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Transforming
lives
with
data
Experian Annual Report 2021
Year ended 31 March 2021
Experian plc Strategic report
Transforming
lives
with
data
Contents
Strategic report
02 Experian at a glance
04 Chairman’s statement
06 Chief Executive’s review
10 Our purpose in action – COVID-19 response
14 Our investment case
16 Key performance indicators
18 Market trends
20 Our business model
26 Our strategic focus areas
38
Our sustainable business strategy:
Environmental, Social and Governance
Non-financial information and
s172(1) statement
57
58 North America regional review
59 Latin America regional review
60 UK and Ireland regional review
61 EMEA/Asia Pacific regional review
62 Financial review
72 Risk management
81 Viability and going concern
Governance
84 Chairman’s introduction
86 Board of directors
88 Corporate governance report
99
Nomination and Corporate Governance
Committee report
104 Audit Committee report
111 Report on directors’ remuneration
135 Directors’ report
Financial statements
139 Financial statements contents
140
Independent auditor’s report
Group financial statements
147 Group income statement
148 Group statement of comprehensive income
149 Group balance sheet
150 Group statement of changes in equity
151 Group cash flow statement
152 Notes to the Group financial statements
Company financial statements
206 Company financial statements
208 Notes to the Company financial statements
220 Shareholder and corporate information
222 Glossary
To download this Annual Report
and our other corporate literature
visit www.experianplc.com
Roundings
Certain financial data has been rounded in this report.
As a result, the totals of data presented may vary
slightly from the actual arithmetic totals of the data.
Exchange rates
Principal exchange rates used are given in note 10 to the
Group financial statements. The average pound sterling
to US dollar rate is 1.31 (2020 1.27).
Our purpose
To create a better tomorrow for consumers, for
businesses, for our people and for our communities.
What we do
We create opportunities by turning data into
information, and by deploying advanced technologies
and analytics.
Why this matters
As the world’s leading information services company
we play a pivotal role in the societies in which we work.
We believe it is our responsibility to use our capabilities
and data as a force for good.
Financial highlights
Statutory
Revenue
US$5,372m
(2020: US$5,179m)
Operating profit
US$1,183m
(2020: US$1,185m)
Profit before tax
US$1,077m
(2020: US$942m)
Basic EPS
USc88.2
(2020: USc74.8)
1 From ongoing activities.
Growth % at
actual rates
Growth % at
constant rates
+4% +6%
0% +4%
+14% +6%
+18% +5%
Benchmark
Revenue – ongoing
activities
US$5,357m
(2020: US$5,161m)
Benchmark EBIT¹
US$1,385m
(2020: US$1,386m)
Benchmark profit
before tax
US$1,265m
(2020: US$1,255m)
Benchmark EPS
USc103.1
(2020: USc103.0)
Growth % at
actual rates
Growth % at
constant rates
+4% +7%
0% +3%
+1% +5%
0% +4%
The 2020 financial highlights have been re-presented following the reclassification of our Consumer Services business in Latin America
to the Consumer Services business segment. See note 9 to the Group financial statements for further detail.
See note 6 to the Group financial statements on page 160 for definitions of non-GAAP measures.
Experian plc Annual Report 2021
01
S
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An unprecedented year
The past year was not one that we, or anyone, could have predicted.
For many it has been a time of great hardship and loss. The COVID-19
pandemic is sadly not over yet and we are all working through its
impact, the long-term effects of which are unknown.
At Experian, we have played an essential role in helping people,
businesses, governments, and society manage through the crisis. We
have helped our employees adapt to remote working and we have
reoriented how we engaged with tens of thousands of clients.
A good performance, demonstrating the resilience of our business
Experian delivered growth in FY21. Organic revenue growth was 4%
and total revenue growth from ongoing activities was 7% at constant
currency. North America and Brazil performed strongly, offsetting
declines in UK and Ireland, and EMEA/Asia Pacific.
Our ability to grow, even in a crisis, reflects the strength and diversity of
our portfolio. It also reflects our commitment to innovation and to the
millions of relationships we have established with consumers.
Looking ahead to FY22 we are poised for strong growth. Our
addressable markets are large and expanding, and we are well placed
to take advantage of a number of compelling opportunities.
Brian Cassin
Chief Executive Officer
We play a vital role for
People
Empowering them to better
understand their financial position, to
take control of their finances and
manage their financial health.
Businesses
Helping them to make more
informed and better decisions.
Communities, governments
and charities
Using data to help the most
vulnerable in society and to support
economic growth.
02
Experian at a glance
Global technology and innovation
We are a global technology company playing a key role in making it easier for
consumers and businesses to interact. We help them manage their financial health,
make informed decisions and seize opportunities. We embrace innovation and harness
technology to expand access to credit, support responsible lending, modernise
processes and better protect against fraud and identity theft. Our talented and diverse
workforce serves customers worldwide from 44 countries. We manage and organise
ourselves across four geographic reporting regions and two business segments.
Our business activities
Business-to-Business
Data
Revenue - ongoing activities1
US$2,866m
+2%
Decisioning
Revenue - ongoing activities1
US$1,184m
-4%
We help businesses to identify and understand
their customers and to lend responsibly and
appropriately, providing them with the
information to help them manage the risks
associated with lending. We also help them
build a better understanding of consumers’
preferences.
We are experts at creating and developing
innovative analytical and decisioning tools.
We help businesses to manage their
customers, minimise the risk of fraud,
comply with legal requirements and
automate decisions and processes.
1 % growths shown are organic revenue growth at constant exchange rates.
Revenue from ongoing activities by region and business activity (US$m)
Consumer Services
Revenue - ongoing activities1
US$1,307m
+17%
We help consumers take control of their credit,
making it easier for them to manage their
financial position, receive financial education,
access credit offers, and protect themselves
from identity fraud.
A North America
B Latin America
C UK and Ireland
D EMEA/Asia Pacific
Total
17,800*
employees globally
166m
Business credit
history records
DataLab
San Diego
110m
Free consumer
membership base
Data
1,761
457
361
287
2,866
Decisioning
694
92
220
178
1,184
Business-to-
Business
2,455
549
581
465
4,050
Consumer
Services
1,075
76
156
n/a
1,307
Total
US$m
3,530
625
737
465
5,357
% split
65
12
14
9
DataLab
London
DataLab
São Paulo
DataLab
Singapore
1.3bn
Consumer credit
history records
44
Countries
North America
See page 58
Latin America
See page 59
UK and Ireland
See page 60
EMEA/Asia Pacific
See page 61
* Figure does not include recent acquisitions in Spain
and Brazil.
Experian plc Strategic report 03
Our strategic focus areas
Our sustainable business strategy
See page 26
See page 38
1
Make credit and
lending simpler, faster and
safer for consumers
and businesses
5
Enable businesses
to find, understand
and connect
with audiences
2
Empower
consumers to improve
their financial lives
Our
customers
4
Help organisations
in specialised vertical
markets harness data and
analytics to make
smarter decisions
3
Help businesses
verify identity and
combat fraud
OUR PURPOSE
Creating a better
tomorrow
Improving financial health for all
Core
products
THROUGH OUR
Social
Innovation
ENABLED BY
Community
investment
Treating data with respect
Security
Accuracy
Privacy
Transparency
Inspiring
and supporting
our people
SUPPORTED BY
Working
with
integrity
Protecting
the
environment
Our investment case, a unique proposition
See page 14
We are a leader in global
information services with strong
positions in growing markets
Strong foundations support our
growth potential
We place a strong emphasis
on environmental, social and
governance (ESG) criteria
We remain financially well
positioned
Experian plc Annual Report 2021Strategic report 04
Chairman’s statement
Supporting our customers, clients
and communities in challenging times
Mike Rogers
Chairman
The pandemic has demonstrated
the power of data as a force for good
in difficult times. Data-led decision-
making has been critical in helping
us to take on the biggest challenge
in a generation. Experian moved
quickly to make our data insights
available to governments, health
services, communities, businesses
and charities, so they could better
respond to their challenges. We also
worked rapidly with lenders and
governments to support financial
accommodation programmes,
making sure financial support
reached those in need.
Responding to the crisis in a purpose-
led way – using data for good
The pandemic has demonstrated the power
of data as a force for good in difficult times.
Data-led decision-making has been critical in
helping us to take on the biggest challenge in
a generation.
In the USA, we developed the COVID-19 Outlook
& Response Evaluator (CORE) tool to predict
future hot zones for the virus – a free application
that allows health and government leaders to
forecast how a specific area may be affected.
In the UK, we launched Experian Safeguard, a
dashboard based on anonymised data insights,
to help organisations, including food banks and
local authorities, to plan and allocate their
resources based on those who need it most.
In Brazil, the COVID Radar Panel provided
information about the pandemic to partners,
offering them a detailed view on COVID-19
movement by city and even by neighbourhood,
to allow the adoption of quick and assertive
measures in the most affected areas.
Supporting global financial health
Alongside these data-driven initiatives, our
United for Financial Health programme has used
financial education and partnerships to help the
people hit hardest by the COVID-19 crisis.
To date, we have worked with 11 new non-profit
organisations in the USA, UK and Brazil,
providing resources, funding, products and
volunteers as part of our mission to improve
financial health worldwide.
We have reached 35 million people so far, more
than doubling our programme target of reaching
15 million people this year. Our aim is to reach
100 million people in total by 2024.
We have offered credit education, advice and free
tools to consumers and businesses across the
globe. I am proud that more than 110 million
people can now access their credit reports free
on our consumer platforms, helping them better
understand their credit profiles, save money and
navigate their personal financial needs.
Furthering our efforts to help consumers, our
Social Innovation programme invests in new
products specifically designed to offer additional
societal benefits as well as creating revenue for
our business. Through Social Innovation, we have
reached 61 million people in the last eight years
– including 28 million this year – with a target
of reaching 100 million by 2025.
These are examples of the purposeful activity
that helps contribute towards reaching the three
United Nations Sustainable Development Goals
we’ve identified as those we can influence, all of
which we are addressing through our strategic
focus on improving financial health. You can
read more on page 38.
When I wrote about COVID-19 affecting the world
in our 2020 Annual Report, I never expected this
2021 statement would be a reflection on living
and working amid the global pandemic for a
further 12 months.
It has been an extraordinary year, yet we have
stayed true to our purpose and achieved a strong
performance. Once again, Experian has shown it
can withstand external shocks and grow even in
the most challenging of circumstances. Our
resilience is due to the diversity of our portfolio,
the strength of our culture and the focus of our
strategy on innovation-led growth. We expect to
emerge from the pandemic in good shape, with
an abundance of opportunities to pursue despite
operating in many of the worst-hit countries.
Throughout the pandemic, our people remained
focused on supporting customers, governments
and the communities we serve: I found the
commitment of Experian colleagues across the
world inspiring.
For example, Experian moved quickly to make
our data insights available to governments,
health services, communities, businesses and
charities, so they could better respond to their
challenges. We also worked rapidly with lenders
and governments to support financial
accommodation programmes, making sure
financial support reached those in need, and
ensuring that economies kept moving as well
as possible during lockdowns.
Experian plc Strategic report 05
As part of a continued focus on improving our
sustainability disclosure, this year we have
started reporting to the recommendations of the
Sustainability Accounting Standards Board
(SASB) framework.
Our commitment to the environment
We acknowledge our responsibility to help
protect the planet for future generations, and we
have set ambitious new targets to benchmark
our progress.
Our aim is to be carbon neutral in our own
operations by 2030. FY21 is the first year for
which we’ll offset a portion of our emissions,
offsetting 20% of our emissions with the goal
of reaching 100% in FY25.
We are also announcing science-based targets
to cut our Scope 1 and 2 emissions by 50%,
and our Scope 3 emissions by 15% by 2030.
In addition, we are proud to be a public supporter
of the Task Force on Climate-related Financial
Disclosures (TCFD) and our ‘A-‘ rating from the
CDP (formerly known as the Carbon Disclosure
Project) places us in the leadership category for
our disclosure on climate risks and opportunities.
Positioned for growth with
digital technology
Innovation has always been a central belief of
Experian’s business, and we are well positioned
to take advantage of trends and opportunities
we have identified in the market. The pandemic
has changed the behaviour of consumers, and
of how businesses operate, in many cases
accelerating exciting trends towards the
adoption of digital business models – I would
encourage you to read more about these
trends on page 18.
We have adapted quickly to the changing
environment and continued with our significant
programme of investment. This is helping
us to build fast-growing franchises in areas
like Experian Consumer Services and
Experian Health.
We have also moved forward with the
internationalisation of our ground-breaking
innovations like Experian Ascend and our Open
Data platform. For example, we introduced a raft
of propositions to take advantage of the new era
of positive data in Brazil, a market change that
will greatly enhance fair access to credit for
the Brazilian population.
We have remained rightly ambitious, so we have
not let up on geographic expansion (for example
our German acquisition) or in building new
franchises such as verification services.
These are just a few examples of the geographic
growth and innovation-led growth at the heart
of our strategy.
People and culture
The innovative solutions we provide to
customers are made possible by our people.
Throughout the pandemic, we have adopted a
‘people first’ agenda. Colleagues have had to
work in very different circumstances, and we
have supported them by offering the flexibility
they need for their changing world.
As we emerge from the lockdowns, we will
continue to adopt new ways of working and we
will give much of our global workforce more
flexibility to work to a pattern that suits them and
benefits Experian.
I remain incredibly proud of our growing diversity
at Experian, and we continue with a strong focus
on recruiting, retaining and developing
colleagues who fully reflect the rich diversity of
the communities we serve. We believe this
achieves both better outcomes for customers
and superior business performance.
This year we hired our first-ever Chief Diversity
Officer in our North American business, and our
global leaders are serving as executive sponsors
for key diversity pillars – gender, race and
ethnicity, disability, LGBTQ+ and mental health.
I would like to express my thanks on behalf of
the Board to our 17,800 employees, who have
shown remarkable resilience and commitment,
and without whose talents we could not achieve
success for customers or shareholders.
Governance and the Board
Strong corporate governance has always been at
the heart of the Experian business, and we
maintain the highest standards as set out in the
UK Corporate Governance Code 2018.
I am pleased our current Board meets the
recommendations of both the Hampton-
Alexander Review on gender diversity and the
Parker Review on ethnic diversity.
During the last financial year, we were delighted
to welcome Alison Brittain as an independent
non-executive director. Her impressive career of
over 25 years of senior management experience
at a variety of major financial institutions, and as
a FTSE 100 Chief Executive, means Alison is an
invaluable addition to the Board. I look forward to
working closely with her over the coming years.
In March 2021, we announced that Jonathan
Howell would join the Board in May 2021 as an
independent non-executive director. Jonathan is
a highly regarded FTSE 100 Chief Financial
Officer, and also brings a wealth of relevant
expertise and extensive board-level experience.
There were no other changes to the Board
during the period.
Committed to data privacy
As we plan for the future, we are also acutely
aware of our responsibilities when managing the
information we are entrusted with. Data is critical
to economic growth, but it must be managed and
used appropriately.
Experian holds vast amounts of data, and we
have a responsibility to make sure it is kept safe
and used only in the most appropriate and
responsible ways. Maintaining the highest levels
of security is fundamental to our business and
we follow strict regulations for managing and
using data in compliance with all relevant laws.
We're firmly committed to doing the right thing
when it comes to working with consumer data
and have programmes that evaluate every
product and service to ensure we strike the right
balance between privacy considerations and the
economic benefit to customers. Furthermore, we
are continually investing in our multi-layered
information security programme to prevent,
detect and mitigate cyber security risks in all our
markets.
The future – performance with purpose
Looking ahead, we have a clear strategy of
innovation-led growth to capture the potential
from a number of substantial and exciting
addressable markets, so growing shareholder
value further.
Financial performance this year was resilient.
We delivered 4% organic revenue growth, led by
North America and Latin America, which helped
to offset weaker performances elsewhere.
Portfolio diversity, strong execution and our
commitment to long-term strategic investments
were all contributory factors, helping the Group
withstand the trading challenges posed by the
pandemic. It is also worth noting that Experian
ended the year in a strong funding position, was
able to move forward with some exciting
investments to extend the franchise, while
maintaining the final dividend in line with the
prior year.
Our people’s professional and personal
responses to COVID-19 and the results achieved
have been remarkable. We have helped people,
organisations and government use data to make
a difference and have extended our commitment
to supporting financial health around the world.
So we enter next year with strong foundations
for further growth and the confidence that
comes from knowing that, through the most
challenging of times, we continue to work
towards our purpose of creating a better
tomorrow.
Experian plc Annual Report 2021Strategic report 06
Chief Executive’s review
A resilient performance spurred
by innovation, teamwork and empathy
businesses and consumers make better-
informed decisions about their futures.
Our financial performance was robust. Total
revenue growth was 7% at constant currency,
while organically we grew 4%. Consumer
Services deserves special mention, delivering
17% underlying growth in the year and reaching
110 million members globally. We benefitted
from growth in B2B platforms across many
territories. Combined with continued expansion
in key verticals like health, and growth in
counter-cyclical revenue streams such as US
mortgage, this enabled us to offset declines in
some parts of our business caused by the
COVID-19 economic downturn. We benefitted
both from our portfolio diversity and from the
strategic investments we have made over many
years, and we continued to invest in our
business in FY21.
Full-year financial highlights
Revenue growth was 7% at constant
currency and organic revenue growth was
4%. At actual exchange rates revenue growth
was 4%.
Organic revenue growth in North America
was 7% and 9% in Latin America, including
very strong contributions from Consumer
Services. The UK and Ireland and EMEA/Asia
Pacific regions were impacted negatively,
down (6)% and (14)% respectively.
B2B organic revenue growth was flat. Growth
in North America Data and Decisioning was
offset by declines elsewhere.
Growth in Consumer Services was very
strong, with organic revenue up 17%, driven
by North America and Brazil.
Growth in Benchmark EBIT was 3% at
constant exchange rates and flat at actual
exchange rates after currency translation
headwinds.
Our Benchmark EBIT margin was 25.9%,
down 80 basis points at constant currency
and down 100 basis points at actual
exchange rates. This was after deliberate
action to support our people through the
crisis, increased marketing investment and
investment to support new product
innovation and technology transformation.
We delivered growth in Benchmark earnings
per share of 4% at constant exchange rates
and flat at actual exchange rates.
Cash flow was very strong, with a conversion
rate of Benchmark EBIT into Benchmark
operating cash flow of 106%.
We ended the year in the lower half of our
leverage range at 2.2x (on a pre-IFRS 16
basis), compared to our target of 2.0-2.5x for
Net debt to Benchmark EBITDA.
Brian Cassin
Chief Executive Officer
Experian delivered a strong
performance this year, even as
the world faced the testing times
posed by the COVID-19 pandemic.
We have again shown Experian’s
resilience in the face of external
shocks, which is due to the
diversity of our portfolio and
our successful innovation-led
investments in new opportunities.
FY21 was a year when we
unlocked the power of
data for consumers, clients
and communities across
the world.
Revenue
– ongoing activities
US$5,357m
+4%1
Benchmark EBIT
– ongoing activities
US$1,385m
+3%2
1 Organic growth at constant
exchange rates.
2 At constant exchange rates.
Experian delivered another successful year of
growth even as the COVID-19 pandemic posed
significant challenges to people, clients, and the
world economy. I am proud of the
accomplishments of our 17,800 people around
the world who have shown incredible resilience
and passion, and who have worked tirelessly to
serve our various communities over this year. In
recognition, we intend to make a special one-off
share-based award to recognise the outstanding
commitment of our people this year.
The COVID-19 pandemic has demonstrated how
properly managed data can be used as a
significant force for good and has been used by
decision-makers to navigate the immediate
crisis and to direct resources to where they
were most needed. Our people were
instrumental in using innovative data science to
predict hot zones for the spread of the virus. We
stepped up to launch financial education
projects aimed at supporting communities
impacted by COVID-19. We supported
governments, charities and food banks to help
the most vulnerable during the pandemic, and
we provided health and data modelling tools to
assist with co-ordination of national efforts.
These are just some examples of how we have
placed the power of our data and innovation in
service of society. As we look out to the
economic recovery in the months ahead, data
will be a critical driver of growth, helping
Experian plc Strategic report 07
B2B organic revenue was flat overall,
recovering as the year progressed, with
H1 (2)% and H2 +2%:
Growth in North America and Latin America
offset declines in other regions. Strength in
US mortgage volumes, Experian Ascend,
health and fraud and identity services helped
to offset weaker conditions for unsecured
credit origination, decisioning software and
marketing expenditure by clients.
We made further headway with the roll-out
and scaling of our core B2B platforms. The
cumulative total contract value for Ascend is
US$374m and we continue to make progress
with Experian One, CrossCore and our Open
Data platforms.
Health delivered another year of growth,
automotive was stable and we have
expanded our position in employment and
verification services.
In Brazil, we had significant success
extending our relationships with some of
our largest financial services clients as
we signed expanded new multi-year
agreements, and we saw good growth in
positive data propositions.
We had an outstanding year in Consumer
Services, which delivered 17% organic revenue
growth, with H1 +13% and H2 +22%:
We now have 110 million free consumer
memberships, up by 28 million year-on-year.
We have 41 million free members in the USA,
59m in Brazil and 9.5 million in the UK.
North America delivered organic revenue
growth of 16%. We are investing behind the
success of Experian Boost, which now has
6.7m unique account connections. Our
membership continued to grow and we
launched a new vertical, automotive
insurance, which performed strongly, and
which offers significant further growth
opportunities in FY22 and beyond.
Our Latin America revenues more than
doubled in the year at local currency, with
revenue up 144% organically.
Consumer Services in the UK recovered as
the year progressed, returning to growth in
H2. We launched Experian Boost in the UK in
early November and now have 370,000
active Boost members.
Operating efficiency
One of our key operating principles to
manage throughout the COVID-19 crisis has
been to retain capacity to recover strongly
and to help our people to cope with the crisis.
We did not use any government furlough
schemes.
We deliberately balanced our approach to
cost management. We cut back on
discretionary spend, froze headcount, and
delayed non-critical investment. We also
supported our people and sustained critical
growth investments. We took concerted
action to increase investment in marketing
Revenue and Benchmark EBIT by region, Benchmark EBIT margin
2021
US$m
20202
US$m
Total growth1
%
Organic growth1
%
7
9
(6)
(14)
4
Revenue
North America
Latin America
UK and Ireland
EMEA/Asia Pacific
Ongoing activities
Exited business activities
Total
Benchmark EBIT
North America
Latin America
UK and Ireland
EMEA/Asia Pacific
Total operating segments
Central Activities – central corporate costs
Benchmark EBIT from ongoing activities
Exited business activities
Total Benchmark EBIT
Benchmark EBIT margin – ongoing activities
3,530
625
737
465
5,357
15
5,372
1,201
172
122
(20)
1,475
(90)
1,385
1
1,386
25.9%
3,247
732
755
427
5,161
18
5,179
1,093
220
173
12
1,498
(112)
1,386
1
1,387
26.9%
9
9
(6)
7
7
n/a
6
10
4
(34)
(232)
2
n/a
3
n/a
3
1 At constant exchange rates.
2 Results for FY20 are re-presented for the reclassification to exited business activities of certain B2B businesses.
See the Financial review for analysis of revenue, Benchmark EBIT and Benchmark EBIT margin by business segment and note 6
to the Group financial statements for definitions of non-GAAP measures.
expenditure in support of Consumer
Services. We have also invested in and
materially progressed our technology
transformation as we migrate from
mainframes into a distributed framework
utilising the cloud, and we continued to invest
in new product innovation.
We previously announced that we have
embarked on a transformation programme
in the UK and Ireland to simplify our
technology estate, enhance customer
experience and to return to profitable growth.
The programme is progressing well and to
plan. As previously announced, these actions
have given rise to an exceptional
restructuring charge of US$50m in FY21. We
are on course to deliver year-on-year
run-rate savings of US$40m in the year
ending 31 March 2022.
The net effect was that EBIT margin for the
year reduced to 25.9%. For FY22, we expect
strong accretion in the EBIT margin.
Funding and liquidity
We further strengthened our funding position
while also supporting investment activities.
We continued to invest in data, technology
and innovation through capital expenditure.
Capital expenditure reduced by (13)% to
US$422m, which represented 8% of total
revenue. For FY22, we expect capital
expenditure to represent circa 9% of total
revenue.
We took steps to expand the reach of our
portfolio through a number of inorganic
investments. These included:
– The expansion of our bureau estate with
the acquisition of a majority stake in a
German credit bureau (the Risk
Management division of Arvato Financial
Solutions) and of the Spanish credit
bureau, Axesor.
– We also accelerated our entry into the
verification services vertical with the
acquisition of employer solutions provider
Corporate Cost Control. After the year end,
we acquired Tax Credit Co (TCC) and
Emptech, which also add to our income
verification business in North America.
– Consistent with our ambitions to extend
our position in fraud and identity
management, we acquired Tapad, a leader
in resolution of digital online identities and
BrScan, a leading player in Brazil.
– Total acquisition outflow in the year was
cash of US$583m and 7.2m Experian
plc shares.
Experian plc Annual Report 2021Strategic report 08
Experian plc Strategic report
Chief Executive’s review
continued
We have announced a second interim
dividend of 32.5 US cents per share,
unchanged year-on-year. This will be paid on
23 July 2021 to shareholders on the register
at the close of business on 25 June 2021.
We have also announced that we will
commence a US$150m share repurchase
programme, which will mainly offset
deliveries under employee share plans.
During the year we undertook two bond
issues totalling US$1.1bn. Including these,
our bonds total US$4bn and have an average
remaining tenor of six years.
At 31 March 2021, we had no drawn bank
debt and held US$2.65bn of undrawn
committed bank borrowing facilities which
have an average remaining tenor of four
years. These include our core US$1.95bn
club facility which is undrawn and committed
until December 2025.
As at 31 March 2021, Net debt to Benchmark
EBITDA was 2.2x (on a pre-IFRS 16 basis),
compared to our target leverage range of 2.0-
2.5x.
Other financial developments
Benchmark PBT was US$1,265m, up 5% at
constant currency and 1% at actual rates, after
lower net interest expense of US$121m (2020:
US$132m). The reduction reflects lower average
global interest rates. For FY22, we expect net
interest expense to be around US$115-120m.
The Benchmark tax rate was 25.9% (2020:
25.8%). For FY22, we expect a rate in the range of
26% to 27%, taking into account expected profit
mix for the year.
Our Benchmark EPS was 103.1 US cents, an
increase of 4% at constant currency and flat at
actual exchange rates. The weighted average
number of ordinary shares (WANOS) increased to
910m (2020: 902m), inclusive of the shares
delivered in connection with the purchase of our
stake in the Risk Management division of Arvato
Financial Solutions. For FY22, we expect WANOS
of circa 915m.
Benchmark operating cash flow increased 22%
at actual rates and our cash flow conversion
was 106% (2020: 88%). The increase is due to
the mix of growth, strong control of working
capital, reduced infrastructure investment,
and some phasing.
Foreign exchange translation was a 4% headwind
to Benchmark EPS in the year. This was
predominantly due to the Brazilian real, which
weakened by 31% relative to the US dollar versus
the prior year. For FY22, we expect a neutral
impact to Benchmark EBIT, assuming recent
foreign exchange rates prevail.
Environmental, Social,
and Governance (ESG)
A key priority for Experian is to improve the
financial health of the communities we serve.
This is how we can use our data and
expertise to make the biggest difference to
society, helping us to contribute to three
United Nations Sustainable Development
Goals, namely targets 1.4, 8.10 and 9.3, which
relate to improving access to financial
services and credit.
This year we have reached 28 million people
with our Social Innovation products specifically
developed to deliver societal benefits and
improve financial health. Examples include
Social Determinants of Healthcare, which
helps people in the USA to avoid major medical
bills in future, and a financial online training
module in Brazil to help people manage their
finances. This brings the total number of
people reached since 2013 to 61 million,
putting us on track to meet our target of 100
million people by 2024.
A year ago, we launched United for Financial
Health, a financial recovery programme
partnering with NGOs to help communities
significantly affected by COVID-19. For
example, we partnered with Operation HOPE
to reach ethnic minority groups in the USA
with support to raise credit scores, and the
National Literacy Trust in the UK. We have
reached 35 million people and small
businesses across the USA, Brazil and the
UK and Ireland this year. We are also
expanding into EMEA and Asia Pacific.
As part of our ‘people first’ agenda we will be
making a special one-off share-based
recognition award to our people for their
commitment to Experian during the
COVID-19 pandemic.
We have undertaken an extensive review of
our Diversity, Equity and Inclusion strategy,
and aim to increase the number of women
among our senior leaders from 32% to 40%
by 2024, supporting the commitment we
made this year to the UN Women’s
Empowerment Principles.
Following a recent appointment, our Board is
now comprised of 36% women and 73%
independent members (including the
Chairman). We continue to meet the
recommendations of the Hampton-Alexander
Review on gender diversity and the Parker
Review on ethnic diversity.
Experian featured in the S&P Global
Sustainability Yearbook 2021 as a leader on
ESG, scoring in the top 15% of the
professional services industry.
Our commitment to help tackle climate
change and reduce our impact on the
environment is reflected in our CDP rating of
‘A-‘. This places us in the leadership category
and among the top 14% of professional
services companies for our disclosure on
climate risks and opportunities.
This year we have cut our absolute carbon
emissions by a further 58% and reduced our
carbon intensity by 60% (Scope 1, Scope 2
market-based and Scope 3 emissions). This
reduction was mainly due to the decrease in
air travel as a result of COVID-19 restrictions.
As business activities resume, we’re
expecting to see an increase in air travel
trends and we will continue looking into
carbon reduction initiatives to help decrease
our footprint sustainably and in the long term.
Building on last year’s commitment to be
carbon neutral in our own operations by 2030,
we are today announcing a science-based
target to cut our Scope 1 and 2 emissions by
50% by 2030, and our Scope 3 emissions by
15% by 2030. Having committed last year to
gradually carbon offset our Scope 1 and 2
emissions over the five years to 2025, we are
offsetting 20% of our FY21 emissions.
Outlook
As the global recovery gathers pace, we believe
data will be a key driver of economic growth.
We are off to a strong start to FY22 which gives
us every confidence of another successful year
ahead. We expect organic revenue growth in the
range of 7-9%, total revenue growth of 11-13%
and strong EBIT margin accretion, all at
constant currency.
Year-on-year % change in organic revenue – for the year ended 31 March 2021
North America
Latin America
UK and Ireland
EMEA/Asia Pacific
Total Global
% of Group
revenue
65
12
14
9
100
Data
5
1
(5)
(8)
2
Decisioning
2
2
(7)
(20)
(4)
B2B1
4
1
(6)
(14)
0
Consumer
Services
16
144
(6)
n/a
17
Total
7
9
(6)
(14)
4
1 B2B = Business-to-Business segment consists of Data and Decisioning business sub-divisions.
Transforming
lives with
agility and
speed in
the cloud
Cloud-based decisioning is
critical to an organisation’s ability
to quickly and nimbly support
their customers. The COVID-19
crisis has accelerated the need
for solutions that are fast to
install, secure, can easily scale to
meet emerging needs and
changes in demand, and upgrade
seamlessly.
Donna DePasquale
Executive Vice President and General
Manager, Decisioning, Experian
Experian plc Annual Report 2021
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Experian Decision Analytics’
PowerCurve recognised as
a winner of the 2021
Artificial Intelligence
Excellence Award
60%
of people now have
higher expectations
of their online
experiences than
before COVID-19
Consumers around the world are facing increasing
financial pressures and need more support than
ever from organisations. COVID-19 and natural
disasters have intensified consumer need for quick
and relevant support. And they’re demanding it –
60% of people now have higher expectations of
their online experiences than before COVID-19.
At the same time, organisations have faced significant business
disruption, such as overwhelmed call centres, and older, less flexible
processes that can’t adapt as rapidly to changing circumstances,
impacting customer service, and causing delays. Organisations are having
to navigate this complexity, to change at pace, and take decisive action.
By using automated decisioning solutions, such as our enhanced
cloud-based PowerCurve solutions, businesses can upgrade and
accelerate their digital transformation to effectively address these
challenges. Coupled with our powerful datasets they can make decisions
with speed and agility, while still supporting customers and providing
them with a personalised, consistent experience.
Our cloud solutions help businesses simplify their IT environments,
lower costs, and nimbly scale up and down to meet consumer demand
as needed. Businesses have access to our continuous innovation through
accessible upgrades and smaller companies can take advantage of data
and analytics previously out of reach. And, because there’s no software
to install, they can be ready to test in days and go live in weeks rather
than months.
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Our purpose in action – COVID-19 response
Supporting you during the pandemic and beyond
The COVID-19 pandemic has impacted millions of people and
organisations around the world and, more than a year in, many
are still grappling with its mental, emotional, and financial toll.
Among the more pressing issues for people has been navigating
the financial landscape and hardships brought on by illness and
unemployment. It has also exacerbated underlying financial
issues for already marginalised groups in society. For businesses
it has meant navigating operational closures, changes to revenue
models and increasing fraud attacks.
In response we developed several solutions which provide education, advice and
free tools to consumers and businesses. We have also worked with charities and
governments to ensure that financial relief reaches the people and businesses that
need it most.
Yet there are signs of hope and resolution ahead. People’s concerns about personal
finances are starting to ease and they are more comfortable with the security and
convenience of online shopping and banking. Businesses are embracing new
opportunities to serve the growing ranks of online customers and are preparing
for the future as pent-up consumer demand is released.
Our employees have risen to the
challenge of providing practical
assistance, innovating at speed to
help those immediately affected and
help them better position themselves
as they recover from COVID-19
related hardships. We knew early on
in the pandemic that we had an
important part to play and pivoted
our efforts to do just that. Looking
forward, we remain committed to
developing new ways to use our
resources, data, technology and
creativity to be part of the solution
and long-term recovery.
Brian Cassin
Chief Executive Officer
Globally
Facilitating access to fair
and affordable credit
As people and businesses get more and more
stretched during times of crisis, the ability to
access credit, or have forbearance on existing
credit is vital. It can be the difference between
sinking or making it through. We remain
committed to helping lenders and governments
maintain access to the credit economy, and
continue to support consumers to protect their
credit standing and financial health.
We stepped up financial
education for consumers
We stepped up financial education for
consumers so they could benefit from
accessing resources and educational materials
to learn about credit and other important
personal finance topics. Giving them the
information and tools so they can make more
informed decisions during difficult times.
We launched United for Financial Health to
empower and protect vulnerable consumers
United for Financial Health is a new financial
recovery programme to empower and protect
vulnerable consumers hardest hit by COVID-19,
helping them to improve their financial health
through education and action. So far, we’ve
partnered with 11 non-profit organisations in
the USA, UK and Brazil, to deliver tools and
resources to help those affected the most.
During FY21 we’ve reached 35 million people,
far above our first-year target of 15 million.
See page 42 for more detail.
35 million
People reached
Highlighting the impact of
the global pandemic
Our research, such as in our Global Insights
Report and Global Data Management Research
Report, is helping organisations understand
how the pandemic has impacted data
perception and usage, as well as consumer
behaviours and business strategies, and helps
them understand how important it is to quickly
identify and support those who are facing
short-term challenges as well as the
vulnerable.
North America
Making life easier for hospital
and healthcare administrators
We developed a free Payer Alerts Community
COVID-19 Portal for healthcare administrators
that provides a comprehensive overview of the
latest policy and procedure changes from
medical insurers and payers, with 8,509 alerts
available to users. Allowing administrators to
quickly respond to those changes, ensure
smooth processing of payments and freeing
up their time to deal with other issues. So far,
1,732 organisations and 2,049 users, from all
50 US states, have taken advantage of the
portal during the pandemic.
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US$130,000
has helped 21 families stay
in their homes
Helping families keep their homes
and promoting financial inclusion
We partnered with the NAACP¹ and created
Home Preservation Grants to support
African-American homeowners facing
COVID-19 related hardship who are at risk of
losing their homes. We donated US$150,000
to the NAACP for financial education and
mortgage relief, of which US$130,000 has
helped 21 families stay in their homes with
grants of between US$2,000 and US$10,000
per recipient.
Improving financial health with
increased access to credit reports
Free weekly credit reports from March 2020
to March 2022 for all Americans via
AnnualCreditReport.com.
Innovating to support informed
decisions and help mitigate risk
We built the Ascend Portfolio Loss Forecaster,
a new tool for lenders that uses Experian’s data,
along with up-to-date macroeconomic
forecasts, to help them analyse risk accurately
across consumer loan portfolios.
Guiding healthcare and government
efforts to help the at-risk
We created a free interactive heatmap
showing populations in the USA most
susceptible to developing severe cases of
COVID-19: to help inform and guide efforts
around communications, outreach to high-risk
populations, align healthcare, community
and government programmes, and plan
for the recovery.
Helping lenders understand small
businesses' unique circumstances
We launched a free COVID-19 US Business
Risk Index to assist lenders and government
organisations in understanding how to make
fair and responsible lending to small
businesses that need it the most during this
time. Our analysts built the dashboard's first
iteration in one weekend to provide easily
accessible, relevant insights in response to
the rapidly advancing virus.
Backing innovation to help solve global
challenges, level the playing field and
create new opportunities
We've supported Massachusetts Institute of
Technology's Solve programme by committing
up to US$100,000 for the Good Jobs & Inclusive
Entrepreneurship and Learning for Girls &
Women. Each of which is working to solve
financial health issues which have arisen for
consumers as a result of COVID-19.
1 National Association for the Advancement of Colored People.
See www.naacp.org for more information.
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Our purpose in action – COVID-19 response
continued
Latin America
Colombia and Peru
Helping consumers in Colombia and Peru
manage their financial health
Our free credit reports and scores have enabled
people to manage their financial health. In
Colombia, since April 2020, more than one
million people have had access to their credit
history for free. From mid-April 2021, we
extended this free access to SME businesses.
Colombia
Assisting the government to prioritise
those most in need
We helped the Colombian Government to
segment the low-income population. Our
information became an additional tool for them
to use so they could deliver special subsidies
to help support these households during the
difficult economic situation caused by
COVID-19, So far, in the first stage alone
1,162,965 subsidies were delivered by the
government.
UK and Ireland
Supporting charities to help identify
vulnerable people
We offered our Affordability Passport to
organisations, including debt charities and
lenders, free of charge for three months to
help them identify customers who could be
left vulnerable due to changes in their
financial circumstances.
Brazil
Applying data science to enable fast access to
data for researchers and public health workers
We built and launched a new data platform, the
COVID Radar, in just three weeks, and mobilised
a public-private partnership of more than 60
companies and organisations, to use data to
fight the pandemic and help with Brazil’s
economic recovery. It provides real-time
information on COVID-19 cases in Brazil and
analytical tools to help predict its progression.
In addition to providing case monitoring and
disease forecasting, the COVID Radar integrates
and connects companies with the hospitals and
communities that need donations of ventilators,
personal protection equipment, or other
supplies.
Protecting people’s credit scores
Along with Equifax and TransUnion, we
helped implement a special measure called
an 'emergency payment freeze' to ensure that
an individual’s current credit score is protected
for the duration of an agreed payment holiday
with their lender.
Assisting public organisations including
health services in planning their response
We created a new dashboard tool, called
Experian Safeguard, for local authorities,
NHS trusts, fire services, and major charities to
help them prioritise those most in need during
the pandemic. Developed in just two weeks,
it enabled the identification of geographic
areas where vulnerable people lived, allowing
targeted community care to be delivered
to them.
Supporting Brazilian consumers
to pay off their debts
We held our debt negotiation fair (Feirao Limpa
Nome) online this year, bringing on even more
partners and greater discounts to support
Brazilian consumers in paying off their financial
debts during such challenging economic times.
Overall, it was our biggest fair to date, we
helped 3.6 million people, and saw a record
6.2 million agreements reached with lenders.
3.6 million
Brazilians supported to renegotiate
their debts during our online
Limpa Nome fair
Backing micro and small entrepreneurs
to create innovative business solutions
We’re backing small companies with our
‘SME challenge’, a nationwide contest to support
entrepreneurs' innovation projects and help
them overcome the pandemic challenges they
were facing.
1,325 companies entered the competition, all of
whom had free access to our online financial
education course and their credit score. They
also received mentorship from our employees
who volunteered more than 500 hours to work
with the companies, Overall, 20 companies won
a cash prize of R$25,000 each to invest in the
implementation of their ideas and contribute to
the development of the entrepreneurial culture
in Brazil.
Helping disadvantaged school
children get online
We’re helping close the ‘digital divide’, between
families with laptops and internet access, and
those without, whose school-aged children
have been struggling to keep up with online
classes during the pandemic. Overall, for the UK
and Ireland we donated £170,000 for student
laptops, of which £100,000 was used to match
donations from Mail Force's ‘Computers For
Kids’ campaign via The Big Give, helping to raise
£200,000 for the initiative.
£170,000
for student laptops
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South Africa
Improving people’s lives through financial
literacy
We partnered with Rhiza Babuyile, a local NGO,
to launch a programme focused on incubating
entrepreneurs based in the townships of
Kyamandi and Fisantekraal, Cape Town.
We provided consulting assistance to ten
entrepreneurs, who each have four to five
dependents, in the form of a business
assessment and one-on-one coaching.
Plans are to continue the coaching and
add masterclasses and training workshops.
Malaysia
Credit education and tools for consumers
and businesses
Since the start of the pandemic we have
provided consumers with free access to
credit health monitoring services and
businesses with free access to credit risk
management, digital customer relationship
management, secure file sharing and storage,
and business analysis tools.
Singapore
Supported small businesses
We provided complimentary credit monitoring
for 500 local businesses, helping them to
embrace digitalisation and be ready to address
business continuity challenges.
Italy
Guiding businesses and supporting
them to react quickly
By providing free feasibility studies for
businesses we’ve helped them to analyse
current market conditions, assess the impact of
change on their portfolios and decision-making
processes, and identify critical issues and
suitable solutions.
The Netherlands
Assessing portfolio risk
We wanted to help our clients quickly and
accurately find and mitigate risk in their
portfolios, by providing an innovative Portfolio
Health Web Data Check. This helped them
identify which of their SME clients may be
affected by the pandemic, giving our clients a
chance to proactively protect their business
while still supporting their clients in the most
fair and appropriate way, helping to minimise
the impact of COVID-19.
India
Employee Relief Fund and fundraising drive
to support colleagues and their families.
We extended our Employee Relief Fund to help
our employees and their families cope under
harsh pandemic conditions. We also provided
homecare support, extended health insurance,
COVID-19 test cost reimbursement and
business-wide well-being and mindfulness
sessions for our teams in India. A 48-hour
fundraising drive saw colleagues across all
our regions making personal donations, which
were in turn fully matched by the Company.
Experian committed a further US$600,000
towards charitable efforts to provide
emergency relief across India.
Helping consumers manage
their financial anxiety
Our free credit reports enabled people to
take control of their financial health.
EMEA / Asia Pacific
EMEA
Educating businesses on urgent issues
Across the EMEA region we helped businesses
address urgent issues arising from the
pandemic through a series of dedicated
webinars on: fraud prevention, supporting small
and medium-sized enterprises, debt defence
and collections strategies, the ‘new normal’ for
digital, and the economic reboot and impact
on regulation.
Asia Pacific
Supporting the next level of customer
experience
With the surge in demand for digital services
from consumers Experian has been providing
businesses with extra support via cloud-based
and on-premise solutions, as well as helping to
protect against fraudsters, whether that is to
differentiate legitimate consumers from
fraudsters, or swiftly respond to emerging
fraud threats.
Thailand, Vietnam and Sri Lanka
Keeping consumers connected during
uncertain times
Supported leading telecommunications
companies, allowing them to rapidly provide
assistance to their subscribers to minimise
financial impacts and lockdown/movement
controls of the COVID-19 outbreak. Staying
connected during movement control
restrictions has proven to be critical, allowing
3.2 million consumers to gain access to
essential services like food supplies and in
managing the psychological effects of isolation.
3.2 million
consumers gained access to
essential services like food
supplies
US$600,000
emergency relief across India
14
Our investment case
A unique proposition
We are a global technology company and a leader in data and
analytics. Our data assets, both for businesses and consumers,
are extensive. We have global reach and the capability to
constantly innovate to fulfil new and emerging needs. The global
COVID-19 pandemic has further accelerated the existing
revolution in data, analytics and digitisation, and we are in a
unique position to react to these trends.
We take a client-first approach to product innovation, creating new
products by investing in people, data and the science of data
interpretation, aided by advanced technologies such as artificial
intelligence, big data and machine learning. Through this, we aim
to create a better tomorrow by improving the ways consumers
and businesses can control their financial well-being and seize
new opportunities.
Experian’s roots are in providing credit information and assessing
lending risks. This is still the foundation of our business but we
also do much more – for lenders, individuals, telecommunications
companies, governments, the automotive sector, US healthcare
providers and many other industries. Our scale and diverse
portfolio provide great resilience, helping us tackle unforeseen
circumstances, such as a global pandemic, with confidence.
We have mapped the addressable markets for Experian and they
are significant, estimated at US$130bn and growing. These
markets are driven by accelerating digital adoption, the shift
towards automated services, the growing requirement for
customer authentication and consumers needing to access and
manage their credit. We target and allocate capital across our
strategic focus areas to make credit and lending simpler,
transform financial lives, and help businesses to combat fraud
and to find customers across the segments in which we operate.
We have developed detailed plans to pursue these opportunities.
We are financially well positioned, with a strong balance sheet
and funding liquidity, and a proven record of converting operating
profit to cash. This allows us to focus on key investment areas,
balancing shareholder returns with the need for constant
innovation, as well as investing in organic business growth while
also pursuing strategic acquisition opportunities.
We are a leader in global information services
with strong positions in growing markets
We are a leader, holding the number one or two positions in
our largest markets – the USA, Brazil and the UK.
We have a diversified portfolio of businesses across different
sectors and regions, operating in 44 countries.
Our business model is scalable, allowing us to grow revenues
quickly at low incremental cost.
We achieve significant synergies across our operations, by
combining data sources, integrating analytics and using
technology to offer differentiated propositions.
We invest continually to secure opportunities across
specific addressable markets, which we have estimated at
US$130bn.
These five strengths combine to create a strong basis for
future growth.
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We place a strong emphasis
on Environmental, Social and
Governance criteria
We transform financial lives by helping people take control of their
financial status – through our core offering, Social Innovation products
and community investment.
We safeguard futures by protecting our customers and their families
from identity theft and fraud.
We are introducing innovative ways for those who lack basic financial
services to gain access to credit, for example through use of
alternative data sources and financial education programmes.
We help to protect the environment and manage the risks of climate
change. We have consistently reduced our carbon footprint
year-on-year and are committed to being carbon neutral in our own
operations by 2030.
We are committed to being a diverse and inclusive organisation, at all
levels and across all regions. We have established detailed targets to
achieve this, as set out in the Environmental, Social and Governance
(ESG) section of this report on page 38.
Strong foundations support
our growth potential
We continually invest in product innovation and new sources of data,
to address changing macroeconomic factors and emerging market
opportunities.
We have direct relationships with over 100 million consumers, a
situation unique in our industry. This provides a mechanism for us to
engage directly with millions of people.
We have demonstrated our ability to adapt quickly to meet the
changing needs of our clients in unforeseen market conditions.
We have great potential to introduce and expand our services in all of
our markets over the longer term.
We are increasing our product offering in growing industry segments
such as US healthcare and automotive, and in expanding markets such
as Brazil.
We remain financially well positioned
We have averaged 6% annual organic revenue growth1 since we
became an independent listed company in 2006, sustaining positive
organic growth through all macroeconomic conditions, including both
the 2007/2008 global financial crisis and the 2020/2021 COVID-19
pandemic to date. More detail is available in the Financial review
section of this report on page 62.
Much of our revenue is highly recurring, as many of our products and
solutions are mission critical and an integral part of our clients’
operating processes.
We are a highly cash-generative, low capital intensity business. Our
Benchmark EBIT to Benchmark operating cash flow conversion rate1
has averaged 99% since 2006.
We make the best use of the cash we generate, balancing the
need for organic investment in innovation and acquisitions
with returns to shareholders, through dividends and share
repurchases.
1 Please refer to note 6 to the Group financial statements for
definitions of organic revenue growth and Benchmark EBIT to
Benchmark operating cash flow conversion.
16
Key performance indicators
A resilient performance
Against a challenging external backdrop, we launched many new products, supported our
employees, and helped many who were financially impacted by the pandemic. The strength
of our business performance is evidenced by a range of key performance indicators.
Organic revenue growth
4%
2021
2020
2019
2018
2017
Why is this important? It is a measure of our
ability to provide innovative propositions and
services for clients and consumers, and to
extend these into new industries and across
many geographies.
Aim To consistently achieve mid- to high
single-digit organic revenue growth.
Analysis Organic revenue grew 4%, with the
main contributors being North America 7%
and Latin America 9%, including very strong
contributions from Consumer Services.
%
4
8
9
5
5
See page 117 – Revenue performance
is linked to directors’ remuneration
For a reconciliation of revenue from ongoing activities, including
disclosure of organic and acquisition revenue, from the year
ended 31 March 2020 to 31 March 2021 see page 165.
Benchmark EBIT and Benchmark EBIT margin1
US$1,385m
25.9%
2021
20202
2019
20183
2017
US$m
%
1,385
25.9
1,386
1,306
1,241
1,197
26.9
26.9
27.1
27.6
Why is this important? It measures how well
we turn our revenue into profits, allowing us to
generate returns for shareholders, and to
reinvest for future growth.
Aim: To operate our business efficiently and
cost effectively with stable EBIT margins.
Analysis: We protected our people, made the
conscious decision to invest in marketing for
Consumer Services, and continued our
innovation and technology modernisation
programmes. Overall, for the Group, Benchmark
See page 117 – Benchmark EBIT
is a directors’ remuneration measure
EBIT was US$1,385m, up 3% at constant
exchange rates and flat at actual rates.
Benchmark EBIT margin was 25.9%, down
80 basis points before the impact of foreign
exchange rates, and down 100 basis points
overall.
1 From ongoing activities.
2 Results for FY20 are re-presented for the reclassification to exited business activities of certain B2B businesses.
3 Restated for IFRS 15.
Return on capital employed (ROCE)
15.0%
2021
2020
2019
20181
2017
1 Restated for IFRS 15.
%
15.0
16.1
15.9
15.5
15.5
Why is this important? It measures how
effectively we have deployed our resources
and how efficiently we apply our capital.
Aim: To generate good returns on the
investments we make and create long-term
value for shareholders.
Analysis: Our decision to sustain organic
investment and to pursue attractive acquisition
opportunities reduced ROCE in FY21. This year,
ROCE was 15.0%, down 110 basis points on
the prior year.
Benchmark earnings per share (EPS)
USc103.1
Why is this important? EPS measures our
success at generating surpluses and value
for our shareholders.
2021
2020
2019
20181
2017
1 Restated for IFRS 15.
USc
103.1
103.0
98.0
94.4
88.4
Aim: To achieve earnings growth for
shareholders while balancing reinvestment
to secure future growth opportunities.
Analysis: Benchmark EBIT from ongoing
activities was up 3% at constant exchange
rates, driven by our organic revenue growth
performance. Our Benchmark net finance costs
decreased to US$121m, and Benchmark tax
See page 117 – ROCE is a directors’
remuneration measure
See page 117 – Adjusted Benchmark EPS
is a directors’ remuneration measure
rate was up 10 basis points at 25.9%. With
weighted average numbers of shares at 910m,
this resulted in Benchmark earnings per share
of 103.1 US cents. This was flat on the prior
year at actual exchange rates and up 4% at
constant currency.
Experian plc Strategic report 17
See page 117 – Cumulative Benchmark operating
cash flow is a directors’ remuneration measure
Benchmark operating cash flow and cash flow conversion
106%
US$1,476m
2021
2020
2019
20181
2017
1 Restated for IFRS 15.
US$m
%
1,476
106
1,214
1,270
1,196
1,149
88
97
96
96
Why is this important? Cash flow gives us the
capacity to operate, and reinvest. The efficiency
with which we convert profits into cash flow is
measured by cash flow conversion.
Aim: To convert at least 90% of Benchmark
EBIT into Benchmark operating cash flow.
Analysis: Cash flow performance was strong
this year with Benchmark operating cash flow
of US$1,476m, up US$262m on last year. The
increase is due to changing revenue mix, strong
control and phasing of working capital, and
deferred infrastructure investment.
Employee engagement
Why is this important? An engaged and
motivated workforce helps us to develop
exciting new propositions and find new
opportunities while appropriately managing
risks.
Aim: To ensure Experian is a great place to
work and that we can attract and retain the best
people.
Analysis: This year has been challenging for
everyone, including our 17,800 employees with
the majority working remotely due to COVID-19
related office closures. For many, it has been a
See the Environmental, Social and Governance (ESG) section on pages 38 to 56 for
further information on how we’ve been looking after and listening to employees this year
period of adjustment and adaptation. We have
been dealing with the uniqueness of remote
working and sometimes unanticipated mental
health consequences such as loneliness and
anxiety, as well as other added challenges such
as having to home-school children. We have
therefore focused very strongly on our
colleagues’ mental and physical well-being
throughout the year. To stay in touch we have
conducted more frequent and flexible pulse
surveys, rather than our traditional single
annual survey. Survey results show that:
On average across all pulse surveys, 75% of
employees responded favourably to ‘I am
feeling physically and mentally well’
On average across all pulse surveys, 88% of
employees responded favourably to ‘I am able
to be productive in my current work set up’.
We plan to continue this approach into FY22 as
more frequent sampling and direct employee
feedback helps us to ensure we fully take
account of our people’s needs and enables us
to make decisions in a timely manner. We will
also conduct our more extensive annual survey
in June 2021.
Greenhouse gas emissions (000s CO2e1 tonnes)
16.8
)
e
2
O
C
s
e
n
n
o
T
(
s
n
o
s
s
m
e
2
O
C
i
i
60
11.9
50
40
30
20
10
0
12.8
34.2
9.9
14.1
28.0
8.9
14.3
25.6
7.8
15.2
22.1
3.1
14.3
4.4
2017
2017
3.9
2018
2018
3.6
2019
2019
3.0
2020
2020
2.2
2021
2021
12
10
8
6
4
2
0
)
e
2
O
C
s
e
n
n
o
T
(
s
n
o
s
s
m
e
2
O
C
i
i
Why is this important? It measures the carbon
emissions we generate, as we have a
responsibility as a business to reduce our
carbon footprint and respond to the climate
change emergency.
Aim: To reduce our carbon emissions with the
goal of becoming carbon neutral in our own
operations by 2030.
Analysis: To become carbon neutral, we need to
reduce our direct emissions and take further
action by becoming more energy efficient and
switching to renewables where possible. Once
we have reduced our footprint as far as
possible, remaining emissions should be offset.
In 2020, we committed to gradually carbon
For further information please refer to the Sustainable
Business report at www.experianplc.com/sbreport
offset our Scope 1 and 2 emissions by 2025.
FY21 is the first year for which we’ll offset a
portion of our emissions, offsetting 20% of our
emissions with the end goal of reaching 100%
in FY25. This year, as a result of lockdowns and
most of our staff working from home, we have
seen a decrease in our Scope 1 emissions by
27% to 2.2 thousand tonnes of CO2e and Scope
2 emissions by 35% to 14.3 thousand tonnes of
CO2e. Equally we have seen a decrease in air
travel emissions (Scope 3) by 98% to 0.3
thousand tonnes of CO2e. We continue to work
on making effective long-term changes in our
business, to reduce our carbon footprint. For
more information on our approach and next
steps to achieve this, see page 54.
Scope 1
Scope 1
Scope 2
Scope 2
Scope 3
Scope 3
CO2e emission per US$1m of revenue (tonnes)
CO2e emission per US$1m of revenue (tonnes)
CO2e emission per full-time equivalent employee (tonnes)
CO2e emission per full-time equivalent employee (tonnes)
1 CO2e = CO2-equivalent.
2 Scope 1 covers direct emissions such as gas consumption
and diesel used in generators or company cars. Scope 2
(market-based) covers indirect emissions from the
generation of purchased electricity, steam, heating and
cooling calculated using supplier issued or residual emission
factors. Where supplier and residual emission factors are not
available, we use location-based emission factors. Scope 3
includes indirect emissions from our value chain. Our current
Scope 3 reporting only includes emissions from air travel
(using DEFRA conversion factors. FY21 air travel emissions
were calculated using relevant RF emission factors. Prior to
FY21, non-RF emission factors were used). Actual emissions
from other Scope 3 emission categories are being calculated,
estimated emissions are included in the People and ESG
section on page 56.
3 Carbon intensity: CO2e emission per US$1m of revenue.
4 CO2e emission per full-time equivalent (FTE) employee.
FTE employees as at 31 March 2021.
5 The 2017 calculation includes CCM which has been
reclassified as a discontinued operation.
6 The 2018 intensity metric based on revenue was restated
following the adoption of IFRS 15. Metric reported in our 2018
Annual Report: 10.8 tonnes of CO2e per US$m revenue.
See note 6 to the Group financial statements for definitions of these non-GAAP measures: organic revenue growth, Benchmark EBIT, Benchmark EBIT margin, ROCE, Benchmark earnings per share, and
Benchmark operating cash flow and cash flow conversion.
Experian plc Annual Report 2021Strategic report
18
Market trends
Understanding our key market trends
The COVID-19 pandemic has
catalysed many of the trends that
have been shaping our markets for
some time. People have rapidly
adopted digital services and this in
turn is transforming the way that
businesses operate so that they may
better serve their customers. To
operate effectively in the digital
sphere, organisations need to invest
in smooth digital journeys and
automate processes, as well as
contend with higher levels of online
fraud. These trends have been on
our radar for a number of years.
For many years we have invested in
strategies to meet these needs and
this positions us well. That said, the
COVID-19 pandemic has required us
to adapt, while also opening up new
opportunities for expansion.
COVID-19 and counter-cyclical response
In the short term, we will continue to face
macroeconomic pressures as well as lockdown
uncertainty in a number of our regions.
However, our business benefits from
counter-cyclical drivers, segments which
prosper when economic conditions are
depressed. We also have businesses in the
portfolio which are less susceptible to economic
downturns. Consumer Services, Health and
Mortgage are examples of business segments
which grew this year and which contributed to
our resilient performance.
We also adapted some of our propositions to
help our customers deal with the uncertainties
created by the pandemic. In total, we launched
158 innovations during the year, many of which
were directly linked to these needs. These
included propositions in areas such as fraud
prevention and debt collections, as well as new
attributes and scores to help our customers
make better lending decisions, including
recovery scores, downturn triggers and
loss-forecasting capabilities.
Strategic focus areas
1
2
3
4
5
Make credit and lending simpler,
faster and safer for consumers
and businesses
Empower consumers to improve
their financial lives
Help businesses verify identity
and combat fraud
Help organisations in specialised
vertical markets harness data and
analytics to make smarter decisions
Enable businesses to find, understand
and connect with audiences
Changes in consumers’
digital behaviour
Trend
Economies have digitised at a time when
personal finances have become much more
stressed. Consumers want to save money.
They also want to protect their data and they
are often faced with bewildering levels of
choice online. They expect digital interactions
to be smooth, intuitive and fast, whether
making purchases or applying for credit. New
trends are also emerging and, with a growing
awareness of the value of their data,
consumers are increasingly willing to share
data in exchange for discernible value.
Businesses on the other hand have to work
harder than ever to find, serve and retain
customers in this hyper-connected digital
world.
Our response
We have established direct relationships with
more than 100 million consumers globally.
We are introducing new services that meet
their changing demands, helping them
manage their finances more efficiently – on
any device, at any time, anywhere – and
placing them in control.
We provide our business clients with data and
analytical tools so they can understand who
they are interacting with, help them make
better and faster decisions about which
services to offer, while also minimising the
risk of fraud.
Our Ascend Analytical Sandbox is an
advanced analytics environment which allows
our clients to access deeper insights, data
visualisations, and business intelligence. It
combines Experian credit data, the
customer’s data, and other data sources such
as industry-specific feeds. As consumers
consent to data sharing to unlock value, we
are adding new modules and datasets to the
product, enabling more powerful insights.
We constantly develop new propositions to
take account of changing behaviours. In
Health, increasingly healthcare is shifting out
of the traditional hospital setting and into
settings that are more cost effective and
convenient for patients. We have introduced
offers which co-ordinate digital care, while
also helping to authenticate and identify
patients before they embark on treatment.
1
2
3
5
Population and wealth
Trend
The global population is set to continue
growing, with an increase of two billion
people expected in the next 30 years.
Emerging markets are becoming key drivers
of economic growth over the medium to long
term.
Currently, there are around 1.7 billion adults
globally who are unbanked. Huge numbers of
people in the developing world have no
access to formal financial services, while in
more developed countries, large segments of
the population may have ’thin’ or no credit
profiles. This can reduce people's access to
credit and to mainstream finance because
they may be ‘invisible’ to the industry.
Our response
We are developing new technologies to help
people gain access to financial services at fair
and affordable rates. Many products support
the millions of credit invisibles. Experian Lift,
our new service in the USA, draws on
extensive data sources to enhance
predictions of creditworthiness. Our new
Atlas platform has the potential to improve
access to credit for one billion under-banked
people in Asia Pacific. It combines technology
with non-traditional datasets such as
telecommunications, rental or ecommerce
data to help lenders assess risk cost
effectively. This can help more people to get
fairer access to credit. In the UK, our new
Credit Limits service enables consumers to
check the limit they are likely to be offered
before applying for a new credit card, without
impacting their credit report.
Experian Boost has helped over four million
people in the USA instantly improve their
credit scores, adding positive data about
on-time payments of utility bills to their
financial profiles. In November 2020, we also
introduced Experian Boost to the UK to help
people improve their credit scores.
In Brazil, we built a positive data bureau in
response to legislation in 2019 that means
positive payment histories (records of bills
paid) can now be used in credit assessment.
We have developed a range of new positive
data services which we have been launching
through the year, and currently have 96 banks
contributing data. We believe that of the 157
million adults in Brazil, we can assist 137
million with positive data products, either by
enabling their access to credit they would not
have had previously, or by allowing them to
access credit at reduced interest rates.
2
4
5
Experian plc Strategic report 19
Proliferation of data
Advances in automation
and technology
A changing regulatory
environment
Trend
Businesses in all industries are looking to AI
and machine learning to automate processes
in order to operate more efficiently, and
secure productivity gains. New technologies
are revolutionising industries, and businesses
are investing to remain competitive, with over
95% of Fortune 1000 organisations stating
they are investing in big data and AI.
Automation can personalise customer
experiences, make online transactions
simpler, automate logistics and optimise
business decisions, allowing companies to
generate significant efficiencies and redeploy
their staff to do jobs which require a higher
level of human input.
Our response
We are transforming our technology stack to
a modern, resilient, scalable and secure
cloud-based architecture to accelerate
product delivery to clients. Investment in the
best technology is critical to the way we
ingest, store and secure data, as well as to the
way we develop and deliver our products. It is
one of the critical factors in how we can
maintain and extend competitive advantage.
Technology enables us to link Experian and
third-party data assets to create innovative
products.
In addition, we use technology to enhance our
own processes, which has improved
productivity. It has allowed us to reduce our
conventional cost base and release funds for
investment in new opportunities, such as
further innovation. For example, we continue
to invest in our RPA (Robotic Process
Automation) capability and have automated
377 of our key processes, equating to more
than 350 years of manual activity time saved
since project inception.
1
4
5
95%
of Fortune 1000
organisations state they are
investing in big data and AI
Trend
Regulators are becoming increasingly more
active in protecting consumer data and
privacy rights, and there are now significant
financial and reputational consequences for
non-compliance. Cybercrime is also
increasing, and there is much greater scrutiny
of data protection.
As data custodians, businesses have a
responsibility to safeguard consumer privacy.
We believe we can help our clients and
consumers meet their responsibilities in this
more demanding environment.
Regulators are opening up banking and other
data-rich industries, encouraging consumers
to ensure they get the best possible deal.
Our response
We work with regulators to ensure we comply
fully with all new regulations, and engage in
public debate to ensure policy-makers take
into account our views and those of our
industry. We develop new services to help our
clients remain compliant with regulations that
affect them.
Protecting consumer privacy and information
security is extremely important to us. We
have programmes that evaluate every
product and service to ensure we strike the
right balance between consumers’ privacy
expectations and the economic benefit to both
consumers and clients. Furthermore, we are
channelling investment into our multi-layered
and extensive information security
programme to manage and protect against
cyber security risks, by continually upgrading
our security infrastructure in an ever-
changing environment.
Accurate data is fundamental to our
reputation and business success. We
constantly strive to increase the accuracy of
our data in a competitive market, to ensure
customers can have confidence in the
services we provide.
2
3
4
Trend
As the world moves increasingly online, the
amount of data available is growing at an
extraordinary pace. Of all current data, 90%
has been created in the last two years, and 127
new devices connect to the internet every
second. As well as the increased amount
available, it is becoming cheaper for
businesses to store, manage and analyse data.
However, these businesses need to
understand the many data sources available to
them in order to improve decision-making.
New data sources, made available through
open banking in the UK and USA, and positive
data in Brazil, are giving organisations access
to rich, up-to-date information. However, to
optimise opportunities in these challenging
times, businesses need to embrace advanced
analytics tools, capable of connecting disparate
datasets and making the information more
usable.
Our response
We develop solutions to offer sophisticated
platforms to help clients take advantage of
data proliferation. For example, Ascend
Intelligence Services uses AI and machine
learning to support continuous improvement
of strategic models for clients. This frees up
data-scientist time from model building and
monitoring activities, it means data can be
integrated into models faster, and produces an
endpoint that can be utilised by PowerCurve
and Experian One. It can also offer real-time
market insights, benchmarking and health
monitoring.
We are evolving our analytics portfolio in
response to client demand for a shift towards
cloud-based products. We are investing in a
roadmap of innovation to evolve from a largely
on-premise software business towards a
cloud-first, digital-first, API-enabled and
scalable platform business. This
transformation is well underway and began
with our investments to unify and standardise
our product suites, easing the process of
scaling these globally.
For example, PowerCurve migration to the
cloud provides an adaptable platform that
enables decisions to be designed to client
needs and combines rich data and advanced
analytics to drive decisions at scale. The
modular design offers agility, and our continual
augmentation of machine learning into the
platform can bring greater connectivity to the
businesses we serve, with frictionless
experiences for their consumers.
2
3
4
5
90%
of all data has been
created in the last
two years
127
new devices connect
to the internet every
second
Experian plc Annual Report 2021Strategic report 20
Our business model
We play a vital role in connecting people
and business through data and technology
We believe data has the power to transform lives and create a better tomorrow. We combine our
innovative technology with data to drive economic growth, supporting jobs and prosperity.
What we do
With our expertise in data and technology we are ideally placed to link people
and organisations, helping them interact more easily.
We help people
better understand their financial position
improve access to financial services
enjoy a quick and seamless online service
17,800
employees globally
Four
reporting regions:
– North America
– Latin America
– UK and Ireland
– EMEA/Asia Pacific
See page 21 for more information on
Business-to-Business and Consumer Services.
Organisations can
deliver services to consumers with greater speed and efficiency
make fairer, better-informed and more responsible decisions
become more efficient and reduce costs
USA, UK
and Brazil
are our largest and longest-
established markets
44
countries where we have
offices
Two
main segments:
– Business-to-Business
– Consumer Services
Providing essential services for people and organisations
We help create opportunities for people to improve their lives and for organisations
to make faster, smarter decisions. We do this by transforming data into information,
and by deploying advanced technologies, platforms and analytics.
Big data analytics
Ascend Technology Platform: data
on demand and sophisticated
analysis tools.
DataLabs: advanced data analysis,
and research and development by
data scientists.
Core data platforms
Collect, sort and aggregate
data from tens of thousands
of traditional and alternative
sources and transform it to provide
a range of information services.
Open data platforms
Open Banking: facilitating
consumer-permissioned sharing of
data from their bank account with
other parties.
Consumer-contributed data
Consumers adding their own data
to their credit files. 6.7m consumers
connected with Experian Boost in the
USA and over 5m consumers with
Serasa Score Turbo in Brazil.
Empowering people to better
understand their financial position, take
control of their finances and manage
their financial health
Helping business to make faster,
smarter and better decisions
Using data to help the most
vulnerable in society and supporting
economic growth
Decisioning
Manage and automate large
volumes of decisions and processes,
on-premise or in the cloud.
PowerCurve: customer decision
management for connecting analysis
and operations.
CrossCore: fraud prevention.
Financial education
Access to credit reports and scores,
identity monitoring and protection
as well as comprehensive awareness
and education programmes.
Free consumer membership base
of 110m people.
Product comparison
Credit Match/Credit Matcher:
consumers can understand which
credit card, personal loan, mortgage
or automotive insurance products
they will most likely qualify for and
benefit from using.
Online debt negotiation
With Limpa Nome in Brazil
consumers see all their own past-due
debts in one place and negotiate more
achievable repayment plans with
lenders.
Experian plc Strategic report 21
A detailed look at what our business segments do and how they generate revenue
Business-to-Business
Data
What we do
We provide businesses with information to help
them to understand and develop relationships
with their customers, to build their businesses
and to manage the risks inside their
organisations. We build and manage large and
comprehensive databases containing the credit
activity and repayment histories of millions of
consumers and businesses. We collect, sort and
aggregate data from tens of thousands of
sources and transform it to provide a range of
information services. Organisations analyse and
use this information to make decisions about
lending and the terms on which to lend.
Link to our strategic focus areas
See page 28 and 34
1
4
Key customers
Banks, automotive dealers, retailers and
telecommunication companies
How we add value
We aggregate data from many sources and
turn it into information that can be used for
many different purposes
We help provide lenders with a
comprehensive view of a consumer’s
financial situation
Information is used to support impartial
credit decisions, broaden access to credit
and promote fair and responsible lending
We also provide marketing data relevant to
consumer lifestyles which helps businesses
understand their customers better and
serve them with tailored products
Revenue model
Primarily transactional with some
contribution from licence fees
Market position
Number one or number two in our key
markets
Main competitors: Equifax, TransUnion,
Dun & Bradstreet, BoaVista, LiveRamp
and Epsilon
Decisioning
What we do
We draw on the depth and breadth of our credit
information databases and on other information,
including clients’ own data, to develop predictive
tools, sophisticated software and platforms.
These all help businesses and organisations
manage and automate large volumes of decisions
and processes. Our services help our clients
improve the consistency and quality of their
business decisions, in areas including credit
risk, fraud prevention, identity management,
customer service and engagement, account
processing, and account management.
Link to our strategic focus areas
See page 28 and 32
Key customers
Financial services, retail, US healthcare,
telecommunications, utilities, insurance and
FinTech
1
3
How we add value
Assessments of creditworthiness,
suitability and affordability of loans support
responsible lending
Faster, frictionless and better-informed
decisions help improve customer
experience
Relevant insights into new and existing
customers support more effective
management and better engagement with
customers
Authentication of customer identity helps
prevent identity fraud and other crime
Revenue model
Software and system sales: consultancy and
implementation fees; recurring licence fees;
and transactional charges
Credit scores sold on a transactional,
volume-tiered basis
Analytics: a mix of consultancy and
professional fees, as well as transactional
revenues
Consumer Services
What we do
We provide credit education and identity
monitoring services directly to millions of
consumers in the USA, Brazil, UK, South Africa,
Peru, Colombia and India. Our services for
consumers include free access to their
Experian credit report and score, and useful
online educational tools. In the USA and UK we
enable people to contribute their own data to
their file, for example utility, mobile payments
and streaming services, to help them improve
their credit score. We offer comparison services
that show consumers a choice of relevant and
available credit card, personal loan, mortgage,
automotive insurance and other deals. In Brazil,
our online recovery portal, Limpa Nome, lets
consumers see all their own past-due debts in
one place, and negotiate more achievable
repayment plans with lenders.
Link to our strategic focus areas
See page 30
2
Key customers
Consumers, lenders and insurance providers
How we add value
Support consumers in taking control of their
credit, improving their financial well-being
and achieving their financial goals
Provide immediate tangible results through
credit score improvement and
renegotiation of debts
Support eligibility for, and improved access
to, credit offers and other services
Improve navigation of major financial
decisions, such as buying a home
Improve detection of, and resilience to,
identity theft and fraud
Revenue model
Monthly subscription and one-off transaction
fees
Referral fees for credit products
White-label partnerships
Market position
Market-leading provider of business solutions
in key markets except for the USA
Main competitors: FICO, IBM, SAS and
Change Healthcare
Market position
We are the market leader in Brazil and one of
the market leaders in the USA and the UK
Main competitors: Intuit, NerdWallet, Lending
Tree, ClearScore, Equifax and TransUnion
Data revenue¹ (US$m)
A. North America
B. Latin America
C. UK and Ireland
D. EMEA/Asia Pacific
Total
1,761
457
361
287
2,866
1 Revenue from ongoing activities.
D
A
C
B
Decisioning revenue¹ (US$m)
A. North America
B. Latin America
C. UK and Ireland
D. EMEA/Asia Pacific
694
92
220
178
A
D
C
Total
1,184
B
Consumer Services revenue¹ (US$m)
A. North America
B. Latin America
C. UK and Ireland
1,075
76
156
B
C
A
Total
1,307
Experian plc Annual Report 2021Strategic report
22
Our business model
continued
What makes us different?
We invest in a number of key areas to sustain and grow our competitive lead.
A culture of innovation
Innovation has always been at the heart of our business and
we employ some of the world’s leading data scientists and
software engineers. We have a long tradition of introducing
innovative new products and we invest to maintain high
standards of scientific excellence. It’s an important
differentiator for our business as well as being a significant
growth driver.
We have introduced a formal process to embed a culture and
framework of innovation across Experian. We call it ‘Athena’.
Athena helps us to innovate and bring new products and
services to market more successfully.
Our extensive data assets
Data is the foundation of our business. Worldwide we hold and
manage the credit history and repayment data of 1.3 billion
people and 166 million businesses. We focus on ensuring we
continue to have the best datasets available, alongside the best
products to help our clients make sense of their data.
Consumers are at the heart of what we do
We aim to be the consumers’ bureau. We have built our
business on clear commitments.
Safeguarding data security: we operate a multi-faceted
approach to ensure that data is held securely. This approach
focuses on prevention, detection and mitigation.
Improving data accuracy: we constantly strive to increase the
accuracy of our data. We use data from reputable sources, we
measure accuracy continuously, and we have improvement
programmes and processes that quickly correct inaccurate data.
Protecting data privacy: we have programmes to evaluate every
product and service to ensure we strike the right balance
between consumers’ privacy expectations and the economic
benefit to both consumers and clients.
Ensuring data transparency: we offer consumers the ability to
review the data that we hold and, where appropriate, to opt out
of further processing or sharing of data for particular uses.
We have relationships with millions of consumers. We empower
people to use data to support their financial well-being. We have
pioneered new ways to give people greater control over their data
and give them the confidence to flourish financially.
The Athena process
Monitor
market trends
Evaluate
client needs
Identify
opportunities
Invest in the
most promising
initiatives
Traditional
credit data
New
datasets
Increase breadth
and depth of data
More predictive
Broader applications
110m
Direct relationship with
consumers across the
USA, Brazil and the UK
23
consumer and 12
business information
bureaux globally
Robust security
controls based on
ISO 27001
See page 43 for more detail on these four areas.
Experian plc Strategic report 23
Breadth and combination of capabilities
Our greatest strength comes from the combination of data with our
advanced analytics and decisioning tools. This approach means we
can often create highly differentiated services which are unique to
Experian. We work together and we proactively seek these
opportunities across our organisation.
Data &
Analytics
Consumer
engagement
Decisioning
Our global footprint and employees
We provide our services to both multi-national and local clients. We can
develop new products in one market and transfer them into others in a
systematic and replicable way, helping us to export our most successful
platforms and formats. Our 17,800 skilled employees work in 44 global
operations across six continents.
3,300
UK and Ireland
44
countries in which we
operate
7,100
North America
3,200
Latin America
4,200
EMEA/Asia Pacific
Investing sustainably
Robust financial performance and reinvestment
We are committed to incorporating ESG factors into our investment
decisions. We choose to invest in products and services with the clear
purpose of generating positive social impacts, alongside financial
returns. Our core products and Social Innovation products help improve
access to credit to support financial inclusion, improve financial literacy,
and prevent fraud and identity theft. We are also investing to lessen our
environmental impact, reducing our carbon emissions through investing
in more efficient technology, reducing our energy requirements, and
making more use of renewable energy. This supports our commitment
to be carbon neutral by 2030 in our own operations. Underlying our
commitment to sustainable investing is our investment in data privacy,
security, accuracy and transparency, and our commitment to working
with integrity.
2030
carbon neutral
commitment
See page 38 for more detail
We have a disciplined approach to capital allocation which balances
investment in the business and returns to shareholders in support of
our strategy to deliver consistent growth.
Organic investment
in selected projects
Inorganic investment
through acquisitions
balanced
with
Shareholder returns
Dividend payments
Share repurchase programme
when appropriate
Experian plc Annual Report 2021Strategic report 24
Our business model
continued
Value creation for our stakeholders
Our clients and consumers
Why
How
Value
Clients’ needs include:
better services for customers – faster
and frictionless
meeting regulatory requirements
Clients’ and consumers’ needs include:
high-quality and accurate data
data security
consumer privacy
access to credit and other services
prevention of fraud and identity theft
Our communities
Why
Communities need:
business success, employment and
job creation
access to public services
long-term asset creation in
communities
inclusion in mainstream financial
services and products
a healthy environment in which to live
Our people
Why
People need:
to feel valued for their contribution
to feel supported, especially while
working remotely
to feel they make a difference to
society
to contribute to our engaging, positive
empowering culture
training and learning
career progression
job security
We help millions of people and thousands
of businesses use their data more
effectively – seizing new opportunities
and taking greater control.
We help them by turning data from many
sources into useful information they can
use. We create powerful analytics and
software, so they can make
more-informed decisions.
We work with our clients to understand
their challenges and develop new
products that help them solve problems.
We welcome their constructive feedback
about our products and services, either
informally or through our yearly Net
Promoter Score surveys.
We engage with consumers via our free
platforms, providing them with financial
education, useful tools, free Experian
credit reports online and various other
products. Consumers can reach us
through our call centres and we respond
to their concerns on a range of issues,
from access to credit, to amending data
on their credit file, to identity theft. For
inaccurate data on credit files we have
processes in place for consumers to
review their data, raise a query and have
corrections made if needed.
How
Value
We draw on all our resources – including
our people, information and skills – to
support communities worldwide in
innovative and effective ways. These
include the development of Social
Innovation products, employee
volunteering and partnerships and
support for community groups and
charities.
We help people access credit and other
financial services, that they can use to
take control of their financial
circumstances and improve their lives.
We help businesses prosper, and to
enhance their potential as local
employers.
How
Value
Our work carries great responsibility,
and how we work is as important as
what we do.
We provide employees with opportunities
for growth through training, giving them a
sense of purpose – an integral part of our
organisational culture that has a positive
impact globally.
We listen to our people’s views, support a
positive empowering culture and do all
we can to make Experian a great place to
work.
We encourage employees to use their
skills to undertake interesting work. We
give them the right tools to work
effectively, learn new skills and develop
their careers.
We celebrate great performance and
ensure employees feel nurtured and
supported throughout their careers with
Experian.
3.5bn
credit decisions
supported facilitating
billions of loans
3.2bn
microloans enabled
11.6m
conversations with
consumers
390k
fraud victims supported
Prevented fraud
of at least
US$10bn
61m
people reached through
Social Innovation projects
US$12m
community investment
21,000
hours volunteering
58%
reduction in carbon
emissions
Employee reported
results from pulse
surveys:
75%
favourable response to
‘I am feeling physically
and mentally well’
88%
positive response to
‘I am able to be
productive in my current
work set up’
Experian plc Strategic report 25
Our suppliers
Why
Suppliers want:
long-term, collaborative relationships
business opportunities
to mitigate market and financial risks
to meet regulatory requirements
How
Value
We create close and collaborative
relationships with key suppliers to ensure
streamlined processes, performance,
segmentation and qualification.
This helps us uncover and realise new
value, increase savings and reduce costs
and risk of failure.
These close relationships also help us
ensure we meet our compliance
obligations.
Many of our data contributors are also
our clients. They supply us with data
through a give-to-get model.
Our ability to combine, clean, sort and
aggregate data from thousands of data
contributors creates a more complete
picture of consumer or business
interactions across markets.
31
key suppliers in our
dedicated SRM1
>11k
data contributors
in the USA
Governments
Why
How
Value
Governments are concerned about:
generating prosperity
managing economic cycles
supporting their stakeholders’
financial well-being
compliance with regulations
managing issues that affect
consumers and businesses
mitigating impacts and reversing
climate change
We develop constructive relationships
with policy-makers and regulators. Our
senior executives meet with legislators
regularly to ensure they understand the
opportunities, value and challenges
associated with our business.
We respond to, and engage with,
government during public consultations
on issues that are relevant to our
business.
We enable the transparent flow of data
that is essential to the functioning of
modern economies and the financial
ecosystem.
High-quality data reduces the risk to
lenders of extending credit, ensures fair
and responsible lending, increases
confidence to lend, as well as the ability
to assess affordability and meet
compliance obligations. This benefits the
wider economy by improving access to
credit, improving market competition,
increasing credit diversification and
reducing the cost of credit.
Our shareholders
Why
How
Value
We aim to create long-term shareholder
value, by investing to grow our position in
our chosen markets, while ensuring we
meet our wider sustainability
commitments.
Shareholders want to:
understand Experian’s strategic
direction, financial performance, and
the sustainability of the business
analyse structural market trends
generate sustainable investment
returns through share price
appreciation, dividends or share
buybacks
understand management and
incentive structures
ensure they are investing in
businesses that are committed to
environmental progress, societal
benefit and which have strong
governance.
We build relationships with our
shareholders through our investor
relations programme.
In our quarterly financial updates we
inform our shareholders about Experian’s
financial and strategic progress. We hold
face-to-face meetings and run dedicated
teach-ins to educate them about our
business and ESG commitments.
Regular investor surveys provide us with
feedback and enable us to take corrective
action if necessary.
1 Supplier Relationship
Management
1.3bn
consumers and
166m businesses –
credit history and
repayment records
4%
Organic revenue growth
15.0%
Return on capital
employed
USc103.1
Benchmark EPS
2030
carbon neutral
commitment
Experian plc Annual Report 2021Strategic report 26
Experian plc Strategic report
Our strategic focus areas
Accelerating
innovation
to seize new opportunities
and help customers
achieve their ambitions
Our strategy is based on our fundamental purpose: to create a better
tomorrow for consumers and organisations. It has been a year of
challenge, with the COVID-19 pandemic affecting billions of people around
the world. In response, our purpose has guided our approach, as we have
played an essential role in helping those affected. Our employees have
risen to the challenge of providing practical assistance to help
consumers, businesses and communities. We have also worked with
regulators, lawmakers and governments in our key markets to ensure
that financial relief reaches, and will continue to reach, the people and
businesses that need it most.
Even during these times, we have not let up on strategic investment. We
have invested in new innovations, strengthened our competitive position
and seized new market opportunities. In fact, the pandemic has
accelerated previously existing trends. The new product investments we
have made over the last few years have positioned us well to take
advantage of these trends, as have the investments we have made in
organisational capacity and technology infrastructure. Combined, this has
meant we can bring the right products to market quickly.
At the heart of our strategy are the key market trends driving long-term
changes in our customer base. Their needs and priorities are continually
evolving. Our strategic focus areas define the priority customer sets that
we serve, the key challenges they are grappling with, and how we can be
part of the solution. We consult customers to better understand these
needs so that we can develop the best propositions to address them.
27
1
Make credit and
lending simpler, faster and
safer for consumers
and businesses
See page 28
Our
customers
2
Empower
consumers to improve
their financial lives
See page 30
5
Enable businesses
to find, understand
and connect
with audiences
See page 36
4
Help organisations
in specialised vertical
markets harness data and
analytics to make
smarter decisions
3
Help businesses
verify identity and
combat fraud
See page 34
See page 32
Experian plc Annual Report 2021Strategic report 28
Our strategic focus areas
continued
Market
trends
Changes in consumers’
digital behaviour
Advancements in
automation and technology
1
Make credit and
lending simpler, faster
and safer for
consumers and
businesses
Customer
needs
Reduced friction
in loan acquisition
and underwriting
Ability to make smarter
lending decisions
Optimal management
of credit portfolios
Who?
Why?
How?
Financial services
– Credit cards
– Consumer lenders
– Mortgage lenders
– Auto lenders
– Commercial lenders and trade credit
– Online lenders
Risk of high loss for our clients from
poor lending decisions
The primary role of these companies
is lending
Lending opportunities are growing
across digital channels
Experian is a leader in this space
Through industry-leading accuracy
of credit and alternative data
Consumer-consented data focus
Data linkage capabilities
Advanced analytics
Market-leading platforms
Strong and long-standing relationships
with clients
When consumers apply for credit
they have certain needs and
expectations. They would like the
process to be easy and increasingly
they want to apply through a digital
device. In other words, they seek a
seamless online experience. At the
same time lenders need to make
decisions rapidly on who to lend to
and how much. We sit in-between.
Our data assets and advanced
analytics mean the time taken to
make decisions is greatly reduced
and consumers can get responses
quickly. In this way, friction in the
whole lending process is reduced
and everyone benefits from a
better experience.
What we did this year
In EMEA, we have expanded our presence
through strategic acquisitions. In June, we
completed the acquisition of a majority
stake in Arvato Financial Solutions’ Risk
Management division, allowing us to rapidly
expand our range of risk, fraud and identity
management services across Germany,
Austria and Switzerland. In Spain, we
acquired Axesor, whose experience in
business information complements our
previously existing consumer information
business in the region. This means we are
now able to offer our clients the only
integrated proposition for consumer
information, business information and
decision analysis in the Spanish market.
We are at the forefront of open data
technology, and have introduced new
services such as affordability checking tools,
personal finance management and
recommendation engines. To date, we have
launched open data categorisation services
in eight countries. We continue to focus on
consumer-contributed data and open data
to augment our capabilities in both existing
and new vertical markets.
In Brazil, the introduction of new legislation in
2019, supported by Serasa Experian, means
positive payment histories (records of bills
paid) can now be used in credit assessment,
as well as negative data (missed payments
and defaults). We have launched a range of
new positive data services, that we believe
has the capability to benefit 137m people,
87% of Brazil’s adult population. To date, we
have 96 banks contributing data on 97m
consumers.
Based on our success in North America, we
have been rolling out our Big Data analytics
and insights platform, Ascend, across our
global markets. We are continuing to launch
new products on the cloud-based platform,
including Ascend Intelligence Services, which
harnesses the power of AI and machine
learning to support model management,
development and monitoring.
We initiated the implementation of our plans
to improve the performance of the UK and
Ireland business, enhancing customer
experience, and aiming to return the
business to profitable growth. This has
involved establishing and starting out on
the pathway to simplify our technology and
application estate, as well as restructuring
the organisation to focus on delivering
enhanced outcomes for our clients. In
addition, we have implemented growth
initiatives to bring scale to some geographies,
with restructuring actions to gain greater
operational efficiency and focus our activity
on a smaller number of end markets in
EMEA and Asia Pacific.
Experian plc Strategic report Experian plc Annual Report 2021
29
Transforming
lives by
generating
new opportunities
with positive
data
Positive data is generating new opportunities in Brazil.
Previously lenders had to wait until a loan defaulted to
find out if a customer was able to pay back a loan. Now
with positive data they can assess a customer’s capacity
to repay a loan and over time track trends that might
indicate repayment distress or vulnerability to default,
and take the appropriate action.
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To help them do this, we have been launching new positive data scores,
attributes and alerts, such as for estimated income, affordability and
on-time payments. We’ve added machine learning into the statistical
modelling techniques for the data analysis and score construction,
as well as new sources of data like utility payments. And our data is
refreshed frequently allowing for a rapid response to changing credit
profiles. Lenders can increase credit thresholds and offer customers
better fitting products based on their circumstances.
It’s not just large companies that will benefit from this but small and
medium-sized businesses as well. Having access to this rich base of
information and analysis will help provide them with a new vision of
their customer base, and help them improve results at a time when it
is essential to seek new business opportunities and rapidly respond
to changes in the market.
So far, 105 million Brazilians have joined the positive data registry and
770 million transactions have been registered. With positive data we
expect to see that 23 million people, 14% of the adult population, with thin
files will gain better access to credit, that total credit : GDP will increase
from 47% to 67% and more than US$240bn of new credit will become
available in the Brazilian economy.
Future plans
We will continue to invest to develop and
maintain the superiority of our data, analytics
and decisioning products, as well as opening
up new opportunities, for example in
consumer-consented data. These
investments allow us to preserve and
increase our existing revenue streams, while
also expanding the markets we address.
We are focused on better aligning our global
platforms to make it easier for clients to use
our advanced capabilities. We expect strong
growth as organisations further embrace
analytics and automation, and will bring our
capabilities together in increasingly
sophisticated and integrated propositions to
address key business needs. Through scaling
our solutions, we can bring our products to
new markets more quickly. New features
of our global platforms such as Ascend,
PowerCurve and Experian One, as well as
our open data products, are being rolled out
globally to give a wider geographical reach.
We will remain market leaders for major
market shifts, such as adoption of open data
globally, positive data in Brazil, and identity
services. For shifts such as positive data, we
will continue expand our solutions to serve
as wide a market as possible.
14%
of the adult
population in Brazil,
with thin files will gain
better access
to credit
The wealth of new information
on customers' payment habits
means lenders can gain deeper
insights and a greater degree
of accuracy in their forecasts,
increasing trust and leading
to wider access to credit
for consumers.
Rodrigo Sanchez
Vice President, Credit Services,
Serasa Experian
30
Our strategic focus areas
continued
Market
trends
Changes in consumers’
digital behaviour
Population growth
worldwide
Proliferation of data
Changing regulatory
environment
2
Empower
consumers to
improve their
financial lives
Customer
needs
Gaining access to credit
Safeguarding identity
Saving money
Negotiating debt
Improving financial
knowledge
Who?
Consumers
Small business owners
Consumer lenders
Why?
How?
Consumers face significant financial
and emotional costs to maintain
financial wellness, protect themselves
and navigate the healthcare system
Urgency increases as life events occur
Increasing use of technology
Direct relationships are critical for
consumer-consented data
Consumer-consented data
Comprehensive financial wellness
Best-in-class website and mobile
experiences
Strong partnership ecosystem
Accelerated marketing to grow user
base
Our vision is to become consumers’
first choice for managing their
financial lives. Our solutions can help
consumers gain access to credit at
affordable rates and to manage
their financial lives. We have built
relationships with 110 million
consumers globally, including over
33% of the adult Brazilian population.
What we did this year
Future plans
In November, we launched Experian Boost
in the UK, enabling UK consumers to add
on-time payments to their credit files for the
first time to instantly improve their credit
scores. Boost is also stimulating activity for
credit comparison services and generating
referral fees as consumers often boost their
score when looking to apply for credit. In the
USA, we have increased the types of
payment Experian Boost takes into account.
Consumers can now add payments they
make to streaming services such as Netflix,
Hulu and others to help boost their credit
scores.
Similarly, in Brazil we have established an
ecosystem of services which include an
in-app digital wallet and debt payment tool
alongside Serasa Score Turbo. The
ecosystem also includes a subscription-
based offer, Serasa Premium, that provides
enhanced benefits.
We will continue to build direct relationships
with consumers and our ambition is to reach
millions more.
We will also continue to strengthen the
propositions we have built to date in credit
education, identity protection and credit
comparison.
We intend to expand the range of services
we offer, adding new capabilities in segments
such as Insurance and Health.
We will evaluate the potential to introduce
services for consumers in all the markets
in which we operate credit bureaux.
We will continue to invest in propositions
which help those who are currently
unbanked to gain access to affordable
credit and wider financial services.
Experian plc Strategic report 31
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Winner of the 2020
Experian Si Ramo
Award for
Commercial
Impact
In Brazil 63 million people are included on the negative
data registry, with an average of three debts per person.
Approximately 45 million adults have no bank account,
they may be unemployed or work in low income roles.
They are excluded from mainstream credit, such as for
credit cards or car loans, because they
are so-called ‘thin files’, meaning there is insufficient
information on their credit files for traditional lenders
to reliably make credit decisions.
Many people also have debt obligations which are more than five years
old. These are not included in the negative data registry for regulatory
reasons. This leads people to think, falsely, that their debts have been
expunged or forgiven, but in reality these older obligations are still taken
into consideration by lenders.
A dedicated team at Serasa Experian spent six months developing the
free Score Turbo experience, which is designed to help people to get on
top of their debt payments, improve their credit score and enhance
prospects for accessing credit. People get rewarded for paying their bills.
They can connect to Serasa Limpa Nome (our online debt resolution
marketplace), activate their positive data registration, and we offer them
the opportunity to ‘Turbo’ their score by making payments towards older
debt obligations. They can also keep current credit repayments up to date
before they fall overdue.
The offer was launched in September 2020. So far, people have on
average received a 22-point increase in their score and more than 69m
points have been distributed overall. This is not all, as people can improve
their eligibility for more suitable loans. For the unbanked, it helps them to
establish a credit history and can be a path towards accessing
mainstream credit.
