Equifax, Inc. · NYSE:EFX
Equifax — Investor Presentation (February 2019)
32 slides from Equifax's investor presentation, February 2019
Slide 1: Investor Relations February 2019
INVESTOR RELATIONS February 2019 Confidential and Proprietary
Slide 2: Forward Looking Statements
Forward Looking Statements This document contains certain forward-looking information, including full year 2019 guidance, to help you understand Equifax and its business environment. Actual results may differ materially from the forward looking information. Factors that could cause actual results to
Slide 3: Non-GAAP Disclosure Statement
Non-GAAP Disclosure Statement This document contains certain non-GAAP financial measures, including Adjusted EPS attributable to Equifax and Adjusted EBITDA, which will be adjusted for certain items that affect the comparability of our underlying operational performance. Adjusted EPS attributable to
Slide 4: 2018 by the Numbers
2018 by the Numbers +2.3% $3.41B 33.7% CONSTANT DOLLAR ADJUSTED REVENUE REVENUE GROWTH EBITDA MARGIN $5.79 $307.2M ADJUSTED EPS TRANSFORMATION $1.15B INVESTMENT ADJUSTED EBITDA (CONTINUING OPS) 4 February 2019 Confidential and Proprietary
Slide 5: Broad Based Execution to Strengthen Equifax
Broad Based Execution to Strengthen Equifax USIS WS INTL GCS Revenue: -1% Revenue: +8% Revenue: +7% Revenue: -8% + Rebuilding customer trust + Grew TWN records to almost + Launched Ignite across multiple + Launched free Lock & Alert and + Acquired DataX (alternative 90M regions Freeze products credi
Slide 6: Equifax Imperatives – EFX2020
Equifax Imperatives – EFX2020 CULTURE INDUSTRY DRIVE INVEST IN MARKET-LEADING CONSUMER- OF CUSTOMER LEADER IN GROWTH TECHNOLOGY D&A FRIENDLY CRA CENTRICITY SECURITY Leverage global data Standardize Exceed customer Ongoing data perfection Provide consumer- Build security deep into assets
Slide 7: Equifax Competitive Advantage
Unique Data Assets Advanced Analytics 24 Countries | 5 Continents ACRO Trended Data The Work Number® Configurable Scores DIFFERENTIATED DATA & United States NCTUE+ NDT IXI Attributes ANALYTICS Canada GLOBAL Australia & New Zealand RELEVANCE Latin America Europe India Russia STRONG Equifax Innovation
Slide 8: Dramatically Stronger Insights Through a Vast Array of Direct, Verified Data
Dramatically Stronger Insights Through a Vast Array of Direct, Verified Data Consumer Telco, Cable Employment Credit & Utility & Income Reliable, Fast, Accounts Verified, High-Quality Exclusive, Direct from Superior Employers Coverage Asset & Property & Consumer Single-Source Wealth Valuation Demogr
Slide 9: Real Time Integration of Data from Multiple Sources and State-of-the-Art Analytics
Real Time Integration of Data from Multiple Sources and State-of-the-Art Analytics Drives Unique Insights Big Data Wide Range of Data, Population-based Analysis Analytics and Insights Varied new data constantly gathered from diverse sources and at large volumes VARIABLES & METHODS Strongest models w
Slide 10: Our Business Model is Robust and Resilient
Our Business Model is Robust and Resilient Data Analytics Technology Customer Broad-based and + Value-added + Software Integrating = Solutions Customized High Value Decisioning Solutions Unique Data Assets Analytical Insights Data and Insights Credit Scores and Models Optimization Banks Alternative
Slide 11: Broadening Our Global Presence in Important Growth Markets
Broadening Our Global Presence in Important Growth Markets RUSSIA UNITED KINGDOM (50% interest) CANADA Consumer Consumer Consumer Commercial Commercial Debt Mgmt. UNITED STATES Consumer Commercial IBERIA Spain Consumer MEXICO Portugal Consumer INDIA Debt Mgmt. SaaS (49% interest) Active Start-up Oth
Slide 12: A Strong Portfolio of Businesses
A Strong Portfolio of Businesses 2018 Business Mix 2018 Vertical Mix 2018 Revenue 2018 Growth Adjusted EBITDA Margin Resellers (Constant $) 6% Other 100% 8% 90% International 7% 30.4% Healthcare 2% Financial 80% 24% 70% Corporate Global Consumer Solutions (8%) 28.8% (Employers) 60% 8% 50% Workforce
Slide 13: Security Transformation
Security Transformation 2018 Accomplishments/Highlights In 2018, we began a 3-year initiative to transform our security processes, technology and infrastructure. Cultural Realignment: Established a “security-first” culture, including adding a significant number of new team members to our security or
Slide 14: Security Transformation (con't)
Security Transformation (con’t) We will continue to take major strides in 2019 to help protect consumers and our customers, with the following goals: Programmatic Improvements Execute against security program targets with the goal of becoming an industry leader. Continue engaging with customers
Slide 15: Supplemental Information
SUPPLEMENTAL INFORMATION 15 February 2019 Confidential and Proprietary
Slide 16: Our Technology Transformation Is Empowered by the Following Focus Areas
Our Technology Transformation Is Empowered by the Following Focus Areas People Discipline Culture of innovation and Standardized platforms and collaboration, with a strong applications that reduce developer-first mindset complexity and enable innovation. Technology Focus Areas Cloud Data Technologie
Slide 17: It's about harnessing technology to better anticipate customers' needs
It’s about harnessing Always on and available technology to better anticipate and deliver on our Ready and agile customers’ needs. Empowered and innovative Integrated Security 17 February 2019 Confidential and Proprietary
Slide 18: How are we putting this approach into action?
