Experian a portfolio of opportunities June 2006 This presentation - - PDF document

Experian – a portfolio of opportunities June 2006

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Certain statements made in this presentation 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. This presentation is not an offer of securities for sale in any jurisdiction. Any shares to be issued in Experian have not been and will not be registered under the US Securities Act of 1933 (the “Securities Act”) and may not be offered or sold within the United States absent registration under the Securities Act or an exemption from registration. No public offering of such shares will be made in the United States.

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Experian - contents

• Overview
• Growth drivers in the UK
• International opportunities
• Experian North America
• Experian Interactive
• Appendix

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Experian

Experian is a global leader in providing information solutions to

• rganisations and consumers

We help organisations find, develop and manage profitable customer relationships; with information, decision-making solutions and processing services We empower consumers to understand, manage and protect their personal information and assets

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Experian – helping organisations

Enables m ajor banks to reduce bad debt losses Helps retailers to grow custom er loyalty and cross-sell new products Prevents fraud for

• nline

retailers

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Experian – helping consumers

Enabled 4 4 m illion US consum ers to refinance their m ortgage Helps a m obile phone com pany to

• ffer the right

services to its 1 3 m users Told over 8 m consum ers by text and e-m ail about changes to their credit report

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Experian - what we do

I NFORMATI ON

Credit Marketing

300m plus consumers Consumer credit

• c. 25m

businesses Business credit

• c. 500m

vehicles Vehicle histories

• c. 30m

policies Insurance databases

• c. 105m US

households Catalogue purchasing habits

• c. 120m

households Consumer marketing

I nform ation is the foundation of our business

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Experian - what we do

I NFORMATI ON

Credit Marketing

SOLUTI ONS

Strategy Manager Scoring and decisions Hunter / Detect Fraud prevention Transact / Autoscore / GEMS Application and account processing Truvue Customer data integration Mosaic Classifying consumers and businesses Business Strategies Econom ic analysis and forecasting

Solutions add value to the inform ation

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Credit 4 7 % Marketing 2 5 %

Outsourcing 8 %

North Am erica 5 8 % I nternational 4 2 %

Experian – balanced portfolio

I nform ation 4 0 % Solutions 3 2 %

Outsourcing 8 %

Sales – 12 months to 31 March 2006 Continuing activities

I nteractive 2 0 % I nteractive 2 0 %

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Experian – how we are paid

Outsourcing

Cost-plus long-term contracts

Solutions

Value-based long-term contacts

I nform ation

Volume-based contracts

I nteractive

Subscriptions; pay-per-lead

11 Financial services 55% Direct-to- consumer 12% Telecom/ utilities/ insurance 7% Other 6% Government 3% Automotive 3%

Experian – broad offering

• Over 50,000 clients in more than

60 countries

• Top 10 clients account for about

25% of sales

• At least 85% of top 50 clients

bought from Experian for over five years

Year to March 2 0 0 6

% of sales by vertical m arket

Clients include:

• AOL Time Warner
• BNP Paribas
• Barclays
• Citigroup
• Ford
• HBOS
• MBNA
• McDonald’s
• Microsoft
• Morgan Stanley
• Orange
• Société Générale

Retail/ home shopping 11% Publishing/ media 3% 12

Experian – competitive strength

All figures are for last full year of actuals Number on top of bar represents prospective PE rating Exchange rate £1: $1.79

Global sales revenue $ m

Experian D&B Equifax Acxiom Harte-Hanks Fair, Isaac

North America I nternational Source: Company accounts I/ B/ E/ S estimates

Mar 06 Dec 05 Dec 05 Mar 06 Sep 05 1 9 x 2 0 x 2 8 x 1 6 x $ 3 .1 bn

No single com petitor offers as m any products and solutions in as m any countries

Dec 05 2 0 x

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Broad portfolio – cross-selling opportunities

• HSBC already a major global client for

Experian

• Recently signed global multi-million pound,

multi-year deal for Strategy Management software, initially in 22 countries

• Experian will enable up to 50bn customer

decisions annually

• Contract won due to

– High quality product – Global reach of Experian – Strength of existing relationship with Experian

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EBI T £ m 2002 2003 2004 2005 2006

Experian – strong financial performance

Sales £ m 2002 2003 2004 2005 2006 Year to March Year to March

1 ,1 1 5 1 ,2 0 1 1 ,2 8 6 2 2 4 2 5 6 2 8 2 + 1 2 % + 1 4 % + 2 0 % + 2 0 % + 1 8 % 1 ,3 3 2 + 1 6 % 3 1 6 1 ,7 2 2 4 1 7 + 2 7 % + 2 9 %

