American Express Company · NYSE:AXP
American Express — Investor Presentation (February 2011)
48 slides from American Express's investor presentation, Feb 9, 2011
Slide 1: American Express Company Financial Community Meeting
American Express Company Financial Community Meeting Kenneth Chenault Chairman and Chief Executive Officer Doug Buckminster President, International Consumer Card and Small Business Services February 9, 2011
Slide 2: AXP: The International Story
AXP: The International Story ■ Large and diverse footprint ■ Differentiated assets and capabilities ■ Flexibility to meet market conditions ■ Delivering strong growth ■ Accelerate momentum with growth opportunities ■ Commitment to win a larger share of International for AXP 2
Slide 3: Agenda
Agenda ■ AXP Footprint in International ■ Performance in International ■ Growth Going Forward 3
Slide 4: AXP International Across the Payments Landscape
AXP International Across the Payments Landscape Note: The trademarks, logos and service marks used on this slide and throughout this presentation are the property of their respective owners. 4
Slide 5: Global Presence: Over 130 Markets
Global Presence: Over 130 Markets AXP Top Ten Markets by Billings, 2010 AXP International Markets 5
Slide 6: International Business Operations Business Growth
International Business Operations* Business Growth $ in billions, FX Adjusted**: CAGR 2006-2010: $1.5 CAGR 2006-2010: $250 $200 $1.0 $150 $100 $0.5 $50 $0 $0.0 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Growth Growth vs. PY 14% 11% (2%) 15% (12%) (1%) 25% 54% vs. PY *International Business Op
Slide 7: Strong Network of Relationships
Strong Network of Relationships 7
Slide 8: Partnership Excellence
Partner ship Excellence eS q 5 Financial CATHAY PACIFIC BRITISH AIRWAYS ANAM *282Na18 4¥ AEROMEXICO. 4) | AIR FRANCE KLM — KINGFISHER, @THAI TURKISH AIRLINES — | A eat SIZ = | _ AIRLINES (6) Spanair i : QANTAS —"F "ME estpac ® Lloyds TSB Lorrecaro CREDIT SAISON CO.,LTD Fini % ® NEDBANK Bank of Ameri
Slide 9: Strong Network of Relationships
Strong Network of Relationships 9
Slide 10: Unique Capabilities and Assets
Unique Capabilities and Assets ■ Relationship ■ Brand ■ Risk Management Management ■ Loyalty Marketing ■ Customer Service ■ New Product ■ Marketing Development ■ Partnership Analytics Management ■ Global Platforms ■ Co-branding 10
Slide 11: Agenda
Agenda ■ AXP Footprint in International ■ Performance in International ■ Growth Going Forward 11
Slide 12: International Business Operations Financial Performance
International Business Operations* Financial Performance ($ in billions, FX Adj.**) $8.3 $8.2 $8.4 $4.7 $4.5 $4.2 $1.4 $0.9 $0.7 2008 2009 2010 2008 2009 2010 2008 2009 2010 Growth vs. PY (2%) 3% (10%) 6% 25% 54% *International Business Operations (IBO) includes the ICS segment and the international
Slide 13: International Business Operations Cards in Force and Billed Business
International Business Operations* Cards in Force and Billed Business millions $ in billions, FX Adj.** 50 $250 40 $200 30 $150 20 $100 10 $50 0 $0 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Growth Growth vs. PY 14% 13% 2% 8% vs. PY 14% 11% (2%) 15% *International Business Operations (IBO) in
Slide 14: International Business Operations Billings Growth vs. U.S.
