European Business Services "The Signal Service" McKenzie

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European Business Services "The Signal Service" McKenzie

ation today), in order to reaccelerate growth

and lift margins in a world of agentic AI. We also heard again about the recent

proliferation of CX AI start-ups and rising AI costs for all players (with TP emphasising the

attraction of its leading scale, unique IP/process expertise, and strong balance sheet in

this increasingly ‘noisy’ market context). Our view: TP is dealing with a rapidly changing

market, technology set and customer demand, and in this backdrop we think the

company is still searching for a future-proofed value proposition. Current valuation of 4x

PE and 23% FCF yield suggests the market is sceptical about the future growth path and

so TP will have to lay out a lot of evidence to prove out i) why a significant portion of

existing revenues shouldn’t face severe deflationary pressure and ii) the long-term

sustainability of its newer AI-focused revenue streams.

Experian: Credit Landscape Symposium & Expert call with former FHFA Director

Our US colleagues as a part of their Credit Landscape Symposium have hosted Equifax IR

and an expert call with former FHFA Director Sandra Thompson. Equifax noted positive

trends in VantageScore adoption with most institutions now leveraging both FICO & VS

to analyse US mortgage risk. Equifax is also benefitting from using AI to aggregate and

incorporate alternative data supplementing the traditional credit file. The former FHFA

Director said the VantageScore 4.0 pilot with approved lenders can span a few months

to a year, and believes VS could benefit from lenders looking to score more people. Our

View: We view commentary on VantageScore as incrementally positive for Experian,

with all 3 major CRAs set to benefit from any potential adoption. The most important