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Experian – strong cash flow

50 100 150 200 250 300 350 400 2001 2002 2003 2004 2005 2006 0% 25% 50% 75% 100% Operating cash flow (LHS) Operating cash flow as % of EBIT (RHS)

Operating cash flow is defined as EBIT plus depreciation and amortisation, less capex, plus change in working capital and associates

Year to March

£m

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Experian – acquisition strategy

• Organic growth accelerated in last

four years

• Acquisitions are key part of growth

strategy

• Often small; always complementary;

bringing – Data – New products – Geographical expansion – Vertical market expansion – Consolidation – Cross-selling opportunities

• Must generate double-digit post-tax

returns over time

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Experian - key growth drivers

• Growth in online advertising
• Increase in consumer credit and card usage
• Move to multi-channel marketing
• Growth in fraud prevention
• Growth in demand for information in new sectors, e.g. automotive,

insurance, business-to-business, government

• Growth in emerging markets

Growth drivers in the UK

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Experian International – growth record

100 200 300 400 500 600 700 800 900

'93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06

20 40 60 80 100 120 140 160 Sales (LHS) EBIT (RHS) £m £m Year to March

CAGR of 1 9 % sales and 2 2 % EBI T

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Experian International

• Founded in 1980
• Strong organic growth
• Supported by complementary

acquisitions

• Wide product range
• Wide geographic reach

UK 5 9 % Rest of W orld* 4 1 %

* Continental Europe, Eastern Europe, South Africa, Latin America, Asia Pacific. France is c.55% of ROW

Sales Year to March 2 0 0 6

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Experian in UK - total solutions provider

• Clear market leader in Information and Solutions
• Grown to offer widest range of services in any one country
• Principal credit information supplier to nine of the top ten UK

banks

• Future growth driven by

– Deeper client relationships, e.g. HBOS – Product innovation, e.g. authentication; fraud detection – New sectors, e.g. government; business-to business; direct-to-consumer

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UK consumer credit growth slowing

Gross lending grow th slow ed, but som e offset as client spend shifts from acquiring custom ers to m anaging existing accounts

Source: Bank of England; Experian Business Strategies forecasts

• 5

5 10 15 20 25 Gross lending Net lending annual % change

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2007F 2008F 2009F 2010F 2006F 24

Experian in UK - HBOS contract

• Over £40m five-year contract
• Experian offers a unique combination of services

– Credit I nformation

• Consumer and business lending

– Credit Solutions

• Application processing/ scoring solutions
• Fraud prevention capabilities
• Consumer and business authentication

– Marketing Information

• Analysis and consultancy support

– Marketing Solutions

• Database hosting
• Outsourced data processing
• Experian selling new products, such as fraud

prevention

• Experian supporting HBOS across its product

groups, e.g. mortgage, credit cards

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Fraud

• Total fraud losses in US are $150bn - $115bn in healthcare

and insurance, $13bn in financial services and $13bn borne by merchants (Experian)

• Total UK fraud losses of £20bn in 2003 (Fraud Advisory Panel)
• Global credit card fraud estimated at $4bn (Juniper Bank)
• Online fraud cost US merchants $2.6bn or 2% of sales in 2004

(CyberSource)

• Between $600bn and $1.5 trillion is money-laundered globally

each year (UN Office of Drug Control and Crime Prevention) Fraud is a grow ing global issue Experian offers global solutions

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Fraud prevention – saving clients money

• Hunter: identifies at the application

stage fraudulent new accounts or claims

• Global solution: standalone or web-

based

• Immediate benefits

– £3m per month for a major bank – £1.5m per month for a large building society – £1m plus per month for a medium-sized mortgage lender – £1m per month for a major motor finance organisation – £0.5m per month for an Internet bank

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Experian in UK - public sector

• Apply skills developed in financial services to public sector

– Complying with anti-money laundering regulations – Reducing fraudulent benefit claims – Supporting collection of local and national taxes – Improving accuracy of data held on individuals – Enabling instant confirmation of valid vehicle insurance – Helping the police allocate resources by postcode risk index – Forecasting economic and demographic trends for local and national government

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QAS – accelerating growth in public sector

• Leading supplier of address management software
• Continued growth in public sector

– New business sales – Excellent customer retention

• Strong performances in

– Healthcare (NHS) – Established government agencies

• Making markets in

– Criminal justice – Local government

• Cross-selling opportunities

– Experian I ntact – Authentication – Accelerating international growth

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Business information and solutions

