Western Union Company (the) · NYSE:WU
Western Union Company (the) — Q4 2022 Earnings Presentation
32 slides from Western Union Company (the)'s earnings presentation, Feb 7, 2023
Slide 1: Fourth Quarter 2022 Financial Results
Fourth Quarter 2022 Financial Results February 7, 2023 Exhibit 99.2
Slide 2: Brad Windbigler, Head of Treasury and Investor Relations
Brad Windbigler Head of Treasury and Investor Relations
Slide 3: Forward-Looking Statements
Forward-Looking Statements 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 d
Slide 4: Devin McGranahan, President & CEO
Devin McGranahan President & CEO
Slide 5: Fourth Quarter Results
$1.1 billion GAAP revenue Fourth Quarter Results 13.9% GAAP operating margin 15.8% Adjusted operating margin* $0.65 GAAP EPS $0.32 Adjusted EPS* *Note: See appendix for reconciliation of GAAP to Non-GAAP financial measures.
Slide 6: Remittances Projected to Remain Resilient
Remittances Projected to Remain Resilient +2% World Bank 2023 Global Remittance Flows to LMIC1 +3% IMF 2023 Global GDP Growth2 1 World Bank global remittance flows to low-and-middle income countries (LMIC); World Bank Migration and Development Brief 37, November 2022 2 IMF World Economic Outlook Upd
Slide 7: Accelerating Strategic Investments
Accelerate digital Deliver accessible financial services Drive customer experience and operational excellence Retail as the gateway to Western Union Accelerating Strategic Investments New point of sale system pilot launch Owned stores expansion in Europe and LACA New go-to-market strategy, including
Slide 8: Reigniting the Customer Acquisition Engine
+30% Q4 U.S. outbound branded digital new customer growth New go-to-market strategy implemented Reigniting the Customer Acquisition Engine Note: the impact from Russia and Belarus is excluded from all time periods +30% YoY
Slide 9: Latin America and the Caribbean
Latin America and the Caribbean *Note: See appendix for reconciliation of segment financial results. Over 50 Corporate owned stores in 2022 +16% Q4 new x-border customer growth +11% Q4 x-border monthly active users
Slide 10: Benefits of Owned/Concept Retail Stores
Benefits of Owned/Concept Retail Stores Western Union Store, Madrid More control over distribution Increasing the number of products and services Promoting the retail to digital escalator Assisting in the adoption of the financial ecosystem Low initial investment and above average margins
Slide 11: Q4 Partnership Highlights
Q4 Partnership Highlights
Slide 12: Matt Cagwin, CFO
Matt Cagwin CFO
Slide 13: Q4 Business Trends
Q4 Business Trends *Note: See appendix for reconciliation of GAAP to Non-GAAP financial measures. $1.1 billion GAAP revenue 13.9% GAAP operating margin 15.8% Adjusted operating margin (15.2%) GAAP effective tax rate 14.7% Adjusted effective tax rate $0.65 GAAP EPS $0.32 Adjusted EPS
Slide 14: Q4 C2C Business Trends
Q4 C2C Business Trends Regions Const. Curr Revenue* YoY % Change Transaction Growth/(Decline) North America (7%) (2%) Europe & CIS1 (17%) (31%) MEASA (7%) (5%) LACA 13% 8% APAC (14%) (12%) Total C2C1 (9%) (12%) Branded Digital1,2 (6%) 2% *Note: See appendix for reconciliation of segment financial re
Slide 15: Q4 Other & Business Solutions Highlights
Q4 Other & Business Solutions Highlights Other % of Total Company Revenue (GAAP) Business Solutions Third closing (EU operations) expected to occur in Q2 2023 Until the third closing, the Company will recognize revenue and operating profit plus offsetting contractual payments to the buyers in Other
Slide 16: Financial Highlights YTD as of December 31, 2022
Financial Highlights YTD as of December 31, 2022 Edit text Cash flow from operations $582 million Dividends paid $362 million Share repurchases $352 million Capital expenditures $208 million Cash balance $1.3 billion Debt outstanding $2.6 billion
Slide 17: 2023 Financial Outlook
2023 Financial Outlook *Note: See appendix for reconciliation of GAAP to Non-GAAP financial measures. Revenue Operating margin EPS GAAP (9%) to (7%) 18% to 20% $1.48 to $1.58 Adjusted (4%) to (2%) 19% to 21% $1.55 to $1.65
