US cents

per share

US$m


US cents

per share

US$m

Amounts recognised and paid during the financial year:






First interim - paid in February 2022 (2021: February 2021)

16.00

147

 

14.50

133

Second interim - paid in July 2021 (2021: July 2020)

32.50

297

 

32.50

294

Dividends paid on ordinary shares

48.50

444

 

47.00

427

 

 

 

 



Full-year dividend for the financial year

51.75

474

 

47.00

430

A second interim dividend in respect of the year ended 31 March 2022 of 35.75 US cents per ordinary share will be paid on 22 July 2022, to shareholders on the register at the close of business on 24 June 2022. This dividend is not included as a liability in these financial statements. This second interim dividend and the first interim dividend paid in February 2022 comprise the full-year dividend for the financial year of 51.75 US cents per ordinary share. Further administrative information on dividends is given in the Shareholder and corporate information section. Dividend amounts are quoted gross.

In the year ended 31 March 2022, the employee trusts waived their entitlements to dividends of US$4m (2021: US$2m). There is no entitlement to dividends in respect of own shares held as treasury shares.

(b) Income Access Share (IAS) arrangements

As its ordinary shares are listed on the London Stock Exchange, the Company has a large number of UK resident shareholders. In order that shareholders may receive Experian dividends from a UK source, should they wish, the IAS arrangements have been put in place. The purpose of the IAS arrangements is to preserve the tax treatment of dividends paid to Experian shareholders in the UK, in respect of dividends paid by the Company. Shareholders who elect, or are deemed to elect, to receive their dividends via the IAS arrangements will receive their dividends from a UK source (rather than directly from the Company) for UK tax purposes.

Shareholders who hold 50,000 or fewer Experian plc shares on the first dividend record date after they become shareholders, unless they elect otherwise, will be deemed to have elected to receive their dividends under the IAS arrangements.

Shareholders who hold more than 50,000 shares and who wish to receive their dividends from a UK source must make an election to receive dividends via the IAS arrangements. All elections remain in force indefinitely unless revoked.

Unless shareholders have made an election to receive dividends via the IAS arrangements, or are deemed to have made such an election, dividends will be received from an Irish source and will be taxed accordingly. The final date for submission of elections to receive UK sourced dividends via the IAS arrangements is 24 June 2022. The Company offers a Dividend Reinvestment Plan (DRIP) to shareholders who receive their dividends under the IAS arrangements, and the final date for submission of DRIP elections is also 24 June 2022.



 

Notes to the financial statements (continued)

for the year ended 31 March 2022

13. Goodwill

(a) Movements in goodwill

 

2022

2021

 

US$m

US$m

Cost

 


At 1 April

5,314

4,543

Differences on exchange

40

114

Additions through business combinations (note 21)

469

657

Disposal of business (note 22)

(33)

-

At 31 March

5,790

5,314

Accumulated impairment

 


At 1 April

53

-

Impairment charge

-

53

At 31 March

53

53

Net book amount at 1 April

5,261

4,543

Net book amount at 31 March

5,737

5,261

(b) Goodwill by cash-generating unit (CGU)


 

 

2022

2021

 

 

US$m

US$m

North America

3,546

3,133

Latin America

760

611

UK and Ireland

694

718

EMEA

649

711

Asia Pacific

88

88

At 31 March

5,737

5,261









(c) Key assumptions for value-in-use calculations by CGU

 

2022



2021

 

 

 

Discount rate

Long-term growth rate



Discount rate

Long-term growth rate


% p.a.

% p.a.

 

 

% p.a.

% p.a.

