Experian plc (EXPN) Earnings Call Transcript & Summary

Good day, everyone, and welcome to the Experian Q1 Trading Update Conference Call hosted by Brian Cassin. My name is Camilla and I will be your event manager today. [Operator Instructions] I would like to advise all parties this conference is being recorded for monitoring purposes. And now I would like to hand it over to your host today. Brian, please go ahead.

Thank you very much. Hello, everybody, and welcome to our Q1 trading update call. I hope you're all keeping well. I'm here with Lloyd who will take you through the trading performance after my opening remarks. Q1 was a good quarter, in line with our expectations. Total revenue growth was 9% at constant exchange rates and organic revenue growth was 8%. Our three largest regions delivered good growth with very strong performance in Latin America. And while it's not yet reflected in good revenue performance, we are making progress as we reposition EMEA, Asia Pacific. By segment, Consumer Services, where we now reach 139 million free members globally, delivered 13% growth, and there was a robust performance in B2B at 6%. In all, Q1 came in line with full year expectations that we set out in May. Let me now touch on some of the regional Q1 highlights, starting with North America, where all business units were in growth. Excluding mortgage, market conditions have been pretty stable, good, in fact, helped by the strength of consumer balance sheets and tight labor markets. And while threat of inflation is putting pressure on consumer spending, most consumers continue to make their payments on time and credit card delinquencies have not returned to pre-pandemic levels. No single trend driving client behavior, while lending criteria are tighter in some subprime segments, many larger lenders and fintechs are looking to grow share and remain active in new credit issuance. The clear evidence of this is in the performance of our marketplace business, which was very strong in Q1. Both consumer demand and supply are good. Many clients also see opportunities to accelerate the shift to digital, take our costs, to manage higher inflation, and this is driving demand for data, new attributes and platforms that help with automation. This quarter highlights include favorable bureau volume trends when mortgage is excluded. We saw strong demand for alternative data from Clarity, and we made very good progress in verifications where revenue is growing. Fannie Mae recently certified Experian Verify for Day 1 certainty. This is a very positive milestone and should add to revenue progress as we move through the year. Health delivered a respectable outcome, with good growth in core revenue cycle management, even as we lap the tougher comparable from elevated COVID-related identity checks, and there were solid performances in auto and targeting. Consumer Services delivered another good quarter of very good progress. Our credit marketplace grew strongly, helped by our ability to deliver a large audience to our lending partners. Our free membership base now stands at 55 million. We're adding new features, and we have detailed plans to greatly enhance our auto insurance for this year adding to the utility and appeal of our insurance marketplace and helping consumers to save money. We're also adding greater value to our premium features, and we continue our efforts to help credit invisibles through Experian Boost and Experian Go. Experian Boost now has approximately 10 million connected accounts, which is a great achievement. And these actions are all deepening the engagement that we have with our members. I should also add the Partner Solutions contributed positive to the growth performance and has a strong pipeline of new business opportunities. Taken together, this gives us good confidence of our ability to sustain strong levels of growth in this part of the business. Turning now to Latin America, which delivered a strong quarter of organic revenue growth, up 18%. We've had a very strong start to the year, both in Brazil and in Spanish Latin America. In Brazil, growth was broad-based with strong tailwinds arising apart from positive data. Our position with existing and new clients continues to grow as we introduce new features, attributes and scores. We're also generating growth from new installations to defend and to take-up of our cloud-enabled platforms. And we're making inroads across other areas where in place a strategic focus, for example, in fraud and identity management, and we're very pleased with progress in new areas like agri business, which we believe has a lot of long-term potential. Consumer Services is also performing extremely well. We are building a powerful new concept in Brazil what a financial marketplace can be. The aim is to offer consumers the ability to pay down their debt, get access to finance, get premium features like Lock/Unlock and to utilize data to enhance consumer experience, and we're making very good progress with strong revenue growth and continued membership growth now reaching 73 million. Overall, the U.K. and I performed well. Our B2B business operations have been resilient. We've had good success in new business wins, which we expect to sustain supported by a strong pipeline. As in the U.S., there's no overall trend in the credit market, consumer appetite for credit remains healthy, and credit origination volumes are actually growing. We see some increased emphasis by clients on affordability analysis and customer segmentation, which is natural in this environment and more widely across U.K. B2B, we continue to be successful in fraud and identity management. We started well in business credit and we continue to execute the turnaround in parts of B2B portfolio. All in all, the U.K. has had a very good first quarter. In U.K. Consumer Services, we have seen very strong growth in our credit marketplace across cards and loans, and there's no real evidence of weakening. We have seen some softening in U.K. consumer services subscriptions. We benefited during COVID from increased sign-ups to our premium subscription offers, which has since reversed, and we'll look to address this by launching new features during the course of the year to add more value to the premium proposition. In EMEA, Asia Pacific, we're focused on executing the strategy we outlined in May, which will see us concentrate on our most strategic markets. We're in the process of exiting from some of our smaller geographies, and we're executing on a plan to enhance operating efficiency. We expect this process to take up to 18 months and to be accretive to our financial performance once we are through it. So with that overview, I will now hand over to Lloyd for the financials.

