Western Union(US:WU)2020-02-12 01:05Financial Data and Key Metrics Changes - Fourth quarter revenue increased by 3% on an adjusted constant currency basis, while reported revenue of $1.3 billion declined by 7% compared to the prior year period [8][19] - Adjusted EPS for the fourth quarter was $0.38, down from $0.51 in the prior year [29] - The GAAP effective tax rate was 31.4% in the quarter compared to 9.8% in the prior year period, primarily due to certain discrete benefits in the prior year [28] Business Line Data and Key Metrics Changes - Consumer-to-Consumer (C2C) segment reported revenue was flat, with a 1% increase on a constant currency basis, while transactions declined by 1% [20] - Digital money transfer revenues increased by 25% on a constant currency basis in the fourth quarter, with westernunion.com revenue growing by 17% [24][10] - Business Solutions revenue was flat on a reported basis but increased by 1% on a constant currency basis, driven by strong performance in Europe [25] Market Data and Key Metrics Changes - North America revenue grew by 1% on both reported and constant currency basis, while transactions declined by 4% [21] - The Europe and CIS region saw revenue increase by 1% or 2% on a constant currency basis, with transactions increasing by 5% [22] - The APAC region experienced a revenue decline of 10% on both reported and constant currency basis, primarily due to the Philippines domestic business [24] Company Strategy and Development Direction - The company aims to enhance its global payments network, drive digital growth, and optimize its organization in 2020 [13][16] - A focus on transitioning the consumer business from a transaction-based model to a lifetime value model is underway [15] - The company plans to expand real-time account payout capabilities to over 100 countries [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2022 margin and EPS targets, with expectations for a strong start in 2020 [18] - The company does not anticipate a material impact from the coronavirus, as China represents only 2% of total revenues [58] - Management highlighted the importance of partnerships and digital expansion as key growth drivers [39][40] Other Important Information - The company returned over $880 million to shareholders in 2019 and announced a 13% increase in the quarterly dividend [8][9] - The company incurred $17 million in restructuring expenses in the fourth quarter, with a total of $115 million for the full year [27] Q&A Session Summary Question: Guidance for business solutions and revenue shape - Management indicated that fundamentals remain unchanged and digital expansion is expected to perform well [36] Question: Update on Amazon partnership and third-party pipeline - Management noted that partnerships are growing and contributing to strong digital growth, with ongoing discussions for additional partnerships [39] Question: North America transaction and revenue delta - The decline in domestic money transfer transactions in the U.S. was a key driver, but digital cross-border transactions grew at 26% [44] Question: Impact of pricing initiatives - Management confirmed that dynamic pricing initiatives are yielding positive results, contributing to revenue stability [56] Question: Unit economics of digital white-label programs - Management stated that while revenue per transaction is lower, the margins can be high due to lower associated costs [72]