North America

9.3

2.3

 

 

9.1

2.3

Latin America

13.5

4.7



12.8

4.7

UK and Ireland

9.1

2.3



8.9

2.3

EMEA

10.6

3.9



10.4

3.9

Asia Pacific

8.6

5.3



9.4

5.3












As indicated in note 5(a) of the Group's statutory financial statements for the year ended 31 March 2021, value-in-use calculations are underpinned by financial budgets looking forward up to five years, which continue to reflect our current assessment of the impact of climate change and associated commitments the Group has made. Management's key assumptions in setting the financial budgets for the initial five-year period were as follows:

·        forecast revenue growth rates were based on past experience, adjusted for the strategic opportunities within each CGU; the forecasts typically used average nominal growth rates of up to 14%;

·        Benchmark EBIT was forecast based on historic margins. These were expected to improve modestly throughout the period in the mature CGUs, and improve annually by a low- to mid-single-digit amount in EMEA and Asia Pacific; and

·        forecast Benchmark operating cash flow conversion rates were based on historical experience and performance expectations with rates of up to 90% unless a Benchmark EBIT loss was forecast. In these circumstances, cash outflows were forecast to exceed the Benchmark EBIT loss.

Further details of the principles used in determining the basis of allocation by CGU and annual impairment testing are given in note 5(a) of the Group's statutory financial statements for the year ended 31 March 2021.



 

Notes to the financial statements (continued)

for the year ended 31 March 2022

13. Goodwill (continued)

(d) Results of annual impairment review as at 31 March 2022

The review for the EMEA CGU indicated that the recoverable amount exceeded the carrying value by US$201m and that any decline in estimated value-in-use in excess of that amount would result in the recognition of an impairment charge. The sensitivities, which result in the recoverable amount being equal to the carrying value, can be summarised as follows:

·        an absolute increase of 1.4 percentage points in the discount rate, from 10.6% to 12.0%; or

·        an absolute reduction of 1.8 percentage points in the long-term growth rate, from growth of 3.9% to growth of 2.1%; or

·        a reduction of 4.7 percentage points in the forecast terminal profit margin, from 22.9% to 18.2%. A reduction in the annual margin improvement of approximately 0.9 percentage points per year over the five-year forecast period would also reduce the recoverable amount to the carrying value.

The review for the Asia Pacific CGU indicated that the recoverable amount exceeded the carrying value by US$154m and that any decline in estimated value-in-use in excess of that amount would result in the recognition of an impairment charge. The sensitivities, which result in the recoverable amount being equal to the carrying value, can be summarised as follows:

·        an absolute increase of 2.4 percentage points in the discount rate, from 8.6% to 11.0%; or

·        an absolute reduction of 2.9 percentage points in the long-term growth rate, from growth of 5.3% to growth of 2.4%; or

·        a reduction of 3.5 percentage points in the forecast terminal profit margin, from 8.9% to 5.4%. A reduction in the annual margin improvement of approximately 0.7 percentage points per year over the five-year forecast period would also reduce the recoverable amount to the carrying value.

The recoverable amount of all other CGUs exceeded their carrying value, on the basis of the assumptions set out in note 13(c) and any reasonably possible changes thereof.

14. Capital expenditure, disposals and capital commitments

(a) Additions

 

2022

2021

 

US$m

US$m

Capital expenditure

508

422

Right-of-use-assets

39

57


547

479

b) Disposal of other intangible assets and property, plant and equipment

The book value of other intangible fixed assets and purchased property, plant and equipment disposed of in the year was US$19m (2021: US$4m) and the amount realised was US$23m (2021: US$1m). Right-of-use assets with a book value of US$5m (2021: US$24m) were also disposed of, largely as a result of early termination and restructuring of leases The disposal of right-of-use assets in the year ended 31 March 2021 primarily related to sublease arrangements.

(c) Capital commitments

 

2022

2021

 

US$m

US$m

Capital expenditure for which contracts have been placed:

 


 

Other intangible assets

64

6

Property, plant and equipment

17

10


81

16







Capital commitments at 31 March 2022 included US$2m (2021: US$1m) in respect of right-of-use assets. Capital commitments at 31 March 2022 included commitments of US$56m not expected to be incurred before 31 March 2023. All commitments at 31 March 2021 were expected to be incurred before 31 March 2022. There were no material leases committed to that had not yet started at 31 March 2022 or 31 March 2021.



