MASTERCARD, INC. Mastercard
Incorporated
Third-Quarter 2020 Financial Results Conference Call
October 28, 2020
Business Update
Key Trends
Business Highlights
Financial Overview
©2020 Mastercard
October 28, 2020 | 2 |
3rd Quarter Selected Financial Performance
($ in millions, except per share data)
YOY Growth | |||||||||||
3Q 20 | 3Q 19 | Currency | |||||||||
Non-GAAP | Non-GAAP | As adjusted | Neutral | ||||||||
Net revenue | $ | 3,837 | $ | 4,467 | (14)% | (14)% | |||||
Adjusted operating expenses | 1,732 | 1,812 | (4)% | (5)% | |||||||
Adjusted operating income | 2,105 | 2,655 | (21)% | (20)% | |||||||
Adjusted operating margin | 54.9 % | 59.4 % | (4.6) ppt | (4.2) ppt | |||||||
Adjusted net income | $ | 1,605 | $ | 2,191 | (27)% | (26)% | |||||
Adjusted diluted EPS | $ | 1.60 | $ | 2.15 | (26)% | (25)% | |||||
Adjusted effective tax rate | 20.0 | % | 16.8 | % |
Note: See Appendix A for Non-GAAP reconciliation.
©2020 Mastercard
October 28, 2020 | 3 |
3rd Quarter Gross Dollar Volume (GDV)
($ in billions)
Worldwide | United States | Rest of World | |||||||||||||||||||||||
1% Growth | 4% Growth | Flat Growth | |||||||||||||||||||||||
$1,800 | $1,652 | $1,648 | |||||||||||||||||||||||
$1,600 | $1,159 | $1,135 | |||||||||||||||||||||||
$1,400 | $831 | ||||||||||||||||||||||||
$1,200 | $911 | ||||||||||||||||||||||||
$1,000 | $582 | $612 | |||||||||||||||||||||||
$800 | $493 | $513 | |||||||||||||||||||||||
$600 | |||||||||||||||||||||||||
$400 | $821 | ||||||||||||||||||||||||
$737 | $249 | $299 | $577 | $523 | |||||||||||||||||||||
$200 | $244 | $214 | |||||||||||||||||||||||
$0 | |||||||||||||||||||||||||
3Q19 | 3Q20 | 3Q19 | 3Q20 | 3Q19 | 3Q20 | ||||||||||||||||||||
Notes: 1. Growth rates are shown in local currency. | Credit | Debit / Prepaid | |||||||||||||||||||||||
2. Figures may not sum due to rounding.
©2020 Mastercard
October 28, 2020 | 4 |
3rd Quarter Switched Transactions and Cards
Switched Transactions | Cards | |||||||||||||||||||
5% Growth* | 5% Growth | |||||||||||||||||||
4,000 | ||||||||||||||||||||
30 | ||||||||||||||||||||
billions)(inTransactions | 22.9 | 23.8 | millions)(inCards | 3,000 | 2,574 | 2,692 | ||||||||||||||
418 | ||||||||||||||||||||
20 | 2,000 | 435 | ||||||||||||||||||
10 | 2,139 | 2,275 | ||||||||||||||||||
1,000 | ||||||||||||||||||||
0 | 0 | |||||||||||||||||||
3Q19 | 3Q20 | |||||||||||||||||||
3Q19 | 3Q20 | |||||||||||||||||||
Mastercard Cards | Maestro Cards | |||||||||||||||||||
Notes: Figures may not sum due to rounding.
*Growth rates have been normalized to eliminate the effects of differing switching and carryover days between periods.
©2020 Mastercard
October 28, 2020 | 5 |
3rd Quarter Revenue
3Q19 | 3Q20 | ||||||
$5,000 | $4,467 | ||||||
$4,000 | $3,837 | ||||||
$3,000 | $2,231 | $2,251 | |||||
$2,000 | $1,722 | $1,750 | |||||
$1,517 | $1,087 | $1,143 | |||||
$1,000 | $791 | ||||||
$0 | |||||||
$-1,000 | |||||||
$-2,000 | $(2,090) | $(2,098) | |||||
$-3,000 | |||||||
Growth | Domestic | Cross-Border | Transaction | Other | Rebates and | Total Net Revenue |
Assessments | Volume Fees | Processing | Revenues | Incentives | ||
As reported | 2% | (48)% | 1% | 5% | -% | (14)% |
Currency-neutral | 5% | (48)% | 1% | 6% | 2% | (14)% |
Note: Figures may not sum due to rounding.
