GUS plc June 2 0 0 6 Frankfurt/Paris
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. 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. 1 Transforming the Group Operating profit * Pro form a EBI T * £ 5 1 9 m £ 7 6 6 m Hom e shopping Property 7 % 6% ARG Finance ARG 5 % 3 0 % Lew is 9 % 4 5 % 5 5 % 4 % Burberry 3 9 % Experian Experian Year to March 2 0 0 0 Year to March 2 0 0 6 * Before central activities 2
2006 – further strategic progress • Pursued strategy of focusing on fewer activities since 2000 • Plan to demerge ARG and Experian is natural final step in strategy • Disposed of more businesses in 2006 – Lewis – Wehkamp – Burberry • Continue to invest organically and by acquisition in ARG and Experian 3
Argos Retail Group Argos Retail Group – overview EBI T • Leading UK general Financial merchandise retailer Services • Multi-brand, multi-channel 2% • Supported by central Hom ebase Argos infrastructure, where appropriate 15% 83% Year to March 2 0 0 6 £ 3 4 9 m 6
ARG in 2006 • Consumer spending under pressure in 2006 • Continued to invest in key initiatives while effectively controlling costs • Further benefited from leveraging ARG infrastructure • Planning on basis of cautious outlook for recovery in consumer spending • ARG well-positioned in its markets – Argos: multi-channel general merchandise retailing – Homebase: serving most attractive part of wider home enhancement market 7 Argos • More than two-thirds of UK households collect a catalogue from store • Currently 657 stores • 98% of the UK population live within 10 miles of a store • 12% of sales ordered via Internet • 22% of sales delivered to home via Argos Direct • Over 17,000 products in catalogue • Market leader in many product categories • Low cost operator • Value retailer 8
Argos – key initiatives Improve choice • Launched Argos Extra in all stores • Increase direct importing Improve value • Drive cost productivity/ efficiencies • Grow Argos Direct • Open more stores Improve convenience • Improve multi-channel services, including Check and Reserve 9 Argos Extra • First trial in January 2003 • Offers 17,200 lines with extended ranges in leisure, home and electrical • From July 2005, Argos Extra ranges available in all stores – c. 190 stores stocked-in – Rest are order-in • Increasing sales by 2-3% in first full year 10
Homebase • Number two DIY brand in UK • High brand awareness – ABC1 customers – Female shoppers • 297 stores, biased to South East • Become the leading UK home enhancement retailer • Significant synergies between Argos and Homebase benefiting both businesses • Cautious short-term industry outlook 11 Homebase – key initiatives • Pursuing initiatives that differentiate it from other players – All major product groups repositioned since acquisition – Customer service improved – Furniture Extra catalogue rolled out, increasing sales performance – Trialling 200-page home furnishing catalogue in 30 stores – Ten new stores opened; added more mezzanine floors – Further cost and revenue synergies from leveraging ARG infrastructure 12
Experian Experian - overview • Sales of £1.7bn and EBIT of £417m in 12 months to March 2006; highly cash generative • Largest global information solutions company • No single competitor offers as many products and solutions • No single competitor operates successfully in so many countries • Experian has strong market positions and client relationships 14
Experian – what we do e.g. consumer e.g. credit scoring credit databases Credit Credit I nform ation Solutions Outsourcing I nteractive Marketing Marketing e.g. marketing e.g. database e.g. cheque e.g. online lead databases management processing generation 15 Experian – balanced portfolio North I nternational Am erica 4 2 % 5 8 % I nteractive I nteractive 2 0 % 2 0 % Outsourcing Outsourcing I nform ation Credit 8 % 8 % 4 0 % 4 7 % Marketing Solutions 2 5 % 3 2 % Sales – 12 months to 31 March 2006 Continuing activities 16