 

Notes to the financial statements (continued)

for the year ended 31 March 2022

15. Post-employment benefits - IAS 19 information

(a) Balance sheet assets/(obligations)

 


 


2022

2021

 

 

US$m

US$m

 

Retirement benefit assets/(obligations) - funded defined benefit plans:

 


 

Fair value of funded plans' assets

1,214

1,274

 

Present value of funded plans' obligations

(998)

(1,172)

 

Assets in the Group balance sheet for funded defined benefit pensions

216

102

 


 


 

Obligations for unfunded post-employment benefits:



 

Present value of defined benefit pensions - unfunded plans

(48)

(51)

 

Present value of post-employment medical benefits

(4)

(4)

 

Liabilities in the Group balance sheet

(52)

(55)

 

Net post-employment benefit assets

164

47

 

 

Pension assets are deemed to be recoverable and there are no adjustments in respect of minimum funding requirements as, under the rules of the UK Experian Pension Scheme, future economic benefits are available to the Group in the form of reductions in future contributions or refunds of surplus.

 

 



 

(b) Movements in net post-employment benefit assets recognised in the Group balance sheet


 


 


2022

2021

 

 

US$m

US$m

 

At 1 April

47

35

 

Differences on exchange

(7)

5

 

Charge to the Group income statement

(7)

(5)

 

Remeasurement gains recognised within Other comprehensive income

121

2

 

Contributions paid by the Group and employees

10

10

 

At 31 March

164

47

 










 

There was a small funding deficit at the date of the 2016 full actuarial valuation of the Experian Pension Scheme. To correct the shortfall the employer agreed to pay additional contributions of US$4m per annum over five years from 1 April 2017. The employer agreed to continue to pay these contributions notwithstanding the small surplus recognised following the 2019 full actuarial valuation, and the final additional contribution was paid in the year.

On 1 September 2021, the outcome of a consultation with active members of the Experian Pension Scheme, on the proposal to cease future accrual of new benefits, was determined. The plan was closed to the future accrual of new benefits from 1 April 2022, and active member benefits were crystallised as deferred pensions from that date. No material impact on the Group's net post-employment benefit assets resulted from this change. All UK employees were offered membership of the Group's UK defined contribution plan from April 2022.

As a result of the closure of the Experian Pension Scheme to future accrual, the employer has agreed to pay an additional voluntary contribution equal to 20% of the base salary of participating employees. This payment will be paid either to the Experian Pension Scheme or to the Group's UK defined contribution plan, at the employees' option, and US$1m is currently expected to be paid to the Experian Pension Scheme during the year ending 31 March 2023.

(c) Income statement charge

 



2022

2021

 

US$m

US$m

By nature of expense:

 


Current service cost

5

4

Administration expenses

3

2

Charge within labour costs and operating profit

8

6

Interest income

(1)

(1)

Total net charge to the Group income statement

7

5

 

The income statement charge and the remeasurement recognised in the Statement of comprehensive income relate to defined benefit pension plans.

 

 





 



 

Notes to the financial statements (continued)

for the year ended 31 March 2022

15. Post-employment benefits - IAS 19 information (continued)

 

(d) Financial actuarial assumptions

 



2022

2021


% p.a.

% p.a.

Discount rate

2.8

2.0

Inflation rate - based on the UK Retail Prices Index (the RPI)

3.8

3.3

Inflation rate - based on the UK Consumer Prices Index (the CPI)

3.3

2.8

Increase in salaries

n/a

2.8

Increase for pensions in payment - element based on the RPI (where cap is 5%)

3.4

3.0

Increase for pensions in payment - element based on the CPI (where cap is 2.5%)

2.0

1.9

Increase for pensions in payment - element based on the CPI (where cap is 3%)

2.3

2.2

Increase for pensions in deferment

3.3

2.8

Inflation in medical costs

6.8

6.3


The principal financial assumption is the real discount rate, which is the excess of the discount rate over the rate of inflation. The discount rate is based on the market yields on high-quality corporate bonds of a currency and term appropriate to the defined benefit obligations. In the case of the Experian Pension Scheme, the obligations are in pounds sterling and have a maturity on average of 16 years. If the real discount rate increased/decreased by 0.1%, the defined benefit obligations at 31 March 2022 would decrease/increase by approximately US$16m and the fair value of plan assets would decrease/increase by approximately US$18m. There would be no impact on any future annual current service cost, due to the closure of the plan to accrual from 1 April 2022.

