Wex Inc. · NYSE:WEX
Wex — Q2 2020 Earnings Presentation
20 slides from Wex's earnings presentation, Oct 19, 2020
Slide 1: WEX Second Quarter 2020 Earnings
WEX Second Quarter 2020 Earnings July 30, 2020
Slide 2: WEX Forward-Looking Statements
WEX Forward-Looking Statements These earnings materials contain forward-looking statements, including statements regarding: financial guidance; assumptions underlying the Company's financial guidance and the potential for providing the same; future growth opportunities and expectations; and, market
Slide 3: 2Q2020 Highlights
2Q2020 Highlights 2Q2020 Segment Revenue Growth Vs. 2Q2019 (1) -24% -40% +6% (2) Fleet Travel & Corporate Health & Employee Benefits (1) Represents US Healthcare purchase volume only 3 (2) Approximately $2.4 billion of the decline in purchase volume was due to lower fuel prices
Slide 4: Strategic Pillars
Strategic Pillars HIGHLIGHTS FOR THE QUARTER • Several high-profile customer wins across each segment • Employees continue to work from home with successful technology transition • Adjustments made in cost structure to help offset impacts from COVID-19 • Targeted CAPEX deployment focused on areas of
Slide 5: Executing on the WEX Strategy
Executing on the WEX Strategy BUILDING A BEST-IN-CLASS GROWTH ENGINE LEADING WITH SUPERIOR TECHNOLOGY FLEET TRAVEL & CORPORATE HEALTH & EMPLOYEE BENEFITS • Migration of EG Fleet card • Transition of 70% of volume • July product release includes onto WEX cloud-based onto internal cloud-based employer
Slide 6: Weekly Volume Metrics
Weekly Volume Metrics Key Updates • July month-to-date domestic fuel price is $2.23 • Expect stabilization to gradual improvement going forward 6
Slide 7: Weekly Volume Metrics
Weekly Volume Metrics Key Updates • SaaS account growth MTD in July is 13.2% • Expect the trajectory of spend volumes in June and July to continue through the remainder of 2020 • Customers begin to spend on elective healthcare procedures and resume a more normal cadence of doctor visits • SaaS accou
Slide 8: WEX Second Quarter 2020 Financial Results
WEX Second Quarter 2020 Financial Results 8
Slide 9: Company Results - Q2 2020
Company Results - Q2 2020 Q2 Results Show Impact of Covid-19 2Q20 2Q19 $ ∆ Yr/Yr % ∆ Yr/Yr Total Revenue $347,084 $441,807 $(94,723) (21)% Net income attributable to $72,658 $13,807 $58,851 426% shareholders Net income attributable to WEX Inc. $1.66 $0.32 $1.34 419% per diluted share Adjusted net in
Slide 10: Revenue Breakdown - Q2 2020
Revenue Breakdown - Q2 2020 Continued revenue growth in Health and Employee Benefit Solutions segment 2Q20 2Q19 $ ∆ Yr/Yr % ∆ Yr/Yr Total Revenue $347,084 $441,807 -$94,723 (21)% Segment Revenue: Fleet Solutions $204,380 $267,314 -$62,934 (24)% Travel and Corporate Solutions $54,495 $91,350 -$36,855
Slide 11: Fleet Solutions
Fleet Solutions OTR Business Resilient in Challenging Environment 2Q20 2Q19 $ ∆ Yr/Yr % ∆ Yr/Yr Total Segment Revenue ($) 204,380 267,314 (62,934) (24)% Payment Processing Revenue ($) 90,147 120,717 (30,570) (25)% Finance Fee Revenue ($) 42,463 62,385 (19,922) (32)% All Other Revenue ($) 71,770 84,2
Slide 12: Travel and Corporate Solutions
Travel and Corporate Solutions Travel Customers Impacted by COVID-19 2Q20 2Q19 $ ∆ Yr/Yr % ∆ Yr/Yr Total Segment Revenue ($) 54,495 91,350 (36,855) (40)% Payment Processing Revenue ($) 43,261 77,273 (34,012) (44)% All Other Revenue ($) 11,234 14,077 (2,843) (20)% Purchase Volume ($) 3,168,064 10,047
Slide 13: Health and Employee Benefit Solutions
Health and Employee Benefit Solutions Continued Strong Account Growth in U.S. Health Business 2Q20 2Q19 $ ∆ Yr/Yr % ∆ Yr/Yr Total Segment Revenue ($) 88,209 83,143 5,066 6% Payment Processing Revenue ($) 14,053 16,836 (2,783) (17)% Account Servicing Revenue ($) 62,602 54,669 7,933 15% All Other Reve
Slide 14: Selected Operating Expenses
Selected Operating Expenses Selected Operating Expenses (GAAP) (In thousands) 2Q20 2Q19 $ ∆ Yr/Yr % ∆ Yr/Yr Processing costs $ 99,991 $ 99,481 $ 510 1 % Service fees $ 9,700 $ 14,197 $ (4,497) (32) % Provision for credit losses $ 20,581 $ 14,832 $ 5,749 39 % Operating interest $ 6,504 $ 10,693 $ (4,
Slide 15: Tax Rate
Tax Rate Key Updates • ANI tax rate consistent with the prior year quarter • GAAP tax rate unusually high due to a decrease in Pre-Tax Income, a shift in jurisdictional earnings and sizable nondeductible expenses partially offset by a discrete tax benefit 15
Slide 16: Additional Balance Sheet Items
Additional Balance Sheet Items Key Updates • Corporate cash1 balance was $580 million • Available borrowing capacity of $769 million on line of credit • Amended credit facility including 2 allowances for higher leverage and more liberal cash netting to calculate leverage • Leverage ratio of 3.1X • P
Slide 17: Appendix
Appendix 17
Slide 18: Diversity and Inclusion
Diversity and Inclusion Areas of focus WORKPLACE WORKFORCE COMMUNITY MARKETPLACE Create a culture of Build tomorrow’s Embrace the Cement D&I as a inclusion to drive diverse workforce diversity of our market imperative innovation communities and as part of our reputation 18
Slide 19: WEX Non-GAAP Reconciliation
WEX Non-GAAP Reconciliation Three Months Ended June 30, 2020 2019 per diluted share per diluted share Net income attributable to shareholders $ 72,658 $ 1.66 $ 13,807 $ 0.32 Unrealized loss on financial instruments 3,842 0.09 21,516 0.49 Net foreign currency loss (gain) 2,462 0.06 (6,665) (0.15) Acq
Slide 20: WEX Non-GAAP Reconciliation
WEX Non-GAAP Reconciliation The Company's non-GAAP adjusted net income excludes unrealized gains and losses on financial instruments, net foreign currency gains and losses, acquisition-related intangible amortization, other acquisition and divestiture related items, stock-based compensation, other c