Western Union Company (the) · NYSE:WU

Western Union Company (the) — Q1 2023 Earnings Presentation

32 slides from Western Union Company (the)'s earnings presentation, May 2, 2023

  1. Slide 1: First Quarter 2023 Financial Results

    First Quarter 2023 Financial Results May 2, 2023 Classification: Western Union Confidential

  2. Slide 2: Tom Hadley, Head of Investor Relations

    Western Union Tom Hadley Head of Investor Relations 2 Classification: Western Union Confidential

  3. 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

  4. Slide 4: Devin McGranahan, President & CEO

    Western Union Devin McGranahan President & CEO 4 Classification: Western Union Confidential

  5. Slide 5: First Quarter Results

    Western Union First Quarter Results $1.04 billion GAAP revenue 19.7% 20.5% GAAP operating margin Adjusted operating margin* $0.40 $0.43 GAAP EPS Adjusted EPS* 5 *Note: See appendix for reconciliation of GAAP to Non-GAAP financial measures. Classification: Western Union Confidential

  6. Slide 6: Remittances remain resilient despite tough macro backdrop

    Western Union Remittances remain resilient despite tough macro backdrop Central Bank Reported Principal Growth1 Western Union C2C Principal Per Transaction Growth (Constant Currency) 5% 6% 4% 4% 4% 4% 4% 3% 23-Jan 23-Feb 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 1 Central bank remittance reporting includes data

  7. 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

  8. Slide 8: Fueling the Customer Acquisition Engine

    Western Union Fueling the Customer Acquisition Engine Western Union Branded Digital Global and U.S. Outbound Transaction Growth +11% YoY +7% YoY Q1 U.S. outbound branded digital new 2% customer growth 1 0% -1% -3% 1Q22 2Q22 3Q22 4Q22 1Q23 8 1 Excludes the impact related to the suspension of operatio

  9. Slide 9: Acquiring customers more effectively to maximize lifetime value

    Western Union Acquiring customers more effectively to maximize lifetime value North America Branded Digital Business New Customers vs. CAC $45.00 600,000 $40.00 500,000 400,000 CAC down $35.00 roughly 20% YoY in Q1 $30.00 300,000 $25.00 200,000 100,000 $20.00 - $15.00 1Q22 2Q22 3Q22 4Q22 1Q23 New Cu

  10. Slide 10: Retail as the Gateway to Western Union

    Western Union Retail as the Gateway to Western Union Corridor and Improved customer Network community and agent omni- optimization customer channel acquisition experiences • The right messages in • Introducing new • The right partners, in the marketplace products and services the right location • Di

  11. Slide 11: Ecosystem update: understanding migrated customers

    Western Union Ecosystem update: understanding migrated customers The ecosystem is driving Customers are doing the retail to digital We are reengaging with more than 2x the escalator as we lapsed customers transactions than prior reengage with lapsed to conversion retail customers 11 Classification:

  12. Slide 12: Matt Cagwin, CFO

    Western Union Matt Cagwin CFO 12 Classification: Western Union Confidential

  13. Slide 13: Q1 Business Trends

    Q1 Business Trends Adjusted Revenue* Adjusted Operating Margin* $1,150 -1% -1% 0% -1% $1,100 -2% $1,050 -4% -3% $1,000 -4% -6% -6% -5% 23.3% $950 -6% 21.8% 20.6% 20.5% $900 -7% 15.8% -8% $850 -9% $800 -10% 1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23 GAAP $1,156 $1,138 $1,090 $1,092 $1,037 GAAP

  14. Slide 14: Q1 C2C Business Trends

    Western Union Q1 C2C Business Trends Adjusted % of C2C Revenue Transaction Regions Revenue* Growth/(Decline) YoY % Change 6% North America (8%) 1% 11% Europe & CIS1 (13%) (23%) 38% MEASA 6% (3%) 19% LACA 17% 9% APAC (5%) (2%) Total C2C1 (5%) (6%) 26% Branded Digital1,2 (6%) 7% North America EU & CIS

  15. Slide 15: Q1 Other Highlights

    Western Union Q1 Other Highlights Other Other Quarterly Revenue Growth • GAAP revenue grew 23% +23% • Primarily bill payments YoY 20% businesses in Argentina and the 19% U.S. and retail money orders Business Solutions 8% • Third closing (EU operations) expected to occur in June 2023 0% • Until the t

  16. Slide 16: Financial Highlights

    Western Union Financial Highlights YTD as of March 31, 2023 Edit text Cash flow from operations $137 million Dividends paid $88 million Capital expenditures $57 million Cash balance $1.23 billion Debt outstanding $2.46 billion 16 *Note: See appendix for reconciliation of GAAP to Non-GAAP financial m

  17. Slide 17: 2023 Financial Outlook

    Western Union 2023 Financial Outlook Revenue Operating margin EPS GAAP (9%) to (7%) 18% to 20% $1.53 to $1.63 Adjusted* (4%) to (2%) 19% to 21% $1.55 to $1.65 17 *Note: See appendix for reconciliation of GAAP to Non-GAAP financial measures. Classification: Western Union Confidential

  18. Slide 18: Western Union

    Western Union 18 Classification: Western Union Confidential

  19. Slide 19: Appendix

    Western Union Appendix First Quarter 2023 19 Classification: Western Union Confidential

