Brian Cassin – Chief Executive Officer Lloyd Pitchford – Chief Financial Officer Peg Smith – Executive Vice President, Investor Relations

Brett Huff – Stephens Rajesh Kumar – HSBC Andrew Farnell – Morgan Stanley Paul Sullivan – Barclays Robert Plant – JPMorgan Joel Spungin – Merrill Lynch Giasone Salati – Macquarie David Phillips – Redburn Ed Steele – Citi Andy Grobler – Credit Suisse George Gregory – Exane

A very good day, ladies and gentlemen, and welcome to the Experian third-quarter trading update conference call. [Operator Instructions]. And now I would like to hand over to your host for today, Brian Cassin, Chief Executive Officer. Please go ahead.

Thank you and good morning, ladies and gentlemen, and thanks for joining our Q3 trading-update call. I’m here with Lloyd Pitchford, who’ll take you through the trading performance, following my opening comments. And we’ll then open the lines for your questions. So, we delivered a solid performance in Q3 with organic growth of 4%, and with continued momentum across the business. Our underlying performance was impacted by a tough comparator in the prior year in North America ECS. But, despite that, we delivered mid-single digit organic growth consistent with our guidance. Credit services, decision analytics and core marketing services businesses delivered mid-single digit growth or better in the quarter. And our strategy of combining data, software, and analytics capabilities continues to make a difference to our performance. We are continuing to invest to sustain good, organic growth, reflected in the number of new products introduced every quarter which, in many cases, combine capabilities from multiple business units. And we’re making progress on the new products that we introduced to you in November, including digital prescreen and decision as a service. And these are big opportunities to provide a long runway for strong growth in the future. And we believe that our investments in innovation are laying a strong foundation for the future growth of the business. And you’re going to see, continue to see us to bring new solutions to the market. In consumer services we’re transforming our business, diversifying our revenue streams, and reducing our dependence on the paid-membership model. New products coming on-stream will see us build a lead- generation business with our Right Offer and Credit Matcher products. That will change through our new model; create new partnerships and develop higher levels of consumer engagement, all aimed at building a bigger and stronger business in the future. In the US, these efforts over the last few years have returned the business to flat year-on-year performance in underlying terms. And we’re also moving quickly in the UK business with similar changes. And since launching Right Offer, our US lead- generation platform which we introduced to you in November, the focus has been on optimizing the performance of the platform. And it is performing well. Early results from this are giving us confidence that Right Offer creates greater value for consumers and lenders by taking friction out of the process. We’re matching consumers with the best prequalified-credit offers, which is producing higher response rates and better conversion for lenders. And we’re now adding more lenders and directing more consumer traffic platform to enable us to generate meaningful progress as we go through FY18. Now, before I turn the call over to Lloyd, let me touch on a recent development that will benefit our business in Brazil. After nearly four years of severe recession the macro- environment in Brazil has largely stabilized. And the Central Government is now taking action to stimulate economic development. As some of you may have picked up from the Brazilian press, one of the legislative proposals introduced last month would accelerate the collection and use of positive data, in an effort to expand access to affordable credit. The amendment would eliminate the need for consumers to opt-in and instead provide a mechanism for consumers to opt-out of positive data. Now, should this new law be approved, and we will review the final language and assess the impact on our business, we would view this as a big change that’s better for consumers, lenders, the economy and, of course, our business in Brazil. We’re deploying our resources to scale up the build-out of positive data and accelerate our product development. As Brazil gradually moves towards economic recovery, we intend to be gearing up to be first in market with the most comprehensive data and products, which combine positive data from 70 million consumers with Serasa’s superior negative data to create the best value for our clients. So, with that, let me turn the call over to Lloyd who’ll take you through the trading performance.

