Western Union Company (the) · NYSE:WU

Western Union Company (the) — The Western Union Company — Q1 2013 Earnings Presentation

28 slides from Western Union Company (the)'s earnings presentation, Apr 30, 2013

  1. Slide 1: First Quarter 2013 Earnings Webcast & Conference Call

    First Quarter 2013 Earnings Webcast & Conference Call April 30, 2013

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

    Mike Salop Senior Vice President, Investor Relations 2 Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved.

  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 4 Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved.

  5. Slide 5: 2013 Strategic Initiatives

    2013 Strategic Initiatives 2013 strategies focused on three key initiatives  Strengthening the consumer money transfer business  Driving growth in customers and usage in business-to-business  Generating and deploying strong cash flow for our shareholders Repositioning the Company for revenue and

  6. Slide 6: 2013 Strategic Initiatives: Consumer Money Transfer

    2013 Strategic Initiatives Strengthening the consumer money transfer business  Strategic pricing actions meeting objectives  Expanding the global agent network  Expanding capabilities in electronic channels 6 Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved.

  7. Slide 7: 2013 Strategic Initiatives: Business-to-Business

    2013 Strategic Initiatives Driving growth in customers and usage in business-to- business  Improving go-to-market processes  Driving new sales and retention  Increasing product offerings and solutions 7 Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved.

  8. Slide 8: 2013 Strategic Initiatives: Cash Flow for Shareholders

    2013 Strategic Initiatives Generating and deploying strong cash flow for shareholders  Cash flow from operations of $237 million in the first quarter  Returned $260 million to shareholders through share repurchases and dividends Expect to return ~$700 million to shareholders in 2013 Represents app

  9. Slide 9: Scott Scheirman, Executive Vice President & Chief Financial Officer

    Scott Scheirman Executive Vice President & Chief Financial Officer 9 Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved.

  10. Slide 10: Revenue Q1

    Revenue Q1 ($ in millions) $1,393 $1,325  Consolidated revenue down $29 5% on a reported basis, or $35 4% constant currency* $323 $312  Transaction fee revenue decreased 6%  Foreign exchange revenue $1,041 $978 decreased 3% Q1 2012 Q1 2013 Transaction Fee Foreign Exchange Other *Note: See appendi

  11. Slide 11: Consumer-to-Consumer Q1

    Consumer-to-Consumer Q1  79% of Company revenue  Revenue decreased 7% reported and 6% constant currency,* with transactions down 2%  Western Union brand transactions increased 2%  Cross-border principal declined 3%  Western Union brand cross-border principal increased 1% Pricing investments are

  12. Slide 12: C2C Transaction and Revenue Growth

    C2C Transaction and Revenue Growth Q1 2013 *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. 12 Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved.

  13. Slide 13: Consumer-to-Consumer

    Consumer-to-Consumer Q1 2013 Revenue Currency Transaction % of Total Regions Growth Impact** Growth Revenue Europe and CIS -6% 0% -1% 21% North America -15% 0% -7% 19% Middle East and Africa 0% 0% 4% 16% Asia Pacific -5% 0% 0% 12% LACA -7% -3% -10% 8% westernunion.com 13% 0% 60% 3% **Note: Currency

  14. Slide 14: Electronic Channels & Prepaid Q1

    Electronic Channels & Prepaid Q1  Account based money transfer  Revenue increased 26%  Nearly 70 banks active globally  Westernunion.com  C2C revenue increased 13%  C2C transactions grew 60%  Prepaid  Revenue flat Electronic Channels Revenue Growth 18% 14 Western Union Confidential | ©2013 W

  15. Slide 15: C2B and B2B Q1

    C2B and B2B Q1  Consumer-to-Business  12% of Company revenue  Revenue declined 1%, or increased 3% constant currency*  Business Solutions  7% of Company revenue  Revenue increased 7% on a reported and constant currency* basis *Note: See appendix for reconciliation of Non-GAAP to GAAP financial

