Experian's B2B business growth offsets consumer decline

The FTSE 100 company said its revenue growth at constant currencies was 6%, while organic revenue growth was 5%.

Looking at its business units, revenue growth for its business-to-business segments was 8%, while it fell 4% in consumer services.

“We made good progress during our third quarter, with organic revenue growth of 5% and total growth of 8% at actual rates,” said chief executive Brian Cassin.

“Performance across our B2B activities strengthened, and Consumer Services is making good progress in identity protection and credit comparison services.

“We are confident of further improvement as we move into our traditionally stronger final quarter.”

Breaking it down by territory, revenue growth in North America was 7% at actual and constant currencies, while organic revenue growth at constant exchange rates was 5%, with the difference largely reflecting the contribution from the Clarity acquisition.

Organic revenue growth across B2B was said to be “strong” in North America, up 8%, aided by new product introductions, growth in core credit volumes, excellent progress in software and fraud prevention and continued strength in health.

Experian Ascend, a "next generation analytical sandbox", has been well-received, and several major financial institutions were signed to the service during the quarter, with a "robust" pipeline.

The decline at the North America division continued but at a lesser rate amid “good progress” in consumer services.

In Latin America, total revenue growth was 8%, with revenue growth at constant exchange rates and organic revenue growth both 7%, while total revenue growth in the UK and Ireland was 7% but flat at constant currencies and organically.

Brazil performed strongly, driven by higher core volumes, reflecting improved market conditions, and recent client wins, including another new long-term agreement with a major Brazilian bank to deliver a broad range of services and several in Spanish Latin America which it said would help underpin future growth in this part of the region.

Total and organic revenue at constant exchange rates in the UK and Ireland was flat, as strength in B2B was offset by consumer services.

B2B growth was said to have been led by consumer information services, credit pre-qualification services, fraud prevention services and strength in digital marketing volumes, with sizeable new business wins.

“In Consumer Services, the rate of decline has continued to moderate, and while subscription revenues for credit monitoring services were lower, we delivered very strong growth in CreditMatcher, where we introduce consumers to loan offers.”

The board said that formed part of Experian’s broader strategy to develop new and engaging offers for consumers, and it continued to build a substantial base of free members, now totalling 3.3m.

In the Europe, Middle East, Africa and Asia Pacific territories, total revenue growth was 17%, or 12% at constant currencies, with organic revenue growth at constant currencies also 12%.

“A strong performance in EMEA was aided by our One Experian approach, delivering integrated data, analytical and software services, while in Asia Pacific growth was primarily led by strong client demand for software and fraud prevention services,” the board said.

Effects of the Trump administration’s tax policy were expected to reduce the headline tax rate but for this to be broadly offset by the reduction in the availability of tax deductions for interest and other group costs.

"For the year as a whole we continue to expect organic revenue growth of mid-single digits, with stable margins and further progress in Benchmark earnings per share,” Cassin concluded.

Experian shares fell around 1% early on Thursday, rebounding slightly to 1,649p by late morning.

Analyst Nicholas Hyett at Hargreaves Lansdown said: “In recent years the challenge for Experian has been to find a way to make money from its huge consumer base after rival credit check providers started offering their services for free.

"It’s been a painful adjustment, and the UK is still haemorrhaging subscribers. But evidence in the US suggests the group is making progress. Products that help protect against identity fraud have attracted 150,000 paying customers, while matching consumers with lenders is proving popular on both sides of the pond.

"Consumer headwinds aside, Experian’s data heavy analytics remain in demand, with Credit and analytics services growing quickly. We only see demand for those services going one way, and Experian looks well placed to capitalise in the long term.”