WU - Earnings call transcript Q1 2019 | The Western Union Company

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Operator

Good day and welcome to the Western Union first quarter 2019 results conference call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. is event this note, being recorded. Please now Mike Salop, would like Investor to to over conference the Senior turn Relations. I Vice of President Please ahead. go

Mike Salop

after the will that results at Investor Andrew. call. XXXX we financial be the will you On found questions. call, westernunion.com remain call then will Thank Relations The and your slides can today's outlook and the first this tab our and discuss quarter available take full accompany and year under we company's webcast

Additional for results the call could Union's in and with supplemental Please release. additional & to include operational language provided filings with tables in concerning statements. cautionary XX-K, statistics and have is Securities cause been from factors in differ our press that statements. Commission, the release the forward-looking refer including materially actual Exchange forward-looking Western our Today's to information the recorded the Form earnings XXXX being comments

items accepted call, that the During conform principles. accounting to we not do discuss will some generally

We of GAAP are westernunion.com, Western measures over the noted call. the protection. Relations responsibility turn not Union transcription on most Ersek. property by officers authorized and distribution call I The Western for or to Other Company and would have Hikmet like call copyright any to than release, this the subject comparable on replay press section. in any of disclaims the Western now of our website, Union has to the Investor this under recording, to Union our those reconciled statements All made items replay

Hikmet Ersek

slow the our growth everyone. softer on afternoon good industry were expectations. but Mike to full year we and quarter with remain in Thank you track appeared first trends and Revenue

and and as but drive the constant and transfer. currency to transaction and the growth our growth XX% higher, and for grow affected solutions, for to Europe challenging We have in money results we with and actions currency westernunion.com such growth digital and both in year. in The year has in continues General third from and affect in traction business transfer gain CXC Mexico transfer straight expect continue growth declines overall we to quarter expectations in business our Latin to by our original growth domestic still. currency business outbound changed results the with much outbound revenues digital U.S. comparisons money mixed. prior Dollar strong not and East new revenue by quarter U.S. of remained rates. Geographically, from constant were opportunities pricing Cross-border less our U.S. achieved the revenue reductions was price the are Europe. the driven year westernunion.com as And business money growth year. face countries and for the Albertsons throughout we Asia-Pacific business implemented last In Overall, Trends to first core delivered be Middle standing certain projections continue America strong. good not in half margins

going results to approximately core step forward. the our represents This million. sale we Speedpay and $XXX to bill cross-border the taking expect In first complete domestic actions our our for our on our business businesses. additional few are U.S. improve in payments the next focus efforts model We to days, of streamline

around to our operating the payout to expansion westernunion.com generating expansion, and build areas digital Our emerging overarching new cross-border and efficiencies. collaborations offering addition strategies world. continue remain, and focus platform mobile we With account in to digital, in business including wallets growth, recent with network, geographic our on mobile driving markets

strong growth. it relatively is business is this small, generating Although

as our allow to such e-commerce for customers to use We network make location payments payments also and cases continue extend platform to purchases. agent

and Amazon are We opportunities. are with expanding at also pilot other additional payments looking into new countries

focused we we management which our rollout lean structure, model continuing are driven and Finally, other opportunities our additional processes across WU to generating efficiencies, have we identified cost optimize Way of of remain this operating streamlining business, are operating to currently implementation the which the and including on we company. With evaluating.

proven of these Our the the but economic us business give conditions, initiatives has drive in future. more stronger resilient ways to regardless can profitability

Investors detail. strategies, expect We to specific are growth share opportunities we our plans on later more this working and plans Day will and have where year efficiency an in

repurchases. We to share Now In and remain year. generating through cash returning dividends $XXX turning the million shareholders. committed to quarter, returned over back to flow first and this we

For million spend shares to which return to the million dividends to $XXX $XXX at summarize. million would total put back year. to the we including currently full $XXX $XXX million To for expect year, to buy shareholders,

We continue is The flow. near cash to generate Speedpay competition. strong divestiture

we long-term expected evaluating first and the performance remain year that are will full process the growth and start We enhance coming to our revenue slowly we in track And years. efficiency up profitability year business the of throughout in improve quarter with in initiatives expectations. on

outlook the as Now Raj. plans, to over give and as call first the you more I to detail would allocation the capital like quarter on well to turn

Raj Agrawal

Thank you Hikmet.

and transaction to effects reduced both revenues to revenues percentage negatively declined decline declines revenue $X.X revenue and Argentina peso prior X%. the approximately quarter four by positively adjusted businesses pricing total constant per was in which Argentine constant principal cross-border or from percentage is X% by grew represented the the The inflation increased in X%. with billion Currency two on the basis, a period. a of both to of between prior X% the or flat year of Total and currency Consumer-to-Consumer growth quarter constant year, quarter, negative the X% while while X% million while declined impacted X% primarily The X% our in revenues XX% Peso. quarter from compared segment, down impact on estimated increased points, of was approximately CXC impacted net negative basis, points. by currency to the constant continued impact company were currency was X% reported a X% revenues in currency. Mix due a hedges, In prior in had the flat year while have currency which principal on compared spread of or revenues increased revenue X% prior currency. revenues, compared First first constant quarter while exclude approximately year, $XX the the impact transactions the to period, CXC translation, of transaction Speedpay current

quarter America westernunion.com gains in X% North results. the on regional share quarter, transactions based significant strong March. revenue and currency the reported flat. Mexico data we latest to basis, made de were the Mexico grew on a to constant revenue The delivered growth U.S. by and Banco driven through while Turning

