Visa Inc. · NYSE:V
Visa — Q4 2010 Earnings Presentation
29 slides from Visa's earnings presentation, Oct 27, 2010
Slide 1: Fiscal Fourth Quarter and Full-Year 2010 Financial Results
Visa Inc Inc. Fiscal Fourth Quarter and Full-Year Full Year 2010 Financial Results October 27, 27 2010
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by the terms “expect,” “will,” “continue” and similar references to the future. Examples of such forwar
Slide 3: Solid Fiscal Fourth Quarter and Full-Year Results
Solid Fiscal Fourth Quarter and Full-Year Results • Strong operating revenues of $2.1 billion for the fourth quarter and $8.1 billion for the full-year, up 13% and 17% over prior periods • Adjusted quarterly and annual net income of $695 million and $2.9 billion, or adjusted diluted earnings of $0.9
Slide 4: Payments Volume – Quarter ended June
Payments Volume US$ in billions, nominal, except percentages Quarter ended June 2009 802 ROW = Rest of World 2010 687 U.S. U.S. 481 412 469 426 U.S. U.S. 321 192 204 261 U.S. U.S. ROW ROW ROW ROW 220 266 275 333 234 277 ROW 41 ROW 55 Total Visa Inc. Credit Debit YOY Change (nominal) 17% 13% 23% YOY
Slide 5: Payments Volume – Quarter ended September
Payments Volume US$ in billions, nominal, except percentages Quarter ended September Note: Current quarter payments volume and other select metrics are provided in the operational performance data supplement to provide more recent operating data. Service revenues continue to be recognized based on p
Slide 6: Payments Volume – Twelve Months ended June
Payments Volume US$ in billions, nominal, except percentages Twelve Months ended June 2009 ROW = Rest of World 2010 3,037 2,680 U.S. U.S. 1,861 1,621 1,752 1,689 U.S. U.S. 1,176 785 781 990 ROW ROW U.S. U.S. ROW ROW 837 971 1,058 1,285 905 1,080 ROW 153 ROW 206 Total Visa Inc. Credit Debit YOY Chang
Slide 7: Payments Volume – Twelve Months ended September
Payments Volume US$ in billions, nominal, except percentages Twelve Months ended September Note: Current quarter payments volume and other select metrics are provided in the operational performance data supplement to provide more recent operating data. Service revenues continue to be recognized base
Slide 8: Payments Volume by Region – Quarter ended June
Payments Volume US$ in billions, nominal, except percentages Quarter ended June 2009 469 2010 412 198 165 49 62 48 41 24 20 United States Asia Pacific Latin America and Canada Central and Caribbean Eastern Europe, Middle East and Africa YOY Change (nominal) 14% 20% 26% 18% 31% YOY Change (constant)
Slide 9: Payments Volume by Region – Quarter ended September
Payments Volume US$ in billions, nominal, except percentages Quarter ended September Note: Current quarter payments volume and other select metrics are provided in the operational performance data supplement to provide more recent operating data. Service revenues continue to be recognized based on p
Slide 10: Payments Volume by Region – Twelve Months ended June
Payments Volume US$ in billions, nominal, except percentages Twelve Months ended June 2009 1,752 2010 1,621 771 636 189 240 183 155 91 78 United States Asia Pacific Latin America and Canada Central and Eastern Caribbean Europe, Middle East and Africa YOY Change (nominal) 8% 21% 27% 18% 17% YOY Chang
Slide 11: Payments Volume by Region – Twelve Months ended September
Payments Volume US$ in billions, nominal, except percentages Twelve Months ended September Note: Current quarter payments volume and other select metrics are provided in the operational performance data supplement to provide more recent operating data. Service revenues continue to be recognized base
Slide 12: Transactions
Transactions in millions, except percentages Quarter ended June Quarter ended September 2009 2010 17,582 18,122 15,491 15,855 Credit Credit 12,119 Credit Credit 11,721 37% 35% 37% 35% 10,266 10,463 Debit Debit Debit Debit 63% 65% 63% 65% Total Transactions Processed Total Transactions Processed Tran
Slide 13: Transactions – Twelve Months
Transactions in millions, except percentages Twelve Months ended June Twelve Months ended September 2009 2010 66,158 68,423 59,205 60,573 Credit Credit Credit Credit 38% 36% 43,755 38% 36% 45,411 39,012 39,885 Debit Debit Debit Debit 62% 64% 62% 64% Total Transactions Processed Total Transactions Pr
Slide 14: Total Cards
Total Cards in millions, except percentages Quarter ended June 2009 1,837 2010 1,732 1,065 941 791 772 Credit Debit Visa Inc. YOY (2%) 13% 6% Change Note: From time to time, previously submitted cards information may be updated. Prior year cards information presented has not been updated, as changes
Slide 15: Revenue – Q4 2010
