U.S. Markets closed

Edited Transcript of WU earnings conference call or presentation 5-May-20 8:30pm GMT

Q1 2020 Western Union Co Earnings Call

ENGLEWOOD Jun 3, 2020 (Thomson StreetEvents) -- Edited Transcript of Western Union Co earnings conference call or presentation Tuesday, May 5, 2020 at 8:30:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Brendan Metrano;VP of Investor Relations

* Hikmet Ersek

The Western Union Company - President, CEO & Director

* Rajesh K. Agrawal

The Western Union Company - CFO

================================================================================

Conference Call Participants

================================================================================

* Andrew William Jeffrey

SunTrust Robinson Humphrey, Inc., Research Division - Director

* Bryan Connell Keane

Deutsche Bank AG, Research Division - Research Analyst

* Darrin David Peller

Wolfe Research, LLC - MD & Senior Analyst

* James Eugene Faucette

Morgan Stanley, Research Division - Executive Director

* Jason Alan Kupferberg

BofA Merrill Lynch, Research Division - MD in US Equity Research & Senior Analyst

* Ramsey Clark El-Assal

Barclays Bank PLC, Research Division - Research Analyst

* Tien-Tsin Huang

JP Morgan Chase & Co, Research Division - Senior Analyst

* Timothy Wayne Willi

Wells Fargo Securities, LLC, Research Division - MD & Senior Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Good day, and welcome to The Western Union Company First Quarter 2020 Earnings Release Conference Call. (Operator Instructions) Please note, this event is being recorded.

I would now like to turn the conference over to Brendan Metrano, Vice President, Investor Relations. Please go ahead.

--------------------------------------------------------------------------------

Brendan Metrano;VP of Investor Relations, [2]

--------------------------------------------------------------------------------

Thank you. On today's call, we will discuss the company's results for the first quarter of 2020 and then we will take your questions. The slides that accompany this call and webcast can be found at westernunion.com under the Investor Relations tab and will remain available after the call. Additional operational statistics have been provided in supplemental tables with our press release.

Western Union is still following a work-from-home policy. So on our remote call today is our CEO, Hikmet Ersek; our CFO, Raj Agrawal; and Head of Treasury and Investor Relations, Brad Windbigler.

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 2019 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, westernunion.com, under the Investor Relations section.

We will also discuss certain adjusted metrics. Although the expenses that have been excluded from adjusted metrics are specific to these initiatives, the types of expenses may be similar to types of expenses that the company has previously incurred and can reasonably be expected to incur in the future.

All statements made by Western Union officers on this call are the property of The Western Union Company and are subject to copyright protection. Other than the replay noted in our press release, Western Union has not authorized and disclaims responsibility for any recording, replay or distribution of any transcription of this call.

I will now turn the call over to our CEO, Hikmet Ersek.

--------------------------------------------------------------------------------

Hikmet Ersek, The Western Union Company - President, CEO & Director [3]

--------------------------------------------------------------------------------

Thank you, Brendan, and good afternoon, everyone. We hope you and your families are safe and well. Our thoughts are with all of those who have been affected by COVID-19.

Western Union has been determined to do its part by living up to our responsibilities as one of the most trusted global brands, delivering essential services to millions of customers worldwide during this unprecedented and challenging time. We are grateful to all of the frontline heroes and essential workers as well as our employees and partners who are working tirelessly to combat this global health and economic crisis.

During our call today, our CFO, Raj Agrawal, and I will share how Western Union is navigating the current environment and discuss our first quarter results. We will also share our views on the market environment impacted by COVID-19 and provide our perspective on economic and customer trends.

The COVID-19 pandemic has brought social and business life to a grinding halt. Stock markets have been in turmoil, global GDP growth projection have been plummeted to near historic lows, and unemployment rates in many countries have surged.

The effects of this pandemic are likely triggering one of the greatest economic shocks of the past century. Our industry is no exception, and we are experiencing the impacts of the COVID-19 pandemic. Besides migration flows, economic indicators like GDP growth and employment levels are indicative of consumer behavior and business activity. However, I'm glad to say that the strategic decisions and the investment we made at Western Union during the past years have laid the foundation for us to navigate to this unprecedented crisis from a position of strength. We have one of the most trusted global consumer brands. Our strong corporate balance sheet and healthy financial position are supported by a very strong annual operating cash flow and investment-grade credit rating and an undrawn revolving credit facility.

Our operating model and WU Way lean management tools give us the necessary financial flexibility to support our operations as well as our capital allocation priorities. Further, the backdrop of COVID-19 has highlighted the importance of the new global strategy we laid out at our Investors Day in September of 2019. It has not only confirmed but accelerated the implementation of our strategic priorities for 2020 and beyond, including the expansion of our digital capabilities, the diversification of our global payments network and the opening of our cross-border platform to new use cases and partners. These fundamentals, paired with a careful and diligent approach we have taken to navigate the first phase of COVID-19, will allow us to keep supporting our customers and clients as the world responds to COVID-19.

While the timing for the recovery from the pandemic and rebound of the global economy is currently uncertain, we stay focused on best positioning our company for success, both during and after the COVID-19 world.

Let me now take you through the pillars of our COVID-19 response. As an organization, our top priority during the crisis is the safety and well-being of all our stakeholders. So here is what are we doing. For our employees, we are supporting the safety, health and financial security of our global talent with measures like expanded employee assistance programs, a work-from-home policy and the technology infrastructure that enables our teams to perform at the same high level while operating under business continuity plans.

For our customers, we are accelerating the rollout of digital services and introducing new solutions to help customers transfer money and make payments around the world. For example, we recently launched westernunion.com in additional countries, enabling our customers to send funds digitally to the world, now from more than 75 countries. We introduced a digital location service in 10 countries that helps customers complete digital transactions to assistant voice and video calls. Additionally, we are expanding our payout service by working with agents to provide home delivery of money transfer in select countries where curfews are restricting the movement of our receivers.

We also fast-tracked the expansion of our real-time payout capabilities. For decades, we have been paying out transactions in minutes in approximately 130 currencies within our vast global retail network. Over the last years, we have diversified our payout network to include more than 4 billion accounts and wallets in over 100 countries. Recent enhancements to our payout network now enable customers to send funds into bank accounts and wallets in 50 countries in minutes. Further, we are working with our global agent partners to create a safe retail environment by implementing social distancing measures and safety procedures designed to protect frontline associates and customers.

While the large majority of our agent locations remain open as essential services, we offer a global agent locative tool updated multiple times a day to keep our customers informed about availability of our agent network.

