Investor meeting presentation final version

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<ul><li> 1. Visa Inc. Investor Day June 6, 2013</li></ul><p> 2. Agenda 8:00 a.m. WelcomeJack CarskyStrategic OverviewCharlie ScharfDeveloped Markets PerspectiveBill SheedyEmerging Markets PerspectiveElizabeth BuseQ &amp; A Discussion 9:45 a.m. Break and Innovation Showcase10:15 a.m. Driving Growth through InnovationJim McCarthyInnovation Panel DiscussionSam Shrauger, Bill Gajda, Mike Walsh, and Silvio TavaresFinancial ReviewByron PollittBringing it all TogetherCharlie ScharfQ &amp; A Discussion 12:45 p.m. Luncheon and Innovation Showcase 2 | Visa Investor Day 3. Forward-Looking Statements Reminder This presentation contains forwardlooking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by terms such as "believe," "continue," early thoughts, expect," guiding principals, over time, preserve, reinvest, return excess cash, trend and similar references to the future. Examples of such forward-looking statements include, but are not limited to, statements we make about revenues, client incentives, expenses, operating margin, tax rate, earnings per share, capital expenditures, free cash flow, financial inclusion, market penetration, innovation, investments, electronification of payments and the growth of those items. By their nature, forward-looking statements: (i) speak only as of the date they are made, (ii) are neither statements of historical fact nor guarantees of future performance, and (iii) are subject to risks, uncertainties, assumptions and changes in circumstances that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from those forward-looking statements because of a variety of factors, including the following: the impact of laws, regulations and marketplace barriers, including: rules capping debit interchange reimbursement fees promulgated under the U.S. Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act; rules under the Dodd-Frank Act expanding issuers' and merchants' choice among debit payment networks; increased regulation inside and outside the United States and in other product categories; increased government support of national payment networks outside the United States; and rules about consumer privacy and data use and security; developments in litigation and government intervention, including those affecting interchange reimbursement fees, antitrust and tax; any failure to make our multidistrict interchange litigation settlement effective; and regulatory and litigation developments in Europe having direct or indirect impact on Visa Inc. and its subsidiaries or clients;economic factors, such as: an increase or spread of the European crisis involving sovereign debt and the euro; governmental budgeting impasses; cross-border activity and currency exchange rates; material changes in our clients' performance compared to our estimates; and other global economic, political, natural disaster, terrorist, and health conditions;industry developments, such as competitive pressure, rapid technological developments and disintermediation from the payments value stream;system developments, such as: disruption of our transaction processing systems or the inability to process transactions efficiently; account data compromises or increased fraudulent or other illegal activities involving our cards; and issues arising at Visa Europe, including any failure to maintain interoperability between our systems, and any failure to indemnify for antitrust exposurescosts arising if Visa Europe were to exercise its right to require us to acquire all of its outstanding stock;loss of organizational effectiveness or key employees, or change in strategies prompted by the risks outlined in this reminder or by unforeseen risks;failure to integrate acquisitions successfully or to effectively launch new products and businesses; andAll risk factors and other matters discussed in our most recent Annual Report on Form 10K filed with the U.S. Securities and Exchange Commission.You should not place undue reliance on our forward-looking statements. Unless required to do so by law, we do not intend to update or revise any forwardlooking statement, because of new information or future developments or otherwise. This presentation contains certain prior-period non-GAAP financial measures, including previously released EPS results for 2012. A reconciliation of these non-GAAP measures to GAAP accompanied their release and can be found in the company's Form 8-K filed with the U.S. Securities and Exchange Commission ("SEC") on October 31, 2012, and Form 10-K filed with the SEC on November 16, 2012, which reconciliation is incorporated by reference as if set forth fully herein.3 | Visa Investor Day3 4. Strategic Overview Charlie Scharf Chief Executive Officer 5. Key themes for todayBusiness is built on a strong foundation Macro trends are working in our favorSuccessful progress on our aspirations Investing