Thank you, Brian, and good morning everyone. As you’ve seen from the announcement, we’ve continued to make good progress in the third quarter with total revenue growth at constant exchange rates of 6%, benefiting from the first full quarter of inclusion of CSIdentity. Organic revenue growth was 4%. And you’ll recall that we had significant one-off revenue in the prior year, which added #% to Group organic growth and 2% to North America organic growth, in the third quarter of last year. Adjusting for this prior-year effect, organic growth this quarter was 5%, continuing the consistent performance we’ve delivered in each quarter this year. Exchange rates represented a 2% headwind to revenue in the quarter, as sterling weakness more than offset the recovery in the Brazilian real, with total revenue growth at actual exchange rates of 4%. Turning to the performance by region and beginning with North America, where total revenue growth was 7% and organic revenue growth was 3%. Credit services delivered organic growth of 8%. And marketing services grew 4% organically. Decision analytics; organic revenue was down 3% whilst, as anticipated, consumer services organic revenue was 5% lower. In credit services we saw good growth across all areas against a very strong prior-year comparable. Decision analytics declined modestly, reflecting the lumpy nature of the business. And new business wins should contribute to growth in the future quarters. In marketing services we delivered good growth in our targeting business, while cross- channel marketing delivered record-high email volumes through the holiday season. In consumer services we continue to diversify our model and develop our products to monetize our increasing membership base. Last year we on-boarded a large Affinity partner which included a significant one-off component. Revenue declined in the quarter as we lapped this comparable. And, excluding the one-off element, organic revenue growth was flat. Moving on to Latin America. At constant exchange rates, organic-revenue growth was 8%. All segments grew in the quarter with organic-revenue growth of 4% in credit services, 48% in decision analytics, and 55% in marketing services. Brazil continued to be resilient and grew at 6% during the quarter with a good performance in the core bureau. In credit services, growth in Brazil benefited from continued strength in countercyclical products and increased sales of data and analytics to large banks and retailers. Our bureau in Spanish Latin America also delivered a strong contribution in the quarter. Growth in decision analytics reflected new contract wins and strong demand across a variety of products, particularly analytics and scoring. And in marketing services there was a strong contribution from data-quality services and targeting. Turning to the UK, our organic-revenue growth was 2% at constant exchange rates, with growth in our B2B operations offsetting the expected decline in consumer services. Organic revenue growth was 5% in credit services and 12% in decision analytics, with marketing services also contributing positively at 3%. Consumer services was 12% lower as we continue to focus on growing the free membership base. In credit services, we saw strengthening credit-reference volumes and credit-prequalification services across the banking, telecoms, and utilities verticals. And, as expected, decision analytics rebounded, driven by strong take-up of our PowerCurve software and analytics products. There were also contributions from new contract wins in fraud and identity services. In marketing services, we saw good demand for digital marketing. And in consumer services we’re executing our product plans. And the reaction to our free score offer has been positive since launch in September 2016. We’ve now attracted over 1 million free members and seen good levels of consumer engagements. Our Credit Matcher price-comparison services gained traction. And, whilst it’s early days, the initial results are encouraging. And finally, in EMEA, Asia Pacific, where at constant exchange rates organic-revenue growth was 6%. Decision analytics delivered another strong performance, up 13%, as did marketing services, which was up 10%, offsetting credit services, which was 3% lower. We’re making excellent progress in decision analytics with new client wins reflecting strong demand for credit-decisioning software and fraud-prevention services. In marketing services, we delivered growth across cross-channel marketing, targeting, and data-quality services. And these strong performances offset some softness in credit services. So, that summarizes the performance in Q3. As we look ahead we continue to expect organic-revenue growth to be in the mid-single digit range for the year with stable margins at constant currency. Currency movements continue to be volatile. And if current rates prevail to the end of the financial year, this would result in an FX drag of 1% of the EBIT level, but with a small margin tailwind. And as you’ve seen in the announcement, we’ve made really good progress on our share- buyback program over the last quarter and are now over 80% through this years’ program. So, in summary, barring movements in foreign exchange, our expectations for the full year are unchanged from the guidance that we issued at the half year. And, with that, let me hand it back to Brian.

Thanks, Lloyd. So, to summarize our comments this morning, Q3 was another solid quarter. And our business is a diversified global portfolio and the strategic actions we’ve taken over the last few years have strengthened the portfolio. And we are beginning to capitalize on the significant synergies between our business lines. We’ve delivered good global performance which demonstrates the resilience of our business model. And we remain focused on executing against our strategy to continue to drive the business forward. Now we’ll open the line for your questions, for which we’ll be joined by Peg and Nadia from the IR team. Operator, can we please go ahead?

Thank you. [Operator Instructions] Your first questions comes from the line of Brett Huff, Stephens. Please go ahead, you are live in the call.

Good morning. Thanks for taking my question. I wanted to dig in a little bit on the Brazilian news. Can you give us the timeline on when we’ll know whether this proposed rule, or the proposed amendment, actually takes effect or not? As I understand it, it’s proposed, and if there’s no objections then it rolls into law. And when does that happen? And can you quantify for us maybe a little bit more, if you could, how much larger the addressable market becomes as a result of that positive data? If you could give us some sort of parameters on that. Thanks.

Sure. Thanks Brett. So, it’s a provisional measure which goes – which is to be put forward in front of congress, but that actually should happen relatively quickly. I think the maximum time period for that is about 120 days. So, we’ll know relatively quickly, whether this is going to be passed into law. I think the second factor behind that is actually not just the change in legislation from opt-in to opt-out, but actually what provisions they put around that, which determine what furnishers of data have to do and by when. So, we might get the law enacted quickly, but we have to see the detail about how quickly that means people have to act, to furnish data to file. That said, I think that the impression that we have is that the government wants to get on with this. And it sees this as a key measure in really driving some changes in the Brazilian economy. And obviously it sees it as a way of expanding access to credit. So, I think we’re optimistic that this won’t be a long-burn timetable; really a matter of months before we can get into an operational positive-data environment. So, then I think we have to move on to that the set of operational consequences of that. Obviously we have been collecting our own opt-ins and we’ve had some success with that with around up to just over 5 million opt-ins today. So, we’re in a position where we can actually ingest and put positive data to file already. That has to be tested at scale. There’s a big difference between 5 million and 70 million records and all the data that goes with that. But we’re not anticipating that from an operational perspective we have to do a hell of a lot to really get to the point where we can make a big positive-data file work. So, all of that summed up is really months, and certainly not years. And then once we’re up and running we can get out to market with products as quickly as possible. That’s our intention. We’ve already been testing some of the positive data that we have on file with products that we’ve put in front on a trial basis. So – and obviously we know what we’re doing here and our intention is to be out there as quickly as possible. I’m going to ask Peg just to comment on the set of just the macro point about the size of the credit market in positive data versus negative data.

