WU - Earnings call transcript Q4 2019 | The Western Union Company

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Operator

Good afternoon and welcome to the Western Union Fourth Quarter Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Brad Windbigler, Head of Investor Relations. Please go ahead.

Brad Windbigler

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

have in supplemental statistics with our operational Additional tables been provided press release.

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

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

those comparable We website, section. items on our Investor most under to measures the westernunion.com, GAAP the Relations have reconciled

although be certain from expenses initiatives, expected also may discuss reasonably adjusted We has the be types the previously incurred are to company adjusted these specific metrics excluded and future. will that those can similar expenses of to metrics in have that incur been of to types expenses

this copyright Western statements call are The replay distribution not has on responsibility made any officers and disclaims replay for call. Union of in than Other of this recording, Company or release, by subject of property All Western Union the the Western any to noted protection. press Union our authorized transcription and

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Hikmet Ersek

in and basis constant delivered results performance adjusted thank good and say by digital EPS our was revenue increased an am the that everyone. adjusted offerings. currency $X.XX. business on to X% continued quarter in fourth solid strong driven our Fourth afternoon you, I quarter pleased Brad Well, the

outlook For with were quarter year, results results. financial provided we our the with the third full adjusted in line

expectations profit global to shareholders Western our and announced I for a the – movement the XXXX am delivered Union year significant in returned XXXX as money cross-currency XX% we strong that and we which as progress leader quarterly also made $XXX we increase and shareholders cash for vision confidence our new that Returning priority dividend, I in strength of million remained in and pivotal towards am in today, being to a a pleased XXXX. payments, pleased over results. financial strategy. business the cross-border, strong of was reflects

of So, a moment key I review some would from to take XXXX. accomplishments the to like strategic

the the First, of second and quarter. domestic The the for we $XXX shareholders. U.S. a million largely operations completing and mortgage simplified in Speedpay created business non-core sale from proceeds payment cash to U.S. with returns focus funded exit enhanced service payment bill service our sharper in the

now With the services our cross-border domestic other smaller financial primarily for institutions, is focused and money business divestitures and transfers, consumers, businesses. banks on

payout core our and settlement, cross-border foreign competencies with aligns and in retail global network. focus Our account exchange, compliance

in Second continued cross-border accomplishment westernunion.com The quarter. the for XX% consumer digital revenue we in now accounts service revenues XXXX to expand increased was our for business. and XX% fourth

third-party and We partners. cross-border, digital platform value our global also unlocking the physical began leading of cross-currency into opening

Pay among Sberbank. and example, edit significant two others, For STC we customers

increased constant reported the money XX% or Our currency quarter. total transfer digital in fourth revenues XX%

STC label whether strong have Bank, cross-currency and Today, Sberbank enable offerings money westernunion.com digital potential. very platforms to both or our one offerings offerings branded movement for westernunion.com TD partners of cross-border, most Pay. we digital white the that extensive growth like or direct like operate – continue like

Postale; of the Italy’s Europe’s integrated recently services UK have La Post. three Banque with Postepay, postal and France’s We digital largest institutions,

announced operations with partnership across also Asia and We Airtel, recently Africa. company with Bharti telecommunications global new a a

Airtel and accounts millions partnership offer established soon in into at non-remittance cases, payments will with as payments countries global Union XXXX. addressable translated bank payments payments the They market use in verticals, such white on X% India wallets real-time constant label in to strong payments, Amazon currency business Africa. payments. our We our e-commerce And further consumer-to-business have of growth for across which and by XX expanding mobile performance Solutions growth trend, of revenue solid into basis in for Western its continued Business led institution a education financial

it was year. So, a quite good

continue strategic we vision our we'll and digital global to While will organization. we drive we September at progress in in objectives strategic We network, are forward XXXX, on our laid to optimizing content highlight I business focus XXXX. like Investor XXXX, three our our would not enhancing growth our and in and key made significant our out driving Day

