Willis Towers Watson Public Limited Company · NASDAQ:WTW
Willis Towers Watson Public — Willis Towers Watson — Q4 2022 Earnings Presentation
27 slides from Willis Towers Watson Public's earnings presentation, Feb 9, 2023
Slide 1: Earnings Release Supplemental Materials: Fourth Quarter and Full Year 2022
WT Earning 2022 Fou February 9, 2 W s Release Supplemental Materials rth Quarter and Full Year Financial Results 023 wtwco.com © 2023 WTW. All rights reserved.
Slide 2: WTW Forward-Looking Statements
wtwco.com © 2023 WTW. All rights reserved. WTW Forward - Looking Statements This document contains ‘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 harb
Slide 3: WTW Non-GAAP Measures
WTW Non - GAAP Measures wtwco.com © 2023 WTW. All rights reserved. See “WTW Forward - Looking Statements“ above for information about forward - looking statements and cautionary language, including how actual results may differ materially from those in the slide presentation. 3 In order to assist re
Slide 4: Strategy and Operating Performance
Strategy and Operating Performance wtwco.com © 2023 WTW. All rights reserved. See “WTW Forward - Looking Statements“ above for information about forward - looking statements and cautionary language, including how actual results may differ materially from those in the slide presentation. 4
Slide 5: Key Takeaways
Organic growth of 5% in Q4 - 22 and 4% for full year 2022, and Adjusted EPS growth of 12% for Q4 - 22 and 16% for full year 2022 1 Significant progress on strategic priorities, with expanding talent base continuing to contribute to our performance Realized $49M of incremental annualized savings in Q
Slide 6: Fourth Quarter and Full Year 2022 GAAP Financial Results
Fourth Quarter and Full Year 2022 GAAP Financial Results Key figures wtwco.com © 2023 WTW. All rights reserved. See “WTW Forward - Looking Statements“ above for information about forward - looking statements and cautionary language, including how actual results may differ materially from those in th
Slide 7: Q4 2022 Key Figures, Including Non-GAAP Financial Results
Q4 2022 Key Figures, Including Non - GAAP Financial Results Solid Operating Performance Total Revenue +5% Q4 2022 Organic +4% Q4 2021 Organic Adjusted Diluted EPS 1 Q4 - 2022 Results Adjusted Operating Margin 1 Transformation Program $49M of run rate savings in Q4 2022 $2.7B Q4 2022 wtwco.com © 2023
Slide 8: Full Year 2022 Key Figures, Including Non-GAAP Financial Results
Full Year 2022 Key Figures, Including Non - GAAP Financial Results Solid Operating Performance Total Revenue +4% 2022 Organic +6% 2021 Organic Adjusted Diluted EPS 1 Full Year 2022 Results Adjusted Operating Margin 1 Transformation Program $149M of run rate savings since inception Free Cash Flow 1 $
Slide 9: Strategic Priorities and FY 2024 Financial Targets
Focus on the execution on our strategy and the generation of outstanding value creation for all shareholders • Grow: Invest to grow at or above market in chosen areas • Simplify: Increase agility; do the basics well • Transform: Enhance client and colleague experience through operational excellence
Slide 10: Recent Progress Against Strategic Priorities
Recent Progress Against Strategic Priorities Grow Simplify Transform x New talent contributing to performance x Expect client pipeline momentum to continue wtwco.com © 2023 WTW. All rights reserved. See “WTW Forward - Looking Statements“ above for information about forward - looking statements and c
Slide 11: We Have a Portfolio of Leading Businesses in Attractive Markets
Delivering superior advice, broking and solutions in the areas of people, risk and capital We Have a Portfolio of Leading Businesses in Attractive Markets We have: A distinctive mix of complementary businesses • Accomplished and aspiring talent • Collaborative client - first culture • Sophisticated
Slide 12: Segment Overview: Health, Wealth & Career
$4,586 $4,895 $5,268 $5,287 $1,149 $1,236 $1,382 25.0% 25.2% 25.6% 26.1% Segment Overview: Health, Wealth, & Career 1 Operating Income ($M) $1,346 Revenue ($M) Operating Margin % Health, Wealth & Career: World - class portfolio of leading businesses providing advisory and consulting services within
Slide 13: Segment Overview: Risk & Broking
$3,282 $3,316 $3,564 $3,460 $650 $734 19.8% 21.6% 23.4% 21.2% Segment Overview: Risk & Broking 1 Risk & Broking: Risk advisory and solutions business delivering innovative, integrated solutions tailored to client needs and underpinned by cutting edge data and analytics, technology and experienced ri
Slide 14: Value Creation Framework
