Don Robert is one of a dwindling band of
business leaders in Europe who can look forward to 2012 with
some confidence. CEO of Dublin-headquartered credit and
business information group Experian, Robert has surging revenue
and a buoyant share price on his side. In November, Standard
& Poors upgraded the credit rating of wholly owned
subsidiary Experian Finance to A from BBB+, saying the
unit will continue to show resilient revenue growth,
despite the soft economic conditions.
The largest credit reporting firm by revenue after U.S.
rivals Equifax and TransUnion, Experian emerged from the
financial crisis of 200809 in good shape. The Dodd-Frank
Wall Street Reform and Consumer Protection Act creates
opportunities for Experian and its peers by forcing lenders to
be more transparent. And a well-timed 2007 acquisition in
Brazil, along with other moves to expand in Latin America, has
boosted Experians revenue growth just as some mature
economies have slowed.
In the six months ended September 30, revenue for London
Stock Exchange-listed Experian was $2.3 billion, up 15
percent over the same period in 2010, while pretax profits
climbed 20 percent, to $539 million. Having started 2011
below 700 pence ($11), the FTSE 100 companys stock now
hovers around 800 pence, giving it a market capitalization of
nearly £8 billion.
Experian, where U.S. expat Robert has been CEO since April
2005, is perhaps best known for helping banks check
consumers credit records. Founded in 1980 as CCN Systems
by current chairman Sir John Peace, it was the first British
company to develop credit scoring. CCN, which began as part of
U.K. retailer Great Universal Stores, was renamed Experian in
1997. Experian demerged from GUS in 2006 and now employs some
Roughly one third of the companys $4 billion in
fiscal 2010 revenue came from financial institutions, with
consumers making up another third. In the U.K. and the U.S.,
Experian keeps records on about 45 million and
215 million adults, respectively, including electoral roll
details and loan default and bankruptcy information. This data
has many applications. For example, consumers use it to check
their own credit ratingsa growing business these days.
Meanwhile, the British government turns to Experian to help it
detect housing and disability benefits fraud. The company also
works with telecommunications businesses and other utilities to
help assess their customers financial positions.
Robert, a native of Portland, Oregon, led Experian through
the demerger and made the U.K. a smaller part of the business,
although that market remains vital. His central strategic
challenge: boosting revenue from sources other than financial
institutions. Experian has made much progress. Only nine years
ago it had no consumer business and about 70 percent of revenue
came from financial institutions. Its digital marketing
services business, linked to online advertising, is also
increasingly important, bringing in $800 million in fiscal
Under Robert, 52, Experian has diversified geographically
too. Latin America now accounts for 20 percent of revenue, up
from zero in 2006. In November, Experian kept that market in
focus by acquiring Bogotábased credit bureau
Computec, which operates in several Latin American countries.
But Asia is proving tougher; it still accounts for only 5
percent of revenue.
Robert joined Experian in 2001 from real estate and
insurance information company First American Corp., where he
headed mortgage origination services. He had previously spent
15 years with U.S. Bancorp, becoming CEO of Credco, its San
Diegobased credit reporting division, which First
American acquired in 1995.
Colleagues say Robert, who has a bachelor of business
administration degree from Oregon State University, has become
increasingly Anglophile as the American CEO of a company with a
mostly British board. Hes good at managing
international businesses and at dealing with different kinds of
people from different cultures, says Experian deputy
chairman Sir Alan Rudge, who describes Roberts management
style as understated and quite British.
Robert had a difficult time in the years immediately after
the demerger, Rudge recalls. Analysts were cautious about
Experian, which lagged the FTSE 100 in 2007 because of worries
surrounding the credit crunch. Don didnt get too
worked up, Rudge says. He concentrated on the
performance of the business, and hes now won them
In June and November, staff writer Neil Sen talked to Robert
about Experians current challenges and its expansion
Institutional Investor: How did you come to join
Experian in 2001, when it was a U.K. company?
