Corporate Report 2014

When you see further the world makes sense

CONTENTS SEE FURTHER

FINANCIAL REPORT Highlights and Headlines 03 – 04

BUSINESS OVERVIEW Mike Gordon, CEO 01 – 02

CONSUMER ADVOCACY Challenging the Status Quo 05 – 06

CORPORATE RESPONSIBILITY Making a Difference 09 – 12

DATA The Evolution of Data 07 – 08

It is a pleasure to be in the position to lead this business and to play a part in the next chapter of its growth strategy. We have an extremely energetic and dynamic culture, driven by ‘can do’, innovative and smart people, who have a real passion for the business. We have great solutions that are valued by our customers across all of our lines of business, which together have contributed to Callcredit becoming the trusted partner it is today.

However, we shouldn’t become complacent and it’s important that as a business we look to build an efficient, scalable infrastructure, to support our business growth and our talent, and put in place good management information to continue to make smart decisions about how we run our business. This will allow us to support our corporate customers’ ever expanding needs and the end consumers need to understand their credit history and protect their digital identities.

Our aim is to continue to accelerate growth in our business. We will do this through expanding our solutions that solve customers’ problems and protect the consumer’s information. We expect the next five years to be exciting times for our business and we have clearly defined goals to achieve these ambitious plans:

• Data Solutions – the core of Callcredit is the strength of our data assets that we manage on the behalf of the consumer. With data expanding exponentially we will look to improve these data assets to provide further information and insight across our different businesses

• Software Solutions – to accentuate our data assets, we will actively build our software and analytics solutions, to improve our customers’ decision making processes. This focus of this expansion will be around our core assets in fraud/identity and decisioning

• Consumer Solutions – the number of consumers who manage their credit histories through Noddle has doubled over the past year. We will continue to expand this offering to ensure that consumers have

the knowledge they need to make decisions on their credit history and also so they can protect their information and identities

• International – we will continue to expand our international presence to support our customers’ cross-border needs as the world becomes more mobile and data is no longer confined across within borders

• Our people are at the centre to our success. To be successful, we want to create the best place to work wherever we have offices around the world and will be investing significantly around our resources.

These goals will guide us on where we will make our investments going into the near future. For the next fiscal year we have ambitious plans to grow our business and invest in the infrastructure in order to maintain our strategic edge in the marketplace. So there is a lot to do, but the future remains bright for Callcredit.

BUSINESS OVERVIEWMike Gordon, CEO

“The ability to adapt is central to an organisation’s ability to grow and survive.” Mike Gordon, CEO

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We had another extremely successful year in 2014, delivering strong results against a backdrop of challenging conditions within the financial services market, where a number of lenders, particularly within the alternative finance sector, were heavily impacted by the introduction of new regulation. Revenues increased by 19% to £150m from £126m, with all divisions within the business reporting strong growth. Overall revenue growth was driven by a number of significant new customer wins, underpinned by a continued focus on customer service and product innovation, and by the efforts and support of colleagues across the Group. We generated profit before tax of £29.3m in 2014, up from £26.9m in 2013, representing an increase of 9% year-on-year.

Under the ownership of GTCR, following the acquisition of Callcredit in February 2014, investments have been made in repositioning the organisation and expanding capabilities, to enable us to best serve our customers and capitalise on the significant opportunities in our markets. Alongside continuing investments in data assets, products and customer service, chief amongst these initiatives are expanding go-to market capabilities, to drive sustainable top line growth, and upgrading the operational infrastructure, to enable the business to scale more effectively in the future and improve operating profit margins.

The business generated healthy cash flows, converting profits into £16.6m of operating cash, and continues to operate well within its banking covenant. With revenues and growth typically weighted to the second half and final quarter, operating cash growth has historically trailed profit performance, which represents an ongoing area of focus.

We also pride ourselves on the ability to understand the impact we have on our suppliers. We operate fairly and commit to paying suppliers within payment terms, which are typically 30 days. We have built up strong partnerships, including those with small businesses, which help to support our local economy and community.

