Initial Observations
• Impressive customer relationships
• Strong talent base supporting key growth initiatives
• Solid growth opportunities through the core business,
new product innovation and strategic acquisition
• Sustainable financial model and performance with strong
operating leverage, cash flows and operating margins
Solid Execution
Produces Strong Results
The strengths of Equifax are especially clear in its business
model. Excellent operating leverage produces strong and consistent
cash flow and operating margins. Our 2005 financial results demonstrate
the power of this model. Revenue reached a record $1.4 billion,
up 13 percent over the previous year, and our operating margin
was an impressive 29 percent. Cash provided by operating activities
rose 9 percent to $338 million.
This performance reflects outstanding execution across every business
unit. North American Information Services (NAIS) had its best
year ever. This group managed the implementation of the FACT Act
requirements in an exemplary manner, balancing the needs of consumers,
customers and shareholders. In the United States, revenue climbed
14 percent, and in Canada, revenue grew 12 percent to a record
level. Marketing Services delivered its best performance in five
years, driven by new leadership and new products. Personal Solutions
continued its strong growth, increasing revenue 19 percent to
$115 million.
The strong performance of North America underscores the sound foundation
of our core business. This foundation is critical to building
new growth. Equifax Commercial Solutions, for example, demonstrates
how we have leveraged the relationship between Equifax and its
core customer base of financial institutions to build an entirely
new revenue stream by providing unique solutions serving their
small-business lending needs.
Our international businesses did a superb job of focusing on profitable
growth. In Latin America, revenue grew 38 percent and operating
margins were 26 percent, up from 19 percent in 2004. Europe also
did a terrific job by posting a record 24 percent operating margin.
Both businesses are excellent illustrations of the sound operating
principles that are inherent in our business model.
Growth in 2005 also showed how prudent and targeted acquisitions
are an effective way to extend our business and expand our technological
capabilities. Last year’s acquisition of BeNOW, a marketing
solutions company, is providing new ways for Marketing Services’
technology to assist customers in acquiring, retaining and growing
their customer relationships. Similarly, another 2005 acquisition,
APPRO Systems, Inc., has enhanced the ability of our core North
American Information Services business to sell small and mid-sized
financial institutions high-value decisioning solutions.
With the power of our enabling technologies and APPRO’s loan
origination expertise, we deliver decisioning solutions that redefine
the way financial institutions of all types do business –
a powerful combination in today’s competitive lending market.
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