intelligently for growth5 | Visa Investor Day 6. The Visa business Key Metrics Payments Volume Merchant Acceptance Locations1 ATMs Cards Outstanding Net Revenue Adjusted Diluted EPS2Historical Growth CAGRFY121 Year5 Year2$3,936B7%11%~36M + mPOS8%6%2M3%9%2.1B8%6%$10.4B13%15%$6.2024%29%(4-year CAGR)1) Includes locations in Europe 2) Adjusted EPS of $6.20 excludes covered litigation provision of $3.82, a reversal of tax reserves of $0.48, and a deferred tax adjustment of $.031, compared to GAAP EPS of $3.16 (numbers do not recalculate exactly due to rounding). Fiscal 2007 amounts represent combined historical balances of Visa U.S.A., Visa International, Visa Canada and Inovant, prior to Visa Inc.s October 1, 2007 reorganization, on a pro forma basis. See Form 8-K and Form 10-K filed on October 31, 2012 Sources: Merchant Acceptance Locations from Nilson issues 1014, 989 and 903. Payments Volume, ATM and Cards Outstanding from Visa Inc. Quarterly Operating Certificates, as reported by client financial institutions6 | Visa Investor Day 7. Our business is built around great partners of all sizes Leading share at 7 of top 10 US issuers Financial Institutions US Long-term contracts with &gt;600 US Financial Institutions Leading share with Credit Union and Community Bank associations ~12,000 Visa clients in the US ~3,000 non-US Visa clientsFinancial Institutions Non-US Leading share at 17 of top 25 non-US issuers in Visa Inc. geographies ~60% of non-US cards-in-force were issued by smaller issuersSources: Top issuers from Nilson 1003, 1001, 1000, 999, 991 (2012), excluding Europe and China; share from Visa Quarterly Operating Certificates FY12, as reported by client financial institutions, and Visa Inc. Estimates; smaller issuers identified as those FIs outside of Visa Inc.'s top 25 non-US issuers7 | Visa Investor Day 8. Our business is built around great partners of all types Co-brand Merchants 7 of top 10 US co-brands are majority Visa Many large, global co-brands are Visa partners Over 3,000 government programs in 30+ countriesGovernmentNew Payment ParticipantsSource: Visa Inc. 2013 Internal Cobrand Estimate8 | Visa Investor Day Working with governments on financial inclusion objectives Active engagement with strategic partners Partnering to connect traditional and emerging playersCommerce EcoSystems Commerce Enablers Mobile Network Operators 9. The Visa story1958 2007 Context2007 20112011+ Financial Institution-owned association structure Global merger (ex. Europe) Increased regulatory activity Integration of five associations Rapid technological change Six autonomous associations (US, Canada, Asia Pacific, CEMEA, LAC, Europe) Initial Public Offering Migration to mobile Growth in eCommerce Evolving competitive landscape Merchant-centric modelsVisa Focus Financial Institution focus Internal focus initially Accelerated innovation Regional priorities Shift to for-profit model Flexibility/adaptability Building credit and debit categories Establish Visa as a growth company Redefine customer base Build prepaid CYBS, PlaySpan, Fundamo acquisitions9 | Visa Investor Day Broaden partnerships Focus on customer objectives Financial inclusion 10. Consistency of macro trends PCE for Visa Inc. Countries ($T) PCE CAGREmerging Market PCE Developed Market PCE20212324Visa Inc. Country PCE Penetration Visa PCE penetration in Visa Inc Emerging Markets Visa PCE penetration in Visa Inc Developed Markets6% 22%22%20% 19%89101010%121313133%9% 6%200920102011201220097% 20108%20112012We have confidence in continuation of favorable macro trends Notes: PCE defined as Purchase PCE (does not include non-financial transactions); excludes Europe Source: Euromonitor Merchant Segment Survey estimates, 2013; Visa Inc. Quarterly Operating Certificates, as reported by client financial institution; Visa Inc. Analysis10 | Visa Investor Day 11. Our growth drivers Contribution to Revenue Growth 20122008-2011PCE Growth25%28%Visa Penetration of PCE56%43%Pricing / Acquisitions / Other19%29%100%100%Net Revenue Growth Macroeconomic growth is a consistent driver of Visa revenue growth Strong global electronification trends further drive new volume and revenue Share gain and pricing have also provided revenue growth Source: PCE from Euromonitor Merchant Segment Survey estimates, 2013; Visa Inc. Quarterly Operating Certificates, as reported by client financial institutions; Visa Inc. estimates11 | Visa Investor Day 12. Cash is the single biggest opportunity Visa Inc. Developed Markets (2012)PCE~$13TPCE 13-16 CAGR4%PCECash / Check % of PCE41%Cash / Check Opportunity~$5TVisa Inc. Emerging Markets (2012)PCE~$10TPCEPCE 13-16 CAGR10%Note: PCE defined as Purchase PCE (does not include non-financial transactions); excludes Europe Source: PCE growth from Oxford Economics (Nominal $); all other data from Euromonitor Merchant Segment Survey estimates, 201312 | Visa Investor DayCash / Check % of PCE62%Cash / Check Opportunity~$6T 13. Potential