Experian Regulatory News (EXPN)

Preliminary results for the year ended 31 March 2018

7am, 17 May 2018 ─ Experian plc, the global information services company, today issues its financial report for the year ended 31 March 2018.

· A strong finish to the year.

o Q4 total revenue growth of 12% and Q4 organic revenue growth of 8%.

o North America Consumer Services returned to growth in Q4 and UK trends continued to improve.

· FY18: good progress, with momentum in B2B* and improving trends in Consumer Services.

o 8% total revenue growth, 8% total Benchmark EBIT growth, 11% Benchmark EPS growth.

o 5% organic revenue growth, 8% B2B organic revenue growth.

o Benchmark EBIT margin of 27.7%, in line with prior year at constant rates, up 10 basis points at actual rates.

o Strong cash conversion of 93% and Return on Capital Employed of 15.7%.

· Significant progress on our strategy.

o Key investments to add new sources of data, e.g. low income lending, mobile phone, affordability.

o Strong client reception for product introductions such as Experian Ascend, PowerCurve Collections, CrossCore, and a strong pipeline of future initiatives underway.

o Good initial market reception for consumer identity protection offers and significant steps taken to advance position in consumer credit comparison.

o Proposed acquisition of ClearScore will extend services to UK consumers.

· Continuing commitment to shareholder returns and disciplined capital allocation:

o $305m acquisitions and investments completed.

o Over US$950m returned to shareholders in the year, by dividends and share repurchases.

o Second interim dividend up 10% to 31.25 US cents per ordinary share; total dividend for FY18 up 8% to 44.75 US cents per share.

o New net share repurchase programme of up to US$400m.

1 Revenue from ongoing activities. See Appendix 1 on page 15 and note 4 to the financial statements on pages 26-27 for definitions of non-GAAP measures.

2 Results for 2017 are restated for exited business activities, comprised of our Experian Public Records business, divested in March 2018.3 See page 7 for reconciliation of Benchmark EBIT from ongoing activities to Profit before tax.

4 Basic EPS has reduced to 88.9 US cents from 92.1 US cents (2017). The decrease reflects higher non-cash costs for financing fair value remeasurements (see Note 7a) and a loss from discontinued operations (see Note 10a).

* B2B = business-to-business activities consists of Credit Services (7% organic revenue growth), Decision Analytics (12%) and Marketing Services (7%) business lines.

Brian Cassin, Chief Executive Officer, commented:

"We delivered a strong performance in FY18 as we execute on our innovation agenda and our One Experian approach. Growth was particularly strong across B2B and we have made significant progress in Consumer Services, which returned to growth in North America in the fourth quarter.

"The investments we have made will continue to power our performance. We begin the year with momentum in the business, and we expect another year of strong performance, with EBIT growth at or above revenue growth and further strong progress in Benchmark earnings per share."

Contacts

There will be a presentation today at 9.30am (UK time) to analysts and investors at the Bank of America Merrill Lynch Financial Centre, 2 King Edward Street, London, EC1A 1HQ. The presentation can be viewed live via the link from the Experian website at www.experianplc.com and can also be accessed live via a telephone dial-in facility: 0800 783 0906 (UK primary) or 01296 480 100 (UK direct) or +44 1296 480 100 (International direct), using access code 774 306 59. The supporting slides and an indexed replay will be available on the website later in the day.

Experian will update on first quarter trading for FY19 on 13 July 2018.

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 26 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 16,500 people operating across 39 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.

Chief Executive Officer's review

We made great progress over the course of this year, financially, operationally and strategically. The pace and range of new product innovation has increased dramatically across the business. This, plus the investments we have made in technology and our One Experian approach, position us strongly for the future.

We delivered a strong financial performance, with:

o Total revenue growth of 8%, total revenue growth at constant currency of 7%, organic revenue growth of 5%. B2B delivered organic revenue up 8% for the year and in Consumer Services the rate of organic revenue decline moderated to (5%) overall and was flat in the fourth quarter.

o Growth accelerated as the year progressed, with organic revenue growth of 4% in H1 and of 6% in H2.

o Benchmark EBIT growth was 8%, with EBIT margins of 27.7%.

o Double-digit growth in Benchmark earnings per share, which grew 11%.

o Cash conversion of 93% of Benchmark EBIT into operating cash flow.