Value Creation Framework wtwco.com © 2023 WTW. All rights reserved. See “WTW Forward - Looking Statements“ above for information about forward - looking statements and cautionary language, including how actual results may differ materially from those in the slide presentation. 14 1. Seek profitable
Slide 15: Financial Review
Financial Review wtwco.com © 2023 WTW. All rights reserved. See “WTW Forward - Looking Statements“ above for information about forward - looking statements and cautionary language, including how actual results may differ materially from those in the slide presentation. 15
Slide 16: Segment Highlights: Health, Wealth & Career
Segment Highlights • For the quarter, HWC grew 5% organically, with BD&O leading the segment. – BD&O organic revenue growth was led by Medicare Advantage sales. – Wealth generated organic revenue growth from increased project activity across all geographies, related to financial market volatility, a
Slide 17: Segment Highlights: Risk & Broking
Segment Highlights • For the quarter, R&B grew 5% organically. – CRB generated organic revenue growth across all geographies, driven by our global lines of business, most notably in Construction and Aerospace. – CRB organic revenue growth rate was pressured by headwinds from book sales in the compar
Slide 18: Continued Progress on Transformation Program
Continued Progress on Transformation Program On track to generate $360M+ of annualized savings through 2024 wtwco.com © 2023 WTW. All rights reserved. See “WTW Forward - Looking Statements“ above for information about forward - looking statements and cautionary language, including how actual results
Slide 19: Maintaining a Flexible Balance Sheet
Maintaining a Flexible Balance Sheet wtwco.com © 2023 WTW. All rights reserved. See “WTW Forward - Looking Statements“ above for information about forward - looking statements and cautionary language, including how actual results may differ materially from those in the slide presentation. 19 1 Total
Slide 20: Executing Against a Balanced Capital Allocation Strategy
Executing Against a Balanced Capital Allocation Strategy CASH RETURNED TO SHAREHOLDERS $ 9.2 B FY2016 to FY2022 $396 $150 $709 $602 $1,627 $199 $277 $306 $329 $346 $374 $369 2016 2017 2018 2019 2020 2021 2022 $3,899 $595 $986 $908 $479 $346 $2,001 3,530 Share repurchases Dividends 2020 2016 2017 $0.
Slide 21: 2023 Financial Targets
2023 Financial Targets 1 Expect to deliver adjusted operating margin expansion for full year 2023 FY2023 Adjusted Margin Improvement Expect approximately $0.01 headwind on Adj. EPS at today’s rates FY2023 Foreign Currency Impact on Adjusted EPS Expect approximately $112 million in non - cash pension
Slide 22: Appendix: Reconciliation of Non-GAAP Measures
Appendix: Reconciliation of Non - GAAP Measures wtwco.com © 2023 WTW. All rights reserved. See “WTW Forward - Looking Statements“ above for information about forward - looking statements and cautionary language, including how actual results may differ materially from those in the slide presentation.
Slide 23: Constant Currency and Organic Revenue Change
Constant Currency and Organic Revenue Change As reported, USD millions except % Components of Revenue Change (i) Less: Less: Three Months Ended December 31, As Reported Currency Constant Currency Acquisitions/ Organic 2022 2021 % Change Impact Change Divestitures Change Health, Wealth & Career $ 1,7
Slide 24: Adjusted Operating Income and Margin, Adjusted EBITDA and Margin
Adjusted Op Income and Margin, Adj. EBITDA and Margin As reported, USD millions except % Three Months Ended December 31, 2022 2021 Income from operations $ 708 26.0 % $ 690 25.5 % Adjusted for certain items: Amortization 73 84 Restructuring costs 28 26 Transaction and transformation, net 73 71 Adjus
Slide 25: Adjusted Net Income and Adjusted Diluted EPS
Adjusted Net Income and Adjusted Diluted EPS As reported, USD millions except % (i) The tax effect was calculated using an effective tax rate for each item. (ii) Per share values and totals may differ due to rounding. Three Months Ended December 31, 2022 2021 Net Income attributable to WTW $ 588 $ 2
Slide 26: Adjusted Income Before Taxes, Tax Rate and Free Cash Flow
Adjusted Income Before Taxes, Adjusted Income Tax Rate and Free Cash Flow As reported, USD millions except % (i) The tax effect was calculated using an effective tax rate for each item. Three Months Ended December 31, 2022 2021 Income from continuing operations before income taxes $ 737 $ 724 Adjust
Slide 27: About WTW
About WTW At WTW (NASDAQ: WTW), we provide data - driven, insight - led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilie