Willis Towers Watson Public Limited Company · NASDAQ:WTW
Willis Towers Watson Public — Q3 2024 Earnings Presentation
33 slides from Willis Towers Watson Public's earnings presentation, Oct 31, 2024
Slide 1: Earnings Release Supplemental Materials: 2024 Third Quarter Financial Results
WTW Earnings Release Supplemental Materials 2024 Third Quarter Financial Results October 31, 2024 wtwco.com © 2024 WTW. All rights reserved.
Slide 2: WTW Forward-Looking Statements
WTW Forward-Looking Statements This document contains ‘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-lookin
Slide 3: WTW Non-GAAP Measures
WTW Non-GAAP Measures In order to assist readers of our consolidated financial statements in understanding the core operating results that WTW’s management uses to evaluate the business and for financial planning, we present the following non-GAAP measures: (1) Constant Currency Change, (2) Organic
Slide 4: Key Takeaways
Key Takeaways Organic revenue growth1 of 6%, Adjusted Operating Margin1 expansion of +190 bps and Adjusted Diluted EPS1 growth of 31% in Q3 2024 Continued to make significant progress on strategic priorities with our specialization strategy, new talent and smart connections contributing to growth Re
Slide 5: Q3 2024 GAAP Financial Results
Q3 2024 GAAP Financial Results1 Key figures $USD million, except EPS and % Three months ended Nine months ended September 30, September 30, 2024 2023 2024 2023 Revenue $2,289 $6,895 $2,166 $6,569 % change 6% 5% (Loss)/Income from Operations $(766) $(274) $159 $586 % change NM NM Operating Margin % (
Slide 6: Q3 2024 Key Figures, Including Non-GAAP Financial Results
Q3 2024 Key Figures, Including Non-GAAP Financial Results Q3 2024 Results Total Revenue $2.3B +6% +9% Q3 2024 Q3 2024 Q3 2023 Organic1 Organic1 Adjusted Diluted EPS1 $2.93 Q3 2024 +31% Q3 2024 $2.24 Q3 2023 Adjusted Operating Margin1 18.1% +190 bps 16.2% Q3 2024 Q3 2024 Q3 2023 Free Cash Flow1 $807M
Slide 7: Financial Review
Financial Review wtwco.com © 2024 WTW. All rights reserved. See “WTW Forward-Looking Statements“ above for information about forward-looking statements and cautionary language, including how actual results may differ materially from those in the slide presentation. 7
Slide 8: Quarterly Segment Performance: Health, Wealth & Career
Quarterly Segment Performance: Health, Wealth & Career Q3 2024 Segment Highlights1 Revenue ($M) Segment Operating • For the quarter, HWC had organic revenue growth2 of 4%. Margin1 – Health had organic revenue growth driven by strong client retention, new $1,328 $1,282 24.7% 23.8% local appointments
Slide 9: Quarterly Segment Performance: Risk & Broking
Quarterly Segment Performance: Risk & Broking Q3 2024 Segment Highlights1 Revenue ($M) Segment Operating • For the quarter, R&B had organic revenue growth2 of 10%. Margin1 $940 18.1% – CRB generated organic revenue growth of 10% driven by higher levels of $855 15.7% new business activity and strong
Slide 10: Transformation Program: Savings
Transformation Program: Savings Projected to generate ~$450 million of annualized savings through 2024 Delivering on our financial Cumulative Q3-24 commitments From Projected YTD ($ millions) Inception • Delivering ~$450 million of run-rate savings to contribute ~450 bps of margin Real Estate Ration
Slide 11: Transformation Program: Costs to Achieve
Transformation Program: Costs to Achieve Cumulative • Incurred $75 million of restructuring / Q3-24 transformation related charges From Projected YTD during the quarter ($ millions) Inception Real Estate Rationalization $45 $204 • Incurred $12 million of capital Technology Modernization $113 $305 ex
Slide 12: Maintaining a Flexible Balance Sheet
Maintaining a Flexible Balance Sheet Reinforcing our business fundamentals; safeguarding WTW’s financial strengths Disciplined capital management strategy Sept 30, 2024 Dec 31, 2023 Provides WTW with the financial flexibility to ($ millions) reinvest in our businesses, capitalize on market growth op
Slide 13: Executing Against a Balanced Capital Allocation Strategy
Executing Against a Balanced Capital Allocation Strategy Allocating capital to opportunities with the potential for highest return Capital Allocation Priorities CASH RETURNED TO SHAREHOLDERS • Reinvest in capabilities, businesses, and processes • Invest in innovation, technology, and new business $1
Slide 14: Business Overview
Business Overview wtwco.com © 2024 WTW. All rights reserved. See “WTW Forward-Looking Statements“ above for information about forward-looking statements and cautionary language, including how actual results may differ materially from those in the slide presentation. 14
Slide 15: We Have a Portfolio of Leading Businesses in Attractive Markets
We have: We Have a Portfolio of A distinctive mix of complementary businesses • Accomplished and aspiring talent Leading Businesses in • Collaborative client-first culture • Sophisticated data and analytics Attractive Markets • Powerful tools A strong balance sheet and significant financial flexibil
Slide 16: Segment Overview: Health, Wealth & Career
Segment Overview: Health, Wealth & Career1 Health, Wealth & Career: World-class portfolio of leading businesses FY 2023 Revenue and Organic Growth providing advisory and consulting services within human capital, employee benefits and retirement verticals +6% Organic +6% Organic Health Health provide
Slide 17: Segment Overview: Risk & Broking
Segment Overview: Risk & Broking1 Risk & Broking: Risk advisory and solutions business delivering FY 2023 Revenue and Organic Growth innovative, integrated solutions tailored to client needs and underpinned +7% Organic by cutting edge data and analytics, technology and experienced risk ICT thinkers