Experian – broad offering % of sales by vertical m arket • Over 50,000 clients in more than 60 countries Other 6% Publishing/ media 3% Financial Government 3% • Top 10 clients account for about services Automotive 3% 55% 25% of sales Telecom/ utilities/ insurance 7% • At least 85% of top 50 clients bought from Experian for over Retail/ home shopping five years 11% Clients include: Direct-to- • AOL Time Warner • MBNA consumer • BNP Paribas • McDonald’s 12% • Barclays • Microsoft • Citigroup • Morgan Stanley Year to March 2 0 0 6 • Ford • Orange • HBOS • Société Générale 17 Experian – building shareholder value Sales EBI T £ m £ m 3 1 6 4 1 7 1 ,1 1 5 1 ,2 0 1 1 ,2 8 6 1 ,3 3 2 1 ,7 2 2 2 2 4 2 5 6 2 8 2 + 2 9 % + 2 7 % + 1 6 % + 1 8 % + 2 0 % + 1 4 % + 2 0 % + 1 2 % 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 Year to March Year to March 18
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 19 Experian Interactive Credit reports and Online monitoring services lead generation 20
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 Siam Commercial Bank • Serving domestic and global clients – Winning significant contracts 21 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 22
GUS - summary • Planned demerger in October 2006 is the natural final step of our strategy • Created £8bn of shareholder value since start of 2000 • Giving shareholders the choice to invest directly in three well-positioned businesses – ARG – Burberry – Experian 23
Appendix Sales by division I m pact of 2 0 0 6 2 0 0 5 exchange £ m £ m rate £ m 1 2 m onths to 3 1 March Argos Retail Group 5,548 5,313 1 Experian 1,725 1,362 36 Inter-divisional sales (11) (12) - Total continuing operations 7 ,2 6 2 6 ,6 6 3 3 7 Discontinued operations* 653 1,124 6 Total sales 7 ,9 1 5 7 ,7 8 7 4 3 * Represents Lewis, Burberry and Wehkamp 26
EBIT by division I m pact of 2 0 0 6 2 0 0 5 exchange 1 2 m onths to 3 1 March £ m £ m rate £ m Argos Retail Group 348.9 399.5 0.3 Experian 416.7 317.0 9.1 Central activities (20.2) (21.8) - Total continuing operations 7 4 5 .4 6 9 4 .7 9 .4 Discontinued operations* 119.4 239.0 0.7 Net interest (36.3) (23.7) 0.5 Benchm ark PBT 8 2 8 .5 9 1 0 .0 1 0 .6 * Represents Lewis, Burberry and Wehkamp 27 Group balance sheet 2 0 0 6 2 0 0 5 £ m £ m As at 3 1 March Fixed assets 1,491 1,354 Investment in associates 129 110 Working capital 304 762 Trading assets 1 ,9 2 4 2 ,2 2 6 Goodwill 3,068 2,485 Taxation (44) (1) Net retirement benefit assets/ (obligations) 18 (112) Home Shopping receivable 140 140 Net debt (1,974) (1,427) Capital em ployed 3 ,1 3 2 3 ,3 1 1 28
Cash flow 2 0 0 6 2 0 0 5 £ m £ m 1 2 m onths to 3 1 March EBIT 745 695 Depreciation* 258 230 Capital expenditure (365) (344) Change in working capital 3 (3) Operating cash flow 6 4 1 5 7 8 Interest (33) (34) Corporation tax (108) (170) Free cash flow # 5 0 0 3 7 4 * Excluding amortisation of acquisition intangibles # For continuing operations only. Under IFRS, net cash flow of discontinued operations is shown separately 29 Cash flow 2 0 0 6 2 0 0 5 £ m £ m 1 2 m onths to 3 1 March Free cash flow 5 0 0 3 7 4 Acquisitions (819) (176) Divestments 360 106 Dividends (284) (281) Share repurchases - (200) Special pension contributions (100) (76) Net debt flow * ( 3 4 3 ) ( 2 5 3 ) Exchange and other movements - 56 Net debt flow of discontinued operations (204) (30) Movem ent in net debt ( 5 4 7 ) ( 2 2 7 ) Closing net debt ( 1 ,9 7 4 ) ( 1 ,4 2 7 ) * For continuing operations only. Under IFRS, net debt flow of discontinued operations is 30 shown separately
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