Willis Towers Watson Public Limited Company · NASDAQ:WTW
Willis Towers Watson Public — Willis Group Holdings — Q3 2009 Earnings Presentation
28 slides from Willis Towers Watson Public's earnings presentation, Nov 16, 2009
Slide 1: Willis Group Holdings Fact Book for the Quarter Ended September 30, 2009
WILLIS GROUP HOLDINGS FACT BOOK FOR THE QUARTER ENDED SEPTEMBER 30, 2009
Slide 2: Executive summary
Executive summary Body: Willis 2008 performance* Industry leading organic commissions and fees growth with 4% for FY2008 Shaping our Future delivered significant benefits, helping to maintain solid adjusted operating margin while investing $40 million in the business Adjusted earnings per share of $
Slide 3: Group financial summary – 2008
3 Group financial summary – 2008 Strong organic growth in commissions and fees (C&F) of 4% for the year, driven by exceptional growth in International of 9%* Maintained solid adjusted operating marginStringent cost discipline while investing$40m in initiatives, including Shaping our Future Retail, S
Slide 4: Group financial summary – 3Q YTD 2009
4 Group financial summary – 3Q YTD 2009 Strong organic growth in commissions & fees of 2% for the first nine months reflects geographic and business diversity*International 5% growth tempered North America 5% declineGlobal 5% growth reflects good new business and improvement in reinsurance marketsSt
Slide 5: Organic growth in commissions and fees exceeds peers
5 Organic growth in commissions and fees exceeds peers* 4% 5% 3% 4% 3% 2% 1% 0% 0% (1)% (2)% 2004 2005 2006 2007 2008 3Q09 YTD Willis Peer Average * Notes: • Peer Average includes public filing information from AJG, AOC, BRO, MMC 5 • See important disclosures regarding Non-GAAP measures on page 23 *
Slide 6: Growth driven by strong new business production through market cycles
6 6 6 4 8 6 5 avg. 6% (2) (1) (1) (2) (3) 2004 2005 2006 2007 2008 3Q09 YTD Growth driven by strong new business production through market cycles* % Organic growth in commissions and fees Net new avg. 6% * See important disclosures regarding Non-GAAP measures on page 23
Slide 7: Adjusted operating margin exceeds peers
7 Adjusted operating margin exceeds peers* Notes: Peer Average includes public filing information from AJG, AOC, BRO, MMC See important disclosures regarding Non-GAAP measures on page 23 Average 2004 – 2008Willis 23% Peers 20% 27% 21% 24% 21% 22% 22% 19% 21% 19% 19% 21% 23% 2004 2005 2006 2007 2008
Slide 8: Segment highlights
8 Title: Segment highlights* NORTH AMERICA INTERNATIONAL Organic commissions and fees growth (5)% for 3Q09 YTD with soft market and economic headwinds; significant underlying margin expansion from cost savingsEstimate over $180m full year 2009 savings from integration and Right Sizing ; approximatel
Slide 9: Willis North America overview
9 Willis North America overview Positioned for continued profitable growth Extensive retail platform with approximately 95 retail locations Leading positions in several markets Industry and specialty practice groups leverage expertise Client centric approach Distribution network for all core busines
Slide 10: Willis International overview
10 Body: Represents all of the Group’s retail operations excluding US & CanadaNetwork of subsidiaries, affiliates and correspondents in more than 100 countries; leading positions in UK, France, Scandinavia, China and RussiaOffices designed to grow business locally around the world, making use of the
Slide 11: Willis Global overview
11 Segment overview 2008 pro forma commissions and fees 2008 pro forma = $821 million Willis Global overview Willis Global overview Aerospace Clients located in approximately 190 countries; over $14 billion premiums placed in 2008 Aerospace/Inspace – Market leaders in airlines and helicopters Faber
Slide 12: 2009 Focus
2009 Focus TS. |
Slide 13: Four main priorities
13 Continue to drive industry leading revenue growth Execute Right-Sizing Willis Continue to execute Shaping our Future Drive HRH integration and achieve increased synergies Four main priorities
Slide 14: Driving growth
14 Further develop aggressive sales cultureFurther enhance Client AdvocacyContinue to make strategic hires ReinsuranceInternational Specialty lines (Energy, Marine, Aerospace) Build on already strong client retention Monitor specific growth metrics for all regions, countries and lines Improve tracki
