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)%

  1. Growth rates have been normalized to eliminate the effects of differing switching and carryover days between periods
  2. 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