Western Union Company (the) · NYSE:WU

Western Union Company (the) — Q3 2013 Earnings Presentation

28 slides from Western Union Company (the)'s earnings presentation, Oct 29, 2013

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

    Third Quarter 2013 Earnings Webcast & Conference Call October 29, 2013 Exhibit 99.2

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

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

  3. Slide 3: Safe Harbor

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

  4. Slide 4: Hikmet Ersek, President & Chief Executive Officer

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved. Hikmet Ersek President & Chief Executive Officer 4

  5. Slide 5: Executing on key strategies

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved. Executing on key strategies  Consumer money transfer transaction growth rate accelerated to 9% – Strongest quarterly transaction growth rate in 3 years  Business Solutions and Consumer Bill Payments delivered stro

  6. Slide 6: Strengthening the consumer money transfer business

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved. Strengthening the consumer money transfer business – Q3  Strategic pricing actions yielding positive results – Transactions +20% in priced corridors  Strong growth in electronic channels – +24% revenue growth  In

  7. Slide 7: Driving growth in customers and usage in business-to-business

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved. Driving growth in customers and usage in business- to-business – Q3  Delivered 6% revenue growth, or 10% constant currency*  Expansion of service offerings and growth in key verticals 2013 Strategic Initiatives 7

  8. Slide 8: Generating and deploying strong cash flow for shareholders

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved. Generating and deploying strong cash flow for shareholders  Cash flow from operations of $811 million year-to-date  Returned $543 million to shareholders through share repurchases and dividends 2013 Strategic Init

  9. Slide 9: Compliance and Regulatory Investments

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved. Compliance and Regulatory Investments  Financial services industry continues to be subject to an increasingly strict set of legal and regulatory requirements  Compliance related expenses expected to increase from

  10. Slide 10: Scott Scheirman, Executive Vice President & Chief Financial Officer

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved. Scott Scheirman Executive Vice President & Chief Financial Officer 10

  11. Slide 11: Revenue Q3

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved. $1,053 $1,030 $338 $348 $31 $31 Q3 2012 Q3 2013 Transaction Fee Foreign Exchange Other ($ in millions) $1,409 $1,422 *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures.  Consolidated reve

  12. Slide 12: Consumer-to-Consumer Q3

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved.  80% of Company revenue  Reported revenue decreased 2%, or 1% constant currency*  Western Union brand transactions increased 10%, while total transactions increased 9%  Cross-border principal increased 8%  West

  13. Slide 13: C2C Transaction and Revenue Analysis

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved. *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. C2C Transaction and Revenue Analysis 13 Q3 2013

  14. Slide 14: Consumer-to-Consumer regional results

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved. Regions Revenue Growth/ Decline Currency Impact** Transaction Growth % of Total Revenue Europe and CIS -2% 2% 7% 21% North America -7% 0% 5% 19% Middle East and Africa 1% 0% 10% 16% Asia Pacific -3% -2% 10% 12% LACA

  15. Slide 15: Electronic Channels & Prepaid Q3

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved.  Account based money transfer  Revenue increased 29% and transactions grew 55%  Over 75 banks active globally  Westernunion.com  C2C revenue increased 24%  C2C transactions grew 68%  Prepaid  Revenue decline

  16. Slide 16: C2B and B2B Q3

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved.  Consumer-to-Business  11% of Company revenue  Revenue increased 3%, or 9% constant currency*  Business Solutions  7% of Company revenue  Revenue increased 6%, or 10% and 8% on constant currency* *Note: See ap

  17. Slide 17: Operating Margin Q3

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved. 25.7% 21.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Q3 2012 Q3 2013 Operating Margin Q3  Operating margin decrease • Primarily result of pricing driven revenue declines and other strategic investments, lower compen

  18. Slide 18: C2C Operating Margin Q3

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved.  Operating margin decrease • Driven by same factors as overall Company margins 29.4% 24.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Q3 2012 Q3 2013 C2C Operating Margin Q3 18

  19. Slide 19: C2B Operating Margin Q3

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved.  Operating margin decrease • Benefited from higher revenue, offset by higher bank fees, the pass-through to billers of Durbin related debit card savings, and IT investments 25.3% 19.2% 0.0% 5.0% 10.0% 15.0% 20.0% 2

  20. Slide 20: Business Solutions Operating Loss Q3

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved.  Operating Loss  Operating loss of $3 million compared to an operating loss of $7 million in the prior year period  Includes $16 million of depreciation and amortization in current quarter and $17 million in the

  21. Slide 21: Financial Strength

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved. YTD 2013 Cash Flow from Operations $811 million Capital Expenditures $166 million Stock Repurchases $334 million Dividends Paid $209 million Cash Balance, Sept. 30, 2013 $1.7 billion Debt Outstanding, Sept. 30, 2013

  22. Slide 22: 2013 Outlook Affirmed

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved.  Revenue – Low single digit constant currency revenue declines  Margins – GAAP operating margin of approximately 20% – EBITDA margin of approximately 25%, compared to 24.5% previously*  Earnings per Share – GAAP

  23. Slide 23: Questions & Answers

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved. Questions & Answers 23

  24. Slide 24: Appendix

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved. Third Quarter 2013 Earnings Webcast & Conference Call October 29, 2013 Appendix 24

  25. Slide 25: Non-GAAP financial measures

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

  26. Slide 26: Reconciliation of Non-GAAP Measures

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved. Reconciliation of Non-GAAP Measures 26 3Q12 4Q12 FY2012 1Q13 2Q13 3Q13 YTD 3Q13 Consolidated Metrics Revenues, as reported (GAAP) 1,421.6$ 1,424.7$ 5,664.8$ 1,325.4$ 1,385.9$ 1,408.8$ 4,120.1$ Foreign currency trans

  27. Slide 27: Reconciliation of Non-GAAP Measures

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved. Reconciliation of Non-GAAP Measures 27 3Q12 4Q12 FY2012 1Q13 2Q13 3Q13 YTD 3Q13 Consumer-to-Business Segment Revenues, as reported (GAAP) 147.3$ 152.1$ 603.9$ 153.7$ 153.0$ 152.3$ 459.0$ Foreign currency translation

  28. Slide 28: Reconciliation of Non-GAAP Measures

    Western Union Confidential | ©2013 Western Union Holdings, Inc. All Rights Reserved. Reconciliation of Non-GAAP Measures 28 2013 Outlook Metrics Operating income margin (GAAP) 20% Depreciation and a ortization impact 5 EBITDA margin (c) 25% Non-GAAP related notes: (a) (b) (c) Earnings before Interes

Western Union — Q3 2013 Earnings Presentation on 6ix