Mastercard Incorporated · NYSE:MA
Mastercard — Investor Day (November 2024)
71 slides from Mastercard's investor day presentation, Nov 13, 2024
Slide 1: Mastercard Investment Community Meeting
Mastercard Investment Community Meeting November 13, 2024
Slide 2: Welcome
Welcome Devin Corr Executive Vice President, Investor Relations
Slide 3: Agenda
Agenda 01 Strategy Michael Miebach 05 Market perspective Linda Kirkpatrick, Ling Hai 02 Jorn Lambert Consumer payments 06 Financial perspective Sachin Mehra 03 Commercial and new payment flows Raj Seshadri 07 Q&A Select management ©2022 Mastercard. Proprietary and Confidential 04 Services Craig Vosb
Slide 4: Mastercard management presenters
Mastercard management presenters Michael Miebach Jorn Lambert Raj Seshadri Craig Vosburg Chief Executive Officer Chief Product Officer Chief Commercial Chief Services Officer Payments Officer ©2022 Mastercard. Proprietary and Confidential Linda Ling Hai Sachin Mehra Devin Corr Kirkpatrick President,
Slide 5: Additional attendees - board of directors and executive management
Additional attendees - board of directors and executive management Richard Davis Merit E. Lance Uggla Director Janow Director Board Chair Pablo Fourez Michael Fraccaro Johan Gerber Karen Griffin Jon Huntsman Ed McLaughlin Chief Digital Officer Chief People Officer Executive Vice Chief Risk Officer V
Slide 6: Forward-looking statements
Forward-looking statements Today’s presentation may contain, in addition to historical information, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current assumptions, expectations and projectio
Slide 7: Strategy
Strategy Michael Miebach Chief Executive Officer
Slide 8: Market trends underscore our opportunities within payments and services
Market trends underscore our opportunities within payments and services Commerce Society Technology Accelerated digitization Scaling of digital public Acceleration of AI adoption infrastructure Demands for seamless, instant Cybersecurity and identity and personalized experiences Evolving regulatory
Slide 9: Our strategy is strong, focused and being executed
Our strategy is strong, focused and being executed Grow our core OUR Diversify into new customers and geographies STRATEGY Build new areas for the future STRATEGIC PRIORITIES Consumer Commercial and Services and payments new payment other solutions flows ©2024 Mastercard. Proprietary and Confidentia
Slide 10: Advancing key initiatives across each strategic priority
Advancing key initiatives across each strategic priority Consumer Commercial and new Services and payments payment flows other solutions Capturing the significant secular Accelerating secular shift in Differentiating our payments opportunity commercial point-of-sale purchases capabilities Driving br
Slide 11: Together, our priorities generate a reinforcing virtuous cycle
Together, our priorities generate a reinforcing virtuous cycle Payments volume Share gain Switching Differentiated Incremental offerings data ©2024 Mastercard. Proprietary and Confidential Data-driven 11 services
Slide 12: Underpinning our success are a series of strategic enablers
Underpinning our success are a series of strategic enablers People Brand Franchise ©2024 Mastercard. Proprietary and Confidential Data & AI Technology Doing well by doing good 12
Slide 13: Key takeaways
Key takeaways Capitalizing on Driving further growth Fueling the virtuous structural tailwinds through Mastercard cycle across payments actions and services ©2023 Mastercard. Proprietary and Confidential 13
Slide 14: Consumer payments
Consumer payments Jorn Lambert Chief Product Officer
Slide 15: Consumer payment flows present a long runway of opportunity
Consumer payment flows present a long runway of opportunity for sustained growth SAM of consumer transaction value1 SAM of consumer # transactions1 VOLUME IN $T #T 54 2.4 0.1 A2A / Bill Pay2 10 A2A / Bill Pay2 0.2 China3 10 China3 1.5 Cash & check 11 Cash & check dom. networks 3 ©2023 Mastercard. Pr
Slide 16: Unparalleled reach and the payments + services virtuous cycle
Unparalleled reach and the payments + services virtuous cycle are at the heart of our network 220+ Payments volume Anywhere, anytime markets Most geographically distributed payment Share gain Switching network 3.4B credentials1 ~150M acceptance locations2 Any way you choose Largest acceptance 250M+
Slide 17: Strategic initiatives
