Digital money transfer revenues on track to
exceed $1 billion in 2021; first quarter revenue growth of
45%
WU.com delivers fourth consecutive quarter
with growth of 50% or more for transactions and more than 40% for
average monthly active users
Total Company revenues grew 2% to $1.2
billion; Earnings Per Share (EPS) of $0.44
Reaffirms 2021 financial outlook for revenue
and margin; raises GAAP EPS to $2.06 - $2.16
The Western Union Company (NYSE: WU), a global leader in
cross-border, cross-currency money movement and payments, today
reported first quarter financial results and updated its 2021
financial outlook, which includes a $0.06 increase in the GAAP EPS
range primarily from the sale of an investment in the second
quarter of 2021.
The Company’s first quarter revenue of $1.2 billion increased 2%
on both a reported and constant currency basis compared to the
prior year period, including a 1% benefit from inflation in
Argentina. The increase in revenue was led by strength in digital
money transfer which grew 45% to a new quarterly high of $242
million.
EPS in the first quarter was $0.44. GAAP EPS in the prior year
period was $0.42, which included costs related to the Company’s
restructuring program that was completed in the fourth quarter of
2020, while adjusted EPS was $0.44. EPS in the current period
benefitted from revenue growth, a lower effective tax rate, and
share repurchases, offset by increased investments in strategic
initiatives and marketing and compensation-related expenses.
President and CEO Hikmet Ersek said, “2021 is an important year
for Western Union and we got off to a healthy start led by the
continued strong growth of our market-leading digital business that
generated over $240 million of revenue in the first quarter,
putting us on track to exceed $1 billion of digital revenue this
year. While additional waves of COVID-19 continue to affect
countries around the world, we are optimistic that conditions may
continue to improve over the year, supporting the momentum of our
business and allowing us to achieve our 2021 financial
outlook.”
Ersek added, “Our growth strategy has positioned us well for
today’s dynamic environment and to lead the digital transformation
of cross-border, Consumer-to-Consumer payments, and also leverage
our capabilities in the rapidly growing cross-border payments
market across different use cases. We remain focused on executing,
evolving, and investing behind our strategy to ensure that we can
capitalize on these exciting growth opportunities and develop an
ecosystem of services centered around cross-border financial
transactions.”
CFO Raj Agrawal stated, “We are encouraged by our first quarter
performance that puts us on track to achieve our 2021 financial
outlook. Our digital consumer business maintained the elevated
levels of growth that we saw last year, while trends for our retail
consumer business and Business Solutions segment improved
sequentially. We also delivered operating margin of 19%, despite
making significant investments in initiatives that were delayed in
2020 due to the effects of COVID-19, and we resumed returning cash
to investors through share repurchases. Given our solid start to
the year, we are affirming our revenue and operating margin
financial outlook and raising our GAAP EPS financial outlook for
2021.”
Q1 Business Highlights
- Consumer-to-Consumer (C2C) transactions increased 9% in the
quarter, while revenues increased 4% on a reported basis, or 2%
constant currency. Within the C2C segment, cross-border money
transfer revenues grew 6% partially offset by declines in domestic
money transfers. Transaction growth was led by Europe and CIS, U.S.
outbound, and the Middle East, partially offset by declines in U.S.
domestic money transfer and Latin America and the Caribbean.
- Digital money transfer revenues increased 45% on a reported
basis, or 44% constant currency, and represented 23% and 34% of
total C2C revenues and transactions, respectively. Digital money
transfer reached new quarterly highs for principal and revenues.
Westernunion.com revenue grew 38% on a reported basis, or 37%
constant currency, including cross-border revenue growth of
49%.
- Westernunion.com average monthly active users for the first
quarter increased 46% year-over-year. Westernunion.com was the most
downloaded mobile app among peer money transfer companies during
the first quarter, according to data provided by mobile app
marketing firm Sensor Tower1.
- Western Union Business Solutions revenues declined 2% on a
reported basis, or 8% constant currency, and continued to improve
sequentially, with declines due to lower hedging activity and the
ongoing impact of COVID-19 on certain segment verticals. Other
revenues, which consists primarily of retail bill payments in the
U.S. and Argentina and money orders, declined 18% due to the
ongoing impact of COVID-19 and the depreciation of the Argentine
peso. Business Solutions and Other represented 8% and 5% of total
Company revenue, respectively.
Q1 Financial Highlights
- The operating margin in the quarter was 19.2%. Prior year
period GAAP operating margin was 19.6% and included approximately
$11 million of restructuring expenses, while adjusted operating
margin was 20.5%. The decrease in operating margin was driven by
higher investments in strategic initiatives and marketing and
compensation-related expenses, partially offset by changes in
foreign exchange.
- The effective tax rate in the quarter was 10.4%. In the prior
year period, both the GAAP and adjusted effective tax rates were
12.5%. The decrease in the Company’s effective tax rate was
primarily due to changes in composition between higher-taxed and
lower-taxed foreign earnings and an increase in discrete tax
benefits.
- Cash flow from operating activities for the quarter was $176
million. The Company returned $172 million to shareholders in the
first quarter consisting of $97 million in dividends and $75
million of share repurchases.
