Marsh · NYSE:MRSH
Marsh — Marsh & McLennan Companies — Q3 2023 Earnings Presentation
28 slides from Marsh's earnings presentation, Oct 19, 2023
Slide 1: Investor Presentation: Results Through Third Quarter 2023
INVESTOR PRESENTATION Results Through Third Quarter 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains "forward-looking statements," as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management's current views concerning future events or results, use words like "anticipate," "assume," "believe," "c
Slide 3: The Global Leader in Advisory on Risk, Strategy and People
The Global Leader in Advisory on Risk, Strategy and People A Global Leader with Four Leading Uniquely Positioned to Help Unmatched Scale and Capabilities Businesses Working Together as Clients Navigate Today’s Issues One Enterprise 85,000+ colleagues globally ✓ Mitigating cyber risk $22.2 billion of
Slide 4: Marsh McLennan: A Compelling Core Holding
Marsh McLennan: A Compelling Core Holding Track record of superior returns at lower relative volatility Strong underlying revenue growth Expanding margins across operating environments* • Several underpinnings for sustained growth • Reported margin expansion for 15 consecutive years** • Proven resil
Slide 5: Strong Financial Results Drive Shareholder Value
Strong Financial Results Drive Shareholder Value Superior Performance Over The Long Term GAAP Revenue Adjusted Operating Margin*** $ billions $22.2 25.8% A History of Strong Growth (2010 – 2023)* 6.0% GAAP Revenue CAGR +1,230 bps Adjusted Operating Margin** Expansion 13.0% Adjusted EPS** CAGR 2016 2
Slide 6: Strong Growth Across Cycles
Strong Growth Across Cycles Demonstrated resilience in downturns and emerged stronger post pandemic Underlying Revenue Growth Has Moved Above Durable Growth Drivers Our Recent Historical Range Solid demand for our advice and solutions driven by macro uncertainty and an increase in 10% 9 – 10% risk
Slide 7: Fundamental Underpinnings for Sustained Growth
Fundamental Underpinnings for Sustained Growth Risk Health Wealth Global Non-Life Direct Written Premiums1 U.S. Health Direct Written Premiums2 Retirement Assets3 ($ billions) $3,969 ($ billions) ($ trillions) $1,024 $48 $1,235 $189 $11 2003 2006 2001 2002 2004 2005 2007 2008 2009 2010 2011 2012 201
Slide 8: Well-Positioned for the Issues of Today
Well-Positioned for the Issues of Today Significant opportunity to grow and help clients in areas including ESG, cyber, retirement and health Mitigating Cyber Risk Addressing Protection Gaps Environmental, Social & Governance Global cyber crime estimated to be over Estimated 2022 global catastrophe
Slide 9: Mix Shift to Higher Growth Areas
Mix Shift to Higher Growth Areas With numerous opportunities for future growth RIS Mercer Investments (OCIO) Emerging Growth Opportunities Mercer Investments (OCIO) Small commercial MMA now accounts for around half 114 Mercer’s investments businesses is 109 leveraged to strong long-term growth of th
Slide 10: Driving Margin Expansion Through Expense Discipline
Driving Margin Expansion Through Expense Discipline Adjusted Operating Margin* Significant margin expansion driven by disciplined approach to underlying expense management and operating leverage 25.8% ▪ Our disciplined approach and operating leverage have generated 1,700 bps of adjusted operating ma
Slide 11: Substantial Free Cash Flow Generation
Substantial Free Cash Flow Generation MMC’s capital-light business model generates substantial free cash flows Free Cash Flow* $ millions $3,578 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023** Since 2010, free cash flow has grown at a CAGR of 18%** *Reconciliation of Non-GAAP
Slide 12: Disciplined and Balanced Long-Term Capital Strategy
Disciplined and Balanced Long-Term Capital Strategy Cumulative Acquisition Consideration ($ billions) $18 $14 $15 $16 $17 Robust cash flow Invest for Organic Growth generation supports $7 $4 $5 $6 disciplined and balanced $2 $2 $3 <$1 $1 $1 capital return strategy 2009 2010 2011 2012 2013 2014 2015
Slide 13: Stronger Returns with Lower Relative Volatility
Stronger Returns with Lower Relative Volatility 12/31/09 – 9/30/23 Total Return Beta 1100% 1057% 2.0 1000% 924% 900% 1.5 800% 1.2 700% 600% 1.0 1.0 0.9 1.0 500% 0.8 484% 0.8 403% 400% 0.6 300% 222% 232% 0.5 200% 180% 100% 0% 0.0 MMC S&P Ins.Brokers S&P P&C S&P 500 S&P Banks S&P Life S&P Asset Mgs So
Slide 14: Environmental, Social & Governance (ESG) at MMC