Thanks, Brian. Good morning, everyone. As you've seen, we had a strong start to the year in line with our expectations with Q1 organic revenue growth of 8%. Our core lending markets remain resilient with good strength in Latin America, and our Consumer Services business delivered another strong quarter with strength across marketplaces in particular. Organic revenue for Consumer Services was up 13%, whilst B2B was up 6%. Including acquisitions, our total revenue growth at constant exchange rates was 9%. Exchange rates in the quarter were a 2% revenue headwind, bringing total revenue at actual exchange rates to 7%. Turning to the performance by region, beginning with North America, where organic revenue was up 7% with B2B up 5% and Consumer Services up 13%. Data was up 4% with growth in all business units. Bureau revenue, excluding mortgage, grew double digit, reflecting continued robust new lending appetite across our financial services clients. Our Alternative Data business, Clarity Services also performed well, and demand for eligibility services continued to increase. Excluding the mortgage headwind, the growth in our Data segment was 9%. Mortgage revenue was down 31% against last year, and we still expect mortgage revenue to be down around 35% for the full year. We also continue to make good progress in Verification Services further diversifying our sources of growth. Decisioning was up 6% as both Health and Decision Analytics grew well against strong prior year results. The underlying trends in the Health business are positive with eligibility transaction volumes and client bookings both growing well. Decision Analytics grew across all the principal areas of software, analytics and ID and fraud management. Consumer Services was up 13% as marketplace revenues performed very strongly for the quarter as both cards and loans showed strength. The acquisition of Gabi has further enhanced our auto insurance proposition, and we see this growing its contribution as we continue to progress our product offerings throughout this year. As expected, subscription revenue grew modestly as we lap the pandemic-related member influx. Moving on to Latin America, where organic revenue was up 18%. At constant exchange rates, total revenue was up 23%, including acquisitions. Factoring in an FX tailwind during the quarter, total revenue grew 30%. B2B was up 15% organically, whilst Consumer Services delivered organic growth of 42%. Data grew 13% organically as our clients access our widening range of positive data propositions. The Ascend platform also performed very well with revenue doubling during the quarter. Consumer Services grew across the product suite. Limpa Nome continued to grow well, with almost 60% of these inquiries now online. Our marketplace proposition also grew strongly, and this now makes up around 30% of consumer revenue. Adding in our recent Brazilian acquisition, we saw, total Consumer services revenue growth was 64% at constant currency. Turning to the U.K., we saw 5% organic revenue growth, down 6% at actual rates after factoring and foreign exchange headwinds. B2B grew 6% whilst Consumer Services was flat from last year. Data grew 8% during the quarter, benefiting from new business wins in the prior year and volumes back at pre-pandemic levels. We also saw good growth in affordability and eligibility product propositions as our clients continue to look for more ways to expand lending whilst maintaining strong controls. Decisioning was up 2% organically with new business wins across both identity and fraud and analytics. And Consumer Services was flat, reflecting strong growth in marketplace offset by our subscription business, lapping the tougher comparatives in the prior year. And finally, on to EMEA and Asia Pacific, where organically grew 1% with data and decisioning, both growing. In data, we saw a mixture of recovery in some of our APAC markets and challenges remaining on the EMEA side. As Brian mentioned, we're well progressed with our plans for the region going forward, and we'll update you more on that at the half year results in November. Turning now to our near-term expectations. Our full year expectations are unchanged from those we've discussed in May. We continue to expect organic revenue growth for the year in the range of 7% to 9% with a further 1% from acquisitions, and we expect Q2 also to be in the 7% to 9% organic revenue growth range. Our margin guidance is unchanged. We expect to deliver modest margin expansion at constant currency and all other areas of modeling considerations remain unchanged. So with that, let me hand you back to Brian.

