Western Union Company (the) · NYSE:WU
Western Union Company (the) — The Western Union Company — Q2 2017 Earnings Presentation
27 slides from Western Union Company (the)'s earnings presentation, Aug 3, 2017
Slide 1: Western Union
Western Union Confidential | ©2017 Western Union Holdings, Inc. All rights reserved.
Slide 2: Mike Salop, Senior Vice President, Investor Relations
Mike Salop Senior Vice President, Investor Relations Western Union Confidential | ©2017 Western Union Holdings, Inc. All rights reserved. 2
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
Slide 4: Hikmet Ersek, President & Chief Executive Officer
Hikmet Ersek President & Chief Executive Officer Western Union Confidential | ©2017 Western Union Holdings, Inc. All rights reserved. 4
Slide 5: Overview
Overview Solid performance in the second quarter • GAAP revenues flat, while constant currency revenues increased 2%* • Strong growth from digital in consumer money transfer and from Speedpay U.S. electronic bill payments • Westernunion.com transactions increased 25% Returned $540 million to shareho
Slide 6: Overview: Long-term strategic plans
Overview Long-term strategic plans • Digital expansion in money transfer • Optimization of retail money transfer business • Expansion of payments based businesses, including Business Solutions and U.S. electronic bill payments • Further increasing operating efficiencies Western Union Confidential |
Slide 7: Raj Agrawal, Executive Vice President & Chief Financial Officer
Raj Agrawal Executive Vice President & Chief Financial Officer Western Union Confidential | ©2017 Western Union Holdings, Inc. All rights reserved. 7
Slide 8: Revenue
Revenue ▪ Consolidated revenues of $1.4 billion were flat with the prior year period, or increased 2% constant currency* *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. Western Union Confidential | ©2017 Western Union Holdings, Inc. All rights reserved. 8
Slide 9: Consumer-to-Consumer Q2
Consumer-to-Consumer Q2 ▪ 79% of Company revenue ▪ Revenue decreased 1% compared with prior year period, or increased 1% constant currency* ▪ Total transactions increased 3% ▪ Cross-border principal increased 1%, or increased 2% constant currency* *Note: See appendix for reconciliation of Non-GAAP t
Slide 10: Consumer-to-Consumer
Consumer-to-Consumer Q2 2017 Constant Revenue Currency Rev. Transaction Growth/ Growth/ Growth/ % of C2C Decline Regions Decline* Decline Revenue North America 3% 3% 4% 37% Europe and CIS -2% 2% 7% 31% MEASA -12% -11% -10% 16% APAC -4% -2% -1% 8% LACA 21% 22% 16% 8% Total C2C -1% 1% 3% 100% Included
Slide 11: Business Solutions and Other Q2
Business Solutions and Other Q2 ▪ Business Solutions (B2B) ▪ 7% of Company revenue ▪ Revenue declined 4%, or decreased 1% constant currency* ▪ Other (primarily bill payments businesses in the U.S. & Argentina) ▪ 14% of Company revenue ▪ Revenue increased 9%, or increased 12% constant currency* *Note
Slide 12: Operating Margin Q2
Operating Margin Q2 30.0% ▪ Operating margin 25.0% 21.7% * • GAAP margin includes the $49 20.2% * million legal matter accrual and $35 20.0% 18.9% million of WU Way expenses in the 15.6% 15.0% current quarter, and $2 million of WU Way expenses and $15 million 10.0% of expenses related to the settlem
Slide 13: C2C Operating Margin Q2
C2C Operating Margin Q2 40.0% 35.0% ▪ Operating margin 30.0% 24.8% 25.0% 23.0% • Increased primarily due to benefits 20.0% from the timing of marketing spending and lower commission 15.0% expense 10.0% 5.0% 0.0% Q2 2016 Q2 2017 Western Union Confidential | ©2017 Western Union Holdings, Inc. All righ
Slide 14: B2B Operating Margin Q2
B2B Operating Margin Q2 ▪ Operating Margin ▪ Operating margin of 5.5% in the current period compared to 5.2% in the prior year period, as lower depreciation and amortization expense was partially offset by higher technology expense ▪ Depreciation and amortization of approximately $11 million, compar
Slide 15: Other Operating Margin Q2
Other Operating Margin Q2 (Primarily consists of bill payments business in the U.S. & Argentina) 25.0% 20.0% 15.0% ▪ Operating margin 12.1% • Improvement was driven by 11.3% 10.0% technology efficiencies and revenue growth, partially offset by higher bank fees in U.S. electronic bill payments 5.0% b
Slide 16: Financial Strength
Financial Strength YTD June 30, 2017 Cash Flow from Operations $(24) million Capital Expenditures $75 million Stock Repurchases $375 million Dividends Paid $165 million Cash Balance, June 30, 2017 $1.1 billion Debt Outstanding, June 30, 2017 $3.6 billion Western Union Confidential | ©2017 Western Un
Slide 17: 2017 Outlook
2017 Outlook ▪ Revenue • Flat to low single digit growth in GAAP revenue (previously flat to low single digit decline), or a low single digit increase constant currency* ▪ Operating Profit Margin • GAAP operating margin of approximately 17% and adjusted operating margin of approximately 20%* ▪ Earni
Slide 18: Questions & Answers
Questions & Answers Western Union Confidential | ©2017 Western Union Holdings, Inc. All rights reserved. 18
Slide 19: Appendix
Appendix Second Quarter 2017 Earnings Webcast & Conference Call August 3, 2017 Western Union Confidential | ©2017 Western Union Holdings, Inc. All rights reserved. 19
Slide 20: 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
Slide 21: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Western Union Confidential | ©2017 Western Union Holdings, Inc. All rights reserved. 21
Slide 22: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Western Union Confidential | ©2017 Western Union Holdings, Inc. All rights reserved. 22
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Western Union Confidential | ©2017 Western Union Holdings, Inc. All rights reserved. 23
Slide 24: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Western Union Confidential | ©2017 Western Union Holdings, Inc. All rights reserved. 24
Slide 25: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Western Union Confidential | ©2017 Western Union Holdings, Inc. All rights reserved. 25
Slide 26: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Western Union Confidential | ©2017 Western Union Holdings, Inc. All rights reserved. 26
Slide 27: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Western Union Confidential | ©2017 Western Union Holdings, Inc. All rights reserved. 27
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