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#Yes, <UNK>, it's <UNK>.
I'll just jump in quickly.
So purchase price-wise, it's small.
It's sort of $50 million-ish US.
So it's not a particularly large asset.
But it's a very nice ---+ I think of it as a product add to our existing position in Ezidebit business in Australia.
It obviously enhances our omni solution ---+ omni-channel solution strategy that we spoke at great length about in October at our Investor Day.
I think bringing that asset to our portfolio into Australia really positions us to accelerate our omni-channel solutions' capability in market.
We really looked at it very simply as a buy versus build opportunity.
We're delighted with Realex and what its been able to bring to our portfolio.
As we noted in our prepared comments, we launched the bundle in the Fall in the UK.
We're bringing it to Spain in the not too distant future.
But as it related to Australia, this was a very unique opportunity to buy the market leader from an eCom point of view, couple it with our existing presence with Ezidebit, which we've been thrilled with their performance, to create the leading technology-enabled distribution platform in the Asia-Pacific region.
So it was a fantastic opportunity.
One of the side benefits of structuring the Heartland transaction the way we did is, we've maintained the financial capacity to be able to do these types of things.
We're obviously delighted to have eWAY as part of the family.
Sure.
<UNK>, it's <UNK>, I'll respond to that.
So obviously the announced product extension today with eWAY ---+ as we said in December, at the time of the Heartland announcement, we continue to have term sheets out in a bunch of regions, primarily in Asia and in Europe.
Of course, we're pretty full up here in the United States and in North America with the pending close of the Heartland transaction.
So I think as you look at eWAY and as you look at Erste, which we expect to close by the end of this fiscal year, I think to <UNK>'s point, those are pretty good examples of the types of transactions that we have sheets out on today, which is to say while toward the lower end of what we've invested in transactions nonetheless very meaningful from a strategic and new market point of view.
I would look to see some more of those as well, as <UNK> mentioned in his remarks, a return to the normal cadence of capital allocation that we've been doing as a Company over the last 3.5 years.
Thanks, <UNK>.
Sure, <UNK>, it's <UNK>, I'll start.
So one of the things that we point out in our prepared remarks is that we've been very successful in Asia-Pacific by adding new markets and by increasing our presence in markets that have been performing well.
So we talked a lot about Australia.
We just responded <UNK> talking about eWAY and Ezidebit.
Of course we have our joint venture with the Bank of the Phillipine Islands, which we are also performing in line with our expectations.
We are in that market before the JV.
We increased our size to the second largest presence in that market thereafter.
As a result, we've been able to grow ---+ to answer your question, we've been able to grow the Asia-Pacific business 9% on a constant currency basis this quarter.
So I'd say, we started getting very good growth in Greater China, which I define as Mainland China, Hong Kong, Taiwan and Macau, as a percentage of the business in Asia-Pacific has been reduced from probably a number of years ago to probably around half of it to maybe around 30% currently.
That's largely as a result of targeted additions in other markets like Australia, New Zealand and the Philippines.
We also continue to grow very well in markets like Singapore, beyond the two or three that I just listed.
So I would say there's been a fair amount of revenue growth.
I see about two-thirds of Asia-Pacific, <UNK>, coming from markets other than ---+ as a percentage of revenue, other than Greater China, providing in the case of Ezidebit 20% plus growth.
It's not really going to have all that dramatic an impact on the revenue growth in any one quarter ---+ Greater China that is.
So I think a lot of it's coming from the mix of business, particularly that Ezidebit is at a much higher margin than the overall Company, as well as Asia by itself.
That's how I think about it.
<UNK>, you can comment maybe a little bit on the expense side.
Sure.
I'll just start maybe, <UNK>, on Ezi.
So I would note first and foremost, we're a year plus beyond the acquisition.
We've now I think, in our minds fully integrated Ezidebit, so that is creating an environment where incremental margins at EZI are improving.
Obviously, it's already higher than our Asia average margins.
So it's increasing from there.
It's all ready from there.
So I think that's contributing to it, but as it relates to the expense side, I think what we really tried to do is look at our core business in Asia-Pacific outside of Australia and to some degree the Philippines, where we have the joint venture with BPI and really try to rationalize the size of the expense base relative to the outlook for that market over the next 12 to 18 months.