We are executing well against our strategy, and have invested in a series of initiatives to sustain growth in the future. These include:

o New sources of data. We acquired Clarity Services, Inc. ('Clarity'), which adds non-traditional credit data assets in the US, improving visibility of over 60m consumers with traditional lenders, and extending the superiority of our datasets.

o New products. We launched Experian Ascend, our next-generation analytical sandbox, which has had a very strong reception since launch in the US.

o New agreements across multiple territories for major Experian platforms, including for PowerCurve, our decisioning platform, and for CrossCore our fraud prevention platform which signed 51 client agreements in the year, and we have a pipeline of new product introductions which will launch during the forthcoming year.

o New and extended client engagements which exploit the breadth of our capabilities as One Experian. These included major new data and decisioning contracts in the US, the UK and Brazil with large financial institutions.

o We launched the new identity protection proposition in the US, we substantially developed our credit comparison services and we have agreed the acquisition of ClearScore, subject to UK regulatory approval, which will add a complementary credit comparison brand in the UK.

o We have made significant additional investments in information security in order to maintain strong defences and continue to provide a secure environment for data.

With regards to capital allocation and uses of cash:

o We invested organically across a broad range of initiatives during the year in support of our strategy. We also made inorganic investments through acquisitions, minority investments and venture investments totalling US$305m.

o We are announcing a second interim dividend of 31.25 US cents per share, up 10% on the prior year to bring the total for FY18 to 44.75 US cents per share, up 8% on the prior year. This dividend will be paid on 20 July 2018 to shareholders on the register at the close of business on 22 June 2018.

o We completed a US$566m share repurchase programme. We also expect to execute a new net share repurchase programme of up to US$400m.

o We maintained tight discipline on capital allocation, ending the year with net debt of US$3,408m, which places us at 2.1 times EBITDA by the end of the year, compared to our target leverage range of 2 to 2.5 times net debt to EBITDA.

o Return on capital continues to be strong at 15.7%, up 20 basis points on the prior year (2017: 15.5%).

Regional highlights

Organic revenue growth was strong across three of our four regions, with double-digit growth in EMEA/Asia Pacific. Organic revenue was flat in the UK and Ireland.

North America

Total revenue growth in North America was 8% and organic revenue growth was 6%, reflecting a strong performance across B2B of 9%, partially offset by Consumer Services decline of 2%.

Our B2B business is performing very well driven by successful new product introductions and major One Experian client wins. The Experian Ascend Sandbox tool, which gives clients access to current and historic credit data for the development of analytical models and strategies, has grown quickly, and since launch we have signed contracts with 11 of the top financial institutions, with a strong pipeline of future prospects. We have seen early momentum in our strategy to introduce new sources of data to the credit bureau, and the Clarity Services acquisition has exceeded our expectations. Since completion of the acquisition in October, synergies realised include the roll out of Clarity Services products to our traditional bureau clients with the introduction of our first new product which will combine data from both Clarity and our credit bureau to enhance credit risk decisions. Credit Services' performance also benefited from the new Fannie Mae trended data agreement, which was implemented in Q4. There was also strength in business information, health and Decision Analytics which each delivered double-digit organic revenue growth.

Consumer Services returned to growth during Q4. We have diversified our revenue streams in this business towards high growth market segments, helping to offset an overall decline for the year. Our identity protection offer is growing rapidly, and we have now enrolled approximately 200,000 paying members. We are extending the product offer with good take-up rates for premium plans and new free services such as triple dark web scan. We are developing our credit comparison service which, while still at a relatively early stage, is growing strongly. We are also highly focused on enhancing the experience for both consumers and lenders by using our capabilities to drive relevance and approval rates. Partner Solutions, which accounts for c. 40% of North America Consumer Services revenue, is also well positioned as we secure new clients, provide new products for existing client programmes and as we fully benefit from the client wins secured this year.

Latin America

Latin America delivered a good performance, with 6% organic revenue growth, reflecting strength across Credit Services, Decision Analytics and Marketing Services.

