Mastercard Incorporated · NYSE:MA
Mastercard — Investor Day (May 2009)
92 slides from Mastercard's investor day presentation, May 13, 2009
Slide 1: MasterCard Worldwide
= MasterCard Worldwide
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Slide 4: MasterCard Incorporated 2009 Investment Community Meeting
MasterCard Incorporated 2009 Investment Community Meeting May 13, 2009 Exhibit 99.1
Slide 5: Forward-Looking Statements
May 13, 2009 2009 Investment Community Meeting Today’s presentation may contain, in addition to historical information, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current assumptions, expect
Slide 6: MasterCard Worldwide
. Ge a MasterCard Worldwide
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Slide 9: Strategic Overview
Strategic Overview 2009 Investment Community Meeting May 13, 2009 Robert W. Selander, President and Chief Executive Officer
Slide 10: Operating Environment
May 13, 2009 2009 Investment Community Meeting Operating Environment Remaining Flexible and Adapting to the leveraging our strengths challenging environment &
Slide 11: MasterCard GDV, Processed Transactions, and Net Revenue Growth
May 13, 2009 2009 Investment Community Meeting MasterCard GDV, Processed Transactions, and Net Revenue Growth * Net Revenue growth has been FX adjusted for the Euro and Real 0% 5% 10% 15% 20% 25% Q2'08 Q3'08 Q4'08 Q1'09 GDV (LC) Processed Transactions Net Revenue*
Slide 12: Managing for Top-Line Growth and Bottom-Line Performance
May 13, 2009 2009 Investment Community Meeting Managing for Top-Line Growth and Bottom-Line Performance • Continuing to focus on expense reduction – Prudent management of G&A and A&M – Reorganization contributed to efficiencies • Maintaining a healthy balance sheet • Investing for the future
Slide 13: Current Environment: U.S. Consumer Spending
May 13, 2009 2009 Investment Community Meeting Current Environment: U.S. Consumer Spending High Sensitivity Home furnishings; luxury retail; appliances High Sensitivity Home furnishings; luxury retail; appliances -20% to -27% Medium Sensitivity Airlines; hotels; footwear; apparel Medium Sensitivity
Slide 14: Current Environment: Payments Industry
May 13, 2009 2009 Investment Community Meeting Current Environment: Payments Industry Customers facing a multitude of challenges Industry consolidation Increased competition
Slide 15: Current Environment: Regulatory/Legislative
May 13, 2009 2009 Investment Community Meeting Current Environment: Regulatory/Legislative Regulatory/legislative developments • Interim arrangement with European Commission • U.S. legislative environment • Dual issuance in Canada Customers facing a multitude of challenges Industry consolidation Inc
Slide 16: Looking Ahead: Economy and Payments Industry
May 13, 2009 2009 Investment Community Meeting Looking Ahead: Economy and Payments Industry • Pace of decline slowing in U.S. • Economic conditions mixed outside of U.S. • Impact of stimulus packages still to come • Consolidation of banks likely to continue • Payments industry will continue to face
Slide 17: Dynamic Strategy
May 13, 2009 2009 Investment Community Meeting Dynamic Strategy • Remain flexible • Better mitigate threats • Take advantage of opportunities earlier • Be more adaptive and agile Helping us… Industry trends and forces at work Tracking… Utilizing Scenario Planning Utilizing Scenario Planning
Slide 18: Customer-Focused Strategy
May 13, 2009 2009 Investment Community Meeting Customer-Focused Strategy Sensitive to cultural and regulatory differences Developing products and solutions for local markets
Slide 19: Customers
Customers May 13, 2009 2009 Investment Community Meeting International Markets U.S. Markets Each region has a lead for: Customer-Focused Strategy Commerce Development Customer Delivery Products & Solutions APMEA Canada Europe LA/C United States
Slide 20: Leveraging Our Strengths to Capture Opportunities
May 13, 2009 2009 Investment Community Meeting Leveraging Our Strengths to Capture Opportunities Franchisor Processor Advisor • Continued migration to electronic payments • Technologically savvy consumers/businesses • Opportunities in debit, prepaid, affluent, commercial, mobile • Growth in processe
Slide 21: Summary
May 13, 2009 2009 Investment Community Meeting Summary Solid business model Strong global diversification Well positioned for the long term Remaining Flexible and Adapting to the leveraging our strengths challenging environment &
Slide 22: MasterCard Worldwide
y MasterCard Worldwide
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Slide 25: Fireside Chat
Fireside Chat 2009 Investment Community Meeting May 13, 2009 Chris McWilton, President, U.S. Markets Walt Macnee, President, International Markets
Slide 26: MasterCard Worldwide
Wa @ 4 MasterCard Worldwide
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Slide 29: Global Products and Solutions
Global Products and Solutions 2009 Investment Community Meeting May 13, 2009 Gary Flood, President, Global Products and Solutions
Slide 30: Core Products