The pension increase assumption is affected by the way that future volatility of the inflation assumption is modelled. Following guidance from our actuarial advisors, this model has been revised in the year ended 31 March 2022 to be consistent with the model used by the Experian Pension Scheme Trustee for funding purposes. The change in estimation approach reduced retirement benefit obligations at 31 March 2022 by approximately US$3m.

The rates of increase for pensions in payment reflect the separate arrangements applying to different groups of Experian's pensioners. If the inflation rate underlying the pension increases (both in payment and in deferment) increased/decreased by 0.1%, the defined benefit obligations at 31 March 2022 would increase/decrease by approximately US$13m.

The other methods and assumptions used are consistent with those used in the prior year, with the exception of the assumption for increase in salaries. The Scheme was closed to the future accrual of new benefits from 1 April 2022 and consequently no further assumption is required for future pensionable salary growth.

The mortality and other demographic assumptions used at 31 March 2022 remain broadly unchanged from those utilised at 31 March 2021 and disclosed in the Group's statutory financial statements for the year then ended. While COVID-19 has had an impact on mortality in FY22, the impact on future mortality trends is currently unknown and consequently no adjustment has been made to mortality assumptions in this regard.



 

Notes to the financial statements (continued)

for the year ended 31 March 2022

16. Notes to the Group cash flow statement

(a) Cash generated from operations

 

 



 

 

 

2022


2021

 



US$m


US$m

 

Profit before tax

 

1,447


1,077

 

Share of post-tax loss/(profit) of associates

 

28


(21)

 

Net finance (income)/costs

 

(59)


127

 

Operating profit

 

1,416


1,183

 

(Profit)/loss on disposal of property, plant and equipment

 

(4)


3

 

Loss on disposal of business

 

43


-

 

Net profit on disposal of associates

 

(90)


(120)

 

Impairment of goodwill

 

 

-


53

 

Impairment of other intangible assets

 

-


33

 

Impairment of property, plant and equipment

 

-


4

 

Amortisation and depreciation1

 

658


591

 

Charge in respect of share incentive plans

 

149


106

 

Decrease/(increase) in working capital (note 16(b))

 

58


(13)

 

Acquisition expenses - difference between income statement charge and amount paid

 

7


(9)

 

Adjustment to the fair value of contingent consideration

 

26


1

 

Movement in Exceptional and other non-benchmark items included in working capital

 

7


(10)

 

Cash generated from operations

 

2,270


1,822



 

 



 

1.     Amortisation and depreciation includes amortisation of acquisition intangibles of US$174m (2021: US$138m) which is excluded from Benchmark PBT.

 

 

 

 



 

(b) Decrease/(increase) in working capital

 

 



 


 

2022


2021

 


 

US$m


US$m

 

Trade and other receivables

 

(143)


(31)

 

Trade and other payables

 

201


18

 

Decrease/(increase) in working capital

 

58


(13)

 

 

 

 

 

 



 

 

 

 



 

(c) Purchase of other intangible assets

 

 



 

 

 

2022


2021

 

 

 

US$m


US$m

 

Databases

 

180


147

 

Internally generated software

 

236


197

 

Internal use software

 

29


30

 

Purchase of other intangible assets

 

445


374

 

 

 

 



 

 

 

 



 

(d) Cash flows on acquisitions (non-GAAP measure)

 

 



 



2022


2021

 



US$m


US$m

 

Purchase of subsidiaries (note 21(a))


706


568

 

Less: net cash acquired with subsidiaries


(17)


(47)

 

Settlement of deferred and contingent consideration


47


5

 

As reported in the Group cash flow statement


736


526

 

Acquisition expenses paid


40


47

 

Settlement of put options held over shares in subsidiaries


4


-

 

Transactions in respect of non-controlling interests


1


10

 

Cash outflow for acquisitions (non-GAAP measure)

 

781


583

 
















 



 

Notes to the financial statements (continued)

for the year ended 31 March 2022

16. Notes to the Group cash flow statement (continued)

 

