Willis Towers Watson Public Limited Company · NASDAQ:WTW
Willis Towers Watson Public — Willis Group Holdings — Q1 2010 Earnings Presentation
31 slides from Willis Towers Watson Public's earnings presentation, May 17, 2010
Slide 1: Willis Group Holdings Fact Book for the Quarter Ended March 31, 2010
WILLIS GROUP HOLDINGS FACT BOOK FOR THE QUARTER ENDED MARCH 31, 2010
Slide 2: 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 than 400 offices in
Slide 3: Group financial summary – 1Q 2010
Group financial summary – 1Q 2010 5 percent reported growth in commissions and fees (C&F) 3 percent organic growth in C&F positive growth in all segments 1 percent in North America, 3 percent in International, and 7 percent in Global (reinsurance and specialties) 200+ basis points increase in adjust
Slide 4: Group financial summary – 2009
Group financial summary – 2009 2 percent organic growth in C&F, driven by growth of 4 percent in both of our Global and International segments* Maintained solid adjusted operating margin Stringent cost discipline while investing North America merger integration synergies and other cost savings of $2
Slide 5: Organic growth in commissions and fees exceeds peers
Organic growth in commissions and fees exceeds peers* Average 2005 – 2009 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 5% 8% 3% 3% 4% 2% 3% 0% 0% (1)% (2)% (4)%
Slide 6: 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 2005 – 2009 Net new underlying business Changes in rate and other market factors 2005 6 (1) 2006 8 0 200
Slide 7: Adjusted operating margin exceeds peers
Adjusted operating margin exceeds peers* Average 2005 – 2009 Willis 22% 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 2005 2006 2007 2008 2009 1Q10 Willis 21% 23% 24% 21%
Slide 8: Segment highlights – 1Q 2010
Segment highlights – 1Q 2010* NORTH AMERICA INTERNATIONAL Organic C&F growth of 1 percent despite continued soft market and economic headwinds Strong results from healthcare, financial institutions, personal lines, and real estate/hospitality Operating margin 25.5 percent, up 60 basis points compare
Slide 9: Willis North America overview
Willis North America overview 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 across network Major practice groups include: Employee Benefits (appro
Slide 10: 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 designed to grow business locally around the world, making use of the skills
Slide 11: Willis Global overview – Reinsurance
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 Research Network Complete range of transactional capabilities including, in conjunction with
Slide 12: Willis Global overview (continued) – Global Specialties
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 opportunity Construction – dominates global contractor sector Faber & Dumas our wholesa
Slide 13: Adjusted cash flow
Adjusted cash flow is defined as cash flow from operating and investing activities excluding acquisitions and disposals, and other items listed below: Additional pension contributions of $8 million, $107 million, $153 million, $211 million and $50 million, for LTM 1Q10, 2008, 2007, 2006, and 2005, r
Slide 14: Debt and maturity profile
Debt and maturity profile Total debt approximately $2.4 billion Ratings Moody’s Baa3 (stable outlook) Standard & Poor’s BBB- (stable outlook) Significantly improved debt maturity profile 2010 mandatory debt repayments of $112 million on term loan; $83 million 2010 bond maturities 2010 2011 2012 2013
Slide 15: 2010 Focus
2010 Focus ES |
Slide 16: The Willis Cause
The Willis Cause Continue to drive industry leading revenue growth Continue to execute Shaping our Future Funding for Growth - incremental savings to fund growth initiatives Main priorities * See important disclosures regarding forward-looking statements on page 24
Slide 17: We thoroughly understand our clients' needs and their industries
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 The Willis Cause WITH INTEGRITY * See important disclosures regarding forward-looking statemen
Slide 18: Delivering the Willis Cause
Delivering the Willis Cause CLIENT UNDERSTANDING SERVICE QUALITY CLAIMS PAID Segments Specialization Analytics Client profitability Sales operations Client advocacy Placement proposition Programs & facilities Placement organization WillPlace Willis Quality Index Willis Capital Markets Operational ex
Slide 19: Driving growth
Further develop aggressive sales culture Further enhance Client Advocacy Continue to make strategic hires Reinsurance International Specialty lines (Energy, Marine, Aerospace) Build on already strong client retention Monitor specific growth metrics for all regions, countries and lines Improve tracki
Slide 20: Shaping our Future continues to deliver
Shaping our Future continues to deliver 2010 priorities: Greater emphasis on retention, cross-selling and pipeline initiatives Further development of global marketing capabilities Further develop retail platform initiatives Technology infrastructure programs, process changes and use of support and s
Slide 21: Funding for Growth 2010
Funding for Growth 2010 Generate incremental savings in 2010 to invest in new producers and growth initiatives Drive incremental growth and create a real sales culture through best practice in growth drivers Out-recruiting competitors with producer pipelines Developing new products or packages Devel
Slide 22: Wrap up – 1Q10
Wrap up – 1Q10 Willis 1Q10 performance* Industry leading 3 percent organic C&F growth; positive organic growth in all segments 200+ basis points increase in adjusted operating margin driven by revenue growth and continued cost discipline Delivered Shaping our Future net benefits of approximately $14
Slide 23: Appendix
Appendix ES «|
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
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) See related footnotes on page 30 Operating Income to Adjusted Operating Income
Slide 27: Net Income from Continuing Operations to Adjusted Net Income
Important disclosures regarding Non-GAAP measures (continued) See related footnotes on page 30 Net Income from Continuing Operations to Adjusted Net Income from Continuing Operations
Slide 28: Commissions and Fees Analysis
Commissions and Fees Analysis* Important disclosures regarding Non-GAAP measures (continued) * Included in North America reported commissions and fees were legacy HRH contingent commissions of $8 million in the first quarter of 2010 compared with $20 million in the first quarter of 2009.
Slide 29: Commissions and Fees Analysis
Commissions and Fees Analysis* Important disclosures regarding Non-GAAP measures (continued)
Slide 30: 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 31: Willis Group Holdings Fact Book for the Quarter Ended March 31, 2010
WILLIS GROUP HOLDINGS FACT BOOK FOR THE QUARTER ENDED MARCH 31, 2010
Willis Group Holdings — Q1 2010 Earnings Presentation on 6ix