________________ 1
Data obtained from Sensor Tower App
Install Market Share Report
2021 Outlook
The Company today reaffirmed its 2021 financial outlook for
revenue growth and operating margin and increased the GAAP EPS
outlook by $0.06 reflecting the impact of two items realized in the
second quarter of 2021 including the sale of an investment,
partially offset by expenses related to the early retirement of the
Company’s notes due in 2022. Excluding the impact of these two
items, the 2021 EPS outlook is unchanged. The outlook provided
today assumes no material worsening in current global
macro-economic conditions or the COVID-19 pandemic:
Revenue
GAAP: mid-to-high single digit
increase
Constant currency: mid-single digit
increase, excluding Argentina inflation impact
Operating Profit Margin
Approximately 21.5%
Effective Tax Rate (GAAP and Adjusted)
Mid-teens range
EPS (GAAP)
In a range of $2.06 - $2.16
EPS (Adjusted)
In a range of $2.00 - $2.10
Adjustment Items
Adjusted tax rate and earnings per share metrics for 2021
periods exclude two items realized in the second quarter of 2021
including the impact from the sale of an investment and expenses
related to the early retirement of the Company’s notes due in 2022,
net of related taxes, as applicable.
Adjusted operating profit, tax rate, and earnings per share
metrics for 2020 periods exclude restructuring expenses and
acquisition and divestiture costs, net of related taxes, as
applicable.
Although the Company has previously incurred and can reasonably
be expected to incur restructuring costs in the future, these
expenses were specific to the implementation of a global strategy
initiative and the Company has therefore provided adjusted
financial results that exclude these expenses.
Additional Statistics
Additional key statistics for the quarter and historical trends
can be found in the supplemental tables included with this press
release.
All amounts included in the supplemental tables to this press
release are rounded to the nearest tenth of a million, except as
otherwise noted. As a result, the percentage changes and margins
disclosed herein may not recalculate precisely using the rounded
amounts provided.
Non-GAAP Measures
Western Union presents a number of non-GAAP financial measures
because management believes that these metrics provide meaningful
supplemental information in addition to the GAAP metrics and
provide comparability and consistency to prior periods. Constant
currency results assume foreign revenues are translated from
foreign currencies to the U.S. dollar, net of the effect of foreign
currency hedges, at rates consistent with those in the prior
year.
Reconciliations of non-GAAP to comparable GAAP measures are
available in the accompanying schedules and in the “Investor
Relations” section of the Company’s website at
https://ir.westernunion.com.
Investor and Analyst Conference Call
and Slide Presentation
The Company will host a conference call and webcast, including
slides, at 4:30 p.m. Eastern Time today. To listen to the
conference call via telephone, dial +1 (888) 317-6003 (U.S.) or +1
(412) 317-6061 (outside the U.S.) ten minutes prior to the start of
the call. The pass code is 0142810.
The conference call and accompanying slides will be available
via webcast at https://ir.westernunion.com. Registration for the
event is required, so please register at least five minutes prior
to the scheduled start time.
A webcast replay will be available at
https://ir.westernunion.com.
Please note: All statements made by Western Union officers on
this call are the property of Western Union and subject to
copyright protection. Other than the replay, Western Union has not
authorized, and disclaims responsibility for, any recording, replay
or distribution of any transcription of this call.
Safe Harbor Compliance Statement for Forward-Looking
Statements
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 predict. Actual outcomes and
results may differ materially from those expressed in, or implied
by, our forward-looking statements. Words such as "expects,"
"intends," "targets," "anticipates," "believes," "estimates,"
"guides," "provides guidance," "provides outlook," and other
similar expressions or future or conditional verbs such as "may,"
"will," "should," "would," "could," and "might" are intended to
identify such forward-looking statements. Readers of this press
release of The Western Union Company (the "Company," "Western
Union," "we," "our," or "us") should not rely solely on the
forward-looking statements and should consider all uncertainties
and risks discussed in the Risk Factors section and throughout the
Annual Report on Form 10-K for the year ended December 31, 2020.
The statements are only as of the date they are made, and the
Company undertakes no obligation to update any forward-looking
statement.
Possible events or factors that could cause results or
performance to differ materially from those expressed in our
forward-looking statements include the following: (i) events
related to our business and industry, such as: changes in general
economic conditions and economic conditions in the regions and
industries in which we operate, including global economic downturns
and trade disruptions, or significantly slower growth or declines
in the money transfer, payment service, and other markets in which
we operate, including downturns or declines related to
interruptions in migration patterns or other events, such as public
health emergencies, epidemics, or pandemics such as COVID-19, civil
unrest, war, terrorism, or natural disasters, or non-performance by
our banks, lenders, insurers, or other financial services
providers; failure to compete effectively in the money transfer and