Yes. I think that, Brett, your question is really dead on with the planning that we have underway. There’s two things that are going to work in parallel here. Obviously one is economic recovery. And the other is positive data, because positive data in and of itself won’t drive growth, until you begin to see the economy itself pick up. So, as we look at it today, we have a much more crowded market in Brazil than we did when this law went into effect four years ago, whether it’s GIC or Boa Vista or anyone else in this space. What we’re sensitive to is that we combine negative and positive data and put the highest-value products in front of our clients. What that says to us is don’t look for a lot on price. Look instead for expanded opportunity on greater lending. And that’s where the two, the economy and the use of positive data, will work hand-in-hand. So, sizing is yet to be determined, but those are the factors we’re looking at that will drive that.

Great. That’s really good. Thanks for your time this morning.

Sure. Thanks, Brett.

Thanks, Brett.

Thank you. Your next question comes from the line of Rajesh Kumar, HSBC. Please proceed. You’re live in the call.

Hi. Good morning. It’s Rajesh Kumar from HSBC. Just following up on that Brazilian issue, clearly it is a constructive move from the government. They’re making the whole process easier to opt-in. As you pointed out, it’s a more crowded marketplace than before. What your assessment is how competitors such as Boa Vista and GIC will respond to that? Looking at the wording of the law proposed, clearly there is desire to put you on, and Boa Vista on, an even playing field with GIC. So, do you think it’s a race to build a database first, now?

Yes. I think, Rajesh, that you probably haven’t seen the language in the law because they’re still drafting it. What you’re seeing are proposed and media coverage of language. And, yes, on the positive data I think what the government’s aiming to do is get this data out there and used by the industry as a whole to really facilitate lending. That said, it is really important for investors to understand that Serasa has now a competitive advantage on negative data. You need both to actually have an informed decision on credit lending. And it is our intent to continue to have both positive and negative data at a superior level to anybody in the market. So, I think it’ll be accessible to all. I do believe, we strongly believe, Serasa has a leading edge right now because we’re up and operational. And we have been the player in the market collecting opt-ins actively. So, we have had about a two year lead time. Others will have to get ready for it.

And I think, just adding to that, the big question that was leveled at us during the past 12 months was, would GIC have a competitive advantage over Serasa because it might be able to get access to positive data immediately? I think that we can now lance that notion entirely. In fact, GIC, from a technology perspective, as they say it themselves, are not ready yet. So, what this does actually is turn that table around. So, I think a combination of the competition authorities and this move by the government is, I think, a fairly clear signal that they view an independent-bureaus sector as incredibly important to the development of credit in Brazil. And I think all of that bodes well for our business in future in addition to the points that Peg made.

Thanks for the detailed clarification. I just wanted to ask you what your read is about what Boa Vista and GIC might do in response to this change because clearly it would be stupid not to invest for Boa Vista in the market at this point. And they also have a credit bureau standing next to you.

Well, I mean, so you’re right. There are – in every bureau market we operate their competitors. Those competitors plan their business just like we do. So, I don’t know what Boa Vista or GIC will be doing. The positive data won’t be exclusive to Serasa. It will be made available to other bureaus too. But it puts them – it doesn’t change the position with respect to Serasa’s market position or superiority on the negative file. I can’t see any factor around this with respect to Boa Vista that changes the dynamic very significantly. And, as to what GIC does, I really don’t know. We haven’t heard anything from them. They’ve obviously got some time to go before they have the technological capability to get in market place. I think the other point to say is that from a market perspective Boa Vista is a local Brazilian operator. They don’t have anything like the global expertise, knowledge, or products that we have. And we are bringing all of our global expertise to bear in the Brazilian market place with respect to building out positive-data products. So, all in all I think this is very good news for us, and I think this puts us in a much better position.

Isn’t Boa Vista partnered with Equifax?

Equifax has a small stake in Boa Vista. It has a very complicated ownership structure. So, that’s – I mean, it’s not a fully-owned subsidiary of Equifax.

I’m sorry. I didn’t follow the negative-data point fully. Is negative data a subset of the positive data?

Peg, do you want to?

Yes. They are actually being used in Brazil as two separate files; a negative-data file and a positive-data file. So, it’s not the same data structure as you would see in the U.S. and UK, which means that the demonstrated value of what we own today in Brazil will still be there in the market; a very, very strong and comprehensive set of negative database. Hard to replicate that.

