The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Answer By: Mike Salop - Western Union Company - SVP - IR
Question: Bryan Keane - Credit Suisse - Analyst: Yes, hi, it's Bryan Keane, Credit Suisse. Hikmet, maybe you could talk a little about market share. I think the last numbers I saw was 18% per share for Western Union. All these new channels, does this mean share will go up, down. Can you help us with that? And then, secondly -- the second question, just looking at historically, Western Union has been able to grow a lot faster in the history of the company. Is there anything that prevents Western Union from getting the historical growth rates, besides the economy obviously is there competition or some other reason why you can't get back there? ¬2010 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by
Answer By: Hikmet Ersek - Western Union Co. - President, CEO
Answer By: Mike Salop - Western Union Company - SVP - IR
Question: Adam Frisch - Morgan Stanley - Analyst: Adam Frisch from Morgan Stanley. I just wanted to extend my compliments to the team here for the presentation. I thought it was great and very well done. But it only goes so far in terms of the next real thing that everyone is going to be looking for is execution. I think the last couple of quarters have been good, but now, the expectations are getting higher the bar is getting higher. not disappointed and maybe talk about Hikmet, your plans in terms of compensation, metrics, goals, objectives, how you tie your goals and objectives so that the incentives are completely aligned with your shareholders. Thank you.
Answer By: Hikmet Ersek - Western Union Co. - President, CEO
Answer By: Scott Scheirman - Western Union Company - EVP, CFO
Answer By: Hikmet Ersek - Western Union Co. - President, CEO
Answer By: Scott Scheirman - Western Union Company - EVP, CFO
Question: Tien-Tsin Huang - JPMorgan - Analyst: Tien-Tsin Huang from JPMorgan. I just want to ask about your commitment to margin expansion. It sounds like obviously, with revenue growth, it would be there, but with a lot of the investments and the mix of the business changing, I'm curious about your level of confidence and margin expansion. As a related questions, pricing -- I curious about pricing. I think in the past, we've talked about 2% to 3% is a good level for investments and I'm curious if that's still a good number to consider, given what you discussed today.
Answer By: Scott Scheirman - Western Union Company - EVP, CFO
Answer By: Mike Salop - Western Union Company - SVP - IR
Question: Ashwin Shirvaikar - Citigroup - Analyst: Ashwin Shirvaikar from Citi. My first question is on, as you become more of a broad financial services company, what should we expect the impact on marketing spin in innovation to be? The $200 million number I figure is not going to be enough. What might that number be two years from now?
Answer By: Hikmet Ersek - Western Union Co. - President, CEO
Answer By: Scott Scheirman - Western Union Company - EVP, CFO
Question: Ashwin Shirvaikar - Citigroup - Analyst: Thank you.
Answer By: Mike Salop - Western Union Company - SVP - IR
Question: Tim Wili - Wells Fargo - Analyst: Tim Wili with Wells Fargo. Question about the mobile payments and I appreciate the information around revenue per transaction. Two parts of the question, one is can you talk about the role of the Asian Commission Structure around mobile payments? How it sort of sits right now, in terms of account cash and how people maybe cash out what's on their phone to access cash? And then, second, do you see anything in emerging markets around the alternative of electronic channels, like mobile it impacts, agent relationship, your priority for physical agent growth, as opposed to alternative delivery?
Answer By: Mike Salop - Western Union Company - SVP - IR
Answer By: David Yates - Western Union Company - EVP - Alternative Channels
Answer By: Hikmet Ersek - Western Union Co. - President, CEO
Answer By: Mike Salop - Western Union Company - SVP - IR
Question: Jason Kupferberg - UBS - Analyst: Jason Kupferberg from UBS. One for Scott and one for Stewart if I could. Scott, maybe we can start with you on the restructuring program from earlier this year. I think you guys have talked about $30 to $40 million in savings next year and $50 million per year starting in '12. Can you talk about how you're going to balance how much of that you'll let drop to the bottom line versus re-invest in the business?
Answer By: Scott Scheirman - Western Union Company - EVP, CFO
Question: Jason Kupferberg - UBS - Analyst: Just for Stewart on the prepaid side. 560,000 some odd cards in force, I think you highlighted at this point are 650, maybe it was. Can you tell us among those cards, what percentage of them are active, if you will? We define active as having a load or a spend transaction, say within the last 60 or 90 days, however you guys might measure it. Just so we have a sense of what kind frequency of activity. I now it's still early days, but it would be helpful. Thanks.
Answer By: Stewart Stockdale - Western Union Company - President - Americas, EVP - Global Cards & Global Key Accounts
Answer By: Mike Salop - Western Union Company - SVP - IR
Question: Bill Carcache - Macquarie - Analyst: Hello, Bill Carcache with Macquarie. Can you please address the risk of cannibalization of the core money transfer business from these alternatives of money transfer? Hikmet, you mentioned when you spoke earlier that you expect pricing to hold despite the emergence of these money transfer alternatives. Can you help us understand how pricing holds given the competitive dynamics in prepaid, Internet and mobile? Thank you.
Answer By: Hikmet Ersek - Western Union Co. - President, CEO
Answer By: Mike Salop - Western Union Company - SVP - IR
Question: Craig Moore - COSA - Analyst: [Craig Moore], [COSA]. Just want to build on the last question. With all the businesses you'll be signing up through what was custom house, is there a future where you can extend your C2C business so that people will receive money through their mobile and then actually be able to pay those businesses that might be a part of your custom house network, directly, so this would mediate the traditional payment methods.
Answer By: Mike Salop - Western Union Company - SVP - IR
Answer By: Scott Scheirman - Western Union Company - EVP, CFO
Answer By: Hikmet Ersek - Western Union Co. - President, CEO
Answer By: Mike Salop - Western Union Company - SVP - IR
Question: David Todd - Evercore Partners - Analyst: [David Todd], Evercore Partners. Jean Claude highlighted Africa as a growth opportunity this week. Wal-Mart announced the acquisition of Massmart. How are you affected by that, money gram pickup business with Wal-Mart or could you go after Wal-Mart?
Answer By: Hikmet Ersek - Western Union Co. - President, CEO
Answer By: Stewart Stockdale - Western Union Company - President - Americas, EVP - Global Cards & Global Key Accounts
Question: David Todd - Evercore Partners - Analyst: Relationship in Africa?
Answer By: Stewart Stockdale - Western Union Company - President - Americas, EVP - Global Cards & Global Key Accounts
Answer By: Hikmet Ersek - Western Union Co. - President, CEO
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