payment service industry, including among other things, with
respect to price, with global and niche or corridor money transfer
providers, banks and other money transfer and payment service
providers, including digital, mobile and internet-based services,
card associations, and card-based payment providers, and with
digital currencies and related protocols, and other innovations in
technology and business models; political conditions and related
actions, including trade restrictions and government sanctions, in
the United States and abroad, which may adversely affect our
business and economic conditions as a whole, including
interruptions of United States or other government relations with
countries in which we have or are implementing significant business
relationships with agents, clients, or other partners;
deterioration in customer confidence in our business, or in money
transfer and payment service providers generally; failure to
maintain our agent network and business relationships under terms
consistent with or more advantageous to us than those currently in
place; our ability to adopt new technology and develop and gain
market acceptance of new and enhanced services in response to
changing industry and consumer needs or trends; changes in, and
failure to manage effectively, exposure to foreign exchange rates,
including the impact of the regulation of foreign exchange spreads
on money transfers and payment transactions; any material breach of
security, including cybersecurity, or safeguards of or
interruptions in any of our systems or those of our vendors or
other third parties; cessation of or defects in various services
provided to us by third-party vendors; mergers, acquisitions, and
the integration of acquired businesses and technologies into our
Company, divestitures, and the failure to realize anticipated
financial benefits from these transactions, and events requiring us
to write down our goodwill; decisions to change our business mix;
our ability to realize the anticipated benefits from
restructuring-related initiatives, which may include decisions to
downsize or to transition operating activities from one location to
another, and to minimize any disruptions in our workforce that may
result from those initiatives; failure to manage credit and fraud
risks presented by our agents, clients, and consumers; changes in
tax laws or their interpretation, any subsequent regulation, and
potential related state income tax impacts, and unfavorable
resolution of tax contingencies; adverse rating actions by credit
rating agencies; our ability to protect our trademarks, patents,
copyrights, and other intellectual property rights and to defend
ourselves against potential intellectual property infringement
claims; our ability to attract and retain qualified key employees
and to manage our workforce successfully; material changes in the
market value or liquidity of securities that we hold; restrictions
imposed by our debt obligations; (ii) events related to our
regulatory and litigation environment, such as: liabilities or loss
of business resulting from a failure by us, our agents, or their
subagents to comply with laws and regulations and regulatory or
judicial interpretations thereof, including laws and regulations
designed to protect consumers, or detect and prevent money
laundering, terrorist financing, fraud, and other illicit activity;
increased costs, operational burden or loss of business due to
regulatory initiatives and changes in laws, including changes in
interpretations, resulting in increasing regulations and industry
practices and standards in the United States and abroad, affecting
us, our agents, or their subagents, our external business partners
such as financial institutions, or the banks with which we or our
agents maintain bank accounts needed to provide our services,
including related to anti-money laundering regulations, anti-fraud
measures, our licensing arrangements, customer due diligence, agent
and subagent due diligence, registration and monitoring
requirements, consumer protection requirements, remittances, and
immigration; liabilities, increased costs or loss of business and
unanticipated developments resulting from governmental
investigations and consent agreements with or enforcement actions
by regulators; liabilities resulting from litigation, including
class-action lawsuits and similar matters, and regulatory
enforcement actions, including costs, expenses, settlements, and
judgments; failure to comply with regulations and evolving industry
standards regarding consumer privacy, data use, the transfer of
personal data between jurisdictions, and information security,
including with respect to the General Data Protection Regulation in
the European Union and the California Consumer Privacy Act; failure
to comply with the Dodd-Frank Wall Street Reform and Consumer
Protection Act, as well as regulations issued pursuant to it and
the actions of the Consumer Financial Protection Bureau and similar
legislation and regulations enacted by other governmental
authorities in the United States and abroad related to consumer
protection and derivative transactions; effects of unclaimed
property laws or their interpretation or the enforcement thereof;
failure to maintain sufficient amounts or types of regulatory
capital or other restrictions on the use of our working capital to
meet the changing requirements of our regulators worldwide; changes
in accounting standards, rules and interpretations, or industry
standards affecting our business; and (iii) other events, such as:
catastrophic events; and management’s ability to identify and
manage these and other risks.
About Western Union
The Western Union Company (NYSE: WU) is a global leader in
cross-border, cross-currency money movement and payments. Western
