Western Union Company (the) · NYSE:WU
Western Union Company (the) — The Western Union Company — Q2 2024 Earnings Presentation
38 slides from Western Union Company (the)'s earnings presentation, Jul 30, 2024
Slide 1: Second Quarter 2024 Financial Results
Second Quarter 2024 Financial Results July 30, 2024
Slide 2: Tom Hadley, VP of Investor Relations
Western Union Tom Hadley Vice President of Investor Relations 2
Slide 3: Forward-Looking Statements
Western Union Forward-Looking Statements 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 assumpti
Slide 4: Devin McGranahan, President & CEO
Western Union Devin McGranahan President & CEO 4
Slide 5: Evolve 2025 Driving Transaction Improvements
Western Union Evolve 2025 Driving Transaction Improvements Total Adjusted Revenue* and Transaction Growth Trends (ex. Iraq) 5% 5% 5% +4% 4% 2% Q2 2024 Consumer Money Transfer transactions 0% +5% Excluding Iraq -1% -4% -4% -5% +13% Q2 2024 Branded Digital 2Q23 3Q23 4Q23 1Q24 2Q24 transactions Adjuste
Slide 6: Second Quarter Results
Western Union Second Quarter Results $1.07 billion GAAP revenue 17.9% 19.0% GAAP operating margin Adjusted operating margin* $0.41 $0.44 GAAP EPS Adjusted EPS* 6 *Note: See appendix for reconciliation of GAAP to Non-GAAP financial measures.
Slide 7: World Bank expects remittances growth to accelerate
Western Union World Bank expects remittances growth to accelerate Source: World Bank Migration and Development Brief 40: https://www.knomad.org/sites/default/files/publication-doc/migration-and-development-brief-40_2.pdf Note: f = forecast; FDI = foreign direct investment; ODA = official development
Slide 8: Evolve 2025 Strategy
Western Union Evolve 2025 Strategy • Digital first customer • Digital first customer experiences experiences • Scalable marketing driven • Remittance-led offering customer acquisition • Expanded set of accessible • Retail to digital escalator products and services Deliver Accelerate digital accessib
Slide 9: Modernizing our experience to make it seamless for customers to transact
Western Union Modernizing our experience to make it seamless for customers to transact Key Experience Focus Areas This Year • Marking it easier for customers to create Western Union profiles • Reducing the number of actions it takes for a customer to complete a transaction • Modernizing our user exp
Slide 10: Improved Customer Experience Leads to Higher Transactions per Customer
Western Union Improved Customer Experience Leads to Higher Transactions per Customer (TPC) TPC of all cohorts during 3-month of customers lifecycle 2024 2023 2022 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TPC of all cohorts during 6-month of customers lifecycle 2023 2022 Jan Feb Mar Apr May Ju
Slide 11: Australia Branded Digital Success
Western Union Australia Branded Digital Success Australia Branded Digital Transactions and Revenue Growth Rates Transactions Growth 30% Revenue (cc)* 3500 bps 2024: Expect gap to continue to Improvement close in the back half of the year 2022: Launched first transaction free offers in the marketplac
Slide 12: Retail as the Gateway to Western Union
Western Union Retail as the Gateway to Western Union Loyalty Program Lifetime Value Quick Resend One Step Refund Customer Retention Universal Customer ID Customer Experience 12
Slide 13: Consumer Services Global Distribution
Western Union Consumer Services Global Distribution Select locations offering bill payments and/or forex services Argentina Czech Republic Peru Brazil Italy Singapore Canada Panama Spain USA Forex Services Bill Payment Services 13 Note: Retail Money Order services are only offered in US and Canada
Slide 14: Matt Cagwin, Chief Financial Officer
