Western Union Company (the) · NYSE:WU
Western Union Company (the) — The Western Union Company — Q4 2019 Earnings Presentation
26 slides from Western Union Company (the)'s earnings presentation, Feb 11, 2020
Slide 1: Fourth Quarter 2019 Earnings Webcast and Conference Call
Fourth Quarter 2019 Earnings Webcast and Conference Call February 11, 2020 1
Slide 2: Brad Windbigler, Head of Investor Relations and Treasury
Brad Windbigler Head of Investor Relations and Treasury 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, Chief Executive Officer
Hikmet Ersek Chief Executive Officer 4
Slide 5: Overview
Overview Fourth quarter and full year Solid fourth quarter results; Digital money transfer Business Solutions Over $880 GAAP revenue down 7%, or revenues including wu.com and continued growth trend million increased 3% on an adjusted white label increased 24% driven by education and returned to cons
Slide 6: 2020 Strategic Objectives
2020 Strategic Shareholder Objectives 4 Value 3 Organizational Strength • Mission driven • ESG • WU Way investments and returns 2 Digital strategy • Lifetime value model Leverage our cross-border 1 platform for multiple use cases 6
Slide 7: Raj Agrawal, Chief Financial Officer
Raj Agrawal Chief Financial Officer 7
Slide 8: Revenue Q4
Revenue Q4 Consolidated revenues of $1.3 billion declined 7% compared to the prior year period, or increased 3% on an adjusted constant currency basis* *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. 8
Slide 9: Consumer-to-Consumer Q4
Consumer-to-Consumer Q4 • 86% of Company revenue • Revenue was flat, or increased 1% constant currency* • Transactions declined 1% • Cross-border principal increased 1%, or 2% constant currency* *Note: See appendix for reconciliation of Non-GAAP to GAAP financial measures. 9
Slide 10: Consumer-to-Consumer
Consumer-to-Consumer Q4 2019 Revenue Constant Currency Transaction % of C2C Regions Change Rev. Change* Change Revenue North America 1% 1% (4%) 38% Europe and CIS 1% 2% 5% 32% MEASA 0% 0% (1%) 15% LACA (2%) 6% 4% 9% APAC (10%) (10%) (7%) 6% Total C2C 0% 1% (1%) 100% Included in C2C regions above: 17
Slide 11: Business Solutions and Other Q4
Business Solutions and Other Q4 Business Solutions (B2B) • 7% of Company revenue • Revenue flat, or increased 1% constant currency* Other (primarily retail bill payments businesses in the U.S. & Argentina) • 7% of Company revenue • Revenue decreased 52% due to the divestiture of the Speedpay busines
Slide 12: Operating Margin Q4
Operating Margin Q4 • GAAP operating margin declined due to higher marketing 19.3% 19.9% investment, the impact of 18.7% 17.3% restructuring expenses, and the divestiture of Speedpay in May 2019 • Adjusted operating margin decreased primarily due to higher marketing investment and the Speedpay dives
Slide 13: Other Financial Highlights
Other Financial Highlights Year Ended December 31, 2019 Cash Flow from Operations $915 million Cash Flow from Operations, Adjusted* $1.1 billion Capital Expenditures $128 million Stock Repurchases $540 million Dividends Paid $341 million Cash Balance, December 31, 2019 $1.5 billion Debt Outstanding,
Slide 14: 2020 Outlook
2020 Outlook Revenue Earnings per Share GAAP revenue: flat to low single-digit decline, GAAP EPS in a range of $1.87 to $1.97 primarily due to the divestiture of Speedpay Adjusted EPS in a range of $1.95 to $2.05* Adjusted constant currency revenue: low single-digit increase, excluding any benefit r
Slide 15: Questions and Answers
WesternUnion\WU Questions and Answers
Slide 16: Appendix
Appendix 4th Quarter 2019 Earnings Webcast and Conference Call 16
Slide 17: Non-GAAP Measures
Non-GAAP Measures Western Union's management believes the non-GAAP financial measures (11) operating margin outlook, adjusted, excluding restructuring-related presented provide meaningful supplemental information regarding our operating expenses and acquisition and divestiture costs, (12) earnings p
Slide 18: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Notes 4Q18 FY2018 1Q19 2Q19 3Q19 4Q19 FY2019 Consolidated Metrics Revenues, as reported (GAAP) $ 1,401.6 $ 5,589.9 $ 1,337.0 $ 1,340.5 $ 1,306.9 $ 1,307.7 $ 5,292.1 Foreign currency translation impact (a) 68.9 111.9 77.2 74.2 45.8 41.7 238.9 Revenues, constant cur
Slide 19: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Notes 4Q18 FY2018 1Q19 2Q19 3Q19 4Q19 FY2019 Consolidated Metrics cont. Operating income, as reported (GAAP) $ 271.0 $ 1,122.1 $ 251.2 $ 258.9 $ 197.4 $ 226.5 $ 934.0 Operating margin, as reported (GAAP) 19.3 % 20.1 % 18.8 % 19.3 % 15.1 % 17.3 % 17.6 % Speedpay an
Slide 20: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Notes 4Q18 FY2018 1Q19 2Q19 3Q19 4Q19 FY2019 Consolidated Metrics cont. Net income, as reported (GAAP) $ 212.1 $ 851.9 $ 173.1 $ 614.8 $ 135.0 $ 135.4 $ 1,058.3 Restructuring-related expenses (e) N/A N/A N/A 7.4 91.5 16.6 115.5 Acquisition and divestiture costs (f
Slide 21: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Notes 4Q18 FY2018 1Q19 2Q19 3Q19 4Q19 FY2019 Consolidated Metrics cont. Effective tax rate, as reported (GAAP) 10 % 14 % 20 % 18 % 17 % 31 % 20 % Impact from restructuring-related expenses (e) N/A N/A N/A 0 % 1 % 0 % 1 % Impact from acquisition and divestiture cos
Slide 22: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Notes 4Q18 FY2018 1Q19 2Q19 3Q19 4Q19 FY2019 Consumer-to-Consumer Segment cont. NA region revenue change, as reported (GAAP) 0 % 2 % 1 % 2 % 2 % 1 % 2 % NA region foreign currency translation impact (a) 0 % 0 % 0 % 0 % 0 % 0 % 0 % NA region revenue change, constan
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Notes 4Q18 FY2018 1Q19 2Q19 3Q19 4Q19 FY2019 Business Solutions Segment Revenues, as reported (GAAP) $ 96.8 $ 386.8 $ 95.6 $ 95.6 $ 100.6 $ 97.0 $ 388.8 Foreign currency translation impact (a) 2.6 (2.6) 4.6 3.6 2.9 1.0 12.1 Revenues, constant currency adjusted $ 9
Slide 24: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Digital Money Transfer Revenues Notes 4Q19 Digital money transfer revenue change (GAAP) 24 % Digital money transfer foreign currency translation impact (a) 1% Digital money transfer revenue change, constant currency adjusted 25 % Cash Flows from Operating Activiti
Slide 25: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Non-GAAP related notes: (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 be
Slide 26: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Non-GAAP related notes (continued): (c) Earnings before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) results from taking operating income and adjusting for depreciation and amortization expenses. EBITDA results provide an additional performance measu
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