Experian - contents Overview Growth drivers in the UK - - PDF document

Experian – a portfolio of opportunities September 2005 Richard Fiddis Managing Director, UK, Ireland and Northern Europe

2

Experian - contents

• Overview
• Growth drivers in the UK

– Cross-selling – Fraud – Public sector – Business information and solutions

• International opportunities
• Experian Interactive
• Appendix

3

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

4

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

5

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

6

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

7

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

8

Credit 5 3 % Marketing 2 5 %

Outsourcing 1 0 %

North Am erica 5 4 % I nternational 4 6 %

Experian – balanced portfolio

I nform ation 4 6 % Solutions 3 2 %

Outsourcing 1 0 %

Sales Year to March 2 0 0 5

I nteractive 1 2 % I nteractive 1 2 %

9

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

10 Financial services 53% Direct-to- consumer 12% Telecom/ utilities/ insurance 8% 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

dealt with Experian for over five years

Year to March 2 0 0 5

% of sales by vertical m arket

Retail/ home shopping 13% Publishing/ media 2%

Clients include:

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

11

Experian – competitive strength

All figures are for last full year of actuals Number on top of bar represents prospective PE rating Exchange rate £1: $1.85

Global sales revenue $ m Experian D&B Equifax Acxiom Harte-Hanks Fair, Isaac

North America I nternational Source: Company accounts Reuters Estimates

Mar 05 Dec 04 Dec 04 Mar 05 Sep 04 1 8 x 1 9 x 2 8 x 2 2 x $ 2 .5 bn

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

Dec 04 1 8 x

12

Experian – investment highlights

• Market leading positions selling to

businesses and consumers

• Scale gives us high barriers to entry
• Global leader in long term growth

markets

• Unequalled product offer
• Delivering

– Double-digit growth in sales and profit – Strong cash flow

13

Experian – building shareholder value

* Growth rates at constant currency and in 2004 to 2006 for continuing activities only

Sales* £ m 2000 2001 2002 2003 2004 2005 Operating profit* £ m 2000 2001 2002 2003 2004 2005 Year to March Year to March

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

Q1 2006 sales growth: 27% (13% organic, 14% from acquisitions)

14

Experian – strong cash flow

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

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

Year to March

£m

15

Experian - key growth drivers

• Growth in direct-to-consumer market
• Growth in fraud prevention
• Growth in demand for information in new sectors, e.g. automotive,

insurance, business-to-business, government

• Growth in emerging markets
• Increase in credit and card usage
• Move to multi-channel marketing

Growth drivers in the UK

18

Experian International – growth record

100 200 300 400 500 600 700 800 900

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

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

CAGR of 2 0 % sales and 2 3 % profit

19

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

Sales Year to March 2 0 0 5

20

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

21

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 22

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

23

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 will 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

24

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

25

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

26

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 Intact – Authentication

27

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
• Recent acquisition of Baker Hill providing software and consulting

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

28

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

30 Canada Canada China China Denmark Denmark Finland Finland France France Singapore Singapore South Africa South Africa South Korea South Korea Spain Spain Sweden Sweden

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 Turkey Turkey United Kingdom United Kingdom United States United States

Experian International - strong global presence

Experian operates in over 6 0 countries around the w orld

31

Experian International - unparalleled product offer

• Operate eleven consumer credit bureaux
• Operate seven 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

32

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

– Spain – Italy – Scandinavia

• Establish a presence as allowed

– France fraud bureau

33

Experian 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

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

CCI contract extended to 2 0 1 0

34

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

35

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

36

Experian in Korea

Experian now serves six of the seven largest Korean banks

37

Experian in Russia

• Large, growing market
• JV signed in April 2005 with

Interfax, Russia’s leading provider of information and services to the financial market

• Launched first national credit

bureau in June 2005

• Already selling decision

solutions to five of the top 15 banks

• Over 20 clients have agreed to

join the bureau

• Small P&L investment but

well-positioned for long-term growth

Experian Interactive

40

Experian North America- transforming the portfolio

Pro form a sales Year to March 2 0 0 5 Sales Year to March 2 0 0 2

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

41

Experian Interactive

Online lead generation Credit reports and monitoring services

US and UK

42

Experian Interactive - helping consumers

• Become a trusted and preferred source for consumers when

making key financial decisions

• Offer a wide range of products that assist consumers in

managing the financial aspects of key life events

Check my credit Enroll in online education programmes Apply for mortgages Shop for credit card offers

43

Experian Interactive - common business model

Customer acquisition channels

Broadcast Experian websites Search listings Partners Affiliates

Consum ers Advertisers

Lead generation Experian products Customer acquisition

Customer monetisation

Experian data assets Experian m odelling and analytics

44

Growth of online customer acquisition

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

Source: eMarketer 1 8 % CAGR ’0 4 to ‘0 9

Online advertising spending $ bn

45

Consumer Direct - strong organic growth

• Leading player in selling credit products to consumers
• Sales grew by 33% in 2005
• Growth drivers

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

46

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

47

Experian Interactive – investment highlights

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

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

• Scale

– 11th biggest player by unique visitors in 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

