Western Union Company (the) · NYSE:WU
Western Union Company (the) — The Western Union Company — Q3 2020 Earnings Presentation
30 slides from Western Union Company (the)'s earnings presentation, Oct 29, 2020
Slide 1: Third Quarter 2020 Earnings Webcast and Conference Call
Third Quarter 2020 Earnings Webcast and Conference Call October 29, 2020 1
Slide 2: Brendan Metrano, Vice President of Investor Relations
Brendan Metrano Vice President of 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 pre
Slide 4: Hikmet Ersek, Chief Executive Officer
Hikmet Ersek Chief Executive Officer 4
Slide 5: Third Quarter Snapshot
Third Quarter Snapshot Results Highlight Strong Profitability Digital Drives Growth Strong Financial Position Improving Trends Operating margin Digital money transfer Returned $92 million Revenue $1.3 billion 22.7% GAAP, or 23.5% revenue increased to shareholders in adjusted* 45%, or 46% dividends E
Slide 6: A Market Leader: westernunion.com
A Market Leader: westernunion.com Customers are choosing westernunion.com to meet their needs WU.com Average Monthly Active Q3 2020 Total App Downloads Customer Growth* (In millions of downloads) 45% 47% 15% Q1 2020 Q2 2020 Q3 2020 Western Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 *A monthly
Slide 7: C2C Digital Business Has Strong Fundamentals
C2C Digital Business Has Strong Fundamentals Platform is the Payout capabilities & channel Leveraging capabilities to foundation mix are an advantage grow through partnerships Unparalleled Global WU.com Omni-Channel Network Financial Retail Account WU Insitutions Payout Payout Accounts for payout Bi
Slide 8: C2C Digital Drives Incremental Value
C2C Digital Drives Incremental Value Driving Incremental Business Strong Profitability 80% of new customers Incremental new to WU Contribution Margin (%)* customers across WU channels WU.com YTD September Account Initiated & Digital Account Partnerships Payout C2C Retail WU.com Digital Partnerships
Slide 9: 2020 Strategic Agenda
2020 Strategic Agenda Our Strategy is focused on serving our customers, enhancing our competitive position, and supporting financial strength Driving Digital Enhancing the Optimizing the Growth Global Network Organization • Over $230 million in digital • Continue to improve the • A leaner, more agil
Slide 10: Raj Agrawal, Chief Financial Officer
Raj Agrawal Chief Financial Officer 10
Slide 11: Business Trends Q3
Business Trends Q3 Consolidated revenues of $1.3 billion declined 4% compared to the prior year period, or 1% constant currency*, with improvement from the second quarter bolstered by the Consumer-to-Consumer (C2C) segment Quarterly Business Trends 23% 6% Q3 0% Q3 0% 1% Q1 Q3 Q1 Q1 Q3 Q1 Q2 -1% Q2 -
Slide 12: C2C Digital Channels Drive Profitable Growth
C2C Digital Channels Drive Profitable Growth Digital is a growth driver Digital has solid Greater mix of digital & for Western Union profitability expanded margins y/y in Q3 Revenue Per Transaction Quarterly Constant Currency Revenue Growth* 23.5% YTD September 22.3% 50% 21% 46% 14% 22% Contribution
Slide 13: Consumer-to-Consumer Q3
Consumer-to-Consumer Q3 Revenue Constant Currency Rev. Transaction % of C2C Regions Growth/(Decline) Growth/(Decline)* Growth/(Decline) Revenue North America 0% 1% 1% 38% Europe & CIS 3% 1% 24% 33% MEASA 2% 2% 15% 16% LACA (21%) (8%) (21%) 7% APAC 4% 5% (6%) 6% Total C2C (1%) 0% 6% 100% Included in
Slide 14: Business Solutions and Other Q3
Business Solutions and Other Q3 Business Solutions • 7% of Company revenue • Revenue decreased 11%, or 13% constant currency* Other (primarily retail bill payments businesses in Argentina & the U.S. as well as money orders) • 5% of Company revenue • Revenue decreased 33% *Note: See appendix for reco
Slide 15: Operating Margin Q3
Operating Margin Q3 • GAAP operating margin increased due to $92 million 23.5% in restructuring expenses incurred in the prior year 22.7% 22.3% period, productivity savings and additional cost management measures, partially offset by revenue declines associated with COVID-19 15.1% • Adjusted operati
Slide 16: Financial Highlights
