Western Union Company (the) · NYSE:WU
Western Union Company (the) — The Western Union Company — Q1 2024 Earnings Presentation
36 slides from Western Union Company (the)'s earnings presentation, Apr 24, 2024
Slide 1: First Quarter 2024 Financial Results
First Quarter 2024 Financial Results April 24, 2024
Slide 2: Tom Hadley, VP of Investor Relations
Western Union Tom Hadley Vice President of Investor Relations 2
Slide 3: Forward-Looking Statements
Western Union 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 assumpti
Slide 4: Devin McGranahan, President & CEO
Western Union Devin McGranahan President & CEO 4
Slide 5: Evolve 2025 Driving Transaction Improvements
Western Union Evolve 2025 Driving Transaction Improvements Branded Digital Revenue and Transaction Growth Trends 13% 13% 12% 12% +6% 9% Q1 2024 Consumer Money 4% Transfer transactions 3% -2% +13% 2Q23 3Q23 4Q23 1Q24 Q1 2024 Branded Digital Revenue Growth (Adjusted*) Transaction Growth transactions 5
Slide 6: First Quarter Results
Western Union First Quarter Results $1.05 billion GAAP revenue 18.3% 19.7% GAAP operating margin Adjusted operating margin* $0.41 $0.45 GAAP EPS Adjusted EPS* 6 *Note: See appendix for reconciliation of GAAP to Non-GAAP financial measures.
Slide 7: Evolve 2025 Strategy
Western Union Evolve 2025 Strategy • Digital first customer • Digital first customer experiences experiences • Scalable marketing driven • Remittance-led offering customer acquisition • Expanded set of accessible • Retail to digital escalator products and services Deliver Accelerate digital accessib
Slide 8: US Migration Trends
Western Union US Migration Trends Sources: ”The Foreign-Born Share and Number at Record Highs in February 2024.” Center for Immigration Studies, 28 Mar. 2024. Decennial Census for 1850 to 2000, American Community Survey (ACS) for 2010 and 2020, February Current Population Survey for 2024. *The 2020
Slide 9: Retail as the Gateway to Western Union
Western Union Retail as the Gateway to Western Union Quick Resend Lifetime Value One Step Refund Universal Customer Customer ID Retention Loyalty Program Customer Experience 9
Slide 10: Improved Experience
Western Union Improved Experience Having the right go-to-market strategy Technology driving improved transaction trends in Europe/CIS Europe/CIS Region Transaction Growth 1200 10% 1150 4% 5% 5% 1100 -1% 0% Distribution Product 0% 1050 -5% 1000 -10% 950 -15% 900 850 -23% -20% Customer & Agent 800 -25
Slide 11: Consumer Services Segment Growth
Western Union Consumer Services Segment Growth Retail Money Order Bill Payment Prepaid Card FX Exchange Digital Wallet Lending Partnerships 11
Slide 12: Wallet-based account launched in Brazil
Western Union Wallet-based account launched in Brazil 12
Slide 13: Western Union and Swiss Post Launch Strategic Relationship
Western Union Western Union and Swiss Post Launch Strategic Relationship Expected to bring Western Union services to over 700 new Swiss Post locations across Switzerland 13
Slide 14: Matt Cagwin, Chief Financial Officer
Western Union Matt Cagwin Chief Financial Officer 14
Slide 15: Business Trends
Western Union Business Trends Adjusted Revenue Growth* Adjusted Operating Margin* 1200 12% 1150 10% 6% 8% 4% 1100 3% 6% 1050 4% -1% 1000 2% 20.5% 21.8% 19.6% 19.7% -3% 950 0% 900 -2% 16.1% -4% 850 -6% 800 -8% 1Q23 2Q23 3Q23 4Q23 1Q24 1Q23 2Q23 3Q23 4Q23 1Q24 GAAP $1,037 $1,170 $1,098 $1,052 $1,049 G
Slide 16: Consumer Money Transfer (CMT) Business Trends
Western Union Consumer Money Transfer (CMT) Business Trends Key Highlights Branded • Branded Digital business showing continued momentum after Digital reaching positive revenue growth in Q3 % of Q1 2024 CMT Retail • Improved transaction trends in the Retail business for the third Revenue consecutive
Slide 17: Consumer Services
Western Union Consumer Services Consumer Services Highlights Consumer Services Adj. Revenue Growth* • Adjusted revenue* increased 8% in Q1 24% 24% • Includes ecosystem revenue streams 16% Expect to grow from bill payments, retail money order, double-digits for FY FX exchange, prepaid card, lending 8
Slide 18: Disciplined Cost Management Funding Investments
Western Union Disciplined Cost Management Funding Investments Cost savings driving… Incremental Investments 5-Year $150M Expense Redeployment Program Talent Reallocation Ecosystem Initiatives Targeted Future Achieved Redeployments in 2023 Procurement Efficiencies Point of Sale $50M Marketing Efficie
Slide 19: Financial Highlights
Western Union Financial Highlights YTD as of March 31, 2024 Edit text Cash flow from operations $94 million Capital Expenditures $35 million Dividends paid $80 million Share repurchases $150 million Cash balance $1.1 billion Debt outstanding $2.5 billion 19
Slide 20: 2024 Financial Outlook
Western Union 2024 Financial Outlook Revenue (M) Operating margin EPS GAAP $4,125 to $4,200 18% to 20% $1.62 to $1.72 Adjusted* $4,150 to $4,225 19% to 21% $1.70 to $1.80 20 *Note: See appendix for reconciliation of GAAP to Non-GAAP financial measures.