(e) Cash outflow/(inflow) in respect of net share purchases (non-GAAP measure)

 

 

 

2022

2021

 

 

 

US$m

US$m

 

Issue of ordinary shares


(24)

(19)

 

Purchase of shares by employee trusts

 

61

-

 

Purchase of shares held as treasury shares

 

109

-

 

Purchase of shares for Co-Investment Plan delivery

 

3

-

 

Cash outflow/(inflow) in respect of net share purchases (non-GAAP measure)

 

149

(19)

 

 

 

 


 

As reported in the Group cash flow statement:

 

 


 

Cash inflow in respect of shares issued

 

(24)

(19)

 

Cash outflow in respect of share purchases

 

173

-

 

Cash outflow/(inflow) in respect of net share purchases (non-GAAP measure)

 

149

(19)

 

 

 

 

 

 

 

 

 


 

 

(f) Analysis of cash and cash equivalents

 


 

 

 

 

2022

2021

 

 

 

 

US$m

US$m

 

 

Cash and cash equivalents in the Group balance sheet

 

179

180

 

 

Bank overdrafts

 

(3)

(10)

 

 

Cash and cash equivalents in the Group cash flow statement

 

176

170

 
















(g) Reconciliation of Cash generated from operations to Benchmark operating cash flow (non-GAAP measure)

 


2022

2021

 


US$m

US$m

Cash generated from operations (note 16(a))


2,270

1,822

Purchase of other intangible assets (note 16(c))


(445)

(374)

Purchase of property, plant and equipment


(63)

(48)

Sale of property, plant and equipment


23

1

Principal lease payments


(57)

(56)

Acquisition expenses paid


40

47

Dividends received from associates


13

17

Cash flows in respect of Exceptional and other non-benchmark items


19

67

Benchmark operating cash flow (non-GAAP measure)


1,800

1,476






Cash flow conversion for the year ended 31 March 2022 was 109% (2021: 106%). Benchmark free cash flow for the year ended 31 March 2022 was US$1,311m (2021: US$1,124m).



 

Notes to the financial statements (continued)

for the year ended 31 March 2022

17. Net debt (non-GAAP measure)

(a) Analysis by nature

 


 

 


 2021

 

 

 

(Restated)

 

 

2022

(Note 4)

 

 

US$m

US$m

 

Cash and cash equivalents (net of overdrafts)

176

170

 

Debt due within one year - commercial paper

-

(25)

 

Debt due within one year - bonds and notes

-

(554)

 

Debt due within one year - lease obligations

(53)

(56)

 

Debt due after more than one year - bonds and notes

(3,903)

(3,526)

 

Debt due after more than one year - bank loans

(2)

(2)

 

Debt due after more than one year - lease obligations

(126)

(144)

 

Derivatives hedging loans and borrowings

(42)

111

 

 

(3,950)

(4,026)

 


 


 

 


 

(b) Analysis by balance sheet caption

 


 

 

 

 2021

 

 

 

(Restated)

 

 

2022

(Note 4)

 

 

US$m

US$m

 

Cash and cash equivalents

179

180

 

Current borrowings

(57)

(655)

 

Non-current borrowings

(4,039)

(3,682)

 

Borrowings

(4,096)

(4,337)

 

Total of Group balance sheet line items

(3,917)

(4,157)

 

Accrued interest reported within borrowings excluded from Net debt

9

20

 

Derivatives reported within Other financial assets

20

117

 

Derivatives reported within Other financial liabilities

(62)

(6)

 

 

(3,950)

(4,026)

 









At 31 March 2022, the fair value of borrowings was US$4,089 (2021: US$4,476m) and includes lease obligations of US$180m (2021: US$202m) recognised in respect of right-of-use assets.

