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MarketScreener Homepage  >  Equities  >  Nyse  >  Visa Inc.    V

VISA INC.

(V)
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Visa : 4Q 2020 Earnings Presentation

10/28/2020 | 03:20pm EST

Visa Inc.

Fiscal Fourth Quarter 2020

Financial Results

October 28, 2020

Fiscal Fourth Quarter 2020 Results

Diluted Class A

Net

Client Incentives

Common Stock

as a % of

Operating

Effective Tax

Earnings Per

YoY Increase / (Decrease)

Revenues

Gross Revenue

Expense

Rate

Share

GAAP Nominal-Dollar Basis

(18%)

30.0%

(28%)

Non-GAAPNominal-Dollar

(17%)*

25.0%

(4%)

18.3%

(23%)

Basis(1)

Foreign Currency Impact

~0.0%

~0.5%

~0.5%

Acquisition Impact

(~0.5%)

0.1%

(~1.0%)

0%

0%

Adjusted Constant-Dollar

(17%)

25.1%

(5%)

18.3%

(23%)

Basis(2)

  • Had we recognized service revenues on current quarter payments volume and other revenue components remained unchanged, net revenues would have decreased approximately 11%.
  1. Non-GAAPresults exclude special items, equity investment gains and losses, amortization of acquired intangible assets for acquisitions in fiscal year 2019 and subsequent periods, and non-recurringacquisition-related costs.
  2. Adjusted financial results are on a constant-dollar basis and exclude the impact of the non-GAAP items and operating revenues and expenses of the acquired entities that were not in the entire quarter of the previous year and the incremental interest expense or forgone interest income as a result of funding the acquisition through debt or cash, respectively. Adjusted diluted class A common stock earnings per share growth is derived from adjusted fourth quarter 2019 earnings per share results of $1.46, which excludes $370 million of the non-GAAP special item, $42 million of net equity investment gains, and $5 million related to the amortization of acquired intangible assets and non-recurringacquisition-related costs.

Note: Refer to the Adjusted Constant-Dollar Results Footnote for further information.

1 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

Non-GAAP and Adjusted Constant-Dollar Results Footnote

We consider the non-GAAP measures useful to investors because they provide greater transparency into management´s view and assessment of the Company´s ongoing operating performance by removing items management believes are not representative of our continuing operations, as they may be non-recurring or have no cash impact, and may distort our longer-term operating trends. We believe these measures to be useful to enhance the comparability of our results from period to period and with our competitors, as well as to show ongoing results from operations distinct from items that are infrequent or not associated with the Company´s core operations. The Company does not, nor does it suggest investors should, consider such non- GAAP financial measures in isolation from, or as a substitute for, GAAP financial information.

We exclude the following to arrive at our Adjusted Constant-Dollar Financial Results:

non-GAAP impacts of (refer to the financial tables in the earnings release for further details):

special items;

equity investment gains and losses;

amortization of acquired intangible assets for acquisitions in fiscal year 2019 and subsequent periods;

non-recurringacquisition-related costs;

impact of foreign currency to provide currency-neutral growth rates which management believes are a better reflection of the underlying performance of our business; and

impact of acquisitions, which include operating revenues and expenses of the acquired entities that were not in the entire quarter of the previous year and the incremental interest expense or forgone interest income as a result of funding the acquisition through debt or cash, respectively, which management believes enhances the comparability of our results. These amounts will be adjusted until we lap the quarter that the entity was acquired in, at which time there will be comparable results within each reported period.

2 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

Fiscal Fourth Quarter 2020 Results

(Ended September 30, 2020)

  • Net revenues of $5.1B, a decrease of 17% or approximately 11% with service revenues recognized on current quarter payments volume
  • Payments volume, cross-border volume and processed transactions growth all improved through the quarter and were at varying stages of recovery
  • Returned $2.3B of capital to shareholders in the form of share repurchases and dividends
  • The board of directors increased Visa's quarterly cash dividend to $0.32 per share

In billions, except percentages and per share data. % change is calculated over the

Q4 2020

comparable prior-year period.

