Western Union Company (the) · NYSE:WU
Western Union Company (the) — The Western Union Company — Q4 2020 Earnings Presentation
28 slides from Western Union Company (the)'s earnings presentation, Feb 10, 2021
Slide 1: Fourth Quarter 2020 Earnings Webcast and Conference Call
Fourth Quarter 2020 Earnings Webcast and Conference Call February 10, 2021 1
Slide 2: Brendan Metrano, Vice President of Investor Relations
Brendan Metrano Vice President of Investor Relations 2
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 pre
Slide 4: Hikmet Ersek, Chief Executive Officer
Hikmet Ersek Chief Executive Officer 4
Slide 5: 2020 Global Backdrop & Changes
2020 Global Backdrop & Changes Global GDP Growth Y/Y1 U.S. E-Commerce Growth Y/Y2 40% 31% 29% -1.7% -2.7% -2.2% 12% -8.9% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 WU Revenue Growth Y/Y (adj. constant currency*) WU Digital C2C Transaction Growth Y/Y 96% 96% -1% -1% 83% -1% 42% -11% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 Oxford Ec
Slide 6: Western Union Finishes 2020 with Solid Momentum
Western Union Finishes 2020 with Solid Momentum WU.com Average Monthly Active Customer Growth1 Q4 2020 Total App Downloads2 - Top Five Players in number of downloads 49% 47% 45% 15% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Western Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Pee Union Record Breaking Year in Di
Slide 7: 2020 Strategic Agenda
2020 Strategic Agenda Priorities were getting fit for growth & implementing growth initiatives Objectives Progress Accomplishments • A leaner, more agile organization Optimizing the • Delivered more than $50 million in annual cost Organization savings in 2020 and on track to achieve $150 million in
Slide 8: 2020 Exceptional Digital Performance
2020 Exceptional Digital Performance WU.com Growing Customers Digital Partnerships Drive & Engagement Profitable Growth + 29% westernunion.com Customers 2019 2020 + 12% Transactions per Customer Digital Contribution Profit + 25% Principal per Customer 2019 vs. 2020 WU.com Digital Partnerships Note:
Slide 9: Advancing Our Strategy in 2021
Advancing Our Strategy in 2021 Principal Growth Outpaced Our Cross-border Network Investments to Expand Services the Market in 2020 Provides Competitive Advantage and Enhance Capabilities Upgrade Cross-border Principal Growth Technology Optimize Retail Walmart COVERAGE 12% Enhance Dynamic NETWORK Pr
Slide 10: Raj Agrawal, Chief Financial Officer
Raj Agrawal Chief Financial Officer 10
Slide 11: Business Trends Q4
Business Trends Q4 Consolidated revenues of $1.3 billion declined 3% compared to the prior year period, or 1% constant currency* Quarterly Business Trends 23% 24% 6% 6% 0% 0% 0% 1% Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q4 -1% -1% -1% -3% -3% -8% -11% -11% WU Adj. Constant Currency C2C Constan
Slide 12: Consumer-to-Consumer Q4
Consumer-to-Consumer Q4 Revenue Constant Currency Rev. Transaction % of C2C Regions Growth/(Decline) Growth/(Decline)* Growth/(Decline) Revenue North America (3%) (3%) (1%) 37% Europe & CIS 3% 0% 23% 33% MEASA 1% 0% 12% 15% LACA (9%) 2% (13%) 8% APAC 8% 6% (3%) 7% Total C2C 0% 0% 6% 100% Included in
Slide 13: Business Solutions and Other Q4
Business Solutions and Other Q4 Business Solutions • 7% of Company revenue • Revenue decreased 8%, or 11% constant currency* Other (primarily retail bill payments businesses in the U.S. & Argentina as well as money orders) • 5% of Company revenue • Revenue decreased 29% 13 *Note: See appendix for re
Slide 14: Operating Margin Q4
Operating Margin Q4 Key factors driving the increase in GAAP operating margin: 18.7% 18.8% ‒ (+) Productivity and additional cost savings resulting from COVID-19 17.9% ‒ (+) Timing of marketing investments 17.3% ‒ (-) Revenue declines Adjusted operating margin increased due to the same factors above
