Experian Regulatory News (EXPN)

news release

Half-yearly financial report

Strong performance demonstrating the power of data for consumers and our clients

7am, 17 November 2021 ─ Experian plc, the global information services company, today issues its half-yearly financial report for the six months ended 30 September 2021.

Brian Cassin, Chief Executive Officer, commented:

"We had a very good first half performance with total revenue growth of 23% at actual exchange rates, 21% at constant exchange rates and organic revenue growth of 16%. Benchmark earnings per share also progressed strongly, up 30% for the half (at constant exchange rates). Consumer Services has seen standout growth, and our B2B businesses continue to perform very well. We expect progress to continue, and for the full year, we now expect organic revenue growth in the range of 11-13%, total revenue growth of 15-17% and strong EBIT margin accretion, all at constant exchange rates."

"Our growth is being enabled by a successful innovation-led strategy which has financial inclusion at its heart. Our aim is to empower consumers and businesses globally, improving financial health for all by using our capabilities as a force for good to transform lives and power opportunities."

1. See Appendix 1 (page 14) and note 5 to the interim financial statements (pages 25-27) for definitions of non-GAAP measures.

2. Organic revenue growth is at constant currency.

3. Revenue and Benchmark EBIT for the six months ended 30 September 2020 have been re-presented for the reclassification to exited business activities of certain B2B businesses.

4. See page 15 for reconciliation of Benchmark EBIT from ongoing activities to Profit before tax.

Highlights

· Strong execution and strategic progress across the Group. Full year guidance upgraded.

· Outstanding first half in Consumer Services, revenue +27% with 122m free members.

· B2B growing well; organic revenue +12% with strategic initiative momentum.

· H1 Benchmark EBIT +25%, H1 Benchmark EPS +30%, both at constant exchange rates.

· Very strong cash performance; up 25%. Guidance raised to c.100% operating cash flow conversion.

· Strong financial position; low end of leverage range.

· Two acquisitions completed after period end for US$353m.

· First interim dividend up 10% to 16.0 US cents per ordinary share.

Contacts

Experian

Nadia Ridout-Jamieson Investor queries +44 (0)20 3042 4278

Gerry Tschopp Media queries

Tulchan

Graeme Wilson, Louise Male and Guy Bates +44 (0)20 7353 4200

There will be a presentation today at 9.30am (UK time) to analysts and investors via conference call. To view the slides and listen in online please go to www.experianplc.com for the link.

Experian will update on third quarter trading for FY22 on 14 January 2022.

Roundings

Certain financial data has been rounded within this announcement. As a result of this rounding, the totals of data presented may vary slightly from the actual arithmetic totals of such data.

Forward looking statements

Certain statements made in this announcement are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward looking statements. See note 25 for further information on risks and uncertainties facing Experian.

Company website

Neither the content of the Company's website, nor the content of any website accessible from hyperlinks on the Company's website (or any other website), is incorporated into, or forms part of, this announcement.

About Experian

Experian is the world's leading global information services company. During life's big moments - from buying a home or a car, to sending a child to college, to growing a business by connecting with new customers - we empower consumers and our clients to manage their data with confidence. We help individuals to take financial control and access financial services, businesses to make smarter decisions and thrive, lenders to lend more responsibly, and organisations to prevent identity fraud and crime.

We have 20,000 people operating across 44 countries and every day we're investing in new technologies, talented people, and innovation to help all our clients maximise every opportunity. We are listed on the London Stock Exchange (EXPN) and are a constituent of the FTSE 100 Index.

Learn more at www.experianplc.com or visit our global content hub at our global news blog for the latest news and insights from the Group.

Part 1 - Chief Executive Officer's review

Experian delivered a strong first half as markets recovered and we continue to execute on our growth strategy. We operate in a number of large and growing end-markets which are undergoing significant change, driving increased demand for the services we offer and opening up new business opportunities to address. Digitisation is driving this change, and companies are investing to upgrade their infrastructure, make their platforms more flexible and make customer experiences more seamless and personalised. They also want to protect themselves and their customers from fraud while also managing their regulatory obligations.

These are all areas in which Experian can make a positive difference to companies and consumers globally. Our Consumer Services business has become one of the largest platforms in the world to help consumers manage their personal finances and to save money. Our unrivalled portfolio of data, analytics and software products positions us well to assist clients as markets evolve. With strong momentum across all areas, both B2B and B2C, we continue to increase investment to capture the significant market expansion opportunity.