Union’s platform provides seamless cross-border flows and its
leading global financial network bridges more than 200 countries
and territories and over 130 currencies. We connect businesses,
financial institutions, governments, and consumers through one of
the world’s widest reaching networks, accessing billions of bank
accounts, millions of digital wallets and cards, and over half a
million retail locations. Western Union connects the world to bring
boundless possibilities within reach. For more information, visit
www.westernunion.com.
WU-G
THE WESTERN UNION
COMPANY
KEY STATISTICS
(Unaudited)
Notes*
1Q20
2Q20
3Q20
4Q20
FY2020
1Q21
Consolidated Metrics Consolidated revenues (GAAP) - YoY %
change
(11
)
%
(17
)
%
(4
)
%
(3
)
%
(9
)
%
2
%
Consolidated revenues (non-GAAP, constant currency and excluding
Speedpay and Paymap) - YoY % change
(a)
(1
)
%
(11
)
%
(1
)
%
(1
)
%
(3
)
%
2
%
Consolidated operating margin (GAAP)
19.6
%
19.9
%
22.7
%
17.9
%
20.0
%
19.2
%
Consolidated operating margin, excluding restructuring-related
expenses and acquisition and divestiture costs (non-GAAP)
(b)
20.5
%
20.4
%
23.5
%
18.8
%
20.8
%
19.2
%
EBITDA margin (non-GAAP)
(c)
24.5
%
25.0
%
27.0
%
22.3
%
24.7
%
23.7
%
Consumer-to-Consumer (C2C) Segment Metrics
Revenues (GAAP) - YoY % change
(4
)
%
(12
)
%
(1
)
%
0
%
(4
)
%
4
%
Revenues (non-GAAP, constant currency) - YoY % change
(e)
(3
)
%
(11
)
%
0
%
0
%
(3
)
%
2
%
Transactions (in millions)
66.8
68.0
77.3
78.4
290.5
73.0
Transactions - YoY % change
(3
)
%
(8
)
%
6
%
6
%
0
%
9
%
Total principal ($- billions)
$
20.6
$
21.9
$
26.9
$
26.7
$
96.1
$
25.7
Principal per transaction, as reported - YoY % change
2
%
7
%
13
%
14
%
9
%
15
%
Principal per transaction (constant currency) - YoY % change
(f)
4
%
9
%
14
%
13
%
10
%
12
%
Cross-border principal, as reported - YoY % change
0
%
1
%
23
%
24
%
12
%
28
%
Cross-border principal (constant currency) - YoY % change
(g)
2
%
3
%
24
%
23
%
13
%
26
%
Operating margin
20.7
%
21.8
%
24.6
%
20.5
%
21.9
%
19.6
%
Digital money transfer revenues (GAAP) - YoY % change (1)
21
%
48
%
45
%
36
%
38
%
45
%
Digital money transfer foreign currency translation impact
(j)
1
%
2
%
1
%
(1
)
%
0
%
(1
)
%
Digital money transfer revenues (non-GAAP, constant currency) - YoY
% change (1)
22
%
50
%
46
%
35
%
38
%
44
%
Digital money transfer transactions - YoY % change
42
%
96
%
96
%
83
%
81
%
77
%
westernunion.com revenues (GAAP) - YoY % change
(gg)
13
%
33
%
33
%
27
%
27
%
38
%
westernunion.com foreign currency translation impact
(j)
1
%
1
%
(1
)
%
(1
)
%
0
%
(1
)
%
westernunion.com revenues (non-GAAP, constant currency) - YoY %
change
(gg)
14
%
34
%
32
%
26
%
27
%
37
%
westernunion.com transactions - YoY % change
(gg)
15
%
50
%
53
%
56
%
44
%
55
%
C2C Segment Regional Metrics - YoY % change
NA region revenues (GAAP)
(aa), (bb)
(2
)
%
(6
)
%
0
%
(3
)
%
(3
)
%
0
%
NA region foreign currency translation impact
(j)
0
%
1
%
1
%
0
%
0
%
1
%
NA region revenues (non-GAAP, constant currency)
(aa), (bb)
(2
)
%
(5
)
%
1
%
(3
)
%
(3
)
%
1
%
NA region transactions
(aa), (bb)
(5
)
%
(7
)
%
1
%
(1
)
%
(3
)
%
1
%
EU & CIS region revenues (GAAP)
(aa), (cc)
(5
)
%
(10
)
%
3
%
3
%
(2
)
%
8
%
EU & CIS region foreign currency translation impact
(j)
0
%
1
%
(2
)
%
(3
)
%
(1
)
%
(4
)
%
EU & CIS region revenues (non-GAAP, constant currency)
(aa), (cc)
(5
)
%
(9
)
%
1
%
0
%
(3
)
%
4
%
EU & CIS region transactions
(aa), (cc)
1
%
4
%
24
%
23
%
13
%
28
%
MEASA region revenues (GAAP)
(aa), (dd)
3
%
(13
)
%
2
%
1
%
(2
)
%
1
%
MEASA region foreign currency translation impact
(j)
0
%
1
%
0
%
(1
)
%
0
%
(1
)
%
MEASA region revenues (non-GAAP, constant currency)
(aa), (dd)
3
%
(12
)
%
2
%
0
%
(2
)
%
0
%
MEASA region transactions
(aa), (dd)
1
%
(1
)
%
15
%
12
%
7
%
13
%
LACA region revenues (GAAP)
(aa), (ee)
(11
)
%
(45
)
%
(21
)
%
(9
)
%
(22
)
%
3
%
LACA region foreign currency translation impact
(j)
8
%
10
%
13
%
11
%
11
%
5
%
LACA region revenues (non-GAAP, constant currency)
(aa), (ee)
(3
)
%
(35
)
%
(8
)
%
2
%
(11
)
%
8
%
LACA region transactions
(aa), (ee)
(5
)
%
(41
)
%
(21
)
%
(13
)
%
(20
)
%
(8
)
%
APAC region revenues (GAAP)
(aa), (ff)
(10
)
%
(14
)
%
4
%
8
%
(3
)
%
9
%
APAC region foreign currency translation impact
(j)
1
%
1
%
1
%
(2
)
%
0
%
(6
)
%
APAC region revenues (non-GAAP, constant currency)
(aa), (ff)
(9
)
%
(13
)
%
5
%
6
%
(3
)
%
3
%
APAC region transactions
(aa), (ff)
(14
)
%
(18
)
%
(6
)
%
(3
)
%
(10
)
%
(2
)
%
% of C2C Revenue
NA region revenues
(aa), (bb)
38
%
41
%
38
%
37
%
38
%
37
%
EU & CIS region revenues
(aa), (cc)
31
%
32
%
33
%
33
%
33
%
33
%
MEASA region revenues
(aa), (dd)
16
%
15
%
16
%
15
%
15
%
16
%
LACA region revenues
(aa), (ee)
9
%
6
%
7
%
8
%
8
%
8
%
APAC region revenues
(aa), (ff)
6
%
6
%
6
%
7
%
6
%
6
%
Digital money transfer revenues
(aa)
16
%
22
%
21
%
21
%
20
%
23
%
Business Solutions Segment Metrics
Revenues (GAAP) - YoY % change
3
%
(17
)
%
(11
)
%
(8
)
%
(8
)
%
(2
)
%
Revenues (non-GAAP, constant currency) - YoY % change
(h)
5
%
(15
)
%
(13
)
%
(11
)
%
(8
)
%
(8
)
%
Operating margin
14.1
%
1.6
%
10.5
%
(0.2
)
%
6.9
%
13.1
%
Other (primarily bill payments businesses in Argentina and the
United States and money orders)
Revenues (GAAP) - YoY % change
(59
)
%
(56
)
%
(33
)
%
(29
)
%
(48
)
%
(18
)
%
Operating margin
26.1
%
21.9
%
20.0
%
15.8
%
21.2
%
22.6
%
% of Total Company Revenue (GAAP) Consumer-to-Consumer
segment revenues
85
%
88
%
88
%
88
%
87
%
87
%
Business Solutions segment revenues
8
%
7
%
7
%
7
%
8
%
8
%
Other revenues
7
%
5
%
5
%
5
%
5
%
5
%
________________
(1)
Represents revenue from
transactions conducted and funded through westernunion.com and
transactions initiated on internet and mobile applications hosted
by the Company's third-party white label or co-branded digital
partners.