For the communities. To support communities around the world, Western Union and the Western Union Foundation have pledged significant funds in the fight against COVID-19 which will support domestic hunger relief efforts and global health care systems. To show our appreciation to frontline heroes, this week, we will launch fee discounts on our digital channels for first responders and essential service workers across the world.

Lastly and importantly, we also continued to strive at being stewards of shareholder capital. We put an increased focus on cost discipline, efficiency and prioritization of investments. The careful management of our financial position ensures that we are prepared to meet current challenges and succeed in long term. Our capital allocation priorities remain unchanged. Besides continuing to invest in our operations and in growth initiatives, we plan to continue to return cash through quarterly dividends to our shareholders.

Let me now move into recap of our first quarter performance. Our first quarter started out solid. And through mid-March, our business performed well and in line with our objectives. In the second half of March, our transactions dipped significantly due to impact of COVID-19 global spread. In light of the observed performance trends and the rising uncertainty caused by COVID-19, we withdrew our 2020 financial outlook on March 27.

First quarter revenues declined 1% on an adjusted constant currency basis, including healthy digital revenue growth of 22%. Our adjusted operating margin expanded to 20.5%, and adjusted EPS grew 7% year-over-year to $0.44.

As uncertainty regarding COVID-19 remains high and global economic implications are starting to unfold, we are not reinstating the 2020 outlook at this time.

On a positive note, in recent days, we are encouraged to see some indications that customers and transaction trends are stabilizing, even turning positive in a few outbound markets like Germany and Switzerland. We are also seeing positive developments in some key receive markets where lockdowns policies are loosening.

I would now like to discuss some perspective on the global market environment we currently operate in and the customer trends we observe. Early on, a number of industries that rely on migrant workers were hit hard by the economic impact of COVID-19. As a consequence, some workers have less capacity to send support back to their home countries. At the end of April, the World Bank issued a forecast projecting a 20% decline for global remittances in 2020.

While we think this forecast is too pessimistic, we are expecting remittance volumes to be down this year. As we triangulate projections from various institutions, it is of utmost importance to keep our focus on the needs and sentiment of our customers. Despite the future economic outlook and respective employment uncertainty, we know through panels and surveys that our consumers still have a strong desire to continue sending money.

Our consumers are highly motivated to support families and loved ones back home and are typically resilient in their efforts to do so. We witnessed an example of this during the global financial crisis. COVID-19 has also accelerated a shift in consumer behavior and led to increased use of digital channels. Customers tell us that it is important to them to use a trusted brand when switching to digital send options. We think this is a factor that our digital transaction performing so well, a combination of channel shifts by some existing consumers and strong new customer acquisition.

Turning to our payments business. Our Business Solutions segment was less affected by COVID-19 in the first quarter due to strong foreign exchange hedging revenue and some key payments verticals like financial institutions performing well. While COVID-19 will also impact our payments business in the near term, Western Union's strong franchise should be a benefit as the industry navigates through this economic downturn. Over the long term, we believe our Business Solutions operations will continue to prosper.

To summarize, COVID-19 is having a significant impact on our business. However, we expect this impact to be temporary. Western Union as well as our consumers are proactively making adjustment to manage through this period of disruption. At the same time, we are getting ready to capitalize on opportunities emerging from when we expect to become a phase of accelerated industry transformation. Based on the very early signs we see from a few countries in the later part of April, we expect to be well positioned to capture these opportunities.

Our vision to be a leader in cross-border, cross-currency movement and payment has been underlined by a strong fundamentals, including a trusted global brand with over 90% brand recognition; a robust digital cross-border money movement platform; and expanding, unmatched global payments network consisting of 550,000 retail locations and billions of bank accounts and mobile wallets to serve a base of 150 million global consumers and thousands of global businesses.

Our resilient business model delivering solid profitability has proven vital once more in times of growth and even more in times of crisis. When the world emerges from COVID-19 crisis, we believe Western Union will remain well positioned to compete in the large and fragmented cross-border payments and remittance market. While we are one of the largest players in the remittance market, estimated at $700 billion of annual principal, our share is still small, and we see lots of opportunities to grow. We also see opportunities to grow our share within the cross-border payments market.

I would now like to provide you with a brief strategy update. We continue to execute well against the new global strategy we laid out at our Investors Day in September: enhancing our global network, driving our digital growth, opening our platform to new use cases and optimizing our organization. Built on the strength of our vast global retail network, we increased our breadth of our bank account payout network in the quarter, which now includes over 100 countries. We see evidence of these actions starting to pay off. In the first quarter of account payout network, transactions grew over 90%.

As part of our network optimization initiatives, we continued to generate commission savings through a combination of renegotiations and channel mix shifts. Also, our goal to optimize our organization and increase margins with our WU Way productivity program is progressing well.

On the growth initiatives, our consumer digital business grew first quarter revenue 22% on a constant currency basis, and we are seeing accelerating transaction growth in recent months. In fact, for the month of April, approximately 30% of our total C2C transactions were generated by digital channels. We are very pleased with this growth, and we are currently evaluating a number of initiatives to further enhance our digital business during this time when more consumers and partners are seeking reliable, high-quality digital services from trusted brands like Western Union.

Business Solutions is also further advancing on its digital journey. We currently see about 1/3 of our business clients digital self-serve their needs through our online platform, EDGE. In the first quarter, we reached a significant milestone of 1 million transactions on EDGE, with over 90% repeat payments transactions rate.

So overall, we are pleased with our long-term strategic initiatives. And before I pass over to Raj to discuss the financial results in detail, let me once again recognize and thank the millions of our customers around the globe who place their trust in our services, many of whom are the frontline heroes. They are nurses, grocery store workers or ambulance drivers. While they put their lives at risk and support millions of people that shelter in place around the world, at the same time, they are supporting their love ones, often far away from them, by sending money home.

I'm confident as a global community and strong company, we will get through this challenging time together. I remain excited about long-term prospects and would like to thank all our shareholders for their trust and the Western Union team for their hard work and commitment.

With that, I'll turn the call over to Raj.

--------------------------------------------------------------------------------

Rajesh K. Agrawal, The Western Union Company - CFO [4]

--------------------------------------------------------------------------------

Thank you, Hikmet, and good afternoon, everyone. Today, I will start off with a review of our first quarter results and then offer some insights into our plans for managing through the COVID-19 crisis. To improve comparability with prior year results and to better reflect ongoing operations, our adjusted results excluded the impact of the Speedpay and Paymap divestitures from revenue and costs associated with the restructuring initiatives and mergers and acquisitions.

Before I get into our first quarter results, I would like to provide some context around the impact of COVID-19 during the quarter.