Experian is fully committed to our long-term approach of acting as a force for good to help people across the world improve their financial health and offer them opportunities to transform their lives. We have made significant progress on these ambitions and are also focused on progressing towards our stated targets on carbon neutrality and diversity.

Half year financial highlights

· At actual exchange rates revenue growth was 23%. Revenue growth was 21% at constant exchange rates and organic revenue growth was 16%.

· Organically, revenue growth was 22% in Q1 and 11% in Q2. Prior-year comparatives mostly normalised in Q2 versus Q1 when we lapped the height of the pandemic-related slowdown.

· Organic revenue growth in North America was 16%, 20% in Latin America, 15% in UK and Ireland and 6% in EMEA/Asia Pacific.

· B2B organic revenue growth was 12%, with growth across all regions.

· Consumer Services performed very strongly, revenue was up 27%, with growth across all relevant regions operating in this business segment.

· Growth in Benchmark EBIT for ongoing activities was 25% at both constant and actual exchange rates.

· Our Benchmark EBIT margin was 26.3%, up 70 basis points at constant exchange rates and up 20 basis points at actual exchange rates, notwithstanding increasing marketing investment to support Consumer Services momentum, new product innovation and increasing investment in our technology transformation programme. Strong progress in the UK and Ireland transformation programme with EBIT margin nearly doubling in the half.

· We delivered growth in Benchmark earnings per share of 30% at constant exchange rates and 29% at actual exchange rates.

· Cash flow was very strong, with a conversion rate of Benchmark EBIT into Benchmark operating cash flow of 89%, in our seasonally weaker half of the year for cash conversion.

· We ended the period in the lower half of our leverage range at 2.1x, compared to our target of 2.0-2.5x for Net debt to Benchmark EBITDA.

B2B organic revenue growth was 12% overall, with Q1 +18% and Q2 +7%:

· In Data, we have benefitted from strong volume rebound across the majority of our markets linked to the reactivation of lending and marketing by clients. Innovation and new business development have also been critical contributors to our performance. For example, we now have 113 Ascend clients globally across 10 countries. We have signed over 60 contracts for verification services in North America, and we see good demand for positive data attributes and scores in Brazil.

· In Decisioning, PowerCurve and CrossCore are both performing strongly. We have launched CrossCore 2.0 with 144 clients and it is now our fastest growing identity and fraud product, against a backdrop of very good growth across all of our fraud prevention offerings, with Brazil becoming our third territory with meaningful revenues. We have also made good progress with PowerCurve as client demand resumed and in particular, we are seeing increased demand for our cloud-enabled decisioning platforms. The number of clients who have implemented PowerCurve on Experian One at the end of the period was 104.

· Vertical markets also did well. In Health, we are seeing increased demand for better consumer experiences in healthcare and this is driving demand for digital products focussed on better patient interaction, scheduling and engagement. We also continue to broaden the breadth of the services we offer to hospitals and to expand into market adjacencies such as the payer and pharmacy sectors.

We had an outstanding first half in Consumer Services which delivered 27% organic revenue growth, with Q1 +32% and Q2 +22%:

· We now have 122m free consumer memberships, up by 26m year-on-year across our three principal markets. We have 47m free members in the USA, 65m in Brazil and 10.4m in the UK.

· All regions operating in this business segment delivered strong growth as we increase our membership base, help consumers to take control of their credit scores and expand our product ecosystem.

Environmental, Social, and Governance (ESG)

· Improving financial health for all is at the core of Experian's strategy. We can use our data, our extensive product portfolio and our deep expertise to make the biggest difference to society, helping us to contribute to the UN Sustainable Development Goals (targets 1.4, 8.10 and 9.3), related to improving access to financial services and credit.

· We were delighted that the impact that Experian Boost has had helping millions of people improve their credit scores resulted in Experian being included in the Fortune Change the World list 2021, which honours 50 companies addressing society's unmet needs.

· We launched Inclusion Forward - Experian Empowering Opportunities, an initiative that harnesses Experian's data, analytics and technology that can help clients create and provide more affordable credit access. Inclusion Forward will also provide ongoing resources to help consumers better understand their credit health, particularly in diverse communities. It is a good example of how our focus on financial inclusion and our focus on Diversity, Equity and Inclusion can re-enforce each other.

