Slide 1: Western Union Fourth Quarter 2011 Earnings Webcast & Conference Call
Western Union Fourth Quarter 2011 Earnings Webcast & Conference Call February 7, 2012 Exhibit 99.2
Slide 2: Mike Salop, Senior Vice President, Investor Relations
Mike Salop Senior Vice President, Investor Relations
Slide 3: Hikmet Ersek, President & Chief Executive Officer
Hikmet Ersek President & Chief Executive Officer
Slide 4: 2011 Highlights
2011 Highlights 2011 Increased EPS guidance $0.06 Launched WU Ventures, E-channels 35% Rev Growth Completed $800 Million Share Repurchase, $200 Million Dividends Acquired Completed Restructuring Agent Locations reach ~485,000 MasterCard Prepaid & MT Partnership Resolved IRS tax issue Evolved Brand A
Slide 5: Focus on Execution
Focus on Execution Global Consumer Financial Services C2C and Consumer Bill Pay Western Union Ventures WU.com, Prepaid/Stored Value, Mobile New products and services Western Union Business Solutions B2B
Slide 6: Billion Consumers Worldwide
2 Billion Consumers Worldwide SOURCE: McKinsey & Co., October 2009; CGAP, 2009; C.K. Prahalad, 2004; Hammond et all, 2007; World Bank 2009, Company analysis Our objective: To be the premier financial service provider for the underserved The underserved – More than just the immigrant population
Slide 7: Global Consumer Financial Services
Global Consumer Financial Services Transition from a transaction based company to consumer-centric organization Increase loyalty and add new consumers Accelerate network expansion in 2012
Slide 8: Electronic Channels
Electronic Channels Digital business headquartered in San Francisco Investing in people and technology to redesign consumer experience, offer multiple funding and receive options, and optimize risk mitigation Grow Westernunion.com from over $100 million in revenues to over $500 million in revenues b
Slide 9: Western Union Business Solutions
Western Union Business Solutions Focus on growth and integration of Travelex Global Business Payments (TGBP) Ended the year with approximately 100,000 customers in 23 countries, including over 500 financial institutions Significant opportunity to increase market share Adding sales resources Expandin
Slide 10: Positioned for Growth
Positioned for Growth Global Consumer Financial Services Strong foundation and brand Expand global network Western Union Ventures Build a world class digital business Western Union Business Solutions Integrate and grow B2B
Slide 11: Scott Scheirman, Executive Vice President & Chief Financial Officer
Scott Scheirman Executive Vice President & Chief Financial Officer
Slide 12: Revenue
Revenue $1,058 $1,082 $268 $322 ($ in millions) $1,357 $1,431 *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. Consolidated revenue up 5%, or up 6% constant currency adjusted* Excluding TGBP up 3%, or 4% constant currency* Transaction fees increased 2% Foreign exchange
Slide 13: Consumer-to-Consumer +5%
Consumer-to-Consumer +5% C2C Transactions (millions) C2C revenue growth of 3% reported and constant currency* Total Q4 Western Union cross- border principal of $19 billion Increased 2% on a reported basis Increased 3% constant currency* Principal per transaction Declined 2% on a reported basis Down
Slide 14: Consumer-to-Consumer: Europe, Middle East, Africa, S. Asia
Consumer-to-Consumer Revenue Transactions Q4 2011 2% 3% Europe, Middle East, Africa, S. Asia 43% of Western Union revenue Reported revenue growth moderated from Q3 due to currency and challenges in Southern Europe and Russia U.K., France, and Germany performed well India grew revenue 12% and transac
Slide 15: Consumer-to-Consumer: Americas
Consumer-to-Consumer Revenue Transactions Americas 3% 6% 31% of Western Union revenue Domestic money transfer grew revenue 7% and transactions 11% Mexico revenue declined 1% while transactions increased 1% U.S. outbound revenue growth improved from Q3 Q4 2011
Slide 16: Consumer-to-Consumer: Asia Pacific
Consumer-to-Consumer Revenue Transactions Asia Pacific 6% 8% 9% of Western Union revenue Philippines delivered growth similar to Q3 and Australia delivered solid growth, though not as strong as Q3 China revenue down 5% and transactions grew 1% Q4 2011
Slide 17: C2C Transaction and Revenue Growth
C2C Transaction and Revenue Growth Q4 2011 *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures.