Slide 15: Financial Highlights
Financial Highlights Quarter Ended December 31, 2020 EPS: GAAP / Adjusted* $0.43 / $0.45 YTD Cash Flow from Operations $878 million Dividends Paid $93 million Cash Balance, December 31, 2020 $1.4 billion Debt outstanding, December 31, 2020 $3.1 billion Note: No shares were repurchased during the fou
Slide 16: 2021 Outlook
2021 Outlook Revenue GAAP revenue: mid-to-high single digit increase Earnings per Share EPS in a range of Constant currency revenue: mid-single $2.00 to $2.10 digit increase, excluding any benefit related to Argentina inflation Operating Profit Margin Effective Tax rate Operating profit margin of Ef
Slide 17: Questions and Answers
WesternUnion\WU Questions and Answers
Slide 18: Appendix
Appendix Fourth Quarter 2020 Earnings Webcast and Conference Call 18
Slide 19: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Western Union presents a number of non-GAAP financial measures because A non-GAAP financial measure should not be considered in isolation or as a management believes that these metrics provide meaningful supplemental substitute for the most comp
Slide 20: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Notes 4Q19 FY2019 1Q20 2Q20 3Q20 4Q20 FY2020 Consolidated Metrics Consolidated revenues (GAAP) - YoY % change (7) % (5) % (11) % (17) % (4) % (3) % (9) % Consolidated revenues (non-GAAP, constant currency adjusted and excluding Speedpay and Paym
Slide 21: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Notes 4Q19 FY2019 1Q20 2Q20 3Q20 4Q20 FY2020 C2C Segment Regional Metrics NA region revenues (GAAP) - YoY % change 1 % 2 % (2) % (6) % 0 % (3) % (3) % NA region foreign currency translation impact (j) 0 % 0 % 0 % 1 % 1 % 0 % 0 % NA region revenu
Slide 22: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Notes 4Q19 FY2019 1Q20 2Q20 3Q20 4Q20 FY2020 % of C2C Revenue NA region revenues 38 % 38 % 38 % 41 % 38 % 37 % 38 % EU & CIS region revenues 32 % 32 % 31 % 32 % 33 % 33 % 33 % MEASA region revenues 15 % 15 % 16 % 15 % 16 % 15 % 15 % LACA region
Slide 23: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Three Months Ended December 31, 2020 Operating Income Before Provision for Diluted Earnings Notes Revenues Income Income Taxes Income Taxes Net Income per Share (in millions, except per share amounts) Reported results (GAAP) $ 1,271.8 $ 227.1 $
Slide 24: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Twelve Months Ended December 31, 2020 Operating Income Before Provision for Diluted Earnings Notes Revenues Income Income Taxes Income Taxes Net Income per Share (in millions, except per share amounts) Reported results (GAAP) $ 4,835.0 $ 967.3 $
Slide 25: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Notes 4Q19 FY2019 1Q20 2Q20 3Q20 4Q20 FY2020 Consolidated Metrics (a) Revenues (GAAP) $ 1,307.7 $ 5,292.1 $ 1,190.0 $ 1,114.7 $ 1,258.5 $ 1,271.8 $ 4,835.0 Foreign currency translation impact (j) 41.7 238.9 47.3 46.4 41.1 22.4 157.2 Revenues (no
Slide 26: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Notes 4Q19 FY2019 1Q20 2Q20 3Q20 4Q20 FY2020 Consolidated Metrics cont. (d) Effective tax rate (GAAP) 31 % 20 % 13 % 16 % 12 % 11 % 13 % Impact from restructuring-related expenses (m) 0 % 1 % 0 % 0 % 1 % 1 % 0 % Impact from acquisition and dives
Slide 27: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Notes 4Q19 FY2019 1Q20 2Q20 3Q20 4Q20 FY2020 Business Solutions Segment Metrics (h) Revenues (GAAP) $ 97.0 $ 388.8 $ 98.4 $ 79.4 $ 89.1 $ 89.2 $ 356.1 Foreign currency translation impact (j) 1.0 12.1 2.2 2.0 (1.9) (2.4) (0.1) Revenues (non-GAAP,
Slide 28: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Non-GAAP related notes: (j) 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 excha
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