Equifax, Inc. · NYSE:EFX
Equifax — Investor Presentation (April 2008)
34 slides from Equifax's investor presentation, Apr 29, 2008
Slide 1: Investor Presentation April 29, 2008
Investor Presentation April 29, 2008 Equifax Confidential and Proprietary
Slide 2: Forward Looking Statements
Forward Looking Statements As usual, we will make statements during the presentation which are forward looking. Our 10Ks, 10Qs and other SEC documents outline the risks associated with these statements and we encourage you to review them. We also incorporate non-GAAP financial measures in this prese
Slide 3: Financial Performance
Financial Performance ($ in millions, except per share amounts) Q1, 2008 Q1, 2007 Change Revenue $503.1 $405.1 24% Operating Income $126.2 $117.0 8% Adjusted Operating Income (Operating Income excluding acquisition-related amortization $147.9 $124.8 19% expense) EBITDA (Operating Income before depre
Slide 4: Diversified Business Mix
Diversified Business Mix Total Revenue ($ Millions) Q1 2008 Local Currency Q1 2008 $503.1 Growth3 Mix $500.0 +24% TALX1 8%2 16% $405.1 North America Commercial Solutions 13% 3% $400.0 +5% North America Personal Solutions 14% 9% $300.0 International 11% 26% $200.0 U.S. Consumer Information -6% 46% $1
Slide 5: A Challenging U.S. Environment
Percent Percent 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% 4q01 0% 5% 10% 15% 20% 25% 30% 35% 1q02 2q02 4q01 3q02 1q02 4q02 2q02 1q03 3q02 2q03 4q02 3q03 1q03 4q03 2q03 1q04 3q03 2q04 4q03 3q04 1q04 4q04 2q04 1q05 3q04 Total 2q05 4q04 3q05 1q05 Auto Finance 4q05 2q05 1q06 3q05 Equifax 2q06 4q
Slide 6: Consumers Prudent in Use of Credit Cards
Consumers Prudent in Use of Credit Cards Equifax Bankcard Accounts, Credit Limits, Balance Trends 4.0 500 3.5 450 3.0 2.5 400 Millions $Trillions 2.0 350 1.5 1.0 300 0.5 0.0 250 Nov07 Jan07 Jun07 Jul07 Jan08 Dec06 Feb07 Mar07 Apr07 May0 Aug07 Sept0 Oct07 Dec07 Feb08 Mar08 4q01 1q02 2q02 3q02 4q02 1q
Slide 7: Overall, Total U.S. Consumer Risk Appears to be Stable
Overall, Total U.S. Consumer Risk Appears to be Stable Equifax Credit Risk and Bankruptcy Score Trends 705 288 286 700 698.5 Equifax Bankruptcy Navigator 3.0 284 Equifax Risk Score 3.0 697.2 696.7 695 282 280 690 277.0 278 685 276.4 276.5 276 274 680 272 675 270 Nov07 Jan07 Jun07 Jul07 Jan08 Dec06 F
Slide 8: A Powerful Vision Focused on Our Customers
A Powerful Vision Focused on Our Customers To be the trusted provider of INFORMation solutions that ENRICH and EMPOWER our customers to make critical decisions with greater confidence. 8 Equifax Confidential and Proprietary
Slide 9: Our Business Model
Our Business Model Unique Proprietary Customer Centric Analytics & Data Decision Enabling Technologies 9 Equifax Confidential and Proprietary
Slide 10: Unique Data Assets That Differentiate
Unique Data Assets That Differentiate Unique Data Data (U.S. Market) Credit File - 220M (Credit Behavior) 35M 24M Unique Unique Records Records DMS - 190M TALX – 159M (Demographic Behavior) (Employment Income) 10 Equifax Confidential and Proprietary
Slide 11: Leading, Proprietary, & Integrated Capabilities
Leading, Proprietary, & Integrated Capabilities Proprietary Analytics Analytics & & Enabling Enabling Technologies Technologies Customer segments Problem- solution maps Banks Credit Telco Mortgage Auto Unions Inter- Decision APPRO Enabling eID Database Connect Power Loan Services Technologies Origin
Slide 12: Serving Customers in Diverse Industries