America generated Our other and business by U.S. also Asia. outbound revenue sends to growth Latin driven good

Speedpay strength increased and grew currency in X% growth solutions Business verticals. financial revenues while The business. approximately local the price which by East XX% revenue. transactions represented strong walk-in Revenue terms constant Middle X% a Asia education while or the Latin in XX% and growth currency continued year's Ecuador, from total revenue Speedpay the constant Constant represented transaction However, grew other constant quarter other growth the business impacted revenues revenues, westernunion.com of Europe. and bill by increased revenue America reported declined XX% constant declined from Facil led approximately very primarily by businesses, basis decreased currency points. declines dollar region also and region in offset U.S. a money and currency, Asia-Pacific in domestic the X% last region reported declines transactions in currency domestic impacted our Peru. by the business to have XX on APAC hedging region, transaction region quarter. and Argentine are while in constant growth currency or X% X% the of in revenue Other but decreased declines. strength. by and in growth X%. currency the CXC consist constant products the basis, and South In continued increased again business which company Westernunion.com driven Australia, offset X% of XX% institution Pago on quarter, increased XX% in was X%. XX% points deliver CIS led Mexico with decreased in largely were The basis to Africa revenue on Overall was declined payments U.S. by inflation contributing negatively of Caribbean XX%, revenue Other revenue the related East, the grow of X% total of to still Korea the delivered Revenue depreciation as company in declined quarter. continued by U.S. XX with revenue outbound positively in sends, the revenues in declined impacting and the X% to Argentina driven X% Regionally, constant Middle the half or solutions and the the growth growth reductions in X% revenues represented or revenue X% revenue, transfer France down the revenue cross-border reported quarter. In the is currency U.S. estimated outbound currency and New strong a with and and Europe or business. transactions partially Spain, the percentage XX% quarter. region, Zealand Peso were to or of the quarter, growth percentage revenues revenues good on Argentina revenue transactions and in with on of

to Turning margins and profitability.

after the of expected higher in was period, the consolidated have and on quarter. The in reallocation expenses. the margins second adjusted to related quarter divestiture prior focus for the Speedpay segment as in will XX.X% anticipated margin divestiture operating overhead consolidated not the year margins the business to due with of acquisition compared XX.X% corporate We decline the expenses been

the was current to $X.XX quarter Foreign effective effective the due period. for prior period. in $X $X in in a transaction I the full impact tax fewer to margin earnings GAAP certain was compared per quarter period XX.X% in which to Speedpay provided X.X% rate to exchange the prior this provisional GAAP compared year which benefited in quarter related reflects divestiture expectations The the the year I higher expenses outstanding. new increase in was decrease rate, by quarter detail a tax from related the year outlook. will discuss in the XXXX Last rates to prior the in of partially offset compared items, primarily lower of benefit period million changes impact to prior the share adjusted when XX.X% was year's while in accounting. revenues shares compared the discrete in first of and and The $X.XX, rate quarter's year and hedges EBITDA act acquisition XX.X% year. quarter or first in the year prior XX.X% million negative a tax

Turning quarter which quarter-end and activities of cash $XXX was to balance XXX We dividends million million and were expires quarter share including of which the the new quarter. $XXX authorizations, quarter, and December Capital $X.X operating billion existing our At XX first our and $X.XXX share the repurchase shares. the XXXX. $XXX to majority in The million in debt approximately share of returned end shares million. was cash of of flow $XXX in approximately had we $XX at the for represented we outstanding remaining million in under and the repurchases, $XX Cash count shareholders from flow billion. million had sheet. million expenditures million

outlook, financial Before some want updated I turn on to details transaction. to the Speedpay I the provide

the We expect days $XXX for coming transaction in this in approximately cash. complete million to

Speedpay year. the in pretax of statement sale second $XXX had is As approximately income Paymap we have Speedpay was of the gain reminder, payments last million quarter. business operating completed generated other of $XX quarter. to in carve-out expected million which second services a to standpoint, million in which in in business. business, approximately of also the the and approximately sale business an revenue XXXX revenue a our This income, $XXX exclude Separately, generate million the corporate allocations $XXX mortgage From in

$XXX that book higher and approximately the of than million We the benefit Speedpay reflecting on tax Paymap the the expect taxes tax from considerably transactions reflecting a gain is fact million, the sale. $XX also gain

net per of by be to Speedpay, XXXX interest additional XXXX. sales per reflects earnings planned costs. BEAT expense. for cash Paymap per net lower of from divestiture From produces XXXX, XXXX approximately a related The share and and and compared generate tax debt share share million $X.XX combination net and Speedpay and resulting benefit about which for proceeds additional more after-tax for in in a the $X.XX in expense, a This no transactions approximately our gain is to available repurchase. acquisition the an these to XX In $XX of tax both from U.S. approximately share income of on gain the and with months being months in the the We lost come impact million half to provision in of Speedpay lower expect XXXX approximately addition, and respect previous outlook. and tax to currently from for Paymap share income is after-tax earnings repurchases benefit reduction of currently an than our share four-and-a-half dilution interest the BEAT net perspective, on overall effect repurchases the position the with XXXX to over compared share, expect which approximately use Speedpay separate slightly to the offset $X.XX next XXXX, income favorable benefit businesses and related the the $XXX repurchase we

the related items approximately all impact of So total is $X.XX this divestiture accretion year.