Slide 18: Key Drivers and Medium-Term Aspirations
Key Drivers Metrics Medium-Term Aspirations Results Increase retention in retail +200 bps annually +46 bps in 2022 Drive omnichannel experiences Over 20% growth in omnichannel customers annually Flat in 2022 Grow new branded digital customers Double-digit growth annually +14% in Q4 Expand ecosystem
Slide 19: Questions & Answers
Questions & Answers
Slide 20: Appendix Fourth Quarter 2022
Appendix Fourth Quarter 2022
Slide 21: Non-GAAP financial measures definitions and consolidated metrics
Western Union presents a number of non-GAAP financial measures because management believes that these metrics provide meaningful supplemental information in addition to the GAAP metrics and provide comparability and consistency to prior periods. Constant currency results assume foreign revenues are
Slide 22: Consolidated and C2C Segment Metrics
Notes 4Q21 FY2021 1Q22 2Q22 3Q22 4Q22 FY2022 Consolidated Metrics Revenues (GAAP)-YoY % change 1% 5% (4)% (12)% (15)% (15)% (12)% Adjusted revenues (non-GAAP) – YoY % change (a) 1% 4% (1)% (4)% (6)% (6)% (4)% Operating margin (GAAP) 24.7% 22.1% 20.5% 23.2% 21.3% 13.9% 19.8% Adjusted operating margin
Slide 23: C2C Segment Regional Metrics
C2C Segment Regional Metrics - YoY %change Notes 4Q21 FY2021 1Q22 2Q22 3Q22 4Q22 FY2022 NA region revenues (GAAP) 2% 1% 1% (2)% (5)% (7)% (4)% NA region foreign currency translation impact (i) 0% 0% 0% 0% 0% 0% Adjusted NA region revenues (non-GAAP) 2% 1% (1)% (2)% (5)% (7)% 0% NA region transaction
Slide 24: Revenue mix by region and segment
Notes 4q21 fy2021 1q22 2q22 3q22 4q22 fy2022 % of C 2C Revenue NA region revenues EU & CIS region revenues MEASA region revenues LACA region revenues APAC region revenues Branded Digital revenues Other (primarily bill payments businesses in Argentina and the united states and money orders) Revenues
Slide 25: Consolidated metrics reconciliation
Notes 4Q21 FY2021 1Q22 2Q22 3Q22 4Q22 FY2022 Consolidated metrics (a)Revenues (gaap) Foreign currency translation impact Revenues, constant currency (non-gaap) Less business solutions Revenues, constant currency (non-gaap) Adjusted Revenues (non-gaap) Prior year Revenues (gaap) Less prior year Reven
Slide 26: Net income and EPS reconciliation
Notes 4Q21 FY2021 1Q2022 2Q22 3Q22 4Q22 FY2022 (C) Net Income (GAAP) $ 168.8 $ 805.8 $ 293.3 $ 194.0 $ 173.9 $ 294 4 $ 910 6 Acquisition and divestiture costs (k) 3.7 15.7 3.3 0.9 0.4 1.6 6.2 Gain on investment sale (l) —(47.9) N/A N/A N/A N/A N/A Debt extinguishment costs (m) — 14.8 N/A N/A N/A N/A
Slide 27: C2C Segment Metrics
Notes 4Q21 FY2021 1Q22 2Q22 3422 4Q22 FY2022 C2C Segment Metrics (f) Revenues (GAAP) $ 1,111.5 $ 4,394.0 $ 999.0 $ 1,026.9 $ 982.4 $ 985.2 $ 3,993.5 Foreign currency translation impact (i) 6.2 (46.4) 20.8 28.1 37.1 30.9 116.9 Revenues, constant currency (non-GAAP)$ 1,117.7 $ 4,347.6 $ 1,019.8 $ 1,05
Slide 28: C2C Segment Metrics
Notes 4Q21 FY2021 1Q22 2Q22 3422 4Q22 FY2022 C2C Segment Metrics (f) Revenues (GAAP) $ 1,111.5 $ 4,394.0 $ 999.0 $ 1,026.9 $ 982.4 $ 985.2 $ 3,993.5 Foreign currency translation impact (i) 6.2 (46.4) 20.8 28.1 37.1 30.9 116.9 Revenues, constant currency (non-GAAP)$ 1,117.7 $ 4,347.6 $ 1,019.8 $ 1,05
Slide 29: 2023 Consolidated Outlook
2023 Consolidated Outlook Metrics Notes Range Revenues (GAAP) -YoY %change (9) % (7)% Foreign currency translation impact (i) 1% 1% Impact from Business Solutions (p) 4% 4% Revenues, constant currency, excluding Business Solutions (non-GAAP) - YoY %change (4)% (2)% Range Operating margin (GAAP) 18%
Slide 30: Non-GAAP related notes
Non-GAAP related notes; (i) 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 currencies and the Uni
Slide 31: Non-GAAP related notes (continued)
and this expense is recognized in other income/(expense), net. Therefore, the Company believes that providing this information enhances investors' understanding of the profitability of the Company's remaining businesses. The Company has also excluded the gain on the sale, net of related taxes from i
Slide 32: Thank you.
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