· We also launched a global partnership with Disability:IN, the leading non-profit resource for business disability inclusion worldwide.

· This summer Experian was certified as a Great Place to Work in 21 countries, with over 90% of participating employees agreeing that people are treated fairly regardless of their social and economic status, sexual orientation, race and gender, and 86% are proud to tell others they work for Experian.

· We delivered a very successful Mental Health Awareness Month that delivered specific tools to help our employees to manage their mental wellness, including the expansion of our scheme of volunteer mental health first aiders, trained to provide workplace mental support.

· Our science-based target for reducing scope 1, 2 and 3 carbon emissions was recently approved by the Science Based Targets initiative, who also determined that our scope 1 and 2 target ambition is in line with a 1.5°C trajectory and that our scope 3 target is ambitious.

Part 2 - Regional highlights for the six months ended 30 September 2021

We delivered organic revenue growth across all regions in the half.

1. For the six months ended 30 September 2021.

2. B2B = Business-to-Business segment consists of Data and Decisioning business sub-divisions.

3. At constant currency

4. At actual exchange rates

See note 5 to the financial statements on pages 25-27 for definition of organic revenue growth.

North America

We made very good progress in North America. Revenue was US$2,037m, with total revenue growth of 21% and organic revenue growth of 16%. The difference related to the acquisitions of Tapad, Corporate Cost Control, Emptech and Tax Credit Co (TCC).

Organic revenue growth across B2B was 13%. This was driven by volume strength, high take-up rates for new products, expansion into new client segments and strong execution across Health and Automotive.

Financial institutions have resumed credit prospecting and new credit origination activity. This included a rebound across traditional client segments as well as across the alternative financial services markets. Innovation-led growth has been an important driver of growth and our expanded datasets and scores are being positively received by clients who want to use them to include more people in the financial economy. These include propositions such as Experian Lift Premium, which scores up to 96% of the US population.

Ascend continues to grow as we have added new modules. We are also integrating Ascend with our decisioning platforms to offer a more seamless proposition from credit analysis through to underwriting. We have made significant progress in decisioning solutions in the cloud, offering world-class decisioning capabilities which can be deployed quickly, at scale and cost effectively. In addition to our decisioning capabilities, this is driving demand for our fraud and identity management capabilities. These factors have contributed to significant client wins and a strong new business pipeline. This includes new clients in high-growth segments such as Buy Now Pay Later, as well as new business wins in the public sector. As expected, mortgage volumes contracted in the half due to lower re-financing activity and we continue to expect this to be a 1% headwind to Group organic revenue growth for the year.

Our expansion into verifications is progressing well. Since April, we have signed over 60 new contracts for Experian Verify. Employer Services delivered a robust performance on a pro forma basis driven by new client acquisition.

We saw a significant rebound in Targeting activities related to market recovery and organic expansion in addressable television services and our new business pipeline is up sharply. Our Automotive vertical has continued to perform well. This reflected strong growth in our automotive marketing and value recovery activities, even while the industry has faced challenges caused by constraints on the global supply chain.

In Health we delivered very good growth across the breadth of our suite which includes scheduling, patient access, identity management, claims and coverage discovery. We are investing in a suite of propositions to diversify our product mix. This includes enhancements through an initiative we refer to as the 'digital front door', which is helping our clients as they establish online portals, and for which early indications are positive. We are also making good progress with our plans to grow our client footprint in adjacent client segments such as physician practices, payer and pharmacy.

Consumer Services was our fastest growing segment in North America, delivering organic revenue growth of 24%. This was fuelled by membership growth, high rates of upsell into our premium credit and identity offers and strength across our credit and insurance marketplaces. Free memberships reached 47m, up by 11m year-on-year. Our credit comparison marketplace continues to scale. Consumers shopping for credit cards can access a wide range of offers from our panel and Experian Boost can help to ensure they are matched into the best loan offer to suit their circumstances. Personal loan volumes have also seen a big uplift. In addition, we are progressing our plans to grow our presence in the insurance marketplace, and the acquisition of Gabi will help us to streamline this shopping experience for consumers.

The strength in our revenue performance translated into Benchmark EBIT up 21% to US$737m and the Benchmark EBIT margin was 36.2% in line with prior year.

