Western Union Company (the) · NYSE:WU

Western Union Company (the) — The Western Union Company — Q4 2014 Earnings Presentation

23 slides from Western Union Company (the)'s earnings presentation, Feb 10, 2015

  1. Slide 1: Fourth Quarter 2014 Earnings Webcast & Conference Call

    Fourth Quarter 2014 Earnings Webcast & Conference Call February 10, 2015

  2. Slide 2: Mike Salop, Senior Vice President, Investor Relations

    Mike Salop Senior Vice President, Investor Relations Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 2

  3. Slide 3: Safe Harbor

    Safe Harbor This presentation contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to pred

  4. Slide 4: Hikmet Ersek, President & Chief Executive Officer

    Hikmet Ersek President & Chief Executive Officer Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 4

  5. Slide 5: Overview

    Overview Delivered key results in 2014  Returned consumer money transfer to revenue growth  Expanded online and account based capabilities  Enhanced global compliance programs  Generated operating profit margin improvement EPS increased 11% to $1.59 for the full year Western Union | ©2015 Wester

  6. Slide 6: Capital Deployment and 2015 Financial Outlook

    Capital Deployment and 2015 Financial Outlook Capital Deployment  Approximately $1 billion of operating cash flow generated in 2014  Over $750 million returned through repurchases and dividends 2015 Outlook  Revenue impacts from currency and macroeconomic headwinds  Profitability benefits from c

  7. Slide 7: Raj Agrawal, Executive Vice President & Chief Financial Officer

    Raj Agrawal Executive Vice President & Chief Financial Officer Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 7

  8. Slide 8: Revenue Q4

    Revenue Q4 ($ in millions) $1,422 $1,410  Consolidated revenue $30 $32 decreased 1% on a reported basis, or increased 4% $350 $352 constant currency*  Transaction fee revenue decreased 2% $1,042 $1,026  Foreign exchange revenue increased 1% Q4 2013 Q4 2014 Transaction Fee Foreign Exchange Other *

  9. Slide 9: Consumer-to-Consumer Q4

    Consumer-to-Consumer Q4  80% of Company revenue  Revenue decreased 2%, or increased 2% constant currency*  Total transactions increased 2%  Cross-border principal decreased 1%, or increased 2% constant currency* *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. Weste

  10. Slide 10: C2C Transaction and Revenue Analysis

    C2C Transaction and Revenue Analysis Q4 2014 *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 10

  11. Slide 11: Consumer-to-Consumer

    Consumer-to-Consumer Q4 2014 Revenue Transaction Growth/ Currency Growth/ % of Total Regions Decline Impact** Decline Revenue Europe and CIS -5% -6% 6% 21% North America 0% -1% 2% 19% Middle East and Africa -3% -3% -3% 16% Asia Pacific -3% -4% -4% 11% LACA -3% -7% 2% 9% westernunion.com 19% -4% 27%

  12. Slide 12: C2B and B2B Q4

    C2B and B2B Q4  Consumer-to-Business  11% of Company revenue  Revenue increased 4%, or 15% constant currency*  Business Solutions  7% of Company revenue  Revenue increased 1%, or 5% constant currency* *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. Western Union

  13. Slide 13: Operating Margin Q4

    Operating Margin Q4 30.0% 25.0% 19.6% 20.0% 16.8%  Operating margin increase 15.0% • Driven primarily by cost savings initiatives and lower 10.0% integration expenses 5.0% 0.0% Q4 2013 Q4 2014 *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. Western Union | ©2015 Weste

  14. Slide 14: C2C Operating Margin Q4

    C2C Operating Margin Q4 30.0% 25.0% 23.1% 20.5%  Operating margin increase 20.0% • Primarily due to benefits from 15.0% cost savings initiatives 10.0% 5.0% 0.0% Q4 2013 Q4 2014 Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 14

  15. Slide 15: C2B Operating Margin Q4

    C2B Operating Margin Q4 30.0% 25.0% 20.0% 15.6%  Operating margin decrease 14.2% 15.0% • Primarily due to higher interchange expense 10.0% 5.0% 0.0% Q4 2013 Q4 2014 Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 15

  16. Slide 16: Business Solutions Operating Loss Q4

    Business Solutions Operating Loss Q4  Operating Loss  Operating loss of $5 million compared to an operating loss of $11 million in the prior year period  Depreciation and amortization of approximately $13 million in both the current quarter and in the prior year period  The improvement in operat

  17. Slide 17: Financial Strength

    Financial Strength Year Ended Dec. 31, 2014 Cash Flow from Operations $1.0 billion Capital Expenditures $179 million Stock Repurchases $488 million Dividends Paid $265 million Cash Balance, Dec. 31, 2014 $1.8 billion Debt Outstanding, Dec. 31, 2014 $3.7 billion Western Union | ©2015 Western Union Ho

  18. Slide 18: 2015 Outlook

    2015 Outlook  Revenue – Low single digit constant currency revenue increase – Low to mid-single digit GAAP revenue decrease, which reflects the expected negative currency impact from depreciation of the Euro and other major currencies  Operating Profit Margin – Operating margin of approximately 21

  19. Slide 19: Questions & Answers

    Questions & Answers Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 19

  20. Slide 20: Appendix

    Appendix Fourth Quarter 2014 Earnings Webcast & Conference Call February 10, 2015 Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 20

  21. Slide 21: Non-GAAP Measures

    Non-GAAP Measures Western Union's management believes the non-GAAP financial measures presented provide meaningful supplemental information regarding our operating results to assist management, investors, analysts, and others in understanding our financial results and to better analyze trends in our

  22. Slide 22: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 4Q13 FY2013 1Q14 2Q14 3Q14 4Q14 FY2014 Consolidated Metrics Revenues, as reported (GAAP) $ 1,421.9 $ 5,542.0 $ 1,350.8 $ 1,405.6 $ 1,440.9 $ 1,409.9 $ 5,607.2 Foreign currency translation impact (a) 23.9 70.3 32.5 26.3 35.0 63.7 157.5 Revenues, constant currency a

  23. Slide 23: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 4Q13 FY2013 1Q14 2Q14 3Q14 4Q14 FY2014 Consumer-to-Business Segment Revenues, as reported (GAAP) $ 149.5 $ 608.5 $ 147.2 $ 145.9 $ 150.4 $ 155.3 $ 598.8 Foreign currency translation impact (a) 10.2 31.6 16.6 18.8 18.1 16.6 70.1 Revenues, constant currency adjusted

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