Western Union Company (the) · NYSE:WU
Western Union Company (the) — The Western Union Company — Q2 2023 Earnings Presentation
33 slides from Western Union Company (the)'s earnings presentation, Jul 26, 2023
Slide 1: Second Quarter 2023 Financial Results
Slide 2: Tom Hadley, Head of Investor Relations
Western Union Tom Hadley Head of Investor Relations
Slide 3: Forward-Looking Statements
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 assumptions that are d
Slide 4: Devin McGranahan, President & CEO
Western Union Devin McGranahan President & CEO
Slide 5: C2C Transaction Trends
Wester Union w C2C Transaction Trends Western Union C2C Transaction Growth 4% +4% Q2 2023 C2C transactions +12% Q2 2023 branded digital transactions 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 —C2C ex Russia, Belarus, and Iraq ~-C2C ex Russia and Belarus
Slide 6: Second Quarter Results
Second Quarter Results $1.17 billion GAAP revenue 20.7% GAAP operating margin $0.47 GAAP EPS 21.8% Adjusted operating margin* $0.51 Adjusted EPS* *Note: See appendix for reconciliation of GAAP to Non-GAAP financial measures. Wiitgsem © Orange 2) Airtel iC) Mvola
Slide 7: World Bank Remittance Forecast
Western Union * The World Bank updated its Migration and Development Brief in June, calling for low-single digit remittance growth in 2023 and 2024 * Even though the World Bank anticipates a slowing remittance market, we believe there is still ample opportunity to execute on our ‘Evolve 2025’ strate
Slide 8: Branded Digital Go-to-Market (GTM) Strategy
Western Union w Branded Digital Go-to-Market (GTM) Strategy Western Union Branded Digital Revenue (CC)* & Transaction Growth! 12% GTM program scaled in the U.S. in September 2922 3Q22 4Q22 1923 2923 —CC Revenue Growth —Transaction Growth 1 The Company suspended operations in Russia and Belarus in Ma
Slide 9: Stabilizing Retail: Improving Transaction Trends
Western Union Stabilizing Retail: Improving Transaction Trends Western Union C2C Retail’ Transaction Growth 2.4% 2922 3922 4Q22 1923 2923 " Excludes the impact related to the Company's suspension of operations in Russia and Belarus and the impact from Iraq w
Slide 10: Driving Customer Experience & Operational Excellence
Wester Union w Driving Customer Experience & Operational Excellence Enhancements such as ‘One Step Refund’ and ‘Quick Resend’ have Customer Engagement Initial Focus led to: Customer 9 Retention 30 % Gecreass in total call volume! Lifetime 20% decrease Value in contact rate’ folume and contact rate i
Slide 11: Prepaid Debit Card
Western Union Western Union Prepaid Debit Card The launch of our new prepaid debit card in North America will allow us to provide additional accessible financial services to our customers
Slide 12: Evolve 2025 Strategy
Western Union Corridor and community customer acquisition Improved customer and agent omni- channel experiences Network optimization Evolve 2025 Strategy Digital first customer + Digital first customer experiences experiences ; Scalable marketing driven + Remittance-led offering customer acquisition
Slide 13: Matt Cagwin, CFO
Western Union Matt Cagwin CFO
Slide 14: Q2 Business Trends
w Q2 Business Trends Adjusted Revenue Growth* 9% Adjusted Operating Margin* T T - t on ~ 1 2922 3Q22 4Q22 1Q23 2923 2922 3Q22 4Q22 1923 GAAP $1,138 $1,090 $1,092 $1,037 $1,170 GAAP 23.2% 21.3% 13.9% 19.7% Adjusted Effective Tax Rate* Adjusted EPS* “ oo “ 1 2922 3Q22 4Q22 1923 2Q23 2Q22 3Q22 4Q22 1Q2
Slide 15: Q2 C2C Business Trends by Region
Regions Adjusted Revenue* YoY % Change Q2 C2C Business Trends North America (7%) Europe & CIS (10%) (1%) MEASA' 67% 8% LACA 8% 8% APAC (4%) 1% Total C2C' 5% 4% Branded Digital? (2%) 12% *Note: See appendix for reconciliation of segment financial results "Includes benefit from monetary policy change
Slide 16: Q2 Other Highlights
Wester Union w Q2 Other Highlights Other + GAAP revenue grew 10% Other Quarterly Revenue Growth * Optimization of retail money 23% order float portfolio driving 20% revenue growth US * Primarily bill payments businesses in Argentina and the 10% U.S. and retail money orders Business Solutions 0% 2022
Slide 17: Financial Highlights
w Financial Highlights | vr seot une 30,2008 as of June 30, 2023 Cash flow from operations $264 million Dividends paid $176 million Capital expenditures $90 million Cash balance $1.59 billion Debt outstanding $2.81 billion
Slide 18: 2023 Financial Outlook
Western Union 2023 Financial Outlook GS) Revenue Operating margin EPS GAAP (5%) to (3%) 18% to 20% $1.63 to $1.73 Adjusted* (1%) to 1% 19% to 21% $1.65 to $1.75 *Note: See appendix for reconciliation of GAAP to Non-GAAP financial measures.