*
See the “Notes to Key Statistics”
section of the press release for the applicable Note references and
the reconciliation of non-GAAP financial measures, unless already
reconciled herein.
THE WESTERN UNION COMPANY CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (Unaudited) (in millions, except per share amounts)
Three Months Ended
March 31,
2021
2020
% Change
Revenues $
1,210.0
$
1,190.0
2
%
Expenses: Cost of services
706.0
683.4
3
%
Selling, general, and administrative
271.2
273.4
(1
)
%
Total operating expenses (a)
977.2
956.8
2
%
Operating income
232.8
233.2
0
%
Other income/(expense): Interest income
0.4
1.6
(75
)
%
Interest expense
(28.4
)
(32.9
)
(14
)
%
Other expense, net
(1.9
)
—
(b)
Total other expense, net
(29.9
)
(31.3
)
(4
)
%
Income before income taxes
202.9
201.9
0
%
Provision for income taxes
21.1
25.2
(17
)
%
Net income $
181.8
$
176.7
3
%
Earnings per share: Basic $
0.44
$
0.43
2
%
Diluted $
0.44
$
0.42
5
%
Weighted-average shares outstanding: Basic
411.7
414.3
Diluted
414.3
418.3
________________
(a)
For the three months ended March
31, 2020, the Company incurred $10.5 million related to its
restructuring plan, with a majority related to consulting service
fees, severance and other costs, of which $0.9 million and $9.6
million were included in Cost of services and Selling, general, and
administrative, respectively.
(b)
Calculation not meaningful.
THE WESTERN UNION
COMPANY
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(in millions, except per share
amounts)
March 31,
December 31,
2021
2020
Assets Cash and cash equivalents $
1,502.6
$
1,428.2
Settlement assets
3,638.2
3,821.4
Property and equipment, net of accumulated depreciation of $665.7
and $659.9, respectively
144.9
150.4
Goodwill
2,566.6
2,566.6
Other intangible assets, net of accumulated amortization of
$1,064.7 and $1,044.6, respectively
523.0
505.0
Other assets
905.7
1,024.7
Total assets $
9,281.0
$
9,496.3
Liabilities and stockholders' equity Liabilities: Accounts
payable and accrued liabilities $
513.3
$
500.9
Settlement obligations
3,638.2
3,821.4
Income taxes payable
933.1
928.9
Deferred tax liability, net
187.2
188.9
Borrowings
3,230.5
3,067.2
Other liabilities
559.9
802.4
Total liabilities
9,062.2
9,309.7
Stockholders' equity: Preferred stock, $1.00 par value; 10
shares authorized; no shares issued
—
—
Common stock, $0.01 par value; 2,000 shares authorized; 409.8
shares and 411.2 shares issued and outstanding as of March 31, 2021
and December 31, 2020, respectively
4.1
4.1
Capital surplus
904.0
885.1
Accumulated deficit
(548.2
)
(543.1
)
Accumulated other comprehensive loss
(141.1
)
(159.5
)
Total stockholders' equity
218.8
186.6
Total liabilities and stockholders' equity $
9,281.0
$
9,496.3
THE WESTERN UNION
COMPANY
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
(in millions)
Three Months Ended
March 31,
2021
2020
Cash flows from operating activities Net income $
181.8
$
176.7
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation
12.8
16.5
Amortization
40.6
41.7
Other non-cash items, net
30.3
20.8
Increase/(decrease) in cash, resulting from changes in: Other
assets
(46.9
)
(23.1
)
Accounts payable and accrued liabilities
(35.8
)
(109.3
)
Income taxes payable
5.5
(2.8
)
Other liabilities
(12.5
)
(8.1
)
Net cash provided by operating activities
175.8
112.4
Cash flows from investing activities Payments for
capitalized contract costs
(78.3
)
(21.5
)
Payments for internal use software
(9.9
)
(7.9
)
Purchases of property and equipment
(8.7
)
(6.3
)
Proceeds from the sale of former corporate headquarters
—
44.2
Purchases of non-settlement related investments
(0.9
)
—
Proceeds from maturity of non-settlement related investments
0.5
0.3
Other investing activities
1.1
—
Net cash (used in)/provided by investing activities
(96.2
)
8.8
Cash flows from financing activities Cash dividends and
dividend equivalents paid
(96.7
)
(92.4
)
Common stock repurchased
(84.5
)
(237.1
)
Net repayments of commercial paper
(80.0
)
(160.0
)
Net proceeds from issuance of borrowings
892.6
—
Principal payments on borrowings
(650.0
)
—
Proceeds from exercise of options
8.1
1.0
Other financing activities
0.1
(0.7
)
Net cash used in financing activities
(10.4
)
(489.2
)
Net change in cash, cash equivalents, and restricted cash
69.2
(368.0
)
Cash, cash equivalents, and restricted cash at beginning of period
1,447.4
1,456.8
Cash, cash equivalents, and restricted cash at end of period (a) $
1,516.6
$
1,088.8
________________ (a) As of March 31, 2021 and 2020 the Company had
$14.0 million and $16.0 million, respectively, of restricted cash.