©2020 Mastercard
October 28, 2020 | 6 |
3rd Quarter Adjusted Operating Expenses
($ in millions)
$2,000 | 3Q19 | 3Q20 | $1,812 | $1,732 | ||||||||||
$1,500 | $1,448 | $1,423 | ||||||||||||
$1,000 | ||||||||||||||
$500 | $227 | $168 | ||||||||||||
$137 | $141 | |||||||||||||
$0 | ||||||||||||||
Growth | General & Administrative | Advertising & Marketing | Depreciation & Amortization | Adjusted Operating Expenses | ||||||||||
Non-GAAP | (2)% | (26)% | 3% | (4)% | ||||||||||
Currency-neutral | (2)% | (26)% | 2% | (5)% |
Note: See Appendix A for Non-GAAP reconciliation. Figures may not sum due to rounding.
©2020 Mastercard
October 28, 2020 | 7 |
Business Update Through October 21st
year-over-year growth %
July | August | September | Week ending | Week ending | Week ending | ||||||
Full Month1 | Full Month1 | Full Month1 | October 7 | October 14 | October 21 | ||||||
Switched volume2 | 2% | 2% | 3% | 3% | 2% | 5% | |||||
United States | 6% | 4% | 6% | 6% | 3% | 8% | |||||
Worldwide less U.S. | (3)% | 1% | -% | 1% | 1% | 3% | |||||
Switched transactions3 | 3% | 6% | 5% | 6% | 6% | 5% | |||||
Cross-border volume2 | (39)% | (35)% | (35)% | (34)% | (34)% | (30)% | |||||
Intra-Europe | (25)% | (21)% | (23)% | (22)% | (21)% | (15)% | |||||
Other Cross-Border | (51)% | (49)% | (46)% | (44)% | (46)% | (44)% |
1. | Growth rates have been normalized to eliminate the effects of differing switching and carryover days between periods | ||
2. | Mastercard-branded programs only; on a local currency basis | October 28, 2020 | 8 |
3. | Total number of transactions switched by Mastercard |
©2020 Mastercard
Cross-border Volume Trends
Card not present (Non-travel) | Card not present | Total | Card present | |||||
60%
40%
20%
0%
-20%
-40%
-60%
-80%
-100%
JAN | FEB | MAR | APR | MAY | JUN | JUL | AUG | SEPT | OCT1 |
1. Through October 21st MTD
Note: Cross-border volume growth is calculated in a manner as defined in our Supplemental Operational Performance Data
©2020 Mastercard
October 28, 2020 | 9 |
Looking Ahead
Further thoughts
©2020 Mastercard
October 28, 2020 | 10 |
Appendices
Appendix A
Non-GAAP Reconciliation
($ in millions, except per share data)
Three Months Ended September 30, 2020 | ||||||||||||||||||
Operating | Operating | Operating | Other Income | Effective income | Net income | Diluted earnings | ||||||||||||
expenses | income | margin | (Expense) | tax rate | per share | |||||||||||||
Reported - GAAP | $ | 1,732 | $ | 2,105 | 54.9 % | $ | (190) | 21.0 % | $ | 1,513 | $ | 1.51 | ||||||
(Gains) losses on equity investments 1 | ** | ** | ** | 91 | (1.0)% | 92 | $ | 0.09 | ||||||||||
Non-GAAP | $ | 1,732 | $ | 2,105 | 54.9 % | $ | (99) | 20.0 % | $ | 1,605 | $ | 1.60 | ||||||
Three Months Ended September 30, 2019 | ||||||||||||||||||
Operating | Operating | Operating | Other Income | Effective income | Net income | Diluted earnings | ||||||||||||
expenses | income | margin | (Expense) | tax rate | per share | |||||||||||||
Reported - GAAP | $ | 1,812 | $ | 2,655 | 59.4 % | $ | (121) | 16.9 % | $ | 2,108 | $ | 2.07 | ||||||
(Gains) losses on equity investments 1 | ** | ** | ** | 100 | - % | 84 | $ | 0.08 | ||||||||||
Non-GAAP | $ | 1,812 | $ | 2,655 | 59.4 % | $ | (21) | 16.8 % | $ | 2,191 | $ | 2.15 | ||||||
Note: Figures may not sum due to rounding. ** Not applicable
- Q3'20 and Q3'19, net losses of $91 million and $100 million, respectively, were primarily related to unrealized fair market value adjustments on marketable and non-marketable equity securities.