Thank you.

Thank you. Your next question comes from the line of Andrew Farnell, Morgan Stanley. Please proceed.

Good morning guys. Just on consumer services, I was just wondering, in terms of the path to recovery in the UK, do you think this will be determined by how much you’re willing to spend on advertising? Or is there genuine differences that you see between your product offering and the alternatives in the market?

Hi Andrew. So, I mean, to a certain extent – I mean, but I think you’ve got to remember that we actually spend a lot on advertising today, as well. So, it’s actually more a question of what do you direct that advertising towards? Do you direct that advertising towards trying to build a subscription product? Or do you direct that advertising towards building a larger free-membership base from which you can up-sell and also generate lead generation – revenues from lead generation? In fact, if you look at the advertising in the UK most recently, you’ll see that actually most of it is directing consumers to take up a free proposition. That’s actually been very successful. I think, as Lloyd referenced, we’re over 1 million customers in just over three months. So, quite a significant, I think, response, to that. Now, the monetization of that actually comes in two formats. One, we’re up-selling people from the free product into the full paid-for membership. We’re also generating leads – generating revenues off the Credit Matcher program. So, really, the diversification of revenue stream comes in two parts, really. First of all, developing scale in those lead-generation revenues. And, secondly, launching the identity features onto the premium service. Both of those initiatives will be fully ready to go in FY 2018 and the same story in the UK. And that’s the job that we have to do, to really get to where we want to get to. And I think that the other factor, as we think about the U.S. business, is the CSID acquisition is going to help significantly on the Affinity side. And, of course, that business is going to give us some growth as well, as well as the features that we need on the premium product. So, yes, you’re always going to have to market behind these propositions. But that’s something that we’ve always done.

I see. But you don’t really – you don’t expect a material step up relative to where you’ve been historically? There’s no, you think you have to put more spend behind it to make these products more successful, now that there’s a bit more competition in the market?

As I said, I think it’s a question about where we direct our spending to. The advertising spend, the level of marketing that you need, is always something which is fairly dynamic. So, at a future point in time, we may decide that we want to do that. But I think we will – that will probably be a very encouraging sign, based on if we’re getting very positive response and we see an opportunity to really go after that, then I think we might take a different view.

I think it depends a little on time horizons, as well, Andrew. If you look at what’s happened in the U.S. over the last three years we’ve actually reduced our advertising spend. And part of the technology upgrade that we’ve talked you through means that we can identify flows of customers much more specifically and we get more bang for our marketing dollar. So, more online search, a little bit less in terms of online – on TV advertising, et cetera, which makes it more effective.

Okay, thank you. And just on those products you’ve talked about, so Right Offer and Credit Matcher, can you just give us a sense of when you expect to meaningfully increase that offering to customers? And then I think you talked at H1 about leveraging your relationships you’ve – which you’ve got with the banks and card providers. Just, in terms of the new entrants, are they able to leverage those same relationships, or is that something that’s unique to you?

Well, they’re slightly different, so I’ll take them in turn. I mean, Right Offer, when we talk about leveraging the relationships with the financial institutions, what that essentially means is that we can develop a platform which has very specific, in essence, sort of lending criteria from those institutions which enables us to put a superior proposition in front of consumers. So, in other words, I think we explained this in November, consumers will actually be presented with offers that they’re qualified for. Today in the market place in the U.S. that doesn’t happen. They’re presented with offers which they might be qualified for, but in many – certainly not all, but in many cases when they go through the next steps in the application process they find that, in fact, the product is not available to them at the rate advertised. And, therefore, they sometimes get a substituted product or not a product at all. It’s a pretty negative consumer experience and it’s imprecise. It’s imprecise for consumer and for the institutions. So, what we’ve seen from the banks, is a real support in our efforts with Right Offer in making available a wide range of their products on the platform and encouraging us to really develop this as a channel. And I think that’s also demonstrated by the fact that we are in discussions with all of these institutions to actually make the Right Offer capability available to them on their own platform. So, for us, this is both a direct consumer play and it’s a, call it an Affinity play, if you like. So, I think that’s a demonstration of the sort of support that we’re getting. Of course, we have to make the public aware that there’s a better proposition out there. So, that’s part of what we’ll be planning into FY 2018. But it is a big change. And it is no doubt, I mean, a much better proposition. In the UK, Credit Matcher is already in market and is generate – it’s starting to generate some meaningful revenues off that platform. Again, very big support from the financial institutions, the relationships they have. Everybody’s interested in actually making the consumer experience better and getting the right products in front of them. Important distinction for us is that we don’t push products based on the highest commission to Experian. We push products based on the highest or the most suitable product for that consumer. And that’s really where our access to bank-lending data and our own information really comes into play. So, it’s a much more, excuse me, tailored experience. I think the extent to which we can scale those revenues, we have to see that as we go through FY 2018. Obviously, the markets in both cases are very, very, large. There are plenty of players out there. It’s not as if there isn’t available revenue to go for. It’s really down to how quickly and how well we execute, going forward. That obviously has to sort of be a key plank for the business, going forward. And we’ve got to judge that relative to the spending on the membership product as well. So, all of that we calibrate, as carefully as we can.

