Willis Towers Watson Public Limited Company · NASDAQ:WTW
Willis Towers Watson Public — Willis Group Holdings — FY2010 Earnings Presentation
33 slides from Willis Towers Watson Public's earnings presentation, Mar 21, 2011
Slide 1: Willis Group Holdings Fact Book, quarter and year ended December 31, 2010
WILLIS GROUP HOLDINGS FACT BOOK For the quarter and year ended December 31, 2010
Slide 2: Willis snapshot
Willis snapshot Leading global insurance broker Broad range of professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services Global distribution capabilities to meet risk management needs of large multinational and middle market clients More tha
Slide 3: 2010 review
2010 review
Slide 4: Group financial summary – 4Q 2010
Group financial summary – 4Q 2010 2 percent reported growth in commissions and fees (C&F) 4 percent organic growth in C&F - strong new business generation and steady retention 0 percent in North America, 8 percent in International, and 6 percent in Global (reinsurance and specialties) 21.2 percent r
Slide 5: Group financial summary – FY 2010
Group financial summary – FY 2010 3 percent reported growth in C&F4 percent organic growth in C&F 0 percent in North America, 6 percent in International, and 6 percent in Global (reinsurance and specialties) 120 basis points increase in adjusted operating margin Organic revenue growth, favorable FX
Slide 6: Organic growth in commissions and fees exceeds peers
Organic growth in commissions and fees exceeds peers Average 2006 – 2010 Willis 4% Peers 0% Note: Peer averages are based on Willis estimates using public information from AJG, AON, BRO, MMC See important disclosures regarding Non-GAAP measures on page 25 8% 3% 0% 4% (1)% 2% (2)% 2006 2007 2008 2009
Slide 7: Growth driven by strong new business production
Growth driven by strong new business production % Organic growth in commissions and fees See important disclosures regarding Non-GAAP measures on page 25 6% average net new underlying business 2006 – 2010 Changes in rate and other market factors 8% 0% 4% (1)% 6% (2)% 5% (3)%
Slide 8: Strong adjusted operating margins
Strong adjusted operating margins Average 2006 – 2010 Willis 23% Peers 20% See important disclosures regarding Non-GAAP measures on page 25 Note: Peer averages are based on Willis estimates using public information from AJG, AON, BRO, MMC 23% 21% 24% 19% 22% 2006 2007 2008 2009 2010
Slide 9: Segment highlights – 4Q 2010
Segment highlights – 4Q 2010 NORTH AMERICA INTERNATIONAL Organic C&F flat compared to year ago quarter Double-digit new business generation, increased client retention with continued soft market and economic headwinds Employee Benefits up 4 percent, strong results from specialty businesses; includin
Slide 10: Segment highlights – FY2010
Segment highlights – FY2010 NORTH AMERICA INTERNATIONAL Organic C&F growth flat compared to prior year Strong growth in specialty businesses; Employee Benefits up 3 percent Good new business generation, improved retention with continued soft market and economic headwinds Operating margin of 23.2 per
Slide 11: Willis North America overview
Willis North America overview Segment overview 2010 commissions and fees 2010 = $1,359 million Extensive retail platform with leading positions in major markets Distribution network for all core businesses Client centric approach Able to leverage industry and specialty practice group expertise acros
Slide 12: Willis International overview
Segment overview 2010 commissions and fees Willis International overview Represents all of the Group’s retail operations excluding US & Canada Network of subsidiaries, affiliates and correspondents in more than 100 countries; leading positions in UK, France, Scandinavia, China and Russia Offices des
Slide 13: Willis Global overview
Segment overview 2010 commissions and fees 2010 = $873 million Willis Global overview Reinsurance Willis Re One of only three global reinsurance brokers Significant market share in major markets, particularly marine and aviation Cutting edge analytical and advisory services, including Willis Researc
Slide 14: Willis Global overview (continued)
Segment overview 2010 commissions and fees Willis Global overview (continued) Global Specialties Aerospace/Inspace – Market leader in airlines and helicopters FINEX – market leader in political risks and UK financial institutions Marine – growing global presence Energy – significant growth opportuni
Slide 15: Strong cash flow
Cash flow from Operations ($ millions) Strong cash flow Cash and cash equivalents of $316 million at December 31, 2010 Dividends $176 million paid in 2010 2011 debt repayments $110 million mandatory repayments on term loan Ordinary stock buyback program $1 billion current buyback approval; $925 mill
Slide 16: Improved debt and maturity profile