48

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

50

Experian – what we are

Outsourcing Solutions

Credit Marketing

I nform ation

Credit Marketing

I nteractive

Sales (£m) 1 615 436 138 161 % of sales 46% 32% 10% 12% Year to March 2005 underlying growth2 8% 5% 7% 37% No of people (FTE) 3 5,023 3,985 2,534 274 Sales per FTE (£k) 124 113 49 637

1 Sales are for the year to March 2005 and exclude discontinued activities 2 Growth excluding discontinued activities and corporate acquisitions at constant exchange rates 3 As at March 2005

51

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

52

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

53

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

54

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

55

Experian - broad product reach

No single com petitor offers as m any products and solutions

Acxiom Equifax infoUSA Equifax TransUnion D&B Fair, I saac Equifax FDC TSYS Acxiom Harte-Hanks

I nform ation

Credit Marketing

Solutions

Credit Marketing

56

Experian - products by region

Decision support (Global) Application processing (Global) Fraud solutions (Global) Consum er information Business information Account processing Autom otive information Property information Insurance information Micromarketing Economic analysis and forecasting List enhancem ent Database hosting Cheque/ debit processing Direct-to-consum er credit information

Global services

• Asia
• Australia/ NZ
• Canada
• Central & Eastern

Europe

• ■
• France/ Belgium/

North Africa

■

• ■
• ■
• Germany/ Austria
• Italy
• Latin America

■

• Middle East
• ■
• Netherlands
• Nordic Region
• Republic of Ireland
• ■
• Spain/ Portugal
• ■

Turkey

• UK
• ▼
• US
• South Africa
• Service offered ■ Service offered via third party bureau ▼Service offered via JV with First Am erican Real Estate (FARES)

57

Experian North America – sales mix

Sales ($m) 1 684 357 296 % of sales 51% 27% 22% Year to March 2005 underlying growth2 5% 6% 37%

I nteractive Credit

I nform ation Solutions

Marketing

I nform ation Solutions

1 Sales are for the year to March 2005 and exclude discontinued activities 2 Growth excluding discontinued activities and corporate acquisitions

58

Experian International – sales mix

Outsourcing Credit

I nform ation Solutions

Marketing

I nform ation Solutions Sales (£m) 1 347 141 138 % of sales 55% 23% 22% Year to March 2005 underlying growth2 8% 9% 7%

1 Sales are for the year to March 2005 and exclude discontinued activities 2 Growth excluding discontinued activities and corporate acquisitions at constant exchange rates

59

Experian – accelerating organic growth

5% 6% 8% 9% 2% 8% 6% 9%

2002 2003 2004 2005

Year to March

Contribution from acquisitions Organic growth

• Organic growth accelerating
• Supplemented by targeted

acquisitions

• Expect contribution from

acquisitions already completed of over 10% in H1 2006 e.g. – LowerMyBills.com – QAS

Sales grow th % *

* At constant currency and for continuing activities only 7% 14% 14% 18% 60

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

• Must generate double-digit post-tax

returns over time

61

Experian - cost profile

Global

Costs are for the year to March 2005. Direct businesses only, excluding discontinued activities. Depreciation and data amortisation: 9% of sales in North America and 6% 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

19% 7% 7% 46% 21% 24% 9% 7% 39% 21% 13% 3% 9% 54% 21% Other IT Data Labour EBIT Other IT Data Labour EBIT Other IT Data Labour EBIT 62

Experian - cash flow

Year to March 2 0 0 5 2 0 0 4 2 0 0 3 £ m £ m £ m Operating profit – continuing activities 317 288 254 Operating profit – discontinued activities 1 (6) 2 Total operating profit 318 282 256 Depreciation/ amortisation 104 119 118 Capital expenditure (109) (102) (128) Working capital 12 2 34 Dividend from associates, less share of profit (16) (3) (10) Operating cash flow 309 298 270

63

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 05F 06F

Purchase originations Refinance originations

Source: Mortgage Bankers Association – August 2005 $bn

US m ortgage originations Year to Decem ber

Year

64

US mortgage market

% of Experian North Am erica sales to m ortgage sector

0% 2% 4% 6% 8% 10% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Year to March 2 0 0 3 Year to March 2 0 0 4 Year to March 2 0 0 5 2 0 0 6

65

GUS - financial calendar

12 October 2005

• First Half Trading Update

17 November 2005

• Interim Results

12 January 2006

• Third Quarter Trading Update

12 April 2006

• Second Half Trading Update

24 May 2006

• Preliminary Results

66

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 Finance Director Tel: + 44 20 7318 6204 Fax: + 44 20 7318 6257 Email: david.tyler@gusplc.com Fay Dodds Director of I nvestor Relations Tel: + 44 20 7318 6245 Fax: + 44 20 7318 6253 Email: fay.dodds@gusplc.com Peter Blythe Director of Finance Tel: + 44 20 7318 6215 Fax: + 44 20 7318 6253 Email: peter.blythe@gusplc.com Stuart Ford I nvestor Relations Manager Tel: + 44 20 7318 6245 Fax: + 44 20 7318 6253 Email: stuart.ford@gusplc.com

67

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.