Thanks, Lloyd. And so to summarize, we started the year well with a solid performance in Q1, and we expect a similar outcome in Q2. And as Lloyd has just said, our guidance for the year is unchanged. Clearly, the pressure in the macroeconomic environment has yet to have any major impact on our operations. Banks continue to land and credit quality is generally good. The strength in consumer balance sheet is supported by a tight labor market. Brazil sits in a different cycle for other markets, and we're taking advantage of the many opportunities available for us there. Similarly, in Consumer Services, we're growing our position in the marketplace, and we have an extensive road map of the new offers to help consumers save money. Combined, this gives us confidence in the stability and resilience of our model and our ability to deliver a good outcome for the year. So with that, we'll open up the line for questions. So back to you, operator.

[Operator Instructions] And we have our first incoming question. It is coming from the line of Rory McKenzie from UBS.

Well, it's Rory here from UBS. Just two questions, please. Firstly, on the credit cycle, obviously, it's safe to say that sentiment has worsened in eventual markets. People are expecting default rates to go up in consumer credit. Have you seen any of your clients changing their maybe acquisition behavior in terms of their strategy to market or otherwise changing how they're consuming your products? And then secondly, related to that, how is the kind of product pipeline for your larger in stations being things like Ascend? And then secondly, on consumer, can you just say where the paid subscriber numbers are in the U.S. and the U.K. today compared to the pre-pandemic level?

Great. Thanks, Rory. I'll deal with the first one and then Lloyd, maybe you can deal with the second one. So we're not seeing any real change. And just to give you some data points, actually, if we look at the state of credit report for so far in '22, so these numbers will be accurate really as at the end of May. If you look at Average VantageScore, if you look at Median VantageScore they're all still higher than they were pre-pandemic. So there's no stress in the system. Average credit card balances have increased a little bit on '21 but again, still below the pre-pandemic levels. And that trend really continues as you look across all the lead indicators, particularly in delinquencies. There has been a little bit of a tick up in delinquencies compared to '21, but that was really an unusually low rate. And the real measure is to look at that compared to 2019, which was a strong credit year, and actually they're substantially below the 2019 levels. So we don't see any as yet kind of stress in the system. I think there is a little bit of pullback in the subprime area, but no major alteration that we see in the credit issuance. Now as we said in May, I think we've got 100 different varieties of this question in May for understandable reasons. Yes, everybody is sort of looking around at the headlines and looking ahead and kind of thinking what might be. But really, I think if you look at the marketplace, results that Lloyd outlined, they're incredibly strong, which tells you the credit issuance is still there and that consumer demand is there and supply is there. So I think that's the best indication we can give you, Rory. Now everybody always asks that, this data is pretty up to date. It's only a month, we'll get the June numbers pretty soon. They won't be changed very much in them.