The reality is we do expect a continued weakness in China.
Hopefully we've seen the four, but we don't expect it to rebound dramatically in the near term.
So we really try to reposition the business to ride out what we expect to be a soft spot in the cycle in the Greater China markets and position the business for continued success.
I think you're seeing results of that play through in margins in this quarter.
Yes, I think I'll start by saying we're delighted with the performance of our Canadian team this year.
Their ability to forecast, predict and manage their business to produce results in line with our expectations in light of what is obviously a continued soft macroeconomic environment has been fantastic.
So I'll start there.
I think we continue to see ---+ sort of our code for stable fundamentals is a combination of stable low single-digit transaction volume growth and relatively stable spreads.
So when we talk about fundamentals for Canada, our expectation is the combination of transaction volume growth and stable spreads is going to produce low single-digit growth in local currency in that market.
We've been consistently doing that now for probably 8 to 10 quarters, I would say and I remained very pleased with how that team has performed in light of the broader macro issues.
Tien-Tsin, this is <UNK>, a little commercial for Canada.
We're ahead on sales.
So when you lay on top of that sales growth and new product introductions, things like Alpha Blue that we can rollout on a global basis, you've got that little bit extra to help make you feel more confident in managing the stable conditions and the stable metrics that <UNK> was describing.
Thanks, <UNK>.
Yes, <UNK>, it's <UNK>.
I think that's a really pressing question in that where Spain sits right now is flat to slightly up in terms of revenue growth, which is really remarkable when you think about annualizing that interchange benefit.
It's of course, driven by the amazing sales we get out of the branches and the resulting volume and transaction growth in the mid teens.
So you're exactly right.
As we look ahead and can think through fully annualizing spread changes, et cetera, as we head toward September, it is accelerating as we speak in terms of market share and penetration.
It will be a piece of the European growth story that <UNK> was describing earlier as we go forward, no question about it.
<UNK>, it's <UNK>.
The only thing I'll add to <UNK>'s point more specifically, we annualized the annualization of the interchange reductions in September.
So when you're growing transaction and volumes at the rate we're growing, once you get beyond that date obviously you should see top line growing at similar levels, which creates a nice tail wind growing into the back half of FY17 in Europe as we start to annualize the interchange reductions in the UK.
Well I think your point on Q1 is a good one.
As we said in October, when we had our first-quarter call, Q1 was an exceptional quarter this year.
Not one that we expect to duplicate notwithstanding that there seemed to be sort of a view that we would duplicate it in Q2.
Despite having a very good quarter, it wasn't quite as good as Q1.
So I do think that's a fair point as you think about setting your model up for FY17.
Outside of that, it's just again ---+ I talked to many of you guys about this.
It's sort of assessing the FX impacts on results and trying to figure out how to overlay those on top of annualization of acquisitions that we've made and how all that plays through the financials.
Obviously, happy to talk more off line, as to how I think about that.
But obviously, the volatility around FX and the amount of headwind we've seen from FX does make it a little bit difficult from time to time to try to get reported results forecasted correctly quarter-over-quarter, year-over-year.
I would say <UNK> though, it's <UNK>, that's exactly right.
I would say that the Company as you know from our descriptions before is going to go from about half the revenue being in the United States and half outside being dollar denominated into two-thirds post Heartland dollar denominated.
So while <UNK> is exactly right, of course, we still have our three regions.
So if we do it regionally, I would hope ---+ I'm looking at <UNK>'s statements, I would hope it would be easier to model coming out just given the mix of 50% dollar denominated for the overall Company going to two-thirds.
So my hope is while those things are exactly right that in terms of the impact as a whole on overall Company revenue and overall Company earnings, <UNK>, I'm hopeful that it's a little more straightforward.
But as <UNK> said, the devil is in the details; I'm sure we'll get that.
Thanks, <UNK>.
Yes, <UNK>, this is <UNK>, a couple of lessons learned.
We're finding very strong demand for the bundled solution in the UK.
The place where we're working the hardest is probably on the joint sales proposition and being able to take what you might think of as a traditional sale and marry to it a more technology-enabled piece of the sale.
