Willis Towers Watson Public Limited Company · NASDAQ:WTW
Willis Towers Watson Public — Willis Group Holdings — Q4 2013 Earnings Presentation
21 slides from Willis Towers Watson Public's earnings presentation, Feb 12, 2014
Slide 1: Fourth Quarter 2013 Results
Exhibit 99.2 Willis Group Holdings FOURTH QUARTER 2013 RESULTS February, 2014
Slide 2: Important disclosures regarding forward-looking statements
Important disclosures regarding forward-looking statements This presentation contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors cre
Slide 3: Important disclosures regarding non-GAAP measures
Important disclosures regarding non-GAAP measures This presentation contains references to "non-GAAP financial measures" as defined in Regulation G of SEC rules. We present these measures because we believe they are of interest to the investment community and they provide additional meaningful metho
Slide 4: Commissions and fees growth
Commissions and fees growth Organic growth excluding $9.4 million (110 bps) net 4Q 2013 negative revenue recognition adjustment would have been 4.8% Reported Organic North America – North America 6.6% 5.8% Excluding $5.3 million (160 bps) positive International 3.0% 3.0% revenue recognition adjustme
Slide 5: Q4 2013 summary financial results
Q4 2013 summary financial results Adjustment Change to reflect Q4 2012 – Q4 2013 vs. Q4 Q4 accrual of “apples to Q4 2012 2013 2012 bonuses apples” “apples to throughout comparison apples” 2012 * Adjusted operating $ 150 m $ 166 m $ (15) m $ 151 m $ (1) m income Adjusted operating 16.3% 19.1% (180) b
Slide 6: FY 2013 summary financial results
FY 2013 summary financial results Adjustment to reflect 2012 – Change accrual of “apples to 2013 vs. 2013 2012 bonuses apples” 2012“apples throughout comparison to apples” 2012 * Adjusted operating $ 730 m $ 752 m $ (48) m $ 704 m $ 26 m income Adjusted operating 20.0% 21.6% (140) bps 20.2% (20) bps
Slide 7: Total expenses
Total expenses Q4 Q4 $ millions 2013 2012 Total expenses – reported $ 767 $ 1,646 (53.4)% Goodwill impairment charge - (492) Write-off of unamortized - (200) retention awards 2012 cash bonus accrual - (252) Insurance recovery - 5 Gain (loss) on disposal of 2 (2) operations Total expenses – adjusted
Slide 8: Salaries and benefits – assuming cash bonus accrued throughout 2012
Salaries and benefits – assuming cash bonus accrued throughout 2012 $ millions Q1 Q2 Q3 Q4 FY Salaries and benefits – $ 506 500 502 515 $ 2,023 adjusted Amortization of cash (59) (51) (46) (48) (204) retention awards 2012 cash bonus 63 63 63 63 252 accrual Difference 4 12 17 15 48 Salaries and benef
Slide 9: Salaries and benefits
Salaries and benefits Q4 Q4 $ millions 2013 2012 Salaries and benefits – $ 569 $ 967 (41.2)% reported Write-off of unamortized - (200) retention awards 2012 cash bonus accrual - (252) “Apples to apples” S&B growth of 7.5% Salaries and benefits – Driven by: $ 569 $ 515 10.5% adjusted Increased headco
Slide 10: Other operating expenses
Other operating expenses Q4 Q4 $ millions 2013 2012 Other operating expenses – reported $ 161 $ 150 7.3% Insurance recovery - 5 Other operating expenses – adjusted $ 161 $ 155 3.9% Y-o-Y FX movement 5 - Underlying growth in other operating expenses of 7.1% Other operating expenses $ 166 $ 155 7.1% –
Slide 11: Balance sheet and cash flow highlights
Balance sheet and cash flow highlights $ millions Dec 31, Dec 31, As of 2013 2012 $296 million increase in cash at end of 2013 Cash $796 $500 compared to prior year Total debt $2,326 $2,353 $36 million increase in cash flow from Dec 31, Dec 31, operations in 2013 compared to 2012 Year ended 2013 201
Slide 12: Appendices
APPENDICES Willis
Slide 13: Commissions and fees growth
Commissions and fees growth Mid-single digit organic growth across all segments. FY 2013 Excluding $9.4 million (20 bps) net negative revenue Reported Organic recognition adjustment organic growth would have been 5.1% North America 5.4% 4.9% North America – International 3.9% 4.1% Excluding $5.3 mil
Slide 14: Total expenses - 2013
Total expenses - 2013 $ millions 2013 2012 Total expenses – reported $ 2,970 $ 3,689 (19.5)% Fees related to the extinguishment of debt (1) - Expense reduction initiative (46) - Goodwill impairment charge - (492) Write-off of unamortized retention awards - (200) 2012 cash bonus accrual - (252) India
Slide 15: Salaries and benefits - 2013
Salaries and benefits - 2013 $ millions 2013 2012 Salaries and benefits – $ 2,207 $2,475 (10.8)% reported Expense reduction initiative (29) - Write-off of unamortized - (200) retention awards 2012 cash bonus accrual - (252) Salaries and benefits – 2013: Underlying S&B growth of 8.1% $ 2,178 $2,023 7
Slide 16: Other operating expenses
Other operating expenses $ millions 2013 2012 Other operating expenses $ 616 $ 581 6.0% – reported Fees related to the (1) - extinguishment of debt Expense reduction initiative (12) - India JV settlement - (11) 2013: Other operating expenses Write-off of uncollectible - (13) increased 6.3% on both a
Slide 17: Commissions and fees analysis
Important disclosures regarding non-GAAP measures Commissions and fees analysis Organic Foreign Acquisitions commissions currency and and fees 2013 2012 Change translation disposals growth ($ millions) % % % % Three months ended December 31, 2013 North America $353 $331 6.6 0.0 0.8 5.8 International
Slide 18: Operating income to adjusted operating income
Important disclosures regarding non-GAAP measures Operating income (loss) to adjusted operating income 2012 2013 (In millions) 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY Operating Income (Loss) $317 $179 $70 ($775) ($209) $287 $171 $75 $152 $685 Excluding: Tender related fees - - - - - - - 1 - 1 Expense reductio
Slide 19: Net income to adjusted net income
Important disclosures regarding non-GAAP measures Net income (loss) to adjusted net income 2012 2013 (In millions, except per share data) 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY Net Income from continuing operations $225 $107 $26 ($804) ($446) $219 $105 ($27) $68 $365 Excluding the following, net of tax: Debt
Slide 20: IR Contacts
IR Contacts Peter Poillon Tel: +1 212 915-8084 Email: peter.poillon@willis.com Mark Jones Tel: +1 212 915-8796 Email: mark.p.jones@willis.com 19
Slide 21: Fourth Quarter 2013 Results
Willis Group Holdings FOURTH QUARTER 2013 RESULTS February, 2014
Willis Group Holdings — Q4 2013 Earnings Presentation on 6ix