Western Union(US:WU)2020-05-06 00:51Financial Data and Key Metrics Changes - First quarter revenues declined 1% on an adjusted constant currency basis, with adjusted operating margin expanding to 20.5% and adjusted EPS growing 7% year-over-year to $0.44 [15][36] - First quarter revenue of $1.2 billion declined 11% compared to the prior year period, primarily due to divestitures, while adjusted constant currency revenue declined 1% [28] - GAAP earnings per share in the quarter was $0.42 compared to $0.39 in the prior year period, and adjusted earnings per share was $0.44, compared to $0.41 in the prior year period [36] Business Line Data and Key Metrics Changes - In the consumer-to-consumer segment, reported revenue declined 4% or 3% on a constant currency basis, with transactions declining 3% primarily due to COVID-19 impacts [28] - Digital money transfer revenues increased 21% or 22% on a constant currency basis in the quarter, accounting for 16% of total C2C revenues [32][33] - Business Solutions revenue increased 3% on a reported basis or 5% constant currency, representing 8% of company revenues in the quarter [33] Market Data and Key Metrics Changes - North America revenue declined 2% on both reported and constant currency basis, while transactions declined 5% [29] - Revenue in the Europe and CIS region decreased 5% on both reported and constant currency basis, with transactions growing 1% [30] - Revenue in the Latin America and Caribbean region decreased 11% on a reported basis or 3% constant currency on transaction declines of 5% [32] Company Strategy and Development Direction - The company is focused on expanding digital capabilities, diversifying its global payments network, and optimizing its organization [9][21] - The strategic decisions made in previous years have positioned the company to navigate the COVID-19 crisis from a position of strength [8][10] - The company aims to capitalize on opportunities emerging from the accelerated industry transformation post-COVID-19 [19][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the significant impact of COVID-19 on the business but expects this impact to be temporary [19] - The company is not reinstating formal financial targets for 2020 due to high levels of uncertainty [38] - Management remains optimistic about long-term prospects and believes the company is well-positioned for future success [42] Other Important Information - The company has pledged significant funds to support COVID-19 relief efforts and is implementing measures to ensure the safety of employees and customers [14] - The company has an undrawn $1.5 billion revolving credit facility and no significant debt maturities until 2022 [41] Q&A Session Summary Question: On the expense side, what should be assumed regarding fixed costs and potential savings? - Management targets $150 million of run rate savings over three years, with potential for additional short-term savings depending on revenue trends [44][45] Question: How is the digital versus traditional customer mix shifting? - Most new customers are digital, with some traditional customers converting to digital due to lockdowns [46][47] Question: Can you provide insights on April trends and improvements? - C2C transactions declined 21% in April, showing improvement from March, with positive signs in certain markets [52][53] Question: How is government stimulus impacting outbound volumes? - Stimulus payments have helped sustain consumer base, with improvements seen in both digital and retail businesses [80][81] Question: What are the expectations for the tax rate for the year? - The tax rate came in lower than models, and management is evaluating the implications for the rest of the year [82]