In Brazil, we have placed significant strategic emphasis on expanding the services we provide to our larger clients and on developing more extensive services for smaller businesses and for consumers. We see significant potential as the macroeconomic environment in Brazil improves and as we grow our presence across the Latin American region.

We are expanding our position with larger clients in Brazil, moving beyond pure credit data services to offer alternative data sources, analytics, software, consultancy services and client access to our data labs. We see good prospects for Experian software platforms such as PowerCurve and CrossCore, as well as for new product innovations such as mobile credit-prequalification services, recently launched with major Brazilian retailers and where we are establishing a decent pipeline. We are also developing new services for smaller businesses in Brazil, to help them better manage and gain access to relevant credit offers.

This was an important year for the development of services to consumers in Brazil. By the end of the year we had enrolled over 22m people into Serasa Consumidor. We have introduced a new credit comparison service (eCred), which we will seek to expand over the coming year. Our debt resolution service Limpa Nome is also expanding rapidly. We have converted this into a digital service which helps millions of consumers to negotiate and settle debts with lenders. We see significant potential for Serasa Consumidor in Brazil, and are investing to extend our product range and to scale our existing offers over the coming year.

UK and Ireland

In the UK and Ireland, organic revenue was flat as growth in B2B of 5% was offset by a decline in Consumer Services of 16%.

We saw good momentum across our B2B portfolio in the UK and Ireland. Across our core, we have secured new client wins driven by demand for unique Experian capabilities such as ExPIN (our proprietary data pinning technology), PowerCurve and CrossCore. Regulatory changes such as the Open Banking directive are also opening up new opportunities, with both existing and new clients. Our strategy is to automate key processes to enable better consumer experiences in areas such as affordability assessment, which is mandatory for mortgage and in debt management services. We have developed new capabilities built on Runpath and Experian technology to address this opportunity. We also continue to expand our position in new market segments such as the price comparison sector, background checking and within industry verticals such as telecommunications.

In Consumer Services, we now address an audience of nearly 4m consumers through our free services. We made considerable progress in credit comparison, and CreditMatcher saw a big step up in both traffic and revenue over the year. We are enabling lenders to be more precise in which offers they make to which individuals, leading to greater use of data and analytics in the credit comparison process. The proposed acquisition of ClearScore will allow us to address more of this growing market through two complementary brands and to generate significant synergies. Subscription-based credit monitoring services have continued to contract, a trend which we expect to persist, although we have seen the rate of decline start to ease as we have introduced new product features and as we drive greater engagement with our paying membership base.

EMEA/Asia Pacific

EMEA/Asia Pacific performed strongly, with organic growth of 11%, with positive contributions across Credit Services, Decision Analytics and Marketing Services.

Our operations in EMEA/Asia Pacific are growing well. Our business is shifting from providing point solutions to providing more One Experian, integrated solutions. This is leading to a change in perceptions of Experian as we become more of a strategic partner to our clients. It also improves the size and scale of our client engagements and builds recurring revenue streams. We are also making significant investments to access the considerable opportunities we see in these markets, driven by the growth of population and wealth, and the need for new sources of data to assess credit risk. For example, we are developing propositions which use mobile data to conduct credit risk assessment, we are investing in a new innovation hub in Singapore and we are assessing opportunities to expand services to consumers in key bureau markets.

Update to financial reporting format

Change to segmental reporting

Experian has maintained the same segmental reporting structure since the demerger from GUS plc in 2006. During that time the shape of the business has evolved and a significant proportion of Experian's business-to-business products and services are now bundled. Following a review, we plan to change our business segments. Our regional operating segments, which are our statutory segments for reporting purposes, will remain the same.

For the financial year ending 31 March 2019, the three business segments of Credit Services, Decision Analytics and Marketing Services will be consolidated into a single 'Business-to-Business' segment. Consumer Services will remain as a separate segment. In total, there will be two business segments. A reconciliation of revenue reporting under the new reporting structure for the year ended 31 March 2018 is provided on page 14.

IFRS-15 reporting

As previously noted, we will be restating our results for the introduction of IFRS 15 'Revenue from contracts with customers'. From the first quarter of the year ending 31 March 2019 we will restate for the new IFRS 15 reporting standard. For further information please see Note 3 to the financial statements.

