Western Union Company (the) · NYSE:WU
Western Union Company (the) — The Western Union Company — Q2 2014 Earnings Presentation
22 slides from Western Union Company (the)'s earnings presentation, Jul 31, 2014
Slide 1: Second Quarter 2014 Earnings Webcast & Conference Call
Second Quarter 2014 Earnings Webcast & Conference Call July 31, 2014
Slide 2: Mike Salop, Senior Vice President, Investor Relations
Mike Salop Senior Vice President, Investor Relations 2
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
Slide 4: Hikmet Ersek, President & Chief Executive Officer
Hikmet Ersek President & Chief Executive Officer 4
Slide 5: Overview
Overview First half results in line with expectations Consumer money transfer returned to revenue growth driven by strategic pricing actions and digital expansion 20% operating margin in first half Over $450 million of dividends and share repurchases YTD Narrowed full year operating margin and
Slide 6: Raj Agrawal, Executive Vice President & Chief Financial Officer
Raj Agrawal Executive Vice President & Chief Financial Officer Western Union | ©2014 Western Union Holdings, Inc. All Rights Reserved. 6
Slide 7: Revenue Q2
Revenue Q2 ($ in millions) $1,386 $1,406 Consolidated revenue $32 $33 increased 1% on a reported basis, and 3% constant $338 $344 currency* Transaction fee revenue increased 1% $1,016 $1,029 Foreign exchange revenue increased 2% Q2 2013 Q2 2014 Transaction Fee Foreign Exchange Other *Note: See
Slide 8: Consumer-to-Consumer Q2
Consumer-to-Consumer Q2 81% of Company revenue Reported revenue increased 2%, or 3% constant currency* Total transactions increased 6% Cross-border principal increased 7%, or 6% constant currency* *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. Western Union |
Slide 9: C2C Transaction and Revenue Analysis
C2C Transaction and Revenue Analysis Q2 2014 *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. Western Union | ©2014 Western Union Holdings, Inc. All Rights Reserved. 9
Slide 10: Consumer-to-Consumer
Consumer-to-Consumer Q2 2014 Revenue Growth/ Currency Transaction % of Total Regions Decline Impact** Growth Revenue Europe and CIS 3% 1% 11% 22% North America 1% 0% 3% 19% Middle East and Africa 6% 0% 6% 16% Asia Pacific 1% -1% 3% 12% LACA -13% -6% 0% 8% westernunion.com 31% 1% 46% 4% **Note: Curre
Slide 11: C2B and B2B Q2
C2B and B2B Q2 Consumer-to-Business 10% of Company revenue Revenue declined 5%, or increased 8% constant currency* Business Solutions 7% of Company revenue Revenue flat on a reported and constant currency basis* *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measure
Slide 12: Operating Margin Q2
Operating Margin Q2 30.0% 25.0% Operating margin 20.0% • Higher average C2C retail 19.8% 20.0% commission rates, higher funding costs in C2B, and 15.0% negative impact from currency 10.0% • Benefits from cost savings initiatives and lower integration 5.0% expenses 0.0% Q2 2013 Q2 2014 Note: See ap
Slide 13: C2C Operating Margin Q2
C2C Operating Margin Q2 30.0% 25.0% 23.2% 22.7% Operating margin decrease 20.0% • Primarily due to higher average retail commission rates and 15.0% negative impact from currency, partially offset by benefits from 10.0% cost savings initiatives 5.0% 0.0% Q2 2013 Q2 2014 Western Union | ©2014 Wester
Slide 14: C2B Operating Margin Q2
C2B Operating Margin Q2 30.0% 25.0% Operating margin decrease 20.5% 20.0% • Primarily due to higher funding 16.2% costs related to increased 15.0% interchange expense 10.0% 5.0% 0.0% Q2 2013 Q2 2014 Western Union | ©2014 Western Union Holdings, Inc. All Rights Reserved. 14
Slide 15: Business Solutions Operating Loss Q2
Business Solutions Operating Loss Q2 Operating Loss Operating loss of $3 million compared to an operating loss of $7 million in the prior year period Both current and prior year included depreciation and amortization of approximately $15 million The reduction in operating loss was driven pri
Slide 16: Financial Strength
Financial Strength YTD 2014 Cash Flow from Operations $450 million Capital Expenditures $96 million Stock Repurchases $323 million Dividends Paid $134 million Cash Balance, June 30, 2014 $1.6 billion Debt Outstanding, June 30, 2014 $3.8 billion Western Union | ©2014 Western Union Holdings, Inc. All
Slide 17: 2014 Outlook
2014 Outlook Revenue – Low to mid-single digit constant currency revenue increase – Flat to low single digit GAAP revenue growth, which reflects expected negative currency impact from certain emerging market countries Margins – GAAP operating margin in a range of approximately 19.5% to 20% (prev
Slide 18: Questions & Answers
Questions & Answers Western Union | ©2014 Western Union Holdings, Inc. All Rights Reserved. 18
Slide 19: Appendix
Appendix Second Quarter 2014 Earnings Webcast & Conference Call July 31, 2014 Western Union | ©2014 Western Union Holdings, Inc. All Rights Reserved. 19
Slide 20: 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
Slide 21: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 2Q13 3Q13 4Q13 FY2013 1Q14 2Q14 YTD 2Q14 Consolidated Metrics Revenues, as reported (GAAP) $ 1,385.9 $ 1,408.8 $ 1,421.9 $ 5,542.0 $ 1,350.8 $ 1,405.6 $ 2,756.4 Foreign currency translation impact (a) 14.9 19.2 23.9 70.3 32.5 26.3 58.8 Revenues, constant currency
Slide 22: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 2Q13 3Q13 4Q13 FY2013 1Q14 2Q14 YTD 2Q14 Consumer-to-Business Segment Revenues, as reported (GAAP) $ 153.0 $ 152.3 $ 149.5 $ 608.5 $ 147.2 $ 145.9 $ 293.1 Foreign currency translation impact (a) 7.2 8.3 10.2 31.6 16.6 18.8 35.4 Revenues, constant currency adjusted
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