vast locations leverage in our networks countries We Today, work markets capabilities additional territories. an Digital digital the quality XXX,XXX to it physical billions across movement global offering further money will and over both to partnership. capabilities XX network, enhance and third-party our accounts. with XXX over in send account and and payments and bank of than XXX countries cost across include platform with coverage over more payout improving capabilities

adding over institutions. XX to an expand The year. plans and as account also ability which now with new customers offer should We account this over expanded and it to segments grow the to e-commerce we'll transfer payout services services we help quality payout, to our in value-added XXXX. during financial countries like funds us real-time gain new We to value-added real-time continue in countries by customers will improve network have such XXX into

aggressively the wherever, the forward in market desire our drive larger or will over $XX they serve billion Gulf digital opportunities outbound and and consumers however India. in We expand and the including to $XXX whenever, market few outbound next years, strategy billion the China States like

money and is movement. to payments world’s goal the ultimate cross-border for Our agnostic evolve in network

XXX from customer experience data precisely ability To over value have further allowing the and optimizing we retention. growth. Union drive and also improving this to pool a price transitioning goal, analytic data and to revenue our global our more a to countries, applying business rich are strong lifetime model enhance ultimately achieve market We branded of us model, consumer capabilities to developing dynamically, Western our transaction-based

is objective and to strategic has organization. and of third optimize WU capabilities the Lean our on Our foundation strengthen building the Western talent, transformation office. Union Way tremendous

effectively execution, leverage will internal drive profitability, resources enhance improve We expansion. more margin and to

the we that, Swanback, she to directly reports of in play great our enhancing will our from services. building add new role Union Shelly me who team Shelly recent was can in instrumental our & firm's where In of digital president A selectively Western to comes addition addition to is new the business. impact Shelley platform. to and members, platform. critical continue Accenture, global example a product

all we while financial on for Finally, will we these to planned environmental, also governance our delivering can in to We ESG its later be XXXX value, of social report continue value our to report. XXXX found results, efforts will this on spring details efforts. and strong focus our focus driving stakeholders ESG shareholder The issue

days prosecution Settlement January milestone also past month, term thing, in the agreement our the make Department that And for on deferred has charges. the The dismissal with the from U.S. DPA, XX. to promptly. will to out this expired achieved significant a emotion have DOJ Justice of close the dismiss Agreements. the expiration close the matter, of during understand under one We to – file our of the DPA XX Joint we to more DOJ

we programs, our by We protect which compliance will maintaining strong advantage. competitive partners continue and to believe customers work us a to give

for better XXXX confident margin our payments made we to money goals. in closing, to reflects our I'm than In the opportunity before strong a significant our start EPS the large achieve global and we significant ability progress XXXX deliver begin on the positioned and year growing this to in our capitalize targets outlook in and market. XXXX and ever and transfer expectations

will Raj, team thank all about to over consumers big for and our the loyalty. in that, Raj. and thank outlook long-term targets shareholders long-term remain the And from and to and commitment. business their prospects hard our we our trust financial partners, all for With you turn detail. I'll members world to call agents, our over a like more excited discuss I work and your

Raj Agrawal

I attached financial the on the quarter, can fourth the similar year information Thank release the press focus you, full for primarily and will our schedules. my comments be Hikmet. found in

the Given there comparisons program, divestiture on the prior a are and and takes period impact puts our from fourth of results. restructuring quarter productivity of in our number costs

which quarter of billion while year $X.X of which to fourth excludes to year, most results. net increased of impact to adjusted period removed year million prior our factors the the the X% hedges $XX quarter in Argentine Fourth adjusted X%. due the Our by businesses impact the will of of reduced period, not revenue, translation, prior peso. Currency the compared our approximately the future compared prior the of affect currency primarily depreciation declined constant revenue results divested revenue