THE WESTERN UNION
COMPANY
SUMMARY SEGMENT DATA
(Unaudited)
(in millions)
Three Months Ended
March 31,
2021
2020
% Change
Revenues: Consumer-to-Consumer $
1,050.9
$
1,015.4
4
%
Business Solutions
96.5
98.4
(2
)
%
Other (a)
62.6
76.2
(18
)
%
Total consolidated revenues $
1,210.0
$
1,190.0
2
%
Segment operating income: Consumer-to-Consumer $
206.1
$
209.9
(2
)
%
Business Solutions
12.6
13.9
(9
)
%
Other (a)
14.1
19.9
(29
)
%
Total segment operating income
232.8
243.7
(4
)
%
Restructuring-related expenses (b)
—
(10.5
)
(c) Total consolidated operating income $
232.8
$
233.2
0
%
Segment operating income margin Consumer-to-Consumer
19.6
%
20.7
%
(1.1
)
%
Business Solutions
13.1
%
14.1
%
(1.0
)
%
Other (a)
22.6
%
26.1
%
(3.5
)
%
________________
(a)
Other primarily includes the Company’s bill payment services which
facilitate payments from consumers to businesses and other
organizations and the Company’s money order services.
(b)
Restructuring-related expenses have been excluded from the
measurement of segment operating income provided to the chief
operating decision maker for purposes of assessing segment
performance and decision making with respect to resource
allocation.
(c)
Calculation not meaningful.
THE WESTERN UNION COMPANY NOTES TO KEY
STATISTICS (in millions, unless indicated otherwise)
(Unaudited)
Western Union’s management believes the non-GAAP financial
measures presented provide meaningful supplemental information
regarding the Company’s operating results to assist management,
investors, analysts, and others in understanding the Company’s
financial results and to better analyze trends in the Company’s
underlying business because they provide consistency and
comparability to prior periods.
A non-GAAP financial measure should not be considered in
isolation or as a substitute for the most comparable GAAP financial
measure. A non-GAAP financial measure reflects an additional way of
viewing aspects of the Company’s operations that, when viewed with
the Company’s GAAP results and the reconciliation to the
corresponding GAAP financial measure, provide a more complete
understanding of the Company’s business. Users of the financial
statements are encouraged to review the Company’s financial
statements and publicly-filed reports in their entirety and not to
rely on any single financial measure. A reconciliation of non-GAAP
financial measures to the most directly comparable GAAP financial
measures is included below, where not previously reconciled
above.
Three Months Ended March 31,
2021
Notes
Revenues
Operating Income
Income Before Income
Taxes
Provision for Income
Taxes
Net Income
Diluted Earnings per
Share
(in millions, except per share amounts) Reported results (GAAP) $
1,210.0
$
232.8
$
202.9
$
21.1
$
181.8
$
0.44
Foreign currency translation impact
(j)
(0.9
)
Revenues, constant currency adjusted (non-GAAP) $
1,209.1
Three Months Ended March 31,
2020
Notes
Revenues
Operating Income
Income Before Income
Taxes
Provision for Income
Taxes
Net Income
Diluted Earnings per
Share
(in millions, except per share amounts) Reported results (GAAP) $
1,190.0
$
233.2
$
201.9
$
25.2
$
176.7
$
0.42
Restructuring related expenses and related tax benefit
(m)
—
10.5
10.5
1.3
9.2
0.02
Adjusted results (non-GAAP) $
1,190.0
$
243.7
$
212.4
$
26.5
$
185.9
$
0.44
Quarter over quarter growth/(decline) (GAAP)
2
%
0
%
0
%
(17
)%
3
%
5
%
Quarter over quarter growth/(decline) (non-GAAP)
2
%
(4
)
%
(5
)
%
(19
)%
(2
)
%
0
%
THE WESTERN UNION
COMPANY
NOTES TO KEY
STATISTICS
(in millions, unless indicated
otherwise)
(Unaudited)
Notes
1Q20
2Q20
3Q20
4Q20
FY2020
1Q21
Consolidated Metrics
(a)
Revenues (GAAP)
$
1,190.0
$
1,114.7
$
1,258.5
$
1,271.8
$
4,835.0
$
1,210.0
Foreign currency translation impact
(j)
47.3
46.4
41.1
22.4
157.2
(0.9
)
Revenues (non-GAAP, constant currency)
$
1,237.3
$
1,161.1
$
1,299.6
$
1,294.2
$
4,992.2
$
1,209.1
Prior year revenues (GAAP)
$
1,337.0
$
1,340.5
$
1,306.9
$
1,307.7
$
5,292.1
$
1,190.0
Less prior year revenues from Speedpay and Paymap divestitures
(k)
(91.9
)
(38.8
)
N/A
N/A
(130.7
)
N/A
Prior year revenues, adjusted for divestitures (non-GAAP)
$
1,245.1
$
1,301.7
$
1,306.9
$
1,307.7
$
5,161.4
$
1,190.0
Revenues (GAAP) - YoY % Change
(11
)
%
(17
)
%
(4
)
%
(3
)
%
(9
)
%
2
%
Revenues, constant currency and adjusted for divestitures
(non-GAAP) - YoY % Change
(1
)
%
(11
)
%
(1
)
%
(1
)
%
(3
)
%
2
%
(b)
Operating income (GAAP)
$
233.2
$
221.8
$
285.2
$
227.1
$