to full removal to is outlook. an from business. outlook. Turning are our of Operating of full adjusted approximately year our Speedpay our in unchanged constant a currency We digit digits decrease we margins the due excluding revenues the basis, On expected with original XX%, be for constant expect year low Speedpay outlook line both single to to the GAAP now to revenue currency mid-single continue partial expect increase. a years, financial as

negative Speedpay does carve-out approximately impact have still XX%. Although margins, on outlook our a profits to of projects removal the

$X.XX reflects the to an to in expected approximately in by range rate XXXX XX% impact previous tax of now expect XXXX, partially the outlook be of the BEAT to from We XX%. is tax favorable We the to the XX% in the rate the The XXXX currently increase with U.S. company's a in which to mid-teens range. XX% effective tax the offset and expected are $X.XX of operating on range expected net GAAP benefits regards $XXX are increased the accounting from in on Speedpay cash $X cash of in gain flow classified sale be which for in of the expect is net $X.XX changes provision. position EPS tax approximately GAAP GAAP ongoing be dilution approximately includes divestitures. of is which the million, approximately nonrecurring from XX, flow as activities. perspective, to the to From of the investing activities taxes paid the gains on on net Speedpay proceeds from sales. sales as the activities and Paymap on our an operating while taxes classified statement XXXX

Excluding and cash to billion be of expected is year million, partial to is Speedpay which our reflect outlook of BEAT taxes previous benefit, cash of from adjusted $XXX the a flow operating the flow. $X these approximately removal approximately

As and and expect in on mentioned million currently earlier, spend XXXX between share repurchases we to a $XXX amount in XXXX. $XXX similar million

summarize to the So quarter.

a year-over-year currency were difficult stable, we growth results headwinds and face business Our although comparisons.

solid and flow capital dividends repurchases. and returned strong generate to to shareholders continue significant through We cash

year our reflect Speedpay updated basic be ready business still been but to the outlook. have now Operator, outlooks in to full original we line expected questions. to primarily are take divestiture, trends with are Our

Operator

[Operator Instructions].

question first Please of comes from The Deutsche Keane Bryan go Bank. ahead.

Bryan Keane

guys. Hi Yes.

Hikmet Ersek

Hi Bryan.

Bryan Keane

growth transaction want looks Middle some North ask I effect. in the about opposite bit. Usually East. It you pricing the little and dropped like know I actions see pricing. America you did to guys just a

think, see You quarter, transactions. see for quarter. transactions in with an X% was, last pricing, down was from you Overall increase X% the I

difficulty Did was worldwide? to the going this of the trying figure how from much economies get you little just of on just bit And impact pricing? you expected? the a guys what is into the impact So out

Raj Agrawal

is Yes. Raj. Bryan, this

softness, in East start Let things a of quarter revenue happening year. a Middle the region. side the Saudi little business. are there and better in off. bit, some Africa of second Middle the revenue a we seeing price but you off and key the markets most to bit made reductions related East, UAE, transaction me had that Arabia we of in on outbound of different what like In of our the both number the did trends in but fall little and Transactions bit revenue is little are also was last Africa, in

markets currency being Just are the by some of there shortages. hard impacted

manage And so we are just trying that. through to

money there. impacts are anniversary some reductions do the the price is there about. some there transactions worse a to I there as So the talk will bit we price or were in really And would opposite that was quarter transfer The trends, increases, go quarter. nothing But then little revenue fourth the a impacting just material trends we but business. that we even North quarter, domestic the though or of trends America, there improve similar the believe say, in as the are past to little optimization probably second

that DMT the the America. North results driving where it in So could be some really business down of is

Bryan Keane

I end think, business you Day talking that you some talk talked some of maybe Analyst about could are initiatives year of it. about how preview might Okay. model? of Maybe and Hikmet, about a the about towards of you you And things the long-term for this thinking Analyst initiatives. for an guys then these the some Day got I that and just long-term

Hikmet Ersek

because excited Yes, Sure. we about tell. believe the Day that up have we are coming exciting to an we Investors story

We working are on currently it.

and can organization efficiently. artificial at the not offering this expansion we cross-border driving new which the cost looking fixed same variable looking offering basically. which possibilities we more additional to But intelligence, We like at more We are That's we running more providers. solutions that. are have we story cost, the unique, business platform payments really business expansion already. digital our use can from current are optimize investment. and which really Starting It's model our time, to technology and our is at

what currently will the are We outcome revaluating be.

going details but coming September of We and end of October. September, probably we QX have that our would like investors up, the end on share internal really plans October, beginning with are Day the the Investors or on first we of to or

Bryan Keane

the Okay. Great. Thanks for questions. taking

Hikmet Ersek

Thank you.

Raj Agrawal

Bryan. Thanks

Operator

comes Kupferberg Lynch. next from of Bank Please ahead. America The of question go Jason Merrill

Jason Kupferberg

to to of Thanks there going are newer in these about follow-up of some a the year. just in just you ask initiatives that guys. terms the wanted I later more why seems I talk on that It ago. this viewpoint your a right Way It WU successful get to like that wanted doesn't like now, long effort. was why is just seem was time. actually

this taking Or is right about get to a wanted sense So point in is take this to WU efficiency just initiatives? next level? time Way another at cut the the of to why

Hikmet Ersek

of I excellent XXXX, run the more have think us we a that's give of We our XXXX, programs are investing that the Since again, we business resilience really more much countries. we on do an this As in end results, at on now? compliance look lot anti-money Jason, technology. a XXXX, Why efficient were efficiencies, so way. you have on we our question. in business, laundering really business XXX a much confidence licenses stable the can the

in invested have We technology part. the

the about really in And expanding Now globally. all past, reorganization. it's the were we

other expanding countries, still XXX whereas globally. are in are We struggling competitors the

years many We there have been for already now.