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by currency. in currency. per in the transaction prior X% year the or offset between spread or was largely principle compared quarter with impact on to CXC The and growth impact basis. Total mix. X% on and CXC positive was flat revenue revenue Pricing currency increased in from increased a was was X% X% The net constant X% was cross-border the the higher quarter negative fourth constant Principal transaction quarter. a

constant led on businesses revenue offset to outbound Revenue region and was transactions the continued growth transfer. regional money a results, while in by other U.S. currency by North grew declines in reported U.S. basis, the Turning was the and X%. domestic which declined U.S.-to-Mexico America corridor X% partially

Saudi business and basis in increased the in were flat certain Arabia Revenue by both Europe slower currency by continued Spain, France. in year basis. flow. growth region X% expect the U.S. reported on quarter X% South region we was markets. as Transactions unrest Middle hard DMT East, in this reflected aided Asia a Sberbank region trends constant to civil in white-label the the constant and will the we and and and Revenue the manage increased in and and Revenue African currency trends last region Lebanon UAE driven Russia cash on or the declines CIS quarter, again in business. Africa similar the limitations currency X% for in in continue

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the are adjustments pricing growth. improve also to making We incentives marketing, region other in to and

America Latin basis in constant revenue region the increased strong outbound, X% constant led currency region growth multiple currency, Revenue Caribbean reported on by a while and unrest transactions Chile countries. South declined American civil delivered grew and despite in The X% Mexico or X%.

the APAC the last revenue primarily on to compared Philippines partially in both has declined profits. constant business, pricing by basis. reported impact to on In limited currency driven XX% which X% and in region, Transactions were due improved quarter’s certain region down markets. rate, actions domestic trends the Revenue

XX% transfer. label the services. XX% by was a white the revenue revenue transfer now currency. money and westernunion.com wu.com represents of XX% increased in in Westernunion.com revenues or CXC offset declines in westernunion.com XX% which partially currency constant quarter. Cross-border total basis XX% quarter, money Digital grew third-party approximately on revenue domestic including increased constant

a revenue and growth as as X% strong basis on revenue was Europe growth the was by revenues performance quarter. financial and growth in which verticals strong currency were in by of currency institution reported X% offset or education solutions represented slower Business the flat in services. constant Constant driven in company well increased hedging

and Speedpay retail May. Argentina posted total businesses in revenues reflects Other currency represented increases the business decreased divestitures quarter, of The the in U.S. revenue bill payments in X% and Argentina XX% quarter. consists the local in revenues, our in company the primarily Paymap impact which walk-in in Pago transactions growth. Other Facil and good of the which revenues

corporate comparable are Financial the prior-year profitability, Speedpay with business. consolidated margins will segment on the as margins of the margins reallocation divestiture to due not we and following of period costs focus

restructuring expenses, costs We are also providing effects. exclude adjusted to acquisition metrics and tax and merger related

The compared impact operating GAAP to of quarter to was the prior margin period. the Speedpay the in XX.X% the May consolidated XXXX. the investment quarter prior current in was year of of compared XX.X% The period. year The in the marketing primarily in higher to restructuring due decline expenses divestiture and

and remainder for $XXX restructuring expected the but million incurred of due total with was be expense in margin the operating continue in timing a million which full quarter $XXX quarter Speedpay compared in XXXX the higher fourth some we year, items, with higher to to to We decrease expense to the $XX expect year of of of than restructuring we slightly marketing was due primarily encouraged million period of approximately year. prior the divestiture. the the this XX.X% XX.X% investment fourth Adjusted and to the

rate one-time prior the about XX.X% the tax X.X% The million benefit the while tax the quarter year, the year adjusted prior last increased in while taxes additional The in year's fourth the $X XX.X% benefit have GAAP further we the discrete compared of to in prior year the rate also of Also, GAAP year provided period. period. to the certain expected period. quarter period, increase a foreign rate was of rates geographies. a due of tax highest exchange in rate included and contributed was adjusted X.X% XX to tax quarter with the and $X of while benefits to divestitures. basis margin, year Speedpay the points million settlement primarily GAAP to the associated in hedges it XXXX in fourth quarter in prior May by current compared The certain effective

