Slide 1: First Quarter 2008 Earnings Webcast & Conference Call
First Quarter 2008 Earnings Webcast & Conference Call April 22, 2008 Exhibit 99.2
Slide 2: Gary Kohn, Vice President Investor Relations
Gary Kohn Vice President Investor Relations
Slide 3: Safe Harbor
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 diffi
Slide 4: Christina Gold, President & Chief Executive Officer
Christina Gold President & Chief Executive Officer
Slide 5: Strong First Quarter Results
Strong First Quarter Results Strong First Quarter Results Revenue $1.27B up 12% consecutive quarter of organic revenue growth acceleration • C2C revenue and transactions up 14% • International C2C revenue and transactions up 19% – International (excluding U.S.-originated) • Revenue up 28%, transacti
Slide 6: Strong First Quarter Results
Strong First Quarter Results Strong First Quarter Results EPS, ex restructuring $0.29 up 16% EPS, reported $0.27 up 8% Note: See appendix for reconciliation of Non-GAAP to GAAP measures.
Slide 7: Driving Success
Driving Success Driving Success Huge Market Opportunity Unmatched Distribution Financial Strength Brand Recognition
Slide 8: Q1 Growth in Top Remittance Markets
Q1 08 Growth in Top Remittance Markets Q1 08 Growth in Top Remittance Markets India 52% 65% Revenue Transactions Chinese New Year Promotional Materials India and China represent 6% of Western Union revenue China 35% 22%
Slide 9: Grow the C2C Business
1. Grow the C2C Business 1. Grow the C2C Business • Increase distribution – 345,000 agent locations – Key signings and renewals – Vigo international expansion • Brand strategy – Extending the brand – Loyalty initiatives • Expand distribution channels – westernunion.com – Scotiabank
Slide 10: Expand the C2B Business
2. Expand the C2B Business 2. Expand the C2B Business • Pago Fácil performing well – Expanding footprint in Latin America • Small business payment options – www.globalbusinesspayments.com • Yodlee Partnership
Slide 11: Innovate New Services and Technologies
3. Innovate New Services and Technologies 3. Innovate New Services and Technologies • Mobile Money Transfer – Customer pilot test to begin in Q2 with: • Globe Telecom & Smart Communications in the Philippines – Expanded Radio Shack, Trumpet mobile offering • Micro Lending – Marketing to select Weste
Slide 12: Focus on Profitability
4. Focus on Profitability 4. Focus on Profitability • Operating income margin improvement is an ongoing objective • Goal to improve 2009 margin by up to 50 basis points • Maintain important investments in the business
Slide 13: Strong First Quarter
Strong First Quarter Strong First Quarter • Solid financial results • Loyal customers • Global presence • World-class team of agents and employees
Slide 14: Scott Scheirman, Executive Vice President & CFO
Scott Scheirman Executive Vice President & CFO
Slide 15: Strong First Quarter Results
Strong First Quarter Results Strong First Quarter Results Revenue $1.27B up 12% EPS, ex restructuring $0.29 up 16% Geographically diverse revenue stream EPS, reported $0.27 up 8% Note: See appendix for reconciliation of Non-GAAP to GAAP measures.
Slide 16: Imported Labor Drives Growth
Imported Labor Drives Growth Imported Labor Drives Growth • UAE – Huge opportunity – Native Population = 1 million – Expatriates = 4 million – Home to 16% of the world’s construction cranes Dubai decades ago Dubai today
Slide 17: Components of Revenue
Up 10% Up 26% Transaction Fee Components of Revenue Components of Revenue $ in millions Q1 07 Q1 08 $1,021 $930 Foreign Exchange Q1 07 Q1 08 $210 $167 Foreign exchange revenue driven by international transaction growth
Slide 18: Operating Income Margin
Operating Income Margin Operating Income Margin • Q1 operating income margin impacted by: – Restructuring expenses – C2B product mix shift • Expect 2008 operating income margin excluding restructuring expenses to be consistent with 2007 • Operating income margin stronger in second half
Slide 19: Profitability Initiatives
Profitability Initiatives Profitability Initiatives • Q1 Restructuring expense = $24 million – $17 million related to the transition of Missouri and Texas operations – $7 million related to January and February actions • Full-year 2008 restructuring expenses estimated at $69 million • Expected savin
Slide 20: Selected Financial Results
Selected Financial Results Selected Financial Results Q1 2008 Q1 2007 % Change $ in billions except for per share and tax rate information Excluding Restructuring Expense Note: See appendix for reconciliation of Non-GAAP to GAAP measures. Revenue 1.266 $ 1.131 $ 12% Cost of Services 0.759 0.646 17%