Transforming
lives by
helping Brazilians
to resolve their
debts
We have a big social role to fulfil
as very often we are the first
point of contact for the unbanked
or people who need help to
resolve their credit obligations.
With Score Turbo we wanted to
find a new way to educate people,
to help them keep their accounts
up to date and improve financial
access.
Carina Herzmann
Product Manager, Score Turbo,
Serasa Experian
Scan the QR codes
for further examples
Limpa Nome
Supporting Brazilian
consumers to repay
their debts
Serasa Score Turbo
Speed up your credit
score on the fly!
32
Our strategic focus areas
continued
Market
trends
Changes in consumers’
digital behaviour
Proliferation of data
Changing regulatory
environment
3
Help businesses
verify identity and
combat fraud
Customer
needs
Help with identity
verification and
detection and
prevention of fraud
Streamlined
authentication of
legitimate partners
Who?
Why?
How?
Financial services
Retail
Travel and leisure
Public sector
Social media
Health
– Providers
– Payers
– Pharmacy
People and businesses are
transacting more online and in the
digital sphere. Fraudsters are taking
advantage of this and so businesses
are increasingly aware of the need
to protect themselves from fraud.
We provide services which help
organisations to identify and
authenticate the counterparties they
engage with to ensure transactions
are legitimate. We also help
organisations to detect and prevent
fraudulent activity.
High proportion of credit card and loan
charge-offs are from identity fraud
Growing regulatory costs
Increasing opportunity from growing
use of digital channels
Fragmented competitors beginning
to consolidate
Leveraging unique consumer and
commercial data assets
Advanced analytics and machine
learning models
Modern technological infrastructure
Tokenised identity
Extensive partner ecosystem
What we did this year
Future plans
In May, we launched Sure Profile in the USA,
aimed at combatting the growth of synthetic
identity fraud which is expected to contribute
to US$48 billion in annual online payment
fraud losses by 2023. This type of fraud
occurs when the perpetrator, instead of
stealing an identity, blends information
together to create fictitious identities used to
obtain and build credit history. Sure Profile
validates consumer identities and detects
profiles that have an increased risk of
synthetic identity fraud.
In North America, the unemployment rate
has surged as a result of COVID-19, which
has in turn led to a spike in fraudulent
unemployment claims. Experian’s Precise ID
solution is helping prevent and detect
improper and fraudulent unemployment
insurance payments, through our exclusive
partnership with the Unemployment
Insurance Integrity Center’s centralised
Identity Verification capability.
In our 2020 Global Identity and Fraud Report,
95% of businesses said they felt confident
they can identify their customers. Yet more
than half of consumers don't feel recognised,
and 88% say their perception of a business
is improved when that business invests in
security. This shows the progress that needs
to be made in bridging the gap between
business and consumer perception of
customer verification. In FY22, we expect
to continue our progress in helping
businesses bridge this gap.
We will continue to scale the adoption of
CrossCore, our fraud prevention platform.
CrossCore combines advanced analytics,
rich data assets, identity insights and
fraud-prevention capabilities. It enables
businesses to connect any new or existing
tools and systems in one place. These can be
fraud detection applications from Experian,
our partners, or the client’s own applications.
We will continue to add market-leading
solutions to this platform, so that businesses
can adjust their fraud-prevention strategies
to cope with the evolving threat landscape.
Experian plc Strategic report 33
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Upper-right quadrant
on the Juniper Research
2020 ‘Digital Identity’
leader board
The COVID-19 pandemic has driven a rapid shift from
face-to-face to online transactions. This has resulted in
fraudsters escalating their automated targetting of online
channels, with fraud attacks such as account takeover
64% higher than the year before.
Account takeover (ATO) fraud is a blend of old and new-style fraud. It
occurs when a fraudster gains control over an account that does not
belong to them, changes information such as login credentials, passwords
or personal information, and then makes unauthorised transactions in
that account.
The rise of ATOs has come about in part due to the increased capabilities
of bots that run automated tasks, constantly barraging and testing
security systems. They repetitively try to infiltrate accounts. Over 40% of
online login attempts last year came from attackers. And they are proving
successful. In 2020, ATOs accounted for 54% of all fraud attacks, up from
34% in 2019.
We want to help businesses to respond swiftly to these threats. That’s
why we updated CrossCore, our integrated digital identity and fraud risk
platform. It can flexibly scale up and down, handling the large volumes
and speeds of the recent upsurge in online transactions with ease.
And to determine that the fraudster, not the customer, is the one logging
into an account requires a layered approach, beyond passwords and
two-factor authentication. Our capabilities in device recognition,
behavioural biometrics, machine learning and risk-based authentication
can all help businesses reduce their reliance on manual checking,
usernames and passwords, and block fraudulent transactions.
Businesses can respond to ATO threats quickly and automatically, and at
the same time keep giving their customers a seamless online experience,
one where legitimate transactions aren’t turned away.
Transforming
lives by
protecting
businesses
from automated
attacks
Identity risk fraud has evolved.
It is now more automated, more
scalable and more sophisticated,
with fraudsters increasing both the
variety and volume of their attacks.
Businesses need to respond just as
swiftly with more robust security
and identity checking strategies,
while still ensuring a great
customer experience.
Eric Haller
Executive Vice President and General
Manager of Identity and Fraud, Experian
Scan the QR codes
for further examples
CrossCore
Brings together all the
data and services you
need into a single view
via one platform
Precise ID
Evolved identity verification
and fraud prevention
Anti-Money Laundering
(AML) and Know Your
Customer (KYC)
checks to protect and
improve customer journey
34
Our strategic focus areas
continued
Market
trends
Changes in consumers’
digital behaviour
Proliferation of data
Advancements in
automation and technology
Changing regulatory
environment
4
Help organisations in
specialised vertical
markets harness data
and analytics to
make smarter
decisions
Customer
needs
Reduced complexity
and increased
transparency
Improved ability to
leverage data and
analytics within
workflows
Reduced operational
costs
Who?
Why?
How?
Healthcare
Insurance
Automotive
– Dealers
– Lenders
– Manufacturers
Large or growing areas where
high-cost decisions currently intersect
with lack of transparency
Opportunities to build new data assets
in many areas
Utilising Experian customer
commercial and vehicle data
Advanced analytics
Platforms and advanced programming
interface distribution methods
Relationship sales forces
The propositions we develop are
often relevant to a wide range of
clients and can be adopted across
a range of market segments. Many
of these vertical markets are only
just starting to realise the benefits
our solutions can bring and are ripe
for transformation. We take a
targeted approach to this by focusing
on certain attractive vertical
opportunities.
What we did this year
Future plans
We continue to scale our offerings in the
health sector, reacting to changing trends
within the industry such as the shift towards
'value-based care' and the demand from
consumers for a better patient experience.
We have a comprehensive set of propositions
to help healthcare providers with revenue
cycle management, and an extensive and
expanding client base using these solutions.
Increased digitisation and expectations of the
modern consumer around their healthcare
experience have driven growth in our
scheduling, patient engagement and
payment solutions, and we have also
pursued opportunities to expand in the
identity management space.
We started to establish a presence in the
automotive segment in Brazil through Serasa
Auto, our auto loans contract registration
solution. We are expanding Serasa Auto’s
geographical reach within Brazil, helping
clients comply with vehicle financing
regulations within their state.
The health industry is experiencing
significant change, with COVID-19 having a
massive impact on how care is provided and
managed, and also on patient expectations.
We see our expertise in patient care
co-ordination, identity, authentication,
payments, and collections as a significant
growth opportunity. Beyond that, we also
see consumer opportunities within Health.
Across verticals and regions, we are aiming
to complete our transition to a fully
cloud-enabled business, broadening
decisioning access through Experian One.
We will improve our position in key growth
verticals. For example, we will build on our
lead in Automotive, utilising Experian
solutions in data decisioning and marketing,
to help a range of industry participants make
better decisions.
Experian plc Strategic report 35
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Transforming
lives by
putting patients
in control
Online patient scheduling has
been a game changer in the USA,
not only recently during the
height of the pandemic, but also
during the vaccine roll-out. We’re
very proud to have helped book
100,000 vaccine appointments
across nine clients since
December 2020, with an average
time from booking until first
appointment of just 4.7 days.
Jennifer Schulz
Group President, Health,
Automotive, Targeting and
Data Quality, Experian
To help improve the patient
experience we combined our data,
capabilities, and competencies to
create an online patient scheduling
solution that seamlessly covers:
More control and more convenience. That’s what people
want from their healthcare experience. Nearly eight in
ten people in the USA want to be able to schedule their
own appointments, as well as complete their registration
and pay bills, at any time of day or night.
Just like ordering groceries or online banking, they want the same level
of flexibility and accessibility when managing their healthcare.
Not only does it put the patient in the driver’s seat, but it helps reduce
no shows, it’s easier for patients to adhere to care plans, and has helped
minimise face-to-face contact while COVID-19 remains a concern,
keeping staff and patients safer.
For health providers it means they can attract and retain more patients
by quickly verifying legitimate patients, reducing fraud and denial rate for
eligible patients, as well as providing simple and clear pricing information,
helping to increase patient trust and payment collection efficiency.
Now, as the USA pushes forward with its COVID-19 vaccination drive, the
challenge for health providers has turned to administering vaccines as
efficiently and safely as possible. Online patient scheduling allows
providers to:
Push booking links directly to patients, and designate specific day
and time slots for administering vaccines
Triage people for vaccinations or testing, and check eligibility using
screening questionnaires
Automate follow-up appointments for two-dose vaccines
Scale up or down their efforts depending on when, or how many
vaccines they receive.
Most importantly, healthcare workers, and the aged and vulnerable, can
be prioritised for vaccination, followed by the rest of the population who
can conveniently, comfortably, and safely book their appointments.
Engagement
between
provider and
patient
Scheduling of
appointments
Registration
and checking
of identity
Estimation
of costs
Payment
options
Checking into
appointment
36
Our strategic focus areas
continued
Market
trends
Changes in consumers’
digital behaviour
Population growth
worldwide
Proliferation of data
Advancements in
automation and technology
5
Enable businesses
to find, understand
and connect with
audiences
Customer
needs
Ability to accurately
connect businesses
and customers
Capacity to offer
products to consumers
across channels
Compliance with
regulations
Who?
Why?
How?
Financial Services
Retail
Media
Automotive
Healthcare
Marketers
Advertising agencies
Efficiently acquired customers are
highly valuable
Customer acquisition is a primary
focus for businesses
Advertising spend moving to digital
channels that can take advantage of
targeted marketing
Identity graphs (offline and online)
Proprietary consumer data
Segmentation models (such as Mosaic)
Advanced analytics
Platforms simplifying audience creation,
digital delivery and reporting
Partner ecosystem to enable identifying
consumers across channels
In a crowded marketplace,
businesses want to understand their
customers better and communicate
with them more effectively. They
need to be able to identify audience
groups, then target them with
relevant messages and offers –
simultaneously managing their
communication costs as effectively
as possible. We provide the insights
they need by combining and
enriching datasets and helping our
clients identify customers.
What we did this year
Future plans
In November 2020, we completed the
acquisition of Tapad in North America, to
advance our position in digital identity
resolution for marketers. Tapad augments
our offline identity and marketing data assets
in the US market with cross-device data,
digital linking and distribution capabilities,
to help connect brands to consumers.
The marketing industry was
disproportionately impacted by the COVID-19
pandemic, as businesses looked to manage
their discretionary spend. Despite this, our
targeting business made good strategic
progress. For example, in the UK and Ireland,
we successfully partnered with Infosum
to launch a new digital linkage solution.
Experian Match provides UK publishers with
addressability at scale, without relying on
third-party cookies or requiring a logged-in
audience. This means advertisers are able
to safely and securely match their first-party
customer data against publishers’
addressable audiences in a privacy-
compliant way, without any personal data
being shared between companies.
The explosion of digital activity during FY21
redefined how people shop, manage and
spend money, and access various services.
Some of that activity has returned offline and
will continue to do so as vaccine availability
broadens, but much will not. As more
transactions and spend occur digitally, we
will ensure Experian provides propositions
to help clients with customer acquisition,
onboarding, fraud prevention and detection,
and with authentication which always
complies with privacy requirements.
We will look to expand the solutions we
provide and the verticals we serve by
maximising adjacent opportunities, including
extending across the financial services value
chain and targeting other verticals with
attractive growth prospects. Our product
pipeline continues to grow, allowing us to
enable trusted sharing of data for targeted
advertising, and utilising our solutions to
accurately connect businesses with
customers.
Experian plc Strategic report 37
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70+
local authorities, NHS
Trusts, emergency
services and charities
used this free resource
Marketing data isn’t used just by advertisers. It is
useful to any organisation that delivers services,
helping them to find the people who need support as
quickly as possible.
With the dramatic rise in COVID-19 cases in March 2020, people in the UK
were asked to stop non-essential contact and travel, and to stay at home
unless for essential reasons. Many shops and workplaces closed, with
subsequent loss of work and income for many families. People vulnerable
to infection, such as the aged or disabled, were advised to shield at home
losing their contact with their local communities.
Charities and local officials needed to quickly prioritise resources, identify
the people who were struggling, and get them help fast. To do that they
needed information on which to act. Our UK and Ireland marketing team
knew that we had the data, analytics and expertise to help. We developed
a new tool called Experian Safeguard which from concept to deployment
took just two weeks.
We aggregated and anonymised our ConsumerView database into a
dashboard, and included visual mapping tools for accessibility and ease
of use. Users could then identify, for example, population groups across
the UK that were likely to include those who are 71-years plus, single
pensioners or low-income households on the poverty line.
This free tool was used by more than 70 local authorities, NHS Trusts,
emergency services and charities. In one example it was used by a charity
to identify the best locations for new food banks where they could reach
the highest number of vulnerable people.
At a time of great stress and crisis it has allowed organisations to more
effectively plan and prioritise their services and allocate their resources,
as well as create communication strategies to engage local communities,
and to estimate future demand for services. Access to data and analytics
brings greater insight into problems facing society and this was another
example of where data drives good outcomes for people, communities
and society as a whole.
Transforming
lives by
helping local
authorities
and vulnerable
communities
We believe that data analytics
helps make better, more
informed decisions. It plays a
fundamental role in how societies
can respond to and overcome
challenges, and drives positive
outcomes for everyone.
Sarah Robertson
Product Director, Experian Marketing
Services, UK and Ireland
Scan the QR codes
for further examples
COVID Outlook
& Response Evaluator
A 'heat map' of geographic
populations across the USA most
susceptible to developing severe
cases of COVID-19, which would
likely result in excessive strain on
healthcare resources.
Mosaic
Our consumer
classification for consistent
cross-channel marketing
38
Our sustainable business strategy: Environmental, Social and Governance
Transforming lives with data
We are using the power of data to
transform lives and help businesses
grow, by improving financial health
for people around the world. Our
commitment to sustainable business
is stronger than ever, and we have
rigorous processes in place to
mitigate environmental, social and
governance (ESG) risks.
Our goals
Improving financial health for all
Reach 100m people through Social
Innovation products by 2025 (from
2013)
Reach 100m people through United
for Financial Health by 2024
Diversity
By 2024 increase the proportion of
women in our executive committee
and direct reports to 30%, in our
senior leaders to 40%, in our
mid-level leaders to 42%, and in
our total workforce to 47%
Environment
Become carbon neutral in our
own operations by 2030
Science-based target: By 2030
reduce Scope 1 and 2 emissions
by 50% and Scope 3 by 15%
Gradually offset our Scope
1 and 2 emissions over the
five years to 20251
1 See page 55 for more detail.
OUR PURPOSE
Creating
a better
tomorrow
OUR SUSTAINABLE BUSINESS STRATEGIC PRIORITY
Improving financial health for all
Core
products
See page 40
THROUGH OUR
Social
Innovation
See page 41
Community
investment
See page 41
Contributing to the UN Sustainable Development Goals
1.4
8.10
9.3
ENABLED BY
Treating data with respect
Security
See page 43
Accuracy
See page 45
Privacy
See page 45
Transparency
See page 46
Inspiring
and supporting
our people
See page 47
SUPPORTED BY
Working
with
integrity
See page 51
Protecting
the
environment
See page 53
Experian plc Strategic reportw 39
Our purpose
is to create a better tomorrow for consumers, our clients,
our people and communities. We are doing this by
unlocking the power of data to create opportunities
for people and businesses.
Our sustainable business strategy
aligns with and supports our purpose and business
model, helping us add value for our stakeholders
(see page 24). It sets out our approach to our most
material ESG opportunities and risks.
Highlights in FY21
35 million
Our United for Financial Health campaign has
reached 35 million vulnerable people in
communities hit hardest by COVID-19 through
financial education partnerships with 11 NGOs
in the USA, the UK and Ireland and Brazil.
61 million
Since 2013, our Social Innovation products have
reached 61 million people – putting us on track
to meet our goal of 100 million by 2025 – and
generated US$103m in revenue. This year,
PowerScore alone enabled 1.3 million people
in Indonesia to apply for credit for the first time.
4.5 million
6.7 million people in the USA have connected
to Experian Boost since March 2019, enabling
4.5 million people to instantly improve their
credit score by adding on-time payments to
their profiles. In the UK we launched Experian
Boost in November 2020 and have 370,000
active members.
Diversity, equity
and inclusion
We have refreshed our strategy on diversity,
equity and inclusion (DEI) and set public targets
to improve gender diversity. In 2021, we are
publishing a global DEI report for the first time.
SecurityFirst
We have maintained our strict information
security controls and SecurityFirst culture as
we adapted to new ways of working during
the pandemic and responded to emerging
cyber threats.
Roadmap to
carbon neutral
We cut our carbon footprint by 58% this year
and set a science-based target as part of our
ambition to become carbon neutral in our
own operations by 2030. We became a public
supporter of the Task Force on Climate-Related
Financial Disclosure and achieved an ‘A-‘
leadership rating from the CDP.
Experian plc Annual Report 2021Strategic reportw Improving financial health for all
40
Our sustainable business strategy: Environment, Social and Governance
continued
Our priorities
Improving financial health is how we can make
the biggest difference to society by raising
standards of living, tackling inequalities and
contributing to the United Nations Sustainable
Development Goals (SDGs). The economic fallout
of COVID-19 has further underlined this as a
priority, exacerbating underlying financial issues
for already marginalised groups in society.
We use our core and Social Innovation products,
harness the passion and expertise of our
people, and donate some of our profits to
improve financial health for people around the
world. Through our data and analytics, we give
lenders the information they need to offer fairer
access to credit that enables people to get the
essentials that can transform their lives – from
homes and healthcare, to education and
entrepreneurship. We go further by increasing
access to financial services, and empowering
people to understand and manage their
finances and protect themselves from fraud.
Improving financial health also supports the
long-term success of our business by
strengthening our reputation and stakeholder
relationships, driving innovation, generating
new revenue streams, and creating potential
new customers for us and our clients by
increasing financial inclusion.
How we work is as important as what we do.
We are entrusted with data on 1.3 billion people
and 166 million businesses worldwide. Treating
that data with respect is essential to maintain
trust. Keeping it secure is our first priority, and
failure to do so is our biggest business and ESG
risk (see page 75). We must also protect the
privacy of the data we hold, keep the
information we have on individuals and
businesses as up-to-date and accurate as
possible, and be transparent about the data we
collect and how we use it.
Our strategy is built on a strong culture of
corporate responsibility. We aim to inspire and
support our people by embracing and
developing diverse talent, and creating an
inclusive working environment. We are
committed to working with integrity, always,
and we strive to do our part to tackle climate
change and protect the environment.
This responsible culture also helps us recruit
and retain people with the expertise and
experience we need to grow our business and
meet our sustainable business goals.
Governance
The Chief Financial Officer acts as executive
sponsor of our overall ESG programme, which
focuses on ESG opportunities and risks and the
Company Secretary oversees the Group's
Corporate Responsibility programme. They both
sit on the Executive Risk Management
Committee that oversees how we manage risks
globally, including ESG risks (see page 72).
Our innovation culture puts consumer and
client needs first, and we have strict processes
to ensure we build critical ESG considerations
– such as data security, privacy and accuracy –
into our products and services. We extend our
high standards to suppliers through our
third-party risk management framework.
A central team and a network of regional
corporate responsibility leads, specialists and
steering groups across the business manage
our Social Innovation, community investment,
health and safety, and environmental
programmes and impact. The impact
framework for our sustainable business
programme helps us achieve demonstrable
financial health improvements through our
people, products and profit.
We track metrics related to our charitable and
voluntary contributions in each region monthly,
in line with the Business For Societal Impact
framework. The Board receives regular reports
on our performance, and we publish global data
every year in our Annual Report and
Sustainable Business Report. We are
increasingly measuring and reporting on the
impact of individual products and programmes,
as well as their combined reach. This year, we
have started using the Sustainability
Accounting Standards Board (SASB) reporting
framework to report on material issues (see
our Sustainable Business Report).
Experian has been a
member of the FTSE4Good
ESG index since 2012.
Experian is featured in the S&P
Global Sustainability Yearbook
2021 as a leader on ESG –
scoring in the top 15% of the
professional services industry.
Promoting financial
health for all
Core products
Across our key markets, we see
significant opportunities to transform
lives by tackling financial exclusion
and improving access to credit.
More than a billion people in Asia Pacific lack
access to formal financial services, 45 million
in the USA have thin or no credit profiles, 45
million in Brazil do not use bank accounts and
over five million in the UK have no credit history.
We focus on four key aspects of financial health:
increasing access to financial services, improving
financial literacy and confidence, helping people
manage their financial lives, and preventing fraud
and identity theft. We do this through our core
business, Social Innovation products and
community investment programmes.
Improving financial health also supports our
business. Both core and Social Innovation
products that improve financial health are already
generating significant revenue for our business.
Enabling more people to access financial services
expands our potential consumer base. Employees
who volunteer their time and expertise to support
our financial education and community
programmes also bring new ideas and
experience back to the business.
Core products
In the last two years, more than 4.5 million people
in the USA have used Experian Boost to instantly
improve their credit scores by adding positive
data from on-time payments to their profiles.
Following its launch in November 2020, we have
370,000 active Experian Boost members in the
UK (see page 30). In Brazil, our new Serasa
Score Turbo encouraged more than 6 million
consumers to renegotiate 9 million debt
agreements since its launch in September 2020
(see page 31). Regulations on positive data have
opened up the potential to reach millions more
across the country (see page 29).
Around the world, 110 million consumers now
use our free platforms to access products and
services that can help them understand and
manage their credit profiles. Our consumer
services also help individuals spot potentially
fraudulent transactions in their credit profiles,
and we offer a range of solutions to help
lenders and other clients prevent fraud. This
year, our core fraud and identity theft products
are estimated to have prevented at least
US$10bn in fraud for our clients, and across the
Group fraud and identity products generated
10% of our business revenue.
Experian plc Strategic report 41
Core products
Social Innovation
Community investment
Improving financial health for all
Social Innovation
Community investment
Through our Social Innovation programme, we
invest in developing new products that are
specifically designed to offer additional societal
benefits as well as creating revenue for our
business. Our Social Innovation products have
reached 61 million people in the last eight years
– including 28 million this year – and we’re
targeting 100 million by 2025. Since 2013, they
have generated US$103m in revenue from a
total investment of over US$8m.
Well-established products such as our Limpa
Nome debt recovery portal in Brazil and Prove
ID-Link identity authentication in India have
contributed to the significant expansion in reach
this year. Several newly launched products
have also achieved a big reach in their first year.
PowerScore has given 180 million people in
Indonesia a credit profile for the first time by
using data about their mobile phone use and
more than 1.3 million applications for credit
products have already been made as a result.
Our Social Determinants of Healthcare product
has appended the records of 7.6 million people
in the USA to connect them to preventative
healthcare programmes to help them avoid
major medical problems and bills in future. In
Brazil, almost 500,000 consumers have
registered for our Trilha Financeira (financial
trail) online training modules to learn how to
better manage their finances.
The COVID-19 pandemic has further
accentuated inequalities and we have stepped
up to help hard-hit communities by launching
our United for Financial Health programme,
which has reached 35 million people in less
than a year (see page 42).
This year, our total contributions reached
US$12m. Employees volunteered 21,000 hours
of their time (in and outside working hours) to
help out, despite COVID-19 restrictions limiting
face-to-face opportunities. Local initiatives
included support for communities and financial
education programmes to help people through
the pandemic.
We also ran a virtual campaign to #Map1Million
that saw employees volunteer more than 2,280
hours to map previously unmapped areas of
the world that are home to an estimated
923,000 people. The aim is to support
Humanitarian OpenStreetMap Team – an
international team dedicated to humanitarian
action and community development through
open mapping – in its ambition to map areas
home to one billion people at risk of disaster
or experiencing poverty. Inclusion on the
map can also be a critical step towards
financial inclusion.
Innovation and advocacy
This year, we channelled innovation for financial
health – including COVID-19 recovery efforts
– through our DataLabs, our annual Future of
Information Conference, our Creating a Better
Tomorrow Awards and our first-ever global
hackathon. We invited external ideas for
overcoming financial issues arising from
COVID-19 by sponsoring the Experian Financial
Health prize as part of the US Massachusetts
Institute of Technology’s Solve programme.
We also advocate for financial health more
broadly. This year, we provided expert input to
the World Bank’s guidelines for lenders relating
to the reporting of consumer payment data
during the extended COVID-19 emergency
period. Payment holidays and forbearances
negotiated between lenders and consumers
who suffered hardships because of COVID-19
were reported and reflected in credit reports to
avoid adverse effects on credit scores as a
result. We also explored barriers to small
businesses accessing credit, as a member of
the International Finance Corporation’s SME
Finance Forum, and sponsored the Forum’s
annual global conference.
Our Identities of the World campaign continues
to raise awareness of the impact of financial
exclusion through powerful personal stories. It
has reached over 36 million people over the last
three years and this year highlighted challenges
faced by microbusinesses in Peru.
1.4
8.10
9.3
We’ve identified three United
Nations SDGs – and their
specific targets – where we can
make the biggest contribution
through our strategic focus on
improving financial health for
all. These three targets are all
related to improving access to
credit and financial services.
>2,280 hours
to help our NGO partner's
Missing Maps project put
previously unmapped areas of
the world on the map.
180 million
PowerScore has given 180 million
people in Indonesia a credit profile
for the first time by leveraging
data from their mobile phone use.
Experian plc Annual Report 2021Strategic report 42
Our sustainable business strategy and Governance
continued
11
We teamed up with 11
NGOs to reach 35
million people in less
than a year
Transforming
lives
through
United for
Financial
Health
Armed with opportunity and financial
literacy, we believe that Experian’s
commitment to unlocking the power
of data to create opportunity means
more people will be set up not just to
survive, but to thrive in the months
and years to come. Their willingness
to lean in and support individuals and
families through our work in a time of
global crisis demonstrates their
sincere commitment to community
uplift and outreach.
John Hope Bryant
Operation HOPE Founder,
Chairman, and CEO
Scan me
to find out how this pilot
scheme is helping
empower and protect
vulnerable consumers
COVID-19 presents a serious threat not just to physical
health, but to financial health for millions of people
around the world. Our United for Financial Health
programme is using financial education to empower
vulnerable communities that have been hit hard by
COVID-19 and kickstart their road to recovery.
We teamed up with 11 NGOs to reach 35 million people in less than a year
– smashing our first-year target of 15 million. We are providing financial
education resources, funding, products and volunteers to help our partners
reach the communities they have trusted relationships with, in ways that
are most meaningful and helpful to them.
The partnerships this year focused on our three primary consumer
markets – the USA, the UK and Ireland and Brazil. Many support women,
young people and minorities to help tackle inequalities that have been
exposed and deepened by COVID-19.
In the USA, we kicked off the United for Financial Health programme with
Operation HOPE, reaching over 4.5 million people from ethnic minority
groups with support to raise their credit scores from survival to thriving.
We’re also working with the National Association for the Advancement of
Colored People (NAACP) to help black American families struggling to keep
up with mortgage payments, with Black Girl Ventures to support black and
brown women entrepreneurs, with SaverLife to encourage people from
low-income backgrounds to make a habit of saving, and with 211 to tackle
stress among low-income and diverse communities.
In the UK, we supported National Numeracy’s Number Confidence Week,
and we partnered on the launch of the National Literacy Trust’s Words that
Count campaign, reaching almost 3.5 million people with the aim of tackling
the link between poor reading skills and low financial competence. We’re
also partnering with The Mix to reach under-25s through digital channels,
with the Trussell Trust to offer access to financial education through their
network of food banks, and with The Big Issue to provide guidance through
their magazine, online publications and e-wallet for vendors. Some of our
partners have also used our new 'Living on 4.27' YouTube channel to reach
more young adults.
In Brazil, we’re working with Sebrae to help small businesses recover from
the economic shock of COVID-19 through an online financial education
platform and mentoring from Serasa Experian volunteers.
Our United for Financial Health partnerships are enabling us to reach
consumers who don’t have an existing relationship with Experian, providing
a model we can scale up to help more people and providing insights for our
business to help us create wider social benefits.
Now, we are going further with a target to reach 100 million people by 2024.
43
Treating data with respect
Security
Accuracy
Privacy
Transparency
Data is the lifeblood of our business.
So ensuring we collect, store
and manage data safely and
appropriately is fundamental to our
ongoing success. It’s important our
clients and customers know we take
our responsibilities very seriously
when it comes to managing data
securely, ensuring privacy measures
are managed effectively, the data we
hold is accurate and we are open
and transparent about the data we
hold and the way it is processed.
Security
Safeguarding data
We hold vast amounts of data on people and
businesses. The loss or inappropriate use of
data and systems could result in material loss
of business, substantial legal liability, regulatory
enforcement actions and significant harm to
our reputation.
Our approach
We continually enhance our security
infrastructure, practices and culture across the
business through our SecurityFirst programme.
We invest heavily in cyber security and have
specialist teams, state-of-the-art technology
and rigorous due diligence procedures to deal
with potential threats.
Our security approach has three tiers: applying
tools and processes to prevent threats from
entering our environment; detecting if a threat
enters our environment; and mitigating any
threats by minimising the potential for
information to be extracted from our
environment.
Protecting our perimeter
We have a defence-in-depth approach to
protecting our critical data assets, which
provides multiple layers of control and
protection.
Perimeter scanning
Scanning the perimeter for open access
and scanning applications for regulatory
compliance
Firewall
Blocks unauthorised access while
permitting outward communication
Intrusion Prevention System (IPS)
Examines network traffic flows to detect
and prevent vulnerability exploitation
Web Application Firewall (WAF)
Filters, monitors, and blocks HTTP
traffic to and from web applications
Realtime Application Self
Protection (RASP)
Detects and blocks computer attacks by
taking advantage of information from
inside the running software
Server protection
Antivirus, host security,
continuous reporting
We have controls in place to check for
compliance and constantly scan for potential
threats, with several layers of protection for our
data assets (see diagram below). Our perimeter
deflects tens of thousands of attempts every
day.
Our Global Security Operations Centre works
around the clock to identify suspicious or
malicious activity, with teams in Malaysia, the
UK and the USA, as well as automated tools
and AI. If they identify a threat, our incident
response team steps in to eliminate it with
support from in-house forensic data specialists
and external experts if required.
We gather intelligence to help our security
teams stay ahead of evolving cyber threats.
This year, we expanded our interaction with law
enforcement authorities and others in our
industry to help give each other early warnings
of high-potential cyber security threats. We also
share our knowledge to help other businesses
and consumers keep their data safe. Our
annual Data Breach Industry Forecast for 2021
highlighted areas that have become
increasingly vulnerable to cyber attack in the
COVID-19 era. Predicted threats include
vaccination misinformation and disruption,
hackers holding home devices for ransom, and
exploitation of ‘track and trace’ apps to gain
access to personal user information.
This year, COVID-19 led to almost our entire
workforce moving to homeworking and we took
steps to provide employees with secure remote
connections to our systems. Most data
breaches involve some human interaction, often
something as simple as clicking a link in an
email. Our email and web browsing controls
protect against this kind of malware, and our
security training also encourages people to
think carefully about what they are clicking on.
Our Development, Security and Operations
(DevSecOps) teams work together to build
security considerations into our products
throughout their lifecycle, from start to finish.
We use a range of processes, including manual
penetration testing, to discover, detect and
remediate any potential security risks at every
stage of product development – from concept to
coding, build, quality assurance and production.
We conduct regular risk assessments and
vulnerability checks, and our operations are
subject to external cyber security audits every
year. Simulated exercises and a global data
breach plan prepare our cyber security teams
and senior leaders to respond rapidly in the
event of a breach.
Experian plc Annual Report 2021Strategic report 44
Our sustainable business strategy: Environment, Social and Governance
continued
Security governance
The Chief Information Security Officer has
overall responsibility for Experian’s global
security strategy and the Global Security Office
(GSO) sets relevant policies and standards. The
Security and Continuity Steering Committee –
which includes the Chief Executive Officer, Chief
Financial Officer, Chief Operating Officer and
Chief Information Officer – oversees our
approach to keeping data secure and protecting
consumer information. It reviews key metrics
on security tools, compliance and training
completion rates every month. The Audit
Committee also receives progress reports at
each of its meetings.
We have a comprehensive Global Security
Policy and controls based on the internationally
recognised ISO 27001 standard. Our robust
information security programme builds on
industry-recognised procedures, including the
US National Institute of Standards and
Technology (NIST) framework. We seek and
receive third-party assurance through ISO
27001 certifications of key business areas and
systems, as well as other recognised external
accreditations of our security programmes. For
example, we hold a Cyber Essentials
Certification and perform risk assessments
against our critical and external-facing
applications annually.
Security, Audit and Risk teams work together to
continually improve our assurance capabilities
and test the effectiveness of our controls. Our
Three Lines of Defence model for risk
management (see page 73) includes review by
Global Internal Audit and oversight from the
Board. Any potential policy breaches are
thoroughly investigated and we take
disciplinary action where appropriate.
The GSO conducts due diligence to identify
any potential risks before an acquisition,
followed by an in-depth post-acquisition
security assessment that is reviewed by
Global Internal Audit.
When it is necessary to provide third parties
with access to our data and systems, the GSO
ensures we provide access in line with our
information security requirements. We extend
stringent standards on information security to
our suppliers and partners through the terms
of our contracts. All third parties are risk
assessed. Of our nearly 13,000 active third
parties, 1,674 have been identified as significant
or high risk and all of these have undergone
more in-depth assurance by the GSO.
Security requirements are tiered based on this
risk assessment, and can include increased
controls for higher-risk third parties. We monitor
compliance through our third-party risk
management framework and third parties
identified as significant or high risk are added to
the GSO's continuous monitoring programme
which alerts us to any material changes to
trigger follow-up action if needed.
Our information security culture
At Experian, information security is everyone’s
responsibility. We set out clear requirements for
employees and business units in our Security
Risk Management and Governance Policy. We
invest significant time and resources in training
and awareness on information security through
our SecurityFirst programme.
Our strong information security culture starts
from the top of the business. Senior leaders are
highly engaged and continually reinforce the
message that security is the personal
responsibility of everyone working with us.
All our employees and any contractors who
have access to our systems must complete
mandatory annual training on information
security and data protection. We track training
completion rates weekly and provide a monthly
dashboard to the Security and Continuity
Steering Committee.
More than 250 training courses are available for
people across the business to find out more
about keeping information safe across various
web, mobile and desktop platforms,
applications and software. We provide
additional in-depth training for people working
in higher-risk roles, such as product and
software development.
We continually refresh our training to stay up
to date with evolving risks and circumstances.
This year, we focused on risks associated with
working from home and made sure employees
understood how to secure their home network,
for example by using filtering software and
strong passwords. We adapted our regular
awareness campaigns to continue providing
employees with frequent updates on important
topics, such as email protection and phishing.
Our Global Information Values
Wherever we operate, we are committed to
five core Global Information Values:
1. Balance
2. Accuracy
3. Security
4. Integrity
5. Communication
250+
training courses are
available for people across
the business to find out
more about keeping
information safe.
Scan me
to find out more about
Experian’s commitment
to its Global Information
Values.
Experian plc Strategic report 45
Accuracy
Improving data
Accurate credit reports enable lenders to give
people fairer access to credit and essential
services to improve their lives (see pages 28
and 30). Any inaccuracies in credit reports – and
the data they are built on – can cause problems
for consumers, and potentially deny them fair
access to credit and services.
We understand how important this issue is for
consumers, and place accuracy at the heart of
our Global Information Values, which guide our
approach wherever we operate. We constantly
strive to improve the accuracy of our data in a
competitive market to ensure our clients can
always rely on it to make the most appropriate
decisions.
We have strict processes to ensure data
accuracy – all the way through from designing
a new data supply and sourcing accurate data
in the first place to monitoring and improving
accuracy over time, and resolving any
inaccuracies or queried information. Our focus
is on timeliness, accuracy and completeness of
the data we hold, and the reports we provide to
our clients.
Sourcing accurate data
All our data comes from reputable sources and
our quality control procedures help us identify
and weed out inaccurate or out-of-date
information before we add it to our databases.
We work with data providers to review and
continuously improve the quality of the
information we receive. To do this, we regularly
review and report back on quality to our data
providers, and we offer a comprehensive suite
of software and analytics tools to help them
check data before they submit it to us.
We monitor how data providers deal with
queries about data and how they remediate
them to improve accuracy. If data providers are
unwilling to implement improvements to meet
our standards, we will no longer source data
from them.
Monitoring and improving
data accuracy
Once we have acquired data, we frequently
update and periodically audit the information in
our databases to ensure it is as current as
possible. We also apply further quality
assurance techniques, including data-matching
algorithms, before providing data to our clients.
This ensures we provide clients with
information that represents consumers and
businesses as accurately and fairly as possible.
In North America, the team that manages the
accuracy of data from around 12,000 providers
makes it a priority to rapidly resolve any
conflicts or errors that are likely to have a
material impact on a consumer’s credit score.
Every month, we receive around 32,000
submissions from data providers, and update
around 1.4 billion records – 98% within 24
hours. Through continuous improvement
efforts, we have raised the accuracy rates of
credit reports delivered to 99.9% in recent years
(see chart).
In the UK and Ireland, we have added over 20
million new records in the last year alone,
constantly reviewing the market and working
with new lenders and sectors to ensure their
customers are represented appropriately within
the bureau. Our UK and Ireland Data Office
leads our efforts to achieve world-class data
governance through a strong focus on data
quality, acquisition, transparency and privacy.
Accuracy rate for credit reports
delivered in North America
Accuracy rate for credit reports delivered in North America
Empowering consumers
to correct their data
Our platforms enable us to continually monitor
and measure data accuracy. We also have
processes for consumers to review their own
data, raise a query and have corrections made
if needed.
Our dispute centre in the USA and our website
in the UK make it easy for people to raise a
query about credit information and get it
corrected quickly. Many of our products also
empower consumers and businesses to protect
their data and check for any inaccuracies in
their financial profiles. In Brazil, we have seen a
substantial increase in consumer requests for
corrections to their data since new regulations
enabled the inclusion of positive data in credit
reports. We pass on these requests to the data
provider to evaluate, resolve and supply
corrected data where errors are confirmed.
Privacy
Protecting data
Data privacy is becoming an increasingly hot
topic as people are living more of their lives
online, a trend that has been further
accelerated by COVID-19 lockdowns and
restrictions this year. Our Group Operating
Committee and senior leaders receive regular
briefings to keep them apprised of privacy
developments around the world.
We provide services based on information about
millions of individuals and businesses. As a
steward of the data we collect and use, we have
a responsibility not only to ensure the security of
that data, but to maintain the privacy of
consumers through appropriate and responsible
use. We believe use of data must benefit both
businesses and individuals, while meeting
consumer expectations related to privacy.
100%
99%
98%
97%
96%
95%
99.9%
99.9%
99.9%
99.6%
99.0%
98.3%
Jan 16
Dec 16
Dec 17
Dec 18
Dec 19
Dec 20
Data accuracy is mission critical for us. Because when a credit report is
inaccurate, and someone is denied credit or pays a higher price for
credit, then it can have a huge impact on their lives. In 2016 our data
accuracy was at 98.3%. That sounds high but we knew we had to do
better, so we invested in a programme to find where material and
consequential errors arose and took action to fix them.
We have now achieved 99.9% accuracy for our US consumer bureau,
an impressive, industry-setting standard. Yet we’re not done. We are
innovating to continuously improve our data integrity and focus on
targeted changes that drive even better accuracy for consumers.
Donna Smith, Chief Data Officer,
Consumer Information Services, North America
Experian plc Annual Report 2021Strategic report 46
Our sustainable business strategy: Environment, Social and Governance
continued
financial products in the year ahead. The aim is to
give our customers more comprehensible data,
to help them understand how that impacts their
financial health as a whole.
In the USA, we set out our privacy policies for
specific products and services on the privacy
section of our website. Consumers can access
the information that Experian holds on them by
signing up for a free or paid membership through
the Reports and Scores section of our website.
They will then be presented with a report
showing the data Experian holds on them and
how to dispute this information online if
necessary. Californian residents can also manage
their personal data permissions through the
CP3A portal.
Our newly designed credit reports in North
America include a new Credit Report Insights
section that features infographics, colour-
coding and easy-to-interpret explanations of
the factors that may be helping or hurting a
consumer’s credit status and score.
We also work with financial institutions to
enhance transparency with consumers. In the
UK, when a consumer applies for credit, the
lender will direct them to an industry standard
information notice which presents clear and
consistent information explaining how credit
reference agencies use and share personal
information. In the USA, financial institutions
provide adverse action notices when an
applicant is denied credit or employment based
on information included on their consumer
credit report. This notice includes a brief
description of the data used for the decision
and a contact for the credit reference agencies
that provided the data.
Transparency
Making data accessible
We strive to be transparent about the information
we collect from consumers and third parties, and
how that data is used and shared.
In the UK, the privacy section of our website
provides privacy policies for different parts of
the business, and our Marketing Services
Consumer Information Portal (MSCIP) explains
data rights and sets out the various ways we
use personal and anonymised data. The content
on these websites is designed to be clear and
easy for non-experts, and the MSCIP includes a
series of engaging videos on topics such as
how we obtain data and how people can benefit
from sharing their data.
Individuals can use the MSCIP to find out if they
are on our marketing file and understand what
data we hold about them, where this data
comes from and how it is used. It includes a
prominent feature enabling people to opt out of
targeted marketing if they choose.
To add transparency around the marketing
profiles we build, the MSCIP allows consumers
to view our Mosaic classification for any valid
UK postcode. Through this feature, consumers
can get a flavour of how marketers may view
them, or people like them, when using our
Mosaic segmentation to improve the relevance
of their marketing messages. The results use
simple icons to show key attributes such as
property, transport, lifestyle and holidays in a
way that’s easy to understand at a glance.
In Brazil, our privacy terms page has been
developed to be more user-friendly, by translating
the consumer contract into simple and accessible
language and layout before the user logs in. We
also provide consumers with illustrations of what
their positive data means, based on their credit
card information, with plans to extend to other
Our new-look credit reports in the USA
Our privacy policies vary in each country or
region to comply with local regulatory
requirements. Underlying these policies is our
commitment to provide consumers with notice,
choice and education about the use of personal
information. Educated consumers are better
equipped to be effective, successful participants
in a world that increasingly relies on the
exchange of information to deliver products and
services efficiently.
Lenders need access to accurate information
about people’s financial profiles from Experian
or other credit bureaux. Such information is
integral to an efficient and competitive credit
ecosystem which provides innovative products
that enable consumers to get the most out of
their data, contributes to economic growth and
supports a stable consumer banking system.
Our Marketing Services business also gathers,
analyses, combines and processes data to help
organisations better understand consumers so
they can offer them relevant products and
services, and communicate more effectively
and at the right time.
We evaluate every product and service to ensure
we strike the right balance between consumers’
privacy expectations and the economic benefit to
both consumers and clients. This commitment to
balance is one of our Global Information Values
that define how data must be secured, managed
and used. Our comprehensive data protection
programme details the steps we take to mitigate
data protection risks, and what we expect from
our employees.
We are committed to obtaining, processing and
using data compliantly and responsibly. We only
ever share data with authorised and trusted
organisations. When we do so, we follow strict
guidelines and comply with all relevant laws.
Regulations on data privacy – the way data is
collected and used, and how consent is gained
from consumers – are tightening around the
world. We respond to government consultations
and engage with regulators as privacy
regulations and guidance evolve. Data offers
huge potential to support jobs and prosperity.
We need a regulatory framework that nurtures
and supports use of data to encourage growth,
while protecting consumers’ privacy.
Many regional and national regulations on data
privacy share common principles, and we
advocate for interoperability to support global
commerce. We have updated our data
processes to ensure compliance with
regulations, such as the EU General Data
Protection Regulation (GDPR) in Europe, the
California Consumer Privacy Act (CCPA) in the
USA and the Brazil General Data Protection Law
(LGPD).
Experian plc Strategic report 47
The Experian Way
The Experian Way represents our values, and the behaviours we expect from all our
employees in their everyday activities. This year, our people have continued to find new
ways to demonstrate these behaviours while adjusting to different ways of working.
Delight
customers
Innovate
to grow
Collaborate
to win
Safeguard
our future
Value
each other
External recognition across the globe
recommend the programme to a colleague. We
introduced or improved Employee Assistance
Programmes in all regions. In the UK and
Ireland, and North America, we extended the
time people could take for caring
responsibilities, and in EMEA we refreshed the
holiday leave policy to help employees cope
with the additional demands placed upon them.
We placed additional importance on the ability
to collaborate remotely. Connect 4, for example,
is an initiative to connect groups of four
colleagues randomly, to replicate spontaneous
‘water-cooler’ conversations and to grow
employee networks.
Our people also demonstrated their capacity for
creating new connections independently, an
example being our Home-Aloners group
– employees who live on their own coming
together to create a community of support,
swapping stories, pictures, hints and tips.
Our strong culture has really brought out the
best in our people, and we are encouraged to
say we have seen pride in Experian, and
employee advocacy, increase. In our pulse
surveys, responses to ‘I am proud to work for
Experian’ saw a 5% increase since our 2019
Annual People Survey and ‘I would recommend
Experian to family or friends as a place to work’
increased by 3% over the same period. The
steps taken to support our people, both
practically and personally, have helped them
adapt to new ways of working, with the question
‘I am able to be productive in my current work
set up’ scoring well across all pulse surveys –
averaging 88% positive across the five surveys.
Line managers have also played a critical role,
and we are proud employees have recognised
this, averaging 85% favourable response to the
statement ‘I am receiving the right level of
support from my manager at this time’.
To further the two-way conversation with our
employees, and to strengthen the connection
between our people and leaders while working
virtually, we accelerated the launch of Horizon,
our leading-edge employee communications
platform. This allows users to receive important
updates in one place and access it at any time,
from anywhere, as well as curate their own
content by subscribing to a series of optional
categories. They can also publish approved
content directly on social media. This has been
a resounding success, with 97% of our people
registered on the platform, over 900,000 post
views and 20,000 comments from employees.
Throughout FY22, we will continue to develop
the platform, to encourage even greater
employee connection and engagement.
Inspiring and supporting
our people
At Experian, we work to create a
better tomorrow for consumers, for
businesses, and for our
communities. This ambition
underpins our plans for our people
– to ensure we have the best people,
working in a high-performing and
inclusive environment where they
feel they can do their best work in
support of our vision.
Last year, we set out our people priorities,
focusing on:
hiring and developing world-class people in
‘game-changer’ roles;
ensuring a supportive, flexible and inclusive
environment that attracts world-class talent;
establishing a high-performance mindset
throughout the organisation; and
creating frictionless employee experiences.
As the COVID-19 pandemic emerged at the
beginning of 2020, our priorities needed to shift
quickly to supporting our people where and when
they needed it most. Our Board and leadership
team took a 'people first' approach when making
pandemic-related decisions. This philosophy has
remained in place throughout the year as we
have sought to look after our people, listen to
their changing needs, and continue to build and
celebrate our diverse and inclusive culture.
Looking after our people
Throughout the pandemic we have increased
our focus on the health and well-being of our
teams across the world. We quickly
implemented regular pulse surveys so we could
respond rapidly and ensure the right support
was available. We emphasised mental health,
reflecting the challenges people faced while
working remotely. A response to the statement
‘I am feeling physically and mentally well’ was
75% favourable on average across five pulse
surveys we ran during the year. We put in place
a range of initiatives to support our teams, for
example #ReachOut, which gave all employees
access to resources to support their physical
and mental health whenever they needed it.
We also developed programmes to help
employees adapt to working from home. For
example, in Asia Pacific, Thriving Remotely
provided resources such as e-booklets,
podcasts, webinars, senior leadership vlogs,
playlists and infographics, alongside other
activities to communicate with colleagues. We
ran mindfulness and resilience programmes for
employees, which were received well, with Asia
Pacific receiving a 95% Net Promoter Score
(NPS) - the percentage of those who would
Experian plc Annual Report 2021Strategic reportFev/2021 - Fev/2022AUG 2021 - AUG 2022USAAUG 2021 - AUG 2022COSTA RICABRASIL 48
Transforming
lives by
responding
to racial
inequality
in Brazil
Racial inequality is a very real
problem in Brazil. It is a massive
challenge to overcome and there is a
long road to go given the systemic
problems in society. Yet I’m optimistic
about the future. We’re going in the
right direction and we are focused on
implementing real change, fast. I’m
really proud about how everyone at
Serasa Experian is working together
to be part of the transformation.
Natasha Santos
HR analyst and leader of Black ERG,
Serasa Experian, Brazil
Many people’s image of Brazil is one of sandy
beaches, carnivals, and a melting pot of cultures.
However, it is grappling with a historical legacy of
racial inequality stemming from the 4m black people
enslaved and trafficked from Africa.
While slavery in Brazil was finally abolished in 1888, policies were later put
in place that continued to discriminate against black people. These
included blocking them from certain jobs, preventing them from buying
homes in particular areas, and forcing them to live in neglected favelas.
These policies were, unfortunately, highly effective and their impact still
ripples through Brazil today.
The representation of black and mixed-raced people in higher education is
low, and on average they earn half the income of white people. 64% of the
prison population are black or mixed race compared with 54% of the
general population, and black and mixed-race people suffer from racial
microaggressions or worse on a daily basis.
Recently, there has been a wider acknowledgement that these problems
exist and that there needs to be an active response to overcome them. At
Experian we want to be part of the solution, reflecting our commitment to
a culture of diversity and inclusion.
As part of serving the community we are focused on helping marginalised
populations, specifically black and mixed-race, through our financial
education volunteering programmes, as well as promoting our free
financial tools that can help reduce debt, improve credit scores and help
people access the credit they need.
Inside our business we have identified that just 20% of our workforce in
Brazil are black, compared with over half of the Brazilian population, so we
are working to improve the black representation. We have launched a
mentorship programme between senior employees and black employees
to help support them in their careers. And our senior leaders are engaging
in reverse mentoring, so they are aware of and understand the challenges
that black employees face.
In response to a recent employee survey in which 60% of black
respondents said that not understanding English was a significant barrier
to them at work, we are launching subsidised English lessons. We are also
ensuring that new trainees and interns joining the company are given roles
that don’t require English.
We hope that we can start to make a difference and ensure a better quality
of life for everyone, regardless of their race.
49
Our 5 key commitments for
diversity, equity and inclusion (DEI)
1. Active sponsorship
We have appointed executive sponsors for five
areas of our DEI focus. They each sit on our
Group Operating Committee, ensuring these
topics are represented in decision-making
at the highest level.
Gender: Jennifer Schulz, Group President,
Vertical Markets
Race and Ethnicity: Craig Boundy, Chief
Executive Officer, North America
LGBTQ+: Jose Luiz Rossi, Managing Director,
UK and Ireland
Disability: Ben Elliott, Chief Executive Officer,
Asia Pacific
Mental Health: Lloyd Pitchford, Chief
Financial Officer
2. Better understand our opportunities
and challenges
We believe that it is critical that we have a deep
understanding of the make-up of our population
and their experience of working here so we can
set relevant goals and develop meaningful DEI
programmes and practices. In the coming year
we will focus on improving demographic data
and our people will be asked to take part in a
voluntary census.
3. Measure progress against specific goals
We are also raising our ambition and setting
three-year targets for gender diversity. Our
current global gender diversity and FY24
gender targets are:
Representation of women
Senior Leaders
Mid-Level Leaders
Total workforce
FY21
32%
35%
44%
FY24
40%
42%
47%
4. Ensure accountability
We will be holding annual strategic reviews
chaired by our CEO focused on DEI. We will also
have bi-annual DEI deep dives and quarterly
reviews with each region to monitor our
performance closely and take quick action
where needed.
5. Support our people
We are developing a global Conscious Inclusion
training programme to ensure that we all
understand the importance DEI holds for our
people, our business and our customers.
Scan me To read more
about our DEI journey and
see our first global DEI
report.
Continuing to build and celebrate
our diverse and inclusive culture
Through a year of our people working
predominantly remotely, we have been able to
really bring to life our focus on inclusion. We
have been welcomed into people’s homes
through the medium of video calls, seen our
team-mates with their children, partners and
pets, we have discussed the impact of the
pandemic on each of us and, as a result, have
got to know each other more deeply as
individuals. We have continued to work and
have experienced first-hand that people who
feel able to bring their whole selves to work can
achieve great results.
This year our Group Operating Committee
announced commitments to five key focus
areas for DEI, as shown on the right. Our
leadership commitment is clear, and we are
fortunate this is matched by our employees’
passion and drive on this topic – seen through
the continued success of our Employee
Resource Groups (ERGs). Globally, we now have
over 30 ERGs. They continue to raise awareness,
inspire involvement, and encourage action on a
broad range of topics. Employees have created
two more ERGs this year in the UK and Ireland.
One is Black at Experian, which exists to create a
safe and inclusive environment for people of
black heritage to work, access opportunities and
grow and fulfil their potential. The other, the
Disability Network was launched to help the
business think differently about disability and
how we can be more inclusive.
Our global commitment to recognising and
celebrating international diversity events has
thrived virtually, with regions hosting a range of
events to mark International Women’s Day,
International Men’s Day, Pride, International Day
of Persons with Disabilities and World Mental
Health Day, as well as celebrating additional
local traditions. All regions published Diversity
and Inclusion Reports to celebrate their
achievements and set out areas of focus for the
coming year. We have provided DEI-related
UN Women’s Empowerment Principles
1. High-level corporate leadership
2. Treat all women and men fairly at work,
without discrimination
3. Employee health, well-being and safety
4. Education and training for career
advancement
5. Enterprise development, supply chain and
marketing practices
6. Community initiatives and advocacy
7. Measurement and reporting
training in all regions – with North America
launching Consciously Unbiased, a new,
multimedia approach to raising awareness. The
topic of allyship has been central to our focus
this year, with How to Ally guides launched
globally to ensure all employees can play their
part in making Experian an inclusive place to
work. Our Accelerated Development
Programme (ADP) in Global Decision Analytics,
designed to support talented women at mid and
lower tiers to progress in the organisation, saw
great success, with 44% of the participants
being promoted after the programme. The
Women in Leadership DiveIn (WILD)
programme in Asia Pacific, designed to give
real and raw experiences of leadership
development and career acceleration for
women, concluded with an 88% retention rate
and 71% of women experiencing development
of their roles since finishing the programme. In
Experian Information Technology Services
(EITS), we launched Advancing Women Leaders
in Tech, a nine-month leadership-development
programme for high-potential employees.
We have also built upon our commitment
through several partnerships outside of the
business. We became a global signatory of the
United Nations Women’s Empowerment
Principles (WEPs), which promote gender
equality and women’s empowerment in the
workplace, marketplace, and community. In the
UK and Ireland, we signed the Business in the
Community Race at Work Charter, and became
a signatory supporting Stonewall’s Trans Rights
Are Human Rights campaign to help reform the
Gender Recognition Act (GRA) 2004. We also
became an official partner of Women in Data
for the very first Women in Data week in the UK.
In North America, we established a partnership
with Disability: IN, the leading non-profit
resource for business disability inclusion
worldwide. We’ve been a sponsor of events that
support us in building diverse pools of future
talent, including AfroTech, one of the largest
multicultural technology conferences in the
USA, and Grace Hopper Celebration, the world's
largest gathering of women in computing.
In recognition of our efforts and achievements,
we are proud to have been awarded several
distinctions through FY21 which reflect our
culture and our commitment to a positive and
inclusive environment for our people.
It is impossible to discuss DEI in 2020 without
referring to the tragic death of George Floyd
and the resulting spotlight upon racial inequity
in society. This focus created introspection on a
personal and corporate level, and while we feel
good about everything we have done and the
progress we have made, we know there is more
to do. In direct response, we announced
donations to Operation HOPE, double-matching
of employee donations to associated causes,
and established a Product Review Team to
ensure our products address the needs of black
Experian plc Annual Report 2021Strategic report 50
Our sustainable business strategy: Environment, Social and Governance
continued
and other disadvantaged communities.
Throughout the period since, we have focused
on disadvantaged communities through our
United for Financial Health programme,
forming partnerships with groups such as the
NAACP, Black Girl Ventures, the Trussell Trust
and The Mix.
To ensure we are clear about the gaps and
opportunities in our DEI work, and to reflect our
commitment to continuous improvement, we
launched an independent audit through an
external partner. The findings will inform our
FY22 DEI strategy.
Hiring and developing
our world-class workforce
Our ability to continue to attract world-class
people is critical, and we have continued to
invest in a strong presence on social media in
support of this. Our Experian Creator series is
live across all major social channels,
highlighting innovation through product stories.
We are profiling our current tech talent weekly
on LinkedIn and other social media, targeting
future talent tech groups (such as Girls Who
Code) and early talent. Our careers site now has
a page dedicated to technology and innovation,
featuring product stories, Creator series
highlights, technology-leader content, and open
tech roles. In FY21 our social media following
increased, now with over 1 million followers.
Furthermore, our hires sourced via social media
channels reached 53%, far surpassing our FY21
target of 29%.
We are proud of how we adapted to hiring and
onboarding our colleagues remotely and have
assigned buddies to all new joiners to help them
integrate effectively in a virtual world. Results
are good, with 96% of new joiners feeling
positive about their onboarding experience, a
2% increase in the last year. This strong internal
sentiment is matched by external measures:
we exceeded expectations by improving our
Glassdoor score for the fifth year in a row,
sitting 4.1 out of 5.0 in March 2021.
Glassdoor trend 2016-2021
e
r
o
c
s
r
o
o
d
s
s
a
l
G
4.2
4.0
3.8
3.6
3.4
3.2
3.0
2.8
2.6
1,000+
participants took part in our
first global hackathon,
forming almost 100 teams,
with winners being selected
across our five global
strategic focus areas.
Development of our people has remained
central to our work – with the focus shifting to
remote-learning opportunities. We were well
placed with our on-demand, access-anywhere
Elevate Learning platform, launched in 2019,
and have continued to make the most of it
throughout the year. Our partnership with
Pluralsight supports our technology-focused
employees in keeping their skills relevant, given
the frequent need for new capabilities. Our
employees consumed almost 15,000 learning
hours on the platform this year. Our Stepping
Stones tool, developed internally, enables our
people to match their skills to short-term
projects, or ‘gigs’, to build capability and apply
new skills in ways they may not have the
opportunity to do in their main roles. In addition,
Stepping Stones has helped us re-distribute
work and create a balance between those with
reduced capacity and those who can absorb
more and over 1,000 employees have now
registered for opportunities. In Global Decision
Analytics, we ran Be World Ready, an initiative
to help employees build their personal
employability. The programme also encourages
employees to stay connected to the external job
market, to keep their skills and experiences
relevant. Finally, the pandemic has placed high
demands upon our leaders to manage in new
ways. We have taken the opportunity to review
and revamp our global manager training
programme, which we have relaunched as
the New Leader Programme. It is designed
to develop well-rounded leaders who can
lead their teams effectively, beyond
technical capability and focuses on areas
such as inclusion, psychological safety,
engagement, high-performing teams,
and agility around change.
We have kept up our commitment to providing
strong support for functional skills
development. This year we ran our first cohort
of the Global Analytics bootcamp. These are
interactive immersive workshops, delivered
by our own experts, that provide intensive
hands-on experience in Advanced Analytics
and Artificial Intelligence. We also ran our first
ever global hackathon based on ideas and
collaboration for recovery after COVID-19. Over
1,000 participants took part, forming almost
100 teams, with winners being selected across
our five global strategic focus areas. The
winners received a large donation for the
charity of their choice, and significant
investment in developing their solutions.
Our high-performance culture has provided
critical security this year, bringing clarity for
employees in an unstable and uncertain
environment. We have continued evolving this
Senior Leadership
Senior Managers
Middle Managers
All Line Managers
High
Performance
Masterclass
CEO
Forum
Accelerate
Ambition
+ Amplify1
Experian
Business
Network
Ambition
Programme
Emerging Leaders
Programme
New Leader Programme
Elevate Performance Modules
Elevate Learning
/ GetAbstract / Development Guides
Accelerated Development Programmes for women, e.g. ADP, WILD
Jan
2016
Jan
2017
Jan
2018
Jan
2019
Jan
2020
Jan
2021
1 Amplify – refresher sessions for those who have previously
been through our high performance programmes (High
Performance Masterclass, Accelerate Ambition, Ambition)
All Levels
Experian plc Strategic report
51
part of our culture, with our approach being
further woven throughout our leadership
development programmes. We launched
Amplify - a new opportunity for leaders who
have previously been through our high-
performance programmes - to re-group and
refresh their thinking with the high-performance
principles central to our organisation and
focusing on what matters most now, in this
‘new normal’. To establish high performance
throughout our organisation, all employees now
have access to a series of high-performance
content explaining our philosophy at Experian.
We are also building upon the success of the
Elevate Performance platform for year-round
performance management. We have run a pilot
of an augmented platform which fully integrates
an employee’s performance goal with
development plans – linking directly to relevant
learning materials. Teams can also run
‘check-ins’, a simple but frequent online
interaction, helping them communicate. The
platform will go live in FY22, to support more
powerful discussions on performance.
While we build technical skills for the future,
we also plan for the future of our broader
leadership roles and are proud of our healthy
approach to succession. This year 89% of our
top-100 leadership roles have at least one
identified successor ready now or within two
years; while over 50% have two or more
potential successors.
Looking forward
The pandemic has required us to think
differently about the way we work in the future,
and we have embraced this opportunity to
create greater flexibility for our people. We
have spent considerable time listening to our
employees, tracking key measures of how we
work, watching how norms have shifted and
analysing how to make our approach a success.
The ‘new normal’ at Experian will be a flexible
one, and this is not just about remote working,
it's our commitment to make a difference in our
people's working lives. Our people will have the
opportunity to work in a way that works for
them – this may be working remotely, in the
office, or a mix of both, as well as flexibility over
start and finish times. Our aim is to strike the
right balance between what works for an
individual and what works for the business –
we believe both are critical. Our new approach
is built on trust, flexibility and enabling success
and as we undergo this shift and all the
operational changes that will follow, we are
placing a strong focus on reinforcing intangible
anchors like values, behaviours and employee
experience to ensure everyone in their own way
can thrive in a more remote and flexible world.
Working with
integrity
Working with integrity is one of our core values
and central to The Experian Way of working. Our
Code of Conduct, available in several languages,
sets out clear guidance to help everyone at
Experian make the right decisions. It is
supported by detailed policies on specific topics
such as anti-corruption, gifts and hospitality,
fraud management, complaint management,
fair treatment of vulnerable consumers,
product development and marketing,
whistleblowing and tax.
Anti-bribery and corruption
We take a zero-tolerance approach to bribery or
corruption in our business and our supply
chain. Our Global Anti-corruption Framework
prohibits facilitation payments, kickbacks, or
any form of bribery or corruption.
The accompanying Global Gifts and Hospitality
Policy sets out strict ethical standards relating
to gifts, entertainment, hospitality, sponsorship,
travel expenses and donations. We also have
controls to ensure we conduct any
sponsorships, charitable contributions,
lobbying or political donations ethically and
in compliance with all relevant laws.
Our suppliers are contractually obliged to
ensure their employees, agents and
subcontractors refrain from paying or receiving
improper bribes, facilitation payments,
gratuities or kickbacks. If we identify any
suppliers as high risk for bribery or corruption,
we refer them to the Compliance team for
further due diligence, including an assessment
of corruption, regulatory and reputational risks.
Effective assessment and mitigation of
corruption risks are a critical component of
our Compliance Management Programme
for the business, and we conduct periodic
assessments check for corruption risks. We
also follow rigorous due diligence procedures
to identify any risk of improper payments
during mergers and acquisitions, or when
we enter into joint ventures.
Our Finance and Global Sourcing teams
have training and controls to detect and stop
improper payments, with support from our
Global Internal Audit team. If we identify any
concerns, we promptly investigate them and
take appropriate action.
Training and compliance
All employees (including part-time employees
and contractors) complete mandatory training
on our Code of Conduct and on anti-bribery and
corruption when they first join Experian.
Thereafter, they must complete refresher
training every one to two years and we make
sure that they do so through our performance
review process. We also expect managers to be
positive role models for ethical behaviour.
Any breaches of our Code of Conduct or
associated policies could undermine our
reputation and stakeholder trust. Our Three
Lines of Defence risk management model
reinforces our culture of compliance, and we
encourage people to report any suspected
policy breach or unethical activity without fear
of reprisals. We ask employees to start by
talking to their manager if they have concerns.
Employees and third parties can also report any
concerns, anonymously if they choose, through
our 24-hour Confidential Helpline.
We take any allegations of ethical breaches very
seriously. All reported concerns are investigated
by relevant functions, such as Human
Resources, Global Security Office or Global
Fraud Investigations, to identify root causes
and take appropriate corrective action. This
year, 37 concerns were reported. The majority
of these, 78%, concerned human resources
related matters.
Respecting human rights
We are committed to respecting human rights
and upholding the United Nations Universal
Declaration of Human Rights (UDHR) and the
UN Guiding Principles on Business and Human
Rights (UNGP) in our business and supply chain.
Everyone at Experian completes training on
our Global Code of Conduct, which sets out
clear standards to avoid any infringement
of human rights.
We are committed to treating all our people
fairly and with respect. Experian is an
accredited Living Wage employer in the
UK, going beyond the legal minimum wage
to pay employees the amount the Living
Wage Foundation has calculated they really
need to live on.
This year, we have strengthened our focus on
DEI globally (see page 49) and will publish our
first Global DEI Report to enhance disclosure on
this important topic. We have signed up to the
UN Women’s Empowerment Principles, and our
North American business received a perfect
score from the Human Rights Campaign
Foundation’s 2021 Corporate Equality Index on
policies and practices for LGBTQ+ employees.
Our Supply Chain Principles set out clear
standards on human rights, and we include
clauses in our contracts that oblige suppliers
to protect workers’ rights and freedoms. We
monitor compliance through our third-party
risk management framework. We also expect
suppliers to set similar requirements for their
own suppliers and subcontractors to extend
high standards throughout the supply chain.
Experian plc Annual Report 2021Strategic report 52
Transforming
lives by
supporting
slavery
survivors
We are tremendously proud of our
profound relationship with Experian
and have been absolutely delighted to
see what incredible outcomes have
been achieved over the past year, as a
direct result of our partnership. Our
collaboration continues to build
resilience within potentially vulnerable
communities, assists victims to
freedom and empowers survivors
towards sustainable remedy and
lasting independence. We are excited
to see what the future holds, and –
together - to reach even more people
whose lives have been impacted by
this abhorrent affront to freedom.
Paul McAnulty
UK & Europe Programme Director,
Hope for Justice
Victims of modern slavery often find they have
also been the victims of fraud and identity theft.
We worked with Hope for Justice to adapt our
authentication process to help survivors, who often
have little or no documentation to prove who they
are, get access to their credit reports and resolve
fraudulent debts through our dispute process.
This year, our funding has helped Hope for Justice support nearly 500
modern slavery survivors in the UK with advocacy and advice services –
from language training and job skills to financial, legal and mental health
support. We also helped Hope for Justice reach over 15,000 people in
vulnerable communities through Facebook Live Sessions during the
COVID-19 restrictions.
A data model we developed is helping Hope for Justice focus its resources
in parts of the UK where they can have the greatest impact and we have
provided a similar model to help the organisation choose where to locate
support hubs in the USA as they grow their presence in North America.
Experian plc Strategic report We conduct a risk assessment of all the third
parties we work with, including suppliers and
indirect clients. Overseen by our Third Party
Risk Management team, we assess risks
related to data security and privacy, business
continuity, compliance and reputation (including
bribery, corruption and modern slavery).
Of the thousands of third parties we work with,
most fall into the minor or moderate risk
category in our initial risk assessment. Those
we consider higher risk – based on factors such
as the type of product or service they provide
and the type of data they have access to – are
subject to more in-depth assessments,
oversight and controls.
As our first line of defence, the business
function that owns the relationship with the
third party is responsible for identifying,
tracking and resolving any issues. Periodic
reports on key suppliers, drawn from news
sources around the world, help us monitor risks
in our supply chain by alerting procurement
teams and supplier relationship managers to
any issues.
This year, we have strengthened our processes
for ongoing monitoring of higher-risk suppliers
and third parties to include periodic sampling
and testing of controls to ensure our standards
are upheld. If we identify any gaps in controls,
we log these in our centralised global
governance, risk and compliance system, and
track issues through to resolution. We will not
work with – and routinely reject – third parties
that do not uphold our standards on critical
issues, such as data security.
We are committed to supporting diverse
suppliers through our strategic sourcing
process that is designed to offer a level playing
field for all third parties. In the USA, we support
women and minority-owned suppliers as a
member of the National Minority Supplier
Development Council and the Women’s
Business Enterprise National Council. Diverse
suppliers account for around 6% of our US
base.
To support our climate strategy, we are working
with our most carbon-intensive suppliers to
request data to help us get a better
understanding of our Scope 3 carbon footprint
(see page 56).
Tackling modern slavery
Supplier risk assessments and in-depth
training help procurement teams identify risks
of modern slavery in our supply chain, and take
action if they have any concerns. Our Slavery
and Human Trafficking Statement provides
further information on our commitment,
policies and actions to tackle modern slavery
risks in our business and supply chain.
Experian is a founding member of the
Slave-Free Alliance, which brings together
businesses working towards a slave-free
supply chain. Following a comprehensive
assessment of our approach by the Slave-Free
Alliance, we are completing a three-year
improvement plan to improve our processes for
identifying and preventing modern slavery risks
in our supply chain. A quarterly steering group,
headed by our Group Chief Procurement Officer
and Head of Strategic Pricing, manages
implementation of the plan. We have also
invited members of the Slave-Free Alliance and
our charity partner Hope for Justice to provide
expert guidance. First steps this year included
assigning responsibility for mitigating risks and
implementing improvements to the owners of
relevant areas of the business.
We are using our data and analytics to support
wider efforts to tackle modern slavery, and
contribute to the United Nations’ Sustainable
Development Goal to eradicate forced labour.
Our DataLabs are collaborating with the United
Nations University Centre for Policy Research
and the University of Nottingham’s Rights Lab
to develop an ‘analytical sandbox’ that will use a
combination of datasets to help pinpoint
locations that may be vulnerable to modern
slavery risks. We are also working with Hope
for Justice to support survivors of modern
slavery.
Partnering with suppliers
Our Supply Chain Principles and Code of
Business Conduct represent the minimum
ethical, labour, human rights and environmental
standards that all Experian suppliers must
meet. As part of their contracts with us, all
suppliers must confirm that they accept our
standards or have their own equivalent
standards in place.
We integrate risk management and compliance
in our supplier selection process, alongside
commercial considerations. We use our
third-party risk management framework to
conduct due diligence on suppliers and third
parties before we work with them, and assess
and monitor risks throughout our working
relationship. Our Three Lines of Defence
controls support compliance.
53
Protecting the
environment
Our Environmental Policy commits us to
minimising the impacts associated with our
business activities. Improving our
environmental performance is managed and
communicated at Board level.
As an information services business, the main
environmental impact we control is the carbon
footprint of our offices, data centres and
business travel. We are also working to better
understand and manage the climate impact of
our supply chain, and aim to reduce our
environmental footprint further by eliminating
the use of single-use plastic in our facilities as
far as possible.
Our TCFD statement
In March 2021, Experian became an official
supporter of the Task Force on Climate-related
Financial Disclosures (TCFD). We are committed
to aligning our corporate reporting with the
TCFD recommendations and early reporting on
the majority of its requirements before it
becomes mandatory for us in FY22.
Governance
Experian has a long-established process for
identifying, assessing, responding to and
reporting business risks through the Global
Risk Management framework that combines a
bottom-up approach at a regional and business
unit level, and a top-down approach at a global
level.
Risks are identified and assessed at project and
regional level, overseen by the Strategic Project
Committees and Regional Risk Management
Committees that report to the Executive Risk
Management Committee (ERMC), on a quarterly
basis. The Board has oversight of climate-
related issues along with the Audit Committee,
which oversees a response for global risks and
opportunities, including climate change.
Our carbon neutral plan, published in June
2020, is an example of our long-term strategy
to mitigate the impacts of climate change.
Regular updates on our plan are presented to
the Group Operating Committee. The Board also
receives reports of our corporate responsibility
activities and performance from the Chief
Executive Officer at every Board meeting. These
reports include progress made on strategic
drivers to address climate-related issues (for
example, our science-based target and TCFD
reporting). In 2021, the ERMC endorsed both our
science-based target and this TCFD statement,
prior to Board approval.
Regionally, our established environmental
management system (EMS) demonstrates best
practice in minimising the environmental and
climate impacts of our business, ensuring we
Experian plc Annual Report 2021Strategic report 54
Our sustainable business strategy: Environment, Social and Governance
continued
comply with local regulations and continuously
improve our performance. Where certified,
regular management reviews of the EMS are
performed, involving regional leadership, to
ensure the objectives of the management
system are being met, the system is effective,
and risks and opportunities are reviewed. Three
of our sites in the UK and our site in Bulgaria
are certified to ISO 14001:2015. These locations
are externally audited to ensure conformity with
this standard, and we align all our operations
globally to this standard, which is internationally
recognised as best practice.
In FY21, we strategically reviewed existing and
future climate change risks and opportunities
with a multi-disciplinary group of stakeholders
across the business, representing each
geographic region we operate in. The output of
this was to:
Identify and assess climate-related risks and
opportunities to our business arising from
climate change
Conduct climate scenario analysis to help
understand the long-term impacts of climate
change on our business model
Ensure climate-related risks are fully
incorporated into our established risk
assessment framework
Identify risk owners to develop the capability
in the management team for assessing and
managing the identified risks.
'A-' leadership category
Strategy
Experian recognises the significance of climate
change to our stakeholders and we are
committed to identifying, addressing and
managing risks and opportunities presented by
climate change both now and in the future. We
have been responding to the CDP climate
change questionnaire since 2007, which is
aligned with the TCFD recommendations, and
most recently achieved an 'A-' leadership rating.
Our climate change strategy includes a
commitment published in June 2020 to become
carbon neutral across our own operations by
2030, an example of the long-term strategic
approach we are taking to respond to the
physical and transitional risks associated with
climate change. Our carbon neutral plan
incorporates a science-based target to reduce
our global carbon emissions and purchasing
certified carbon credits to offset unavoidable,
residual emissions across our direct operations
(Scope 1 and 2). We are gradually phasing in
carbon offsetting between 2021 and 2025 (see
page 56).
During the last year we have engaged with
our top 20 strategic global suppliers,
acknowledging the indirect environmental
impact of our business operations. Our supply
chain plays an important role in achieving our
carbon reduction target for Scope 3 and we are
keen to explore opportunities that can help to
accelerate our decarbonisation plan. We will
expand the scope of the engagement in future
years to include a greater number of suppliers
and prioritise those with the most material
environmental impact.
We have reviewed our climate risks and
opportunities that exist across our business
lines, and across the regions in which we
operate, by engaging with key internal
stakeholders. This process has enabled us to
create a comprehensive climate risk and
opportunity register identifying a wide range of
physical and transitional climate-related risks
and opportunities across short (one to two
years), medium (two to five years) and
long-term (five or more years) timeframes. This
climate-specific risk and opportunity register
has been developed in accordance with the
Global Risk Management framework to ensure
this was performed as a fully integrated
process.
The risks included in the matrix below have
been identified as part of the recent strategic
review, and have been classified based on their
inherent risk (before control measures have
Failure to adapt products and services to
changing markets
Reputational impact of failing to meet climate
change commitments and targets
Failure to disclose ESG performance to investors
and customers
Failure to incorporate climate risk on investment
decisions exposing Experian to financial risk (e.g.
pension investment)
Failure to comply with climate change policy/
regulation
Chronic impact of climate change leading to
climate migrants' loss of credit history and
constraints to data transfer
Increased energy demand for operating data
centres, providing cooling as the global mean
temperature increases
Disruption to power supply in data centres
Intermittency of grid supplied power and rising
operating costs
Attracting, engaging and retaining employee
talent through responsible business strategy
including climate change
Interruption to Experian supply chain as a result
of extreme weather
Third-party services being disrupted by extreme
weather and associated grid power disruption
Increased operational cost from direct impact of
climate change policy/regulation
Increased operational cost from indirect impact
(supply chain) of climate change policy/
regulation
Lack of access to sustainability-linked finance
(green investment bonds, sustainability-linked
bonds)
Unstable carbon market for purchasing carbon
credits
Extreme weather impacting customers in
operating markets
h
g
H
i
e
t
a
r
e
d
o
M
r
o
n
M
i
Possible
Probable
Very likely
Experian plc Strategic report 55
been considered). The standard process for risk
classification is based on residual risk (once
control measures have been fully considered
and reviewed). This will be a priority for FY22.
In FY22, we will complete our journey to report
in full alignment with the TCFD
recommendations and will perform climate
scenario analysis using high and low carbon
scenarios. This analysis will systematically
review our assets across the globe against a
series of region-specific climate-related
hazards (for example, water stress,
susceptibility to drought and increased rainfall
events) based on specified increases in mean
temperature.
This scenario modelling will be performed using
recognised climate models such as RCP 2.6 and
RCP 8.51 that explore well below 2°C (low
carbon scenario) and 4°C (high carbon scenario)
climate change pathways respectively. This will
enable us to assess our exposure and
vulnerability to climate-related risks, quantify
the financial impact of climate-related risks and
opportunities, and demonstrate the resilience of
our strategy when we consider the future
impact of climate change.
Metrics and targets
We measure, externally assure and publicly
report our carbon footprint (see table on page
56). In order to accurately reflect our renewable
electricity consumption, we are shifting our
emissions metrics from using location-based
Scope 2 emissions to market-based Scope 2
emissions2. Our emissions in FY21 dropped by
58% compared with the previous year. This
reduction was due to a combination of factors,
including the intermittent closure of our offices
as a result of local COVID-19 restrictions,
increased use of renewable energy contracts
and a reduction in business travel.
Our total carbon footprint this year was 16.8
thousand tonnes of CO2e, down from 40.3
thousand tonnes the previous year. The carbon
intensity of our business decreased by 60% to
3.1 tonnes per US$1m of revenue. We continue
to invest in energy efficiency technologies in
assets around the globe and are progressively
sourcing more renewable electricity. In FY21,
34% of our electricity consumption was from
renewable sources.
This year, we set our science-based target:
Scope 1 and 2 (1.5 degree scenario): To
reduce absolute Scope 1 and 2 emissions by
50% by 20302 (from 2019)
Scope 3 (2 degree scenario): To reduce
Scope 3 emissions from purchased goods
and services, business travel and Well-To-
Tank3 by 15% by 2030 (from 2019)
To enable the delivery of our Scope 1 and 2
target and carbon neutral plan we have worked
with colleagues across the globe to identify
carbon reduction, energy efficiency and
renewable energy opportunities. To date, over
40 projects have been identified. Throughout
FY22 we will continue to work towards
implementing these projects to drive progress
towards our 2030 commitment.
To achieve our Scope 3 target, we will engage
with our suppliers to minimise the indirect
environmental and climate impact of the
products and services we procure. We have
already engaged our top 20 suppliers to
understand their climate strategies including
commitments to science-based targets and net
zero strategies. This engagement will lead to the
identification for collaborative opportunities to
reduce the carbon intensity of the products and
services that we purchase and also discuss
strategic opportunities such as the use of
renewable electricity, adoption of electric vehicles,
end-of-life takeback schemes, eliminating the use
of single-use plastics and minimising packaging.
We will continue to monitor the levels of business
travel in FY22 as travel corridors reopen however,
we do not expect business travel to return to
pre-pandemic levels.
Reducing emissions from buildings
The COVID-19 pandemic has accelerated the
move to more flexible working. Almost our
entire workforce moved to full-time
homeworking this year, with just a small
number of employees working on site to keep
our facilities and data centres going. We plan to
maintain a more flexible approach to working
as we prepare for a post-pandemic new normal
(see page 51).
Further consolidation of offices, together with
increased use of renewable energy, will help to
reduce emissions from our buildings. This year,
we switched to renewable energy at three more
offices in the UK and Ireland and North
Risk management
Climate-related risks are identified using the
established Global Risk Management
framework as detailed on page 72 of this report.
This framework combines a bottom-up
approach of engaging with local subject matter
experts (First and Second Lines of Defence),
who have in-depth knowledge of business
activity, with a top-down approach (Third Line of
Defence) that conducts a strategic review of the
risks.
The following process ensures risks are
appropriately identified, addressed and
managed.
This process is completed at least twice a year
to ensure that it remains appropriate and that
any new activities or changes to variables have
been captured. Key risks that are identified as a
result of this process are maintained in the
Global Risk Inventory, reviewed by the ERMC,
approved by the Audit Committee and presented
to the Board. At present, climate change is
classified as an emerging risk.
Step 1
Risk identification
Step 2
Risk assessment
Step 3
Risk response
Consider key business
Assess controls
Estimate likelihood, impact and
Accept or remediate current
risk and control environment
Step 4
Risk reporting & monitoring
Business unit and regional
level
velocity
Determine corrective action if
RRMCs and ERMC
Consider legal, reputation and
conduct exposure
needed
Audit Committee
objectives
Identify principal risks
Identify key controls
1
Representative Carbon Pathway 2.6 (RCP 2.6) is a climate model based on a greenhouse gas projection that requires global CO2e start
declining by 2020 and reach zero by 2100, representing a ‘best-case scenario’. RCP 8.5 is a climate model based on a greenhouse gas
projection that projects global CO2e continue to rise, representing a ‘worst-case scenario’ of climate change.
2 This year, we have updated the way we calculate our total greenhouse gas emissions by using our Scope 2 market-based rather than the
Scope 2 location-based indicator. This enables us to factor in the renewable energy we purchase and helps track our performance against
targets and our carbon neutral commitment.
3 Also known as ‘Fuel-and-energy-related activities’, is an average of all the greenhouse gas emissions released into the atmosphere from
the production, processing and delivery of a fuel or energy.
Experian plc Annual Report 2021Strategic report 56
Our sustainable business strategy: Environment, Social and Governance
continued
America. We are also developing a global
strategy for reducing emissions from data
storage at our on-site data centres, as well as
from external sites or cloud-based solutions.
While the move to homeworking this year
has reduced our operational emissions,
we recognise there is a knock-on effect in
increased energy use in employees’ homes.
We are exploring how to account for this in
our Scope 3 reporting in future and we have
engaged colleagues to help them reduce
environmental impacts at home (see below).
Engaging employees to reduce
environmental impacts
We encourage employees to use virtual meeting
alternatives to minimise travel, and this year
there was a big reduction in business travel and
related emissions due to COVID-19 restrictions.
We also asked employees to keep thinking
about the environment and reducing their
footprint even when they are working from
home. Our Little Green Steps campaign in Asia
Pacific helped colleagues avoid an estimated
318kg of carbon emissions.
Last year, we committed to eliminating as
much single-use plastic in Experian-controlled
facilities as possible within two years. With
hardly anyone working in our facilities this year,
we have postponed action on this target, but our
commitment still stands. In the coming year, we
will assess how the new flexible working policy
and patterns impact the amount of single-use
plastic usage in our facilities to establish a
baseline, and from there plan to establish
a quantifiable target for its maximum
feasible reduction
Investing in high-quality offsetting
Last year, we committed to offset our Scope 1
and 2 emissions gradually over the five years to
2025. Accordingly, we will offset 20% of these
emissions for FY21. We aim to invest in
offsetting projects that not only reduce carbon,
but bring added value to communities to
enhance our contribution to the United
Nations SDGs.
Our carbon footprint
CO2e
Scope 1
Scope 2 (market-based)1
Scope 3 (air travel only)2
Total emissions 1
Scope 2 (location-based)3
Total Scope 1 and 23
Total Scope 1 and 23 normalised by revenue
– per US$1m revenue
Total energy consumption in the UK4
Unit
000s tonnes CO2e
000s tonnes CO2e
000s tonnes CO2e
000s tonnes CO2e
000s tonnes CO2e
000s tonnes CO2e
tonnes CO2e
GWh
2021
2.2
14.3
0.3
16.8
22.2
24.4
4.5
25.5
2020
3.0
22.1
15.2
40.3
25.5
28.5
5.5
27.2
2019
3.6
25.6
14.3
43.5
29.8
33.4
6.9
29.5
1 Calculated with Scope 2 market-based carbon emissions. We have calculated market-based Scope 2 emissions using electricity
supplier emission factors where available. Where supplier factors are not available, we use residual emission factors where
available. If residual emission factors are not available, we use location-based emission factors.
2 Scope 3 includes emissions from global air travel. In FY21 air travel emissions have been calculated using Radiative Forcing (RF)
emission factors for the first time and we intend to continue to report on this basis in the future. For comparison, the non-RF reported
figure would be 0.1.
3 Location-based carbon emissions. We have calculated location-based Scope 2 emissions using the International Energy Agency (IEA)
4
carbon emission factors for electricity.
Includes scaled data for electricity, gas, diesel used in generators and district heating consumption in the UK. We have reported on all
the emission sources within our total carbon footprint which includes Scope 1, 2 and 3 (falling within our Group financial statements)
in line with the UK Companies Act 2006 (Strategic Report and Directors Reports) Regulations 2013.
Full Scope 3 emissions analysis (estimated base on FY19 baseline)
Sources of Scope 3 emissions
Purchased goods and services
Business travel
Capital goods
Employee commuting
Upstream leased assets
Fuel-and-energy-related activities3
Waste generated in operations
Investments
Thousand
tonnes of CO2e1
357.4
49.12
31.2
24.6
17.5
6.2
5.2
4.3
Contributions to
Scope 3 (%)1
72%
10%
6%
5%
4%
1%
1%
1%
Total Scope 3 (FY19) =
495.34 thousand tonnes of CO2e
Top 4 sources of controlled
Scope 3 emissions
Purchased goods and services
Business travel
Upstream leased assets (including
cloud, outsourced servers)
Fuel-and-energy-related activities
(or Well-To-Tank)
1 Baseline data corresponds to FY19.
2 Business travel: For greater accuracy, air travel emissions were calculated using the individual flight and seat classes, rather than
the round trip mileage. It also includes all other types of travel - rail, taxi, grey fleet, public transport, and indirect emissions from
overnight accommodation.
3 Not included in Scope 2.
Assessing Scope 3 emissions
In previous years, we have only tracked and
reported Scope 3 emissions related to air travel.
In FY21, we engaged external experts to
undertake a full assessment of our Scope 3
emissions, using best practice models and a
combination of procurement and financial data
available for FY19, the last full year before the
exceptional circumstances of COVID-19.
This initial analysis estimated our baseline
Scope 3 emissions in FY19 as 495.3 thousand
tonnes. The biggest contributor to this total is
purchased goods and services (72%), followed
by business travel (10%) and capital goods (6%)
(see data table).
To improve the accuracy of these estimates, we
are requesting more detailed information from
suppliers on the portion of their emissions
attributable to the products they supply to
Experian. We are also engaging with suppliers
to understand whether they have carbon
reduction programmes or science-based
targets in place.
Capturing climate-related opportunities
Climate-related opportunities identified for our
business include:
Developing products and services to support
customers in response to acute and chronic
weather-related impacts of climate change
Accelerating the transition to a low carbon
future by enabling customers to access credit
facilities to support the low carbon economy
Providing insights about the carbon impact of
products and services to inform the
consumer decision-making process
Accessing green investment funds by
demonstrating a strong climate change
strategy and effective management.
We are already developing new climate-related
products and services. Our UK DataLab team is
building a tool to support clients in developing
their climate change risk disclosures to meet
guidance from the TCFD and the UK Financial
Conduct Authority (FCA). As part of a leadership
development programme, our Business
Information Services team in North America is
exploring a solution to help clients build
information on environmental impact and
sustainability into their evaluations of suppliers
or lending applications.
Through our Social Innovation programme, we
are developing an agriculture index to support
clients in offering affordable finance and
insurance to smallholder farmers, which can
help boost their productivity and protect them
from climate risks.
Experian plc Strategic report Non-financial information and s172(1) statement
57
We report in line with the Non-
Financial Reporting requirement as
detailed in Sections 414CA and
414CB of the UK Companies
Act 2006.
Our aims
Our business model is set out on pages 20
to 25. We believe data can create a better
tomorrow for everyone, transforming lives and
societies, making credit lending simpler, faster
and more effective, and helping businesses to
become more efficient, with faster and more
convenient service delivery to consumers.
Non-financial risks
The Risk management section of the Strategic
report, starting on page 72, sets out the Group’s
approach to identifying and managing our
principal risks and uncertainties. Our Three
Lines of Defence model provides a rigorous
governance framework, and the list of principal
risks starting on page 75 gives details of the
policies, outcomes and due diligence processes
that control and mitigate those risks.
The key areas where non-financial adverse
impacts could arise are:
1. Respect for human rights
As data custodians, we have a responsibility to
safeguard consumer privacy, and we continue
to systematically educate our people on how to
handle sensitive data through our SecurityFirst
programme.
Our Global Code of Conduct1 aligns with the
United Nations Universal Declaration of Human
Rights, and our commitment to ensuring an
ethical supply chain1 is borne out by our
membership of the Slave-Free Alliance.
2. Employees
Employee engagement is a key performance
indicator (see page 17), and we talk on pages
49 to 50 about our many programmes and
initiatives that inspire our people to be their
best, to bring their whole selves to work, our
commitment to diversity, equity and inclusion,
and our recruitment, retention and succession
practices that help to mitigate the risk of our
dependence on highly skilled personnel.
3. Environmental matters1
We take our environmental responsibilities
seriously, and the reduction of greenhouse gas
emissions is a key performance indicator for
us (see page 17). See also page 53 for further
actions and initiatives Experian is taking to help
protect the environment2.
4. Anti-corruption and anti-bribery
Our Anti-Corruption Framework1 sets out
our zero-tolerance policy on bribery and
corruption in any form, and this message is
reinforced through mandatory annual training
for employees.
5. Social matters
Experian has many initiatives in place to
deliver our purpose of creating a better
tomorrow for consumers, businesses, our
people and our communities. The role we play
benefits everyone: businesses grow, people
prosper and communities thrive. This happens
in many ways, including through our core
business, the development of Social Innovation
products, employee volunteering and support
for community groups and charities.
1 More detail is available at www.experianplc.com/responsibility/our-policies.
2 Further detail is also available at www.experianplc.com/responsibility/data-and-assurance.
Section 172
Section 172 legislation, which became
effective in the UK during FY20, aims to help
shareholders better understand how directors
have discharged their duty to promote the
success of companies, while having regard
to the matters set out in Section 172(1)(a)
to (f) of the UK Companies Act 2006 (s172
matters). In addition, the 2018 UK Corporate
Governance Code recommends that boards
describe how the matters set out in Section
172 have been considered in Board
discussions and decision-making.
Section 172 defines the duties of company
directors and concerns the duty to promote
the success of companies. Throughout FY21,
the directors of the Company continued to
exercise these duties while having regard to
the s172 matters, and also to other relevant
factors as they reviewed and considered
proposals from senior management, and
as they governed the Company on behalf
of its shareholders through the Board and
its committees.
Section 172 matters
Specific examples
Experian plc, a Jersey-incorporated company,
and the Board embrace Section 172 and fully
support its aims, and we are reporting in line
with the UK requirement.
We outline below, through use of cross
reference, where we have considered the
s172 matters throughout this Annual Report.
(a) The likely consequences of any decision in
the long term
Our dividend policy, taken together with sections of our Financial review,
explains how we balance returns to shareholders with capital invested
organically and on acquisitions
Our governance framework shows how the Board delegates its authority
(b) The interests of the company’s employees
Our purpose in action - COVID-19 response
Employee engagement
(c) The need to foster the company’s business
relationships with suppliers, customers
and others
Partnering with suppliers
We comply with the requirements of ‘The Reporting on Payment Practices
and Performance Regulations (2017)’ for all of our in-scope UK companies
(d) The impact of the company’s operations on
the community and the environment
Improving financial lives
Protecting the environment
(e) The desirability of the company maintaining
a reputation for high standards of business
Upholding high ethical standards
Partnering with suppliers
(f) The need to act fairly between members of
the company
Stakeholder engagement
Investment proposition
Page
62
93
10
17, 24
25, 51
30
53
51
25, 51
24
94, 95
Experian plc Annual Report 2021Strategic report 58
Regional review
North America
growth of 16%. This was fuelled by new
memberships and product innovation. Experian
Boost has proved to be an innovative new
product to help consumers to manage their
finances, with 6.7m connected accounts. Brand
investment through our ‘purple cow’ advertising
campaign has yielded considerable growth in
free memberships which totalled 41m at the
year-end, up from 30m free members at the
end of FY20. We continue to diversify our
business model. We have successfully entered
into automotive insurance matching, which
supplemented growth from subscription-based
credit education services and credit matching
referral fees. Our credit matching lending panel
added more lending partners who are attracted
to our platform because we are able to deliver
a large audience and because of our ability to
match consumers with suitable credit offers.