  16. Slide 16: Operating Margin Q1

    Operating Margin Q1 25.0% 23.9% 24.0%  Operating margin decrease 23.0% 22.4% • Current quarter negatively 22.0% impacted by pricing driven 21.0% revenue declines, increased 20.0% compliance costs, and strategic 19.0% investments 18.0% • Partially offset by improvement 17.0% in Business Solutions pr

  17. Slide 17: C2C Operating Margin Q1

    C2C Operating Margin Q1 29.0% 27.7% 27.0%  Operating margin decrease 25.4% 25.0% • Impacted primarily by pricing driven revenue declines, digital 23.0% and other strategic investments, 21.0% and increased compliance costs 19.0% 17.0% 15.0% Q1 2012 Q1 2013 17 Western Union Confidential | ©2013 Weste

  18. Slide 18: C2B Operating Margin Q1

    C2B Operating Margin Q1 29.0% 27.0% 26.5%  Operating margin decrease 25.0% 24.7% • Negatively impacted by Durbin pass-throughs and mix 23.0% 21.0% 19.0% 17.0% 15.0% Q1 2012 Q1 2013 18 Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved.

  19. Slide 19: Business Solutions Operating Loss Q1

    Business Solutions Operating Loss Q1  Operating Loss  Operating loss improved to $6 million compared to an operating loss of $15 million in the prior year period  Includes $15 million of depreciation and amortization in current quarter and in the prior year period  Includes $4 million of integra

  20. Slide 20: Financial Strength

    Financial Strength Q1 2013 Cash Flow from Operations $237 million Capital Expenditures $38 million Stock Repurchases $190 million Dividends Paid $70 million Cash Balance, March 31, 2013 $1.4 billion Debt Outstanding, March 31, 2013 $3.7 billion 20 Western Union Confidential | ©2013 Western Union Hol

  21. Slide 21: 2013 Outlook Affirmed

    2013 Outlook Affirmed  Revenue – Low single digit constant currency revenue declines  Margins – GAAP operating margin of approximately 20% – EBITDA margin of approximately 24.5%*  Earnings per Share – GAAP EPS in a range of $1.33 to $1.43  Cash Flow – GAAP Cash flow from operating activities of

  22. Slide 22: Questions & Answers

    Questions & Answers 22 Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved.

  23. Slide 23: Appendix

    Appendix First Quarter 2013 Earnings Webcast & Conference Call April 30, 2013 23 Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved.

  24. Slide 24: 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

  25. Slide 25: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 1Q12 2Q12 3Q12 4Q12 FY2012 1Q13 Consolidated Metrics Revenues, as reported (GAAP) $ 1,393.4 $ 1,425.1 $ 1,421.6 $ 1,424.7 $ 5,664.8 $ 1,325.4 Foreign currency translation impact (a) 8.1 34.6 37.7 13.4 93.8 12.3 Revenues, constant currency adjusted $ 1,401.5 $ 1,45

  26. Slide 26: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 1Q12 2Q12 3Q12 4Q12 FY2012 1Q13 Consumer-to-Business Segment Revenues, as reported (GAAP) $ 155.1 $ 149.4 $ 147.3 $ 152.1 $ 603.9 $ 153.7 Foreign currency translation impact (a) 2.9 3.5 4.2 4.9 15.5 5.9 Revenues, constant currency adjusted $ 158.0 $ 152.9 $ 151.5

  27. Slide 27: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 2013 Outlook Metrics Operating income margin (GAAP) 20.0% Depreciation and amortization impact 4.5% EBITDA margin (c) 24.5% Operating cash flow (GAAP) $ 900 Payments on IRS Agreement (d) 100 Operating cash flow, IRS Agreement adjusted $ 1,000 27 Western Union Conf

  28. Slide 28: Footnote Explanations

    Footnote Explanations Non-GAAP related notes: (a) Represents the impact from the fluctuation in exchange rates between all foreign currency denominated amounts and the United States dollar. Constant currency results exclude any benefit or loss caused by foreign exchange fluctuations between foreign

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