Slide 21: Strong Cash Generation and Position
Strong Cash Generation and Position Strong Cash Generation and Position Investing in the business and returning capital to shareholders Q1 2008 $ in millions Cash Flow From Operations $ Cash Balance on March 31 1,895 $ Capital Expenditures $ Stock Repurchases 14 Million Shares $ Remaining for buybac
Slide 22: Consumer-to-Consumer
Consumer-to-Consumer Consumer-to-Consumer Revenue $1,054 14% Q1 2008 Change Transactions 43.1 14% Operating income $273 15% Operating margin 25.9% +10bps (millions)
Slide 23: Consumer-to-Consumer Growth
Consumer-to-Consumer Growth Consumer-to-Consumer Growth Revenue Transactions Mexico 1% 2% Domestic (8%) (3%) International 19% 19% International excluding U.S. Outbound 28% 29% Q1 08
Slide 24: Consumer-to-Business
Consumer-to-Business Consumer-to-Business Revenue $190 4% Q1 2008 Change Transactions 103.5 3% Operating income $56 (8%) Operating margin 29.6% (380bps) (millions)
Slide 25: 2008 Financial Guidance
2008 Financial Guidance 2008 Financial Guidance 9% to 11% $1.25 to $1.29 $1.2 Billion Note: See appendix for reconciliation of Non-GAAP to GAAP measures. EPS , Excluding $0.06 of restructuring expenses, and including $0.01 in cost savings Revenue Growth Cash Flow from Operations $1.19 to $1.23 GAAP
Slide 26: Summary
Summary Summary • International strength driving revenue and earnings • Important cost-savings measures implemented • Strong cash flow in 2008 • Cash priorities remain: • Grow the business • Make acquisitions • Return capital to shareholders primarily through stock buyback Confident in the state of
Slide 27: Questions and Answers
Questions and Answers
Slide 28: Driving Success
Driving Success Driving Success Huge Market Opportunity Unmatched Distribution Financial Strength Brand Recognition
Slide 29: First Quarter 2008 Earnings Webcast & Conference Call: Appendix
First Quarter 2008 Earnings Webcast & Conference Call April 22, 2008 Appendix
Slide 30: Non-GAAP measures presentation notes
Western Union’s management has presented revenue growth excluding the foreign currency translation impact of euro denominated revenues. In addition, Western Union's management has presented cost of services as a percent of revenue, operating income margin, and growth rates for cost of services, sell
Slide 31: Reconciliation of Non-GAAP Measures
(unaudited) THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (in millions) Growth $ 1,265.9 $ 1,131.0 12% Benefit from euro translation (a) (32.9) - $ 1,233.0 $ 1,131.0 9% $ 207.1 $ 193.2 Restructuring and related expenses, net of income tax benefit of $9.1 million (b) 15.1 - $ 222.2 $
Slide 32: Reconciliation of Non-GAAP Measures
(unaudited) THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (in millions) As reported Restructuring and (GAAP) Related Expenses (b) Adjusted Revenues $ 1,265.9 - $ $ 1,265.9 Cost of services 758.6 (22.4) 736.2 Selling, general and administrative 198.0 (1.8) 196.2 Operating income 309.3
Slide 33: Reconciliation of Non-GAAP Measures: EPS Guidance
(unaudited) THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (in millions) EPS Guidance 2008 EPS Guidance GAAP basis $ 1.19 $ 1.23 Adjustment: Estimated restructuring and related expenses, net of income tax benefit (b), (c) 0.06 0.06 $ 1.25 $ 1.29 EPS as reported (GAAP) $ 1.11 $ 1.11 Ad
Slide 34: Reconciliation of Non-GAAP Measures footnotes
THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (d) In the third quarter of 2007, the Company recognized a $22 million or a $0.02 per share non-cash charge in accordance with SFAS No. 123R accounting for stock-based compensation resulting from the previously announced acceleration of v
Slide 35: Restructuring Expenses
Restructuring Expenses Restructuring Expenses During the quarter, Western Union incurred a total of $24 million in restructuring expenses. Of this total, $17 million is related to the company’s decision to close substantially all of its union operating facilities in Missouri and Texas as disclosed o
Slide 36: Use of Material
Use of Material Use of Material The information contained in this presentation is being provided for your convenience and information only. This information is accurate as of the date of its initial presentation, April 22, 2008. If you plan to use this information for any purpose, verification of it