We enhanced Experian Boost and now
consumers can contribute payment history
data from streaming services (including Netflix)
to their credit scores as an eligible tradeline,
and we continue to invest in a new breed of
smart services to help consumers manage
their financial health.
The strength in our revenue performance
contributed to strong EBIT progression, up 10%
to US$1,201m. The Benchmark EBIT margin
increased by 30 basis points year-on-year to
34.0%, even as we invested in customer
acquisition in support of Consumer Services.
Ascend, with strong demand for our data
services, marketing and account management
modules as well as first-time contributions
from newer modules like Ascend Intelligence
Services. In keeping with our ambition to make
credit and lending simpler, we also made good
progress towards developing our suite of
verification services offers, and after the
year-end secured important new client wins.
Growth in these areas offset significantly
reduced volumes in relation to unsecured
lending, and lower software revenue, as well as
lower revenues from retail clients as they
reduced marketing expenditure.
We made further progress in our strategy to
grow in specialised verticals. Health delivered a
very solid performance. We have expanded the
range of services we offer to our hospital
clients to help them manage their revenue
cycle and we are steadily increasing our
presence in new customer segments such as
the payer sector and pharmacies. Our recent
investments, designed to enhance the
consumer experience through digital channels,
have proved well timed. We saw strong traction
for these services as our hospital clients sought
to provide healthcare in virtual settings. This
also benefitted authentication volumes as
clients sought to verify patient identities. At the
other end of the customer lifecycle, we saw
good demand for solutions which provide
revenue certainty for healthcare clients. Our
automotive vertical, while volatile through
the year, was also relatively resilient.
Empowering financial lives is an important
aspect of what we do at Experian and we
delivered one of our strongest years ever for
Consumer Services with organic revenue
Craig Boundy
CEO, North America
North America was resilient despite challenging
external market conditions. Our strategic
investments in innovation and our pursuit
of new business opportunities have been
successful. We made good progress with
Ascend, our strategy to grow in specialised
verticals like Health, and through expansion
of our Consumer Services business.
Revenue in North America was US$3,530m,
with total revenue growth of 9% and organic
revenue growth of 7%. The difference related to
the acquisitions of Tapad and Corporate Cost
Control and other smaller acquisitions.
North America was very resilient in the face of
the marketplace challenges. While we were
able to rely on some support from counter-
cyclical revenue streams, we benefitted equally,
if not more, from our investments in innovation,
our brand and from the progress we have made
in developing new business opportunities.
The B2B segment delivered organic revenue
growth of 4%. Mortgage volumes were robust
as historically low interest rates led to higher
consumer refinancing activity. We secured new
and expanded client relationships for Experian
Total revenue growth
2021
2020
2019
2018
2017
Organic revenue growth
2021
2020
2019
2018
2017
Benchmark EBIT and
Benchmark EBIT margin
2021
2020
2019
20181
2017
Revenue split
A. B2B: Data
B. B2B: Decisioning
C. Consumer Services
US$m
Margin %
1,201
34.0
1,093
940
821
779
33.7
32.3
31.4
31.8
Revenue by activity
2020
2021
US$m
US$m
1,761 1,642
B2B: Data
679
B2B: Decisioning
2,455 2,321
Total B2B
Consumer Services 1,075
926
Total North America 3,530 3,247
694
Total
growth
%
7
2
6
16
9
Organic
growth
%
5
2
4
16
7
1 Restated for IFRS 15.
%
9
11
11
8
7
%
7
11
10
6
5
50%
20%
30%
A
B
C
Experian plc Strategic report Latin America
59
enhanced propositions in FY22, and we intend
to make all new scores and attributes available
through our Ascend technology platform.
Across the region, we signed 12 new clients
in the year for Experian Ascend and plan to
introduce new modules in the coming months.
We had good growth in fraud and identity
management, which included new wins for
our CrossCore platform, all of which contributed
to a solid year for Decisioning.
Nowhere perhaps better illustrates our
commitment to empower consumers than the
progress we have made in Brazil. Consumer
Services delivered another year of outstanding
performance, with organic revenue growth of
144%. We have established a model, unique in
Brazil, where we can provide consumers with
financial information, help people to better
understand their credit scores, compare pricing
and apply for credit offers, as well as offering
identity monitoring subscription services.
Consumers can also use our collections
marketplace to pay their bills and even to see
the impact of these bill payments in improved
credit scores through our free Score Turbo
offer. As a result, we have grown our free
membership base to 59m, compared to 45m
in FY20. Audiences of this size and scale have
attracted new lenders to our platform, including
a growing proportion of the emerging FinTech
community in Brazil. Our team in Brazil is
committed to innovation-led growth and we
are excited by the opportunities that lie ahead.
In January, we were subject to media
speculation claiming that Serasa marketing
data was part of data from multiple
organisations illegally offered for sale on the
dark web. We take our responsibilities to protect
Valdemir Bertolo
CEO, Brazil
We continue to execute on our strategy to be
the undisputed leader for negative and positive
data in Brazil and to address new market needs
with our innovative platforms. We signed new
multi-year, multi-solution agreements with
our largest clients and secured a number
of new clients. Consumer Services goes
from strength to strength.
Revenue in Latin America was US$625m, with
both total and organic revenue growth of 9%
at constant exchange rates. Organic revenue
growth in Brazil was 11%.
B2B organic revenue grew 1%. Strength in
Serasa Automotive and Decisioning in Brazil
offset weakness in traditional credit bureau
volumes across Brazil and other markets in
Latin America.
In Brazil, we made good progress despite the
challenging backdrop, signing new multi-year,
multi-solution agreements with our largest
clients, with increased share of wallet. We are
also driving widespread adoption of positive
data propositions which is leading to volume
growth in enquiries. We expect to sustain this
trajectory with the introduction of a range of
consumer data extremely seriously and we
initiated an extensive and detailed review which
was conducted over several months and
supported by multiple third-party experts. This
investigation has found no evidence that any of
our systems have been compromised. We have
provided our conclusions and the detailed
results of our investigation to the relevant
authorities, including the Federal authorities
who continue to pursue a criminal investigation
against the individuals involved.
Performance in Spanish Latin America was
weaker as parts of the region have been
especially hard hit by the COVID-19 pandemic.
We have placed a strong focus on operating
efficiency, while sustaining new product
investment and undertaking technology
transformation. More recently, we have seen
evidence of recovery which will help us to
resume our strategic ambitions to diversify
our traditional bureau offerings and focus
on developing new opportunities such as
services to consumers.
Benchmark EBIT in Latin America was
US$172m, up 4% at constant exchange rates.
The Benchmark EBIT margin from ongoing
activities at actual exchange rates was 27.5%
(2020: 30.1%) mainly reflecting revenue mix
effects.
Total revenue growth2
2021
2020
2019
2018
2017
Organic revenue growth
2021
2020
2019
2018
2017
%
9
13
6
6
9
%
9
13
6
6
9
Benchmark EBIT and
Benchmark EBIT margin
2021
2020
2019
20181
2017
Revenue split
A. B2B: Data
B. B2B: Decisioning
C. Consumer Services
US$m
Margin %
172
220
231
259
251
27.5
30.1
32.7
33.3
34.4
73%
15%
12%
A
C
B
Revenue by activity
2021
US$m
457
92
549
76
625
20203
US$m
578
114
692
40
732
Total
growth2
%
1
2
1
144
9
Organic
growth2
%
1
2
1
144
9
B2B: Data
B2B: Decisioning
Total B2B
Consumer Services
Total Latin America
1 Restated for IFRS 15.
2 At constant exchange rates.
3 Revenue for FY20 has been re-presented for the
reclassification of our Consumer Services business to the
Consumer Services business segment.
Experian plc Annual Report 2021Strategic report 60
UK and Ireland
Jose Luiz Rossi
Managing Director, UK and Ireland
We have made good progress with our
transformation programme in the UK and
Ireland. Our ambition in the region is to simplify
and modernise our technology estate and
resume profitable growth. We returned to
growth in Q4 and delivered much-improved
margin performance in H2 compared to H1.
We are well positioned to take advantage of
the many opportunities which lie ahead.
Revenue from ongoing activities in the UK and
Ireland was US$737m. Total and organic
revenue declined (6)% at constant exchange
rates. Both B2B and Consumer Services organic
revenue declined (6)%.
This was a year of transformation in the UK and
Ireland and we made a lot of progress. While we
have more to accomplish, it was encouraging to
see the region return to growth in Q4 and
deliver much-improved margin performance in
H2 compared to H1. Our ambition in the region
is to simplify and modernise our technology
Total revenue growth2
2021
2020
2019
2018
2017
Organic revenue growth
2021
2020
2019
2018
2017
%
(6)
(2)
4
1
1
%
(6)
(2)
4
0
1
the important step to launch Experian Boost in
the UK and this has made a promising start.
The constraints on credit supply in the early
part of the year also impacted revenues in our
credit comparison marketplace. However, there
was an improvement in the trajectory as the
year progressed and we exited the year with
growth in Q4. Our free membership base grew
to 9.5m consumers, compared to 7.5m last
year, with 370,000 active Experian Boost
memberships.
Revenue reductions and the impact of our
transformation programme affected our EBIT
performance. Benchmark EBIT from ongoing
activities was US$122m, down from US$173m
the year before. The Benchmark EBIT margin
from ongoing activities was 16.6% (2020:
22.9)%. With the transformation programme
now well progressed, we expect a strong
improvement in the UK margin in the
year ahead.
Revenue split
A. B2B: Data
B. B2B: Decisioning
C. Consumer Services
49%
30%
21%
C
A
B
estate and resume profitable growth, as well as
to take advantage of the many opportunities
which lie ahead. We already see tangible
evidence of progress in the form of much-
improved client net promoter scores, higher
employee engagement levels, greater network
stability, and a robust new business
performance.
B2B revenue from ongoing activities declined
(6)% at constant exchange rates. Revenues
were down for much of the year due to
reductions in UK bank consumer lending and
reduced demand for software investment. Our
marketing services segment was also affected
by reduced marketing expenditure. We
successfully pivoted towards COVID-19 support
propositions, including government loan
schemes, and as a result business credit
volumes remained robust. Negative trends
reversed to some extent towards the end of our
financial year with strengthening transaction
volumes as lenders reactivate programmes.
The new business pipeline has also been
encouragingly strong, setting us up well for
FY22. In particular, there is good demand for
our open data solutions such as affordability
and categorisation, and for our identity and
fraud management propositions, including
CrossCore, and there have been new wins for
Experian Ascend. We also added many new
logos in the mid-market.
While Consumer Services also had a difficult
year, with organic revenue down (6)%, we took
Benchmark EBIT and
Benchmark EBIT margin
US$m
Margin %
122
173
230
235
246
16.6
22.9
28.3
29.8
30.5
Total
growth2
%
(5)
(7)
(6)
(6)
Organic
growth2
%
(5)
(7)
(6)
(6)
20203
US$m
367
227
594
161
2021
20203
2019
20181
2017
Revenue by activity
2021
US$m
361
220
581
156
B2B: Data
B2B: Decisioning
Total B2B
Consumer Services
Total –
737
ongoing activities
Exited activities
12
Total UK and Ireland 749
755
14
769
1 Restated for IFRS 15.
(6)
(6)
2 At constant exchange rates.
3 Revenue and Benchmark EBIT for FY20 have been
re-presented for the reclassification to exited business
activities of certain B2B businesses.
Experian plc Strategic report
EMEA/Asia Pacific
61
Ben Elliott
CEO, Asia Pacific
Our ambition in EMEA/Asia Pacific is to
concentrate our efforts where we can establish
a strong market presence and can operate at
scale. We are pleased with the performance of
our recent bureau acquisitions in Germany and
Spain, which are opening up new opportunities
for us to pursue across the region.
In EMEA/Asia Pacific, revenue from ongoing
activities was US$465m, with total revenue
growth at constant exchange rates of 7% and
an organic decline of (14)%. The difference
principally relates to the contribution from
our bureau acquisitions: Compuscan, the Risk
Management division of Arvato Financial
Solutions, and Axesor.
Our ambition in EMEA/Asia Pacific is to
concentrate our efforts where we can establish
a strong market presence and can operate at
scale. The COVID-19 pandemic has opened up
some specific opportunities as many of our
clients are accelerating their adoption of
Total revenue growth2
2021
2020
2019
2018
2017
Organic revenue growth
2021
2020
2019
2018
2017
%
7
7
14
11
9
%
(14)
(3)
14
11
9
cloud-based technologies. We are rapidly
introducing our global advanced B2B
propositions, including Ascend, SaaS
decisioning through PowerCurve, our open
data solutions, and fraud and identity services.
Revenue performance last year was significantly
impacted by reduced bureau volumes,
particularly during the initial phases of lockdown.
The trajectory gradually improved as lockdowns
eased in most markets but remained challenged
in countries hardest hit by the pandemic, such as
India. Clients were also hesitant to spend on
software implementations, delaying or cancelling
decisions, which particularly affected Asia Pacific.
Client activity has picked up in recent months,
particularly in EMEA.
We have got off to a strong start in our two new
bureau acquisitions in Germany and Spain, both
of which have performed well in the period
since acquisition. All our global platforms have
already been introduced and made available
in Germany. In Spain, we now have two highly
complementary bureau businesses, the
integration of which is proceeding well, and we
are exploring ways to fully address the new
opportunity we have in the small and medium
enterprise (SME) market.
The reduction in revenue affected our EBIT
performance. Benchmark EBIT from ongoing
activities was US$(20)m (2020: US$12m) and
the Benchmark EBIT margin from ongoing
activities was (4.3)% (2020: 2.8%).
Benchmark EBIT and
Benchmark EBIT margin
Revenue split
2021
20203
2019
20181
2017
US$m
Margin %
(20)
(4.3)
A. B2B: Data
B. B2B: Decisioning
12
3
5
2.8
0.7
1.3
(3)
(0.9)
62%
38%
A
B
Revenue by activity
2021
US$m
287
178
20203
US$m
213
214
Total
growth2
%
32
(18)
Organic
growth2
%
(8)
(20)
7
(14)
465
3
427
4
468
431
B2B: Data
B2B: Decisioning
Total – ongoing
activities
Exited activities
Total EMEA/
Asia Pacific
1 Restated for IFRS 15.
2 At constant exchange rates.
3 Revenue and Benchmark EBIT for FY20 have been
re-presented for the reclassification to exited business
activities of certain B2B businesses.
Experian plc Annual Report 2021Strategic report 62
Financial review
Resilience and a strong recovery
Summary
Our focus this year has been to protect and
support our people, clients and consumers.
We have supported governments, businesses
and communities during the pandemic through
our data insights.
We quickly transitioned the majority of our
employees to work from home. We introduced
flexible working and increased collaboration
tools and support networks, such as
mindfulness programmes, to help our people
navigate the challenges of home working.
Webinars and senior leadership vlogs helped us
connect. Our employees around the world have
shown incredible resilience, commitment and
flexibility during the COVID-19 pandemic and
this is reflected in our results.
We maintained operational capacity throughout
the pandemic, and are in a strong financial
position, with access to substantial funding,
ready to take advantage of the global pandemic
recovery as it builds.
Statutory financial highlights
Revenue
Operating profit
Profit before tax
Profit after tax from
continuing operations
Net cash inflow from
operating activities
– continuing
operations
Full-year dividend
per share
Basic EPS
2021
US$m
5,372
1,183
1,077
2020
US$m
5,179
1,185
942
Growth
%
4
–
14
802
679
18
1,488
1,262
USc47.0 USc47.0
USc88.2 USc74.8
18
–
18
Benchmark financial highlights1
Constant
rates
growth
%
7
3
5
20202
US$m
5,161
1,387
1,255
2021
US$m
5,357
1,386
1,265
1,476
1,214
24
2,650
2,175
USc103.1 USc103.0
n/a
4
Revenue3
Benchmark EBIT
Benchmark PBT
Benchmark
operating cash flow
Undrawn committed
bank facilities
Benchmark EPS
1 See note 6 to the Group financial statements for definitions of
non-GAAP measures.
2 Results for FY20 are re-presented for the reclassification to
exited business activities of certain B2B businesses.
3 From ongoing activities.
Highlights 2021
Revenue
US$5.4bn
Total revenue from ongoing
activities growth*
7%
(at constant FX)
Organic revenue growth*
4%
(at constant FX)
Basic EPS
USc 88.2
Benchmark EPS*
USc103.1
Cash flow conversion*
106%
Ordinary dividends
US$427m
Lloyd Pitchford
Chief Financial Officer
Against the backdrop of the global
pandemic we delivered a strong
performance, growing total revenue3
7% at constant exchange rates. We
generated US$1.5bn of cash with
Benchmark operating cash flow
up 22%.
We have focused on supporting our
people, clients and consumers
throughout the COVID-19 pandemic,
using data as a force for good,
helping to navigate the crisis.
*Alternative Performance Measures
We have identified and defined certain
non-GAAP measures. These are the key
measures management uses to assess the
underlying performance of our ongoing
businesses. There is a summary of these
measures on page 71 and a fuller explanation
in note 6 to the Group financial statements on
pages 160 to 161.
Experian plc Strategic report
63
Total Benchmark EBIT
and Benchmark EBIT margin
US$m
5,372
2021
5,179
20201
4,861
2019
4,584
20182
4,335
2017
US$m
Margin %
1,386
25.9
1,387
1,311
1,247
1,199
26.9
26.9
27.1
27.6
USc
47.00
47.00
46.50
44.75
41.50
Benchmark EPS
Dividend per share
2021
2020
2019
20182
2017
USc
103.1
2021
103.0
98.0
94.4
88.4
2020
2019
2018
2017
1 Results for FY20 are re-presented for the reclassification to exited business activities of certain B2B businesses.
2 Results for 2018 are restated for IFRS 15.
Revenue
2021
2020
2019
20182
2017
Performance summary
Commentary on revenue and Benchmark EBIT
performance by region is provided earlier in the
Strategic report, within the regional reviews on
pages 58 to 61.
We report our financial results in US dollars.
The weakening of our other trading currencies
during the year, primarily the Brazilian real
against the US dollar, reduced total revenue by
US$141m and Benchmark EBIT by US$56m.
A ± 1% change in the Brazilian real or pound
sterling exchange rate would impact total
revenue by ± US$5m or ± US$8m respectively.
Benchmark EBIT from ongoing activities was
US$1,385m (2020: US$ 1,386m), growing at 3%
at constant currency, flat at actual exchange
rates. Benchmark EBIT margin from ongoing
activities was 25.9% (2020: 26.9%), and was
adversely impacted by foreign exchange
movements by 20 basis points.
Details of the principal exchange rates used and
currency exposures are provided in note 10 to
the Group financial statements on page 169.
Revenue, Profit before tax and Benchmark EBIT margin by business segment
Revenue
Data
Decisioning
Business-to-Business
Consumer Services
Ongoing activities
Exited business activities
Total
Benchmark EBIT
Business-to-Business
Consumer Services
Business segments
Central Activities – central corporate costs
Ongoing activities
Exited business activities
Total Benchmark EBIT
Net interest and non-benchmark items
Profit before tax
Benchmark EBIT margin –
ongoing activities
Business-to-Business
Consumer Services
Total Benchmark EBIT margin3
2021
US$m
2,866
1,184
4,050
1,307
5,357
15
5,372
1,192
283
1,475
(90)
1,385
1
1,386
(309)
1,077
20202
US$m
Total growth1
%
Organic growth1
%
2
(4)
–
17
4
2,800
1,234
4,034
1,127
5,161
18
5,179
1,251
247
1,498
(112)
1,386
1
1,387
(445)
942
6
(3)
3
17
7
n/a
6
(1)
14
2
n/a
3
n/a
3
n/a
6
29.4%
21.7%
25.9%
31.0%
21.9%
26.9%
1 At constant exchange rates.
2 Revenue and Benchmark EBIT for FY20 are re-presented for the reclassification to exited business activities of certain B2B businesses and the reclassification of our Consumer Services business in Latin America
to the Consumer Services business segment. Further information is provided in note 9 (b) to the Group financial statements.
3 Benchmark EBIT margin for ongoing activities is calculated by dividing Benchmark EBIT for ongoing activities by revenue from ongoing activities.
Experian plc Annual Report 2021Strategic report
64
Financial review
continued
COVID-19 pandemic
Total revenue growth1
12%
10%
8%
6%
4%
2%
0%
-2%
10%
10%
9% 9%
9% 9%
11%
10%
9%
7%
7%
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
-1%
Total organic revenue growth1
12%
10%
8%
6%
4%
2%
0%
-2%
10%
9%
8% 8%
10%
7% 7%
6%
7%
5%
5%
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
-2%
FY19
FY20
FY21
FY19
FY20
FY21
Business-to-Business organic revenue growth1
Consumer Services organic revenue growth1
15%
10%
9% 9%
8%
11%
9%
6% 6%
7%
5%
0%
-5%
2%
1%
1%
-5%
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
25%
20%
15%
10%
5%
0%
22% 22%
17%
14%
10%
8%
6%
6%
11%
8%
5% 5%
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
FY19
FY20
FY21
FY19
FY20
FY21
1 From ongoing activities at constant exchange rates.
Business resilience
Since its listing in 2006, Experian has
consistently grown its organic revenue. As we
reflect on our history, in the most significant
financial crises of the last 15 years – the
COVID-19 pandemic and the global financial
crash of 2008 – we have maintained that
positive trajectory.
This year we experienced a downward trend in
Q1 as the COVID-19 pandemic unfolded and
global economic activity faltered. We saw
significantly reduced volumes in relation to
unsecured lending across the globe with
regional volumes down in the quarter by
approximately 30%. As the year progressed
volumes recovered and we returned to growth
in Q2, with quarterly total revenue growth
thereafter near pre-COVID-19 levels and even
accelerating in our Consumer Services
business.
We attribute this resilience to a variety of
factors: our portfolio diversity, a strong
innovation pipeline, our strategic investments,
aspects of our business being counter-cyclical,
and diversification of our markets by expanding
into new verticals, such as US automotive
insurance.
The COVID-19 pandemic has required us to
adapt. We quickly transitioned our business
with the majority of our employees working
from home, increasing security and
collaboration tools to provide a seamless
service to clients.
We have continued innovation and product
investment throughout the period, to sustain
performance.
We also acted quickly to support governments,
businesses and communities during the
pandemic through our data insights, helping to
ensure financial support reached the people
and businesses who needed it most.
While the pandemic has inevitably had a
detrimental impact on some aspects of our
business, market trends have been catalysed
by the global crisis, providing new opportunities
for expansion in others. There has been
accelerated growth in the fraud management
market, increased reliance on data and
analytics and accelerated investment in digital
platforms.
We are ready to take advantage of the global
pandemic recovery as it builds.
Experian plc Strategic report 65
Historic organic revenue growth performance1
(at constant FX)
15%
10%
5%
Global Financial Crisis
8%
8%
8%
10%
4%
3%
2%
5%
5%
5%
5%
1%
9%
8%
COVID-19
pandemic
4%
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
1 Ongoing activities.
Business-to-Business growth has been driven
by ongoing strength in counter-cyclical revenue
streams, such as US mortgage, less susceptible
to economic downturns. We delivered
expansion in key verticals and strengthened our
position in employment and verification
services. We have continued the roll-out of our
Ascend platform across further territories.
There was heightened consumer interest
leading to good demand in credit education and
identity monitoring services. We delivered
considerable growth in Consumer Services in
Latin America, with revenue up 144% at
constant exchange rates, reflecting transaction
growth in eCred credit matching and strength in
our debt resolution service.
We will continue to invest in propositions which
help those who are currently unbanked gain
access to affordable credit and wider financial
services.
We anticipate that strong growth will continue
in FY22 as the global economy recovers, with
projected high single-digit organic revenue
growth for the year as a whole.
These factors offset ongoing COVID-19 related
weakness in credit reference volumes. While
bureaux volumes are down year-on-year we
saw improving trends as the year progressed
and credit supply improved.
In Decisioning, performance in health and fraud
management was strong, though software
delivery, particularly of on-premise solutions,
has been hit by COVID-19. In Brazil we
benefitted from increased contributions from
positive data propositions and signed new
multi-year agreements with our largest
financial services clients.
Strength in Consumer Services was supported
by ongoing expansion of our free membership
base. We now have 110m consumer free
memberships. Experian Boost is helping people
instantly improve their credit scores. In the USA
we now have 6.7m unique account connections.
We are encouraged by consumer reaction since
launching Boost in the UK in November 2020.
Boost is also stimulating activity for credit
comparison services and generating referral
fees.
FY21 Revenue by customer1
J
I
K
A
H
G
F
E
D
C
B
Software and Professional services
Automotive
A Financial services
B Direct-to-consumer
C Health
D Retail
E
F
G Insurance
H Telecoms and Utilities
Media and Technology
I
Government and Public Sector
J
K Other
1 Revenue from ongoing activities.
%
38
17
7
5
5
4
4
4
3
3
10
Experian plc Annual Report 2021Strategic report 66
Financial review
continued
Free member base million
New and scaling products revenue US$m
22
40
57
82
110
108
213
359
537
678
FY17
FY18
FY19
FY20
FY21
USA
Brazil
UK
FY17
FY18
FY19
FY20
FY21
Global cost profile %
Benchmark operating cash flow US$m
and cash flow conversion %
51
8
17
10
12
2
1,149
1,196
1,270
1,214
96%
96%
97%
88%
B2C products
– Lead generation
– ID Works
– Brazil consumer
B2B products
– PowerCurve suite
– Ascend
– Health new products
– Auto new products
– CrossCore
1,476
106%
Labour
IT
Data
Marketing
Other
Central
Activities
FY17
FY181
FY19
FY20
FY21
1 Restated for IFRS 15.
Capital summary US$m
Capital expenditure (capex) as % of total revenue
FY17
9
399
20%
32%
FY18
9
431
24%
31%
FY19
9
439
28%
34%
FY20
9
487
33%
31%
48%
45%
38%
36%
FY21
8
422
40%
25%
35%
Capex %
Capex US$m
%
n
w
o
d
k
a
e
r
b
t
n
e
m
t
s
e
v
n
i
l
a
t
i
p
a
C
Development
Infrastructure
FY17
FY18
FY19
FY20
FY21
Data
1,600
1,200
Funds from
Operations*
800
400
Reduction
in Net debt
and other
Acquisitions
and minority
investments
Dividends
Organic
capital
investment
0
Cash generated
Uses of cash
* Funds from Operations is defined as Benchmark free cash flow
plus organic capital investment (capital expenditure).
Experian plc Strategic report
67
2020
US$m
1,387
413
1,800
–
(483)
(112)
(55)
(2)
(17)
83
1,214
(152)
(286)
(2)
774
(700)
(95)
–
(18)
(424)
(463)
(3,262)
(188)
(6)
21
(3,898)
2020
US$m
487
(5)
1
483
Cash flow and Net debt summary1
Year ended 31 March
Benchmark EBIT
Amortisation and depreciation charged to Benchmark EBIT
Benchmark EBITDA
Impairment of non-current assets charged to Benchmark EBIT
Net capital expenditure
Increase in working capital
Principal lease payments
Benchmark loss/(profit) retained in associates
Fair value gain on revaluation of step acquisition
Charge for share incentive plans
Benchmark operating cash flow
Net interest paid
Tax paid – continuing operations
Dividends paid to non-controlling interests
Benchmark free cash flow
Acquisitions
Purchase of investments
Disposal of investments
Movement in Exceptional and other non-benchmark items
Ordinary dividends paid
Net cash inflow/(outflow) – continuing operations
Net debt at 1 April
Net share purchases
Discontinued operations
Foreign exchange and other movements
Net debt at 31 March
1 For Group cash flow statement see page 151.
Reconciliation of net capital expenditure
Year ended 31 March
Capital expenditure as reported in the Group cash flow statement
Disposal of property, plant and equipment
(Loss)/profit on disposals of fixed assets
Net capital expenditure as reported in the cash flow and
Net debt summary
2021
US$m
1,386
453
1,839
6
(418)
(13)
(56)
12
–
106
1,476
(115)
(236)
(1)
1,124
(583)
(31)
151
(67)
(427)
167
(3,898)
19
–
(114)
(3,826)
2021
US$m
422
(1)
(3)
418
and did not breach this covenant given on
borrowings during the year under review or
the prior year.
Disciplined capital management
Our capital allocation framework is based on
balancing a number of competing priorities –
notably operating and capital investment,
dividends, acquisitions and share repurchases
– while targeting Net debt within the range of
2.0 to 2.5 times Benchmark EBITDA. The mix
between these categories will vary over time,
and in FY21 we suspended our share
repurchase programme due to uncertainties
surrounding COVID-19.
We assess acquisition opportunities against a
range of metrics, including economic valuations
and the earnings enhancement we expect them
to bring relative to share repurchases. Total
investment of US$881m (2020: US$1,278m)
comprised cash flows for net capital
expenditure, acquisitions and net investments.
The acquisition of our majority stake in the
Risk Management division of Arvato Financial
Solutions was satisfied by 7.2m Experian
plc shares.
The chart opposite shows our capital summary
as executed this year.
Capital expenditure
Our capital expenditure of US$422m (2020:
US$487m) was 8% (2020: 9%) of revenue. The
reduction was due to exchange and where we
took a disciplined approach to prioritising
investments.
Digitisation and customer expectations of how
we deliver data are increasing. We continue to
invest to drive innovation and bring the latest
technologies to our clients, with emphasis on
automation and tools to improve efficiency,
speed and effectiveness.
Operating efficiency
Throughout the COVID-19 pandemic we have
maintained operational capacity while taking a
balanced approach to cost management. We
have not availed ourselves of any government
furlough schemes. While there has been
increased amortisation and depreciation
reflecting previous investment in technology
infrastructure, we have made reductions in
discretionary spend to combat this, freezing
headcount and delaying non-critical investment.
We are rationalising our office footprint. Our
Future of Work programme is a global initiative
to create more modern, flexible and collaborative
ways of working while simultaneously reducing
costs. Employees will have more choice in the
way they work and be able to work flexibly,
remotely or from office hubs.
We continue to invest in growth, increasing
marketing and customer acquisition
expenditure, as we position ourselves to
emerge strongly from the pandemic.
Cash and liquidity management
This year, we continued to generate cash
strongly, with a 106% (2020: 88%) conversion of
Benchmark EBIT to Benchmark operating cash
flow, and Benchmark free cash flow of
US$1,124m (2020: US$774m). The continued
strength of our Benchmark operating cash flow
performance reflects the nature of our business
and financial model, and our focus on working
capital management. We have successfully
improved collections, recovering receivables
that had increased towards the end of FY20 due
to the impact of COVID-19.
Funding
During the year we issued two bonds of £400m
each which mature in 2025 and 2032, extending
the life of our longest debt by 25 months. We took
advantage of prevailing markets to secure
additional long-term funding for the Group and the
latest issue was at a coupon rate of 0.739%. At 31
March 2021, 56% (2020: 43%) of our total
borrowings falls due in over five years, and our
undrawn committed bank borrowing facilities
were US$2.7 bn (2020: US$2.2bn).
We keep our debt levels stable at a low multiple
of our profits. Net debt at 31 March 2021 was
US$3,826m (2020: US$3,898m), 2.1 times
Benchmark EBITDA and 2.2 times Benchmark
EBITDA when measured on the frozen GAAP
basis we use for our debt covenant. Our target
range is 2.0 to 2.5 times.
The covenant on our banking facilities requires
that Benchmark EBIT should cover net interest
expense before financing fair value
remeasurements by three times. At 31 March
2021, this coverage ratio was 11 times (2020:11
times). We have no undue concentration of
repayment obligations in respect of borrowings
Experian plc Annual Report 2021Strategic report 68
Financial review
continued
Acquisitions
Our acquisition cash outflow was US$583m
(2020: US$700m). We completed a number of
acquisitions in the year, including a 60% stake
in the Risk Management division of Arvato
Financial Solutions for 7.2m Experian plc
shares, which were valued at US$253m on
completion.
We acquired the whole of the issued share
capital of Tapad, Inc. a leader in resolution of
digital online identities, for US$290m. We also
acquired the whole of the issued share capital
of BrScan Processamento de Dados e
Tecnologia Ltda (BrScan) for US$132m.
Acquisitions were in the Business-to-Business
segment and contributed US$117m to revenue
and US$28m to Benchmark EBIT in the year,
with annualised pro-forma revenue of
US$246m.
We have recognised a non-current financial
liability of US$208m for put options in respect
of acquisitions made this year.
In April 2021, we completed two further
acquisitions in the USA to bolster our income
verification business: Tax Credit Co., LLC and
Employment Tax Servicing, LLC.
Arvato Risk Management
This investment expands our
bureau presence in EMEA and
extends our range of risk, anti-fraud
and identity management services
across Germany, Austria and
Switzerland.
Tapad
A leading provider in digital identity
resolution for marketers helping to
connect brands to consumers,
primarily in the USA.
BrScan
A market leader in fraud and
identity solutions in Brazil.
Corporate Cost Control
A leading provider of workforce
solutions in the USA expanding
our verification services offering.
Axesor businesses
One of the largest independent
business information bureaux in
Spain, complementing our existing
consumer information business.
Brain Soluções de Tecnologia
Digital
The 55% investment enables us
to expand our share of the
Brazilian Agri credit market.
Associates and venture investments
Associates
Venture
Total
US$128m
US$176m
US$304m
9
–
25
10
34
10
Current invested
capital
Number of portfolio
companies
New deals
closed this year
We continue to invest in smaller start-ups and
FinTech companies, to boost innovation and
advance our intellectual property. We completed
ten investments in our venture programme in
FY21, bringing our total venture programme
financing to US$176m.
During the year we disposed of our interest
in Finicity Corporation, recognising a gain on
disposal of US$120m, and in the year ahead
we expect to realise further gains.
Following a favourable trading performance
we reversed the associate impairment charge
of US$23m booked in FY20.
Experian plc Strategic report 69
20201
US$m
1,386
1
1,387
(132)
1,255
(35)
(278)
942
2020
%
25.8
(3.1)
(1.3)
1.4
22.8
2021
US$m
1,385
1
1,386
(121)
1,265
35
(223)
1,077
2021
%
25.9
(2.6)
(2.0)
(2.6)
18.7
Reconciliation of Benchmark EBIT to statutory profit before tax
Year ended 31 March
Benchmark EBIT from ongoing activities
Exited business activities
Benchmark EBIT
Net interest expense
Benchmark PBT
Exceptional items
Other adjustments made to derive Benchmark PBT (note 14(a))
Profit before tax
1. Results for FY20 are re-presented for the reclassification to exited business activities of certain B2B businesses.
Cash tax reconciliation
Year ended 31 March
Tax charge on Benchmark PBT
Tax relief on goodwill amortisation
Benefit of brought forward tax losses
Other
Tax paid as a percentage of Benchmark PBT
Dividend history (USc) Payout ratio (%)1
)
s
t
n
e
c
S
U
(
e
r
a
h
s
r
e
p
d
n
e
d
i
v
i
D
47%
46%
46%
46%
41% 45% 47%
41%
41%
41%
40%
50
40
30
34%
32%
31%
20
28%
10
0
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
Second interim dividend
First interim dividend
1 Payout ratio is dividend per share as a proportion of Benchmark EPS.
Dividends and distributable reserves
Our dividend policy aims to increase dividends,
broadly in line with the underlying growth
in Benchmark EPS over time. This aligns
shareholder returns with our underlying
profitability.
In the past five years we have returned over
US$2bn to shareholders by dividend and over
US$1.3bn via net share purchases.
We expect to execute share purchases of up to
US$150m in the coming year, which will mainly
offset deliveries under employee share plans.
The Board has announced a second interim
dividend of 32.5 (2020: 32.5) US cents per
share, giving a total dividend for the year of 47.0
(2020: 47.0) US cents per share.
The dividend in FY21 has been held level with
the prior year in line with our policy.
The total dividend per share for the year is
covered 2.2 times (2020: 2.2 times) by
Benchmark EPS. Ordinary dividends paid in the
year amounted to US$427m (2020: US$424m).
Experian plc and the UK entity responsible for
distributing dividends under the Group’s Income
Access Share arrangements have significant
distributable reserves, which at 31 March 2021
were US$18.2bn and US$12.0bn respectively.
See note K to the Company financial statements
for further detail.
Interest
Benchmark net finance costs decreased by
US$11m reflecting a reduction in market
interest rates and average borrowing levels.
A reduction in foreign exchange losses on
Brazilian real intra-Group funding of US$38m,
and other fair value remeasurements,
contributed to the decrease in statutory net
finance costs of US$130m. At 31 March 2021,
interest on 91% of our net funding was at fixed
rates (2020: 67%).
Taxation
Our total tax charge was US$275m (2020:
US$263m) and our effective tax rate on
Benchmark PBT was 25.9% (2020: 25.8%),
reflecting the mix of profits and prevailing tax
rates by territory. We expect that our effective
tax rate on Benchmark PBT in FY22 will be in
the range of 26% to 27%.
The equivalent cash tax rate remains below our
Benchmark tax rate and we provide a
reconciliation in the table opposite. Other
differences include an acceleration of tax
deductions as a result of US legislative changes
in the year. We anticipate that our cash tax rate
will increase and move closer to our
Benchmark tax rate over the course of the next
three years, as tax amortisation of goodwill on
earlier acquisitions and prior tax losses are
utilised.
Earnings per share
Basic EPS was 88.2 US cents (2020: 74.8 US
cents). Basic EPS was reduced by 14.9 US cents
per share (2020: 28.2 US cents per share) in
respect of discontinued operations, Exceptional
items and other adjustments made to derive
Benchmark PBT.
Benchmark EPS was 103.1 US cents (2020:
103.0 US cents), an increase of 4% at constant
exchange rates and flat at actual rates. A ± 10%
change in the Brazilian real exchange rate
would impact Benchmark EPS by ± 1 US cents.
There would be no impact on Benchmark EPS
from a similar change in the pound sterling
exchange rate. We provide further information
in note 18 to the Group financial statements
on page 175.
Share capital
In FY21 we suspended our share repurchase
programme due to uncertainties surrounding
COVID-19. During the year, the average number
of shares in circulation was 910m (2020: 902m)
and the closing number of shares at 31 March
2021 was 914m (2020: 901m). The increase in
the year is attributable to shares delivered as
acquisition consideration and shares issued on
vesting of employee share incentive plans.
Experian plc Annual Report 2021Strategic report
70
Financial review
continued
Net assets and ROCE summary
Year ended 31 March
Goodwill
Other segment assets
Total segment assets
Segment liabilities
Operating segments – net assets
Central Activities – net assets
Deduct: non-controlling interests
Capital employed
Net debt
Tax
Add: non-controlling interests
Net assets
Average capital employed
ROCE1
2021
US$m
5,261
3,756
9,017
(2,043)
6,974
388
(38)
7,324
(3,826)
(417)
38
3,119
6,849
15.0%
2020
US$m
4,543
3,344
7,887
(1,723)
6,164
307
(6)
6,465
(3,898)
(292)
6
2,281
6,383
16.1%
2019
US$m
4,324
2,957
7,281
(1,541)
5,740
300
(14)
6,026
(3,275)
(271)
14
2,494
6,094
15.9%
Net assets and ROCE
Operating segment net assets increased by
US$810m in the year as a result of acquisitions.
ROCE for the year ended 31 March 2021
reduced to 15.0% (2020: 16.1%) largely due to
the effect of acquisitions completed part way
through the year. ROCE is a post-tax measure
and we use our Benchmark tax rate for ease of
calculation.
Financial risk management
The key financial risks specific to our business
are set out in the Risk management section on
pages 72 – 80. We continue to monitor closely
the impact of COVID-19 on our business and the
global economy. Our priority remains the health,
safety and well-being of our employees, clients
and consumers.
While the UK’s departure from the EU has not
had a significant impact on our business, there
is ongoing uncertainty related to Brexit and the
longer-term effect on trade, cross-border data
regulations and legislative arrangements. We
continue to monitor this risk.
We have identified unpredictable financial
markets or fiscal developments as a principal
risk, including evolving tax laws and the
resolution of uncertainties relating to prior-year
tax liabilities. Detailed narrative disclosures are
contained in note 7 to the Group financial
statements on pages 161 – 162, with further
numeric disclosures for foreign exchange,
interest rate and credit risk in notes 10, 15, 24
and 30 respectively.
Critical estimates and judgments
The Group is subject to a number of risks and
uncertainties which require us to make
estimates and judgments. Areas involving
significant uncertainty are:
Goodwill Goodwill represents 52% of total
assets. We test for impairment of goodwill at
least annually by performing a value-in-use
calculation for each cash-generating unit
(CGU), which is based on cash flow projections
with assumptions updated for the impacts
of COVID-19.
Following our evaluation this year the carrying
value of the Asia Pacific CGU has been reduced
to its recoverable amount through recognition of
a US$53m impairment charge.
These estimates are, by nature, subject to
uncertainty and the key assumptions used by
each CGU, and sensitivities, are set out in note
20 to the Group financial statements.
Useful life of intangible assets Our business is
subject to technological change and competition.
We currently amortise non-acquisition
intangibles over a period from three to ten
years, with the average life being five years. If
the useful life of our databases and internal
use/internally generated software either
increased or decreased by one year, the impact
on the annual amortisation charge would be a
decrease of US$53m or an increase of US$76m
respectively.
We have recognised an impairment charge in
the year of US$33m which largely relates to an
internally generated software asset identified
as requiring impairment due to the planned
upgrade of our technology estate.
Taxation We are subject to tax in numerous
jurisdictions and have a number of open tax
returns with various tax authorities. It can
take many years to agree an outcome with
a tax authority, as there are transactions in
the ordinary course of business for which the
ultimate tax determination is uncertain. Our
key uncertainties relate to the deductibility of
purchased goodwill, inter-company trading
and financing. US$350m (2020: US$327m) is
ROCE
2021
2020
2019
20182
2017
%
15.0
16.1
15.9
15.5
15.5
1 For definition of ROCE see ‘Non-GAAP measures’ on page 161.
For FY21 the return used in the calculation of ROCE is based
on Benchmark EBIT of US$1,386m and a Benchmark tax rate
of 25.9%.
2 Restated for IFRS 15.
included in current tax liabilities in relation to
these judgmental areas. If the resolution of all
these uncertainties was ultimately adverse,
we may be required to pay an amount of up to
US$166m (2020: US$163m) in addition to that
currently provided. Future tax charges and our
effective tax rate may be affected by tax regime
reforms in our key markets as well as resolution
of open matters as we continue to bring our tax
affairs up to date.
Deciding whether to recognise deferred tax
assets is a financial judgment. Assets are only
recognised when we consider it probable that
they can be recovered based on forecasts of
future profits, against which those assets may
be utilised.
The Group is subject to challenge by the
Brazilian and Colombian tax authorities on the
deduction for tax purposes of goodwill
amortisation. Further information on the
contingency is provided in note 43 to the
Group financial statements.
Pensions The Group is exposed to a number of
risks inherent in defined benefit pension plans,
as outlined in note 34(d) to the Group financial
statements. The principal financial assumption
used in determining the carrying value of
pension assets/obligations is the real discount
rate. If this rate increased/decreased by 0.1%,
defined benefit obligations at 31 March 2021
would change by approximately ± US$21m
offset by a change in the fair value of plan
assets of approximately ± US$20m.
Litigation There continue to be a number of
litigation and other claims across all our major
regions. We do not consider that the outcome of
any such claims will have a materially adverse
effect on our financial position.
Experian plc Strategic report 71
Exceptional items and other adjustments made to derive Benchmark PBT
We make certain adjustments to derive Benchmark PBT. These are summarised in the table below. Note 6 to the Group financial statements explains the
reasons for the exclusion from our definition of Benchmark PBT of Exceptional items and other adjustments made to derive Benchmark PBT.
Year ended 31 March
Exceptional items:
Profit on disposal of associate
Restructuring costs
Impairment of intangible asset
Legal provisions movements
Net (credit)/charge for Exceptional items
Other adjustments made to derive Benchmark PBT:
Amortisation of acquisition intangibles
Impairment of goodwill
Acquisition and disposal expenses
Adjustment to the fair value of contingent consideration
Non-benchmark share of post-tax profit of associates
Interest on uncertain tax provisions
Financing fair value remeasurements
Net charge for other adjustments made to derive Benchmark PBT
Net charge for Exceptional items and other adjustments made to derive Benchmark PBT
2021
US$m
2020
US$m
(120)
50
27
8
(35)
138
53
41
1
(16)
11
(5)
223
188
–
–
–
35
35
124
–
39
(4)
(6)
14
111
278
313
Further information on Exceptional items is provided in note 14 to the Group financial statements on page 171.
Non-GAAP measures
We have identified and defined certain non-GAAP measures as the key measures used by management to assess the underlying performance of the
Group’s ongoing businesses. The table below summarises these measures and there is a fuller explanation in note 6 to the Group financial statements
on pages 160 to 161.
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 EBITDA
Benchmark PBT before net interest expense.
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.
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, plus/minus the net tax liability or asset and
plus Net debt.
Experian plc Annual Report 2021Strategic report
72
Risk management
Identifying and managing risk
Identifying and managing risk is key to our business. Doing so helps
us deliver long-term shareholder value and protect our business,
people, assets, capital and reputation.
Our risk management governance structure
Board
Sets our overarching risk appetite and ensures that we manage risks appropriately across the Group.
The Board delegates oversight of risk management activities to the Audit Committee.
Audit Committee
Regularly monitors the principal risks and uncertainties identified by our risk assessment processes, with the
strategies we have developed and the actions we have taken to mitigate them. Management also continually reviews
the effectiveness of our risk management system and internal control systems, which support our risk identification,
assessment and reporting.
Executive Risk Management Committee (ERMC)
Comprises senior Group executives, including the executive directors and the Company Secretary.
It oversees how we manage global risks.
Risk Management Committees
Security and
Continuity Steering
Committee (SCSC)
is a sub-committee of
the ERMC. Its primary
responsibility is to
oversee management
of global information
security, physical security,
and business continuity
risks.
Assurance Steering
Committee (ASC)
Tax and Treasury
Committee
Global and Regional
Strategic Project
Committees
Regional
Risk Management
Committees (RRMC)
is a sub-committee of
the ERMC and oversees
the development and
implementation of the
Group’s assurance
framework.
oversees management of
financial risks, including
tax, credit, liquidity,
funding, market and
currency risks.
oversee management of
regional risks and feed
up to the ERMC.
ensure that we
appropriately resource
our strategic projects,
and that they are
risk-assessed, and
commercially and
technically appraised.
The committees’
conclusions are then
considered by the
Board or relevant Group
Principal Operating
Subsidiary for approval.
Group Operating Committee (OpCo)
The Group Operating Committee comprises our most senior executives. Its remit includes identifying, debating
and achieving consensus on issues involving strategy, risk, growth, people and culture, and operational efficiency.
Its meetings generally focus on the key issues facing our Group.
Executive management
Our executive management takes day-to-day responsibility for implementing the Board’s policies on risk
management and internal control. It designates who is responsible and accountable through the design and
implementation of all necessary internal control systems, including policies, standards and guidance.
Experian plc Strategic report 73
The Board is responsible for maintaining
and reviewing the effectiveness of our risk
management activities from a strategic,
financial, and operational perspective.
These activities are designed to identify and
manage, rather than eliminate, the risk of
failure to achieve business objectives or to
successfully deliver our business strategy.
The risk management process is designed
to identify, assess, respond to, report on and
monitor the risks that threaten our ability to
achieve our business strategy and objectives,
within our risk appetite.
Our risk management process
We follow the Three Lines of Defence
approach to risk management. Risks are
owned and managed within the business
and reviewed by our businesses at least
quarterly. Global governance teams review
risks and controls, including those relating
to information security, compliance and
business continuity. Global Internal
Audit assesses our risks and controls
independently and objectively. The results
of these reviews feed into our reporting cycle,
including through the risk management
governance structure outlined opposite.
Risk categories
Strategic risk
– Country/Political/
Economic
– Acquisition
– Competitor
– Business strategy
– Publicity
Financial risk
– Accounting
– Credit
– Liquidity
– Market
– Currency
Regulatory/
Compliance risk
– Regulated activities
– Privacy
– Financial crime
Operational risk
– Technology
– Information security
– Physical security
– Continuity
– Third party
– People
– Process
Step 1
Risk identification
Consider key business
objectives
Identify principal risks
Identify key controls
Step 2
Risk assessment
Assess controls
Estimate likelihood,
impact and velocity
Consider legal, reputation
and conduct exposure
Step 3
Risk response
Step 4
Risk reporting & monitoring
Accept or remediate
current risk and control
environment
Determine corrective
action if needed
Business unit and
regional level
RRMCs and ERMC
Audit Committee
Three Lines of Defence
Audit Committee
Executive management / Risk Management Committees
First Line of Defence
Second Line of Defence
Third Line of Defence
Lines of business (regional
and global)
Experian IT Services (EITS)
Corporate functions
Global Risk Management
Global Security Office
Compliance
Business Continuity
Physical Security
Legal
Global Internal Audit
All employees have First Line
responsibilities
Governance teams have
Second Line responsibilities
Global Internal Audit has
Third Line responsibilities
Experian plc Annual Report 2021Strategic report
74
Risk management
continued
Our risk profile
Our risk identification processes follow a dual
approach:
A bottom-up approach at a business unit or
country level. This identifies the risks that
threaten an individual business unit activity.
To provide visibility of issues across the
business, we consolidate these risks at a
regional and global level, then escalate to
the Risk Management Committees.
A top-down approach at the global level.
This identifies the principal risks that
threaten the delivery of our strategy
(see below). The diagram on this page
summarises our principal risk profile and
trends in the threat levels (on a net/residual
risk basis) since the last reporting period.
Compared to last year, the principal risks
remain the same (we have removed ‘data
ownership, access and integrity’ as a
standalone risk due to overlap with other
risks, and the associated risk information
is covered in other risk descriptions).
Our strategic focus areas
1 Make credit and lending simpler, faster
and safer for consumers and businesses
2 Empower consumers to improve their
financial lives
3 Help businesses verify identity and
combat fraud
4 Help organisations in specialised vertical
markets harness data and analytics to make
smarter decisions
5 Enable businesses to find, understand
and connect with audiences
Risk appetite
We assess the level of risk and our associated
risk appetite to ensure we focus appropriately
on those risks we face. We target risks for
assessment based on gross risk and measure
them based on net risk using a risk and control
assessment methodology. We then prioritise
them for mitigation. The Board and Audit
Committee review the principal risks, of which
there are currently nine, on an ongoing basis, as
does the ERMC. The Board has defined risk
appetites for certain principal risks that we face
during the normal course of business. We use a
variety of information sources to show if we are
working within our tolerance for these risks and
whether or not any of them require additional
executive attention.
Our risk culture
The Board is committed to maintaining a
culture that emphasises the importance of
managing risk and encourages transparent
and timely risk reporting. We work to align
employees’ behaviours, attitudes and incentives
with our risk appetite and other governance
and risk management policies. Our risk
Principal risk profile
Business conduct risk
Failure to comply with
laws and regulations
Non-resilient IT/business
environment
Undesirable investment
outcomes
Dependence on highly
skilled personnel
T
C
A
P
M
I
Adverse and unpredictable
financial markets or fiscal
developments
Loss or inappropriate use
of data and systems
New legislation or changes
in regulatory enforcement
Increasing competition
L I K E L I H O O D
Risk movement:
Increasing
Decreasing
Stable
governance process reinforces and facilitates
appropriate ownership, accountability,
escalation and management of our principal
risks. This process includes: well-defined roles
and responsibilities across our Three Lines
of Defence model; assigning accountability
for risk-taking when making key business
decisions; documenting clear boundaries
and behavioural expectations in policies and
standards; and creating an environment that
reinforces adherence and accountability.
Current areas of focus
Our risk landscape continues to change as both
business and regulatory environments evolve.
While COVID-19 has not led us to change our
risk management framework or processes, we
have ensured that the impacts of the pandemic
are considered across all our principal risks. We
make references to COVID-19 in future sections.
Our focus in the current year was to continue
getting more proactive in the identification and
management of our principal risks through a
combination of best-in-class risk practices,
greater engagement across the Three Lines of
Defence and increased use of data and
analytics. While we have made good progress in
all these focus areas, we would expect similar
areas of focus to continue in the upcoming
fiscal year. We are currently undertaking an
external review of our operational risk
management programme to ensure it is
keeping pace with our evolving risk profile.
In addition to known principal risks, we continue
to identify and analyse emerging ones, and
discuss these, as appropriate, in different forums,
including the ERMC and Audit Committee.
Some of the emerging risks we are currently
considering include:
ESG matters: we continue to develop our ESG
programme to address different aspects.
The Group has committed to becoming
carbon neutral in its own operations by 2030
and has also developed its alignment to the
Task Force on Climate-Related Financial
Disclosures (TCFD) reporting framework.
Experian will be required to report its
environmental disclosure aligned to the TCFD
framework from FY22 (Annual Report 2022)
onwards, however our TCFD statement in
this year’s annual report (see page 53)
already covers most of the required TCFD
disclosure. The Group has an Environmental
Policy in place to address related matters,
and an Environmental Management System
(EMS) designed to ISO 14001 standards that
allows us to measure and monitor our direct
environmental impact.
We continue to focus on People and Diversity
matters, including setting gender targets (see
page 49). We also continue to engage with
investors and clients to address their
expectations.
Accelerating privacy regulation: regulators
are becoming more active in interpreting
and enforcing privacy regulations across
existing regulations, and proposing new and
more stringent privacy regulations in others.
We closely monitor these developments
and interact with regulators, legislators and
other stakeholders to provide input.
Experian plc Strategic report
75
An example of increased fraudulent activity is
the incident we experienced in South Africa this
year where we concluded an agreement for
services with an individual fraudulently
impersonating a representative of a legitimate
company seeking access to marketing data.
While no personal consumer credit, financial or
banking information was shared by Experian
and none of our infrastructure, systems or
databases were compromised, this highlights
the increased risks related to unauthorised
access to data. In response to this incident, we
provided support to affected consumers and
businesses, engaged third parties to assist in
our analysis and response, and have
strengthened our organisational protocols and
business processes to prevent this sort of fraud,
including new client onboarding controls, new
data transfer protocols, and organisational
changes to increase our privacy compliance
activities.
In response to cyber risks, we continue to
enhance our protection, detection and response
capabilities by strengthening our security
policies, practices and training and continue to
ensure that we apply them consistently across
our regions and business units. We will continue
investing in the tools, people, resources and
initiatives necessary to maintain and improve
our global information security programme.
With COVID-19 and while we consider our
longer-term strategy for the future of work
location, we continue to monitor the impact of
most of our employees and third parties
working remotely, including any potential
exposure to vulnerabilities. We have taken
technical measures to restrict, secure and
monitor devices, and added compliance
requirements for employees and third parties,
especially those handling sensitive information.
Principal risks
The following pages summarise our principal
risks and uncertainties with mitigating actions
for each and related trends in the risk
environment, as identified by the Board for the
year ended 31 March 2021.
The list is not exhaustive and may change
during the next financial year, as the risk
landscape evolves.
COVID-19 continues to be a consideration in
several of our principal risks. We continue to
seek to mitigate the impact of COVID-19 and
remain focused on the health, safety and
well-being of our employees, clients and
consumers.
In order to assess our Group’s viability, the
directors focused on three principal risks
that are critical to our success. These are
summarised below and discussed in more
detail in the Viability assessment section
following the description of our principal risks.
Loss or inappropriate use of data or
systems leading to serious reputational
and brand damage, legal penalties and
class action litigation.
Adverse and unpredictable financial markets
or fiscal developments in one of our major
countries of operation, resulting in significant
economic deterioration, currency weakness
or restriction.
New legislation or changes in regulatory
enforcement, changing how we operate
our business.
Loss or inappropriate
use of data and systems
We hold and manage sensitive consumer
information that increases our exposure
and susceptibility to cyber-attacks or other
unauthorised access to data, either directly
through our online systems or indirectly
through our partners or third-party
contractors.
Part of the viability assessment
Risk type
– Operational
Risk movement
Stable
Potential impact
Unauthorised access to consumer data could
cause problems for consumers and result in
material loss of business, substantial legal
liability, regulatory enforcement actions and/or
significant harm to our reputation. The impact
of this risk, if it materialises, will typically be felt
in the near term.
Examples of control mitigation
We deploy physical and technological
security measures, combined with
monitoring and alerting for suspicious
activities.
We maintain an information security
programme with strong governance for
identifying, protecting against, detecting
and responding to cyber security risks and
recovering from cyber security incidents.
We impose contractual security
requirements on our partners and other third
parties that use our data, complemented by
periodic reviews of third-party controls.
We maintain insurance coverage, where
feasible and appropriate.
Responsibility
Our Global Security Office sets policies and
standards related to the information security
programme. Every employee is ultimately
responsible for following security policies
and protocols.
Changes this year
External cyber security threats to businesses
continue to increase in number and scale. We
have also seen an increase in fraudulent activity
seeking access to data. In addition, the inherent
risk level of data exposure has also increased,
particularly with respect to data that has not
traditionally been considered sensitive or
‘personally identifiable’.
Experian plc Annual Report 2021Strategic report 76
Principal risks
continued
Adverse and unpredictable
financial markets or fiscal
developments
We operate globally and our results could
be affected by global, regional or national
changes in fiscal or monetary policies.
A substantial change in credit markets in
the USA, Brazil or the UK could reduce
our financial performance and growth
potential in those countries.
We present our Group financial statements
in US dollars. However, we transact
business in a number of currencies.
Changes in other currencies relative to
the US dollar affect our financial results.
A substantial rise in US, EU or UK interest
rates could increase our future cost of
borrowings.
We are subject to complex and evolving
tax laws and interpretations, which may
change significantly. These changes may
increase our effective tax rates in the
future. Uncertainty about the application
of these laws may also result in different
outcomes from the amounts we
provide for.
We have a number of outstanding tax
matters and resolving them could have
a substantial impact on our financial
statements, cash and reputation.
Part of the viability assessment
Risk type
– Financial
Risk movement
Increasing
Potential impact
The US, Brazilian and UK markets are
significant contributors to our revenue.
A reduction in one or more of these consumer
and business credit services markets could
reduce our revenue and profit.
We benefit from the strengthening of currencies
relative to the US dollar and are adversely
affected by currencies weakening relative to it.
We have outstanding debt denominated
principally in euros, pounds sterling and
US dollars. As this debt matures, we may
need to replace it with borrowings at higher
interest rates.
Our earnings could be reduced and tax
payments increased as a result of settling
historical tax positions or increases in tax rates.
Adverse publicity around tax could damage
our reputation.
1 World Bank, 5 January 2021.
The impact of this risk, if it materialises, will
typically be felt in the short to long term.
Examples of control mitigation
We have a diverse portfolio by geography,
product, sector and client. We provide
counter-cyclical products and services.
We convert cash balances in foreign
currencies into US dollars.
We fix the interest rates on a proportion of
our borrowings.
We retain internal and external tax
professionals, who regularly monitor
developments in international tax and
assess the impact of changes and
differing outcomes.
We review contingency plans in our key
markets as to specific potential responses
to evolving financial conditions.
Responsibility
Our corporate and business unit finance
functions monitor our external landscape,
and interface with business units to develop
and implement appropriate actions.
Changes this year
We continue to analyse the impact of potential
economic downturn and associated actions,
particularly in our key markets. Some of the
underlying risk vectors are improving, while
others have future uncertainty associated with
them, as detailed below and so this will
continue to remain an area of focus.
The global economy is expected to expand in
the mid-single digits during 2021, following a
contraction of 4.3% in 20201. This will likely
positively impact areas of the business which
experienced difficult trading conditions during
the previous year.
We continue to perform analyses to understand
the impact of changes in economic conditions
on Group revenues and have considered
different economic scenarios in our viability
assessment.
Serasa S.A. has been successful in its
challenges against the Brazilian tax authorities
for the deduction of the initial goodwill
amortisation arising from its acquisition by
Experian in 2007, however there are some
remaining matters that are yet to be resolved.
The Colombian Tax Authority has raised a
similar challenge on the deductibility of
goodwill in respect of the 2014 and 2016
tax years.
Historic UK tax disputes continue to be
discussed with Her Majesty’s Revenue &
Customs.
Any changes to the US, UK and Brazil corporate
tax rates would result in a change to our
effective tax rate and cash tax payments. In the
USA, the new administration may consider tax
reform proposals which could involve changes
to the Tax Cuts and Jobs Act or the corporate
federal income tax rate. In the UK, it has been
announced that the corporation tax rate will
increase from 19% to 25% from 1 April 2023.
Experian continues to monitor these
developments closely.
New legislation or changes
in regulatory enforcement
We operate in an increasingly complex
environment and many of our activities
and services are subject to legal and
regulatory influences. New laws, new
interpretations of existing laws, changes
to existing regulations and heightened
regulatory scrutiny could affect how we
operate. For example, regulatory
interpretation of complex, principles-based
privacy regulations could affect how we
collect and process information for
marketing, risk management and fraud
detection.
Part of the viability assessment
Risk movement
Increasing
Risk type
– Strategic
– Regulatory/
Compliance
– Operational
Potential impact
We may suffer increased costs or reduced
revenue resulting from modified business
practices, adopting new procedures,
self-regulation and litigation or regulatory
actions resulting in liability, fines and/or
changes in our business practices. The impact
of this risk, if it materialises, will typically be
felt in the short term.
Examples of control mitigation
We use internal and external resources
to monitor planned and realised changes
in legislation.
We educate lawmakers, regulators,
consumer and privacy advocates, industry
trade groups, our clients and other
stakeholders in the public policy debate.
Our global Compliance team has
region-specific regulatory expertise and
works with our businesses to identify and
adopt balanced compliance strategies.
We execute our Compliance Management
Programme, which directs the structure,
documentation, tools and training
requirements to support compliance
on an ongoing basis.
Experian plc Strategic report 77
The proposed India Personal Data Privacy
(PDP) Bill is still being analysed by a Joint
Parliamentary Committee (JPC). At this point
it is unclear whether the bill will be taken
up or tabled, so there is no clarity on
implementation dates.
Related to COVID-19, we continue to monitor for
additional rules and regulations related to the
reporting of data.
Failure to comply with
laws and regulations
We hold and manage sensitive consumer
information and we must comply with
many complex privacy and consumer
protection laws, regulations and
contractual obligations.
Risk type
– Regulatory/
Compliance
– Operational
Risk movement
Increasing
Potential impact
Non-compliance may result in material
litigation, including class actions, as well as
regulatory actions. These could result in civil
or criminal liability or penalties, damage to
our reputation or significant changes to parts
of our business. The impact of this risk, if
it materialises, will typically be felt in the
near term.
Examples of control mitigation
We maintain a compliance management
framework that includes defined policies,
procedures and controls for Experian
employees, business processes, and third
parties such as our data resellers.
We assess the appropriateness of using data
in new and changing products and services.
We vigorously defend all pending and
threatened claims, employing internal and
external counsel to effectively manage and
conclude such proceedings.
We analyse the causes of claims, to identify
any potential changes we need to make
to our business processes and policies.
We maintain insurance coverage, where
feasible and appropriate.
Responsibility
Our Legal and Compliance functions work with
our business units to understand the impact
of relevant laws and regulations, including
any regulatory interpretations and associated
implications. Our business units put into place
appropriate procedures and controls designed
to ensure compliance.
Changes this year
We have faced increased regulatory scrutiny,
and regulatory and government enquiries and
investigations in several jurisdictions. The laws
and regulations to which we are subject are
complex, and in many cases principles-based.
Compliance with these laws and regulations
continues to get more challenging as
interpretations may differ among regulators,
and as changes in the regulatory environment
evolve.
In the UK, the UK Information Commissioner’s
Office (ICO) issued its final Enforcement Notice
(EN) on 12 October 2020. We disagree with the
ICO’s interpretation of the EU General Data
Protection Regulation (GDPR) and have filed our
appeal, which will be heard at the end of
November 2021. We have also seen closer
contact by the Financial Conduct Authority (FCA)
during the COVID-19 pandemic.
In the USA, we are subject to ongoing regulatory
supervision by the Consumer Financial
Protection Bureau (CFPB), and for some
matters by other regulators such as the New
York Department of Financial Services (DFS).
Over the past year, the number of US class
action lawsuits have decreased slightly,
however individual consumer cases are
trending up. While we are managing the effects
associated with these investigations and
lawsuits, the cost of defending litigation is rising
and consequently the risk of potential liability
and impact on some parts of our business still
remains significant.
Related to COVID-19, we continue to closely
monitor call centre volumes and other
indicators to ensure that we continue to adhere
to statutory and regulatory deadlines. There is a
potential for increased regulatory investigations
and/or litigation if any capacity constraints on
our side or at data providers result in missing
statutory deadlines, such as for disputes.
Responsibility
Our Legal, Government Affairs and Compliance
functions work with our business units to
understand the impact of relevant laws
and regulations, including any regulatory
interpretations and associated implications.
The business units put into place appropriate
procedures and controls designed to
ensure compliance.
Changes this year
New laws, new interpretations of existing laws,
changes to existing regulations and regulatory
scrutiny continue to be considered and
introduced, with a global focus on privacy and a
general trend towards more consumer control
over data. Many of these laws and regulations
are complex and principles-based, leading to
actual and potential differences in how
regulations are interpreted and enforced after
they become effective in many of the
jurisdictions we operate in. In some cases these
differences in interpretations may have to be
decided in the courts.
We highlight some significant updates below:
In the USA, California voters recently approved a
ballot initiative to enact the California Privacy
Rights Act (CPRA). The CPRA will become
effective on 1 January 2023, with the California
Consumer Privacy Act (CCPA) remaining in
effect through that date. The CPRA further
enhances the CCPA by creating a new privacy
regulatory agency with expanded enforcement
and rulemaking authority, new consumer rights
of data correction, expansion of opt-out rights,
and increased disclosures and opt-out rights
regarding sensitive information, among other
requirements. We are compliant with the CCPA.
Several other states are progressing privacy
legislation, with Virginia passing the Consumer
Data Protection Act (VDPA) in March 2021. More
states are expected to enact privacy laws before
a national privacy standard may be established.
In the meantime, divergence in state laws may
have an impact on products and services.
In Brazil, the general data protection law (LGPD)
has been effective since September 2020. While
we have implemented our rigorous compliance
programme based on the principles outlined in
the law, we have already seen some different
regulatory interpretations of these principles
and how they relate to our Marketing Services
business under LGPD. Open banking is under
implementation in Brazil and the Central Bank
is progressing discussions internally and with
authorised private sector entities to define legal
and technical aspects.
In South Africa, Experian remains on track in
implementing its readiness programme for full
compliance with the Protection of Personal
Information Act (POPIA) ahead of the 12-month
implementation grace period, which ends on
1 July 2021.
Experian plc Annual Report 2021Strategic report 78
Principal risks
continued
Non-resilient IT/business
environment
Delivery of our products and services
depends on a number of key IT systems
and processes that expose our clients,
consumers and businesses to serious
disruption in the event of systems or
operational failures.
Risk type
– Operational
Risk movement
Stable
Potential impact
A significant failure or interruption could have
a materially adverse effect on our business,
financial performance, financial condition
and reputation. The impact of this risk, if
it materialises, will typically be felt in the
near term.
Examples of control mitigation
We maintain a significant level of resilience
in our operations, designed to avoid material
and sustained disruption to our businesses,
clients and consumers.
We design applications to be resilient
and with a balance between longevity,
sustainability and speed.
We maintain a global integrated business
continuity framework that includes
industry-appropriate policies, procedures
and controls for all our systems and related
processes, as well as ongoing review,
monitoring and escalation activities.
We duplicate information in our databases
and maintain back-up data centres.
Responsibility
Our corporate and business technology teams,
assisted by the Business Continuity function,
are responsible for maintaining appropriate
primary and back-up infrastructure to
minimise disruption.
Changes this year
Throughout this year we experienced isolated
events that tested our plans and processes.
From an operational resiliency standpoint,
including related to the impact of COVID-19, we
continue to closely monitor our infrastructure
and processes to manage our commitments to
clients, consumers and regulators.
In addition, we provide training to our key
responders and carry out periodic exercises to
validate that our procedures are fit for purpose.
We have designed our applications using a
‘build anywhere, deploy anywhere’ strategy, to
support portability and maximum resilience.
Our approach to asset lifecycle management
helps ensure that we retire and replace our
technology in a timely fashion.
A global initiative continues progress to
maximise business value and maintain
leadership through accelerated technology
transformation.
Business conduct risk
Our business model is designed to create
long-term value for people, businesses
and society, through our data assets
and innovative analytics and software
solutions. Inappropriate execution of our
business strategies or activities could
adversely affect our clients, consumers
or counterparties.
Risk type
– Strategic
– Operational
Risk movement
Stable
Potential impact
Consumers or clients could receive
inappropriate products or not have access to
appropriate products, resulting in material
loss of business, substantial legal liability,
regulatory enforcement actions or significant
harm to our reputation. The impact of this risk,
if it materialises, will typically be felt in the
short term.
Examples of control mitigation
We maintain appropriate governance and
oversight through policies, procedures and
controls designed to safeguard personal
data, avoid detriment to consumers, provide
consumer-centric product design and
delivery, and effectively respond to enquiries
and complaints.
The above activities also support a robust
conduct risk management framework.
We enforce our Global Code of Conduct,
Anti-Corruption Policy and Gifts and
Hospitality Policy. If we believe employees
or suppliers are not following our conduct
standards, we will investigate thoroughly and
take disciplinary action where appropriate.
Responsibility
Our Compliance function sets policies and
standards, including the Code of Conduct. All
employees are accountable for understanding
and following our conduct standards.
Changes this year
Regulators have continued to put public trust
and consumer and investor protection at the
centre of their mission statements and have
promoted prudent conduct risk management.
We periodically evaluate our policies and other
protocols to ensure that we stay up to speed
with external and internal expectations.
Related to COVID-19, we continue to take
industry-leading positions designed to protect
and educate consumers, as well as to promote
the responsible reporting of data, with
appropriate safeguards, in order to help the
economic recovery from the crisis.
Dependence on highly
skilled personnel
Our success depends on our ability to
attract, motivate and retain key talent
while also building future leadership.
Risk type
– Operational
Risk movement
Stable
Potential impact
Not having the right people could materially
affect our ability to service our clients and
grow our business. The impact of this risk,
if it materialises, will typically be felt in the
long term.
Examples of control mitigation
In every region, we have ongoing
programmes for recruitment, personal and
career development, and talent identification
and development.
As part of our employee engagement
strategy, we conduct periodic employee
surveys. We track progress against our action
plans.
We offer competitive compensation and
benefits and review them regularly.
We actively monitor attrition rates, with a
focus on individuals designated as high
talent or in strategically important roles.
Experian plc Strategic report 79
Responsibility
Our business units work with the Human
Resources function to set and implement
talent management strategies.
Changes this year
We continue to take steps to effectively manage
our ability to attract, develop and retain
employee talent and believe our mitigation
efforts have stabilised the overall risk to
Experian.
We continue to transform our Talent Acquisition
proposition to better attract talent to Experian.
We have embedded mobile-enabled technology,
introduced candidate experience surveys at
different stages of the hiring and onboarding
process, significantly enhanced our presence
on social media, implemented key performance
indicators for recruiters and continue to upskill
our capability within the Talent Acquisition
team.
We monitor employee engagement through a
variety of channels and have been
implementing the action plans from our
periodic surveys. In addition to high response
rates, our latest surveys continue to show
strong engagement and enablement scores.
Voluntary attrition rates are stable but continue
to be a focus.
Significant activity in the DEI space prevails
with senior executives taking up Sponsor roles
for key areas of our DEI strategy, including
setting gender and ethnicity targets.
With COVID-19, we have kept the health and
safety of our employees as the primary
consideration of our pandemic response. Most
of our employees are still working remotely. An
effort is underway to determine our strategy for
work arrangements in the future. We expect
this to be guided by a consistent global
framework and principles, with local flexibility
around the approach to account for legal and
cultural nuances.
Increasing competition
We operate in dynamic markets such as
business and consumer credit information,
decisioning software, fraud, marketing,
and consumer services. Our competitive
landscape is still evolving, with traditional
players reinventing themselves, emerging
players investing heavily and new entrants
making commitments in new technologies
or approaches to our markets. There is a
risk that we will not respond adequately to
such disruptions or that our products and
services will fail to meet changing client
and consumer preferences.
Risk type
– Strategic
Risk movement
Stable
Potential impact
Price reductions may reduce our margins and
financial results. Increased competition may
reduce our market share, harm our ability to
obtain new clients or retain existing ones, affect
our ability to recruit talent and influence our
investment decisions. We might also be unable
to support changes in the way our businesses
and clients use and purchase information,
affecting our operating results. The impact of
this risk, if it materialises, will typically be felt
in the long term.
Examples of control mitigation
We continue to research and invest in
new data sources, analytics, technology,
capabilities and talent to deliver our
strategic priorities.
We continue to develop innovative new
products that leverage our scale and
expertise and allow us to deploy
capabilities in new and existing markets
and geographies.
We use rigorous processes to identify and
select our development investments, so we
can efficiently and effectively introduce new
products and solutions to the market.
Where appropriate, and available, we make
acquisitions, take minority investments and
enter into strategic alliances to acquire new
capabilities and enter into new markets.
Responsibility
Our Corporate Development and Experian
Ventures teams, as well as our business units,
monitor the competitive landscape in order to
develop and implement appropriate actions.
Changes this year
We are proactive in our efforts to evaluate
competitors and markets, and pursue
investments and enhancements to our data,
analytics, technology and capabilities where
appropriate, available and feasible.
Traditional competitors continue to pursue
differentiated data assets, adjacent vertical
expansion, and new geographic markets. In the
Consumer Services space, other firms have
become bigger competitors in recent years as
we have expanded in areas such as digital
marketplaces and identity protection. We feel
confident in Experian’s relative position and
competitive advantages, but the broader
landscape continues to evolve.
There is a long-term competitive risk to
consider related to newer entrants building
information networks based on consumer data.
While some of them may not be trying to build a
credit bureau or fraud business per se, this is
not many degrees away from our core business
and is being closely monitored.
Certain governments and central banks in
countries where we have credit bureaux are
collecting loan data from banks, principally for
systemic risk analysis, though some may share
individual loan data with lenders, which has the
potential to compete with some of our credit
reference data services. The timing and
whether any government agencies choose to go
this route is uncertain.
In India, the Reserve Bank of India (RBI) had
announced plans to establish a Public Credit
Registry (PCR) in 2018. The full extent of
competition with private credit bureaux in India
is uncertain at this point.
In the USA, there have been references to the
potential formation of a government-owned
credit bureau, though there have been no actual
proposals to establish such a bureau.
With COVID-19, we continue to engage with our
clients to help them navigate risk decisions,
such as lending, in the current environment
of economic uncertainty.
Experian plc Annual Report 2021Strategic report Responsibility
Our Corporate Development and Experian
Ventures teams, as well as our business units,
monitor the investments we make to ensure
outcomes are in line with expectations.
Changes this year
We have refreshed policies and standards that
apply minimum requirements to our acquisition
and integration processes, including enhanced
information security requirements.
We are analysing competitive threats to our
business model and will take advantage of
acquisitions, investments and strategic
partnerships, and invest in new technologies
where appropriate.
Related to COVID-19, we continue to closely
monitor our acquisition pipeline. We are closely
engaged with each of our minority investments
to offer guidance and advice and, where
appropriate, are providing commercial offerings
that may be helpful to these companies. In
addition, we continue to research any available
opportunities for investment.
80
Principal risks
continued
Undesirable investment
outcomes
We critically evaluate, and may invest in,
equity investments and other growth
opportunities, including internal
performance improvement programmes.
To the extent invested, any of these may
not produce the desired financial or
operating results.
Risk type
– Strategic
– Operational
Risk movement
Stable
Potential impact
Failure to successfully implement our key
business strategies could have a materially
adverse effect on our ability to achieve our
growth targets.
Poorly executed business acquisitions or
partnerships could result in material loss
of business, increased costs, reduced
revenue, substantial legal liability, regulatory
enforcement actions and significant harm to
our reputation.
The impact of this risk, if it materialises, will
typically be felt in the long term.
Examples of control mitigation
We analyse competitive threats to our
business model and markets.
We carry out comprehensive business
reviews.
We perform comprehensive due diligence
and post-investment reviews on acquisitions
and investments.
We employ a rigorous capital allocation
framework.
We design our incentive programmes to
optimise shareholder value through delivery
of balanced, sustainable returns and a sound
risk profile over the long term.
Experian plc Strategic report Viability and going concern
81
Going concern
Our going concern assessment focuses
mainly on immediately available sources of
liquidity to fund our anticipated trading pattern,
plus anticipated acquisition spend, returns to
shareholders and capital investment, ensuring
we always maintain a comfortable margin of
headroom in case of the unexpected. As is now
best practice, we also perform a review of
factors that might indicate the beginnings of
going concern issues, and have found none.
Viability
Our viability assessment focuses mainly on
the expected future solvency of the Group in the
face of more severe, but plausible, unexpected
events. We use the going concern modelling as
a base, and layer on the effects of downside
scenarios to assess the magnitude and
practicality of measures we could take to
continue to trade in the face of such events.
We are not expecting the current economic
environment, under any plausible scenario,
to develop into a scenario that could threaten
our viability.
In the last year, the Group has demonstrated
its resilient business model and diverse
strategy, both of which are described within
the Strategic report. They exemplify our
underlying purpose to create a better tomorrow,
how we create value for our stakeholders and
communities, and how our data and analytics
are helping address the changing needs of
consumers and businesses. Our strategy has
enabled our business to grow and achieve
good financial results consistently over the last
decade, despite changes both in the economic
cycle and in our senior leadership team.
We consider current-year business
performance and our future prospects by
conducting a regular cycle of strategic planning,
budgeting and forecasting. These processes
appraise revenue, Benchmark EBIT, cash flows,
dividend cover, committed and forecast funding,
liquidity positions and other key financial ratios,
including those relevant to maintaining our
investment-grade credit ratings.
This year, despite our resilient and better-than-
expected performance in the face of the
pandemic and its associated global economic
downturn, in addition to our usual modelling, we
have performed a stress test to anticipate the
impacts of a prudent assumption of a 5%
decline in Benchmark EBIT year-on-year.
Assessment period
There are a wide variety of time horizons
relevant to managing our business and some
of these are highlighted in the chart below. In
conducting our viability assessment we have
focused on a three-year timeline because we
believe our three-year financial planning
process provides the strongest basis for
reviewing the outlook for our business
beyond the current financial year.
Time horizons affecting prospects
1 year
2 years
3 years
5 years
10 years +
Detailed budgets
Financial plan including cash
flow forecasts
Medium-term
financing
– revolving credit
Long-term
financing – bonds
Typical service life of data assets
Investment appraisal – acquisitions and organic
Share incentive plans
IT systems development
Management
succession
planning
Pensions
The assessment process and
key assumptions
While we assess our prospects through
various parts of our planning cycle, we
specifically review our three-year growth
expectations and the external environment as
part of the annual strategic planning process.
The Board participates in this review, using the
January Strategy meeting as a focal point. We
then develop our detailed annual budget,
together with an update to the financial plan
for the two subsequent years.
Current economic outlook
COVID-19 presents a challenging context
for accurate forecasting. We have again
supplemented our normal corporate plan
process with a number of scenarios reflecting
the impact of the pandemic in our key business
territories across a range of severities. Some
countries and businesses may be more heavily
affected by the pandemic than others, in
longevity and scale. In many of the markets for
our services, demand is related to employment
levels and other economic factors. We used
the most severe of these scenarios, which
equates to a 5% decline in Benchmark EBIT
year-on-year, to stress test the base year of
our model, with our strategic plan growth
rates thereafter.
Additionally, we assume the Group continues
to achieve strong cash flow conversion, and
maintains its investment-grade credit rating
such that funding in the form of capital markets
debt, committed bank borrowing facilities
or alternatives is available in all plausible
market conditions.
We assume effective tax rates to be broadly
stable (before the impact of any changes
of legislation) over the medium term.
Assessment of viability
The Group continues to be subject to its
principal risks, which we have reassessed in
the light of COVID-19 (see the principal risks
section in the Strategic report).
To assess the Group’s resilience to adverse
outcomes, its forecast performance over
the three-year period – including capital
expenditure, costs of acquisitions and returns
to shareholders – was sensitised to reflect
a series of scenarios based on the Group’s
principal risks. This assessment included a
reasonable worst-case scenario in which the
Group’s principal risks manifest to a ‘severe
but plausible’ level. The assessed risks for
which the impacts were applied in aggregate,
are shown overleaf.
Experian plc Annual Report 2021Strategic report 82
Viability and going concern
continued
Principal risk
Impact modelled
The loss or inappropriate use of data or
systems, leading to serious reputational
and brand damage, legal penalties and
class action litigation.
Adverse and unpredictable financial
markets or fiscal developments in one or
more of our major countries of operation,
resulting in significant economic
deterioration, currency weakness
or restriction.
New legislation or changes in regulatory
enforcement, changing how we operate
our business.
Expected future solvency
The Group had:
undrawn committed bank borrowing
facilities of US$2.7bn at 31 March 2021
only one borrowing facility covenant,
requiring Benchmark EBIT to exceed three
times net interest expense before financing
fair value remeasurements (as at 31 March
2021 our cover is 11 times)
Benchmark operating cash inflows of
US$1.5bn and interest expense of
US$0.1bn for FY21.
For this, we assessed the maximum
credible extent of a data breach and
modelled the likely financial impacts
through loss of revenue, dispute and
regulatory actions, and the costs of
remediation.
For this, we assessed the possible range of
outcomes, beyond our base case, due to
the COVID-19 pandemic.
For this, we assessed the maximum
credible extent of simultaneous legal
actions in two of our core markets and
modelled the likely financial impacts after
potential insurance recoveries.
Our modelling shows that:
under our continued COVID-19 stress test
scenario, which assumes a 5% decline
in Benchmark EBIT year-on-year, with
associated reductions in cash flow, we
would be able to maintain the significant
majority of our undrawn committed bank
borrowing facilities
under our harshest ‘severe but plausible’
scenario we would comfortably maintain
sufficient undrawn borrowing capacity and
satisfy all borrowing facility covenants
further significant headroom could be
made available by scaling back capital
investment or operating expenditure
in all scenarios our debt covenants
would be comfortably satisfied.
The results of the stress-testing show that,
due to our diversified nature – which includes
significant counter-cyclical protection, the
resilience of the core business, its substantial
free cash flows and its strong investment-
grade credit rating – we would withstand the
considered scenarios were these to occur
during the forecast period, despite the
impacts of COVID-19.
Viability statement
Based on their assessment of prospects and
viability, the directors confirm that they have
a reasonable expectation that the Group will
be able to continue in operation and meet its
liabilities as they fall due over the three-year
period ending 31 March 2024. Looking further
forward, the directors have considered whether
they are aware of any specific relevant factors
beyond the three-year horizon that would
threaten the long-term financial stability of
the Group over a ten-year period and have
confirmed that, other than any residual
uncertainty surrounding COVID-19, the effects
of which have been considered in the analysis,
they are not aware of any.
Strategic report
This Strategic report was approved by a duly
authorised committee of the Board of directors
on 18 May 2021 and signed on its behalf by:
Charles Brown
Company Secretary
18 May 2021
Experian plc Strategic report Experian plc Annual Report 2021
83
Governance
In this section
84 Chairman’s introduction
86 Board of directors
88 Corporate governance report
99
Nomination and Corporate
Governance Committee report
104 Audit Committee report
111 Report on directors’
remuneration
135 Directors’ report
Governance 84
Chairman’s introduction
Good corporate governance
is at the heart of our business
Mike Rogers
Chairman
On behalf of the Experian Board,
I am delighted to present the
Corporate governance report for
the year ended 31 March 2021.
The aim of the report is to provide
an overview of the Group’s
governance framework and the
Board’s approach to maintaining
good corporate governance
during this challenging year, as
well as summarising the work of
the Board and its committees in
discharging their duties and
responsibilities.
During the year, the Board:
considered the payment of dividends;
balanced business performance and
shareholder interests;
approved the issue of debt securities and a
funding plan for the financial year;
considered an update on workforce pay and
policies from George Rose, our Remuneration
Committee Chairman, following his meeting
with the UK and Ireland People Forum;
consulted with shareholders on our new
Remuneration Policy (which received a
95.34% favourable vote at the Annual
General Meeting in July 2020), and
considered a number of important strategic
acquisitions in North America, Latin America
and EMEA.
The Chief Executive Officer, Company Secretary
and I regularly evaluated possibilities for the
Board to meet in person during the year.
However, as in many areas of all our business
and personal lives, the Board embraced
technology and all Board and committee
meetings were held using video. Although not
ideal, there was no deterioration in the
engagement of the Board, nor in the quality of
debate, challenge and discussions as we
worked (and continue to work) to ensure good
corporate governance, oversight and
monitoring during the continuing pandemic.
Equally, the pandemic has not impacted the
commitment that our directors have to the
Experian Board – our directors had 100%
attendance at Board and committee meetings
held during the year.
As discussed at the January 2021 strategy
presentations, Experian and the Board can
be proud of the resilience of the business and
the ingenuity shown by our employees, in a
situation where the work environment and
expectations underwent a rapid change, and
where the way we engage with employees,
clients, suppliers, regulators and other
stakeholders had to be reoriented practically
overnight. Experian was proud to put its people
first in its response to the pandemic and, from
a cultural perspective, our people have been
pleased with the ability to be productive in their
roles, the communications regarding COVID-19
and the support from managers.
One of the positive things from the pandemic
was how Experian demonstrates the critical
role it plays in society, helping people,
governments and businesses. As the pandemic
continues, and as we think about new ways
of working, the Board will continue to partner
closely with management to safeguard our
employees, customers, communities and our
business to ensure Experian is in the best
possible place to move forward once the
pandemic has passed.
As Chairman, one of my key roles is to ensure
that the Board and Experian continue to have
high standards of corporate governance while,
at the same time, establishing and continually
developing the right controls to provide the
Board with the appropriate level of oversight
and assurance. By having a sound corporate
governance framework, we can ensure
effective and efficient decision-making, and
the right balance of knowledge, diversity, skills,
experience and challenge to monitor and
manage the risks we face.
COVID-19 pandemic
In the 2020 Annual Report, published in June
2020, I observed that the last time the Experian
Board had all physically met was January 2020,
and that none of us could have imagined how
the world would change in the months
following the start of the pandemic. Sadly,
similar conditions apply one year on and, while
the roll-out of vaccines provides some hope, the
pandemic is not over yet.
In what has been a challenging global
environment, the Board had a busy year,
including COVID-19 focused meetings at the
height of the crisis and increased review of
financial and operational performance.
Experian plc Governance 85
Provision 38 – the Company is largely
compliant with this provision. The area of partial
compliance relates to alignment of pension
contribution rates of the executive directors
with the wider workforce. The rate for our
US-based executive director is already aligned
with the wider US workforce, and the rates for
our two UK-based executive directors are
already aligned with those available to other
senior UK employees. The rates for any new
UK-based director would immediately be
aligned with the wider workforce, and the rates
for our two existing UK-based executive
directors will be aligned with the wider UK
workforce by the end of 2022, following the
required amendments to contractual
arrangements.
Experian corporate website
The website www.experianplc.com
contains additional information about our
corporate governance:
Terms of reference of the principal
Board committees
The schedule of matters reserved
to the Board
The Chairman’s and the CEO’s split
of duties, and the duties of the Senior
Independent Director
The Company’s memorandum and
articles of association
Details of AGM proxy voting by
shareholders, including votes withheld.
Board composition and succession
The Nomination and Corporate Governance
Committee continues to lead the process for
Board appointments, and ensures that plans
are in place for orderly Board and senior
management succession. During the year,
on the recommendation of the Committee,
Alison Brittain was appointed as a non-
executive director. We were delighted to
welcome Alison to the Board, albeit virtually,
and she brings over 25 years' senior
management experience in major financial
institutions, alongside five years as the
Chief Executive of a FTSE 100 leisure business
with UK and growing international operations.
The Company Secretary and I ensured that a
tailored induction programme was put together
for Alison. This was again provided virtually by
global executives, and was well received. The
Committee also recommended the appointment
of Jonathan Howell to the Board on 1 May 2021.
Key attributes that Jonathan brings to the
Board include a wealth of financial, strategic,
technology and regulatory expertise,
encompassing both Business-to-Business
(B2B) and Business-to-Consumer (B2C), which
is of significant benefit to Experian.
The Committee’s work during the year also
included agreement on certain key Board
composition and succession considerations,
including areas of focus for future non-
executive director recruitment, continued focus
on diversity and the recruitment of
non-executive directors who are serving
executives, and the preferred timing of
non-executive recruitment including of potential
successors to the Audit and Remuneration
Committee Chairmen.
There is more detail on Board composition
and succession beginning on page 100.
Board evaluation
A key element of good governance is an
annual evaluation to ensure that the Board, its
committees and Board members are continuing
to operate and perform effectively. The UK
Corporate Governance Code (the Code)
recommends (and the Board supports) an
external evaluation every three years. A
comprehensive and externally facilitated Board
evaluation took place last year. This year, our
Board evaluation was an internal one which (in
line with our agreed three-year cycle)
concentrated on progress on last year’s areas
of focus and the resulting actions, as well as
agreeing new areas of focus for the coming
year. The evaluation provided the Board with the
assurance that actions from the external
evaluation, including around Board succession,
were progressing well, and the Board
concluded that it was operating effectively.
The evaluation process also allowed the Board
to identify opportunities for it to further improve
its effectiveness. You will read later about the
results of the evaluation and the areas of focus
that we have agreed.
Conclusion
I hope you find this Corporate governance
report helpful in understanding the
arrangements and processes we have in place
at Experian, and what we have done in terms of
the recommendations of the Code.
Even though it has been a challenging year, and
the COVID-19 pandemic continues to impact our
business, I believe that the Board is well placed
to provide the strategic oversight and
stewardship required to ensure that Experian
continues to deliver long-term sustainable
success.
The 2021 Annual General Meeting will be
held on 21 July 2021. Further details will be
published in the Notice of Annual General
Meeting, which has been sent or made available
to shareholders, and is also available on the
Company’s website, www.experianplc.com.
Statement of compliance
The Board is committed to the highest
standards of corporate governance and, for the
year ended 31 March 2021, other than one
element of Provision 38 in relation to alignment
of pension contribution rates (as explained
below), the Company complied with all the
provisions of the UK Financial Reporting
Council’s (FRC’s) UK Corporate Governance
Code (as published in July 2018), the UK
Financial Conduct Authority’s (FCA’s) Disclosure
Guidance and Transparency Rules sourcebook
sections 7.1 and 7.2 (which set out certain
mandatory disclosure requirements), the FCA’s
Listing Rules 9.8.6R, 9.8.7R and 9.8.7AR which
include the ‘comply or explain’ requirement and,
on a voluntary basis, the UK Department for
Business, Energy and Industrial Strategy (BEIS)
Directors’ Remuneration Reporting Regulations
and Narrative Reporting Regulations. These
documents are publicly available as follows:
The Code can be found at www.frc.org.uk
The FCA’s Disclosure Guidance and
Transparency Rules sourcebook as well
as Listing Rules can be found at www.
handbook.fca.org.uk
The BEIS Directors’ Remuneration Reporting
Regulations and Narrative Reporting
Regulations can be found at www.gov.uk.
In addition, the FRC Guidance on Risk
Management, Internal Control and Related
Financial and Business Reporting can be found
at www.frc.org.uk.
Experian plc Annual Report 2021Governance
86
Board of directors
Code principle
Board Leadership
Nm
Re
Mike Rogers (56)
Chairman
Brian Cassin (53)
Chief Executive Officer
Lloyd Pitchford (49)
Chief Financial Officer
Appointed to the Board as Chief Financial
Officer on 30 April 2012, and as Chief Executive
Officer on 16 July 2014.
Other current roles: Brian is a non-executive
director of J Sainsbury plc and sits on its Audit
and Nomination Committees.
Skills and contribution: Brian brings strong
leadership, a clear view of strategic objectives
and decisive management skills to this role. He
has strong financial and commercial acumen
and a broad range of operational competencies.
His non-executive role augments his strong
board-level experience.
Experience: Brian was previously the
Chief Financial Officer of Experian and, before
that, Managing Director at Greenhill & Co. He
has also held various senior roles at Baring
Brothers International and the London
Stock Exchange.
Appointed to the Board on 1 October 2014.