Group financial results

Revenue by region

1 Results for 2017 are restated for exited business activities which comprise our Experian Public Records business, divested in March 2018.

See Appendix 2 (page 15) for analyses of revenue, Benchmark EBIT and Benchmark EBIT margin from ongoing activities by business segment.

Income statement, earnings and EBIT margin analysis

1 Results for 2017 are restated for exited business activities which comprise our Experian Public Records business, divested in March 2018.

See Appendix 1 (page 15) and note 4 to the financial statements for definitions of non-GAAP measures.

See Appendix 2 (page 15) for analyses of revenue, Benchmark EBIT and Benchmark EBIT margin from ongoing activities by business segment.

Business review

North America

Total revenue from ongoing activities in North America was US$2,646m, with total revenue growth of 8% and organic revenue growth of 6%. The difference relates mainly to the contribution from the acquired CSIdentity Corp (CSIdentity) and Clarity Services businesses.

Credit Services

Total revenue growth was 11%, reflecting the acquisition of Clarity Services, with organic revenue growth of 9%. We delivered positive organic revenue growth across all business units. In consumer information, we saw good growth in credit marketing, origination and account management volumes. Mortgage performed strongly following the implementation of the new Fannie Mae trended data contract, and there was a first-time contribution from licence fees related to the Experian Ascend platform. Business information performed well as we expand our API hub. In health, there was further growth in new client bookings and we continue to extend our position with existing clients as we cross-sell our services such as the Universal Patient Identifier.

Decision Analytics

Total and organic revenue was up 10%, reflecting a series of new client wins, with good demand across decisioning software, fraud prevention tools and analytics.

Marketing Services

Total and organic revenue increased 6%, as we continue to gain traction with digital advertisers.

Consumer Services

Total revenue growth was 2%, reflecting the acquisition of CSIdentity, with organic revenue of (2)%. Across our direct-to-consumer activities, we delivered growth in identity protection subscriptions and price comparison services, offset by a decline in the revenue from subscription based credit monitoring services. Partner solutions benefited from new client wins and as we expand our position with existing clients.

Benchmark EBIT and EBIT margin

North America Benchmark EBIT from ongoing activities was US$833m, up 7%. The Benchmark EBIT margin from ongoing activities was 31.5%, down 30 basis points year-on-year reflecting strong operating leverage in B2B, offset by investment to support the launch of new consumer offers.

Latin America

Total revenue from ongoing activities in Latin America was US$788m, with total and organic revenue growth of 6% at constant exchange rates.

Credit Services

At constant exchange rates, total and organic revenue growth was 4%. There was strong growth in Brazil reflecting higher core volumes and new contract wins secured with the major Brazilian banks. This was slightly offset by a headwind from countercyclical products and a softer performance in Spanish Latin America.

Decision Analytics

Total and organic revenue growth was 25% at constant exchange rates reflecting strong demand across the region for decisioning software, analytics and scoring. 

Marketing Services

Total and organic revenue at constant exchange rates increased 29%. We made good progress in Marketing Services with a strong contribution from digital marketing and data insights.

Benchmark EBIT and EBIT margin

Latin America Benchmark EBIT from ongoing activities was US$267m, up 5% at constant exchange rates. Benchmark EBIT margin from ongoing activities was 33.9% (2017: 34.4%) as operating leverage and productivity enhancements were offset by adverse mix effects and margin contraction in Spanish Latin America.

UK and Ireland

In the UK and Ireland, total revenue from ongoing activities was US$830m, with total revenue growth of 1% and flat organic revenue at constant exchange rates. The difference is due to the contribution from the acquired Runpath business.

Credit Services

Total revenue at constant exchange rates increased 7% and organic revenue growth was 4%. There was good growth in credit reference and background checking volumes, as well as across credit pre-qualification services. We also expanded our position with clients across the banking, telecommunications and price comparison sectors and secured new agreements for Verdus, our new affordability Open Banking platform.

Decision Analytics

At constant exchange rates, both total and organic revenue increased 6%. Growth was driven by strong demand for origination and customer management. We also secured new agreements for fraud prevention and identity verification services.

