Willis Towers Watson Public Limited Company · NASDAQ:WTW
Willis Towers Watson Public — Willis Group Holdings — Q3 2010 Earnings Presentation
34 slides from Willis Towers Watson Public's earnings presentation, Nov 16, 2010
Slide 1: Willis Group Holdings Fact Book, quarter ended September 30, 2010
1 WILLIS GROUP HOLDINGS FACT BOOK For the quarter ended September 30, 2010
Slide 2: Willis snapshot
2 Leading global insurance brokerBroad 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 clientsMore than 400 offices in
Slide 3: Group financial summary – 3Q 2010
3 Group financial summary – 3Q 2010 1 percent reported growth in commissions and fees (C&F) 4 percent organic growth in C&F - strong new business generation and steady retention2 percent in North America, 6 percent in International, and4 percent in Global (reinsurance and specialties) 14.5 percent r
Slide 4: Group financial summary – 3Q YTD 2010
4 Group financial summary – 3Q YTD 2010 3 percent reported growth in C&F4 percent organic growth in C&F1 percent in North America, 6 percent in International, and 6 percent in Global (reinsurance and specialties) 150 basis points increase in adjusted operating margin Organic revenue growth and cost
Slide 5: Organic growth in commissions and fees exceeds peers
5 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 26
Slide 6: Growth driven by strong new business production
6 Growth driven by strong new business production % Organic growth in commissions and fees See important disclosures regarding Non-GAAP measures on page 26 6% average net newunderlying business 2005 – 2009
Slide 7: Adjusted operating margin exceeds peers
7 Adjusted operating margin exceeds peers Average 2005 – 2009 Willis 22% Peers 20% See important disclosures regarding Non-GAAP measures on page 26 Note: Peer averages are based on Willis estimates using public information from AJG, AON, BRO, MMC
Slide 8: Segment highlights – 3Q 2010
8 Segment highlights – 3Q 2010 NORTH AMERICA INTERNATIONAL Organic C&F growth of 2 percent, up from negative 3 percent in year ago quarter Double-digit new business generation, improved retention with continued soft market and economic headwinds Employee Benefits up 4 percent, strong results from sp
Slide 9: Segment highlights – 3Q YTD 2010
9 Segment highlights – 3Q YTD 2010 NORTH AMERICA INTERNATIONAL Organic C&F growth of 1 percent, up from negative 5 percent in year ago quarter Double-digit new business generation, improved retention with continued soft market and economic headwinds Employee Benefits up 2 percent, strong results fro
Slide 10: Willis North America overview
10 Willis North America overview Segment overview 2009 commissions and fees 2009 = $1,368 million Body: 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 expert
Slide 11: Willis International overview
11 Segment overview 2009 commissions and fees Willis International overview Body: 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 Of
Slide 12: Willis Global overview
12 Segment overview 2009 commissions and fees 2009 = $822 million Willis Global overview Body: 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 Willi
Slide 13: Willis Global overview (continued)
13 Segment overview 2009 commissions and fees Willis Global overview (continued) Body: 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
Slide 14: Adjusted cash flow
14 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 $31 million, $107 million, $153 million, $211 million and $50 million, for LTM 3Q10, 2008, 2007, 2006, and 200
Slide 15: Debt and maturity profile
15 Total debt approximately $2.3 billion RatingsMoody’s Baa3 (stable outlook) Standard & Poor’s BBB- (stable outlook)Significantly improved debt maturity profile ($ in millions) Debt and maturity profile 2010 mandatory debt repayments of $112 million on term loan (approx $84 million paid through 9M1
Slide 16: 2010 Focus
2010 Focus Willis mg
Slide 17: The Willis Cause: main priorities
17 The Willis CauseContinue to drive industry leading revenue growthContinue to execute Shaping our FutureFunding for Growth - incremental savings to support current and future growth initiatives Main priorities See important disclosures regarding forward-looking statements on page 25
Slide 18: The Willis Cause