Other current roles: Lloyd is a non-executive
director (and chairs the Audit Committee) of
Bunzl plc.
Skills and contribution: Lloyd is a qualified
accountant. He holds an MBA and has deep
financial and strategic experience, built up
through a career working in complex,
growth-oriented, global organisations, across a
range of industries and responsibilities. He
brings additional perspectives to Experian from
his non-executive role with Bunzl plc.
Experience: Before joining Experian, Lloyd held
a wide portfolio of finance and operational
responsibilities: as Chief Financial Officer of
Intertek Group plc; in senior finance positions
(including Group Financial Controller) at BG
Group plc; and in financial and commercial
roles at Mobil Oil.
Appointed to the Board on 1 July 2017, and as
Chairman (and Chairman of the Nomination and
Corporate Governance Committee) on 24 July
2019.
Other current roles: Mike is a non-executive
director of NatWest Group plc (he chairs its
Group Sustainable Banking Committee, and sits
on the Group Performance and Remuneration
Committee) and is the non-executive Chairman
of Aegon UK (and certain of its regulated
subsidiaries).
Skills and contribution: Mike brings over 30
years of banking and financial services
experience, with a reputation for strategic
insight and focused execution. His current and
previous board-level experience, both executive
and non-executive, is of huge value to the
Experian Board.
Experience: Mike was Group Chief Executive
Officer of LV= Group from 2006 until 2016,
during which time he grew the organisation
into a significant player in the life and general
insurance market. Before that, Mike was with
Barclays plc for more than 20 years, holding
a number of senior roles, most recently as
Managing Director, UK Retail Banking. He was
previously a non-executive director of the
Association of British Insurers.
Au Nm Re
Au Nm Re
Au Nm Re
*
Caroline Donahue (60)
Non-executive director
Appointed to the Board on 1 January 2017.
Other current roles: Caroline is on the Board of
GoDaddy Inc., Emerge America, and the
Computer History Museum. She is also on the
Executive Committee of Northwestern C100,
and is a mentor for She-Can.
Skills and contribution: Caroline brings
extensive experience of international markets
and technology as well as knowledge of
consumer sales and marketing, innovation and
consumer-centricity. The Board also benefits
from her insight and extensive experience in
mass-market, digital, multi-channel and
Business-to-Consumer (B2C) distribution,
marketing, and brand and sales management.
Experience: Caroline previously held roles at
Intuit where she was Executive Vice President,
Chief Marketing and Sales Officer; Senior Vice
President, Sales and Channel Marketing; and
Vice President and Director of Sales. She also
held sales and channel management roles at
Knowledge Adventure, NeXT Computer and
Apple, Inc.
Luiz Fleury (64)
Non-executive director
Jonathan Howell (58)
Non-executive director
Appointed to the Board on 8 September 2015.
Appointed to the Board on 1 May 2021.
Other current roles: Luiz is a Board member of
Carrefour Brazil (the trading name of Atacadão
S.A.), Magnopus, Inc. and DOTZ S.A.
Skills and contribution: Luiz has spent most of
his career in financial services and has
extensive insight and deep local knowledge of
the Brazilian financial market. His considerable
boardroom experience adds to the strength,
depth and effectiveness of our Board.
Experience: Luiz has held Chief Executive roles
at Cetip S.A., Banco Ibi and Redecard, together
with senior finance and investment positions at
Banco Citibank S.A., Banco Marka S.A. and C&A
Brenninkmeyer Brasil. Luiz was President and
a member of the Executive Board at Cetip S.A.,
and a Board member of Grupo Sequóia de
Logística, Eneva S.A., Discount Malls do Brasil,
Banco Ibi and FHV Holdings Ltda.
Other current roles: Jonathan is the Chief
Financial Officer of The Sage Group plc.
Skills and contribution: Jonathan has a wealth
of financial, strategic, technology and
regulatory expertise, encompassing both
Business-to-Business (B2B) and Business-to-
Consumer (B2C), which is of huge benefit to
Experian. He is a highly regarded FTSE 100
Chief Financial Officer, and also brings
considerable executive and non-executive
UK-listed boardroom experience.
Experience: Jonathan was previously an
independent non-executive director and
Chairman of the Audit and Risk Committee of
The Sage Group plc., for five years while
serving as Group Finance Director of Close
Brothers Group plc for ten years until
November 2018. Before that he was Group
Finance Director at the London Stock Exchange
Group plc for nine years and has also been a
non-executive director of EMAP plc and
Chairman of FTSE International. The early part
of Jonathan's career was at Price Waterhouse
where he qualified as a chartered accountant.
Experian plc Governance Code principle
Board Leadership
87
Kerry Williams (59)
Chief Operating Officer
Dr Ruba Borno (40)
Non-executive director
Alison Brittain (56)
Non-executive director
Appointed to the Board on 16 July 2014.
Appointed to the Board on 1 April 2018.
Appointed to the Board on 1 September 2020.
Au Nm Re
Au Nm Re
Other current roles: Alison is the Chief
Executive of Whitbread PLC, and Deputy Chair
and a Trustee of the Prince’s Trust.
Skills and contribution: Alison is a highly
versatile business leader and general manager,
who holds an MBA and brings considerable
experience of operating in consumer-facing
service environments. She has over 25 years'
senior management experience in major
financial institutions, and the Board also
benefits from her board-level experience with
Whitbread PLC and, previously, Marks &
Spencer Group PLC.
Experience: Alison was previously with Lloyds
Banking Group (Group Director, Retail Division)
and Santander UK PLC (Executive Director,
Retail Distribution), where she was also a board
director. She previously held senior roles at
Barclays Bank, has been a member of the UK
Prime Minister’s Advisory Council, was named
‘Business Woman of the Year 2017’ in the Veuve
Clicquot awards and was awarded a CBE in the
2019 UK New Year Honours list. Alison has
been a non-executive director of Marks &
Spencer Group PLC.
Company Secretary: Charles Brown FCG
Independent Auditor: KPMG LLP, Chartered
Accountants and Recognized Auditor
Au
Member of the Audit Committee
Nm
Member of the Nomination and
Corporate Governance Committee
Re
Member of the Remuneration Committee
Committee Chairman
* Jonathan Howell’s committee memberships commenced on
appointment on 1 May 2021.
Other current roles: Kerry is a Board member
of Pacific Mutual Holding Company, and the US
Institute for Intergovernmental Research.
Skills and contribution: Kerry holds an MBA
and has built up a significant and deep
knowledge of Experian’s global business and
operations, through the leadership roles he has
held. He brings to Experian and the Board a
wide range of skills from his background in the
financial services industry and his
non-executive roles.
Experience: Kerry’s roles at Experian have
included Group Deputy Chief Operating Officer,
President of Credit Services, President of
Experian Latin America, and Group President
of Credit Services and Decision Analytics,
Experian North America. Previously, he was
President at ERisk Holdings Incorporated,
Senior Vice President/General Manager at
Bank of America and held senior management
positions at Wells Fargo Bank.
Other current roles: Ruba is a Senior Vice
President and General Manager at Cisco.
Skills and contribution: Ruba holds a Ph.D., a
Master of Science in Electrical Engineering, and
a Bachelor of Science in Computer Engineering.
She was an Intel Ph.D. fellow at the National
Science Foundation’s Engineering Research
Center for Wireless Integrated MicroSystems.
She brings advanced technologies expertise to
Experian. We benefit greatly from her focus on
supporting businesses in strategically adapting
to the threats and opportunities created by
technology, as well as pushing disruptive
technology to create new opportunities.
Experience: Ruba sat on the Board of The Tech
Museum of Innovation in Silicon Valley. She was
previously at The Boston Consulting Group
(BCG), where she specialised in helping
enterprises through complex technology
transformations, and was also a leader in
BCG’s Technology, Media &
Telecommunications, and People &
Organization practice groups.
Au Nm Re
Au Nm Re
Deirdre Mahlan (58)
Non-executive director
Appointed to the Board on 1 September 2012,
and as Chairman of the Audit Committee on
21 January 2015.
Other current roles: Deirdre chairs our Audit
Committee. She is a non-executive director
(and chairs the Audit Committee) of The
Duckhorn Portfolio, Inc.
Skills and contribution: Deirdre is a qualified
accountant with an MBA and has many years’
experience in senior finance and general
management roles. Her financial expertise and
experience ensure effective leadership of our
Audit Committee. Deirdre also brings us the
benefits of her previous board-level experience
with Diageo plc.
Experience: Deirdre has held senior finance
and general management roles, including most
recently as President of Diageo North America,
as well as Chief Financial Officer, Deputy Chief
Financial Officer, Head of Tax and Treasury at
Diageo plc, Senior Vice President, Chief
Financial Officer at Diageo North America, and
Vice President of Finance at Diageo Guinness
USA, as well as various senior finance roles in
Joseph Seagram and Sons, Inc. and PwC.
George Rose (69)
Deputy Chairman and
Senior Independent Director
Appointed to the Board on 1 September 2012,
as Deputy Chairman and Senior Independent
Director on 16 July 2014 and as Chairman of the
Remuneration Committee on 24 July 2019.
Other current roles: George chairs our
Remuneration Committee and is a
non-executive director of EXPO 2020 LLC.
Skills and contribution: George is a qualified
accountant, whose career has included several
high-level finance positions. As well as this
financial expertise, he adds to the collective
strength of the Board thanks to the numerous
non-executive positions he has held with
leading companies.
Experience: George was Group Finance Director
and Director of Finance and Treasury at BAE
Systems plc (where he was a Board member),
and held senior finance positions at Leyland DAF
plc and Rover Group. He was a non-executive
director of National Grid plc, SAAB AB, Orange
plc, and also (where he chaired the Audit
Committees) Laing O’Rourke plc and Genel
Energy plc. He has also been a member of the
UK Industrial Development Advisory Board.
Experian plc Annual Report 2021Governance 88
Corporate governance report
Code principle
Board Leadership and Company Purpose
Board
Role of the directors
The Board is responsible for setting the
Company’s purpose, values and strategy, and
ensuring that the necessary resources are
available for long-term sustainable success, to
generate value for shareholders and contribute
to wider society. The Board sets the Group's
strategy. In January 2021, senior management
presented the proposed strategic plan to the
Board, which had been developed to deliver
strong financial performance and build on
Experian’s competitive advantages, with
fundamental components around building
relationships with consumers, maximising
adjacent opportunities, building a high-
performing and inclusive culture and achieving
operational excellence. As usual, the
presentations took place over two days.
However, due to COVID-19 travel restrictions, the
presentations were completed using video
technology. Board members were pleased with
the revised format, the quality of the pre-reading
material and the more focused presentations.
This year’s presentations included regional
and business line updates (Health, Consumer
Information Services, Consumer Services and
Decision Analytics). The Board also discussed
with management plans to scale regions
outside the Group’s largest (North America,
Strategic and budget planning process
Latin America and UK and Ireland), and
technology activity to support Experian’s growth
ambitions. The Board observed, in particular,
the continued increase in strategic options for
the Group, the opportunities for the Health
business, the plan for margin growth in smaller
regions and the skillsets and culture required
to continue to drive the business forward.
The Board monitors strategy and major
initiatives throughout the year (as indicated
on the Strategic and budget planning
process chart, below).
The budget discussions in March are focused
on ensuring that we have the right resources to
deliver the agreed strategy. These discussions
include detailed focus on both regional and
global business budgets. This year, the Board
noted that the backdrop for the FY22 budget
remained uncertain, with COVID-19 and the
related health and economic crises continuing
to disrupt global markets.
The Board continually monitors management
and financial performance against the Group’s
objectives. To enable it to do this the Board
receives updates, at and between every
scheduled Board meeting, on operational and
financial matters as well as any major
initiatives underway. Given the challenges of
COVID-19, the Board received an increased
number of ‘between meeting’ updates this year,
January
Board strategy review*
October to November
Financial planning
and prioritisation
March
Board budget review
September
Internal review
March to May
Preliminary steps
July to August
Strategic planning
June
Group Operating Committee
review meeting
July
Board strategy mid-year review
* Including two days of strategy presentations.
to allow for appropriate oversight and
monitoring. For example, as well as the usual
monthly Board Finance Report, the Chief
Executive Officer provided additional updates
to the Board on latest financial performance,
forecasts and trends, and certain other
operational matters.
The Board also conducts post-investment
reviews on an agreed timeline, for any
acquisitions it has previously approved.
You can read about the Board’s procedures
to manage risk, oversee the internal control
framework, and determine the nature and
extent of the principal risks the Company is
willing to take to achieve its strategic objectives,
under Risk management and internal control
systems review on page 110.
The Board delegates management of the
Group’s day-to-day activities but is accountable
to shareholders for delivering financial
performance and long-term shareholder value.
To achieve this, the Board has put in place a
framework of controls, including clear and
robust procedures and delegated authorities,
which enables the Group to appraise and
manage risk effectively. This framework is
illustrated in the Governance framework
diagram on page 93.
In addition, the Board has reserved decisions
about certain key activities to itself, including:
A. Strategy and management – approval and
oversight of Experian’s long-term objectives
and commercial strategy, approval of annual
operating and capital expenditure budgets, and
oversight and monitoring of operations.
B. Structure and capital/Financial reporting
and controls – changes in the Group capital or
corporate structure. Approval of the Group’s
results, dividends, dividend policy, significant
changes in accounting policy, tax policy and
treasury policy.
C. Contracts – approval of major or strategic
capital projects, and of major acquisitions
and disposals.
D. Communication – approval of key
stakeholder documents, circulars, prospectuses,
and reviewing investor sentiment.
E. Board membership/Delegation of
authority/Corporate governance/Policies
– approval of changes to Board composition,
ensuring adequate succession planning,
reviewing reports from Board committees,
reviewing governance arrangements, and
approval of various policies.
Details of the activities of the Board during the
year under these headings are on page 90.
A high-level statement of the types of decisions
that have been delegated by the Board is shown
in the ‘Governance framework’ diagram on
page 93.
Experian plc Governance Code principle
Board Leadership and Company Purpose
89
Board meetings
The Board meets sufficiently frequently to
discharge its duties, and holds additional
meetings when required. This year, for
example, the Board met to specifically discuss
the impact of the COVID-19 global pandemic
from a number of perspectives, including
liquidity and funding, operational resilience,
governmental and societal support, and
people. Nine Board meetings were held during
the year, three of which were ad-hoc meetings.
Scheduled meetings are normally held over
two to three days, with Board committee
meetings also taking place during this time.
The Board continued to operate effectively
during the year utilising video technology and
the Board retained its cohesive and collegiate
culture. There is no doubt that the pandemic
has changed ways of working for many people
and organisations across the world, and the
Chairman, Chief Executive Officer and
Company Secretary will continue to review
optimal ways to operate the Board on an
ongoing basis, as circumstances dictate.
2020
2021
April
Board
meeting
May
Board and
committee
meetings
June
Board
meeting
July
Board and
committee
meetings
September
Board and
committee
meetings
November
Board and
committee
meetings
January
Board and
committee
meetings
February
Board
meeting
March
Board and
committee
meetings
Ad-hoc Board meetings
Attendance at Board and principal committee meetings
Directors as at 31 March 2021
Mike Rogers
Brian Cassin
Lloyd Pitchford
Kerry Williams
Dr Ruba Borno
Alison Brittain (appointed 1 September 2020)
Caroline Donahue
Luiz Fleury
Deirdre Mahlan
George Rose
*
Includes three ad-hoc Board meetings held during the year
Board*
9/9 – 100%
9/9 – 100%
9/9 – 100%
9/9 – 100%
9/9 – 100%
5/5 – 100%
9/9 – 100%
9/9 – 100%
9/9 – 100%
9/9 – 100%
Nomination
and Corporate
Governance
Committee
4/4 – 100%
n/a
n/a
n/a
4/4 – 100%
3/3 – 100%
4/4 – 100%
4/4 – 100%
4/4 – 100%
4/4 – 100%
Remuneration
Committee
Audit
Committee
6/6 – 100%
n/a
n/a
n/a
6/6 – 100%
4/4 – 100%
6/6 – 100%
6/6 – 100%
6/6 – 100%
6/6 – 100%
n/a
n/a
n/a
n/a
4/4 – 100%
3/3 – 100%
4/4 – 100%
4/4 – 100%
4/4 – 100%
4/4 – 100%
Experian plc Annual Report 2021Governance 90
Corporate governance report
continued
Code principle
Board Leadership and Company Purpose
What did the Board do this year?
The Board’s key activities during the year
F
D
E
A
B
C
A. Strategy and management
B. Structure and capital/Financial reporting and controls
C. Contracts
D. Communication
E. Board membership/Delegation of authority/
Corporate governance/Policies
F. Other
A. Strategy and management
Evaluated and debated presentations
from management during the two-day
strategy presentations, and approved the
Group’s strategy update.
Received and considered the key
initiatives and strategy update as part of
the ongoing strategic planning cycle.
Reviewed operational and financial
updates from the Chief Executive Officer,
the Chief Operating Officer and the Chief
Financial Officer at each scheduled Board
meeting – this year, particularly in the first
half, the Board was provided with
significant detail on the Group’s continuing
response to COVID-19.
Reviewed monthly reports, including
details of performance against budget and
the Group’s financial position and
stakeholder updates, plus additional
out-of-cycle reporting and updates due to
COVID-19.
Reviewed and discussed regulatory and
compliance matters with the Group
General Counsel at Board and Audit
Committee meetings, including updates
on ongoing engagement, current issues,
potential impacts and plans.
Reviewed the ongoing investigation into a
potential non-sensitive data incident in
Brazil.
Reviewed and approved risk appetite
statements for the Group.
B. Structure and capital/Financial
reporting and controls
Approved the Group’s Annual Report and
full-year and half-year financial results and
carefully considered dividend payments.
Approved the refinancing of existing
borrowing facilities, the issue of bonds, and
delegated authority that would ensure
flexibility regarding financing between
Board meetings while markets remained
volatile.
Discussed and approved the Group’s
budget presentation for FY22 and received
updates on Group insurance and pension
arrangements.
Considered and approved the Viability
statement for inclusion in the Annual
Report.
Reviewed risk reports, the appropriateness
of preparing the financial statements on
the going concern basis and the Audit
Committee’s advice on making a ‘fair,
balanced and understandable’ (FBU)
statement in the Annual Report.
C. Contracts
Reviewed and approved several strategic
acquisitions, including:
– Tapad, Inc., a leading provider of digital
identity services.
– Axesor businesses, one of Spain’s
Business Information leaders.
– BrScan, a leading player in the identity
and fraud market in Brazil.
– Corporate Cost Control, a leading
provider of workforce solutions in the
USA, as the Group looks to broaden its
employer and verification solutions
offering.
– Employment Tax Servicing, LLC, a
leader in verification of employment
and income in the USA which provides
enterprise-level workforce
management solutions complementing
human resources and payroll
administration.
– Tax Credit Co., LLC a leading provider of
verification of employment and of
income and hiring and research tax
credit technology and administration.
Approved the disposal of Experian’s
investment in Finicity to MasterCard.
Reviewed and discussed the corporate
development pipeline at each Board
meeting.
D. Communication
Reviewed investor relations, external
communications and media updates at
each scheduled Board meeting, and
discussed the positive brand impact of the
North America Consumer Services
business.
Reviewed and discussed draft full-year
and half-year financial results
presentations for analysts and
institutional shareholders, and noted
investor sentiment regarding the Board
and senior management.
Through the Remuneration Committee,
engaged extensively with shareholders
on proposed remuneration arrangements.
E. Board membership/Delegation
of authority/Corporate governance/
Policies
Reviewed the Group’s Gifts and Hospitality
Policy, and considered the annual
environmental, and health and safety,
updates and approved associated policy
statements.
Reviewed Board evaluation findings and
agreed areas of focus, authorised Board
members’ potential conflicts of interest
and approved the annual election and
re-election of Board members.
Considered and approved the Notice of
Annual General Meeting (AGM) for issue to
shareholders, and the arrangements for
the 2020 AGM due to COVID-19.
Reviewed and approved the appointments
of Alison Brittain and Jonathan Howell as
independent non-executive directors of the
Company.
Reviewed and discussed the annual
corporate responsibility update from the
Global Head of Corporate Responsibility.
Received details of Board members’
external appointments and share dealings.
Reviewed and approved the Group’s tax
and treasury policies, and approved the
Group’s Code of Conduct.
Experian plc Governance Code principle
Board Leadership and Company Purpose
91
In addition, during the year, all of our female
Board members (Dr Ruba Borno, Alison Brittain,
Caroline Donahue and Deirdre Mahlan)
participated in a panel session as part of our
global celebration of International Women’s Day
in March 2021. The Women in Experian group
organised a series of events, with activities
including a Women in Experian mentoring
programme, leadership panels with featured
keynote speakers, personal and professional
development sessions, and community
outreach. As well as this, the Board did continue
to interact with employees as much as possible
during the year: for example, all of the Group
Operating Committee attended the strategy
presentations with the Board in January 2021,
and the Board met with members of our global
and Consumer Services communications
teams in November 2020 to discuss the
integration and support of the Experian
brand by the Consumer Services business.
Culture
The UK Corporate Governance Code
emphasises the importance of the role of the
Board regarding culture, with specific
recommendations that the Board assesses and
monitors culture, and ensures that workforce
policies, practices and behaviours are aligned
with the Company’s purpose, values and
strategy. The Experian Way, which lays out a
globally consistent set of expectations within
the business across five strategically important
areas, is underpinned by the following
Principles – Integrity, Fairness, Data Security
and Value. These Principles help us to create a
vibrant ethical performance culture. We
continue to believe that culture is embedded
throughout an organisation, rather than, for
example, in isolation within a set of Board
metrics. We are confident that the information
the Board and its committees review, the
activities that Board members engage in, and
Experian’s existing structures and processes,
mean that Experian and the Board are meeting
the recommendations of the Code.
Last year’s external Board effectiveness
evaluation noted that there was an excellent
focus on Board culture, employee engagement
and developing talent, with opportunities (in
normal times) for the Board to meet Experian’s
people, assess potential and see culture in
action. The evaluation report also noted that the
Board recognises the importance of values and
culture in what Experian has delivered to date
and is leading by example in the way it acts and
engages.
One of the primary ways we believe the Board
can experience, assess and evaluate culture is
through meeting with colleagues throughout
the business, as it does in normal years. A
notable example of this was 2019 when the
Board attended a number of engagement
events at our North America operational
headquarters in Costa Mesa, California,
including a ‘Power of You’ lunch event focused
on culture, diversity and inclusion, attended by a
large number of employees and
representatives from many of Experian North
America’s Employee Resource Groups (ERGs).
With COVID-19, it has not been possible for the
Board to engage with our people in the same
way this year. Prior to the pandemic, the Board
had planned to hold meetings during the year
at our operational headquarters in Brazil and
North America, and engagement events would
have been planned around those Board visits.
The Board also planned to spend time at the
Group’s Customer Innovation Experience in
London, which aims to bring our business
propositions and innovation to life, and provide
an insight into customer and consumer
interactions with the business.
Given the constraints this year, the Board has
regularly been kept apprised on people-related
and cultural matters. The pandemic took hold in
March 2020 and, as reported last year, the
Board agreed COVID-19 priorities and goals,
which included the safety of employees and the
use of the Group’s capabilities to help
communities survive and recover rapidly. The
April 2020 ad-hoc Board meeting was COVID-19
focused and, from a cultural perspective, the
Board heard that morale was good across the
business and that employees were coping well
working from home. The level of employee
communication and support provided by the
business was very high, and the Board was
updated on the small number of confirmed
COVID-19 cases among employees. The Board
was also reminded of the 'people first' approach
being taken by the business, with the priority
being to protect Experian’s people and their
jobs as far as possible through the crisis. This
was well received by employees, and reflected
the Group’s long-term investment in its people
and its talent agenda.
The People updates from the Chief Executive
Officer to the Board at each scheduled meeting
were a core focus of his reporting to the Board,
particularly in the early stages of the pandemic.
For example, in May 2020, the Board considered
the results of a sentiment survey, which
indicated the concern and uncertainty of
employees, but that there was optimism also
and employees were pleased with the Experian
response. Employee concerns were
acknowledged and acted upon, including
around technology, tools and the variety of
challenges facing them (such as isolation,
competing demands, working environments,
and physical and mental well-being). As the
pandemic continued, and mindful of a people
and culture perspective, the Group Operating
Committee considered the return of employees
to our offices (it was explained to employees
that they would have the choice to return when
they felt comfortable) and longer-term future
ways of working, where employees would have
increased flexibility and choice in their work
arrangements such as location and hours.
Experian plc Annual Report 2021Governance 92
Corporate governance report
continued
Code principle
Board Leadership and Company Purpose
Examples of ways that the Board monitors and assesses culture
Who
The Board
Board members
Audit Committee
Remuneration Committee
What
The Chief Executive Officer’s report, circulated before every scheduled Board meeting, contains a specific People
update, which includes culture.
The Board regularly considers the results of employee sentiment surveys.
Annually reviews the Group’s Code of Conduct. This explains our approach to professional and ethical standards, and
ensures that Experian’s employees know exactly what’s expected from them in helping Experian live up to those
standards. All employees must undertake annual training.
Visiting Group business locations enables the Board to spend time with employees of varying seniority and assess
culture in a local context. Although this has not been possible due to COVID-19 travel restrictions, it remains a key
consideration that the Board has the ability to engage in this way with the business.
Overviews of interactions with government, regulators and the perspective provided by Global Internal Audit can give
an indication of culture. The Committee and the Board receive relevant updates at every meeting. Management is
transparent and responsive to challenge.
Twice a year, the Committee reviews calls made to the Confidential Helpline.
Reviews an ‘Overview of employee pay’ paper, designed to provide an overview of pay structures at Experian and
their alignment with our purpose, values and strategy. This allows the Committee to ensure that relevant policies and
practices are consistent with Experian’s values.
The Committee Chairman met virtually with the UK and Ireland Experian People Forum in the UK and Ireland in
March 2021, and feedback was provided to the Board.
Reviews our UK gender pay gap disclosures every year, on behalf of the Board.
Nomination and Corporate
Governance Committee
In January, the Committee discussed a People Strategy, Talent and Culture update with the Chief People Officer,
which included details of strategic pillars and key risks, people implications, global people strategic focus areas and
the positive progress of talent and culture initiatives.
The Experian Way
The Experian Way is a unique and consistent way of working globally. It informs how our people act and behave, which shapes our culture.
It is defined across five key areas of strategic importance:
Delight
customers
Innovate
to grow
Collaborate
to win
Safeguard
our future
Value
each other
At Experian, whether your
role brings you into
contact with customers
directly or not, all of us
contribute to meeting
customer needs. At the
heart of what we do are
the relationships we
invest in and nurture.
At Experian, it’s the
responsibility of each one
of us to find opportunities
and improve the way we
do things to help our
business and our
customers grow.
One Experian mindset –
we work as one
united team and use
the combined strengths
and capabilities of our
people, products and
services across teams,
functions and regions.
This translates into
seamless experiences
for our customers.
At Experian, each of us
acts as a guardian for the
protection of data,
information, assets and
our people to safeguard
our future.
We make Experian a great
place to work. We treat
each other with respect,
trust and integrity.
Experian plc Governance Code principle
Board Leadership and Company Purpose
93
Governance framework
Global Delegated Authorities Matrix
This key Group governance document
comprises the schedule of matters reserved
to the Board, the Board committees’ terms of
reference and the authority levels for the
Group’s principal subsidiaries, directors and
senior executives. For matters not reserved
to the Board, the matrix prescribes the
cascade of authorities delegated
throughout the Group by respective Group
companies, together with their monetary
limits. The Board monitors the exercise of
delegations to the Group’s principal
subsidiaries, which are reported to it at each
Board meeting. Regional matrices are also in
place.
Delegated authority flow
Board
See Board of
directors
on pages 86
to 87
Principal subsidiaries
These are Group companies to which the Board has
delegated certain decision-making powers, for example
implementing decisions agreed in principle by the Board;
executive management of the operations of the Group within
the strategy and budget approved by the Board; acquisitions
and disposals with a value up to US$20m, and capital
expenditure projects.
Executive
management
team
Operating
businesses
Board committees
Executive committees/functions
Nomination and Corporate
Governance Committee
See report on
page 99
Audit Committee
See report on
page 104
Remuneration Committee
See report on
page 111
Group Operating Committee (OpCo)
The OpCo comprises the most senior executives from the Group. Its remit includes identifying,
debating and achieving consensus on issues involving strategy, growth, people and culture, and
operational efficiency. It also focuses on ensuring strong communication and co-operative
working relationships among the top team. Its meetings tend to be issues oriented and focus
on selected Group issues worthy of debate.
Risk management committees (executive and regional)
Executive Risk Management Committee (ERMC) comprises senior Group executives, including
the executive directors and the Company Secretary. Its primary responsibility is to oversee the
management of global risks. The regional risk management committees oversee the
management of regional risks, consistent with Experian’s risk appetite, strategies and
objectives, and are comprised of senior regional leaders.
Security and Continuity Steering Committee (SCSC) is a sub-committee of the ERMC. The
SCSC’s primary responsibility is to oversee management of global information security,
physical security, and business continuity risks, consistent with Experian’s risk appetite,
strategies and objectives.
Assurance Steering Committee (ASC) is also a sub-committee of the ERMC and oversees the
development and implementation of the Group's assurance framework.
Strategic project committees (global and regional)
These committees comprise the most senior global and regional executives. Their remit is to
oversee a process to ensure that all strategic projects are appropriately resourced, risk
assessed and commercially, financially and technically appraised. A similar body, the
Investment Committee, performs the same function in respect of proposals regarding minority
investments. Depending on the outcome of the discussions, the committees’ conclusions are
then considered by the board of the relevant Group company for approval.
Global Internal Audit
Global Internal Audit (GIA) conducts a range of independent audit reviews throughout the
Group during the year and is represented at each Audit Committee meeting. GIA’s plans,
results and key findings are presented to, and discussed with, the Audit Committee. The
internal audit programme and methodology are aligned to the risk categories and risk
assessment parameters established by Global Risk Management. GIA also makes use of risk
assessment information at a business level, in planning and conducting its audits.
Experian plc Annual Report 2021Governance 94
Corporate governance report
continued
Code principle
Board Leadership and Company Purpose
Timeline of shareholder engagement
April
21, 22, 26, 27 & 28 May
1, 2, & 3 June
Dublin
22 Jul
18, 19, 20,
23, 24 &
25 Nov
Nov
1 April
2020
31 March
2021
12 May
21 Jul
16 Sep
11 Nov
28 Jan
23 Mar
Investor virtual conferences and meetings
Remuneration engagement
AGM
Investor and media relations reports provided to the Board
Shareholder and
stakeholder engagement
The Code encourages companies and boards,
including committee chairs, to seek regular
engagement with major shareholders in order
to understand their views. Boards are also
encouraged to have a clear understanding
of the views of shareholders.
In addition, the Code states that the Board
should understand the views of the Company’s
other key stakeholders and describe how their
interests have been considered in discussions
and decision-making. Details regarding key
stakeholders are on page 95.
Shareholders
We are committed to open and regular
communication and engagement with
shareholders at any time of the year, and our
communications with them will always offer
invitations to meet with the Chairman or any of
the Board’s committee chairs.
Board – Investor relations and external
communications and media reports are
circulated before every Board meeting.
The investor relations report contains a
commentary on recent market events, share
price performance, investor feedback, analyst
recommendations and investor relations
activities. The external communication and
media report was a new report this year, with
existing media reporting expanded to provide
detail of upcoming communications campaigns,
key issues, media coverage and spotlights on
various issues (for example, the naming of
Experian North America as #1 Top Workplace
by the Orange County Register for dedication
to culture). The Chief Communications Officer
provides regular updates at Board meetings.
Engagement with investors – The Chairman
of the Remuneration Committee wrote to our
major shareholders and the main UK and US
proxy advisory bodies twice this year. In April
2020, he provided an update on the Group’s
proposed approach to remuneration, ahead
of the AGM, specifically in relation to proposed
enhancements to the Directors’ remuneration
policy. In November 2020, he provided an
update on the 2020 long-term incentive plan
(LTIP) targets, which the Committee had
delayed setting and disclosing until there was
more clarity on the business impact of
COVID-19, and which were disclosed to the
market in November 2020. He also provided a
further update to investors on the impact of
COVID-19 on our business and key
stakeholders, and shared further insights on
how we have supported our people during the
pandemic.
As always, the Chairman is available to meet
with investors and did so virtually during the
year (while complying with COVID-19
restrictions), as did the Audit Committee
Chairman, to discuss a wide range of issues,
including how Experian was handling the
pandemic, sustainability, information security,
risk matters and external audit.
Investors and analysts – The executive team
runs an ongoing programme of dialogue with
institutional investors and analysts, through
which they discuss a wide range of issues
including strategy, performance, management
and governance. Experian also engages with
investors through industry conferences and by
hosting events with members of the senior
management team. The announcements of the
annual and half-year results and trading
updates provide opportunities for us to answer
questions from analysts, covering a wide range
of topics. This year, executive management
attended virtual conferences and investor
meetings in May and November 2020.
Annual General Meeting – The AGM provides
a valuable opportunity for the Board to
communicate with shareholders and, in normal
years, to meet them informally before the main
business of the meeting. In response to
COVID-19, restrictions had been introduced by
the Irish Government in relation to travel and
public gatherings at the time of the 2020 AGM.
To comply with these restrictions and public
health advice, and in order to ensure the safety
of the Company’s shareholders, employees and
directors, shareholders were not permitted to
attend the Company’s 2020 AGM. However, we
invited shareholders to submit questions, and
we also engaged with investors in relation to
AGM voting. After the AGM, we updated the
Experian website with a document
summarising the themes of the questions that
had been received from shareholders. Voting
levels at the AGM were 76.24% of the
Company’s issued share capital.
The 2021 AGM will take place on Wednesday
21 July 2021 in Dublin, Ireland, and the specific
arrangements for this year’s meeting (in the
context of COVID-19) are outlined in the Notice
of AGM which has been sent to shareholders
or appears on the Experian website,
www.experianplc.com. We encourage
shareholders to use proxy voting on the
resolutions put forward, all of which (except for
procedural resolutions) will be taken by a poll.
Private shareholders – The Company
Secretary, Charles Brown, oversees
communication with private shareholders, and
ensures direct responses as appropriate in
respect of any matters raised by shareholders.
The Company issues a ‘Shareholder Questions’
card each year, together with the AGM
documentation. As well as placing the themes
on our website this year, Charles Brown
responded to shareholders directly, as
appropriate, following the meeting.
Investor relations app – This contains
information about our financial performance,
together with reports, presentations and news
of upcoming events.
Website – Our website is an important channel
for communicating with all stakeholders,
including shareholders. All material information
reported to the regulatory news services is
published at www.experianplc.com/investors/
regulatory-news together with copies of annual
and half-year results announcements and
trading updates.
Experian plc Governance Code principle
Board Leadership and Company Purpose
95
Other stakeholders
Further information concerning Group-wide engagement with key stakeholders is on pages 24 and 25 in the Strategic report. Board activities regarding
key stakeholders, including engagement, are summarised in the table below. Shareholder engagement has been considered earlier.
Stakeholder
Responsibility
Relevant activities during FY21
Summary of stakeholder views/actions
Board
Our clients
and consumers
Board
Our
communities
Our people
Board,
Nomination
and Corporate
Governance
Committee,
Remuneration
Committee
Board
Our
suppliers
Board, Audit
Committee
Governments
The Board report in March includes an
update on clients and consumers,
including (for client) Net Promoter Score
(NPS) metrics, top-performing NPS
attributes and areas that require
improvement.
On consumers, the reporting includes
brand awareness, trust in the Experian
brand and the level of complaints.
The Chief Executive Officer reports on
corporate responsibility at each scheduled
Board meeting.
At least once a year, the Global Head of
Corporate Responsibility presents to the
Board.
Highlights this year included our response
to COVID-19, supporting vulnerable
communities, our impact in FY20 and our
commitments.
Pulse survey updates to the Board.
Board reporting at every scheduled Board
meeting (COVID-19 and Human Resources
sections of Board report).
People Strategy, Talent and Culture update
to the Nomination and Corporate
Governance Committee.
Direct feedback to the Board from George
Rose, Remuneration Committee Chairman,
who met virtually with the UK and Ireland
Experian People Forum in the UK and
Ireland in March 2021.
Confidential Helpline updates to the Audit
Committee.
Annual update to the Board on suppliers,
which includes details of engagement, the
Group’s Supplier Relationship
Management programme (SRM) and
supplier views.
Annual Board review of the Group’s
Modern Slavery Statement.
Board members receive regular Board and
Audit Committee updates from the Group
General Counsel regarding regulatory
engagement, and any ongoing regulatory
matters.
There is ongoing Compliance reporting to
the Audit Committee, including Compliance
training.
Audit Committee Risk Management
reporting includes legislative/regulatory
matters. Any relevant government affairs
matters are also considered by the Audit
Committee and the Board.
There had been a significant increase in Experian’s NPS, and Experian’s reputation
as a trusted company continued as the highest scoring brand attribute, for the
fifth year in a row.
Client satisfaction had increased for every journey touchpoint with high ratings in
account relationship management.
In response to the COVID-19 pandemic, clients felt that Experian partnered well
with them and provided the vital support and solutions they needed to adapt to
their new challenges.
There had been improvements in brand trustworthiness, and a decrease in
complaints in the USA and Brazil.
The Board noted and supported the actions being taken in response to COVID-19,
including:
– Helping vulnerable communities with charitable donations, donations of personal
protective equipment, over 3,500 hours of volunteering in March 2020, provision of
products, tools and education resources, and work with regulators to ensure that
credit scores remained unaffected by payment holidays.
– Scaling of global efforts to drive our financial education recovery programme,
United for Financial Health.
– The Board was updated on the work completed during FY20 to amplify the
Group’s societal impact, which included 13.8 million more people reached through
the Group’s Social Innovation products, 54,500 hours of volunteering, and an 8%
reduction in the Group’s carbon footprint.
The Board supported the Group’s commitment to becoming a carbon neutral
business in our own operations by 2030.
The Board was updated and considered the actions taken in response to our various
COVID-19 sentiment surveys:
– Clear communication around business outlook, approach to job protection and
financial impact.
– The approach to equipment access and reimbursement for critical work items.
– Well-being and resilience support.
– Continued focus on Experian’s role as a socially responsible employer.
The Nomination and Corporate Governance Committee was updated on the five
global people strategic focus areas in response to insights from employees. These
focus areas included preparing Experian for further growth, putting people first in
order to create a compelling employee experience, and growing world-beating
technology leaders.
Views of Experian colleagues and suppliers are surveyed on a regular basis to give
a full picture of key relationships. The results are used to highlight areas of focus for
relationship development.
Experian runs a collaborative global SRM programme with its suppliers, which
includes:
– Executive sponsorship to ensure two-way communication at a strategic level.
– Regular forums for dialogue in quarterly business reviews.
– Periodic 360-degree surveys to understand suppliers' views.
– Maturity model to gauge the maturity of each relationship and identify next steps
to progress.
During the year, a Group subsidiary, Experian Limited, received an enforcement
notice from the UK Information Commissioner's Office (ICO) in relation to the
marketing services Experian provides in the UK. The contents of the notice and
views of the ICO were considered, and a decision was made to appeal on the basis
that the Group considers the ICO’s view to have gone beyond the relevant legal
requirements. The Board and Audit Committee have been regularly apprised on this
matter during the year.
There were ongoing regulatory inquiries in respect of other matters during the year,
and the Board and Audit Committee receive regular updates on the matters being
considered by regulators. Our response to these inquiries will also take into
consideration the regulatory position on the relevant inquiry.
Experian plc Annual Report 2021Governance 96
Corporate governance report
continued
Workforce engagement
The Code requires companies to select one or a
combination of prescribed methods for the
Board to engage with the workforce. If a
particular method is not appropriate for a
company, it may explain the alternative
arrangements in place and why these are
considered effective. The Experian Board has
always felt well informed about workforce
views and matters, including in relation to pay
and related policy arrangements for the
broader employee population. As a result, no
single approach recommended in the Code was
considered appropriate for our business. The
Board instead adopted a combination of
methods to comply with the Code’s
requirements. These are summarised below,
and include:
There are regular people and sentiment
survey updates to the Board (including
COVID-19 specific surveys this year), and
reporting at every scheduled Board meeting
on people matters. People, talent and culture
updates are also provided to the Nomination
and Corporate Governance Committee,
offering a valuable insight into workforce
matters.
Any relevant business cases reviewed
by the Board include an evaluation of
potential impacts of the transaction on the
Group’s stakeholders, including employees.
The Remuneration Committee annually
considers an extensive paper setting out
details of all-employee pay and workforce
policies across Experian. The discussions on
this topic provide helpful insights for framing
pay considerations.
The Remuneration Committee Chairman
annually attends a meeting of the UK and
Ireland Experian People Forum (see Our
people, in the table on page 95), providing the
opportunity to gain first-hand feedback in
two-way discussions with the workforce,
which is invaluable. The employee insights
and views gathered are shared with the full
Board, allowing the Board to hear directly
from the wider workforce.
In normal years, the Board would meet
with employees physically outside the
Boardroom environment. Clearly, COVID-19
has impacted on the Board’s ability to engage
in this way during this year.
In coming to this approach, the Board debated
updates from management on the
implementation of the UK Corporate
Governance Code, and the information it already
received and reviewed regarding the Experian
workforce, and was satisfied that the approach
was appropriate for Experian and that the
Board keeps workforce considerations to the
fore in its deliberations.
Code principle
Board Leadership and Company Purpose
Considering our stakeholders
in our decision-making
The Code also recommends that the Board
should describe how stakeholder interests
have been considered in Board discussions and
decision-making. We have processes in place
to capture and consider stakeholders’ views
(including the matters contained in Section 172
of the UK Companies Act 2006, on a voluntary
basis) and feed them into Board decision-
making.
All material business cases considered in the
Group (for example, mergers, acquisitions and
major capital investments) include an analysis
of the stakeholder considerations, anticipated
impact and mitigations. This process, which has
been reinforced, helps the Board to perform the
duties outlined in section 172 of the UK
Companies Act 2006 and provides assurance to
the Board that potential impacts on
stakeholders have been considered in the
development of the proposal.
An example of how this process works in
practice is outlined below, where Board
consideration of a strategic acquisition included
a review of the standing stakeholder impact
analysis.
Acquisition of Axesor in Spain
In November 2020, the Board reviewed,
considered and approved the acquisition of
Axesor, one of the largest independent business
information (BI) providers in Spain.
The acquisition of Axesor’s well-established
BI data assets allows the enlarged business
to offer a highly differentiated consumer
information 'one-stop' proposition to new and
existing customers in Spain. Spain is a core and
strategic market for Experian EMEA, and the
transaction provides Experian with a more
diverse, scaled and resilient business,
benefitting from enhanced and highly
complementary customer coverage. There
is also the opportunity to realise substantial
cost synergies.
A briefing paper was circulated to the Board
ahead of its November 2020 meeting, outlining
the strategic rationale for the transaction, as
well as the financial evaluation and deal
structure. The Group’s Chief Investment Officer
attended the meeting and presented the
business case to the Board. The Board noted
that Axesor aligned with Experian global BI
strategic priorities and that Experian would
integrate administrative, financial, and HR
functions.
In considering the acquisition, the Board
reviewed the stakeholder impact analysis
which had been prepared (and which is
prepared for all acquisition business cases).
The analysis identified the following
stakeholder impacts and actions/mitigations:
Evaluation of the acquisition indicated that
the combination of the two businesses would
enhance the innovation, quality and
completeness of product offerings in Spain.
The transaction provides exciting growth
opportunities for both the Axesor employee
base and the Experian Madrid employees.
Initiatives would be implemented across the
combined organisation to optimise
efficiencies and protect our Benchmark EBIT.
Employees of the combined organisation as
well as the Workers Council will be engaged
to ensure a smooth and optimal cultural
integration.
The integration plan for the business
considered the alignment of suppliers. There
was some customer crossover, for which
combined management plans were made.
The acquisition was expected to have a
meaningfully positive long-term impact on all
relevant stakeholders, and no material
community or environmental impacts
were anticipated.
Workforce policies and practices
The Board is expected to ensure that:
workforce policies and practices are consistent
with the Company’s values; that they support
its long-term sustainable success; and that the
workforce can raise any matters of concern.
An example of the alignment of policies and
practices is how the Group manages
anti-bribery and anti-corruption. Experian has a
strong compliance culture, which is at the heart
of our strategy for ensuring we comply both
with the laws that apply to our business and
with our Global Code of Conduct. The Board sets
the tone and leads by example and is one of the
most important influences on the Company’s
commitment to preventing bribery and
corruption. Our Anti-Corruption Framework
sets out our zero-tolerance policy on bribery
and corruption in any form, and this message is
reinforced through mandatory annual training
for employees. We also extend this
framework to our third-party network and
business partners, which helps to instil our
values in every aspect of our business. We
apply due diligence and careful screening to
intermediaries such as agents, representatives,
resellers and service providers and train them
in our policies.
Experian plc Governance Code principle
Division of Responsibilities
97
Division of responsibilities
The Code principles regarding the role of the Chairman, the desired characteristics of the Chairman and his duty regarding Board relations and
contributions are outlined in the Chairman’s letter of appointment. A summary appears in the table below. The table also summarises how there
is a clear division of responsibilities between the leadership of the Board and the executive leadership of the business.
Chairman
Running the Board effectively and ensuring that the Board plays a full and constructive part in developing and determining the
Group’s strategy and overall commercial objectives
Promoting the highest standards of integrity, probity and corporate governance throughout the Group and particularly at Board level
Ensuring that the Board receives accurate, timely and clear information on the Group’s performance and its issues, challenges and
opportunities
Ensuring effective communication with the Company’s shareholders by the CEO, the CFO and other executive management; and
ensuring that the Board develops an understanding of the views of the Company’s major shareholders
Facilitates the non-executive directors’ effective contribution to the Board, and ensures constructive relationships between the
executive and non-executive directors
Primarily responsible for the Board’s leadership and governance, ensuring its effectiveness
Chief Executive
Officer
Responsible for the Group’s day-to-day business, in line with the strategy, risk profile, objectives and policies set by the Board and its
committees
Accountable to the Board for the Group’s development and its operations
Running the Group’s business and developing the Group’s strategy and overall commercial objectives
Implementing, with the executive team, the decisions of the Board, its committees and the principal subsidiaries
Maintaining a dialogue with the Chairman on the important and strategic issues facing the Group, and alerting the Chairman to
forthcoming complex, contentious or sensitive issues
Leading the communication programme with shareholders
Chairing the Group Operating Committee
Chief Financial
Officer
Responsible for managing the financial affairs of the Group, including tax, corporate finance and treasury
Works closely with the CEO and COO to manage the Group’s operations
Member of the Group Operating Committee
Chief Operating
Officer
Oversees the Company’s business operations, including information security
Ensures the Group has effective operational procedures and controls
Responsible for driving the evolution of the Group’s technology and innovation strategy
Member of the Group Operating Committee
Senior
Independent
Director
Provides support and guidance, acts as a sounding board for the Chairman, and serves as an intermediary for other directors
Acts as a contact point for shareholders if they have concerns which are not resolved through discussion with the Chairman, CEO or
CFO
Evaluates the performance of the Chairman
Non-executive
directors
Constructively challenge and help develop Group strategy
Scrutinise management performance against agreed goals and objectives
Uphold the highest standards of integrity and probity and support the Chairman in instilling the appropriate culture, values and
behaviours in the Group
Ensure the integrity of financial information and that there are robust financial controls and systems of risk management; determine
executive remuneration and succession planning
Group Company
Secretary
Secretary to the Board and its committees
Provides support and guidance to the Board and the Chairman, and acts as an intermediary for non-executive directors
Responsible for: corporate governance; listing rules, prospectus rules, and disclosure guidance and transparency rules compliance;
statutory compliance and reporting; shareholder services; and corporate responsibility
Member (and secretary) of the Group Operating Committee
Group General
Counsel
Responsible for overseeing Experian’s global legal, risk management, regulatory compliance and government affairs functions
Provides the Board and Audit Committee with legal advice, leads on legal, risk and regulatory reporting, and active in public
policy advocacy
Member of the Group Operating Committee
Experian plc Annual Report 2021Governance Code principle
Division of Responsibilities
Independence
As required by the UK Corporate Governance
Code, the Board considers each of the
non-executive directors to be independent in
character and judgment and believes there are
no relationships or circumstances that are
likely to affect (or could appear to affect) each
director’s judgment.
Conflicts of interest, and
external appointments
The Company’s articles of association allow the
Board to authorise actual or potential conflicts
of interest. The authorisation procedure
involves Group Corporate Secretariat issuing
guidance and a questionnaire each August,
asking directors to identify any conflicts or
potential conflicts, which the Board then
considers at its September meeting. In addition,
directors are expected to advise the Company
Secretary of any actual or potential conflicts as
soon as they arise so the Board can consider
them at the next available opportunity. In the
Board’s view, this procedure operated
effectively during the year under review. The
Board has also agreed a process whereby
directors’ proposed external or additional
appointments are reviewed and considered
for approval by the Board.
98
Corporate governance report
continued
Workforce policies and practices
(continued)
In terms of the ability to raise matters of
concern, Experian is committed to achieving the
highest possible standards of quality, honesty,
openness and accountability, and there is an
expectation that employees maintain high
standards in accordance with the Global Code
of Conduct. There is also a culture of openness
and accountability, and all employees are
encouraged to raise any concerns about the
way in which the business is run at an early
stage so that any concerns can be dealt with
effectively. A confidential helpline, facilitated by
an external provider, has been set up for
employees who wish to raise any concerns.
Calls to the Confidential Helpline, and any
actions required, are reviewed by the Audit
Committee at least every six months.
Non-executive director appointment
Non-executive directors are initially appointed
for three years. This may, subject to satisfactory
performance and election or re-election by the
shareholders, be extended by mutual
agreement. They normally serve for a
maximum of nine years, through three terms,
each of three years’ duration.
Meetings of non-executive directors
In addition to attending Board and committee
meetings, the non-executive directors normally
meet separately with the Chairman, and
sometimes also with the Chief Executive Officer,
at the end of each scheduled Board meeting.
The non-executive directors also meet privately
at least once a year with the Deputy Chairman,
without the Chairman present, and did so once
during the year to discuss matters including the
Chairman’s performance.
Board information
All directors receive financial and operational
information each month to help them discharge
their duties, and there were increased financial
and operational updates this year due to the
COVID-19 pandemic. Board papers are
circulated digitally at least one week before
each Board meeting, to ensure directors have
time to review them. Directors have access to
independent professional advice at the
Company’s expense, if they consider it
appropriate. No director obtained any such
advice during the year ended 31 March 2021.
Experian plc Governance Code principle
Composition, Succession and Evaluation
Nomination and Corporate Governance Committee report
99
As Chairman of the Nomination and
Corporate Governance Committee, I
am very pleased to report on the work
done by the Committee during the
year, and provide some detail of the
Committee’s principal roles and
responsibilities. There are updates
also on Board composition, diversity
and inclusion, and this year’s Board
evaluation.
A key responsibility of the Committee is to
ensure plans are in place for orderly Board
succession, and the Committee regularly
receives and reviews updates on the
structure, size and composition of the Board
and its committees, to ensure critical skills
and experience are appropriately refreshed.
During the year, on the recommendation of
the Committee members, Alison Brittain was
appointed to the Board, providing significant
financial services, consumer-facing, and
retail product experience, as well as UK-listed
company expertise. In addition, the
Committee recommended the appointment of
Jonathan Howell to the Board. Jonathan is a
highly regarded FTSE 100 Chief Financial
Officer, and has considerable executive and
non-executive UK-listed boardroom
experience, which will further enhance the
strength, depth and effectiveness of the
Board. The Committee reviews any skills gaps
and the current Board composition (and
Board members’ expertise, diversity and
tenure) to allow for smooth succession
planning. A key current focus of the
Committee relates to Audit and Remuneration
Committee Chairman succession, given the
anticipated departures of Deirdre Mahlan and
George Rose from the Board in the medium
term, following completion of nine years'
Board tenure.
The Committee has also maintained its focus
on the executive talent pipeline and senior
management succession plans, reflecting the
Board’s responsibility to ensure appropriate
plans are in place. A detailed succession
planning update was provided at the January
2021 Committee meeting. Included in the
update was an analysis of executive
management succession coverage. The
impacts of COVID-19 on attrition (which had
reduced) were also discussed by the
Committee.
Diversity, equity and inclusion are essential to
Experian’s purpose, and the Committee
received and discussed a detailed update
from our Chief People Officer, Jacky
Simmonds, in January 2021. Experian is
focused on several dimensions of workforce
diversity (including race/ethnicity, gender,
age/generation, working parents/families
and LGBTQ+), and the Committee noted that
the business was strong in terms of
employee commitment, having an inclusive
culture and diversity and inclusion initiatives,
and that actions were being taken regarding
representation, data and harnessing regional
efforts to maximise impact.
At our March 2021 meeting, as well as
recommending the appointment of Jonathan
Howell to the Board, the Committee
considered the proposed election/re-election
of directors at the AGM, recommended Dr
Ruba Borno’s re-appointment for a further
three-year term, reviewed the draft corporate
governance section of the Annual Report, and
reviewed various company law and
governance changes.
As noted earlier in the Corporate governance
report, the Committee also reviewed a people
strategy, talent and culture update during the
year.
The Committee was in place throughout the
year ended 31 March 2021.
Committee’s key roles
and responsibilities
The Board strongly believes that good
governance and strong, responsible, balanced
leadership are critical to business success and
to creating both long-term shareholder value
and a strong, sustainable culture. As a
Committee, our responsibilities include:
Ensuring we have appropriate procedures for
nominating, selecting, training and evaluating
directors, and that adequate succession
plans are in place.
Reviewing the Board’s structure, size,
composition and succession needs;
considering the balance of membership and
the Board’s required balance of skills,
experience, independence, knowledge and
diversity.
Identifying and nominating, for the Board’s
approval, suitable candidates to fill vacancies
for non-executive directors and, with the
Chief Executive Officer’s assistance,
executive directors. Board appointments are
made on merit and against objective criteria,
to ensure the Board maintains its balance of
skills, experience, independence, knowledge
and diversity.
Reviewing legislative, regulatory and
corporate governance developments and
making recommendations to the Board; and
ensuring that the Company observes the
standards and disclosures recommended by
the UK Corporate Governance Code.
Mike Rogers
Chairman of the Nomination and
Corporate Governance Committee
As Chairman of the Nomination and
Corporate Governance Committee, it is
my pleasure to present this year's
report on the Committee's activities
during the year.
Members
Mike Rogers (Chairman)
Dr Ruba Borno
Alison Brittain
Caroline Donahue
Luiz Fleury
Jonathan Howell*
Deirdre Mahlan
George Rose
* From 1 May 2021
Quick facts
Mike Rogers was appointed Chairman
of the Committee in July 2019, when
he was appointed as Chairman of the
Company.
The Board considers the Committee
members to be independent
non-executive directors, in line with
the UK Corporate Governance Code.
The Committee met four times during
the year ended 31 March 2021.
The Chief People Officer and the Chief
Communications Officer are invited to
attend certain meetings.
The Chief Executive Officer is also
invited to attend meetings and
provides valuable contributions.
Quick link
experianplc.com/
about-us/
corporate-governance/
board-committees/
Experian plc Annual Report 2021Governance 100
Nomination and Corporate Governance Committee report
continued
Code principle
Composition, Succession and Evaluation
Committee activities during FY21
April — July
November
January
March
Recommended the appointment
of Alison Brittain as an
independent non-executive
director of the Company.
Discussed a detailed AGM briefing
from the Company Secretary and
the Chief Communications Officer,
including voting results,
shareholder feedback and
engagement that had taken place
in the lead-up to the AGM.
Discussed an update on the
agreed focus areas from the FY20
Board evaluation.
Discussed Board composition
and, in particular, approved role
specifications for new
non-executive directors.
Continued important discussions
regarding Board succession, with
a focus on plans regarding Audit
Committee Chairman succession.
Reviewed the Committee’s
performance during the year
against its terms of reference, and
concluded that it was operating
effectively.
Agreed the structure of the FY21
Board, committee and director
evaluation.
Reviewed and discussed a people,
talent and culture update,
including the identified strategic
pillars, key risks, people
implications and insights gained
from business leaders.
Reviewed an update on executive
succession, including specific
plans for key operational and
functional roles.
Reviewed an update on diversity,
equity and inclusion, outlining the
Experian philosophy and
approach, where the business
was strong, and where further
efforts are needed.
Received and considered a
Board succession update.
Recommended to the Board the
directors due to be considered
for election/re-election at the
2021 AGM.
Considered the annual company
law and governance update.
Recommended the re-
appointment of Dr Ruba Borno as
a director of the Company for a
further three-year appointment
term.
Recommended the appointment
of Jonathan Howell as an
independent non-executive
director of the Company.
Board, and executive committee (and direct reports), composition
As at 1 May 2021
Balance of executive and non-executive directors
Ethnicity of the Board
Independent Chairman
Executive
Independent non-executive
Total number of directors
Tenure of the Board
<1 year
1 to <3 years
3 to <6 years
6 to <9 years
9+ years
Total number of directors
Average Board tenure
1
3
7
11
White – European
White – North American
Non-white ethnic group – Arabic
Non-white ethnic group – South American
Total number of directors
2
2
4
2
1
11
5 years, 9 months
Non-executive director skills*
Financial services
Serving listed company executive
Consumer/Digital
Financial expertise
Technology/Information
Consumer packaged goods
Manufacturing/Large projects
6
3
1
1
11
4
4
4
3
3
1
1
Gender diversity of the Board
Gender diversity of executive committee and direct reports
Men
Women
Total number of directors
7 (64%)
4 (36%)
11
Men
Women
74%
26%
* Table signifies the number of non-executive directors, as at 1 May 2021, considered to have that
particular expertise. Individual non-executive directors may have more than one area of expertise.
Experian plc Governance Code principle
Composition, Succession and Evaluation
101
Board composition
As at the date of approval of the Annual Report,
the Board comprises the independent
Chairman, Mike Rogers, three executive
directors and seven independent non-executive
directors, including the Deputy Chairman,
George Rose. George is also the Chairman of
the Remuneration Committee. Deirdre Mahlan
is the Chairman of the Audit Committee and
Mike Rogers is the Chairman of the Nomination
and Corporate Governance Committee.
The Nomination and Corporate Governance
Committee regularly evaluates Board
composition from a number of perspectives,
including diversity and orderly succession. The
Committee’s discussions during the year
concluded that there should continue to be a
focus on diversity, including gender and
ethnicity, and there was a preference where
possible for recruiting non-executive directors
who are serving executives at other
organisations, and who have recent and
relevant financial experience. Audit and
Remuneration Committee chairmanship has
also been a recent focus of the Committee.
In terms of near- and medium-term skill
requirements, the Committee’s focus will
include non-executives who provide good
geographic representation in terms of
Experian’s markets, and technology,
decisioning, advanced data and analytics will be
considerations also.
As with all Board appointments, the Committee
recognises the continued importance of culture,
fit and international experience when assessing
potential candidates for the Board.
Process for Board appointments
When making Board appointments, the
Committee reviews and approves an outline
brief and role specification, and appoints a
search agent for the assignment.
We disclose the name of the search agent and
any other connection they have with Experian
in our next Annual Report. The specification
and the search are discussed with the search
agent, who then prepares an initial longlist of
candidates. The Committee defines a shortlist
and holds interviews. Ultimately, the
Committee makes a recommendation to the
Board for its consideration. Following Board
approval, the appointment is announced in line
with the requirements of the UK Financial
Conduct Authority's (FCA’s) Listing Rules.
In due course, a tailored induction programme
is developed for the new director.
We engaged Russell Reynolds as the specialist
search firm involved with the recruitment of
Alison Brittain and Jonathan Howell, our most
recently appointed non-executive directors.
They also provide other executive search
services to the Group.
Step 1
Committee reviews
and approves an
outline brief and
role specification and
appoints a search
agent for the
assignment
Step 2
The agent prepares
an initial longlist
of candidates
Step 3
The Committee
then considers a
shortlist and we
hold interviews
Step 4
The Committee
makes a
recommendation
to the Board for
its consideration
Step 5
Following Board
approval, the
appointment is
announced in
line with the
requirements of the
FCA’s Listing Rules
Induction and training
The Company has procedures to ensure newly
appointed directors receive a formal induction,
involving meetings with senior executives and
functional leaders. A tailored induction
programme is designed for each new
non-executive director who joins the Board, to
ensure they are equipped with a foundation of
knowledge and materials necessary to add
value. Individual induction programmes are
usually completed within the first six months of
a director’s appointment and the Company
Secretary provides assistance and support
throughout the induction process. The
programmes are reviewed regularly to consider
directors’ feedback and are continually updated
and improved. During the year, the Board
appointed Alison Brittain as an independent
non-executive director, and Alison’s induction
took place via video technology in late 2020. A
similar induction has been arranged for
Jonathan Howell, to take place in June/July
2021.
Alison's induction included:
Business/Operations – briefings, regional and
global business overviews and product
demonstrations in respect of a number of
business areas, including: Technology and
Information Security, Consumer Information
Services, Decision Analytics, Vertical Markets,
as well as business market and financial
overviews.
Corporate/Governance – focused briefings on
corporate governance, audit and investor
relations and communications. Other areas
covered include remuneration, talent, people
and reward; a financial overview, budget and
capital strategy; strategic planning, corporate
development and competition overview; legal
compliance, regulation, government affairs, risk
management; and corporate responsibility.
Diversity
We believe that diversity and inclusion are
essential to our purpose of creating a better
tomorrow – making positive change in the
world by actively working to open up access to
financial systems to marginalised communities.
Our core philosophy is that our employees are
people first, and we welcome people of all
backgrounds to bring their whole selves to our
team.
The Board’s diversity policy is unchanged. We
strongly believe that diversity throughout the
Group and at Board level is a driver of business
success. We respect, value and welcome all
forms of diversity, and seek to reflect the
diversity of our clients, investors and employees
in our Board. We recruit talented Board
members, who have the appropriate mix of
skills, capabilities and market knowledge to
ensure the Board is effective. When recruiting,
we look across all sectors and non-traditional
talent pools, and we require diversity on our
candidate shortlists.
Experian plc Annual Report 2021Governance 102
Nomination and Corporate Governance Committee report
continued
Code principle
Composition, Succession and Evaluation
Diversity (continued)
Although we do not publish specific Board
diversity targets, the female representation of
the Board is 36%, which exceeds the current
Hampton-Alexander Review recommendation
of 33%. We also continue to monitor closely the
numbers submitted as part of our Hampton-
Alexander commitment around our executive
committee and their direct reports. The
proportion of women in this population stands
at 26%. As part of our commitment to continue
to improve upon our gender diversity, we are
putting in place a three-year target of 30% for
this group. This, alongside the targets set for
senior and mid-level leaders within Experian,
will ensure a strong pipeline of women for our
most senior positions over time.
In addition, the February 2021 Parker Review
Committee update confirmed that we met their
Board ethnic diversity recommendations. We
recognise the significant benefits of a diverse
Board and, when recruiting, will continue to
seek to address any diversity gaps on our
Board, including gender and ethnicity.
As well as the Board policy outlined above, the
Group’s Code of Conduct further outlines our
approach and how we think about diversity.
We understand the fundamental value that
diversity, equity and inclusion bring to our
business, and there are many ongoing
initiatives to support a work environment in
which everyone is treated with fairness and
respect, has equal access to opportunities and
resources, and can contribute fully to our
success. At Experian, we embrace diversity and
appreciate different perspectives and the
unique value each employee brings.
Fundamentally, we do not discriminate against
anyone based on race, colour, religion, gender,
sexual orientation, gender identity or
expression, national origin, disability, age,
covered veteran status, or any other
characteristic protected by law. The Code of
Conduct applies to everyone at Experian,
including contractors, suppliers and others who
do business with us. Contractors and suppliers
performing work on behalf of Experian are
expected to comply with the law and the
portions of the Group’s Code of Conduct that
apply to them.
Board evaluation
The UK Corporate Governance Code specifies
that the Board should undertake a formal and
rigorous annual evaluation of its own
performance and that of its committees and
individual directors, and that the Board should
also have an externally facilitated evaluation
at least once every three years.
FY21 was Year 2 of our Board’s three-year
review cycle. Last year (FY20), an independent
external evaluation was conducted by
Manchester Square Partners to provide the
Board with greater insights into its
performance and to identify opportunities to
further increase and improve its overall
effectiveness. The conclusion of the external
evaluation was that the Board was functioning
extremely well and in line with first-class
governance. Board dynamics were considered
to be excellent, with specific characteristics
including inclusivity, supportiveness,
constructively challenging and responsible.
The Board was noted as being unified and
aligned, with the Experian agenda as the
priority.
Year 1 – FY20
Evaluation by external facilitator
Year 2 – FY21
Internal review against detailed
Year 1 review
Year 3 – FY22
Questionnaire-based internal evaluation
Following that external evaluation, the Board
agreed areas of focus for FY21. This year,
the second year of our cycle, involved the
Board performing an internal evaluation of
progress against the FY21 areas of focus
and the resulting actions, as well as
agreeing new areas of focus for the coming
year. The third year of the cycle, to be
undertaken in FY22, will be a questionnaire-
based internal evaluation.
This year’s internal evaluation was
structured as follows:
Board
Group Corporate Secretariat reviewed progress against the agreed
FY21 areas of focus and an update was presented at the Board meeting
in March 2021.
That update, and the Board review and discussion of its actions, and the
actions of management, against the FY21 areas of focus formed the
basis of this year’s review from a Board perspective, and new FY22
areas of focus were agreed.
Committees
A performance evaluation discussion was included on the agendas of
the Board committees, supported by an analysis of how each committee
was performing against the key areas in its terms of reference.
Individual
directors
Meetings were held between each director and the Chairman
in March 2021, in relation to each director’s performance.
The Deputy Chairman and Senior Independent Director evaluated the
Chairman, taking account of input from other directors.
Experian plc Governance Code principle
Composition, Succession and Evaluation
103
Progress against the focus areas highlighted in the FY20 review
Area
Focus
Progress
COVID-19
pandemic
Board
succession
and talent
As the pandemic evolved, the Board took decisive action to agree a
set of priorities and goals for the Group, the purpose of which was to
establish measures of success for the Board’s role in navigating the
emergency. These covered: maintenance of operations while keeping
our people, clients and suppliers safe and healthy; preserving the
health of the business (including its financial health); recovering
strongly as the emergency subsides; and using the Group’s
capabilities to help communities survive and recover rapidly.
It is expected that a significant Board focus for the coming year will
be how the Group adapts, adjusts and recovers from the situation
and lessons learned that could have relevance for the evaluation and
mitigation of emerging risks. The Board will play a key part in this
process, guided by the agreed priorities and goals.
The Board’s FY21 priority will be on non-executive succession,
particularly chairmanship of the Remuneration and the Audit
Committees, as the current role holders approach the natural end of
their Board terms of appointment.
The focus for the Chairman and the Board will be on replacing the
significant breadth and depth of experience, insight, advice and
challenge that will leave the Board, ensuring the right seniority,
experience (including financial) and cultural fit of any successors,
and that there is a smooth transition (and comprehensive induction)
for any new appointments.
As part of its regular meetings and visits, the Board spends time with
the senior leadership team and has opportunities to meet
up-and-coming talent within the organisation. There is also an
annual formal review of talent, discussion of specific appointments
as needed and updates on talent development programmes. The
development, attraction, retention and diversity of talent is also an
area of increasing focus for the Board, as the Group evolves into new
and highly competitive business areas, balancing internal
development with key external hires.
Additional Board meetings and updates were initiated at an early
stage, and took place in April 2020 and June 2020, in addition to the
scheduled meetings in March, May and July 2020. This allowed the
Board to regularly oversee the actions being taken by the Group in
response to the pandemic and to receive regular updates on
trading.
Early action was taken to ensure an appropriately focused Board
agenda, principally through the inclusion of a 'COVID-19 Board
Report' covering People, Operations, Consumer/Regulatory,
Funding, Societal Support, Return to business-as-usual, and the
Group’s global response. Reporting on many of these matters was
also enhanced in the regular updates to the Board between
meetings.
The Audit Committee requested, and discussed, a management
report specifically related to the potential impacts on the Group’s
risk environment arising from COVID-19, including the impact of the
Group’s principal risks and key activities undertaken within the
Group’s pandemic response plans.
Alison Brittain was appointed as an independent non-executive
director on 1 September 2020.
Jonathan Howell was appointed as an independent non-executive
director on 1 May 2021.
The Nomination and Corporate Governance Committee continued to
regularly discuss Board composition and succession (including
Committee chairmanship succession) and reviewed the role
specifications for the new non-executive director appointments and
potential future appointments.
The Nomination and Corporate Governance Committee continued to
receive in-depth updates on senior leadership succession, diversity
and inclusion, and people strategy, talent and culture, including
updates on the Group’s people development programmes.
The Board continued to spend time with senior management and
high-potential talent within the business. This was undertaken via
video technology during the year, and it remains the intention that
the Board will re-commence visits to the Group’s key business
locations when it is safe to do so in line with COVID-19 travel
restrictions and public health guidance.
FY22 focus areas agreed in the FY21 review
Area
Focus
Culture and
Social capital
As the Board concluded in this year’s internal evaluation, the Board has continued to operate effectively despite not meeting
together physically since January 2020. Since that time, two new independent non-executive directors have joined the Board.
Although there may be some changes to the way the Board operates in the future, the Board recognises the importance of
remaining closely connected with the business and fellow directors, in order to lead by example and continue to promote and
monitor the desired culture throughout the Group.
The Board intends to focus on ways to further strengthen the culture and rebuild social capital to ensure that the strong culture of
the Board is not impacted by the COVID-19 pandemic, and that it continues to operate as a high-performing collegiate team.
Environmental,
Social, and
Governance
(ESG)
The Group continues to progress a number of ambitious programmes of ESG-centred activities, which include considerations
around climate change, gender and ethnicity, diversity, pay, monitoring of suppliers, reporting frameworks, and the positive role of
the Group and data in society.
The Board, through its oversight of the Group’s strategy and its responsibilities, will continue to evaluate how ESG issues affect key
aspects of the business and what Experian’s ambitions and goals should be as a long-term sustainable business.
Experian plc Annual Report 2021Governance 104
Audit Committee report
Code principle
Audit, Risk and Internal Control
I am pleased, as Chairman of the Audit
Committee, to report on how the
Committee carried out its
responsibilities during the year, in
particular with the ongoing COVID-19
global pandemic, and how we
discharged our duties.
The Committee’s remit is to: review and
monitor the integrity of the Group’s financial
reporting, ensuring that any judgments made
are appropriate; ensure the external auditor
is independent and effective in its role, and
recommend the appointment of the external
auditor; and ensure that the Group has an
effective internal control framework,
including the risk management system. The
Committee members’ collective international
and financial experience enables them to act
effectively in these areas, and the work of the
Committee during the year covered all
elements of its remit.
This report contains details of the significant
issues we considered in relation to the
financial statements and how these were
addressed, and our process for concluding
that this Annual Report is fair, balanced and
understandable.
Deirdre Mahlan
Chairman of the Audit Committee
I am pleased to report on the
Committee’s activities during the
year, especially with 2020 being a
particularly difficult year given the
ongoing COVID-19 global pandemic.
Members
Deirdre Mahlan (Chairman)
Dr Ruba Borno
Alison Brittain
Caroline Donahue
Luiz Fleury
Jonathan Howell*
George Rose
* From 1 May 2021
Quick facts
Deirdre Mahlan has chaired the
Committee since January 2015. Deirdre
is a qualified accountant with an MBA
and has many years’ experience in
senior finance roles, most recently as
Chief Financial Officer of Diageo plc.
All members of the Committee are
independent non-executive directors
and the Board considers them to have
an appropriate level of experience.
Deirdre Mahlan, George Rose and
Jonathan Howell are considered to have
recent and relevant financial experience,
in line with the UK Corporate
Governance Code.
The Committee met four times during
the year, with each scheduled meeting
timed to coincide with key dates in
the Group’s financial reporting and
audit cycle.
Regular attendees at meetings include
the Chairman, the executive directors,
the Group General Counsel, the Head of
Global Internal Audit, the Global
Financial Controller, the Chief
Information Officer, the Chief Information
Security Officer and representatives
from KPMG LLP (the external auditor).
Other invitees include the Global Head of
Risk Management and the Global Head
of Compliance.
At the end of each scheduled meeting,
the external auditor and the Head of
Global Internal Audit meet with the
Committee to discuss any matters
without management being present.
The Committee is authorised to seek
outside legal or other independent
professional advice as it sees fit.
Quick link
experianplc.com/
about-us/
corporate-governance/
board-committees/
The Committee responded quickly to the
impact of COVID-19 on its areas of
responsibility. Soon after the start of the
pandemic, the Committee requested a
COVID-19 specific risk update from
management, which was presented to the
Committee early in FY21. The initial view of
the Committee was that COVID-19 had
impacted some of the Group’s principal risks
– for example, risk considerations related to
employees working from home. For each risk
area impacted, the Committee was advised of
the mitigating actions that had been put in
place. These included, for the risks associated
with working from home, enhanced technical
measures to restrict, secure and monitor
devices, increased phishing testing, robust
compliance requirements for employees with
access to sensitive data and implementation
of critical security updates. A similar analysis
was discussed by the Committee in respect of
each of the impacted Group principal risks.
The Committee was in place throughout the
year ended 31 March 2021.
Committee’s key roles and
responsibilities
Monitoring the integrity of the financial
statements and reviewing significant
financial reporting judgments contained
in them.
Reviewing internal financial controls
and the Group’s internal control and risk
management systems, with special attention
this year on COVID-19 specific risks.
Reviewing the effectiveness and quality
of the audit process and the independence
and objectivity of the external auditor.
Monitoring and reviewing the effectiveness
of the internal audit function.
Developing and implementing policy on
engaging the external auditor to supply
non-audit services, taking into account
relevant guidance.
Approving the external auditor’s
remuneration and terms of engagement,
and making recommendations about its
re-appointment.
Experian plc Governance Code principle
Audit, Risk and Internal Control
105
Committee activities during FY21
May
September
November
March
Reviewed the principal
accounting policies, pre-year-end
accounting matters and updates
on the year-end financial
statements and financial review.
Reviewed the external auditor’s
pre-year-end report, including
scope, status and controls
findings.
Reviewed fraud and Confidential
Helpline update.
Reviewed the Group’s Tax Policy.
Reviewed the Group’s non-audit
fee policy and the Group audit
fee.
Reviewed the Global Internal
Audit strategy and annual plan.
Considered the re-appointment
of the external auditor.
Reviewed the preliminary results
announcement and the Annual
Report, and papers in relation to:
– year-end accounting matters
– the preparation of financial
statements on the going
concern basis (see also note 2
to the Group financial
statements)
– the making of a viability
statement recommendation to
the Board
– the fair, balanced and
understandable assessment
– and the making of
management representations.
Reviewed the 2020 Annual
Report to ensure it was fair,
balanced and understandable
and provided information
enabling an assessment of
Experian’s position and
performance, business model
and strategy.
Reviewed and discussed
with management the draft
Enforcement Notice received
from the UK Information
Commissioner's Office (ICO), and
the associated accounting
impact.
Reviewed the Risk Management
Framework and Summary of
Assurance, including a COVID-19
specific risk update.
Reviewed the external auditor’s
year-end report, including
independence considerations.
Reviewed non-audit fees.
Considered the FY21 external
audit plan with the external
auditor, including its scope,
materiality and the expected
impact of COVID-19. The plan
included the external auditor’s
response to developments in
the business during the year,
developments in the audit
process, the Group’s risk
assessment and the coverage
of the audit.
Reviewed the effectiveness of
the external auditor (see page
107 ‘External auditor’).
Evaluated the performance of
the Global Internal Audit function
(see page 107 ‘Internal audit’).
Received and discussed with
management an update in
relation to a South Africa
fraudulent data access matter.
Continued to assess with
management the impact of
COVID-19 from a risk perspective
(including information security),
noting the COVID-19 risk
assurance that had been
undertaken.
Reviewed the Compliance
Management Programme
overview from the Global Head of
Compliance; assessed the
Compliance terms of reference
and received annual compliance
training.
Reviewed fraud and Confidential
Helpline updates.
Reviewed the Group’s Treasury
Policy.
Approved the Committee’s
annual meeting schedule and
reviewed the Committee’s
performance against its terms
of reference.
Reviewed the half-yearly
financial report announcement,
and papers in relation to:
– half-year accounting matters
– the preparation of the
half-yearly report on the going
concern basis
– a fair, balanced and
understandable assessment
– and the making of
management representations.
Although not required for the
half-year, reviewed the viability
modelling assessment that had
taken place, given the situation
with COVID-19.
Reviewed the external auditor’s
half-year report, including
independence considerations.
Reviewed and discussed with
management the final
Enforcement Notice received
from the ICO, the appeal made
by the Group, potential business
impacts of the notice, and the
associated accounting
considerations.
Debated extensively with
management the restructuring
charge for the transformation
programme in the UK and
Ireland and other restructuring
initiatives.
Received an update and
Committee training from the
external auditor in respect of
forthcoming audit industry
changes (including strengthening
of internal controls frameworks,
known as ‘UK SOX’), new or
impending accounting standard
changes, and the likely impacts
and considerations for Experian.
All meetings
Reviewed full or summary risk management
updates at each meeting, including status of
and changes to the Group’s principal risks,
material litigation, regulatory developments
and details of any emerging risks, with
particular focus on COVID-19 specific risks.
An Internal Audit update was presented by
the Head of Global Internal Audit at each
meeting, and discussed by the Committee,
including the status of the audit plan, audit
findings and themes in the reporting period,
and progress on any overdue audit actions.
Reviewed an information security update
from the Chief Information Security Officer at
each scheduled meeting. This is a standing
item on the Committee agenda, given its
importance to the Group. Included this year
were updates on the impact of COVID-19 on
information security, for example in relation
to any increased risk from employees
working from home and the resultant
changing threat landscape.
Experian plc Annual Report 2021Governance 106
Audit Committee report
continued
Code principle
Audit, Risk and Internal Control
Significant issues
The table below summarises the significant matters considered by the Committee in relation to the Group and Company financial statements and the
way they were concluded. These matters, together with any other significant considerations of the Committee, are reported to the Board. The minutes of
each Audit Committee meeting are also circulated to all members of the Board.
Matter considered
Challenge and conclusion
Impairment review – goodwill and other intangible assets
A summary of the annual impairment analysis and underlying process was
provided to the Committee.
The Committee scrutinised the methodology and assumptions applied by
management.
The analysis indicated that, following a challenging year impacted by the effects
of the COVID-19 pandemic, growth in Asia Pacific was adversely affected and the
estimated recoverable amounts of the assets were below their carrying value.
Accordingly, an impairment of goodwill in the region was proposed.
In respect of Asia Pacific, the Committee challenged management on the
longer-term strategy of the region and the extent to which this could be
captured in the forecasts used. The Committee debated with management the
best approach to including forecasting adjustments.
The recoverable amounts of the assets of all other segments continued to
sufficiently exceed their carrying amounts.
The Committee concurred with management’s conclusions that an
impairment of goodwill was required in Asia Pacific.
The Committee noted the headroom and the sensitivity to changes in
assumptions and concurred with the proposed disclosure of these in note 20
to the Group financial statements.
Impairment review – other assets
A summary of the review process for other assets was provided to the
Committee.
The Committee scrutinised the methodology and assumptions applied by
management.
The review indicated that an impairment was required in one of the Group’s
intangible assets, and that an impairment reversal was required in one of the
Group’s associates.
The Committee noted the changes in trading performance against the forecast
of the associate and debated with management the future strategy for this
investment.
Going concern and viability
The Committee reviewed the assessment of going concern and viability.
The Committee concurred with management’s conclusion that a write-down of
intangibles was required, an impairment reversal in associates was required
and that the proposed accounting was appropriate.
The Committee scrutinised the key risks and viability scenarios, the
assumptions used and the methodology.
The Committee concurred with management’s assessment that the Group
is a going concern and is expected to remain viable.
Acquisitions
The Committee received an update on the acquisitions made during the year
notably the acquisitions of Arvato’s Risk Management division in Germany,
Tapad, Inc. in North America and BrScan in Brazil.
The Committee noted these deals included elements of contingent
consideration and put options, and that an independent external valuer had
assisted with these valuations along with the acquired assets and liabilities.
Tax
The Committee received a regular update from management on the adequacy of
provisions in respect of significant open tax matters. The review included details
of ongoing correspondence with tax authorities in the UK, the USA and Brazil
and the principal areas of tax challenge.
Litigation and regulatory matters
The Committee received an update and analysis of open litigation and regulatory
matters affecting the Group, including the enforcement notice from the UK
Information Commissioner’s Office.
Restructuring
A summary of potential restructuring opportunities was presented to the
Committee in the first half.
The Committee discussed with management a refinement to the
non-controlling interest policy, in light of these acquisitions.
The Committee approved the valuation of the acquisition intangibles and
accounting for non-controlling interests.
The Committee agreed that the assessment of the uncertain tax positions was
appropriate and that the judgment taken in respect of the year-end provision
in the Group financial statements was reasonable.
The Committee also noted the evolving and complex tax laws that applied to
the Group and the uncertainty that these might bring. It concluded that the
Group tax risk disclosures were appropriate.
The Committee concluded that these matters had been appropriately provided
for at 31 March 2021.
The Committee considered and concurred with the proposed contingent
liability disclosures included in the notes to the Group financial statements.
The Committee discussed the proposals with management. As the
performance of the Group strengthened the Committee challenged
management to keep the overall programme limited and focused on certain
specific areas.
The Committee approved the proposed accounting for the programme as a
non-benchmark item.
Experian plc Governance Code principle
Audit, Risk and Internal Control
107
Fair, balanced and understandable – what did we do?
Each year, in line with the UK Corporate Governance Code and the Committee’s terms of
reference, the Committee is asked to consider whether or not, in its opinion, the Annual Report
is fair, balanced and understandable (FBU) and whether or not it provides the information
necessary for shareholders to assess the Group’s position and performance, business model
and strategy. There is an established process to support the Audit Committee in making this
assessment, and we use a similar process for the Group’s half-yearly financial report.
The key areas to focus on included
ensuring that:
The overall message of the narrative
reporting is consistent with the primary
financial statements.
The overall message of the narrative
reporting is appropriate, in the context of
the industry and the wider economic
environment.
The Annual Report is consistent with
messages already communicated to
investors, analysts and other stakeholders.
The Annual Report, taken as a whole, is
fair, balanced and understandable.
The Chairman and Chief Executive
Officer’s statements include a balanced
view of the Group’s performance and
prospects, and of the industry and market
as a whole.
Any summaries or highlights capture the
big picture of the Group appropriately.
Case studies or examples are of strategic
importance and do not over-emphasise
immaterial matters.
The main elements of the process are:
A list of ‘key areas to focus on’ was
previously shared with the Annual Report
team. The team is reminded of the
requirement annually, and asked to reflect
this in their drafting.
An internal FBU committee considered the
Annual Report in May 2021, ahead of the
Audit Committee meeting. A wide range of
functions are represented on this
committee, including executives from
finance, communications, investor
relations, legal and corporate secretariat.
The external auditor also supports the
committee.
In advance of its May 2021 meeting, the
Audit Committee received a near-final
draft of the Annual Report, together with a
reminder of the areas to focus on. The FBU
committee’s observations and conclusions
were also relayed to the Audit Committee.
Following its review this year, the Audit
Committee concluded that it was
appropriate to confirm to the Board that
the 2021 Annual Report was fair, balanced
and understandable, and provided the
information necessary for shareholders to
assess the Group’s position and
performance, business model and
strategy. The FBU statement appears in
the Directors’ report.
Internal audit
An internal evaluation of Internal Audit was
reviewed by the Committee at its September
2019 meeting, as part of the agreed four-year
evaluation cycle (a full external quality
assessment every four years, and follow-up
interim external quality assessments and
internal reviews in the intervening period).
In September 2020, the Committee reviewed
the conclusions of a further internal evaluation
of Internal Audit, which comprised: internal
quality assurance results; post-audit
stakeholder feedback; key internal metrics;
self-assessment against the International
Standards for the Professional Practice of
Internal Auditing and the Code of Ethics by the
Head of Global Internal Audit; and a survey of
principal stakeholders for areas requiring
improvement. All audits that had been assessed
using Internal Audit’s quality assurance process
were rated positively, with strong adherence to
standards and processes. Feedback from
stakeholders was also positive, and there was
good progress in relation to the quality of the
assurance process and the insights provided by
Internal Audit. The assessment against key
internal metrics indicated that a continued
focus area should be the time taken to issue
reports. There was conformance with the
International Standards for the Professional
Practice of Internal Auditing, and stakeholder
feedback on the function was strong, with the
team viewed as highly effective, professional
and independent.
External auditor
Tenure and tendering
KPMG LLP (KPMG) has been the Company’s
auditor since July 2016, following the
conclusion of the audit tender process in
September 2015. There are currently no
contractual obligations restricting our choice of
external auditor and we confirm that we have
complied on a voluntary basis (as a
non-UK-incorporated company) with the
provisions of the UK Competition and Markets
Authority (Mandatory Use of Competitive Tender
Processes and Audit Committee
responsibilities) Order 2014 for the financial
year under review.
Effectiveness, audit quality, independence
and appointment
At its September 2020 meeting, the Audit
Committee reviewed and discussed KPMG’s
audit strategy for the year ended 31 March 2021.
In November 2020, and March and May 2021,
the Committee received detailed updates on the
audit’s progress, which included details of the
external auditor’s actions, such as the audit
procedures undertaken, the audit’s coverage,
the impact of COVID-19 on the audit, the
segregation of duties and the status of any
significant findings, as well as details of key
matters arising from the audit and assessments
of management’s judgments on them; and
reviewed the content of the independence letter
and the management representation letter, as
well as engagement terms.
The Committee formally reviews the
effectiveness of the external auditor at its
September meeting. This year, questionnaires
were provided to Board members, senior
operational and functional management and
senior regional, finance and treasury
leadership. As part of the evaluation, the FRC’s
Guidance on Audit Committees was reviewed to
ensure that best practice was being followed.
The evaluation focused on the four key areas
used in the FRC’s May 2015 ‘Practice aid for
audit committees’: mind-set and culture; skills,
character and knowledge; quality control, and
judgment. The Committee also reflected on the
assurance on financial statements, the audit
teams and communication, as well as
considering external regulatory updates on the
external auditor received during the year.
The overall results of the evaluation were
favourable, particularly with regard to quality
and value of the service. There were no
concerns regarding the independence of the
audit team, the technical knowledge of KPMG or
the way in which judgments were explained.
The Committee concluded, based on feedback
and information obtained during its other work,
that the external auditor had performed
effectively, and that the Group and the auditor
had complied with relevant guidance.
The Committee also assesses the quality of the
audit (along with the effectiveness review
described above) in the following ways:
Evaluation of external auditor (process
described above) – the large majority of
internal respondents agreed that the audit had
been completed efficiently and as planned;
where this was not the case, it was felt that
Experian plc Annual Report 2021Governance 108
Audit Committee report
continued
Code principle
Audit, Risk and Internal Control
deviations from the plan were communicated
and appropriate. It was additionally noted that
any COVID-19 related changes were handled
efficiently and effectively. No necessary
improvements were noted with regard to the
external auditor's judgment and
communication, particularly as to technical
issues, estimates, discussing potential issues
and management letter content.
Meeting attendance by the external auditor
– KPMG attend all scheduled Committee
meetings and, during the year, reported to the
Committee on the components of the audit plan,
additional or forthcoming requirements or
regulatory changes, audit findings and interim
audit findings. These reports, the private
sessions held with the Committee, and the level
of challenge applied by the external auditor to
management, are opportunities for KPMG to
demonstrate and articulate (and for the
Committee to assess and challenge, as
required) the quality of the audit work.
FRC Audit Quality Inspection Report (AQR) – in
June 2020, the FRC published its AQR for KPMG,
which was focused on the key areas requiring
action by KPMG to safeguard and enhance audit
quality. This provided the Committee with an
external perspective on the quality of audits by
KPMG, and the Committee noted the FRC’s
comments that there had been considerable
Provision of non-audit services
Background
The Audit Committee annually reviews the
policy on the provision of non-audit services
and the recruitment of former auditor
employees, and the latest review took place in
March 2021. The policy, which is set out below,
recognises the importance of the external
auditor’s independence and objectivity.
Policy
The external auditor is prohibited from
providing any services other than those
directly associated with the audit or required
by legislation. These are limited to:
Reporting required by a competent
authority or regulator under UK law or
regulation, for example:
– Reporting to a regulator on client assets;
– In relation to entities regulated under the
UK Financial Services and Markets Act
2000 (FSMA), reports under s166 and
s340 of FSMA;
– Reporting to a regulator on regulatory
financial statements;
– Reporting on a Solvency and Financial
Condition Report under EU Solvency II
Directive 2009
Reporting on internal financial controls
focus on audit quality at the top of the firm and
a number of improvements to the audit practice
as a result. However, the report also observed
that further increased consistency of high-
quality audits was required. In response to the
findings, KPMG subsequently updated the
Committee on the investment being made in
audit quality, talent retention, diversity, and the
ongoing monitoring that was in place.
Technology and processes – KPMG employ a
‘hub’ approach in order to perform
standardised testing for each local market. This
approach includes the use of data analytics
techniques, which supplies audit evidence over
significant quantities of data, and this provides
a perspective on audit quality to the Committee.
Independence is an important element of the
external audit. To ensure auditor objectivity and
independence, the Committee reviews potential
threats to independence and the associated
safeguards during the year. The safeguards that
KPMG had in place during the year to maintain
independence included annual confirmation by
KPMG staff of compliance with ethics and
independence policies and procedures. KPMG
also had in place underlying safeguards to
maintain independence by: instilling
professional values; communications;
international accountability; risk management,
and independent reviews. They also ensured
that there was appropriate pre-approval for
non-audit services, which are provided only if
permissible under relevant ethical standards.
The Committee concluded that the external
auditor had maintained its independence
throughout the year.
Non-audit services
KPMG provides other services to Experian.
To ensure auditor objectivity and independence,
we have a policy relating to providing such
services. The policy includes financial limits
above which any proposed non-audit services
must be pre-approved, depending on the
expenditure proposed. The Committee receives
half-yearly reports providing details of
non-audit assignments carried out by the
external auditor, together with the related fees.
Under the policy, non-audit fees paid to KPMG
are capped at 30% of the fees for audit services,
except in exceptional circumstances.
Pre-approval by the Audit Committee or
Audit Committee Chairman is required in
that situation. An analysis of fees paid to the
external auditor for the year ended 31 March
2021 is set out in note 13 to the Group financial
statements.
Reports required by or supplied to
competent authorities/regulators
supervising the audited entity, where the
authority/regulator has either specified the
auditor to provide the service or identified
to the entity that the auditor would be an
appropriate choice for service provider
Audit and other services provided as
auditor of the entity, or as reporting
accountant, where the services are required
by law or regulation
Reviews of interim financial information;
and providing verification of interim profits
Extended audit or assurance work where
the work is integrated with the audit work
and is performed on the same principal
terms and conditions
Services which support the entity in
fulfilling an obligation required by law or
regulation, where the provision of such
services is time critical and the subject
matter of the engagement is price sensitive
Reporting on government grants
Reporting on covenant or loan agreements
which require independent verification
Additional assurance work on material
included within the Annual Report
Services which have been the subject of an
application to a competent authority.
The appointment of the external auditor for
any non-audit work up to US$50,000 must be
approved by the Global Financial Controller.
The appointment of the external auditor for
any non-audit work where the expected fees
are over US$50,000 and up to US$100,000
requires the approval, in advance, of the Group
Chief Financial Officer. Where the expected
fees are over US$100,000, the approval of the
Chairman of the Audit Committee is required
in advance.
Where cumulative annual fees exceed the
30% annual limit, all expenditure must be
approved by the Chairman of the Audit
Committee (via the Global Financial
Controller), up to 35%. Where cumulative
annual fees exceed the 35% annual limit,
all expenditure must be approved by the Audit
Committee. All expenditure is subject to a
tender process, unless express permission is
provided by the Chairman of the Audit
Committee, the Chief Financial Officer or the
Global Financial Controller based on the above
approval limits. Any expenditure below
US$100,000 not subject to a tender will be
notified to the Chairman of the Audit
Committee.
Continued opposite
Experian plc Governance Code principle
Audit, Risk and Internal Control
109
Commercial agreements where Experian
provides services to the auditor must be
approved by the Global Financial Controller
and not exceed the lower of 5% of the local
Experian entity’s total revenue and
US$250,000, and all transactions should
be undertaken on an arm’s length basis.
Transactions in excess of this limit require
approval of the Chairman of the Audit
Committee in advance.
The Committee will receive half-yearly reports
providing details of assignments and related
fees carried out by the external auditor in
addition to their normal work.
worked on the audit of Experian plc or its
subsidiaries.
