Mastercard Incorporated · NYSE:MA
Mastercard — Q4 2019 Earnings Presentation
18 slides from Mastercard's earnings presentation, Jan 29, 2020
Slide 1: Mastercard Incorporated Fourth-Quarter and Full-Year 2019 Financial Results Conference Call
Mastercard Incorporated Fourth-Quarter and Full-Year 2019 Financial Results Conference Call January 29, 2020
Slide 2: Business Update, Financial Overview, Economics Update, Business Highlights
Business Update Financial Overview Economics Update Business Highlights ©2020 Mastercard January 29, 2020 2
Slide 3: 4th Quarter Selected Financial Performance
4th Quarter Selected Financial Performance ($ in millions, except per share data) YOY Growth 4Q 19 4Q 18 Currency Non-GAAP Non-GAAP As adjusted Neutral Net revenue $ 4,414 $ 3,807 16% 17% Adjusted operating expenses 2,015 1,816 11% 12% Adjusted operating income 2,399 1,991 21% 22% Adjusted operating
Slide 4: 4th Quarter Gross Dollar Volume (GDV)
4th Quarter Gross Dollar Volume (GDV) ($ in billions) Worldwide United States Rest of World 12% Growth 9% Growth 14% Growth $2,000 $1,726 $1,549 $1,500 $1,219 $870 $1,083 $761 $1,000 $617 $465 $507 $523 $500 $856 $788 $238 $253 $560 $602 $228 $254 $0 4Q18 4Q19 4Q18 4Q19 4Q18 4Q19 Credit Debit / Prep
Slide 5: 4th Quarter Switched Transactions and Cards
4th Quarter Switched Transactions and Cards Switched Transactions Cards 19% Growth* 5% Growth 4,000 30 Transactions (in billions) Cards (in millions) 23.8 3,000 2,615 2,488 20.1 20 442 489 2,000 10 2,174 1,000 1,999 0 0 4Q18 4Q19 4Q18 4Q19 ©2020 Mastercard Mastercard Cards Maestro Cards Notes: Figur
Slide 6: 4th Quarter Revenue
4th Quarter Revenue ($ in millions) 4Q18 4Q19 $5,000 $4,414 $3,807 $4,000 $3,000 $1,942 $2,263 $1,579 $1,774 $1,261 $1,452 $1,233 $2,000 $996 $1,000 $0 -$1,000 -$2,000 -$3,000 $(1,971)$(2,308) Domestic Cross-Border Transaction Other Rebates and Growth Assessments Volume Fees Processing Fees Revenues
Slide 7: 4th Quarter Adjusted Operating Expenses
4th Quarter Adjusted Operating Expenses ($ in millions) 4Q18 4Q19 $2,500 1 $2,015 $2,000 $1,816 $1,579 $1,401 $1,500 $1,000 $500 $302 $290 $113 $146 $0 1 Growth General & Administrative Advertising & Marketing Depreciation & Amortization Adjusted Operating Expenses Non-GAAP 13% (4)% 29% 11% Currency
Slide 8: Looking Ahead
Looking Ahead Business update through January 21st Thoughts for 2020 ©2020 Mastercard January 29, 2020 8
Slide 9: Thoughts for 2020
Thoughts for 2020 Non-GAAP, currency-neutral basis, excluding acquisitions1 2020 Forecasted Growth Net Revenue Low-teens Operating Expense High end of high single-digits Effective Tax Rate 17-18% 1 Amounts exclude the impact of gains and losses on the company’s equity investments, special items as d
Slide 10: Appendices
Appendices
Slide 11: A Non-GAAP Reconciliation
Appendix A Non-GAAP Reconciliation ($ in millions, except per share data) Three Months Ended December 31, 2019 Operating Operating Operating Other Income Effective income Diluted earnings expenses income margin (Expense) tax rate Net income per share ($ in millions, except per share data) Reported -
Slide 12: A (continued) Non-GAAP Reconciliation
Appendix A (continued) Non-GAAP Reconciliation Three Months Ended December 31, 2019 as compared to the Three Months Ended December 31, 2018 Increase/(Decrease) Diluted Operating Operating Operating Effective income earnings per Net revenue expenses income margin tax rate Net income share Reported -
Slide 13: B Non-GAAP Growth Drivers
Appendix B Non-GAAP Growth Drivers Twelve Months Ended December 31, 2019 as compared to the Twelve Months Ended December 31, 2018 Increase/(Decrease) Net revenue Diluted earnings per share Reported - GAAP 13 % 42 % (Gains) losses on equity investments 1 ** (2)% Tax act 2, 3 ** 1% Litigation provisio
Slide 14: C Non-GAAP Reconciliation: 2020 full-year financial outlook
Appendix C Non-GAAP Reconciliation 2020 full-year financial outlook 2020 vs. 2019 Increase/(Decrease) Net Revenue Operating Expenses Forecasted Growth - GAAP 1 Mid-teens High-teens Litigation provisions ** ** Non-GAAP Growth Mid-teens High-teens Currency impact 2 -% -% Acquisitions 3 (2)% (7-9)% Hig
Slide 15: D Non-GAAP Reconciliation: First quarter 2020 financial outlook
Appendix D Non-GAAP Reconciliation First quarter 2020 financial outlook Q1'20 vs. Q1'19 Increase/(Decrease) Net Revenue Operating Expenses Forecasted Growth - GAAP 1 Low double-digits Mid-teens Litigation provisions ** ** Non-GAAP Growth Low double-digits Mid-teens Currency impact 2 ~ 1% -% Acquisit
Slide 16: E Revenue Growth Drivers
Appendix E Revenue Growth Drivers Three Months Ended December 31, 2019 Currency Volume Acquisitions Impact 1 Other 2 Total Domestic assessments 13% —% (1)% 1% 12% Cross-border volume fees 15% —% (1)% 1% 15% Transaction processing 15% —% (1)% 3% 17% Other revenues ** 4% (1)% 20% 3 24% Rebates and inc
Slide 17: F Operating Expense Growth Drivers (Non-GAAP)
Appendix F Operating Expense Growth Drivers (Non-GAAP) Three Months Ended December 31, 2019 Currency Operational Acquisitions Impact 1 Total General and administrative 9% 4% (1)% 13 % Advertising and marketing (4)% 1% (1)% (4)% Depreciation and amortization 17 % 12% —% 29 % Total operating expenses
Slide 18: G 4th Quarter G&A Detail
Appendix G 4th Quarter G&A Detail ($ in millions) Increase/(Decrease) 4Q 19 4Q 18 $ % Personnel $936 $843 $93 11% Professional fees 154 124 30 24% Data processing and telecommunications 178 163 15 9% Foreign exchange activity 20 (7) 27 ** Other 291 278 13 5% General and administrative expenses $1,57