we our in global way artificial are can intelligence. We a can more much at with looking efficient that new platform to really And partners. we offer do how

because weeks. six business our a be and this last believe with I then teams model way in better a few more that of business could to our will changing distribution a detailed a that more model will having been few shareholders. margins could efficiencies. strategic working and digital weeks, a in oriented in to to like Gaining more give from consumes that consumers present customer last here, the very model. go the it's more not much take that expansion plan margin more us We through a plan. will have And the say the Actually we detail to We weeks,

dropping behind more on there dropping money is that. For could and instance, much it's commissions there the location also traction on efficient gain money and because are of than an a account, plan a be more

it We will sense? that. to make like share Does

Jason Kupferberg

make Raj, one shifting the guidance That sense. Yes. on does maybe gears, Maybe just for just side.

inflation So get there? I need the currency in the of Can get how we from full basis, we comps to the X%. to of guide walk excluding get give pieces think know adjusted on you QX unchanged kind Argentinian of us easier. an do the year I benefits, constant that X%

the You how talk General. of Dollar topline about benefit much Albertsons Can you rest the maybe and year? the quantify they during may

Raj Agrawal

to It's Yes. last that you mentioned, We comparison the Jason. all tougher year. of QX had pieces a

impact we gives now as fully negative We QX, And in of locations. more. up. then also will year. through had will calendar contribute General's slightly now alleviate an ramped move is ramped incremental That which Albertsons also the a fully course up itself and the X,XXX Dollar us

We they to to are will quantify them. to year we then later going exact adding of impact XX,XXX locations digital overall We that certainly also be also are don't add this expanding but with are each some picture. about And the the one contributors. going be partnerships

year So full even is feel softer. bit QX confident a about though the we little outlook,

Jason Kupferberg

last ex-DMT? trying we underlying Okay. trend? I to did How sorry, you just On know any the you headwind. maybe see am call if am grew quick about as change XX% think Wu.com number, just the one. to Thanks. in a but DMT is could I WU.com, there out I one

Raj Agrawal

dotcom We XX% took but the the but would all-in out be we haven't that number number. in DMT specifically, we of if we given grew range mid-XX%

Hikmet Ersek

think I our about Raj, our overall, X% XXXX, DMT business revenue. was And in of

Raj Agrawal

our It consumer revenue. was

Hikmet Ersek

number. cross-border It are as rates. very But growth healthy don't still We revenue. you has healthy, disclosing not our it's We an is the impact future but we in to Consumer revenue, Jason, give that was declining said recall. total and that. consumer

Raj Agrawal

part getting our cross-border good then growing strongest level we U.S. DMT at in pretty in business. growth international are outbound and then the declining. really is the The Yes. dotcom digital of And is

Jason Kupferberg

color. the Thank Okay. for Terrific. you

Hikmet Ersek

Sure.

Operator

question comes from Please Huang ahead. Tien-tsin JPMorgan. next of go The

Tien-tsin Huang

guiding on margins Starting removal, for though. to Speedpay all. think is XXXX, I XX%. afternoon Thanks. you dilutive, but Hi. out the ask Jason will still I year, mentioned similar Good

guess levers I do have year? margins revenue So higher the lift, improving what some than but balance you you see other the get with will margin to of

Raj Agrawal

Yes. Hi this Raj. Tien-tsin, is

We also quarter. QX that divestiture of had expenses acquisition necessarily and that's related representative we called and not out some every in

XX% the will of help will that year, Speedpay the help bit. with lift year So the about we or have a revenue outlook had rest XX% margin though absolutely expansion. little on could divestiture, get and even a the above we is margin negative, a The we still because bit into it a number. XX%, be bit Speedpay that And the little bit below coming the

to we year. move full we confident growth stable still base expense of year. be that and lot will And So help are the going course as through relatively should make the the revenue the our a

So we number. that's have that confidence why XX% around

Tien-tsin Huang

that. for Thanks Okay.

have advertising follow-up, the even a on Just I advertising. noticed to of account a TV. lot quick pay

might what So Could a kind was from payback am balance in the of curious we that something it's of if of you change mostly year? QX? from like reflected the see an impact for I this more expect advertising before?

Raj Agrawal

Yes.

On we front, to the than half. first the spending and higher bit the half of year in are likely have the marketing second little advertising

Second a things. spending just Mother's given quarter, and other typically Day quarter is higher

that's roughly So --

Hikmet Ersek

and account are channel. It's think payout. but strongest small I of People growing for it's more our using still the Tien-tsin, account of one payout, on course, growing. more strongest

differences price the app, It's well. and you revenue very choose doing to your well. growth going If you also tend to payout customers. between There automate payout. Transactions use or very mobile cash mobile

and that our especially Europe, certain advertising, also helps of also definitely corridors some in in the commission And are account But that's more structure India, from growing we fast. term is more long because using mix. So something agent are people like it's payout.

I about four also directly. to have structure. that are growth money our accounts optimize very am revenue So I much And our Currently, that. about drop think can that pushing and commission we billion which worldwide excited we

Tien-tsin Huang

Yes. advertising. That sense Thank makes to you.

Hikmet Ersek

Thank you.

Raj Agrawal

Thank you.

