Western Union’s top line revenue is feeling the impact of the ongoing Russia/Ukraine war and the sale of its Business Solutions segment in Q1 2022, with a 4% year-on-year decline in revenues to $1.2bn, as well as a 5% drop in consumer-to-consumer revenues. However, new CEO Devin McGranahan has plans to turn things around.
Western Union Q1 2022 results highlights
Here are some of the main financial highlights for Q1 2022:
- First quarter revenue saw a 4% YoY decline, which the company put down to a decrease in retail money transfer and suspended services in Russia and Belarus. This also affected the total C2C cross-border principal, which declined by 3%.
- Europe and the CIS saw C2C revenues decline by 14% – according to Western Union, this was due to continued “softness” in retail and high digital growth in the region. C2C revenues also declined in North America (1%) and APAC (6%) but grew in the Middle East, Africa and South Asia (2%) and Latin America and the Caribbean (2%).
- Consumers are continuing to move towards digital money transfers, but at slower rates than 2020 and 2021 with revenues from digital increasing by 5%.
- On partnerships and acquisitions, the first closing of the Western Union Business Solutions acquisition completed in March for $900m, with the second expected later in the year. The company has also expanded its Visa Direct partnership to the US, enabled real-time account payout to Paytm wallets in India and partnered with the UK Post Office, adding 4,000 retail locations in the UK.
- Western Union has downgraded its full financial outlook in 2022 as a result of suspending services to Russia and Belarus (which had made up about 4% of the company’s revenues). The company now expects GAAP revenue to decline approximately 9-11%, compared to the mid-single-digit decline it had projected in February.
CEO Devin McGranahan’s 2022 strategy
Having joined Western Union in late 2021, CEO Devin McGranahan has faced a tough first 100 days, but used the call to outline some of the pillars of his strategy for the remainder of 2022:
- Omnichannel customers are worth twice as much as retail-only or digital-only customers. This was probably the most interesting number revealed this quarter and has interesting implications for how Western Union (and competitors) choose to focus their efforts.
- The retail business will continue to be the largest driver of financial performance. Devin wants to grow this area in four ways: identify remittance markets where WU has growth opportunities; improve customer experience; increase retail marketing spend and optimise the company’s network.
- After losing retail consumers to digital competitors, Devin wants to raise awareness of Western Union’s digital services. WU has launched a new digital transaction platform in Canada, which will be followed by launches in Australia in Q2 and many large European markets in Q3.
Devin added that he would go into more detail about how Western Union aims to build a “holistic customer relationship mindset” at the company’s investor day, set to take place in Q3 2022.