Slide 21: Questions and Answers
Western Union Questions and Answers 21
Slide 22: Appendix
Western Union Appendix First Quarter 2024 22
Slide 23: Key Statistics and Reconciliation of Non-GAAP Measures
Western Union Key Statistics and Reconciliation of Non-GAAP Measures Western Union’s management believes the non-GAAP financial A non-GAAP financial measure should not be considered in measures presented within this presentation provide meaningful isolation or as a substitute for the most comparable
Slide 24: Western Union Consolidated and CMT Metrics
Western Union Consolidated Metrics ‘Revermes (GAAP) - YoY % change Adjusted revennes (non-GAAP) - YoY % change ‘Operating margin (GAAP) Adjusted operatag margin (non-GAAP) ‘Consumer Money Transfer (CMT) Segment Metrics Revermes (GAAP) - YoY % change “Adjusted revenues (non-GAAP) - YoY % change ‘Tran
Slide 25: CMT Segment Regional Metrics
‘CMI Segment Regional Metrics - YoY % change ‘NA region revenues (GAAP) ‘NA region foreign currency translation impact, Adjusted NA region revermes (non-GAAP) NA region transactions EU & CIS region revenues (GAAP) EU & CIS region foreign currency translation impact Adjusted EU & CIS region revenues
Slide 26: Revenue Mix and Consumer Services Metrics
Western Union % of CMT Revenue NA region revenues EU & CIS region revenues MEASA region revenues LACA region revenues APAC region revenues Branded Digital revenues ‘Consumer Services (CS) Revenues (GAAP) - YoY % change Adjusted revenues (non-GAAP) - YoY % change Operating margin % of Total Company R
Slide 27: Consolidated Metrics: Revenues
Western Union Notes 1923 2923 3Q23 4Q23 F¥2023 igs Consolidated Metrics (@)_Revemues (GAAP) 8 10369 § 11700 $ 10378 $ 10523 $ asso | 1048.1 Foreign curency translation and Argeatina inflation impact, w ng 82 6% 2 14 56 ‘Revemues, constant currency, net of Argentina inflation (non-GAAP) 1048.8 11782
Slide 28: Consolidated Metrics cont.
Western Union © (a Consolidated Metrics cont. ‘Net income (GAAP) Acquistion, separation and integration costs Income tax expense'(benefit) from ather adjustments -Adiusted net income (non-GAAP) ‘Net income (GAAP) Provision fr income tes Inerest income terest expense (Other (income)/expense, net ‘Bus
Slide 29: Consolidated Metrics cont.
Western Union Consolidated Metrics cont. (© _ Effective tax rate (GAAP) Other adustments Adjusted effective tax rate (non-GAAP) (®) Ditted eamings per share (GAAP) (S- dollars) Pretax impacts fiom the following: Acquisition, separation and integration costs Business Solutions gain Redeployment progr
Slide 30: CMT Segment Metrics
Western Union @® w Notes 1923 2923 3Q23 4Q23 FY2023 1924 (CMT Segment Metries Revenues (GAAP) 938.3 1072.2 10190 -$ m5 $ 4,005.0 962.0 Foreign currency translation and Argentina inflation impact ® 106 45 ay G4) 46 25 Revenues, constant currency, net of Argentina inflation (non-GAAP) 348.9 1078.7 Lou
Slide 31: CS and Business Solutions Segment Metrics
Western Union @ CS Segment Metrics Revennes (GAAP) Foreign currency translation and Argentina inflation impact Revenites, constant currency. net of Argentina inflation (non-GAAP) Prior year revenues (GAAP) Revenntes (GAAP) - YoY % change Adjusted revenues (non-GAAP) - YoY % change Business Solutions
Slide 32: Cash Flow and Operating Income Reconciliation
Western Union Notes 1923 2923 3Q23 4923 FY2023 1924 ‘Net cash provided by operating activities (GAAP) $ 13730 8 1267 $ 254.6 § 2645 $ 733.1 | $ 94.0 Depreciation (102) 03) 0.3) 02) 9.1) 0.2) Amortization (364) 36.0) (66.2) 05.9) (44s) 7a) Gein on divestiture of business, excluding transaction costs
Slide 33: 2024 Consolidated Outlook Metrics
Western Union 2024 Consolidated Outlook Metrics Revenues (GAAP) Foreign currency translation and Argentina inflation impact Revenues, adjusted (non-GAAP) Earnings per share (GAAP) (S- dollars) Redeployment program costs Acquisition, separation, and integration costs Income taxes associated with thes
Slide 34: Non-GAAP Definitions and Notes
Western Union (&) Represents the impact from the fluctuation in exchange rates between all foreign currency denominated amounts and the United States dollar. Constant currency results exchide any benefit or loss caused by foreign exchange fluctuations between foreign currencies and the United States
Slide 35: Non-GAAP Definitions and Notes cont.
Western Union w (0) Represents severance, expenses associated with streamlining the Company's organizational and legal structure. and other expenses associated with the Company's program to redeploy expenses in its cost base through optimizations in vendor management, real estate, marketing, and peo
Slide 36: Thank you.
Thank you. ©2024 Western Union Holdings, Inc. All rights reserved
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