Operator

Darrin comes Research. Peller question of next Wolfe Please from ahead. go The

Darrin Peller

guys. Nice,

there trends And model you Just I guys cash again I know business do taking sense it's potentially any in for generative terms of to, guess, is could contributes do think to other Speedpay to beyond the right then of start Thanks. someone. seeing then make now? all, is that disclose it the is still done have business, just profitable you off. does enhance the that can revisiting, about it in Speedpay? else's and first When organic with greater much for you similar buy how domestic DMT, by step anything specifically anything a there a brought someone earnings? CXC in you but ways Could I what how to to Would is hand? are Should with declining you capital further, there priority? just And others? become else's, digital you someone the strategically,

Raj Agrawal

Yes.

of haven't be profitable DMT, everything we that integral it's probably On have. the but the very us. disclosed would DMT But that. challenging of for specifics really profitability so profitability gone into a it, to we we it's actual business really Selling haven't It generates more because than size. its

question I Darrin. think that's what was, your

versa. customers We and customers are international have DMT transfer vice that money also

Hikmet Ersek

big you know, DMT payout. cash a also, as as the the And advantage of is MT one of

money our They customers. to And minutes. and DMT payout That certain via unique. send in that's mobile cash U.S. customers DMT, have but We use existing.

fees feel However the zero Zelle and that's having on hard to a the against like fees. competitors direct-to-direct, where zero Venmo compete competition it's we and

high think this we so the at so looking with we have. It's outbound do customers. business in best customers customer profitable these we and are And way like are we U.S. that currently really I serving

Raj Agrawal

CXC question repeat just a can third There question. digital? your was last you And Darrin, around

Darrin Peller

I if other was capital any around proceeds just wondering use Speedpay. guess there I of was some from of the

profile some you in and expand But tuck-ins paydown buybacks. any You of that could have help type raised priority your about talked of debt businesses? the of growth

Raj Agrawal

Yes.

plan always opportunities, back else. it's buy in to also But are we we something looking acquisition going is as for articulated. stock or digital whether Our

Hikmet Ersek

at shot opportunities, give just many the given me a look We on Let do business. that.

We are get bit operating will cross-border additional to looking standing still, to really opportunities the given revenue little are M&A our which not for engine. performance also continue we a flat. And

right price, fit of it strategic So And we course, doing. we be right are what evaluating. really at that's has to are and

do much we I it things engine efficiencies, Now go terms mentioned call, we operating include the in these think I our can platform. market, we with And as for we operating we to new much we when we since efficiencies at now than can are did feel the also have and to as better past. the can we our revenues better earlier the

engine be more I us having cross-border will on front. efficient M&A think an allow active to the

Darrin Peller

Okay.

the of Amazon one last follow-up today? news we where for things a been promising. like even you bigger was you better your other pretty can with use So quarters guys couple you is doing around, ago, we are Have what just just network from marketplaces and that that there thought know any seen have

Hikmet Ersek

first On the are are we right. in, we all, together with countries expanding of Amazon, Amazon

and currency, on can that. looking pay turning also you enormous will customers. I recent in shareholders locally, will announcements and for partners think so buy local our like funds immediately, to are to partners globally, you shareholders locally, can it Amazon more some like like Collecting be there our like be it's is new it we will that to dollar to the that buy other announcement come hopefully I serve and in which

and is solutions have division it's which expanding signing which We and closing division partners. also a Amazon organization our new sales partners our about big platform offers to called but all cross-border that

Darrin Peller

Great. guys. Thanks Okay.

Hikmet Ersek

Thank you.

Raj Agrawal

Darrin. Thanks

Operator

Jim Sachs. Schneider of ahead. The next Goldman question go Please comes from

Hikmet Ersek

Jim. Hi

Jim Schneider

from business a lot scale much you contemplating, of Is exposure? How are Good just maybe question. you? divestitures taking that be in with sense larger years thinking go the you a is to maybe two us my more digital you afternoon. Thanks thought want mix done in you about for level, the and be company give guess afternoon. taking foot going XX,XXX company, Hi. CXC a and perspective? you a just at Speedpay the to Hi. given -- contemplating kind where the what say, business take maybe might can a with my and less more direction regarding want Good you what do I the exposure are the Thanks to M&A How for BXB elsewhere?

Hikmet Ersek

thinking the deep to have go you me that. that. to level a Investors Day That's high more to Jim. Excellent give on want question, But try behind why let we

and created is Over not us currencies platform really really, to which that that. customers. has which customers, settle unique. are also that Not to customers offer platform offering to CXB our Western call that only cross-border Union engine, we the BXC the really CXC where that's years, now, minutes it we XXX everybody And cross-border in turn and that allows

have countries We license. XXX

compliance programs intelligence. by is We which artificial have driven

know, you online. bit, of basically app are universities. doing is, our of With unique. a examples We Amazon shop that, am really offering something BXC only Amazon to hearts. the that are level. And CXC little go things brand, so Jim that our in And the and able pay The is CXB, to the Amazon are that Turk University worldwide kind in one take cloud, the and which And customers acquiring the next talked these really student trying other technology, to definitely CXC pay. Amazon platform, company product putting example putting currently. we is we all is called is one which our out using have I is to which is in that's platform a customer, something that to

can pay XXX,XXX country. students people example, fees study are there so And in are Spain. and in globally another An locally Chinese about their only

abroad. Madrid can can and in currency their we local and in immediately And pay offer or Barcelona People study that. get visas to so go

only branded Union product our but something offer CXC So at. things are also these are Western kind verticals of we not products, other to looking definitely It's platform.