marketing outstanding. both the adjusted in by to offset divestitures EPS and year effective in compared share the share earnings period quarter in $X.XX partially the to prior earnings decrease compared fewer year. The was was $X.XX was in per per due higher $X.XX primarily GAAP prior tax the rates, shares quarter the GAAP in adjusted and and to $X.XX year-over-year investment higher

exceeded GAAP our Capital due the the billion. billion full working primarily for $X.X approximately capital balance cash to the cash favorable had full and and year, from XXXX. from our activities at million operating activities flow in Turning quarter flow the end $XXX to flow which $XX sheet. billion million $XXX operating cash was Adjusted items. and year. year, $X.X expenditures $X.X debt in we At was were cash the million for of outlook of

reduce fourth $XXX was which of million million notes share quarter, and year quarter The million $XX $XXX quarter, outstanding and million share shares. our repurchases, X.XX% shareholders expires We and end billion notes. the During commercial returned represented we to due approximately the X.X at which $XXX repurchase XXXX. authorizations, we including $X December fourth this million issued million in million redeemed share in $XX and paper. under We shares, XXX in had count dividends remaining

on reflected margin EPS a and As for Hikmet good deliver our operating restructuring XXXX. which noted, and to start growth is strategic plans, off to our strong outlook we're initiatives in

current no from conditions. Our macro outlook material economic assumes change

to year primarily to of Speedpay due a in the divestiture the May for flat-to-low revenues GAAP full XXXX. expect be decline, We single-digit

adjusted the constant expect XX%, be this we is approximately on to as toward we operating second and GAAP approximately Argentina which low-single-digit related on growth we savings margin restructuring is to year, currency while from continue expected a generating to revenues basis XX% benefit weighted Speedpay benefit be excludes and an efficiencies half. to will expected begin to focus adjusted basis any Operating inflation. revenue On margin

$XX to We in $XXX increasing annual XXXX. continue in savings restructuring approximately million million to from expect XXXX to realize of

$XX million of efficiency million XXXX. a savings In this, for realize we addition other to of by in annual total savings to expect XXXX of $XXX

and mid-teens range to the effective GAAP be in adjusted tax We year. rate this expected

be billion. activities to per while which in teens. is approximately operating adjusted approximately expected to range $X.XX is a of to to represents $X.XX, is the growth be flow to be in earnings is $X.XX operating from cash adjusted a year $X $X.XX, Cash of while expected $XXX the expected million, to for from share flow be activities EPS in expected GAAP range a

million to for repurchases expect the share approximately spend $XXX full We on year.

restructuring funds progress to XXXX our profitability, long-term and shareholders. operating strategy to in look adjusted in generated made global growth. We three and our targets XXXX in delivering earnings approximately and delivered ending strong years on a to long-term margin share our to per of XXXX full financial strategy designed We our forward We efficiency XX% financial and XXXX. EPS. return significant our of of outlook we summary, low-double-digit good flow and continue the activities In for drive adjusted year cash CAGR off new

Thanks call we take and to your the operator ready joining for are now questions. today,

Operator

Bank. Bryan comes Please And go from Deutsche Instructions] question first Keane of [Operator our ahead.