Yes. On Consumer, the paid subscription, so if you go back to FY '19, FY '20, the North America subscriber base is higher and the U.K. is broadly flat. So we saw the same behavior in the U.S. and the U.K. during COVID, strong inflow of subscribers. The size of that was much bigger in North America. You see more on it of an instant reaction when you hit harder times in the North America business into the subscription product. And then on product pipeline, really continues to be very strong. We've had quite an investment in some of our scaling products of Ascend, CrossCore, Experian One, and we're making great traction with those. You saw just as an example, in Brazil, where we're making a lot of progress as positive data gives us the opportunity to bring a lot of our analytics and software products to bear on that market. You saw that in the decisioning number this quarter, and I expect that strength to continue.

We have our next incoming question. This question is coming from the line of Paul Sullivan from Barclays.

Just following up on the Consumer in the U.S., I don't know if you can give us a bit more granularity on the -- of -- or in terms of the growth rates of the component parts. And if we go into a tighter lending environment, how do we view sort of cyclicality or how are you thinking about the cyclicality of that marketplace business because it's something that you haven't gone through previous -- through in previous cycles? Secondly, can you just talk about or characterize your ability to protect margin through a downturn? And then thirdly, as fintech valuations come down and they struggle to raise cash, could M&A become a more material driver over the next 12 to 18 months in your view? And any priorities you can share?

Yes. Thanks, Paul. So a few questions there. Well, we'll tag team on this one. On the Consumer U.S., I'll let Lloyd deal with the granularity point. On the cyclicality point, I think that your comment that we haven't sort of been through a cycle on that is partially correct because, of course, the marketplace business is a relatively new one for us. But actually, we did actually start it before COVID. And of course, in COVID, what we saw was for a short period of time that a complete hiatus and credit offers. But if you recall, we managed to still grow during that period, largely because we're ramping our business up. But still say that we have a long way to go our marketplace business, both in cards and loans. So I think that might offset any cyclical downturn that we might see. Of course, if you do see a radical change in credit offers available in the marketplace, it's automatic that, that would have an impact on that business. But don't forget, though, that this year, we're making a big push into our insurance product as well. And we expect that's going to be very favorable for us. And I think that's less cyclical than, say, cards and loans in a downturn. And of course, the question we face every time that we -- somebody asked the question about what happens in a macroeconomic downturn is what happens to the subscription business. Every time that question has been asked, the answer has always been the subscription business actually performs well. We've seen that through the financial crisis, we've seen through COVID. Of course, the next question is, well, how will it perform in this time. Of course, you never know exactly, but the evidence would suggest that there's a bit of resilience built in because of that. It's impossible to say whether it's exactly like the last time, but you would expect that consumer behavior mimics what it's done in the past, that those would all be things that could actually help us through that. So let me just deal with the M&A question and then come back to Lloyd on the other two. Yes, I mean valuations in fintech have come down dramatically in some cases. M&A market is actually pretty dormant, I think. And there's a lot of opportunities in the pipeline. I think in these sort of situations, what you find is valuations in public markets come down very quick, which they have. Private markets take a lot longer to adjust. And so I think there are opportunities around. We deliberately put ourselves in a position to have a strong balance sheet so that we could take advantage if those opportunities arise. And we'll be proceeding looking to add M&A where it makes sense strategically and where we can get the right value equation. But it's not automatic that the opportunities arise just because some valuation rounds have been quite publicly kind of reduced significantly. So I think a lot to play out there, and I expect that as we get into the second half of the year and into next year that maybe there'll be a tick-up in activity. But as you know, it's always really hard to predict this stuff, Paul. Lloyd?

Yes. So just a couple of comments on scenario planning, I guess, Paul. If you look at this year, clearly, we banked 8% in the first quarter. We've got very strong line of sight of 7% to 9% in the second quarter. So our range of 7% to 9% for the full year is solidifying. We've got confidence in that range. When you think about a potential downturn scenario in the credit cycle, clearly, we talked in the past about looking back to the financial crisis where we bottomed out at 2% organic growth. Now that was a very particular liquidity-driven downturn. Our portfolio is very different now. Clearly, we have health in the portfolio. We have a much bigger Brazilian business, both of which are subject to different types of variability. So we'd expect to be less leverage to U.S. GDP. The other thing I think that's important is to just talk about mortgage. So we've -- if you think 18 months ago, our mortgage business was about 2/3 refinancing and about 1/3 originations. By the time we're through this year, that share will reverse. And of course, originations are much less sensitive. So I think we come out of this year with the majority of the softness in mortgage out of the portfolio. So again, you have to take that into account when you're thinking about what a credit cycle impact might be. Then on consumer, your question in the quarter. So the lead generation business grew about 70% of Partner Solutions business grew high single digit, and the subscription business, as we said, was stable.

