Western Union(US:WU)2020-10-30 04:16Financial Data and Key Metrics Changes - Revenue for Q3 2020 was $1.3 billion, a decline of 4% compared to the prior year, with a constant currency revenue decline of 1% [20][21] - GAAP operating margin was 22.7%, compared to 15.1% in the prior year, primarily due to restructuring costs in the previous year and current productivity savings [31] - Adjusted earnings per share increased to $0.57 from $0.49 in the prior year [33] Business Line Data and Key Metrics Changes - Consumer-to-Consumer (C2C) segment revenue was flat on a constant currency basis, with transaction growth of 6% driven by a 96% increase in digital money transfer [21][22] - Digital money transfer revenues grew 45%, accounting for 21% of total C2C revenue and 31% of total C2C transactions [24][26] - Business Solutions segment revenue decreased 11% on a reported basis, representing 7% of total company revenues [30] Market Data and Key Metrics Changes - North America revenue trends improved to flat year-over-year, driven by U.S. outbound business [27] - Revenue in Europe and CIS increased 3% on a reported basis, led by Germany, France, and Russia [28] - Latin America and Caribbean region revenue decreased 21% on a reported basis due to COVID-19 impacts [29] Company Strategy and Development Direction - The company is focused on enhancing digital offerings and investing in customer acquisition, data analytics, and technology infrastructure [16][17] - The digital business is seen as a significant source of incremental profit, with over 80% of westernunion.com customers being new to the company [13][14] - The company aims to expand its omnichannel capabilities and improve its network coverage and quality [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery from COVID-19, noting strong performance in digital channels and retail trends [7][19] - The company anticipates continued growth in digital transactions and is preparing for a new normal post-pandemic [66] - Management expects GAAP revenues for the full year to decline in the high-single digits due to COVID-19 impacts [34] Other Important Information - The company has a strong financial position with $1.3 billion in cash and an undrawn $1.5 billion revolving credit facility [34] - The company is on track to achieve $50 million in annual productivity savings this year [18] Q&A Session Summary Question: Trends in principal per transaction and customer stickiness - Management noted that higher principal per transaction is driven by customers transacting at higher levels and new customers exhibiting similar behavior [38][39] Question: C2C business trajectory and October performance - Management indicated that the business is improving month-to-month, with retail contributions and digital growth driving overall performance [44][45] Question: Capital deployment and stock buyback considerations - Management stated that they are considering stock buybacks as confidence in the business grows, while maintaining a strong dividend policy [48][49] Question: Guidance for fourth quarter and pricing strategies - Management clarified that the guidance reflects ongoing trends and that dynamic pricing strategies are in place to drive customer acquisition [51][54] Question: Opportunities in white label partnerships - Management highlighted the potential for growth in white label partnerships, particularly with financial institutions transitioning from correspondent banking [67][68]