Marketing Services

Total and organic revenue growth at constant exchange rates was 4%, driven by strong growth across digital marketing tools. 

Consumer Services

At constant exchange rates, total and organic revenue declined by 16%. Revenue declined by 18% in the first half, and by 14% in the second half. There was very strong growth in referral fees through CreditMatcher, offset by attrition in subscription-based credit monitoring revenues.

Benchmark EBIT and EBIT margin

Benchmark EBIT from ongoing activities was US$260m, up 2% at constant exchange rates. Benchmark EBIT margin from ongoing activities was 31.3% (2017: 30.5%). The improvement reflected operating leverage across B2B which offset ongoing investment in Consumer Services.

EMEA/Asia Pacific

Total revenue from ongoing activities in EMEA/Asia Pacific was US$393m, with total and organic revenue growth of 11% at constant exchange rates.

Credit Services

Total and organic revenue at constant exchange rates was up 3%. Declines in the Nordics were offset by strong volumes in Italy and Spain, and we saw good growth in Southeast Asia and India.

Decision Analytics

At constant exchange rates total and organic revenue growth was 18%, as we secured multiple new agreements for PowerCurve decisioning software and for our fraud and identity management solutions.

Marketing Services

Total and organic revenue growth at constant exchange rates was 12%, with strong growth across data quality and targeting services.

Benchmark EBIT and EBIT margin

Benchmark EBIT was US$9m (2017: US$(3)m). Benchmark EBIT margin from ongoing activities improved 320 basis points at 2.3% as the business gains in scale.

Group financial review

Key financials

The Group has identified and defined certain non-GAAP measures, as they are the key measures used within the business to assess performance. These measures are used within this Group financial review and, unless otherwise indicated, all discussion of Revenue and Benchmark EBIT margin relates to ongoing activities only.

Summary

We made good strategic and financial progress during the year, with 7% revenue growth from ongoing activities and a 10% increase in Benchmark EPS, both at constant currency. Benchmark EBIT margin from ongoing activities was 27.7%, up ten basis points.

We report our financial results in US dollars and therefore the strengthening of our other trading currencies, primarily the pound sterling, against the US dollar during the year increased total revenue by US$50m and Benchmark EBIT by US$14m, and improved our Benchmark EBIT margin from ongoing activities by ten basis points. Details of the principal exchange rates used are given on page 13.

Our Benchmark PBT was US$1,206m (2017: US$1,124m). Benchmark EPS of 97.8 US cents (2017: 88.4 US cents) increased by 11 % at actual exchange rates and 10% at constant currency. There has been upward pressure on interest rates over the year increasing the net interest expense included in Benchmark PBT to US$85m (2017: US$75m). The Benchmark tax rate was 25.6% (2017: 26.2%).

We continued to generate strong cash flows, with a 93% conversion of Benchmark EBIT to Benchmark operating cash flow (2017: 96%). Cash conversion reflects the changing mix of our business, as our B2B revenue has a longer cash cycle than that observed in our Consumer Services business. Investment activity in the year has been undertaken within the capital allocation framework previously outlined and includes the acquisition of Clarity Services, Inc. for US$113m and Runpath Group Limited for US$66m.

Cash inflow from discontinued operations was US$215m (2017: US$20m) primarily from the divestment of our email/cross-channel marketing business ('CCM').

Shareholder returns

For the year ended 31 March 2018 net share repurchases totalled US$566m, of which US$1m was settled in April 2018, (2017: US$353m).

The second interim dividend is 31.25 (2017: 28.5) US cents per share giving a total dividend for the year of 44.75 (2017: 41.50) US cents per share, an increase of 8% on the prior year reflecting the underlying strength of the business.

Ordinary dividends paid in the year amounted to US$388m (2017: US$381m). The Group has significant distributable reserves of US$3.49bn in the UK entity responsible for distributing the Group's dividend.

Taking the total dividend and share repurchases together, during the year we returned a total of US$954m to shareholders.

Growing the business

We continued to deliver good growth during the year, with organic revenue growth within our mid-single-digit target range.