Serving Customers in Diverse Industries Customer Centric Decision Decision Insurance 1% Other 3% Healthcare 1% Government 4% Marketing Services (other) 5% Financial 31% Telco 5% Auto 6% Human Resources 7% Retail 7% Mortgage 13% Commercial 7% Consumer 10% 12 Equifax Confidential and Proprietary
Slide 13: A Resilient Growth Strategy
A Resilient Growth Strategy Increase Enabling Greater Invest in data Technologies & Target emerging share-of-wallet sources Predictive Sciences opportunities and penetration that differentiate penetration •Customer intimacy •Deploy enhanced •Robust commercial •Equifax Growth decision systems and dat
Slide 14: USCIS Delivers Insights to Identify Opportunities
USCIS Delivers Insights to Identify Opportunities Lost opportunity analysis Customer base insights Product vector analysis and benchmarking Adjustable Rate Mortgage exposure analysis Number of Credit Bank Best Group Mean Relationships Percent of Customer Balances with 1st mortgage 1 91.19% 86.85% AR
Slide 15: Bankcard Customers (example)
Bankcard Customers (example) Wachovia Bankcard Consumers Wachovia Bankcard Consumers %Consumers with Score Declines of 20+ Points % of Consumers with Utilization Increases 20%+ 9.0% 4.5% 7.8% 4.0% 8.0% 4.0% - % o f B a se lin e P o p u la tio n - - % o f B a s e lin e P o p u la t io n - 7.0% 3.5% 5
Slide 16: InterConnect Platform – Application Process
InterConnect Platform – Application Process 16 Equifax Confidential and Proprietary
Slide 17: Solutions Further Strengthen Customer Relationships
Solutions Further Strengthen Customer Relationships Percent of core online volume through Enabling Technologies 50% • Enabling Technologies 43% drives core 40% volume growth, 35% 29% 30% • Strengthens 23% client 19% relationships, 20% 14% • Focuses on 10% Strategic and 3% 3% Mid-Market 0% penetratio
Slide 18: TALX Manages the Exchange of Data
TALX Manages the Exchange of Data TALX Core Business Model Customers Employers Mortgage Bankers & Brokers Pre-Employment Screeners The Work Number Database Social Services ~166 million Consumer Lenders ~9,000 Equifax Business Model Financial Customers Institutions / Banks Mortgage Bankers & Brokers
Slide 19: Leveraging The Work Number Service
Leveraging The Work Number Service 23M Adds 180 160 140 (millions of records) 120 100 80 60 40 20 0 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 19 Equifax Confidential and Proprietary
Slide 20: NA Commercial Serves Top Industry Players
NA Commercial Serves Top Industry Players U.S. Financial Institution Customers U.S. Telco & Utility Customers Within Top 30 Small Business Card Within Top 7 Telco’s & Issuers & Top 50 Visa & MC 5 Major Utilities… Commercial Issuers… …we capture over 95% …we capture over 98% of credit card trade-line
Slide 21: Our Solutions Meet Multiple Customer Needs
Our Solutions Meet Multiple Customer Needs Customer business needs Win new Retain existing Grow existing customers customers customers Limit risk from customers and suppliers & reduce costs Equifax solutions Marketing services Master data management services Risk decision and portfolio management se
Slide 22: Many Companies Need Critical Data Intelligence
Many Companies Need Critical Data Intelligence Companies need to merge, reconcile …into useful views of the & translate their own data… real-world Customer Product-line segmentation profitability …spread-out across multiple information systems… Factory Etc. efficiency Master Master Data Data Managem
Slide 23: Foundation for Growth in Personal Solutions