967.3
$
232.8
Restructuring-related expenses
(m)
10.5
5.2
9.1
12.0
36.8
N/A
Acquisition and divestiture costs
(n)
—
0.7
1.5
0.3
2.5
N/A
Operating income, adjusted (non-GAAP)
$
243.7
$
227.7
$
295.8
$
239.4
$
1,006.6
$
232.8
Operating margin (GAAP)
19.6
%
19.9
%
22.7
%
17.9
%
20.0
%
19.2
%
Operating margin, adjusted (non-GAAP)
20.5
%
20.4
%
23.5
%
18.8
%
20.8
%
19.2
%
(c)
Operating income (GAAP)
$
233.2
$
221.8
$
285.2
$
227.1
$
967.3
$
232.8
Depreciation and amortization
58.2
57.1
54.2
56.1
225.6
53.4
EBITDA (non-GAAP)
(l)
$
291.4
$
278.9
$
339.4
$
283.2
$
1,192.9
$
286.2
Operating margin (GAAP)
19.6
%
19.9
%
22.7
%
17.9
%
20.0
%
19.2
%
EBITDA margin (non-GAAP)
24.5
%
25.0
%
27.0
%
22.3
%
24.7
%
23.7
%
(d)
Effective tax rate (GAAP)
13
%
16
%
12
%
11
%
13
%
10
%
Impact from restructuring-related expenses
(m)
0
%
0
%
1
%
1
%
0
%
N/A
Impact from acquisition and divestiture costs
(n)
0
%
0
%
0
%
0
%
0
%
N/A
Effective tax rate, adjusted (non-GAAP)
13
%
16
%
13
%
12
%
13
%
10
%
C2C Segment Metrics
(e)
Revenues (GAAP)
$
1,015.4
$
976.6
$
1,106.5
$
1,121.5
$
4,220.0
$
1,050.9
Foreign currency translation impact
(j)
12.9
18.4
11.1
(1.2
)
41.2
(11.1
)
Revenues (non-GAAP, constant currency)
$
1,028.3
$
995.0
$
1,117.6
$
1,120.3
$
4,261.2
$
1,039.8
Prior year revenues (GAAP)
$
1,056.9
$
1,112.9
$
1,113.0
$
1,125.0
$
4,407.8
$
1,015.4
Revenues (GAAP) - YoY % change
(4
)
%
(12
)
%
(1
)
%
0
%
(4
)
%
4
%
Revenues (non-GAAP, constant currency) - YoY % change
(3
)
%
(11
)
%
0
%
0
%
(3
)
%
2
%
(f)
Principal per transaction, as reported ($- dollars)
$
308
$
322
$
348
$
341
$
331
$
353
Foreign currency translation impact ($- dollars)
(j)
5
7
1
(2
)
2
(7
)
Principal per transaction (constant currency) ($- dollars)
$
313
$
329
$
349
$
339
$
333
$
346
Prior year principal per transaction, as reported ($- dollars)
$
302
$
303
$
307
$
300
$
303
$
308
Principal per transaction, as reported - YoY % change
2
%
7
%
13
%
14
%
9
%
15
%
Principal per transaction (constant currency) - YoY % change
4
%
9
%
14
%
13
%
10
%
12
%
(g)
Cross-border principal, as reported ($- billions)
$
19.1
$
20.7
$
25.5
$
25.3
$
90.6
$
24.5
Foreign currency translation impact ($- billions)
(j)
0.3
0.4
—
(0.1
)
0.6
(0.5
)
Cross-border principal (constant currency) ($- billions)
$
19.4
$
21.1
$
25.5
$
25.2
$
91.2
$
24.0
Prior year cross-border principal, as reported ($- billions)
$
19.1
$
20.5
$
20.6
$
20.5
$
80.7
$
19.1
Cross-border principal, as reported - YoY % change
0
%
1
%
23
%
24
%
12
%
28
%
Cross-border principal (constant currency) - YoY % change
2
%
3
%
24
%
23
%
13
%
26
%
Business Solutions Segment Metrics
(h)
Revenues (GAAP)
$
98.4
$
79.4
$
89.1
$
89.2
$
356.1
$
96.5
Foreign currency translation impact
(j)
2.2
2.0
(1.9
)
(2.4
)
(0.1
)
(5.6
)
Revenues (non-GAAP, constant currency)
$
100.6
$
81.4
$
87.2
$
86.8
$
356.0
$
90.9
Prior year revenues (GAAP)
$
95.6
$
95.6
$
100.6
$
97.0
$
388.8
$
98.4
Revenues (GAAP) - YoY % change
3
%
(17
)
%
(11
)
%
(8
)
%
(8
)
%
(2
)
%
Revenues (non-GAAP, constant currency) - YoY % change
5
%
(15
)
%
(13
)
%
(11
)
%
(8
)
%
(8
)
%
(i)
Operating income/(loss) (GAAP)
$
13.9
$
1.3
$
9.4
$
(0.2
)
$
24.4
$
12.6
Depreciation and amortization
9.4
9.3
9.3
8.1
36.1
6.9
EBITDA (non-GAAP)
(l)
$
23.3
$
10.6
$
18.7
$
7.9
$
60.5
$
19.5
Operating income margin (GAAP)
14.1
%
1.6
%
10.5
%
(0.2
)
%
6.9
%
13.1
%
EBITDA margin (non-GAAP)
23.7
%
13.2
%
21.1
%
8.8
%
17.0
%
20.2
%
THE WESTERN UNION
COMPANY
NOTES TO KEY
STATISTICS
(in millions, unless indicated
otherwise)
(Unaudited)
2021 Consolidated Outlook Metrics Range Earnings per
share (GAAP) ($- dollars) $
2.06
$
2.16
Impact from the net gain on an investment sale and debt
extinguishment costs ($- dollars) (o), (p)
(0.06
)
(0.06
)
Earnings per share, adjusted, excluding the net gain on an
investment sale and debt extinguishment costs (non-GAAP) ($-
dollars) $
2.00
$
2.10
THE WESTERN UNION COMPANY NOTES TO KEY
STATISTICS (in millions, unless indicated otherwise)
(Unaudited)
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 exchange
fluctuations between foreign currencies and the United States
dollar, net of foreign currency hedges, which would not have
occurred if there had been a constant exchange rate. The Company
believes that this measure provides management and investors with
information about revenue results and trends that eliminates
currency volatility while increasing the comparability of the
Company's underlying results and trends.