(c) Analysis of movements in Net debt

 

1 April


Movements in the year ended 31 March 2022

31 March

 

 

2021

Net

cash flow

 Non-cash lease obligation

movements

Principal lease payments

Net share purchases

Additions
 through business combinations

Fair

value

gains/

(losses)

Exchange

and other movements

2022

 

US$m

US$m

US$m

US$m

US$m

US$m

US$m

US$m

US$m

 

Derivatives hedging loans and borrowings

111

16

-

-

-

-

(65)

(104)

(42)

 

Borrowings1,2

(4,337)

80

(35)

-

-

(2)

44

154

(4,096)

 

Liabilities from financing activities

(4,226)

96

(35)

-

-

(2)

(21)

50

(4,138)

 

Accrued interest

20

(11)

-

-

-

-

-

-

9

 

Cash and cash equivalents

180

86

-

57

(149)

-

-

5

179

 

Net debt1

(4,026)

171

(35)

57

(149)

(2)

(21)

55

(3,950)

 


















1.   Following the implementation of IFRS 16, we have reviewed emerging practice and have updated our definition of Net debt to include lease obligations. The opening position has been revised to include lease liabilities, net of accrued interest of US$200m.

2.   Non-cash lease obligation movements include additions of US$39m and disposals of US$4m.

.



 

Notes to the financial statements (continued)

for the year ended 31 March 2022

18. Undrawn committed bank borrowing facilities

 

2022

2021


US$m

US$m

Facilities expiring in:



Less than one year

-

 

-

One to two years

400

400

Two to three years

250

300

Three to four years

1,950

-

Four to five years

 

-

1,950

 

2,600

2,650

These facilities are at variable interest rates and are in place for general corporate purposes, including the financing of acquisitions and the refinancing of other borrowings.

19. Called-up share capital and share premium account

 

 

Number of shares

 

Called-up share

capital

Share

premium

account


million

 

US$m

US$m

At 1 April 2020

968.7


96

1,574

Shares issued under employee share incentive plans

0.9


-

19

Premium on treasury shares delivered as consideration

-


-

163

At 31 March 2021

969.6


96

1,756

Shares issued under employee share incentive plans

1.0


-

24

At 31 March 2022

970.6

 

96

1,780

 

20. Own shares held

Number of shares

 

Cost

of shares       


million

 

US$m

At 1 April 2020

67.8


1,183

Shares delivered as consideration for acquisition

(7.2)


(90)

Other vesting of awards and exercises of share options

(4.6)


(87)

At 31 March 2021

56.0

 


1,006

Purchase of shares held as treasury shares

2.7


111

Purchase of shares by employee trusts

1.7

 


61

Other vesting of awards and exercises of share options

(3.7)


(49)

At 31 March 2022

56.7

 

1,129

Own shares held at 31 March 2022 included 48.5 million shares (2021: 52.3 million) held as treasury shares and 8.2 million (2021: 3.7 million) shares held by employee trusts.

During the year ended 31 March 2022, 6.0 million shares held as treasury shares were transferred to an employee trust.

The total cost of own shares held at 31 March 2022 of US$1,129m (2021: US$1,006m) is deducted from Other reserves in the Group balance sheet.



 

Notes to the financial statements (continued)

for the year ended 31 March 2022

21. Acquisitions

(a) Acquisitions in the year

The Group made six acquisitions during the year ended 31 March 2022, including Gabi Personal Insurance Agency, Inc. (Gabi) in the USA on 21 October 2021 for US$322m. This wholly owned digital insurance agency allows us to expand our presence in the auto and home insurance vertical. We also acquired the trade and assets of Tax Credit Co., LLC (TCC) in the USA on 13 April 2021, for a cash consideration of US$252m and contingent consideration of up to US$110m, determined by revenue and profit performance. This acquisition augments our expansion into income and employment verification services and the release of our new suite of real-time products, Experian Verify.

In total provisional goodwill of US$469m was recognised based on the fair value of the net assets acquired of US$305m.

Net assets acquired, goodwill and acquisition consideration are analysed below.

 

Gabi

TCC

Other

Total


US$m

US$m

US$m

US$m

Intangible assets:





Customer and other relationships

87

75

45

207

Software development

 

53

31

21

105

Marketing-related acquisition intangibles

1

1

7

9

Other non-acquisition intangibles

-

-

(6)

(6)

Intangible assets

141

107

67

315

Property, plant and equipment

-