Strategic initiatives Capturing the Driving brand Investing in the future significant secular preference through and driving market opportunity compelling consumer transformation experiences ©2023 Mastercard. Proprietary and Confidential 17
Slide 18: The secular shift starts with cash displacement
The secular shift starts with cash displacement... Cash Closed-loop and Digital displacement domestic networks economy Technologies Urban mobility Digital content Tap on Phone QR Domestic networks Subscription Channels PSP1 Gateway ©2023 Mastercard. Proprietary and Confidential Wallets Marketplace P
Slide 19: … and extends across verticals and rails
… and extends across verticals and rails Card underpenetrated verticals APMs and A2A Utilities Flows Debit value propositions Selective APM partnerships Government Instant Payments State-of-the-art A2A platform Healthcare ©2023 Mastercard. Proprietary and Confidential A2A Services Housing Scam Prote
Slide 20: Driving brand preference through compelling consumer experiences
Driving brand preference through compelling consumer experiences Digital First The Mastercard Collection Comprehensive digital functionality across Rich offering of priority access for the consumer journey + affluent consumers Acquire digital card Travel Apply and enroll for a card Premium airport d
Slide 21: Enhancing and delivering value across the ecosystem
Enhancing and delivering value across the ecosystem Replacing card numbers with secure tokens Scaling authentication, including biometrics with 3D Secure and Passkeys Enhance security and Streamlining online checkout by eliminating manual functionality entry Converting Maestro to Mastercard Debit to
Slide 22: Delivering long term growth through market transformation
Delivering long term growth through market transformation and extending the reach of the network Token economy Modernized card switch Delivering security, privacy and control for Meeting the needs of a more complex world and hyperconnected consumers and unlocking new real-time economy business model
Slide 23: Key takeaways
Key takeaways Extending network reach Delivering digital Securing the future by to more merchants and functionality and leaning into market consumers consumer experiences transformation ©2023 Mastercard. Proprietary and Confidential Differentiating and driving long-term growth through our unique net
Slide 24: Commercial and new payment flows
Commercial and new payment flows Raj Seshadri Chief Commercial Payments Officer
Slide 25: Commercial and new payment flows present a significant opportunity
Commercial and new payment flows present a significant opportunity with substantial runway to fuel Mastercard’s growth Commercial Disbursements and remittances Point-of-sale purchases Invoiced payments Mastercard Move Payments by businesses, Payments by businesses or Money transfers to consumers emp
Slide 26: We grow commercial payments by extending secular shift, winning share
We grow commercial payments by extending secular shift, winning share and enhancing value through services and solutions Commercial Extend Drive market Embed value-added spend growth + secular shift + share growth + services and solutions $77T (~95%) $3T (~5%) of addressable of global commercial com
Slide 27: Capturing commercial point-of-sale purchases
We are capturing commercial point-of-sale purchases to drive secular shift and grow market share Point-of-sale purchases $16T cash and check + $1T carded Differentiate propositions Expand distribution Build acceptance Financial institutions Cards Acceptance Segment-specific value propositions New ge
Slide 28: Our approach is delivering wins with customers
Our approach is delivering wins with customers and unlocking commercial card flows ©2024 Mastercard. Proprietary and Confidential Portfolio flips with Renewals and expansions Helping financial financial institutions with financial institutions institutions sell 28
Slide 29: Addressing the commercial invoiced payments opportunity
We are addressing the commercial invoiced payments opportunity by driving engagement across buyers and suppliers Invoiced payments $8T check + $53T EFT/ACH/wire + $2T carded Buyer enablement Ecosystem enablement Supplier enablement Analyze accounts payable Leverage virtual cards Engage suppliers Ena
Slide 30: Extending our success in travel to select attractive verticals
We are extending our success in travel to select attractive verticals B2B marketplaces Consumer packaged goods Travel Extend into select high potential Corporate travel and verticals expense and leisure Education Healthcare travel verticals High commercial spend unlocked High in cross-border Cash/ch