Latin America

Latin America performed very strongly, delivering revenue of US$362m. Organic revenue growth of 20% was broadly spread across our portfolio. Total revenue growth at constant currency was 27%, including acquisitions in fraud and identity management and a new bureau in Chile. 

B2B organic revenue growth was 15% across Brazil and Spanish Latin America helped by economic recovery and new products. In Brazil, lending is digitising rapidly and the market is adapting to this change. We have made great progress towards our ambition to lead the next generation of credit and risk solutions and to expand and diversify our portfolio. Take-up rates for our new positive data scores and attributes has accelerated. We have now introduced over 100 positive data propositions and Serasa Score 2.0 is increasingly recognised as the most highly predictive score in Brazil. Market changes are driving demand for more sophisticated products, we have seen increased demand for CrossCore 2.0, PowerCurve on Experian One and Ascend. We see significant scope to drive further adoption as we deploy new modules and use cases. We are also broadening our portfolio to address new high-growth verticals in Brazil and across the region. The acquisitions of BrScan and Brain Soluções de Tecnologia Digital Ltd in fraud and identity management and agribusiness are accelerating this strategy. In Chile, the integration of Sinacofi Buró is progressing well and we see a lot of opportunity for growth by adding innovative Experian propositions to the bureau.

Consumer Services organic revenue growth was 64%. Our ambition is to enable credit for all, in a market where access to credit is still not universal and where consumers are often financially excluded by prohibitive interest rates. Our membership base in Brazil continues to grow and we now have 65m free members. We are developing and expanding our ecosystem of consumer offers. In debt resolution (Limpa Nome) we have added more partners and negotiated more deals for consumers. We also recently acquired PagueVeloz which will accelerate the process for consumers to instantly 'clean their name', potentially increase their Serasa Score and help them to access credit at more affordable rates more quickly. In our credit marketplace we have matched more consumers to more credit cards, personal loans and other loans while also attracting more lenders to our platform. We have introduced new features to our premium offers, including a 'lock/unlock' feature which Experian first pioneered in North America and which helps consumers with fraud and identity management.

Benchmark EBIT in Latin America was US$87m, up 30% at constant exchange rates. The Benchmark EBIT margin from ongoing activities at actual exchange rates was 24.0% up by 60 basis points. Progress reflected revenue acceleration, even as we invested in customer acquisition spend as we scale in Consumer Services.

UK and Ireland

Revenue in the UK and Ireland was US$408m. Total and organic revenue increased 15% at constant exchange rates.

UK and Ireland had a strong start to the year, with much improved margin performance. Our transformation programme is progressing well and we are confident about our ability to deliver more sustainable and more profitable growth.

B2B organic revenue growth was 11%. Our end markets started to recover as clients relaxed lending policies and reactivated lending programmes. We benefitted from volume growth and new business wins during the period. Adoption of propositions based on new data sources is also encouraging, including for affordability and eligibility assessment. We see good prospects for Ascend with a growing pipeline of opportunities. Decisioning growth reflected strength in fraud and identity management driven by transactional recovery and increased take-up of CrossCore 2.0. Software also delivered growth driven by cloud-enabled solutions and new business wins.

Organic revenue growth in Consumer Services was 30%. We delivered further growth in premium services and very strong growth from our credit marketplace. This reflected the improved lending environment in the UK as well as the progress we have made on strengthening our market position and increasing brand recognition. Free membership reached 10.4m.

Benchmark EBIT improved markedly to US$85m, up from US$34m (all from ongoing activities). The Benchmark EBIT margin from ongoing activities was 20.8% (2020: 10.5%). This reflects the progress we have made through our transformation programme, as well as the contribution from revenue expansion.

EMEA/Asia Pacific

In EMEA/Asia Pacific, revenue from ongoing activities was US$253m, with total revenue growth at constant exchange rates of 26% and organic growth of 6%. The difference principally relates to the contribution from our bureau acquisitions, namely the Risk Management division of Arvato Financial Solutions (AFS) in Germany, and Axesor in Spain.

Client activity has increased across the majority of our markets with only some countries still affected by COVID-19 restrictions. This gave rise to bureau volume recovery in most countries. The decline in EMEA in Q2 was due to the lapping of a one-off contract in the prior year comparative. Our clients are adopting cloud-enabled technologies and we have seen good demand for Ascend, PowerCurve on Experian One, open data solutions, as well as our fraud and identity management services.