Our next incoming question is coming from the line of Sylvia Barker from JPM.

Three quick questions, please. Firstly, on targeting, that was very strong in the quarter. Could you talk about the drivers behind that? And can you just talk about how discretionary that marketing spend can be, how much of an order book, I guess, you have in that business? Secondly, on Verify, could you just update us on the progress there? And maybe just on the run rate of revenue if you can? And finally, BNPL, that piece has been very strong last year. Maybe just a quick update on how that's looking as well.

Sure. On the targeting business, yes, we had a good quarter. We bought a business in targeting back 2 years ago, tap out, which really pushed us more into the sort of digital identity resolution area. That's seen some very strong growth. We've seen strong growth in things like connected TV. So I think there's a couple of macro drivers that are helping out there. Of course, we think back to COVID, there was quite a large impact on the retail sector. And I think that's -- there's been a bit of a rebound in that because we are seeing such a dramatic contraction in that sector, and that's a very big vertical for that area. So I think the strategic moves we've made in that business has positioned us well. There are some favorable strategic dynamics playing out. Again, I think it comes back to a macroeconomic question if they're a little bit like the last month, there was a significant downturn, yet that business would see some impact. But I think it's also an indication that we're not seeing that yet because a pretty good performance, and we're pretty confident about the outlook as we go into Q2. On BNPL that's still actually performing well. I think everybody is focused on some pretty high-profile revaluations. But I think, again, the same trends are playing out. The long-term trend of this category is attractive to consumers, demand still remains there. So I don't think we see anything radically different in the credit market performance of those businesses. And then on Verify?

On Verify, Sylvia, so we're still making good progress. We're winning employee services contracts, which is adding to the unique record count. And we're winning contracts on the Verification side, quite a number of which are putting us first in the waterfall. So really good progress there to update on maybe later in the year. In terms of run rate, we've said this year ahead that we would expect to be a bit over $130 million of revenue in the combined employee services and Verifications business. And that's still very much our guidance.

Okay. Great. Maybe just a quick follow-up on BNPL. Just around the Apple Pay later news. I suppose you had this question, if they're not using credit bureau, could that be a trend that we see elsewhere? Is that something that you're seeing at all as a change?

No, we don't see any change. They haven't introduced their proposition yet, they just announced it. So I think that's a development that will happen in the future. I don't see any difference between that question and the question we've been asked over the last few years about BNPL, it's the same question. The BNPL will become -- has become a part of the kind of bureau environment, and I don't see this to be any different.

Our next incoming question is coming from the line of Anvesh Agrawal from Morgan Stanley.

Got two questions. First, just going back on the B2C, and we know that a subscription can be countercyclical and grow. But time sort of you're coming already from a higher base and closer to sort of COVID bump that we had. And if you do sort of end up into a broader slowdown, do you sort of see the same trends playing out? Or it would be more difficult because there is already sort of big base that is already under the subscription? And then just on the marketplace overall, I mean we saw some of the players like LendingTree sort of came out and cut their guidance. They called out the home product and also the insurance product, which is where you're pushing, but your outlook is sort of quite different on the marketplace. So just trying to understand, is there like any fundamental differences between what you are offering versus some of the other players in the market that sort of make your outlook much more resilient than what we are hearing across the sort of marketplace?

