Mastercard
Incorporated
Second-Quarter 2020 Financial Results Conference Call
July 30, 2020
Business Update
Financial Overview
COVID-Recovery Update
Business Highlights
©2020 Mastercard
July 30, 2020 | 2 |
2nd Quarter Selected Financial Performance
($ in millions, except per share data)
YOY Growth | ||||||||||
2Q 20 | 2Q 19 | Currency | ||||||||
Non-GAAP | Non-GAAP | As adjusted | Neutral | |||||||
Net revenue | $ | 3,335 | $ | 4,113 | (19)% | (17)% | ||||
Adjusted operating expenses | 1,606 | 1,716 | (6)% | (5)% | ||||||
Adjusted operating income | 1,728 | 2,397 | (28)% | (25)% | ||||||
Adjusted operating margin | 51.8% | 58.3% | (6.4) ppt | (6.0) ppt | ||||||
Adjusted net income | $ | 1,370 | $ | 1,937 | (29)% | (27)% | ||||
Adjusted diluted EPS | $ | 1.36 | $ | 1.89 | (28)% | (26)% | ||||
Adjusted effective tax rate | 16.3% | 18.5% |
Note: See Appendix A for Non-GAAP reconciliation.
©2020 Mastercard
July 30, 2020 | 3 |
2nd Quarter Gross Dollar Volume (GDV)
($ in billions)
Worldwide | United States | Rest of World | ||
(10)% Growth | (5)% Growth | (12)% Growth | ||
$1,800 | $1,601 | |||||
$1,600 | $1,383 | |||||
$1,400 | $1,115 | $919 | ||||
$1,200 | $805 | |||||
$764 | ||||||
$1,000 | $556 | |||||
$800 | $486 | $464 | $484 | |||
$600 | ||||||
$400 | $796 | $619 | $249 | $280 | $560 | $435 |
$200 | ||||||
$237 | $183 | |||||
$0 | ||||||
2Q19 | 2Q20 | 2Q19 | 2Q20 | 2Q19 | 2Q20 | |
Credit | Debit / Prepaid |
Notes: 1. Growth rates are shown in local currency. 2. Figures may not sum due to rounding.
©2020 Mastercard
July 30, 2020 | 4 |
2nd Quarter Switched Transactions and Cards
Switched Transactions | Cards | |
(10)% Growth | 5% Growth | |
billions) | 30 | |
21.4 | 19.4 | |
20 | ||
(in | ||
Transactions | 10 | |
0 | ||
2Q19 | 2Q20 |
4,000 | |||
millions) | 3,000 | 2,532 | 2,646 |
417 | |||
439 | |||
2,000 | |||
Cards (in | |||
1,000 | 2,093 | 2,229 | |
0 | 2Q19 | 2Q20 | |
Mastercard Cards | Maestro Cards |
Notes: Figures may not sum due to rounding.
©2020 Mastercard
July 30, 2020 | 5 |
2nd Quarter Revenue
($ in millions)
2Q19 2Q20
$5,000 | $4,113 | |||||
$4,000 | $3,335 | |||||
$3,000 | $1,680 | $1,474 | $1,374 | $2,053 | $1,901 | |
$2,000 | $1,081 | |||||
$637 | $962 | |||||
$1,000 | ||||||
$0 |
-$1,000 | ||||||
-$2,000 | $(1,956)$(1,758) | |||||
-$3,000 | ||||||
Growth | Domestic | Cross-Border | Transaction | Other | Rebates and | Total Net Revenue |
Assessments | Volume Fees | Processing | Revenues | Incentives | ||
As reported | (12)% | (54)% | (7)% | 12% | (10)% | (19)% |
Currency-neutral | (8)% | (52)% | (6)% | 14% | (7)% | (17)% |
Note: Figures may not sum due to rounding.
©2020 Mastercard
July 30, 2020 | 6 |
2nd Quarter Adjusted Operating Expenses
($ in millions)
2Q19 | 2Q20 | ||||
$2,000 | $1,716 | $1,606 | |||
$1,500 | $1,369 | $1,368 | |||
$1,000 | |||||
$500 | $225 | $122 | $145 | ||
$93 | |||||
$0 |
Growth | General & Administrative | Advertising & Marketing | Depreciation & Amortization | Adjusted Operating Expenses |
Non-GAAP | -% | (59)% | 19% | (6)% |
Currency-neutral | 1% | (58)% | 20% | (5)% |
Note: See Appendix A for Non-GAAP reconciliation. Figures may not sum due to rounding.