How are we putting this approach into action? We’re performing a cloud and data We are re-architecting our platforms, migration, which is critical for high including developing a standardized velocity product innovation that fuels Data Fabric for data consistency, customer growth and prosperity. pow
Slide 19: Cloud Platform Services and Data Fabric
Our common Data Fabric, built on the standard Google Cloud Platform will enable seamless, real time integration and data access across our unique data sources Ingestion Entity Resolution Purposing Analytics Fulfillment Data Factory Search Match Non-purposed Analytics Sandbox Online Services Raw Data
Slide 20: Network Fabric integrated with Data Fabric
Our Network Fabric, cloud enabled through GCP and AWS, is integrated with our Data Fabric to enable faster delivery and increased uptimes Equifax Network Fabric Virtual Private Cloud Data Protection B2B B2C VPC Presentation API Stream Batch Metering Framework Framework Framework Framework Monitoring
Slide 21: InterConnect ecosystem built in Ignite
Our InterConnect® ecosystem, is a prime example of delivering innovative solutions, built in Ignite, to our customers on an end-to-end, standalone cloud-based architecture Customer Portal B2B Provisioning Reports Rules Editor Client Underwriter Presentation API Stream Batch Framework Framework Frame
Slide 22: Consolidated 2018 Equifax Results
Consolidated 2018 Equifax Results Dollars in millions (except per share amounts) 4Q18 FY 2018 Reported Revenue $835.3 $3,412.1 Growth % (0.4%) 1.5% Local Currency Revenue $856.9 $3,440.4 Growth % 2.2% 2.3% GAAP Net Income $25.6 $299.8 Growth % (85.2%) (49.0%) Adjusted EBITDA Margin 33.2% 33.7% Growt
Slide 23: 4Q18 Business Unit Performance
4Q18 Business Unit Performance Reported Local Currency Adj. EBITDA Margin Adj. EBITDA Margin Revenue Growth Revenue Growth Growth / (Decline) USIS (2%) (2%) 47.5% (100 bps) Online -% -% N/A N/A Mortgage Solutions (17%) (17%) N/A N/A Financial Marketing (1%) (1%) N/A N/A Workforce Solutions 12% 12% 4
Slide 24: Cybersecurity Related Costs and Other Items
Cybersecurity Related Costs and Other Items Dollars in millions 2017 1Q18 2Q18 3Q18 4Q18 FY18 2019 Estimate CYBERSECURITY RELATED Legal and Investigative Fees $75.5 $28.9 $16.4 $16.1 $12.2 $73.6 $50.0 Technology and Data Security $26.5 $45.7 $54.9 $92.6 $113.9 $307.2 $300.0 Product Liability $62.0 $
Slide 25: Cash Flow and Other Metrics
Cash Flow and Other Metrics Dollars in millions 4Q18 4Q17 FY 2018 FY 2017 Operating Cash Flow $164.8 $207.3 $672.2 $816.0 Capital Expenditures (Cash) ($113.8) ($60.7) ($321.9) ($218.2) Free Cash Flow $51.0 $146.6 $350.3 $597.8 Dollars in millions 4Q18 4Q17 FY 2018 FY 2017 Cash Capex as a % Revenue 1
Slide 26: Effective Income Tax Rate
Effective Income Tax Rate The effective tax rate used in calculating our 2018 GAAP and Adjusted EPS is as follows: GAAP EPS Adjusted EPS FY 2018 14.0% 22.6% 4Q 2018 (6.9%) 21.4% We expect our 2019 tax rate for Adjusted EPS to be 24%. See Earnings Release for reconciliation of non-GAAP measures and r
Slide 27: 2019 Guidance
2019 Guidance FY 2019 1Q 2019 Revenue $3.425B - $3.525B $840M - $855M Local Currency Revenue Growth 2% - 5% 0% - 2% FX Impact on Revenue Growth (1%) (3%) Adjusted EPS $5.60 - $5.80 per share $1.15 - $1.20 per share FX Impact on Adjusted EPS ($0.08) per share ($0.05) per share Capital Expenditures $3
Slide 28: Strong Mortgage franchise with all inquiry transactions
With domain expertise, Equifax has built a strong Mortgage franchise. We see all inquiry transactions in our Mortgage business. 2019 2018 2017 2016 2015 Full Year -5% -8% -6% 12% 15% 28 February 2019 Confidential and Proprietary
Slide 29: Appendix
APPENDIX 29 February 2019 Confidential and Proprietary
Slide 30: Glossary
Term Our Definition GLOSSARY A give-to-get model where data providers determine the content of the database, utilization requirements/obligations, and governance Closed Exchange philosophy; generally, all data providers contribute the same amount/type of data in return for their access to the consol
Slide 31: Technology Glossary
Term Our Definition TECHNOLOGY GLOSSARY A method of project management used in software development that is characterized by the division of tasks into short phases of work and Agile frequent reassessment and adaptation of plans. API – Application A software intermediary that allows two applications
Slide 32: Technology Glossary
Term Our Definition TECHNOLOGY GLOSSARY Data Gateway A system that connects to multiple data sources and provides a single and central point of access to connect to each data source. Data Governance The overall management of the availability, usability, integrity and security of data used in an Ente