(k)
On May 9, 2019, the Company
completed the sale of its United States electronic bill payments
business known as “Speedpay” to ACI Worldwide Corp. and ACW
Worldwide, Inc. ("ACI") for approximately $750 million in cash. In
addition, on May 6, 2019, the Company completed the sale of Paymap
Inc. ("Paymap"), which provides electronic mortgage bill payment
services, for contingent consideration and immaterial cash proceeds
received at closing. Both Speedpay and Paymap were included as a
component of "Other" in the Company’s segment reporting. 2019
revenues have been adjusted to exclude the carved out financial
information for Speedpay and Paymap to compare the year-over-year
revenue change. These financial measures are non-GAAP measures and
should not be considered a substitute for the GAAP measures. The
Company has included this information because management believes
that presenting these measures as adjusted to exclude divestitures
will provide investors with a more meaningful comparison of results
within the periods presented.
(l)
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
measurement calculation which helps neutralize the operating income
effect of assets acquired in prior periods.
(m)
Represents impact from expenses
incurred in connection with an overall restructuring plan, approved
by the Board of Directors on August 1, 2019, to improve the
Company's business processes and cost structure by reducing
headcount and consolidating various facilities. While certain of
these expenses are identifiable to the Company's business segments,
primarily to the Company's Consumer-to-Consumer segment, they have
been excluded from the measurement of segment operating income
provided to the Chief Operating Decision Maker for purposes of
assessing segment performance and decision making with respect to
resource allocation. These expenses are therefore excluded from the
Company's segment operating income results. While these expenses
are specific to this initiative, the types of expenses related to
this initiative are similar to expenses that the Company has
previously incurred and can reasonably be expected to incur in the
future. The Company believes that, by excluding the effects of
these charges that can impact operating trends, management and
investors are provided with a measure that increases the
comparability of the Company's underlying operating results. As of
December 31, 2020, all expenses associated with this plan have been
incurred.
(n)
Represents the impact from
expenses incurred in connection with the Company's acquisition and
divestiture activity. The Company's acquisition and divestiture
costs incurred in the first quarter of 2021 were not material. The
Company believes that, by excluding the effects of these charges
that can impact operating trends, management and investors are
provided with a measure that increases the comparability of the
Company's underlying operating results.
(o)
On April 12, 2021, the Company
sold a substantial majority of the shares it held as a minority
investor in a private company for cash proceeds of $50.9 million.
As a result, the Company recorded a pre-tax gain of approximately
$48 million to Other income/(expense), net, in the second quarter
of 2021. The Company's 2021 earnings per share outlook has been
adjusted to exclude the estimated after-tax gain on this
transaction. Management believes that presenting the Company's 2021
earnings per share outlook as adjusted to exclude this gain will
provide investors with a more meaningful comparison of results with
the historical periods presented.
(p)
On April 1, 2021, the Company
repaid $500 million of aggregate principal amount of 3.6% unsecured
notes due in 2022 and incurred approximately $14.8 million of
costs, excluding accrued interest, in connection with the
repayment. The cost associated with the repayment was recorded to
Other income/(expense), net, in the second quarter of 2021. The
Company's 2021 earnings per share outlook has been adjusted to
exclude the estimated after-tax costs of this repayment. Management
believes that presenting the Company's 2021 earnings per share
outlook as adjusted to exclude these costs will provide investors
with a more meaningful comparison of results with the historical
periods presented.
Other
notes:
(aa)
Geographic split for transactions
and revenue, including transactions initiated digitally, as earlier
defined, is determined entirely based upon the region where the
money transfer is initiated.
(bb)
Represents the North America
(United States and Canada) (“NA”) region of the Company's
Consumer-to-Consumer segment.
(cc)
Represents the Europe and the
Russia/Commonwealth of Independent States (“EU & CIS”) region
of the Company's Consumer-to-Consumer segment.
(dd)
Represents the Middle East,
Africa, and South Asia (“MEASA”) region of the Company's
Consumer-to-Consumer segment, including India and certain South
Asian countries, which consist of Bangladesh, Bhutan, Maldives,
Nepal, and Sri Lanka.
(ee)
Represents the Latin America and
the Caribbean (“LACA”) region of the Company's Consumer-to-Consumer
segment, including Mexico.
(ff)
Represents the East Asia and
Oceania (“APAC”) region of the Company's Consumer-to-Consumer
segment.
(gg)
Represents transactions conducted
and funded through websites and mobile applications marketed under
the Company's brands (“westernunion.com”).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210504005431/en/
Media Relations: Pia De Lima +1(954) 260-5732
Pia.DeLima@westernunion.com Investor Relations: Brendan Metrano
+1(720) 332-8089 Brendan.Metrano@westernunion.com
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