©2020 Mastercard
October 28, 2020 | 12 |
Appendix A (continued)
Non-GAAP Reconciliation
Three Months Ended September 30, 2020 as compared to the Three Months Ended September 30, 2019 | |||||||||||||||
Increase/(Decrease) | |||||||||||||||
Net revenue | Operating | Operating | Operating | Effective income | Net income | Diluted earnings | |||||||||
expenses | income | margin | tax rate | per share | |||||||||||
Reported - GAAP | (14)% | (4)% | (21)% | (4.6) ppt | 4.1 | ppt | (28)% | (27)% | |||||||
(Gains) losses on equity investments 1 | ** | ** | ** | ** | (0.9) ppt | 1 % | 1 % | ||||||||
Non-GAAP | (14)% | (4)% | (21)% | (4.6) ppt | 3.2 | ppt | (27)% | (26)% | |||||||
Currency impact 2 | - % | - % | 1 % | 0.3 ppt | 0.1 | ppt | 1 % | 1 % | |||||||
Non-GAAP - currency-neutral | (14)% | (5)% | (20)% | (4.2) ppt | 3.3 | ppt | (26)% | (25)% | |||||||
Note: Figures may not sum due to rounding. ** Not applicable
-
Q3'20 and Q3'19, net losses of $91 million and $100 million, respectively, were primarily related to unrealized fair market value adjustments on marketable and non-marketable equity securities.
2 Represents the translational and transactional impact of currency.
©2020 Mastercard
October 28, 2020 | 13 |
Appendix B
Non-GAAP Reconciliation
Fourth quarter 2020 operating expenses outlook
Q4'20 vs. Q4'19 | |
Increase/(Decrease) | |
Forecasted Growth - GAAP 1 | Low-single-digits |
Litigation provisions | ** |
Non-GAAP Growth | |
Low-single-digits | |
Currency impact 2 | (0-1)% |
Acquisitions 3 | (4-5)% |
Non-GAAP Growth, currency neutral, excluding acquisitions | (Low-single-digits) |
** Not applicable.
- GAAP - Q4'20 Forecast versus Q4'19 reported results
2 | Represents the projected translational and transactional impact of currency. |
3 | Mastercard©2020 |
Acquisitions closed after the beginning of 2019. |
October 28, 2020 | 14 |
Appendix C
Non-GAAP Reconciliation
($ in millions)
Twelve Months Ended December 31, | |||||
2019 | 2009 | ||||
Net income | Net income | ||||
Reported - GAAP | $ | 8,118 | $ | 1,463 | |
(Gains) losses on equity investments 1 | (124) | ** | |||
Tax act 2 | (57) | ** | |||
Litigation provisions 3 | ** | 4 | |||
Non-GAAP | $ | 7,937 | $ | 1,467 | |
Note: Figures may not sum due to rounding. ** Not applicable
- Fiscal year 2019 net gains of $167 million were primarily related to unrealized fair market value adjustments on marketable and non-marketable equity securities.
- Fiscal year 2019 net tax benefit of $57 million included a $30 million benefit related to a reduction to the 2017 one-time deemed repatriation tax on accumulated foreign earnings resulting from final transition tax regulations issued in 2019 and a $27 million benefit related to additional foreign tax credits which can be carried back under the transition rules contained in the final foreign tax credit regulations issued in 2019.
3 Fiscal year 2009 pre-tax charges of $7 million related to litigation settlements.
©2020 Mastercard
October 28, 2020 | 15 |
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MasterCard Inc. published this content on 27 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 November 2020 10:22:00 UTC
