Visa Inc. · NYSE:V
Visa — Q3 2011 Earnings Presentation
23 slides from Visa's earnings presentation, Jul 27, 2011
Slide 1: Visa Inc. Fiscal Third Quarter Financial Results
Visa Inc. Fiscal Third Quarter Financial Results July 27, 2011
Slide 2: Forward-Looking Information
Forward-Looking Information This presentation contains forward−looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by the terms “expect,” “will,” “continue” and similar references to the future. Examples of such forwa
Slide 3: Solid Fiscal Third Quarter Results
Solid Fiscal Third Quarter Results • Strong operating revenues of $2.3 billion, up 14% over prior year • Adjusted quarterly net income of $883 million, up 23%, and adjusted diluted earnings per share of $1.26, up 29% over prior year • Repurchased 13.7 million shares at an average price of $77.36 for
Slide 4: Payments Volume
Payments Volume US$ in billions, nominal, except percentages Quarter ended March 2010 ROW = Rest of World 2011 862 745 U.S. U.S. 517 427 477 449 U.S. U.S. 199 345 296 182 U.S. U.S. ROW ROW ROW ROW 245 278 318 385 266 318 ROW 51 ROW 68 Total Visa Inc. Credit Debit YOY Change (nominal) 16% 15% 17% YOY
Slide 5: Payments Volume
Payments Volume US$ in billions, nominal, except percentages Quarter ended June Note: Current quarter payments volume and other select metrics are provided in the operational performance data supplement to provide more recent operating data. Service revenues continue to be recognized based on paymen
Slide 6: Payments Volume
Payments Volume US$ in billions, nominal, except percentages Quarter ended March 2010 2011 477 427 230 195 77 58 43 48 23 30 United States Asia Pacific Latin America and Canada Central and Eastern Caribbean Europe, Middle East and Africa YOY Change (nominal) 12% 18% 32% 11% 34% YOY Change (constant)
Slide 7: Payments Volume
Payments Volume US$ in billions, nominal, except percentages Quarter ended June Note: Current quarter payments volume and other select metrics are provided in the operational performance data supplement to provide more recent operating data. Service revenues continue to be recognized based on paymen
Slide 8: Transactions
Transactions in millions, except percentages Quarter ended March Quarter ended June 2010 2011 19,400 18,046 17,582 16,118 Credit Credit Credit 35% 35% 13,038 Credit 35% 12,040 11,721 36% 10,648 Debit Debit Debit Debit 64% 65% 65% 65% Total Transactions Processed Total Transactions Processed Transact
Slide 9: Total Cards
Total Cards in millions, except percentages Quarter ended March 2010 1,825 1,870 2011 1,110 1,051 774 760 Credit Debit Visa Inc. YOY (2)% 6% 2% Change Note: From time to time, previously submitted card information may be updated. Prior year card information presented has not been updated, as changes
Slide 10: Revenue – Q3 2011
Revenue – Q3 2011 US$ in millions, except percentages Fiscal 2010 Fiscal 2011 2,770 2,422 2,322 2,029 (393) (448) Gross Net Operating Revenues Incentives Revenues YOY 14% 14% 14% Change Note: Growth rates calculated based on whole numbers, not rounded numbers. Fiscal Third Quarter 2011 Financial Res
Slide 11: Revenue Detail – Q3 2011
Revenue Detail – Q3 2011 US$ in millions, except percentages Fiscal 2010 Fiscal 2011 1,055 873 886 792 662 574 183 167 Data International Service Other Processing Transaction Revenues Revenues Revenues Revenues YOY 21% 12% 15% (10)% Change Note: Growth rates calculated based on whole numbers, not ro
Slide 12: Operating Margin – Q3 2011
Operating Margin – Q3 2011 US$ in millions, except percentages Fiscal 2010 Fiscal 2011 2,322 58% 2,029 56% 1,345 1,137 977 892 Operating Margin Net Operating Total Operating Operating Income Revenues Expenses YOY 2 ppt 14% 10% 18% Change Note: Growth rates calculated based on whole numbers, not roun
Slide 13: Operating Expenses – Q3 2011
Operating Expenses – Q3 2011 US$ in millions, except percentages Fiscal 2010 Fiscal 2011 363 285 277 251 114 103 91 84 87 77 74 63 Network Depreciation General Professional Personnel and Marketing and and Fees Processing Amortization Administrative YOY Change 27% (12)% (9)% 9% 18% 32% Note: Growth r
Slide 14: Other Income (Expense)
Other Income (Expense) US$ in millions The following table presents components of our other income (expense). Three Months Ended June 30, 2011 Gain on sale of investment in CBSS $ 85 Revaluation of Visa Europe put option 122 (1) Other (9) Total other income $ 198 (1) Amount primarily represents inte
Slide 15: Other Financial Results
Other Financial Results • Cash, cash equivalents, restricted cash and available-for-sale investment securities of $6.7 billion at the end of the fiscal third quarter which includes $2.9 billion of restricted cash in the litigation escrow account • Total free cash flow of $1.4 billion for the fiscal
Slide 16: Financial Metrics for Fiscal Year 2011
Financial Metrics for Fiscal Year 2011 11% to 15% Annual net revenue growth range Top end of the Client incentives as % of gross revenues 16% to 16.5% range Less than Marketing expenses $900 million Annual operating margin About 60% Fiscal Third Quarter 2011 Financial Results 16
Slide 17: Financial Metrics for Fiscal Year 2011
Financial Metrics for Fiscal Year 2011 GAAP tax rate, excluding the revaluation of 36.5% to 37% the Visa Europe put option range Annual diluted class A common stock earnings 20% + per share growth Moderately Capital expenditures above $300 million Annual free cash flow $3 billion + Fiscal Third Quar
Slide 18: Financial Metrics for Fiscal Year 2012
Financial Metrics for Fiscal Year 2012 High single to Annual net revenue growth low double digit range Annual diluted class A common stock earnings Mid to high per share growth teens Fiscal Third Quarter 2011 Financial Results 18
Slide 19: Appendix: Reconciliation of Non-GAAP Measures
Appendix Reconciliation of Non-GAAP Measures
Slide 20: Adjusted Net Income and Earnings
Adjusted Net Income and Earnings US$ in millions, except per share data Management believes the presentation of adjusted net income and diluted earnings per share provides a clearer understanding of our operating performance for the periods. The revaluation of the Visa Europe put option resulted in
Slide 21: Calculation of Free Cash Flow
Calculation of Free Cash Flow US$ in millions Calculation of Free Cash Flow US$ in millions Additions (+) / Reductions (-) to Net income attributable to Three Months Ended Nine Months Ended Visa Inc. June 30, 2011 June 30, 2011 Net income attributable to Visa Inc. (as reported) 1,005 2,770 Capital A
Slide 22: Impact of PlaySpan Acquisition
Impact of PlaySpan Acquisition US$ in millions, except per share data The following table presents the impact of the PlaySpan acquisition on Visa’s adjusted diluted earnings per share. Three Months Ended June 30, 2011 Net income attributable to Visa Inc. (as reported) $ 1,005 Revaluation of Visa Eur
Slide 23: Impact of Fundamo Acquisition
Impact of Fundamo Acquisition US$ in millions, except per share data The following table presents the impact of the Fundamo acquisition on Visa’s adjusted diluted earnings per share. Three Months Ended June 30, 2011 Net income attributable to Visa Inc. (as reported) $ 1,005 Revaluation of Visa Europ