©2020 Mastercard
July 30, 2020 | 7 |
Business Update Through July 21st
year-over-year growth %
April Full Month1 | May Full Month1 | June Full Month1 | Week ending | Week ending | Week ending | ||||||
July 7 | July 14 | July 21 | |||||||||
Switched volume1 | (23)% | (9)% | (3)% | 1% | 2% | 1% | |||||
United States | (18)% | (2)% | 2% | 6% | 7% | 5% | |||||
Worldwide less U.S. | (27)% | (15)% | (7)% | (3)% | (2)% | (3)% | |||||
Switched transactions2 | (20)% | (7)% | (2)% | 2% | 4% | 3% | |||||
Cross-border volume1 | (50)% | (44)% | (41)% | (37)% | (38)% | (40)% | |||||
Intra-Europe | (39)% | (34)% | (31)% | (25)% | (25)% | (27)% | |||||
Other Cross-Border | (59)% | (53)% | (51)% | (49)% | (51)% | (52)% |
- Growth rates have been normalized to eliminate the effects of differing switching and carryover days between periods
- Mastercard-brandedprograms only; on a local currency basis
3. Total number of transactions switched by Mastercard | July 30, 2020 | 8 |
©2020 Mastercard
Cross-border Volume Trends
60%
40%
20%
0%
-20%
-40%
-60%
-80%
-100%
Card not present (Non-travel)
Card not present
Total
Card present
Mastercard
JAN | FEB | MAR | APR | MAY | JUN | JUL1 | ||||||
1. Through July 21st MTD
Note: Cross-border volume growth is calculated in a manner as defined in our Supplemental Operational Performance Data
©2020
July 30, 2020 | 9 |
Looking Ahead
Further thoughts
©2020 Mastercard
July 30, 2020 | 10 |
Appendices
Appendix A
Non-GAAP Reconciliation
($ in millions, except per share data)
Three Months Ended June 30, 2020 | ||||||||||||||||||
Operating | Operating | Operating | Other Income | Effective income | Net income | Diluted earnings | ||||||||||||
expenses | income | margin | (Expense) | tax rate | per share | |||||||||||||
($ in millions, except per share data) | ||||||||||||||||||
Reported - GAAP | $ | 1,628 | $ | 1,707 | 51.2% | $ | (17) | 16.0% | $ | 1,420 | $ | 1.41 | ||||||
(Gains) losses on equity investments 1 | ** | ** | ** | (75) | 0.2% | (67) | $ | (0.07) | ||||||||||
Litigation provisions 2 | (22) | 22 | 0.7% | ** | 0.1% | 17 | $ | 0.02 | ||||||||||
Non-GAAP | $ | 1,606 | $ | 1,728 | 51.8% | $ | (92) | 16.3% | $ | 1,370 | $ | 1.36 | ||||||
Three Months Ended June 30, 2019 | ||||||||||||||||||
Operating | Operating | Operating | Other Income | Effective income | Net income | Diluted earnings | ||||||||||||
expenses | income | margin | (Expense) | tax rate | per share | |||||||||||||
Reported - GAAP | $ | 1,716 | $ | 2,397 | 58.3% | $ | 122 | 18.7 % | $ | 2,048 | $ | 2.00 | ||||||
(Gains) losses on equity investments 1 | ** | ** | ** | (143) | (0.2)% | (111) | $ | (0.11) | ||||||||||
Non-GAAP | $ | 1,716 | $ | 2,397 | 58.3% | $ | (21) | 18.5 % | $ | 1,937 | $ | 1.89 | ||||||
Note: Figures may not sum due to rounding. ** Not applicable
- Q2'20 and Q2'19, net gains of $75 million and $143 million, respectively, were primarily related to unrealized fair market value adjustments on marketable and non-marketable equity securities.
2 Q2'20 pre-tax charges of $22 million related to estimated attorneys' fees and litigation settlements with U.K. and Pan-European merchants. Mastercard©2020
July 30, 2020 | 12 |
Appendix A (continued)
Non-GAAP Reconciliation
Three Months Ended June 30, 2020 as compared to the Three Months Ended June 30, 2019 | |||||||||||||
Increase/(Decrease) | |||||||||||||
Operating | Operating | Operating | Effective income | Diluted | |||||||||
Net revenue | Net income | earnings per | |||||||||||
expenses | income | margin | tax rate | share | |||||||||
Reported - GAAP | (19)% | (5)% | (29)% | (7.1) ppt | (2.7) ppt | (31)% | (30)% | ||||||
(Gains) losses on equity investments 1 | ** | ** | ** | ** | 0.4 ppt | 1 % | - % | ||||||
Litigation provisions 2 | ** | (1)% | 1 % | 0.7 ppt | 0.1 ppt | 1 % | 1 % | ||||||
Non-GAAP | (19)% | (6)% | (28)% | (6.4) ppt | (2.2) ppt | (29)% | (28)% | ||||||
Currency impact 3 | 2 % | 2 % | 2 % | 0.4 ppt | 0.3 ppt | 2 % | 2 % | ||||||
Non-GAAP - currency-neutral | (17)% | (5)% | (25)% | (6.0) ppt | (1.9) ppt | (27)% | (26)% | ||||||
Note: Figures may not sum due to rounding. ** Not applicable
- Q2'20 and Q2'19, net gains of $75 million and $143 million, respectively, were primarily related to unrealized fair market value adjustments on marketable and non-marketable equity securities.
- Q2'20 pre-tax charges of $22 million related to estimated attorneys' fees and litigation settlements with U.K. and Pan-European merchants.
3 Represents the translational and transactional impact of currency. Mastercard©2020
July 30, 2020 | 13 |
Appendix B
Non-GAAP Reconciliation
Third quarter 2020 operating expenses outlook
Q3'20 vs. Q3'19 | ||
Increase/(Decrease) | ||
Forecasted Growth - GAAP 1 | Mid-single-digits | |
Litigation provisions | ** | |
Non-GAAP Growth | Mid-single-digits | |
Currency impact 2 | 0% | |
Acquisitions 3 | (6-7)% | |
Non-GAAP Growth, currency neutral, excluding acquisitions | (Low-single-digits) | |
** Not applicable. | ||
1 GAAP - Q3'20 Forecast versus Q3'19 reported results | ||
2 Represents the projected translational and transactional impact of currency. | ||
. | ©2020 Mastercard | |
3 Acquisitions closed after the beginning of 2019. | ||
July 30, 2020 | 14 |
Attachments
- Original document
- Permalink
Disclaimer
MasterCard Inc. published this content on 30 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 July 2020 12:05:11 UTC