Western Union Company (the) · NYSE:WU

Western Union Company (the) — The Western Union Company — Q4 2015 Earnings Presentation

26 slides from Western Union Company (the)'s earnings presentation, Feb 9, 2016

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

   Fourth Quarter 2015 Earnings Webcast & Conference Call February 9, 2016

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

   Mike Salop Senior Vice President, Investor Relations Western Union | ©2016 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 | ©2016 Western Union Holdings, Inc. All Rights Reserved. 4

5. Slide 5: Overview

   Overview Delivered solid results in 2015  Consumer money transfer constant currency revenue growth* driven by westernunion.com and U.S. outbound  Business Solutions and Consumer Bill Pay contributed strong constant currency revenue growth*  Operating margin of 20.9%, excluding Q2 Paymap charge* 

6. Slide 6: Overview: Strategic progress in 2015

   Overview Strategic progress in 2015  Launched 10 wu.com online transaction sites  Introduced WU® ConnectSM platform to offer services to social media and messaging companies  Invested in technology and compliance  Expanded account payout network, enabling capability to efficiently send to over o

7. Slide 7: Overview: 2016 Outlook

   Overview 2016 Outlook  Revenues expected to grow in constant currency terms despite challenging environment  Reported results expected to be impacted by continued strengthening of the U.S. dollar and fewer hedge gains Western Union | ©2016 Western Union Holdings, Inc. All Rights Reserved. 7

8. Slide 8: Raj Agrawal, Executive Vice President & Chief Financial Officer

   Raj Agrawal Executive Vice President & Chief Financial Officer Western Union | ©2016 Western Union Holdings, Inc. All Rights Reserved. 8

9. Slide 9: Revenue Q4

   Revenue Q4 ($ in millions) $1,410 $1,380  Consolidated revenue $32 $32 decreased 2% on a reported basis or increased 3% $352 $364 constant currency*  Transaction fee revenue decreased 4% $1,026 $984  Foreign exchange revenue increased 3% Q4 2014 Q4 2015 Transaction Fee Foreign Exchange Other *Not

10. Slide 10: Consumer-to-Consumer Q4

    Consumer-to-Consumer Q4  79% of Company revenue  Revenue decreased 3% or increased 2% constant currency*  Total transactions increased 3%  Cross-border principal decreased 4%, or increased 1% constant currency* *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. Wester

11. Slide 11: C2C Transaction and Revenue Analysis

    C2C Transaction and Revenue Analysis Q4 2015 *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. Western Union | ©2016 Western Union Holdings, Inc. All Rights Reserved. 11

12. Slide 12: Consumer-to-Consumer

    Consumer-to-Consumer Q4 2015 Constant Revenue Currency Transaction % of Growth/ Rev. Growth/ Growth/ Company Decline Regions Decline* Decline Revenue Europe and CIS -8% 0% 1% 20% North America 0% 2% 5% 19% Middle East and Africa -5% -1% -1% 15% Asia Pacific -6% -1% -5% 11% LACA -2% 5% 7% 9% westernu

13. Slide 13: C2B and B2B Q4

    C2B and B2B Q4  Consumer-to-Business  12% of Company revenue  Revenue increased 4%, or 9% constant currency*  Business Solutions  7% of Company revenue  Revenue increased 1%, or 8% constant currency* *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. Western Union |

14. Slide 14: Operating Margin Q4

    Operating Margin Q4 30.0% 25.0% 20.4%  Operating margin 19.6% 20.0% • Benefited from lower expenses and incremental savings related 15.0% to cost initiatives and foreign exchange hedge gains 10.0% • Partially offset by higher 5.0% technology expense 0.0% Q4 2014 Q4 2015 *Note: See appendix for reco

15. Slide 15: C2C Operating Margin Q4

    C2C Operating Margin Q4 30.0% 25.0% 23.1% 24.0%  Operating margin 20.0% • Benefited from lower expenses 15.0% and incremental savings related to cost initiatives and foreign 10.0% exchange hedge gains • Partially offset by higher 5.0% technology expense 0.0% Q4 2014 Q4 2015 Western Union | ©2016 We

16. Slide 16: C2B Operating Margin Q4

    C2B Operating Margin Q4 30.0% 25.0% 20.0%  Operating margin • Decrease due to higher expenses 15.0% 14.2% in Argentina and increased 11.9% technology expense 10.0% • Partially offset by lower expenses and incremental savings related to 5.0% cost initiatives 0.0% Q4 2014 Q4 2015 Western Union | ©201

17. Slide 17: Business Solutions Operating Profit Q4

    Business Solutions Operating Profit Q4  Operating Profit  Operating profit of $4 million compared to a loss of $5 million in the prior year period  Improvement driven by lower expenses and incremental savings related to cost initiatives  Depreciation and amortization of approximately $13 million

18. Slide 18: Financial Strength

    Financial Strength Year Ended Dec. 31, 2015 Cash Flow from Operations $1.1 billion Capital Expenditures $267 million Stock Repurchases $500 million Dividends Paid $317 million Cash Balance, December 31, 2015 $1.3 billion Debt Outstanding, December 31, 2015 $3.2 billion Western Union | ©2016 Western

19. Slide 19: 2016 Outlook

    2016 Outlook  Revenue – Low to mid-single digit constant currency revenue increase – GAAP revenue change approximately 400 basis points lower than constant currency  Operating Profit Margin – Operating margin of approximately 20%  Earnings per Share – EPS in a range of $1.58 to $1.70, which refle

20. Slide 20: Questions & Answers

    Questions & Answers Western Union | ©2016 Western Union Holdings, Inc. All Rights Reserved. 20

21. Slide 21: Appendix

    Appendix Fourth Quarter 2015 Earnings Webcast & Conference Call February 9, 2016 Western Union | ©2016 Western Union Holdings, Inc. All Rights Reserved. 21

22. Slide 22: 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

23. Slide 23: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 4Q14 FY2014 1Q15 2Q15 3Q15 4Q15 FY2015 Consolidated Metrics Revenues, as reported (GAAP) $ 1,409.9 $ 5,607.2 $ 1,320.9 $ 1,383.6 $ 1,399.2 $ 1,380.0 $ 5,483.7 Foreign currency translation impact (a) 63.7 157.5 78.6 84.7 85.4 73.9 322.6 Revenues, constant currency

24. Slide 24: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 4Q14 FY2014 1Q15 2Q15 3Q15 4Q15 FY2015 Consumer-to-Consumer Segment Revenues, as reported (GAAP) $ 1,125.3 $ 4,485.8 $ 1,038.3 $ 1,101.5 $ 1,112.9 $ 1,091.2 $ 4,343.9 Foreign currency translation impact (a) 42.8 80.7 63.0 69.1 67.1 56.8 256.0 Revenues, constant cu

25. Slide 25: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 4Q14 FY2014 1Q15 2Q15 3Q15 4Q15 FY2015 Consumer-to-Consumer Segment cont. Europe and CIS region revenue change, as reported (GAAP) (5)% 0% (9)% (9)% (10)% (8)% (9)% Europe and CIS region foreign currency translation impact (a) 6% 1% 11 % 11 % 10 % 8% 10 % Europe a

26. Slide 26: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 4Q14 FY2014 1Q15 2Q15 3Q15 4Q15 FY2015 Consumer-to-Business Segment Revenues, as reported (GAAP) $ 155.3 $ 598.8 $ 157.8 $ 157.9 $ 160.1 $ 161.9 $ 637.7 Foreign currency translation impact (a) 16.6 70.1 6.3 4.9 5.6 7.8 24.6 Revenues, constant currency adjusted $ 1

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