Korey Marcello

terms Korey this the three-year to consumer, business wanted any shape other for some ask; I on particular guidance, up. calling is Brian maybe divestiture. of guys, I impacts color going next just Keane. for I the how think but from year I have is you Hey to growth guess for in X% solutions you're Marcello in and the guess first outlook on to X% lapping know revenue in will

So had the of cadence of revenue sort you the for I if year? growth any didn't on comments know quarterly

Hikmet Ersek

quite competitors investing long that that's – have, and and our expansion, growth a to digital the a for the continue We Bill that Well, The that for perform; fundamentals, digital We I expansion perform. me but the is business go will Look white nothing can expansion it changed. base right? us go. growing here branded jump especially in impressive in from in, our really have start. saw different on been very or will strong going numbers is you assume and digital our recent let labeling are to than has numbers and time

It's money continue and also grow. capabilities. consumer our And drop money businesses, on countries, The I cash to that dropping time. within – from money offering we are is for huge And retail started to competitive in look, part payout different will in collecting mean other advantage real real-time we right? for a on accounts Amazon that businesses. dropping

parties We are for our transactions and business-to-business growing third had X%. good doing by year a

would from generally nothing say Investors has that So Day. changed I our

we We you a promising. like momentum. add our we good are in something? those are targeted our goals. We like transformational efficiency in XXXX still and are we Anyone business, And to especially activities very activities want how affirming, our are are

Raj Agrawal

covered you've think I it.

So I think good. we're

Korey Marcello

any third of and update the can and plans of year Amazon obviously like go broader more longer guess Okay, from out on follow-up guess, market that particular third year? looks guess live. there. pipeline the what a give next baked kind some you for great. I there those called the update as anything maybe there for just I in I Amazon mentioned a terms guidance parties maybe of into in you partnership, like kind the stuff And term, of this Thanks. and for as you've is parties

Hikmet Ersek

part, is you in currency it's digital dotcom the term. and XXX cross And some to capable on on some talking is as we our countries stronger cross our it's longer go-to-market, our unique. environment, countries move we consumer on the business – a and strong money. our good depending two that of news partnership operating countries partner, partners in started are labeling the But having we border on choosing I depending right? capability growth; countries the that's definitely legal are that Yes, depending growth, in relationship. look, And capabilities think said, a in offering good our very digital on white We helps our

consumers definitely right. they instance UK Postale, having strong And postal the and their we – mean, consumers signed we million small will Post. Banque – good big very, potential with and to recently offices so, three they by additional I transaction the access post mobile Italian very has but still I mean, with cross-border growing phones, Italy partners. do La our And go it's like update Italy using X for will Post platform. is and

time we for impressive them. quite dropped in money it's real So and

codes, depends partnership their to brand are we Amazon the their Union choose that's online referred partner as Amazon, own money collect on if to services. being choose, Western continue. uses like It really a for going provider how them And service or they they which

Korey Marcello

All right, thanks guys.

Hikmet Ersek

Thanks Korey.

Raj Agrawal

you. Thank

Operator

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

Unidentified Analyst

this guys, Darrin. Hey is on Andrew, behalf of

Raj Agrawal

Hey, Andrew.

Unidentified Analyst

domestic? other looks Raj? into widened to there and bit for how's to quarter? wanted into couple America. any further drill I the over quarters like this little can Hey, between is wondering, transactions last the color And outlook drill the want transactions number stable North the domestic revenues all that in impact on little XXXX? going into is a It bit. any it you and was I of North quarter the what was a in for or digital in America I Delta that and saw you additional if largely provide relatively

Raj Agrawal

Yes. our driver that money key domestic North of transactions U.S. in America, I'd in transfer really one the say the was declines

also transactions, Philippines We number a a was has that small very heavy which business intra of declining. have also

on impact an has overall that mix. So

I impact also also which overall of just although is a part say at there. market if look the principal wu.com grew we’ve some quarter. U.S.-to-Mexico business, digital so again, market But you obviously of XX%. cross-border the then in that contributor had at The was the things we the standpoint, of softer there America North part in would And share gain place U.S.-to-Cuba, from for to an limits these put continue a new

part bit in a of quarter the certainly previous digital, digital than was to little do domestic the So in continues part it The it quarter. well. the worse was