  20. Slide 20: 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

  21. Slide 21: Key Statistics: Consolidated and C2C Metrics

    Western Union Notes 1Q22 2Q22 3Q22 4Q22 FY2022 1Q23 Consolidated Metrics Revenues (GAAP) - YoY % change (4)% (12)% (15)% (15)% (12)% (10)% Adjusted revenues (non-GAAP) - YoY % change (a) (1)% (4)% (6)% (6)% (4)% (1)% Operating margin (GAAP) 20.5% 23.2% 21.3% 13.9% 19.8% 19.7% Adjusted operating marg

  22. Slide 22: C2C Segment Regional Metrics

    Western Union Notes 1Q22 2Q22 3Q22 4Q22 FY2022 1Q23 C2C Segment Regional Metrics - YoY % change NA region revenues (GAAP) (1)% (2)% (5)% (7)% (4)% (8)% NA region foreign currency translation impact (i) 0% 0% 0% 0% 0% 0% Adjusted NA region revenues (non-GAAP) (1)% (2)% (5)% (7)% (4)% (8)% NA region t

  23. Slide 23: Percent of C2C Revenue and Other Segment Metrics

    Western Union Notes 1Q22 2Q22 3Q22 4Q22 FY2022 1Q23 % of C2C Revenue NA region revenues 39% 40% 40% 39% 40% 38% EU & CIS region revenues 29% 28% 28% 27% 28% 26% MEASA region revenues 17% 16% 16% 16% 16% 19% LACA region revenues 9% 10% 10% 12% 10% 11% APAC region revenues 6% 6% 6% 6% 6% 6% Branded Di

  24. Slide 24: Consolidated Metrics Reconciliation

    Western Union Notes 1Q22 2Q22 3Q22 4Q22 FY2022 1Q23 Consolidated Metrics (a) Revenues (GAAP) $ 1,155.7 $ 1,138.3 $ 1,089.6 $ 1,091.9 $ 4,475.5 $ 1,036.9 Foreign currency translation impact (i) 33.2 42.1 60.8 49.4 185.5 35.2 Revenues, constant currency (non-GAAP) $ 1,188.9 $ 1,180.4 $ 1,150.4 $ 1,141

  25. Slide 25: Net Income Reconciliation

    Western Union Notes 1Q22 2Q22 3Q22 4Q22 FY2022 1Q23 (c) Net income (GAAP) $ 293.3 $ 194.0 $ 173.9 $ 249.4 $ 910.6 $ 151.8 Acquisition and divestiture costs (k) 3.3 0.9 0.4 1.6 6.2 — Business Solutions gain (l) (151.4) — — (96.9) (248.3) — Business Solutions exit costs (m) 7.7 — — — 7.7 — Russia/Bela

  26. Slide 26: Consolidated Metrics: Tax Rate and EPS

    Western Union Notes 1Q22 2Q22 3Q22 4Q22 FY2022 1Q23 Consolidated Metrics cont. (d) Effective tax rate (GAAP) 19% 18% 10% (15)% 10% 16% Reversal of significant uncertain tax positions (n) N/A N/A 7% 32% 8% 0% (k), (l), (m), Other adjustments (o) (6%) (1%) (2%) (2%) (3%) (2%) Adjusted effective tax ra

  27. Slide 27: C2C Segment Metrics Reconciliation

    Western Union Notes 1Q22 2Q22 3Q22 4Q22 FY2022 1Q23 C2C Segment Metrics (f) Revenues (GAAP) $ 999.0 $ 1,026.9 $ 982.4 $ 985.2 $ 3,993.5 $ 938.3 Foreign currency translation impact (i) 20.8 28.1 37.1 30.9 116.9 13.8 Revenues, constant currency (non-GAAP) $ 1,019.8 $ 1,055.0 $ 1,019.5 $ 1,016.1 $ 4,11

  28. Slide 28: Cash Flow and Operating Income Reconciliation

    Western Union Notes 1Q22 2Q22 3Q22 4Q22 FY2022 1Q23 Net cash provided by operating activities (GAAP) $ 200.0 $ 106.8 $ 215.6 $ 59.2 $ 581.6 $ 137.3 Depreciation (11.3) (11.3) (9.2) (10.9) (42.7) (10.2) Amortization (35.5) (34.6) (35.6) (35.4) (141.1) (36.4) Gain on divestiture of business, excluding

  29. Slide 29: 2023 Consolidated Outlook Metrics

    Western Union 2023 Consolidated Outlook Metrics Notes Range Revenues (GAAP) - YoY % change (9)% (7)% Foreign currency translation impact (i) 1% 1% Impact from Business Solutions (l) 4% 4% Revenues, constant currency, excluding Business Solutions (non-GAAP) - YoY % change (4)% (2)% Range Operating ma

  30. Slide 30: Western Union

    Western Union 30 Classification: Western Union Confidential

  31. Slide 31: Western Union

    Western Union 31 Classification: Western Union Confidential

  32. Slide 32: ©2023 Western Union Holdings, Inc. All rights reserved

    ©2023 Western Union Holdings, Inc. All rights reserved Classification: Western Union Confidential

Western Union — Q1 2023 Earnings Presentation on 6ix