Highlights

• Revenues increased 19% to £150 million • All businesses delivered strong revenue growth • Profits before tax up 9% to £29.3 million • Business continuing to invest to drive sales growth and scale effectively

FINANCIAL REPORTHighlights and Headlines

2014 PBT - £29.3m

2014 £29.3m

2013 £26.9m

2012 £16.3m

2011 £11.0m

2010 £10.0m

2009 £7.1m

2008 £4.6m

2007 £2.8m

2006 £-2.1m

2014 Revenue - £150m (£2.4m was acquired revenue)

2014 £150m

2013 £126m

2012 £114m

2011 £92m

2010 £61m

2009 £54m

2008 £49m

2007 £29m

2006 £19m

Organic Revenue Acquired Revenue

£150m 2014 Revenue £29.3m 2014 PBT 1200 EMPLOYEES

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In Summary

2014 proved to be another good year for our business, with all divisions contributing to a strong revenue and profit growth performance. The business has ambitious growth plans for 2015 and beyond, and is well positioned to capitalise on the significant opportunities both in the UK market and internationally.

Our new owners, GTCR, have given us a clear mandate to build on our success, and we are investing against these opportunities to deliver innovative data and software solutions to help our customers thrive in a fast changing environment. At the same time, we are investing in our operational capabilities and systems to enable the business to scale effectively as we grow.

Against more challenging market conditions, in 2014 the business delivered another year of double digit sales growth, testament to the strength of the business and considerable efforts of colleagues across the Group.

As a Group we have billions of pieces of raw data. What we have never lost sight of is that whoever we work with and whatever sector they operate in, they want us to help them understand the data and create valuable insight from it - enabling them to make smarter decisions.

That could mean helping consumers to better protect themselves from identity fraud, delivering a marketing campaign that will ensure that consumers receive the right marketing offer at the right time through the right channel, or providing consumers with free access to their credit report. In order to remain competitive our clients are changing their business models, evolving new channels and delivering increased value to their customers, consequently it remains imperative that we are in a position to respond to these challenges and remain at the forefront of innovation.

Data and the information it delivers plays an integral part in our everyday lives. The emergence of social media has created an environment where we feel much more readily inclined to share data with each other and with organisations. Consumers have evolved from face-to-face transactions; to telephony; to web channels; to a world where consumers expect to be able to transact remotely, faster using mobile, web and mobile apps.

This explosion of data has created so many new data sources that can be harvested to provide information. As a society we should encourage consumers to take greater control of their own data and identity allowing them to share their data with and for what purposes they choose. Why shouldn’t a consumer, when applying for a mortgage or a loan have a fuller understanding of their data.

Enabling smarter decisions, is at the heart of what we do. Data is key to this, and this is why we have recently appointed a Chief Data Officer to be at the forefront of an ever evolving marketplace.

In 2012 Callcredit launched Noddle the first free for life credit report in the UK. Why you might ask when our competitors offer paid for subscription services? Well we wanted to ensure that consumers better understood the importance of the information held on their credit report and how, by taking greater control of their finances, this could enable them greater access to financial services and products. We now have over 1.25 million consumers signed up to use the service with over 500,000 consumers actively using the service each month – which is testament that consumers are engaged with the service and trust the value it provides.

More recently we launched MOGObankconnect a product that provides consumers with the facility to simply, securely and quickly package up their online banking transactional data. This provides a uniquely fast way to verify and transmit financial data and bank statements, whilst at the same time helping to dramatically streamline lending decisions. The software uses a single use digital app which is a sealed smart browser that automatically navigates and streams online banking data from the safety of a consumers’ personal device.

By combining products like Noddle and MOGObankconnect we are providing consumers with new innovative, easy to access solutions, that empower the consumer to take greater control and use that data to their advantage.

Our business has been built on the pillars of trust and risk in the new digital economy, trust is playing an increasingly important role. In today’s modern society there is often talk about trust which organisations do you trust the most, which organisations you trust the least and which individuals you trust the most.

Ultimately consumer data will continue to evolve - in depth, breadth and how consumers advocate its use. We are committed to staying at the forefront of the market.