Unidentified Analyst

about like And to mean, the across mix new been able have? that the how separate metric, time think then that regions I really that I we it's them out, the that. that called first that different should revenues you've you all digital you think

segments? the of should So about that better Thanks. maybe just we us get letting a sense think how across

Raj Agrawal

which in and right a two now, quarter right ones includes revenue the of those XX% the Russia. as the of in Telecom We Saudi only handful are The wu.com digital Sberbank as now. well mean, partners. and primary have Arabia I grew Yes, digital, for Saudi

growth. lot ones the of are those the additional So are that primary driving a two

is those cut to of not well if Middle it's in East will, Europe. in as as there's regions in you terms two it much the in globally, where So

more really look the of sign And, offerings certainly is and right? both we We and with non-branded at being branded offering, want our they're one platform partners to type digital more leveraging opportunities. and capabilities, total

Hikmet Ersek

our to for Saudi in that market Telecom in brand, the but network. Arabia platform, by they the in use platform, basically it's network, same westernunion.com go dropped case seeing platform our They we Saudi decision their partner's user, and and if it's platform our our money use and

a really brands. it's with different digital So, transaction

Unidentified Analyst

right, guys. All thanks

Hikmet Ersek

Yes, thank you.

Operator

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

Ben Budish

factors this on talked is and Ben are impacting know kind that actually I like called you one-time growth, guys, or there really growing that's East to the out? versus factors Europe better on some those transactions is wanted you Hey by the of STC wallet follow-up Budish growth called at you of for and through in maybe just read looking kind to related growth one-time Middle to but, than the Ramsey. those of there, Middle perfect East. white-label I out about anything the guys in that is kind all

Raj Agrawal

I say and which India of tax and obviously factor, it the there’s to then reversed. also some the long related we'll was civil unrest the factors how called one-time in most is the Syria see issue is Yes, would the be out, other Lebanon,

what working we're quarter, third play we right quarter. late some now. tax through and but was But that's the in it came the customer in then reversed that into did attrition fourth So have

see the this but be that come we'll of assumed to part first through months we should able along here. that year in that, we've So some the as work of

in really to you So factors related rather than any mix if it's will. shift those

Ben Budish

with of would And just got mean, according again of has does like nicely, kind say little along back performance a at any things Okay. we've line that Analyst to expectations? following plan? then there it been on on were is kind Day white-labels, going things kind seem I it the that and change hint the are the up of in like you of like or to looks quite moving

Raj Agrawal

continue to more much mix. moving They're the well are want very things more them. quite partners according plan. and say would I we're doing add And along to to excited very we and about Yes, to

Ben Budish

taking Okay, questions. my great. Thanks for

Raj Agrawal

Thank you.

Operator

from question the of next ahead. comes go Our Please Vasu KBW. Govil

Vasu Govil

guess just my tailwind to clearly taking of it like question. for you stability from or if doesn't Thanks what's whether a an And for I been a underlying on like pricing couple the competitive that's pricing impact also comment talk abated? starting the could then about Hi. seem Can the are in seems better. you your quarters first dynamic the you is the it's see trends enabling front, environment the one pricing on environment now. are initiative it because necessarily

Hikmet Ersek

we as partly dynamic the obviously our environment earlier, We with pricing mix, Well said by comfortable impacted pricing feel pricing partly environment. with strong activities.

globally. few we code, adjust can like compare that excited behavior As a will ZIP you ZIP by even that something start And are we behavior that and corridor-by-corridor, know, airliner, about effort and and and we in we That’s by a price you you our that’s you in And the code expand about we customer direction. we corridors one that’s pricing customer and aiming on return this with beginning very just big started payments. we needs, that’s we different have though are that. to story corridors see the and some good fly going customers happen are different different started with quite to excited what that. and of

Vasu Govil

growth the quick transaction just Raj. trends, Great. on Thanks. And follow-up a

India mentioned or that any coronavirus the for think negative? confirm, the you the to the that assuming be kind Is on just have will you’re saw that true just various or that, impact piece weak your this in first on one to all half. positive does I you that quarter? previous of business, timers continue question And then