Okay. That’s really helpful. Thank you.

Thank you. Your next question comes from the line of Paul Sullivan, Barclays. Please proceed.

Yes. Morning everybody. It’s just a few from me. Firstly, in the U.S., on the credit-services side of the business, I mean, we’re seeing growth gently slow there. Is it – would it be right to expect that growth to continue to slow as we progress through the fourth quarter and into next year? And what are your thoughts on the tough comps and the challenges in the U.S. mortgage market, going forward? And any further thoughts on the situation in healthcare and whether uncertainty delays some of the uptake in product offerings there? And that’s the first question. And then just sort of adjacent to that on trended data. I mean, the U.S. guys keep making a big fuss of this. You don’t. You don’t really mention it much at all. Can you just maybe just clarify the differences between what they’re saying and what you’re saying there? Thank you.

Okay Paul. It’s Lloyd. So, I think on credit services, probably the best thing to point to is the trends we saw in the prior year. We saw the core bureau grow at 11% in the second half of last year. And so the softening of growth as we go into the second half this year is really a reflection of that step up in growth and the tough comps that we had in the prior year. So, I’d expect something around this level, as we go through Q4. Q4 is slightly tougher comps. But we’ll see from there the trends continue to be fairly positive as we look at the economy. In terms of mortgage, as you know, mortgage makes up a small part of our business. It’s about 7% of credit services and North America overall, so much less material for us than it is for some of our competitors. So obviously we’re watching the flows there quite carefully, but not expected to really move the overall number in credit services for us. On health, the area that we’re in, again as compared to some of our competitors in revenue cycle management, we don’t expect some of the regulatory uncertainty to really have that much of an impact. We’re certainly not seeing it so far. And the trends of mid-teen revenue growth continue as we increase the number of the products that we sell into individual hospitals and increase the total contract value that we’ve got with each of the areas. On trended data, I’ll maybe pass over to Peg to give an update on that.

Yes, Paul. On trended data, you remember that we had to move our product from the – purely a batched product over into our online system so people could access it one record at a time. That has been accomplished. It was actually released to the market back in October. So now in terms of the Fannie Mae opportunity – remember that all the noise in the market really today is about one contract. It’s Fannie Mae. And our product’s ready when they’re ready to accept our data. We don’t, at this point in time, have an indication from them on when they’ll put Experian into the next release of their software, but the product is certainly there for them to access.

And if they do decide, that would be a reasonably – a reasonable revenue opportunity for you, if they do decide to take on board your data?

Yes. The background on this of course is that it is a three-bureau market for mortgage in the U.S. Fannie Mae requires that all three credit bureau reports are pulled on every applicant, so the impact in terms of size of opportunity is the same for each of the three players in the market. When our product is incorporated, that portion of the lift that you’ve seen that the other two have already had benefit from, will also come over to Experian.

Great. That’s very clear. Thank you.

Thank you. Your next question comes from the line of Robert Plant, JPMorgan. Please proceed.

Morning, Lloyd and Brian. Two questions, please. In North America, decision analytics had a 3% decline, but the commentary looks quite positive. How quickly do you think that goes back to growth? And then in the UK consumer services, at the time of the H1 you said that the peak decline probably wouldn’t be as bad as the 14% that happened in the U.S., and it was minus 12%. Do you still think that’s the case? Thank you.

Yes. Maybe start with the peak decline. That was an annual decline. I think we had a peak quarter at 18% for North America consumer services. So I think you can see that the rate of decline has slowed a little. We were 1% in Q1, 8% in Q2, 12% in Q3. So as we go through Q4, Q1, really start monetizing some of the – this 1 million-plus free members that we’ve got, I think you’d expect to see that moderate some and we’ll see how we go from there. On the decision analytics, I think we said in the past, Robert, this can be a little bit lumpy and dependent on whether some contracts land. Sometimes they land at the end of a quarter, sometimes they land at the beginning of the following quarter. I’d expect that to be back into positive territory in Q4. The one drag that we’ve got is you’ll remember that we had the contract to me some of the issues with T-Mobile in decision analytics in North America. They’ve – after taking some time to prepare the ground to move to another supplier, they’ve now done that. So we’d expect that to drag a little as we go through into third quarter next year, but that shouldn’t stop us being back in positive territory in Q4.

Okay. Thanks, Lloyd.

Thank you. Your next question comes from the line of Joel Spungin, Merrill Lynch. Please proceed.

Morning. It’s Joel Spungin from Merrill Lynch, not Spuntin. But anyway, just – I’ve got three questions. If I could start just quickly on Brazil, just going back to some of the things you were discussing earlier, can you just clarify for us in terms of the Brazil credit services’ revenue how much of it relates to consumer information as opposed to business information? Maybe we’ll just start there.