So the gateway married to the acquiring, married to the reporting, married to the fraud and credit management you have to be able to provide.
All those tools are there.
Probably the place where we've learned the most lessons has been on making those joint sales calls and enabling and equipping traditional sales folks to be able to sell either the early stages of eCommerce enablement to a small to medium merchant or sell the entire bundle.
The good news is with the demand we've had and the level of execution we've seen, it has not affected our sales trajectories.
In fact, we're very pleased with the sales coming on the back of the demand.
But it is a more technical sale.
So being able to equip your salespeople on a global basis to sell more technology-enabled transaction processing is a challenge of its own.
We feel like we've learned a lot in that early integration between the UK and Ireland that will serve us well in Spain particularly.
It's allowed us, <UNK>, to think more specifically about how you target a market.
How you focus a piece of the sales force on the micro payments themselves on micro merchants, a piece of the sales force on small to medium.
Then joint calling of experts maybe from Ireland in addition to Spain on large to national merchants and certainly joint calling between all of your regions as well as your technical experts in a place like Ireland where Realex is based; on to multi-regional or multi-marketer regional accounts.
So really, how you go to market has been where you've learned lessons.
Again, we're fortunate enough to be learning them in a situation where the sales are right at target or above in many cases.
So we feel good about those pieces.
If you step back a little bit and think about this, the second and third piece of this is really partners and software developers.
As you enter new markets, you want to continue the momentum you have with channel partners, so ISVs, cart providers, folks like that.
You also want to develop and foster your relationship with developers, the PrestaShop's of this world, whom you see in the press even from other providers in the eCommerce world.
So in specific markets, you've got certain ISVs, card providers as well as software providers.
You're also taking your regional partners with you.
So being able to go to market and manage the direct sales as I described earlier in a specific region, the face-to-face married to the technology, as well as local channel partners, local software providers and with that an overlay of the regional folks and in many cases the global software providers.
It's a little tricky.
It comes down again to market segmentation and how you compensate and drive the direct sales force to certain behaviors you want to target the segments, make sure they don't trip over each other, and make sure that you can drive joint sales.
That's all a bit in its infancy in global but we're really, really pleased with the pieces.
So pleased that we went ahead and deployed $50 million of more capital in Australia to continue executing the same strategy, where we can take this bundle with Ezidebit and eWAY to market and drive even deeper penetration with what's already the leading provider of small to medium sized retail eCommerce in Australia.
So, a long-winded answer, I realize, but its actually been a great deal of learning, a great deal of really excellent execution by our teams in Ireland and in the UK and now about to be in Spain, that's lead us to sort of feel really good about the execution levels we're seeing relative to something we spent a lot of time describing at the Investor Day in October, omni-channel global capabilities that we think we are uniquely positioned to sell
Thanks, <UNK>.
It's a great question, <UNK>.
I would say, we're still seeing some weakness in certain markets, particularly the pound.
Today is another example, I would point to, to say not only is the US dollar sort of secularly strong, the volatility in some of these major currencies is astounding.
I see the pound moving 1.5 or 2 points intraday.
For example, obviously makes it very difficult to forecast FX with any sort of certainty as we think and look forward.
I think we are as we get into FY17 particularly as we get into the back half of FY17, hope we're going to be in an environment where we're starting to anniversary some of the stronger headwinds.
But I certainly don't think that we're approaching any time soon an environment where the US dollar is going to weaken relative to most of the major currencies around the world to which we have an exposure.
I think we are in a sort of secular bull market for the US dollar.
I expect that to continue for some time.
There's just not a lot that would cause me to believe the dollar is going to weaken.
But as we continue to anniversary some of these bigger moves ---+ for example, we anniversaried the strong euro move in Q3 of this year.
Unfortunately, that was more than offset by an equally strong move downward in the pound at relatively the same time.
So we have a good exposure to a fair number of currencies.
To <UNK>'s earlier point, part of the benefit of the Heartland transaction is it does de-risk currency exposure to the Company.
On a macro basis, we'll be two-thirds US dollar denominated business going forward.
That obviously will diminish some of the FX exposure that we have globally.
But I'm hopeful to get into an environment wherein 2017 we're leasing most of the strong headwinds begin to diminish to some degree.