Slide 15: Right Sizing Willis
Right Sizing Willis Continuous evaluation of all spending to fund continued investment in the business in the current rate environmentMaintain solid adjusted operating margin and potentially reduce costs in a low top-line growth environmentRealize operational savings to maintain investment spend Zer
Slide 16: Shaping our Future is delivering
Shaping our Future is delivering SOF gross and net benefits $122 $146 Key priorities for 2009/10 • Much greater emphasis on Cumulative $ in millions Incremental net benefit of $75 $93 $67 $81 g p retention, cross-selling and pipeline initiatives • Development of a global $47m in YTD 3Q09 $29 $48 $17
Slide 17: Integration achievements to date
17 Integration achievements to date Detailed integration plan and communication program in place Integration success across all fronts Over $180m of cost base reductions to be realized in 2009 in North America and other Legacy HRH unitsAnticipated synergies of approximately $130m and Right Sizing Wi
Slide 18: Upside potential for HRH commission levels
18 Upside potential for HRH commission levels Willis average commission levels were higher than HRH average commission levels at the time of the acquisition HRH transacted business with approximately 2,000 different carriers Detailed plan executed to transition HRH contingents / supplemental commiss
Slide 19: Wrap up
19 Wrap up Body: Willis 2008 performanceIndustry leading organic growth in commissions and fees with 4% for FY2008*Shaping our Future delivered significant benefits, helping to maintain solid adjusted operating margin while investing $40 million in the business Adjusted earnings per share of $2.56 f
Slide 20: Important disclosures regarding forward-looking statements
20 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 created by those laws. These forward-looking statements inc
Slide 21: Important disclosures regarding forward-looking statements (continued)
21 our ability to implement and realize anticipated benefits of the Shaping our Future initiative and any other new initiatives; material changes in the commercial property and casualty markets generally or the availability of insurance products or changes in premiums resulting from a catastrophic e
Slide 22: Important disclosures regarding forward-looking statements (continued)
22 the potential costs and difficulties in complying with a wide variety of foreign laws and regulations and any related changes, given the global scope of our operations; our involvement in and the results of any regulatory investigations, legal proceedings and other contingencies; our exposure to
Slide 23: Important disclosures regarding non-GAAP measures
23 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
Slide 24: Operating Income to Adjusted Operating Income
Important disclosures regarding Non-GAAP measures (continued) Operating Income to Adjusted Operating Income 2004 2005 2006 2007 2008 2009 (In millions) FY FY FY FY Q3 Q3YTD FY Q3 Q3YTD Operating Income, GAAP Basis $ 630 $ 451 $ 552 $ 620 $ 66 $ 368 $ 504 $ 82 $ 521 Excluding: Net (gain)/loss on disp
Slide 25: Net Income from Continuing Operations to Adjusted Net Income
Important disclosures regarding Non-GAAP measures (continued) Net Income from Continuing Operations to Adjusted Net Income from Continuing Operations 2004 2005 2006 2007 2008 2009 (In millions, except per share data) FY FY FY FY Q3 Q3YTD FY Q3 Q3YTD Net Income from Continuing Ops, GAAP Basis $ 402 $
Slide 26: Commissions and Fees Analysis
Important disclosures regarding Non-GAAP measures (continued) Commissions and Fees Analysis (in millions) 2009 2008 % change currency translation and disposals commissions and fees growth Q309 Quarter to date Global $ 175 $ 159 10% 0% 6% 4% North America 320 175 83% 0% 86% (3)% International 219 222
Slide 27: 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 Adjusted Net Income from Operations reconciliation to Continuing (a) Comprises $51 million to establish the reimbursement
Slide 28: Willis Group Holdings Fact Book for the Quarter Ended September 30, 2009
WILLIS GROUP HOLDINGS FACT BOOK FOR THE QUARTER ENDED SEPTEMBER 30, 2009
Willis Group Holdings — Q3 2009 Earnings Presentation on 6ix