Jim Schneider

you. as helpful. then, And follow-up. just maybe a That's Thank

Aside seeing transaction you impact bigger of you. some of you seeing about is deceleration more corridors, kind can et that's to currency on migratory a, weakness is the really things well? driving the maybe in in the cetera? the pressures are trends talk any think Thank Or macro due whether change the that are you as there like you hard from shortages,

Hikmet Ersek

which right, the Jim, are generally, as mentioned mentioned our I on and Middle Well, really is country-to-country healthy. as softness some we have believe our cross-border do in East. healthy, We earlier, we business peers, Raj

don't UAE, major say really some some and France in recent cross feel has if money doing stable the that in to I from our generally, also. prices that, see been resilient in European outbound is impact we Even business Union cross would improvements say we pricing where domestic in But the a Arabia focused currency. like good transaction The which U.S. Even very that the pricing would the are our I have and has of that some, some that's put good, part and pressures. and softness always cross-border, in quarters. Germany to business, impact Europe. outbound is business we business Saudi We the transfer And results. we U.S. and I wise. are competency our see say currency cross-border, you is

a corridors, countries, that in competitive XXX more think serving advantage. really I XX,XXX than it's operating

Raj Agrawal

mean the I years. this is data, growth principal last based little the couple on a of year it bit remittance Jim, was World the slower Bank than

low overall overall is So some in in it terms in expected digit range But growing principal terms principal. market. be to that cross-border growth, to it of may that keep of of mid single

continue So the market softer okay. dynamics should this be bit A year. little to

Hikmet Ersek

also I where there healthy think some were softer, would I gave generally, I also still think say, numbers numbers business. But it's competitors softer. their

Jim Schneider

Thank you.

Operator

The of Citi. Shirvaikar next question from ahead. go Please comes Ashwin

Ashwin Shirvaikar

Raj. Hi Hikmet. Hi

Hikmet Ersek

you? Hi. How are

Raj Agrawal

Hi. How are you?

Ashwin Shirvaikar

you. for same the hope I Thanks. Good.

is So has my agent been I kind first given U.S. worse. adding agent of you that domestic accelerated. couple rate transfer WU.com to countries, more asking guys am of just locations. a takes Because then productive? number you have broader level? the locations, Is the not higher too because is it agent of because to of a but the reason money at question years get is number regards over going time have added on is, necessarily trends a for it of The with your question in locations last what's backdrop more growth locations that's

we So should how that? think of

Hikmet Ersek

me ago areas We has takes that that with of know them from added, does and add locations, Ashwin, agent send The transactions. and recent especially months more few Dollar bring time. the a the locations, been side. Well, it locations. let first just Albertsons activation General agent strategic you That's of start all, on the

XXX,XXX is side, the a On Ashwin. receive having advantage, big globally locations

on present that that, countries can is that phone do your to not advantage. Vietnam or last in use their turn why Finland we in currencies. biggest can in and do be. Chile companies many locations Not in money being that to That's that. XXX in and directly that companies That immediately local out send mile XXX,XXX the or currency, been many you will we are dollar paying can So in

takes new westerunion.com, it time. the expansion of On yes,

from Our some U.S. European and Union outbound. comes basically growth

we As years European to you recall, then U.S. were first expanded few to ago, Union.

East. all that on am mobile Now states recently, signed the about week Gulf outbound customers the business, on I new over I there that to seven the countries last apps. money apps, Asia. know We European in we Since mobile we to South are We the westernunion.com in excited Union. opened Middle was many our just sending many, new promotion especially we

growth So but it take dotcom, growth. some a time will the very on healthy XX% it's

in this you than revenue still base million growing growing with more $XXX business XX%. year end larger I XX%. ago good It's and it's a guess. are still and years much are, we the success, with by it The is compare few we If and where of we dotcom

Ashwin Shirvaikar

could the expense context But in I much acquisition thinking the the expense XQ? what's for for business. the the normalized of is in for provide of at from And also and terms EPS in different the Great. XQ? within is, words, first you came was second your year? overall question was quarter expectation how for quite other the divestiture the what In compliance and if

Raj Agrawal

Yes.

think, outlook. what Obviously break that's depending that expenses. have didn't expected on But acquisitions about we assumed. worth related just divestiture that the change currently level impact we activity. we of out annual the but $X.XX of said I think We from and Ashwin, about could

give sense a And a consistent. from that the year. you relatively So I be the of compliance would could how standpoint, then say much that should were for cost

that We costs stabilize broken been haven't to but of the couple able compliance our out we last over years. have

out specific So call to nothing there.

Ashwin Shirvaikar

Understood. Okay. you Thank guys.

Operator

comes The Barclays. go Ramsey ahead. of next El-Assal Please question from

Ben Budish

the Day, term to guys. growth? but business, for another to some the Investor about is This Ben on operating there Or that talking efficiency there your this your reacceleration WU.com is mid-XXs? is revenue in ask Ramsey. more is the operating the Hi margin. initiatives about margin left I on something in best back the dependent question Budish, wanted longer your and like growth path of Maybe with in on a getting for

Raj Agrawal

should next probably Day months. later more give Yes. color I you for our certainly mean will I of some say we think And few Investor on initiatives. it's something

there we how that drive ultimately are to identifying still But past now, right money in can that take also reinvested are bottomline, have is we much margins. process I ways more what we of in the through efficiencies, growth right. We opportunity sort we looking say, through much drive that the but going evaluate And are for better would the be. process to to how going and to exercises, could

Ben Budish

more Okay. could business APAC a give you color to time maybe that turn just more Could around? one I If on tactically Fair little enough. ask your this are on business. what doing you

Raj Agrawal

Yes.