Total revenue growth in the year from ongoing activities was 7% at constant exchange rates and 8% at actual rates. This year, Benchmark EBIT from ongoing activities was US$1,290m, growing at 8% at actual exchange rates and 7% at constant currency.

Investment in innovation is providing new growth opportunities as we increase our product offering. Performance across our B2B operations was very strong as clients engage with us to access new superior sources of data and there is an improving outlook in our Consumer Services business.

Generating value

The table at Appendix 3 on page 16 provides a reconciliation of our underlying profitability, as measured by Benchmark EBIT, to our statutory profit before tax.

Our net interest expense and the related cash flows have benefited from the strong cash generation and from low interest rates globally, though there has been upward pressure on rates over the year. At 31 March 2018, the interest on 60% of our net funding was at fixed rates (2017: 63%).

Our effective tax rate on Benchmark PBT was 25.6%, reflecting the mix of profits and prevailing tax rates by territory.

Our total tax charge for the year was impacted by some one-time movements. In particular, we recognised a credit of US$116m as our US net deferred tax liabilities were revalued following the US Tax Cuts and Jobs Act in December 2017, which reduced the US federal corporate tax rate from 35% to 21% from 1 January 2018.

We believe the Group's effective tax rate in the year ending 31 March 2019 will be broadly unchanged, notwithstanding US tax reform impacts.

The equivalent cash tax rate remains below our Benchmark tax rate and a reconciliation is provided in the table at Appendix 7. It is currently anticipated that our cash tax rate will increase and move closer to our Benchmark tax rate over time, as tax amortisation of goodwill on earlier acquisitions and prior tax losses are utilised.

Basic EPS was 88.9 US cents (2017: 92.1 US cents). Basic EPS for the year ended 31 March 2018 is reduced by 8.9 (2017: increased by 3.7) US cents in respect of discontinued operations and other adjustments made to derive Benchmark EPS. Benchmark EPS was 97.8 US cents (2017: 88.4 US cents), an increase of 11% at actual exchange rates 10% constant exchange rates. Further information is given in note 11 to the financial statements.

At 31 March 2018, we had 980 million shares in issue of which some 74 million were held by employee trusts and as treasury shares. Accordingly, the number of shares to be used for the purposes of calculating basic EPS from 31 March 2018 is 906 million. Issues and purchases of shares after 31 March 2018 will result in amendments to this figure.

The total dividend per share for the year is covered 2.2 times by Benchmark EPS (2017: 2.1 times) in accordance with our previously declared policy. Ordinary dividends paid in the year amounted to US$388m (2017: US$381m).

Cash and liquidity management

As shown in the Cash flow and net debt summary table at Appendix 5 on page 17, we generated good Benchmark operating and free cash flows in the year. The continued strength of our operating cash flow performance reflects the nature of our business and financial model and our focus on working capital management.

Net debt at 31 March 2018 was US$3,408m (2017: US$3,173m), with undrawn committed borrowing facilities of US$2,325m (2017: US$2,375m). Our net debt at 31 March 2018 was 2.1 times Benchmark EBITDA (2017: 2.1 times), compared to our target range of 2.0 to 2.5 times.

Investment activity in the year has been undertaken within the capital allocation framework previously outlined and includes the acquisition of Clarity Services, Inc. for US$113m. Total investment was US$678m (2017: US$825m) and comprised cash flows for net capital expenditure, acquisitions and investments. Our capital expenditure of US$431m (2017: US$399m) was 9% (2017: 9%) of total revenue.

Key statutory measures

Revenue for the year ended 31 March 2018 was US$4,662m (2017: US$4,335m) reflecting an improved underlying performance of ongoing activities offset by the impact of exited businesses.

Operating profit for the year ended 31 March 2018 was US$1,095m (2017: US$1,075m).

Cash generated from continuing operations was US$1,255m (2017: US$1,314m) reflecting movements in working capital and higher tax payments of US$47m.

Basic EPS was 88.9 US cents (2017: 92.1 US cents). Earnings in the prior year benefited from a gain of US$67m in non-cash financing fair value remeasurements within net finance costs. This year there was a small charge of US$4m.