Anvesh, I'll maybe take those. So on the marketplace, I think if you look at the last quarter results across all the players, it was very strong. You've seen we're probably first to report this quarter. We're seeing continued strength. What does that tell you? It tells you there's a lot of demand for credit, and there's a lot of supply for credit. And that's where it lands in that marketplace business. In terms of insurance, we're obviously making a pretty unique play into the auto insurance sector, where we think we've got some very unique assets to bring to bear that can accelerate the ship digital customer acquisition in auto insurance in a market that's been traditionally quite broker-led, but then we can do some unique things with our auto data assets. So we think that's a very differentiated position. I'm not too aware of LendingTree's position in the insurance market. So marketplace continues to grow well, and we have, as Brian mentioned, quite a number of new product launches coming in the second half of this year. So we made an acquisition of a company called BillFixers that helps consumers negotiate with some of their day-to-day bills. We'll expand booths to include rental payments onto the credit file and quite a number of other outside of auto insurance and other launches, which will really drive higher engagement across the growing number of members that we have. On your question of subscriptions and countercyclical, I think every economic cycle is a bit different. I think what you -- we've seen through all of the cycles is when consumers are credit hungry and if you see a point where credit supply is restricted, they then tend to search out avenues of how they get credit fit. And that's, of course, what we try and target the subscription product at. So we would expect that if you see at any point in the cycle, withdrawal of credit supply, but that behavior would continue. Now it's hard to scale. It was different in GFC than it was in the pandemic, but we saw that effect in both cases.

Yes. And just as a follow-up on the auto insurance part specifically, is that business contingent on the sale of the autos or like the sort of consumer actually buying the cars? Or even if like your consumer is sort of looking to switch the auto insurance, you essentially can drive the business. So therefore, the cyclicality of your auto insurance marketplace could be quite different really.

No. So it's nothing really to do with auto sales. It's purely the annual and biannual cycle of ensuring your car. And the maturity of that digital market in the U.S. is very immature in comparison, say, to the U.K. market. So we see just a real opportunity. Remember, we have a big auto business there with the data on all the cars in North America and we've now got 55 million people on our Consumer platform. There's a lot we can do making up those two data sets.

The next question is coming from the line of Andrew Ripper from Liberum.

Well done on the numbers. Just a couple of quick ones from me. First of all, just in terms of the core bureau businesses in North America and LatAm growth rates. Is that all volume? Or have you been getting some price growth as well? And then secondly, on costs, can you just say a few words and maybe just remind us what sort of increase in wages you're paying this year? And where are you in terms of sort of tech and data costs for this year, please, in terms of guidance?

Great, Andrew. Yes. So maybe Lloyd will deal with cost one. I mean the bureaus are obviously very different between Brazil and North America. But I mean, the answer is it's a mix of all 3, really. Volume growth we've seen -- again, I think Lloyd referenced the number of marketplace, that tells you credit issuance is still strong. And we continue to penetrate with new products. I think at the smaller end of the scale, some pricing actions. So in Brazil, when you flip over to there, you still have this sort of very strong secular trend with positive data coming into play, driving a lot of growth. We don't really see that changing. Some of the stats coming out of Brazil are pretty significant. So we're seeing a pretty significant increase in the number of people that are actually included in the financial net. We're seeing a lot of new products coming into play. And I think if we start to see that's really just benefiting the overall data environment there. We have -- just to give you some stats. We think that we have now more than 22 million extra people who have access to credit through the introduction of positive data. So we think that's gone from 59 to 81. And that's across all age groups. So you can see that what we always said about positive data, whether it will expand the market, and that's what we're seeing. And it not just expands the market, it also expands the addressable product market because positive data is a much richer data set and the requirement for analytics and for more sophisticated solutions to deal with that just drives demand for things like Ascend and others. So I think very different dynamics, but I suppose, shorthand answer is it's a mix of all of those things. Lloyd, would you add anything to that?