Sure. Lloyd?

Yes, so a little bit more from business information than consumer information, but broadly 50/50 I would say.

Okay, so – okay, fine. That’s clear. Thank you. And then just moving onto a completely different subject, marketing services, obviously you had a pretty decent quarter in terms of organic growth and I think it also had a good quarter in Q2 as well. Obviously part of that business is currently up for sale. Can you give us a sense of whether or not there is any difference in the organic performance of the bit you’re keeping as opposed to the bit that’s going out the door?

Yes. Well, the bit we’re keeping is performing extremely well. We’re glad to say. And CCM’s improving, but it’s not some – it’s not at the growth rates that we’re seeing and targeting in data quality. I think we can’t quit when it was we spoke to you about the opportunities that we saw on target and data quality, and obviously that was a large part of the reason on our thinking about how that portfolio should be reshaped in terms of the opportunities that we could get behind. But both of those businesses are growing, certainly in the U.S., high-single digit. Good performance in the UK as well. And we have seen sequential improvement in CCM and obviously that’s part of the whole proposition to – as currently the business is up for sale. So we’ll see how that progresses, but I think we’re pretty happy with how things have moved in marketing services.

Okay. So it’s fair to say that the bits you’re keeping probably actually did a bit better than the overall marketing services’ organic growth rate that you reported?

That’s right, yes.

Yes.

Definitely, okay, okay. Okay, thank you. That’s helpful. Then just finally, just to finish off, on the buyback, I just wanted to understand, I mean obviously, you really stepped on the accelerator in this quarter with regard to the rate of buyback. If I remember back to what you were saying at the half year when you’d only done $80-odd million or whatever it was, you said you were sort of going to be judicious in how you went around doing the buyback. And obviously the share price is higher now than it was, on average, in the first half and you’ve done a lot more. So I mean what is your thinking? I guess you’re just going to finish it off now, but should we just assume, going forward, that if there’s any further buybacks it will be more linear? Was there something unusual in the first half, which meant that you didn’t do anywhere near as much? I’m just trying to get a sense of what was going on there.

Yes I think – when you think about executing our program over a year, markets are quite volatile, and clearly we choose our timing quite carefully. So we’ve had, I would say, six quite intense buying weeks this year so far. The two to three weeks in the run-up to the Brexit vote, when there was a lot of weakness in the market, we bought, and in the three or four weeks post the U.S. election when there was a lot of weakness in the market. So our average buying price for the $324 million we’ve done so far is £14.22, so you can see we’ve been quite focused in how we transact the program. So we expect to finish up the other just shy of 20% before the end of the year.

Okay. And just finally, to finish on that point, if we think about where you’re going to be in terms of leverage by the end of the financial year and given I guess we might get some sort of finalization of the sale of some of the marketing services’ businesses, I guess you’ll review the share buyback program for the new financial year as and when we get there, given where we will end up?

Yes, that’s right. And we always look ahead for the year ahead in our May results and really look at what is our deal flow in terms of M&A and cash expectations. And then we’ll decide what to do with the buyback. But we said consistently I think we expect to be at a level of free cash flow where we expect the buyback to be a continual part of our allocation.

Super. Thank you very much, both. Cheers.

Thank you.

Thank you, Joel. Your next question comes from the line of Giasone Salati, Macquarie. Please proceed.

Hi, good morning. It’s Giasone Salati from Macquarie. Two questions just on a couple of details. In North America, have you quantified the sort of one-off from Affinity contract in the previous year? Just so we have an understanding of the underlying rate in North America. And for UK consumer services, following what – the comments you made on trough rate and stuff, I think you’re implying that this could actually be the trough quarter in this segment. Is that correct?

So I’ll start with UK consumer. No, we don’t expect the trend of decline to continue, but perhaps shallowing a bit. So from minus 12% in Q3 would expect about to get a little bit worse in Q4 and then we’ll see as the products gain traction exactly where that bottoms out. On the prior year comparative, in Q3 last year it was somewhere between $11 million and $12 million added 1% to Group growth, 2% in North America growth and 5% to North America consumer growth in the third quarter last year. So if you adjust those numbers back, then you’ll see that Group growth this year moves from 4% to 5%, North America growth moves from 3% to 5% and consumer services North America moves from 5% declined to flat. So very consistent with the growth when you adjusted for that that we’ve really been in for the last four quarters.

That’s very clear. Thank you very much.

Thanks.

Thank you. Your next question comes from the line of Thomas Sykes. Please proceed.

Yes. Morning, everybody. Just a follow-up on the questions on the U.S. and what the split in where you’re getting the growth means for operational gearing in the business. So if you’re growing at sort of mid-teens in the passport business, are you actually getting operational gearing on the passport business itself, and then – given the amount of implementations that you’ve got at the moment? And then what does that – what does the mix of revenue growth there do to the weighted average margin for you? And then if you are growing at mid-teens in passport, then the rest of the U.S. credit services business is probably around about 6%/7% or so. Can you still get reasonable operational gearing on 6%/7% growth there, please?