Thanks, <UNK>.
<UNK>, it's <UNK>.
I think the thinking is very similar to what we described to you in December.
That's a large part of why we're so attractive to the Heartland acquisition.
That sales force, its trajectory has been remarkable for the last couple of years.
The deeper we've gone into our homework on integration, the happier we are with what we found.
So our plans are really very similar to what they were in December.
We don't want to screw this up, so we're going to keep the performance plans consistent.
We're going to keep the Bills of Rights with which you're familiar.
Keep using those to drive organic growth.
As a management matter, we're very impressed with the team.
We spent a lot more time with them.
So I think not a lot of changes at all, as you might imagine going forward.
Their trajectory right now is really impressive.
So it's more a matter of making sure we can figure out how to accelerate that with more product, maybe a different way to think about enhancing the traditional distribution with again additional product out of Heartland commerce and the other business units that are already in place there.
So really pleased with the pieces, really pleased with the sales force and the trajectory and no plans to change anything we described to you in December.
The only thing I would add, <UNK>, it's <UNK>, when you think about our entire approach to integration, it's really behind the sales force, behind the customer, such that the objective is to not disrupt anything that's happening from a sales and sales momentum point of view, nor to create conflict at the customer level that's going to distract the sales professionals from continuing to grow and expand the business.
Our objective is to accelerate growth through that channel, as we've been able to do with many of the previous acquisitions we've done.
The integration that we're going to do will be behind the scenes such that it won't impact the momentum that we're expecting to be able to achieve from an organic sales point of view.
Yes, <UNK>, it's <UNK>, again, I'll start and let these guys chime in with anything I miss.
So, we continue to be very pleased with OpenEdge.
It still grows in the mid to high teens.
The revenue production is really, really impressive.
That's all at increasing margins that are higher than the Company's margin.
So back to several of the other questions earlier today.
In terms of existing verticals, we remain very, very low penetrated.
I realize that's not perfect grammar.
But really, I don't think we have a vertical that's more than 20% penetrated anywhere in any of our key verticals.
So if you think of vets and dentists, we talk about those a lot, pharma.
We think about parking garages, all those very low levels.
We've got a sales force that's focused on driving deeper penetration into those verticals.
At the same time that we're looking for other places to grow.
So we mentioned the Heartland description before where we don't have an education vertical in OpenEdge.
We don't do restaurants and hospitality.
The opportunity to drive deeper penetration in those verticals by OpenEdge to compliment the direct sales force about which you asked in your first question is there.
It's real.
We continue to work on that in integration planning.
The other couple things we have is we literally entered a new vertical in the United States that we weren't in before, just in the last couple of weeks.
We entered the unattended payments vertical in United States, with a brand new partner, large ISV, who plays in that space, you're talking about car washes, more parking, vending, things like that.
That's new and unique for OpenEdge.
So a brand new vertical effectively we're at 0% penetration in that vertical as we sit here today.
But we know how to manage the ecosystem of partners, merchants, leads and marketing to drive that.
Then maybe happiest news of all, in terms of how we think about growing that OpenEdge beyond just the United States.
The global opportunity is real.
We're really pleased to announce we actually have opened up OpenEdge and launched in the UK this quarter.
So we have a staff there, dedicated sales folks, dedicated product folks.
Remember back to October in the Investor Day, one of our key pillars of accelerating global growth was the global expansion of integrated payments, OpenEdge driving into Canada driving into the United Kingdom.
So we've now launched our business in the UK.
We can bring that dedicated and product and ecosystem to the United Kingdom to work with ISVs, to drive the benefits of technology integration that don't exist in the UK, as they exist in the US today.
Best still, we can drive existing partners into the United Kingdom.
So US-based ISVs and software providers provide near-term sales opportunities.
In fact, we're going to bring a few customers live in the UK in just the next few months coming from US-based ISVs where we are extending their franchise, extending the integrated payments benefit out to the UK for them.
So more to come on this, but really OpenEdge is poised for more global growth but still continued excellent execution in United States as we go forward.
Thank you.
Thanks, <UNK>.
On behalf of Global Payments, thank you very much for joining us this morning and for your continuing interest in Global.