The effective rate of tax based on profit before tax has improved from 24.2% in the year ended 31 March 2017 to 15.0% in the current financial year. This is largely due to a credit arising on the restatement of deferred tax balances in North America following US tax reform and the recognition of previously unrecognised tax losses.

At 31 March 2018, net assets amounted to US$2,624m (2017: US$2,651m). Capital employed, as defined in note 4(r) to the financial statements, was US$6,342m (2017: US$6,149m).

There was a decrease in equity of US$27m from US$2,651m at 31 March 2017 with movements detailed in the Group statement of changes in equity on page 21.

Key movements in equity during the year included:

• Profit for the year of US$815m.

• Currency translation gains of US$28m.

• Remeasurement gains of US$28m in respect of defined benefit pension plans.

• Ordinary dividends of US$388m of which US$370m (2017:US$358m) was paid by a UK subsidiary undertaking which has distributable reserves of US$3,485.5m (2017: US$5,152.1m).

• A movement of US$566m in connection with net share purchases.

Foreign exchange rates

Foreign exchange - average rates

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

Foreign exchange - closing rates

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

Risks and uncertainties

The ten principal risks and uncertainties faced by the Group are summarised in note 26 to the financial statements.

Change to business segments

Following a review, our regional operating segments (our statutory reporting segments) for reporting purposes will remain the same. We will continue to organise and group these into the four segments of North America, Latin America, UK and Ireland, and EMEA/Asia Pacific for reporting purposes.

Going forward, for the financial year ending 31 March 2019, the three business segments of Credit Services, Decision Analytics and Marketing Services will be consolidated into a single 'Business-to-Business' (B2B) segment. Consumer Services will remain as a separate segment. In total, there will be two business segments.

Within B2B there will be two sub-divisions: Data and Decisioning. Data will include: Credit Services; and Targeting (from Marketing Services). Decisioning will include: Decision Analytics; Data Quality (from Marketing Services); and Health (from Credit Services) given the nature of solutions it provides.

1 Business-to-Business disclosures will be of revenue, Benchmark EBIT and Benchmark EBIT margin.

2 Disclosures for the Data and Decisioning sub-divisions will be on a revenue-only basis.

Appendices

1. Non-GAAP financial information

We have identified and defined certain measures that we believe assist in understanding the performance of the Group. These measures are not defined under IFRS and they may not be directly comparable with other companies' adjusted measures. The non-GAAP measures are not intended to be a substitute for, or superior to, any IFRS measures of performance but management has included them as these are considered to be key measures used within the business for assessing performance. Information on certain of our non-GAAP measures is set out below in the further appendices. Definitions of all our non-GAAP measures are given in note 4 to the financial statements.

3. Reconciliation of Benchmark EBIT to statutory profit before tax

4. Exceptional items and Other adjustments made to derive Benchmark PBT

An explanation of the reasons for the exclusion of such items from our definition of Benchmark PBT is given in note 4 to the financial statements.

5. Cash flow and net debt summary

6. Reconciliation of total investment

7. Cash tax reconciliation

Group income statement

for the year ended 31 March 2018

1. Total Benchmark EBIT, Benchmark PBT per share and Full year dividend per share are non-GAAP measures, defined where appropriate in note 4 to the financial statements.

2. The loss before tax for non-benchmark items of US$212m (2017: US$53m) comprises a charge for exceptional items of US$57m (2017: US$nil) and charges for Other adjustments made to derive Benchmark PBT of US$155m (2017: US$53m). Further information is given in note 7 to the financial statements.

3. Benchmark PBT per share is calculated by dividing Benchmark PBT of US$1,206m by the weighted average number of ordinary shares of 917 million. The amount is stated in US cents per share.

The segmental disclosures in notes 5 and 6 indicate the impact of business disposals on the comparative revenue and Total Benchmark EBIT figures.

Group statement of comprehensive income

for the year ended 31 March 2018

1. Amounts reported within Other comprehensive income 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 are recognised in the translation reserve within other reserves. Other items within Other comprehensive income are recognised in retained earnings.

2. The tax charge recognised in respect of discontinued operations in the year was US$53m (2017: credit of US$45m).

Group balance sheet

at 31 March 2018

Group statement of changes in total equity

for the year ended 31 March 2018