We also continue to focus on driving performance improvement across EMEA/Asia Pacific and are taking further measures to improve growth, streamline our operations and enhance efficiency across the region.

Benchmark EBIT from ongoing activities was US$(21)m (2020: US$(34)m) and the Benchmark EBIT margin from ongoing activities was (8.3)% (2020: (17.9)%). The improving trend reflected revenue recovery and a positive acquisition mix effect.

Part 3 - Other financial developments

Central Activities was US$82m, up from US$28m in the prior year at actual rates. This increase reflects the phasing of expenses in the prior year, a catch up of long-term incentive plans after a strong start to FY22, increased investment in global innovation projects and exchange rate movements. For the full year we expect Central Activities cost of US$140m-US$150m, of which around US$20m is a catch-up on incentive expenses incurred in the first half.

Benchmark PBT was US$751m, up 28% at both constant and actual rates, after lower net interest expense of US$55m (2020: US$60m). The reduction reflects lower average global interest rates. For FY22, we expect net interest expense to be circa US$115m.

The Benchmark tax rate was 24.8% (2020: 26.2%) including a one-off tax credit associated with the change to UK tax rates. For FY22, we expect a rate of approximately 26%.

Our Benchmark EPS was 61.7 US cents, an increase of 30% at constant currency and 29% at actual exchange rates. The weighted average number of ordinary shares (WANOS) increased to 914m (2020: 907m), 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.

Cash conversion rates and cash generation were very strong, in the typically seasonally weaker half of the year for cash flow. Benchmark operating cash flow increased 25% at actual rates and our cash flow conversion was 89% (2020: 89%).

Foreign exchange translation was a 1% headwind to Benchmark EPS in the half. This was predominantly due to pound Sterling, which appreciated by 9% relative to the US dollar versus the prior year. For FY22, we expect foreign exchange impact to be neutral to Benchmark EBIT and a (30) basis point headwind to EBIT margin. This assumes recent foreign exchange rates prevail.

We continued to expand investment in data, technology and innovation organically through capital expenditure. Capital expenditure increased by 22% to US$229m, which represented 7% of total revenue. For FY22, we expect capital expenditure to represent circa 8% of total revenue.

We took steps to expand the reach of our portfolio through inorganic investments. Total acquisition cash outflow in the first half was US$369m. This included the acquisitions of TCC and Emptech, as part of the expansion of our income verification business in North America, and a majority stake in Sinacofi Buró, a leading credit bureau in Chile. After the period end we completed the acquisitions of Gabi Personal Insurance Agency, Inc., to extend our North America insurance marketplace, and of Holding Veloz Investimentos e Participações S.A. 'PagueVeloz', a digital payments fintech in Brazil which will form part of our online debt resolution proposition, Limpa Nome.

We have announced a first interim dividend of 16.0 US cents per share, up 10%. This will be paid on 4 February 2022 to shareholders on the register at the close of business on 7 January 2022.

We have executed a net US$115m of our planned US$150m FY22 share repurchase programme, which mainly offsets deliveries under employee share plans.

During the half we redeemed our £400m 3.50% Euronotes due October 2021. Our bonds, net of derivatives, totalled US$3.4bn at 30 September 2021 and had an average remaining tenor of six years. 

As at 30 September 2021, Net debt to Benchmark EBITDA was 2.1x, compared to our target leverage range of 2.0-2.5x. Following changes in market adoption of the recently implemented IFRS 16 'Leases' our definition of Net debt has been updated to include lease obligations. 

Modelling considerations

1. Constant exchange rates.

2. Weighted average number of shares.

3. Operating cash flow

Group financial results

Business mix including % change in organic revenue year-on-year for the six months ended

30 September 2021

1. Percentage of group revenue from ongoing activities calculated based on H1 FY22 revenue at actual exchange rates.

2. Ongoing activities only, at constant exchange rates.

CI = Consumer Information, BI = Business Information, DA = Decision Analytics.

Revenue by region

1. The results for the six months ended 30 September 2020 have been re-presented for the reclassification to exited business activities of certain B2B businesses.

See Appendix 1 (page 14) and note 5 to the interim financial statements (pages 25-27) for definitions of non-GAAP measures.