May 13, 2009 2009 Investment Community Meeting Core Products Innovative Platforms Network Products MasterCard Advisors Worldwide Marketing & Communications Organized and Aligned to Deliver Franchisor Processor Advisor Impactful Solutions
Slide 31: Solving Customer and Market Needs
Insights People Technology Brand May 13, 2009 2009 Investment Community Meeting Solving Customer and Market Needs We fully understand our customers’ local, regional and global needs — for today and tomorrow Impactful Solutions Insights People Technology Brand
Slide 32: Displace Cash and Checks
Displace Cash and Checks May 13, 2009 Investment Community Meeting Understanding the Opportunity Displace Cash and Checks Focused on ways to… Total commercial card spend to grow to $1.2T by 2011 More than 64 million small businesses globally Gen Y in the US average $100/week in disposable income US
Slide 33: Trends We're Tracking
May 13, 2009 2009 Investment Community Meeting Trends We’re Tracking CUSTOMER CONSUMER/ COMMERCIAL Cost containment Portfolio optimization International spend and remittance flows Empowerment of youth Spending power of underserved All-in-one products & services Technology advancements Bank consolida
Slide 34: Setting Priorities, Investment Strategies
Commercial Affluent inControl P2P Mobile Prepaid PayPass E-commerce Processing Brand & Reputation Advisors Debit May 13, 2009 Investment Community Meeting Setting Priorities, Investment Strategies Insights drive priorities Commercial Affluent inControl P2P Mobile Prepaid PayPass E-commerce Processin
Slide 35: Managing Risk and Fraud
May 13, 2009 2009 Investment Community Meeting Managing Risk and Fraud Solving Today’s Needs and Paving the Way for Tomorrow’s Opportunities with Relevant Insights… Innovation Portfolio Optimization The Market Network Technology Into New Segments • Benchmarking • Research • Predictive capabilities •
Slide 36: Innovation: Mobile, Contactless, Controls
May 13, 2009 2009 Investment Community Meeting Solving Today’s Needs and Paving the Way for Tomorrow’s Opportunities with Relevant Insights Network Technology Innovation… Into New Segments The Market Portfolio Optimization • Mobile • Contactless • Controls for businesses and consumers BarclayCard Or
Slide 37: Portfolio Optimization: Partnering to Drive Results
May 13, 2009 2009 Investment Community Meeting Solving Today’s Needs and Paving the Way for Tomorrow’s Opportunities Partnering to Drive Results with Relevant Insights Portfolio Optimization… Network Technology Innovation Into New Segments The Market • Strategy definition • Partner selection • Opera
Slide 38: The Market: France Retail Innovation, Canada Chip Migration
May 13, 2009 2009 Investment Community Meeting Solving Today’s Needs and Paving the Way for Tomorrow’s Opportunities France Retail Innovation with Relevant Insights Portfolio Optimization The Market… Network Technology Innovation Into New Segments • Coordinated issuer & merchant strategies • Differe
Slide 39: Into New Segments
May 13, 2009 2009 Investment Community Meeting Solving Today’s Needs and Paving the Way for Tomorrow’s Opportunities with Relevant Insights Portfolio Optimization The Market Network Technology Into New Segments… Innovation • Emerging opportunity • Strong growth potential • Global leverage • Local ex
Slide 40: Network Technology: Intelligent Ways to Grow
May 13, 2009 2009 Investment Community Meeting Solving Today’s Needs and Paving the Way for Tomorrow’s Opportunities Network Technology with Relevant Insights Innovation Portfolio Optimization The Market Into New Segments Intelligent Ways to Grow • Wired for speed & reliability • Real-time processin
Slide 41: MasterCard leverages its capabilities worldwide
May 13, 2009 2009 Investment Community Meeting MasterCard successfully leverages its capabilities by deploying local and regional expertise and learnings worldwide.
Slide 42: MasterCard Worldwide
MasterCard Worldwide
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Slide 45: Core Products
Core Products 2009 Investment Community Meeting May 13, 2009 Tim Murphy, Group Executive, Core Products
Slide 46: Core Products - Today's Focus
Affluent Consumer Credit Debit Prepaid May 13, 2009 2009 Investment Community Meeting Core Products – Today’s Focus Expand the business by… • Driving meaningful differentiation • Delivering thought leadership and deep product expertise • Executing disciplined product strategies • Integrating and ali
Slide 47: Leveraging the Equity in Priceless
Leveraging the equity in Priceless May 13, 2009 2009 Investment Community Meeting Affluent Consumer Credit Leveraging the equity in Priceless A priority for our customers Sizable, growing, resilient Core to growth in Asia, the Middle East and Latin America Customers are increasingly open to partneri
Slide 48: Affluent Strategy
Our affluent strategy is to build flexible solutions that drive true business value to our financial institution customers. May 13, 2009 2009 Investment Community Meeting Affluent Consumer Credit Our affluent strategy is to build flexible solutions that drive true business value to our financial ins
Slide 49: Debit
May 13, 2009 2009 Investment Community Meeting Debit Debit is a rapidly growing non-cash global payment method.
