MoneyGram International's CEO Presents At 40th Annual J.P. Morgan Global Technology, Media And Telecom Conference (Transcript)

MoneyGram International Inc. (MGI)

40th Annual J.P. Morgan Global Technology, Media and Telecom Conference

May 15, 2012 2:10 PM ET

Executives

Tien-Tsin Huang – JP Morgan

Pamela Patsley – Chairman and CEO

Alex Holmes – EVP and CFO

Presentation

Tien-Tsin Huang

All right, are we good to go? All right. Thanks everyone for joining us. My name is Tien-Tsin Huang. I cover Computer Services and IT consulting at JP Morgan. So, very happy to have MoneyGram here with us. Pam Patsley, the CEO is here; Alex Holmes as well, CFO. So, same format as the others, doing fireside chats and obviously have the opportunity for the audience to ask a question. I think this is being webcasted, so we’d probably would do want to use the mic.

But maybe I’ll just kick it off and get right into it. Pam, I guess the big theme to me – the big take away from the first quarter is that we actually saw growth accelerate a little bit and the metrics get a little bit better. So, just to start out there, maybe if you can just put some context to that, why we’re seeing a little bit of acceleration. What is MoneyGram doing specifically to drive that? How much of that is cyclical versus some of the things that you’ve been putting in place?

Pamela Patsley

Okay, great. Thanks. Welcome and I appreciate your interest in MoneyGram today. We did, and thank you for noticing, have great results for the first quarter. And I would say momentum had picked up. But we had been, I think, putting up some pretty good numbers the last several quarters. The industry, the World Bank is kind of the best measure for growth in cross border remittances. So, unlike 2009 and 2010 where that industry and shrank in 2009, very modest growth or flat in 2010, modest growth in 2011, they’re projecting kind of 6% to 8%, 7% kind of growth this year. So, the industry is back to growth and we are basically outpacing that kind of 2X.

And I think, Tien-Tsin, it’s really all the work we’ve been doing to aggressively continue to build our network, improve agent productivity and the network we’ve already had, and focus those initiatives on network improvement and activation of new network around kind of the relevant quarters. I think our marketing has been very effective. I think our message to consumer resonates well. I think we’ve worked on a lot of kind of service-related initiatives, specifically in Mexico on the receive side. I know I’ve talked about that probably a year ago. And we’re seeing the fruits of our labor there. So this is what we’re going to continue to do. It’s kind of double-digit for us on an internal talking point, if you will.

Tien-Tsin Huang

I’m curious. I’ve been getting this question more and more, Pam. It’s about just migration in general given austerity, some views on protectionism, et cetera. What’s happening with migration trends? I think sometimes we get a little bit too complacent and not appreciate migration has been a long-term secular driver. So what do you see globally?

Pamela Patsley

Yeah. So as the – I guess just in the nutshell, what we see globally is that our consumer who leaves their country of origin or their home country for work is flexible. And when the Romanians aren’t finding as much work in Spain because Spain unemployment rate is 20% to 30%. Some have it as much as 31% for the migrant population. Romanians we’re seeing or going more to Germany. The Poles aren’t going as often to Ireland to find work. So a lot of these are kind of just common sense things. Someone that we were visiting with earlier said it’s kind of like water finds its own level or whatever.

So that is certainly something we’re experiencing. And our presence in 194 countries says that can still be our consumer. That Romanian used to go to Spain but is now going to Germany can still be our consumer. And you still have the same issue with the G6 and the aging population and the low birth rate in the developed countries. So as much as the economy can be a little bit sluggish or in the dumps. And you can have all kind of theoretic policy issues around immigration, at the end of the day, to even just maintain GDP let alone grow it, most developed countries need guest workers. And Russia is living that in spades. So just a very, very low birth rate population. And so, all the Russians speakers from the stands provide most of the workforce there.

Tien-Tsin Huang

That all makes sense. So given that and what’s happening in Europe, how much time do you spend focusing on the cycle there and what’s happening there both from a macro and from a regulatory standpoint? It sounds like you’re diverse enough that you can weather the storm. But obviously, it’s a big question that people have in their minds especially at this conference.

Pamela Patsley

Yeah. Europe as a whole is an amalgamation of a mixed story really. So we still that Southern Europe, as we talked about at the first quarter and really I think also the fourth quarter conference call, Greece, Italy, Spain, Portugal very, very challenged. We saw tremendous growth in Germany and France from a send perspective. UK remained very, very strong for MoneyGram. So it’s a tale of kind of two Europe’s’. We’re seeing Poland be more of a send country and not just received. So getting back a little bit to that migration notion.

Read the rest of this transcript for free on seekingalpha.com

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