Western Union Company (the) · NYSE:WU

Western Union Company (the) — The Western Union Company — Q1 2011 Earnings Presentation

27 slides from Western Union Company (the)'s earnings presentation, Apr 26, 2011

  1. Slide 1: Western Union First Quarter 2011 Earnings Webcast & Conference Call

    Western Union First Quarter 2011 Earnings Webcast & Conference Call April 26, 2011

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

    Mik S Mike Salop l Senior Vice President, Investor Relations

  3. Slide 3: Safe Harbor

    Safe Harbor This press release 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

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

    Hikmet Ersek President & Chief Executive Officer

  5. Slide 5: Q1 Highlights

    Q1 Highlights  Total revenue increased 4%  Strong trends continue in C2C  5% revenue growth, reported and constant currency  Domestic moneyy transfer revenue increased 8%  Bill Payments  Revenue decline moderated to -2% 2%  Margins improved versus Q4  Business Solutions revenue grew 13% Good

  6. Slide 6: Electronic Channels & Prepaid Q1 Highlights

    Electronic Channels & Prepaid Q1 Highlights  Account-based money transfer  Over 35% transaction growth g  Agreements in place with over 45 banks globally  Westernunion.com  Over O 40% ttransaction ti growth th iin iinternational t ti l markets k t  Transactions increased by over 15% globally 

  7. Slide 7: Go To Market Leadership

    Go To Market Leadership • Consumer Money Transfer and Bill Payments • Global Gl b l SSales l and dNNetwork kMManagement Stewart Stockdale EVP & President Global Consumer Financial Services • New Products and Services • Business Solutions • Electronic Channels David Yates EVP & President Business Dev

  8. Slide 8: Scott Scheirman, Executive Vice President & Chief Financial Officer

    Scott Scheirman Executive Vice President & Chief Financial Officer

  9. Slide 9: Revenue

    Revenue ($ in millions) $1,233 , $1,283 , $29 $29  Consolidated revenue up 4%, $238 $256 reported and constant currency  Transaction fees increased 3% $966 $998  Foreign g exchange g revenue increased 8% Q1 2010 Q1 2011 Transaction Fee Foreign Exchange Other Note: See appendix for reconciliation

  10. Slide 10: C2C Remittance Trends

    C2C Remittance Trends C2C Transactions (millions)  C2C Revenue growth 5%, reported and constant currency +7% 53 50  Total Q1 Western Union cross- border principal of $17 billion  Increased 7% on a reported basis  Increased 6% constant currency  Principal per transaction  Increased 1% on a repo

  11. Slide 11: Consumer-to-Consumer: Europe, Middle East, Africa, S. Asia

    Consumer-to-Consumer Q1 2011 Revenue Transactions Europe, Middle East, Africa, S. Asia 2% 4%  43% of Western Union revenue  Europe constant currency revenue trends similar to Q4  India grew revenue 8% and transactions 6%  Completed acquisition of super-agent, Angelo Costa, earlier this month 11

  12. Slide 12: Consumer-to-Consumer: Americas

    Consumer-to-Consumer Q1 2011 Revenue Transactions Americas 6% 8%  32% of Western Union revenue  Domestic money transfer grew revenue 8% and transactions 21%  Mexico grew revenue and transactions 1%  Signed US Bank to account based money transfer 12

  13. Slide 13: Consumer-to-Consumer: Asia Pacific

    Consumer-to-Consumer Q1 2011 Revenue Transactions Asia Pacific 14% 11%  9% off Western W t Union U i revenue  Many markets contributing to growth  China grew revenue 12% and transactions 5%  Signed China Construction Bank 13

  14. Slide 14: C2C Transaction and Revenue Growth

    C2C Transaction and Revenue Growth Q1 2011 +7% +5% +5% Transaction T ti P i Reductions Price R d ti Oth Mix Other Mi C Constant t t C Currency IImpactt R Reported t d Growth Currency Revenue Growth Revenue Growth Note: See appendix for reconciliation of Non-GAAP to GAAP measures. 14