Following the year-end audit, neither Experian
nor any of its subsidiary companies will
employ any audit partner or audit team
member in a position which could have a
significant influence on the Group’s
accounting policies or the content of its
financial statements until a cooling-off period
has elapsed. The cooling-off period is two
years in respect of an audit partner, and one
year in respect of a director, where they have
The KPMG Engagement Letter further
prohibits Experian from soliciting the
employment of any audit team member for
three months following completion of the
audit, without KPMG consent.
The Committee will receive an update if any
senior audit team members are recruited by
Experian, and an annual update in March
providing numbers of former auditor
employees currently employed by Experian.
Risk management and internal control
The Board is responsible for maintaining and
monitoring sound risk management and
internal control systems, and for determining
the nature and extent of the principal risks
Experian is willing to take to achieve its
strategic objectives. There is an ongoing
process for identifying, evaluating and
managing the principal and emerging risks
we face. This process was in place for the
financial year and up to the date of approval of
this Annual Report. Full details of our risk
management and internal control systems
and processes can be found in the Risk
management section of the Strategic report
on page 73. The Audit Committee considers
emerging risks with management as part of
the standing risk management update it
receives. During the year, as well as
management-identified emerging risks, the
Committee asked management to evaluate
certain risks as potential emerging risks.
The specific processes underlying the elements
of our risk framework are set out below.
Identify
Identify and escalate new, emerging or changing risks, significant
incidents, significant control gaps and risk acceptance
Assess
Assess the potential impact of each strategic, operational and
financial risk on the achievement of our business objectives, and
the Group’s corresponding risk appetite
Produce Board-level and Group-level finance reports, including
financial summaries, results, forecasts and revenue trends,
investor relations analysis and detailed business trading
summaries
Follow formal review and approval procedures for major
transactions, capital expenditure and revenue expenditure
Evaluate compliance with policies and standards that address
risk management, compliance, accounting, treasury
management, fraud, information security and business continuity
Monitor budgetary and performance reviews tied to KPIs and
achievement of objectives
Consider external factors arising from our operating environment
and internal risks arising from the nature of our business, our
controls and processes, and our management decisions
Conduct detailed performance reviews at a regional level
Report to Regional Risk Committees, the Security and Continuity
Steering Committee, the Executive Risk Management Committee,
and the Audit Committee on the status of principal and emerging
risks, the progress of strategic projects and acquisitions, and
escalation of significant accepted risks
Global Internal Audit reports to the Audit Committee on assurance
testing and Confidential Helpline investigation results
Group Compliance reports to the Audit Committee on fraud
management
Apply a risk scoring system, based on our assessment of the
probability of a risk materialising, and its impact if it does
Require executive management confirmations of compliance with
our corporate governance processes and control environment
Respond
Apply active risk remediation strategies, including internal
controls, formal exception processes, insurance and specialised
treasury instruments
Accept or remediate current risk and control environment
Determine corrective action if required
Use formal review and approval procedures for significant
accepted risks
Monitor
Maintain comprehensive risk registers representing the current
risk and control environment, using a software solution to provide
enhanced monitoring
Review of controls and follow-ups by management, second line
functions such as Compliance, Global Internal Audit and third
parties
Use Global Internal Audit to independently assess the adequacy
and effectiveness of the system of internal controls
Report on risk to the Audit Committee, addressing material and
emerging risks, material litigation, information security, business
continuity, and regulatory compliance
Use the Audit Committee to monitor the Group’s risk management
and internal control systems
Review by the Audit Committee of the effectiveness of our systems
of risk management and internal control
Receive an annual report on the controls over relevant risks
Ongoing review of principal risks identified by the Group’s risk
assessment processes
Experian plc Annual Report 2021Governance 110
Audit Committee report
continued
Code principle
Audit, Risk and Internal Control
Through a combination of
ongoing and annual reviews,
the Board is able to review
the effectiveness of the
Group’s risk management
and internal control systems
Risk management and internal control systems review
Risk management is essential in a global,
innovation-driven business such as Experian. It
helps to create long-term shareholder value and
protects our business, people, assets, capital and
reputation. It operates at all levels throughout
the organisation, across regions, business
activities and operational support functions.
Our approach to risk management encourages
clear decisions about which risks we take and
how we manage them, based on an
understanding of their potential strategic,
commercial, financial, compliance, legal and
reputational impact. As risk management and
internal control systems are designed to
manage rather than eliminate the risk of failure
to achieve business objectives, they can provide
reasonable but not absolute assurance against
material financial misstatement or loss.
In line with the Code, the Audit Committee
monitors our risk management and internal
control systems, robustly assesses the principal
risks identified by our risk assessment processes
(including those that would threaten our business
model, future performance, solvency or liquidity),
and monitors actions taken to mitigate them.
For certain joint arrangements, the Board relies
on the systems of internal control operating
within Experian partners’ infrastructure and the
obligations of partners’ boards, relating to the
effectiveness of their own systems. The Code
requires companies to review the effectiveness
of their risk management and internal control
systems, at least annually. The Audit Committee
performs this review under delegated authority
from the Board.
Following this year’s review, the Board
considers that the information it received
enabled it to review the effectiveness of the
Group’s system of internal control in accordance
with the FRC’s ‘Guidance on Risk Management,
Internal Control and Related Financial and
Business Reporting’ and confirm that the system
has no significant failings or weaknesses.
For more on our approach to risk management
see pages 72 to 80.
Independent assessment
Global Internal Audit reports
Global Internal Audit Confidential Helpline
reports
External auditor’s report
Sustainable business independent
assurance report
Review by relevant regulatory bodies (e.g. US
Consumer Financial Protection Bureau)
Evaluation of external auditor
Evaluation of Global Internal Audit
Management assurance
Annual executive certification of compliance
with UK FRC guidance and control adequacy
Risk management reports, including material
litigation
Compliance reports
Information security reports
Impairment, going concern and viability reviews
Annual Report, full-year and half-yearly financial
report review
Management representation letters
Board/Audit Committee approved
Annual Global Internal Audit plan
External auditor’s engagement letter
External auditor’s annual audit plan
Treasury policy
Tax policy
Compliance policy
Global Delegated Authorities Matrix, which
defines internal approval procedures
Additional financial reporting
internal controls
We have detailed policies and procedures in
place to ensure the accuracy and reliability of
our financial reporting and the preparation of
Group financial statements. This includes our
comprehensive Global Accounting Policy and
Standards, which contains the detailed
requirements of International Financial
Reporting Standards (IFRS). The Group’s
Financial Reporting team owns the Global
Accounting Policy and Standards and we have
rolled it out across the Group, obliging all Group
companies to follow its requirements. The main
objectives of the Policy and Standards are to:
provide standards for accounting issues and to
act as a reference document for both Experian
employees and external auditors; allow for
preparation of consistent and well-defined
information for financial reporting
requirements under IFRS; provide a set of
measures to be used for both quantitative and
qualitative assessments of Group performance;
increase the efficiency of the reporting process;
and provide a guide for educating Group
personnel in approved standardised finance
and accounting procedures.
Experian plc Governance Code principle
Remuneration
Report on directors’ remuneration
111
George Rose
Chairman of the Remuneration
Committee
I am pleased to present, on behalf
of the Remuneration Committee, the
Report on directors’ remuneration,
following a challenging year, but one of
resilient performance for the Company.
Members
George Rose (Chairman)
Dr Ruba Borno
Alison Brittain
Caroline Donahue
Luiz Fleury
Jonathan Howell*
Deirdre Mahlan
Mike Rogers
* From 1 May 2021
Quick link
experianplc.com/
about-us/
corporate-governance/
board-committees/
FY21 was undoubtedly an unprecedented
year for our business, our employees, and the
societies in which we operate. The emergence
of the global COVID-19 pandemic, and the
subsequent national lockdowns in all our
major markets, created a drastically different
operating environment than the one that we
had planned for. We had to adapt quickly to
the many unique and unforeseen challenges
that faced our business and our employees.
I would therefore like to start by thanking all
our 17,800 employees whose resilience and
commitment enabled us to deliver another
year of growth. I am proud of how the
Company approached this year. From the very
beginning of the pandemic we were clear that
our priority was to protect our people and our
business. By doing this, we established a
platform from which to emerge stronger from
the pandemic and help all our stakeholders
and national governments along the way.
Protecting our people
Protecting our people, not just their mental
and physical well-being but their jobs too, has
been one of our key priorities throughout the
pandemic.
Driven by the backdrop of COVID-19, we took a
prudent decision to apply a global pay freeze
to all employees, including executive directors,
for FY21 in order to enhance our ability to
preserve the jobs of all our workforce.
It is pleasing to report that our prudence paid
off, and that in FY21:
We did not furlough any of our employees,
or avail of any similar government support
in any of the countries in which we operate.
We did not reduce any employees’ salaries
or working hours
We have maintained our global level of
employment at c.17,800 throughout
COVID-19
For FY22 we will once again be operating our
normal merit review process, for which all
employees will be eligible.
The vast majority of employees continue to
work from home in a safe and efficient way,
supported by a number of 'people first'
policies designed to help employees and their
families to navigate the current environment.
We reviewed and enhanced a number of our
people policies in FY21, to ensure that we
could support our employees as they dealt
with the challenges, both personal and
professional, of the pandemic. We expanded
some of our existing well-being programmes
to include stress management, mindfulness
and meditation as well as broader mental
health support. We also enhanced some of
our leave policies, for example in the UK&I we
doubled our carer’s leave to ten days and
provided enhanced sick pay for employees with
COVID-19, irrespective of their tenure.
Like a lot of society, our employees had to
deal with personal and professional challenges
for the whole of FY21. With both admiration and
sincere gratitude we witnessed the incredible
efforts shown by all our employees as they
supported each other through the pandemic. As
a way of saying thank you for this exceptional
effort, we will be making a special one-off
recognition award to all our employees below
senior management, approximately 17,000
employees, for helping Experian to thrive during
the pandemic. The initial award will be a share
award of US$700 and we will match the award
on a 2:1 basis (i.e. a further US$1,400) for any
employee who retains their initial share award
for a period of three years.
Once again this year I had the opportunity
to meet – albeit necessarily virtually –
with our UK and Ireland Experian People Forum.
These meetings are always an informative
engagement opportunity to discuss a variety
of topics that are close to the hearts of our
employees. I was very pleased to hear very
positive feedback on the actions that had been
taken to help support our employees through the
pandemic. There was a sense that virtual working
gave a greater insight into everyone’s personal
circumstances, which has actually further
‘humanised’ our leaders and enhanced the strong
collaboration aspect of the Experian culture.
Protecting our business and respecting
our investors
Our strategy continues to be focused on
maximising our long-term growth potential.
The emergence of the pandemic in March 2020
came as the previous financial year was closing
out. Despite the uncertainty brought about by
COVID-19 our ambition remained unchanged.
Therefore, we decided to push forward with
a number of planned critical strategic
investments in FY21. Those investments in
areas such as business portfolio and
technology infrastructure are designed to
further fuel the sustainability of the business to
meet our longer-term aspirations. We were
pleased to be in a position to pay, in the normal
way, both our FY20 second interim dividend in
July 2020 and our FY21 first interim dividend in
February 2021. Our share price, which has
remained resilient over FY21, continues to
reflect the positive investor sentiment in how
our Board, management team and employees
have responded to the challenges of delivering
business performance and growth during the
pandemic.
Experian plc Annual Report 2021Governance 112
Report on directors’ remuneration
continued
Code principle
Remuneration
Supporting governments and society
As a Company we believe that we should help
and contribute to the societies in which we
work, and while this social responsibility is
central to many of our annual activities, it was
brought into focus even more in FY21.
We mobilised our business quickly to provide
governments and non-profit organisations with
our tools and resources to help deal with the
crisis. We are proud to say that this enabled
national governments to direct financial
support to the businesses and individuals who
needed it most.
On the subject of government support, I want to
confirm that Experian did not look to secure any
government support, in any of the countries in
which we operate. We did not avail of any
furloughing programmes or any other national
support programmes.
Executive directors
Our Remuneration Policy (Policy) is built on the
principles that (i) executives are only rewarded
for delivering strong financial results and (ii)
executive pay is aligned with stakeholder
experience. True to these principles, the
Committee determined that for FY21:
executive directors did not receive any salary
increases;
no adjustments would be made to
outstanding long-term incentive (LTI) awards.
All outstanding LTI awards will be assessed
against the already disclosed performance
conditions, with no adjustments to account
for the impact of COVID-19; and
2020 LTI performance targets were set to
balance the known impact of the pandemic
at the time of grant with our longer-term
unchanged growth ambitions.
Additionally, in recognition of the prevailing
uncertainty and to acknowledge the difficult
economic circumstances created by COVID-19
on the wider economy, our executive directors
voluntarily waived 25% of their contractual
base salary for six months in FY21. The
Committee supported this decision and
determined it would be appropriate to donate
an amount equal to the value of salary waived
by the executive directors to the Experian
Hardship Funds across the Group. These
Employee Hardship Funds are used to provide
financial support to Experian employees in
cases of extreme difficulty, such as when their
homes were damaged or destroyed by flooding
or wildfires. Most recently, the Experian
Hardship funds have been utilised to provide
our employees in India with additional financial
hardship support, enabling them to access
funds quickly for medical expenses, temporary
housing and any other urgent needs.
Experian’s executive
remuneration policy
Since the 2017 Remuneration Policy (Policy)
vote, we have engaged proactively with our
shareholders. Based on the valuable feedback
received, we have made a series of changes
and additional refinements over the last four
years to further improve our executive
remuneration structure. It was pleasing to see
the strong level of shareholder support we
received, for both our Policy and Remuneration
Report, at the 2020 AGM.
As we disclosed in last year's Report on
Directors' Remuneration (RDR), the Committee
considered it was appropriate to delay setting
and disclosing 2020 LTI plan targets until later
in 2020, when there was more clarity on the
business impact of the global pandemic.
The decision to delay setting 2020 LTI targets
was driven by the Committee’s strong
preference to set meaningful targets that were
stretching but attainable even in the prevailing
uncertain economic environment, rather than
Stakeholder experience in FY21
Employees
Investors
Executives
Experian Group
No furloughing of staff
Global employment maintained at 17,800
Pay freeze but no reductions to employee salary in FY21
No forced annual leave or reduced working hours
Normal bonus entitlement for FY20 and FY21
Enhanced flexible working from home, to better support personal circumstances
97% employees globally working from home in FY21
3.2% global pay increase budget for FY22
US$700 Thank You Share Award with a further 2-for-1 matching opportunity
Dividends of USc32.5 and USc14.5per share paid in July 2020 and February 2021, respectively
Share price stability, 11% increase1 in FY21
No shareholder capital raising
Pay freeze applied for FY21
Executive directors voluntarily waived 25% of their base salaries for six months in FY21
No adjustments to in-flight LTI awards
No financial government support taken in any of our operating regions
Protected strategic investments and executed all planned acquisitions to support future growth
Experian is proud to have been in a position to provide pro bono support to national governments to enable
COVID-19 relief to be directed to those most in need
1 Share price is the 12-month average to 1 April 2021 compared to 12-month average to 1 April 2020.
Experian plc Governance Code principle
Remuneration
113
relying on the Committee’s discretion to
determine how much, if any, of the 2020 LTI
awards would vest. We felt that this was a more
transparent approach and we were pleased to
receive investors' support for taking the
additional time to set LTI targets that would be
more motivational from the outset.
The Committee first discussed a set of
preliminary 2020 LTI targets at an ad-hoc
meeting in September 2020. After further
discussion, the finalised targets were agreed
at the November 2020 meeting, and shortly
afterwards we released a RNS announcement
to confirm the full performance range that
would apply to the 2020 LTI awards.
At that time, we also issued a letter, to our
major shareholders and the proxy advisory
bodies, that provided them with some of the
additional context outlined above. We were
pleased with both the engagement and the
support we received from investors in response
to this letter.
We continue to value the open and constructive
nature of our shareholder engagement over
recent years. It has been encouraging to receive
feedback about the frequency and proactive
spirit in which we engage. For full transparency
we have provided the additional context we
shared with investors in November 2020, and
also some details on the key questions from
shareholder discussions since then.
Q&A
Q: Can you provide some insight on any
additional factors that shaped the
Committee’s thinking in setting FY21
incentive plan targets?
From the beginning of the pandemic, the
Committee’s strong preference was to allow
the Remuneration Policy to apply unadjusted,
and not to apply discretion to any outstanding
LTI awards.
When 2020 LTI plan targets were set the
vesting levels of the outstanding (2018 and
2019) LTI awards were – understandably – not
anticipated to hit the projected pre-COVID-19
levels. While the Committee were not
intending to apply any discretion to those
outstanding awards – in that their formulaic
vesting levels would simply prevail – it was
felt inappropriate not to reflect the known
impact of the global pandemic when setting
targets for the awards granted in 2020.
Therefore, the agreed 2020 LTI targets reflect
the uncertainty and challenges of FY21 but,
importantly, also our unchanged ambitions for
the remainder of the three-year performance
period. The strength of our conviction is
demonstrated by the decision to retain our
existing performance target ranges for three
of the four metrics (Operating Cash Flow,
Return on Capital Employed and Total
Shareholder Return (TSR)) for the 2020 LTI
plan awards.
In order to set a motivational but stretching
target range for the Benchmark Earnings
Per Share (EPS) metric, we blended the
anticipated impact on earnings in FY21
with a return to previous target ranges for
the remaining two years of the three-year
performance period. This resulted in an EPS
performance range of 3% – 7% per year, over
the three-year performance period, which is
lower than our more recent performance
ranges, but is still very stretching over the
three-year period of the awards.
We remain committed to our principle that
executives are only rewarded for delivering
strong financial results and outturns that are
in our shareholders' best interests. We believe
that the 2020 LTI performance range, which
was set on a one-off basis, reflects this
approach.
It is also worth noting that a significant
number of the plan participants are US-based.
Therefore the ability to set credible,
motivational targets plays an important role in
the retention of key talent in the very dynamic
US external market of data information and
technology companies.
Q: Have you made any redundancies as a
result of COVID-19?
No. In line with our normal practice we made
changes to our business portfolio during the
year and continued with organisation and
technology transformation activities planned or
announced in advance of FY21, and the onset of
COVID-19.
Overall we maintained the same total number of
employees for this financial year as the previous
one. As part of the implementation of any
transformational activities, and as is our normal
practice, we sought opportunities to redeploy
employees wherever possible, and where this
wasn’t feasible employees were provided with
additional support, including enhanced
severance terms, adjustment periods
recognising local pandemic-related restrictions
and outplacement resources.
Q: Has Experian considered incorporating
Environmental, Social and Governance
(ESG) metrics into the executive
incentive plans?
In recent months a clear ‘direction of travel’
has emerged, with more investors raising this
particular query. To date, we have felt that we
have always taken our ESG agenda seriously
and with appropriate focus such that there
has not been a perceived necessity to include
an ESG metric in our incentive framework. In
recent years, we have consulted quite
extensively on our performance metrics and
the feedback from those engagements has
shaped our current framework. As with any
metric to be considered for inclusion in our
incentive framework, we look for a strong
strategic alignment and something that
resonates with the Company's purpose.
We will begin to discuss this topic in more
depth in the coming year and consider how
the important aspects of ESG should shape
our remuneration arrangements.
Q: What is Experian’s plan for aligning
UK-based executive director pension
provisions with the majority of the UK
workforce?
In line with our 2020 Remuneration Policy,
any new UK-based executive director
appointments would receive a cash pension
allowance or pension contribution that is
aligned with the majority of the wider UK
employee workforce (currently an employer
contribution of 10% of base salary).
From 1 January 2023, the cash pension
allowance of our incumbent UK-based
executive directors (currently 20% of base
salary) will be reduced to a cash pension
allowance of 10% of base salary to align to the
employer pension contribution of the majority
of the wider UK employee workforce.
Experian plc Annual Report 2021Governance 114
Report on directors’ remuneration
continued
FY21 performance
FY21 at a glance
Annual performance
7% revenue growth*
3% Benchmark EBIT growth*
Stable 17,800 headcount1
Three-year performance
22% cumulative PBT per share growth
61% share price growth2
US$4.2bn cumulative benchmark
operating cash flow over three years
7% average increase per annum in
adjusted Benchmark EPS
*At constant currency rates
1 Headcount as at 31 March 2021 (31 March 2020: 17,800).
2 Three-month average to 31 March 2021 of £25.58
compared to the three-month average to 31 March 2018
of £15.90.
I am pleased to report that FY21 was a year of
resilient and strong performance for Experian.
The emergence of COVID-19 at the beginning of
the financial year had a significant impact on
our global operating environment, as national
lockdowns were introduced in all our major
markets. Despite the unprecedented challenges
of FY21, the Group delivered growth across all
our key financial metrics. Continuing to achieve
growth in such economic circumstances
reflects the robustness of our business strategy
and importantly the ability to execute that
strategy.
In FY21, the Group achieved 7% total revenue
growth, as well as strong levels of growth in
Benchmark PBT per share 4% and Benchmark
EPS 4%. Furthermore, these results are
supported by a strong operating cash flow. It
was undoubtedly a very different year for many
businesses, and we took very conscious steps
to ensure that we protected our people and our
key strategic investments. With that backdrop,
still being able to deliver positive Benchmark
EBIT growth of 3% for FY21 is a reflection of
both the resilience of our business and the
commitment of our people. Our share price
demonstrated a similar degree of resilience, as
it remained stable over FY21.
Whilst the delivery of financial results is
undoubtedly very important, the Committee
actively undertakes a holistic approach to the
assessment of the Company’s performance by
reviewing a broad range of metrics. These
include – but not exclusively – employee
engagement, diversity and inclusion, impact on
the environment and consumer satisfaction. For
FY21, there was even greater emphasis on the
stakeholder experience of our employees and
our investors during this pandemic year.
Code principle
Remuneration
The Committee’s broader review of
performance is always important to ensure that
the financial outturns are a fair and true
reflection of the Group’s overall performance
over the period. Having considered a number of
additional non-financial measures and the
stakeholder experience at its May 2021
meeting, the Committee was satisfied that the
Company’s financial performance was aligned
with its holistic assessment of performance
over the period.
How is our performance reflected in executive
pay?
Salary: the Committee applied a pay freeze to
executive director salaries for FY21. However, in
recognition of the prevailing uncertainty and to
acknowledge the difficult economic
circumstances created by COVID-19 in the
wider economy, each of the executive directors
voluntarily waived 25% of their salary for six
months in FY21. The Company determined it
would be appropriate to donate a value equal to
the salary waived by the executive directors to
the Experian Employee Hardship Funds.
Annual Bonus: the Committee always seeks to
set stretching but attainable annual bonus
performance targets that reflect our strong
pay-for-performance philosophy. Incentivising
the delivery of both EBIT and Revenue growth
remained core to our ambitions, however being
able to maintain the 'attainable', and hence
motivational, aspect of the targets was more
challenging given the level of prevailing
uncertainty. Admittedly, those ambitions were
rightly tempered by the need to protect jobs and
maintain strategic investments, both of which
were critical objectives for the Board as part of
navigating this pandemic year.
In FY21 both North America and Latin America
once again delivered outstanding, high
single-digit organic revenue growth, which built
upon the resilient revenue performance in our
other regions to deliver Group revenue
performance growth, for annual bonus
purposes of 5.8% (further information on page
120). This strong revenue performance,
combined with returns on strategic investments
and prudent financial management of
expenses, ensured that this top-line growth
flowed through to the Benchmark EBIT outturn
for the year which, for annual bonus purposes,
grew by 2.7%.
Following a review of the Group’s financial
performance and consideration of all business
priorities, including those non-financial in
nature, and having reflected on the
assumptions underpinning the performance
targets, the executive directors proposed an
adjustment to the performance range. This
resulted in a degree of downward discretion
against the formulaic outturn.
As a result of the combined revenue
performance and Benchmark EBIT growth the
overall bonus for FY21 will be paid out at 91.3%
of maximum for each of the executive directors.
Actual
91.3%
Threshold
25%
Target
50%
Maximum
100%
The Committee was satisfied that the revised
level of bonus payout aligned fairly and
accurately to the year’s achievements.
Therefore, no further discretion (upward or
downward) was deemed necessary. Full details
of the annual bonus outcomes are set out in the
Annual report on directors’ remuneration.
Long-term Incentives: The Performance Share
Plan (PSP) and Co-investment Plan (CIP)
awards granted in 2018 will vest on 7 June
2021. The resilient financial performance in
FY21 follows the strong performance of both
FY19 and FY20. Over the last three years,
Experian has achieved:
7% average increase per annum in adjusted
Benchmark EPS
US$4.2bn cumulative Benchmark operating
cash flow over three years
22% cumulative Benchmark PBT growth
61% share price growth over three years
These strong growth figures underpin the
Experian 3-year TSR relative to FTSE 100 Index
Experian
FTSE 100 Index
£200
£180
£160
£140
£120
£100
£80
March
2018
September
2018
March
2019
September
2019
March
2020
September
2020
March
2021
Experian plc Governance Code principle
Remuneration
115
overall vesting levels of the PSP and of the CIP,
which were 80% and 87% respectively. Whilst
the impact of the pandemic in the final year of
the performance period undoubtedly affected
the potential performance outcomes that may
have otherwise been achieved in FY21, no
adjustments were made in assessing the
performance outturns for the 2018 LTI plans.
As with the annual bonus plan, the Committee
considered the LTI vesting levels in the context
of the current economic environment, and
determined the formulaic vesting levels to be
an appropriate reflection of the strong business
growth achieved over the three-year
performance period.
In line with our remuneration principles, a
substantial portion of the CEO’s single figure
value is determined by long-term performance.
For FY21 62% of the CEO’s single figure value is
driven by the vesting levels of the LTI plans.
Importantly, despite the prevailing economic
uncertainty 18% of the total FY21 single figure
value for the executive directors is directly
attributable to share price growth and
dividends. All shareholders, including
shareholder employees, will also have
benefitted from this same share price growth
and dividend return over the same three-year
period.
Pay in the wider workforce
Employee engagement
As I mentioned in my 2020 statement, we have
always felt well informed about the pay and
related policy arrangements for the broader
employee population at Experian. As the
Committee had existing processes in place to
gain an extensive understanding of employee
pay, prior to the introduction of the 2018 UK
Corporate Governance Code (the Code)
requirements, no single approach
recommended in the Code was considered
appropriate for our business. We have therefore
adopted a combination of the suggested
methods to comply with the Code’s
requirements.
Each year, as part of the Committee’s standing
agenda, we are provided with an extensive
paper setting out details of all-employee pay
and workforce policies across Experian. The
discussions on this topic have enabled us to
proactively incorporate wider employee pay as
important context for framing executive pay
considerations. This year, at the Committee’s
request, we reviewed an additional paper
providing greater insights into the remuneration
and benefit arrangements, including gender
pay positioning, in our major regions.
The Committee were also provided with an
update on a number of the policy
enhancements and additional programmes
introduced to support employees' well-being
over the course of the COVID-19 pandemic.
Understandably some of these policies varied
by jurisdiction, however – as an example –
some of the policies introduced to support our
UK employees during the pandemic include:
UK COVID-19 steps
99% UK employees working from home
US$700 Thank You Share Award with a
further 2-for-1 matching opportunity
Normal bonus entitlement for FY20 and
FY21
Extended carer's leave (doubled from five
days to ten days)
Full sick pay for all employees with
COVID-19, regardless of tenure
Flu vaccination vouchers available to all
employees
Enhanced access to Bupa medical care
from home
Virtual well-being and mindfulness
sessions
As I mentioned previously, I had the opportunity
to further supplement the Committee’s
understanding of the pay and related policies
for the broader workforce by attending our
virtual UK and Ireland Experian People Forum. I
was very pleased that the virtual nature of the
Forum this year didn’t hinder the level of
engagement from employees and I found the
two-way nature of the discussions to be very
insightful.
In the course of my discussions with the Forum
it was clear that employees appreciated the
open and honest communications received
from senior leaders over the year. The feedback
was that this transparency provided further
comfort to employees that Experian would
continue to protect both their jobs and their
well-being, over the course of the pandemic. It
was equally clear that employees continue to
value our current reward offering, and that the
additional benefits, such as critical illness cover
and access to personalised financial well-being
advice, which were introduced on the back of
the UK Total Rewards Optimisation project were
very well received.
People and culture
Creating an agile, innovative, high-performance
culture has been, and continues to be, a huge
focus for Experian as we look to maintain and
further develop an environment that enables
our employees to thrive and be successful.
The Experian Way, our unique and consistent
way of working globally, informs how our
people act and behave, thus shaping our
culture. Experian’s culture is a key enabler of
our success and this was clear to see in FY21.
The resilient performance delivered this year is
a true testament to the strong collaborative
culture at Experian, and the vibrancy of The
Experian Way.
The vibrancy plays out in many ways, one of
which is our focus on innovation, which fuels
the exploration of new opportunities and rapidly
pivots our business to meet our clients' evolving
needs. The collegiate nature of The Experian
Way generated via our connected global
network enabled us to deliver better results and
leverage solutions across the Group – even
though globally 97% of our employees
understandably worked from home for the full
financial year.
The Committee takes a keen interest in the
health of the Company’s culture and is regularly
updated on the KPIs used to track and monitor
Experian’s culture, including its People Survey
results, Employee Engagement Score and our
Net Promoter Score.
For FY21, driven in part by the uncertainty of
the global pandemic we replaced the annual
People Survey with monthly, and then quarterly,
pulse surveys. The ability to quickly identify and
respond to some of the new and emerging
challenges facing our employees proved
invaluable in the development and provision of
appropriate support for all our workforce.
We appreciate that measuring culture is
difficult but we have disclosed on the following
page some quantitative culture-related data
that we use to inform our own assessment on
our culture, which can also help inform our
investors and other stakeholders.
Experian plc Annual Report 2021Governance Code principle
Remuneration
Experian diversity
2019
Senior leaders - women 32% 30% 31%
2021
2020
Total workforce - women 44% 44% 44%
We strongly believe that diversity throughout
the Group is a driver of business success and
are working hard to reflect in our workforce
the diversity of our customers, clients and the
societies in which we operate. In the coming
year we will be undertaking our first global
employee census. This census is the first,
very important, step to enable us to better
understand and develop our diversity. One of
our priorities is to nurture our talent pipeline
and while we’re making strides in the right
direction, we know we need to do more to
increase the level of representation of women
at senior levels. We are working very
proactively to address this, including setting a
target of women representing 40% of our
senior leaders by 2024. For detailed
information on diversity at Experian please
see page 49.
116
Report on directors’ remuneration
continued
Experian attrition
2021
2020
2019
Voluntary turnover
10.1% 11.6% 12.3%
Involuntary turnover 6.3%
7.2%
8.5%
Total turnover
16.4% 18.8% 20.8%
Partly as a result of our strong, collaborative
working culture, which came to the fore in
this pandemic year, employee turnover was
comparatively low across the regions in
which we operate. Our 2021 involuntary
turnover was at its lowest level in recent
years reflecting our focus on protecting jobs
throughout the pandemic. As disclosed above,
we have not made any redundancies as a
result of COVID-19. The involuntary turnover
for 2021 is driven by a combination of an
employee's performance or cultural fit not
aligning with Experian’s expectations
together with a small proportion of agreed
transformational activities being actioned
later than originally planned due to the
emergence of the global pandemic.
Looking forward
As we begin to emerge from an unprecedented
year, we do so with a lot of positive momentum.
Whilst the impact of the global pandemic is not
yet behind us, we have a greater degree of
certainty in the economic outlook compared
with this time last year. The resilience, shown
by both our business and our employees in
FY21, stands us in great stead for future years.
Our business strategy and our ambition to
continue to deliver future growth remains
unchanged.
At the onset of the pandemic we made the
decision to stay the course and did not make
any changes to our Remuneration Policy or the
metrics we use to assess performance. As I
mentioned in last year's Report on directors’
remuneration, we believed then and we
continue to believe now that this Policy is the
best fit for our business and is a key contributor
to the achievement of our strong financial
results.
In FY21, despite 97% of our global workforce
working remotely, our employees maintained
their productivity, creativity and collaboration to
deliver a strong resilient financial performance.
It is encouraging to hear positive employee
feedback on the steps taken to support our
workforce through the pandemic. I look forward
to seeing how the experiences and learnings
from this year will enable us to emerge strongly
and take greater advantage of the return to a
more normal operating environment.
Experian employee composition
headcount by employee type
Full-time
Part-time
Temporary employees 4%
Contractors
0%
2021
2020
2019
93%
94%
93%
3%
2%
4%
0%
3%
4%
0%
Calculations based on the total number of permanent
employees, fixed-term employees, contingent workers
and independent contractors in FY21.
The vast majority of our workforce is
employed on a full-time basis by the
Company, which fuels and amplifies our
collaborative culture that employees continue
to give very positive feedback on. Our
employees receive a comprehensive benefits
package, tailored to the region in which the
individual is employed. We augment our
permanent employees with a small number
of temporary employees to enable us to
respond quickly to specific client needs or
broader business requirements.
As I have said previously, we will continue to
listen to and act on feedback from our
shareholders, including how the important
aspects of ESG should shape the metrics
included in our remuneration approach. The
inclusion of any metrics in our incentive
framework is driven by their alignment to our
strategic business objectives and our purpose
of creating a better tomorrow for our
customers, our clients, our employees and our
shareholders. As always, we will engage with
and seek feedback from our shareholders and
the proxy advisory bodies as we consider any
potential changes.
In closing, I hope that I have provided some
helpful insight and broader context on
Experian's FY21 performance, that enables
shareholders to support our Annual report on
directors’ remuneration at the 2021 AGM.
Experian plc Governance Code principle
Remuneration
Annual report on directors’ remuneration
117
Our executive remuneration at a glance
Performance snapshot
7%
3%
USc103.1
15%
83%
Revenue performance*
Benchmark EBIT growth*
Benchmark EPS
Return on capital employed
Employee well-being**
Performance measure
Benchmark EBIT growth*
Revenue performance growth
Three-year Benchmark PBT per share growth*
Three-year cumulative Benchmark operating cash flow*
Three-year TSR relative to FTSE 100 Index
Incentive plan
Outturn
Achievement (% of max)
Annual bonus
Annual bonus
CIP/PSP
CIP
PSP
2.7%1
5.8%1
7.4%
US$4.2bn
65%
1 For annual bonus purposes, see further information on page 120.
* At constant exchange rates.
** Positive employee response to a global people survey question on the level of support provided by Experian during the pandemic.
As a result of the performance shown above, the 2018 PSP vested at 80%, and the 2018 CIP vested at 87%.
90%
97%
73%
100%
100%
Executive director single figure of pay
Incentive awards timelines
’000
0
2,000
4,000
6,000
8,000
10,000
Grant
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Brian Cassin £7.6m
Lloyd Pitchford £4.7m
Kerry Williams US$8.0m
Fixed elements of pay:
Variable elements of pay:
Base salary
Annual bonus
Pension and benefits
Share-based incentives: value at grant
Share-based incentives: value attributable to share
price growth and dividend equivalent payments
Annual bonus
CIP
PSP
Performance period
Holding period
Share ownership
Guideline
Additional holding
Brian Cassin
Actual holding 13.5 x salary
Lloyd Pitchford
Actual holding 11.6 x salary
Kerry Williams
Actual holding 4.9 x salary
3
3
10.5
10.5
2
2
9.6
9.6
2
2
2.9
2.9
As at 31 March 2021 and calculated as outlined on page 127.
Executive director remuneration arrangements for FY21
Our executive pay framework
No salary increases awarded to executive directors for FY21.
Pension contributions for new UK executive director appointments
aligned with workforce immediately and incumbent executive
directors will be aligned by the end of 2022.
Annual bonus based on Benchmark EBIT (80%) and revenue
performance (20%). The opportunity is 200% of base salary.
Half of any payout must be deferred into the CIP for three years.
CIP awards will be based on cumulative Benchmark operating
cash flow (50%) and adjusted Benchmark EPS (50%). The
maximum award remains a 2:1 match.
PSP awards will be based on TSR (25%), ROCE (25%) and adjusted
Benchmark EPS (50%) performance. The opportunity of 200% of
base salary is unchanged.
CIP and PSP awards will be subject to an additional two-year
holding period.
All incentive awards are subject to malus and clawback provisions.
Existing in-employment shareholding guidelines will apply for two
years post-employment.
Annual
bonus
80%
Benchmark
EBIT
20%
Revenue
CIP
PSP
50%
Adjusted
Benchmark
EPS
50%
Adjusted
Benchmark
EPS
50%
Cumulative
Benchmark
operating
cash flow
25%
ROCE
25%
TSR
Revenue growth is a
key metric for us and
will provide a quality
of earnings balance
to the important
profit focus of
Benchmark EBIT.
The CIP is designed
to incentivise cash
discipline while the
PSP is designed
to incentivise
shareholder returns.
However, growth
is the single most
important aspect
of our business
strategy and
therefore adjusted
Benchmark EPS runs
across both plans.
Experian plc Annual Report 2021Governance
118
Annual report on directors’ remuneration
continued
Code principle
Remuneration
This Annual report on directors’ remuneration will be put to shareholders for an advisory vote at the AGM on 21 July 2021. The Remuneration Committee
has prepared it on behalf of the Board in line with the UK Companies Act 2006, Schedule 8 to the UK Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 (as amended) and the Listing Rules of the UK Financial Conduct Authority. All of the sections which have been
audited by the Company’s external auditor, KPMG, have been noted.
What did we pay our executive directors in the year? (audited)
The table below shows the single total figure of remuneration for the executive directors, for the years ended 31 March 2021 and 31 March 2020. Further
explanatory information is set out below the table.
Fixed pay
Gross salary1,2
Salary waived 1,2
Post-waiver salary
Post-waiver salary
Benefits
Pension
Total fixed pay
Performance-related pay
Annual bonus3
Share-based incentives4
Value delivered through performance5
Value delivered through share price growth
and dividends6
Total variable pay
Total single figure of remuneration
Brian Cassin
2021
£’000
973
(122)
851
851
24
194
1,069
1,776
3,351
1,364
6,491
7,560
2020
£’000
968
–
968
968
24
194
1,186
1,549
4,545
3,556
9,650
10,836
Lloyd Pitchford
Kerry Williams
2021
£’000
600
(75)
525
525
23
120
668
1,096
2,067
841
4,004
4,672
2020
£’000
2021
US$’000
2020
US$’000
597
–
597
597
23
119
739
956
2,803
2,192
5,951
6,690
1,028
(128)
900
900
42
10
952
1,872
3,638
1,467
6,977
7,929
1,026
–
1,026
1,026
41
11
1,078
1,632
4,709
3,691
10,032
11,110
1
In FY21 our executive directors voluntarily waived 25% of their contractual base salary for six months. Gross salary is the base salary the executives would have received if they had not waived entitlement to a
portion of their salary in FY21. The amounts of salary waived by Brian Cassin, Lloyd Pitchford and Kerry Williams in FY21 were £121,562, £75,000, and US$128,125 respectively.
2 For Kerry Williams, the salary also reflects the timing of US payroll payments.
3 The FY21 annual bonus opportunity is calculated as a percentage of the executive director’s contractual annual base salary. Brian Cassin, Lloyd Pitchford and Kerry Williams’ FY21 annual bonus entitlements were
calculated on their contractual base salary amounts for the year of £972,500, £600,000 and US$1,025,000 respectively.
4 None of the executive directors exercised share options in the years ended 31 March 2021 or 31 March 2020.
5 Value delivered through performance is calculated as the number of vested performance shares multiplied by the share price on the date of grant.
6 For FY21, the value delivered through share price growth and dividends is calculated as (i) the difference between the average share price in the last three months of the financial year and the share price on the
date of grant multiplied by the number of vested performance shares, plus (ii) dividend equivalent payments for the number of vested performance shares. For 2020, this is calculated based on (i) the difference
between the share price on date of vest and the share price on the date of grant multiplied by the number of vested performance shares, plus (ii) dividend equivalent payments for the number of vested
performance shares.
How has the single figure been calculated? (audited)
Salary
Salary increases typically take effect from 1 June. However due to the economic uncertainty with the emergence of the global pandemic, the Committee
determined it would be prudent to apply a pay freeze for executive directors in FY21. That same prudence meant that a pay freeze was applied to all
employees across the Group and the financial benefit of that prudence enabled us to protect our employees and provide important support to them
during this challenging year.
In FY21, it is important to note that we did not apply any salary reductions to any of our employees. We did not furlough any employees, nor did we
reduce anyone's working hours, or force any taking of annual leave.
In recognition of the prevailing economic uncertainty and to acknowledge the difficult operating circumstances created by COVID-19, our executive
directors voluntarily waived 25% of their contractual base salary for six months in FY21. The single figure represents the salary we paid to executive
directors during the year, and as a result of the voluntary salary waivers their FY21 salary levels were lower than for FY20, as outlined below.
Brian Cassin
Lloyd Pitchford
Kerry Williams
1 June 2020
‘000
£973
£600
US$1,028
1 July – 31 December
2020 salary waiver
‘000
£122
£75
US$128
FY21
post-waiver salary
‘000
£851
£525
US$900
1 June 2019
‘000
£973
£600
US$1,025
%
increase
0%
0%
0%
Experian plc Governance Code principle
Remuneration
119
The value of salary voluntarily waived by Brian Cassin, Lloyd Pitchford and Kerry Williams was £121,562, £75,000, and US$128,125 respectively. It was
decided that an amount equivalent to the value of salary waived by the executive directors should be donated to the Experian Employee Hardship Funds.
These Funds are registered charitable organisations that support Experian employees globally by providing, for example, financial assistance to those
employees whose homes were damaged or destroyed by flooding or wildfires.
Benefits and pension
Taxable benefits include life insurance, private healthcare and a company car, or car allowance.
Brian Cassin and Lloyd Pitchford are eligible to participate in a defined contribution pension plan but elected not to do so during the year ended 31 March
2021. In 2021, Brian Cassin received a cash supplement of £194,500 (2020: £193,667), and Lloyd Pitchford received a cash supplement of £120,000
(2020: £119,500), in lieu of their pension contributions.
Kerry Williams participates in a defined contribution plan (401k). The company contribution to this during the year was US$9,644 (2020: US$11,192).
No executive director has a prospective right to a defined benefit pension.
Annual bonus
Overview
All Experian employees participate in an annual bonus plan. We have one annual bonus plan in operation across Experian and the majority of our
workforce participate in this plan. The remainder of employees participate in a sales commission plan. How the annual bonus plan works varies slightly
depending on region and grade. For the vast majority of employees annual bonus awards are based on the performance of their particular business line
or region.
Executive directors are required to defer half of any bonus earned for three years through the CIP, although they may choose to defer more. This year, as
in previous years, all three executive directors chose to voluntarily defer their full bonus payments into the CIP.
Our annual bonus plan is based upon two performance metrics, which are Benchmark EBIT growth (80% weighting) and revenue performance (20%
weighting). Benchmark EBIT is an important earnings metric and focuses on items directly within management’s control. To balance the important profit
focus of Benchmark EBIT, revenue performance growth was added to the bonus plan in FY20 to provide an important quality of earnings element.
How do we set the bonus targets?
Performance-related pay is a key component of our reward structure for all employees and, as such, setting stretching targets is a critical focus area for
the Committee. Every year we undertake a rigorous exercise to ensure that our targets are sufficiently stretching, taking into consideration the external
marketplace and our own performance aspirations.
The Committee is able to take a holistic approach to target setting as all our non-executive directors sit on the Remuneration Committee, as well as on
all of our other principal Board Committees. This ensures Committee members are fully apprised of the wider business context and the Group’s
business prospects over the coming years.
As with many FTSE companies, our usual operating rhythm was significantly impacted by the onset of the global COVID-19 pandemic. When the
Remuneration Committee considered the potential annual bonus targets for FY21, the coronavirus outbreak was in its early stages but dominating the
landscape. It was incredibly difficult to predict the extent or duration of the pandemic and therefore the setting of the annual bonus targets was done in
the hope that clarity on the impact of the pandemic on the global economy would quickly emerge.
However, the scale of the impact of COVID-19 was not quickly apparent so the annual bonus targets were set with a backdrop of significant uncertainty.
The Committee stuck to its principle of setting stretching but attainable performance targets that reflect our strong pay-for-performance philosophy. The
challenge was to preserve the required motivational aspect of the targets in an unpredictable economic environment. It appeared to be very unlikely that
we could – with credibility – set targets that took no account of the economic conditions and also give us the ability to deliver on the critical objectives of
protecting jobs, supporting employees and maintaining strategic investments during the pandemic.
The outlook was very uncertain as national lockdowns continued and vaccine development was in its infancy, but we made no changes to the annual
bonus performance metrics in order to maintain our strategic focus on both revenue performance and EBIT growth. The targets reflected our philosophy
of not rewarding negative growth – even during a global pandemic – and continuing to incentivise positive growth.
Experian plc Annual Report 2021Governance 120
Annual report on directors’ remuneration
continued
Code principle
Remuneration
Outlined below are some of the additional factors the Committee considered in setting specific FY21 annual bonus targets:
Revenue performance (20%):
As a growth company, revenue is a key indicator of business vitality and was added to our annual bonus plan in FY20. This additional metric added a
quality of earnings aspect to the important focus of EBIT growth. The culture of Experian has a strong performance-driven ethic and even in a
contracting market we continued to focus on sustaining top-line growth, which was reflected in the performance target range for FY21. A maximum
payout on the revenue element of the bonus would be earned for 6% revenue performance and target was set at 3% revenue performance growth.
Benchmark EBIT (80%)
The key FY21 priorities were preserving employment, supporting employees and protecting investment in key strategic and transformation areas that
would enable us to emerge stronger from the pandemic and deliver continued future growth. We took a number of actions in FY21 to protect the
business and support our employees, clients and other stakeholders through the pandemic. These actions included discretionary spend reductions,
hiring and merit freeze and reprioritisation of capital expenditure and inorganic investments.
The Committee fully supported the decision to prioritise employees and maintain strategic investment in FY21. The Committee recognised this would
inevitably restrict our ability to fully optimise EBIT and this was reflected in the agreed targets. Target was set at maintaining flat full-year EBIT, over the
course of the pandemic, increasing to maximum payout for 3% EBIT growth over the year. Given our commitment to growth, and our stance that no
bonus should be paid for negative growth, the Committee agreed there was no threshold for FY21 EBIT.
Annual bonus outcome
Revenue performance is calculated as the Group total revenue growth after the removal of intra-Group sales, and Benchmark EBIT is based on ongoing
activities. Performance is measured on a constant currency basis to strip out the effects of exchange rate fluctuations, which are outside of
management’s control. The Committee also exclude the impact of any material acquisitions or disposals made in the year, to ensure both metrics are
measured consistently, which is in line with our approach to long-term incentive plan measures. Whilst the headline numbers of revenue performance
and Benchmark EBIT growth for FY21 were 7% and 3% respectively, the level of qualifying growth included for the purpose of calculating the annual
bonus outturns was 5.8% and 2.7%, as shown in the table below.
The table below shows our growth in Benchmark EBIT and revenue performance for bonus purposes relative to the FY21 agreed targets.
Metric
Benchmark EBIT growth
Revenue performance growth
Total annual bonus achievement as % target
% growth
required for
threshold
payout
0%
0%
% growth
required for
target
payout
1.5%
3%
% growth
required for
maximum
payout
3%
6%
Weighting
80%
20%
FY21 actual
growth
2.7%
5.8%
Annual bonus
achievement
144%
39%
183%
Before approving the annual bonus outcomes, the Committee discussed whether or not the proposed payout was appropriate in the context of both the
current external environment and the Group’s wider business performance during the year. The original performance range for Benchmark EBIT growth
was 0% – 3% between target and maximum payout. This performance range was set to be stretching at a time of great uncertainty regarding the impact
of the global COVID-19 pandemic recognising that, given the challenging environment for target setting, it may be appropriate to apply a degree of
discretion to better reflect a holistic view of performance over the year. As part of that holistic review of performance following the end of the year, it was
agreed that the 0% – 3% performance parameters for Benchmark EBIT growth was appropriate for the challenging FY21 operating environment.
However, reflecting on the assumptions underlying the setting of the performance target range in the context of actual performance in the financial year,
it was agreed that it would be more appropriate to assess the outcome of this element against a 0% – 3% range from threshold to maximum (as shown
in the table above), rather than from target to maximum. This meant that Benchmark EBIT growth of 0% would result in 0% payout under this element,
with growth of 1.5% required to earn a target payout (50% of maximum). This discretionary adjustment to the effective performance range resulted in a
reduction to the FY21 annual bonus outcome.
As set out earlier in the Report, the Group’s performance in the year was extremely resilient in the context of the challenging external economic
environment. The Committee agreed that the Company’s financial performance was aligned with their holistic assessment of performance over the
period, which included non-financial factors such as our Net Promoter Score, employee experience, employee engagement results, direct employee
feedback to the Committee Chairman at the People Forum, and the broader shareholder experience over the financial year.
The Committee was also satisfied that it did not need to exercise any further discretion, and that the reduced level of bonus payout was appropriate for
the performance delivered. The resulting annual bonus outcomes for each executive director (up to a maximum of 200% of contractual annual salary),
for the year ended 31 March 2021 are set out in the table below.
Brian Cassin
Lloyd Pitchford
Kerry Williams
FY21
Bonus payout
‘000
£1,776
£1,096
US$1,872
Bonus payout
% salary
183%
183%
183%
% bonus
deferred
under the CIP
100%
100%
100%
While the executive directors waived an entitlement to 25% of their contractual salaries for six months in FY21, their annual bonus entitlement was
calculated – as is the case with all employees – based on their contractual annual salary entitlements, which are £972,500, £600,000 and US$1,025,000
respectively for Brian Cassin, Lloyd Pitchford and Kerry Williams. The bonus payout as a percentage of salary amounts above are based on these
contractual salary entitlements, not the post-waiver salary amount the individual received in the year.
Experian plc Governance Code principle
Remuneration
121
Each of the executive directors has elected to defer their full bonus into Experian shares under the CIP for a three-year period. Deferred bonus shares
are not subject to any further conditions but may be matched, subject to the conditions set out in the CIP awards section below.
Share-based incentives
The share-based incentive amount included in the single total figure of remuneration is the combined value of the CIP and PSP awards vesting in respect
of the relevant financial year. For FY21 these relate to the awards granted on 7 June 2018 and for FY20 they relate to the awards granted on 7 June
2017. Vesting in 2021 for both the CIP and PSP awards is determined based on performance over the three years ended 31 March 2021 as well as
continued service.
The Committee has not exercised any discretion, or made any adjustments, in determining the vesting outcomes for the 2018 LTI awards. The 2018 LTI
targets were set in May 2018, when our growth ambitions were to achieve sustainable high single-digit growth. Our strong performance in the first two
years of the performance period, combined with our resilient financial performance in FY21, where we continued to grow despite the challenges
presented by the global pandemic, resulted in the formulaic vesting results outlined in the table below. The Committee reflected not just on the financial
performance delivered, but also on the experience of our investors and employees over the three-year performance period, and considered the
formulaic results to be a fair and balanced outturn and, as such, did not make any adjustments to the vesting results.
The tables below show the performance achieved against the targets for the CIP and PSP awards granted in June 2018:
CIP awards
Performance measure
Benchmark PBT per share (annual growth)
Cumulative Benchmark operating cash
flow3
Total
PSP awards
Performance measure
Benchmark PBT per share (annual growth)
TSR of Experian vs TSR of FTSE 100 Index
Total
1 Straight-line vesting between the points shown.
No match
Weighting
50%
Below 5%
50% Below US$3.7bn
Vesting1
1:2 match
5%
US$3.7bn
1:1 match
6%
US$3.8bn
2:1 match
9%
US$4.1bn
Actual
7.4%
US$4.2bn
Vesting1
Weighting
75%
25%
0%
Below 5%
Below Index
25%
5%
Actual
7.4%
Equal to Index 8.3% above Index 25% above Index 65% above Index
100%
9%
50%
6%
Percentage
vesting2
73%
100%
87%
Percentage
vesting4
73%
100%
80%
2 The maximum opportunity, which requires 100% vesting, results in a two-for-one match on the bonus deferred.
3
In line with the approach taken in previous years, the cumulative Benchmark operating cash flow targets shown above have been adjusted compared to those originally set to take into account the impact of
acquisitions and disposals made over the performance period. The actual cumulative Benchmark operating cash flow over the performance period, of US$4.2bn, is determined on a constant currency basis. This is
in line with our approach for all performance metrics, to ensure that awards are measured on a consistent basis.
4 The maximum opportunity was the original award with a face value of 200% of salary. Vesting of these awards was also subject to the Committee agreeing that the return on capital employed (ROCE) performance
over the period was satisfactory. FY21 ROCE was 15%, and so the Committee was comfortable that the payout determined by applying the performance criteria was appropriate in the context of this level of
performance.
No discretion was applied in determining the share-based payments that vested in FY21.
These awards had not vested at the date this report was finalised, and so the reported value of the awards has been based on the average share price in
the last three months of the financial year, which was £25.58. The value of the awards included in the single total figure of remuneration is as follows:
Brian Cassin
Lloyd Pitchford
Kerry Williams
CIP
Shares
awarded
111,130
68,488
87,480
Shares
vesting
96,294
59,344
75,801
PSP
Shares
awarded
100,699
62,173
79,354
Shares
vesting
80,534
49,722
63,463
Value of
shares
vesting
‘000
£4,523
£2,790
US$4,911
Value of
dividend
equivalent
payments
‘000
£192
£118
US$194
Total value
of shares
vesting and
dividend
payments
‘000
£4,715
£2,908
US$5,105
The value of Kerry Williams’ shares has been converted into US dollars at a rate of £1:US$1.379, which is the average rate during the last three months
of FY21.
Dividend equivalents of 139.25 US cents per share will be paid on vested shares. These represent the value of the dividends that would have been paid to
the owner of one share between the date of grant and the date of vesting.
Experian plc Annual Report 2021Governance 122
Annual report on directors’ remuneration
continued
Code principle
Remuneration
The chart below shows the make-up of the CEO’s FY21 single figure value, including £4.7m relating to the LTI. Of the £4.7m LTI value disclosed for the
CEO, 71% is the value at grant, 4% is the value of dividend equivalent payments and 25% is a result of share price growth between the grant date and the
average price over the last three months of the financial year – which grew by over 35%. The same proportions are true for the other executive directors.
Breakdown of FY21 CEO Single Figure %
Experian 3-year TSR relative to FTSE 100 Index
Experian
FTSE 100 Index
100%
80%
60%
40%
20%
0%
18%
18%
44%
44%
24%
24%
14%
14%
FY21
Fixed
Annual bonus
Long-term incentives
(LTI) vesting
£200
£180
£160
£140
£120
£100
LTI – share price
and dividends
£80
March
2018
September
2018
March
2019
September
2019
March
2020
September
2020
March
2021
Update to 2020 disclosure
We originally calculated the value of the share awards realised by our executive directors in 2020 using the average share price from 1 January 2020 to
31 March 2020, in line with the prescribed single figure methodology. This has now been revised to reflect the actual share price and exchange rate on
vesting, as follows:
Brian Cassin
Lloyd Pitchford
Kerry Williams
Three-month
average share
price to
31 March 2020
£25.63
Estimated value
of long-term
incentive awards
‘000
£7,563
£4,663
US$7,934
Share price
on vesting
£27.53
Actual value
of long-term
incentive awards
‘000
£8,101
£4,995
US$8,400
What share-based incentive awards did we make in the year? (audited)
On 11 June 2020, awards were granted to the executive directors under the CIP and PSP. The face value of awards made to Brian Cassin and Lloyd
Pitchford is shown in pounds sterling; the face value of awards made to Kerry Williams is shown in US dollars. The number of shares awarded to Kerry
Williams was calculated using the average exchange rate for the three days prior to grant of £1:US$1.27. All awards have been calculated using a
three-day average share price.
In line with the CIP rules, invested shares for Brian Cassin and Lloyd Pitchford were purchased with their bonuses net of tax. In line with the rules of The
Experian North America Co-investment Plan, invested shares for Kerry Williams were calculated with reference to his gross bonus. Matching awards are
based on the gross value of the bonus deferred.
Details of these awards are set out in the following table:
Type of interest in shares
Basis of award
Face value
‘000
Number
of shares
Vesting at threshold
performance
Vesting date
Brian Cassin
CIP invested shares
CIP matching shares1
PSP2
Lloyd Pitchford
CIP invested shares
CIP matching shares1
PSP2
Kerry Williams
CIP invested shares
CIP matching shares1
PSP2
Deferred shares
Nil-cost options
Conditional shares
100% of net bonus
200% of value of gross bonus deferral
200% of salary
Deferred shares
Nil-cost options
Conditional shares
100% of net bonus
200% of value of gross bonus deferral
200% of salary
£821
£3,099
£1,945
£507
£1,912
£1,200
Deferred shares
Conditional shares
Conditional shares
100% of gross bonus
200% of value of gross bonus deferral
200% of salary
US$1,631
US$3,262
US$2,050
30,202
113,971
70,335
18,636
70,325
43,394
47,285
94,570
58,426
n/a
25%
25%
n/a
25%
25%
n/a
25%
25%
11 June 2023
11 June 2023
11 June 2023
11 June 2023
11 June 2023
11 June 2023
11 June 2023
11 June 2023
11 June 2023
1 The number of shares awarded to executive directors under the CIP was based on the share price at which invested shares were purchased in the market and the face value shown above is based on this. This
price was £27.19.
2 The number of shares awarded to executive directors under the PSP was based on the average share price for the three days prior to grant, which was £27.65, and the face value shown above is based on this.
Experian plc Governance Code principle
Remuneration
123
As disclosed in our 2020 Annual report on directors' remuneration, given the prevailing uncertainty in May 2020, when LTI targets would ordinarily be
finalised, regarding the short- and longer-term impact of COVID-19, the Committee determined it appropriate to delay setting and disclosing 2020 LTI
targets until later in the year. The chart below outlines the timeline and some of the factors the Committee considered when determining appropriate
targets for the 2020 LTI plans.
March 2020
May 2020
September 2020
November 2020
At its March meeting the
Committee ordinarily has a
preliminary discussion about
possible targets for the
forthcoming year. However,
as a result of the timing of
the global pandemic these
discussions were delayed in
anticipation of increasing
clarity emerging about the
likely global economic
impact of COVID-19.
The Committee discussed the emerging impact
of COVID-19 on our operating environment in the
context of a number of key factors including:
The ambition to set stretching but attainable
targets, that reflect the emerging operating
and economic realities, which would therefore
reduce the prospect of relying on discretion at
vest and therefore providing clarity and
transparency for investors.
The population of our top talent (below Board
level) that participate in the PSP/CIP plans
with the same performance targets as the
executive directors, and the need to attract,
motivate and retain that talent in an
increasingly competitive external market,
particularly in North America.
The Committee’s strong preference was to
apply performance targets which reflect both
(i) the current economic realities and (ii) our
desire to rapidly return to the level of growth
achieved in recent years.
The Committee decided that, having considered
our investor experience and our resilient share
price performance to grant LTI awards in June
2020 but subject to performance conditions that
would be determined later in the year. At the
time of the June 2020 grant the share price had
returned to pre-pandemic levels and the
Committee was satisfied there would not be any
windfall gains.
At an additional meeting held in
September the Committee began
its initial discussion on potential
2020 LTI targets taking into
account:
Anticipated half-year financial
performance, which provided a
realistic view of the early
impact of COVID-19 on our
operating environment;
Brokers' earnings estimates,
which reflected the general
economic uncertainty at the
time and which were therefore
across a wider range than
normal; and
Views on the longer-term
economic outlook coloured by
potential second waves of
COVID-19 and by vaccine
development.
The Committee met again in
November when the emergence
of a second wave was clear and at
this time there were no emerging
breakthroughs on vaccinations or
expectations for near-term
resumption of normal economic
environment.
Based on the information
available at that time and
incorporating analysts'
expectations the Committee set
stretching but attainable targets.
The targets set reflected the
anticipated impact of COVID-19 on
FY21 – while maintaining our
unchanged ambitions for FY22
and FY23.
Targets were disclosed via RNS
announcement on 26 November
2020.
Letters issued on 26 November to
our top 20 shareholders, to
provide additional context on the
factors the Committee considered
in setting the 2020 LTI targets.
In determining 2020 LTI plan targets, the Committee sought to maintain our ongoing commitment to setting stretching targets while balancing this with
the need to (i) take account of the realities of COVID-19 for FY21, (ii) reflect our ambition to return to high single-digit growth in FY22 and FY23, while also
(iii) ensuring targets are motivational, particularly for critical talent below Board level who participate in the CIP and PSP.
The Committee determined the best approach to balancing these needs was to set the EPS targets to reflect the impact of COVID-19 in FY21 while
challenging management to return to high single-digit growth in FY22 and FY23 and retain the existing stretching three-year targets for all other
metrics. We consider this approach achieves the appropriate balance of setting targets that are challenging but attainable, and our expectation is that
this approach will enable the Committee to apply the Policy without the need to rely on discretion for in-flight awards, or to adjust the performance
outcomes of this award going forward.
PSP awards and CIP matching shares granted in June 2020 will vest subject to the achievement of the following performance conditions:
Performance measure
CIP matching shares
Benchmark Earnings per share (average annual growth)2
Cumulative Benchmark operating cash flow
PSP awards
Benchmark Earnings per share (average annual growth)2
TSR of Experian vs TSR of FTSE 100 Index
Weighting
0%
Vesting1
25%
50%
100%
50%
Below 3%
50% Below US$3.7bn
3%
US$3.7bn
4%
US$3.8bn
7%
US$4.1bn
50%
25%
Below 3%
Below Index
3%
Equal to Index
4%
8.3% above
Index
15.4%
7%
25% above
Index
16%
Return on capital employed (average over three years)
25%
Below 14.5%
14.5%
1 Straight-line vesting between the points shown.
2 Measured on an ongoing activities and constant currency basis.
The Committee retains the right to vary the level of vesting if it believes that the level of vesting determined by measuring performance is inconsistent
with the Group’s underlying financial and operational performance over the performance period. These awards will also only vest if the Committee is
satisfied the vesting is not based on materially misstated financial results.
Experian plc Annual Report 2021Governance 124
Annual report on directors’ remuneration
continued
Code principle
Remuneration
How is the CEO’s pay linked to Experian’s performance?
The chart below shows Experian’s annual TSR performance compared to the FTSE 100 Index over the last ten years. The FTSE 100 Index is the most
appropriate index as it is widely used and understood, and Experian is a constituent of the index. The chart also includes the CEO’s single figure value
received in each of the years, to demonstrate the alignment between executive pay and shareholder experience.
Value of £100 invested in Experian and the FTSE 100 on 31 March 2011
Experian
FTSE 100 Index
£450
£400
£350
£300
£250
£200
£150
£100
£50
£0
31 March
2011
31 March
2012
31 March
2013
31 March
2014
31 March
2015
31 March
2016
31 March
2017
31 March
2018
31 March
2019
31 March
2020
31 March
2021
The table below sets out our CEO’s pay for the last ten financial years:
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
CEO total single figure of
remuneration (‘000)1
Don Robert
Brian Cassin
Annual bonus paid against
maximum opportunity (%)
Don Robert
Brian Cassin
LTIP vesting against
maximum opportunity (%)2
Don Robert
Brian Cassin
US$23,206 US$22,974 US$16,290
—
—
—
US$620
£1,976
—
£3,678
—
£3,647
—
£6,387
—
£11,882
—
£10,836
—
£7,560
100%
—
100%
—
75%
—
100%
—
50%
—
94%
—
—
38%
69%
40%
—
100%
—
33%
—
89%
—
32%
—
58%
—
95%
—
85%
—
90%
—
80%
—
90%
—
91%
—
84%
1 Prior year numbers have been updated to reflect actual long-term incentive plan outcomes.
2 The maximum LTIP opportunity varies as the CIP opportunity is based upon the actual bonus earned.
CEO pay ratio
Experian is committed to good corporate governance and transparency in the reporting of remuneration for our executive directors and employees. We
have presented below the CEO pay ratio for the year ended 31 March 2021, in line with the UK regulatory requirements. The pay ratios have been
calculated using Option A of the three methodologies provided under the new regulations, which we believe is the most statistically accurate approach.
Year
2020
2021
Method
Option A
Total pay and benefits
Salary
Option A
Total pay and benefits
Salary
25th percentile
pay ratio
267:1
Median
pay ratio
178:1
75th percentile
pay ratio
112:1
£38,630
£33,362
185:1
£40,969
£32,569
£57,803
£47,869
124:1
£61,115
£49,983
£91,736
£77,000
81:1
£93,574
£75,000
The CEO value used is the total single figure remuneration data for FY21 of £7.6m, as outlined on page 118 of this Report. For UK employees, total pay
and benefits are based on actual earnings for the year to 31 March 2021. Annual incentive payments for employees have been calculated using the
Experian Group financial performance outcome for FY21, rather than any regional or market business performance results, to ensure a like-for-like
comparison across remuneration structures. Selected employee grades below senior management level are also eligible for annual awards of restricted
stock, rather than the performance share awards provided to senior management. Where applicable, the LTI value for employees has been calculated by
applying the average share price for the three months prior to 31 March 2021 to the number of restricted stock awards granted to the employee in June
2018. We adopted this approach to provide a like-for-like comparison and ensure the share-price growth over the previous three years is reflected
Experian plc Governance Code principle
Remuneration
125
equally in both the CEO and employee LTI values. Employees on inbound and outbound international assignments to and from the UK have been
excluded from the analysis as their remuneration structures understandably deviate from the standard approach for UK employees. In line with the
guidance, only individuals employed for the full year have been included in the analysis.
Observations on change in CEO pay ratio
The FY21 CEO single figure has reduced by c.30% compared to FY20. By comparison the total pay and benefits provided to UK employees in FY21
increased slightly over the previous year and as a result the FY21 CEO pay ratios for all percentiles are lower than for FY20.
As mentioned previously, the CEO voluntarily waived 25% of his salary for six months in FY21, resulting in a significantly lower salary for the CEO than
the previous year. Conversely, the salary amounts received by employees in FY21 remained broadly consistent with FY20 as we did not reduce any
employee salaries, make any COVID-19 related redundancies or furlough any employees. In the interest of transparency, and to provide a true
comparison with FY20, if the CEO had not waived any of his salary in FY21 the CEO pay ratio percentiles would have been 188:1, 126:1 and 82:1.
The primary driver behind the lower FY21 CEO pay ratio is the value of the LTI received by the CEO in FY21. While the value of LTI awards that vested in
FY21 was very strong, particularly given the external operating environment during the final year of the performance period, no adjustments were made
to the vesting outturns to account for the impact of the global pandemic. Therefore, the LTI value that the CEO received in FY21 was considerably lower
than in the previous year. By way of comparison, the total pay and benefit amounts received by UK employees in FY21 is slightly higher than FY20 due to
a combination of the US$700 Thank You Share Award and the introduction of additional benefit policies in FY21 as a response to employee feedback
gathered as part of the UK Total Reward Optimisation project.
The Committee believe it is appropriate that a significant proportion of total remuneration for executive directors is ‘at risk’ and driven entirely by Group
performance, which is within their power to influence. In line with our remuneration principles the proportion of total compensation that is ‘at risk’
increases with employee seniority within the Group. The remuneration framework is designed to deliver market-competitive total compensation. All UK
employees are also eligible to participate in the annual bonus plan, providing them with the opportunity to benefit from the financial performance that
they help to deliver.
Understandably more (71%) of the CEO’s total target remuneration is ‘at risk’ compared to c.8% on average for UK-based employees. As evidenced in
FY21, the CEO pay ratio is therefore likely to vary, potentially significantly, over time based on the Group’s performance outcomes.
Observations on FY21 pay ratio
The median pay ratio for FY21 of 124:1 reflects not only the strong resilient performance achieved in this pandemic year, but also the exceptional
performance achieved in the preceding two financial years, which are reflected in the CEO’s LTI vesting values. As LTI values can be highly variable,
driven in part by fluctuations in share price, a supplemental pay ratio has been provided below, where the value of LTIs has been excluded. The CEO
single figure value excluding LTI compensation was £2.9m for FY21.
Year
FY20
FY21
Method
Option A excluding long-term incentives
Option A excluding long-term incentives
25th percentile
pay ratio
71:1
69:1
Median
pay ratio
47:1
47:1
75th percentile
pay ratio
30:1
30:1
Some important additional context regarding our FY21 CEO pay ratio includes:
As mentioned in the Chairman's statement, we will be making a special one-off share recognition award to c.17,000 employees below senior
management. Employees will be granted an initial share award of US$700, which will be matched on a 2:1 basis if employees continue to hold their
shares for three further years. While the US$700 shares will not be granted until August 2021, the commitment to provide the award was
communicated to all eligible employees in March 2021. As the award is a 'Thank You' for the commitment and dedication shown throughout FY21 and
is not forfeitable, the US$700 initial share award has been included in the above analysis.
Experian has been a Living Wage employer in the United Kingdom since 2015, and the median salary for UK employees (as reflected in the table on
the previous page) is more than 50% above the UK average.
The Committee always has the context of the all-employee pay review budget when determining salary increases for the CEO and ensures that any
percentage increase for the CEO does not exceed that provided to employees. In FY21, the CEO’s salary reduced as he voluntarily waived 25% of his
contractual salary for six months of the year, while UK employees’ base salary broadly remained the same as FY20. A global pay freeze was applied to
all employees in FY21 but the average UK employee base pay did increase by 2.6% as a result of promotions etc. For FY22, the UK salary review
budget is 2.5%, while the CEO’s salary will increase by 2.3%.
An ‘individual performance modifier’ is applied in calculating the annual bonus payments for employees to ensure that the outstanding contributions
of high-performing individuals is reflected through higher bonus payments. To ensure a like-for-like comparison with the CEO single figure, the
employee calculations as outlined on the previous page do not reflect the impact of individual performance modifiers as they do not apply to senior
management, including the CEO, which would have considerably increased the annual bonus payments for employees, as individual performance
modifiers do not apply to senior management, including the CEO.
We have also not included the value of our Sharesave scheme in the all-employee values on the previous page. We firmly believe in the value of
employee share ownership and encourage employees to participate in our Sharesave offering, which is a tax-efficient plan in the UK and allows
employees to share in Experian’s growth and success. Around 67% of UK employees participate in Sharesave and the average profit received by UK
employees at maturity in FY21 was £5,125, but this value which has not been included in the all-employee values on the previous page.
Experian plc Annual Report 2021Governance 126
Annual report on directors’ remuneration
continued
Code principle
Remuneration
How has our Board of directors' pay changed compared to the wider workforce?
The table below sets out the percentage change in the Board of directors' salary/fees, benefits and annual bonus between FY20 and FY21, and how this
compares to the average percentage change for our UK employees. While the Regulations require the employee comparison against employees of
Experian plc, the proportion of our workforce employed by Experian plc is comparatively very small. We have therefore elected to provide the
comparison against our UK employees which we believe will provide a more representative analysis. We have selected this group of employees because
Experian operates in 44 countries and, as such, has widely varying approaches to pay across different regions. This approach also avoids the
complexities involved in collating and comparing remuneration data across different geographic populations, including the impact of foreign exchange
rate movements. The figures for UK employees are consistent with the information used to prepare the CEO pay ratio analysis, but reflect average
salaries and average employee numbers each year, rather than percentile data. For the CEO, the annual bonus is based on Group performance. For UK
employees, the annual bonus is based on the part of the business the individual works in. As outlined previously, the executive directors each waived
25% of their salaries for six months in FY21 and this is behind the year-on-year base salary change for Brian Cassin, Lloyd Pitchford and Kerry Williams.
FY21
Base salary change
Taxable benefits
Annual bonus
Year-on-year change in pay for directors compared to the average UK employee
Executive directors
Average
employee
2.6%
7.1%
27.5%
Brian
Cassin
-12%
1%
15%
Lloyd
Pitchford
-12%
3%
15%
Kerry
Williams
-12%
3%
15%
Independent
Chairman
Mike
Rogers1
21%
n/a
n/a
Dr Ruba
Borno
-11%
n/a
n/a
Non-executive directors
Deirdre
Mahlan
-11%
n/a
n/a
Caroline
Donahue
-14%
n/a
n/a
Alison
Brittain2
n/a
n/a
n/a
Luiz
Fleury
-11%
n/a
n/a
George
Rose
0%
n/a
n/a
1 FY21 was Mike Rogers' first full year as Chairman and the change to his base salary is a result of his receiving a full year's fees.
2 Alison Brittain joined the Board on 1 September 2020 and did not receive any fees in FY20.
How do we intend to implement the remuneration policy next year?
Salary
The table below outlines the salary increases that will take effect from 1 June 2021 for each Executive Director. The global employee salary review
budget for FY22 is 3.2%, and for our employees in the UK and the USA the FY22 salary review budget will be 2.5%.
Brian Cassin
Lloyd Pitchford
Kerry Williams
1 June 2021
‘000
£995
£615
US$1,050
1 June 2020
‘000
£973
£600
US$1,025
% increase
2.3%
2.5%
2.4%
Annual bonus
For the year ending 31 March 2022, the measures the executive directors are assessed on will remain unchanged from FY21.
In line with our policy, we will disclose the targets for the annual bonus in next year’s Annual report on directors’ remuneration. While the FY22 annual
bonus targets cannot be disclosed due to their commercial sensitivity they reflect our confidence in the outlook for the year ahead. Annual bonus will be
subject to clawback provisions, allowing the Group to recover all or part of any payment for a period of three years from payment. In addition, the
Committee can vary the level of payout if it considers that the formulaic payout determined by measuring performance is inconsistent with the Group’s
actual underlying financial and operational performance.
Performance is measured on a constant currency basis to strip out the effects of exchange rate fluctuations, which are outside of management’s control.
The Committee also excludes the impact of any material acquisitions or disposals made in the year to ensure both metrics are measured consistently,
which is in line with our approach to long-term incentive plan measures.
Share-based incentives
While deferral of 50% is compulsory, the executive directors have each elected to defer the full 100% of their FY21 bonuses into the CIP. We expect to
grant matching shares in the first quarter of the year ending 31 March 2022, on a two-for-one basis. We also expect to grant PSP awards equivalent to
200% of salary at the same time. The CIP and PSP awards will vest subject to meeting the following targets, which will be measured over three years,
with a further two-year holding period applying:
Performance measure
CIP awards
Benchmark Earnings per share (average annual growth)2
Cumulative Benchmark operating cash flow
PSP awards
Benchmark Earnings per share (average annual growth)2
Return on capital employed
Weighting
0%
Vesting1
25%
50%
100%
50%
Below 5%
50% Below US$4.0bn
5%
US$4.0bn
7%
US$4.2bn
10%
US$4.4bn
50%
25%
Below 5%
Below 14.5%
5%
14.5%
7%
15.4%
8.3% above
Index
10%
16%
25% above
Index
TSR of Experian vs TSR of FTSE 100 Index
25%
Below Index
Equal to Index
1 Straight-line vesting between the points shown.
2 Measured on an ongoing activities and constant currency basis.
Experian plc Governance Code principle
Remuneration
127
The Committee selected adjusted Benchmark EPS, cumulative Benchmark operating cash flow and ROCE as performance metrics for our long-term
incentive plans, as they reflect three of our key performance indicators. As such, using these measures directly links Experian’s long-term incentive
arrangements to our strategic aims and business objectives. In addition, using relative TSR recognises the importance of creating value for shareholders.
We believe these measures to be the most appropriate measures of the Group’s success and, together with our annual bonus measures, they ensure
that executive directors are incentivised to deliver on a wide range of business and financial measures over both the short and long term. The structure
differentiates the role of each of our long-term incentive plans: the PSP incentivises returns and the CIP incentivises cash discipline. However, given that
growth is so fundamental to our business strategy, Benchmark EPS runs across both of the long-term incentive plans.
Vesting of CIP and PSP awards will be subject to the Committee being satisfied that the vesting is not based on materially misstated financial results.
The Committee also retains the discretion to vary the level of vesting if it considers that the level of vesting determined by measuring performance is
inconsistent with the Group’s underlying financial and operational performance. These awards will all be subject to clawback provisions, allowing the
Company to recover all or part of any vested award during the holding period.
TSR performance
We measure our TSR performance relative to the FTSE 100 Index, rather than against a bespoke comparator group. Our usual comparator companies are
Alliance Data Systems, CoreLogic, Dun & Bradstreet, Equifax, FICO, LiveRamp, Moody’s, RELX, Thomson Reuters and TransUnion, however we believe that
it would be difficult to measure our TSR performance against them on a consistent basis, since many of them are listed in different markets and, as such,
may be subject to different market forces. However, the Committee uses them as a reference point when reviewing other aspects of executive director pay.
Additional disclosures
Directors’ shareholdings and share interests (audited)
We believe it is important that executive directors build up a significant holding in Experian shares, to align their interests with those of shareholders. Under
our guidelines, the CEO should hold the equivalent of three times his or her base salary in Experian shares and other executive directors should hold the
equivalent of two times their base salary. These guidelines include invested or deferred shares held under the CIP, but not matching shares. Shares that have
vested but are subject to the two-year holding period will also count towards the guideline. Until the shareholding guideline is met, we expect executive
directors to retain at least 50% of any shares vesting (net of tax) under a share award. Unvested shares do not count towards the guideline.
We also have guidelines for non-executive directors to build up a holding in Experian’s shares equal to their annual fee. Each financial year, the net fee
for the first quarter is used to purchase Experian shares until the non-executive director reaches this holding.
As set out in the table below, our executive directors already significantly exceed their personal shareholding guidelines, demonstrating their personal
alignment to shareholder interests as well as their commitment to Experian. To further strengthen this alignment post-employment, the Remuneration
Committee introduced a two-year post-employment shareholding guideline as part of the 2020 Policy review.
All executive directors that served during the year hold shares in excess of the relevant shareholding guidelines. The interests of the directors (at 31 March
2021) and their connected persons in the Company’s ordinary shares (as at 31 March 2021) are shown below and, for those individuals in the table below,
there have been no changes between 31 March 2021 and the date of this report:
Brian Cassin5
Lloyd Pitchford5
Kerry Williams6
Mike Rogers7
Dr Ruba Borno8
Alison Brittain9
Caroline Donahue
Luiz Fleury
Deirdre Mahlan
George Rose
Shares held in
Experian plc at
31 March 2021
526,185
278,947
146,930
15,287
2,685
5,250
10,000
9,650
15,000
20,000
Shareholding guidelines
Share awards subject to
performance conditions
Guideline 1
(% of salary/fee)
300%
200%
200%
100%
100%
100%
100%
100%
100%
100%
Shareholding
(% of salary)2
1,351%
1,161%
493%
96%
50%
97%
185%
179%
214%
231%
Guideline met?
Yes
Yes
Yes
No
No
No
Yes
Yes
Yes
Yes
CIP matching
awards3
359,717
221,906
293,860
—
—
—
—
—
—
—
PSP awards
252,154
155,615
205,118
—
—
—
—
—
—
—
Share options4
—
1,470
—
—
—
—
—
—
—
—
1 Executive director shareholding guideline will apply for two years post-employment.
2 Shareholding guidelines have been calculated using the closing share price on 31 March 2021, which was £24.97 and exchange rates at 31 March 2021 of £1:US$1.378 and £1:€1.1746.
3 Matching shares granted to Brian Cassin and Lloyd Pitchford are in the form of nil-cost options, which are unvested at 31 March 2021. Those granted to Kerry Williams are conditional share awards.
4 Share options granted under the all-employee Sharesave plan.
5 The number of Experian shares held by Brian Cassin and Lloyd Pitchford at 31 March 2021 includes 95,326 and 58,804 invested shares in the CIP respectively.
6 The number of Experian shares held by Kerry Williams at 31 March 2021 includes 146,930 shares awarded to him under The Experian North America Co-investment Plan as a result of his annual bonus deferral
elections, in addition to his personal beneficial shareholding. Kerry Williams has an unconditional right to receive these Experian shares at the end of the relevant three-year deferral period. These shares do not
carry dividend or voting rights prior to receipt.
7 Mike Rogers was appointed Chairman on 24 July 2019 and is continuing to build his shareholding.
8 Dr Ruba Borno joined the Board in 2018 and is still building up her shareholding.
9 Alison Brittain joined the Board on 1 September 2020 and is still building up her shareholding.
Payments made to former directors (audited)
Four former directors of Experian Finance plc (formerly GUS plc) received unfunded pensions from the Group. Two of the former directors are now paid
under the Secured Unfunded Retirement Benefit Scheme, which provides security for the unfunded pensions of executives affected by the Her Majesty’s
Experian plc Annual Report 2021Governance 128
Annual report on directors’ remuneration
continued
Code principle
Remuneration
Revenue & Customs (HMRC) earnings cap. The total unfunded pensions paid to the former directors was £833,581 in the year ended 31 March 2021.
Payments for loss of office (audited)
No payments for loss of office were made in the year (2020: nil).
Relative importance of spend on pay
The table below illustrates the relative importance of spend on pay for all employees, compared to the financial distributions to shareholders, through
dividends and earnings-enhancing share repurchases:
Employee remuneration costs
Dividends paid on ordinary shares
Estimated value of earnings-enhancing share repurchases
2021
US$m
1,995
427
—
2020
US$m
1,872
424
16
% change
6.6%
0.5%
-100%
The Remuneration Committee
All our non-executive directors are members of the Committee, which met six times during the year ended 31 March 2021. Each member is considered
to be independent in accordance with the UK Corporate Governance Code.
The Committee’s terms of reference can be found at www.experianplc.com/about-us/corporate-governance/board-committees/.
The Committee’s role and responsibilities
The Committee is responsible for:
1
Recommending
to the Board
senior executive
remuneration policy
and the Chairman’s
remuneration.
2
Determining
individual
remuneration
packages for
executive directors
and certain senior
executives.
Committee activities
During the year, the Committee:
3
Communicating
with shareholders
on remuneration
policy.
4
Making
recommendations
to the Board on
the design of the
Group’s short-
and long-term
incentive plans.
5
Overseeing
the Group’s
executive pension
arrangements.
6
Overseeing
broader employee
workforce policies.
Reviewed and approved the 2020 Report on directors’ remuneration, and reviewed a draft of the 2021 Report on directors’ remuneration.
Finalised the Remuneration Policy, which was put to shareholder vote at the 2020 AGM.
Has continuously monitored the impact of COVID-19 on our business, and remuneration decisions taken across the Group, such as the decision to
apply global pay freezes.
Reviewed salaries of certain Group Operating Committee members and approved annual pay freezes for all Group Operating Committee members in
FY21.
Agreed the FY20 incentive plan outcomes, the FY21 bonus targets, and the long-term incentive plan participants.
Received updates on the Company’s long-term incentive plans, including the impact of COVID-19 on these in-flight awards.
Held an additional meeting in September 2020 to consider the impact of COVID-19 on our operating environment, its impact on our in-flight long-term
incentive plan awards and to discuss performance targets for the 2020 long-term incentive awards.
Discussed at length executive pay in the context of the wider workforce and the broader impact on society, the Group, and our shareholders.
Was updated on all-employee pay and workforce policies across Experian. Following this update the Committee requested, and was provided with,
detailed additional insights on all-employee pay, workforce policies and gender pay gap analysis in North America and Brazil, two of our key regions.
Was updated on current trends in the executive remuneration environment, focusing on our key regions.
Was updated on the Company’s FY21 gender pay gap disclosure requirement. The Committee had a robust discussion regarding the results and was
provided with additional detailed analysis on Experian’s gender pay position.
Was updated on the Company’s response to the UK CEO pay ratio disclosure requirement and reviewed the relevant disclosures.
Initiated the invitation to employees to participate in the 2020 Sharesave plan, and was updated on take-up and outcomes of previous grants.
Considered remuneration matters in respect of senior hires and departures and, where appropriate, approved remuneration packages for senior new
hire awards below Board level.
Reviewed the Committee’s performance during the year against its terms of reference; and
Received feedback from the Chairman on the key topics discussed at the UK&I Experian People Forum. The Chairman of the Committee attended the
Forum which was held virtually in March 2021, to engage with employees, discuss how Experian’s executive remuneration aligns with the wider
Group pay policy, and understand employees’ views on pay-related issues.
Experian plc Governance Code principle
Remuneration
129
Advice provided to the Committee
In making its decisions, the Committee consults the Chairman, the Chief Executive Officer and the Group Chief People Officer where required.
We also invite members of the Global Reward team to attend Committee meetings as appropriate. We normally consult the Chief Financial Officer about
performance conditions applying to short- and long-term incentive arrangements to ensure they are appropriately financially stretching. However, we do
not consider it appropriate that executives are present when their own remuneration arrangements are being discussed.
The Committee has access to independent consultants to ensure that it receives objective advice. We reviewed our external advisers in 2013 and
appointed Towers Watson Ltd (Willis Towers Watson), who remained our external advisers throughout the year ended 31 March 2021. Willis Towers
Watson provides other services to Experian globally, including advice on benefits and provision of market data.
Additionally, both Mercer Kepler (from 1 April 2020 to 31 December 2020) and Ellason LLP (from 1 January 2021) provided incentive-plan award
valuations and remuneration data, as well as supporting data for the target calibration process. Kepler does not provide any other services to the Group,
although Mercer, Kepler’s parent company, does provide unrelated services to the Group. Ellason does not provide any other services to the Group.
Willis Towers Watson, Mercer Kepler and Ellason are members of the Remuneration Consultants Group and voluntarily operate under the Code of
Conduct in relation to executive remuneration consulting in the UK. The Committee was satisfied that their advice was objective and independent.
The fees paid to these advisers for services to the Committee in the year ended 31 March 2021, based on hours spent, were as follows:
Adviser
Willis Towers Watson
Mercer Kepler
Ellason
Fees paid in the year
£44,900
£3,600
£9,750
What did we pay our non-executive directors during the year? (audited)
The table below shows a single total figure of remuneration for the Chairman and non-executive directors for the years ended 31 March 2021 and 31
March 2020:
Mike Rogers1
Dr Ruba Borno
Alison Brittain (appointed 1 September 2020)
Caroline Donahue
Luiz Fleury2
Deirdre Mahlan
George Rose
Fees ‘000
2021
€465
€158
€92
€158
€210
€206
€254
2020
€385
€179
—
€185
€256
€231
€254
Benefits ‘000
2021
—
—
—
—
—
—
—
2020
—
—
—
—
—
—
—
Share-based incentives ‘000
2020
—
—
—
—
—
—
—
2021
—
—
—
—
—
—
—
Total ‘000
2021
€465
€158
£92
€158
€210
€206
€254
2020
€385
€179
—
€185
€256
€231
€254
1 Mike Rogers was appointed Chairman of the Board on 24 July 2019 and receives an annual fee for this role of €465,000.
2 Luiz Fleury acted as an independent adviser to Serasa S.A., our Brazilian business. His remuneration includes a fee for this role, paid in Brazilian reais, along with the annual non-executive director’s fee.
Non-executive director fees are reviewed every two years and were last reviewed in 2019. The current fee levels are as follows:
Base fee
Audit Committee Chairman fee
Remuneration Committee Chairman fee
Deputy Chairman/Senior Independent Director fee
Annual fee from
1 October 2019
€158,250
€47,750
€38,250
€95,500
Annual fee prior to
1 October 2019
€150,750
€45,500
€36,500
€91,000
Other than the Chairman, non-executive directors required to undertake intercontinental travel to attend Board meetings receive a supplementary
payment of €6,000 per trip, in addition to any travel expenses. This amount has not changed since October 2009. No such payments were made in FY21
due to COVID-19 travel restrictions.
George Rose holds the role of Chairman of the Remuneration Committee, in addition to his role as Senior Independent Director. George Rose does not
receive an additional fee for his role as Chairman of the Remuneration Committee.
Experian plc Annual Report 2021Governance 130
Annual report on directors’ remuneration
continued
Code principle
Remuneration
Statement of voting at the 2020 AGM
The voting to approve the Annual report on directors' remuneration and the Directors’ remuneration policy at the AGM held on 22 July 2020 is set out in
the following table:
Annual report on directors’ remuneration
Directors’ remuneration policy
Votes for
(including
discretionary
votes)
%
Number
93.5%
653,070,165
95.3%
651,717,394
Votes against
%
Number
6.5%
45,388,636
4.7%
31,847,208
Total number
of votes cast
Number of
votes withheld
698,458,801
274,374
683,564,602
15,168,573
Service contracts
Non-executive directors have letters of appointment that set out their duties and time commitment expected. They are appointed for an initial three-year
term, subject to election and annual re-election by shareholders at the AGM. Appointments are renewed by mutual agreement. Details of current
non-executive director arrangements as at 31 March 2021 are set out below:
Name
Mike Rogers (appointed Chairman on 24 July 2019)
Dr Ruba Borno
Alison Brittain
Caroline Donahue
Luiz Fleury
Deirdre Mahlan
George Rose
Date of appointment
1 July 2017
1 April 2018
1 September 2020
1 January 2017
8 September 2015
1 September 2012
1 September 2012
Length of service at 31 March 2021
Years
3
3
0
4
5
8
8
Months
9
0
7
3
7
7
7
Executive directors’ service contracts contain a 12-month notice period, as set out in the Directors’ remuneration policy. Brian Cassin was appointed to
the Board on 30 April 2012 as Chief Financial Officer, and 16 July 2014 as Chief Executive Officer. The date of appointment to the Board for Lloyd
Pitchford was 1 October 2014 and for Kerry Williams was 16 July 2014.
Experian plc Governance Code principle
Remuneration
Directors’ remuneration policy
131
The Directors’ remuneration policy was last approved by shareholders at the AGM on 22 July 2020.
We have included below the Policy table and the ‘Which clawback provisions apply?’ section, which we consider to be the most helpful sections of
the Policy for investors. The full and original version of the Policy, as approved by shareholders, is available on the Experian corporate website at
www.experianplc.com/investors/reports.
Element and link to strategy
Base salary
To help with attracting and
retaining executive directors
of the right calibre.
Provides a base level of pay
and reflects the competitive
market salary for the role.
Base salary level takes
account of personal
contribution and
performance against
Group strategy.
Benefits
Benefits are provided as
part of a competitive and
cost-effective overall
remuneration package.
Certain benefits may also
be provided to support
expatriates, where they
have relocated.
Pension
Provides a market-aligned
retirement provision.
Operation
Maximum potential value
and payment at target
Performance metrics
and weightings
Base salary is paid in equal instalments
during the year.
Salaries are reviewed annually, with any increases
generally taking effect from 1 June.
Salary levels and increases take into account
a number of factors, including the approach to
employee remuneration throughout the Group,
prevailing economic conditions, best practice and
positioning against the market.
Annual executive director
salary increases will, in normal
circumstances, be limited to the
increases awarded across the
Group as a whole.
Higher increases may be made in
exceptional circumstances including,
but not limited to, a change in role or
responsibility, and will take account
of market practice in relation to
the new role.
When the Committee
considers salary increases,
it takes into account
individual performance
over the preceding
financial year.
The Group provides a range of market-competitive
benefits that include, but are not limited to,
healthcare, financial and tax advice, death-in-service
provision and company car or allowance.
Executive directors can also participate in any of the
Group’s all-employee share plans, for example the
Sharesave plan, on the same basis as other eligible
employees.
In the USA, eligible executive directors may
participate in a deferred compensation plan, which is
standard market practice in the USA.
For expatriate assignments, we retain the flexibility to
tailor benefits to the circumstances of the assignment.
Additional benefits may include relocation expenses
at the beginning and end of each assignment, housing
allowance and school fees.
Pension arrangements are in line with local
market practice.
In the UK, the Group operates a defined contribution
plan, with company contributions set as a percentage
of base salary. If impacted by HMRC pension limits, an
individual may elect to receive a cash allowance
instead.
In the USA, executive directors are eligible to join a
defined contribution plan.
None.
The cost of providing such
benefits may vary from year to year,
reflecting the cost to the Group.
The Committee sets benefits at a
level it considers appropriate against
relevant market practice, the role
and particular circumstances (for
example, in the case of expatriate
benefits, where the individual is
required to relocate).
None.
In the UK, the cash payment or
pension contribution for current
executive directors is normally equal
to 20% of annual gross base salary.
Future UK-based executive directors
will receive a cash payment or
pension contribution aligned to the
wider UK employee workforce (to
apply to all incumbents by the
end of 2022).
In the USA, the contribution rate is
up to 4% of earnings, up to an annual
compensation limit set by the
Internal Revenue Service.
If required, pension arrangements in
other jurisdictions would be in line
with local market practice.
Experian plc Annual Report 2021Governance 132
Directors’ remuneration policy
continued
Code principle
Remuneration
Element and link to strategy
Annual bonus
Motivates and rewards the
achievement of specific
annual objectives, linked to
Experian’s business strategy.
Co-investment Plans
Aligns with shareholder
interests through voluntary
investment of personal
capital, delivery of Experian
shares and the long-term
time horizons.
Use of stretching financial
metrics incentivises
performance.
Encourages participants’
long-term commitment to
the Group through personal
investment.
Performance Share Plan
Use of stretching financial
metrics incentivises
performance.
Aligns with shareholder
interests through delivery of
shares and the long-term
time horizons.
Operation
Maximum potential value
and payment at target
Performance metrics
and weightings
The Committee sets appropriate performance targets
at the start of each financial year.
At the end of the financial year, the Committee
determines the extent to which these have been
satisfied, based on audited results, and agrees the
level of bonus to be paid.