Through mid-March, COVID-19's impact on our business was primarily limited to China, and to some extent, Italy. Overall, our business was performing in line with the expectations underlying our original 2020 financial outlook. In the latter part of March, as the spread of COVID-19 accelerated and stay-at-home orders were implemented, we began to experience significant declines in consumer-to-consumer transactions. In the final days of March, rates of decline were around 30%. Given the extent and uncertain duration of this disruption, it became clear that we could not reasonably project the impact of COVID-19 on our 2020 financial results. So on March 27, we withdrew our 2020 financial outlook.

Since then, trends for the month of April improved from March, with C2C transactions declining 21%. I will provide some thoughts on how COVID-19 may affect our business during 2020 in a few minutes.

Moving on to our first quarter results. First quarter revenue of $1.2 billion declined 11% compared to the prior year period, primarily due to the divestitures, while adjusted constant currency revenue, which excludes our divested businesses in the prior year period, declined 1%. Currency translation, net of the impact from hedges, reduced first quarter revenue by approximately $47 million compared to the prior year, primarily due to the depreciation of the Argentine peso. Decline in the peso negatively impacted reported revenue by 3%, while the effective inflation on our Argentina businesses is estimated to have positively impacted both reported and constant currency revenue by approximately 1%.

In the consumer-to-consumer segment, reported revenue declined 4%, or 3% on a constant currency basis. Transactions declined 3%, primarily due to the impact of the COVID-19 outbreak on outbound markets. We generally expect that demand for money transfers will remain strong for our inbound markets. But in the near term, the economic impact from the crisis will reduce senders' ability to meet that inbound demand.

Total C2C cross-border principal was flat, or increased 2% on a constant currency basis. Principal per transaction increased 2%, or 4% constant currency. The spread between C2C transaction and revenue growth in the quarter was 1%, with a negative 1% impact from currency.

Pricing was higher in the first quarter compared to the prior year period, but was offset by the negative impact of mix.

Turning to the regional results. My commentary today will focus on developments that reflect broader trends we're seeing in our business. North America revenue declined 2% on both a reported and constant currency basis, while transactions declined 5%. Pre-COVID-19 performance was on track with internal expectations. We saw strong growth in the U.S. to Mexico corridor, benefiting from the weaker peso, while domestic money transfer transactions continued to decline.

North America digital cross-border transaction growth remained strong, likely benefiting from some channel shifts of retail. Similarly, we saw an increase in account payout during the quarter. Revenue in the Europe and CIS region decreased 5% on both the reported and constant currency basis. Transactions grew 1% as growth in Russia benefiting from the Sberbank partnership was offset by declines in Italy, the U.K. and France. Both reported and constant currency revenue growth were negatively impacted by softening trends in retail due to COVID-19. However, our digital business continued to gain momentum, especially in March, with strong revenue and transaction growth.

A notable positive trend to highlight is that, in recent days, Germany, Switzerland and the Netherlands are now back to pre-COVID-19 growth trajectories.

Revenue in the Middle East, Africa and South Asia region increased 3% on both a reported and constant currency basis on transaction growth of 1%. Our Saudi Telecom partnership continued to be a key growth driver in the quarter. Sends to India, notably from the Gulf region, negatively impacted growth.

Revenue in the Latin America and Caribbean region decreased 11% on a reported basis, or 3% constant currency on transaction declines of 5%. The civil unrest that impacted the fourth quarter of 2019 quieted, but gave way to the impact of COVID-19. Argentina was the biggest source of pressure as COVID-19 policy responses resulted in significant location closures.

Similar to other markets experiencing lockdowns, we saw an increase in digital money transfer transactions and also adoption of digital wallet payout.

Revenue in the APAC region declined 10% on a reported basis, or 9% constant currency. Transactions declined 14% in the region, driven primarily by the Philippines domestic business, which has limited impact on revenue.

For our overall digital money transfer business, revenues increased 21%, or 22% constant currency in the quarter, including westernunion.com and our third-party white label and co-branded digital partnerships. Digital money transfer revenues accounted for 16% of total C2C revenue in the quarter. westernunion.com revenue grew 13%, or 14% constant currency. Cross-border westernunion.com revenue increased approximately 23%, which was partially offset by a decline in domestic money transfer.

For the month of April, westernunion.com transactions growth accelerated. Business Solutions revenue increased 3% on a reported basis, or 5% constant currency, and represented 8% of company revenues in the quarter.

Strong foreign exchange hedging revenue in Europe was a key contributor to constant currency growth.

Other revenues, which consist primarily of our retail bill payments businesses in the U.S. and Argentina, decreased 59% in the quarter, which primarily reflects the impact of the 2019 divestitures. Pago Facil walk-in business in Argentina posted good increases in transactions and local currency revenue growth. Other revenues represented 7% of total company revenues in the quarter.

Turning to margins and profitability. We will focus on consolidated margins, as segment margins are not comparable with the prior year period due to the divestitures and other cost allocation changes in the first quarter of 2020, and COVID-19 impact on the segments. We are also providing adjusted metrics to exclude restructuring expenses, M&A and related tax effects.

The consolidated GAAP operating margin was 19.6% in the quarter compared to 18.8% in the prior year period. The increase was primarily driven by savings from our productivity program and lower compensation expense, partially offset by the divestitures and changes in FX. We incurred $11 million of restructuring expense in the first quarter, related to productivity initiatives.

We continue to expect total restructuring expenses of $150 million related to our productivity program. And to date, we have incurred $126 million.

Adjusted operating margin in the first quarter was 20.5% compared to 19.3% in the prior year period, with the increase driven by the same factors stated above and adjusted for the restructuring and M&A costs. Speedpay contributed about 40 basis points to last year's first quarter margins, while foreign exchange hedges provided a benefit of $10 million in the current quarter and a benefit of $5 million in the prior year period.

The GAAP effective tax rate was 12.5% in the quarter compared to 19.9% in the prior year period, while adjusted tax rate was 12.5% compared to 20% in the prior year period.

The decrease in the GAAP and adjusted tax rates was primarily due to project tax liabilities from the divestitures in the prior year period and greater discrete tax benefits in the current period.

GAAP earnings per share in the quarter was $0.42 compared to $0.39 in the prior year period, and adjusted earnings per share in the quarter was $0.44 compared to $0.41 in the prior year period. The year-over-year increase in both GAAP and adjusted EPS was primarily due to productivity savings, lower compensation expense, a lower effective tax rate and fewer shares outstanding, partially offset by the divestitures.

Turning to our cash flow and balance sheet. GAAP cash flow from operating activities was $112 million for the quarter. The year-over-year decline in operating cash flow was primarily due to the timing of payables and liabilities. We expect continued strong free cash flow conversion in 2020. Capital expenditures in the quarter were approximately $36 million. At the end of the quarter, we had cash of $1.1 billion and debt of $3.1 billion.