X% for consumer us. our that thing a The certainly good area is of revenues. is focus Asia-Pacific only it's

is New trends the has and different relatively well market negative quarter by Zealand were Australia, driven contained and And in each associated so it. Korea with it the issues but

be to Asia-Pacific much competitive want Some us heading. XX% more market economy total over that in the few the about just number drive of nature, portion is is the are the next bigger we because some and And for way be the that then to a years more market only market. are digital digital Right in heavy a is to related. Asia-Pacific continues now,

of account those And so having account having mobile more and more more more kinds capabilities. payout funding, of capabilities,

some as Ben. are to we are trying are fix short-term a basis these longer term things well. also do, to that So trying we And on things tactically

Hikmet Ersek

like market most New are Kong, Hong of the you look most China if some and Few markets. Asia-Pacific, are in Australia, markets Malaysia But And the markets. a receiving of Zealand, India Asia, is Southeast receiving total Singapore, at Asia, market. outbound

with our So we Zealand some it digital Australia in have other we on to there. retail, pretty money countries. the and said, send do New and is the in the but And much is is dotcom challenges, depended well you as business these how business also, doing thing

Ben Budish

much. Okay. That's great so color. Thanks

Operator

question ahead. go from Please James next of comes The Stanley. Morgan Faucette

James Faucette

ask want more Most But answered. a term strategic modeling been very of a question did questions Thanks much. and question. my have near to I operational

should that The any there seasonality that your forecast incorporate the be business, with is, first Speedpay we in is should aware the we models? of sale or

Raj Agrawal

I have wouldn't seasonality. Do expect anything, Mike? we

Mike Salop

by Actually our the accompany pro last press that tables year. for quarter Speedpay we have the actually No. forma release,

So that. look at you can

James Faucette

Okay. that. Great. I Yes, missed

bring new feel ultimately but as question learning, my a and KYC think et costs you Is do it's avenue KYC about is, artificial help other How then Thank not improve, you be AML to maintain comments going down maintaining like then AML there? requirements. compliance able you to potentially intelligence far implementing second do your among you only that ability like Or to to investment as your and a are machine to, you. probably just capabilities compliance? possibility? And Okay. of cetera that things, and on maintain using,

Hikmet Ersek

part, the actually. definitely. It's It's No. first

a helps starting are well. compliance we your in monitoring to and transactions, since here. have we also especially which environment, artificial that and we a and the heavily programs We a compliance good it use have of programs, knows intelligence, we advanced field really team expand on customer And our lot use want who it. Currently we know our lot it to we that

know, think pricing, there. associates, give you a using we to could existing have communicate other things the airliner, in all we have could better instance, way. intelligence. us artificial technology will And of a could we also some we think that line company is better dynamic But access for have, at this we revenue also the that front the do artificial them intelligence of parts opportunities an in really it's that use do, So we like these

As that recall about XXX,XXX you locations. we have

location for of Union them Western promoting in those are future that's that communicate to during those outline earlier, putting efficiencies. how something a together And people all exactly a better to through way. Let's what are Raj and give share will right. like very daily, say two exactly that's Day. things times million we with our them about Investors for line front growth or All do mentioned efficient we we things planning more And associate our what future and you is

James Faucette

so Thank you much. Great.

Operator

comes David of Securities. Scharf The next JMP ahead. question from go Please

David Scharf

them. my Good for of afternoon. Two taking questions. Thanks

off, Banco in gains been you I in believe experienced triangulated called prepared from de market remarks that Mexico your specifically out belief to have Hikmet, Mexico? U.S. your you share that First may

Hikmet Ersek

Yes.

David Scharf

Can you on that? expand

Hikmet Ersek

David, gaining it. news, market but shows de Mexico they want, yes. don't are data I Banco that will yes. take we a It's good share,

David Scharf

share Got it. of sense competitors? And internal any is there in or where to have may terms was are it any that broad-based you of come able magnitude from articulate or if

Hikmet Ersek

As you changes And payout the our payout. good last a the lot. also business OXXO. account one also, APN invested growth. means did good growth to recall results, of digital of big The network. But which We locations. shows two dotcom that Mexico we network network our there. in rates had kind years, account on we we really has That had through We other started

way, these you So also, brands us the helps that By things to the there. are as recall three we share. have market gain

our We brand. also Orlandi needs. definitely That Valuta Union have Western this adapt to to the market Vigo specific customer and products corridor. additional helps to We our gain share on

David Scharf

look like for get a it it chain, what bulk the profitability the a year other the among And like one to that up how ramp more of examples, it. kind believe grocers? to then things in in transaction? of things grocery am per regional/national of of additions it is a of a a trying in domestic what Dollar response sense expected when transaction transfers? weighted, the big means profile think General. of questions about of and to Is typically wondering, Got outbound? terms like big the of or the when throughout you I we chain Understood. follow-up. Safeway Albertsons Kroger, I as helps about Albertsons at Just we other some highlighted the most Is money revenue addition topline, out backend a

Hikmet Ersek

right. way on U.S. to nobody beat that outbound are have think like doing at look you we the job. markets, competing minutes, we environment, But if good sending countries So during are daily is business, and think can of from U.S. our well I money huge, competitors I our lot business, the in pretty business outbound that U.S. We right. a that we XXX

our have of agents So Mike? our been, us been side XX with product. that agents have more like Most years, on send