Slide 31: Embedding payments into widely used platforms and workflows
We are embedding payments into widely used platforms and workflows to capture invoiced payments Procure to pay Business buyer Embedded Mastercard In Control® into leading platforms1 to enable virtual card payments Procurement Reconcile Powered Invoice automation Platform Order and enabled credit Pay
Slide 32: Opportunity in disbursements and remittances
Significant opportunity in disbursements and remittances that we target with an extensive set of capabilities Mastercard Move $20T Tapping into use cases … … powered by strong foundations Wallet loads Family support Global reach Shared bills Personal savings Consumer Tips Investments 60+ 155+ origin
Slide 33: Driving growth in disbursements and remittances
We are driving growth in disbursements and remittances by scaling use cases and expanding Mastercard Move’s reach Differentiate propositions Expand network Origination Receiving Expanding money movement across Mastercard’s global network of Enhanced digital journeys financial institution partners Si
Slide 34: Key takeaways
Key takeaways Continue to drive secular Innovate to further Scale Mastercard Move shift to cards and win accelerate secular shift use cases to penetrate market share in point- in invoiced payments disbursements and of-sale purchases remittances ©2023 Mastercard. Proprietary and Confidential Continui
Slide 35: Services
Services Craig Vosburg Chief Services Officer
Slide 36: Expansive and diversified value-added services and solutions portfolio
We have built an expansive and diversified value-added services and solutions1 portfolio Security solutions Consumer acquisition Business and and engagement market insights Safety and security Loyalty Payment operations Identity management Marketing services Analytics and insights Cybersecurity and
Slide 37: Services growth roadmap
Services growth roadmap Strategic priorities Competitive differentiators Growth drivers Differentiate Proprietary and Payments volume growth consumer payments differentiated data Accelerate commercial and Serviceable addressable market Payments product synergies new payment flows growth expansion ©2
Slide 38: Services differentiate our payment propositions
Services differentiate our payment propositions, driving market wins and share gains Open Banking Fraud tools Processing Identity solutions Consulting services Economic insights Cardholder benefits Portfolio optimization Offers Authentication Gateway Data and analytics Operations insights Personaliz
Slide 39: Services extend beyond payments to adjacent revenue opportunities
Services also extend beyond payments to adjacent revenue opportunities Customers Government Small business Large merchants Fintechs Payfacs Acquirers Issuers Cards Network Payments Cards Fraud Payments Lending Loyalty Digital Risk Marketing Operations ©2024 Mastercard. Proprietary and Confidential I
Slide 40: Differentiation is anchored in proprietary data
Differentiation is anchored in deep experience with proprietary data Billions of…. Consumer card RTP Open Banking Device Digital threat transactions transactions transactions attributes assessments Buyer/supplier Commercial card Mastercard Move Rewards Gateway Individual digital payment transactions
Slide 41: Synergies with payments drive high impact solutions
Synergies with payments and across services drive high impact solutions Consumer credit example Account opening Onboarding, activation & usage Identify Instant Sharpen Launch Optimize Detect and Enhance Seamless target credential Increase targeting target Optimize Incentivize underwriting account se
Slide 42: Services products target large and growing addressable revenue pools
Our services products target large and growing addressable revenue pools as priorities for growth Total Security Business & Consumer acquisition Services solutions market insights & engagement $490B $145B $110B $200B Path to growth TAM1,2 Market growth 2024 Conversion of TAM into SAM $50B Deepening
Slide 43: Network expansion continues to power growth in services
Network expansion continues to power growth in services Network-linked services1 • Authentication solutions • Fraud solutions • Operational insights Network-linked • Dispute resolution solutions services revenue2 • Portfolio analytics ©2024 Mastercard. Proprietary and Confidential • Cardholder benef