We returned nearly $310 million to shareholders in the first quarter, including $92 million in dividends and $217 million of share repurchases, which represented approximately 8.5 million shares. The outstanding share count at quarter end was 411 million shares, and we had $783 million remaining under our share repurchase authorization, which expires in December 2021.

As Hikmet highlighted earlier, our company was in a strong position when the COVID-19 crisis hit. So we believe we can withstand this period of disruption better than many and come out of it with good momentum to execute our strategy and realize new potential opportunities.

As previously noted, we are not reinstating formal financial targets for 2020 due to the high levels of uncertainty. We'll discuss some factors we consider in our planning efforts. Our business is tied to global economic activity, with higher exposure to developed markets. Current forecast for 2020 global remittances vary anywhere from declines of 3.5% to 20%, and there's no single factor that predicted accurately.

So for the purpose of our discussion, we'll focus on the potential path to global economic activity over the course of 2020. Prevailing view from a number of forecast appears to be that global economic activity should bottom out during the second quarter of 2020, and with easing of restrictive policies, improve progressively through the second half of 2020 and into 2021. At this time, we think this is a reasonable trajectory to consider for our business.

Under this type of scenario, we believe that we can deliver solid margins, although there is likely to be significant quarterly variation along with revenues. Our cost structure is approximately 60% variable and 40% fixed, which provides some inherent margin buffer.

In addition, there are other fixed cost adjustments we can make to align with revenue trends. For example, we have delayed new hiring, deferred all nonessential travel and are prioritizing investments. The level of additional short-term expense reductions we realize also depends in part on the length and severity of declines.

We continue to target $150 million of annual cost savings through 2022 related to the productivity program we started last year, and are on track to realize 1/3 of those savings in 2020. Given our cash flow generation and solid balance sheet, our financial position remains strong. This was reflected by our investment-grade credit rating, which remains a high priority for the company.

We have an undrawn $1.5 billion revolving credit facility and are financing short-term working capital needs through the commercial paper market, which was less than $100 million at the end of the first quarter. We have no significant debt maturities until 2022.

Our capital allocation priorities remain unchanged. Our top priorities remain investing to support our existing operations and growth initiatives, and returning cash to shareholders through the quarterly dividend. We continue to evaluate opportunities for M&A, and then to the extent we have excess cash, we return it to shareholders through share repurchases. At this time, share repurchases have been temporarily parked, as we feel it is prudent to conserve capital until there is better visibility into how the disruption from COVID-19 plays out.

To recap, despite the current economic disruption, we believe we are well positioned for future success. We operate in a large and historically stable market. We have an operating model that provides flexibility, with 60% of our costs variable. We're executing on our strategic objectives to drive growth, and we operate from a position of financial strength. Thank you for joining our call today. And operator, we are now ready to take questions.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) The first question comes from Tien-Tsin Huang of JPMorgan.

--------------------------------------------------------------------------------

Tien-Tsin Huang, JP Morgan Chase & Co, Research Division - Senior Analyst [2]

--------------------------------------------------------------------------------

I hope you guys are well and safe and sound. The -- yes, I think how you laid out the outcomes on revenues makes sense and the withdrawal of guidance makes sense. But Raj, on the expense side, did I hear correctly, it sounds like we should assume that your expenses from here or the fixed side of it should be relatively flat, and then we should assume the $50 million in savings coming through? Is that sort of the base case? Is there an opportunity to maybe bring forward some of the extra $100 million into this year, if need be?

--------------------------------------------------------------------------------

Rajesh K. Agrawal, The Western Union Company - CFO [3]

--------------------------------------------------------------------------------

Yes. I think the way to think about it, Tien-Tsin, is that we're still targeting the $150 million of run rate savings in 3 years from the programs we launched last year. But we probably do have some additional opportunity this year with fixed cost savings, and it largely depends on how revenue plays out, too. So we've already stopped hiring any significant new roles. We've already -- and also travel is limited, obviously, in this environment. We're also reprioritizing some of the key investments we want to make. So there's certainly more opportunity for cost savings beyond the $50 million on a short-term basis, I would say, Tien-Tsin.

--------------------------------------------------------------------------------

Tien-Tsin Huang, JP Morgan Chase & Co, Research Division - Senior Analyst [4]

--------------------------------------------------------------------------------

Okay. Got it. And then just my quick follow-up on the -- thinking about second order effects of the pandemic and the digital versus traditional mix shift, the assumption is what? Are we seeing the traditional customers converting to digital faster? Or are the new digital customers still primarily new to Western Union? Just trying to understand that interplay. And then also maybe just an update on your profit or margins on the digital side versus traditional.

--------------------------------------------------------------------------------

Hikmet Ersek, The Western Union Company - President, CEO & Director [5]

--------------------------------------------------------------------------------

Yes. Let me take the first part, saying that most of the customers are new to this digital. As you know, we have 2 digitals. One is with digital partners, one is with westernunion.com, and that -- especially in the westernunion.com, we see new customers continuing to be new customers, but we do also see some conversions. As people are locked down, they are subjects of lockdown orders to regulators in many countries. They just can't go out of the -- to the street and make transactions. Many people do choose westernunion.com. They are very loyal to our brand, and they do use westernunion.com. But many, many customers are joining us as a new customers, especially on the digital side -- digital partner side, sorry, all are new, right? As you know, as we rolled out with the digital partners, new customer segments, they are new to our network. Raj, do you want to talk about the profitability there?

--------------------------------------------------------------------------------

Rajesh K. Agrawal, The Western Union Company - CFO [6]

--------------------------------------------------------------------------------

Yes. Yes. I mean I think, Tien-Tsin, just this environment really reinforces why our digital strategy is so good and why it's going to continue to be very beneficial to us. Our digital business overall is very profitable, both for branded and nonbranded offerings. We look at largely as incremental business, incremental customers. If you break it down a little bit, westernunion.com has a relatively high RPT or revenue per transaction. It's a little bit lower than retail, but relatively close. And then the gross margins on that business on a percentage basis are not too dissimilar from retail. So it's a very profitable business.

And then on the partnership side, we are more of a processor of transactions, as we've talked before, and we don't have a lot of cost in that process. So we have a lower starting point in terms of revenue per transaction, but the margins are very high in the white label side and it's still early stages, I would say. We don't have a lot of those partnerships yet, and so we're still learning, but it certainly has driven a lot of good growth in the overall business.