Foundation for Growth in Personal Solutions (Percentage of Revenue) 31% 40% Transaction 54% Q1 Strategic Strategic % Refocus Execution 69% 60% Subscription 46% 1H06 2H06 FY 2007 $200 Revenue 25% Operating Margin ($ millions) (%) 20% $150 15% $100 22% $154 10% $115 $126 15% $50 12% 5% $0 0% 2005 2006
Slide 24: Three Levers Will Drive Sustainable Growth
Three Levers Will Drive Sustainable Growth Acquisition Share-of-Wallet Retention • Optimize ROMS • Drive subscription • Enhanced customer upgrades loyalty • Enrich segments • Drive multi-product • Optimize contact • Optimize buyers strategy Equifax.com • Optimize pricing • Save based upon • Scale Ca
Slide 25: International Has a Strong Bureau Franchise
International Has a Strong Bureau Franchise CANADA UNITED KINGDOM Consumer #1 Consumer #2 Commercial #3 IBERIA Spain Consumer #1 Portugal Consumer #1 ANDEAN REGION • Peru #1 • Uruguay #1 • El Salvador #1 BRAZIL • Honduras #1 Commercial #2 • Ecuador #1 Consumer #3 CHILE #1 ARGENTINA #1 12 countries w
Slide 26: Growth Will Come Through Four Initiatives
Growth Will Come Through Four Initiatives “Corporate “Local Execution” “Innovation” Development” Core and Product New Business Core Initiatives Transfer Adjacencies Diversification Overview Overview Overview • Over-achievement in • Transfer best-in-class • New ideas drive • Diversify International c
Slide 27: International Consistently Delivers Growth & Performance
International Consistently Delivers Growth & Performance Revenue in Constant $ Operating Margin $200 40.0% $150 30.0% $100 20.0% $50 10.0% $0 0.0% 2005 2006 2007 2005 2006 2007 Europe Canada Latin America Europe Canada Latin America Latin Europe Canada America 2 Year 8.4% 2.4% 12.0% CAGR 27 Equifax
Slide 28: Multi-Year Objectives
Strategy Delivers Performance Across Cycles 2008–2010 Planning Period 1-2% 8-11% 3-4% 9 Cash EPS growth 11 – 14% Multi-Year Objectives Revenue CAGR (Est.) 9 High, sustainable 4-6% Operating Margins 27 – 28% Market Core Adjacencies/ Total Organic Organic M&A Growth Initiatives 28 Equifax Confidential
Slide 29: With an Attractive and Diversified Business Mix
With an Attractive and Diversified Business Mix Long Term Operating Q1 2008 Growth Margin Revenue Target Target Mix US Consumer Information 4-7% ~40% 46% Solutions International 9-11% ~30% 26% TALX 14-17% 20-25% 16% NA Personal 15-20% 20-25% 9% Solutions NA Commercial 25-35% Expanding 3% Solutions 2
Slide 30: Guidance for 2008
Guidance for 2008 Full Year 2008 Revenue 9-12% Growth from 2007 EBITDA $675-$710 Million Adjusted EPS $2.48-$2.58 Capital $125-$150 Million Expenditures 30 Equifax Confidential and Proprietary
Slide 31: 2008 Priorities
2008 Priorities • Execute growth plans • Double NPI revenue • Deliver margin improvement in USCIS starting in Q1, 2008 • Expand global footprint 31 Equifax Confidential and Proprietary
Slide 32: Strong, Consistent Financial Performance
Strong, Consistent Financial Performance Revenue ($M) Adjusted EPS $2.32 11.0% CAGR $1,843 8.5% CAGR $2.17 $2.01 $1,546 $1,443 $1.79 $1.70 $1,211 $1,273 $1.54 $1,095 2002 2003 2004 2005 2006 2007 2002 2003 2004 2005 2006 2007 Cash from Operations ($M) Capital Returned via Share Repurchase $450 $718
Slide 33: And a Commitment to Deliver
And a Commitment to Deliver • Proven business strategy • Powerful business model with opportunities for cross business synergies • Unique product solutions driven by unique data, analytics and Enabling Technologies • Strong franchise with excellent reputation • Highly recurring, transaction-based re
Slide 34: Questions & Answers
Questions & Answers Equifax Confidential and Proprietary Equifax Confidential and Proprietary