18 We thoroughly understand our clients’ needs and their industriesWe develop client solutions with the best markets, price and termsWe relentlessly deliver quality client serviceWe get claims paid quickly The Willis Cause WITH INTEGRITY See important disclosures regarding forward-looking statements
Slide 19: Delivering the Willis Cause
19 Delivering the Willis Cause CLIENT UNDERSTANDING SERVICE QUALITY CLAIMS PAID Segments Specialization Analytics Client profitability Sales operations Client advocacy Placement proposition Programs & facilities Placement organization WillPlace Willis Quality Index Willis Capital Markets Operational
Slide 20: Driving growth
20 Further develop aggressive sales cultureFurther enhance Client AdvocacyContinue to make strategic hiresReinsuranceInternationalSpecialty lines (Energy, Marine, Aerospace)Build on already strong client retentionMonitor specific growth metrics for all regions, countries and linesImprove tracking of
Slide 21: Shaping our Future continues to deliver
21 Shaping our Future continues to deliver Cumulative SOF gross and net benefits($ millions) See important disclosures regarding forward-looking statements on page 24 2010 priorities:Greater emphasis on retention, cross-selling and pipeline initiativesFurther development of global marketing capabili
Slide 22: Funding for Growth 2010
22 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 De
Slide 23: Wrap up – 3Q10
23 Wrap up – 3Q10 Willis 3Q10 performance4 percent organic growth in C&F; organic growth in each segmentStrong new business generation and steady retention14.5 percent reported and adjusted operating margin reflects organic revenue growth, rigorous expense management and favorable FX, partially offs
Slide 24: Appendix
Appendix Willis ima
Slide 25: Important disclosures regarding forward-looking statements
25 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
Slide 26: Non-GAAP financial measures
26 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 27: Operating Income to Adjusted Operating Income (annual)
27 Important disclosures regarding Non-GAAP measures (continued) See related footnotes on page 33 Operating Income to Adjusted Operating Income 20052006200720082009(In millions) FY FY FY FY FY Operating Income, GAAP Basis$451 $552 $620 $503 $694 Excluding:Venezuela currency devaluation (a)-----Net (
Slide 28: Operating Income to Adjusted Operating Income (quarterly)
28 Important disclosures regarding Non-GAAP measures (continued) See related footnotes on page 33 Operating Income to Adjusted Operating Income 20092010(In millions) 1Q 2Q 3Q YTD 4Q 1Q 2Q 3Q YTD Operating Income, GAAP Basis$274 $165 $82 $521 $173 $301 $169 $106 $576 Excluding:Venezuela currency deva
Slide 29: Net Income to Adjusted Net Income (annual)
29 Important disclosures regarding Non-GAAP measures (continued) See related footnotes on page 33 Net Income from Continuing Operations to Adjusted Net Income from Continuing Operations 20052006200720082009(In millions, except per share data)FYFYFYFYFYNet Income from Continuing Ops, GAAP Basis$281 $
Slide 30: Net Income to Adjusted Net Income (quarterly)
30 Important disclosures regarding Non-GAAP measures (continued) See related footnotes on page 33 Net Income from Continuing Operations to Adjusted Net Income from Continuing Operations 20092010(In millions, except per share data)1Q2Q3QYTD4Q1Q2Q3QYTDNet Income from Continuing Ops, GAAP Basis$192 $87
Slide 31: Commissions and Fees Analysis (annual)
31 Commissions and Fees Analysis* Important disclosures regarding Non-GAAP measures (continued) 20092008ChangeForeign currency translationAcquisitions and disposalsOrganic commissions and fees growth($ millions)%%%%2009 Full yearGlobal$822 $784 5 (3)4 4 North America1,36890551 0 54 (3)International1
Slide 32: Commissions and Fees Analysis (quarterly)
32 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 $1 million in the third quarter of 2010 compared with $2 million in the third quarter of 2009 and $11 mil
Slide 33: Notes to the reconciliations
33 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 econo
Slide 34: Willis Group Holdings Fact Book, quarter ended September 30, 2010
34 WILLIS GROUP HOLDINGS FACT BOOK For the quarter ended September 30, 2010
Willis Group Holdings — Q3 2010 Earnings Presentation on 6ix