• Global sales of business information and solutions exceed £100m
• Sell credit and marketing information and solutions

predominantly about small and medium-sized businesses to clients of all sizes

• Competitive advantages

– Ability to blend business and consumer information – Concentrating on value-added solutions to improve

• perational efficiency for clients
• Acquisition of Baker Hill providing software and consulting

services to US commercial lending banks – Cross-sell into 1,100 banks

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Experian in UK - business information and solutions

• Market leader in information and solutions for acquiring and

managing business customers

• Continuing double-digit growth; gaining UK market share
• Three m ajor UK banks

– Anti-money laundering software – FSA-compliant automated application processing – Trebled productivity of field-based sales teams

• Viking Direct

– Sophisticated risk scoring in application processing – Reduced bad debts without compromising same day delivery

• ffer to customers
• Centrica

– Deployed automated risk solutions in energy business – Reduced new customer vetting process from hours to seconds

International opportunities

32 Canada Canada China China Denmark Denmark Finland Finland France France Singapore Singapore South Africa South Africa Spain Spain Sweden Sweden Turkey Turkey

Countries Countries where we where we have offices: have offices:

Germany Germany Greece Greece Hong Kong Hong Kong Ireland Ireland Italy Italy Japan Japan Monaco Monaco Netherlands Netherlands Norway Norway Russia Russia Argentina Argentina Australia Australia Austria Austria Brazil Brazil Bulgaria Bulgaria United Kingdom United Kingdom United States United States

Experian International - strong global presence

Experian operates in over 6 0 countries around the w orld

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Experian International - unparalleled product offer

• Operate twelve consumer credit bureaux
• Operate eight business credit bureaux
• Interface with over 70 credit bureaux globally
• Classify over a billion consumers worldwide
• Hold lifestyle data on 14 million UK individuals and 8 million

households

• Provide detailed economic forecasts for 25 countries
• Deliver billions of customer decisions annually

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Experian International - tailoring the offer

Continental Europe

• European countries still have different legal, regulatory and

cultural environments

• Lead with decision analytics
• Follow with credit bureaux where possible

– Organic (Spain) – By acquisition (Scandinavia)

• Establish a presence as allowed

– France fraud bureau

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Experian – success in Spain

1 9 9 4

Enter w ith scoring/ decisions

1 9 9 9

Establish credit bureau

2 0 0 1

Marketing Services acquisition

2 0 0 2

W in m ain credit bureau contract Start credit card processing for US client

2 0 0 3

Launch Mosaic consum er segm entation

2 0 0 5

Add fraud prevention/ anti-m oney laundering

Experian Spain now has the w idest end-to-end range of solutions

2 0 0 4

Credit bureau contract extended to 2 0 1 0

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Experian in France

• Largest market outside the UK
• Employs 2,500 FTEs
• About 60% of sales from card and

payment processing – consolidating the industry

• Other activities include

– Back-office processing – Decision solutions – Business information services

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Experian International - emerging markets

• Best growth opportunities in

emerging markets where – Rising GDP per capita – Increasing use of consumer credit

• Serving both local and global

clients

• Often enter via decision solutions
• Must be sensitive to local
• perating environment
• Already serve clients in over 20

countries in Eastern Europe and Asia Pacific

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Experian in Korea

Experian now serves the seven largest Korean banks

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Experian - strengthened presence in emerging markets

• Significant investment in talent and

infrastructure – Now employ nearly 200 people in Asia Pacific; up more than 50% in year – Over 150 contributors signed up to Russian bureau – Helping to establish bureaux in Bulgaria and Romania

• Serving domestic and global clients

– Winning significant contracts

Siam Commercial Bank

Experian North America

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Experian North America

Interactive 35% Marketing 22% Credit 43%

Sales Year to March 2 0 0 6

• Well balanced portfolio
• Wider product offer than

competitors

• Interactive transforming the

growth profile

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North America – building on core credit

• 2006 helped by strong market and FACTA revenue
• Innovative products

– Next generation triggers used by five of top seven card issuers – User-friendly new format business credit reports – Launch of VantageScore

• More effective sales execution

– Vertical market focus on regional banks, credit unions and telecommunications – Sale of entire product range into former affiliate territories

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North America – repositioning marketing

Traditional client needs Names and addresses Additional customer information Individual campaigns Many suppliers Em erging client needs Multi-channel marketing Complete view of customer base Lifetime customer management Single supplier

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2006 - introduced new products

