TransUnion Announces Next Step in Transformation Program to Reduce Costs, Accelerate Innovation and Drive Growth
15 November 2023 - 1:17PM
TransUnion (NYSE: TRU) (the “Company”) today announced the next
step in its ongoing, multi-year transformation effort to optimize
its operating model and advance its market-leading technology. The
Company will transition additional roles to its successful Global
Capability Centers (GCCs) to improve productivity, reduce costs and
fund growth. TransUnion will also leverage Neustar’s cloud-native
technology to create its next-generation integrated data
management, identity resolution, analytics and delivery platform.
The Company believes these actions will reduce costs, accelerate
innovation and increase organic growth.
The Company expects to deliver $120 to $140 million of
annualized operating expense savings and a $70 to $80 million
capital expenditure reduction in 2026 relative to 2023 levels.
Approximately half of the operating expense savings, which exclude
depreciation and amortization, are expected to be realized in
2024.
This initiative encompasses two components:
Optimize Operating Model: TransUnion
established its award-winning GCC network in 2018 to centralize,
standardize and automate work in locations with deep talent pools.
Since then, the network has grown to more than 4,000 employees, or
about one-third of TransUnion’s employee base, in India, South
Africa and Costa Rica, supporting a wide range of functions. The
Company plans to transition additional roles to the GCC locations
over the course of the next two years, driving material cost
savings and productivity benefits. In addition, the Company plans
to eliminate roles in the near-term to further reduce operating
expenses.
Expand Technology Capabilities: TransUnion
expects to successfully complete its cloud migration, called
Project Rise, by the end of 2024 as planned. This initiative
migrates the majority of TransUnion’s technology applications to a
new software foundation within leading public clouds. TransUnion
intends to further leverage Neustar’s state-of-the-art technology
to streamline its product delivery platforms, achieve material
savings and increase innovation velocity. This new, integrated
product platform, branded OneTruTM, will provide customers with
seamless access to TransUnion’s broad portfolio of data, solutions
and capabilities for more rapid product development and
commercialization.
“Today’s announcement reflects our continued focus on creating
shareholder value. We believe these investments will help optimize
our global operating model and enhance our market-leading
technology to reduce costs, accelerate innovation and drive growth.
I’m excited about TransUnion’s direction and believe that these
changes enhance our ability to deliver even more innovative
solutions that help customers grow and protect their businesses,”
said Chris Cartwright, President and CEO, TransUnion. To capture
the benefits, TransUnion expects to incur approximately $355 to
$375 million of one-time pre-tax expenses, with the majority
incurred by the end of 2024. Employee separation and facility exit
costs are expected to make up approximately $155 million of the
total. The remaining expense includes approximately $65 million
already planned and communicated to complete Project Rise plus
approximately $145 million to implement OneTruTM and optimize the
operating model.
Capital expenditures are expected to increase to 9 percent of
revenue in 2024 and return to 8 percent in 2025. In 2026 and going
forward, the Company expects capital expenditures to be 6 percent
of revenue.
Altogether, the program is expected to impact approximately 10
percent of the Company’s current workforce through relocation to
the GCC locations and position eliminations. TransUnion expects to
make these investments while continuing to prioritize debt
prepayment with a targeted net leverage ratio of 3.0x.
“While these changes involve difficult decisions, they
strengthen TransUnion and create an opportunity to extract more
value from our recent acquisitions. As a leadership team, we
recognize that many talented TransUnion colleagues will be impacted
by these decisions and we are committed to supporting them through
this transition,” said Cartwright.
The transformation program will be implemented with a focus on
maintaining operational continuity and high levels of service to
consumers, customers and partners.
As previously announced, Chris Cartwright will present at the
J.P. Morgan Ultimate Services Investor Conference on Thursday,
November 16, 2023 at 8:10 a.m. CT (9:10 a.m. ET). A live
webcast of the presentation will be made available on the
TransUnion Investor Relations website at
http://www.transunion.com/tru. A replay will also be available
on the Company’s website following the conclusion of the
presentation.
About TransUnion (NYSE:TRU)TransUnion is a
global information and insights company with over 13,000 associates
operating in more than 30 countries. We make trust possible by
ensuring each person is reliably represented in the marketplace. We
do this with a Tru™ picture of each person: an actionable view of
consumers, stewarded with care. Through our acquisitions and
technology investments we have developed innovative solutions that
extend beyond our strong foundation in core credit into areas such
as marketing, fraud, risk and advanced analytics. As a result,
consumers and businesses can transact with confidence and achieve
great things. We call this Information for Good® — and it leads to
economic opportunity, great experiences and personal empowerment
for millions of people around the world.
http://www.transunion.com/business
TransUnion Forward-Looking
StatementsThis press release contains “forward-looking
statements”, within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are based on the
current beliefs and expectations of TransUnion’s management and are
subject to significant risks and uncertainties. Actual results may
differ materially from those described in the forward-looking
statements. Any statements made in this press release that are not
statements of historical fact, including statements about our
beliefs and expectations, are forward-looking statements.
Forward-looking statements include information concerning possible
or assumed future results of operations, including descriptions of
our business plans and strategies. These forward-looking statements
often include words such as “anticipate,” “expect,” “guidance,”
“suggest,” “plan,” “believe,” “intend,” “estimate,” “target,”
“project,” “should,” “could,” “would,” “may,” “will,” “forecast,”
“outlook,” “potential,” “continues,” “seeks,” “predicts,” or the
negatives of these words and other similar expressions. Such
forward-looking statements include statements regarding the timing
and scope of the transformation program, the amount and timing of
the related charges and cash expenditures, the intended objectives
of the transformation program, and the expected benefits, including
expected cost savings resulting from the transformation program.
Many factors could cause the actual results of the transformation
program to differ materially from those expressed in these
forward-looking statements. These factors include, among other
things: (i) the preliminary nature of our estimates of the charges
and cash expenditures to be incurred in connection with the
transformation program, which are subject to change as we make
decisions and refine these estimates over time; (ii) timing delays
in implementing the transformation program because of legal
requirements; and (iii) potential disruption to our business and
operations as we implement the transformation program. A discussion
of these and other risks and uncertainties that could cause our
actual results to differ materially from these forward-looking
statements is included in the documents that we file with the
Securities and Exchange Commission (“SEC”) on Forms 10-K, 10-Q,
8-K, and other documents we file from time to time with the SEC.
These forward-looking statements speak only as of the date of this
press release. We undertake no obligation to publicly release the
result of any revisions to these forward-looking statements to
reflect the impact of events or circumstances that may arise after
the date of this press release.
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Contact |
Dave BlumbergTransUnion |
E-mail |
david.blumberg@transunion.com |
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Telephone |
312-972-6646 |
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