March 2011 Issued $300 million of 5 year, 4.125% Senior Notes and $500 million of 10 year, 5.75% Senior Notes (highlighted below) Launched plan to redeem and/or repurchase $500 million of 12.875% Senior Notes (1) Total debt of $2.477 million (excluding revolving credit facilities) following above ac
Slide 17: Looking ahead
Looking ahead
Slide 18: The Willis Cause
See important disclosures regarding forward-looking statements on page 24 We thoroughly understand our clients’ needs and their industries We develop client solutions with the best markets, price and terms We relentlessly deliver quality client service We get claims paid quickly WITH INTEGRITY The W
Slide 19: Delivering the Willis Cause
Delivering the Willis Cause See important disclosures regarding forward-looking statements on page 24 Realigning our business model to further grow the Company and deliver the Willis Cause - our value proposition to clients – more consistently and efficiently. For example, current and targeted initi
Slide 20: Delivering the Willis Cause – example initiatives
Delivering the Willis Cause – example initiatives CLIENT UNDERSTANDING SERVICE QUALITY CLAIMS PAID Segments Specialization Sales 2.0 Global Solutions Willis Research Network Analytics Willis Quality Index Global Placement Programs, Panels & Facilities Willis Capital Markets & Advisory Target Operati
Slide 21: Operational review
Operational review See important disclosures regarding forward-looking statements on page 24 External environment remains challenging Ongoing soft rate environment Slow pace of economic recovery in major western economies To support our growth strategy and delivery of the Willis Cause in 2011 and be
Slide 22: Wrap up
Wrap up Willis 2010 performance 4 percent organic growth in C&F Strong new business generation and client retention 23 percent adjusted operating margin reflects organic revenue growth, favorable FX, and cost discipline, partially offset by higher incentive compensation Adjusted EPS from continuing
Slide 23: Appendix
Appendix Willis |e
Slide 24: 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 25: Non-GAAP financial measures disclosures
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 methods of evaluating certain aspects of the Company’s
Slide 26: Operating Income to Adjusted Operating Income
Important disclosures regarding Non-GAAP measures (continued) Operating Income to Adjusted Operating Income 2005 2006 2007 2008 2009 2010 (In millions) FY Operating Income, GAAP Basis $451 $552 $620 $503 $694 $753 Excluding: Venezuela currency devaluation (a) 12 Net (gain)/loss on disposal of operat
Slide 27: Operating Income to Adjusted Operating Income (quarterly)
Important disclosures regarding Non GAAP measures (continued) Operating Income to Adjusted Operating Income 2009 2010 (In millions) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Operating Income, GAAP Basis $274 $165 $82 $173 $301 $169 $106 $177 Excluding: Venezuela currency devaluation (a) 12 Net (gain)/loss on disposal
Slide 28: Net Income to Adjusted Net Income from Continuing Operations
Important disclosures regarding NonGAAP measures (continued) Net Income from Continuing Operations to Adjusted Net Income from Continuing Operations (In millions, except per share data) Net Income from Continuing Ops, GAAP Basis 2005 2006 2007 2008 2009 2010 FY FY FY FY FY FY $281 $449 $409 $302 $43
Slide 29: Net Income to Adjusted Net Income (quarterly)
Important disclosures regarding Non GAAP measures (continued) Net Income from Continuing Operations to Adjusted Net Income from Continuing Operations 2009 2010 (In millions, except per share data) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Net Income from Continuing Ops, GAAP Basis $192 $87 $78 $79 $204 $89 $64 $98 Ex
Slide 30: Commissions and Fees Analysis
Important disclosures regarding Non-GAAP measures (continued) Commissions and Fees Analysis* Organic Foreign Acquisitions commissions currency and fees 2009 2008 Change translation disposals growth ($ millions) % % % % 2009 Full year Global $822 $784 5 (3) 4 4 North America 1,368 905 51 - 54 (3) Int
Slide 31: Commissions and Fees Analysis
Commissions and Fees Analysis* Important disclosures regarding Non GAAP measures (continued) 2010 2009 Change Foreign currency translation Acquisitions and disposals Contingent Commissions Organic commissions and fees growth ($ millions) % Three months ended December 31, Global $175 $165 6 (1) 1 6 N
Slide 32: Notes to the reconciliations
Important disclosures regarding Non-GAAP measures (continued) Notes to the Operating Income to Adjusted Operating Income reconciliation and Net Income from Continuing Operations to Adjusted Net Income from Continuing Operations reconciliation With effect from January 1, 2010, the Venezuelan economy
Slide 33: Willis Group Holdings Fact Book, quarter and year ended December 31, 2010
WILLIS GROUP HOLDINGS FACT BOOK For the quarter and year ended December 31, 2010