See Appendix 3 (page 15) for analyses of revenue, Benchmark EBIT and Benchmark EBIT margin from ongoing activities by business segment.

Income statement, earnings and Benchmark EBIT margin analysis

1. Benchmark results for the six months ended 30 September 2020 have been re-presented for the reclassification to exited business activities of certain B2B businesses.

See Appendix 1 (page 14) and note 5 to the interim financial statements (pages 25-27) for definitions of non-GAAP measures.

See Appendix 3 (page 15) for analyses of revenue, Benchmark EBIT and Benchmark EBIT margin from ongoing activities by business segment.

Group financial review

Key statutory measures

Statutory revenue

We delivered a strong performance in the period through a combination of our innovation-led growth strategy and recovery as economies emerge from the COVID-19 pandemic, and revenue increased by 23% to US$3,061m (2020: US$2,487m).

Statutory operating profit and profit before tax

Operating profit for the six months ended 30 September 2021 increased to US$702m (2020: US$546m). The movements in Benchmark EBIT at constant currency are discussed in the Chief Executive Officer's review and Regional highlights on pages three to seven. In addition to these movements, we observed a reduction in net finance costs of US$43m, largely from financing fair value remeasurements, resulting in increased profit before tax of US$654m (2020: US$458m) up 43%.

Statutory Basic EPS

Basic EPS increased to 56.5 US cents (2020: 36.7 US cents). The increase of 54% reflects a higher profit before tax, a profit from discontinued operations and a reduction in our effective tax rate.

Statutory cash flow

Cash generated from operations was US$927m (2020: US$736m) reflecting an improved underlying performance. Net borrowing inflows were US$309m (2020 outflows: US$196m). Increased funding was required for acquisition activity and the purchase of shares. Cash outflows in respect of net share purchases were US$115m (2020 inflows: US$17m). Undrawn committed bank borrowing facilities were US$2.4bn at 30 September 2021.

Tax

The effective rate of tax based on profit before tax was 23.9%, a decrease of 3.6 percentage points from the comparative period largely attributable to a one-off credit arising on restatement of deferred tax balances following recently enacted tax rate changes, primarily in the UK, and the impact of non-taxable fair value movements.

Net assets

At 30 September 2021, net assets amounted to US$3,322m (2020 restated: US$2,631m). Capital employed, as defined in note 5(q) to the interim financial statements, was US$7,824m (2020 restated: US$6,875m).

Equity

There was an increase in equity of US$203m from US$3,119m at 31 March 2021 with movements detailed in the Group statement of changes in equity on page 20.

Key movements in equity during the half include:

· Profit for the period of US$517m.

· Remeasurement gains of US$25m in respect of defined benefit pension plans.

· Employee share awards and options cost of US$74m.

· Ordinary dividends of US$297m and a movement of US$115m in connection with net share purchases.

SeasonalityIn recent years, our Benchmark EBIT performance has tended to be weighted towards the second half of the year reflecting revenue seasonality. In FY22 we expect both revenue and Benchmark EBIT to be broadly uniform across the year, as we benefitted from a H1 upturn, as economies began to recover from the COVID-19 pandemic.

Risks

The principal risks and uncertainties we face in the remaining six months of the year remain largely unchanged from those explained in detail on pages 72 to 80 of our Annual Report for the year ended 31 March 2021:

• Loss or inappropriate use of data and systems;

• Adverse and unpredictable financial markets or fiscal developments;

• New legislation or changes in regulatory enforcement;

• Failure to comply with laws and regulations;

• Non-resilient IT/business environment;

• Business conduct risk;

• Dependence on highly skilled personnel;

• Increasing competition; and

• Undesirable investment outcomes.

In the first half of the financial year, we note that risks associated with new laws, new interpretations of existing laws, changes to existing regulations and regulatory scrutiny continue to increase. Recent examples include increased scrutiny with the administration changes in the US Consumer Financial Protection Bureau, the expansion of California privacy regulation through the California Privacy Rights Act, the enforcement of the Brazilian General Data Protection Law and the ongoing interpretation of data protection laws. In the UK, the Information Commissioner's Office's enforcement notice is listed for an appeal hearing in November 2021.

We continue to see increasing consumer litigation, particularly in the USA and Brazil.

