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The Western Union's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Stocks in this article: WU

I'd now like to turn the call over to Hikmet Ersek.

Hikmet Ersek

Thank you, Mike, and welcome, everyone.

Overall, our performance in the quarter was generally in line with our expectations, and we made some good progress in our 3 strategic growth areas of Global Consumer Financial Services, Business Solutions and Ventures.

In consumer-to-consumer money transfer, our revenue growth accelerated compared to the fourth quarter as constant currency revenue growth increased to 5%. Our North American business was generally strong, and we also saw improved revenue trends in the Middle East, Africa and Asia Pacific regions. U.S. domestic money transfer continued to deliver good growth, and Mexico revenue increased in the quarter. The expected softness in Europe and Russia is here and we did see flat results for the region compared to a year ago, but revenue trends were slightly improved relative to the fourth quarter.

We made more progress in advancing our class-of-trade strategies in money transfer. We recently signed SunTrust Bank as an agent in the U.S., adding to a list that includes U.S. Bank, KeyBank, Regions, Fifth Third and others. Globally, almost 60% of our Western Union agent locations are banks and post offices, but we are also widely present in retail supermarkets, travel agents, other financial services and many more classes of trade.

I'm also very pleased to announce that in April we reached 500,000 agent locations around the world. This is a huge milestone in Western Union's 160 years of history. We believe the expansion of our presence in 200 countries and territories will continue and it will remain a competitive advantage to grow our core money transfer and other products.

Beyond our core Global Consumer Financial Services, we are also making progress evolving our new businesses. Although our Business Solutions pro forma revenue growth of 5% was below our target due to some softness in North America and the U.K., our new customer acquisitions remained strong and our geographic expansion is progressing. Business Solutions is now able to offer services directly or through partners in 25 countries. Our integration efforts with Travelex are on track. Our growth strategies are being implemented, and we remain committed to low double-digit constant currency revenue growth for this business over the next several years.

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