Willis Towers Watson Public Limited Company · NASDAQ:WTW
Willis Towers Watson Public — Willis Group Holdings — Q2 2013 Earnings Presentation
27 slides from Willis Towers Watson Public's earnings presentation, Aug 13, 2013
Slide 1: Fact Book Second Quarter 2013
Exhibit 99.1 Fact Book Second Quarter 2013 WILLIS GROUP HOLDINGS August 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 North International America 30% 38% Global 32% Willis Subsidiaries and Associates 2012 C&F: $3.46 billion With roots dating to 1828, Willis operates today on every continent,
Slide 3: Summary Q2 2013 financial results
Summary Q2 2013 financial results Q2 2013 Q2 2012 Organic 6.3% 1.5% Positive Q2 2013 organic commission and commission and fee growth across fee growth all three business segments, led by double-digit growth in Global Reported 19.2% 21.3% operating margin Adjusted 19.2% 20.7% operating margin Q2 201
Slide 4: Organic Q2 2013 commissions and fees growth
Organic Q2 2013 commissions and fees growth Q2 2013 Q2 2012 Growth across all segments Global 10.3% 6.8% Global Led by Willis Re, with growth in the mid- North America 5.5% (3.0)% teens; Global Specialty grew mid-single- International 2.6% 2.0% digits Willis Group 6.3% 1.5% North America Growth was
Slide 5: Q2 2013 financial results
Q2 2013 financial results Reported operating margin 19.2%; Adjusted operating margin 19.2% Adjusted operating margin down 150 bps from prior year quarter, primarily driven by: Higher salaries and benefits and other operating expenses, together with negative foreign exchange movements Partially offse
Slide 6: WSH & Peers – Organic growth trends
WSH & Peers – Organic growth trends Average 2008-2012: WSH: 3% Peers: 1% 6% 6% 5% 4% 4% 4% 4% 3% 2% 2% 2% 1% 2008 2009 2010 2011 2012 1Q13 2Q13 -1% -2% WSH Peers Note: Peer averages are based on Willis estimates using public information regarding insurance brokerage operations of AJG, AON, BRO, MMC
Slide 7: Strong cash flow from operations
Strong cash flow from operations ($ 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 $85 million increase in cash flow from operations in 2012 $5
Slide 8: Leverage ratios
Leverage ratios Adjusted EBITDA $892 million in LTM June 2013 Debt outstanding $2.3 billion as at June 30, 2013 3.8x 2.7x 2.6x 2.6x 2.6x 2.5x (a) 2008 2009 2010 2011 2012 LTM Jun Debt / Adjusted EBITDA 2013 (a) Includes impact from acquisition of HRH as of 10/1/2008. | 8 See important disclosures re
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% Major practice groups include: 22% 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 UK 17% 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 business Reinsurance, Specialty Insurance and Capital Markets businesses Aerospace / Construction Inspace Marine 3% 3,600 associates; clients around the globe 8% 8% Energy 5% Finex Other 6% 6% Willis Re Faber Global One of the wo
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 / Construction Inspace Marine 3% Marine & Energy 8% 8% Energy 5% Other Finex Construction 6% 6% Financial & Executive
Slide 14: Appendix
APPENDIX Willis
Slide 15: The Willis Cause
The Willis Cause The WillisGause We thoroughly. understand our clients’ needs and their industries, We develop client solutions with the bést markets, price and Forms. : : We relentlessly deliver quality client service. a, We get claims paid quickly. b ...With Integrity. of Willis is
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
Important disclosures regarding Non-GAAP measures (continued) Operating Income to Adjusted Operating Income 2008 2009 2010 2011 2012 (In millions) FY FY FY FY FY Operating Income $503 $690 $753 $566 ($209) Excluding: (b) Goodwill impairment charge - - - - 492 (c) Write-off of unamortized cash retent
Slide 19: Operating Income to Adjusted Operating Income (Q2)
Important disclosures regarding Non-GAAP measures (continued) Operating Income to Adjusted Operating Income 2013 2012 (In millions) 2Q 2Q Operating Income $171 $179 Excluding: (e) Insurance recovery - (5) Adjusted Operating Income $171 $174 Operating Margin 19.2% 21.3% Adjusted Operating Margin 19.2
Slide 20: Net Income to Adjusted Net Income
Important disclosures regarding Non-GAAP measures (continued) Net Income to Adjusted Net Income 2008 2009 2010 2011 2012 (In millions, except per share data) FY FY FY FY FY Net Income $302 $434 $455 $203 ($446) Excluding the following, net of tax: Goodwill impairment charge (b) - - - - 458 Write-off
Slide 21: Net Income to Adjusted Net Income (Q2)
Important disclosures regarding Non-GAAP measures (continued) Net Income to Adjusted Net Income 2013 2012 (In millions, except per share data) 2Q 2Q Net Income $105 $107 Excluding the following, net of tax: (e) Insurance recovery - (3) Adjusted Net Income $105 $104 Diluted shares outstanding 177 176
Slide 22: Adjusted EBITDA and Debt/Adjusted EBITDA
Important disclosures regarding Non-GAAP measures (continued) Adjusted EBITDA and Debt/Adjusted EBITDA 2008 2009 2010 2011 2012 (In millions) FY FY FY FY FY Operating Income $503 $690 $753 $566 ($209) Excluding: Goodwill impairment charge (b) - - - - 492 (c) Write-off of unamortized cash retention a
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) 3Q 4Q 1Q 2Q LTM Operating Income (loss) $70 ($775) $287 $171 ($247) Excluding: (a) Expense reduction initiative - - 46 - 46 (b) Goodwill impairment charge - 492 - - 492 Writ
Slide 24: Commissions and Fees Analysis
Important disclosures regarding Non-GAAP measures (continued) Commissions and Fees Analysis Foreign Organic currency Acquisitions and commissions and 2013 2012 Change translation disposals fees growth ($ millions) % % % % Three months ended June 30, 2013 Global $305 $282 8.2 (2.3) 0.2 10.3 North Ame
Slide 25: Commissions and Fees Analysis (full years)
Important disclosures regarding Non-GAAP measures (continued) Commissions and Fees Analysis Foreign Organic currency Acquisitions commissions and 2012 2011 Change translation and disposals fees growth ($ 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
Important disclosures regarding Non-GAAP measures (continued) Notes to the GAAP to non-GAAP reconciliations (a) $46 million pre-tax charge associated with expense reduction initiative in 1Q13. (b) Impairment charge to reduce carrying value of North America segment goodwill. (c) Charge to write-off u
Slide 27: Willis Group Holdings
WILLIS GROUP HOLDINGS Fact Book Second Quarter 2013 WILLIS GROUP HOLDINGS August 2013
Willis Group Holdings — Q2 2013 Earnings Presentation on 6ix