--------------------------------------------------------------------------------

Tien-Tsin Huang, JP Morgan Chase & Co, Research Division - Senior Analyst [7]

--------------------------------------------------------------------------------

Yes. And I would think the real-time account payout network building out quickly has got to help a little bit.

--------------------------------------------------------------------------------

Hikmet Ersek, The Western Union Company - President, CEO & Director [8]

--------------------------------------------------------------------------------

Yes. It does, Tien-Tsin.

--------------------------------------------------------------------------------

Operator [9]

--------------------------------------------------------------------------------

The next question comes from Jason Kupferberg of Bank of America.

--------------------------------------------------------------------------------

Jason Alan Kupferberg, BofA Merrill Lynch, Research Division - MD in US Equity Research & Senior Analyst [10]

--------------------------------------------------------------------------------

I just wanted to start with a question picking up on some of the comments about April. I think you said down 21% for the month in terms of the C2C transactions versus the 30% exiting March, so obviously some improvement there. Can you just talk about how you kind of exited April? Whether that's the last few days, week, whatever you think the right way to talk about it is, because it sounded like you had a couple of outbound corridors that got back to pre-COVID level. So I just wanted to see where we actually exited April?

--------------------------------------------------------------------------------

Rajesh K. Agrawal, The Western Union Company - CFO [11]

--------------------------------------------------------------------------------

Yes. Jason, we entered April at about the same rate of decline, so about minus 30-or-so, and it did improve sequentially throughout the month. So we exited the month better. I would just say we're really focused on the total month performance at minus 21, but certainly, we saw some positive signs as we moved through the course of the month. And certain markets began to open up later in the month, like Germany and Switzerland, Netherlands, and that did have a positive impact. And for that reason, we think that second quarter is likely to be the lowest quarter for us from a revenue and a profit margin standpoint, and it should improve based on what the forecast that exists externally after we get to the second quarter. So it was positive in the month of April, so relatively speaking.

--------------------------------------------------------------------------------

Hikmet Ersek, The Western Union Company - President, CEO & Director [12]

--------------------------------------------------------------------------------

I think, Jason, if you look at the digital growth in April, was impressive, right? Obviously, as I mentioned earlier, our digital strategies are working. We were coming with a higher 20% now in April is even 32% growth on transactions on digital overall April within that environment. And don't forget, we are one of the largest in digital. We have about $600 million revenue last year, right? In 2019, we had $600 million growing from that basis is really great. We are now in 75 countries with our dot-com business. And then we have many, many digital partners, like white label digital partners globally. So I am proud what we have done. The team has done a good thing in the right time putting the digital. Especially during this crisis, it's really great to see.

--------------------------------------------------------------------------------

Jason Alan Kupferberg, BofA Merrill Lynch, Research Division - MD in US Equity Research & Senior Analyst [13]

--------------------------------------------------------------------------------

Just to pick up on that. I mean do you have a view at this point, how much of the uptake of digital will end up manifesting itself in terms of permanent consumer behavior change? There's a lot of talk about that more broadly in other parts of the payments industry. I'm curious how you're thinking about it within the remittance market, even once we're on the other side of the virus?

--------------------------------------------------------------------------------

Hikmet Ersek, The Western Union Company - President, CEO & Director [14]

--------------------------------------------------------------------------------

Yes. I think, as you know, we have a network of digital and retail. Obviously, globally, we have about 550,000 locations and about 4 billion accounts. The current customers are new, Jason. Most of them are new to our network and they are sticky. We know that they are loyal, and we do have loyalty programs to keep them in our network, and they stay within the network. I think that once you start with the -- especially during the crisis, with the trusted environment, I think you stay. And we do have, worldwide, about 150 million customers, as I outlined in the last meeting, at our Investor Day meeting. We are going more on our ecosystem -- around the consumer ecosystem. We are building that, keeping the loyalty, adding additional products and making them more loyal to our brand.

So the good news is that the digital customer segments and new customer segment, as you know, you need to fund on a credit card or bank account. On the retail, continue to be funded. The fund even has to be collected via cash. And so it's the balance on that. And I -- we probably have the best service on that to serving both kind of customer segments.

--------------------------------------------------------------------------------

Jason Alan Kupferberg, BofA Merrill Lynch, Research Division - MD in US Equity Research & Senior Analyst [15]

--------------------------------------------------------------------------------

And just last quick one for me for Raj. I mean I know your adjusted operating margins were up 120 basis points here in the first quarter. You're going to obviously feel a good amount of revenue pressure in the second quarter. But on a full year basis, do you feel like your adjusted operating margins can increase year-over-year?

--------------------------------------------------------------------------------

Rajesh K. Agrawal, The Western Union Company - CFO [16]

--------------------------------------------------------------------------------

Yes. I don't really have an outlook to give you for that, Jason. A lot of it is going to depend on the level of revenue trajectory that we get. So if we had a better feel to the exact revenue outcome, we'd be able to give you that. I do think we're going to drive strong operating margins. We're doing a lot of things, obviously, to drive the original savings burdens that we launched last year, and those are going very well for us. And then we're also looking at incremental cost savings this year. So we can mitigate the impact of some revenue decline, obviously, not all of it. And I do expect the second quarter is going to be the lowest from a revenue and profit standpoint, but hopefully, we'll improve from there. And you can look at the first quarter, it's not necessarily indicative of the entire year, but we were down in revenue, but we actually were able to increase our margins year-over-year and that's positive. So we're going to do everything we can to maximize the profits without really -- without impacting the long-term investments we're going to continue to make. So we'll balance both those things as well as we can.

--------------------------------------------------------------------------------

Operator [17]

--------------------------------------------------------------------------------

(Operator Instructions) The next question comes from Darrin Peller of Wolfe Research.

--------------------------------------------------------------------------------

Darrin David Peller, Wolfe Research, LLC - MD & Senior Analyst [18]

--------------------------------------------------------------------------------

Can you hear me okay?

--------------------------------------------------------------------------------

Rajesh K. Agrawal, The Western Union Company - CFO [19]

--------------------------------------------------------------------------------

Yes. Yes.

--------------------------------------------------------------------------------

Darrin David Peller, Wolfe Research, LLC - MD & Senior Analyst [20]

--------------------------------------------------------------------------------

Great. When we look through 2020 and into '21, the competitive dynamics in the landscape is probably going to shift a lot. And so you, hopefully, will be doing a lot more digital, and that's good for growth. We'll see how it plays out on revenue yields and margins, but positions you well. I think there's also potentially maybe more competition on digital than retail, but there may be some very large retail competitors who may not exist or could be challenged through this given liquidity position that they have versus you guys. Can you touch on your positioning to maybe take share through this from a competitive standpoint versus, especially, on the retail side?

--------------------------------------------------------------------------------

Hikmet Ersek, The Western Union Company - President, CEO & Director [21]

--------------------------------------------------------------------------------

Sure. Let me take that, Raj. As you know, we are both in home offices. So we coordinate that answer side. Look, Darrin, I think that, first of all, on the digital success, that's going to continue to happen, I believe especially the combination of our digital network globally and the efforts we put behind that on our payout network and also in real-time payout, that's huge. And we believe we are gaining market share here. I think even though we have huge space here, we are gaining market share compared with competitors. I think some of the competition on the retail money transfer, we are always looking at the environment. As you know, our capital allocation has not changed. We're going to continue to invest in our business. We also look at for if there are any synergies or bigger acquisition opportunities, we will definitely look if it fits with our strategy and if it has a good return. The environment is definitely something we continue to look at that. And -- but also we -- most important thing also that we're going to return share -- return cash back to our shareholders via dividend. So this will continue to happen. And if there is any opportunity that fits in with our strategy, is it in digital site or in the retail side, we will look at it, definitely.

--------------------------------------------------------------------------------

Rajesh K. Agrawal, The Western Union Company - CFO [22]

--------------------------------------------------------------------------------

And Darrin, the other thing on the digital side is that the thing that other competitors don't have as much as we do is a great retail network, which, when you combine that with our digital capabilities, it really is a unique offering. And even in this environment, the retail payout capability is highly sought after and -- but then we're also expanding into the other digital account payouts. So it's different from the rest of the competition.

--------------------------------------------------------------------------------

Darrin David Peller, Wolfe Research, LLC - MD & Senior Analyst [23]

--------------------------------------------------------------------------------

Okay. Raj, just the follow-up is now for you on the liquidity position and the dividend. And again, it's great to see your liquidity position and commitment there now. I guess if April trends, which were down around 20%, continue, if the world doesn't get that much easier given unemployment levels, and we look through and unemployment stays high and has an impact along with maybe migration. I just want to understand, from your perspective, where we can get to so that you can still pay the dividend without having to worry about credit ratings having to be tweaked or anything along those lines? How confident are you? And what kind of environments actually?

--------------------------------------------------------------------------------

Rajesh K. Agrawal, The Western Union Company - CFO [24]

--------------------------------------------------------------------------------

Yes. I think there are a lot of ifs in what you asked. And it's hard to predict exactly how things are going to play out. But we don't believe that the dividend is at risk. We feel very good about where we are. And we had a strong position coming in and continue to generate strong cash flows. And I think we would have to be in a very different world that we're in today -- from where we're in today for us to think that way. And I think the dividend is very important to the Board of Western Union, the dividend payout, and we understand that it's very important to shareholders as well. So that's something that we're very committed to.

--------------------------------------------------------------------------------

Operator [25]

--------------------------------------------------------------------------------

Next question comes from James Faucette of Morgan Stanley.

--------------------------------------------------------------------------------

James Eugene Faucette, Morgan Stanley, Research Division - Executive Director [26]

--------------------------------------------------------------------------------

First question I wanted to ask was, you've given some pretty good color in terms of where you've seen improvement and improving flows. I'm wondering if you can dive in a little bit there and provide some more nuanced commentary on where you are seeing improvement, can you tie it back to whether -- how much maybe related to or what the lag was to beginning of reopening of economic activity versus perhaps consumer stimulus funds that were being distributed? Just looking for some color of how you're thinking about like what's driving the improvement? And then how that could be extrapolated out?

--------------------------------------------------------------------------------

Hikmet Ersek, The Western Union Company - President, CEO & Director [27]

--------------------------------------------------------------------------------

Yes, I think that's a great question. If you look at -- let me start where we see first decline, where it started. It has, obviously, to do with lockdowns. It's subject to lockdown orders by governments and especially on our dedicated locations. There were shelter-in-place orders. Obviously, people couldn't go on to a retailer to make a transaction. That impacted. But we believe that also the financial pressure is probably the main one which has a factor to our decline. And that -- combined with that, so we saw, in late March, the significant decline in our transactions.

So if you look at then the time -- over time as the lockdown gets and the stimulus packages get in the U.S., but mainly Germany, Netherlands, Austria and Switzerland, we see improvements there. And as the people could get their stimulus package and they get economical more advanced, they send it -- they start to send money. And at the same time, also some Mexico peso weakness versus U.S. We saw also stronger growth there. And coming back on the Mexico pesos weakness helped us to send money to Mexico from the U.S., the corridor.

In fact, Banco de Mexico, Raj, I believe yesterday they gave the numbers, the monthly numbers, and we can see that we are gaining market share there also in Mexico.

--------------------------------------------------------------------------------

Rajesh K. Agrawal, The Western Union Company - CFO [28]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Hikmet Ersek, The Western Union Company - President, CEO & Director [29]

--------------------------------------------------------------------------------

Our numbers have been improving pretty well there. So it is hard to give a general answer, James. It is really much -- very much dependent, but economic pressure, financial pressure on our customers is definitely, I would say, the main reason. But at the same time, the lockdowns which were forced on us where some of the locations did impact our business.

--------------------------------------------------------------------------------

James Eugene Faucette, Morgan Stanley, Research Division - Executive Director [30]

--------------------------------------------------------------------------------

That's really useful. And then my follow-up question is just on the matter of pricing. If you can talk a little bit about what you've been seeing in the pricing environment, variations or changes? And where that -- any changes may be coming from? And how that's -- how you're factoring in potential pricing pressure or competition into at least your general outlook for the rest of the year? Do you expect more pricing competition than historical, less? Just trying to get a gauge of how you're factoring that in.

--------------------------------------------------------------------------------

Rajesh K. Agrawal, The Western Union Company - CFO [31]

--------------------------------------------------------------------------------

Yes. I would say that the pricing environment has continued to be relatively stable when you look at it on a global macro basis. So no big changes there. We are continuing to look at all of our thousands of corridors where it's productive to change pricing. And we're always moving pricing up and down, as we said before, James. But I think the primary goal we have is to ensure that we get the best lifetime value of our customer set. So we may do promotional pricing, we may do other things that attract the customer, and that's really what we're going after. We're doing a variety of different things in all of our corridors and by different channels, too, wherever it makes sense. So I don't think pricing in this environment is really going to be a factor versus what it's been historically or at least in recent periods. So we don't see that changing dramatically.

--------------------------------------------------------------------------------

James Eugene Faucette, Morgan Stanley, Research Division - Executive Director [32]

--------------------------------------------------------------------------------

Great. And thanks for all the hard work keeping critical lifelines for a lot of people to open.

--------------------------------------------------------------------------------

Operator [33]

--------------------------------------------------------------------------------

The next question comes from Ramsey El-Assal of Barclays.

--------------------------------------------------------------------------------

Ramsey Clark El-Assal, Barclays Bank PLC, Research Division - Research Analyst [34]

--------------------------------------------------------------------------------

I want to follow up on Jason's question from earlier. And speaking about the kind of April trends and the end of April trends, has stimulus -- has government stimulus, has it had any impact on outbound volumes from any places where there is stickiness, obviously, like in the U.S.? In other words, is that something that benefits your user base? And then I also wanted to ask about the improvement you were seeing in April. Did you see improvements across the business in terms of walk-in versus digital? Or was it really more digitally focused, which I wouldn't be surprised to hear, but I wanted to ask.

--------------------------------------------------------------------------------

Rajesh K. Agrawal, The Western Union Company - CFO [35]

--------------------------------------------------------------------------------

Yes, Ramsey, good questions. I would say that the pressure on the business initially in late March and early April was really driven by people having to stay at home and not being able to get out. And that really continued on even in the month of April. We did see some uptick when stimulus checks and other payments were being made around the world. So that certainly has helped our consumer base. So even though there may be some unemployment that's negatively impacting, I think it's being offset to some degree by all the other payments that are going out to individuals, and that could sustain for a little while until things get back on track.

And then with respect to April trends, it was a more broad-based improvement. Certainly, we saw acceleration in our digital business, but we also saw improvement in retail as things opened up. Germany is a great example where people were back to doing the things that they were doing before. And so not only did digital accelerate, but we also saw improvements in the retail business, which is positive for us.

--------------------------------------------------------------------------------

Ramsey Clark El-Assal, Barclays Bank PLC, Research Division - Research Analyst [36]

--------------------------------------------------------------------------------

Okay. That's really interesting. And then a quick follow-up. I was wondering if you could speak to the tax rate expectations for the year. The number came in a little lower than our model. I'm just trying to figure out how to model that out for the rest of the year. And then just lastly, home delivery, is that something you could scale up? Is that -- could that be a new model that accrues a little more importance for Western Union over time? Or is that more of a -- the cost structure may not support it?

--------------------------------------------------------------------------------

Rajesh K. Agrawal, The Western Union Company - CFO [37]

--------------------------------------------------------------------------------

Yes. Let me address the tax question, and then I'll give it to Hikmet on the home delivery. The tax rate was 12.5% in the first quarter. It's in line with roughly what we expect, getting to the mid-teens or so for the full year. Obviously, a number of different scenarios could play out this year, and we don't know exactly which revenue scenario plays out. But we've modeled a number of different potential outcomes and they all seem to spit out something in the mid-teens range for a tax rate. And that's not really the biggest driver, obviously, this year. So that's what I would think about. We had some discrete benefits that helped us in the first quarter, but I would see it being in the mid-teens range for the full year. And maybe I'll give it to you, Hikmet, for the home delivery question.

--------------------------------------------------------------------------------

Hikmet Ersek, The Western Union Company - President, CEO & Director [38]

--------------------------------------------------------------------------------

It's a good question. We did start the home delivery in several countries, especially in developing countries, in partnership with our agents. Some of our agents already have home delivery express services. And we did do home delivery like Colombia or Philippines, and we started -- and the usage is quite good. There are -- due to lockdown some of our customers, also some people with elder people or people who can't go to the locations and the only way to pay out is the cash. We do deliver it at home. And it could be a service, especially for developing countries. And it's really a partnership with our agents and agents to go to the rural areas and deliver to our customers the transactions.

--------------------------------------------------------------------------------

Operator [39]

--------------------------------------------------------------------------------

The next question comes from Andrew Jeffrey of SunTrust.

--------------------------------------------------------------------------------

Andrew William Jeffrey, SunTrust Robinson Humphrey, Inc., Research Division - Director [40]

--------------------------------------------------------------------------------

I'm wondering about -- as I think about the -- all the emphasis on expansion of digital globally, which makes a ton of sense. What are some of the gating factors? And I'm thinking along 2 lines. One would be the 4-plus billion accounts. I guess what are going to be the key factors Western Union can influence in terms of driving payout to those accounts? I assume a lot of it's changing of sender behavior. And two would be -- just we've heard the company talk about accelerating digital expansion. I guess I'm wondering, is that opportunistic? What are the factors that gate the ability to more rapidly expand into digital markets globally?

--------------------------------------------------------------------------------

Hikmet Ersek, The Western Union Company - President, CEO & Director [41]

--------------------------------------------------------------------------------

Well, Andrew, good question. And I think the investments over the years we paid -- we invested is paying back, obviously. If you remember, as we started, it was only few years ago, 2% to 3% of our general revenue was -- or transactions were digital transactions. Now in April, we even had 30% of our transactions coming from digitally generated transactions. I think this growth will continue to grow as more and more customer segments are joining our network. And we do offer them, not only payout on the receive side, not only payout in our retail, but at the same time, also on accounts and on mobile wallets. This is big and we do have real-time payouts in 50 countries, billions of accounts where you can pay real time, and that's good. So on the -- how can that really -- on the receive side, it depends on the customer segmentation. If the customers want to have money on an account, they get money paid out in an account. If they want to have it on a cash, paid out really on a cash payout. Depends also on the economical ecosystem of the environment. If this is in the rural area of India, in the Bihar, most of the customers want to pay out in cash, or is it in Mumbai, many customers want to pay out on an account. We really -- as Western Union, we can do that both in real time, pay out in real-time in a retail location or in an account. And this is huge. And this is going to continue to happen. It's really the combination on the send side and the receive side.

--------------------------------------------------------------------------------

Operator [42]

--------------------------------------------------------------------------------

Next question comes from Bryan Keane with Deutsche Bank.

--------------------------------------------------------------------------------

Bryan Connell Keane, Deutsche Bank AG, Research Division - Research Analyst [43]

--------------------------------------------------------------------------------

Just thinking about that move towards digital. Can you just talk a little bit how the digital competition differs from retail competition for you guys?

--------------------------------------------------------------------------------

Rajesh K. Agrawal, The Western Union Company - CFO [44]

--------------------------------------------------------------------------------

You go ahead.

--------------------------------------------------------------------------------

Hikmet Ersek, The Western Union Company - President, CEO & Director [45]

--------------------------------------------------------------------------------

Go ahead, Raj. Go ahead.

--------------------------------------------------------------------------------

Rajesh K. Agrawal, The Western Union Company - CFO [46]

--------------------------------------------------------------------------------

I was just going to say that one of the key things that we said earlier is that our digital business is unique in that the majority of it still is -- the majority of the revenues that we are in today are still earned from a retail-oriented payout in our total digital business. So -- and that's not really the area where other digital players are trying to make big inroads because you really -- that's where the brand really plays a bigger part in terms of the end-to-end transaction. And if you look at the other digital players, we have already a very large base that we're working from. But we also believe that we can expand our capabilities all over the world faster than others might be able to do. We already have more than 75 send countries. We have account funding capabilities in many of those. We have mobile capabilities also in many of those send markets. And then we can send into an account into 100 markets as well as into -- read into real-time into 50 countries. So just creating more of that network and infrastructure, we've been on an accelerated path there to get there, over the next few years, to get really get omnichannel capabilities on both sending and receiving side of the equation, which is not really something others can match when you're thinking about both retail and digital combined.

--------------------------------------------------------------------------------

Bryan Connell Keane, Deutsche Bank AG, Research Division - Research Analyst [47]

--------------------------------------------------------------------------------

In that 30% percentage of volume that's going to digital in April, does that have any retail in it? Any retail in one side of the transaction? Or that's 100% digital?

--------------------------------------------------------------------------------

Rajesh K. Agrawal, The Western Union Company - CFO [48]

--------------------------------------------------------------------------------

Well, it's digital, yes.

--------------------------------------------------------------------------------

Hikmet Ersek, The Western Union Company - President, CEO & Director [49]

--------------------------------------------------------------------------------

Initiate is digital. 100% initiate is digital on the send side, Bryan. And payout could be a payout on a retail or on an account.

--------------------------------------------------------------------------------

Bryan Connell Keane, Deutsche Bank AG, Research Division - Research Analyst [50]

--------------------------------------------------------------------------------

Yes. And is there a mix of that between how much of that is digital on the payout versus retail?

--------------------------------------------------------------------------------

Hikmet Ersek, The Western Union Company - President, CEO & Director [51]

--------------------------------------------------------------------------------

Majority of that is retail, but the strong growth comes from account. As I mentioned earlier, the account payout was in April, I believe, 90% growth.

--------------------------------------------------------------------------------

Bryan Connell Keane, Deutsche Bank AG, Research Division - Research Analyst [52]

--------------------------------------------------------------------------------

Got it. And then the only other question I have is just thinking about migrant movement, what you guys are seeing there. Did you see many migrants move back home during this time? And then how do you think the impacts will be on any restrictions on immigration going forward from borders being put up by other countries?

--------------------------------------------------------------------------------

Hikmet Ersek, The Western Union Company - President, CEO & Director [53]

--------------------------------------------------------------------------------

Well, the last 6, 7 weeks, the COVID-19 really started, even earlier in China and Italy, we did not see any big changes on the migrant movements, on migration patterns. The big question mark is that what the economic environment, financial environment of these people look like. The employment rate and GDP growth are definitely indicators. That's an unknown. That's one of the reasons the volatility -- given the volatility, we are not giving a 2020 guidance. But we did -- we have not seen any changes on the migrants moving back or less migrants or some like that.

--------------------------------------------------------------------------------

Operator [54]

--------------------------------------------------------------------------------

The next question comes from Tim Willi of Wells Fargo.

--------------------------------------------------------------------------------

Timothy Wayne Willi, Wells Fargo Securities, LLC, Research Division - MD & Senior Analyst [55]

--------------------------------------------------------------------------------

Just one question on marketing. So given the shift in the business, and I guess, just the overall environment and then your comments around efficiency and cost saves. Could you talk a bit about what you're doing with marketing and branding? And sort of how much of that is moving digital versus maybe traditional? And just sort of how that plays into the sort of the digital growth, the productivity, the cost saves you're talking about? Just any way to think about how you're evolving that line item within the income statement?

--------------------------------------------------------------------------------

Hikmet Ersek, The Western Union Company - President, CEO & Director [56]

--------------------------------------------------------------------------------

Well, obviously, we are continuing to invest in marketing, right? Because you could see also, during the crisis, the trust of our consumers is huge to our brands and our -- the brand awareness and being for them here during the crisis and during good times and bad times, has been always for Western Union here and that's going to continue to happen. We are investing definitely from direct marketing activities on the digital side, where we gain new customer segments. But at the same time, our agents continue to promote our -- together with us, our brand on the retail side. Because as we said earlier, the combination between digital and retail payout is huge. And the brand awareness on the receive side drives also the transaction. Look, if you are in a rural area in the Philippines, and you want to have the money immediately, you call your relatives in Finland and say that, "Okay, send me money via Western Union because the next corner, I can pick up the money in minutes," Or you are in -- you have a bank account, you send a message to your relative on the send side in the U.K., you send me the money where I receive it into this account. And this has been -- this brand awareness is, in the receiving country is huge. We actually have within our consumer 90% brand awareness, which is one of the probably the leading one. And the marketing investment drives -- we know that it's driving the revenue and transaction growth. So during this -- during the pandemic, as you know, has been several -- the Mother's Day is coming. There was Easter, Orthodox Easter and Ramadan. And these are definitely promotions we are going to continue to do to attract customers to our brands and promote digital and also the safety and to trust [completely] investor.

--------------------------------------------------------------------------------

Operator [57]

--------------------------------------------------------------------------------

At this time, this concludes our question-and-answer session. I would like to turn the conference back over to Hikmet Ersek for any closing remarks.

--------------------------------------------------------------------------------

Hikmet Ersek, The Western Union Company - President, CEO & Director [58]

--------------------------------------------------------------------------------

Thank you, Andrew. Thank you, everyone, for joining the call today. It's a special call during this crisis, COVID-19. It's not easy for the world. It's not easy for the communities. I would like to thank, first of all, shareholders for their trust on Western Union, obviously. But also, I would like to thank especially the customers for their loyalty and fighting. Many of our customers, I mentioned earlier, are heroes, are really on the front line. They're fighting and helping many people. Is it that a nurse, or is it an ambulance driver, is it keeping a retail shop open, they are really frontline heroes. And at the same time, they really think about their loved ones back home. And it's not easy, helping people and at the same time, thinking about your family members far away from you. And one of the things they do immediately is that they send back home money. And the trust we built over years or decades, the trust we build with our customers, obviously, pays back and makes us stronger. And I would like to thank also our employees for their dedication and for their hard work during this time, and it puts Western Union as a special company, and we are continuing to be very dedicated to serve the communities and our shareholders. And I would like to -- the best end. Thank you for joining the call.

--------------------------------------------------------------------------------

Operator [59]

--------------------------------------------------------------------------------

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.