Environmental, Social & Governance (ESG) at MMC A Commitment to Our Shareholders, Colleagues and Communities Areas of Focus Environmental Social Governance ▪ Achieved certification as a ▪ Unconscious bias & inclusive leadership ▪ Commitment to maintaining a diverse and CarbonNeutral® company trainin
Slide 15: MMC is Well-Positioned for the Future
MMC is Well-Positioned for the Future Industry leader with a proven track record of sustained long-term revenue and earnings growth and underpinnings for continued outperformance Disciplined expense management and track record of margin expansion Unmatched expertise, scale, data and insights a
Slide 16: Appendix
Appendix
Slide 17: One Enterprise with Four Industry-Leading Businesses
One Enterprise with Four Industry-Leading Businesses • World’s leading insurance broker • Powerhouse of reinsurance broking, and risk advisor capital solutions, strategic advisory • Approximately $85 billion in annual and analytics global premiums placed • $55 billion+ in annualized • Operations in
Slide 18: Well-Diversified Across Businesses and Geographies
Well-Diversified Across Businesses and Geographies 2023* Revenue: $13.8 billion Risk & Insurance Services Total MMC 2023* Revenue: Canada 4% $22.2 billion U.K. 18% Non-U.K. EMEA Canada 13% 4% Asia Pac U.K. U.S. 10% 16% Can 49% 4% Latam & Carib. Non-U.K. 6% EMEA 17% 2023* Revenue: $8.5 billion U.S. M
Slide 19: Marsh
Marsh World’s leading insurance broker and risk advisor 2023* Revenue: $11.4 billion Insurance Broking & Risk Management Canada ▪ Risk analysis and risk management consulting 5% ▪ Insurance program design and placement, support and administration ▪ Claims support and advocacy EMEA ▪ Alternative risk
Slide 20: Guy Carpenter
Guy Carpenter Specialized broking expertise, strategic advisory services and analytics solutions 2023* Revenue: $2.3 billion Traditional Reinsurance Services Canada ▪ Creates and executes reinsurance and risk management solutions for clients 2% worldwide through risk assessment analytics, actuarial
Slide 21: Mercer
Mercer Advice and digital solutions to help organizations meet health, wealth and career needs 2023* Revenue: $5.5 billion Health Canada ▪ Total health and wellness management strategies 5% U.K. 13% ▪ Global health brokerage solutions ▪ Vendor performance and audit Non-U.K. EMEA ▪ Life and disabilit
Slide 22: Oliver Wyman
Oliver Wyman Global leader in management consulting delivering advisory services to clients 2023* Revenue: $3.0 billion Oliver Wyman Select Industry Groups Select Functional Specializations ▪ Financial Services ▪ Strategy ▪ Transportation ▪ Operations ▪ Health & Life Sciences ▪ Organizational Effect
Slide 23: Reconciliation of Non-GAAP Measures: Adjusted Operating Income
Marsh McLennan Reconciliation of Non-GAAP Measures ($ millions) Adjusted Operating Income and Adjusted Operating Margin 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023* Revenue 10,730 9,831 10,550 11,526 11,924 12,261 12,951 12,893 13,211 14,024 14,950 16,652 17,224 1
Slide 24: Risk & Insurance Services: Non-GAAP Reconciliation
Risk & Insurance Services Reconciliation of Non-GAAP Measures ($ millions) Adjusted Operating Income and Adjusted Operating Margin 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023* Revenue 5,466 5,284 5,557 6,079 6,350 6,596 6,931 6,869 7,143 7,630 8,228 9,599 10,337 1
Slide 25: Consulting: Non-GAAP Reconciliation
Consulting Reconciliation of Non-GAAP Measures ($ millions) Adjusted Operating Income and Adjusted Operating Margin 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023* Revenue 5,196 4,609 5,042 5,487 5,613 5,701 6,059 6,064 6,112 6,444 6,779 7,143 6,976 7,789 8,139 8,503
Slide 26: Reconciliation of Non-GAAP Measures: Adjusted EPS
Marsh McLennan Reconciliation of Non-GAAP Measures 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023* Diluted EPS, Continuing $0.88 $0.70 $0.96 $1.00 $1.73 $2.13 $2.42 $2.61 $2.98 $3.38 $2.87 $3.23 $ 3.41 $ 3.94 $ 6.13 $6.04 $6.94 Operations Adjustments, after tax
Slide 27: Reconciliation of Non-GAAP Measures: Free Cash Flow
Marsh McLennan Reconciliation of Non-GAAP Measures ($ millions) Free Cash Flow 2008* 2009 2010 2011 2012 2013 2014* 2015 2016 2017 2018 2019 2020 2021 2022 2023** Net cash provided by operations 940 640 722 1,705 1,322 1,341 2,119 1,888 2,007 1,893 2,428 2,361 3,382 3,516 3,465 3,977 Less: Capital E
Slide 28: We are leaders in risk, strategy and people
We are leaders in risk, strategy and people. One company, with four global businesses, united by a shared purpose to make a difference in the moments that matter.
Marsh & McLennan Companies — Q3 2023 Earnings Presentation on 6ix