Willis Towers Watson Public Limited Company · NASDAQ:WTW
Willis Towers Watson Public — Willis Group Holdings — Q3 2013 Earnings Presentation
27 slides from Willis Towers Watson Public's earnings presentation, Nov 8, 2013
Slide 1: Fact Book Third Quarter 2013
Exhibit 99.1 Fact Book Third Quarter 2013 WILLIS GROUP HOLDINGS November 2013
Slide 2: A leading global risk advisor, insurance and reinsurance broker
A leading global risk advisor, insurance and reinsurance broker Willis Global Franchise 2012 Commissions and Fees by Segment International North 30% America 38% Global 32% Willis Subsidiaries and Associates 2012 C&F: $3.46 billion With roots dating to 1828, Willis operates today on every continent,
Slide 3: Summary Q3 2013 financial results
Summary Q3 2013 financial results Q3 2013 Q3 2012 Reported 5.6% (0.5)% Positive Q3 2013 organic commission commission and and fee growth across all three fee growth business segments Organic 5.7% 2.2% commission and fee growth Reported 9.4% 9.3% operating margin Adjusted 9.6% 10.9% operating margin
Slide 4: Organic Q3 2013 commissions and fees growth
Organic Q3 2013 commissions and fees growth Q3 2013 Q3 2012 Growth across all segments North America 3.9% (0.5)% North America Growth was reported across most International 7.8% 4.9% geographic regions; Human Capital and Global 6.4% 2.9% Construction up low single digits and mid- single digits, resp
Slide 5: Q3 2013 financial results
Q3 2013 financial results Reported operating margin 9.4%; Adjusted operating margin 9.6% Adjusted operating margin down 130 bps from prior year quarter, primarily driven by: Higher salaries and benefits and other operating expenses Partially offset by higher commissions and fees Q3 2012 adjusted ope
Slide 6: WSH & Peers – Organic growth trends
WSH & Peers – Organic growth trends Average 2008-2012: WSH: 3% Peers: 1% 6.3% 5.5% 5.7% 5.2% 4.8% 4% 4% 4% 4.1% 3% 2% 2% 2% 2008 2009 2010 2011 2012 1Q13 2Q13 3Q13 -1% -1% -2% WSH Peers Note: Peer averages are based on Willis estimates using public information regarding insurance brokerage operation
Slide 7: Strong cash flow from operations
Strong cash flow from operations ($ millions) 2012 corporate/non-operating uses of cash $525 Dividends $185 million $489 $419 $439 Capex $135 million Share buyback $100 million M&A expenditures of ~$70 million $253 2008 2009 2010 2011 2012 $86 million increase in cash flow from operations in 2012 $6
Slide 8: Leverage ratios
Leverage ratios Adjusted EBITDA $886 million in LTM September 2013 Debt outstanding $2.3 billion as at September 30, 2013 3.8x 2.7x 2.6x 2.6x 2.6x 2.5x 2008 (a) 2009 2010 2011 2012 LTM Sep 2013 (a) Includes impact from acquisition of HRH as of 10/1/2008. | 8 See important disclosures regarding non-G
Slide 9: Segment Overviews
SEGMENT OVERVIEWS Willis
Slide 10: Willis North America overview
Willis North America overview Segment overview 2012 commissions and fees – by region Extensive retail platform Able to leverage industry and specialty West practice group expertise across Willis 14% network South Atlantic 17% 22% Major practice groups include: Human Capital (approximately 24% of 201
Slide 11: Willis International overview
Willis International overview Segment overview 2012 commissions and fees – by region Retail operations in Western and Eastern Europe United Kingdom Latin America Latin America 17% UK Australasia Asia Pacific 18% 7% South Africa South Africa Middle East 2% Asia Offices designed to grow business 9% lo
Slide 12: Willis Global overview
Willis Global overview Segment overview 2012 commissions and fees – by region Reinsurance, Specialty Insurance and Capital Markets businesses Aerospace / Inspace Marine Construction 3% Energy 3,600 associates; clients around the globe 8% 8% 5% Finex Other 6% 6% Willis Re Faber Global One of the worl
Slide 13: Willis Global overview (continued)