• Triple Advantage (Interactive): Tri-bureau credit monitoring

service for consumers

• Hunter II (Credit):

Web-based application fraud prevention software

• VantageScore (Credit):

Joint development by three US credit bureaux of more consistent and predictive credit score

The Queen’s Awards for Enterprise: Innovation Presented for Experian’s anti-fraud system, Hunter I I

Experian Interactive

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Experian North America- transforming the portfolio

Sales FY 2 0 0 6 Sales FY 2 0 0 1

Outsourcing 1 0 % Marketing Solutions 1 5 % Marketing I nform ation 1 7 % Credit I nform ation 4 9 % Consum er Direct 1 % Credit Solutions 8 % Consum er Direct 1 4 % Credit I nform ation 3 6 % Lead Generation 1 8 % Credit Solutions 9 % Marketing I nform ation 1 0 % Marketing Solutions 1 3 %

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Experian Interactive

Credit reports and monitoring services Online lead generation

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Experian Interactive – helping consumers

Experian has a leadership position as a trusted source for consumers of information about key financial transactions and purchasing decisions to lower the cost of daily living

Check my credit Enrol in online education programs Apply for mortgages Research products and shop online

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Experian Interactive - common business model

Customer acquisition channels

Broadcast Experian websites Search listings Partners Affiliates

Consum ers Advertisers

Lead generation Experian products

Customer monetisation

Experian data assets Experian m odelling and analytics

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Growth of online customer acquisition

5 10 15 20 25 30 2000 2001 2002 2003 2004 2005 2006e 2007e 2008e 2009e 2010e

Source: eMarketer 1 8 % CAGR ’0 5 to ‘1 0

Online advertising spending $ bn

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Consumer Direct - strong organic growth

• Leading player in selling credit products to consumers
• Sales grew by 39% in 2006
• Growth drivers

– Increased Internet usage – Awareness of credit importance – ID theft protection – Product development

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LowerMyBills.com

• One-stop financial portal for

consumers to get better deals on their recurring monthly expenses – Current focus on home loans – Platform can be extended to

• ther financial verticals
• Financial service providers pay

Experian a fee for providing leads – $22bn spent by mortgage lenders on acquiring customers – $1bn of this spent online – Online spend growing at

• c. 30% per annum
• Synergies with other parts of

Experian

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PriceGrabber.com

• Leading comparison shopping service in a large and growing market

– About 30% of online shoppers used comparison shopping in 2004 – Increased broadband adoption, e-commerce growth and shift of advertising dollars online are driving market growth

• Founded in 1999, headquarters in Los Angeles, office in London.

Employs 140 staff

• Powers over 300 shopping sites including

– MSN, About.com, Ask.com, Comcast, Terra, Bell South, iVillage

• Over 9,000 merchants and sellers including

– Best Buy, Wal* Mart, Buy.com, Nordstrom, Office Depot, Overstock.com, RitzCamera.com, CDW and Orbitz

• Top 15 Internet shopping site

– Approximately 20 million unique users per m onth across PriceGrabber sites

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PriceGrabber.com - areas of synergy

• Complements Experian Interactive

– Combined buying power in online and broadcast advertising – Sharing of Interactive marketing expertise – Cross-sell PriceGrabber.com services to visitors to other Experian Interactive websites

• Strengthens Experian’s offer to retail and catalogue clients
• Leverages Experian’s expertise in consumer marketing data

and analytics – Use Experian’s existing analytics and propensity modelling skills to provide PriceGrabber.com’s consumers with tailored offers

• Use Experian’s data on consumers who give permission to

PriceGrabber.com to provide them better targeted offers

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Experian Interactive

• Large and growing markets
• Growth underpinned by increasing use of

Internet by – Consumers (more convenient) – Organisations (more cost effective)

• Scale

– Among the top 15 Internet companies by revenue in the US – Largest online financial services advertiser in US – Partnerships with all leading portals and search engines

• Significant synergies with Experian

Information and Solutions

• Internationally scaleable over time

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Experian - summary

• No single competitor matches our scale, product range or global

footprint

• Strong organic growth opportunities across the businesses
• Global R&D driving product innovation
• Acquisitions are a key part of our strategy for growth
• Managing regulatory and privacy concerns is a core competency

Appendix

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Experian – what we are

Outsourcing Solutions

Credit Marketing

I nform ation

Credit Marketing

I nteractive

Sales (£m) 1 685 555 143 345 % of sales 40% 32% 8% 20% Year to March 2006 underlying growth2 9% 10% 4% 22% No of people (FTE) 3 5,036 4,831 1,975 826 Sales per FTE (£k) 137 126 63 627