Half of any bonus must be deferred for a period of
three years. However, the executive director may elect
to defer up to 100% of their bonus into the CIP. Where
they elect not to do so, payment is made as soon as
practicable after the financial year end.
Malus and clawback provisions apply, under which
annual bonus payments may be reduced or recovered
in certain circumstances. Further details about our
clawback and malus policy are set out in the Which
clawback provisions apply? section of the report.
Threshold performance results in a
bonus payout equivalent to 25% of the
maximum. No bonus is payable for
below-threshold performance.
Achieving target performance results
in a bonus payout equivalent to 50%
of the maximum.
Achieving maximum performance
results in full bonus payout of 200%
of salary.
Participants are invited to invest between 50% and
100% of their annual bonus into Experian shares.
A conditional award of matching shares or nil-cost
options is granted on a two-for-one basis on the gross
bonus deferred, and vests after three years subject to
achieving performance targets over the three-year
period. Any vested awards are subject to a further two-
year holding period.
Dividend equivalents accrue on all awards of shares.
Malus and clawback provisions apply, under which CIP
awards may be reduced or recovered in certain
circumstances. Further details about our clawback
and malus policy are set out in the Which clawback
provisions apply? section of the report.
Maximum award levels depend on
the bonus deferred, which will be
matched on up to a two-for-one basis.
There is no vesting for below-
threshold performance.
Achieving threshold performance
results in 25% vesting of the
matching shares.
Achieving target performance results
in 50% vesting of the matching
shares.
Achieving maximum performance
results in full vesting of the matching
shares.
Participants receive an annual award of conditional
shares or nil-cost options, which vest after three years,
subject to achieving performance targets over the
three-year period. Any vested awards are subject to a
further two-year holding period.
Normal maximum award levels are
200% of salary.
Awards of up to 400% of salary may
be made in exceptional
circumstances such as recruitment.
Dividend equivalents accrue on all awards of shares.
Malus and clawback provisions apply, under which
PSP awards may be reduced or recovered in certain
circumstances. Further details about our clawback
and malus policy are set out in the Which clawback
provisions apply? section of the report.
There is no vesting for below-
threshold performance.
Achieving threshold performance
results in 25% of the shares vesting.
Achieving maximum performance
results in full vesting of the shares.
The annual bonus may be
based entirely on financial
performance or on a
combination of financial,
strategic and/or
operational objectives.
However, the financial
element will comprise at
least 70% of the bonus.
The Committee retains the
ability to exercise its
judgment to vary the level
of payout if it considers
that the formulaic payout
determined by measuring
performance is
inconsistent with the
Group’s actual underlying
financial and operational
performance.
Awards vest based on
financial performance and
subject to the Committee
being satisfied that the
vesting is not based on
materially misstated
financial results.
The Committee retains the
discretion to exercise its
judgment to vary the level
of vesting if it considers the
formulaic vesting level
determined by measuring
performance to be
inconsistent with the
Group’s actual underlying
financial and operational
performance.
Vesting of up to 25% of the
awards is based on a
share-based metric, with
the balance based on
financial performance.
The Committee retains the
ability to vary the level of
vesting if it considers the
formulaic vesting level
determined by measuring
performance to be
inconsistent with the
Group’s actual underlying
financial and operational
performance.
Experian plc Governance Code principle
Remuneration
133
Element and link to strategy
Shareholding guideline
To preserve and enhance the
long-term alignment of the
interests of executive
directors with shareholders
and promote a long-term
approach to performance
and risk management.
Operation
Maximum potential value
and payment at target
Performance metrics
and weightings
During employment:
N/A
N/A
Executive directors are required to establish and
maintain a minimum personal shareholding equal to
3x base salary for the CEO and 2x base salary for
other executive directors.
Executive directors are required to retain at least 50%
of any shares vesting under the CIP and PSP (net of
tax) until their during-employment shareholding
guideline has been met.
Shares held beneficially, shares subject to a
post-vesting holding period and invested or deferred
CIP shares will count when assessing the guideline.
Share awards that are still subject to performance
conditions and matching shares under the CIP are not
included.
Post-employment:
For two years following cessation, (former) executive
directors will be required to retain the lower of:
their actual shareholding immediately prior to
cessation; and
their shareholding guideline immediately prior to
cessation.
In determining the actual shareholding at cessation,
shares acquired from own purchases will not be
counted.
Independent Chairman and non-executive director (NED) fees
To attract individuals with a
broad range of experience
and skills, to oversee the
implementation of our
strategy.
The Chairman is paid an annual fee in equal monthly
instalments. The Group may provide the Chairman
with a limited range of benefits such as healthcare, tax
advice or use of a car.
The NEDs are paid a basic fee plus additional fees for
chairing a Board Committee and for the role of Deputy
Chairman or Senior Independent Director. NED fees
are paid in equal quarterly instalments during the year.
The net fee for the first quarter of the financial year is
used to purchase Experian shares for NEDs and/or the
Chairman (as applicable), until the individual has met
their shareholding guideline of 1x their estimated
annual fee (excluding travel fees).
The Committee sets the Chairman’s
fees, while NED fees are set by the
Board. Both are set based on a
number of factors, including the time
commitment required and positioning
against the market.
Fees are normally reviewed every
two years.
No performance-related
arrangements are in place
for the Chairman or the
NEDs.
NEDs receive an additional fee where attendance at
Board meetings involves intercontinental travel from
their home location. The Company may settle any tax
due on travel expenses incurred by the Chairman and
NEDs.
Share Option Plan (SOP)
Provides focus on increasing
Experian’s share price over
the medium to longer term.
The vesting of options is
based on financial
performance targets.
Options are granted with an exercise price equivalent
to the market value of an Experian share at the date of
grant. These vest subject to achieving performance
targets that are tested over a three-year period and
are exercisable for seven years thereafter.
No option grants have been made since 2009 and the
Committee has agreed that no further awards will be
made, unless warranted by exceptional circumstances
such as recruitment.
Malus and clawback provisions apply, under which
SOP awards may be reduced or recovered in certain
circumstances. Further details about our clawback
and malus policy are set out in the Which clawback
provisions apply? section of the report.
Normal maximum award levels are
200% of salary.
Grants of up to 400% of salary may
be made in exceptional
circumstances such as on
recruitment.
There is no vesting for below-
threshold performance.
Achieving threshold performance
results in 25% of the options vesting.
Achieving maximum performance
results in full vesting of the options.
Experian plc Annual Report 2021Governance 134
Directors’ remuneration policy
continued
Code principle
Remuneration
Which clawback provisions apply?
Clawback and/or malus applies to the Company’s incentive plans for five years from grant.
Under these provisions, the Committee may apply clawback or malus in circumstances which have:
resulted in a level of vesting or payment which is higher than would otherwise have been, because of a material misstatement of the Group’s financial
results; or
led to a material financial or reputational loss for the Group, due to serious individual misconduct.
Under our malus and clawback policy, should a trigger event be identified, a Clawback Committee would be appointed by the Remuneration Committee
to investigate the issue. The Clawback Committee would report back with recommendations on whether malus and/or clawback should be applied,
which individuals this should affect, which remuneration should be subject to malus and/or clawback and the value that should be impacted. The
Remuneration Committee would then have final sign-off on any decision to operate clawback or malus.
Legacy arrangements
The Committee reserves the right to make any remuneration payments and payments for loss of office (including exercising any discretions available to
it in connection with such payments) notwithstanding that they are not in line with the policy set out in this report where the entitlement to the payment
arose (i) before the 2020 AGM; (ii) at a time when the relevant individual was not a director of the Company and, in the opinion of the Committee, the
payment was not in consideration for the individual becoming a director of the Company; or (iii) under a remuneration policy previously approved by the
Company’s shareholders. For these purposes entitlements arising under the Company’s current remuneration policy (as approved by shareholders at
the 2017 AGM) will be incorporated into this policy and ‘payments’ includes the Committee satisfying awards of variable remuneration, and an
entitlement under an award over shares arises at the time the award is granted.
On behalf of the Remuneration Committee
Charles Brown
Company Secretary
18 May 2021
Experian plc Governance
Directors' report
135
The directors present their report and the audited financial statements for
the year ended 31 March 2021. The report has been prepared in line with
the UK Companies Act 2006, and the Corporate governance report and the
Shareholder and corporate information section form part of this Directors’
report. The Strategic report contains certain information equivalent to that
required in a report of the directors.
Financial and operational information
Results and dividend
The Group income statement shows a profit for the financial year ended
31 March 2021 of US$802m (2020: US$677m). The directors have
announced the payment of a second interim dividend, in lieu of a final
dividend, of 32.5 US cents per ordinary share (2020: 32.5 US cents) to be
paid on 23 July 2021 to shareholders on the register of members on 25
June 2021. A first interim dividend of 14.5 US cents per ordinary share
was paid on 5 February 2021, giving a total dividend for the year of 47.0
US cents per ordinary share (2020: 47.0 US cents).
Innovation
Innovation, supported by our talented people, and by research and
development, plays a key role in supporting Experian’s business
performance. Details of such activities are given in the Strategic report.
Acquisitions
Information in respect of acquisitions made during the year is contained
in note 41 to the Group financial statements.
Registered branch
The Company has a branch registered in Ireland under branch number
905565.
Post balance sheet events
Details of events occurring after the end of the reporting period are
contained in note 45 to the Group financial statements.
Share capital
Details of the Company’s share capital and changes during the year ended
31 March 2021 are set out in note P to the Company financial statements.
Financial risk management, objectives and policies
Descriptions of the use of financial instruments and Experian’s treasury
and risk management objectives and policies are set out in the Financial
review within the Strategic report and also in note 7 to the Group financial
statements.
Political donations
Experian did not make any political donations during the year ended 31
March 2021.
Going concern
Details of the adoption of the going concern basis in preparing the Group
financial statements are set out in note 2 to the Group financial
statements and are incorporated into this report by reference.
Directors
Information on directors holding office in the year
The directors’ names, biographical details, and skills and experience are
shown in the Board of directors section. Alison Brittain was appointed as
an independent non-executive director on 1 September 2020 and
Jonathan Howell was appointed as an independent non-executive director
with effect from 1 May 2021.
Particulars of directors’ remuneration, service contracts and interests in
the Company’s ordinary shares are shown in the Report on directors’
remuneration. There were no changes in the directors’ (as at 31 March
2021) interests in the ordinary shares between the end of the financial
year and 18 May 2021.
In line with the UK Corporate Governance Code, as at the date of this
report, all directors, being eligible, will offer themselves for election or
re-election at the 2021 AGM. An evaluation of the performance of the
Board, its committees and individual directors was carried out during the
financial year. The Board is satisfied that all directors seeking election or
re-election contribute effectively and demonstrate commitment to their
roles. The Corporate governance report contains further details of the
evaluation process.
Insurance and third-party indemnification
During the year and up to the date of approval of this Annual Report, the
Company maintained liability insurance and third-party indemnification
provisions for its directors and officers.
Appointment and removal of directors
Both the Company, by ordinary resolution, and the directors may elect any
person to be a director. The number of directors shall not exceed the
maximum number fixed by the Company’s articles of association. Any
person appointed by the directors shall only hold office until the next AGM
and shall then be eligible for election. The office of a director shall be
vacated on the occurrence of any of the events listed in article 92 of the
Company’s articles of association. The Company may, in accordance with
its articles of association, remove any director from office and elect
another person in their place.
Experian plc Annual Report 2021Governance 136
Directors' report
continued
Annual General Meeting
The Company’s 2021 AGM will be held in Dublin, Ireland, on Wednesday 21
July 2021. Shareholders may submit questions beforehand via email to
agmquestions@experianplc.com or on the prepaid card sent to
shareholders with the notice of meeting. The questions will be addressed
at the meeting, via the Company’s website at www.experianplc.com or
individually as appropriate. The notice of meeting has been circulated to
shareholders and can also be viewed on the Company’s website.
Share capital information
Rights and obligations
The rights and obligations attaching to the ordinary and deferred shares
are set out in note P to the Company financial statements and in the
Company’s articles of association, a copy of which can be obtained from
the Experian website, www.experianplc.com. The Company’s articles of
association may be amended by passing a special resolution.
ADR programme
The Company has a Level 1 American Depositary Receipt (ADR)
programme in the USA, for which The Bank of New York Mellon acts as
depositary. The ADRs are traded on the highest tier of the US
over-the-counter market, OTCQX, with each ADR representing one
Experian plc ordinary share. Further details are given in the Shareholder
and corporate information section.
Substantial shareholdings
The Company’s articles of association oblige shareholders to comply with
the notification obligations contained in the UK Disclosure Guidance and
Transparency Rules sourcebook. As at 18 May 2021, the Company had
been notified of the indirect interest below in its issued ordinary share
capital or voting rights in respect of the year.
Restrictions on transfers of shares and/or voting rights
The Company is not aware of any agreements between shareholders that
may result in restrictions on the transfer of securities and/or voting rights
and, apart from the matters described below, there are no restrictions on
the transfer of the Company’s ordinary shares and/or voting rights:
Certain restrictions on transfers of shares may from time to time be
imposed by, for example, share dealing regulations. In certain
situations, directors and certain employees are required to seek the
Company’s approval to deal in its shares.
Some of Experian’s share-based employee incentive plans include
restrictions on the transfer of shares, while the shares are subject to
the plan concerned.
As described in the Report on directors’ remuneration, non-executive
directors must hold a proportion of their fees in shares, equal to their
annual fee. These shares may not normally be transferred during their
period of office.
Where participants in a share-based employee incentive plan operated
by Experian are the beneficial owners of the shares but not the
registered owner, the voting rights are normally exercised by the
registered owner at the direction of the participants.
Shares carry no voting rights while they are held in treasury.
The deferred shares in the Company carry no voting rights.
Unless the directors determine otherwise, members are not entitled to
vote personally or by proxy at a shareholders’ meeting, or to exercise
any other member’s right in relation to shareholders’ meetings, in
respect of any share for which any call or other sum payable to the
Company remains unpaid.
Unless the directors determine otherwise, members are not entitled to
vote personally or by proxy at a shareholders’ meeting, or to exercise
any other member’s right in relation to shareholders’ meetings, if the
member fails to provide the Company with the required information
concerning interests in those shares, within the prescribed period after
being served with a notice under the Company’s articles of association.
The Company’s articles of association state that, except for certain
limited circumstances, if the number of shares in the Company
beneficially owned by residents of the USA exceeds a defined permitted
maximum and the directors give notice to the holder(s) of such shares,
the shares do not give their holder(s) the right to receive notice of,
attend or vote at the Company’s general meetings.
Details of deadlines in respect of voting for the 2021 AGM are contained in
the notice of meeting that has been circulated to shareholders and which
can also be viewed at the Company’s website.
Purchase, cancellation and holdings of own shares
The existing authority for the Company to purchase its own shares was
given at the AGM held on 22 July 2020. It permits the Company to
purchase 90,830,113 of its own shares in the market.
On 8 June 2020, the Company transferred 944,435 ordinary shares from
treasury to Computershare Investor Services plc and Computershare
Trustees (Jersey) Limited, the administrator and trustee respectively of
Experian’s share plans, for nil consideration, to be used to meet
obligations under employee share plans. On 29 June 2020, the Company
transferred 7,202,137 ordinary shares from treasury as consideration for
a majority stake in a German credit bureau, the Risk Management division
of Arvato Financial Solutions (AFS).
As at the date of approval of this Annual Report, the Company holds
52,278,013 (2020: 60,424,585) of its own shares as treasury shares, and
had an unexpired authority to purchase up to 90,830,113 of its own
shares. Details of the new authority being requested at the 2021 AGM are
contained in the circular to shareholders, which either accompanies this
Annual Report and/or is available on the Company’s website at www.
experianplc.com.
Details of the shares in the Company purchased by and held under The
Experian plc Employee Share Trust and the Experian UK Approved All
Employee Share Plan are set out in note Q to the Company financial
statements.
Substantial shareholdings
Date of notification
24 September 2020
Shareholder
Massachusetts Financial Services Company
Number of
ordinary shares/
voting rights
45,727,422
Percentage of
issued share
capital/voting
rights
4.99%
Experian plc Governance 137
Significant agreements – change of control
The Group is party to a number of agreements that take effect, alter,
terminate, or have the potential to do so, upon a change of control of the
Company following a takeover bid. These agreements are as follows:
The Group’s banking facilities contain provisions which, in the event of a
change of control, could result in their renegotiation or withdrawal.
The Group’s Euronotes allow holders to require repayment of the notes,
if a rating agency re-rates the notes to below investment grade,
following a change of control.
All of Experian’s share-based employee incentive plans contain
provisions relating to a change of control. Outstanding awards and
options would normally vest and become exercisable, subject to
satisfaction of any performance conditions at that time.
The Group is party to a limited number of operational arrangements
which can be terminated or altered upon a change of control of the
Company, but these are not considered to be individually significant to
the Group’s business as a whole. In certain cases, it is considered that
their disclosure would be seriously prejudicial to the Company.
Employment information
Employment of people with disabilities
People with disabilities have equal opportunities when applying for
vacancies. In addition to complying with legislative requirements, the
Group has procedures to ensure that it treats disabled employees fairly
and carefully manages their training and career development needs. The
policies are considered to operate effectively. The Group supports
employees who become disabled during the course of their employment,
by offering re-training or re-deployment, to enable them to remain with
the Group whenever possible.
Employee involvement
Experian is committed to employee involvement throughout the business.
The Group is intent on motivating staff, keeping them informed on matters
that concern them in the context of their employment, and involving them
through local consultative procedures. Where there are recognition
agreements with trade unions, the consultation process is established
through national and local trade union representatives and through joint
consultation committees.
Employees are kept well informed on matters of interest and the financial
and economic factors affecting the Group’s performance. This is done
through management channels, conferences, meetings, publications and
intranet sites. More detail on employee engagement, together with
information on corporate responsibility, diversity, succession planning and
talent development, can be found in the Our sustainable business
strategy: Environmental, Social and Governance section of the Strategic
report.
Experian supports employee share ownership by providing, whenever
possible, employee share plan arrangements which are intended to align
employees’ interests with those of shareholders.
Auditor information
Relevant audit information
As at 18 May 2021, so far as each director is aware, there is no relevant
audit information, being information needed by the auditor in connection
with preparing the audit report, of which the auditor is unaware, and each
director has taken all steps that he or she ought to have taken as a
director in order to make himself or herself aware of any relevant audit
information and to establish that the auditor is aware of that information.
Independent auditor
The auditor, KPMG LLP, has indicated its willingness to continue in office
and a resolution that it be re-appointed as the Company’s auditor will be
proposed at the AGM.
Statement of directors’ responsibilities
The directors are responsible for:
Preparing the Annual Report, the Group and Company financial
statements in accordance with applicable law and regulations. The
directors have decided to prepare voluntarily a directors’ remuneration
report in accordance with Schedule 8 to The Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations 2008 made
under the UK Companies Act 2006, as if those requirements applied to
the Company.
Preparing financial statements which give a true and fair view of the
state of affairs at the balance sheet date, and the profit or loss for the
period then ended of (a) the Group (in accordance with IFRSs as
adopted for use in the European Union), and (b) the Company (in
accordance with UK Accounting Standards including FRS 101 ‘Reduced
Disclosure Framework’).
Keeping sufficient accounting records which disclose, with reasonable
accuracy, at any time the financial position of the Group and the
Company and enable them to ensure that the Group financial
statements comply with applicable laws.
Maintaining such internal control as they determine is necessary to
enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error, and have general
responsibility for taking such steps as are reasonably open to them to
safeguard the assets of the Group and the Company and to prevent and
detect fraud and other irregularities.
The maintenance and integrity of the statutory and audited information
on the Company’s website. Jersey legislation and UK regulation
governing the preparation and dissemination of financial statements
may differ from requirements in other jurisdictions.
In addition, the directors consider that, in preparing the financial
statements:
suitable accounting policies have been selected and applied
consistently;
judgments and estimates made have been reasonable, relevant and
reliable;
the Group financial statements comply with IFRSs as adopted for use in
the European Union, subject to any material departures disclosed and
explained in the financial statements;
Experian plc Annual Report 2021Governance 138
Directors' report
continued
the Group’s and Company’s ability to continue as a going concern has
been assessed and, as applicable, matters related to going concern
have been disclosed;
the Company financial statements comply with UK Accounting
Standards including FRS 101 ‘Reduced Disclosure Framework’; and
it is appropriate that the Group and Company financial statements have
been prepared on the going concern basis, unless it is intended to
liquidate the Company or any Group company, or to cease operations or
there is no realistic alternative to do so.
The directors also confirm that, to the best of their knowledge, the
financial statements are prepared in accordance with the applicable set of
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit of the Company and the undertakings
included in the consolidation taken as a whole; and the Strategic report
contains a fair review of the development and performance of the
business and the position of the Company and the undertakings included
in the consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face.
In addition, each of the directors considers that the Annual Report and
financial statements, taken as a whole, is fair, balanced and
understandable and provides the information necessary for shareholders
to assess the Group’s position and performance, business model and
strategy.
By order of the Board
Charles Brown
Company Secretary
18 May 2021
Corporate headquarters:
Newenham House
Northern Cross
Malahide Road
Dublin 17
D17 AY61
Ireland
Registered office:
22 Grenville Street
St Helier
Jersey
JE4 8PX
Channel Islands
Experian plc Governance 139
i
F
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c
i
a
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s
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e
m
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t
s
Financial statements
140 Independent auditor’s report
Group financial statements
147 Group income statement
148 Group statement of
comprehensive income
149 Group balance sheet
150 Group statement of changes
in equity
151 Group cash flow statement
Notes to the Group financial statements
152 1. Corporate information
152 2. Basis of preparation
152 3. Recent accounting developments
180 25. Cash and cash equivalents
- excluding bank overdrafts
181 26. Trade and other payables
181 27. Borrowings
182 28. Net debt (non-GAAP measure)
184 29. Leases
185 30. Financial assets and liabilities
190 31. Fair value methodology
190 32. Contractual undiscounted future
cash flows for financial liabilities
191 33. Share incentive plans
193 34. Post-employment benefit plans
and related risks
194 35. Post-employment benefits –
IAS 19 information
152 4. Significant accounting policies
197 36. Deferred and current tax
159 5. Critical accounting estimates,
assumptions and judgments
160 6. Use of non-GAAP measures in the
Group financial statements
161 7. Financial risk management
163 8. Revenue
164 9. Segment information
169 10. Foreign currency
169 11. Labour costs and employee
numbers – continuing operations
199 37. Provisions
199 38. Called-up share capital and
share premium account
199 39. Retained earnings and
other reserves
200 40. Notes to the Group cash flow
statement
202 41. Acquisitions
203 42. Capital commitments
204 43. Contingencies
170 12. Amortisation and depreciation
204 44. Related party transactions
charges
170 13. Fees payable to the
Company’s auditor
205 45. Events occurring after the end
of the reporting period
171 14. Exceptional items and
Company financial statements
206 Company profit and loss account
206 Company statement of
comprehensive income
206 Company balance sheet
207 Company statement of changes
in equity
208 Notes to the Company
financial statements
other adjustments made
to derive Benchmark PBT –
continuing operations
172 15. Net finance costs
173 16. Tax charge
174 17. Discontinued operations
175 18. Earnings per share disclosures
175 19. Dividends
176 20. Goodwill
177 21. Other intangible assets
178 22. Property, plant and equipment
179 23. Investments in associates
179 24. Trade and other receivables
Experian plc Annual Report 2021
140
Independent auditor’s report
To the members of Experian plc
1 Our opinion is unmodified
We have audited the Financial Statements of Experian plc (the Company
or the Parent Company) for the year ended 31 March 2021, which
comprise the Group income statement, Group statement of
comprehensive income, Group balance sheet, Group statement of
changes in equity, Group cash flow statement, Company profit and loss
account, company statement of comprehensive income, Company
balance sheet, Company statement of changes in equity , and the related
notes, including the accounting policies in note 4 to the Group Financial
Statements and note D to the Company Financial Statements.
In our opinion:
the Group Financial Statements give a true and fair view, in accordance
with the International Financial Reporting Standards (IFRS) as adopted
by the European Union, of the state of the Group’s affairs as at 31
March 2021, and of its profit for the year then ended;
the Parent Company Financial Statements give a true and fair view, in
accordance with UK accounting standards, including FRS 101 Reduced
Disclosure Framework, of the state of the Parent Company’s affairs as
at 31 March 2021 and of its profit for the year then ended; and
the financial statements have been prepared in accordance with
Companies (Jersey) Law 1991.
Additional opinion in relation to IFRS as adopted by the
International Accounting Standards Board (IASB)
As explained in note 2 to the Group Financial Statements, the Group, in
addition to applying IFRS as adopted by the European Union, has also
applied IFRS as issued by the IASB.
In our opinion, the Group Financial Statements have been properly
prepared in accordance with IFRS as issued by the IASB.
Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities are
described below. We believe that the audit evidence we have obtained
is a sufficient and appropriate basis for our opinion. Our audit opinion
is consistent with our report to the Audit Committee.
We were first appointed as auditor by the shareholders on 20 July 2016.
The period of total uninterrupted engagement is for the five financial
years ended 31 March 2021. We have fulfilled our ethical responsibilities
under, and we remain independent of the Group in accordance with, UK
ethical requirements including the FRC Ethical Standard as applied to
listed public interest entities. No non-audit services prohibited by that
standard were provided.
Overview
Materiality:
Group Financial
Statements as a
whole
Coverage
US$48m (2020: US$47m)
4.5% (2020: 5.0%) of Group profit before tax
(continuing operations)
89% (2020: 89%) of Group revenue
93% (2020: 81%) of Group profit before tax
(continuing operations)
89% (2020: 89%) of Group total assets
Key audit matters vs 2020
Uncertain tax positions
Provisions for litigation and contingent liabilities
Impairment of goodwill
Recoverability of Parent Company’s investment in and amounts
due from subsidiaries
2 Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the Financial Statements and include
the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest effect
on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. We summarise below the key
audit matters, in decreasing order of audit significance, in arriving at our audit opinion above, together with our key audit procedures to address those
matters and, as required for public interest entities, our results from those procedures. These matters were addressed, and our results are based on
procedures undertaken, in the context of, and solely for the purpose of, our audit of the Financial Statements as a whole, and in forming our opinion
thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on these matters.
Tax – uncertain tax positions
(US$350m; 2020: US$327m)
Refer to the Audit Committee
Report within the Corporate
Governance Report and the
Group Financial Statements
notes 4,5,16, 36 and 43(a).
The risk
Dispute outcome
Experian operates in a number of territories worldwide with
complex local and international tax legislation. Significant
uncertainties arise over ongoing tax matters in the UK, the
USA, Brazil and Colombia. Tax provisioning for uncertain tax
positions is judgmental and requires estimates to be made
in relation to existing and potential tax matters.
The effect of these matters is that, as part of our risk
assessment, we determined that uncertain tax provisions
have a high degree of estimation uncertainty, with a potential
range of reasonable outcomes greater than our materiality
for the Financial Statements as a whole, and possibly many
times that amount.
Our response
We performed the tests below rather than seeking to rely on
any of the Group's controls because the nature of the balance
is such that we would expect to obtain audit evidence primarily
through the detailed procedures described.
Our audit procedures included:
Our tax expertise: Using our own tax specialists to perform
an assessment of the Group’s tax positions through the
inspection of correspondence with the relevant tax
authorities and critically assessed the advice that the Group
has received from external advisors. We challenged the
assumptions applied using our own expectations based on
our knowledge of the Group and considered relevant
judgments passed by authorities; and
Assessing transparency: Assessing the adequacy of the
Group’s disclosures in respect of uncertain tax positions.
Our results
We found the level of tax provisioning and disclosures to be
acceptable (2020 result: acceptable).
Experian plc Financial statements 141
2 Key audit matters: our assessment of risks of material misstatement continued
Provisions for litigation
and contingent liabilities
(US$10m; 2020: US$30m)
Refer to the Audit Committee
Report within the Corporate
Governance Report and the
Group Financial Statements
notes 5, 37 and 43.
Goodwill impairment in respect
of the EMEA and Asia Pacific
cash generating units (CGUs)
Goodwill: (US$799; 2020:
US$414m)
Impairment: (US$53m; 2020:
US$nil)
Refer to the Audit Committee
report within the Corporate
Governance Report and the
Group Financial Statements
notes 4, 5 and 20.
The risk
Dispute outcome
The Group operates in an industry with continuously
increasing levels of regulation, including both the EU and UK
General Data Protection Regulations, Consumer Finance
Protection Bureau in the USA and various federal and state
legislative developments in Brazil, which increase the
potential for regulatory breaches and penalties.
High levels of consumer litigation continue in the USA and
Brazil. The outcome of such litigation is uncertain and any
position taken by the Group involves significant judgment
and estimation.
The effect of these matters is that, as part of our risk
assessment, we determined that the litigation liability has a
high degree of estimation uncertainty, with a potential range
of reasonable outcomes greater than our materiality for the
Financial Statements as a whole, and possibly many times
that amount. In conducting our final audit procedures, based
on the status of ongoing matters at the year end date, we
reassessed the degree of estimation uncertainty to be less
significant. The risk at that date was principally over the
judgment of whether to record certain provisions and /or
disclose contingent liabilities.
Forecast-based valuation
Following the impairment recognised in the Asia Pacific CGU,
the audit risk has reduced compared to the prior year.
The total carrying value of goodwill as at 31 March 2021 is
US$5,261m. Of this, US$4,462m relates to CGUs where there
is significant headroom between the value-in-use and the
carrying value of net assets. The remaining balance of
US$799m relates to the EMEA and Asia Pacific CGUs. The
estimated recoverable amount of the EMEA CGU shows
relatively low headroom and an impairment to goodwill of
$53m in the Asia Pacific CGU has been recognised in the
year. The carrying values of both CGUs are sensitive to
changes in key assumptions, principally relating to short and
long-term revenue growth, future profitability and discount
rates, which could have a material impact on the carrying
value of the associated goodwill.
The effect of these matters is that, as part of our risk
assessment, we determined that the value in use of the
EMEA and Asia Pacific goodwill has a high degree of
estimation uncertainty, with a potential range of reasonable
outcomes greater than our materiality for the Financial
Statements as a whole. The Financial Statements (note 20)
disclose the sensitivity estimated by the Group.
Our response
We performed the tests below rather than seeking to rely on
any of the Group's controls because the nature of the balance
is such that we would expect to obtain audit evidence primarily
through the detailed procedures described.
Our audit procedures included:
Enquiry of lawyers: On all significant legal cases, where
necessary, assessment of correspondence with the Group’s
external lawyers was performed to corroborate our
understanding of these matters, accompanied by
discussions with internal counsel, as well as challenging the
Group’s assumptions on the likelihood and quantum of
potential cash outflows; and
Historical comparisons: Comparing the outcomes of
historical legal cases to current cases with similar fact
patterns; and
Assessing transparency: Assessing whether the Group’s
disclosures detailing significant legal proceedings
adequately disclose the potential liabilities of the Group.
Our results
We consider the provisions for litigation recognised and
contingent liability disclosures made to be acceptable (2020
result: acceptable).
We performed the tests below rather than seeking to rely on
any of the Group's controls because the nature of the balance
is such that we would expect to obtain audit evidence primarily
through the detailed procedures described.
Our audit procedures included:
Assessing methodology: Assessing whether the principles
and integrity of the cash flow model is in accordance with the
relevant accounting standards;
Challenging growth assumptions: Challenging the Group’s
assumptions and obtaining support, such as board-approved
strategy plans, as well as corroborating long term growth
rates to external sources;
Our sector experience: Critically assessing the
appropriateness of the discount rate applied through the use
of our valuations specialists;
Sensitivity analysis: Performing both breakeven and
plausible scenario sensitivity analysis on the key
assumptions noted above to identify sensitivity to potential
impairments;
Historical comparisons: Evaluating the track record of
historical assumptions used against actual results achieved;
and
Assessing transparency: Assessing whether the Group’s
disclosures about the sensitivity of the outcome of the
impairment assessment to a reasonably possible change in
key assumptions reflected the risks inherent in the valuation
of goodwill.
Our results
As a result of our work, we found the carrying value of goodwill
for the EMEA and Asia Pacific CGUs to be acceptable (2020
result: acceptable).
Experian plc Annual Report 2021Financial statements 142
Independent auditor’s report
Continued
2 Key audit matters: our assessment of risks of material misstatement continued
Recoverability of Parent
Company’s investment in and
amounts due from subsidiaries
(Investment in subsidiaries –
US$17,919.5m,
(2020: US$17,413.2m)
Amounts owed by subsidiary
undertakings – US$1,759.5m,
(2020: US$1,728.0m)
Refer to the Parent Company
Financial Statements notes
L and N.
The risk
Low risk, high value
The carrying amount of the Parent Company’s investments
in, and amounts due from, subsidiaries represents 91%
(2020: 91%) and 9% (2020: 9%) of the Parent Company’s total
assets respectively. Their recoverability is not at a high risk
of significant misstatement or subject to significant
judgment. However, due to their materiality in the context of
the Parent Company Financial Statements, this is considered
to be the area that had the greatest effect on our overall
Parent Company audit.
Our response
We performed the tests below rather than seeking to rely on
any of the Group's controls because the nature of the balance
is such that we would expect to obtain audit evidence primarily
through the detailed procedures described.
Our audit procedures included:
Tests of detail: Comparing the carrying amount of 100% of
investments and amounts due from subsidiaries, with the
relevant subsidiaries’ draft balance sheet to identify whether
their net assets, being an approximation of the minimum
recoverable amount of the related investments and
amounts owed by subsidiary undertakings, were in excess
of their carrying amount, and assessing whether those
subsidiaries have historically been profit-making;
Our results
We found the conclusion that there is no impairment of
the carrying amounts of the Parent company’s investments
in and amounts due from subsidiaries to be acceptable
(2020: acceptable).
3 Our application of materiality and an overview of the
scope of our audit
The three reporting components and work performed by the Group audit
team accounted for the percentages illustrated opposite.
Materiality
Materiality for the Group Financial Statements as a whole was set at
US$48m (2020: US$47m), determined with reference to a benchmark of
consolidated Group profit before tax on continuing operations, of which it
represents 4.5% (2020: 5.0%).
Materiality for the Parent Company Financial Statements as a whole
was set at US$25m (2020: US$25m), determined with reference to a
benchmark of company total assets, of which it represents 0.1%
(2020: 0.1%).
In line with our audit methodology, our procedures on individual account
balances and disclosures were performed to a lower threshold,
performance materiality, so as to reduce to an acceptable level the risk
that individually immaterial misstatements in individual account balances
add up to a material amount across the Financial Statements as a whole.
Performance materiality was set at 75% (2020: 75%) of materiality for the
Financial Statements as a whole, which equates to US$36m
(2020: US$35m) for the Group and US$19m (2020: US$19m) for the
Parent Company. We applied this percentage in our determination of
performance materiality because we did not identify any factors indicating
an elevated level of risk.
We agreed to report to the Audit Committee any corrected or uncorrected
identified misstatements exceeding US$2.4m (2020: US$2.3m), in addition
to other identified misstatements that warranted reporting on qualitative
grounds.
Our audit of the Group and Parent Company was undertaken to the
materiality level specified above, which has informed our identification
of significant risks of material misstatement and the associated audit
procedures performed in those areas as detailed above.
Scoping
Of the Group’s 196 (2020: 189) reporting components, we subjected
three (2020: three) to full scope audits for Group purposes, performed
by component auditors (KPMG member firms). Additionally, two reporting
components were audited by the Group audit team, one of which was the
Parent Company.
The remaining 11% (2020:11%) of total Group revenue, 7% (2020:19%)
of total profits and losses that make up Group profit before tax (continuing
operations) and 11% (2020:11%) of total Group assets is represented by
191 (2020:184 ) reporting components, none of which individually
represented more than 2% (2020:3% ) of any of total Group revenue,
Group profit before tax (continuing operations) or total Group assets.
For these residual components, we performed analysis at an aggregated
Group level to re-examine our assessment that there were no significant
risks of material misstatement within these.
The Group audit team instructed component auditors as to the significant
areas to be covered, including the relevant risks detailed above and the
information to be reported back.
The Group audit team approved the component materialities, which
ranged from US$9m to US$36m (2020: US$12m to US$42m) having
regard to the mix of size and risk profile of the Group across the
components.
The Group operates five shared service centres in the UK, the USA,
Malaysia, Costa Rica and Bulgaria, the outputs of which are included in
the financial information of the reporting components they service and
therefore they are not separate reporting components. Each of the
service centres is subject to specified risk-focused audit procedures,
predominantly the testing of transaction processing and review controls.
Additional procedures are performed at certain reporting components to
address the audit risks not covered by the work performed over the
shared service centres.
Site visits to the USA, UK and Brazil components by the Group audit
team were unable to take place as a result of the COVID-19 pandemic.
Telephone and video conference meetings were held with these
component audit teams. At these meetings, the findings reported to
the Group audit team were discussed in more detail, and any further
work required by the Group audit team was then performed by the
component auditors.
Experian plc Financial statements 143
3 Our application of materiality and an overview of the scope of our audit continued
Group profit before tax
(continuing operations)
US$1,077m (2020: US$942m)
Profit before tax
(continuing operations)
Group materiality
Group materiality
US$48m (2020: US$47m)
US$48m
Whole Financial Statements materiality
(2020: US$47m)
US$36m
Range of materiality at three reporting
components US$9m to US$36m
(2020: US$12m to US$42m)
US$2.4m
Misstatements reported to the
Audit Committee (2020: US$2.3m)
Group revenue
11
11
89%
(2020: 89%)
89
89
Total profits and losses that
make up Group profit before tax
(continuing operations)
7
19
93%
(2020: 81%)
81
93
Group total assets
11
11
89%
(2020: 89%)
89
89
Full scope for Group audit purposes 2021
Full scope for Group audit purposes 2020
Residual components
4 Going concern
The Directors have prepared the Financial Statements on the going
concern basis as they do not intend to liquidate the Group or the Company
or to cease their operations, and as they have concluded that the Group’s
and the Company’s financial position means that this is realistic. They
have also concluded that there are no material uncertainties that could
have cast significant doubt over their ability to continue as a going
concern for at least a year from the date of approval of the Financial
Statements (the going concern period).
We used our knowledge of the Group, its industry, and the general
economic environment to identify the inherent risks to its business model
and analysed how those risks might affect the Group’s and Company’s
financial resources or ability to continue operations over the going
concern period. The risk that we considered most likely to adversely affect
the Group’s and Company’s available financial resources and metrics
relevant to debt covenants over this period is the loss or inappropriate use
of data or systems, leading to serious reputational and brand damage,
legal penalties and class action litigation.
We considered whether these risks could plausibly affect the liquidity or
covenant compliance in the going concern period by assessing the degree
of downside assumption that, individually and collectively, could result in a
liquidity issue, taking into account the Group’s current and projected cash
and facilities (a reverse stress test). We also assessed the completeness
of the going concern disclosure.
Our conclusions based on this work:
we consider that the Directors’ use of the going concern basis of
accounting in the preparation of the Financial Statements is
appropriate;
we have not identified, and concur with the Directors’ assessment that
there is not, a material uncertainty related to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s or
Company's ability to continue as a going concern for the going concern
period; and
we have nothing material to add or draw attention to in relation to the
Directors’ statement in note 2 to the Financial Statements on the use of
the going concern basis of accounting with no material uncertainties
that may cast significant doubt over the Group and Company’s use of
that basis for the going concern period, and we found the going concern
disclosure in note 2 to be acceptable.
However, as we cannot predict all future events or conditions and as
subsequent events may result in outcomes that are inconsistent with
judgments that were reasonable at the time they were made, the above
conclusions are not a guarantee that the Group or the Company will
continue in operation.
Experian plc Annual Report 2021Financial statements 144
Independent auditor’s report
Continued
5 Fraud and breaches of laws and regulations – ability
to detect
Identifying and responding to risks of material misstatement
due to fraud
To identify risks of material misstatement due to fraud (fraud risks) we
assessed events or conditions that could indicate an incentive or pressure
to commit fraud or provide an opportunity to commit fraud. Our risk
assessment procedures included:
Enquiring of Directors, the Audit Committee, Internal Audit and
inspection of policy documentation as to the Group’s high-level policies
and procedures to prevent and detect fraud, including the internal audit
function, and the Group’s channel for “whistleblowing”, as well as
whether they have knowledge of any actual, suspected or alleged fraud.
Reading Board, Audit Committee, Remuneration Committee,
Nomination and Corporate Governance Committee minutes.
Considering remuneration incentive schemes and performance targets
for management and Directors including the targets for management
remuneration linked to the Co-investment Plans and Performance
Share Plan share incentive plans.
Using analytical procedures to identify any unusual or unexpected
relationships.
We communicated identified fraud risks throughout the audit team and
remained alert to any indications of fraud throughout the audit. This
included communication from the Group audit team to full scope
component audit teams of relevant fraud risks identified at the Group
level and request to full scope component audit teams to report to the
Group audit team any instances of fraud that could give rise to a material
misstatement in the Group Financial statements.
As required by auditing standards, we perform procedures to address the
risk of management override of controls and the risk of fraudulent
revenue recognition, in particular non-transactional revenue recorded in
the wrong period, and the risk that Group and component management
may make inappropriate accounting entries.
We did not identify any additional fraud risks.
We also performed procedures including:
Identifying journal entries to test for all full scope components and
central entities based on risk criteria and comparing the identified
entries to supporting documentation. These included those posted with
key descriptive words and those posted to seldom used accounts.
Assessing when non-transactional revenue was recognised in all full
scope components, particularly focusing on revenue recognised in the
days before the year end date, and whether it was recognised in the
correct year.
Identifying and responding to risks of material misstatement
due to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be
expected to have a material effect on the Financial Statements from our
general commercial and sector experience, and through discussion with
the Directors (as required by auditing standards), and from inspection of
the Group’s regulatory and legal correspondence and discussed with the
Directors the policies and procedures regarding compliance with laws
and regulations.
As the Group is regulated, our assessment of risks involved gaining an
understanding of the control environment including the entity’s
procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our team
and remained alert to any indications of non-compliance throughout the
audit. This included communication from the Group audit team to
full-scope component audit teams of relevant laws and regulations
identified at the Group level and a request for full scope component
auditors to report to the Group audit team any instances of non-
compliance with laws and regulations that could give rise to a material
misstatement in the Group Financial Statements.
The potential effect of these laws and regulations on the Financial
Statements varies considerably.
First, the Group is subject to laws and regulations that directly affect the
Financial Statements including financial reporting legislation (including
related companies legislation), distributable profits legislation as set out
by Companies (Jersey) Law 1991, taxation legislation and pension
legislation and we assessed the extent of compliance with these laws
and regulations as part of our procedures on the related financial
statement items.
Secondly, the Group is subject to many other laws and regulations where
the consequences of non-compliance could have a material effect on
amounts or disclosures in the Financial Statements, for instance through
the imposition of fines or litigation. We identified the following areas as
those most likely to have such an effect: data protection legislation, health
and safety, anti-bribery, employment law and certain aspects of company
legislation recognising the financial and regulated nature of the Group’s
activities. Auditing standards limit the required audit procedures to
identify non-compliance with these laws and regulations to enquiry of the
Directors and other management and inspection of regulatory and legal
correspondence, if any. Therefore, if a breach of operational regulations is
not disclosed to us or evident from relevant correspondence, an audit will
not detect that breach.
Further detail in respect of the provisions for litigations, contingent
liabilities and uncertain tax positions is set out in the key audit matter
disclosures in section 2 of this report.
Context of the ability of the audit to detect fraud or breaches
of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk
that we may not have detected some material misstatements in the
Financial Statements, even though we have properly planned and
performed our audit in accordance with auditing standards. For example,
the further removed non-compliance with laws and regulations is from
the events and transactions reflected in the Financial Statements, the less
likely the inherently limited procedures required by auditing standards
would identify it.
In addition, as with any audit, there remained a higher risk of non-
detection of fraud, as these may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal controls. Our
audit procedures are designed to detect material misstatement. We are
not responsible for preventing non-compliance or fraud and cannot be
expected to detect non-compliance with all laws and regulations.
6 We have nothing to report on the other information in the
Annual Report
The Directors are responsible for the other information presented in the
Annual Report together with the Financial Statements. Our opinion on the
Financial Statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except as explicitly
stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so,
consider whether, based on our Financial Statements audit work, the
information therein is materially misstated or inconsistent with the
Financial Statements or our audit knowledge. Based solely on that work
we have not identified material misstatements in the other information.
Experian plc Financial statements 145
6 We have nothing to report on the other information in the
Annual Report continued
Report on Directors’ Remuneration
In addition to our audit of the Financial Statements, the Directors
have engaged us to audit the information in the Report on Directors’
Remuneration that is described as having been audited, which the
Directors have decided to prepare as if the Company were required
to comply with the requirements of Schedule 8 to The Large and
Medium-sized Companies and Groups (Accounts and Reports)
Regulations 2008 (S.I. 2008 No. 410) made under the UK
Companies Act 2006.
In our opinion, the part of the Report on Directors’ Remuneration to
be audited has been properly prepared in accordance with the UK
Companies Act 2006, as if it applied to the Company.
Disclosures of emerging and principal risks and
longer-term viability
We are required to perform procedures to identify whether there is a
material inconsistency between the Directors’ disclosures in respect of
emerging and principal risks and the Viability Statement, and the
Financial Statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw
attention to in relation to:
the Directors’ confirmation within the Viability Statement on page 82
that they have carried out a robust assessment of the emerging and
principal risks facing the Group, including those that would threaten its
business model, future performance, solvency and liquidity;
the Principal Risks disclosures describing these risks and how
emerging risks are identified, and explaining how they are being
managed and mitigated; and
the Directors’ explanation in the viability assessment of how they have
assessed the prospects of the Group, over what period they have done
so and why they considered that period to be appropriate, and their
statement as to whether they have a reasonable expectation that the
Group will be able to continue in operation and meet its liabilities as
they fall due over the period of their assessment, including any related
disclosures drawing attention to any necessary qualifications or
assumptions.
We are also required to review the Viability Statement set out on page 82
under the Listing Rules. Based on the above procedures, we have
concluded that the above disclosures are materially consistent with the
Financial Statements and our audit knowledge.
Our work is limited to assessing these matters in the context of only the
knowledge acquired during our Financial Statements audit. As we cannot
predict all future events or conditions and as subsequent events may
result in outcomes that are inconsistent with judgments that were
reasonable at the time they were made, the absence of anything to report
on these statements is not a guarantee as to the Group’s and Company’s
longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a
material inconsistency between the Directors’ corporate governance
disclosures and the Financial Statements and our audit knowledge.
Based on those procedures, we have concluded that each of the
following is materially consistent with the Financial Statements
and our audit knowledge:
the Directors’ statement that they consider that the Annual Report
and Financial Statements taken as a whole is fair, balanced and
understandable, and provides the information necessary for
shareholders to assess the Group’s position and performance,
business model and strategy;
the section of the Annual Report describing the work of the Audit
Committee, including the significant issues that the Audit Committee
considered in relation to the Financial Statements, and how these
issues were addressed; and
the section of the Annual Report that describes the review of the
effectiveness of the Group’s risk management and internal control
systems.
We are required to review the part of the Corporate Governance
Statement relating to the Group’s compliance with the provisions of the
UK Corporate Governance Code specified by the Listing Rules for our
review. We have nothing to report in this respect.
7 We have nothing to report on the other matters on which
we are required to report by exception
Under the Companies (Jersey) Law, 1991 and the terms of our
engagement, we are required to report to you if, in our opinion:
proper accounting records have not been kept by the Company; or
proper returns adequate for our audit have not been received from
branches not visited by us; or
the Company’s Financial Statements and the part of the Report on
Directors’ Remuneration which we were engaged to audit are not in
agreement with the accounting records and returns; or
we have not received all the information and explanations we
require for our audit.
We have nothing to report in these respects.
8 Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 137, the
Directors are responsible for: the preparation of Financial Statements
which give a true and fair view; such internal control as they determine is
necessary to enable the preparation of Financial Statements that are free
from material misstatement, whether due to fraud or error; assessing the
Group and Parent Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern; and using the
going concern basis of accounting unless they either intend to liquidate
the Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
Experian plc Annual Report 2021Financial statements 146
Independent auditor’s report
Continued
8 Respective responsibilities continued
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the
Financial Statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue our opinion in an auditor’s
report. Reasonable assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the Financial Statements.
A fuller description of our responsibilities is provided on the FRC’s
website at www.frc.org.uk/auditorsresponsibilities.
9 The purpose of our audit work and to whom we owe our
responsibilities
This report is made solely to the Company’s members, as a body, in
accordance with Article 113A of the Companies (Jersey) Law 1991 and
the terms of our engagement by the Company. Our audit work has been
undertaken so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report, and the
further matters we are required to state to them in accordance with the
terms agreed with the Company, and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company’s members, as a body,
for our audit work, for this report, or for the opinions we have formed.
Andrew Bradshaw
for and on behalf of KPMG LLP
Chartered Accountants and Recognized Auditor
15 Canada Square,
London
E14 5GL
United Kingdom
18 May 2021
Experian plc Financial statements Group income statement
for the year ended 31 March 2021
Revenue
Labour costs
Data and information technology costs
Amortisation and depreciation charges
Marketing and customer acquisition costs
Other operating charges
Total operating expenses
Profit on disposal of associate
Operating profit/(loss)
Interest income
Finance expense
Net finance costs
Share of post-tax profit of associates
Profit/(loss) before tax
Tax (charge)/credit
Profit/(loss) for the financial year from continuing operations
Loss for the financial year from discontinued operations
Profit/(loss) for the financial year
Attributable to:
Owners of Experian plc
Non-controlling interests
Profit/(loss) for the financial year
Notes
8,9
11(a)
12
14(b)
15
9
16
17
Benchmark1
US$m
5,372
(1,965)
(861)
(453)
(417)
(295)
(3,991)
—
1,381
12
(133)
(121)
5
1,265
(328)
937
—
937
2021
Non-
benchmark2
US$m
—
(30)
—
(138)
—
(150)
(318)
120
(198)
—
(6)
(6)
16
(188)
53
(135)
—
(135)
Total
US$m
5,372
(1,995)
(861)
(591)
(417)
(445)
(4,309)
120
1,183
12
(139)
(127)
21
1,077
(275)
802
—
802
938
(1)
937
(135)
—
(135)
803
(1)
802
Total Benchmark EBIT1
9(a)(i)
1,386
147
Total
US$m
5,179
(1,872)
(753)
(537)
(378)
(454)
(3,994)
—
1,185
13
(270)
(257)
14
942
(263)
679
(2)
677
2020
Non-
benchmark2
US$m
—
(8)
—
(124)
—
(62)
(194)
—
(194)
—
(125)
(125)
6
(313)
61
(252)
(2)
(254)
(254)
—
(254)
675
2
677
Benchmark1
US$m
5,179
(1,864)
(753)
(413)
(378)
(392)
(3,800)
—
1,379
13
(145)
(132)
8
1,255
(324)
931
—
931
929
2
931
1,387
Earnings/(loss) per share
Basic
Diluted
Earnings/(loss) per share from continuing operations
Basic
Diluted
Benchmark PBT per share1,3
Full-year dividend per share1
Notes
US cents
US cents
US cents
US cents
US cents
US cents
103.1
102.3
(14.9)
(14.7)
103.1
102.3
(14.9)
(14.7)
139.0
18(a)
18(a)
18(a)
18(a)
19
88.2
87.6
88.2
87.6
47.0
103.0
102.1
(28.2)
(27.9)
103.0
102.1
(28.0)
(27.7)
139.1
74.8
74.2
75.0
74.4
47.0
1 Total Benchmark EBIT, Benchmark PBT per share and Full-year dividend per share are non-GAAP measures, defined in note 6.
2 The loss before tax for non-benchmark items of US$188m (2020: US$313m) comprises a net credit for Exceptional items of US$35m (2020: charge of US$35m) and net charges for other adjustments made to
derive Benchmark PBT of US$223m (2020: US$278m). Further information is given in note 14.
3 Benchmark PBT per share is calculated by dividing Benchmark PBT of US$1,265m (2020: US$1,255m) by the weighted average number of ordinary shares of 910 million (2020: 902 million). The amount is stated in
US cents per share.
Experian plc Annual Report 2021Financial statements 148
Group statement of comprehensive income
for the year ended 31 March 2021
Profit for the financial year
Other comprehensive income
Items that will not be reclassified to profit or loss:
Remeasurement of post-employment benefit assets and obligations (note 35(b))
Changes in the fair value of investments revalued through OCI
Deferred tax charge
Items that will not be reclassified to profit or loss
Items that are or may be reclassified subsequently to profit or loss:
Currency translation gains/(losses)
Fair value gain on cash flow hedge
Hedging gain reclassified to profit or loss
Items that are or may be reclassified subsequently to profit or loss
Other comprehensive income for the financial year1
Total comprehensive income for the financial year
Attributable to:
Owners of Experian plc
Non-controlling interests
Total comprehensive income for the financial year
2021
US$m
802
2020
US$m
677
2
11
(1)
12
70
35
(33)
72
84
886
881
5
886
26
(6)
(5)
15
(313)
—
—
(313)
(298)
379
378
1
379
1 Amounts reported within Other comprehensive income (OCI) are in respect of continuing operations and, except as reported for post-employment benefit assets and obligations, there is no associated tax.
Currency translation items, not reclassified to profit or loss, are recognised in the translation reserve within other reserves and in non-controlling interests. Other items within Other comprehensive income are
recognised in retained earnings.
Experian plc Financial statements Group balance sheet
at 31 March 2021
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Investments in associates
Deferred tax assets
Post-employment benefit assets
Trade and other receivables
Financial assets revalued through OCI
Other financial assets
Current assets
Trade and other receivables
Current tax assets
Other financial assets
Cash and cash equivalents - excluding bank overdrafts
Current liabilities
Trade and other payables
Borrowings
Current tax liabilities
Provisions
Other financial liabilities
Net current liabilities
Total assets less current liabilities
Non-current liabilities
Trade and other payables
Borrowings
Deferred tax liabilities
Post-employment benefit obligations
Other financial liabilities
Net assets
Equity
Called-up share capital
Share premium account
Retained earnings
Other reserves
Attributable to owners of Experian plc
Non-controlling interests
Total equity
These financial statements were approved by the Board on 18 May 2021 and were signed on its behalf by:
Kerry Williams
Director
149
2020
US$m
4,543
1,583
502
123
107
83
164
171
223
7,499
1,078
28
17
277
1,400
(1,430)
(498)
(225)
(48)
(23)
(2,224)
(824)
6,675
(121)
(3,916)
(202)
(48)
(107)
(4,394)
2,281
2021
US$m
5,261
1,966
469
128
86
102
160
245
223
8,640
1,197
34
20
180
1,431
(1,543)
(655)
(176)
(27)
(15)
(2,416)
(985)
7,655
(159)
(3,682)
(361)
(55)
(279)
(4,536)
3,119
96
1,756
19,207
(17,978)
3,081
38
3,119
96
1,574
18,826
(18,221)
2,275
6
2,281
Notes
20
21
22
23
36(a)
35(a)
24(a)
30(a)
30(b)
24(a)
36(b)
30(b)
25(a)
26(a)
27(a)
36(b)
37
30(b)
26(a)
27(a)
36(a)
35(a)
30(b)
38
38
39(a)
39(b)
Experian plc Annual Report 2021Financial statements 150
Group statement of changes in equity
for the year ended 31 March 2021
At 1 April 2020
Comprehensive income:
Profit for the financial year
Other comprehensive income for the financial year
Total comprehensive income for the financial year
Transactions with owners:
Employee share incentive plans:
– value of employee services
– shares issued on vesting
– other vesting of awards and exercises of share options
– related tax credit
– other payments
Shares delivered as consideration for acquisition
Non-controlling interests arising on business combinations
Recognition of non-controlling interests on acquisition
Dividends paid
Transactions with owners
At 31 March 2021
At 1 April 2019
Comprehensive income:
Profit for the financial year
Other comprehensive income for the financial year
Total comprehensive income for the financial year
Transactions with owners:
Employee share incentive plans:
– value of employee services
– shares issued on vesting
– purchase of shares by employee trusts
– other vesting of awards and exercises of share options
– related tax credit
– other payments
Purchase and cancellation of own shares
Transactions in respect of non-controlling interests
Dividends paid
Transactions with owners
At 31 March 2020
Called-up
share
capital
(Note 38)
US$m
96
Share
premium
account
(Note 38)
US$m
1,574
Retained
earnings
(Note 39)
US$m
18,826
Other
reserves
(Note 39)
US$m
(18,221)
Attributable
to owners of
Experian plc
US$m
2,275
Non-
controlling
interests
US$m
6
—
—
—
—
—
—
—
—
—
—
—
—
—
96
—
—
—
803
12
815
—
66
66
—
19
—
—
—
163
—
—
—
182
1,756
106
—
(75)
2
(6)
—
(34)
—
(427)
(434)
19,207
—
—
87
—
—
90
—
—
—
177
(17,978)
803
78
881
106
19
12
2
(6)
253
(34)
—
(427)
(75)
3,081
(1)
6
5
—
—
—
—
—
—
24
4
(1)
27
38
Called-up
share
capital
(Note 38)
US$m
96
Share
premium
account
(Note 38)
US$m
1,559
Retained
earnings
(Note 39)
US$m
18,718
Other
reserves
(Note 39)
US$m
(17,893)
Attributable
to owners of
Experian plc
US$m
2,480
Non-
controlling
interests
US$m
14
—
—
—
—
—
—
—
—
—
—
—
—
—
96
—
—
—
675
15
690
—
(312)
(312)
—
15
—
—
—
—
—
—
—
15
1,574
83
—
—
(64)
5
(5)
(112)
(65)
(424)
(582)
18,826
—
—
(92)
76
—
—
—
—
—
(16)
(18,221)
675
(297)
378
83
15
(92)
12
5
(5)
(112)
(65)
(424)
(583)
2,275
2
(1)
1
—
—
—
—
—
—
—
(7)
(2)
(9)
6
Total
equity
US$m
2,281
802
84
886
106
19
12
2
(6)
253
(10)
4
(428)
(48)
3,119
Total
equity
US$m
2,494
677
(298)
379
83
15
(92)
12
5
(5)
(112)
(72)
(426)
(592)
2,281
Experian plc Financial statements Group cash flow statement
for the year ended 31 March 2021
Cash flows from operating activities
Cash generated from operations
Interest paid
Interest received
Dividends received from associates
Tax paid
Net cash inflow from operating activities – continuing operations
Net cash outflow from operating activities – discontinued operations
Net cash inflow from operating activities
Cash flows from investing activities
Purchase of other intangible assets
Purchase of property, plant and equipment
Sale of property, plant and equipment
Purchase of other financial assets
Sale of other financial assets
Acquisition of subsidiaries, net of cash acquired
Disposal of investment in associate
Net cash flows used in investing activities
Cash flows from financing activities
Cash inflow in respect of shares issued
Cash outflow in respect of share purchases
Other payments on vesting of share awards
Transactions in respect of non-controlling interests
New borrowings
Repayment of borrowings
Payment of lease liabilities
Net receipts/(payments) for cross-currency swaps and foreign exchange contracts
Net receipts from equity swaps
Dividends paid
Net cash flows (used in)/from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at 1 April
Exchange movements on cash and cash equivalents
Cash and cash equivalents at 31 March
151
2020
US$m
1,694
(157)
5
6
(286)
1,262
(6)
1,256
(403)
(84)
5
(95)
—
(600)
—
(1,177)
15
(203)
(5)
(67)
1,519
(553)
(55)
(169)
5
(426)
61
140
146
(14)
272
Notes
40(a)
17
40(c)
40(d)
14(b), 23
40(e)
40(e)
40(d)
40(f)
2021
US$m
1,822
(119)
4
17
(236)
1,488
—
1,488
(374)
(48)
1
(31)
24
(526)
127
(827)
19
—
(6)
(10)
1,011
(1,337)
(56)
54
6
(428)
(747)
(86)
272
(16)
170
Experian plc Annual Report 2021Financial statements
152
Notes to the Group financial statements
for the year ended 31 March 2021
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.
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.
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.
Interest Rate Benchmark Reform - Phase 1, Amendments to IFRS 9
‘Financial Instruments’, IAS 39 ‘Financial Instruments: Recognition and
Measurement’ and IFRS 7 ‘Financial Instruments: Disclosures’ provide
relief from the discontinuation of hedge accounting as a result of
interbank offered rate (IBOR) reform.
There has been no change in this information since the Annual Report for
the year ended 31 March 2020.
2. Basis of preparation
The Group financial statements are:
prepared in accordance with the Companies (Jersey) Law 1991 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). EU-IFRS differs in certain respects from IFRS
as issued by the IASB, 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 in note 10; and
designed to voluntarily include disclosures in line with those parts of
the UK Companies Act 2006 applicable to companies reporting under
IFRS.
The Company’s own financial statements are prepared under UK
accounting standards in accordance with FRS 101 ‘Reduced Disclosure
Framework’.
Interest Rate Benchmark Reform - Phase 2, Amendments to IFRS 9, IAS
39 and IFRS 7 is effective for Experian from FY22. By applying the
practical expedient in IFRS 9, the Group does not expect to be required to
discontinue its hedging relationships as a result of changes in reference
rates due to IBOR reform.
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. Significant accounting policies
The significant accounting policies applied are summarised below. They
have been applied consistently to both years presented. The explanations
of these policies focus on areas where judgment is applied or which are
particularly important in the financial statements. For ease of reference,
the content within this note is arranged as follows:
sections (a) to (d) – content that applies generally to the preparation of
these financial statements;
sections (e) to (p) – balance sheet policies, to be read in conjunction with
specific notes as indicated;
sections (q) to (x) – income statement policies, to be read in conjunction
with specific notes as indicated; and
section (y) – the policy and presentation principles adopted for disclosing
segment information, in accordance with IFRS 8 ‘Operating Segments’.
There has been no change in the basis of preparation of the Group
financial statements since the Annual Report for the year ended 31 March
2020.
(a) Basis of consolidation
The Group financial statements incorporate the financial statements of
the Company and its subsidiary undertakings.
The use of critical accounting estimates and management judgment is
required in applying the accounting policies. Areas involving a higher
degree of judgment or complexity, or where assumptions and estimates
are significant to the Group financial statements, are highlighted in note 5.
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 discussed in
connection with the Viability statement.
At 31 March 2021, the Group had undrawn committed bank borrowing
facilities of US$2.7bn which have an average remaining tenor of four
years.
The directors believe that the Group is well placed to manage its financing
and other business risks satisfactorily, and have a reasonable expectation
that the Group will have adequate resources to continue in 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.
Subsidiaries
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group and cease to be consolidated from the date that
the Group no longer has control. All business combinations are accounted
for using the acquisition method.
Intra-Group transactions, balances and unrealised gains on transactions
between Group companies are eliminated on consolidation. Unrealised
losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred.
Accounting policies of subsidiaries and segments are consistent with the
policies adopted by the Group for the purposes of the Group’s
consolidation. The Group financial statements incorporate the financial
statements of the Company and its subsidiary undertakings for the year
ended 31 March 2021. A full list of subsidiary undertakings is given in note
S to the Company financial statements.
Associates
Interests in associates are accounted for using the equity method. They
are initially recognised at cost, which includes transaction costs.
Subsequent to initial recognition, the Group financial statements include
the Group’s share of the profit or loss and other comprehensive income of
equity-accounted investees, until the date on which significant influence
ceases. Gains or losses on disposal are recognised within operating profit.
Experian plc Financial statements 153
4. Significant accounting policies continued
Non-controlling interests
The non-controlling interests in the Group balance sheet represent the
share of net assets of subsidiary undertakings held outside the Group. The
movement in the year comprises the profit attributable to such interests
together with any dividends paid, movements in respect of corporate
transactions and related exchange differences.
The Group treats transactions with non-controlling interests that do not
result in a loss of control as transactions with equity owners of the Group.
For purchases from non-controlling interests, the difference between any
consideration paid and the relevant share acquired of the carrying value
of the net assets of the subsidiary is recorded in equity. Gains or losses on
disposals to non-controlling interests are also recorded in equity.
Where put option agreements are in place in respect of shares held by
non-controlling shareholders, the liability is stated at the present value of
the expected future payments. Such liabilities are shown as financial
liabilities in the Group balance sheet. The change in the value of such
options in the year is recognised in the Group income statement within net
finance costs, while any change in that value attributable to exchange rate
movements is recognised directly in Other comprehensive income (OCI).
Where put option agreements are in place the Group adopts the
‘anticipated acquisition’ approach, recording the other side of the put
liability against goodwill, with no subsequent profits attributed to
non-controlling interests.
(b) Foreign currency translation
Transactions and balances
Transactions in foreign currencies are recorded in the functional currency
of the relevant Group undertaking at the exchange rate prevailing on the
date of the transaction. At each balance sheet date, monetary assets and
liabilities denominated in foreign currencies are retranslated at the
exchange rate prevailing at the balance sheet date. Translation differences
on monetary items are taken to the Group income statement except when
recognised in OCI, as qualifying net investment hedges or cash flow
hedges. Translation differences on non-monetary financial assets revalued
through OCI are reported as part of the fair value gains or losses in OCI.
Group undertakings
The results and financial position of Group undertakings whose functional
currencies are not the US dollar are translated into US dollars as follows:
Income and expenses are generally translated at the average exchange
rate for the year. Where this average is not a reasonable approximation
of the cumulative effect of the rates prevailing on the transaction dates,
income and expenses are translated at the rates on the dates of the
transactions.
Assets and liabilities are translated at the closing exchange rate on the
balance sheet date.
All resulting exchange differences are recognised in OCI and as a
separate component of equity.
On consolidation, exchange differences arising from the translation of the
net investment in Group undertakings whose functional currencies are
not the US dollar, and of borrowings and other currency instruments
designated as hedges of such investments, are recognised in OCI to the
extent that such hedges are effective. Tax attributable to those exchange
differences is taken directly to OCI. When such undertakings are sold,
these exchange differences are recognised in the Group income
statement as part of the gain or loss on sale. Goodwill and fair value
adjustments arising on the acquisition of such undertakings are treated
as assets and liabilities of the entities and are translated into US dollars at
the closing exchange rate.
(c) Fair value estimation
The fair values of derivative financial instruments and other financial
assets and liabilities are determined by using market data and
established estimation techniques such as discounted cash flow and
option valuation models. The fair value of foreign exchange contracts is
based on a comparison of the contractual and year-end exchange rates.
The fair values of other derivative financial instruments are estimated by
discounting the future cash flows to net present values, using appropriate
market rates prevailing at the year-end.
(d) Impairment of non-financial assets
Assets that are not subject to amortisation or depreciation are tested
annually for impairment. Assets that are subject to amortisation or
depreciation are reviewed for impairment when there is an indication that
the carrying amount may not be recoverable. An impairment charge is
recognised for the amount by which an asset’s carrying amount exceeds its
recoverable amount, which is the higher of an asset’s fair value less costs of
disposal, and value-in-use. For the purposes of assessing impairment,
assets are grouped into cash generating units (CGUs), determined by the
lowest levels for which there are separately identifiable cash flows.
(e) Goodwill (note 20)
Goodwill is stated at cost less any accumulated impairment, where cost is
the excess of the fair value of the consideration payable for an acquisition
over the fair value at the date of acquisition of the Group’s share of
identifiable net assets of a subsidiary or associate acquired. Fair values
are attributed to the identifiable assets, liabilities and contingent liabilities
that existed at the date of acquisition, reflecting their condition at that
date. Adjustments are made where necessary to align the accounting
policies of acquired businesses with those of the Group. Goodwill is not
amortised but is tested annually for impairment, or more frequently if
there is an indication that it may be impaired. An impairment charge is
recognised in the Group income statement for any amount by which the
carrying value of the goodwill exceeds the recoverable amount.
Goodwill is allocated to CGUs and monitored for internal management
purposes by operating segment. The allocation is made to those CGUs or
groups of CGUs that are expected to benefit from the business
combination in which the goodwill arose.
Gains and losses on the disposal of an undertaking take account of the
carrying amount of goodwill relating to the undertaking sold, allocated
where necessary on the basis of relative fair value.
(f) Other intangible assets (note 21)
Acquisition intangibles
Intangible assets acquired as part of a business combination are
capitalised on acquisition at fair value and separately from goodwill, if
those assets are identifiable (separable or arising from legal rights). Such
assets are referred to as acquisition intangibles in these financial
statements. Amortisation is charged on a straight-line basis as follows:
Customer and other relationships – over three to 18 years, based on
management’s estimates of the average lives of such relationships, and
reflecting their long-term nature.
Acquired software development – over three to eight years, based on
the asset’s expected life.
Marketing-related assets (trademarks and licences) – over their
contractual lives, up to a maximum of 20 years.
Marketing-related assets (trade names) – over three to 14 years, based
on management’s expected retention of trade names within the
business.
Experian plc Annual Report 2021Financial statements 154
4. Significant accounting policies continued
Other intangibles
Other intangibles are capitalised at cost. Certain costs incurred in the
developmental phase of an internal project are capitalised provided that a
number of criteria are satisfied. These include the technical feasibility of
completing the asset so that it is available for use or sale, the availability
of adequate resources to complete the development and to use or sell the
asset, and how the asset will generate probable future economic benefit.
The cost of such assets with finite useful economic or contractual lives is
amortised on a straight-line basis over those lives. The carrying values
are reviewed for impairment when events or changes in circumstances
indicate that the carrying values may not be recoverable. If impaired, the
carrying values are written down to the higher of fair value less costs of
disposal, and value-in-use which is determined by reference to projected
future income streams using assumptions in respect of profitability and
growth.
Further details on the capitalisation and amortisation policy for the key
asset classifications within other intangibles are:
Databases – capitalised databases, which comprise the data purchase
and capture costs of internally developed databases, are amortised
over three to seven years.
Computer software (internal use) – computer software licences
purchased for internal use are capitalised on the basis of the costs
incurred to purchase and bring into use the specific software. These
costs are amortised over three to ten years.
Computer software (internally generated) – costs directly associated
with producing identifiable and unique software products controlled by
the Group, and that will generate economic benefits beyond one year,
are recognised as intangible assets. These costs are amortised over
three to ten years.
Research expenditure, together with other costs associated with
developing or maintaining computer software programs or databases, is
recognised in the Group income statement as incurred.
(g) Property, plant and equipment (note 22)
Purchased items of property, plant and equipment are held at cost less
accumulated depreciation and any impairment in value. Cost includes the
original purchase price of the asset and amounts attributable to bringing
the asset to its working condition for its intended use.
Depreciation is charged on a straight-line basis as follows:
Freehold properties – over 50 years.
Leasehold improvements to short leasehold properties – over the
remaining period of the lease.
Plant and equipment – over three to ten years, according to the asset’s
estimated useful life. Technology-based assets are typically depreciated
over three to five years, with other infrastructure assets depreciated
over five to ten years.
(h) Trade and other receivables (note 24)
Trade receivables and contract assets are initially recognised at fair value
and subsequently measured at this value less loss allowances. Where the
time value of money is material, receivables are then carried at amortised
cost using the effective interest method, less loss allowances.
We apply the IFRS 9 simplified lifetime expected credit loss approach.
Expected credit losses are determined using a combination of historical
experience and forward-looking information. Impairment losses or credits
in respect of trade receivables and contract assets are recognised in the
Group income statement, within other operating charges.
(i) Cash and cash equivalents (note 25)
Cash and cash equivalents include cash in hand, term and call deposits
held with banks and other short-term, highly liquid investments with
original maturities of three months or less. Bank overdrafts are shown
within borrowings in current liabilities in the Group balance sheet. For the
purposes of the Group cash flow statement, cash and cash equivalents
are reported net of bank overdrafts.
(j) Financial assets and liabilities (note 30)
Financial assets
We classify our financial assets into the following measurement
categories, with the classification determined on initial recognition and
dependent on the purpose for which such assets are acquired:
those subsequently measured at fair value (either through OCI or
through profit or loss), and
those measured at amortised cost.
Directly attributable transaction costs are expensed where an asset is
carried at ‘fair value through profit or loss’ (FVPL) and added to the fair
value of the asset otherwise.
Financial assets with embedded derivatives are considered in their
entirety when determining whether their cash flows are solely a payment
of principal and interest.
Debt instruments
Measurement of debt instruments depends on the Group’s business
model for managing the asset and the cash flow characteristics of the
asset. There are three measurement categories into which the Group
classifies debt instruments:
Amortised cost: Assets that are held for collection of contractual cash
flows where those cash flows are solely repayments of principal and
interest are measured at amortised cost. Interest income from these
financial assets is recognised using the effective interest method. Any
impairment or gain or loss on derecognition is recognised directly in
the Group income statement.
Fair value through Other comprehensive income (FVOCI): Assets that
are held both for the collection of contractual cash flows and for their
sale, where the asset’s cash flows solely represent payments of
principal and interest, are measured at FVOCI. Movements in the
carrying amount are taken through OCI, however recognition of
impairment gains or losses, interest income and foreign exchange
gains or losses are recognised in the Group income statement.
FVPL: Assets that do not meet the criteria for amortised cost or FVOCI
are measured at FVPL. A gain or loss on a debt instrument that is
subsequently measured at FVPL is recognised in the Group income
statement and presented net within other gains or losses in the period
in which it arises.
Notes to the Group financial statements continuedExperian plc Financial statements 155
4. Significant accounting policies continued
Equity instruments
We measure all equity instruments at fair value. Where we have elected to
present fair value gains or losses on equity investments in OCI, there is no
subsequent reclassification of fair value gains or losses to the Group
income statement following the derecognition of the investment.
Dividends from such investments are normally recognised as other
income when the Group’s right to receive payments is established.
Changes in the fair value of financial assets at FVPL are recognised in
other gains or losses in the Group income statement. Impairment losses,
and reversals of impairment losses, on equity investments measured at
FVOCI are not reported separately from other changes in fair value.
Impairment
The loss allowances for financial assets are based on assumptions about
significant increases in credit risk and subsequent risk of default. We use
judgment in making these assumptions and selecting the inputs to the
impairment calculation, based on the Group’s history, existing market
conditions as well as forward-looking estimates at the end of each
reporting period.
Financial liabilities
Financial liabilities are measured subsequently at amortised cost using
the effective interest method or at FVPL. Financial liabilities are classified
at FVPL when the financial liability is held for trading, it is a derivative or it
is designated at FVPL on initial recognition. Financial liabilities at FVPL are
measured at fair value, with any net gains or losses arising on changes in
fair value, including any interest expense, recognised in the Group income
statement.
Other financial liabilities are subsequently measured at amortised cost
using the effective interest method. Interest expense, foreign exchange
gains and losses and any gain or loss on derecognition are recognised in
the Group income statement.
The effective interest method is a method of calculating the amortised
cost of a financial liability and of allocating interest expense over the
relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash payments, including all fees that form an
integral part of the effective interest rate, transaction costs and other
premiums or discounts, through the expected life of the financial liability.
Derivatives used for hedging
The Group uses derivative financial instruments to manage its exposures
to fluctuations in foreign exchange rates, interest rates and certain
obligations relating to share incentive plans, including social security
obligations. Instruments used include interest rate swaps, cross-currency
swaps, foreign exchange contracts and equity swaps. These are
recognised as assets or liabilities as appropriate and are classified as
non-current, unless they mature within one year of the balance sheet date.
Derivatives are initially recognised at their fair value on the date the
contract is entered into, and are subsequently remeasured at their fair
value. The method of recognising the resulting gain or loss depends on
whether the derivative is designated as a hedging instrument and, if so,
the nature of the hedge relationship.
The Group designates certain derivatives as either fair value hedges or
cash flow hedges. Fair value hedges are hedges of the fair value of a
recognised asset or liability. Cash flow hedges are hedges of highly
probable future foreign currency cash flows. The Group does not currently
enter into net investment hedges.
We document the relationship between hedging instruments and hedged
items, and our risk management objective and strategy for undertaking
hedge transactions, at the hedge inception. We also document our
assessment of whether the derivatives used in hedging meet the hedge
effectiveness criteria set out in IFRS 9. This assessment is performed at
every reporting date throughout the life of the hedge to confirm that the
hedge continues to meet the hedge effectiveness criteria. Hedge
accounting is discontinued when the hedging instrument expires, is sold,
terminated or exercised, or no longer qualifies for hedge accounting.
Amounts payable or receivable in respect of interest rate swaps, together
with the interest differentials reflected in foreign exchange contracts, are
recognised in net finance costs over the period of the contract.
Changes in the fair value of derivatives that are designated and qualify as
fair value hedging instruments are recognised in the Group income
statement, together with any changes in the fair value of the hedged asset
or liability that are attributable to the hedged risk. The ineffective portion
of a fair value hedge is recognised in net finance costs in the Group
income statement.
The effective portion of changes in the fair value of derivatives that are
designated and qualify as cash flow hedging instruments is recognised in
OCI, while any ineffective part is recognised in the Group income
statement. Amounts recorded in OCI are recycled to the Group income
statement in the same period in which the underlying foreign currency
exposure affects the Group income statement.
Non-hedging derivatives
Changes in the fair value of derivative instruments used to manage
exposures, that are not part of a documented hedge relationship under
IFRS 9, are recognised immediately in the Group income statement. Cost
and income amounts in respect of derivatives entered into in connection
with social security obligations on employee share incentive plans, other
than amounts of a financing nature, are charged or credited within labour
costs. Other costs and changes in the fair value of such derivatives are
charged or credited within financing fair value remeasurements in the
Group income statement.
(k) Trade and other payables (note 26)
Trade payables and contract liabilities are recognised initially at fair value.
Where the time value of money is material, payables and contract
liabilities are then carried at amortised cost using the effective interest
method.
(l) Borrowings (note 27)
Borrowings are recognised initially at fair value, net of any transaction
costs incurred. Borrowings are subsequently stated at amortised cost,
except where they are hedged by an effective fair value hedge, in which
case the carrying value is adjusted to reflect the fair value movements
associated with the hedged risk.
Borrowings are classified as non-current to the extent that the Group has
an unconditional right to defer settlement of the liability for at least one
year after the balance sheet date.
Experian plc Annual Report 2021Financial statements 156
4. Significant accounting policies continued
(m) Leases (note 29)
The Group undertakes an assessment of whether a contract is or contains
a lease at its inception. The assessment establishes whether the Group
obtains substantially all the economic benefits from the use of an asset
and whether we have the right to direct its use.
Low-value lease payments are recognised as an expense, on a
straight-line basis over the lease term. For other leases we recognise
both a right-of-use asset and a lease liability at the commencement date
of a lease contract.
The right-of-use asset is initially measured at cost, comprising the initial
amount of the lease liability adjusted for payments made at or before the
commencement date, plus initial direct costs and an estimate of the cost
of any obligation to refurbish the asset or site, less lease incentives.
Subsequently, right-of-use assets are measured at cost less accumulated
depreciation and impairment losses and are adjusted for any
remeasurement of the lease liability. Depreciation is calculated on a
straight-line basis over the shorter of the lease period or the estimated
useful life of the right-of-use asset, which is determined on a basis
consistent with purchased assets (note 4(g)).
The lease term comprises the non-cancellable period of a lease, plus
periods covered by an extension option, if it is reasonably certain to be
exercised, and periods covered by a termination option if it is reasonably
certain not to be exercised.
The lease liability is initially measured at the present value of lease
payments that are outstanding at the commencement date, discounted at
the interest rate implicit in the lease or if that rate cannot be easily
determined the Group’s incremental borrowing rate.
Lease payments comprise payments of fixed principal, less any lease
incentives, variable elements linked to an index, guaranteed residuals or
buy-out options that are reasonably certain to be exercised. They include
payments in respect of optional renewal periods where these are
reasonably certain to be exercised or early termination payments where
the lease term reflects such an option.
The lease liability is remeasured when there is a change in future lease
payments arising from a change in an index or rate, if there is a change in
the Group’s estimate of the amount expected to be payable under a
residual value guarantee, or if the Group changes its assessment of
whether it will exercise a purchase, extension or termination option.
When a lease liability is remeasured, a corresponding adjustment is made
to the carrying amount of the right-of-use asset or is recognised in the
Group income statement if the asset is fully depreciated.
The Group presents right-of-use assets within property, plant and
equipment and lease obligations within the Group balance sheet.
(n) Post-employment benefit assets and obligations (note 35)
Defined benefit pension arrangements – funded plans
The post-employment benefit assets and obligations recognised in the
Group balance sheet in respect of funded plans comprise the fair value of
plan assets of funded plans less the present value of the related defined
benefit obligation at that date. The defined benefit obligation is calculated
annually by independent qualified actuaries, using the projected unit
credit method.
The present value of the defined benefit obligation is determined by
discounting the estimated future cash outflows, using market yields on
high-quality corporate pound sterling bonds with maturity terms
consistent with the estimated average term of the related pension liability.
Actuarial gains and losses arising from experience adjustments, and
changes in actuarial assumptions, are recognised immediately in the
Group statement of comprehensive income.
The pension cost recognised in the Group income statement comprises
the cost of benefits accrued plus interest on the opening net defined
benefit obligation. Service costs and financing income and expenses are
recognised separately in the Group income statement. Plan expenses are
deducted from the expected return on the plan assets over the year.
Defined benefit pension arrangements – unfunded plans
Unfunded pension obligations are determined and accounted for in
accordance with the principles used in respect of the funded
arrangements.
Defined contribution pension arrangements
The assets of defined contribution plans are held separately in
independently administered funds. The pension cost recognised in the
Group income statement represents the contributions payable by the
Group to these funds, in respect of the year.
Post-retirement healthcare obligations
Obligations in respect of post-retirement healthcare plans are calculated
annually by independent qualified actuaries, using an actuarial
methodology similar to that for the funded defined benefit pension
arrangements.
Actuarial gains and losses arising from experience adjustments, and
changes in actuarial assumptions, are recognised in the Group statement
of comprehensive income. The cost recognised in the Group income
statement comprises only interest on the obligations.
(o) Own shares (note 39)
The Group has a number of equity-settled, share-based employee
incentive plans. In connection with these, shares in the Company are held
by The Experian plc Employee Share Trust and the Experian UK Approved
All-Employee Share Plan. The assets of these entities mainly comprise
Experian plc shares, which are shown as a deduction from equity at cost.
Shares in the Company purchased and held as treasury shares, in
connection with the above plans and any share purchase programme, are
also shown as a deduction from equity at cost. The par value of shares in
the Company that are purchased and cancelled, in connection with any
share purchase programme, is accounted for as a reduction in called-up
share capital with any cost in excess of that amount being deducted from
retained earnings.
(p) Assets and liabilities classified as held-for-sale
Assets and liabilities are classified as held-for-sale when their carrying
amounts are to be recovered or settled principally through a sale
transaction and a sale is considered highly probable. They are stated at
the lower of the carrying amount and fair value less costs to sell. No
depreciation or amortisation is charged in respect of non-current assets
classified as held-for-sale.
(q) Revenue recognition (note 8)
Revenue is stated net of any sales taxes, rebates and discounts and
reflects the amount of consideration we expect to receive in exchange for
the transfer of promised goods and services.
Total consideration from contracts with customers is allocated to the
performance obligations identified based on their standalone selling price,
and is recognised when those performance obligations are satisfied and
the control of goods or services is transferred to the customer, either over
time or at a point in time.
Notes to the Group financial statements continuedExperian plc Financial statements 157
4. Significant accounting policies continued
The provision and processing of transactional data is distinguished
between contracts that:
– provide a service on a per unit basis; where the transfer to the
customer of each completed unit is considered satisfaction of a
single performance obligation. Revenue is recognised on the transfer
of each unit;
– provide a service to the customer over the contractual term,
normally between one and five years, where revenue is recognised
on the transfer of this service to customers. For the majority of
contracts this means revenue is spread evenly over the contract
term, as customers simultaneously receive and consume the
benefits of the service;
– require an enhanced service at the start, where revenue is
recognised to reflect the upfront benefit the customer receives and
consumes. Revenue for such contracts is recognised proportionally
in line with the costs of providing the service.
Revenue from referral fees for credit products and white-label
partnerships is recognised as transactional revenue.
Revenue from transactional batch data arrangements that include an
ongoing update service is apportioned across each delivery to the
customer and is recognised when the delivery is complete, and control
of the batch data passes to the customer. Performance obligations are
determined based on the frequency of data refresh: one-off, quarterly,
monthly, or real-time.
Subscription and membership fees for continuous access to a service
are recognised over the period to which they relate, usually 1, 12 or 24
months. Customers simultaneously receive and consume the benefits
of the service; therefore, revenue is recognised evenly over the
subscription or membership term.
Revenue for one-off credit reports is recognised when the report is
delivered to the consumer.
Software licence and implementation services are primarily accounted
for as a single performance obligation, with revenue recognised when
the combined offering is delivered to the customer. Contract terms
normally vary between one and five years. These services are
distinguished between:
– Experian-hosted solutions, where the customer has the right to
access a software solution over a specified time period. Customers
simultaneously receive and consume the benefits of the service and
revenue is spread evenly over the period that the service is available;
and
– On-premise software licence arrangements, where the software
solution is installed in an environment controlled by the customer.
The arrangement represents a right to use licence and so the
performance obligation is considered to be fulfilled on delivery
completion, when control of the configured solution is passed to the
customer. Revenue is recognised at that point in time.
The delivery of support and maintenance agreements is generally
considered to be a separate performance obligation to provide a
technical support service including minor updates. Contract terms are
often aligned with licence terms. Customers simultaneously receive
and consume the benefits of the service therefore revenue is spread
evenly over the term of the maintenance period.
The provision of distinct standalone consultancy and professional
services is distinguished between:
– Professional consultancy services where the performance obligation
is the provision of personnel. Customers simultaneously receive and
consume the benefits of the service, and revenue is recognised over
time, in line with hours provided; and
– The provision of analytical models and analyses, where the
performance obligation is a deliverable, or a series of deliverables,
and revenue is recognised on delivery when control is passed to the
customer.
Sales are typically invoiced in the geographic area in which the customer
is located. As a result, the geographic location of the invoicing undertaking
is used to attribute revenue to individual countries.
Accrued income balances, which represent the right to consideration in
exchange for goods or services that we have transferred to a customer,
are assessed as to whether they meet the definition of a contract asset:
When the right to consideration is conditional on something other than
the passage of time, a balance is classified as a contract asset. This
arises where there are further performance obligations to be satisfied
as part of the contract with the customer and typically includes
balances relating to software licensing contracts.
When the right to consideration is conditional only on the passage of
time, the balance does not meet the definition of a contract asset and is
classified as an unbilled receivable. This typically arises where the
timing of the related billing cycle occurs in a period after the
performance obligation is satisfied.
Costs incurred prior to the satisfaction or partial satisfaction of a
performance obligation are first assessed to see if they are within the
scope of other standards. Where they are not, certain costs are recognised
as an asset providing they relate directly to a contract (or an anticipated
contract), generate or enhance resources that will be used in satisfying (or
to continue to satisfy) performance obligations in the future and are
expected to be recovered from the customer. Costs which meet this
criteria are deferred as contract costs and these are amortised on a
systematic basis consistent with the pattern of transfer of the related
goods or services.
Costs to obtain a contract predominantly comprise sales commissions
costs.
Costs to fulfil a contract predominantly comprise labour costs directly
relating to the implementation services provided.
Contract liabilities arise when we have an obligation to transfer future
goods or services to a customer for which we have received
consideration, or the amount is due, from the customer, and include both
deferred income balances and specific reserves.
(r) Operating charges
Operating charges are reported by nature in the Group income statement,
reflecting the Group’s cost-management control structure.
Details of the types of charges within labour costs in respect of share
incentive plans are set out in note 4(u). Those for post-employment
benefits are set out in note 4(n).
Details of the Group’s amortisation and depreciation policy are given in
notes 4(f), 4(g) and 4(m). The principles upon which impairment charges
of tangible and intangible assets are recognised are set out in notes 4(d),
4(e) and 4(f).
Experian plc Annual Report 2021Financial statements 158
4. Significant accounting policies continued
(s) Net finance costs (note 15)
Incremental transaction costs which are directly attributable to the issue
of debt are capitalised and amortised over the expected life of the
borrowing, using the effective interest method. All other borrowing costs
are charged in the Group income statement in the year in which they are
incurred.
Amounts payable or receivable in respect of interest rate swaps are taken
to net finance costs over the periods of the contracts, together with the
interest differentials reflected in foreign exchange contracts.
Details of the nature of movements in the fair value of derivatives which
are reported as financial fair value remeasurements are included in note
4(j). The change in the year in the present value of put option agreements,
in respect of shares held by non-controlling shareholders, is recognised
as a financing fair value remeasurement within net finance costs.
(t) Tax (note 16)
The tax charge or credit for the year is recognised in the Group income
statement, except for tax on items recognised in OCI or directly in equity.
Current tax is calculated on the basis of the tax laws substantively
enacted at the balance sheet date in the countries where the Group
operates. Current tax assets and liabilities are offset where there is a
legally enforceable right of offset.
Uncertain tax positions are considered on an individual basis. Where
management considers it probable that an additional outflow will result
from any given position, a provision is made. Such provisions are
measured using management’s best estimate of the most likely outcome.
Further details are given in note 5.
Deferred tax is provided in full on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the
Group financial statements. Deferred tax is not recognised on taxable
temporary differences arising on the initial recognition of goodwill.
Deferred tax is not accounted for when it arises from the initial recognition
of an asset or liability in a transaction, other than a business combination,
that at the time of the transaction affects neither accounting nor taxable
profit or loss. Deferred tax assets and liabilities are calculated at the tax
rates that are expected to apply when the asset is realised or the liability
settled, based on the tax rates and laws that have been enacted or
substantively enacted by the balance sheet date in the countries where
the Group operates.
Deferred tax assets are recognised in respect of tax losses carried
forward and other temporary differences, to the extent that it is probable
that the related tax benefit will be realised through future taxable profits.
Deferred tax is provided on temporary differences arising on investments
in subsidiaries and associates, except where the Group controls the
timing of the reversal of the temporary difference and it is probable that
the temporary difference will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset where there is a legally
enforceable right to offset current tax assets and liabilities and where
they relate to the same tax authority.
(u) Share incentive plans (note 33)
The fair value of share incentives granted in connection with the Group’s
equity-settled, share-based employee incentive plans is recognised as an
expense on a straight-line basis over the vesting period. Fair value is
measured using whichever of the Black-Scholes model, Monte Carlo
model or closing market price is most appropriate. The Group takes into
account the best estimate of the number of awards and options expected
to vest and revises such estimates at each balance sheet date.
Non-market performance conditions are included in the vesting
estimates. Market-based performance conditions are included in the fair
value measurement but are not revised for actual performance.
(v) Contingent consideration
The initially recorded cost of any acquisition includes a reasonable
estimate of the fair value of any contingent amounts expected to be
payable in the future. Any cost or benefit arising when such estimates are
revised is recognised in the Group income statement (note 14).
Where part or all of the amount of disposal consideration is contingent on
future events, the disposal proceeds initially recorded include a
reasonable estimate of the value of the contingent amounts expected to
be receivable and payable in the future. The proceeds and profit or loss on
disposal are adjusted when revised estimates are made, with
corresponding adjustments made to receivables and payables as
appropriate, until the ultimate outcome is known and the related
consideration received.
(w) Discontinued operations (note 17)
A discontinued operation is a component of the Group’s business that
represents a separate geographic area of operation or a separate major
line of business. Classification as a discontinued operation occurs upon
disposal or earlier, if the operation meets the criteria to be classified as
held-for-sale. Discontinued operations are presented in the Group income
statement as a separate line and are shown net of tax.
When an operation is classified as a discontinued operation, comparatives
in the Group income statement and the Group statement of
comprehensive income are re-presented as if the operation had been
discontinued from the start of the comparator year.
(x) Earnings per share (EPS) (note 18)
Earnings per share are reported in accordance with IAS 33.
(y) Segment information policy and presentation principles
(note 9)
We are organised into, and managed on a worldwide basis through, the
following five operating segments, which are based on geographic areas
and supported by central functions:
North America
Latin America
UK and Ireland
Europe, Middle East and Africa (EMEA) and
Asia Pacific.
The chief operating decision maker assesses the performance of these
operating segments on the basis of Benchmark EBIT, as defined in note 6.
The ‘All other segments’ category required to be disclosed has been
captioned as EMEA/Asia Pacific in these financial statements. This
combines information in respect of the EMEA and Asia Pacific segments,
as neither of these operating segments is individually reportable, on the
basis of their share of the Group’s revenue, reported profit or loss, and
assets.
We separately present information equivalent to segment disclosures in
respect of the costs of our central functions, under the caption ‘Central
Activities’, as management believes that this information is helpful to
users of the financial statements. Costs reported for Central Activities
include costs arising from finance, treasury and other global functions.
Notes to the Group financial statements continuedExperian plc Financial statements 159
4. Significant accounting policies continued
Inter-segment transactions are entered into under the normal
commercial terms and conditions that would be available to third parties.
Such transactions do not have a material impact on the Group’s results.
