Slide 1: Second Quarter 2008 Earnings Webcast & Conference Call
Second Quarter 2008 Earnings Webcast & Conference Call July 22, 2008 Exhibit 99.2
Slide 2: Gary Kohn, Vice President Investor Relations
Gary Kohn Vice President Investor Relations Earnings Webcast & Conference Call July 22, 2008
Slide 3: Safe Harbor
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 diffi
Slide 4: Christina Gold, President & Chief Executive Officer
Christina Gold President & Chief Executive Officer Earnings Webcast & Conference Call July 22, 2008
Slide 5: Strong Second Quarter Results: Revenue
Improving pricing trends Strong Second Quarter Results Strong Second Quarter Results Revenue $1.35B up 12% • C2C revenue up 14% and transactions up 13% • International revenue up 19% and transactions 18% • Non-U.S. originated revenue and transactions up 26% • Improving U.S. domestic and U.S. outboun
Slide 6: Strong Second Quarter Results: EPS
Consistent performance Strong Second Quarter Results Strong Second Quarter Results EPS, ex restructuring $0.33 up 27% EPS, reported $0.31 up 19% Note: See appendix for reconciliation of Non-GAAP to GAAP measures.
Slide 7: Leading the Global Money Transfer Marketplace
Long-term EPS growth objective: 15%-18% Leading the Global Money Transfer Marketplace Leading the Global Money Transfer Marketplace • Leadership position in growing market • 355,000 agent locations • Well-known brand • Globally diverse revenue stream • Scalable infrastructure • Industry-leading comp
Slide 8: Western Union Strategy
Improve profitability by leveraging scale, reducing costs and effectively utilizing capital Accelerate profitable growth in the global cash money transfer business Expand and globalize the C2B payments business Innovate new products and services for our target customers Western Union Strategy Wester
Slide 9: Grow the C2C Business
Grow the C2C Business Grow the C2C Business • Strong international growth • Increase distribution – 355,000 agent locations – Key signings and renewals • Indonesia, Laos, India, Nigeria, Sri Lanka, Bangladesh • Enhance customer relationship – 10 million Gold Card holders • Improving Westernunion.com
Slide 10: Expand the C2B Business
Expand the C2B Business Expand the C2B Business • Pago Fácil expansion • Vigo bill payment later this year • Acquisitions
Slide 11: Innovate New Services and Technologies
Innovate New Services and Technologies Innovate New Services and Technologies • Mobile Money Transfer – Globe Telecom & Smart Communications – Discussing opportunities worldwide • Micro Lending pilot
Slide 12: Improve Profitability
Improve Profitability Improve Profitability • 2008 operating margin excluding restructuring expenses expected to be consistent with 2007 • Goal to improve 2009 margin by up to 50 basis points • Scalable business with long-term margin expansion opportunities
Slide 13: Leading the Global Money Transfer Marketplace
Long-term EPS growth objective: 15%-18% Leading the Global Money Transfer Marketplace Leading the Global Money Transfer Marketplace • Leadership position in growing market • 355,000 agent locations • Well-known brand • Globally diverse revenue stream • Scalable infrastructure • Industry-leading comp
Slide 14: Scott Scheirman, Executive Vice President & CFO
Scott Scheirman Executive Vice President & Chief Financial Officer Earnings Webcast & Conference Call July 22, 2008
Slide 15: Strong Second Quarter Results
9% Revenue growth ex-euro Consistent performance Revenue 1.35B $ 12% EPS, reported 0.31 $ 19% EPS, ex restructuring 0.33 $ 27% Strong Second Quarter Results Strong Second Quarter Results Note: See appendix for reconciliation of Non-GAAP to GAAP measures.
