Western Union Company (the) · NYSE:WU

Western Union Company (the) — The Western Union Company — Q3 2015 Earnings Presentation

25 slides from Western Union Company (the)'s earnings presentation, Oct 29, 2015

  1. Slide 1: Third Quarter 2015 Earnings Webcast & Conference Call

    Third Quarter 2015 Earnings Webcast & Conference Call October 29, 2015

  2. Slide 2: Mike Salop, Senior Vice President, Investor Relations

    Mike Salop Senior Vice President, Investor Relations Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 2

  3. Slide 3: 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 difficult to pred

  4. Slide 4: Hikmet Ersek, President & Chief Executive Officer

    Hikmet Ersek President & Chief Executive Officer Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 4

  5. Slide 5: Overview

    Overview Delivered another solid quarter  Consumer money transfer trends led by growth in westernunion.com and U.S. outbound  Business Solutions and Consumer Bill Pay delivered good constant currency revenue growth*  Strong operating margin of 21.8%  Returned $670 million to shareholders through

  6. Slide 6: Vision: To be a leader in cross-border, cross-currency money transfer and payments

    Vision: To be a leader in cross-border, cross-currency money transfer and payments Cross-Border Consumer Money Transfer Cross-Border Payments C2C C2B • B2C • Funds in B2B Retail, Digital, Direct WU Cross-Border Platform Technology Settlement & FX Regulatory and Compliance Data management Funds out W

  7. Slide 7: Raj Agrawal, Executive Vice President & Chief Financial Officer

    Raj Agrawal Executive Vice President & Chief Financial Officer Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 7

  8. Slide 8: Revenue Q3

    Revenue Q3 ($ in millions) $1,441 $1,399  Consolidated revenue $39 $32 decreased 3% on a reported basis, or increased 3% $361 $372 constant currency*  Transaction fee revenue decreased 4% $1,041 $995  Foreign exchange revenue increased 3% Q3 2014 Q3 2015 Transaction Fee Foreign Exchange Other *No

  9. Slide 9: Consumer-to-Consumer Q3

    Consumer-to-Consumer Q3  80% of Company revenue  Revenue decreased 3%, or increased 3% constant currency*  Total transactions increased 2%  Cross-border principal decreased 6%, or increased 1% constant currency* *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. Weste

  10. Slide 10: C2C Transaction and Revenue Analysis

    C2C Transaction and Revenue Analysis Q3 2015 *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 10

  11. Slide 11: Consumer-to-Consumer

    Consumer-to-Consumer Q3 2015 Constant Revenue Currency Transaction % of Growth/ Rev. Growth/ Growth/ Company Decline Regions Decline* Decline Revenue Europe and CIS -10% 0% -3% 20% North America -1% 1% 4% 19% Middle East and Africa -2% 3% 0% 16% Asia Pacific -8% -2% -6% 11% LACA 0% 8% 7% 9% westernu

  12. Slide 12: C2B and B2B Q3

    C2B and B2B Q3  Consumer-to-Business  11% of Company revenue  Revenue increased 6%, or 10% constant currency*  Business Solutions  7% of Company revenue  Revenue decreased 4%, or increased 6% constant currency* *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. West

  13. Slide 13: Operating Margin Q3

    Operating Margin Q3 30.0% 25.0% 21.8% 21.8% 20.0%  Operating margin 15.0% • Benefited from hedge gains and cost savings initiatives 10.0% and other efficiencies, which were offset by increases in 5.0% technology expense and the negative impact of currency 0.0% translation Q3 2014 Q3 2015 *Note: See

  14. Slide 14: C2C Operating Margin Q3

    C2C Operating Margin Q3 30.0% 24.9% 25.5% 25.0%  Operating margin 20.0% • Benefited from hedge gains and 15.0% cost savings initiatives and other efficiencies, which were partially 10.0% offset by increases in technology expense and the negative 5.0% impact of currency translation 0.0% Q3 2014 Q3 2

  15. Slide 15: C2B Operating Margin Q3

    C2B Operating Margin Q3 30.0% 25.0% 20.0% 16.4%  Operating margin increase 15.4% 15.0% • Driven by higher revenue and benefits from cost savings 10.0% initiatives, which were partially offset by increased technology 5.0% expense 0.0% Q3 2014 Q3 2015 Western Union | ©2015 Western Union Holdings, Inc

  16. Slide 16: Business Solutions Operating Loss Q3

    Business Solutions Operating Loss Q3  Operating Loss  Operating loss of $3 million compared to break-even in the prior year period  The decline was primarily due to increased amortization expense resulting from a write down related to an anticipated contract termination and a value added tax reco

  17. Slide 17: Financial Strength

    Financial Strength YTD 2015 Cash Flow from Operations $804 million Capital Expenditures $207 million Stock Repurchases $431 million Dividends Paid $239 million Cash Balance, September 30, 2015 $1.4 billion Debt Outstanding, September 30, 2015 $3.5 billion Western Union | ©2015 Western Union Holdings

  18. Slide 18: 2015 Outlook

    2015 Outlook  Revenue – Low to mid-single digit constant currency revenue increase – Low to mid-single digit GAAP revenue decrease  Operating Profit Margin – Adjusted operating margin* of approximately 21% – GAAP operating margin of approximately 20%  Earnings per Share – Adjusted EPS* in a range

  19. Slide 19: Questions & Answers

    Questions & Answers Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 19

  20. Slide 20: Appendix

    Appendix Third Quarter 2015 Earnings Webcast & Conference Call October 29, 2015 Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 20

  21. Slide 21: Non-GAAP Measures

    Non-GAAP Measures Western Union's management believes the non-GAAP financial measures presented provide meaningful supplemental information regarding our operating results to assist management, investors, analysts, and others in understanding our financial results and to better analyze trends in our

  22. Slide 22: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 3Q14 4Q14 FY2014 1Q15 2Q15 3Q15 YTD 3Q15 Consolidated Metrics Revenues, as reported (GAAP) $ 1,440.9 $ 1,409.9 $ 5,607.2 $ 1,320.9 $ 1,383.6 $ 1,399.2 $ 4,103.7 Foreign currency translation impact (a) 35.0 63.7 157.5 78.6 84.7 85.4 248.7 Revenues, constant currenc

  23. Slide 23: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 3Q14 4Q14 FY2014 1Q15 2Q15 3Q15 YTD 3Q15 Consumer-to-Consumer Segment cont. Europe and CIS region revenue change, as reported (GAAP) 1% (5)% 0% (9)% (9)% (10)% (9)% Europe and CIS region foreign currency translation impact (a) 2% 6% 1% 11 % 11 % 10 % 10 % Europe a

  24. Slide 24: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 3Q14 4Q14 FY2014 1Q15 2Q15 3Q15 YTD 3Q15 Consumer-to-Business Segment Revenues, as reported (GAAP) $ 150.4 $ 155.3 $ 598.8 $ 157.8 $ 157.9 $ 160.1 $ 475.8 Foreign currency translation impact (a) 18.1 16.6 70.1 6.3 4.9 5.6 16.8 Revenues, constant currency adjusted

  25. Slide 25: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 2015 Outlook Metrics 2015 Operating Income Margin Outlook Operating income margin (GAAP) 20 % Impact for Paymap settlement agreement (c) 1% Operating income margin, excluding Paymap settlement agreement 21 % 2015 EPS Outlook Range EPS guidance (GAAP) ($ - dollars)

The Western Union Company — Q3 2015 Earnings Presentation on 6ix