Western Union Company (the) · NYSE:WU
Western Union Company (the) — Q1 2010 Earnings Presentation
24 slides from Western Union Company (the)'s earnings presentation, Apr 27, 2010
Slide 1: Western Union First Quarter 2010 Earnings Webcast & Conference Call
Western Union First Quarter 2010 Earnings Webcast & Conference Call April 27, 2010 Exhibit 99.2 ** ** ** ** ** ** ** ** ** ** **
Slide 2: Mike Salop, Senior Vice President, Investor Relations
Mike Salop Senior Vice President, Investor Relations ** ** ** ** ** ** ** ** ** ** **
Slide 3: Christina Gold, President & Chief Executive Officer
Christina Gold President & Chief Executive Officer ** ** ** ** ** ** ** ** ** ** **
Slide 4: Cash-to-Cash Money Transfer
Cash-to-Cash Money Transfer Improving trends in core cash money transfer Accelerating transaction growth driven by Americas Key cash-to-cash initiatives Signing and activating retail locations in Europe Activating additional bank locations in the U.S. Solid start to 2010
Slide 5: Electronic Channels and B2B
Electronic Channels and B2B Westernunion.com March - record month International transaction growth greater than 60% Account-to-cash money transfer Transaction growth exceeded 65% 15 banks Prepaid 365,000 cards-in-force Retail distribution – 4,500 locations
Slide 6: Electronic Channels and B2B
Electronic Channels and B2B Mobile 19,000 locations enabled for cash-to-mobile service Focus on key mobile corridors Emerging opportunities with mobile banking platforms Business-to-business payments Sales offices added, expansion underway Results on plan
Slide 7: Hikmet Ersek, Chief Operating Officer
Hikmet Ersek Chief Operating Officer ** ** ** ** ** ** ** ** ** ** **
Slide 8: C2C Highlights Geographic diversity
C2C Highlights Geographic diversity Note: See appendix for reconciliation of Non-GAAP to GAAP measures. YoY Change C2C Revenue % C2C Revenue, constant currency % C2C Transactions % Improved trends in Americas Domestic turnaround Sequential improvement in U.S. Outbound and Mexico Continued strength i
Slide 9: Consumer-to-Consumer: Europe, Middle East, Africa, S. Asia
Consumer-to-Consumer Revenue Transactions Q1 2010 5% 6% Europe, Middle East, Africa, S. Asia 44% of Western Union revenue In Europe, transaction trends in most markets stable to slightly better Russia improved Gulf States transactions relatively flat
Slide 10: Consumer-to-Consumer: Americas
Consumer-to-Consumer Revenue Transactions Americas (3)% 8% 31% of Western Union revenue Strong improvement from Q4 2009 Integrated U.S. domestic money transfer strategy delivered strong transaction growth Domestic operating margins >30% Favorable trends in U.S Outbound Mexico trends improved compare
Slide 11: Consumer-to-Consumer: Asia Pacific
Consumer-to-Consumer Revenue Transactions Asia Pacific 14% 15% 9% of Western Union revenue China grew revenue 21% on 8% transaction increase Now 8 bank agents in China Philippines remained strong Q1 2010
Slide 12: Global Business Payments
Global Business Payments Revenue Transactions Global Business Payments 4% (7)% 15% of Western Union revenue Custom House delivered $26 MM in revenue Macroeconomic headwinds for U.S. bill payments Pago Facil continued to perform well Progress developing B2B infrastructure Q1 2010
Slide 13: Scott Scheirman, Executive Vice President & Chief Financial Officer
Scott Scheirman Executive Vice President & Chief Financial Officer ** ** ** ** ** ** ** ** ** ** **
Slide 14: Revenue
Revenue ($ in millions) $1,201 Consolidated revenue up 3% or up 1% constant currency adjusted Transaction fees grew 1% Foreign exchange revenue increased 16%, due to Custom House $1,233 Note: See appendix for reconciliation of Non-GAAP to GAAP measures.
Slide 15: Remittance Trends Up 8%
Remittance Trends Up 8% Total Q1 Western Union cross- border principal of $16 billion, up 7% Principal per transaction Flat on a reported basis Declined 3% constant currency C2C Transactions (millions) Note: See appendix for reconciliation of Non-GAAP to GAAP measures.
Slide 16: C2C Transaction and Revenue Growth
8% 3% C2C Transaction and Revenue Growth 0% Transaction Growth Domestic Price Reduction / Mix Other Price Reductions Other Mix Constant Currency Revenue Currency Impact Reported Revenue Growth Note: See appendix for reconciliation of Non-GAAP to GAAP measures. Q1 2010 Expect 3% pricing investment fo
Slide 17: Operating Margin
Operating Margin Operating margin declined 280 basis points YoY • Delayed spending in Q1 09 • Incremental investments • Retail Money Order portfolio • Custom House and FEXCO acquisition-related amortization • U.S. bill payment volume declines Operating margin improved 140 basis points from Q4 09
Slide 18: C2C Operating Margin
C2C Operating Margin C2C operating margin declined 120 basis points YoY Technology and other investments Weaker US Dollar YoY C2C operating margin improved 170 basis points from Q4 09 Expect full year C2C margin expansion in 2010
Slide 19: Global Business Payments Operating Margin
Global Business Payments Operating Margin Note: See appendix for reconciliation of Non-GAAP to GAAP measures. Segment margin declined YoY Custom House investments and amortization Reduced volumes in U.S. bill payment business Segment margin consistent with Q4 2009 Custom House Base business profitab
Slide 20: Financial Strength
Financial Strength Cash Flow from Operations Excluding Tax Deposit $324 million Refundable IRS Tax Deposit ($250) million GAAP Cash Flow from Operations $74 million Capital Expenditures $15 million Stock Repurchases $200 million Dividends $41 million Cash Balance, March 31, 2010 $1.5 billion Debt Ou
Slide 21: 2010 Outlook & Cash Priorities
2010 Outlook & Cash Priorities Company affirms full year GAAP outlook provided February 3, 2010 GAAP revenue range of -1% to +2% GAAP and constant currency revenue expected to be similar GAAP EPS range of $1.29 to $1.34 GAAP and constant currency EPS expected to be similar Cash priorities Reinvestme
Slide 22: Question & Answer
Question & Answer ** ** ** ** ** ** ** ** ** ** **
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 1Q09 2Q09 3Q09 4Q09 FY2009 1Q10 Consolidated Metrics Revenues, as reported (GAAP) $ 1,201.2 $ 1,254.3 $ 1,314.1 $ 1,314.0 $ 5,083.6 $ 1,232.7 Foreign currency translation impact (a) 60.7 60.1 31.1 (32.4) 119.5 (20.0) Revenues, constant currency adjusted $ 1,261.9
Slide 24: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 1Q09 2Q09 3Q09 4Q09 FY2009 1Q10 Consumer-to-Consumer Segment Cross-border principal, as reported ($ - billions) $ 15.0 $ 15.9 $ 17.0 $ 17.1 $ 65.0 $ 16.1 Foreign currency translation impact (a) ($ - billions) 1.1 1.1 0.5 (0.7) 2.0 (0.5) Cross-border principal, con