Slide 16: Components of Revenue
Up 10% Up 25% Transaction Fee Components of Revenue Components of Revenue $ in millions Q2 07 Q2 08 Foreign Exchange Q2 07 Q2 08 $981 $1,081 $186 $232
Slide 17: Operating Income Margin
Expect 2008 operating margin ex restructuring consistent with 2007 Operating Income Margin Operating Income Margin • Q2 operating income margin, excluding restructuring – Consistent with second quarter 2007 – C2C up 70 basis points year-over-year – C2B impacted by product mix shift • Operating incom
Slide 18: Profitability Initiatives
Goal of expanding 2009 margin up to 50 basis points Profitability Initiatives Profitability Initiatives • Restructuring expenses – $23 million in Q2 – Approximately $80 million full-year 2008 • Estimated savings of – $10 million in 2008 – $35 million annually in 2009 and beyond
Slide 19: Selected Financial Results
Expect 2008 tax rate of 26.5%, ex-restructuring 27.5% Selected Financial Results Selected Financial Results Q2 2008 Q2 2007 % Change $ in millions except for per share and tax rate information Excluding Restructuring Expense Note: See appendix for reconciliation of Non-GAAP to GAAP measures. Total R
Slide 20: Robust Cash Generation and Position
Expect Cash Flow From Operations of $1.2B Robust Cash Generation and Position Robust Cash Generation and Position Cash Flows From Operations, year-to-date $560 Cash Balance on June 30 $1,875 Remaining authorized for buyback, June 30 $1,571 Stock Repurchases, spin through June 30 (66 million shares)
Slide 21: Consumer-to-Consumer
85% of Western Union revenue Consumer-to-Consumer Consumer-to-Consumer Q2 2008 Change (millions) Transactions 47.1 13% Revenue $1,145 14% Operating Income $306 17% Operating Margin 26.7% 70 bp
Slide 22: Slide 22
Slide 23: Consumer-to-Business
13% of Western Union revenue Consumer-to-Business Consumer-to-Business Q2 2008 Change (millions) Transactions 101.5 2% Revenue $179 3% Operating Income $50 -10% Operating Margin 27.7% -380 bp
Slide 24: 2008 Financial Guidance
2008 Financial Guidance 2008 Financial Guidance • Revenue growth at higher end of 9% to 11% range • Non-GAAP EPS at higher end of $1.29 to $1.33 (up from $1.25 to $1.29) – Excludes $0.07 of restructuring expenses and includes $0.01 in cost savings • GAAP EPS at higher end of $1.22 to $1.26 (up from
Slide 25: Summary
Creating long-term shareholder value Summary Summary • Robust revenue growth performance • Financial strength • Superior cash flow • Commitment to expand margin • Long-term objective of 15% to 18% EPS growth
Slide 26: Questions and Answers
Questions and Answers Earnings Webcast & Conference Call July 22, 2008
Slide 27: Leading the Global Money Transfer Marketplace
Long-term EPS growth objective: 15%-18% Leading the Global Money Transfer Marketplace Leading the Global Money Transfer Marketplace • Leadership position in growing market • 355,000 agent locations • Well-known brand • Globally diverse revenue stream • Scalable infrastructure • Industry-leading comp
Slide 28: Appendix
Second Quarter 2008 Earnings Webcast & Conference Call July 22, 2008 Appendix
Slide 29: Non-GAAP Measures
Non-GAAP Measures Non-GAAP Measures Western Union’s management has presented revenue growth excluding the foreign currency translation impact of euro denominated revenues. In addition, Western Union's management has presented cost of services as a percent of revenue, operating income margin, and gro
Slide 30: Reconciliation of Non-GAAP Measures
(unaudited) THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (in millions) Growth $ 1,347.1 $ 1,202.9 12% Benefit from euro translation (a) (38.3) - $ 1,308.8 $ 1,202.9 9% $ 231.5 $ 204.5 Restructuring and related expenses, net of income tax benefit of $10.2 million (b) 12.7 - $ 244.2 $
Slide 31: Reconciliation of Non-GAAP Measures
(unaudited) THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (in millions) As reported Restructuring and (GAAP) Related Expenses (b) Adjusted Revenues $ 1,347.1 - $ $ 1,347.1 Cost of services 799.4 (19.5) 779.9 Selling, general and administrative 211.5 (3.4) 208.1 Operating income 336.2
Slide 32: Reconciliation of Non-GAAP Measures: EPS Guidance
(unaudited) THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (in millions) EPS Guidance 2008 EPS Guidance GAAP basis $ 1.22 $ 1.26 Adjustment: Estimated restructuring and related expenses, net of income tax benefit (b) 0.07 0.07 $ 1.29 $ 1.33 2007 EPS as reported (GAAP) $ 1.11 $ 1.11 Ad
Slide 33: Reconciliation of Non-GAAP Measures: Tax Rate Guidance
THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES 2008 Full Year Estimated Effective Tax Rate Guidance ("ETR") Estimated ETR (GAAP Basis) 26.5% Estimated ETR benefit for restructuring and related expenses (b) 1.0 Adjusted Esti
Slide 34: Reconciliation of Non-GAAP Measures: Footnotes
THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES THE WESTERN UNION COMPANY RECONCILIATION OF NON-GAAP MEASURES (a) Represents a benefit in the fluctuation in the exchange rate between the euro and the United States dollar. This benefit would not have occurred had there been a constant e
Slide 35: Use of Material
Use of Material Use of Material The information contained in this presentation is being provided for your convenience and information only. This information is accurate as of the date of its initial presentation, July 22, 2008. If you plan to use this information for any purpose, verification of its