Yes. So if you look across North America, this year we’re seeing positive margin progression. You saw when we talked a little bit about that at the half year. At a Group level, obviously we’ve been investing in some of our other strategic initiatives, so the move particularly in Brazil to Sao Carlos and the launch of the free products that we’ve had across both the U.S., the UK and Brazil. So that’s all part of our mix of how we get back to flat margins. But in this year, North America, overall positive margin progression.

Right. But when you’re looking at this, is that margin progression coming from operational gearing in non-passport business or is the growth out of passport also margin accretive?

Passport is margin accretive now to the Group.

Right, okay. And if the…

To the Group, obviously North America has quite a high margin, so I would say it’s neutral at the North America level.

Neutral to North America but positive to the Group. Okay. And – but just if the non-passport business – it feels like the non-passport business is a little bit slower than maybe where we were over the summer. And I totally understand the comps and the two-year gross effect, et cetera, but is the – but you had a reasonable amount of operational gearing that you decided to reinvest in other areas. That’s obviously fine, but I’m just trying to gage whether you’re going to have the same benefit going forward if you just continue to sequentially grow at the current rates you’re at. Do you think you’re probably likely to see, say over the next 12 months, a little bit less operational gearing out of that business?

I think – maybe I’ll answer in a different way. Our focus in passport isn’t to grow the margin. It’s to – we see this as a really high-growth opportunity, so to develop the product set and to really increase penetration. So in a year, it might be that we’re progressing the margin but that’s really not our focus in that business. It’s about penetrating and improving the topline. I think when you take it back to a North America or a portfolio Group level, there are lots of moving parts and it depends on the mix of growth and where we’re putting the investment. But our – that’s really all covered in our flat margin guidance. So, sorry to be not very specific on it, but there are lots of moving parts and that’s what we manage to with our flat margin guidance.

Yes. No, that’s fine. I’ll leave it there. Thank you.

Great.

Thank you. Your next question comes from the line of David Phillips, Redburn. Please proceed.

Hi. Good morning, everyone. I’ve got a couple of rather quite quick ones. On the 1 million free signups in the UK, is that including anything you’ve signed up to, the likes of Barclaycard, or is that exclusively, comes free to you as a brand?

It’s exclusive, so it just comes through on our platform.

Great. So that’s a bigger number than I thought. And within decision analytics, is it possible to give some sort of guidance on how 41st Parameter has performed in the last few quarters?

Well, we don’t break it out, but it is actually performing well. You recall last year we talked to you about something called CrossCore, which is the sort of fraud platform that we introduced in market. And we’re seeing quite a lot of traction with that. 41st Parameter is essentially a key component of that platform. So right now it’s getting harder and harder to distinguish individual products on our fraud sweep because we’re tending to bundle them together. But 41st Parameter has performed well over the last year.

And CrossCore itself, is it possible to put a number on how that’s performing.

Well, there’s not much sales yet because the lead times on contract conversations tend to be pretty long, but there’s a lot of interest in it. We have many, many conversations and we have actually sold CrossCore on several occasions now. But we do see the pipeline as very positive. And again, we won’t be able to call out specific CrossCore product revenues because you won’t be able to isolate it from things like Precise ID and 41st because all of those are components of the platform. But we see that as a key enabler of growing the fraud business going forward.

Okay. Thank you. Very clear.

Thank you. Your next question comes from the line of Ed Steele, Citi. Please proceed.

Thanks. Morning, everyone. Just one question from me, please. In Brazil, you get your negative break data from a number of sources. I think you’ve got some competitive advantage in one or two sources, I think particularly with the retail data. Would that be useful to populate your positive database as well? I suppose I’m trying to work out whether there’s any way that your database will be differentiated in the core data from that of your two key competitors, please.

Yes, and I think that it will be differentiated. That’s a good observation on your part. We have more contributors to our file than any other player in this space, given the size and scale of Serasa. And the change in the positive data law would affect anyone lending to consumers, so while the focus is always around the banks, that’s only 40% of the data. The 60% that is from retailers, telecoms, your energy companies, everybody else in this space, also affected by this change. So it will enhance the total value of the data that we have in our file.

Great. So there should be substantive differences in the data?

We believe so, yes. We need to actually build out the file to demonstrate that, obviously, but based on the fact we have something like 15,000 contributors in our database. And that makes it a much larger, much more complete file. Others may catch up over time, but we will go to the market with the most complete product on both positive and negative data. That’s what we’re gearing this whole thing for.

Would the exclusivity you’ve got on the retail data continue for positive data as well as negative or does that end, please?

You’re talking about the relationship with SPC, and yes, that is – that’s a multiyear agreement that has a long runway yet on it. And they are, as we are, engaged in the positive data.

Fantastic. Thank you. Thanks, Peg.

Thank you. Your next question comes from the line of Andy Grobler, Credit Suisse. Please proceed.