We are also still closely monitoring trends in geopolitical risks including market volatility, regulatory and tax policy uncertainty. We note continued uncertainty in the development of tax legislation in our key regions, including proposals that could increase the tax burden on our businesses in some of our largest regions.

We continue to consider both the direct and indirect 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. Most of our employees are continuing to work remotely.

Further information on financial risk management is given in note 23 to the interim financial statements.

The Chief Executive Officer's, Business and Group financial reviews on pages 3 to 12 include consideration of key uncertainties affecting us for the remainder of the current financial year. There may however be additional risks unknown to us and other risks, currently believed to be immaterial, which could turn out to be material. These risks, whether they materialise individually or simultaneously, could significantly affect our business and financial results.

Going concern

The principal risks and uncertainties and viability assessment we face in the remaining six months of the year remain largely unchanged from those explained in detail on pages 72 to 82 of our Annual Report for the year ended 31 March 2021.

The Group has a robust balance sheet with access to considerable funding and continues to adopt the going concern basis in preparing these interim financial statements. Cash flow in the period was strong with cash flow conversion of 89% (2020: 89%). Our undrawn committed bank borrowing facilities at 30 September 2021 were US$2.4bn (2020: US$2.5bn) and have an average remaining tenor of four years (2020: 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 interim financial statements.

See note 2 to the interim financial statements for further detail.

Appendices

1. Non-GAAP financial information

We have identified and defined certain measures that we believe assist understanding of our performance. These 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 we have included them as these are considered to be key measures used within the business for assessing the underlying performance of our ongoing businesses.

Following the implementation of IFRS 16, we have reviewed emerging practice and have updated our definitions of Net debt and Net funding to include lease obligations, to more fully align our treatment with the requirements of investors and finance providers. The definition of capital employed has also been updated accordingly. 

The table below summarises our non-GAAP measures and there is a fuller explanation in note 5 to the interim financial statements.

Information on certain of our non-GAAP measures is set out in the further appendices. The reconciliation of revenue from ongoing activities is set out in note 6(c) on page 29, Benchmark EBIT and Benchmark PBT to profit before tax in Appendix 4 and Benchmark EPS in note 12 on pages 34 and 35.

2. Foreign currency

Foreign exchange - average rates

The principal exchange rates used to translate revenue and Benchmark EBIT into the US dollar are shown in the table below.

The impact of currency movements on revenue from ongoing activities is set out in note 6(c) to the interim financial statements.

Appendices (continued)

2. Foreign currency (continued)

Foreign exchange - closing rates

The principal exchange rates used to translate assets and liabilities into the US dollar at the period end dates are shown in the table below.

3. Revenue, Benchmark EBIT and Benchmark EBIT margin by business segment

1. Revenue and Benchmark EBIT for the six months ended 30 September 2020 have been re-presented for the reclassification to exited business activities of certain B2B businesses.

4. Summary reconciliation of Benchmark EBIT to statutory profit before tax

2. See note 8 to the interim financial statements.

Appendices (continued)

5. Cash flow and Net debt summary

1. See note 17(d) to the interim financial statements. 

2. We have updated our definition of Net debt to include lease obligations, and the opening position at 1 April and Net debt movements in the prior period have been revised to include lease liabilities shown net of accrued interest. 

6. Reconciliation of net investment

3. The consideration for our investment in the Risk Management division of Arvato Financial Solutions (AFS) in the period ended 30 September 2020 was satisfied by the delivery of 7.2m Experian plc treasury shares at market value.

Interim financial statements

Group income statement

for the six months ended 30 September 2021

1. Total Benchmark EBIT and other Benchmark items are non-GAAP measures, defined in note 5 to the interim financial statements.

2. The loss before tax for non-benchmark items of US$97m (2020: US$130m) is analysed in note 8 to the interim financial statements.

Interim financial statements

Group statement of comprehensive income

for the six months ended 30 September 2021

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 hedging or translation reserve within other reserves and in non-controlling interests. Other items within Other comprehensive income are recognised in retained earnings.

Interim financial statements

Group balance sheet

at 30 September 2021

Interim financial statements

Group statement of changes in equity

for the six months ended 30 September 2021

Group statement of changes in equity

for the six months ended 30 September 2020

Interim financial statements

Group cash flow statement

for the six months ended 30 September 2021