International Business Operations* Billings Growth vs. U.S. % increase/decrease vs. prior year: 20% 10% 0% (10%) (20%) Q1'08 Q3'08 Q1'09 Q3'09 Q1'10 Q3'10 Q4’10 International Business Operations (FX Adj.**) U.S. *International Business Operations (IBO) includes the ICS segment and the international
Slide 15: International Card Services Segment
International Card Services Segment $ in billions $12.0 UK $10.7 $1.8B Canada $9.6 $9.3 $2.5B $8.0 Mexico $4.0 $1.0B $0.0 2008 2009 2010 Other Australia Growth (10%) (3%) $1.9B $2.1B vs. PY *FX adjusted information assumes the average exchange rate in 2010 applies to all prior periods for purposes o
Slide 16: International Card Services Segment
International Card Services Segment 12% 10% 8% 6% 4% 2% 0% Q1 '08 Q3'08 Q1 '09 Q3'09 Q1 '10 Q3'10 Q4’10 ICS USCS Managed* *See Annex 3 for a reconciliation to GAAP basis for periods prior to 2010. 16
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Slide 18: International and US: Similarities
International and US: Similarities High Spending Customer base Strong Co-Brand Practice Strong Credit Quality Strong Digital Engagement 18
Slide 19: International and US: Differences
International and US: Differences FY’ 2010 Spend Velocity 7x 5x Outbound Spend 19% 2% Average Fee Per $68 $36 Card (Adj.)* *Average fee per card is computed from proprietary card activities only. Average fee per card is computed based on net card fees, including the amortization of deferred direct a
Slide 20: International Business Operations Regional Overview
International Business Operations* Regional Overview FY’2010, FX Adjusted** Billed Business ($ in B) $87.7 $85.5 $60.5 CAGR 2008-2010 1% 12% 7% Card in Force (in MM) 14.2 14.1 13.8 CAGR 2008-2010 2% 13% 1% IBO Pre-Tax Income ($ in MM) $572 $304 $503 CAGR 2008-2010 32% 57% 37% IBO Pre-Tax Income/Bill
Slide 21: Growth Markets
Growth Markets “Growth Markets“ include BRIC plus Turkey, Mexico, Indonesia and South Korea 21
Slide 22: International Business Operations Growth Market Performance
International Business Operations* Growth Market Performance “Growth Markets“ include BRIC plus Turkey, Mexico, Indonesia and South Korea $ in billions, In millions $ in millions, FX Adj.** FX Adj.** $39.2 10.2 $318 $32.8 8.4 8.6 $28.7 $203 $162 2008 2009 2010 2008 2009 2010 2008 2009 2010 *Internat
Slide 23: Flexible, Multi-Model Approach
Flexible, Multi-Model Approach ■ Attractive Stable Margins ■ Large Affluent Segment ■ Strong Credit Bureau ■ Financial Institution Loyalty ■ Co-Brand Availability ■ Merchant Value 23
Slide 24: Mexico: High Growth Proprietary Market
Mexico: High Growth Proprietary Market ■ Highly Profitable ■ High Share of Spend ■ Strong Brand, Relevance 2006-10 CAGR, FX Adj*: (1%) *FX adjusted information assumes the average exchange rate in 2010 applies to all prior periods for purposes of currency translation into U.S. dollars. The CAGR for
Slide 25: Australia: GNS and Proprietary
Australia: GNS and Proprietary ■ Large Affluent Segment ■ Strong Bank Concentration 2006-10 CAGR, FX Adj*: *FX adjusted information assumes the average exchange rate in 2010 applies to all prior periods for purposes of currency translation into U.S. dollars. The CAGR for 2006 – 2010 for billed busin
Slide 26: Brazil: Partnering for Growth
Brazil: Partnering for Growth ■ Strong bank distribution – card & merchant ■ Relatively volatile market Jul ‘05-Jun ’10* CAGR, FX Adj*: 10% *FX adjusted information assumes the average exchange rate in 2010 applies to all prior periods for purposes of currency translation into U.S. dollars. The CAGR
Slide 27: Agenda
Agenda ■ AXP Footprint in International ■ Performance in International ■ Growth Going Forward 27
Slide 28: Growing International
Growing International New Segments Partnerships Loyalty Alternative Payments 28
Slide 29: Growing International
Growing International New Segments Coverage & Utilization Partnerships Digital Loyalty & Fee Based Offerings Alternative Payments 29
Slide 30: Small Business Services
& Relationship Reneeerent Targeted Merchant Acquisition Rewards and Insurance Benefits
Slide 31: Dental Industry – Japan
Dental Industry – Japan Industry 4.2K Definition & Expertise 0.3K Custom Commercial Designed 2008 2009 2010 Underwriting Products & Rewards 12X Relationship Targeted Management Acquisition 3X X 2008 2009 2010 31
Slide 32: Growth Through Partners
Growth Through Partners Increase size of business through Help partners address high-end segment existing Bank and co-brand partners. through our unique expertise. 32
Slide 33: Expanding Merchant Coverage
Expanding Merchant Coverage Launched Sept 2010 Launched June 2010 Launched Nov 2010 33
Slide 34: Digitize the Business
Digitize the Business In addition to meeting evolving customer needs, our advancements in digital engagement create cost and revenue opportunity. ■ Online Card Acquisition ■ Paperless statements ■ Deliver quality service online ■ Mobile Card Apps and ■ Online Servicing electronic wallet ■ Provide ch
Slide 35: Fee Revenue Mix
Fee Revenue Mix Net Interest Income 21% Discount Revenue Net Card Fees & Other Revenue 35% 44% 1. Strengthen value and price for value 2. Innovative products for current base 3. Add new sources of revenue 35
Slide 36: Why Loyalty Services?