1 Sales are for the year to March 2006 and exclude discontinued activities and International eliminations 2 Growth excluding discontinued activities and corporate acquisitions at constant exchange rates 3 As at March 2006

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Experian - Information

Key characteristics

– Acquire, compile, manage and deliver large databases Core skill – Steady growth – Large market – Regulated Market type – Data sell – Salesforce-led – Contract, licences – Ad-hoc purchases (marketing only) – Revenue earned per transaction Sales channel – Volume-driven pricing – Country specific – Capital intensive – Online, real-time delivery Product characteristics

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Experian - Solutions

– Specialist analytical and software development skills – Good growth – Many niche competitors – Strategic for clients – Executive level sponsorship – Software/ IT sell – Sell to client specialists – Consultancy-led – Long-term relationships – Revenue earned per transaction and by fees – Highly customised – Value-added pricing – Global products – Global alliances – Intellectual property rights

Key characteristics

Core skill Market type Sales channel Product characteristics

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Experian - Outsourcing

– Process and logistics knowledge – Steady growth – Many competitors, including clients’ in- house offers – Capacity sell – Service-led – Long-term relationships – Revenue earned per transaction – Generic process; customised delivery – Cost-based pricing – Volume-driven; scale is key – Country specific (France) – Labour intensive

Key characteristics

Core skill Market type Sales channel Product characteristics

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Experian - Interactive

– Online consum er marketing – High growth – Large and growing market – Partnerships with major Internet portals, advertisers and web publishers – Leverages core financial services client relationships – White label – Pay-per-performance – Country specific

Key characteristics

Core skill Market type Sales channel Product characteristics

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Experian - products by region

Consum er bureaux Business information Marketing services Autom otive information Insurance information Property information Decision support Application processing Fraud solutions Micromarketing Economic forecasting Cheque/ debit/ loyalty processing Direct-to-consum er credit Online lead generation

Global services

China

• Australia/ NZ
• Canada
• Bulgaria/ Romania/

Russia

• France/ Belgium/

North Africa

• Germany/ Austria/

Switzerland

• Italy

Latin America Middle East

• Netherlands
• Norway/ Sweden/

Denmark/ Finland

• Republic of Ireland

Spain/ Portugal Turkey

• UK
• US
• South Africa
• Service offered

Service offered via third party

▼

Service offered via JV with First Am erican Real Estate (FARES)

• ▼
• ▼

▼ ▼

• Japan
• ▼
• ▼
• SE Asia
• ▼
• ▼
• 66

Experian – accelerating organic growth

10% 9% 8% 6% 5% 17% 9% 6% 8% 2% 2002 2003 2004 2005 2006

Year to March

Contribution from acquisitions Organic growth

• Organic growth has accelerated
• Supplemented by targeted

acquisitions

Sales grow th* %

* At constant currency and for continuing activities only

7% 14% 14% 18% 27%

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Experian - cost profile

Global

Costs are for the year to March 2006. Direct businesses only, excluding discontinued activities. Depreciation and data amortisation: 7% of sales in North America and 5% of sales in I nternational. R&D: about 5% of sales in both businesses. ‘Other’ includes marketing (mainly Experian Interactive in North America), other depreciation,

• ccupancy, royalties and voice telecommunications

North Am erica I nternational

100% of sales 100% of sales 100% of sales

23% 5% 7% 43% 22% 29% 6% 6% 36% 23% 14% 4% 9% 52% 21% Other IT Data Labour EBIT Other IT Data Labour EBIT Other IT Data Labour EBIT 68

US mortgage market

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06F 07F 08F Purchase originations Refinance originations

Source: Mortgage Bankers Association – April 2006

US m ortgage originations Year to Decem ber

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Contacts

GUS plc One Stanhope Gate London W 1 K 1 AF Tel: + 4 4 2 0 7 4 9 5 0 0 7 0 Fax: + 4 4 2 0 7 4 9 5 1 5 6 7 W ebsite: w w w .gusplc.com David Tyler Group Finance Director Tel: + 44 20 7 318 6204 Fax: + 44 20 7 318 6257 Email: david.tyler@gusplc.com Fay Dodds Director of I nvestor Relations Tel: + 44 20 7 318 6245 Fax: + 44 20 7 318 6253 Email: fay.dodds@gusplc.com Peter Blythe Director of Finance Tel: + 44 20 7 318 6230 Fax: + 44 20 7 318 6253 Email: peter.blythe@gusplc.com