Slide 44: Extending across the value chain beyond the transaction
We are extending across the value chain to deliver services beyond the transaction and expand our addressable market PRE-TRANSACTION TRANSACTION POST-TRANSACTION Risk Account Fraud Disputes / Digital Identity theft Authentication Decisioning prevention opening protection chargebacks experience prote
Slide 45: Leveraging distribution at scale to deepen market penetration
We are leveraging distribution at scale to deepen market penetration and increase share of wallet for services Technology Customer reach Partnerships • Network rails • Dedicated salesforces • Technology platforms • A2A rails • Global account teams • System integrators • Open Banking rails • Financia
Slide 46: Key takeaways
Key takeaways Large and growing Differentiated data, Focused approach to revenue opportunity products and growth at scale distribution ©2024 Mastercard. Proprietary and Confidential Significant runway for ongoing growth 46
Slide 47: Market perspective
Market perspective Linda Kirkpatrick President, Americas Ling Hai President, Asia Pacific, Europe, Middle East and Africa
Slide 48: Mastercard's business is geographically diverse
Mastercard’s business is geographically diverse ~33% Europe ~34% total North America total volumes volumes ~24% APMEA total volumes ~9% Latin America total ©2019 Mastercard. Proprietary and Confidential volumes 48 Note: Q3 2024 YTD gross dollar volume, on a local currency basis
Slide 49: Execution of our strategy across all markets is enabling our growth
Execution of our strategy across all markets is enabling our growth Capture secular shift Win market share Diversify with services Growing acceptance Expanding volumes Embedding data in consumer and and transactions with driven insights to drive commercial flows our customers customer value Ensuring
Slide 50: Tremendous secular runway exists across all markets
Tremendous secular runway exists across all markets United States Spain Mexico ©2019 Mastercard. Proprietary and Confidential South Africa 50
Slide 51: Mastercard has grown market share globally across all products
Mastercard has grown market share globally across all products Japan United States China Brazil ©2019 Mastercard. Proprietary and Confidential Global market share1 Consumer credit Consumer debit Prepaid Commercial 51 1. Retail Banking Research and Mastercard Internal Analysis (2020-2023)
Slide 52: Services help us differentiate and win
Services help us differentiate and win Debit and credit Commercial Cobrand Innovation labs Debit Fraud insights Consumer debit Loyalty Smart data/ICCP Consumer flex credit Test and Learn Open Banking SME debit Consulting Marketing Consumer credit Market insights and debit Consumer payments Commercia
Slide 53: Financial perspective
Financial perspective Sachin Mehra Chief Financial Officer
Slide 54: Delivering solid net revenue growth
Delivering solid net revenue growth1 Net revenue ($B)2 ~28 25 22 19 15 Net revenue +12%3 2020-2024 ©2024 Mastercard. Proprietary and Confidential 5-year CAGR 2020 2021 2022 2023 2024F 1. 2024 forecast based on three quarters of actuals and Q4 2024 guidance as of October 31, 2024; includes acquisitio
Slide 55: 2022-2024 Performance – on track to achieve/surpass objectives
2022-2024 Performance – on track to achieve/surpass objectives1 Current Estimate Current Estimate Performance Ex. Russia2 Objectives3 Net Revenue CAGR4 17% 19% High-teens Annual Operating Margin % Minimum 50% Minimum 50% EPS CAGR4 25% 27% Low-twenties ©2024 Mastercard. Proprietary and Confidential 1
Slide 56: The evolution of our business
The evolution of our business 2020 20241 % of net revenue generated outside of the U.S. 67% 70% % of total transactions that we switch2 60% 69% Contactless as a % of in-person transactions3 33% 71% Commercial % of GDV4 11% 13% Growing acceptance locations2 ~75M ~150M5 ©2024 Mastercard. Proprietary a
Slide 57: Strong long-term growth potential across multiple vectors
Strong long-term growth potential across multiple vectors Consumer Commercial and Market Market Services and growth + payments + new payment + + Other + solutions secular shift share flows PCE and Across volume Secular shift from Across Optimization, Sizeable fast GDP and transactions cash, check an
Slide 58: Significant opportunity across payment flows
