Western Union Company (the) · NYSE:WU

Western Union Company (the) — The Western Union Company — Q3 2014 Earnings Presentation

22 slides from Western Union Company (the)'s earnings presentation, Oct 30, 2014

  1. Slide 1: Third Quarter 2014 Earnings Webcast & Conference Call

    Third Quarter 2014 Earnings Webcast & Conference Call October 30, 2014

  2. Slide 2: Mike Salop, Senior Vice President, Investor Relations

    Mike Salop Senior Vice President, Investor Relations 2

  3. Slide 3: 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

  4. Slide 4: Hikmet Ersek, President & Chief Executive Officer

    Hikmet Ersek President & Chief Executive Officer 4

  5. Slide 5: Overview

    Overview Delivering on key strategies  Consumer money transfer revenue grew 2%, or 4% constant currency*  Business Solutions returned to revenue growth  Operating profit margin improved to 21.8%  Nearly $650 million of dividends and share repurchases YTD through September Affirmed full year reve

  6. Slide 6: Raj Agrawal, Executive Vice President & Chief Financial Officer

    Raj Agrawal Executive Vice President & Chief Financial Officer Western Union | ©2014 Western Union Holdings, Inc. All Rights Reserved. 6

  7. Slide 7: Revenue Q3

    Revenue Q3 ($ in millions) $1,409 $1,441  Consolidated revenue $31 $39 increased 2% on a reported basis, or 5% constant $348 $361 currency*  Transaction fee revenue increased 1% $1,030 $1,041  Foreign exchange revenue increased 4% Q3 2013 Q3 2014 Transaction Fee Foreign Exchange Other *Note: See

  8. Slide 8: Consumer-to-Consumer Q3

    Consumer-to-Consumer Q3  80% of Company revenue  Revenue increased 2%, or 4% constant currency*  Total transactions increased 5%  Cross-border principal increased 5% *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. Western Union | ©2014 Western Union Holdings, Inc.

  9. Slide 9: C2C Transaction and Revenue Analysis

    C2C Transaction and Revenue Analysis Q3 2014 *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. Western Union | ©2014 Western Union Holdings, Inc. All Rights Reserved. 9

  10. Slide 10: Consumer-to-Consumer

    Consumer-to-Consumer Q3 2014 Revenue Growth/ Currency Transaction % of Total Regions Decline Impact** Growth Revenue Europe and CIS 1% -2% 10% 21% North America 2% 0% 3% 19% Middle East and Africa 3% -1% 1% 16% Asia Pacific 1% -1% 0% 12% LACA -3% -7% 2% 8% westernunion.com 21% 1% 34% 4% **Note: Curr

  11. Slide 11: C2B and B2B Q3

    C2B and B2B Q3  Consumer-to-Business  11% of Company revenue  Revenue declined 1%, or increased 11% constant currency*  Business Solutions  7% of Company revenue  Revenue increased 4%, or 3% constant currency* *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. Weste

  12. Slide 12: Operating Margin Q3

    Operating Margin Q3 30.0% 25.0%  Operating margin increase 21.0% 21.8% • Primarily due to benefits from 20.0% cost savings initiatives and lower integration expenses, 15.0% partially offset by higher compliance and legal 10.0% expenses 5.0% 0.0% Q3 2013 Q3 2014 *Note: See appendix for reconciliatio

  13. Slide 13: C2C Operating Margin Q3

    C2C Operating Margin Q3 30.0% 24.0% 24.9% 25.0%  Operating margin increase 20.0% • Primarily due to benefits from cost savings initiatives, partially 15.0% offset by higher compliance expenses 10.0% 5.0% 0.0% Q3 2013 Q3 2014 Western Union | ©2014 Western Union Holdings, Inc. All Rights Reserved. 13

  14. Slide 14: C2B Operating Margin Q3

    C2B Operating Margin Q3 30.0% 25.0%  Operating margin decrease 20.0% 19.2% • Primarily due to higher funding costs related to increased 15.4% 15.0% interchange expense 10.0% 5.0% 0.0% Q3 2013 Q3 2014 Western Union | ©2014 Western Union Holdings, Inc. All Rights Reserved. 14

  15. Slide 15: Business Solutions Operating Loss Q3

    Business Solutions Operating Loss Q3  Operating Loss  Operating income breakeven compared to an operating loss of $3 million in the prior year period  Depreciation and amortization of approximately $14 million in the current quarter and $16 million in the prior year period  The improvement in op

  16. Slide 16: Financial Strength

    Financial Strength 9 Months Ended Sept. 30, 2014 Cash Flow from Operations $775 million Capital Expenditures $129 million Stock Repurchases $445 million Dividends Paid $200 million Cash Balance, Sept. 30, 2014 $1.7 billion Debt Outstanding, Sept. 30, 2014 $3.7 billion Western Union | ©2014 Western U

  17. Slide 17: 2014 Outlook

    2014 Outlook  Revenue – Low to mid-single digit constant currency revenue increase – Flat to low single digit GAAP revenue growth  Margins – GAAP operating margin of approximately 20% (previous range was 19.5% to 20%)  Earnings per Share – GAAP EPS of approximately $1.50 (previous range was $1.45

  18. Slide 18: Questions & Answers

    Questions & Answers Western Union | ©2014 Western Union Holdings, Inc. All Rights Reserved. 18

  19. Slide 19: Appendix

    Appendix Third Quarter 2014 Earnings Webcast & Conference Call October 30, 2014 Western Union | ©2014 Western Union Holdings, Inc. All Rights Reserved. 19

  20. Slide 20: 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

  21. Slide 21: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 3Q13 4Q13 FY2013 1Q14 2Q14 3Q14 YTD 3Q14 Consolidated Metrics Revenues, as reported (GAAP) $ 1,408.8 $ 1,421.9 $ 5,542.0 $ 1,350.8 $ 1,405.6 $ 1,440.9 $ 4,197.3 Foreign currency translation impact (a) 19.2 23.9 70.3 32.5 26.3 35.0 93.8 Revenues, constant currency

  22. Slide 22: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 3Q13 4Q13 FY2013 1Q14 2Q14 3Q14 YTD 3Q14 Consumer-to-Business Segment Revenues, as reported (GAAP) $ 152.3 $ 149.5 $ 608.5 $ 147.2 $ 145.9 $ 150.4 $ 443.5 Foreign currency translation impact (a) 8.3 10.2 31.6 16.6 18.8 18.1 53.5 Revenues, constant currency adjuste

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