September 13, 2011

Equifax Inc. 

 

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Through June 30, 2011, Equifax has increased its already market leading share in the U.S. consumer 

business for 6 consecutive quarters. During the first half of 2011, revenue increased by 12% reflecting a 12% 

increase in Equifax-branded subscription revenue versus the first six months of 2010. The strong results thus 

far in 2011 follow on the heels of good growth experienced during 2010 (+6%). Recent results have been aided 

by a successful new advertising campaign surrounding Equifax Complete, a new product that has been well 

received by the market and contains high value features such as information from all three national credit 

bureau services. The product is priced at a premium to its other offerings and has helped boost the segment’s 

revenue per subscriber metrics.  While margins have expanded nicely within this segment (28.2% in first half 

2011 vs. 25.3% in first half 2010 and up from 12% in 2005), management believes that the normalized long 

term PSOL margins are in the mid 20s percentage range.  

North America Commercial Solutions (NACS)  

Commercial Solutions products are derived from databases of credit, financial and marketing 

information regarding businesses in the U.S. and Canada. The business records included in the U.S. credit 

database have been developed in part from the Small Business Financial Exchange. SBFE members including 

a number of commercial lending financial institutions, contribute their data to the member-owned SBFE 

database that is exclusively managed by Equifax.  

In addition, the Company maintains other databases that it has compiled from loan, credit card, public 

records and leasing history data, trade accounts receivable and SEC registration information. The Company 

also offers scoring and analytical services that provide additional information to help mitigate the credit risk 

assumed by its customers. Finally, the Company has a marketing database that hosts approximately 47 million 

commercial demographic data records from around the world helping companies identify corporate family 

structures for enterprise visibility of customers and suppliers.  

NACS – Recent Results  

North America Commercial Solutions

 

  

  

  

  

% Change 

     

  

  

  

2008 2009 2010 

2009 

vs.  

2008 

2010 

vs.  

2009  

6 Mos.  

2010 

6 Mos. 

2011 

%  

Change 

NACS Operating Revenues 

$71.5 

$69.8 

$80.5 

-2.4%  15.3%    

$37.3 

$41.4 

11.0% 

  

  

  

  

  

  

     

  

  

NACS Operating Income 

$13.6 

$15.1 

$19.5  11.0%  29.1%    

$8.1 

$9.5 

17.3% 

NACS Operating Margin 

19.0% 

21.6% 

24.2%    

  

  

21.7% 22.9%   

 

During the first half of 2011, NACS revenue increased by 11% (9% on a local currency basis). The 

revenue increase on a local currency basis was primarily due to increases in U.S. risk and marketing service 

revenue and revenue from the Company’s data management products. Notably, the second quarter of 2011 

represented the 7

th

 consecutive quarter of double-digit revenue growth for this segment.   

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Equifax Inc. 

 

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Investment in New Products/Database Integrations Driving Growth  

CAPEX 2006 to 2010  ($MM) 

$52.0

$118.5

$110.5

$70.7

$70.8

6.9%

6.1%

4.1%

3.8%

3.7%

$0

$20

$40

$60

$80

$100

$120

$140

2006

2007

2008

2009

2010*

0%

2%

4%

6%

8%

10%

12%

Capex

Capex (% of revenues)

 

*Note: 2010 Capex excludes $29 million payment for purchase of Atlanta headquarters buildings 

 

Equifax has significantly boosted its spending on new products in recent years. While a significant 

amount of the capex increase in 2008 reflected data center infrastructure improvements, a large amount of the 

Company’s annual capex is utilized for new product development. EFX launched 72 new products in 2010 and 

generated $176 million in revenue during the year from products introduced between 2007 and 2009, 

representing a 31% increase. Equifax’s stated goal is to generate 10% of the Company’s revenue within each 

of its segments from products introduced in the prior three years. During the Company’s 2Q11 earnings 

conference call, Equifax said that new products introduced in the previous 3 years are generating 

2-3 percentage points of incremental revenue growth for the Company. EFX has recently indicated that it is 

ahead of its revenue targets for new products and it has a couple of products that could soon become very 

large revenue contributors.  

Growth Driver – New Product Innovation 

 

Source: Company presentation, March 2011 

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