Slide 18: Value Creation Framework
Value Creation Framework 1. Seek profitable growth through innovation in attractive markets 2. Target superior shareholder returns through buybacks and prudent investments 3. Defensive business model with historically lower volatility than other financial services subsectors 4. Accelerate operationa
Slide 19: Strategy & Outlook
Strategy & Outlook wtwco.com © 2024 WTW. All rights reserved. See “WTW Forward-Looking Statements“ above for information about forward-looking statements and cautionary language, including how actual results may differ materially from those in the slide presentation. 19
Slide 20: 2024 Financial Targets
2024 Financial Targets1 Grow, Simplify, Transform: Focus on the execution on our strategy with a clear path to 2024 Financial Targets Revenue Adjusted Operating Margin Adjusted Diluted EPS $9.9B+ 23.0 - 23.5% $16.00 - $17.00 Mid-single digit (MSD) organic revenue Margin expansion driven by improved
Slide 21: Free Cash Flow Margin Expectations
Free Cash Flow Margin Expectations1 Free Cash Flow Margin 16%+ 12.6% 2024 and Beyond: • Expect incremental improvement in 7.6% 2024 • Adjusted operating margin expansion • Adjusted operating margin • Improvement from sale of TRANZACT expansion • Headwind from cash investment in 2024 • Improvement in
Slide 22: Appendix I: Reconciliation of Non-GAAP Measures
Appendix I: Reconciliation of Non-GAAP Measures wtwco.com © 2024 WTW. All rights reserved. See “WTW Forward-Looking Statements“ above for information about forward-looking statements and cautionary language, including how actual results may differ materially from those in the slide presentation. 22
Slide 23: Constant Currency and Organic Revenue Change QTD
Constant Currency and Organic Revenue Change QTD As reported, USD millions except % Components of Revenue Change(i) Three Months Ended Less: Less: September 30, As Reported Currency Constant Currency Acquisitions/ Organic 2024 2023 % Change Impact Change Divestitures Change Health, Wealth & Career R
Slide 24: Constant Currency and Organic Revenue Change YTD
Constant Currency and Organic Revenue Change YTD As reported, USD millions except % Components of Revenue Change(i) Nine Months Ended Less: Less: September 30, As Reported Currency Constant Currency Acquisitions/ Organic 2024 2023 % Change Impact Change Divestitures Change Health, Wealth & Career Re
Slide 25: Adjusted Op Income and Margin, Adj. EBITDA and Margin QTD
Adjusted Op Income and Margin, Adj. EBITDA and Margin QTD As reported, USD millions except % 2024 2023 (Loss)/Income from operations and Operating margin $ (766) (33.5)% $ 159 7.3% Adjusted for certain items: Impairment 1,042 — Amortization 56 62 Restructuring costs 8 17 Transaction and transformati
Slide 26: Adjusted Op Income and Margin, Adj. EBITDA and Margin YTD
Adjusted Op Income and Margin, Adj. EBITDA and Margin YTD As reported, USD millions except % Nine Months Ended September 30, 2024 2023 (Loss)/Income from operations and Operating margin $ (274) (4.0)% $ 586 8.9% Adjusted for certain items: Impairment 1,042 — Amortization 176 203 Restructuring costs
Slide 27: Adjusted Net Income and Adjusted Diluted EPS QTD
Adjusted Net Income and Adjusted Diluted EPS QTD As reported, USD millions except % Three Months Ended September 30, 2024 2023 Net (loss)/income attributable to WTW $ (1,675) $ 136 Adjusted for certain items: Impairment 1,042 — Amortization 56 62 Restructuring costs 8 17 Transaction and transformati
Slide 28: Adjusted Net Income and Adjusted Diluted EPS YTD
Adjusted Net Income and Adjusted Diluted EPS YTD Nine Months Ended September 30, As reported, USD millions except % 2024 2023 Net (loss)/income attributable to WTW $ (1,344) $ 433 Adjusted for certain items: Impairment 1,042 — Amortization 176 203 Restructuring costs 29 30 Transaction and transforma
Slide 29: Adjusted Income Before Taxes & Adjusted Income Tax Rate QTD
Adjusted Income Before Taxes & Adjusted Income Tax Rate QTD As reported, USD millions except % Three Months Ended September 30, 2024 2023 (Loss)/income from continuing operations before income taxes $ (1,994) $ 164 Adjusted for certain items: Impairment 1,042 — Amortization 56 62 Restructuring costs
Slide 30: Adjusted Income Before Taxes & Tax Rate YTD and Free Cash Flow
Adjusted Income Before Taxes & Adjusted Income Tax Rate YTD and Free Cash Flow Nine Months Ended September 30, As reported, USD millions except % 2024 2023 (Loss)/income from continuing operations before income taxes $ (1,584) $ 540 Adjusted for certain items: Impairment 1,042 — Amortization 176 203
Slide 31: Appendix II: TRANZACT Standalone Historical Financial Results
Appendix II: TRANZACT Standalone Historical Financial Results wtwco.com © 2024 WTW. All rights reserved. See “WTW Forward-Looking Statements“ above for information about forward-looking statements and cautionary language, including how actual results may differ materially from those in the slide pre
Slide 32: TRANZACT Standalone Historical Financial Results
TRANZACT Standalone Historical Financial Results $USD million, except % Nine months ended Seasonality Full Year The seasonal nature of September 30, TRANZACT’S operations creates significant fluctuations 2024 2023 2023 2022 in quarterly operating results. Historically, quarterly financial results ha
Slide 33: About WTW
About WTW At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience,
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