Revenue – Q4 2010 US$ in millions, except percentages Fiscal 2009 Fiscal 2010 2,538 2,205 2,117 1,879 (326) (421) Gross Net Operating Revenues Incentives Revenues YOY 15% 29% 13% Change Note: Growth rates calculated based on whole numbers, not rounded numbers. Fiscal Fourth Quarter and Full-Year 201
Slide 16: Revenue – Fiscal Year 2010
Revenue – Fiscal Year 2010 US$ in millions, except percentages Fiscal 2009 Fiscal 2010 9,625 8,145 8,065 6,911 (1,234) (1,560) Gross Net Operating Revenues Incentives Revenues YOY 18% 26% 17% Change Note: Growth rates calculated based on whole numbers, not rounded numbers. Fiscal Fourth Quarter and
Slide 17: Revenue Detail – Q4 2010
Revenue Detail – Q4 2010 US$ in millions, except percentages Fiscal 2009 Fiscal 2010 912 840 808 727 619 507 163 167 Service Data International Other Revenues Processing Transaction Revenues Revenues Revenues YOY 13% 15% 22% 3% Change Note: Growth rates calculated based on whole numbers, not rounded
Slide 18: Revenue Detail – Fiscal Year 2010
Revenue Detail – Fiscal Year 2010 US$ in millions, except percentages Fiscal 2009 Fiscal 2010 3,497 3,174 3,125 2,430 2,290 1,916 625 713 Service Data International Other Revenues Processing Transaction Revenues Revenues Revenues YOY 10% 29% 20% 14% Change Note: Growth rates calculated based on whol
Slide 19: Operating Margin – Q4 2010
Operating Margin – Q4 2010 US$ in millions, except percentages Fiscal 2009 Fiscal 2010 53% 2,117 1,879 46% 1,113 1,010 1,004 869 Operating Margin Net Operating Total Operating Operating Revenues Expenses Income YOY 7 ppts 13% – 28% Change Note: Growth rates calculated based on whole numbers, not rou
Slide 20: Operating Margin – Fiscal Year 2010
Operating Margin – Fiscal Year 2010 US$ in millions, except percentages Fiscal 2009 Fiscal 2010 57% 8,065 51% 6,911 4,589 3,373 3,476 3,538 Operating Margin Net Operating Total Operating Revenues Operating Income Expenses YOY 6 ppts 17% 3% 30% Change Note: Growth rates calculated based on whole numb
Slide 21: Operating Expenses – Q4 2010
Operating Expenses – Q4 2010 US$ in millions, except percentages Fiscal 2009 Fiscal 2010 355 353 283 233 111 119 108 113 117 86 78 61 1 (4) Professional Network, Advertising, and Depreciation Administrative Litigation Personnel EDP and Marketing and Consulting and Provision Amortization and Other Co
Slide 22: Operating Expenses – Fiscal Year 2010
Operating Expenses – Fiscal Year 2010 US$ in millions, except percentages Fiscal 2009 Fiscal 2010 1,228 1,222 964 918 425 393 338 359 268 286 265 226 2 Professional (45) Network, Advertising, Depreciation and Administrative Litigation Personnel EDP and Marketing and and Consulting and Other Provisio
Slide 23: Other Financial Results
Other Financial Results • Cash, cash equivalents, restricted cash and available-for-sale investment securities of $6.0 billion at the end of the fiscal year, which includes $1.9 billion of restricted cash for litigation escrow • Total free cash flow of $3.4 billion for FY10 and adjusted free cash fl
Slide 24: Financial Metrics for Fiscal Year 2011
Financial Metrics for Fiscal Year 2011 11% to 15% Annual net revenue growth range Volume and support incentives as % 16% to 16.5% of gross revenues range Less than Advertising, marketing and promotion expenses $900 million Annual operating margin About 60% Fiscal Fourth Quarter and Full-Year 2010 Fi
Slide 25: Financial Metrics for Fiscal Year 2011
Financial Metrics for Fiscal Year 2011 36.5% to 37% GAAP tax rate range Annual diluted class A common stock earnings 20% + per share growth Between $250- Capital expenditures $275 million Annual free cash flow $3 billion + Fiscal Fourth Quarter and Full-Year 2010 Financial Results 25
Slide 26: Appendix: Reconciliation of Non-GAAP Measures
Appendix Reconciliation of Non-GAAP Measures
Slide 27: Adjusted Net Income and Earnings
Adjusted Net Income and Earnings US$ in millions, except per share data Management believes the presentation of adjusted net income and diluted earnings per share provides a clearer understanding of our operating performance for the periods. The revaluation of the Put option resulted in non-cash, no
Slide 28: Impact of CyberSource Acquisition
Impact of CyberSource Acquisition US$ in millions, except per share data The following table presents the impact of the CyberSource acquisition on Visa’s diluted earnings per share. Three Months Ended Twelve Months Ended September 30, 2010 September 30, 2010 Net income attributable to Visa Inc. (as
Slide 29: Calculation of Free Cash Flow
Calculation of Free Cash Flow US$ in millions Additions (+) / Reductions (-) to Net income attributable to Three Months Ended Twelve Months Ended Visa Inc. September 30, 2010 September 30, 2010 Net income attributable to Visa Inc. (as reported) 774 2,966 Capital Assets + Depreciation and amortizatio