Drive Step-Change in Customer Scale Grow Fee-Based Revenues Enhance Merchant Value Leverage Core Competencies minsnniasdininiio ee __Emhanceerchanvtue | __tcverage ore Competences
Slide 37: Coalition Loyalty Structure
Coalition Loyalty Structure ■ Consolidate loyalty ■ Build relationships ■ Gain new programs with large customer customers pool ■ More earn ■ Higher consumer opportunities ■ Access to rich data spend ■ Access to valuable ■ Facilitate commerce ■ Increased loyalty / discounts and offers across coalitio
Slide 38: Loyalty Partner Synergies
Loyalty Partner Synergies Creating value through: ■ New Markets ■ Card Distribution ■ Online and digital channels ■ Add 100M Consumers ■ New Card Products ■ Location-based offers ■ Membership Rewards 38
Slide 39: AXP: The International Story
AXP: The International Story ■ Large and diverse footprint ■ Differentiated assets and capabilities ■ Flexibility to meet market conditions ■ Delivering strong growth ■ Accelerate momentum with growth opportunities ■ Commitment to win a larger share of International for AXP 39
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Slide 41: Annex 2
Annex 2 Billed Business Metrics - Reported & FX Adjusted* % increase/(decrease) vs. prior year: Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Worldwide Reported 14% 12% 8% (10%) (16%) (16%) (11%) 8% 16% 16% 14% 15% FX Adjusted 11% 10% 7% (5%) (12%) (13%) (9%) 4% 12% 15% 14%
Slide 42: Annex 3
Annex 3 Cardmember Lending ($ in billions, except percentages) Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Total Loans Worldwide Cardmember Lending Reported (GAAP) $42.2 $48.2 $50.4 $54.4 $49.4 $49.6 $45.7 $42.2 $36.7 $32.5 $31.5 $32.8 Managed $63.1 $68.5 $71.9 $77.1 $75.
Slide 43: Annex 5
Annex 5 $ in millions; % increase/(decrease) 2006 2007 2008 2009 2010 GAAP Consolidated Pretax Income $5,152 $5,694 $3,581 $2,841 $5,964 Pretax Income from continuing ops - United States $4,312 $4,984 $3,322 $3,131 $6,112 Pretax Income from continuing ops - Unallocated Corp & Other Segment* NA NA ($
Slide 44: Annex 6
Annex 6 Billed Business Metrics - Reported & FX Adjusted* $ in billions, % increase/(decrease) vs. prior year: 2006 2007 2008 2009 2010 International Business Operations Reported $ 154.7 $ 188.0 $ 212.2 $ 196.1 $ 234.0 FX Adjusted $ 163.3 $ 185.6 $ 205.8 $ 202.7 $ 234.0 Reported 22% 13% (8%) 19% FX
Slide 45: Annex 7
Annex 7 $ in millions; % increase/(decrease) Revenues net of Interest Expense 2008 2009 2010 GAAP Consolidated Revenues net of Interest Expense $28,365 $24,523 $27,819 Revenues net of Interest Expense - United States $19,792 $17,489 $20,246 Revenues net of Interest Expense - Unallocated Corp & Other
Slide 46: Annex 8
Annex 8 $ in millions; % increase/(decrease) Operating Expenses (Salaries & Benefits, Professional Services, Occupancy & Equipment, Communications & Other, Net) 2008 2009 2010 GAAP Consolidated Operating Expenses $11,625 $9,902 $11,004 Operating Expenses - United States $6,266 $5,468 $5,860 Operatin
Slide 47: Annex 9
Annex 9 International Card Services Loans, FX Adjusted* ($ in billions, except percentages) 2008 2009 2010 Total Loans Reported $9.5 $9.2 $9.3 FX Adjusted $10.7 $9.6 $9.3 Growth Rates vs. Prior Year Reported (3%) 1% FX Adjusted (10%) (3%) *FX adjusted information assumes the average exchange rate in
Slide 48: Annex 10
Annex 10 $ in millions; % increase/(decrease) Unallocated Corporate Europe, Middle East & Japan, Asia/Pacific, Latin America, Caribbean GAAP Consolidated United States Segment* International** Africa Australia & Canada 2008 2010 2008 2010 2008 2010 2008 2010 2008 2010 2008 2010 2008 2010 Pretax Inco
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