Financial Highlights Quarter Ended September 30, 2020 EPS: GAAP / Adjusted* $0.55 / $0.57 YTD Cash Flow from Operations $586 million Dividends Paid $92 million Cash Balance, September 30, 2020 $1.3 billion Debt outstanding, September 30, 2020 $3.0 billion Note: No shares were repurchased during the
Slide 17: 2020 Outlook
2020 Outlook Revenue Operating Profit Margin Earnings per Share High-single digit GAAP Operating profit GAAP EPS in a range revenue decrease margin of approximately 20% of $1.72 to $1.77 and adjusted operating margin Mid-single digit adjusted of approximately 21%* Adjusted EPS in a range of constant
Slide 18: Questions and Answers
WesternUnion\WU Questions and Answers
Slide 19: Appendix
Appendix Third Quarter 2020 Earnings Webcast and Conference Call 19
Slide 20: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Western Union presents a number of non-GAAP financial measures because A non-GAAP financial measure should not be considered in isolation or as a management believes that these metrics provide meaningful supplemental substitute for the most comp
Slide 21: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Notes 3Q19 4Q19 FY2019 1Q20 2Q20 3Q20 YTD 3Q20 Consolidated Metrics Consolidated revenues (GAAP) - YoY % change (6) % (7) % (5) % (11) % (17) % (4) % (11) % Consolidated revenues (non-GAAP, constant currency adjusted and excluding Speedpay and P
Slide 22: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Notes 3Q19 4Q19 FY2019 1Q20 2Q20 3Q20 YTD 3Q20 C2C Segment Regional Metrics NA region revenues (GAAP) - YoY % change 2 % 1 % 2 % (2) % (6) % 0 % (3) % NA region foreign currency translation impact (j) 0 % 0 % 0 % 0 % 1 % 1 % 1 % NA region revenu
Slide 23: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Notes 3Q19 4Q19 FY2019 1Q20 2Q20 3Q20 YTD 3Q20 % of C2C Revenue NA region revenues 38 % 38 % 38 % 38 % 41 % 38 % 39 % EU & CIS region revenues 32 % 32 % 32 % 31 % 32 % 33 % 32 % MEASA region revenues 15 % 15 % 15 % 16 % 15 % 16 % 16 % LACA regio
Slide 24: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Three Months Ended September 30, 2020 Operating Income Before Provision for Diluted Earnings Notes Revenues Income Income Taxes Income Taxes Net Income per Share (in millions, except per share amounts) Reported results (GAAP) $ 1,258.5 $ 285.2 $
Slide 25: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Nine Months Ended September 30, 2020 Operating Income Before Provision for Diluted Earnings Notes Revenues Income Income Taxes Income Taxes Net Income per Share (in millions, except per share amounts) Reported results (GAAP) $ 3,563.2 $ 740.2 $
Slide 26: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Notes 3Q19 4Q19 FY2019 1Q20 2Q20 3Q20 YTD 3Q20 Consolidated Metrics (a) Revenues (GAAP) $ 1,306.9 $ 1,307.7 $ 5,292.1 $ 1,190.0 $ 1,114.7 $ 1,258.5 $ 3,563.2 Foreign currency translation impact (j) 45.8 41.7 238.9 47.3 46.4 41.1 134.8 Revenues (
Slide 27: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Notes 3Q19 4Q19 FY2019 1Q20 2Q20 3Q20 YTD 3Q20 Consolidated Metrics cont. (d) Effective tax rate (GAAP) 17 % 31 % 20 % 13 % 16 % 12 % 14 % Impact from restructuring-related expenses (m) 1 % 0 % 1 % 0 % 0 % 1 % (1) % Impact from acquisition and d
Slide 28: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Notes 3Q19 4Q19 FY2019 1Q20 2Q20 3Q20 YTD 3Q20 Business Solutions Segment Metrics (h) Revenues (GAAP) $ 100.6 $ 97.0 $ 388.8 $ 98.4 $ 79.4 $ 89.1 $ 266.9 Foreign currency translation impact (j) 2.9 1.0 12.1 2.2 2.0 (1.9) 2.3 Revenues (non-GAAP,
Slide 29: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures 2020 Consolidated Outlook Metrics Notes FY2020 Operating margin (GAAP) 20 % Impact from restructuring-related expenses and acquisition and divestiture costs (m), (n) 1 % Operating margin, adjusted, excluding restructuring-related expenses and ac
Slide 30: Key Statistics and Reconciliation of Non-GAAP Measures
Key Statistics and Reconciliation of Non-GAAP Measures Non-GAAP related notes: (j) Represents the impact from the fluctuation in exchange rates between all foreign currency denominated amounts and the United States dollar. Constant currency results exclude any benefit or loss caused by foreign excha
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