Raj Agrawal

Yes.

called the our more. any country see about control you total are we not that entire continue to this And for the China of but items where we unrest. every them have expect auctioning – that’s, are day. obviously that one-time some our part It’s assumed under a and there we’ll least we’ve inbound issues, not year. the update single evolving the our us more coronavirus, conditions control, civil some mostly certainly of terms We at it’s things the ones from In first year. for that impact don’t under that X% of for but nature. for continue as obviously, is of things in that material are we’re assumed those for out specific coronavirus standpoint, we revenues these really QX, will are

need how we plays out. that So, to see

Hikmet Ersek

but China, you our in and are look mention money want And an And most of I active. we support it’s of we also that mean, them agent same all, only the locations X% said, as time, drop important very business. at our minutes it’s to I those in Yes. first after on locations, can employees and But China. account the of agents’

to So, they to payout, a don’t online also is and and have if parts the the could business. feel it physical do location one this of of growing people go our

see really we from do so And impact big yet. coronavirus don’t

go general Now, impact at areas our don’t I what global on can’t big the economy, to see that have judge we business. it generally, we’ll but specific

Vasu Govil

very helpful. Thank you much. That’s very

Raj Agrawal

Sure.

Operator

from Our Please Andrew SunTrust. of Jeffrey go ahead. question comes next

Andrew Jeffrey

taking the good question. Hi, afternoon. you Appreciate guys

Hikmet Ersek

Hi, Andrew.

Andrew Jeffrey

the conceptually, wondering how just I’m business, just you’re about Raj. thinking

CTC to for that fueling that about to better of a and as cash the and the being digital comment reasonable XXX% capital. of a of made business today. a capital cow is really being a it’s looking free support framework? a it cash shareholders. that source appear about sort and your strictly of presumably, at balance think of should increasingly the Is investments and the would lack wu.com, of returning term you think business return I feature domestic we growth

Raj Agrawal

Yes.

– in the type growth a out composition the has I we last then of expected next of overall single-digit we was do was of said but X% of expected the of in grow to the then at the be the that business. X% our think mid bit million case. Andrew, a contribution. laid we off out to business to that obviously, we’d over a grow as continue we it, that and and and our believe And base three expect changed. like growth assumption range bit And That’s years not little year. for Day, BXB range. also Investor digital that retail flattish XX% to a can of that And we quite get will $XXX

really the and thinking growth, comes not to satisfactory, more to X% that’s and as than X% where components we we along. about. are want platform and those our play Obviously, we’re that’s move into signing partners drive more strategy to So, just more

just was of revenues X% about point domestic it on last But year. last total business, the our

what and assumed a piece So, the in probably so and it’s we’re year smaller smaller and going becoming that’s of a our for see company, this to outlook well. for overall trend – as little we’ve while, a that’s

Andrew Jeffrey

Okay.

that that the So, still I for retail business hoping guess turn corner can you?

Raj Agrawal

Yes. ahead. Yes. Go

Hikmet Ersek

different strength that, retail. serve we but I the business. in digital with most that’s drives economical it’s mix in payout The a segments coverage the compared cash side. different out retail, customer business, serve retail to paying combining a of that that’s mean, connect And customers that the in We you – importantly, paying account growth receive nobody and we and a and in we an out has do or in out side. on paying Yes. of our different the it’s continue assume us, big the digital environments, wallet, flat with a global happening huge, different in send can real-time, advantage or going on definitely for

Raj Agrawal

side you think more continues and Investor dynamic at be I as saw And drive opportunity it Day to Yes. the is pricing case, on the the to retail capabilities.

kinds density, week, location because there day the range, give that So, we opportunity in us flattish time type things the more fully of business haven’t we keep can that there’s maximized day, yet. of confidence retail of those