Significant opportunity across payment flows Market size by payment flow1 Volume in $ trillions Serviceable Consumer Commercial and new market payments payment flows $154T $54T $100T Disbursements and 20 Remittances Commercial ~40% ~50% ~95% Commercial invoiced cash, check & cash, check & A2A cash,
Slide 59: Significant opportunity across value-added services and solutions portfolio
Significant opportunity across value-added services and solutions portfolio Market size by offering1 Net Revenue2 Addressable revenue in $ billions Targeted $490B market Growth Runway Serviceable $165B market 18%3 <7% 2022-2024 of the serviceable 3-year CAGR market penetrated 45 Security solutions 5
Slide 60: Strong, resilient and diversified services portfolio
Strong, resilient and diversified value-added services and solutions portfolio ~$11B1 Diversified portfolio Primary drivers Recurring Safety and security Security solutions Identity management Network-linked High Cybersecurity and resiliency Payment operations Network-linked; Medium to Business and
Slide 61: Focused investment priorities
Focused investment priorities Consumer Commercial and Services and payments new payment flows other solutions Acceptance into Product suite and features Security and solutions new verticals Growth markets with high Consumer acquisition Acceptance expansion cash levels and engagement Digital Business
Slide 62: Capital planning priorities
Capital planning priorities Strong Long-term Return excess Capital balance sheet business growth capital to shareholders structure Preserve strong balance Invest in strategy-led Return excess capital with Optimize mix of debt sheet, liquidity and organic and inorganic bias toward share and equity cr
Slide 63: Return of capital
Return of capital $ billions Dividends 11.2 10.7 Share repurchases 2.2 9.4 1.9 7.8 1.8 7.6 1.3 1.7 ~$83 billion1 6.1 returned to shareholders since 1.6 2006 IPO 8.8 9.0 7.6 6.5 ©2024 Mastercard. Proprietary and Confidential 5.9 4.5 2019 2020 2021 2022 2023 3Q24 YTD Note: Table may not sum due to rou
Slide 64: 2025 – 2027 performance objectives
2025 – 2027 performance objectives1 Key Highlights Net revenue High-end of low- Expand in payments CAGR % double-digits • Assumes annual carded market volume growth over the three-year period of ~9%4 ex. China Annual operating margin Minimum 55% Extend our Services and Solutions • Deliver high-teens
Slide 65: Key takeaways
Key takeaways Sizeable opportunity Differentiated Continue to execute across targeted vectors solutions and broad and deliver of growth network reach ©2024 Mastercard. Proprietary and Confidential And we continue to benefit from market tailwinds and navigate local market dynamics 65
Slide 66: Appendices
Appendices ©2024 Mastercard. Proprietary and Confidential
Slide 67: Appendix A: Non-GAAP Reconciliation
Appendix A: Non-GAAP Reconciliation 2022-2024 3-year value-added services and solutions network-linked net revenue CAGR 2022-2024 3-Year CAGR VASS Network-linked Net Revenue1 Forecasted GAAP 15% Currency impact2 1% Forecasted non-GAAP – currency-neutral 17% ©2024 Mastercard. Proprietary and Confiden
Slide 68: Appendix B: Non-GAAP Reconciliation
Appendix B: Non-GAAP Reconciliation 2020-2024 5-year net revenue CAGR 2020-2024 5-Year CAGR Net Revenue1 Forecasted GAAP 11% Currency impact2 1% Forecasted non-GAAP – currency-neutral 12% ©2024 Mastercard. Proprietary and Confidential 1. 2024 forecast based on three quarters of actuals and Q4 2024 g
Slide 69: Appendix C: Non-GAAP Reconciliation
Appendix C: Non-GAAP Reconciliation 2022-2024 performance objectives 2022-2024 3-Year CAGR Net Revenue1 EPS1 Forecasted GAAP 14% 17% (Gains)/losses on equity investments2 ** 3% Special items3 ** 1% Forecasted non-GAAP 14% 20% Acquisitions impact4 ~0% ~0% Currency impact5 3% 5% Forecasted non-GAAP –
Slide 70: Appendix D: Non-GAAP Reconciliation
Appendix D: Non-GAAP Reconciliation 2022-2024 3-year value-added services and solutions net revenue CAGR 2022-2024 3-Year CAGR VASS Net Revenue1 Forecasted GAAP 16% Currency impact2 2% Forecasted non-GAAP – currency-neutral 18% ©2024 Mastercard. Proprietary and Confidential 1. 2024 forecast based on
Slide 71: Appendix E: Non-GAAP Reconciliation
Appendix E: Non-GAAP Reconciliation 2025-2027 performance objectives 2025-2027 3-Year CAGR EPS1 Forecasted GAAP Mid-teens Gains/(losses) on equity investments2 ~0% Special items3 (1)% Forecasted non-GAAP Mid-teens ©2024 Mastercard. Proprietary and Confidential 1. Based on 2024 pro forma EPS utilized