Segment assets consist primarily of property, plant and equipment,
intangible assets including goodwill, derivatives designated as hedges of
future commercial transactions, contract assets and receivables. They
exclude tax assets, cash and cash equivalents, and derivatives designated
as hedges of borrowings. Segment liabilities comprise operating and
contract liabilities, including derivatives designated as hedges of future
commercial transactions. They exclude tax liabilities, borrowings and
related hedging derivatives. Net assets reported for Central Activities
comprise corporate head office assets and liabilities, including certain
post-employment benefit assets and obligations, and derivative assets
and liabilities. Capital expenditure comprises additions to property, plant
and equipment and intangible assets, other than additions through
business combinations or to right-of-use assets.
Information required to be presented also includes analysis of the Group’s
revenues by groups of service lines. This is supplemented by voluntary
disclosure of the profitability of those groups of service lines. For ease of
reference, we use the term ‘business segments’ when discussing the
results of groups of service lines. Our two business segments, details of
which are given in the Strategic report section of this Annual Report, are:
Business-to-Business
Consumer Services.
The North America, Latin America and the UK and Ireland operating
segments derive revenues from both of the Group’s business segments.
The EMEA and Asia Pacific segments currently do not derive revenue
from the Consumer Services business segment.
Reportable segment information for the full year provided to the chief
operating decision maker is set out in note 9(a).
5. Critical accounting estimates, assumptions and judgments
(a) Critical accounting estimates and assumptions
In preparing these financial statements, management is required to make
estimates and assumptions that affect the reported amount of revenues,
expenses, assets, liabilities and the disclosure of contingent liabilities. The
resulting accounting estimates, which are based on management’s best
judgment at the date of these financial statements, will seldom equal the
subsequent actual amounts. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are summarised
below. Revenue recognition is excluded from this summary on the
grounds that the policy adopted in this area is sufficiently objective.
Tax (notes 16, 36 and 43(a))
The Group is subject to tax in numerous jurisdictions. The Group has a
number of open tax returns with various tax authorities with whom it is in
active dialogue. 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. Significant
judgment is required in determining the related assets or provisions, as
there are transactions in the ordinary course of business and calculations
for which the ultimate tax determination is uncertain. The Group
recognises liabilities based on estimates of whether additional tax will be
due. Where the final tax outcome of these matters is different from the
amounts that were initially recognised, the differences will affect the
results for the year and the respective income tax and deferred tax assets
or provisions in the year in which such determination is made. The Group
recognises deferred tax assets based on forecasts of future profits
against which those assets may be utilised.
Goodwill (note 20)
The Group tests goodwill for impairment annually, or more frequently if
there is an indication that it may be impaired. The recoverable amount of
each CGU is generally determined on the basis of value-in-use
calculations, which require the use of cash flow projections based on
financial budgets, looking forward up to five years. Management
determines budgeted profit margin based on past performance and its
expectations for the market’s development. Cash flows are extrapolated
using estimated growth rates beyond a five-year period. The growth rates
used do not exceed the long-term average growth rate for the CGU’s
markets. The discount rates used reflect the Group’s pre-tax weighted
average cost of capital (WACC), as adjusted for region specific risks and
other factors.
(b) Critical judgments
In applying the Group’s accounting policies, management has made
judgments that have a significant effect on the amounts recognised in the
Group financial statements and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to estimates are recognised prospectively.
The most significant of these judgments are in respect of intangible
assets and contingencies:
Intangible assets
Certain costs incurred in the developmental phase of an internal project,
which include the development of databases, internal use software and
internally generated software, are capitalised as intangible assets if a
number of criteria are met. Management has made judgments and
assumptions when assessing whether a project meets these criteria, and
on measuring the costs and the economic life attributed to such projects.
On acquisition, specific intangible assets are identified and recognised
separately from goodwill and then amortised over their estimated useful
lives. These include items such as brand names and customer lists, to
which value is first attributed at the time of acquisition. The capitalisation
of these assets and the related amortisation charges are based on
judgments about the value and economic life of such items.
The economic lives of intangible assets are estimated at between three
and ten years for internal projects and between two and 20 years for
acquisition intangibles. Amortisation methods, useful lives and residual
values are reviewed at each reporting date and adjusted if appropriate.
Further details of the amounts of, and movements in, such assets are
given in note 21.
Contingencies
In the case of pending and threatened litigation claims, management has
formed a judgment as to the likelihood of ultimate liability. No liability has
been recognised where the likelihood of any loss arising is possible rather
than probable.
Experian plc Annual Report 2021Financial statements 160
6. Use of non-GAAP measures in the Group 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.
(a) Benchmark profit before tax (Benchmark PBT)
(note 9(a)(i))
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.
(b) Benchmark earnings before interest and tax (Benchmark
EBIT) and margin (Benchmark EBIT margin) (note 9(a)(i))
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 (note 12).
(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 2021, 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 9(a)(ii))
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 9(a)(ii))
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 18)
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 18)
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 16(b)(ii))
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 16(b)(ii) to these financial
statements. The Benchmark effective rate of tax is calculated by dividing
the Benchmark tax charge by Benchmark PBT.
Notes to the Group financial statements continuedExperian plc Financial statements
161
6. Use of non-GAAP measures in the Group financial
statements continued
(m) Exceptional items (note 14(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 19)
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 28)
Net debt is borrowings (and the fair value of derivatives hedging
borrowings) excluding lease obligations and 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 lease obligations and accrued interest, less cash held in Group
Treasury.
(r) Return on capital employed (ROCE) (note 9(a)(iii))
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, further adjusted to add or deduct the net tax
liability or asset and to add Net debt.
7. Financial risk management
(a) Financial risk factors
The Group’s activities expose it to a variety of financial risks. These are
market risk, including foreign exchange risk and interest rate risk, credit
risk, and liquidity risk. These risks are unchanged from those reported in
the 2020 Annual Report. The numeric disclosures in respect of financial
risks are included within later notes to the financial statements, to provide
a more transparent link between financial risks and results.
Financial risks represent part of the Group’s risks in relation to its strategy
and business objectives. There is a full discussion of the most significant
risks in the Risk management section of this Annual Report. The Group’s
financial risk management focuses on the unpredictability of financial
markets and seeks to minimise potentially adverse effects on the Group’s
financial performance. The Group seeks to reduce its exposure to financial
risks and uses derivative financial instruments to hedge certain risk
exposures. Such derivative financial instruments are also used to manage
the Group’s borrowings so that amounts are held in currencies broadly in
the same proportion as the Group’s main earnings. However, the Group
does not, nor does it currently intend to, borrow in the Brazilian real or the
Colombian peso.
The Group also ensures surplus funds are prudently managed and
controlled.
Foreign exchange risk
The Group is exposed to foreign exchange risk from future commercial
transactions, recognised assets and liabilities and investments in, and
loans between, Group undertakings with different functional currencies.
The Group manages such risk, primarily within undertakings whose
functional currencies are the US dollar, by:
entering into forward foreign exchange contracts in the relevant
currencies in respect of investments in entities with functional
currencies other than the US dollar, whose net assets are exposed to
foreign exchange translation risk;
swapping the proceeds of certain bonds issued in pounds sterling and
euros into US dollars;
managing the liquidity of Group undertakings in the functional currency
of those undertakings by using an in-house banking structure and
hedging any remaining foreign currency exposures with forward
foreign exchange contracts;
denominating internal loans in relevant currencies, to match the
currencies of assets and liabilities in entities with different functional
currencies; and
using forward foreign exchange contracts to hedge certain future
commercial transactions.
The principal transaction exposures are to the pound sterling and the
euro. An indication of the sensitivity to foreign exchange risk is given in
note 10.
Interest rate risk
The Group’s interest rate risk arises principally from components of its
Net debt that are at variable rates.
The Group has a policy of normally maintaining between 50% and 100%
of Net funding at rates that are fixed for more than six months. The Group
manages its interest rate exposure by:
using fixed and floating rate borrowings, interest rate swaps and
cross-currency interest rate swaps to adjust the balance between the
two; and
mixing the duration of borrowings and interest rate swaps to smooth
the impact of interest rate fluctuations.
Further information in respect of the Group’s net finance costs for the
year and an indication of the sensitivity to interest rate risk is given in
note 15.
Experian plc Annual Report 2021Financial statements 162
7. Financial risk management continued
Credit risk
In the case of derivative financial instruments, deposits, contract assets
and trade receivables, the Group is exposed to credit risk from the
non-performance of contractual agreements by the contracted party.
Credit risk is managed by:
only entering into contracts for derivative financial instruments and
deposits with banks and financial institutions with strong credit ratings,
within limits set for each organisation; and
closely controlling dealing activity and regularly monitoring
counterparty positions.
The credit risk on derivative financial instruments utilised and deposits
held by the Group is therefore not considered to be significant. The Group
does not anticipate that any losses will arise from non-performance by its
chosen counterparties. Further information on the Group’s derivative
financial instruments at the balance sheet dates is given in note 30 and
that in respect of amounts recognised in the Group income statement is
given in note 15. Further information on the Group’s cash and cash
equivalents at the balance sheet dates is given in note 25.
To minimise credit risk for trade receivables, the Group has implemented
policies that require appropriate credit checks on potential clients before
granting credit. The maximum credit risk in respect of such financial
assets is their carrying value. Further information in respect of the
Group’s trade receivables is given in note 24.
Debt investments
All of the Group’s debt investments at amortised cost and FVOCI are
considered to have low credit risk; the loss allowance is therefore limited
to 12 months’ expected losses. Management considers ‘low credit risk’ for
listed bonds to be an investment-grade credit rating with at least one
major rating agency. Other instruments are considered to be low credit
risk when they have a low risk of default and the issuer has a high
capacity to meet its contractual cash flow obligations in the near term.
Financial assets at FVPL
The Group is also exposed to credit risk in relation to debt investments
that are measured at FVPL. The maximum exposure at the balance sheet
date is the carrying amount of these investments.
Liquidity risk
The Group manages liquidity risk by:
issuing long-maturity bonds and notes;
entering into long-term committed bank borrowing facilities, to ensure
the Group has sufficient funds available for operations and planned
growth;
spreading the maturity dates of its debt; and
monitoring rolling cash flow forecasts, to ensure the Group has
adequate, unutilised committed bank borrowing facilities.
Details of such facilities are given in note 27. A maturity analysis of
contractual undiscounted future cash flows for financial liabilities is
provided in note 32.
(b) Capital risk management
The Group’s definition and management of capital focuses on capital
employed:
The Group’s capital employed is reported in the net assets summary
table set out in the Financial review and analysed by segment in note
9(a)(iii).
As part of its internal reporting processes, the Group monitors capital
employed by operating segment.
The Group’s objectives in managing capital are to:
safeguard its ability to continue as a going concern, in order to provide
returns for shareholders and benefits for other stakeholders; and
maintain an optimal capital structure and cost of capital.
The Group’s policy is to have:
a prudent but efficient balance sheet; and
a target leverage ratio of 2.0 to 2.5 times Benchmark EBITDA,
consistent with the intention to retain strong investment-grade credit
ratings.
To maintain or adjust its capital structure, the Group may:
adjust the amount of dividends paid to shareholders;
return capital to shareholders;
issue or purchase our own shares; or
sell assets to reduce Net debt.
Dividend policy
The Group has a progressive dividend policy which aims to increase the
dividend over time broadly in line with the underlying growth in
Benchmark EPS. This aligns shareholder returns with the underlying
profitability of the Group. In determining the level of dividend in any one
year, in accordance with the policy, the Board also considers a number of
other factors, including the outlook for the Group, the opportunities for
organic investment, the opportunities to make acquisitions and disposals,
the cash flow generated by the Group, and the level of dividend cover.
Further detail on the distributable reserves of the Company can be found
in note K to the Company financial statements.
Notes to the Group financial statements continuedExperian plc Financial statements 8. Revenue
(a) Disaggregation of revenue from contracts with customers
Year ended 31 March 2021
Revenue from external customers
Data
Decisioning
Business-to-Business
Consumer Services
Total ongoing activities
Year ended 31 March 20201
Revenue from external customers
Data
Decisioning
Business-to-Business
Consumer Services
Total ongoing activities
North
America
US$m
1,761
694
2,455
1,075
3,530
North
America
US$m
1,642
679
2,321
926
3,247
Latin
America
US$m
UK and
Ireland
US$m
EMEA/
Asia Pacific
US$m
457
92
549
76
625
361
220
581
156
737
287
178
465
—
465
Latin
America
US$m
UK and
Ireland
US$m
EMEA/
Asia Pacific
US$m
578
114
692
40
732
367
227
594
161
755
213
214
427
—
427
163
Total
operating
segments
US$m
2,866
1,184
4,050
1,307
5,357
Total
operating
segments
US$m
2,800
1,234
4,034
1,127
5,161
1 Revenue for the year ended 31 March 2020 has been re-presented for the reclassification to exited business activities of certain B2B businesses and the reclassification of our Consumer Services business in Latin
America to the Consumer Services business segment; previously our Consumer Services business in this region was not sufficiently material to be disclosed separately.
Total revenue comprises revenue from ongoing activities as well as revenue from exited business activities and is reconciled in note 9. Revenue in
respect of exited business activities of US$15m (2020: US$18m) comprised UK and Ireland Data revenue of US$12m (2020: US$14m) and EMEA/Asia
Pacific Decisioning revenue of US$3m (2020: US$4m).
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.
The timing of recognition of these revenue streams is discussed in note 4(q).
(b) Significant changes in contract balances
Contract assets predominantly relate to software licence services, where revenue recognition for on-premise arrangements occurs as the solution is
transferred to the customer, whereas the invoicing pattern is often annually over the contract period. Contract assets recognised during the year totalled
US$62m (2020: US$107m). The contract asset balance for work completed but not invoiced on satisfaction of a performance obligation unwinds over the
contract term. Contract assets are transferred to receivables when the right to consideration becomes unconditional, or conditional only on the passage
of time. Contract assets reclassified to receivables during the year totalled US$79m (2020: US$58m). An impairment charge of US$4m (2020: US$nil)
has been recognised against contract assets during the year.
The majority of software licences are invoiced annually in advance. Where these licences relate to Experian-hosted solutions, revenue is recognised over
the period that the service is available to the customer, creating a contract liability. Delivery services are generally invoiced during the delivery period,
creating a contract liability for the consideration received in advance, until the delivery is complete. Where the delivery relates to Experian-hosted
solutions, revenue is recognised over the period that the service is available to the customer, reducing the contract liability over time. Where the delivery
relates to an on-premise solution, the contract liability is released on delivery completion. Support and maintenance agreements are often invoiced
annually in advance, creating a contract liability, which is released over the term of the maintenance period as revenue is recognised.
Revenue recognised in the year of US$352m (2020: US$370m) was included in the opening contract liability. Cash received in advance not recognised as
revenue in the year was US$380m (2020: US$377m). The increase in contract liabilities resulting from business combinations during the year was
US$8m (2020: US$7m).
Foreign exchange accounts for US$8m and US$21m of the increase in contract asset and contract liability balances in the year respectively (2020:
decrease of US$8m and US$23m).
Experian plc Annual Report 2021Financial statements 164
8. Revenue continued
(c) Contract costs
The carrying amount of assets recognised from costs to obtain and costs to fulfil contracts with customers at 31 March 2021 is US$25m and US$74m
respectively (2020: US$28m and US$68m).
Amortisation of contract costs in the year is US$66m (2020: US$74m) and recognised impairment losses totalled US$2m (2020: US$5m).
Contract costs are amortised on a systematic basis consistent with the pattern of transfer of the related goods or services. A portfolio approach has
been applied to calculate contract costs for contracts with similar characteristics, where the Group reasonably expects that the effects of applying a
portfolio approach does not differ materially from calculating the amounts at an individual contract level.
(d) Transaction price allocated to remaining performance obligations
The aggregate amount of the transaction price from non-cancellable contracts with customers with expected durations of 12 months or more, allocated
to the performance obligations that are unsatisfied, or partially satisfied, at 31 March 2021 is US$5.0bn (2020: US$4.6bn). We expect to recognise
approximately 42% (2020: 43%) of this value within one year, 28% (2020: 25%) within one to two years, 17% (2020: 15%) within two to three years and
13% (2020: 17%) thereafter.
The aggregate amount of the transaction price allocated to unsatisfied, or partially satisfied, performance obligations which are transactional in nature
includes estimates of variable consideration. These estimates are based on forecast transactional volumes and do not take into account all external
market factors which may have an impact on the future revenue recognised from such contracts.
A portfolio approach has been applied to calculate the aggregate amount of the transaction price allocated to the unsatisfied, or partially satisfied,
performance obligations for contracts with similar characteristics, where the Group reasonably expects that the effects of applying a portfolio approach
does not differ materially from calculating the amounts at an individual contract level.
We apply the practical expedient in paragraph 121(a) of IFRS 15 and do not disclose information about remaining performance obligations that have
original expected durations of one year or less. This excludes contracts across a number of business units which have revenue due to be recognised in
the financial year ending 31 March 2022; it also excludes the majority of our direct-to-consumer arrangements.
9. Segment information
(a) IFRS 8 disclosures
(i) Income statement
Year ended 31 March 2021
Revenue from external customers
Ongoing activities
Exited business activities
Total
Reconciliation from Benchmark EBIT to profit/(loss) before tax
Benchmark EBIT
Ongoing activities
Exited business activities
Total
Net interest expense included in Benchmark PBT (note 15(b))
Benchmark PBT
Exceptional items (note 14(a))
Impairment of goodwill (note 20)
Amortisation of acquisition intangibles (note 21)
Acquisition and disposal expenses
Adjustment to the fair value of contingent consideration
Non-benchmark share of post-tax (loss)/profit of associates
Interest on uncertain tax provisions
Financing fair value remeasurements (note 15(c))
Profit/(loss) before tax
North
America
US$m
Latin
America
US$m
UK and
Ireland
US$m
EMEA/
Asia Pacific
US$m
Total
operating
segments
US$m
Central
Activities
US$m
Total
continuing
operations
US$m
3,530
—
3,530
1,201
—
1,201
(5)
1,196
112
—
(90)
(16)
—
—
—
—
1,202
625
—
625
172
—
172
(2)
170
(1)
—
(14)
(4)
—
—
—
—
151
737
12
749
122
(1)
121
(1)
120
(63)
—
(7)
(1)
—
(3)
—
—
46
465
3
468
5,357
15
5,372
—
—
—
5,357
15
5,372
(20)
2
(18)
(2)
(20)
(13)
(53)
(27)
(20)
(1)
—
—
—
(134)
1,475
1
1,476
(10)
1,466
35
(53)
(138)
(41)
(1)
(3)
—
—
1,265
(90)
—
(90)
(111)
(201)
—
—
—
—
—
19
(11)
5
(188)
1,385
1
1,386
(121)
1,265
35
(53)
(138)
(41)
(1)
16
(11)
5
1,077
Notes to the Group financial statements continuedExperian plc Financial statements 165
9. Segment information continued
(i) Income statement continued
Year ended 31 March 20201
Revenue from external customers
Ongoing activities
Exited business activities
Total
Reconciliation from Benchmark EBIT to profit/(loss) before tax
Benchmark EBIT
Ongoing activities
Exited business activities
Total
Net interest expense included in Benchmark PBT (note 15(b))
Benchmark PBT
Exceptional items (note 14(a))
Amortisation of acquisition intangibles (note 21)
Acquisition and disposal expenses
Adjustment to the fair value of contingent consideration
Non-benchmark share of post-tax profit of associates
Interest on uncertain tax provisions
Financing fair value remeasurements (note 15(c))
Profit/(loss) before tax
North
America
US$m
Latin
America
US$m
UK and
Ireland
US$m
EMEA/
Asia Pacific
US$m
Total
operating
segments
US$m
Central
Activities
US$m
Total
continuing
operations
US$m
3,247
—
3,247
1,093
—
1,093
(5)
1,088
(35)
(85)
(9)
(1)
—
—
—
958
732
—
732
220
—
220
(2)
218
—
(17)
(2)
—
—
—
—
199
755
14
769
173
(2)
171
(1)
170
—
(8)
(8)
5
—
—
—
159
427
4
431
5,161
18
5,179
—
—
—
5,161
18
5,179
12
3
15
(2)
13
—
(14)
(20)
—
—
—
—
(21)
1,498
1
1,499
(10)
1,489
(35)
(124)
(39)
4
—
—
—
1,295
(112)
—
(112)
(122)
(234)
—
—
—
—
6
(14)
(111)
(353)
1,386
1
1,387
(132)
1,255
(35)
(124)
(39)
4
6
(14)
(111)
942
1 Revenue and Benchmark EBIT for the year ended 31 March 2020 have been re-presented for the reclassification to exited business activities of certain B2B businesses.
Additional information by operating segment, including that on total and organic growth at constant exchange rates, is provided in the Strategic report.
(ii) Reconciliation of revenue from ongoing activities
Revenue for the year ended 31 March 20201
Adjustment to constant exchange rates
Revenue at constant exchange rates for the year ended 31 March 2020
Organic revenue growth
Revenue from acquisitions
Revenue at constant exchange rates for the year ended 31 March 2021
Adjustment to actual exchange rates
Revenue for the year ended 31 March 2021
Organic revenue growth at constant exchange rates
Revenue growth at constant exchange rates
North
America
US$m
3,247
—
3,247
241
42
3,530
—
3,530
7%
9%
Latin
America
US$m
732
1
733
65
4
802
(177)
625
9%
9%
UK and
Ireland
US$m
755
(2)
753
(43)
—
710
27
737
(6)%
(6)%
EMEA/
Asia Pacific
US$m
427
1
428
(60)
89
457
8
465
(14)%
7%
Total
ongoing
activities
US$m
5,161
—
5,161
203
135
5,499
(142)
5,357
4%
7%
1 Revenue for the year ended 31 March 2020 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 6 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 2020.
Experian plc Annual Report 2021Financial statements 166
9. Segment information continued
(iii) Balance sheet
Net assets/(liabilities)
At 31 March 2021
Goodwill
Investments in associates
Other assets
Total assets
Total liabilities
Net assets/(liabilities)
At 31 March 2020
Goodwill
Investments in associates
Other assets
Total assets
Total liabilities
Net assets/(liabilities)
Central Activities and other comprises:
Central Activities
Investments in associates
Net debt
Tax
Capital employed
North America
Latin America
UK and Ireland
EMEA/Asia Pacific
Total operating segments
Central Activities
Non-controlling interests
Capital employed attributable to owners
North
America
US$m
3,133
4
1,969
5,106
(994)
4,112
North
America
US$m
2,943
22
1,816
4,781
(1,010)
3,771
Latin
America
US$m
611
—
495
1,106
(210)
896
Latin
America
US$m
530
—
446
976
(165)
811
UK and
Ireland
US$m
718
61
503
1,282
(345)
937
EMEA/
Asia Pacific
US$m
799
9
715
1,523
(494)
1,029
UK and
Ireland
US$m
656
58
519
1,233
(320)
913
EMEA/
Asia Pacific
US$m
414
7
476
897
(228)
669
Total
operating
segments
US$m
5,261
74
3,682
9,017
(2,043)
6,974
Total
operating
segments
US$m
4,543
87
3,257
7,887
(1,723)
6,164
Central
Activities
and other
US$m
—
54
1,000
1,054
(4,909)
(3,855)
Central
Activities
and other
US$m
—
36
976
1,012
(4,895)
(3,883)
2021
Liabilities
US$m
(249)
—
(4,123)
(537)
(4,909)
Net assets/
(liabilities)
US$m
334
54
(3,826)
(417)
(3,855)
Assets
US$m
583
54
297
120
1,054
Assets
US$m
512
36
329
135
1,012
2020
Liabilities
US$m
(241)
—
(4,227)
(427)
(4,895)
2021
US$m
4,112
896
937
1,029
6,974
388
(38)
7,324
Total
Group
US$m
5,261
128
4,682
10,071
(6,952)
3,119
Total
Group
US$m
4,543
123
4,233
8,899
(6,618)
2,281
Net assets/
(liabilities)
US$m
271
36
(3,898)
(292)
(3,883)
2020
US$m
3,771
811
913
669
6,164
307
(6)
6,465
The three-point average capital employed figure of US$6,849m, used in our calculation of ROCE, is determined by calculating the mathematical average
of capital employed at 31 March 2021, 30 September 2020 and 31 March 2020.
Notes to the Group financial statements continuedExperian plc Financial statements 167
9. Segment information continued
(iv) Capital expenditure, amortisation and depreciation
North America
Latin America
UK and Ireland
EMEA/Asia Pacific
Total operating segments
Central Activities
Total Group
Capital expenditure
Right-of-use
asset additions
2021
US$m
211
81
41
28
361
61
422
2020
US$m
222
107
60
34
423
64
487
2021
US$m
26
3
14
14
57
—
57
2020
US$m
15
17
9
9
50
—
50
Amortisation
2021
US$m
160
61
50
27
298
28
326
2020
US$m
134
70
42
22
268
19
287
Depreciation
2021
US$m
59
17
28
22
126
1
127
2020
US$m
60
19
25
21
125
1
126
Amortisation and depreciation above only include amounts charged to Benchmark PBT.
(v) Revenue by country – continuing operations
USA
UK
Brazil
Germany
Colombia
South Africa
Other
2021
US$m
3,529
744
546
81
60
55
357
5,372
2020
(Re-presented)
US$m
3,245
762
647
8
66
62
389
5,179
Revenue is primarily attributable to countries other than Ireland. No single client accounted for 10% or more of revenue in the current or prior year.
Revenue from the USA, the UK and Brazil in aggregate comprises 90% (2020: 90%) of Group revenue.
Revenue attributable to Germany was previously reported within Other; following the acquisition in the year of the Risk Management division of Arvato
Financial Solutions (AFS) (see note 41) this is now analysed separately, and consequently comparative information has been re-presented.
(vi) Non-current assets by country
USA
UK
Brazil
Germany
South Africa
Colombia
Other
Segment non-current assets by country
Central Activities
Deferred tax
2021
US$m
4,437
1,079
731
477
268
164
703
7,859
695
86
8,640
2020
(Re-presented)
US$m
4,159
1,042
627
5
249
155
603
6,840
552
107
7,499
To add clarity to the presentation of this information, non-current assets for Central Activities and deferred tax have been excluded from the analysis by
country. The Group has no significant non-current assets located in Ireland.
Non-current assets in Germany were previously reported within Other; following the acquisition of the Risk Management division of Arvato Financial
Solutions (AFS) in the year (note 41) they are now analysed separately, and consequently comparative information has been re-presented.
Experian plc Annual Report 2021Financial statements 168
9. Segment information continued
(b) Information on business segments (including non-GAAP disclosures)
Year ended 31 March 2021
Revenue from external customers
Ongoing activities
Exited business activities
Total
Reconciliation from Benchmark EBIT to profit/(loss) before tax
Benchmark EBIT
Ongoing activities
Exited business activities
Total
Net interest expense included in Benchmark PBT (note 15(b))
Benchmark PBT
Exceptional items (note 14(a))
Impairment of goodwill (note 20)
Amortisation of acquisition intangibles (note 21)
Acquisition and disposal expenses
Adjustment to the fair value of contingent consideration
Non-benchmark share of post-tax (loss)/profit of associates
Interest on uncertain tax provisions
Financing fair value remeasurements (note 15(c))
Profit/(loss) before tax
Year ended 31 March 20201
Revenue from external customers
Ongoing activities
Exited business activities
Total
Reconciliation from Benchmark EBIT to profit/(loss) before tax
Benchmark EBIT
Ongoing activities
Exited business activities
Total
Net interest expense included in Benchmark PBT (note 15(b))
Benchmark PBT
Exceptional items (note 14(a))
Amortisation of acquisition intangibles (note 21)
Acquisition and disposal expenses
Adjustment to the fair value of contingent consideration
Non-benchmark share of post-tax profit of associates
Interest on uncertain tax provisions
Financing fair value remeasurements (note 15(c))
Profit/(loss) before tax
Business-to-
Business
US$m
Consumer
Services
US$m
4,050
15
4,065
1,192
1
1,193
(8)
1,185
35
(53)
(118)
(40)
(1)
—
—
—
1,008
1,307
—
1,307
283
—
283
(2)
281
—
—
(20)
(1)
—
(3)
—
—
257
Total
business
segments
US$m
5,357
15
5,372
1,475
1
1,476
(10)
1,466
35
(53)
(138)
(41)
(1)
(3)
—
—
1,265
Central
Activities
US$m
Total
continuing
operations
US$m
—
—
—
(90)
—
(90)
(111)
(201)
—
—
—
—
—
19
(11)
5
(188)
5,357
15
5,372
1,385
1
1,386
(121)
1,265
35
(53)
(138)
(41)
(1)
16
(11)
5
1,077
Business-to-
Business
US$m
Consumer
Services
US$m
Total
business
segments
US$m
Central
Activities
US$m
Total
continuing
operations
US$m
4,034
18
4,052
1,251
1
1,252
(8)
1,244
(35)
(103)
(37)
4
—
—
—
1,073
1,127
—
1,127
247
—
247
(2)
245
—
(21)
(2)
—
—
—
—
222
5,161
18
5,179
1,498
1
1,499
(10)
1,489
(35)
(124)
(39)
4
—
—
—
1,295
—
—
—
(112)
—
(112)
(122)
(234)
—
—
—
—
6
(14)
(111)
(353)
5,161
18
5,179
1,386
1
1,387
(132)
1,255
(35)
(124)
(39)
4
6
(14)
(111)
942
1 Revenue of US$40m and Benchmark EBIT of US$(10)m for the year ended 31 March 2020 have been re-presented for the reclassification of our Consumer Services business in Latin America to the Consumer
Services business segment; previously our Consumer Services business in this region was not sufficiently material to be disclosed separately. In addition, revenue and Benchmark EBIT 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 in the Strategic report.
Notes to the Group financial statements continuedExperian plc Financial statements 169
10. Foreign currency
(a) Principal exchange rates used
US dollar : Brazilian real
Pound sterling : US dollar
Euro : US dollar
US dollar : Colombian peso
US dollar : South African rand
Average
Closing
2021
5.41
1.31
1.17
3,699
16.36
2020
4.12
1.27
1.11
3,382
14.79
2021
5.74
1.38
1.17
3,720
14.76
2020
5.20
1.24
1.09
4,052
17.81
2019
3.89
1.31
1.12
3,163
14.47
(b) Foreign exchange risk
(i) Brazilian real intra-Group funding
Brazilian real intra-Group funding provided to Serasa S.A., from a Group company whose functional currency is not the Brazilian real, is not considered
permanent and foreign exchange gains or losses on this funding are recognised in the Group income statement.
As a result of the weakening of 10% in the Brazilian real against the US dollar in the year ended 31 March 2021, a charge of US$16m has been
recognised within financing fair value remeasurements (2020: US$54m charge due to 34% weakening) (note 15(c)).
The Group is similarly exposed to the impact of the Brazilian real strengthening or weakening against the US dollar in the future. A movement of 20%
would result in a US$37m impact on profit before tax. There is no effect on total equity as a result of this exposure, since it arises on intra-Group funding
and there would be a related equal but opposite foreign exchange movement recognised in the translation reserve within equity.
(ii) Other exposures
On the basis of the profile of foreign exchange exposures, and an assessment of reasonably possible changes in such exposures, there are no other
material sensitivities to foreign exchange risk at the balance sheet dates. In making these assessments, actual data on movements in the principal
currencies over the most recent three-year period has been considered together with exposures at the balance sheet dates. This methodology has been
applied consistently.
11. Labour costs and employee numbers – continuing operations
(a) Labour costs (including executive directors)
Wages and salaries
Social security costs
Share incentive plans
Pension costs – defined benefit plans
Pension costs – defined contribution plans
Employee benefit costs
Other labour costs
Notes
33(a)
35(a)
2021
US$m
1,446
217
111
6
58
1,838
157
1,995
2020
US$m
1,353
218
88
8
56
1,723
149
1,872
Wages and salaries include redundancy costs of US$28m (note 14(c)). Other labour costs includes those in respect of external contractors, outsourcing
and the recruitment, development and training of employees. The definition of key management personnel, and an analysis of their remuneration, is
given in note 44(d).
(b) Average monthly number of employees (including executive directors)
North America
Latin America
UK and Ireland
EMEA/Asia Pacific
Total operating segments
Central Activities
2021
Part-time
49
77
243
69
438
16
454
Full-time
6,992
3,289
3,191
3,955
17,427
181
17,608
Full-time-
equivalent
7,016
3,328
3,313
3,989
17,646
189
17,835
2020
Part-time
49
73
253
72
447
25
472
Full-time
6,620
3,240
3,371
3,671
16,902
186
17,088
Full-time-
equivalent
6,645
3,276
3,497
3,707
17,125
199
17,324
Experian plc Annual Report 2021Financial statements 170
12. Amortisation and depreciation charges
Benchmark:
Amortisation of other intangible assets
Depreciation of property, plant and equipment
Non-benchmark:
Amortisation of acquisition intangibles
2021
US$m
2020
US$m
326
127
453
138
591
287
126
413
124
537
An analysis by segment of amounts charged within Benchmark PBT is given in note 9(a)(iv). Analyses by asset type are given in notes 21 and 22. The
depreciation charge for the year includes US$55m (2020: US$54m) in respect of right-of-use assets.
13. Fees payable to the Company’s auditor
Audit of the Company and Group financial statements
Audit of the financial statements of the Company’s subsidiaries
Audit-related assurance services
Other assurance services
Total fees payable to the Company’s auditor and its associates
Summary of fees by nature:
Fees for audit services
Fees for audit-related assurance services
Fees for other assurance services
2021
US$m
0.7
4.5
0.6
0.1
5.9
5.2
0.6
0.1
5.9
2020
US$m
0.6
4.2
0.4
0.5
5.7
4.8
0.4
0.5
5.7
The guidelines covering the use of the Company’s auditor for non-audit services are set out in the Audit Committee report. Fees for other assurance
services were capped at 30% (2020: 20%) of the fees for audit services. The cap was increased in light of the Revised Ethical Standard issued by the UK
Financial Reporting Council in December 2019, but also includes audit-related assurance services. In the year ended 31 March 2021, fees payable for
non-audit services, were 13% (2020: 20%) of fees payable for audit services. The fees for the year ended 31 March 2020 for non-audit services, excluding
audit-related assurance services were 11% of fees payable for audit services. Such fees are reported within Other operating charges.
The fees for audit-related assurance services relate to the Group’s half-yearly financial report and US$0.1m (2020: US$0.4m) of the fees for other
assurance services was for bond issuance related reports.
Notes to the Group financial statements continuedExperian plc Financial statements 14. Exceptional items and other adjustments made to derive Benchmark PBT – continuing operations
(a) Net charge for Exceptional items and other adjustments made to derive Benchmark PBT
Exceptional items:
Profit on disposal of associate
Restructuring costs
Impairment of intangible asset1
Legal provisions movements1
Net (credit)/charge for Exceptional items
Other adjustments made to derive Benchmark PBT:
Amortisation of acquisition intangibles
Impairment of goodwill1
Acquisition and disposal expenses
Adjustment to the fair value of contingent consideration1
Non-benchmark share of post-tax profit of associates
Interest on uncertain tax provisions
Financing fair value remeasurements
Net charge for other adjustments made to derive Benchmark PBT
Net charge for Exceptional items and other adjustments made to derive Benchmark PBT
By income statement caption:
Labour costs
Amortisation and depreciation charges
Other operating charges
Profit on disposal of associate
Within operating profit
Within share of post-tax profit of associates
Within finance expense
Net charge for Exceptional items and other adjustments made to derive Benchmark PBT
1 Included in other operating charges.
Notes
14(b)
14(c)
14(d)
14(e)
12,21
20
23
15(c)
15(a)
2021
US$m
(120)
50
27
8
(35)
138
53
41
1
(16)
11
(5)
223
188
30
138
150
(120)
198
(16)
6
188
171
2020
US$m
—
—
—
35
35
124
—
39
(4)
(6)
14
111
278
313
8
124
62
—
194
(6)
125
313
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$2m (2020: US$8m) is recorded
within labour costs in the Group income statement, and US$39m (2020: US$31m) is included within other operating charges.
(b) Profit on disposal of investment in associate
On 18 November 2020, the Group disposed of its 18.6% interest in Finicity Corporation for US$127m, recognising a gain on disposal of US$120m.
(c) Restructuring costs
During the year the Group commenced a transformation programme in the UK and Ireland. The objectives of this programme are to simplify our
technology estate, enhance customer experience and to return to profitable growth. In addition, we have launched a programme of restructuring
initiatives in other regions. Costs of US$50m have been recognised, principally in the UK and Ireland, in connection with these actions with a related cash
outflow of US$39m. Of this 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. No further costs are expected to be incurred in relation to these initiatives.
(d) Impairment of intangible asset
During the year an internally generated software asset in the UK and Ireland with a net book value of US$27m was identified as requiring impairment
due to planned upgrade of our technology estate.
(e) Legal provisions movements
During the current and prior year there has been a movement in provisions and related receivables in respect of a number of historic legal claims.
Experian plc Annual Report 2021Financial statements 172
15. Net finance costs
(a) Net finance costs included in profit before tax
Interest income:
Bank deposits, short-term investments and loan notes
Interest on pension plan assets
Interest income
Finance expense:
Eurobonds and notes
Bank loans, commercial paper, overdrafts and other
Commitment and facility fees
Interest on leases
Interest differentials on derivatives
Interest expense
(Credit)/charge in respect of financing fair value remeasurements (note 15(c))
Interest on uncertain tax provisions
Finance expense
Net finance costs included in profit before tax
(b) Net interest expense included in Benchmark PBT
Interest income
Interest expense
Net interest expense included in Benchmark PBT
(c) Analysis of charge for financing fair value remeasurements
Fair value (gains)/losses on borrowings – attributable to interest rate risk
Fair value losses/(gains) on borrowings – attributable to currency risk
Losses/(gains) on interest rate swaps – fair value hedges
(Gains)/losses on cross-currency swaps – fair value hedges
Foreign currency gain on cross-currency swaps designated as a cashflow hedge – transfer from OCI
Gains/(losses) on items in hedging relationships – hedge ineffectiveness
Fair value (gains)/losses on non-hedging derivatives
Foreign exchange losses on Brazilian real intra-Group funding
Other foreign exchange losses/(gains) on financing activities
Decrease in present value of put options
Movement in Other financial assets at FVPL
Movement in connection with commitments to purchase own shares
2021
US$m
2020
US$m
(11)
(1)
(12)
102
8
6
10
7
133
(5)
11
139
127
2021
US$m
(12)
133
121
2021
US$m
(35)
114
31
(75)
(33)
2
(16)
16
9
(13)
(3)
—
(5)
(13)
—
(13)
89
35
5
10
6
145
111
14
270
257
2020
US$m
(13)
145
132
2020
US$m
12
(28)
(26)
33
—
(9)
70
54
(1)
(2)
—
(1)
111
Notes to the Group financial statements continuedExperian plc Financial statements 173
15. Net finance costs continued
(d) Interest rate risk
The following table shows the sensitivity to interest rate risk, on the basis of the profile of Net debt at the balance sheet dates and an assessment of
reasonably possible changes in the principal interest rates, with all other variables held constant. In making this assessment, actual movements in
relevant interest rates over the most recent three-year period have been considered and a consistent methodology applied. An indication of the primary
cause of the reported sensitivity is included.
Gain/(loss)
Impact on profit for the financial year:
Effect of an increase of 1.1% (2020: 0.7%) on US dollar-denominated Net debt:
Due to fair value gains on interest rate swaps offset by higher interest on floating rate borrowings
Effect of an increase of 0.3% (2020: 0.2%) on pound sterling-denominated Net debt:
Due to the revaluation of borrowings and related derivatives
Effect of an increase of 2.1% (2020: 2.8%) on Brazilian real-denominated Net debt:
Due to higher interest income on cash and cash equivalents
Effect of an increase of 0.1% (2020: 0.1%) on euro-denominated Net debt:
Due to fair value gains on interest rate swaps offset by higher interest on floating rate borrowings
Impact on other components of equity:
Effect of an increase of 1.1% (2020: 0.7%) on US dollar-denominated Net debt:
Due to fair value gains on cross-currency swaps treated as a cash flow hedge
Effect of an increase of 0.3% (2020: 0.2%) on pound sterling-denominated Net debt:
Due to fair value gains on cross-currency swaps treated as a cash flow hedge
16. Tax charge
(a) Analysis of tax charge in the Group income statement
Current tax:
Tax on income for the year
Adjustments in respect of prior years
Total current tax charge
Deferred tax:
Origination and reversal of temporary differences
Adjustments in respect of prior years
Total deferred tax charge
Tax charge
The tax charge comprises:
UK tax
Non-UK tax
2021
US$m
2020
US$m
19
11
2
1
—
20
(6)
1
1
—
—
—
2021
US$m
2020
US$m
193
2
195
79
1
80
275
9
266
275
206
6
212
58
(7)
51
263
10
253
263
Experian plc Annual Report 2021Financial statements 174
16. Tax charge continued
(b) Tax reconciliations
(i) Reconciliation of the tax charge
As the Group is subject to the tax rates of more than one country, it has chosen to present its reconciliation of the tax charge using the main rate of
corporation tax in the UK. The effective rate of tax for each year based on profit before tax is higher (2020: higher) than the main rate of corporation tax in
the UK, with the differences explained in note 16(c).
Profit before tax
Profit before tax multiplied by the main rate of UK corporation tax of 19% (2020: 19%)
Effects of:
Adjustments in respect of prior years
Tax on Exceptional items
Income not taxable
Losses not recognised
Expenses not deductible
Different effective tax rates in non-UK businesses
Local taxes
Recognition/utilisation of previously unrecognised tax losses
Tax charge
2021
US$m
1,077
205
3
(16)
(5)
20
15
31
33
(11)
275
2020
US$m
942
179
(1)
3
(15)
18
9
31
40
(1)
263
Effective rate of tax based on profit before tax
25.5%
27.9%
Expenses not deductible include movements in uncertain tax provisions and the impairment of goodwill. Local taxes primarily comprise US state taxes.
(ii) Reconciliation of the tax charge to the Benchmark tax charge
Tax charge
Tax relief on Exceptional items and other adjustments made to derive Benchmark PBT
Benchmark tax charge
Benchmark PBT
Benchmark tax rate
2021
US$m
275
53
328
1,265
25.9%
2020
US$m
263
61
324
1,255
25.8%
(c) Factors that affect the tax charge
Prior year adjustments reflect the net movement on historical tax positions, including adjustments for matters that have been substantively agreed with
local tax authorities, and adjustments to deferred tax assets based on latest estimates and assumptions.
Expenses not deductible include charges in respect of uncertain tax positions, financing fair value remeasurements not allowable for tax purposes, and
losses on the disposal of businesses which are not subject to tax relief.
The Group’s tax rate reflects its internal financing arrangements in place to fund non-UK businesses.
In addition, 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 2021 the Group held current provisions of US$350m (2020: US$327m) in respect of uncertain tax positions. 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.
(d) Other factors that affect the future tax charge
The Group’s tax charge will continue to be influenced by the profile of profits earned in the different countries in which the Group’s subsidiaries operate.
The Group could be affected by changes in tax law in the future, as we expect countries to amend legislation in respect of international tax.
The main rate of UK corporation tax is 19% and it has been announced that the rate will increase to 25% from 1 April 2023. This will have a
consequential effect on the Group’s future tax charge. If this rate change had been substantively enacted at the current balance sheet date the deferred
tax asset would have increased by US$13m.
17. Discontinued operations
There have been no material divestments of subsidiaries during the year ended 31 March 2021. On 31 May 2017, the Group completed the divestment of
CCM, and the results and cash flows of that business were accordingly classified as discontinued. Residual disposal costs of US$2m were incurred
during the year ended 31 March 2020 and cash outflows from operating activities were US$6m in that year.
Notes to the Group financial statements continuedExperian plc Financial statements 175
18. Earnings per share disclosures
(a) Earnings per share
Continuing and discontinued operations
Add: loss from discontinued operations
Continuing operations
Add: Exceptional items and other adjustments made to derive Benchmark PBT, net of
related tax
Benchmark EPS (non-GAAP measure)
(b) Analysis of earnings
(i) Attributable to owners of Experian plc
Basic
Diluted
2021
US cents
88.2
—
88.2
14.9
103.1
2020
US cents
74.8
0.2
75.0
28.0
103.0
2021
US cents
87.6
—
87.6
14.7
102.3
2020
US cents
74.2
0.2
74.4
27.7
102.1
Continuing and discontinued operations
Add: loss from discontinued operations
Continuing operations
Add: Exceptional items and other adjustments made to derive Benchmark PBT, net of related tax
Benchmark earnings attributable to owners of Experian plc (non-GAAP measure)
(ii) Attributable to non-controlling interests
(Loss)/profit for the financial year attributable to non-controlling interests
Add: amortisation of acquisition intangibles attributable to non-controlling interests, net of related tax
Benchmark earnings attributable to non-controlling interests (non-GAAP measure)
(c) Reconciliation of Total Benchmark earnings to profit for the financial year
Total Benchmark earnings (non-GAAP measure)
Loss from discontinued operations
Loss from Exceptional items and other adjustments made to derive Benchmark PBT, net of related tax
Profit for the financial year
(d) Weighted average number of ordinary shares
Weighted average number of ordinary shares
Add: dilutive effect of share incentive awards, options and share purchases
Diluted weighted average number of ordinary shares
19. Dividends
Amounts recognised and paid during the financial year:
First interim – paid in February 2021 (2020: January 2020)
Second interim – paid in July 2020 (2020: July 2019)
Dividends paid on ordinary shares
Full-year dividend for the financial year1
2021
US cents
per share
14.5
32.5
47.0
47.0
US$m
133
294
427
430
2020
US cents
per share
14.5
32.5
47.0
47.0
1 The cost of the second interim dividend for the year ended 31 March 2020 paid in July 2020, increased by US$1m due to foreign exchange rate movements.
A second interim dividend in respect of the year ended 31 March 2021 of 32.5 US cents per ordinary share will be paid on 23 July 2021, to shareholders
on the register at the close of business on 25 June 2021. This dividend is not included as a liability in these financial statements. This second interim
dividend and the first interim dividend paid in February 2021 comprise the full-year dividend for the financial year of 47.0 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 2021, the employee trusts waived their entitlements to dividends of US$2m (2020: US$4m). There is no entitlement to
dividend in respect of own shares held as treasury shares.
2021
US$m
803
—
803
135
938
2021
US$m
(1)
—
(1)
2021
US$m
937
—
(135)
802
2021
million
910
7
917
2020
US$m
675
2
677
252
929
2020
US$m
2
—
2
2020
US$m
931
(2)
(252)
677
2020
million
902
8
910
US$m
130
294
424
423
Experian plc Annual Report 2021Financial statements 2020
US$m
4,324
(252)
471
—
4,543
2020
US$m
2,943
530
656
286
128
4,543
2021
US$m
3,133
611
718
711
88
5,261
176
20. Goodwill
(a) Movements in goodwill
Net book amount
At 1 April
Differences on exchange
Additions through business combinations (note 41(a))
Impairment charge
At 31 March
2021
US$m
4,543
114
657
(53)
5,261
The gross carrying amount of goodwill was US$5,314m at 31 March 2021, US$4,543m at 31 March 2020 and US$4,324m at 31 March 2019. The
accumulated impairment loss was US$53m at 31 March 2021 and US$nil at 31 March 2020 and 31 March 2019.
(b) Goodwill by CGU
North America
Latin America
UK and Ireland
EMEA
Asia Pacific
At 31 March
(c) Key assumptions for value-in-use calculations by CGU
North America
Latin America
UK and Ireland
EMEA
Asia Pacific
2021
2020
Discount rate
% pa
9.1
12.8
8.9
10.4
9.4
Long-term
growth rate
% pa
2.3
4.7
2.3
3.9
5.3
Discount rate
% pa
12.5
16.8
10.7
14.7
10.8
Long-term
growth rate
% pa
2.3
4.7
2.3
3.9
5.3
As indicated in note 5(a), value-in-use calculations are underpinned by financial budgets, looking forward up to five years. 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 11%, with Asia Pacific having rates of up to 17%;
Benchmark EBIT was forecast based on historic margins. These were expected to be stable throughout the period in the mature CGUs, and improve annually by a
low-single-digit amount in EMEA and Asia Pacific; and
forecast Benchmark operating cash flow conversion rates were based on historic experience and performance expectations with rates in a range from 65% 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).
(d) Results of annual impairment review as at 31 March 2021
The review for the EMEA CGU indicated that the recoverable amount exceeded the carrying value by US$348m 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 2.0 percentage points in the discount rate, from 10.4% to 12.4%; or
an absolute reduction of 2.7 percentage points in the long-term growth rate, from growth of 3.9% to a growth of 1.2%; or
a reduction of 6.8 percentage points in the forecast terminal profit margin, from 23.6% to 16.8%. A reduction in the annual margin improvement of
approximately 1.4 percentage points per year over the five-year forecast period would also reduce the recoverable amount to the carrying value.
Following a challenging year impacted by the effects of the COVID-19 pandemic, growth In Asia Pacific was adversely affected. Accordingly, the carrying
value of the Asia Pacific CGU has been reduced to its recoverable amount of US$138m through recognition of an impairment charge of US$53m. This
charge is recognised within Other operating charges in the Group income statement. Any additional movement in the key assumptions at the balance
sheet date would lead to a further impairment of goodwill. An absolute increase of 1.0 percentage points in the discount rate would lead to a further
impairment of US$42m or an absolute reduction in the long-term growth rate of 1.0 percentage points would lead to a further impairment of US$38m.
The recoverable amount of all other CGUs exceeded their carrying value, on the basis of the assumptions set out in the table in note 20(c) and any
reasonably possible changes thereof.
Notes to the Group financial statements continuedExperian plc Financial statements 177
Total
US$m
4,069
51
481
374
(255)
4,720
2,486
26
464
33
(255)
2,754
Acquisition intangibles
Customer
and other
relationships
US$m
Acquired
software
development
US$m
Marketing-
related
assets
US$m
Databases
US$m
Internal use
software
US$m
Internally
generated
software
US$m
1,094
25
386
—
—
1,505
617
10
94
—
—
721
784
337
8
57
—
(1)
401
224
5
38
—
(1)
266
135
91
(2)
11
—
—
100
81
(2)
6
—
—
85
15
1,311
(13)
8
147
(108)
1,345
882
(8)
157
—
(108)
923
422
376
(2)
1
30
(78)
327
300
1
28
—
(78)
251
860
35
18
197
(68)
1,042
382
20
141
33
(68)
508
76
534
1,966
Acquisition intangibles
Customer
and other
relationships
US$m
Acquired
software
development
US$m
Marketing-
related
assets
US$m
Databases
US$m
Internal use
software
US$m
Internally
generated
software
US$m
1,023
(73)
144
—
—
1,094
586
(47)
78
—
617
437
477
295
(20)
62
—
—
337
205
(17)
36
—
224
90
113
98
(11)
4
—
—
91
83
(12)
10
—
81
15
10
1,394
(170)
1
175
(89)
1,311
932
(124)
163
(89)
882
462
429
362
(23)
1
39
(3)
376
290
(16)
28
(2)
300
72
76
709
(29)
3
189
(12)
860
311
(13)
96
(12)
382
398
478
Total
US$m
3,881
(326)
215
403
(104)
4,069
2,407
(229)
411
(103)
2,486
1,474
1,583
21. Other intangible assets
Cost
At 1 April 2020
Differences on exchange
Additions through business combinations
Other additions
Other disposals
At 31 March 2021
Accumulated amortisation and impairment
At 1 April 2020
Differences on exchange
Charge for the year
Impairment charge
Other disposals
At 31 March 2021
Net book amount at 31 March 2021
Cost
At 1 April 2019
Differences on exchange
Additions through business combinations
Other additions
Other disposals
At 31 March 2020
Accumulated amortisation and impairment
At 1 April 2019
Differences on exchange
Charge for the year
Other disposals
At 31 March 2020
Net book amount at 1 April 2019
Net book amount at 31 March 2020
Within the above are the following individually material assets at 31 March 2021:
North America Healthcare customer relationships have a net book value of US$188m, with a remaining amortisation period of seven years.
North America Tapad, Inc. customer relationships with a net book value of US$152m and a remaining amortisation period of 13 years.
Arvato Risk Management customer relationships with a net book value of US$146m, and a remaining amortisation period of 12 years.
In addition to the development capitalised above we charged US$138m (2020: US$153m) of research and development costs in the Group income
statement.
The impairment charge in the year largely relates to an internally generated software asset in the UK and Ireland identified as requiring impairment due
to planned upgrade of our technology estate.
Experian plc Annual Report 2021Financial statements 178
22. Property, plant and equipment
Cost
At 1 April 2020
Differences on exchange
Additions through business combinations
Other additions
Disposals
At 31 March 2021
Accumulated amortisation and impairment
At 1 April 2020
Differences on exchange
Charge for the year
Impairment charge
Disposals
At 31 March 2021
Net book amount at 31 March 2021
Cost
At 1 April 2019
Differences on exchange
Additions through business combinations
Other additions
Disposals
At 31 March 2020
Accumulated depreciation
At 1 April 2019
Differences on exchange
Charge for the year
Disposals
At 31 March 2020
Net book amount at 1 April 2019
Net book amount at 31 March 2020
Freehold
properties
US$m
Leasehold
improvements
US$m
Plant and
equipment
US$m
Land and
buildings
US$m
Motor
vehicles
US$m
Plant and
equipment
US$m
Right-of-use assets
127
10
—
—
(1)
136
42
3
3
—
—
48
88
154
—
—
4
(4)
154
77
—
5
—
(4)
78
76
589
23
2
44
(30)
628
438
17
64
3
(27)
495
133
197
4
3
26
(35)
195
36
2
40
1
(17)
62
133
15
1
—
8
(4)
20
5
—
6
—
(3)
8
12
29
—
—
23
(11)
41
11
—
9
—
(6)
14
27
Freehold
properties
US$m
Leasehold
improvements
US$m
Plant and
equipment
US$m
Land and
buildings
US$m
Motor
vehicles
US$m
Plant and
equipment
US$m
Right-of-use assets
139
(17)
2
3
—
127
43
(4)
3
—
42
96
85
142
—
—
12
—
154
72
—
5
—
77
70
77
556
(26)
2
69
(12)
589
401
(18)
64
(9)
438
155
151
176
(10)
—
34
(3)
197
—
(2)
40
(2)
36
176
161
11
—
—
6
(2)
15
—
—
6
(1)
5
11
10
20
(1)
—
10
—
29
3
—
8
—
11
17
18
Total
US$m
1,111
38
5
105
(85)
1,174
609
22
127
4
(57)
705
469
Total
US$m
1,044
(54)
4
134
(17)
1,111
519
(24)
126
(12)
609
525
502
The disposal of right-of-use assets in the year ended 31 March 2021 largely relates to sublease arrangements, leading to the derecognition of
right-of-use assets and the recognition of sublease receivables in North America.
Notes to the Group financial statements continuedExperian plc Financial statements 23. Investments in associates
At 1 April
Differences on exchange
Fair value gain on step acquisition
Acquisition of controlling stake in associate
Share of (loss)/profit after tax
Dividends received
Impairment charge
Reversal of previous impairment charge
Disposals
At 31 March
179
2020
US$m
122
(5)
17
(19)
37
(6)
(23)
—
—
123
2021
US$m
123
6
—
—
(2)
(17)
—
23
(5)
128
On 18 November 2020, the Group disposed of its 18.6% interest in Finicity Corporation for US$127m. A gain on disposal of US$120m was recognised in
the Group income statement, after additional costs of US$2m in relation to the transaction.
In the year ended 31 March 2020 the share of profit after tax of associates included a gain of US$36m relating to a significant business disposal by an
associate, together with an impairment charge of US$23m in respect of the investment in that associate. The recoverable amount of the investment in
the associate has been assessed during the year and in light of a favourable trading performance a reversal of the impairment charge of US$23m has
been recognised.
The gain on disposal, impairment charge and its reversal are reported within non-benchmark items in the Group income statement.
24. Trade and other receivables
(a) Analysis by type and maturity
Trade and unbilled receivables
Credit note provision
Trade receivables – after credit note provision
Contract assets
Trade receivables and contract assets
Loss allowance
Net impaired trade receivables and contract assets
VAT and equivalent taxes recoverable
Prepayments
Contract costs
As reported in the Group balance sheet:
Current trade and other receivables
Non-current trade and other receivables
2021
US$m
923
(19)
904
151
1,055
(23)
1,032
5
220
100
1,357
1,197
160
1,357
2020
US$m
853
(13)
840
167
1,007
(25)
982
4
160
96
1,242
1,078
164
1,242
There is no material difference between the fair value and the book value stated above. Non-current trade and other receivables comprise prepayments,
contract assets, unbilled receivables and contract costs.
At 31 March 2019, the value of trade and unbilled receivables was US$796m and contract assets was US$129m.
Experian plc Annual Report 2021Financial statements 180
24. Trade and other receivables continued
(b) Loss allowance matrix
Not past-due
Up to three months past-due
Three to six months past-due
Over six months past-due
Trade receivables and contract assets
Loss allowance (note 24(c))
Net trade receivables and contract assets
(c) Movements in the loss allowance
2021
2020
Loss allowance
US$m
(3)
(2)
(2)
(16)
(23)
Gross carrying
amount
US$m
840
157
26
32
1,055
(23)
1,032
Loss allowance
US$m
(8)
(3)
(2)
(12)
(25)
Gross carrying
amount
US$m
795
158
24
30
1,007
(25)
982
At 1 April
(Decrease)/increase in the loss allowance recognised in the Group income statement
Receivables written off in the year as uncollectable
Differences on exchange
At 31 March
(d) Analysis by denomination of currency
2021
US$m
25
(1)
(2)
1
23
Contract assets
Trade receivables
US dollar
Pound sterling
Brazilian real
Euro
Colombian peso
South African rand
Other
25. Cash and cash equivalents - excluding bank overdrafts
(a) Analysis by nature
Cash at bank and in hand
Short-term investments
2021
US$m
50
9
3
32
—
10
47
151
2020
US$m
73
9
4
35
4
5
37
167
2021
US$m
499
142
117
55
13
7
48
881
2021
US$m
113
67
180
2020
US$m
18
12
(2)
(3)
25
2020
US$m
478
138
96
32
12
10
49
815
2020
US$m
84
193
277
The effective interest rate for cash and cash equivalents held at 31 March 2021 is 0.8% (2020: 1.6%). There is no material difference between the fair
value and the book value stated above.
(b) Analysis by external credit rating
Counterparty holding of more than US$2m:
A rated
B rated
Counterparty holding of more than US$2m
Counterparty holding of less than US$2m
2021
US$m
83
79
162
18
180
2020
US$m
221
37
258
19
277
Notes to the Group financial statements continuedExperian plc Financial statements 181
2021
2020
Current
US$m
187
30
110
583
389
244
1,543
Non-current
US$m
—
—
—
4
114
41
159
Current
US$m
275
23
106
480
363
183
1,430
Non-current
US$m
—
—
—
6
87
28
121
26. Trade and other payables
(a) Analysis by type and maturity
Trade payables
VAT and other equivalent taxes payable
Social security costs
Accruals
Contract liabilities
Other payables
There is no material difference between the fair value and the book value stated above. Other payables include employee benefits of US$97m
(2020: US$83m) and deferred and contingent consideration of US$73m (2020: US$34m).
At 31 March 2019, the value of contract liabilities was US$463m.
(b) Analysis by nature
Financial instruments
VAT and other equivalent taxes payable
Social security costs
Amounts within accruals and contract liabilities
Items other than financial instruments
Contractual undiscounted future cash flows in respect of financial instruments are shown in note 32.
27. Borrowings
(a) Analysis by carrying amounts and fair value
2021
US$m
607
30
110
955
1,095
1,702
2020
US$m
572
23
106
850
979
1,551
Current:
Bonds:
£400m 3.50% Euronotes 2021
Commercial paper
Bank overdrafts
Lease obligations (note 29)
Non-current:
Bonds:
£400m 3.50% Euronotes 2021
£400m 2.125% Euronotes 2024
£400m 0.739% Euronotes 2025
€500m 1.375% Euronotes 2026
US$500m 4.25% Notes 2029
US$750m 2.75% Notes 2030
£400m 3.25% Euronotes 2032
Bank loans
Lease obligations (note 29)
Total borrowings
Carrying amount
2021
US$m
2020
US$m
Fair value
2021
US$m
2020
US$m
562
25
10
58
655
—
567
551
618
500
738
562
2
144
3,682
4,337
—
447
5
46
498
509
512
—
577
500
763
—
900
155
3,916
4,414
556
25
10
58
649
—
573
543
624
563
760
618
2
144
3,827
4,476
—
447
5
46
498
507
500
—
556
574
718
—
900
155
3,910
4,408
The effective interest rates for bonds approximate to the coupon rates indicated above. Other than lease obligations, borrowings are unsecured. Further
information on the methodology used in determining fair values is given in note 31.
Experian plc Annual Report 2021Financial statements 182
27. Borrowings continued
(b) Analysis by maturity
Less than one year
One to two years
Two to three years
Three to four years
Four to five years
Over five years
(c) Analysis by currency
US dollar
Pound sterling
Euro
Other
2021
US$m
655
49
35
589
564
2,445
4,337
2021
US$m
3,599
545
95
98
4,337
2020
US$m
498
1,300
185
25
527
1,879
4,414
2020
US$m
3,545
722
75
72
4,414
The above analysis takes account of the effect of cross-currency swaps and forward foreign exchange contracts and reflects the way in which the Group
manages its exposures.
(d) Undrawn committed bank borrowing facilities
Facilities expiring in:
Less than one year
One to two years
Two to three years
Three to four years
Four to five years
2021
US$m
—
400
300
—
1,950
2,650
2020
US$m
75
—
150
—
1,950
2,175
These facilities are at variable interest rates and are in place for general corporate purposes, including the financing of acquisitions and the refinancing
of other borrowings.
(e) Covenants and leverage ratio
There is one financial covenant in connection with the borrowing facilities. Benchmark EBIT must exceed three times net interest expense before
financing fair value remeasurements. The calculation of the financial covenant excludes the effects of IFRS 16. The Group monitors this, and the Net debt
to Benchmark EBITDA leverage ratio, and has complied with this covenant throughout the year.
28. Net debt (non-GAAP measure)
(a) Analysis by nature
Cash and cash equivalents (net of overdrafts)
Debt due within one year – commercial paper
Debt due within one year – bonds and notes
Debt due after more than one year – bonds and notes
Debt due after more than one year – bank loans
Derivatives hedging loans and borrowings
2021
US$m
170
(25)
(554)
(3,526)
(2)
111
(3,826)
2020
US$m
272
(447)
—
(2,858)
(900)
35
(3,898)
Notes to the Group financial statements continuedExperian plc Financial statements 28. Net debt (non-GAAP measure) continued
(b) Analysis by balance sheet caption
Cash and cash equivalents
Current borrowings
Non-current borrowings
Borrowings
Total of Group balance sheet line items
Lease obligations reported within borrowings excluded from Net debt
Accrued interest reported within borrowings excluded from Net debt
Derivatives reported within Other financial assets
Derivatives reported within Other financial liabilities
(c) Analysis of movements in Net debt
At 1 April 2020
Cash flow
Borrowings cash flow
Reclassification of borrowings
Net interest paid
Movement on accrued interest
Net cash flow
Non-cash lease obligation additions
Net share purchases
Additions through business combinations
Fair value gains
Exchange and other movements1
At 31 March 2021
Derivatives
hedging
loans and
borrowings
US$m
35
(54)
—
—
—
—
(54)
—
—
—
10
120
111
Current
borrowings
US$m
(498)
66
424
(558)
—
(1)
(69)
(19)
—
(3)
3
(69)
(655)
Non-current
borrowings
US$m
(3,916)
—
(98)
558
—
(14)
446
(38)
—
(16)
31
(189)
(3,682)
1 Exchange and other movements include US$8m in respect of lease obligation disposals.
At 1 April 2019
Cash flow
Borrowings cash flow
Reclassification of borrowings
Net interest paid
Movement on accrued interest
Net cash flow
Non-cash lease obligation additions
Net share purchases
Fair value gains/(losses)
Exchange and other movements
At 31 March 2020
Derivatives
hedging
loans and
borrowings
US$m
(119)
169
—
—
—
—
169
—
—
14
(29)
35
Current
borrowings
US$m
(910)
30
284
100
—
4
418
(20)
—
31
(17)
(498)
Non-current
borrowings
US$m
(2,618)
33
(1,250)
(100)
—
13
(1,304)
(26)
—
(44)
76
(3,916)
2021
US$m
180
(655)
(3,682)
(4,337)
(4,157)
202
18
117
(6)
(3,826)
Liabilities
from
financing
activities
US$m
(4,379)
12
326
—
—
(15)
323
(57)
—
(19)
44
(138)
(4,226)
Liabilities
from
financing
activities
US$m
(3,647)
232
(966)
—
—
17
(717)
(46)
—
1
30
(4,379)
Lease
obligations
US$m
201
(66)
—
—
—
—
(66)
57
—
4
—
6
202
Lease
obligations
US$m
217
(63)
—
—
—
—
(63)
46
—
—
1
201
Accrued
interest
US$m
3
—
—
—
—
15
15
—
—
—
—
—
18
Cash
and cash
equivalents
US$m
277
(220)
—
—
115
—
(105)
—
19
—
—
(11)
180
Accrued
interest
US$m
19
—
—
—
—
(17)
(17)
—
—
—
1
3
Cash
and cash
equivalents
US$m
149
480
—
—
(152)
—
328
—
(188)
—
(12)
277
183
2020
US$m
277
(498)
(3,916)
(4,414)
(4,137)
201
3
52
(17)
(3,898)
Net debt
US$m
(3,898)
(274)
326
—
115
—
167
—
19
(15)
44
(143)
(3,826)
Net debt
US$m
(3,262)
649
(966)
—
(152)
—
(469)
—
(188)
1
20
(3,898)
Experian plc Annual Report 2021Financial statements 184
29. Leases
The Group’s lease portfolio consists of 35 (2020: 33) significant property leases across the countries in which we operate. In addition, we lease
approximately 121 (2020: 190) smaller properties, 700 (2020: 800) motor vehicles, and a small number of hardware assets. The average remaining lease
term is 4.5 years (2020: 5.5 years) for significant property leases, 1.3 years (2020: 1.3 years) for other minor property leases and 2.0 years (2020: 1.7
years) for motor vehicles and plant and equipment. Extension and termination options are included within a number of property and equipment leases
across the Group. These are used to maximise operational flexibility in terms of managing assets and lease exposures. The majority of extension and
termination options are exercisable only by the Group and not by the respective lessor.
(a) Amounts recognised in the Group balance sheet
Right-of-use assets:
Land and buildings
Motor vehicles
Plant and equipment
At 31 March
Lease obligations:
Current
Non-current
At 31 March
Notes
2021
US$m
2020
US$m
22
22
22
27
27
133
12
27
172
58
144
202
161
10
18
189
46
155
201
During the year the Group derecognised right-of-use assets of US$13m due to sublease arrangements in North America. The lease receivable held in
relation to subleases at 31 March 2021 was US$13m (2020: US$nil), of which US$11m falls due after more than one year.
Lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for
leases in the Group, the incremental borrowing rate is used. The incremental borrowing rate is unique to each country and class of assets therein and is
based on the Group’s cost of debt, adjusted for factors specific to individual lessees and their borrowing capacity.
The Group is exposed to potential future increases in variable lease payments based on an index or a rate, which are not included in the lease obligation
until they take effect.
(b) Maturity of lease obligations – contractual undiscounted cash flows
Less than one year
One to two years
Two to three years
Three to four years
Four to five years
Over five years
Total undiscounted lease obligations at 31 March
(c) Amounts recognised in the Group income statement
Depreciation charge for right-of-use assets:
Land and buildings
Motor vehicles
Plant and equipment
Total depreciation charge for right-of-use assets
Interest expense
Expense relating to the lease of low-value assets
Total
We had no material sublease income in the current or prior year.
2021
US$m
58
54
40
25
16
37
230
2021
US$m
40
6
9
55
10
8
73
2020
US$m
54
49
39
28
17
46
233
2020
US$m
40
6
8
54
10
9
73
Notes
22
22
22
15
(d) Amounts recognised in the Group cash flow statement
During the year lease payments of US$66m (2020: US$63m) comprised US$56m (2020: US$55m) for repayments of principal and US$10m (2020:
US$8m) for payments of interest.
Notes to the Group financial statements continuedExperian plc Financial statements 185
29. Leases continued
(e) Lease commitments
The Group’s commitments for lease agreements where the term has not yet commenced total US$1m (2020: US$7m); such amounts are not recognised
as lease obligations or right-of-use assets.
30. Financial assets and liabilities
(a) Financial assets revalued through OCI
Cash flow hedge of borrowings (cross-currency swaps)
Listed investments
Trade investments
2021
Non-current
US$m
37
44
164
245
Current
US$m
—
—
—
—
Total
US$m
37
44
164
245
2020
Non-current
US$m
—
32
139
171
Current
US$m
—
—
—
—
Total
US$m
—
32
139
171
Listed investments are held in the UK to secure certain unfunded pension arrangements (note 34(b)).
(b) Other financial assets and liabilities
(i) Summary
Assets
Financial assets held at amortised cost
Derivative financial instruments:
Fair value hedge of borrowings (cross-currency swaps)
Fair value hedge of borrowings (interest rate swaps)
Derivatives used for hedging
Non-hedging derivatives (equity swaps)
Non-hedging derivatives (foreign exchange contracts)
Non-hedging derivatives (interest rate swaps)
Other financial assets at fair value through profit or loss
Assets at fair value through profit or loss
Total other financial assets
Total other financial assets comprise:
Loans and receivables
Derivative financial instruments
Convertible loan notes
Liabilities
Derivative financial instruments:
Fair value hedge of borrowings (cross-currency swaps)
Derivatives used for hedging
Non-hedging derivatives (equity swaps)
Non-hedging derivatives (foreign exchange contracts)
Non-hedging derivatives (interest rate swaps)
Derivative financial instruments1
Options in respect of non-controlling interests
Total other financial liabilities
1 Derivative financial liabilities are valued at FVPL.
2021
Non-current
US$m
103
Current
US$m
—
Total
US$m
103
2020
Non-current
US$m
94
Current
US$m
—
Total
US$m
94
—
5
5
—
6
9
—
20
20
—
20
—
20
81
—
81
—
—
27
12
120
223
103
108
12
223
81
5
86
—
6
36
12
140
243
103
128
12
243
—
—
—
2
15
—
—
17
17
—
17
—
17
10
35
45
—
—
58
26
129
223
94
103
26
223
2021
Non-current
US$m
Current
US$m
Total
US$m
Current
US$m
2020
Non-current
US$m
—
—
—
6
2
8
7
15
—
—
2
—
64
66
213
279
—
—
2
6
66
74
220
294
—
—
—
8
2
10
13
23
6
6
1
—
100
107
—
107
10
35
45
2
15
58
26
146
240
94
120
26
240
Total
US$m
6
6
1
8
102
117
13
130
Amounts recognised in the Group income statement in connection with the Group’s hedging instruments are disclosed in note 15. There is no material
difference between the fair values and the book values stated above.
Financial assets held at amortised cost principally comprise amounts due following the disposal of businesses and include accrued interest. Other financial
assets at fair value through profit or loss comprise convertible loan notes purchased when acquiring interests in associates and trade investments.
Experian plc Annual Report 2021Financial statements 186
30. Financial assets and liabilities continued
(ii) Fair value and notional principal amounts of derivative financial instruments
Cross-currency swaps
Interest rate swaps
Equity swaps
Foreign exchange contracts
2021
2020
Assets
Liabilities
Assets
Liabilities
Fair value
US$m
118
41
—
6
165
Notional
US$m
1,413
1,201
—
508
3,122
Fair value
US$m
—
66
2
6
74
Notional
US$m
—
1,563
22
545
2,130
Fair value
US$m
10
93
2
15
120
Notional
US$m
504
1,046
12
286
1,848
Fair value
US$m
6
102
1
8
117
Notional
US$m
395
2,097
8
198
2,698
Notional principal amounts are the amount of principal underlying the contracts at the reporting dates.
(iii) Offsetting derivative financial assets and liabilities held with the same counterparty
Reported in the Group balance sheet
Related amounts not offset in the Group balance sheet
Net amount
Assets
2021
US$m
165
(60)
105
2020
US$m
120
(70)
50
Liabilities
2021
US$m
74
(60)
14
2020
US$m
117
(70)
47
There are no amounts offset within the assets and liabilities reported in the Group balance sheet.
(c) Hedge accounting
(i) Fair value and cash flow hedges
We use interest rate swaps to hedge the interest rate risk arising on fixed rate borrowings, and cross-currency swaps to hedge the currency and interest
rate risk arising on foreign currency fixed rate borrowings. Our risk management strategy for interest rate risk and currency risk is outlined in note 7.
We determine the existence of an economic relationship between the hedging instruments and hedged items by comparing the currency, reference
interest rates, duration, repricing and maturity dates and the notional amounts of the hedging instruments to those of the hedged items.
We have established a hedge ratio of 1:1 for the hedging relationships as the underlying risk of interest rate swaps and cross-currency swaps is identical
to the hedged risk components.
The main sources of ineffectiveness in the hedge accounting relationships arise from:
The application of different interest rate curves to discount the cash flows of the hedged item and those of the hedging instrument.
Differences in timing of cash flows of the hedged item and hedging instrument.
The different impact of the counterparties’ credit risk on the fair value movements of the hedging instrument compared to the hedged item.
(ii) Analysis of hedging instruments
The Group held the following instruments to hedge exposures to changes in foreign currency and interest rates.
At 31 March 2021
Fair value hedges
Interest rate risk
Interest rate swaps:
Notional amount (US$m)
Weighted average fixed interest rate
Cross-currency swaps:
Notional amount (US$m)
Weighted average fixed interest rate
Foreign currency risk
Cross-currency swaps:
Notional amount (US$m)
EUR:USD forward contract rate
GBP:USD forward contract rate
Cash flow hedge
Foreign currency risk
Cross-currency swaps:
Notional amount (US$m)
GBP:USD forward contract rate
Less than
one year
One to
two years
Two to
three years
Three to
four years
Four to
five years
Over
five years
Maturity
207
3.50%
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
395
2.13%
395
—
1.32
—
—
—
—
—
—
—
—
—
515
1.29
300
1.66%
504
1.38%
504
1.12
—
—
—
Notes to the Group financial statements continuedExperian plc Financial statements 187
30. Financial assets and liabilities continued
(ii) Analysis of hedging instruments continued
At 31 March 2020
Fair value hedges
Interest rate risk
Interest rate swaps:
Notional amount (US$m)
Weighted average fixed interest rate
Cross-currency swaps:
Notional amount (US$m)
Weighted average fixed interest rate
Foreign currency risk
Cross-currency swaps:
Notional amount (US$m)
EUR:USD forward contract rate
GBP:USD forward contract rate
(d) Impact of hedging instruments
Less than
one year
One to
two years
Two to
three years
Three to
four years
Four to
five years
Over
five years
Maturity
—
—
—
—
—
—
—
186
3.50%
—
—
—
—
—
—
—
—
—
—
—
—
—
—
395
2.13%
395
—
1.32
300
1.66%
504
1.38%
504
1.12
—
—
—
—
—
—
—
—
2021
Fair value hedges
Interest rate risk
Interest rate swaps
Cross-currency swaps
Foreign exchange risk
Cross-currency swaps
Cash flow hedge
Foreign exchange risk
Cross-currency swaps
Fair value hedges
Interest rate risk
Interest rate swaps
Cross-currency swaps
Foreign exchange risk
Cross-currency swaps
Notional amount
of hedging
instrument
US$m
Carrying amount of
hedging instrument
Assets
US$m
Liabilities
US$m
Changes in fair
value used for
calculating hedge
ineffectiveness
(Note 15(c))
US$m
507
899
899
5
81
81
515
37
2020
—
—
—
—
31
10
(85)
(35)
Notional amount
of hedging
instrument
US$m
Carrying amount of
hedging instrument
Assets
US$m
Liabilities
US$m
Changes in fair
value used for
calculating hedge
ineffectiveness
(Note 15(c))
US$m
486
899
899
35
10
10
—
(6)
(6)
(26)
3
30
Interest rate swaps are reported within Other financial assets, and cross-currency swaps are reported within Other financial assets and Other financial
liabilities in the Group balance sheet.
Experian plc Annual Report 2021Financial statements 188
30. Financial assets and liabilities continued
(e) Impact of hedged items
2021
Accumulated
amount of fair
value hedge
adjustments
included in
the carrying
amount of the
hedged item
Carrying amount
of hedged item
Liabilities
US$m
US$m
2020
Accumulated
amount of fair
value hedge
adjustments
included in
the carrying
amount of the
hedged item
Carrying amount
of hedged item
Liabilities
US$m
US$m
Changes in fair
value used for
calculating hedge
ineffectiveness
(Note 15(c))
US$m
Changes in fair
value used for
calculating hedge
ineffectiveness
(Note 15(c))
US$m
(1,494)
(987)
40
43
(35)
81
(1,424)
(910)
70
(34)
12
(28)
(551)
n/a
35
—
n/a
—
Fair value hedges
Interest rate risk
Borrowings
Foreign exchange risk
Borrowings
Cash flow hedge
Foreign exchange risk
Borrowings
The hedging reserve at 31 March 2021 includes US$2m (2020: US$nil) in respect of the cash flow hedge. Borrowings are reported within Borrowings in
the Group balance sheet.
(f) Impact of hedge ineffectiveness
Fair value hedges (Note 15(c))
Interest rate risk
Foreign exchange risk
Gains/(losses) on items in hedging relationships – hedge ineffectiveness
Hedge ineffectiveness is reported within Net finance costs in the Group income statement.
(g) Analysis by valuation method for put options and items measured at fair value
2021
US$m
6
(4)
2
2020
US$m
(11)
2
(9)
Financial assets:
Derivatives used for hedging
Non-hedging derivatives
Other financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss (note 30(b))
Derivatives used for hedging
Listed and trade investments
Financial assets revalued through OCI (note 30(a))
Financial liabilities:
Derivatives used for hedging
Non-hedging derivatives
Put options
Other liabilities at fair value through profit or loss
Net financial assets/(liabilities)
2021
2020
Level 1
US$m
Level 2
US$m
Level 3
US$m
Total
US$m
Level 1
US$m
Level 2
US$m
Level 3
US$m
Total
US$m
—
—
—
—
—
44
44
44
—
—
—
—
—
44
86
42
—
128
37
—
37
165
—
(74)
—
—
(74)
91
—
—
12
12
—
164
164
176
—
—
(220)
(66)
(286)
(110)
86
42
12
140
37
208
245
385
—
(74)
(220
(66)
(360)
25
—
—
—
—
—
32
32
32
—
—
—
—
—
32
45
75
—
120
—
—
—
120
(6)
(111)
—
—
(117)
3
—
—
26
26
—
139
139
165
—
—
(13)
(29)
(42)
123
45
75
26
146
—
171
171
317
(6)
(111)
(13)
(29)
(159)
158
Notes to the Group financial statements continuedExperian plc Financial statements 189
30. Financial assets and liabilities continued
(g) Analysis by valuation method for put options and items measured at fair value continued
The analysis by level is a requirement of IFRS 13 and the definitions are summarised here for completeness:
assets and liabilities whose valuations are based on unadjusted quoted prices in active markets for identical assets and liabilities are classified as
Level 1;
assets and liabilities which are not traded in an active market, and whose valuations are derived from available market data that is observable for the
asset or liability, are classified as Level 2; and
assets and liabilities whose valuations are derived from inputs not based on observable market data are classified as Level 3.
Level 3 items principally comprise minority shareholdings in unlisted businesses, trade investments, contingent consideration and put options
associated with corporate transactions.
Unlisted equity investments, initially measured at cost, are revalued where sufficient indicators are identified that a change in the fair value has occurred.
The inputs to any subsequent valuations are based on a combination of observable evidence from external transactions in the investee’s equity and
estimated discounted cash flows that will arise from the investment. Valuations of material contingent consideration and put options associated with
corporate transactions, are based on Monte Carlo simulations using the most recent management expectations of relevant business performance,
reflecting the different contractual arrangements in place.
There would be no material effect on the amounts stated from any reasonably possible change in such inputs at 31 March 2021.
(h) Analysis of movements in Level 3 financial assets/(liabilities)
Year ended 31 March 2021
Year ended 31 March 2020
Financial
assets
revalued
through
OCI
US$m
139
24
—
—
Other
financial
assets
at FVPL
US$m
26
7
(24)
—
Contingent
consideration
US$m
(29)
(33)
—
—
—
—
—
1
—
164
—
3
—
—
—
12
(1)
—
—
(3)
—
(66)
Put
options
US$m
(13)
(208)
—
—
—
13
—
(12)
—
(220)
Total
US$m
123
(210)
(24)
—
(1)
16
—
(14)
—
(110)
Financial
assets
revalued
through
OCI
US$m
67
74
—
—
Other
financial
assets
at FVPL
US$m
—
21
—
—
Contingent
consideration
US$m
(27)
(34)
—
25
Put
options
US$m
(17)
—
—
—
—
—
(2)
—
—
139
—
—
—
—
5
26
4
—
—
3
—
(29)
—
2
—
2
—
(13)
Total
US$m
23
61
—
25
4
2
(2)
5
5
123
At 1 April
Additions1,2
Disposals
Settlement of contingent consideration
Adjustment to the fair value of contingent
consideration
Valuation gains recognised
in the Group income statement3
Valuation losses recognised in OCI
Currency translation gains/(losses)
recognised directly in OCI
Other
At 31 March
1 Additions to put options, in the year ended 31 March 2021, comprised US$201m in respect of the acquisition of Arvato Risk Management, and US$7m in respect of the acquisition of
Brain Soluções de Tecnologia Digital Ltda (note 41(a)).
2 Additions to contingent consideration comprised US$33m (2020: US$29m) in respect of acquisitions and US$nil (2020: US$5m) for transactions in respect of non-controlling interests.
3 Movements in the present value of expected future payments of put options are unrealised and are recognised in financing fair value remeasurements in the Group income statement.
Experian plc Annual Report 2021Financial statements 190
31. Fair value methodology
Information in respect of the carrying amounts and the fair value of borrowings is included in note 27(a). There are no material differences between the
carrying value of the Group’s other financial assets and liabilities not measured at fair value and their estimated fair values. The following assumptions
and methods are used to estimate the fair values:
the fair values of receivables, payables and cash and cash equivalents are considered to approximate to the carrying amounts;
the fair values of short-term borrowings, other than bonds, are considered to approximate to the carrying amounts due to the short maturity terms of
such instruments;
the fair value of that portion of bonds carried at amortised cost is based on quoted market prices, employing a valuation methodology falling within
Level 1 of the IFRS 13 fair value hierarchy;
the fair values of long-term variable rate bank loans and lease obligations are considered to approximate to the carrying amount; and
the fair values of other financial assets and liabilities are calculated based on a discounted cash flow analysis, using a valuation methodology falling
within Level 2 of the IFRS 13 fair value hierarchy.
32. Contractual undiscounted future cash flows for financial liabilities
At 31 March 2021
Borrowings
Net settled derivative financial instruments – interest rate swaps
Gross settled derivative financial instruments:
Outflows for derivative contracts
Inflows for derivative contracts
Gross settled derivative financial instruments
Options in respect of acquisitions and non-controlling interests
Trade and other payables
Cash outflows
At 31 March 2020
Borrowings
Net settled derivative financial instruments – interest rate swaps
Gross settled derivative financial instruments:
Outflows for derivative contracts
Inflows for derivative contracts
Gross settled derivative financial instruments
Options in respect of non-controlling interests
Trade and other payables
Cash outflows
Less than
one year
US$m
749
28
One to
two years
US$m
138
26
Two to
three years
US$m
124
19
Three to
four years
US$m
660
11
Four to
five years
US$m
639
8
Over
five years
US$m
2,704
6
545
(539)
6
7
562
1,352
—
—
—
—
43
207
—
—
—
—
—
143
—
—
—
—
—
671
—
—
—
11
—
658
—
—
—
202
2
2,914
Less than
one year
US$m
583
11
One to
two years
US$m
1,372
11
Two to
three years
US$m
249
11
Three to
four years
US$m
88
9
Four to
five years
US$m
573
6
Over
five years
US$m
2,047
6
207
(199)
8
13
538
1,153
9
(8)
1
—
30
1,414
9
(8)
1
—
—
261
9
(8)
1
—
—
98
400
(380)
20
—
1
600
—
—
—
—
3
2,056
Total
US$m
5,014
98
545
(539)
6
220
607
5,945
Total
US$m
4,912
54
634
(603)
31
13
572
5,582
The table above analyses financial liabilities into maturity groupings, based on the period from the balance sheet date to the contractual maturity date.
As the amounts disclosed are the contractual undiscounted cash flows, they differ from the carrying values and fair values. Contractual undiscounted
future cash outflows for derivative financial liabilities in total amount to US$104m (2020: US$85m).
Notes to the Group financial statements continuedExperian plc Financial statements 33. Share incentive plans
(a) Cost of share-based compensation
Share awards
Share options
Expense recognised (all equity-settled)
Charge for associated social security obligations
Total expense recognised in the Group income statement
191
2021
US$m
99
7
106
5
111
2020
US$m
78
5
83
5
88
The Group has a number of equity-settled, share-based employee incentive plans. Further information on share award arrangements is given in note
33(b). As the numbers of share options granted or outstanding and the related charge to the Group income statement are not significant, no further
disclosures are included in these financial statements.
(b) Share awards
(i) Summary of arrangements and performance conditions
There are three plans under which share awards are currently granted – the two Experian Co-investment Plans (the CIP) and the Experian Performance
Share Plan (the PSP). Awards typically take the form of a grant of free shares which vest over a service period of three years, with a maximum term
generally of the same length, and are settled by share distribution. The assumption at grant date for employee departures prior to vesting is 20% for
certain unconditional awards, which are only made under the PSP. Other details in respect of conditional awards are given below.
During the year ended 31 March 2021, a one-off award was made under the PSP to employees who are not eligible to participate in existing share award
schemes. These awards had no service or performance conditions attached and vested immediately. Participants who hold the shares received for three
years will be entitled to receive two matching shares for each share they originally received. The grant date assumption is that 30% of these matching
awards will not vest.
CIP
For the purposes of IFRS 2, the grant date for these plans is the start of the financial year in which performance is assessed. This is before the number
of shares to be awarded is determined but the underlying value of the award is known, subject to the outcome of the performance condition. The value of
awarded shares reflects the performance outcome assumed at the date of their issue to participants and is recognised over a four-year period.
The range of performance conditions for awards under these plans is set out below. The Profit performance condition requires Benchmark PBT per
share growth at the stated percentages over a three-year period for the awards made in year ended 31 March 2019. The profit condition for awards
made in the years ended 31 March 2021 and 31 March 2020 require adjusted Benchmark EPS growth at the stated percentages over a three-year
period. The cumulative Benchmark operating cash flow performance condition (the ‘Cash flow condition’) is based on cumulative Benchmark operating
cash flow over a three-year period. The period of assessment commences at the beginning of the financial year of grant. These are not market-based
performance conditions as defined by IFRS 2.
PSP
The range of Profit performance conditions for conditional awards under this plan is the same as those for the CIP described above. For the years ended
31 March 2021 and 31 March 2020 there is an additional Return on Capital Employed condition (‘ROCE condition’). This condition requires average ROCE
over the period at the percentages stated below. Both these conditions are not market-based performance conditions as defined by IFRS 2 and are also
measured over a three-year period commencing at the beginning of the financial year of grant.
The TSR performance condition is considered a market-based performance condition as defined by IFRS 2. In valuing the awarded shares, TSR is
evaluated using a Monte Carlo simulation, with historic volatilities and correlations for comparator companies measured over the three-year period
preceding valuation and an implied volatility for Experian plc ordinary shares.
Experian plc Annual Report 2021Financial statements 192
33. Share incentive plans continued
(i) Summary of arrangements and performance conditions continued
Year ended
31 March 2021
31 March 2020
31 March 2019
Profit condition:
Measure
Proportion of awards subject to condition
Minimum payout requirement
Target payout requirement
Maximum payout requirement
Assumed outcome at grant date
Cash flow condition:
Proportion of awards subject to condition
Minimum payout requirement
Target payout requirement
Maximum payout requirement
Assumed outcome at grant date
ROCE condition:
Proportion of awards subject to condition
Minimum payout requirement
Target payout requirement
Maximum payout requirement
Assumed outcome at grant date
TSR condition:
Proportion of awards subject to condition
Assumed outcome at grant date
CIP
PSP
CIP
PSP
CIP
PSP
Adjusted
Benchmark EPS
50%
3% per annum
4% per annum
7% per annum
77.8%
Adjusted
Benchmark EPS
50%
3% per annum
4% per annum
7% per annum
77.8%
Adjusted
Benchmark EPS
50%
5% per annum
6% per annum
9% per annum
66.7%
Adjusted
Benchmark EPS
50%
5% per annum
6% per annum
9% per annum
66.7%
Benchmark PBT
per share
50%
5% per annum
6% per annum
9% per annum
66.7%
Benchmark PBT
per share
75%
5% per annum
6% per annum
9% per annum
66.7%
50%
US$3.7bn
US$3.8bn
US$4.1bn
77.8%
—
—
—
—
—
50%
US$3.7bn
US$3.8bn
US$4.1bn
77.2%
—
—
—
—
—
50%
—
US$3.7bn
US$4.1bn
66.4%
—
25%
— 14.5% per annum
— 15.4% per annum
— 16.0% per annum
83%
—
—
—
25%
61.8%
—
25%
— 14.5% per annum
— 15.4% per annum
— 16.0% per annum
75%
—
—
—
25%
61.8%
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
25%
27.8%
(ii) Information on share grant valuations
Share grants are valued by reference to the market price on the day of award, with no modification for dividend distributions or other factors, as
participants are entitled to dividend distributions on awarded shares. Market-based performance conditions are included in the fair value measurement
on the grant date and are not revised for actual performance. Awards granted in the year ended 31 March 2021 had a weighted average fair value per
share of £26.84 (2020: £23.45).
(iii) Share awards outstanding
At 1 April
Grants
Forfeitures
Lapse of awards
Vesting
At 31 March
Analysis by plan:
CIP
PSP – conditional awards
PSP – unconditional awards
At 31 March
2021
million
12.2
4.1
(0.5)
(0.3)
(4.6)
10.9
3.5
3.0
4.4
10.9
2020
million
13.7
4.3
(0.7)
(0.3)
(4.8)
12.2
4.2
3.4
4.6
12.2
Notes to the Group financial statements continuedExperian plc Financial statements 193
34. Post-employment benefit plans and related risks
An overview of the Group’s post-employment benefit plans and the related risks is given below. The additional information required by IAS 19, which
relates only to the Group’s defined benefit pension plans and post-employment medical benefits obligations, is set out in note 35.
(a) Funded pension plans
The Group’s principal defined benefit plan is the Experian Pension Scheme, which provides benefits for certain UK employees. The plan was closed to
new entrants in 2009. It is intended that it will close to the accrual of new benefits from 1 April 2022, at which point all UK employees will be offered
membership of the Group’s UK defined contribution plan. This is currently under consultation with the active members of the plan with the outcome
expected to be determined no later than 1 September 2021.
The Experian Pension Scheme has rules which specify the benefits to be paid, with the level of pension benefit that an employee will receive on
retirement dependent on age, length of service and salary. As at 31 March 2021, there were 95 (2020: 110) active members of this plan, 1,309
(2020: 1,363) deferred members and 2,494 (2020: 2,596) pensioner members.
The Group provides a defined contribution plan, the Experian Retirement Savings Plan, to other eligible UK employees. Under this plan, employee and
employer contributions are paid by the Group into an independently administered fund, which is used to fund member pensions at retirement. As at 31
March 2021, there were 3,080 active members of this plan (2020: 3,128).
Both UK plans are governed by trust deeds, which ensure that their finances and governance are independent from those of the Group. Trustees are
responsible for overseeing the investments and funding of the plans and plan administration. The UK pensions environment is regulated by The
Pensions Regulator whose statutory objectives and regulatory powers are described on its website at www.thepensionsregulator.gov.uk.
A full actuarial funding valuation of the Experian Pension Scheme is carried out every three years, with interim reviews in the intervening years. The
latest full valuation was carried out as at 31 March 2019 by independent qualified actuaries Mercer Limited, using the projected unit credit method and
there was a small funding surplus. The next full valuation will be carried out as at 31 March 2022.
Employees in the USA, Brazil and South Africa have the option to join local defined contribution plans and, as at 31 March 2021, there were 4,455 (2020:
4,368) active members in the USA, 1,100 (2020: 1,256) in Brazil and 485 (2020: 556) in South Africa. There are no other material funded pension
arrangements.
(b) Unfunded pension arrangements
The Group’s unfunded pension arrangements are designed to ensure that certain directors and senior managers who are affected by the earnings cap,
which was introduced by the UK government some years ago to set a ceiling on the amount of benefits that could be paid by defined benefit pension
plans, are placed in broadly the same position as those who are not. There are also unfunded arrangements for certain former directors and employees
of Experian Finance plc and Experian Limited. Certain of these unfunded arrangements in the UK have been secured by the grant to an independent
trustee of charges over an independently managed portfolio of marketable securities owned by the Group and reported as financial assets revalued
through OCI (note 30(a)).