Western Union Matt Cagwin Chief Financial Officer 14
Slide 15: Business Trends
Western Union Business Trends Adjusted Revenue Growth* Adjusted Operating Margin* 1200 Adj. Rev. Growth 12% Avg: 19.2% 10% 1199.8 Adj. Rev. Growth ex. Iraq 6% 8% 4% 1199.6 3% 6% 1199.4 4% -1% 1199.2 2% 1199 0% 0% 21.8% 19.6% 19.7% 19.0% 16.1% -1% -2% 1198.8 -7% -4% 1198.6 -5% -4% -4% -6% 1198.4 -8%
Slide 16: Branded Digital
Western Union Branded Digital Branded Digital Revenue and Transaction Growth Trends 12% 13% 13% 13% 12% As previously communicated, we 9% expected the spread 7% in Q2 to widen 4% 3% -2% 2Q23 3Q23 4Q23 1Q24 2Q24 Adj. Revenue Growth* Transaction Growth 16 *Note: See appendix for reconciliation of GAAP
Slide 17: Consumer Money Transfer (CMT) Business Trends
Western Union Consumer Money Transfer (CMT) Business Trends Key Highlights • Branded Digital business showing continued momentum after reaching positive revenue growth in Q3 2023 • Stable transaction trends continued in the Retail business Q2 2024 North America % of Q2 EU & CIS CMT adj. revenue grow
Slide 18: Consumer Services
Western Union Consumer Services Consumer Services Highlights • Adjusted revenue* increased 14% in Q2 Consumer Services Adj. Revenue Growth* • Includes bill payments, retail money order, forex exchange, media network, 24% prepaid card, lending partnerships, and digital wallets 16% 14% • Continue to e
Slide 19: Redeployed ~$100M of Costs: Accomplished two-thirds of our Investor Day goal
Western Union Redeployed ~$100M of Costs: Accomplished two-thirds of our Investor Day goal Incremental Investments Cost savings driving… 5-Year $150M Expense Redeployment Program Consumer Services Talent Reallocation Initiatives Targeted Future Achieved Redeployments Procurement Efficiencies in 2023
Slide 20: Financial Highlights
Western Union Financial Highlights YTD as of June 30, 2024 Cash flow from operations $60 million Capital Expenditures $65 million Dividends paid $159 million Share repurchases $176 million Cash balance $1.0 billion Debt outstanding $2.6 billion 20
Slide 21: 2024 Financial Outlook
Western Union 2024 Financial Outlook Revenue (M) Operating margin EPS GAAP $4,125 to $4,200 18% to 20% $1.62 to $1.72 Adjusted* $4,150 to $4,225 19% to 21% $1.70 to $1.80 21 *Note: See appendix for reconciliation of GAAP to Non-GAAP financial measures.
Slide 22: Questions and Answers
Western Union Questions and Answers 22
Slide 23: Appendix
Western Union Appendix Second Quarter 2024 23
Slide 24: Key Statistics and Reconciliation of Non-GAAP Measures
Western Union Key Statistics and Reconciliation of Non-GAAP Measures Western Union’s management believes the non-GAAP financial A non-GAAP financial measure should not be considered in measures presented within this presentation provide meaningful isolation or as a substitute for the most comparable
Slide 25: Consolidated Metrics
Western Union Consolidated Metrics Revenues (GAAP) - YoY % change Adnsted revenues (non-GAAP) - YoY % change Adjusted revenues, excluding Iraq (non-GAAP) - YoY % change Operating margin (GAAP) Adnsted opeciting margn (non-GAAP) ‘Consumer Money Transfer (CMT) Segment Metrics Revermes (GAAP) - YoY % c
Slide 26: CMT Segment Regional Metrics
Western Union CMT Segment Regional Metres - YoY % change NA region revemes (GAAP) [NA reslon ocign currency tration pact Adjusted NA reson revemes (noa-GAAP) TNA resion wansactions BU & CIS region revenues (GAAP) BU & CIS region foreign curency translation impact ‘Adjusted EU & CIS region revenues (
Slide 27: Australia Branded Digital
Western Union Australia Branded Digital - YoY % change Australia Branded Digital evenves (GAAP) Australia Branded Digital foreign cumency tanslation impact Adjusted Anstaia Branded Digital revenues (non-GAAP) Anstaia Branded Digital transactions 204 10% A 1494 304] w