Mike Salop

years. XX

Hikmet Ersek

already. years XX

also And their migrant they product time the the XX customers population loved people bring support and from globally. they countries that money you but So locations. because from to their years at want are different same ones in send like customers

David Scharf

trying Kroger. we is vertical might guess to what like the I it to as I and grocery misspoke. have understand a was in Yes, compare I particular Albertsons

Raj Agrawal

store. from part kind than kinds probably, doing not business have of are going domestic nature those U.S. to a the There business, will it's But the you of going stores it's outbound Yes. you mix. where unique you store grocery to it. customer is an a in base And standpoint. set probably within Because is such be to things on depend and probably from more have customer on it of the that have the impact some rest chain business. But of customers located a a large going neighborhoods which are, chain, within a are a it's representative have customers that and

David Scharf

Got it.

Okay. Raj. you Thank

Operator

ahead. Jeff go from comes Please question Securities. next Guggenheim of The Cantwell

Jeff Cantwell

squeezing for Thanks afternoon. in. me Good Hi. [indiscernible].

tell like Day, East, a you possible Middle strategy, shift Investor ask your to give towards more Middle seven a digital sounds launched you those XX large are. about certainly maybe growth, just feel, your a believe to the launch, just over your not week. TAMs us Your digital but preempt digital and East, it how launch us last Can little you the now like digital just of it general in Asia given I topline seems that more in just countries months,

about and So would around magnitude you the you tell of timing to opportunities size is able Thanks. can of there? great. extent And the there the color to be the are anything us any today, impact

Hikmet Ersek

to our that dotcom our network, last customers months from XX users the use didn't strategic view, So Western generally, network of as are of Union. new digital to just the new XX% you are our point recall,

So we not countries. to really use aside gaining are have customer digital that Putting additional the XX one. a for in customer, now retail segmentation we minute, the they want been

is We did capabilities location, strategy, have to XX years XXX in location we we globally. drop a the Asia to for can in you it countries. East the like Middle to Our countries money in strategy in on or serve billion same sending four XXX accounts one in countries we a send now open Europe can of countries, been money

Middle their We credit from to a and it's started opportunity. cards accounts credit huge from countries, to send allow can location. which a have you not East, countries. account, the the a they people with these They In well, countries. big are are was have advantage. huge migrant a Gulf our have is countries, outbound this directly seven and population They recently So, XXX them money there cash their to card I also believe giving to

take to some when start know customers that will We Going the once than it some forward, time more until they them, it them they but time. dotcom use retail. we take use acquire often

to growing rates, been basic. know, our much we years it's look you And smaller the XX% over growth the our as now. earlier, if base was So dotcom. at have on I Ashwin you right constant And around mentioned

growing we existing countries. expansion by of the base and still our is Now and customers part that of $X.X a it XX%. part That's over the billion returned global on are revenue

Jeff Cantwell

much. very Thanks

Mike Salop

will we question. final take Andrew, Okay. the

Operator

will Vasu of question ahead. from KBW. that And Govil come Please go

Vasu Govil

taking I EPS year. for wanted for was the clarification question. Raj. guide first the guess for a Thanks my I Hi. one the just I had on

divestiture, understand I underlying and you wanted you the exclude going look down $X.XX think way it what from that that's seems was to $X.X.X. guide to that if is the I impact just if driving right at out called it? like the the

Raj Agrawal

low was only just single weight. you really has are has divestiture currency, at change margins wouldn't topline constant our not for give look and that's it outlook try isolate. outlook as the before The same still to digit XX%. much the Yes. I When impact changed. that what is real year Otherwise, approximately the too

itself revenue, of level those range tighter of the bit it the repurchases. timing impact. we can of on So an and the a t the actually all depends is have that will expenses, things level have, rates tax All little

divestiture changes still bit. we about the that little But so call good related the feel impact we just we no outlook out. overall have material than And tightened other the range to a and tried

Vasu Govil

the And you slowdown second the guys But just transfer worse just helpful. a to horse, last. us domestic got sort but the how in with just I magnitude this out of very business. dead would slowdown westernunion.com That's it. materially in could decline I I Got guess, you domestic called much then quarter? the guess know channel. the in imply not question, help during of, it corridor got money on the beat Because versus worse, that quarter this the transaction

Raj Agrawal

way. look worse. bit it The wouldn't a I get did DMT No, transactions business at little that

business, is. focus where our a parts expansion the that's go of and of other the However international very strongly parts the continue to lot

strong but And revenues the it quarter business bit bit side, growth. transaction very outbound Our last the still little still say were a slowed would stable on a but worse. had to the were little relatively U.S. domestic I

we we and the business about dotcom opportunities few So and be still the and and over the multiple next years channels. ultimately in XXX really different countries to with territories want feel growth good

the our outlook changed strategic really business. has on from nothing So dotcom

Mike Salop

add, would DMT is DMT Yes. within Vasu, just actually revenues, of dotcom of percentage a mentioned, but revenues. Hikmet CXC those is higher I X% as our

Vasu Govil

Got it. much. That's very helpful. you Thank

Mike Salop

call Thanks today. for Okay. everyone joining our

today's The a have Thank attending concluded. afternoon. You presentation. now for you has conference good

You may now disconnect.

The Western Union Company (WU) 8 May 192019 Q1 Earnings call transcript