  15. Slide 15: Global Business Payments

    Global Business Payments Q1 2011 Revenue Transactions Global Business Payments 0% 8%  14% of Western Union revenue  Bill payments revenue decline moderated to -2%  Business Solutions grew revenue 13% 15

  16. Slide 16: Operating Margin – Q1 2011

    Operating Margin – Q1 2011 25.6% 25.6% 26.3% 24 4% 24.4%  Operating margin excluding restructuring, +70 basis points • Revenue leverage g • Other efficiencies, including restructuring savings • Negative foreign exchange impact • Increased investment spending GAAP Excluding Restructuring (1) Q1 2011

  17. Slide 17: C2C Operating Margin

    C2C Operating Margin 28 6% 28.6%  C2C 84% of total company revenue 27.4% 27.0%  Operating Margin +120 basis points YoY  Improvement due to the same factors as for consolidated margin Q1 2010 Q4 2010 Q1 2011 17

  18. Slide 18: Global Business Payments Operating Margin

    Global Business Payments Operating Margin  GBP 14% of total company revenue 20.7%  Operating margin: vs. Prior Year 16 5% 16.5%  Revenue declines and mix shifts in U.S. bill payments 13.3%  Investments in Business Solutions vs Prior Quarter vs.  Lower integration expenses in Business Solutions

  19. Slide 19: Financial Strength

    Financial Strength Q1 2011 Cash Flow from Operations $252 million Capital Expenditures $22 million St k Repurchases Stock R h $525 million illi Dividends Paid $45 million Cash Balance, March 31, 2011 $2.2 billion Debt Outstanding, March 31, 2011 $3.6 billion 19

  20. Slide 20: 2011 Outlook

    2011 Outlook  Constant currency revenue in the range of 3% to 4%  GAAP revenue growth similar to constant currency  GAAP operating margin of approximately 26%  Operating margin of approximately 27%, excluding restructuring charges  GAAP EPS of $1.41 to $1.46  EPS excluding g restructuring g ch

  21. Slide 21: Questions & Answers

    Questions & Answers

  22. Slide 22: Appendix

    Appendix Firstt Quarter Fi Q t 2011 E Earnings i Webcast & Conference Call April 26 26, 2011 22

  23. Slide 23: Non-GAAP Measures

    Non-GAAP Measures Western Union's management believes the non-GAAP 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 underlyin

  24. Slide 24: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 1Q10 2Q10 3Q10 4Q10 FY2010 1Q11 Consolidated Metrics Revenues, as reported (GAAP) $ 1,232.7 $ 1,273.4 $ 1,329.6 $ 1,357.0 $ 5,192.7 $ 1,283.0 Foreign currency translation impact (a) (20.0) 16.1 22.2 18.5 36.8 2.3 Revenues, constant currency adjusted $ 1,212.7 $ 1,

  25. Slide 25: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 1Q10 2Q10 3Q10 4Q10 FY2010 1Q11 Consumer-to-Consumer Segment Revenues, as reported (GAAP) $ 1,030.2 $ 1,073.1 $ 1,128.3 $ 1,151.8 $ 4,383.4 $ 1,078.1 Foreign currency translation impact (a) (21 9) (21.9) 15 0 15.0 21 2 21.2 18 0 18.0 32 3 32.3 22 2.2 Revenues, con

  26. Slide 26: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures 2011 EPS Outlook Range EPS guidance (GAAP) ($ - dollars) $ 1.41 $ 1.46 I Impact t from f restructuring t t i andd related l t d expenses, nett off income i tax t benefit b fit (b) ($ - dollars) d ll ) 0 06 0.06 0 06 0.06 EPS guidance, restructuring adjusted ($ - d

  27. Slide 27: Footnote explanations

    Footnote explanations a) 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 exchange fluctuations between foreign currencies and the United

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