Slide 28: Segment Revenue Mix and Consumer Services
Western Union % of CMT Revenue [NA region revemes EU & CIS region revemes “MEASA region reveres LACA region revenues APAC region revenues Branded Digital revemes ‘Consumer Services (CS) Revenues (GAAP) - YoY % change Aastedrevemies (non-GAAP) - YoY % change Operating margin % of Total Company Revenu
Slide 29: Consolidated Metrics Reconciliation
Western Union @ (e) w Notes 223 3Q23 4923 y2023 get 2Q24 Yip 2Q24 ‘Consolidated Metrics Revenues (GAAP) 1.1700 10978 $1.0523 43570 1.089. 1.0664 2415s Foreign currency translation and Argeatin inflation impact wo 82 GX 12 154 56 64 120 Revenues, constant currency, net of Argentina inflation (non-GAA
Slide 30: Adjusted Net Income and EBITDA Reconciliation
Western Union (©) Netincome (GAAP) Acquisition, separation, and integration costs Amortization and impairment of acquisition related intangible assets ‘Business Solutions gain ‘Redeployment program costs ‘Income tax expense (benef) fom other adjustments Adjusted net income (nom-GAAP) @ Notincome (GA
Slide 31: Effective Tax Rate and Adjusted EPS Reconciliation
Western Union (@) Effective tax rate (GAAP) ‘Other adjustments Adjusted effective tax rate (non-GAAP), (8) Diluted earnings per share (GAAP) (8- dollars) Pretax impacts fiom the folowing Acquistion, separation, and intesraton costs Amortization and impairment of acquisition related intangible assets
Slide 32: CMT Segment Metrics
Western Union ® CMT Segment Metrics Revenues (GAAP) Foreign currency translation and Argentina inflaton iempact Revenues, constant currency. net of Argentina inflation (non-GAAP) Prior year revemues (GAAP) Revenues (GAAP) - YoY % change Adjusted revemues (non-GAAP) - YoY % change (cross-border princ
Slide 33: CS and Business Solutions Segment Metrics
Western Union 0 CS Segment Metrics Revemues (GAAP) Foreign currency translation and Argentina inflation impact Revemies, constant curency, net of Argentina inflation (non-GAAP) Prine vear revenues (GAAP) Revemcs (GAAP) - YoY % change Adusted revenues (non-GAAP) - YoY" 4 change Business Solutions Seg
Slide 34: Cash Flow, Adjusted EBITDA and Leverage Reconciliation
Western Union ‘Net cash provided by operating activites (GAAP) Depreciation and emortization Gain on divestiure of business, excuding transaction costs Other non-cash tems, met ‘Chimnge in cash, excluding the eects of divestiures, resulting fiom changes in: Otter assets Accounts payable and acerved
Slide 35: 2024 Consolidated Outlook Metrics
Western Union 2024 Consolidated Outlook Metrics Revenues (GAAP) Foreign currency translation and Argentina inflation impact Revenues, adjusted (non-GAAP) Operating margin (GAAP) Redeployment program costs Impact from acquisition, separation, and integration costs Amortization and impairment of acqui
Slide 36: Notes to Non-GAAP Measures
Western Union w (k) Represents the impact from the fluctuation in exchange rates between all foreign currency denominated amounts and the United States dollar. Constant currency results exclude any benefit or loss caused by foreign exchange fluctuations between foreign currencies and the United Stat
Slide 37: Notes to Non-GAAP Measures (continued)
Western Union (0) (p) @ @) (s) 10) Represents severance, expenses associated with streamlining the Company's organizational and legal structure, and other expenses associated with the Company's program to redeploy expenses in its cost base through optimizations in vendor management, real estate, mar
Slide 38: Thank you.
Thank you. ©2024 Western Union Holdings, Inc. All rights reserved
The Western Union Company — Q2 2024 Earnings Presentation on 6ix