CONSUMER ADVOCACY – THE CONSUMER CREDIT BUREAUChallenging the Status Quo

“In 2014 we continued to deliver innovative market leading solutions across our portfolio of clients. Our goal is to ensure that the beneficiary of this innovation - the consumer - remains at the heart of everything we do.”Graham Lund, UK MD

At Callcredit we are continually looking for new ways in which our products and services can best deliver insight and understanding to our broad range of clients. Our expertise spans across a number of sectors including financial services, retail, insurance, gaming, utilities, telecoms, alternative lending and the public sector.

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“For over a decade we have been helping our clients to make smarter, more informed decisions throughout the consumer lifecycle. Technology and innovation remain at the heart of everything we do and is what really sets us apart from our competitors.” Mark Davison, Chief Data Officer

DATAThe Evolution of Data

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It’s not only the volume of data that is changing, the type of data is evolving too. Historically data could be described as factual, point in time, rarely shared and designed for a specific purpose. As we move into the future, data capture is becoming more ubiquitous often captured for ‘any’ or non-specific purpose. For example, only within the last couple of years technology has provided smart phones that count the numbers of steps we do daily and log our location when we interact with services – we are only seeing the beginning of how this data can be utilised.

Data is becoming increasingly accessible and initiatives, such as the Open Data, supported by the UK government bring structure and credibility. Predictive sciences are continuing to rapidly mature

to utilise this additional raw material driving increasing understanding of behaviour in virtually every form. Callcredit is at the forefront of understanding in this evolving environment truly empowering our core strategic driver of ‘enabling smarter decisions’.

In parallel to the increasing volume and variety of data, control is shifting towards the consumer. This is a trend supported by consumer advocacy groups, enterprises across all sectors, regulators and most importantly by us. It will see a route to ensure that consumers are increasingly educated about the value of their own data, and empowered to control and utilise it for their own benefit. These benefits are multifaceted – they help consumers protect, manage and make the most

of their data, which in turn helps to improve their financial status and provide peace of mind against dangers such as identity fraud. Fundamentally this transparency helps provide the pressure test to distinguish between the growing concerns about what is ethical versus what is possible with data.

As a data business founded on innovation, it’s important that we always stay one step ahead of the market by identifying ways in which we can deliver deeper insight, driven through innovation. As we see an increasingly broader distribution of data sources, it’s important to look at ways in which new techniques and approaches can be developed to harness these data sets, which can be utilised to build better decisioning systems, for the benefits of consumer and client alike.

DATA EXPLOSIONToday, we as consumers have become accustomed to data and how that data can help us all in our everyday lives. However what we see today is vastly different from what we have witnessed historically. From the dawn of civilisation to 2003 we produced 5 exabytes (a billion billion bytes) of text – it is estimated we now produce this amount of data every day, and the pace is increasing.

Our Vision

To do good business, by providing responsible solutions, delivered by a healthy and diverse workforce that actively engages with the community and environment.

Stakeholders

Our regulators, clients and the public require that we strike a fair balance between commercial, social and environmental issues.

Our employees expect the same, and for us to support their career development, health and wellbeing and work-life balance.

Equally important, our investors look for market growth and increasing profitability.

CR Governance

We frame our approach to different stakeholders through four responsibility themes:

We act with integrity towards our consumers, clients, regulators, suppliers and investors

We value employee engagement, diversity, development, health and wellbeing

We give back to society, including our local communities and charitable causes

We respect the natural world and make efforts to reduce our impact on it

CORPORATE RESPONSIBILITY Making a Difference

“Our relationship of trust with all our different stakeholders underpins our business model, and the way it will evolve in the future. Our Corporate Responsibility culture brings this alive, and helps makes it authentic to how we do things at Callcredit.”

Mike Gordon, CEO

Coming into Callcredit as the new CEO, I am struck by the integrity shown towards our different stakeholders by our people, operations and plans.

Innovation in our products and services delivers social value by supporting responsible lending, age verification, financial literacy and fraud negation.

In 2014 we raised £83K for CandleLighters, a children’s cancer charity located next to our head office in Leeds. One third of our people volunteered in the community.

We also worked down our environmental footprint, and worked up our investment in our people’s development, careers and choices for a healthy lifestyle.

Our people tell us they like this – Corporate Responsibility is a top driver for engagement in our employee survey. We get the same message from our clients, consumers, suppliers and regulators.

