Western Union Company (the) · NYSE:WU
Western Union Company (the) — Q3 2011 Earnings Presentation
23 slides from Western Union Company (the)'s earnings presentation, Oct 25, 2011
Slide 1: Western Union Third Quarter 2011 Earnings Webcast & Conference Call
Western Union Third Quarter 2011 Earnings Webcast & Conference Call October 25, 2011 Exhibit 99.2
Slide 2: Mike Salop, Senior Vice President, Investor Relations
Mike Salop Senior Vice President, Investor Relations
Slide 3: Hikmet Ersek, President & Chief Executive Officer
Hikmet Ersek President & Chief Executive Officer
Slide 4: Q3 Highlights
Q3 Highlights Total revenue increased 6% or 5% constant currency Solid trends continue in C2C 6% reported revenue growth and 4% constant currency Consumer Bill Payments revenue grew 2% Business Solutions revenue grew 30% 485,000 agent locations Note: See appendix for reconciliation of Non-GAAP to GA
Slide 5: Electronic Channels & Prepaid Q3 Highlights
Electronic Channels & Prepaid Q3 Highlights Account-based money transfer Approximately 40% transaction growth Agreements in place with over 70 banks globally Westernunion.com Transactions increased by 30% Approximately 45% transaction growth in international markets Mobile 19 agreements in place Ove
Slide 6: Go-To-Market Organization
Go-To-Market Organization Global Consumer Financial Services C2C and Consumer Bill Pay Western Union Business Solutions B2B Western Union Ventures New products and services WU.com, Prepaid/Stored Value, Mobile
Slide 7: Scott Scheirman, Executive Vice President & Chief Financial Officer
Scott Scheirman Executive Vice President & Chief Financial Officer
Slide 8: Revenue
Revenue $1,036 $1,083 $263 $294 ($ in millions) $1,330 $1,411 Note: See appendix for reconciliation of Non-GAAP to GAAP measures. Consolidated revenue up 6%, or up 5% constant currency adjusted Transaction fees increased 5% Foreign exchange revenue increased 12% C2C cross-border principal increased
Slide 9: Consumer-to-Consumer
+5% Consumer-to-Consumer C2C Transactions (millions) Note: See appendix for reconciliation of Non-GAAP to GAAP measures. C2C Revenue growth of 6%, or 4% constant currency Total Q3 Western Union cross- border principal of $19 billion Increased 8% on a reported basis Increased 5% constant currency Pri
Slide 10: Consumer-to-Consumer: Europe, Middle East, Africa, S. Asia
Consumer-to-Consumer Revenue Transactions Q3 2011 5% 3% Europe, Middle East, Africa, S. Asia 44% of Western Union revenue Reported revenue growth moderated from Q2 due to currency and slowing in Southern Europe and Russia U.K., France, Germany, and Gulf States remained consistent with Q2 growth Indi
Slide 11: Consumer-to-Consumer: Americas
Consumer-to-Consumer Revenue Transactions Americas 6% 6% 31% of Western Union revenue Domestic money transfer grew revenue 9% and transactions 14% Mexico grew revenue 5% while transactions increased 2% U.S. outbound revenue growth was consistent with Q2 Q3 2011
Slide 12: Consumer-to-Consumer: Asia Pacific
Consumer-to-Consumer Revenue Transactions Asia Pacific 11% 7% 9% of Western Union revenue China grew revenue 5% and transactions 4% Australia and the Philippines delivered good growth, though not as strong as Q2 Q3 2011
Slide 13: C2C Transaction and Revenue Growth
C2C Transaction and Revenue Growth Note: See appendix for reconciliation of Non-GAAP to GAAP measures. Q3 2011
Slide 14: Global Business Payments
Global Business Payments Revenue Transactions Global Business Payments 7% 4% 14% of Western Union revenue Consumer Bill Payments revenue increased 2% Business Solutions revenue growth of 30% Q3 2011
Slide 15: Operating Margin
Operating Margin Note: See appendix for reconciliation of Non-GAAP to GAAP measures GAAP Excluding Restructuring Operating margin excluding restructuring expense declined 80 basis points • Currency translation net of hedges negatively impacted margins • Higher marketing spending • Deal costs related
Slide 16: C2C Operating Margin
C2C Operating Margin C2C 84% of total company revenue Operating margin down 90 basis points from prior year • Negative impact of currency net of hedges and higher marketing offset other efficiencies, including restructuring savings, and revenue leverage 29.9% 29.0% Q3 2011 Q3 2010
Slide 17: Global Business Payments Operating Margin
Global Business Payments Operating Margin GBP 14% of total company revenue Operating margin improved Revenue leverage Restructuring savings Lower integration and investment spending in WUBS 15.1% 17.7% Q3 2010 Q3 2011
Slide 18: 2011 Outlook
2011 Outlook Note: See appendix for reconciliation of Non-GAAP to GAAP measures. Constant currency revenue growth in the range of 4% to 5% GAAP revenue growth 1% higher than constant currency GAAP EPS of $1.50 to $1.53 (previously $1.48 to $1.53) EPS excluding restructuring charges of $1.55 to $1.58
Slide 19: 2011 Outlook
2011 Outlook Note: See appendix for reconciliation of Non-GAAP to GAAP measures. GAAP operating margin range of 25% to 25.5% (including Travelex deal costs) Operating margin range of 26% to 26.5%, excluding restructuring charges Operating margin on a constant currency basis range of 26.5% to 27%, ex
Slide 20: Questions & Answers
Questions & Answers
Slide 21: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Diluted earnings per share ("EPS"), as reported (GAAP) ($ - dollars) Diluted EPS, restructuring adjusted ($ - dollars) Impact from restructuring and related expenses, net of income tax benefit (b) ($ - dollars) 3Q10 4Q10 FY2010 1Q11 2Q11 3Q11 YTD 3Q11 Consolidated
Slide 22: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 3Q10 4Q10 FY2010 1Q11 2Q11 3Q11 YTD 3Q11 Consumer-to-Consumer Segment Revenues, as reported (GAAP) 1,128.3 $ 1,151.8 $ 4,383.4 $ 1,078.1 $ 1,155.1 $ 1,193.3 $ 3,426.5 $ Foreign currency translation impact (a) 21.2 18.0 32.3 2.2 (31.4) (17.9) (47.1) Revenues, const
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 2011 Revenue Outlook Revenue change (GAAP) % % Foreign currency translation impact (c) (1)% (1)% Revenue change, constant currency adjusted % % 2011 Operating Income Margin Outlook Operating income margin (GAAP) 25.0 % 25.5 % Impact from restructuring and related