Slide 50: Debit: Europe
May 13, 2009 2009 Investment Community Meeting Emerging high-growth (Central/Eastern Europe) Grow volumes around acceptance, education, activation and usage Debit Driving integrated strategies market by market… Continental Europe/SEPA Expand Maestro, increase domestic processing, deliver best-in-cla
Slide 51: Debit: U.S.
May 13, 2009 2009 Investment Community Meeting Debit Taking our game to the next level… U.S. Executing our strategy to grow the business • Optimize the franchise for debit • Secure the base / support customer performance • Growing scale and share of new business • Deliver unique products / value pro
Slide 52: Prepaid
Public Sector Corporate Programs Financial Inclusion May 13, 2009 2009 Investment Community Meeting Prepaid Prepaid is one of the fastest growing payment categories for MasterCard. Public Sector Corporate Programs Financial Inclusion Top three categories targeted…
Slide 53: Big Wins in Prepaid
May 13, 2009 2009 Investment Community Meeting Big Wins in Prepaid One of the largest awarded social benefits card programs in Europe. (Poste Italiane in Italy) Largest consumer reloadable / financial inclusion program in the U.S. (H&R Block Bank) Largest awarded public sector benefits card opportun
Slide 54: Prepaid Travelex Win
Strong Global Brand Leadership in Prepaid Global Processing Capabilities Portfolio Optimization Expertise May 13, 2009 2009 Investment Community Meeting Prepaid Travelex Win World’s largest foreign currency prepaid card provider prefers MasterCard’s… Strong Global Brand Leadership in Prepaid Global
Slide 55: Differentiation, Thought Leadership, and Integration
Advancing MasterCard’s strategy with… Differentiation, Thought Leadership, and Integration May 13, 2009 2009 Investment Community Meeting Advancing MasterCard’s strategy with… Differentiation, Thought Leadership, and Integration Core Products
Slide 56: MasterCard Worldwide
. ¥ MasterCard Worldwide
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Slide 59: Innovative Platforms
Innovative Platforms 2009 Investment Community Meeting May 13, 2009 Joshua Peirez, Group Executive, Innovative Platforms
Slide 60: Today's Discussion
May 13, 2009 2009 Investment Community Meeting Today’s Discussion Approach to Innovation Demonstrating by Example Uses of Technology
Slide 61: The Importance of Innovation
May 13, 2009 2009 Investment Community Meeting The Importance of Innovation Our unique platforms give us the ability to add value to every transaction. Game-changing innovations move choice and control to the hands of the consumer. Technology innovations deliver new ways to connect consumers with th
Slide 62: Our Product Development Approach
May 13, 2009 2009 Investment Community Meeting Our Product Development Approach We prefer to aim at where the target will be … not just where it is TODAY.
Slide 63: Identifying Strengths and Capabilities
May 13, 2009 2009 Investment Community Meeting Identifying Strengths and Capabilities Real-time access to data Personalization at the account level Fast payment processing Global interoperability Easy integration of emerging channels Greater profitability from existing customers
Slide 64: Integrated Solutions
Integrated Solutions May 13, 2009 2009 Investment Community Meeting Building Best-in-Class Solutions Integrated Solutions
Slide 65: Using Technology to Innovate
May 13, 2009 2009 Investment Community Meeting Using Technology to Innovate Build leverage existing resources and network expertise Acquire gain functional capabilities we identify as a need Partner bring together ‘best of the breed’ technology providers
Slide 66: Authorization Controls
May 13, 2009 2009 Investment Community Meeting Authorization Controls Specific Specific Merchants Merchants Transaction Transaction Limits Limits Curfews Curfews Geography Geography The Acquisition of Orbiscom Routing Controls Alert Controls SMS/Email SMS/Email On Event On Event Forewarning Forewarn
Slide 67: E-commerce: Online Channels Drive Growth
May 13, 2009 2009 Investment Community Meeting E-commerce: Online Channels Drive Growth
Slide 68: Mobile: The Right Partnership Approach
May 13, 2009 2009 Investment Community Meeting Mobile: The Right Partnership Approach Who Controls the Winning Strategy? Hardware designers Application writers SIM chip manufacturers Mobile network operators
Slide 69: P2P: Building the Framework
May 13, 2009 2009 Investment Community Meeting P2P: Building the Framework
Slide 70: Innovation Is What Our Customers Want