for electronification acceleration Mobile acceptanceFinancial inclusion with government supportMerchant driven electronification With over 4M merchants, Square is now a top 35 merchant for Visa in the US1 The number of mobile terminals globally grew from 4.5M in 2011 to 9.5M in 20122 2.5 billion underbanked worldwide, 1.7 billion of which have access to a mobile phone3 Visa is collaborating with Indian government on the Unique Identification (UID) project to expand financial inclusion Alternative commerce channels that require electronic payments have grown 4x faster than traditional offline commerce worldwide4Brand names and logos are the property of their respective owners and the use of third-party logos does not imply product endorsementSources: 1) Square and Visa MARS database, April 2013 2) 2020 Foresight: Mobile Point of Sale Technology. Timetric, 2013 3) World Bank Global Financial Inclusion Database 2013 4) Euromonitor Passport Database, 201313 | Visa Investor Day 14. Expanding Value of VisaNet Historic Access and Acceptance Channels Transaction Processing Products and Services Business Intelligence Platforms and Tools 14 | Visa Investor DayCurrentFuture Basic POS and ATM Acceptance Clear rules and processes New segments (e.g. small ticket) New access channels (mobile, mPOS, developer centers) Platform for merchants and issuers to customize experience and grow commerce Reliable authorization, clearing, settlement Traditional transaction authentication tools (e.g. CVV, PIN) Value-added and OBO transaction services Customizations for geographical settlement Account level processing Highly customized processing experience New cross-channel technology support (e.g. tokenization) Basic settlement reporting Operational transaction reporting Risk and fraud management tools Business intelligence to target and deliver realtime offers Services based on item/basket level information Enhanced authentication capabilities 15. Investing for the future Incremental expense FY13E vs. FY11 Non-US Market FocusProduct InnovationTechnology and Infrastructure~$125M~$300M~$275MSources: Visa Inc. internal financial information15 | Visa Investor Day Sales Marketing Acceptance Product V.me CyberSource Mobile Information Products Processing Development Security Investing incremental ~$700M for growth in 2013 vs. 2011 Acquisitions of CyberSource, PlaySpan, and Fundamo in 20102011 also totaled $2.3B 16. Striving to be flexible and adapt to the evolving needs of our partners Principles to govern increased flexibility Support the Visa brand and maintain the safety, soundness, and security standards associated with that brand Maintain control over Intellectual Property Enable clients of all sizes to compete in the marketplace Must add value to the Visa network Examples of how flexibility will benefit our partners Support financial Institutions: allow issuers / acquirers to take advantage of their existing relationships and capabilities Merchant focus: build more strategic commercial relationships with merchants by engaging in direct dialogue, demonstrating value and providing targeted and relevant merchant facing products and services Government: assist government partners in pushing electronification and expanding financial inclusion 16 | Visa Investor Day 17. Strategic Aspirations for 2015 As presented at 2010 Investor DayOn track?AspirationBy 2015, Visa willAccelerate electronificationReach X% payments volume share of global PCEDiversify geographicallyGenerate 50% of revenue from outside U.S.Embed processingEnsure X% of all our transactions are processed on VisaNetEnter new businessesDrive X% of revenue from offerings that Visa does not have commercialized in the market todayFocus on offerings that support/add value to VisaNetDifferentiate value propositionPrioritize its investments to services that drive unique value and can be monetized in negotiationsMaximize shareholder valueBe a global top 75 company by market capitalization Focus on Total Shareholder Return17 | Visa Investor DayEvolution17 18. Developed Markets Bill Sheedy Global Executive, Corporate Strategy, M&amp;A, and Government Relations 19. Common themes across developed and emerging marketsCash and Check Opportunity19 | Visa Investor DayGrowth in BusinessMerchant OpportunityInnovationGovernment Engagement 20. Over $5 trillion in paper-based payments in developed markets$137 18%$219Canada$20 14%United States$3,10836%South Korea Hong KongJapan39%$1,806 60% Singapore2012 PCE ($B) % of PCE on paper-based paymentsCash &amp; Check$35 42%$157 21% Australia/ N.Z.Electronic Payments20 | Visa Investor DayNotes: PCE defined as Purchase PCE (does not include non-financial transactions); excludes Europe Source: Euromonitor Merchant Segment Study 2013, estimates; Nomura Research Institute, 2012; all data is calendar year 21. Revenue growth translates into lower yield Transaction MixDomestic ProcessingValue-Added ServicesChile Example Payment...</p>