(c) Post-employment medical benefits
The Group operates a plan which provides post-employment medical benefits to certain retired employees and their dependant relatives. This plan
relates to former employees in the UK and, under it, the Group has undertaken to meet the cost of post-employment medical benefits for all eligible
former employees who retired prior to 1 April 1994 and their dependants.
(d) Related risks
Through its defined benefit pension plans and post-employment medical benefits plan, the Group is exposed to a number of risks that are inherent in
such plans and arrangements, which can be summarised as follows:
asset value volatility, with the associated impact on the assets held in connection with the funding of pension obligations and the related cash flows;
changes in bond yields, with any reduction resulting in an increase in the present value of pension obligations, mitigated by an increase in the value of
plan assets;
inflation, as pension obligations are generally linked to inflation and the prevailing rate of inflation experienced for medical benefits is typically higher
than other inflation measures in the UK; and
life expectancy, as pension and medical benefits are generally provided for the life of beneficiaries and their dependants.
There are no unusual, entity-specific or plan-specific risks, and no significant concentrations of risk.
Experian plc Annual Report 2021Financial statements 194
35. Post-employment benefits – IAS 19 information
(a) Post-employment benefit amounts recognised in the Group financial statements
(i) Balance sheet assets/(obligations)
Retirement benefit assets/(obligations) – funded defined benefit plans:
Fair value of funded plans’ assets
Present value of funded plans’ obligations
Assets in the Group balance sheet for funded defined benefit pensions
Obligations for unfunded post-employment benefits:
Present value of defined benefit pensions – unfunded plans
Present value of post-employment medical benefits
Liabilities in the Group balance sheet
Net post-employment benefit assets
2021
US$m
1,274
(1,172)
102
(51)
(4)
(55)
47
2020
US$m
1,023
(940)
83
(44)
(4)
(48)
35
Pension assets are deemed to be recoverable and there are no adjustments in respect of minimum funding requirements as, under the Experian
Pension Scheme rules, future economic benefits are available to the Group in the form of reductions in future contributions or refunds of surplus.
(ii) Income statement charge
By nature of expense:
Current service cost
Administration expenses
Charge within labour costs and operating profit
Interest income
Total net charge to the Group income statement
2021
US$m
2020
US$m
4
2
6
(1)
5
6
2
8
—
8
The income statement charge and the remeasurement recognised in the Statement of comprehensive income relate to defined benefit plans.
In the year ended 31 March 2019, we recognised a past service cost in respect of Guaranteed Minimum Pension equalisation of US$4m. The amount of
any additional liability resulting from the UK High Court ruling on 20 November 2020 on historic transfers is not anticipated to be material to the Group.
(b) Movements in net post-employment benefit assets/(obligations) recognised in the Group balance sheet
At 1 April 2020
Income statement (charge)/credit:
Current service cost
Administration expenses
Interest income/(expense)
Total (charge)/credit to the Group income statement
Remeasurements:
Return on plan assets other than interest
Gains from change in demographic assumptions
Losses from change in financial assumptions
Remeasurement of post-employment benefit assets
and obligations
Differences on exchange
Contributions paid by the Group and employees
Benefits paid
At 31 March 2021
Present value of obligations
Fair value of
plan assets
US$m
1,023
Defined benefit
pensions –
funded
US$m
(940)
Defined benefit
pensions –
unfunded
US$m
(44)
Post-employment
medical
benefits
US$m
(4)
—
—
23
23
142
—
—
142
121
11
(46)
1,274
(4)
(2)
(21)
(27)
—
2
(137)
(135)
(112)
(1)
43
(1,172)
—
—
(1)
(1)
—
—
(5)
(5)
(3)
—
2
(51)
—
—
—
—
—
—
—
—
(1)
—
1
(4)
Total
US$m
(988)
(4)
(2)
(22)
(28)
—
2
(142)
(140)
(116)
(1)
46
(1,227)
Movements in
net position
US$m
35
(4)
(2)
1
(5)
142
2
(142)
2
5
10
—
47
Notes to the Group financial statements continuedExperian plc Financial statements 195
35. Post-employment benefits – IAS 19 information continued
(b) Movements in net post-employment benefit assets/(obligations) recognised in the Group balance sheet continued
At 1 April 2019
Income statement (charge)/credit:
Current service cost
Administration expenses
Interest income/(expense)
Total (charge)/credit to the Group income statement
Remeasurements:
Return on plan assets other than interest
(Losses)/gains from change in demographic
assumptions
Gains from change in financial assumptions
Experience gains
Remeasurement of post-employment benefit assets
and obligations
Differences on exchange
Contributions paid by the Group and employees
Benefits paid
At 31 March 2020
Present value of obligations
Fair value of
plan assets
US$m
1,122
Defined benefit
pensions –
funded
US$m
(1,061)
Defined benefit
pensions –
unfunded
US$m
(50)
Post-employment
medical
benefits
US$m
(5)
Total
US$m
(1,116)
Movements in
net position
US$m
6
—
—
25
25
(33)
—
—
—
(33)
(55)
13
(49)
1,023
(6)
(2)
(23)
(31)
—
(13)
56
12
55
52
(1)
46
(940)
—
—
(2)
(2)
—
1
2
1
4
2
—
2
(44)
—
—
—
—
—
—
—
—
—
—
—
1
(4)
(6)
(2)
(25)
(33)
—
(12)
58
13
59
54
(1)
49
(988)
(6)
(2)
—
(8)
(33)
(12)
58
13
26
(1)
12
—
35
(c) Actuarial assumptions and sensitivities
The accounting valuations at 31 March 2021 have been based on the most recent actuarial valuations, updated by Willis Towers Watson to take account
of the requirements of IAS 19. The assumptions for the real discount rate, pension increases, salary increases and mortality, used to calculate the
present value of the defined benefit obligations, all have a significant effect on the accounting valuation.
Changes to these assumptions in the light of prevailing conditions may have a significant impact on future valuations. Indications of the sensitivity of the
amounts reported at 31 March 2021 to changes in the real discount rate, pension increases, life expectancy and medical costs are included below.
While the methodology used to determine the discount rate is unchanged from that used at 31 March 2020, the data source used by our external actuary
to construct the corporate bond yield curve has been updated due to changes in the classifications of relevant high-quality corporate bonds. In
constructing the yield curve, judgment is required on the selection of appropriate bonds to be included and the approach then used to derive the yield
curve. The change to the bond universe has reduced retirement benefit obligations at 31 March 2021 by approximately US$28m or 2.4%.
In the year ended 31 March 2020 the CPI assumption was derived by assuming a margin of 80 basis points below RPI. Following the announcement by
the UK Chancellor of the Exchequer on 25 November 2020, of the outcome of a consultation on the reform to RPI methodology, it is now expected that
from 2030 RPI will be aligned with CPIH (the Consumer Price Index including owner occupiers’ housing costs). For the year ended 31 March 2021, a 100
basis point margin between RPI and CPI has been assumed to 2030, with a ten basis point margin assumed thereafter. This results in a single equivalent
differential of 50 basis points and an increase in retirement benefit obligations at 31 March 2021 of approximately US$14m or 1.2%.
The other methods and types of assumptions used are consistent with those used in the prior year and the absolute sensitivity numbers are stated on a
basis consistent with the methodology used in determining the accounting valuation as at 31 March 2021. The methodology evaluates the effect of a
change in each assumption on the relevant obligations, while holding all other assumptions constant.
Experian plc Annual Report 2021Financial statements 196
35. Post-employment benefits – IAS 19 information continued
(i) Financial actuarial assumptions
Discount rate
Inflation rate – based on the UK Retail Prices Index (the RPI)
Inflation rate – based on the UK Consumer Prices Index (the CPI)
Increase in salaries
Increase for pensions in payment – element based on the RPI (where cap is 5%)
Increase for pensions in payment – element based on the CPI (where cap is 2.5%)
Increase for pensions in payment – element based on the CPI (where cap is 3%)
Increase for pensions in deferment
Inflation in medical costs
2021
%
2.0
3.3
2.8
2.8
3.0
1.9
2.2
2.8
6.3
2020
%
2.2
2.6
1.8
2.1
2.5
1.5
1.7
1.8
5.6
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 17 years. If the real discount rate increased/decreased by
0.1%, the defined benefit obligations at 31 March 2021 would decrease/increase by approximately US$21m and the fair value of plan assets would
decrease/increase by approximately US$20m. The annual current service cost would be broadly unchanged.
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
2021 would increase/decrease by approximately US$12m and the annual current service cost would be broadly unchanged.
(ii) Mortality assumptions – average life expectancy on retirement at age 65 in normal health
For a male currently aged 65
For a female currently aged 65
For a male currently aged 50
For a female currently aged 50
2021
years
22.6
24.5
23.5
25.6
2020
years
22.5
24.3
23.3
25.4
The accounting valuation assumes that mortality will be in line with standard tables adjusted to reflect the expected experience of the Experian Pension
Scheme membership, based on analysis carried out for the 2019 actuarial valuation. A specific allowance for anticipated future improvements in life
expectancy is also incorporated. While COVID-19 has had an impact on mortality in FY21, the impact on future mortality trends is currently unknown and
consequently no adjustment has been made to mortality assumptions in this regard. An increase in assumed life expectancy of 0.1 years would increase
the defined benefit obligations at 31 March 2021 by approximately US$6m and the annual current service cost would remain unchanged.
(iii) Post-employment medical benefits
The accounting valuation in respect of post-employment medical benefits assumes a rate of increase for medical costs. If this rate increased/decreased
by 1.0% per annum, the obligations at 31 March 2021 and the finance expense would remain unchanged.
(iv) Increase in salaries
An increase of 0.1% to the salary increase rate would increase the obligations at 31 March 2021 by approximately US$1m, and the annual current
service cost would remain unchanged.
(d) Assets of the Group’s defined benefit plans at fair value
UK equities
Overseas equities
Index-linked gilts
Global corporate bonds
Secured credit
Other unlisted
Other
2021
2020
US$m
7
208
447
404
130
49
29
1,274
%
1
16
35
32
10
4
2
100
US$m
6
175
362
318
105
37
20
1,023
%
1
17
35
31
10
4
2
100
The Experian Pension Scheme investment strategy aims to reduce investment risk and funding volatility. With the exception of a target 5% allocation to
senior private debt, all other assets are regarded as being readily marketable and regularly traded.
The Trustee has adopted funding-based triggers to implement further de-risking of the investment strategy as conditions allow. As a result, during the
year the target allocation to equities was reduced from 20% to 15%. These triggers will be kept under review. Over time, the Scheme is expected to
increase its allocation to liability matching assets, to provide cash flows to match expected benefit payments.
Notes to the Group financial statements continuedExperian plc Financial statements 197
35. Post-employment benefits – IAS 19 information continued
(d) Assets of the Group’s defined benefit plans at fair value continued
The Trustee believes that environmental, social and governance (ESG) factors may have a material impact on investment risk and return outcomes. ESG
factors, including climate change and stewardship, are increasingly integrated within investment processes both in appointing new investment
managers and in monitoring existing investment managers. Monitoring is undertaken and documented on a regular basis, making use of the investment
consultant’s ESG rating framework.
The Group’s defined benefit plans have no holdings of ordinary shares or borrowings of the Company.
(e) Future contributions
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 has agreed to continue to pay these
contributions notwithstanding the small surplus recognised following the 2019 full actuarial valuation. Contributions, including additional contributions,
currently expected to be paid to this plan during the year ending 31 March 2022 are US$8m by the Group and US$1m by employees.
36. Deferred and current tax
(a) Deferred tax
(i) Net deferred tax assets/(liabilities)
At 1 April
Differences on exchange
Tax charge in the Group income statement (note 16(a))
Additions through business combinations
Tax recognised within OCI
Tax recognised directly in equity on transactions with owners
At 31 March
Presented in the Group balance sheet as:
Deferred tax assets
Deferred tax liabilities
2021
US$m
(95)
4
(80)
(100)
(1)
(3)
(275)
86
(361)
(275)
Tax recognised in Other comprehensive income is in respect of the remeasurement of post-employment benefit assets and obligations.
(ii) Movements in gross deferred tax assets and liabilities
Assets
At 1 April 2020
Differences on exchange
Tax recognised in the Group income statement
Tax recognised within OCI
Tax recognised directly in equity on transactions
with owners
Transfers
At 31 March 2021
Assets
At 1 April 2019
Differences on exchange
Tax recognised in the Group income statement
Tax recognised within OCI
Tax recognised directly in equity on transactions
with owners
Additions through business combinations
Transfers
At 31 March 2020
Intangibles
US$m
246
(12)
(8)
—
—
—
226
Intangibles
US$m
327
(81)
(1)
—
—
—
1
246
Tax losses
US$m
94
(2)
16
—
Share incentive
plans
US$m
35
1
3
—
Accelerated
depreciation
US$m
10
1
7
—
—
—
108
(3)
—
36
—
—
18
Tax losses
US$m
96
(2)
(1)
—
Share incentive
plans
US$m
40
1
(2)
—
Accelerated
depreciation
US$m
11
—
(1)
—
—
—
1
94
(4)
—
—
35
—
—
—
10
Other
US$m
215
2
(77)
(1)
—
3
142
Other
US$m
270
(10)
(41)
(5)
—
3
(2)
215
2020
US$m
15
2
(51)
(52)
(5)
(4)
(95)
107
(202)
(95)
Total
US$m
600
(10)
(59)
(1)
(3)
3
530
Total
US$m
744
(92)
(46)
(5)
(4)
3
—
600
Experian plc Annual Report 2021Financial statements 198
36. Deferred and current tax continued
(ii) Movements in gross deferred tax assets and liabilities continued
Liabilities
At 1 April 2020
Differences on exchange
Tax recognised in the Group income statement
Additions through business combinations
Transfers
At 31 March 2021
Liabilities
At 1 April 2019
Differences on exchange
Tax recognised in the Group income statement
Additions through business combinations
Transfers
At 31 March 2020
Intangibles
US$m
650
(14)
23
100
—
759
Intangibles
US$m
699
(92)
(7)
51
(1)
650
Accelerated
depreciation
US$m
24
(2)
2
—
3
27
Accelerated
depreciation
US$m
19
—
5
—
—
24
Other
US$m
21
2
(4)
—
—
19
Other
US$m
11
(2)
7
4
1
21
Total
US$m
695
(14)
21
100
3
805
Total
US$m
729
(94)
5
55
—
695
These movements do not take into consideration the offsetting of assets and liabilities within the same tax jurisdiction. Items classified as Other assets
in the above analyses predominantly relate to future tax benefits deferred in line with local tax laws.
(iii) Other information on deferred tax assets and liabilities
As set out in note 5, there are a number of critical judgments in assessing the recognition of deferred tax assets. The Group has not recognised deferred
tax on losses of US$581m (2020: US$480m) that could be utilised against future taxable income or on US$282m (2020: US$331m) in respect of capital
losses that could be utilised against future taxable gains. While these losses are available indefinitely, they have arisen in undertakings in which it is not
currently anticipated that future benefit will be available from their use. The capital losses arising on investments are available for use within five years,
and future taxable gains against which the capital losses could be utilised are not currently anticipated.
There are retained earnings of US$8,980m (2020: US$8,933m) in subsidiary undertakings which could be subject to tax if remitted to Experian plc. No
deferred tax liability has been recognised on these earnings because the Group is in a position to control the timing of the reversal of the temporary
difference and it is probable that such differences will not reverse in the foreseeable future. Given the mix of countries and tax rates, it is not practicable
to determine the impact of such remittance.
During the current year the main rate of UK corporation tax was 19% (2020: 19%).
(b) Net current tax assets/(liabilities)
At 1 April
Differences on exchange
Tax charge in the Group income statement (note 16(a))
Additions through business combinations
Tax recognised directly in equity on transactions with owners
Other tax paid
At 31 March
Presented in the Group balance sheet as:
Current tax assets
Current tax liabilities
Tax recognised directly in equity on transactions with owners relates to employee share incentive plans.
2021
US$m
(197)
(1)
(195)
10
5
236
(142)
34
(176)
(142)
2020
US$m
(286)
7
(212)
(1)
9
286
(197)
28
(225)
(197)
Notes to the Group financial statements continuedExperian plc Financial statements 199
37. Provisions
At 1 April
Differences on exchange
Amount charged in the year
Utilised
At 31 March
2021
North
America
security
incident
costs
US$m
—
—
8
—
8
Other
liabilities
US$m
18
(2)
5
(4)
17
North
America
legal
claims
US$m
30
—
—
(28)
2
North
America legal
claims
US$m
5
—
30
(5)
30
Total
US$m
48
(2)
13
(32)
27
2020
North
America
security
incident
costs
US$m
12
—
—
(12)
—
Other
liabilities
US$m
24
(7)
6
(5)
18
Total
US$m
41
(7)
36
(22)
48
Legal claims represent a number of related legal claims arising in North America.
In September 2015, Experian North America suffered an unauthorised intrusion to its Decision Analytics computing environment that allowed
unauthorised acquisition of certain data belonging to a client, T-Mobile USA, Inc. We notified the individuals who may have been affected and offered free
credit monitoring and identity theft resolution services. In addition, government agencies were notified as required by law.
We have one remaining claim in respect of the incident and are working with the government bodies involved in this remaining claim, in connection with
this we have provided US$8m in the year. It is currently difficult to predict the result, including the timing and scale, but we do not believe the outcome
will be material to the Group. In the event of an unfavourable outcome, the Group may benefit from applicable insurance recoveries.
Other liabilities principally comprise liabilities of Serasa S.A., in connection with local legal and tax issues, which were primarily recognised on its
acquisition in 2007.
38. Called-up share capital and share premium account
At 31 March 2021, there were 969.6m shares in issue (2020: 968.7m). During the year ended 31 March 2021, 0.9m (2020: 0.9m) shares were issued and
no (2020: 3.6m) shares were cancelled. Further information on share capital is contained in note P to the Company financial statements.
The difference between the amounts shown in the Group and Company financial statements in respect of called-up share capital and the share
premium account arose due to translation of pound sterling amounts into the US dollar at various exchange rates on various translation dates.
39. Retained earnings and other reserves
(a) Retained earnings
Retained earnings comprise net profits retained in the Group after the payment of equity dividends. There are no significant statutory, contractual or
exchange control restrictions on distributions by Group undertakings.
(b) Other reserves
(i) Movements in reserves
At 1 April 2020
Shares delivered as consideration for acquisition
Other vesting of awards and exercises of share options
Change in the fair value of hedging instruments recognised in OCI
Amounts reclassified from OCI to the Group income statement
Currency translation gains
At 31 March 2021
At 1 April 2019
Purchase of shares by employee trusts
Other vesting of awards and exercises of share options
Currency translation losses
At 31 March 2020
Merger
reserve
US$m
(15,682)
—
—
—
—
—
(15,682)
Merger
reserve
US$m
(15,682)
—
—
—
(15,682)
Hedging
reserve
US$m
11
—
—
35
(33)
—
13
Hedging
reserve
US$m
11
—
—
—
11
Translation
reserve
US$m
(1,367)
—
—
—
—
64
(1,303)
Translation
reserve
US$m
(1,055)
—
—
(312)
(1,367)
Own shares
reserve
US$m
(1,183)
90
87
—
—
—
(1,006)
Own shares
reserve
US$m
(1,167)
(92)
76
—
(1,183)
Total other
reserves
US$m
(18,221)
90
87
35
(33)
64
(17,978)
Total other
reserves
US$m
(17,893)
(92)
76
(312)
(18,221)
Experian plc Annual Report 2021Financial statements 200
39. Retained earnings and other reserves continued
(ii) Nature of reserves
The merger reserve arose on the demerger from GUS plc in 2006 and is the difference between the share capital and share premium of GUS plc and the
nominal value of the share capital of the Company before a share offer at that date.
Movements on the hedging reserve and the position at the balance sheet date reflect hedging transactions, originating from the management of foreign
exchange risk, which are not charged or credited to the Group income statement, net of related tax.
Movements on the translation reserve and the position at the balance sheet date reflect foreign currency translations since 1 April 2004 which are not
charged or credited to the Group income statement, net of related tax. The movement in the year ended 31 March 2021 comprises currency translation
gains of US$64m (2020: losses of US$312m) recognised directly in Other comprehensive income.
The balance on the own shares reserve is the cost of ordinary shares in the Company and further details are given in note 39(b)(iii). The difference
between the amounts shown in the Group and Company financial statements in respect of this reserve arose due to translation of pound sterling
amounts into US dollars at different exchange rates on different translation dates.
(iii) Movements in own shares held and own shares reserve
Number of own shares held
Cost of own shares held
Treasury
million
60
(7)
(1)
52
Trusts
million
8
—
(4)
4
Total
million
68
(7)
(5)
56
Treasury
US$m
973
(90)
(12)
871
Trusts
US$m
210
—
(75)
135
Number of own shares held
Cost of own shares held
Treasury
million
61
—
(1)
60
Trusts
million
9
3
(4)
8
Total
million
70
3
(5)
68
At 1 April 2020
Shares delivered as consideration for acquisition
Other vesting of awards and exercises of
share options
At 31 March 2021
At 1 April 2019
Purchase of shares by employee trusts
Other vesting of awards and exercises of
share options
At 31 March 2020
40. Notes to the Group cash flow statement
(a) Cash generated from operations
Profit before tax
Share of post-tax profit of associates
Net finance costs
Operating profit
Loss/(profit) on disposal of fixed assets
Profit on disposal of investment in associate
Impairment of goodwill
Impairment of other intangible assets
Impairment of property, plant and equipment
Amortisation and depreciation1
Charge in respect of share incentive plans
Increase in working capital
Acquisition expenses – difference between income statement charge and amount paid
Fair value gain on revaluation of step acquisition
Adjustment to the fair value of contingent consideration
Movement in Exceptional and other non-benchmark items included in working capital
Cash generated from operations
1 Amortisation and depreciation includes amortisation of acquisition intangibles of US$138m (2020: US$124m) which is excluded from Benchmark PBT.
Total
US$m
1,183
(90)
(87)
1,006
Total
US$m
1,167
92
(76)
1,183
2020
US$m
942
(14)
257
1,185
(1)
—
—
—
—
537
83
(112)
6
(17)
(4)
17
1,694
Treasury
US$m
985
—
(12)
973
Notes
14(b), 23
20(a), 20(d)
21
22
12
33(a)
40(b)
Trusts
US$m
182
92
(64)
210
2021
US$m
1,077
(21)
127
1,183
3
(120)
53
33
4
591
106
(13)
(9)
—
1
(10)
1,822
Notes to the Group financial statements continuedExperian plc Financial statements 40. Notes to the Group cash flow statement continued
(b) Increase in working capital
Trade and other receivables
Trade and other payables
Increase in working capital
(c) Purchase of other intangible assets
Databases
Internally generated software
Internal use software
Purchase of other intangible assets
(d) Cash flows on acquisitions (non-GAAP measure)
Purchase of subsidiaries (note 41(a))
Less: net cash acquired with subsidiaries
Settlement of deferred and contingent consideration
As reported in the Group cash flow statement
Acquisition expenses paid
Transactions in respect of non-controlling interests
Cash outflow for acquisitions (non-GAAP measure)
(e) Cash (inflow)/outflow in respect of net share purchases (non-GAAP measure)
Issue of ordinary shares
Purchase of shares by employee trusts
Purchase and cancellation of own shares
Cash (inflow)/outflow in respect of net share purchases (non-GAAP measure)
As reported in the Group cash flow statement:
Cash inflow in respect of shares issued
Cash outflow in respect of share purchases
Cash (inflow)/outflow in respect of net share purchases (non-GAAP measure)
(f) Analysis of cash and cash equivalents
Cash and cash equivalents in the Group balance sheet
Bank overdrafts
Cash and cash equivalents in the Group cash flow statement
2021
US$m
(31)
18
(13)
2021
US$m
147
197
30
374
2021
US$m
568
(47)
5
526
47
10
583
2021
US$m
(19)
—
—
(19)
(19)
—
(19)
2021
US$m
180
(10)
170
(g) Reconciliation of Cash generated from operations to Benchmark operating cash flow (non-GAAP measure)
Cash generated from operations
Purchase of other intangible assets
Purchase of property, plant and equipment
Sale of property, plant and equipment
Payment of lease liabilities
Acquisition expenses paid
Dividends received from associates
Cash flows in respect of Exceptional and other non-benchmark items
Benchmark operating cash flow (non-GAAP measure)
Notes
40(a)
40(c)
2021
US$m
1,822
(374)
(48)
1
(56)
47
17
67
1,476
Benchmark free cash flow for the year ended 31 March 2021, as set out in the Financial review within the Strategic report, was US$1,124m (2020:
US$774m). Cash flow conversion for the year ended 31 March 2021 was 106% (2020: 88%).
201
2020
US$m
(145)
33
(112)
2020
US$m
175
189
39
403
2020
US$m
601
(26)
25
600
33
67
700
2020
US$m
(15)
92
111
188
(15)
203
188
2020
US$m
277
(5)
272
2020
US$m
1,694
(403)
(84)
5
(55)
33
6
18
1,214
Experian plc Annual Report 2021Financial statements 202
41. Acquisitions
(a) Acquisitions in the year
The Group made seven acquisitions during the year ended 31 March 2021, including the acquisition of a 60% stake in the Risk Management division of
Arvato Financial Solutions (AFS) which completed on 30 June 2020. This investment enables us to expand our range of risk, anti-fraud and identity
management services across Germany, Austria and Switzerland. The consideration was satisfied by the delivery of 7.2m Experian plc treasury shares at
market value.
There are put and call options associated with the shares held by the remaining shareholders of the Risk Management division of Arvato Financial
Solutions, and these first become exercisable in January 2026. Accordingly, a provisional amount in respect of the present value of the put options of
US$201m has been recognised as a non-current financial liability.
On 19 November 2020 we acquired the whole of the issued share capital of Tapad, Inc. (Tapad) a leader in resolution of digital online identities, and on 23
March 2021, we acquired the whole of the issued share capital of BrScan Processamento de Dados e Tecnologia Ltda, (BrScan), a market leader in Fraud
and Identity solutions in Brazil.
In total provisional goodwill of US$657m was recognised based on the fair value of the net assets acquired of US$416m.
Intangible assets:
Customer and other relationships
Software development
Marketing-related acquisition intangibles
Other non-acquisition intangibles
Intangible assets
Property, plant and equipment
Trade and other receivables
Current tax assets
Cash and cash equivalents (note 40(d))
Trade and other payables
Borrowings
Deferred tax liabilities
Total identifiable net assets
Goodwill
Total
Satisfied by:
Cash and cash equivalents (note 40(d))
Experian plc shares
Put options
Recognition of non-controlling interest
Deferred consideration
Contingent consideration
Total
Arvato Risk
Management
US$m
Tapad
US$m
BrScan
US$m
Other
US$m
149
14
5
11
179
3
15
10
1
(22)
—
(55)
131
323
454
—
253
201
—
—
—
454
156
16
3
7
182
1
16
—
18
(24)
—
(13)
180
110
290
290
—
—
—
—
—
290
31
12
1
—
44
1
4
—
—
(5)
—
(15)
29
103
132
106
—
—
—
—
26
132
50
15
2
9
76
—
16
—
28
(12)
(15)
(17)
76
121
197
172
—
7
4
7
7
197
Total
US$m
386
57
11
27
481
5
51
10
47
(63)
(15)
(100)
416
657
1,073
568
253
208
4
7
33
1,073
These provisional fair values are determined by using established estimation techniques such as discounted cash flow and option valuation models; the
most significant assumption being the retention rates for customers. Provisional fair values contain amounts which will be finalised no later than one
year after the date of acquisition. Provisional amounts, predominantly for intangible assets and associated tax balances, have been included at 31 March
2021, as a consequence of the timing and complexity of the acquisitions. Goodwill represents the synergies, assembled workforces and future growth
potential of the acquired businesses. None of the goodwill arising in the period of US$657m is currently deductible for tax purposes. However, in the near
future we expect to undertake a merger of BrScan into Serasa S.A. which we anticipate will create a separate tax deductible goodwill balance within that
company.
Goodwill for Arvato Risk Management has increased by US$141m, since we reported the provisional amount at 30 September 2020, as a result of
adopting the assumed acquisition method of accounting for this non-controlling interest.
Other includes adjustments to prior year acquisition provisional amounts, including a US$9m adjustment to the fair value of customer and other
relationships of Auto I.D., Inc. acquired in the year ended 31 March 2020.
Notes to the Group financial statements continuedExperian plc Financial statements 203
41. Acquisitions continued
(b) Additional information
(i) Current year acquisitions
Increase/(decrease) in book value from fair value adjustments:
Intangible assets
Trade and other payables
Deferred tax liabilities
Increase in book value from fair value adjustments
Gross contractual amounts receivable in respect of trade and other receivables
Pro-forma revenue from 1 April 2020 to date of acquisition
Revenue from date of acquisition to 31 March 2021
Profit before tax from date of acquisition to 31 March 2021
Arvato Risk
Management
US$m
Tapad
US$m
BrScan
US$m
Other
US$m
Total
US$m
172
(2)
(50)
120
10
36
78
15
175
(7)
(13)
155
16
35
22
7
44
(3)
(15)
26
3
23
—
—
67
(1)
(17)
49
11
35
17
2
458
(13)
(95)
350
40
129
117
24
At the dates of acquisition, the gross contractual amounts receivable in respect of trade and other receivables of US$40m were expected to be collected
in full.
If the transactions had occurred on the first day of the financial year, the estimated additional contribution to profit before tax would have been US$28m.
(ii) Prior year acquisitions
Deferred consideration of US$5m (2020: US$25m) was settled in the year in respect of acquisitions made in earlier years. These cash flows principally
relate to the acquisitions of Runpath Group Limited and Clarity Services, Inc. acquired in the year ended 31 March 2018. The Group made eight
acquisitions in the year ended 31 March 2020 which included the acquisition of the whole of the issued share capital of Compuscan (CSH Group (Pty)
Limited) and Auto I.D., Inc. A cash outflow of US$575m was reported in the Group cash flow statement for that year, after deduction of US$26m in
respect of net cash acquired.
(iii) Post balance sheet acquisitions
On 9 April 2021 the Group completed the acquisition of the entire share capital of Employment Tax Servicing, LLC for US$52m including deferred
consideration of US$4m, and on 13 April 2021 we completed the acquisition of the entire share capital of Tax Credit Co., LLC for a cash consideration of
US$250m and contingent consideration of up to US$110m. Both acquisitions will bolster our income verification business in North America.
42. Capital commitments
Capital expenditure for which contracts have been placed:
Other intangible assets
Property, plant and equipment
2021
US$m
6
10
16
2020
US$m
2
23
25
Capital commitments at 31 March 2021 included US$1m (2020: US$7m) in respect of right-of-use assets. All commitments at 31 March 2021 and 31
March 2020 were expected to be incurred before 31 March 2022 and 31 March 2021 respectively. There were no material leases committed to that had
not yet started at 31 March 2021 or 31 March 2020.
Experian plc Annual Report 2021Financial statements 204
43. Contingencies
(a) Latin America tax
As previously indicated, Serasa S.A. has been advised that the Brazilian tax authorities are challenging the deduction for tax purposes of goodwill
amortisation arising from its acquisition by Experian in 2007. The Brazilian courts have ultimately upheld Experian’s position in respect of the tax years
from 2007 to 2011 with no further right of appeal. The Brazilian tax authorities have raised similar assessments in respect of the 2012 to 2016 tax years,
in which approximately US$135m was claimed, and may raise similar claims in respect of other years. The possibility of this resulting in a liability to the
Group is considered to be remote, on the basis of the advice of external legal counsel, success in cases to date and other factors in respect of the claim.
We note that a similar challenge has been raised in Colombia in respect of the 2014 and 2016 tax years, in which approximately US$4m was claimed,
and similar claims in respect of other years may be raised. We are contesting these on the basis of external legal advice.
(b) UK marketing services regulation
We have received a final enforcement notice from the UK Information Commissioner’s Office (ICO) with respect to a 2018 audit of several companies on
the use of data for marketing purposes under the EU General Data Protection Regulation (GDPR), which relates to our marketing services activities in the
UK. We disagree with the ICO’s decision and have appealed, during which time all requirements will be stayed. At this stage we do not know what the
final outcome will be, but it may require significant changes to business processes in our UK marketing services business. This business represents
approximately 1% of our global revenues and we do not expect this to result in a materially adverse financial outcome for the Group.
(c) Other litigation and claims
There continue to be an increasing number of pending and threatened litigation, regulatory and other claims involving the Group across all its major
geographies which are being vigorously defended. The directors do not believe that the outcome of any such claims will have a materially adverse effect
on the Group’s financial position. However, as is inherent in legal, regulatory and administrative proceedings, there is a risk of outcomes that may be
unfavourable to the Group. In the case of unfavourable outcomes, the Group may benefit from applicable insurance recoveries.
44. Related party transactions
(a) Related undertakings
A full list of the Company’s related undertakings, including subsidiary and associate undertakings, is given in note S to the Company financial
statements. There are no significant non-controlling interests.
(b) Transactions with associates
Following the divestment of CCM in the year ended 31 March 2018 the Group owns 23.1% of the issued share capital of Vector CM Holdings (Cayman),
L.P. (Vector).
The Group recorded the following transactions and balances with Vector and its subsidiaries:
Promissory note and accrued interest
Net amounts collected/(settled) and receivable
Transaction amount
Year ended 31 March
2021
US$m
8
—
2020
US$m
7
—
Balance owed to Experian
At 31 March
2021
US$m
102
1
2020
US$m
94
2
The promissory note is due and payable to Experian on 31 May 2024 with interest also payable on this date. During the year ended 31 March 2021, we
ceased processing transactions on behalf of Vector and no amounts were received or paid. In the year ended 31 March 2020 cash of US$2m was
received and US$2m was paid on behalf of Vector. We did not receive any margin on individual transactions.
Transactions with associates are made on normal market terms and in the year ended 31 March 2021 comprised the provision and receipt of services to
other associates of US$3m (2020: US$1m) and US$12m (2020: US$9m) respectively. At 31 March 2021, amounts owed by associates, other than Vector,
were US$nil (2020: US$nil) and amounts due to associates, other than Vector were US$nil (2020: US$1m).
Notes to the Group financial statements continuedExperian plc Financial statements 205
44. Related party transactions continued
(c) Transactions with other related undertakings
The Group transacts with a number of related undertakings in connection with the operation of its share incentive plans, pension arrangements in the
UK, the USA, Brazil, South Africa and Germany, and the provision of medical cover in the UK. These undertakings are listed in note S(v) to the Company
financial statements. Transactional relationships can be summarised as follows:
The assets, liabilities and expenses of the Experian UK Approved All-Employee Share Plan and The Experian plc Employee Share Trust are included in
these financial statements.
During the year ended 31 March 2021, US$57m (2020: US$57m) was paid by the Group to related undertakings, in connection with the provision of
post-employment pensions benefits in the UK, the USA, Brazil and South Africa and US$3m (2020: US$3m) was paid by the Group to Experian Medical
Plan Limited, in connection with the provision of healthcare benefits.
There were no other material transactions or balances with these related undertakings during the current or prior year.
(d) Remuneration of key management personnel
Salaries and short-term employee benefits
Share incentive plans
Pension payments
2021
US$m
10
11
—
21
2020
US$m
10
11
1
22
Key management personnel comprises the Company’s executive and non-executive directors and further details of their remuneration are given in the
audited parts of the Report on directors’ remuneration. There were no other material transactions with the Group in which the key management
personnel had a personal interest, in either the current or prior year.
45. Events occurring after the end of the reporting period
Details of the second interim dividend announced since the end of the reporting period are given in note 19.
We completed the acquisitions of Employment Tax Servicing, LLC and Tax Credit Co., LLC on 9 April 2021 and 13 April 2021 respectively. Further details
are provided in note 41(b)(iii).
Experian plc Annual Report 2021Financial statements 206
Company profit and loss account
for the year ended 31 March 2021
Other operating income
Staff costs
Depreciation
Other operating expenses
Operating profit/(loss)
Interest receivable and similar income
Interest payable and similar expenses
Dividend income from subsidiary undertakings
Profit before tax
Tax on profit
Profit after tax and for the financial year
Notes
F
G
M
F
H
I
L
J
2021
US$m
70.2
(3.9)
(0.3)
(65.1)
0.9
81.5
(0.3)
100.0
182.1
(20.8)
161.3
2020
US$m
79.2
(3.8)
(0.2)
(91.3)
(16.1)
82.9
(0.2)
197.1
263.7
(16.5)
247.2
Company statement of comprehensive income
for the year ended 31 March 2021
The Company has no recognised items of income and expenditure other than those included in the profit and loss account. Total comprehensive income
for the financial year is therefore equal to the profit for the financial year.
Company balance sheet
at 31 March 2021
Fixed assets
Investments – shares in Group undertakings
Right-of-use assets
Deferred tax assets
Current assets
Debtors – amounts falling due within one year
Cash at bank and in hand
Current liabilities
Creditors – amounts falling due within one year
Net current assets
Total assets less current liabilities
Creditors – amounts falling due after more than one year
Net assets
Equity
Called-up share capital
Share premium account
Profit and loss account reserve
Total shareholders’ funds
These financial statements were approved by the Board on 18 May 2021 and were signed on its behalf by:
Kerry Williams
Director
Notes
2021
US$m
2020
US$m
L
M
J
N
O
O
P
P
Q
17,919.5
2.7
15.6
17,937.8
1,761.2
0.4
(1.1)
1,760.5
19,698.3
(2.9)
19,695.4
73.0
1,425.7
18,196.7
19,695.4
17,413.2
3.0
36.4
17,452.6
1,728.7
0.3
(1.4)
1,727.6
19,180.2
(2.9)
19,177.3
72.9
1,243.6
17,860.8
19,177.3
Experian plc Financial statements Company statement of changes in equity
for the year ended 31 March 2021
207
At 1 April 2020
Profit and Total comprehensive income for the
financial year
Transactions with owners:
Employee share incentive plans:
– value of employee services
– shares issued on vesting
– other vesting of awards and exercises of
share options
Shares delivered as consideration for acquisition
Dividends paid
Transactions with owners
At 31 March 2021
At 1 April 2019
Profit and Total comprehensive income for the
financial year
Transactions with owners:
Employee share incentive plans:
– value of employee services
– shares issued on vesting
– purchase of shares by employee trusts
– other vesting of awards and exercises of
share options
Purchase and cancellation of own shares
Dividends paid
Transactions with owners
At 31 March 2020
Called-up
share
capital
(Note P)
US$m
72.9
Share
premium
account
(Note P)
US$m
1,243.6
Profit and loss account reserve
Profit and
loss account
US$m
19,012.4
Own shares
reserve
US$m
(1,151.6)
Total
(Note Q)
US$m
17,860.8
Total
equity
US$m
19,177.3
—
—
161.3
—
—
—
87.3
90.0
—
177.3
(974.3)
161.3
161.3
106.3
—
—
90.0
(21.7)
174.6
18,196.7
106.3
19.4
—
252.8
(21.7)
356.8
19,695.4
106.3
—
(87.3)
—
(21.7)
(2.7)
19,171.0
Profit and loss account reserve
Profit and
loss account
US$m
18,892.8
Own shares
reserve
US$m
(1,136.5)
Total
(Note Q)
US$m
17,756.3
Total
equity
US$m
19,058.5
—
247.2
—
247.2
247.2
—
14.5
—
—
—
—
14.5
1,243.6
83.0
—
—
(76.7)
(111.9)
(22.0)
(127.6)
19,012.4
—
—
(91.5)
76.4
—
—
(15.1)
(1,151.6)
83.0
—
(91.5)
(0.3)
(111.9)
(22.0)
(142.7)
17,860.8
83.0
14.6
(91.5)
(0.3)
(112.2)
(22.0)
(128.4)
19,177.3
—
19.3
—
162.8
—
182.1
1,425.7
Share
premium
account
(Note P)
US$m
1,229.1
—
0.1
—
—
—
0.1
73.0
Called-up
share
capital
(Note P)
US$m
73.1
—
—
0.1
—
—
(0.3)
—
(0.2)
72.9
Experian plc Annual Report 2021Financial statements 208
Notes to the Company financial statements
for the year ended 31 March 2021
A. Corporate information
Corporate information for Experian plc (the Company) is set out in note 1
to the Group financial statements, with further information given in the
Strategic report and the Corporate governance report.
B. Basis of preparation
The separate financial statements of the Company are presented
voluntarily and are:
prepared on the going concern basis under the historical cost
convention and in accordance with UK accounting standards;
presented in US dollars, the Company’s functional currency; and
designed to include disclosures in line with those required by those
parts of the UK Companies Act 2006 applicable to companies reporting
under UK accounting standards even though the Company is
incorporated and registered in Jersey.
The directors opted to prepare the financial statements for the year ended
31 March 2021 in accordance with FRS 101 ‘Reduced Disclosure
Framework’. The Company intends to continue to use this accounting
framework until further notice.
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 Company.
The directors believe that the Company is well placed to manage its
financing and other business risks satisfactorily, and have a reasonable
expectation that the Company will have adequate resources to continue in
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 Company
financial statements.
C. FRS 101 exemptions
FRS 101 allows certain exemptions from the requirements of IFRS to
avoid the duplication of information provided in the Group financial
statements and to provide more concise financial reporting in entity
financial statements. The following exemptions have therefore been
applied in the preparation of these financial statements:
Paragraphs 45(b) and 46 to 52 of IFRS 2 ‘Share-based Payment’,
exempting the Company from providing details of share options and of
how the fair value of services received was determined.
IFRS 7 ‘Financial instruments: Disclosures’.
Paragraphs 91 to 99 of IFRS 13 ‘Fair Value Measurement’, exempting
the Company from disclosing valuation techniques and inputs used for
the measurement of assets and liabilities.
Paragraph 38 of IAS 1 ‘Presentation of Financial Statements’,
exempting the Company from disclosing comparative information
required by:
– paragraph 79(a)(iv) of IAS 1 – shares outstanding at the beginning
and at the end of the period; and
– paragraph 73(e) of IAS 16 ‘Property, Plant and Equipment’ –
reconciliations between the carrying amount at the beginning and
end of the period.
The following paragraphs of IAS 1:
– paragraphs 10(d) and 111, exempting the Company from providing a
cash flow statement and information;
– paragraph 16, exempting the Company from providing a statement
of compliance with all IFRS;
– paragraph 38A, exempting the Company from the requirement for a
minimum of two of each primary statement and the related notes;
– paragraphs 38B to D, exempting the Company from the requirement
to provide additional comparative information; and
– paragraphs 134 to 136, exempting the Company from presenting
capital management disclosures.
IAS 7 ‘Statement of Cash Flows’.
Paragraphs 30 and 31 of IAS 8 ‘Accounting Policies, Changes in
Accounting Estimates and Errors’, exempting the Company from
disclosing information where it has not applied a new IFRS which has
been issued but is not yet effective.
Paragraph 17 of IAS 24 ‘Related Party Disclosures’, exempting the
Company from disclosing details of key management compensation.
The requirements in IAS 24 to disclose related party transactions with
wholly-owned members of the Group.
The use of critical accounting estimates and management judgment is
required in applying the accounting policies. Areas involving a higher
degree of judgment or complexity, or where assumptions and estimates
are significant to the Company financial statements, are highlighted in
note E.
D. Significant accounting policies
The significant accounting policies applied are summarised below. They
have been consistently applied to both years presented. The explanations
of these policies focus on areas where judgment is applied or which are
particularly important in the financial statements. Content from
accounting standards, amendments and interpretations is excluded
where there is simply no policy choice under UK accounting standards.
(i) Foreign currency
Transactions in foreign currencies are recorded at the exchange rate
prevailing at the transaction date. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the exchange rate
prevailing at the balance sheet date. All differences are taken to the profit
and loss account in the year in which they arise.
(ii) Investments – shares in Group undertakings
Investments in Group undertakings are stated at cost less any provisions
for impairment. The fair value of share incentives issued by the Company
to employees of Group undertakings is accounted for as a capital
contribution and recognised as an increase in the Company’s investment
in Group undertakings, with a corresponding increase in equity.
(iii) Debtors and creditors
Debtors are initially recognised at fair value and subsequently measured
at this value. Where the time value of money is material, they are then
carried at amortised cost using the effective interest method. Creditors
are initially recognised at fair value. Where the time value of money is
material, they are then carried at amortised cost using the effective
interest method.
Experian plc Financial statements 209
D. Significant accounting policies continued
(iv) Cash at bank and in hand
Cash at bank includes deposits held at call with banks and other
short-term highly liquid investments.
(v) Accounting for derivative financial instruments
The Company uses forward foreign exchange contracts to manage its
exposures to fluctuations in foreign exchange rates. The interest
differential reflected in forward foreign exchange contracts is taken to
interest receivable and similar income or interest payable and similar
expenses. Forward foreign exchange contracts are recognised at fair
value, based on forward foreign exchange market rates at the balance
sheet date. Gains or losses on forward foreign exchange contracts are
taken to the profit and loss account in the year in which they arise.
(vi) Leases
The Company undertakes an assessment of whether a contract is or
contains a lease at its inception. The assessment establishes whether the
Company obtains substantially all the economic benefits from the use of
an asset and whether it has the right to direct its use.
Low-value lease payments are recognised as an expense, on a
straight-line basis over the lease term. For other leases the Company
recognises both a right-of-use asset and a lease liability at the
commencement date of a lease contract.
The right-of-use asset is initially measured at cost, comprising the initial
amount of the lease liability adjusted for payments made at or before the
commencement date, plus initial direct costs and an estimate of the cost
of any obligation to refurbish the asset or site, less lease incentives.
Subsequently, right-of-use assets are measured at cost less accumulated
depreciation and impairment losses and are adjusted for any
remeasurement of the lease liability. Depreciation is calculated on a
straight-line basis over the shorter of the estimated useful life of the
right-of-use asset and the period of the lease.
The lease term comprises the non-cancellable period of a lease, plus
periods covered by an extension option, if it is reasonably certain to be
exercised, and periods covered by a termination option if it is reasonably
certain not to be exercised.
The lease liability is initially measured at the present value of lease
payments that are outstanding at the commencement date, discounted at
the interest rate implicit in the lease or if that rate cannot be easily
determined the Company’s incremental borrowing rate. Lease payments
comprise payments of fixed principal less any lease incentives.
The lease liability is remeasured when there is a change in future lease
payments arising from a change in an index or rate, or if the Company
changes its assessment of whether it will exercise an extension or
termination option.
When a lease liability is remeasured, a corresponding adjustment is made
to the carrying amount of the right-of-use asset or is recognised in the
Company profit and loss account if the asset is fully depreciated.
(vii) Tax
Current tax is calculated on the basis of the tax laws enacted or
substantively enacted at the balance sheet date in Ireland, where the
Company is resident.
Deferred tax is provided in respect of temporary differences that have
originated but not reversed at the balance sheet date and is determined
using the tax rates that are expected to apply when the temporary
differences reverse. Deferred tax assets are recognised only to the extent
that they are expected to be recoverable.
(viii) Own shares
The Group has a number of equity-settled, share-based employee
incentive plans. In connection with these, shares in the Company are held
by The Experian plc Employee Share Trust and the Experian UK Approved
All-Employee Share Plan. The assets, liabilities and expenses of these
separately administered trusts are included in the financial statements as
if they were the Company’s own. The trusts’ assets mainly comprise
Experian shares, which are shown as a deduction from total shareholders’
funds at cost.
Experian shares purchased and held as treasury shares, in connection
with the above plans and any share purchase programme, are also shown
as a deduction from total shareholders’ funds at cost. The par value of
shares that are purchased and cancelled, in connection with any share
purchase programme, is accounted for as a reduction in called-up share
capital with any cost in excess of that amount being deducted from the
profit and loss account. The Company is not required to recognise the par
value of cancelled shares in a capital redemption reserve.
Contractual obligations to purchase own shares are recognised at the net
present value of expected future payments. Gains and losses in
connection with such obligations are recognised in the profit and loss
account. Gains and losses which arise on financial instruments created by
advance instructions to trade in own shares are recognised directly in
equity.
(ix) Profit and loss account format
Income and expenses, which are recognised on an accruals basis, are
reported by nature in the profit and loss account, as this reflects the
composition of the Company’s income and cost base.
(x) Dividend income
Dividend income is recognised in the Company profit and loss account on
the date on which the Company’s right to receive payment is established.
Liquidation dividends are treated as a return of capital to the extent they
are used to recover the carrying value of the investment in the liquidated
entity. Any amount received in excess of the investment value is treated as
income in the Company profit and loss account.
Experian plc Annual Report 2021Financial statements 210
Notes to the Company financial statements
continued
E. Critical accounting estimates, assumptions and judgments
(i) Critical accounting estimates and assumptions
In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amount of income, costs
and charges, assets and liabilities and the disclosure of contingent liabilities. The resulting accounting estimates, which are based on management’s
best judgment at the date of the financial statements will, by definition, seldom equal the related actual results.
The most significant of these estimates and assumptions for the Company that has a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year is in respect of the carrying value of investments in subsidiary undertakings.
(ii) Critical judgments
In applying the Company’s accounting policies, management may make judgments that have a significant effect on the amounts recognised in the
Company financial statements. These judgments may include the classification of transactions between the Company profit and loss account and the
Company balance sheet.
The most significant of these judgments for the Company is in respect of contingencies where, in the case of pending and threatened litigation claims,
management has formed a judgment as to the likelihood of ultimate liability. No liability has been recognised where the likelihood of any loss arising is
possible rather than probable.
F. Other operating income and expenses
Other operating income and expenses principally comprise charges to and from other Group undertakings in respect of Group management services
and guarantees provided during the year. The reduction in other operating expenses in the year ended 31 March 2021 compared to the prior year is due
to the timing of invoicing. Other operating expenses include a fee of US$0.1m (2020: US$0.1m) payable to the Company’s auditor and its associates for
the audit of the Company financial statements.
G. Staff costs
Directors’ fees
Wages and salaries
Social security costs
Other pension costs
2021
US$m
2.3
1.3
0.1
0.2
3.9
2020
US$m
2.3
1.3
0.1
0.1
3.8
Executive directors of the Company are employed by other Group undertakings and details of their remuneration, together with that of the non-executive
directors, are given in the audited part of the Report on directors’ remuneration. The Company had three employees in the year ended 31 March 2021
and two employees throughout the prior year.
H. Interest receivable and similar income
Interest receivable on amounts owed by subsidiary undertakings
Foreign exchange gains
I. Interest payable and similar expenses
Interest payable on lease obligation
Foreign exchange losses
2021
US$m
81.5
—
81.5
2021
US$m
0.2
0.1
0.3
2020
US$m
81.8
1.1
82.9
2020
US$m
0.2
—
0.2
Experian plc Financial statements J. Tax on profit
(a) Analysis of tax charge in the profit and loss account
Current tax:
Irish corporation tax charge on profit for the financial year
Deferred tax:
Origination and reversal of timing differences
Adjustment in respect of prior years
Total deferred tax charge for the financial year
Tax charge for the year
2021
US$m
—
20.7
0.1
20.8
20.8
(b) Factors affecting the tax charge for the financial year
The tax charge for the year is at a rate lower than the main rate of Irish corporation tax of 25% (2020: 25%) with the differences explained below.
Profit before tax
Profit before tax multiplied by the applicable rate of tax
Effects of:
Income not taxable
Expenses not deductible
Adjustment in respect of prior years
Tax charge for the year
2021
US$m
182.1
45.5
(25.8)
1.0
0.1
20.8
The Company’s tax charge will continue to be influenced by the nature of its income and expenditure and prevailing Irish and Jersey tax laws.
(c) Deferred tax asset
The deferred tax asset is in respect of tax losses and the movements thereon are as follows:
At 1 April
Tax charge in the profit and loss account
At 31 March
The Company has no unrecognised deferred tax (2020: US$nil).
2021
US$m
36.4
(20.8)
15.6
211
2020
US$m
—
16.5
—
16.5
16.5
2020
US$m
263.7
65.9
(50.2)
0.8
—
16.5
2020
US$m
52.9
(16.5)
36.4
K. Dividends
Total gross dividends of US$426.8m (2020: US$424.2m) were paid to Experian shareholders during the year. The Company paid interim dividends of
US$21.7m (2020: US$22.0m) to those shareholders who did not elect to receive dividends under the Income Access Share arrangements. The balance of
US$405.1m (2020: US$402.2m) was paid by a subsidiary undertaking, Experian (UK) Finance Limited (EUKFL), under the Income Access Share
arrangements. The Company’s profit and loss account reserve is available for distribution by way of dividend. At 31 March 2021, the distributable
reserves of EUKFL as determined under UK company law were US$11,972.4m (2020: US$13,551.8m).
Since the balance sheet date, the directors have announced a second interim dividend of 32.5 US cents per ordinary share for the year ended 31 March
2021. No part of this dividend is included as a liability in these financial statements. Further details of payment arrangements, including the Income
Access Share arrangements, are given in the Shareholder and corporate information section of the Annual Report.
Experian plc Annual Report 2021Financial statements 212
Notes to the Company financial statements
continued
L. Investments – shares in Group undertakings
Cost and net book amount
At 1 April
Additions – fair value of share incentives issued to Group employees
Additional investment in direct subsidiary undertakings
Return of capital from direct subsidiary undertakings
At 31 March
2021
US$m
17,413.2
106.3
400.0
—
17,919.5
2020
US$m
5,301.3
83.0
13,299.8
(1,270.9)
17,413.2
During the year ended 31 March 2021 Experian plc undertook one transaction as a result of group restructuring which included subscription for an
additional US$400.0m of shares in an existing subsidiary undertaking.
During the year ended 31 March 2020 Experian plc undertook a number of transactions as a result of group restructuring, including:
subscription for additional shares in existing subsidiary undertakings for US$13,299.8m; and
receipt of dividends of US$1,468.0m. US$1,270.9m was recorded as a return of capital, with the remaining US$197.1m recorded as dividend income
in the Company’s profit and loss account.
A list of the Company’s subsidiary undertakings is given in note S(i). The Company directly holds interests in the whole of the issued share capital of the
following undertakings:
Company
Experian Group Services Limited
Experian Holdings Ireland Limited
Experian Ireland Investments Limited
Country of incorporation
Ireland
Ireland
Ireland
M. Leases
The Company leases its offices. The original lease term is 25 years and includes periodic break options throughout the lease exercisable only by the
Company and not the lessor.
(a) Amounts recognised in the Company balance sheet
Right-of-use asset:
At 1 April
Depreciation charge for the year
At 31 March
Lease obligation:
Current
Non-current
At 31 March
2021
US$m
2020
US$m
3.0
(0.3)
2.7
0.2
2.9
3.1
3.2
(0.2)
3.0
0.2
2.9
3.1
Experian plc Financial statements M. Leases continued
(b) Maturity of lease obligation – contractual undiscounted cash flows
Less than one year
One to two years
Two to three years
Three to four years
Four to five years
Over five years
Total undiscounted lease obligation at 31 March
(c) Amounts recognised in the Company profit and loss account
Depreciation charge for right-of-use asset
Interest expense
213
2020
US$m
0.3
0.3
0.3
0.3
0.3
2.4
3.9
2020
US$m
0.2
0.2
0.4
2021
US$m
0.4
0.4
0.4
0.4
0.4
2.2
4.2
2021
US$m
0.3
0.2
0.5
(d) Lease cash flow
The total lease cash outflow in the year ended 31 March 2021 was US$0.4m (2020: US$0.4m), of which US$0.2m (2020: US$0.2m) related to payments
of interest and US$0.2m (2020: US$0.2m) was for repayments of principal.
N. Debtors – amounts falling due within one year
Amounts owed by Group undertakings
Other debtors
Amounts owed by Group undertakings are primarily unsecured, interest bearing and repayable on demand.
2021
US$m
1,759.5
1.7
1,761.2
2020
US$m
1,728.0
0.7
1,728.7
O. Creditors
Lease obligation (note M)
Accruals
Due within
one year
2021
US$m
0.2
0.9
1.1
Due after more
than one year
2021
US$m
2.9
—
2.9
Due within
one year
2020
US$m
0.2
1.2
1.4
Due after more
than one year
2020
US$m
2.9
—
2.9
Experian plc Annual Report 2021Financial statements 214
Notes to the Company financial statements
continued
P. Called-up share capital and share premium account
Allotted and fully paid
969,611,616 (2020: 968,719,632) ordinary shares of 10 US cents
20 (2020: 20) deferred shares of 10 US cents
2021
US$m
73.0
—
73.0
2020
US$m
72.9
—
72.9
At 31 March 2021 and 31 March 2020, the authorised share capital of the Company was US$200m, divided into 1,999,999,980 ordinary shares and 20
deferred shares, each of 10 US cents. The ordinary shares carry the rights to (i) dividend, (ii) to attend or vote at general meetings and (iii) to participate in
the assets of the Company beyond repayment of the amounts paid up or credited as paid up on them. The deferred shares carry no such rights.
During the year ended 31 March 2021, the Company issued 891,984 (2020: 865,828) ordinary shares for a consideration of US$19.4m (2020: US$14.6m)
in connection with the Group’s share incentive arrangements, details of which are given in note 33 to the Group financial statements. The difference
between the consideration and the par value of the shares issued is recorded in the share premium account. In addition, a premium of US$162.8m was
recorded on treasury shares delivered in the year as acquisition consideration (2020: US$nil).
There were no share repurchases during the year following the suspension of the Company’s share repurchase programme. In the year ended 31 March
2020, 3,623,753 ordinary shares were cancelled after being purchased by the Company.
Q. Profit and loss account reserve
The profit and loss account reserve is stated after deducting the balance on the own shares reserve from that on the profit and loss account. The
balance on the profit and loss account comprises net profits retained in the Company, after the payment of equity dividends. The balance on the own
shares reserve is the cost of ordinary shares in the Company and further details are given below.
At 1 April 2020
Shares delivered as consideration for acquisition
Other vesting of awards and exercises of
share options
At 31 March 2021
At 1 April 2019
Purchase of shares by employee trusts
Other vesting of awards and exercises of
share options
At 31 March 2020
R. Contingencies
The Company has guaranteed:
Number of shares held
Treasury
million
60.4
(7.2)
(0.9)
52.3
Trusts
million
7.4
—
(3.7)
3.7
Number of shares held
Treasury
million
61.5
—
(1.1)
60.4
Trusts
million
8.6
3.0
(4.2)
7.4
Total
million
67.8
(7.2)
(4.6)
56.0
Total
million
70.1
3.0
(5.3)
67.8
Cost of shares held
Trusts
US$m
180.3
—
Treasury
US$m
971.3
(90.0)
(12.2)
869.1
(75.1)
105.2
Cost of shares held
Trusts
US$m
151.9
91.5
Treasury
US$m
984.6
—
(13.3)
971.3
(63.1)
180.3
Total
US$m
1,151.6
(90.0)
(87.3)
974.3
Total
US$m
1,136.5
91.5
(76.4)
1,151.6
borrowings of Group undertakings of US$4,123m (2020: US$4,208m);
the liabilities of The Experian plc Employee Share Trust and the Experian UK Approved All-Employee Share Plan; and
the retirement benefit obligations of Group undertakings that participate in the Experian Pension Scheme and of a Group undertaking that participates
in a small UK defined benefit pension plan. An indication of the Company’s contingent liability for the year ended 31 March 2021, in the event that the
Group undertakings fail to pay their contributions, is given in note 35(e) to the Group financial statements.
The Company has also issued a small number of other guarantees in connection with the performance of business contracts by Group undertakings.
Experian plc Financial statements 215
S. Related undertakings at 31 March 2021
(i) Subsidiary undertakings
Country of incorporation
Company
Argentina
Experian Strategic Solutions SA
Australia
Compuscan Australia (Pty) Ltd
Australia
Experian Asia Pacific Pty Ltd
Australia
Experian Australia Credit Services Pty Ltd
Australia
Experian Australia Fraud Services Pty Ltd
Australia
Experian Australia Holdings Pty Ltd
Australia
Experian Australia Pty Ltd
Australia
Look Who’s Charging Pty Ltd
Australia
Riverleen Finance Pty Ltd
Australia
Tallyman Australia Pty Limited
Austria1
Credify Informationsdienstleistungen GmbH
Austria1
Experian Austria GmbH
Austria2
Experian Österreich Verwaltungsgesellschaft mbH
Botswana
Experian Botswana (Pty) Ltd
Brazil3
Brain Soluções de Tecnologia Digital Ltda
BrScan Processamento de Dados e Tecnologia Ltda Brazil4
Brazil5
Experian Tecnologia Brasil Ltda
Brazil6
Serasa S.A.
Bulgaria
Experian Bulgaria EAD
Canada
Experian Canada Inc.
Chile7
Experian Holdings Chile SpA
Chile8
Experian Services Chile S.A.
China9
Beijing Yiboruizhi Technology Co., Ltd
China10
Experian Credit Service (Beijing) Company Limited
China11
Experian Hong Kong Holdings Limited
China11
Experian Hong Kong Limited
Experian Information Technology (Beijing)
Company Limited
Byington Colombia S.A.S.
Experian Colombia S.A.
Experian Services Costa Rica, S.A.
Experian A/S
Accolade Unlimited
Castlight Limited
CCN UK 2005 Limited
CCN UK Unlimited
Chatsworth Investments Limited
CSID International Limited*
EHI 2005 Limited
EHI UK Unlimited
EIS 2005 Limited
EIS UK Unlimited
Experian (UK) Finance Limited
Experian (UK) Holdings 2006 Limited
Experian 2001 Unlimited
Experian 2006 Unlimited
Experian CIS Limited
Experian Colombia Investments Limited
Experian Europe Unlimited
Experian Finance 2012 Limited
Experian Finance plc
Experian Group Limited
Experian Holdings (UK) Unlimited
Experian Holdings Limited
Experian International Unlimited
Experian Investment Holdings Limited
China12
Colombia
Colombia
Costa Rica
Denmark
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
Company
Experian Latam Holdings Unlimited
Experian Limited
Experian NA Holdings Unlimited
Experian NA Unlimited
Experian Nominees Limited
Experian SURBS Investments Limited
Experian Technology Limited
Experian US Holdings Unlimited
Experian US Unlimited
G.U.S. Property Management Limited
GUS 1998 Unlimited
GUS 2000 Finance Unlimited
GUS 2000 UK Unlimited
GUS 2000 Unlimited
GUS 2002 Unlimited
GUS 2004 Limited
GUS 2005 Finance Unlimited
GUS Catalogues Unlimited
GUS Finance (2004) Limited
GUS Finance 2006 Unlimited
GUS Finance Holdings Unlimited
GUS Financial Services Unlimited
GUS Holdings (2004) Limited
GUS Holdings Unlimited
GUS International
GUS International Holdings UK Societas
GUS Ireland Holdings UK Societas
GUS NA Unlimited
GUS Netherlands Unlimited
GUS Overseas Holdings UK Societas
GUS Overseas Investments UK Societas
GUS Overseas Retailing Unlimited
GUS Overseas Unlimited
GUS Property Investments Limited
GUS Unlimited
GUS US Holdings UK Societas
GUS US Holdings Unlimited
GUS US Unlimited
GUS Ventures Unlimited
Hugh Wyllie, Limited
International Communication & Data Limited
Motorfile Limited
QAS Limited*
Riverleen Finance Unlimited*
Runpath Group Limited
Runpath Pilot Limited
Runpath Regulated Services Limited
Serasa Finance Limited
Tallyman Limited
Tapad UK Limited
Techlightenment Ltd*
The Royal Exchange Company (Leeds) Unlimited
The Witney Mattress, Divan & Quilt Co. Unlimited
Compuscan (Pty) Ltd
Experian France S.A.S.
Experian Holding EURL
Country of incorporation
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
eSwatini/Swaziland
France
France
Experian plc Annual Report 2021Financial statements 216
Notes to the Company financial statements
continued
S. Related undertakings at 31 March 2021 continued
Country of incorporation
France
France
Germany13
Germany14
Germany15
Germany16
Germany14
Germany14
Germany17
India18
India18
India19
Indonesia
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Italy
Italy
Japan
Republic of Korea
Lesotho
(i) Subsidiary undertakings continued
Company
Experian Holding France SAS
Experian PH Sarl
3 C Deutschland GmbH
CONET Corporate Communication Network GmbH
Experian GmbH
Informa HIS GmbH
Informa Solutions GmbH
Infoscore Consumer Data GmbH
Tapad Germany GmbH
Experian Credit Information Company of India
Private Limited
Experian Services India (Private Limited)
W2 Software (India) Private Limited*
PT. Experian Decision Analytics Indonesia
Experian Group Services Limited
Experian Holdings Ireland Limited
Experian Ireland Investments Limited
Experian Ireland Limited
GUS Finance Ireland Unlimited Company
GUS Investments 2003 Unlimited Company
Experian Holding Italia S.r.l.
Experian Italia S.p.A.
Experian Japan Co., Ltd
MCI-Experian Co., Ltd
Experian Lesotho (Pty) Ltd
Experian Information Services (Malaysia) Sdn. Bhd. Malaysia20
Malaysia21
Experian (Malaysia) Sdn. Bhd.
Malaysia21
Experian Marketing Services (Malaysia) Sdn Bhd
Malaysia22
Ringgit Arajaya Sdn. Bhd.
Mexico
ESI Servicios S. de R.L. de C.V.
Mexico
Experian de Mexico S. de R.L. de C.V.
Mexico
Experian Soluciones de Informacion, S.A. de C.V.
Monaco
Experian Micro Analytics SAM
Monaco
Scorex SAM
Mozambique
Sistema de informacao de credito S.A
Namibia
Compuscan Credit Reference Bureau (Pty) Ltd
New Zealand
Experian New Zealand Limited
Norway
Experian AS
Norway
Experian Gjeldsregister AS
Norway
TapAd Norway AS
Peru
Sentinel Peru S.A
Compuscan Philippines, Inc
The Philippines
Experian Polska spółka z ograniczoną
odpowiedzialnością
DP Management Pte Ltd
ENROC Pte. Ltd.
Experian Credit Bureau Singapore Pte. Ltd.
Experian Credit Services Singapore Pte. Ltd.
Experian Asia-Pacific Holdings Pte. Ltd.
Experian Singapore Pte. Ltd
Compuscan Academy (Pty) Ltd
Compuscan Holdings International (Pty) Ltd
Compuscan Holdings South Africa (Pty) Ltd*
Compuscan Information Technologies (Pty) Ltd*
Poland
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
South Africa23
South Africa23
South Africa23
South Africa23
Numeric superscripts refer to registered office addresses given
in note S(ii)
Company
CSH Group (Pty) Ltd
Encentivize (Pty) Ltd*
Encentivize Rewards (Pty) Ltd*
Experian South Africa (Pty) Limited
Great Universal Stores (South Africa) (Pty) Ltd
PCubed Analytical Intelligence (Pty) Ltd*
Prolinx (Pty) Ltd*
Scoresharp (Pty) Ltd*
Techtonic Information Technologies (Pty) Ltd*
Axesor Business Process Outsourcing S.L.U.
Axesor Conocer Para Decidir, S.A.
Experian Bureau de Crédito, S.A.
Experian Colombian Investments, S.L.U.
Experian España, S.L.U.
Experian Holdings Espana, S.L.
Experian Latam España Inversiones, S.L.
Rexburg Spain, S.L.U.
Experian Switzerland AG
Experian (Thailand) Co., Ltd
Experian Micro Analytics B.V.
Experian Nederland BV
Experian Scorex Russia B.V.
GUS Europe Holdings BV
GUS Holdings BV
GUS Treasury Services BV
Experian Bilgi Hizmetleri Limited Şirketi
Experian Uganda CRB Limited
Ground Up Limited
Auto I.D., Inc.
ClarityBlue Inc
Clarity Services, Inc.
ConsumerInfo.com Inc
CSIdentity Corporation
CSIdentity Insurance Services, Inc.
Experian Background Data, Inc.
Experian Credit Advisors, Inc.
Experian Data Corp
Experian Fraud Prevention Solutions, Inc.
Experian Health, Inc.
Experian Holdings, Inc.
Experian Information Solutions Inc
Experian Marketing Solutions, LLC
Experian Reserved Response, Inc.
Experian Services Corp.
MyExperian, Inc.
MyHealthDirect, Inc.
RewardStock, Inc.
Riverleen Finance, LLC
StatSchedules India, LLC
Strategic Cost Control, Inc.
String Automotive Solutions, Inc.
String Enterprises, Inc.
Tapad, Inc.
The 41st Parameter, Inc.
* In voluntary liquidation
Country of incorporation
South Africa23
South Africa24
South Africa24
South Africa24
South Africa24
South Africa24
South Africa23
South Africa24
South Africa23
Spain25
Spain25
Spain26
Spain26
Spain26
Spain26
Spain27
Spain26
Switzerland
Thailand
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
The Netherlands
Turkey
Uganda
Uganda
USA28
USA29
USA28
USA30
USA28
USA28
USA28
USA28
USA28
USA28
USA28
USA28
USA30
USA28
USA28
USA28
USA28
USA29
USA28
USA28
USA28
USA31
USA28
USA28
USA28
USA28
Experian plc Financial statements 217
S. Related undertakings at 31 March 2021 continued
(ii) Addresses of registered offices of subsidiary undertakings
Country of incorporation Address of registered office
Argentina
Country of incorporation Address of registered office
Ireland
Australia
Austria1
Austria2
Botswana
Brazil3
Brazil4
Brazil5
Brazil6
Bulgaria
Canada
Chile7
Chile8
China9
China10
China11
China12
Colombia
Costa Rica
Denmark
England and Wales
eSwatini/Swaziland
France
Germany13
Germany14
Germany15
Germany16
Germany17
India18
India19
Indonesia
Carlos Pelligrini 887, 4th Floor, Ciudad Autonoma de
Buenos Aires, Buenos Aires
Level 6, 549 St Kilda Road, Melbourne, VIC 3004
Gumpendorfer Straße 19-21/5. OG, 1060, Wien
Strozzigasse 10/14, 1080 Vienna
Plot 64518 Deloitte House, Fairgrounds, Gaborone
Avenida Presidente Vargas, 2921 – 6º Andar – sala
611, Vila Homero, Indaiatuba/SP, 13338-705
St SCS Quadra 02 Bloco c, 109 - Sala 301 401 501 e
601 Edif, Brasília, Distrito Federal, 70.302-911
Al. Vicente Pinzon, 51, cj. 1301, Reserva Vila Olímpia,
São Paulo/SP, 04547-130
Avenida das Nações Unidas, 14401 – Torre C-1 do
Complexo Parque da Cidade – conjuntos 191, 192, 201,
202, 211, 212, 221, 222, 231, 232, 241 e 242, Chácara
Santo Antônio, São Paulo/SP, CEP 04794-000
Sofia 1784, “Mladost” district, 115G “Tsarigradsko
Shosse” 115G, Business center MEGAPARK, FL. 10-11
199 Bay Street, Suite 4000, Toronto, Ontario M5L 1A9
Av el Golf 40 piso, 20 Santiago
Av. del Valle 515, Huechuraba, Santiago
Room 604 6F, One Indigo, 20 Jiuxianqiao Road,
Chaoyang District, Beijing, 100015
Room 601-602 6F, One Indigo, 20 Jiuxianqiao Road,
Chaoyang District, Beijing, 100015
Room 2604, 26th Floor, The World Trade Center, 280
Gloucester Road, Causeway Bay, Hong Kong
Room 607, One Indigo, 20 Jiuxianqiao Road, Chaoyang
District, Beijing, 100015
Carrera 7, No. 76 -35 Floor 10, Bogota
Edificio Oller Abogados, Provincia de 5551007, Av. 18,
San José Province, San José
Lyngbyvej 2, DK-2100, Copenhagen
The Sir John Peace Building, Experian Way, NG2
Business Park, Nottingham, NG80 1ZZ
c/o PricewaterhouseCoopers, Rhus Office Park, Kal
Grant Street, Mbabane
1 Avenue du Général de Gaulle, 92800 PUTEAUX,
Immeuble PB5
Edisonstraße 19, 74076, Heilbronn
Rheinstraße 99, 76532, Baden-Baden
Speditionstraße 21, 40221, Düsseldorf
Kreuzberger Ring 68, 65205, Wiesbaden
Walther-von-Cronberg-Platz 13, 60594 Frankfurt a.
Main
5th Floor, East Wing, Tower 3, Equinox Business Park,
LBS Marg, Kurla (West), Mumbai, 400070
1st Floor, Plot No. 6, Janakpuri Colony, Gunrock,
Hyderabad, Telangana 500009
World Trade Centre 3 Lantai 27, Jl. Jendral Sudirman
Kav. 29-31, Kelurahan Karet, Kecamatan Setiabudi,
Kota Adm. Jakarta Selatan, DKI Jakarta
Italy
Japan
Republic of Korea
Lesotho
Malaysia20
Malaysia21
Malaysia22
Mexico
Monaco
Mozambique
Namibia
The Netherlands
New Zealand
Norway
Peru
The Philippines
Poland
Singapore
South Africa23
South Africa24
Spain25
Spain26
Spain27
Switzerland
Thailand
Turkey
Uganda
USA28
USA29
USA30
USA31
Newenham House, Northern Cross, Malahide Road,
Dublin 17, D17 AY61
Piazza dell’Indipendenza No 11/B, 00185, Rome
1-1 Otemachi 1-chome, Chioyda-ku Tokyo
10F Shinhan L Tower, 358 Samil-daero, Jung-gu, Seoul
Plot No. 582, Ha Hoohlo Extension, Maseru
17-9 & 79-9, 9th Floor, The Boulevard Mid Valley City,
Lingkaran Syed Putra, 59200 Kuala Lumpur
10th Floor Menara Hap Seng, No. 1 & 3 Jalan P.
Ramlee, 50250 Kuala Lumpur, Wilayah Persekutuan
Ground, 1st, 2nd & 3rd Floors, Block B, Quill 18,
Lingkaran Teknokrat, 3 Barat, Cyber 4, 63000 Sepang,
Cyberjaya, Selangor
Paseo de la Reforma No. 115, Desp. 1503, Col. Lomas
de Chapultepec, D.F., C.P. 11000
Athos Palace 2, Rue de la Lujerneta, MC 98000
Edifício Millennium Park, Avenida Vladimir Lenine, 174,
13°, Maputo
C/O Aus Secretarial Services, Bougain Villas, 8 Sam
Nujoma Drive, Windhoek
Grote Marktstraat 49, 2511BH’s-Gravenhage
Level 8, DLA Piper Tower, 205 Queen Street, Auckland,
1010
Karenslyst Allé 6, 0278 Oslo
Av. Canaval y Moreyra Nº 480, Piso 19, San Isidro, Lima
24th Floor Philam Life Tower, 8767 Paseo de Roxas,
Makati City
Plac Marsz. Józefa Piłsudskiego 3, 00-078 Warsaw
10 Kallang Avenue, #14-18 Aperia Tower 2, Singapore,
339510
Compuscan House, 3 Neutron Avenue, Techno Park,
Stellenbosch, 7600
Experian House, Ballyoaks Office Park, 35 Ballyclare
Drive, Bryanston Ext 7, 2191
Calle Graham Bell, s/n, Edificio Axesor, Parque
Empresarial San Isidro, C.P. 18100, Armilla
C/Principe de Vergara 132, 1a Planta, 28002, Madrid
Principe de Vergara 131 1°, Madrid
Thurgauerstrasse 101a, CH-8152, Opfikon
No. 1788 Singha Complex Building, Room No. 1905,
19th Floor, New Petchburi Road, Bangkapi, Huai
Kwang, Bangkok
River Plaza Büyükdere Cad.Bahar Sok.No:13 K:8
Levent 34394 İstanbul
Plot 23, 3rd Floor, North Wing, Soliz House, Lumumba
Avenue, Nakasero, Kampala
The Corporation Trust Company, 1209 Orange Street,
Wilmington DE 19801
475 Anton Boulevard, Costa Mesa, CA 92626
CT Corporation System, 818 West 7th Street, Los
Angeles, CA 90017
CSC, 975 Brush Hill Rd, Milton MA 02186
Numeric superscripts refer to subsidiary undertakings given in note S(i)
Experian plc Annual Report 2021Financial statements 218
Notes to the Company financial statements
continued
S. Related undertakings at 31 March 2021 continued
(iii) Additional information on subsidiary undertakings
Summary
The results of the undertakings listed at note S(i) are included in the Group financial statements. Except as indicated below, the Company has direct or
indirect interests in the whole of the issued equity shares of these undertakings. Undertakings which are direct subsidiaries of the Company are detailed
in note L to these financial statements.
Since demerger from GUS plc in 2006, the Company has eliminated dormant and inactive companies through an ongoing internal programme.
Holdings comprising less than 100%
Interests of less than 100% of the issued equity of subsidiary undertakings are:
Brain Soluções de Tecnologia Digital Ltda – 55.0%
Credify Informationsdienstleistungen GmbH – 60.0%
DP Management Pte Ltd – 51.0%
Experian Australia Credit Services Pty Ltd – 84.7%
Experian Bureau de Crédito, S.A. – 75.0%
Experian Colombia S.A. – 99.9%
Experian Credit Information Company of India Private Limited – 66.7%
Experian Italia S.p.A. – 95.0%
Experian Information Services (Malaysia) Sdn. Bhd. – 74.0%
Experian South Africa (Pty) Limited – 87.5%
Informa Solutions GmbH – 60.0%
MCI-Experian Co., Ltd – 51.0%
Serasa S.A. – 99.7%
Holdings comprising other than ordinary shares, common stock or common shares
The Company’s equity interests comprise direct or indirect holdings of ordinary shares, common stock or common shares only, except as listed below:
GUS 2004 Limited, Motorfile Limited and Experian Soluciones de Informacion, S.A. de C.V. – A ordinary and B ordinary shares
GUS International and GUS Investments 2003 Unlimited Company – B ordinary shares
GUS 2000 Unlimited – X ordinary and Y ordinary shares
Experian Holdings, Inc. – class A and B common stock
Experian Information Solutions Inc – common no par value shares
Experian Services Corp. – common no par value shares
Opt-Out Services, LLC – membership interests shares
Riverleen Finance, LLC – common stock shares
Experian plc Financial statements Holding
23.1%
25.0%
25.0%
32.9%
25.0%
25.0%
33.3%
33.3%
33.3%
219
Country of incorporation
Cayman Islands
England and Wales
Russia
South Africa
USA
USA
USA
USA
USA
Country of incorporation
or operation
Brazil
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
Germany
Ireland
Jersey
South Africa
South Africa
USA
S. Related undertakings at 31 March 2021 continued
(iv) Associate undertakings
Company
Vector CM Holdings (Cayman), L.P.
London & Country Mortgages Limited
United Credit Bureau
Who Owns Whom (Pty) Limited
Online Data Exchange LLC
Opt-Out Services, LLC
Central Source LLC
New Management Services, LLC
VantageScore Solutions, LLC
(v) Other undertakings
Undertaking
Serasa Experian Pension Plan
Brigstock Finance Limited
Experian Medical Plan Limited
Experian Pension Scheme
Experian Retirement Savings Plan
Experian Retirement Savings Trustees Limited
Experian Trustees Limited
Experian UK Approved All-Employee Share Plan
The Pension and Life Assurance Plan of Sanderson Systems Limited
Versorgungsordnung der Barclays Industrie Bank GmbH vom April 1988 (incl. amendments)
The Experian Ireland Pension Plan
The Experian plc Employee Share Trust
Compuscan Team Investment Trust
CSH Education & Welfare Trust
Experian Personal Investment Plan
These undertakings are not subsidiaries or associates. Brigstock Finance Limited is a finance company. The other undertakings operate in connection
with the Group’s share incentive plans, pension arrangements in the UK, the USA, Brazil, South Africa and Germany, and the provision of medical cover in
the UK.
Experian plc Annual Report 2021Financial statements 220
Shareholder and corporate information
Analysis of share register at 31 March 2021
By size of shareholding
Over 1,000,000
100,001 to 1,000,000
10,001 to 100,000
5,001 to 10,000
2,001 to 5,000
1 to 2,000
Total
By nature of shareholding
Corporates
Individuals
Treasury shares
Total
Company website
A full range of investor information is available at www.experianplc.com.
Details of the 2021 AGM, to be held in Dublin, Ireland on Wednesday,
21 July 2021, are given on the website and in the notice of meeting.
Information on the Company’s share price is available on the website.
Electronic shareholder communication
Shareholders may register for Share Portal, an electronic communication
service provided by Link Market Services (Jersey) Limited, via the
Company website at www.experianplc.com/shares. The service is free
and it facilitates the use of a comprehensive range of shareholder
services online.
When registering for Share Portal, shareholders can select their preferred
communication method – email or post. Shareholders will receive a
written notification of the availability on the Company’s website of
shareholder documents, such as the Annual Report, unless they have
elected to either (i) receive such notification by email or (ii) receive paper
copies of shareholder documents, where such documents are available in
that format.
Dividend information
Dividends for the year ended 31 March 2021
A second interim dividend in respect of the year ended 31 March 2021 of
32.5 US cents per ordinary share will be paid on 23 July 2021, to
shareholders on the register of members at the close of business on 25
June 2021. Unless shareholders elect by 25 June 2021 to receive US
dollars, their dividends will be paid in pounds sterling at a rate per share
calculated on the basis of the exchange rate from US dollars to pounds
sterling on 2 July 2021. A first interim dividend of 14.5 US cents per
ordinary share was paid on 5 February 2021.
Number of
shareholders
144
366
753
581
2,039
17,839
21,722
Number of
shareholders
3,663
18,058
1
21,722
%
0.7
1.7
3.5
2.7
9.4
82.0
100.0
%
16.9
83.1
—
100.0
Number of
shares
802,461,521
120,910,798
25,666,597
3,962,292
6,173,291
10,437,117
969,611,616
Number of
shares
897,137,030
20,196,573
52,278,013
969,611,616
%
82.8
12.5
2.6
0.4
0.6
1.1
100.0
%
92.5
2.1
5.4
100.0
Income Access Share 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 Income Access Share (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 25 June 2021.
Dividend Reinvestment Plan (DRIP)
The DRIP enables those shareholders who receive their dividends under
the Income Access Share arrangements to use their cash dividends to
buy more shares in the Company. Eligible shareholders, who wish to
participate in the DRIP in respect of the second interim dividend for the
year ended 31 March 2021, to be paid on 23 July 2021, should return a
completed and signed DRIP application form, to be received by the
registrars no later than 25 June 2021. Shareholders should contact the
registrars for further details.
Experian plc Shareholder and corporate information 221
Contact information
Corporate headquarters
Experian plc
Newenham House
Northern Cross
Malahide Road
Dublin 17
D17 AY61
Ireland
T +353 (0) 1 846 9100
F +353 (0) 1 846 9150
Investor relations
E investors@experian.com
Registered office
Experian plc
22 Grenville Street
St Helier
Jersey
JE4 8PX
Channel Islands
Registered number – 93905
Registrars
Experian Shareholder Services
Link Market Services (Jersey) Limited
PO Box 532
St Helier
Jersey
JE4 5UW
Channel Islands
T 0371 664 9245
T (for calls from outside the UK) +44 800 141 2952
E experian@linkregistrars.com
Calls are charged at the standard geographic rate and will vary by
provider. Calls from outside the United Kingdom will be charged at the
applicable international rate. Lines are open from 8.30am to 5.30pm (UK
time) Monday to Friday excluding public holidays in England and Wales.
Stock exchange listing information
Exchange: London Stock Exchange, Premium Main Market
Index: FTSE 100
Symbol: EXPN
Capital Gains Tax (CGT) base cost for UK shareholders
On 10 October 2006, GUS plc separated its Experian business from its
Home Retail Group business by way of demerger. GUS plc shareholders
were entitled to receive one share in Experian plc and one share in Home
Retail Group plc for every share they held in GUS plc.
The base cost of any GUS plc shares held at demerger is apportioned for
UK CGT purposes in the ratio 58.235% to Experian plc shares and
41.765% to Home Retail Group plc shares. This is based on the closing
prices of the respective shares on their first day of trading after their
admission to the Official List of the London Stock Exchange on 11 October
2006.
For GUS plc shares acquired prior to the demerger of Burberry on 13
December 2005, which are affected by both the Burberry demerger and
the subsequent separation of Experian and Home Retail Group, the
original CGT base cost is apportioned 50.604% to Experian plc shares,
36.293% to Home Retail Group plc shares and 13.103% to Burberry Group
plc shares.
Shareholder security
Shareholders are advised to be wary of any unsolicited advice, offers to
buy shares at a discount or offers of free reports about the Company.
More detailed information on such matters can be found at
www.moneyadviceservice.org.uk. Details of any share dealing facilities
that the Company endorses will be included on the Company’s website or
in Company mailings.
The Unclaimed Assets Register
Experian owns and participates in The Unclaimed Assets Register, which
provides a search facility for shareholdings and other financial assets that
may have been forgotten. For further information, please contact The
Unclaimed Assets Register, The Sir John Peace Building, Experian Way,
NG2 Business Park, Nottingham, NG80 1ZZ, United Kingdom
(T +44 (0) 333 000 0182, E uarenquiries@uk.experian.com)
or visit www.uar.co.uk.
American Depositary Receipts (ADR)
Experian has a sponsored Level 1 ADR programme, for which Bank of
New York Mellon acts as Depositary. This programme trades on the
highest tier of the US over-the-counter market, OTCQX, under the symbol
EXPGY. Each ADR represents one Experian plc ordinary share. Further
information can be obtained by contacting:
Shareholder Correspondence
BNY Mellon Depositary Receipts
PO Box 505000
Louisville, KY 40233-5000
USA
T +1 201 680 6825 (from the USA 1-888-BNY-ADRS)
E shrrelations@cpushareownerservices.com
W www.mybnymdr.com
Financial calendar
Second interim dividend record date
Trading update, first quarter
AGM
Second interim dividend payment date
Half-yearly financial report
Trading update, third quarter
Preliminary announcement of full-year results
25 June 2021
15 July 2021
21 July 2021
23 July 2021
17 November 2021
14 January 2022
May 2022
Experian plc Annual Report 2021Shareholder and corporate information
222
Glossary
The following abbreviations are used in this Annual Report, and are taken to have the following meanings:
Meaning
Annual General Meeting
Artificial intelligence
Application Programming Interface
Business-to-Business
Business-to-Business-to-Consumer
Business-to-Consumer
Benchmark earnings before interest and tax. See note 6 to the Group financial statements
Benchmark earnings before interest, tax, depreciation and amortisation. See note 6 to the Group financial statements
Benchmark earnings per share. See note 6 to the Group financial statements
Abbreviation
AGM
AI
API
B2B
B2B2C
B2C
Benchmark EBIT
Benchmark EBITDA
Benchmark EPS
Benchmark operating cash flow See note 6 to the Group financial statements
Benchmark PBT
CCM
CCPA
CDP
CEO
CFO
CGU
CIP
Code
Company
COO
CPIH
CSID
DEFRA
DEI
EITS
EMEA
EPS
ERG
ERMC
ESG
FBU
FCA
FRS
FTE
FVOCI
FVPL
FX
FY19
FY20
FY21
FY22
FY23
GAAP
GDP
GDPR
GIA
GSO
H1
H2
HMRC
IAS
IAS arrangement
IASB
IFRIC
Benchmark profit before tax. See note 6 to the Group financial statements
Experian’s email/cross-channel marketing business (a discontinued operation)
California Consumer Privacy Act
CDP, formerly known as the Carbon Disclosure Project
Chief Executive Officer
Chief Financial Officer
Cash-generating unit
Co-investment Plans
The UK Corporate Governance Code
Experian plc
Chief Operating Officer
The Consumer Price Index including owner occupiers’ housing costs
The CSID group of companies comprising CSIdentity Corporation and CSID International Limited
The UK Government’s Department for Environment, Food and Rural Affairs
Diversity, equity and inclusion
Experian Information Technology Services
Europe, Middle East and Africa
Earnings per share
Employee Resource Group
Executive Risk Management Committee
Environmental, social and governance
Fair, balanced and understandable
The UK Financial Conduct Authority
Financial Reporting Standard
Full-time equivalent
Fair value through Other comprehensive income
Fair value through profit or loss
Foreign exchange rate(s)
Year ended 31 March 2019
Year ended 31 March 2020
Year ended 31 March 2021
Year ending 31 March 2022
Year ending 31 March 2023
Generally Accepted Accounting Practice
Gross Domestic Product
General Data Protection Regulation
Global Internal Audit
Global Security Office
The first half of Experian’s financial year, being the 6 months ending 30 September
The second half of Experian’s financial year, being the 6 months ending 31 March
The UK’s ‘Her Majesty’s Revenue & Customs’
International Accounting Standard
Income Access Share arrangement for the payment of dividends from a UK source
International Accounting Standards Board
International Financial Reporting Standards Interpretations Committee
Experian plc Shareholder and corporate information 223
Abbreviation
IFRS or IFRSs
IRS
ISO
KPI
LGPD
MSCIP
NED
NGO
NPS
OCI
OpCo
Policy
PSP
Q1
Q2
Q3
Q4
RF
ROCE
SaaS
TCFD
TSR
UK&I
WACC
Meaning
International Financial Reporting Standards
The US Internal Revenue Service
International Organization for Standardization
Key performance indicator
Brazil General Data Protection Law
Marketing Services Consumer Information Portal
Non-executive director
Non-governmental organisation
Net Promoter Score
Other comprehensive income
Group Operating Committee
Directors’ remuneration policy
Performance Share Plan
The first quarter of Experian’s financial year, being the 3 months ending 30 June
The second quarter of Experian’s financial year, being the 3 months ending 30 September
The third quarter of Experian’s financial year, being the 3 months ending 31 December
The fourth quarter of Experian’s financial year, being the 3 months ending 31 March
Radiative Forcing
Return on capital employed
Software-as-a-Service
Task Force on Climate-related Financial Disclosures
Total shareholder return
United Kingdom and Ireland
The Group’s pre-tax weighted average cost of capital
Experian plc Annual Report 2021Shareholder and corporate information Notes
Sustainability: at a glance
Environment
Committed to becoming carbon neutral in own operations by
Science-based Target for 2030 set
Overall CO2e in tonnes
Carbon intensity (CO2e per US$1,000 of revenue)
FY21 carbon emissions offset
Electricity from renewable sources
CDP Climate Change score (in the Leadership band)
Social
Improving financial health
Number of people with profiles in Experian’s consumer information bureaux
Number of free consumer memberships
Consumers connected to Experian Boost in the USA
Value of debt written off by Limpe Nome in FY21
Total people reached by our Social Innovation products since 2013
Target to reach people through Social Innovation products by 2025
Total people reached in FY21 through our United for Financial Health education programme
Target to reach people through United for Financial Health by 2024
Number of credit offers to people in emerging markets using our micro analytics
Unbanked people who could benefit through alternative data sources and Experian technology platforms
Data
Data security, accuracy, privacy and transparency are a top priority
Rigorous security controls based on ISO 27001 and we hold Cyber Essentials Certification
Employees
Glassdoor employee rating
Gender diversity targets set
Signatory of UN Women’s Empowerment Principles
Mandatory annual training for all employees:
Code of Conduct
Security and data
Anti-corruption
Supply Chain
A member of the Slave-Free Alliance
Suppliers must comply with our Supply Chain Principles, which are aligned with UN Universal Declaration of Human Rights
Supplier Diversity Programme
Governance
Independent Board members, including independent Chairman
Female Board members
Board meets Hampton-Alexander Review recommendation on gender diversity
Ethnically diverse Board members
Board meets Parker Review Committee recommendation on ethnic diversity
Independence of Audit, Remuneration and Nomination and Corporate Governance committees
Independent Chair and clear division of responsibilities between the Chairman and CEO
Independent external evaluation of the Board’s performance, occurs every three years
Executive remuneration linked to Group performance
Voting rights for ordinary shareholders
2030
Yes
Reduced by 58%
Reduced by 60%
20%
34%
A-
1.3bn
110m
6.7m
US$6.7bn
61m
100m
35m
100m
3.1bn
1.7bn
4.1
Yes
Yes
Yes
73%
36%
Yes
2
Yes
100%
Yes
Yes
Yes
Yes
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Annual Report 2021
www.experianplc.com/annualreport
Sustainable Business Report 2021
www.experianplc.com/sbreport
Experian plc website
www.experianplc.com
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Corporate
headquarters
Experian plc
Newenham House
Northern Cross
Malahide Road
Dublin 17
D17 AY61
Ireland
Operational
headquarters
Experian
475 Anton Boulevard
Costa Mesa
CA 92626
United States
Serasa Experian
Av. Doutor Heitor
José Reali 360
CEP 13571-385
São Carlos
Brazil
Experian
The Sir John Peace Building
Experian Way
NG2 Business Park
Nottingham
NG80 1ZZ
United Kingdom
T +353 (0) 1 846 9100
www.experianplc.com
T +1 714 830 7000
www.experian.com
T +55 11 3004 7728
www.serasaexperian.com.br
T +44 (0) 115 941 0888
www.experian.co.uk