Andrew Jeffrey

I it, and improved apologize like but that? wu.com Okay. it this driving on yields – what’s What quarter. I missed if again looks And

Raj Agrawal

mean I the domestic impact there for – mix cash, if domestic Yes, there parts business was our of some certainly and you business will. running we’re things, because the from

the was that that beneficial so is. growth We as the of we we the but where mix over XX% was transaction certainly overall in about did so digital, mix in net has good and some on a XX% in digital business side. net quarter, also pricing business. positive There And we’ve the pricing digital revenue revenue mentioned, had growth feel that

on side. quite well overall So, we’re the digital doing

Andrew Jeffrey

Okay.

wu.com specifically pricing that’s across… at So or

Raj Agrawal

Yes. wu.com branded offering? the On

Andrew Jeffrey

Okay. All right. Thank you.

Raj Agrawal

Yes.

Operator

ahead. Please next go comes Chiodo Our question Credit Tim of Suisse. from

Tim Chiodo

some the transaction? a Thanks lower, transaction to afternoon. revenue bit is digital I talk might how the a per could in the taking little unit white about the obviously that and traditional transaction to wanted of but for I maybe, compare you the labeling Western Good talked dollars absolute EBIT about Union little of per that bit economics my question. talk a past know, programs. about we’ve

Raj Agrawal

Yes.

learn what the partners of stages to First early on say I it’s label we’re and absolutely you’re they provide, right. economics going to continue would of on but kind all, still can white

standpoint, You are to either in transaction do offerings. don’t lower typically per point in have also from we investing revenue acquire will marketing in The heavily wu.com have paying, customers. starting cost transaction that we branded but our as a we much transaction, we’re a

transaction, and transaction being losses do other and we’re But us delivered We with also white that in have who good things are wants paying we has for. label a fraud to funds, a customer, right? a

So, we and have spend costs. really the we marketing dollars processing the don’t there

so incremental early margins the we of experience, based quite last learn And But would as profits. can incremental I on white more as business. actually is it our thing the we profitable in offerings be and that be these revenues an going we’re a and that partners. more So, to say incremental label largely can very business, launch high see

Tim Chiodo

on, absolute Right [Audio bit to get Dip] the thank more dollar. little at a you.

dollar and is I higher, percentage the could but be lower that understand similar? actually – be the could So, margin the could absolute revenue be

Raj Agrawal

we that’s you of very on examples depends. I It the tell profitable. currently can is depends. have one It going

we’re profitable, getting, and The but other is again, incremental incremental one profits. revenues as not

as it’s within not thing how making – and framework But per getting overall for for transaction. important most it’s So, long it’s our the us. on the money that’s obviously, we’re much important as incremental business we’re company

we learn and us. wouldn’t wasn’t be more this it for we’ll if profitable doing So, overtime

Hikmet Ersek

very are which post and like and – the it’s corridor also and but started sorry, westernunion.com be – are business. depends profitable that, geography, the on depends but it offices our both placing you – it’s both additions Yes. will on it mean the are of the profitable, and the our partner new I partner,

was was revenue. you As only as know, X% – as we it only started of it report, our started, we to

will XX% our future part about on of and done big Now, the very revenue. a adding our that. same will huge be of of digital it’s the wu.com And part by company also a of business profitable. could digital It’s consumer the business approach, combining be be and we think like

Tim Chiodo

a That’s I Thanks appreciate really Great. lot. helpful. it.

Raj Agrawal

Sure, no problem.

Brad Windbigler

we anyone do have Andrea, queue? in the else

Operator

There’s in Instructions] time. this [Operator no one the queue at

Brad Windbigler

Great.

Okay. for joining. Thank you Thanks. everyone We’ll it here. end

Hikmet Ersek

Thank you.

Operator

presentation. Thank you has today’s concluded. attending now for The conference

You may now disconnect.

The Western Union Company (WU) 11 Feb 202019 Q4 Earnings call transcript