GAAP Revenue Increases 7%, Constant Currency Revenue Increases 5%
EPS of $0.41, or $0.42 Excluding Restructuring Expenses
2011 Revenue and EPS Outlook Increased
2011 Revenue and EPS Outlook Increased
ENGLEWOOD, Colo.--(BUSINESS WIRE)--The Western Union Company (NYSE: WU) today reported financial results for the 2011 second quarter.
Financial highlights for the quarter included:
- Revenue of $1.4 billion, an increase of 7% compared to last year’s second quarter
- Constant currency adjusted revenue increase of 5%
- Operating margin of 25.7%, or 26.3% excluding restructuring expenses, compared to 24.4%, or 27.1% excluding restructuring expenses, in the prior year. Current quarter includes $6 million of costs related to the Travelex Global Business Payments acquisition
- Gain of $0.03 per share in Other income related to the Company’s previous 30% ownership position in Angelo Costa S.r.l.
- EPS of $0.41, or $0.42 excluding restructuring expenses, compared to $0.33 in the prior year, or $0.36 in the prior year excluding restructuring expenses
- Year-to-date cash provided by operating activities of $506 million
- Restructuring expenses of $9 million, or $6 million after-tax, related to organizational changes and other actions as previously disclosed by the Company
Additional highlights for the quarter included:
- Consumer-to-consumer (C2C) revenue increase of 8% reported and 5% constant currency on transaction growth of 6%; C2C represented 84% of Company revenues
- Europe, Middle East, Africa and South Asia (EMEASA) region revenue increase of 8% on transaction growth of 4%
- Americas region revenue increase of 5% on transaction growth of 7%
- Asia Pacific (APAC) region revenue increase of 16% on transaction growth of 12%
- C2C operating margin of 28.6% compared to 29.1% in prior year
- Global Business Payments revenue increase of 4%
- Bill payments revenue increase of 2%
- Western Union Business Solutions (WUBS) revenue increase of 14%
- Global Business Payments operating margin of 19.9% compared to 18.9% in the prior year
- Electronic channels revenue increase of over 35%. Electronic channels, which include westernunion.com, account based money transfer, and mobile money transfer, represents 3% of total Company revenue for the quarter
- Prepaid cards in force of 1.1 million, with retail distribution available at approximately 12,000 U.S. locations
- Growth in agent locations to 470,000
- Agreement to acquire Travelex Global Business Payments (TGBP), a leading specialist provider of international business payments, which enhances the Company’s position in one of its key strategic growth areas, business-to-business cross border payments
- Agreement to acquire the remaining 70 percent of Finint S.r.l., a leading money transfer network agent in Europe, which provides the Company more direct access to agent locations and scale benefits on existing European infrastructure
- Share repurchases of $135 million (6.6 million shares at an average price of $20.35 per share) and dividends paid of $50 million in the quarter. Quarterly dividend increased 14%, to $0.08 per share, in May
Additional Statistics
Additional key statistics for the quarter and historical trends can be found in the supplemental table included with this press release.
Western Union President and Chief Executive Officer Hikmet Ersek commented, “We continue to see solid trends in our business, and I am pleased we are able to raise our full year outlook for both revenue and earnings per share. The consumer-to-consumer business is growing in each of our regions, and our bill payments revenue growth turned positive in the quarter for the first time since 2008. We also made further strides in electronic channels, which now represent 3% of total Company revenue.”
Ersek continued, “I am very excited about the recent announcement regarding the acquisition of Travelex Global Business Payments, which will give us immediate scale, further reach, and added capabilities in the business-to-business cross border payments market. Our existing b-to-b business, Western Union Business Solutions, is on track for good growth this year, and we are expanding distribution through our money transfer agent network in several countries. The combination of Travelex Global Business Payments and Western Union Business Solutions will give us a strong foundation for long-term growth in international business payments.”
Ersek added, “We continue to deploy the Company’s strong cash flow against our priorities of investing in the business, making strategic acquisitions to accelerate growth and diversify our sources of revenue, and returning funds to shareholders through both share repurchase and dividends, while maintaining a strong balance sheet. In addition to the Travelex Global Business Payments acquisition, which is expected to close late this year, we completed the purchase of one of our leading money transfer network agents in Europe, Angelo Costa, in April, and expect to complete the Finint acquisition later this year. We have also been active in the first half of the year in returning funds to shareholders. In May, we raised our dividend by 14%, and year-to-date through June we have repurchased $660 million of our shares.”
