Western Union Company (the) · NYSE:WU
Western Union Company (the) — The Western Union Company — Q4 2016 Earnings Presentation
27 slides from Western Union Company (the)'s earnings presentation, Feb 9, 2017
Slide 1: This Is Fourth Quarter 2016 Earnings Webcast & Conference Call
THIS IS FOURTH QUARTER 2016 Earnings Webcast & aul Conference Call February 9, 2017 ed ' / WESTERN i - moving money for better onion WW
Slide 2: Mike Salop, Senior Vice President, Investor Relations
Mike Salop Senior Vice President, Investor Relations 2
Slide 3: 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 difficult to pred
Slide 4: Hikmet Ersek, President & Chief Executive Officer
Hikmet Ersek President & Chief Executive Officer 4
Slide 5: Overview
Overview Solid business performance in the fourth quarter • GAAP revenues declined 1%, while constant currency revenues increased 4%* • Consumer money transfer performance driven by strong results from westernunion.com and the U.S. business • Westernunion.com transactions increased 28% • Settlements
Slide 6: Overview: 2017 Outlook
Overview 2017 Outlook • Expect business performance to be similar to 2016 • Continue strategic focus on mobile and online, account payout and customer experience • Implementation of WU Way transformation program Increased quarterly dividend by 9% and announced new $1.2 billion share repurchase autho
Slide 7: Raj Agrawal, Executive Vice President & Chief Financial Officer
Raj Agrawal Executive Vice President & Chief Financial Officer 7
Slide 8: Revenue
Revenue ($ in millions) $1,380 $1,372 Consolidated revenue $32 $34 decreased 1%, or increased 4% constant currency* $364 $384 Transaction fee revenue decreased 3% Foreign exchange revenue $984 $954 increased 6% Q4 2015 Q4 2016 Transaction Fee Foreign Exchange Other *Note: See appendix for reco
Slide 9: Consumer-to-Consumer Q4
Consumer-to-Consumer Q4 80% of Company revenue Revenue flat with prior year period, or increased 3% constant currency* Total transactions increased 2% Cross-border principal decreased 1%, or increased 1% constant currency* *Note: See appendix for reconciliation of Non-GAAP to GAAP financial
Slide 10: C2C Transaction and Revenue Analysis
C2C Transaction and Revenue Analysis Q4 2016 *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. 10
Slide 11: Consumer-to-Consumer
Consumer-to-Consumer Q4 2016 Constant Revenue Currency Rev. Transaction Growth/ Growth/ Growth/ % of C2C Decline Regions Decline* Decline Revenue North America 7% 8% 7% 29% Europe and CIS -1% 3% 5% 26% Middle East and Africa -8% -5% -9% 19% Asia Pacific -7% -5% -9% 14% LACA 11% 16% 14% 12% Total C2C
Slide 12: C2B and B2B Q4
C2B and B2B Q4 Consumer-to-Business 11% of Company revenue Revenue declined 4%, or increased 9% constant currency* Business Solutions 7% of Company revenue Revenue decreased 3%, or increased 1% constant currency* *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measur
Slide 13: Operating Margin Q4
Operating Margin Q4 25.0% 20.4% 19.7% * 15.0% Operating margin • GAAP margin negatively impacted 5.0% by $571 million settlement charge with government agencies and $13 -5.0% million of costs related to the WU Way transformation program -15.0% • Adjusted margin negatively -22.9% impacted by foreig
Slide 14: C2C Operating Margin Q4
C2C Operating Margin Q4 40.0% 35.0% Operating margin 30.0% 24.0% 22.8% 25.0% • Negatively impacted by foreign 20.0% exchange and higher technology expense 15.0% 10.0% 5.0% 0.0% Q4 2015 Q4 2016 14
Slide 15: C2B Operating Margin Q4
C2B Operating Margin Q4 25.0% 20.0% 15.0% Operating margin 11.9% • Negatively impacted by customer and 10.0% funding mix in the U.S. electronic business 5.7% 5.0% 0.0% Q4 2015 Q4 2016 15
Slide 16: B2B Operating Profit
B2B Operating Profit Operating Profit Operating profit of $10 million in the current period increased from $4 million in the prior year period, primarily due to lower compensation related expenses Depreciation and amortization of approximately $12 million, compared to $13 million in the prior
Slide 17: Financial Strength
Financial Strength Year Ended December 31, 2016 Cash Flow from Operations $1.0 billion Capital Expenditures $230 million Stock Repurchases $481 million Dividends Paid $312 million Cash Balance, December 31, 2016 $878 million Debt Outstanding, December 31, 2016 $2.8 billion 17
Slide 18: 2017 Outlook
2017 Outlook Revenue • Flat to low single digit decrease in GAAP revenues, or a low single digit increase constant currency* Operating Profit Margin • GAAP operating margin of approximately 18% and adjusted operating margin of approximately 20%* Earnings per Share • GAAP EPS in a range of $1.4
Slide 19: Questions & Answers
Questions & Answers 19
Slide 20: Appendix
Appendix Fourth Quarter 2017 Earnings Webcast & Conference Call February 9, 2017 20
Slide 21: Non-GAAP Measures
Non-GAAP Measures 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 understanding our financial results and to better analyze trends in our
Slide 22: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 22
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 23
Slide 24: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 24
Slide 25: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 25
Slide 26: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 26
Slide 27: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 27
The Western Union Company — Q4 2016 Earnings Presentation on 6ix