Willis Global overview (continued) Segment overview 2012 commissions and fees – by business Global Specialty, with strong global positions in: Aerospace – includes Inspace Aerospace / Marine Construction Inspace 3% 8% Energy Marine & Energy 8% 5% Finex Other Construction 6% 6% Financial & Executive
Slide 14: Appendix
APPENDIX Willis
Slide 15: The Willis Cause
The Willis Cause The WillisG@ause We thoroughly understand our clients’ needs and their industries. We develop client solutions with the best markets, price and terms. f _ We relentlessly deliver quality client service. We get claims paid quickly Willis | 15
Slide 16: 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 17: 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 18: Operating income to adjusted operating income (FY)
Important disclosures regarding non-GAAP measures (continued) Operating income (loss) to adjusted operating income FY FY FY FY FY 2008 2009 2010 2011 2012 (In millions) Operating income (loss) $503 $690 $753 $566 ($209) Excluding: (c) Goodwill impairment charge - - - - 492 (d) Write-off of unamortiz
Slide 19: Operating income to adjusted operating income (3Q)
Important disclosures regarding non-GAAP measures (continued) Operating income to adjusted operating income 2013 2012 (In millions) 3Q 3Q Operating income $75 $70 Excluding: (a) Fees related to the extinguishment of debt 1 - (h) India JV settlement - 11 Loss on disposal of operations - 1 Adjusted op
Slide 20: Net income (loss) to adjusted net income (FY)
Important disclosures regarding non-GAAP measures (continued) Net income (loss) to adjusted net income FY FY FY FY FY 2008 2009 2010 2011 2012 (In millions, except per share data) Net income (loss) $302 $434 $455 $203 ($446) Excluding the following, net of tax: Goodwill impairment charge (c) - - - -
Slide 21: Net income (loss) to adjusted net income (3Q)
Important disclosures regarding non-GAAP measures (continued) Net income (loss) to adjusted net income (In millions, except per share data) 3Q 2013 3Q 2012 Net income (loss) $(27) $26 Excluding the following, net of tax: Loss on extinguishment of debt (a) 60 - Fees related to the extinguishment of d
Slide 22: Adjusted EBITDA and Debt/Adjusted EBITDA
Important disclosures regarding non-GAAP measures (continued) Adjusted EBITDA and Debt/Adjusted EBITDA FY FY FY FY FY 2008 2009 2010 2011 2012 (In millions) Operating income (loss) $503 $690 $753 $566 ($209) Excluding: Goodwill impairment charge (c) - - - - 492 Write-off of unamortized cash retentio
Slide 23: Adjusted EBITDA and Debt/Adjusted EBITDA (quarterly)
Important disclosures regarding non-GAAP measures (continued) Adjusted EBITDA and Debt/Adjusted EBITDA 2012 2013 (In millions) 4Q 1Q 2Q 3Q LTM Operating (loss) income ($775) $287 $171 $75 ($242) Excluding: Fees related to extinguishment of debt (a) - - - 1 1 (b) - - 46 Expense reduction initiative -
Slide 24: Commissions and fees analysis
Important disclosures regarding non-GAAP measures (continued) Commissions and fees analysis Organic Foreign Acquisitions commissions currency and and fees 2013 2012 Change translation disposals growth ($ millions) % % % % Three months ended September 30, 2013 North America $328 $315 4.1 (0.4) 0.6 3.
Slide 25: Commissions and fees analysis (full year)
Important disclosures regarding non-GAAP measures (continued) Commissions and fees analysis Foreign Acquisitions Organic currency and commissions 2012 2011 Change translation disposals and fees growth ($ millions) % % % % 2012 Full year Global $1,124 $1,073 4.8 (1.3) - 6.1 North America 1,306 1,314
Slide 26: Notes to the GAAP to non-GAAP reconciliations
IImportant disclosures regarding non-GAAP measures (continued) rtant Notesdisclosures regarding to the GAAP Non-GAAP to non-GAAP measures (continued) reconciliations (a) In August 2013, Willis bought back $521 million of outstanding 2015, 2017 and 2019 senior notes through a tender offer. In conjunc
Slide 27: Willis Group Holdings Fact Book Third Quarter 2013
Fact Book Third Quarter 2013 WILLIS GROUP HOLDINGS November 2013
Willis Group Holdings — Q3 2013 Earnings Presentation on 6ix