Experian 

	1999 £m	1998 £m	Currency translation effect £m
Sales	899	615
Trading Profit	192.2	141.9	(0.1)
Proportion of Group Trading Profit	34%	31%
Net Assets	287.5	210.1

Experian achieved record results in all its major markets in the year. Sales grew by 46% and trading profit by 35%, aided by the acquisition of Metromail on 31 March 1998. Existing businesses produced underlying sales and profit growth of 9% and 13% respectively.

Experian has successfully integrated recent acquisitions with the implementation during the year of a new organisational structure to create a single global enterprise. The new organisation reflects the increasing trend towards globalisation in many of Experian’s markets such as banking, financial services, automotive, insurance, telecommunications and packaged goods manufacturing.

Integral to the new operating model is the creation of global product development centres. The aim of these centres is to ensure a consistent product development strategy, eliminating the duplication of costs and increasing the number of products that can be sold worldwide.

We believe that Experian’s ability to offer its full range of services in many countries around the world is of increasing importance to clients in these industries, many of which have seen consolidation in recent years. A number of these newly-merged companies have decided to outsource non-core back office operations and systems and this creates an opportunity for Experian.

This new organisational structure also enables Experian to support clients at every stage of their relationships with their customers by being:

Industry focused: focusing on key industries in order to develop the specialist knowledge, solutions and reputation needed to make Experian the supplier of choice among companies in these sectors, building long-term relationships with major clients.

Solutions oriented: expanding Experian's range of value-added products in order to develop broader and deeper relationships with its customers around the world, particularly where those clients seek a single supplier for a global solution.

Widely deployed geographically: continuing to extend Experian's global reach where new markets offer significant potential for its services and products.

Product Analysis

Largely as a result of recent acquisitions, Experian’s sales are now less concentrated on its information services hub. Target marketing and outsourcing services have shown considerable growth in the last year. More than 70% of the business is now in areas other than the original consumer credit reference operations.

Share of sales by activity

	1999 (%)	1998 (%)
Information Services	40	58
Decision Support	15	18
Target Marketing	25	17
Outsourcing	20	7
	100	100

The combination of these activities enables Experian to deliver solutions to clients throughout each stage of the life cycle of their customers:

Targeting Prospective Customers Experian's information resources and analysis techniques enable clients to identify the best potential customers for their products and services, understand their motivations and to develop timely and relevant communications. Its direct mail production and telemarketing facilities can be used to ensure that these communications are delivered efficiently and are cost effective.

Acquiring Profitable New Business Experian's information about the financial status and demographics of consumers and businesses enables companies to make decisions about new customers with speed and confidence. For example, Experian can verify the identity of applicants and set the most appropriate payment terms for personal loans, insurance policies or a mobile phone connection.

Managing Customer Accounts through its computing and call centre services, Experian supports clients in the day-to-day management of their customer accounts. It is an invisible interface, processing cheque and card payments, issuing financial statements, responding to telephone enquiries and ensuring that customer records are accurate and up-to-date.

Developing Customer Relationships Experian's database marketing and customer management systems provide clients with the means to build relationships with customers and to manage them in a personal way by identifying opportunities to expand those relationships, including the right offers and when to make them.

Geographical Analysis

		North America* £m	United Kingdom £m	Rest of the world £m	Total £m
Sales:	- 1999	600.5	169.9	128.1	898.5
	- 1998	442.2	136.4	36.7	615.3
	- Increase	+ 36%	+25%		+46%
Profit:	- 1999	147.5	36.4	8.3	192.2
	- 1998	108.6	32.5	0.8	141.9
	- Increase	+ 36%	+12%		+35%

(* Exchange rate: £1 = $1.65 in both years)

North America

Overall, Experian North America contributed sales of £600m ($990m), 36% higher than sales in the previous year and a trading profit of £147.5m ($243.4m), also 36% higher than in the previous year. This reflects the introduction of more value added products and services in the growing US credit market and continued growth in target marketing.

About 25% of Experian’s North American revenues are generated by the provision of reports about the credit histories of consumers. This service achieved 15% volume growth in the year and revenues grew by 5% despite a reduction in average unit prices which were under pressure particularly from the consolidation in the US banking industry.

After a slow start, reflecting the uncertainty within the business while it was it was in the process of being sold, Metromail contributed £27.3m of trading profit on turnover of £179m, the vast majority of which was in America. The business has been fully integrated into Experian, enabling the combined business to offer a broader range of services to a much enlarged client base.

Experian has focused attention on creating added-value services for particular industry sectors. For example, in the insurance sector, it has entered a partnership on both sides of the Atlantic with ChoicePoint Inc, one of the leading providers of claims information to the insurance industry. These databases provide help for insurers to avoid fraud and to set appropriate premiums.

United Kingdom

Underlying sales growth in the UK, excluding the one-off Channel 5 contract which came to an end during 1998, was 17%. Consumer demand for credit has remained strong, generating demand in every part of the UK business.

ICD, the UK prospect targeting business acquired as part of Metromail has been successfully integrated into Experian’s UK Prospect Targeting business. This has created one of the UK’s leading prospect targeting and consumer lifestyle information services.

In the automotive sector, a joint venture with the Automobile Association has developed Car Data Check, an information database for combating vehicle fraud. This is now used by the majority of franchised car dealership groups and is the preferred supplier of many motor manufacturers for their Approved Used Car Schemes.

Rest Of The World

Experian’s sales outside North America and the UK grew by £91.4m to £128.1m. Profit amounted to £8.3m compared to £0.8m in the previous year. The bulk of this growth was derived from France following the acquisition in February 1998 of SG2, which has now been renamed Experian France.

Experian invested £24m in six further acquisitions during the year in Germany, the Netherlands, Italy, Ireland and Argentina. Initial performance has been encouraging.

The European acquisitions, together with Experian’s own organic development, have added significantly to Experian’s ability to offer pan-European solutions to multinational clients looking for a single supplier to provide consistent standards and quality of service.

New credit bureaux were established in Germany, Kuwait, the Netherlands and Turkey. Further bureaux are planned to open during 1999 in Spain and Poland. Each new bureau established increases the demand for the value-added services which Experian provides through its other core businesses.

Electronic Commerce

The internet and e-commerce present Experian with significant new opportunities, particularly in the areas of registration verification services, internet merchant database services and the use of the internet as a new distribution channel for Experian's services.

Its first two e-commerce products; list fulfilment and verification/enhancement services – were launched in April 1999 and further services will come on stream during 1999 on both sides of the Atlantic. The internet in time will enable Experian to reduce its costs, provide a faster service for clients and improve delivery of its own information to clients and consumers.

As a result of its activities in e-commerce, Experian has shareholdings in two e-commerce companies: MyPoints.com and Adforce. The former provides incentives for consumers who visit and use services on specific web sites. Adforce, which has recently been listed, provides on line advertising services on the internet.