Robert: I was working for First American, which had a joint
venture with Experian. I got to know Sir John Peace, who is now
chairman of the company and was then CEO, and he persuaded me
to join, initially as COO of Experian North America. I was
intrigued by the companys size and complexity, and its
Its not easy to pin down Experians
national identity. How would you describe it?
It can only be described as global. Our corporate head
office, the venue for most of our board meetings, is in Dublin,
yet we are incorporated in Jersey in the Channel Islands, our
primary listing is in London, and our biggest source of
revenues is North Americafor now. We have operations in
44 countries. I spend about half my time in the U.K.I
live in Chelsea, Londonabout 20 to 25 percent in the U.S.
and the rest mostly in Asia and Latin America.
Have you considered moving your primary listing away
We did have concerns after the demerger in 2006 that London
might not be a natural home for us because most of our peer
group are in the U.S., and we now have more U.S. shareholders
than we did then. But the London Stock Exchange has been great
for us; weve found an excellent level of understanding
and support from long-only funds, so I dont think
wed benefit from a move to the U.S. Institutions in the
U.K. still own about 46 percent of our stock, down from 50
percent in 2006, and U.S. institutions around 25 percent, up
from 12 percent in 2006.
With revenue growing and the share price climbing,
things are going well for Experian. But are there aspects of
the business with which youre not happy?
Were no longer as dependent on financial services as
we once were, with two thirds of our revenue coming from
non-financial-services sources, but there is more we can do to
develop our other businesses. We have a presence in the telecom
and utilities sectors, where we can provide valuable services
for corporate clients in assessing their customers, building
market share and improving their collections and recoveries
Is slow growth in your North American
businessesonly 2 percent in the six months through
September 30another problem?
Most of our North American businesses saw at least
mid-single-digit growth, but our education lead-generation
business saw a decline. We are seeking to reverse this decline,
and weve had a measure of success in the second half.
What impact has Dodd-Frank had on your
Dodd-Frank imposes a big compliance burden on our clients
because banks have to show how they reach their credit
decisions. But this need for greater transparency is an
opportunity for us, even if we cant quantify its effect
on revenues yet. An important example of this is whats
known as the fifth factor in credit decisions. Lenders
previously had to disclose to consumers the four strongest
factors for declining credit, but now its five. It sounds
innocuous, but they have to overhaul their systemsfor
instance, how they send declination letters, how they choose to
extract and disclose the score, how they describe the score and
the score factors and variables. We help them to do that.
Why is Experian expanding so rapidly in Latin
The underlying reasons are that many Latin American banks
are well regulated and that it is a large and growing market
with an emerging middle class. But also important is that our
acquisitions, especially in Brazil, have been successful and
have given us an appetite for Latin American business. In 2007
we acquired a 65 percent, rising to 70 percent, stake in
Brazilian credit bureau Serasa for $1.3 billion, and our
revenues from the country have grown by 18 percent annually
since then, to $722 million. That experience meant that we
were keen to expand our presence, and this July we acquired the
e-mail marketing company Virid Interatividade Digital. The
second deal is much smallerVirid has annual revenues of
about $5 millionbut it helps secure our position as
the worlds leading e-mail marketer.
Will you be expanding elsewhere in Latin
Were interested in the larger countries, such as
Argentina and Chile, where we already have operations, although
probably not Mexico because of its social problems. We recently
acquired Computec, which has operations in Venezuela and Peru
as well as its home market of Colombia.
Why has growth in Asia been so much
It tends to be an organic growth story, as there are very
few acquisition opportunities in Asia, and its been hard
work starting businesses from scratch. Even so, weve only
been there since 2005 and yet annual revenues are up to
$250 million. I am personally responsible for the Indian
business, from which I plan to drive more growth; it was
awarded a full credit bureau license from the Reserve Bank of
India in February 2010the first credit information
company to receive such a license. I can see India or China
eclipsing North America as our biggest source of revenue, but
that is a long way off.