Slide 19: Questions & Answers
Slide 20: Appendix
Western Union Appendix Second Quarter 2023
Slide 21: Key Statistics and Reconciliation of Non-GAAP Measures
west Key Statistics and Reconciliation of bal Non-GAAP Measures Western Union’s management believes the non-GAAP financial measures presented within this presentation provide meaningful supplemental information regarding the Company's results to assist management, investors, analysts, and others in
Slide 22: Consolidated Metrics
Consolidated Metrics Revenves (GAAP)- YoY % change Adnsted revenves (non-GAAP) - YoY % change (Operating margin (GAAP) Adasted operating margin (n0a-GAAP) ‘Adpsted EBITDA margin (non-GAAP) Consumer-to-Consumer (C2C) Segment Metrics Revenues (GAAP)- YoY % change Adjusted revenves (non-GAAP) - YoY % c
Slide 23: C2C Segment Regional Metrics
Notes 2Q22 SQ 4Qn2r FY2022 1Q28 2Q23 YTD 2Q23 C2C Segment Regional Metrics - YoY % change \NA region revemes (GAAP) Ope (% (m% (a (or rs (O% [NA region foreign currency translation impact @ 1% % 0% om co 196] % Adjusted NA regioa revenues (non-GAAP) po (9% (O% (ape (8% pe (8% WA rege tameections Ore
Slide 24: % of CC Revenue
% of CC Revenue NA region revenues EU & CIS region revenues MEASA region revenues LACA region revenues APAC region revenues Branded Digital revenues ‘Other (primarity bal payments businesses in Argentina and the United States and money orders) Revenues (GAAP) - YoY % change Operating margin ‘% of To
Slide 25: Consolidated Metrics
Consolidated Metrics (®) Revenues (GAAP) ‘Foreign currency transition impact Revenues, constaut currency (no0-GAAP) ‘Less Business Sobitions revenues, constant currency (non-GAAP) Ajsted revenues (nce-GAAP) Price year revenues (GAAP) ‘Less prior year revenues from Business Solutions (GAAP) Adjusted
Slide 26: Net Income Reconciliation
(©) Netincame (GAAP) ‘Acopisiton and separation costs Business Solutions gain Russia /Belarus ext costs (Operating expense redeployment program costs Incame tax benefit from reversal of significant uncertain tax postions Income tax expeme from cther adgstents ‘Adjusted net income (nce-GAAP) Notes 29
Slide 27: Consolidated Metrics (continued)
Notes 2Q22 3Q22 4Q22 Fy2022 1923 2923 YTD 2923 Consolidated Metrics cont. (@) Effective tax rate (GAAP) 18% 10% cass 10% 16% 19%) 17% Reversal of significant uncertain tax positions @) N/A ™ 32% 8% % | % Other adjustments ©. 0.@).(0) ay. ad er % 2% fo 2% Adjusted effective tax rate (non-GAAP) 1% 15%
Slide 28: C2C Segment Metrics
0) a) C2C Segment Metrics Revenues (GAAP) Foreign currency translation impact Revenues, constant currency (non-GAAP) Prior year revenues (GAAP) Revenues (GAAP) - YoY % change Adjusted revenues (non-GAAP) - YoY % change ‘Cross-border principal, as reported (S- billions) Foreign currency transtation i
Slide 29: Cash Flow and Operating Income Reconciliation
Western Union Notes 2Q22 3Q22 4Q22 Fy2022 1923 2Q23 YTD 2923 ‘Net cash provided by operating activities (GAAP) s 1068 2156S 392 S$ 5816S 373 | $ 1267| $ 264.0 Depreciation a3) (92) (109) (42.7) (10.2) 99) (20.1) Amortization 4.6) (356) (54) aay (364) (36.0) (724) Gain on divestiure of business, excl
Slide 30: 2023 Consolidated Outlook Metrics
Western Union 2023 Consolidated Outlook Metrics Revemues (GAAP) - YoY % change Foreign currency transhtion impact Impact from Business Solutions Revenues, constant currency, excluding Business Solutions (non-GAAP) - YoY % change Operating margin (GAAP) Operating expense redeployment program costs Im
Slide 31: Notes to Non-GAAP Measures
Western Union @ _ 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 States
Slide 32: Notes to Non-GAAP Measures (continued)
Western Union (n) Represents non-cash reversals of significant uncertain tax positions. While the Company continues to reverse its uncertain tax positions upon settlements with taxing authorities, the lapse of the applicable statute of limitations, and other events, the Company has excluded certain
Slide 33: Thank you.
Thank you. » \ Western Union
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