Western Union Company (the) · NYSE:WU

Western Union Company (the) — The Western Union Company — Q2 2015 Earnings Presentation

28 slides from Western Union Company (the)'s earnings presentation, Jul 30, 2015

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

   Second Quarter 2015 Earnings Webcast & Conference Call July 30, 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 Solid performance amid challenging global environment  Consumer money transfer trends led by strength in U.S. outbound and westernunion.com  Business Solutions and Consumer Bill Pay delivered strong constant currency revenue growth*  Expanded operating margins (excluding charge)*  Retur

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: Recently announced agreements

   Recently announced agreements Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 7

8. Slide 8: wu.com on-line send markets

   wu.com 29 on-line send markets Payout to over 200 countries and territories Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 8

9. Slide 9: 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. 9

10. Slide 10: Revenue Q2

    Revenue Q2 ($ in millions) $1,406 $1,384  Consolidated revenue $33 $34 decreased 2% on a reported basis, or increased 4% $344 $362 constant currency*  Transaction fee revenue decreased 4% $1,029 $988  Foreign exchange revenue increased 5% Q2 2014 Q2 2015 Transaction Fee Foreign Exchange Other *No

11. Slide 11: Consumer-to-Consumer Q2

    Consumer-to-Consumer Q2  80% of Company revenue  Revenue decreased 3%, or increased 3% constant currency*  Total transactions increased 3%  Cross-border principal decreased 5%, or increased 2% constant currency* *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. Weste

12. Slide 12: C2C Transaction and Revenue Analysis

    C2C Transaction and Revenue Analysis Q2 2015 *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 12

13. Slide 13: Consumer-to-Consumer

    Consumer-to-Consumer Q2 2015 Constant Revenue Currency Transaction % of Growth/ Rev. Growth/ Growth/ Company Decline Regions Decline* Decline Revenue Europe and CIS -9% 2% 1% 20% North America -2% -1% 3% 19% Middle East and Africa -4% 1% 0% 16% Asia Pacific -5% 0% -3% 11% LACA 6% 13% 7% 9% westernun

14. Slide 14: C2B and B2B Q2

    C2B and B2B Q2  Consumer-to-Business  11% of Company revenue  Revenue increased 8%, or 12% constant currency*  Business Solutions  7% of Company revenue  Revenue decreased 1%, or increased 9% constant currency* *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. West

15. Slide 15: Operating Margin Q2

    Operating Margin Q2 30.0% 25.0% 19.8% 20.7%*  Adjusted operating margin 20.0% 18.1% increase 15.0% • Primarily due to cost savings initiatives and the net impact 10.0% of foreign currency movements, which were 5.0% partially offset by increases in incentive compensation, 0.0% compliance, and techno

16. Slide 16: C2C Operating Margin Q2

    C2C Operating Margin Q2 30.0% 25.0% 22.7% 23.3%  Operating margin increase 20.0% • Primarily due to cost savings 15.0% initiatives and the net impact of foreign exchange, partially offset 10.0% by increased compliance costs and incentive compensation 5.0% 0.0% Q2 2014 Q2 2015 Western Union | ©2015

17. Slide 17: C2B Operating Margin Q2

    C2B Operating Margin Q2 30.0% 25.0% 20.0% 18.3%* 16.2% 15.0%  Adjusted operating margin 10.0% increase • Primarily due to higher revenue 5.0% and cost savings initiatives 0.0% -5.0% -4.1% -10.0% Q2 2014 Q2 2015 Q2 2015 GAAP (excluding charge) *Note: See appendix for reconciliation of Non-GAAP to GA

18. Slide 18: Business Solutions Operating Profit Q2

    Business Solutions Operating Profit Q2  Operating Profit  Operating profit break-even compared to an operating loss of $3 million in the prior year period  The improvement was primarily due to lower amortization expense  Depreciation and amortization of approximately $12 million in the current q

19. Slide 19: Financial Strength

    Financial Strength YTD 2015 Cash Flow from Operations $466 million Capital Expenditures $122 million Stock Repurchases $306 million Dividends Paid $160 million Cash Balance, June 30, 2015 $1.6 billion Debt Outstanding, June 30, 2015 $3.7 billion Western Union | ©2015 Western Union Holdings, Inc. All

20. Slide 20: 2015 Outlook

    2015 Outlook  Revenue – Low to mid-single digit constant currency revenue* increase (previously low single digit increase) – Low to mid-single digit GAAP revenue decrease  Operating Profit Margin – Adjusted operating margin* of approximately 21% – GAAP operating margin of approximately 20%  Earni

21. Slide 21: Questions & Answers

    Questions & Answers Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 21

22. Slide 22: Appendix

    Appendix Second Quarter 2015 Earnings Webcast & Conference Call July 30, 2015 Western Union | ©2015 Western Union Holdings, Inc. All Rights Reserved. 22

23. Slide 23: 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

24. Slide 24: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 2Q14 3Q14 4Q14 FY2014 1Q15 2Q15 YTD 2Q15 Consolidated Metrics Revenues, as reported (GAAP) $ 1,405.6 $ 1,440.9 $ 1,409.9 $ 5,607.2 $ 1,320.9 $ 1,383.6 $ 2,704.5 Foreign currency translation impact (a) 26.3 35.0 63.7 157.5 78.6 84.7 163.3 Revenues, constant currenc

25. Slide 25: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 2Q14 3Q14 4Q14 FY2014 1Q15 2Q15 YTD 2Q15 Consumer-to-Consumer Segment Revenues, as reported (GAAP) $ 1,132.1 $ 1,150.9 $ 1,125.3 $ 4,485.8 $ 1,038.3 $ 1,101.5 $ 2,139.8 Foreign currency translation impact (a) 7.5 17.9 42.8 80.7 63.0 69.1 132.1 Revenues, constant c

26. Slide 26: Reconciliation of Non-GAAP Measures

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

27. Slide 27: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 2Q14 3Q14 4Q14 FY2014 1Q15 2Q15 YTD 2Q15 Consumer-to-Business Segment Revenues, as reported (GAAP) $ 145.9 $ 150.4 $ 155.3 $ 598.8 $ 157.8 $ 157.9 $ 315.7 Foreign currency translation impact (a) 18.8 18.1 16.6 70.1 6.3 4.9 11.2 Revenues, constant currency adjusted

28. Slide 28: 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 (b) 1% Operating income margin, excluding Paymap settlement agreement 21 % 2015 EPS Outlook Range EPS guidance (GAAP) ($-dollars) $

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