Visiting our different offices, and speaking to our people based there, I’m pleased to see that all our locations are embracing Corporate Responsibility.

I look forward to this growing further as we deepen our position as a business of trust.

OUR SUSTAINABLE SUCCESSby Mike Gordon, CEO

OUR STRATEGY

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Our Marketplace

Our Workplace

Our Community

Our Environment

CORPORATE RESPONSIBILITY Making a Difference

“Our Governance model makes CR built-in, not bolt-on. That ensures we do the right things at the right time, and so realise the full benefits.”

Julie Wright, HR Director

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2014 KPIs

Community Investment, of EBITDA

Charity fundraising

Staff who volunteered

Community Partnering

By giving our business skills and products pro bono, we can enable community organisations to better focus on their core mission.

In 2014 we did this with Barca, a Leeds charity that helps people overcome issues stemming from poverty. We helped Barca address financial exclusion, roll-out new IT systems and supplier relationships, develop a strategic plan, and win contracts with the public sector.

Employee Volunteering

In 2014 our people gave 399 days to directly benefit society and the environment. Projects included hosting events for the elderly, wildlife conservation and putting in access routes for the disabled.

Charities

Each of our offices chooses and fundraises for a charity of the year. In 2014 our head office in Leeds raised £83K for CandleLighters, helping Yorkshire families facing childhood cancer. We also match employee’s own fundraising.

OUR COMMUNITY

0.43%

£83K

37%

2014 KPIs

People who want career growth with us

Average absent days per employee

Reportable safety incidents

Our People

Each year we conduct an Employee Engagement Survey to listen to and act on feedback from our people. Our 2014 survey showed that 85% of our people want to stay and grow their career with Callcredit, a very positive result.

We apply the Living Wage Foundation’s minimum rate to our UK employees. We have policies on equal opportunities, dignity, whistle-blowing, anti-bribery, and health and safety. We value diversity in our workforce and offer flexible working to support employee’s work/life balance.

Health, Safety and Wellbeing

We are certified to OHSAS18001, the best practice standard for health and safety. We understand that health and wellbeing impacts on engagement and productivity. We support active and healthy minds with events, facilities and lifestyle choices. Our average sickness absence of 3.5 days per year is excellent compared to the industry average of 7.2 days.

Social Events

We hold regular events to have fun together and to recognise everyone’s hard work and success.

OUR WORKPLACE

85%

3.5

012

2014 KPIs

Tonnes carbon footprint per employee

Litres waste per employee

Waste recycled

Systems, Facilities

We are certified to ISO14001, the best practice for environmental management.

Each year we report our carbon footprint to the Carbon Disclosure Project. Our international growth has increased our travel carbon. Efficiencies in facilities and IT have balanced this, but our overall footprint still grew in 2014.

Technology

We do more with less by being smarter about how we design our IT services. We’ve centralised processing to our datacentres, using renewable electricity and award-winning energy efficiency.

In 2014 we rolled out Lync electronic collaboration tools between our offices to reduce our travel carbon.

Business Change

We use process improvement to drive efficiency and save time, cost and environmental impact. In 2014 we implemented Concur for electronic expenses, significantly reducing paper use.

OUR ENVIRONMENT

3.7

1,850

47%

2014 KPIs

Credit client advocacy

Consumer complaints

Average creditor days

Clients

Our Credit services assess ability to pay, detect fraud and verify identity. This helps clients address conduct and financial risk.

Our Marketing solutions help businesses better target consumers, including with products that help reduce poverty and carbon footprints.

Consumers

Noddle, our free-for-life credit report, helps consumers understand and manage their credit profile. Noddle also helps protect from ID theft.

Suppliers

Our suppliers must meet ethical standards in human and labour rights, and the environment. We operate fairly and as partnerships.

Regulatory Compliance, Security

We are regulated by the Financial Conduct Authority, and have made compliance part of our DNA. We are also certified to ISO27001, the best practice standard for information security.

OUR MARKETPLACE

97%

0.36%

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To find out more about Callcredit, please:

Email: info@callcreditgroup.com Call: +44 (0) 113 388 4300 Visit: www.callcredit.co.uk