Slide 18: Electronic Channels & Prepaid Q4 Highlights
Electronic Channels & Prepaid Q4 Highlights Account-based money transfer Over 40% transaction growth Agreements in place with over 80 banks globally Westernunion.com Transactions increased by over 30% Over 40% transaction growth in international markets Prepaid Nearly 1.5 million prepaid cards in fo
Slide 19: Global Business Payments
Global Business Payments Revenue Global Business Payments 24% 16% of Western Union revenue Business Solutions revenue growth of 13% excluding TGBP Consumer Bill Payments revenue increased 2% Q4 2011
Slide 20: Operating Margin – Q4
Operating Margin – Q4 GAAP Excluding Restructuring* Operating margin excluding restructuring expense improved 50 basis points* • Benefits from revenue leverage, restructuring savings, Durbin, and lower marketing expense • TGBP results negatively impacted 4Q margin by 100 basis points • Deal costs re
Slide 21: Operating Margin – Full Year
Operating Margin – Full Year GAAP Excluding Restructuring* Operating margin excluding restructuring relatively flat* • Benefits from restructuring savings and revenue leverage offset by foreign exchange, spending on initiatives, and acquisition deal costs *Note: See appendix for reconciliation of No
Slide 22: EPS – Q4
EPS – Q4 Other income gains Gain of $20 million relating to the revaluation of the Company’s previous ownership position in Finint and $21 million on foreign currency forward contracts related primarily to the acquisition of Travelex Global Business Payments Tax agreement Benefit of approximately $2
Slide 23: C2C Operating Margin – Q4
C2C Operating Margin – Q4 C2C 83% of total company revenue Operating margin increased 100 basis points from prior year • Benefits from restructuring savings and revenue leverage 27.0% 28.0% Q4 2010 Q4 2011
Slide 24: Global Business Payments Operating Margin – Q4
Global Business Payments Operating Margin – Q4 GBP 16% of total company revenue Operating margin improvement Revenue leverage, restructuring savings, Durbin benefit, lower integration and investment spending in WUBS 13.3% 17.5% Q4 2010 Q4 2011
Slide 25: 2012 Outlook - Revenues
2012 Outlook - Revenues Constant currency revenue growth in the range of 6% to 8%*, including 4% benefit from a full year of TGBP GAAP revenue growth 2% lower than constant currency Consumer-to-consumer trends expected to be similar to fourth quarter 2011 Western Union Business Solutions approximate
Slide 26: 2012 Outlook - Margins
2012 Outlook - Margins Operating margins expected to be similar to 2011 GAAP operating margin of approximately 25%, compared to 25.2% in Operating margin excluding TGBP integration costs of approximately 26%, compared to 26.2%, excluding TGBP integration costs and restructuring expenses in 2011* Ben
Slide 27: 2012 Outlook – EPS
2012 Outlook – EPS Net Other Expense expected to increase due to $71 million of non- recurring acquisition related gains in 2011 Effective tax rate in a range of 16% to 17% GAAP EPS in a range of $1.65 to $1.70, or $1.70 to $1.75 excluding TGBP integration expense* Compares to $1.57 in 2011 excludin
Slide 28: 2012 Outlook – Cash Flow
2012 Outlook – Cash Flow GAAP cash flows from operations in range of $1.0 billion to $1.1 billion, or $1.2 billion to $1.3 billion excluding estimated tax payments of approximately $200 million related to the IRS agreement* Capital expenditures in a range of 4% to 5% of revenue due to key agent rene
Slide 29: Questions & Answers
Questions & Answers
Slide 30: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 4Q10 FY2010 1Q11 2Q11 3Q11 4Q11 FY2011 Consolidated Metrics Revenues, as reported (GAAP) 1,357.0 $ 5,192.7 $ 1,283.0 $ 1,366.3 $ 1,410.8 $ 1,431.3 $ 5,491.4 $ Reversal of TGBP revenues, including foreign currency translation impact (a) N/A N/A N/A N/A N/A (35.2) (
Slide 31: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 4Q10 FY2010 1Q11 2Q11 3Q11 4Q11 FY2011 Consumer-to-Consumer Segment Revenues, as reported (GAAP) 1,151.8 $ 4,383.4 $ 1,078.1 $ 1,155.1 $ 1,193.3 $ 1,181.9 $ 4,608.4 $ Foreign currency translation impact (b) 18.0 32.3 2.2 (31.4) (17.9) 8.0 (39.1) Revenues, constant
Slide 32: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 2011 Effective Tax Rate 4Q11 FY2011 Effective tax rate, as reported (GAAP) (28.3)% 8.6 % IRS agreement tax provision benefit impact (e) 58.1% 16.1% Restructuring and related expenses, net of income tax benefit impact (c) N/A 0.2% Effective tax rate, restructuring
Slide 33: Footnote explanations
Footnote explanations Non-GAAP related notes: (a) (b) (c) (d) (e) (f) (g) Travelex Global Business Payments integration expense consists primarily of severance and other benefits, retention, direct and incremental expense consisting of facility relocation, consolidation and closures; IT systems inte