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The Western Union Company Q1 2010 Earnings Call Transcript

The Western Union Company Q1 2010 Earnings Call Transcript

The Western Union Company (WU)

Q1 2010 Earnings Call

April 27, 2010 08:30 am ET


Mike Salop - VP, IR

Christina Gold - President, CEO and Director

Hikmet Ersek - COO

Scott Scheirman - EVP & CFO


Tien-Tsin Huang - JP Morgan

Andrew Jeffrey - SunTrust

Jason Kupferberg - UBS

John Williams - Goldman Sachs

Ashwin Shirvaikar - Citi

Jim Kissane - Bank of America/Merrill Lynch

Bryan Keane - Credit Suisse

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Jim Wiley - Wells Fargo



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Good day ladies and gentlemen and welcome to the first quarter 2010 western union company earnings conference call. My name is Jerry and I will be your coordinator today. At this time, all participants are in a listen-only mode. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today Mr. Mike Salop, Senior Vice President for Investor Relations. Please proceed, sir.

Mike Salop

Thank you, Jerry and good morning everyone. On today’s call we will have comments from Christina Gold, Western Union’s President and Chief Executive Officer, Hikmet Ersek, our Chief Operating Officer, and Scott Scheirman, Executive Vice President and Chief Financial Officer. After the comments, we will have time for your questions.

As we indicated in our press release we have prepared slides to accompany this call and webcast. These slides can be found at under the Investor Relations tab and will remain available after the call. I would also like to point out that additional operational statistics were provided in a supplemental table with our press release.

As a reminder, today’s call is being recorded and our comments include forward-looking statements. Please refer to the cautionary language in the earnings release and in Western Union's filings with the Securities and Exchange Commission including the 2009 Form 10-K for additional information concerning factors that could cause actual results to differ materially from the forward-looking statements.

During the call, we will discuss some items that do not conform to generally accepted accounting principles. We have reconciled those items to the most comparable GAAP measures on our website under the Investor Relations section. All statements made by Western Union officers on this call are the property of The Western Union Company and subject to copyright protection. Other than the replay, Western Union has not authorized and disclaims responsibility for any recording, replay or distribution of any transcription of this call.

I would now like to turn the call over to Christina Gold.

Christina Gold

Thank you, Mike and welcome to everyone on the call. I’m sure many of you have read this morning that I announced my intention to retire as President and Chief Executive Officer of Western Union on September 1. After leading the company for over eight years, I feel the timing is right. The Western Union brand and network are strong, our strategies are in place and we have a sound succession plan.

I have been very fortunate to have worked of exceptional employees, agents and business partners over the years and one those exceptions people is Hikmet Ersek. Hikmet has been with Western Union for over ten years, most recently as Chief Operating Officer after previously leading our Europe, Middle East, Africa and Asia-Pacific regions. Hikmet will assume the President and CEO role and I’m very confident he’s the right person to lead Western Union forward.

Now, our business is off to a good start in 2010 as we execute on our strategies of driving profitable growth in our core C2C money transfer developing electronic channels and expanding business payments.

Globally our core cash money transfer business is gaining momentum. Although we still face challenging employment levels in key send regions, we are experiencing improving trends in many markets and believe we are continuing to gain market share. Our total international business have been steady with transaction gains in US outbound offsetting the expected less favorable trends in the Gulf state.

Transactions in our C2C business grew at a health 8% rate which was 300 basis points higher than the fourth quarter of 2009 and our strongest increase in the last five quarters. The improvement was primarily driven by the Americas region while we continue to benefit from last year’s repositioning of the US domestic business. Our plan to pull US consumers to our brand remains on track and domestic transactions ramped up to 18% growth in the quarter.

In addition to US domestic, the Americas benefited from improved trends in both US outbound and Mexico. We also made advances on our strategic initiatives, we are signing new retail agents in activating locations in Europe as we move towards our target of an incremental 10,000 retail agent activations by year-end. We have been placing particular emphasis on signing smaller independent shops which are located in areas where large immigrant populations work and live.

One retail signing we just completed is the Martin McColl convenience store chain in the UK, which will provide an additional 700 agent locations. In the US, our banking strategy took another step forward as we completed the rollout of our Money Transfer service at more than 1300 Fifth Third bank locations. Banks now represent 13% of our total US and Canada network locations.

Within our electronic channels, had a record transaction month in March with the international portion posting over 60% growth in the quarter, we are moving forward with our country expansion plans for later in the year and adding new product offerings to the US site such as overnight home delivery and gift cards. We are also enhancing non-transaction services as we have seen a large number of visitors using for activities such as finding agent locations, evaluating projects or checking on the status of their transaction.

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