Yes. I think -- and just to add on Brazil. Remember that when the government started to move to positive data credit -- the size of the credit sector to GDP is very low in Brazil in comparison to almost every other market. That's the opportunity for us. The richness of that data democratizes that data into the credit market. It's just a great opportunity, and we expect it to be a tailwind for quite a number of years. If you look back, as you'll remember, Andrew, it was the reason we bought the bureau in Brazil all that time ago. So we feel very good about that. On cost, if you look at our annual wage increases, typically pre-COVID, they were in the 2.5% to 3.5% range. That's ticked up this year by 1%, 1.5%. It's a bit different in each market. We've seen some of the frothiness that we saw last year start to abate just a little bit as some of the recruitment into private equity and venture-backed fintechs has started to take some of the frothiness out of the market. Obviously, we're watching it closely. And on tech costs, there's a lot going on in tech costs in all directions. Probably the thing that we're spending -- we spend most time on is managing the tech transformation out of our legacy estate into the cloud and the dual running costs that I've talked to you about in the past. That's probably the principal area of focus of managing that just now rather than inflation. So all manageable and all within our margin guidance that we've held versus the May position.

And just a quick follow-up. In terms of Brazil with the thicker files, I mean, do you charge more? Or is it all volume?

No, kind of the wrong way to think about it because what happens is that it gets blended. And so you renegotiate contracts with new products as part of the bundle. So if you were to try to unpick the pricing in that would be pretty difficult. The way to think about it is that we'll expand so well because we're providing much more -- a much wider set of products and blended scores between negative and positive data.

Our final question is coming from the line of Suhasini Varanasi at Goldman Sachs.

Just one for me, please. Sorry, I want to go back to the sensitivity to a slowdown in the U.S. If you see a sharp slowdown, specifically in the U.S. GDP, what can be the impact? How should we think about the group in the B2B side of the business in the U.S., please? If you think about today's mix versus '08, '09, you have health, fraud ID now, you probably don't have marketing services. And probably the B2B side of the business in the U.S. was down mid-single digits, I suppose, during GFC. So does that basically mean with the same mix you have something more like a low single-digit decline or maybe flattish growth in the U.S. B2B side of the business? Just to get some color, that would be great.

Yes. So just to leverage back on, I guess, some of the sensitivities we've given before. So if you go back to the GFC, we saw about a 7% reduction in group growth rate from about 9% to 2%. And as you say, we have the health business now. We don't have some of the more volatile marketing services business. We have a larger business in Brazil that isn't really driven by U.S. GDP. So if you took the same downturn scenario and applied it to today's portfolio, that 7% reduction all other things being equal, would be something like a 4% to 5% reduction. But then obviously, you have to look at different scenarios. The GFC was a very sudden liquidity crunch that affected credit supply everywhere. I think whatever scenario we have, I think it's unlikely to have that. Clearly, the drop in mortgage has already predated any future turn. So I think you have to look through all of those movements. I think we've shown through both the GFC and through COVID that we've got a robust and resilient portfolio. We did go negative in either of those global prices. So we're looking ahead with confidence the trends in our business are strong. The 7% to 9% guidance range that we have for this year is solidifying. So that's probably how best to cover it.

If you don't mind, I just have one follow-up, please, on the profit side of the business because even when you had the decline, your EBIT was quite well protected either due to the GFC or even doing the pandemic, I mean, it didn't decline as in the sort of top line decline. So is it fair to say that you have enough flex on your cost base to protect the absolute level of EBIT even in this time around?

Again, I think as you say, both of those examples show that we have a lot of levers to pull. At the end, we're a growth company over the long term. We expect our markets to deliver a lot of incremental value. So there's always a fine balance between managing the cost base for the short term and making sure that we're generating the long-term growth in value that we've shown we can do as a company. But I think our track record shows we can manage the cost base through those turbulent times.

We do not have any other incoming questions. Sorry, go ahead.

Great. Thank you very much. Okay. Well, thank you, everybody, for joining today, and thanks for the questions. So I wish you all have a very good day. And we look forward to speaking with you again in November for our half year results. Thank you very much.

Thank you, everyone. That concludes your conference call for today. You may now disconnect. Thank you for joining. Enjoy the rest of your day.