Hi. Good morning. Just a couple from me if I may, just on Brazil again. In terms of the data and running two separate files, so one positive and one negative for consumers, does that impact the possibilities around a consumer services’ product that is akin to the UK and the U.S. or not? Or is that a possibility to build out a business at that relative scale over time? And then secondly, just in EMEA, Asia-Pacific, the credit services business continues to be under strain. What is – what are your thoughts around that business over the next year, 18 months or so? Thank you.

Thanks, Andy. So first of all, on consumer services, I think this is great news for our ability to build a consumer services business in Brazil. The pre-proposition last year obviously was predicated only on negative data, which has a more limited appeal. Positive data enables us to put a much more comprehensive product offering in front of consumers. So we’re – in addition to the efforts that we’re focused on building out the positive data product set to our B2B customers, we’re now accelerating our efforts on the consumer services’ side to build scale. And just a further point on the consumer services business, we’ll be launching that as a free first proposition. So with the brand strength that we have and – I think we’re optimistic that we can build big-scale audiences there. Obviously, the Brazilian population still has a lot of education to go through, so it’s not a done deal, but I think we’re pretty optimistic. On EMEA credit services, I’ll let Lloyd just comment on some of the individual trends. I think as we look forward, we do – most of that performance is really driven by some softness in our European bureaus. Last year our focus really has been on building a combined credit services DA offering across those marketplaces, so we have a lot of effort on that now to really get the performance up by putting new propositions in the marketplace. And, Lloyd, do you want to give a bit more color around the background there?

Yes. Three micro pieces there, a bit of weakness in our business in Russia, some competitive changes in South Africa and some regulatory-driven weakness in the Nordics. They’re all quite micro issues. But the European bureaus are quite mature, so I think you might see some of that drag reduce a bit. But I think the majority of our growth there will really come from building out the analytics tools on top of our own bureaus and the bureaus we partner with.

Okay. Thank you very much.

Thank you. Your next question comes from the line of George Gregory, Exane. Please proceed.

Yes. Good morning. Three from me, please. Firstly, just following up on that last one, when you talk about the growth coming from building out the analytics, presumably therefore the growth would come from DA or could we also see some of that growth coming from within credit services? Secondly, just a point of clarification on North America consumer services. Brian, did you say you’d expect it to be back in growth in Q4 or rather the rate of decline to moderate, please? And then finally, just on tax. Lloyd, I wondered whether you envisage any impact from the base erosion and profit-shifting efforts and timing of that. Thanks.

Okay, thanks, George. I’ll take the first point about credit services DA. If you look at the DA performance across EMEA/Asia-Pacific, for some time now we’ve actually had very strong growth. We haven’t had a perfect alignment between where we’ve been growing in DA and our bureaus. And that really goes back to the comment that I made about combining those product offerings as a way to drive growth within the actual bureau markets themselves. In markets like EMEA and Asia-Pacific, and particularly EMEA actually – we’ve talked previously to you about the one Experian initiative we have – it is increasingly difficult to actually distinguish, in a bureau market, between what’s credit services and what’s DA. DA capabilities are actually added into the bureau. They may end up as revenues in credit services, but they are in fact DA products and DA capabilities. So I suspect that distinction for us over time will become more and more difficult to articulate to you because really the propositions and products need to work together. So what I would say is we’re not happy with the credit services’ numbers in EMEA/Asia-Pacific at all. There are some specific factors which have driven that, but we’re very focused on getting those numbers up. But I think it’ll be a combined growth rate that we look across the two business lines that we’ll use to judge our performance, if that makes sense.

Understood.

Lloyd, do you want to touch on the North America consumer?

Consumer, yes. So if you look at North America consumer, we’ve been – if you add back the 5% into prior year, we’ve been at a stable growth rate now I think for four quarters. Our focus is really on Q1 next year, when we’re looking to launch, at scale, some of the products that Brian talked through. So as we exit this year I would expect we’ll be within a range around flat to minus 5% as we go through Q4. I think the focus though really is on next year and the branding of those products.

Thanks.

Tax, yes, so we’re obviously watching the tax environment quite closely, all avidly looking at Twitter to see what the North America tax changes will be each day. But on BEPS, I think there’s a lot of change underway. I would say the direction of travel just as we go through the BEPS implementation process over the next two to four years would be marginally up on the tax rate, maybe, 1%, 1%-plus as we go through the next few years. But it’s very difficult to fine tune it. And I would say the overriding tax rates in individual economies is more likely to affect the tax rate than the pure BEPS implementation.

Okay. And clearly I guess it’s far too early to make any calls on North America.

Yes, there are obviously lots of commentary, but the devil’s in the detail with tax, so you really need to wait for the final rules to come out and work out what it means for our business.

Indeed. Thanks very much.

Okay, thank you. And so I think we don’t have any more questions. So thanks, everybody, for your time this morning and your questions. And we look forward to speaking to you again in May for our preliminary results.