can allow you to own the space Applications Technology make it all possible Innovation is what our customers want… speeds convergence Platforms …and it’s what we ’ re delivering. May 13, 2009 2009 Investment Community Meeting can allow you to own the space Applications Identifying the ‘Sweet Spot’ T
Slide 71: MasterCard Worldwide
. Ge a MasterCard Worldwide
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Slide 74: Financial Perspective
Financial Perspective 2009 Investment Community Day May 13, 2009 Martina Hund-Mejean, Chief Financial Officer
Slide 75: Secular Shift from Cash and Checks Continues Globally
Checks 18% Cash 47% Electronic Payments (Cards and EFT) 35% Electronic Payments (Cards and EFT) 45% Cash 44% Checks 11% Secular Shift from Cash and Checks Continues Globally 2003 PCE $22 trillion 2008 PCE $33 trillion Personal Consumption Expenditure (PCE) Estimated to be $38 trillion By US 5.5% ROW
Slide 76: 1Q09 Worldwide GDV Performance
43.3 27.8 18.7 6.7 3.5 -10 US Europe APMEA LAC Canada 1Q09 Worldwide GDV Performance % Percentage Weight of 1Q09 MasterCard GDV US Europe APMEA LAC Canada Worldwide Local Currency Growth -8.0% 3.9% 16.1% 7.1% -0.3% 0.3% USD Growth -8.0% -16.1% 2.4% -16.0% -19.7% -9.7%
Slide 77: US Gross Dollar Volume, Purchase Volume & Retail Sales
-10% -5% 0% 5% 10% 15% 1Q08 2Q08 3Q08 4Q08 1Q09 US Gross Dollar Volume, Purchase Volume & Retail Sales (1Q ‘07 – 1Q ‘09) * Source: U.S. Department of Commerce (Unadjusted Retail & Food Services, excl. Auto) US Retail Sales * MA Purchase Volume MA GDV
Slide 78: US Gross Dollar Volume - Credit and Debit
US Gross Dollar Volume - Credit and Debit (1Q ’07 – 1Q ’09) 62% 38% 64% 36% 64% 36% 63% 37% 60% 40% 60% 40% 60% 40% 59% 41% 54% 46% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 MA Debit MA Credit
Slide 79: Gasoline Volume Growth Scenarios - 2009
Gasoline Volume Growth Scenarios - 2009 -50% -40% -30% -20% -10% 0% 10% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Impact of Lower Current Gas Prices on 2009 US Processed Volumes for Gas Actual Scenarios $3.00 / gallon $2.50 / gallon $2.10 / gallon
Slide 80: ROW Gross Dollar Volume, Purchase Volume and Card Growth
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 ROW Gross Dollar Volume, Purchase Volume and Card Growth (1Q ’07 – 1Q ’09) Cards Purchase Volume * GDV * *Local currency basis
Slide 81: ROW Gross Dollar Volume Growth, by Region
ROW Gross Dollar Volume Growth, by Region (1Q ’07 – 1Q ’09) -5% 0% 5% 10% 15% 20% 25% 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 APMEA Latin America Europe Canada Local currency basis
Slide 82: Cross Border Volume and International Travel Growth
Worldwide MasterCard Branded Cross Border Volume and International Travel Growth Source: International Air Transportation Association (IATA) *Local currency basis -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 ` MA Cross Border * IATA
Slide 83: Quarter-to-date Update
Quarter-to-date Update • Processed volumes • Processed transactions • Cross border volume growth
Slide 84: Outlook for Full-Year 2009
Outlook for Full-Year 2009 • Net revenue growth expected to fall below 12-15% longer-term objective – Cross-border trends – Currency impact – Impact of deals on rebates & incentives • Total operating expenses expected to be flat to down slightly, including impact of all severance charges – G&A – A&M
Slide 85: Remain Committed to Our Longer-Term Performance Objectives
Remain Committed to Our Longer-Term Performance Objectives • Average annual net revenue growth of – 15% • Annual Operating Margin improvement of - ppt • Average annual net income growth of – 30% • Key assumptions – Constant FX rate – Effective annual tax rate of 35%
Slide 86: Strong Capital Position
Strong Capital Position • Solid balance sheet • Healthy cash flow generation • Flexibility for strategic investments • Returned excess cash to shareholders primarily through share repurchases – Completed $1.25 billion share repurchase program in 2008 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Book Equity Cash
Slide 87: In Summary
In Summary • Committed to our longer-term objectives • Current environment • Realizing our potential
Slide 88: MasterCard Worldwide
. Ge a MasterCard Worldwide
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Slide 91: Question & Answer Session
Question & Answer Session 2009 Investment Community Meeting May 13, 2009
Slide 92: MasterCard Worldwide - The Heart of Commerce
MasterCard Worldwide The Heart of Commerce”