Aon Plc · NYSE:AON
Aon — Q1 2015 Earnings Presentation
21 slides from Aon's earnings presentation, May 1, 2015
Slide 1: First Quarter 2015 Results
Aon plc First Quarter 2015 Results May 1, 2015
Slide 2: Presenters: Greg Case and Christa Davies
Greg Case Chief Executive Officer Christa Davies Chief Financial Officer 1
Slide 3: Safe Harbor Statement
Safe Harbor Statement This communication contains certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These
Slide 4: Key Metrics – Delivered Progress in Q1 for a Solid Start to 2015
Key Metrics1 – Delivered Progress in Q1 for a Solid Start to 2015 Q1’14 Q1’15 Q1 Organic Revenue Organic revenue growth of +3% in Risk Solutions and +4% in HR Solutions Delivered solid organic revenue growth of +4% in the Americas in Retail 1. Organic Revenue2 +2% +3% Brokerage and in HR Outsour
Slide 5: Organic Revenue – Continued Growth in Both Segments
Organic Revenue1 – Continued Growth in Both Segments Q1’14 Q1’15 Q1 Risk Solutions Risk Solutions Americas: Growth across all regions driven by solid management of the renewal book portfolio in US Retail, Americas 4% 4% as well as double-digit new business growth in Latin America and Canada Intern
Slide 6: Investing in the Business to Position the Firm for Long-Term Growth
Investing in the Business to Position the Firm for Long-Term Growth “Aon has a truly impressive track record of developing innovative solutions to help solve problems and create differentiated value in response to specific client needs. Solid long-term operating performance, combined with expense di
Slide 7: EPS – Solid Earnings Growth Despite Significant FX Headwind
EPS1 – Solid Earnings Growth Despite Significant FX Headwind “Our first quarter results reflect a solid start to the year with seven percent earnings per share growth despite a significant headwind from foreign currency translation. Results are highlighted by solid organic revenue growth across both
Slide 8: Operating Margins – Delivered Underlying Operational Improvement
Operating Margins1 – Delivered Underlying Operational Improvement ($ millions) Q1’14 Q1’15 Risk Solutions Q1 Risk Solutions Positive Impact Operating Income2 $470 $440 Organic revenue growth of +3% Return on investments Y-o-Y change -6% Expense discipline Operating Margin2 23.6% 23.2% Negative
Slide 9: Long-Term Operating Margin Targets & Primary Drivers
Long-Term Operating Margin Targets & Primary Drivers Risk Solutions Operating Margin1 26.0% Drivers Within Our Control: 1. Return on investments in data and analytics, 22.4% 22.5% 22.9% including Aon Broking and GRIP related initiatives 21.6% 21.6% 21.7% 2. Continued rollout of Revenue Engine intern
Slide 10: Unallocated Expenses & Non-Operating Segment Financials
Unallocated Expenses & Non-Operating Segment Financials Quarterly ($ millions) Q1’14 Q1’15 Guidance Interest expense increased $ 7 million due to Unallocated Expenses ($43) ($47) ($45) an increase in total debt outstanding Other Income primarily includes $23 million of Interest Income $2 $3 $2 g
Slide 11: Solid Balance Sheet and Strong Free Cash Flow Generation
Solid Balance Sheet and Strong Free Cash Flow Generation Balance Sheet Cash Flow from Operations Free Cash Flow 1 ($ mil) ($ mil) ($ mil) Dec 31, Mar 31, $136 2014 2015 $74 Cash $374 $378 YTD 2014 YTD 2015 YTD 2014 YTD 2015 Short-term ($11) $394 $343 Investments ($66) Cash Flow Commentary: Total Deb
Slide 12: Significantly Increasing Free Cash Flow Generation
Significantly Increasing Free Cash Flow1 Generation Aon expects to double free cash flow from $1.15 billion in 2012 to more than $2.3 billion annually for the full year 2017, driven by four key areas: 1. Operational improvement as the firm makes progress towards its long-term operating margin target
Slide 13: Summary – Continued Long-Term Value Creation
Summary – Continued Long-Term Value Creation Positioned for sustainable long-term growth in both Risk Solutions and HR Solutions Significant leverage to an improving global economy, interest rates and insurance pricing Investing in colleagues and capabilities around the globe to better serve c
Slide 14: Appendix
Appendix AION 13 Empower Results®
Slide 15: Appendix A: Reconciliation of Non-GAAP Measures – Organic Revenue and Free Cash Flow
Appendix A: Reconciliation of Non-GAAP Measures – Organic Revenue and Free Cash Flow Organic Revenue (Unaudited) Three Months Ended Less: Less: Acquisitions, Organic March 31, March 31, Percent Currency Divestitures & Revenue (millions) 2015 2014 Change Impact (1) Other Growth (2) Commissions, Fees
Slide 16: Appendix B: Reconciliation of Non-GAAP Measures – Operating Margin and Diluted EPS
Appendix B: Reconciliation of Non-GAAP Measures – Operating Margin and Diluted Earnings per Share Three Months Ended March 31, 2015 Unallocated Risk HR Income & (millions) Solutions Solutions Expense Total Revenue $ 1,895 $ 970 $ (18) $ 2,847 Operating income (loss) - as reported $ 412 $ 76 $ (47) $
Slide 17: Appendix C: Reconciliation of Non-GAAP Measures 2006-2009
Appendix C: Reconciliation of Non-GAAP Measures 2006-2009 Full Year ended December 31, 2006 Full Year ended December 31, 2007 Full Year ended December 31, 2008 Full Year ended December 31, 2009 Risk HR Risk HR Risk HR Risk HR (millions) Solutions Solutions Unallocated Continuing Solutions Solutions
Slide 18: Appendix C: Reconciliation of Non-GAAP Measures 2010-2013
Appendix C: Reconciliation of Non-GAAP Measures 2010-2013 Full Year ended December 31, 2010 Full Year ended December 31, 2011 Full Year ended December 31, 2012 Full Year ended December 31, 2013 Risk HR Risk HR Risk HR Risk HR (millions) Solutions Solutions Unallocated Continuing Solutions Solutions
Slide 19: Appendix C: Reconciliation of Non-GAAP Measures 2014
Appendix C: Reconciliation of Non-GAAP Measures 2014 Full Year ended December 31, 2014 Risk HR (millions) Solutions Solutions Unallocated Continuing GAAP Disclosures As Reported Total revenue 7,834 4,264 (53) 12,045 Compensation and benefits 4,396 2,518 Other general expenses 1,790 1,261 Total opera
Slide 20: Appendix D: Intangible Asset Amortization Schedule
Appendix D: Intangible Asset Amortization Schedule Intangible Asset Amortization by Segment ($ millions) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Risk Solutions $93 $114 $129 $126 $115 $109 $108 $99 $90 $78 HR Solutions - $40 $233 $297 $280 $243 $206 $172 $137 $91 Total $93 $154 $362 $423 $
Slide 21: Investor Relations
Investor Relations Scott Malchow scott.malchow@aon.com Office: +44 (0) 20 7086 0100 Erika Shouldice erika.shouldice@aon.com Office: 312-381-5957 Steven Krall steven.krall@aon.com Office: 312-381-3353