USD

% Change

Net Revenues

$5.1

(17%)

GAAP Net Income

$2.1

(29%)

GAAP Earnings Per Share

$0.97

(28%)

Non-GAAP Net Income(1)

$2.5

(25%)

Non-GAAP Earnings Per Share(1)

$1.12

(23%)

  1. Non-GAAPresults exclude special items, equity investment gains and losses, amortization of acquired intangible assets and non-recurringacquisition-related costs.

Q4 2020 Key Business Drivers

(YoY increase / (decrease), volume in constant dollars)

Q4 2020

Payments Volume

4%

Cross-Border Volume Excluding Intra Europe(1)

(41%)

Cross-Border Volume Total

(29%)

Processed Transactions

3%

  1. Cross-bordervolume excluding transactions within Europe.

3 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

Operational Performance Metrics Weekly Summary

U.S. Payments Volume Results

Total

Credit

Debit

30%

20%

10%

0%

(10%)

(20%)

July

August

September

October

8

15

22

29

5

12

19

26

2

9

16

23

30

7

14

21

Week Ended

Total

Card Present

Card Not Present

Card Not Present,

50%

Excluding Travel

40%

30%

20%

10%

0%

(10%)

July

August

September

October

8

15

22

29

5

12

19

26

2

9

16

23

30

7

14

21

Week Ended

Note: Results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.

4 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

Operational Performance Metrics Weekly Summary

Processed Transactions Results

7%

6%

5%

4%

3%

2%

1%

0%

July

August

September

October

8

15

22

29

5

12

19

26

2

9

16

23

30

7

14

21

Week Ended

Note: Results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.

5 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

Operational Performance Metrics Weekly Summary

Cross-Border Volume Results (Constant Dollar)

Excluding Intra-Europe

Total

0%

(10%)

(20%)

(30%)

(40%)

(50%)

July

August

September

October

8

15

22

29

5

12

19

26

2

9

16

23

30

7

14

21

Week Ended

Cross-Border Volume Excluding Intra-Europe Results (Constant Dollar)

Total

Card Present +

Card Not Present

Card Not Present,

Card Not Present Travel

Excluding Travel

20%

0%

(20%)

(40%)

(60%)

(80%)

July

August

September

October

8

15

22

29

5

12

19

26

2

9

16

23

30

7

14

21

Week Ended

Note: Results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.

6 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

Operational Performance Metrics Monthly Summary

U.S. Payments Volume Results

Total

Credit

Debit

30%

20%

10%

0%

(10%)

(20%)

(30%)

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

1-21

Total

Card Present

Card Not Present

Card Not Present,

50%

Excluding Travel

30%

10%

(10%)

(30%)

(50%)

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

1-21

Note: Results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.

7 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

Operational Performance Metrics Monthly Summary

Processed Transactions Results

20%

10%

0%

(10%)

(20%)

(30%)

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

1-21

Note: Results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.

8 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

Operational Performance Metrics Monthly Summary

Cross-Border Volume Results (Constant Dollar)

Excluding Intra-Europe

Total

10%

0%

(10%)

(20%)

(30%)

(40%)

(50%)

(60%)

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

1-21

Cross-Border Volume Excluding Intra-Europe Results (Constant Dollar)

Total

Card Present +

Card Not Present

Card Not Present,

Card Not Present Travel

Excluding Travel

30%

10%

(10%)

(30%)

(50%)

(70%)

(90%)

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

1-21

Note: Results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.

9 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

Payments Volume Results

Q4 FY2020

Nominal

Constant

Visa Inc.

Credit

Debit

20%

20%

4% 4%

Nominal USD (in billions)

(10%)

(9%)

$493

$603

U.S.

$1,097

International

$1,252

$628

$624

Total

$2,349

$1,121

$1,227

Note: The chart results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.

10 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

Payments Volume Results

Q3 FY2020

Nominal

Constant

Visa Inc.

Credit

Debit

3%

(0%)

(10%)

(12%)

(20%)

(22%)

Nominal USD (in billions)

$417

$532

U.S.

$950

International

$1,004

$529

$475

Total

$1,954

$946

$1,008

Note: The chart results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.

11 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

Transactions and Cross-Border Volume Results

Q4 FY2020

TransactionsCross-Border

Total Payment Processed

4%

Constant

2%

3%

Total

Total

(excluding

Nominal

Constant

Intra-Europe)(1)

38%38%

Debit

62%

Transaction Count (in millions)

Credit

17,028

16,854

Debit

37,088

32,795

Total

54,116

49,649

37,448

(28%) (29%)

(41%)

(1) Cross-border volume excluding transactions within Europe.

Note: The chart results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.

12 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

Total Cards

(USD in millions)

Q3 FY2020

2019

2020

3,401

3,493

2,277 2,354

1,124 1,139

Total Visa Inc.

Credit

Debit

YoY Change

3%

1%

3%

Note: The chart results are calculated over the comparable prior-year period. Refer to Operational Performance Data footnote for further information on these metrics.

13 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

Revenue Results

Q4 FY2020

Reported Adjusted

4%

5%

0%

(13%)

(13%)

(17%) (17%)

(38%)

Service

Data Processing

International

Other

Gross

Client

Net

Revenues

Revenues

Transaction

Revenues

Revenues

Incentives

Revenues

Reported

Revenues

$361

Nominal USD $2,217

$2,875

$1,346

$6,799

$1,698

$5,101

(in millions)

Client Incentives %

25.0%

of Gross Revenues

Note: The chart results are calculated over the comparable prior-year period. Refer to the Adjusted Constant-Dollar Results Footnote for further information on adjusted results. Percentage changes are calculated based on unrounded numbers.

14 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

Operating Expense Results

Q4 FY2020

Reported

Non-GAAP

Adjusted

6%

6%

14%

10%

(6%) (6%)

(1%)

(2%)

NM

(4%) (5%)

(18%)

(25%)

(25%)

(30%)(31%)

(99%)

Personnel

Marketing

Network &

Professional

Depreciation &

General &

Litigation

Total

Operating

Processing

Fees

Amortization

Administrative

Provision

Expenses

Reported

$922

$288

$191

$104

$196

$256

$2

$1,959

Nominal USD

(in millions)

NM - Not meaningful.

Note: The chart results are calculated over the comparable prior-year period. Refer to the Adjusted Constant-Dollar Results Footnote for further information on adjusted results. Percentage changes are calculated based on unrounded numbers. Refer to the financial tables in the earnings release for further details and a reconciliation of the non-GAAP measures presented.

15 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

Other Financial Results and Highlights

  • Visa continues to monitor the COVID-19 impact globally. Many countries had stable to positive year-over- year domestic spending growth in the fiscal fourth quarter. Overall cross-border spending remains depressed, led by travel spending, as the majority of borders remain closed. Card not present excluding travel in both domestic and cross-border volume continued to grow at elevated levels even with the gradual recovery of card present spend.
  • On August 17, 2020, Visa issued fixed-rate senior notes in an aggregate principal amount of $3.25 billion with maturities ranging between 7 and 30 years, and interest rates from 0.75% to 2.0%. The weighted- average interest rate is 1.53%. The net proceeds from the offering of the 2027 Notes will be used to fund eligible green projects and the net proceeds from the offering of the 2031 Notes and the 2050 Notes will be used for general corporate purposes.
  • At the closing of the acquisition of Visa Europe in June 2016, Visa Inc. issued preferred stock to cover certain expenses incurred by Visa in defending and resolving multilateral interchange fee-related claims asserted in the UK and Europe. Visa is required to undertake periodic release assessments to determine if value should be released from the series B and C preferred stock. The first such release assessment occurred on June 21, 2020, the 4th anniversary of the closing of the Visa Europe acquisition. On September 24, 2020, Visa released approximately $7.3 billion from the series B and C convertible participating preferred stock. This did not affect the fully diluted share count.
  • On October 27, 2020, Visa announced it signed a definitive agreement to acquire YellowPepper. We believe this acquisition will accelerate the adoption of Visa's "network of networks" strategy in Latin America and the Caribbean by significantly reducing the time-to-market and cost for issuers and processors associated with accessing innovative and interoperable solutions, regardless of who owns or operates the payment rails.

16 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

Operational Performance Data Footnote

Current quarter payments volume and other select metrics are provided in the operational performance data supplement in the earnings release to provide more recent operating data. Service revenues continue to be recognized based on payments volume in the prior quarter.

Total transactions represent payments and cash transactions as reported by Visa clients on their operating certificates. Processed transactions represent transactions involving cards and other form factors carrying the Visa, Visa Electron, Interlink, V PAY and PLUS cards processed on Visa's networks.

On occasion, reported payments volume, transaction and card information may be updated to reflect revised client submissions or other adjustments. Prior-period updates, other than the change to the payments volume definition, are not material. Figures may not recalculate exactly due to rounding. Percentage changes and totals are calculated based on unrounded numbers. Constant-dollar growth rates exclude the impact of foreign currency fluctuations against the U.S. dollar in measuring performance.

17 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

Free Cash Flow

(USD in millions)

The Company had cash, cash equivalents and investment securities of $20.3 billion as of September 30, 2020.

Calculation of Free Cash Flow

Q4 FY2020 QTD

Q4 FY2020 YTD

Net cash provided by operating activities

$2,096

$10,440

Less: capital expenditures

(168)

(736)

Free Cash Flow(1)

$1,928

$9,704

  1. Free Cash Flow is cash provided by operating activities adjusted to reflect capital investments made in the business

Cash Returned to Shareholders

Q4 FY2020 QTD

Q4 FY2020 YTD

Stock Repurchases

$1,620

$8,106

Dividends

$662

$2,664

Note: Management believes that this presentation is useful to measure Visa's generation of cash available to first re-invest in the business, and then return excess cash to shareholders through stock repurchases and cash dividends.

18 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

Forward-Looking Statements

This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that relate to, among other things, the impact on our underlying business drivers and other volume and transaction trends as a result of COVID-19, our future operations, prospects, developments, strategies and business growth. Forward-looking statements generally are identified by words such as "anticipates," "estimates," "expects," "intends," "may," "projects," "outlook," "could," "should," "will," "continue" and other similar expressions. All statements other than statements of historical fact could be forward-looking statements, which speak only as of the date they are made, are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond our control and are difficult to predict.

Actual results could differ materially from those expressed in, or implied by, our forward-looking statements due to a variety of factors, including, but not limited to:

  • impact of global economic, political, market, health and social events or conditions, including the impact of COVID-19;
  • increased oversight and regulation of the global payments industry and our business;
  • impact of government-imposed obligations and/or restrictions on international payment systems;
  • outcome of tax, litigation and governmental investigation matters;
  • increasingly intense competition in the payments industry, including competition for our clients and merchants;
  • proliferation and continuous evolution of new technologies and business models;
  • our ability to maintain relationships with our clients, acquirers, processors, merchants and other third parties;
  • brand or reputational damage;
  • exposure to loss or illiquidity due to settlement guarantees;
  • the impact of the United Kingdom's withdrawal from the European Union;
  • a disruption, failure, breach or cyber-attack of our networks or systems;
  • risks, uncertainties and the failure to achieve the anticipated benefits with respect to our acquisitions and other strategic investments; and
  • other factors described in our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended September 30, 2019, and our subsequent reports on Forms 10-Q and 8-K.

Except as required by law, we do not intend to update or revise any forward-looking statements as a result of new information, future events or otherwise.

19 Fiscal Fourth Quarter 2020 Financial Results

©2020 Visa. All rights reserved.

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Visa Inc. published this content on 28 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 October 2020 20:19:08 UTC


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Financials (USD)
Sales 2021 23 151 M - -
Net income 2021 11 687 M - -
Net Debt 2021 3 953 M - -
P/E ratio 2021 38,8x
Yield 2021 0,60%
Capitalization 447 B 447 B -
EV / Sales 2021 19,5x
EV / Sales 2022 16,5x
Nbr of Employees 20 500
Free-Float 84,3%
Chart VISA INC.
Duration : Period :
Visa Inc. Technical Analysis Chart | V | US92826C8394 | MarketScreener
Technical analysis trends VISA INC.
Short TermMid-TermLong Term
TrendsBullishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 35
Average target price 222,61 $
Last Close Price 209,68 $
Spread / Highest target 19,2%
Spread / Average Target 6,16%
Spread / Lowest Target -11,3%
EPS Revisions
Managers
NameTitle
Alfred F. Kelly Chairman & Chief Executive Officer
Ryan McInerney President
Vasant M. Prabhu Vice Chairman & Chief Financial Officer
Rajat Taneja President-Technology
John A. C. Swainson Independent Director
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