Experian Executive Insights: Brazil, The Split

On Thursday, Experian PLC (LSE:EXPN.L) reported its fourth quarter earnings and discussed the following topics in its earnings conference call. Take a look.


Robert Plant – JPMorgan Cazenove: Don, could you talk about what’s happening in Brazil in terms of the move towards positive credit checking and what the banks were doing; it’s a year of transition, and the implications for that in terms of the put and call on this larger option?

Don Robert – CEO: Well, really no movement at all on positive data since the last time we updated the market. We had expected a lot of the final rules to be written in, in place by the end of the calendar year, but that hasn’t happened yet, and this has been a long five-year journey toward positive data in Brazil. I don’t see any impact on the put and call. We’ve always said that our view of positive data is simply that it should help sustain this strong rate of organic growth in our Brazilian business, but no direct impact on the put call. Andy?

The Split

Andy Chu – Deutsche Bank: Yeah, three questions if I may. Firstly, in terms of the split, and I wondered if you might be able to give us a flavor of over and above financial services which is now 32% of your revenues. Where are the next chunks please? I guess it’s telcos, utilities; could you help us on that front please?

Don Robert – CEO: Telco, utilities, automotive, government, and retail, those would be the big five I guess.

Andy Chu – Deutsche Bank: Are you able to sort of give us a flavor of how large telcos, utilities, is it 20% is the next largest chunk or…?

Don Robert – CEO: We do. We break that down often, and we show our revenue pie charts by segment, by geography. Peg, if you want to runs us through that Peg?

Peg Smith – IR: Sure. The second largest segment for us is retail. That’s in the range of 15%. We’ll put the actual pie chart up on the website for you to reference. We have a very large chunk though – was direct-to-consumer because of the size and scale of the U.S. and U.K. businesses. And then smaller segments; telco and utilities together are just under 4% – in the range of 4% of global sales. They get very small once you get below those three big segments.

Andy Chu – Deutsche Bank: And my second question was just on your global growth initiatives which have had tremendous impact; 4% organic growth this year. What can we expect for the initiatives impact into full year ’13, please?

Don Robert – CEO: I think we’d be happy with similar performance.

Peg Smith – IR: Yeah. You would expect in the range of another 4% incremental, given the velocity that’s beginning to build up in those programs. We would be disappointed if it’s not another 4% contribution to growth.

Andy Chu – Deutsche Bank: And then my last question was just around (indiscernible) tax authorities looking at sort of deduction of goodwill which is being ongoing. I just wondered if there was any uptake timeline. Clearly, you don’t believe there is any impact to numbers as a contingent liability, but can we hear about any further progress, please?

Don Robert – CEO: We are on top of it, but we’re pretty relaxed about it to the point where we don’t see any liability from that. This deductibility of goodwill is something that’s been done for ages in Brazil. It was part of the tax code. Other cases like ours have been successfully challenged recently. So, we don’t expect any negative impact and it could take years to resolve.