Western Union Company (the) · NYSE:WU
Western Union Company (the) — The Western Union Company — Q1 2012 Earnings Presentation
28 slides from Western Union Company (the)'s earnings presentation, Apr 24, 2012
Slide 1: Western Union First Quarter 2012 Earnings Webcast & Conference Call
Western Union First Quarter 2012 Earnings Webcast & Conference Call April 24, 2012
Slide 2: Mike Salop, Senior Vice President, Investor Relations
Mike Salop Senior Vice President, Investor Relations
Slide 3: Q1 New Segment Structure
Q1 New Segment Structure New segment structure beginning Q1 2012 Consumer-to-Consumer (C2C) now reporting six regions: Europe and Commonwealth of Independent States (CIS) North America including US, Canada, Mexico Middle East and Africa Asia Pacific including India and South Asia (APAC)
Slide 4: 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 5: Hikmet Ersek, President & Chief Executive Officer
Hikmet Ersek President & Chief Executive Officer
Slide 6: Q1 Highlights
Q1 Highlights C2C revenue growth accelerated 4% reported, or 5% constant currency* Reached 500,000 Agent locations in April Business Solutions integration on track Pro forma revenue growth 5%, or 4% constant currency* Strong progress in Ventures westernunion.com money transfer revenue
Slide 7: Q1 Highlights: New services and key agreements
Q1 Highlights New services WU Pay electronics payment platform launched Key agreements Mobile money transfer to integrate with Ericsson’s platforms Acxsys agreement for international account based money transfer for customers of Canadian banks Business Solutions launched pension payment
Slide 8: Scott Scheirman, Chief Financial Officer & Global Operations
Scott Scheirman Executive Vice President Chief Financial Officer & Global Operations
Slide 9: Revenue
Revenue ($ in millions) $1,283 $1,393 Consolidated revenue up 9% $29 reported and constant currency $29 adjusted* $323 Pro forma revenue increase $256 4%, or 5% constant currency, including Travelex Global Business Payments (TGBP) in prior period* Transaction fees increased 4% $998 $1,041 Fo
Slide 10: Consumer-to-Consumer
Consumer-to-Consumer C2C 81% of Company revenue C2C revenue growth of 4% reported, or 5% constant currency* Transaction growth of 7% Total Q1 Western Union cross-border principal of $18 billion Increased 2% on a reported basis Increased 3% constant currency* Principal per transaction
Slide 11: Consumer-to-Consumer regional results
Consumer-to-Consumer Q1 2012 Revenue Transaction % of Total Regions Growth Growth Revenue Europe and CIS 0% 1% 22% North America 5% 6% 21% Middle East and Africa 6% 9% 15% Asia Pacific 7% 6% 12% Latin America and Caribbean 2% 8% 9% westernunion.com 39% 41% 2% 11
Slide 12: Electronic Channels & Prepaid Highlights
Electronic Channels & Prepaid Highlights Account-based money transfer Revenue increased 43% Agreements in place with nearly 90 banks globally westernunion.com C2C revenue increased 39% Total WU.com revenue increased 37% (includes C2B) Prepaid Revenue increased 17% Over $260 million
Slide 13: C2C Transaction and Revenue Growth
C2C Transaction and Revenue Growth Q1 2012 *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. 13
Slide 14: Consumer-to-Business
Consumer-to-Business C2B 11% of Company revenue Revenue increased 1%, or 3% constant currency* Led by growth in South America *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. 14
Slide 15: Business Solutions
Business Solutions Business Solutions 6% of Company revenue Pro forma revenue increased 5%*, or 4% constant currency*, including TGBP in the prior year period Strong growth in Australia, softness in North America and the U.K. New customer acquisitions remain strong Integration of TGBP prog
Slide 16: Operating Margin
Operating Margin 26.3% Operating margin excluding 24.4% 24.3% restructuring expense and TGBP 23.9% integration expense declined 200 basis points • Business Solutions results negatively impacted margin, including $10 million of incremental TGBP intangibles amortization • Higher marketing, additiona
Slide 17: C2C Operating Margin
C2C Operating Margin 29.0% 28.6% 27.7% 27.0% Operating margin decreased 90 basis points from prior year 25.0% • Increased marketing, Costa and 23.0% Finint acquisition related expenses, investments in WU.com and 21.0% compliance costs 19.0% • Partially offset by benefits from revenue leverage, cur
Slide 18: C2B Operating Margin
C2B Operating Margin 29.0% 27.0% 26.5% Operating margin improvement 25.0% Primarily due to the benefit of 22.6% lower debit processing expenses 23.0% related to Durbin 21.0% 19.0% 17.0% 15.0% Q1 2011 Q1 2012 18
Slide 19: Business Solutions Operating Margin
Business Solutions Operating Margin Operating Loss Operating loss of $15 million compared to an operating loss of $4 million in the prior year period Includes $14 million of intangibles amortization in current quarter and $4 million in the prior year period Includes $6 million of integration
Slide 20: Financial Strength
Financial Strength 1Q 2012 Cash Flow from Operations* $215 million Capital Expenditures $76 million Stock Repurchases $147 million Dividends Paid $62 million Cash Balance, March 31, 2012 $1.4 billion Debt Outstanding, March 31, 2012 $3.6 billion * Note: Includes the impact of tax payments of approxi
Slide 21: 2012 Outlook
2012 Outlook February 2012 Outlook Affirmed Constant currency revenue growth in the range of 6% to 8%*, including 4% benefit from a full year of TGBP GAAP revenue growth 2% lower than constant currency Operating margins expected to be similar to 2011 GAAP operating margin of approximately
Slide 22: Questions & Answers
Questions & Answers
Slide 23: Appendix
Appendix First Quarter 2012 Earnings Webcast & Conference Call April 24, 2012 23
Slide 24: 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 25: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 1Q11 2Q11 3Q11 4Q11 FY2011 1Q12 Consolidated Metrics Revenues, as reported (GAAP) $ 1,283.0 $ 1,366.3 $ 1,410.8 $ 1,431.3 $ 5,491.4 $ 1,393.4 Foreign currency translation impact (a) 2.3 (32.5) (18.2) 10.4 (38.0) 8.1 Revenues, constant currency adjusted $ 1,285.3 $
Slide 26: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 1Q11 2Q11 3Q11 4Q11 FY2011 1Q12 Consumer-to-Consumer Segment Revenues, as reported (GAAP) $ 1,078.1 $ 1,155.1 $ 1,193.3 $ 1,181.9 $ 4,608.4 $ 1,124.6 Foreign currency translation impact (a) 2.2 (31.4) (17.9) 8.0 (39.1) 5.2 Revenues, constant currency adjusted $ 1,
Slide 27: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 2012 Outlook Metrics Range Revenue change (GAAP) 4% 6% Foreign currency translation impact (g) 2% 2% Revenue change, constant currency adjusted 6% 8% Operating income margin (GAAP) 25 % TGBP integration expense impact (d) 1% Operating income margin, TGBP integrati
Slide 28: Footnote explanations
Footnote explanations Non-GAAP related notes: (a) 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
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