Willis Towers Watson Public Limited Company · NASDAQ:WTW
Willis Towers Watson Public — Willis Group Holdings — Q4 2012 Earnings Presentation
27 slides from Willis Towers Watson Public's earnings presentation, Mar 6, 2013
Slide 1: Fact Book Fourth Quarter 2012
EXHIBIT 99.1 Fact Book Fourth Quarter 2012 WILLIS GROUP HOLDINGS March 2013
Slide 2: Willis: A leading global insurance broker
Willis: A leading global insurance broker Willis Global Franchise 2012 Commissions and Fees by Segment Willis Subsidiaries and Associates 2012 C&F: $3.46 billion Broad range of professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services Global
Slide 3: Summary Q4 2012 financial results
Summary Q4 2012 financial results Q4 2012 Q4 2011 FY 2012 FY 2011 Organic 7.5% (2.3)% 3.1% 1.8% commission and fee growth Reported (89.0)% 9.9% (6.0)% 16.4% operating margin Adjusted 19.1% 18.7% 21.6% 22.5% operating margin Reported EPS $(4.65) $0.14 $(2.58) $1.15 Adjusted EPS $0.45 $0.45 $2.58 $2.7
Slide 4: Organic Q4 2012 commissions and fees growth
Organic Q4 2012 commissions and fees growth Q4 2012 Q4 2011 Growth across all segments Global 11.6% 6.3% Global North America 5.0% (9.4)% Growth in all Global businesses; strong new business at Willis Faber & Dumas; International 7.4% 2.2% solid growth in Global Specialties and Willis Group 7.5% (2.
Slide 5: Q4 2012 financial results
Q4 2012 financial results Reported operating margin (89.0)%; 19.1% adjusted operating margin Adjusted operating margin up 40 bps from prior year quarter, primarily driven by: Higher commissions and fees Reduction in other operating expenses Partially offset by higher salaries and benefits and lower
Slide 6: Track record of organic commission and fee growth
Track record of organic commission and fee growth Average 2007 – 2012 Willis 3% Peers 0% Note: Peer averages are based on Willis estimates using public information regarding insurance brokerage operations of AJG, AON, BRO, MMC 6 See important disclosures regarding Non-GAAP measures starting on page
Slide 7: Adjusted operating margins
Adjusted operating margins Average 2007 – 2012 Willis 22% Peers 20% Note: Peer averages are based on Willis estimates using public information regarding insurance brokerage operations of AJG, AON, BRO, MMC 7 See important disclosures regarding Non-GAAP measures starting on page 18
Slide 8: Strong cash flow from operations
Strong cash flow from operations ($ millions) 2012 corporate/non-operating uses of cash Dividends $185 million Capex $135 million Share buyback $100 million M&A expenditures of $69 million $85 million increase in cash flow from operations in 2012 $500 million of cash and cash equivalents at December
Slide 9: Leverage ratios
Leverage ratios Adjusted EBITDA $890 million in 2012, a decline of $22 million versus 2011 Debt outstanding $2.35 billion as at December 31, 2012 Debt / Adjusted EBITDA Further reduction of leverage ratio driven by improved operating performance and effective capital management (a) Includes impact f
Slide 10: Segment Overviews
SEGMENT OVERVIEWS Willis
Slide 11: Willis North America overview
Willis North America overview Segment overview 2012 commissions and fees – by region Extensive retail platform with Top 3 position in all major markets Able to leverage industry and specialty practice group expertise across Willis network Major practice groups include: Employee Benefits (approximate
Slide 12: Willis International overview
Willis International overview Segment overview 2012 commissions and fees – by region Retail operations in the United Kingdom, Eastern and Western Europe, Asia Pacific, the Middle East, South Africa and Latin America Provide services to businesses locally in over 120 countries; leading positions in U
Slide 13: Willis Global overview
Willis Global overview Segment overview 2012 commissions and fees – by business 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 Netw
Slide 14: Willis Global overview (continued)
Willis Global overview (continued) Segment overview 2012 commissions and fees – by business Global Specialties, with strong global positions in: Aerospace/Inspace FINEX and Financial Solutions – political risks and UK financial institutions Marine Energy Construction Willis Faber & Dumas includes: F
Slide 15: Appendix
APPENDIX Willis
Slide 16: The Willis Cause
The Willis Cause 16 See important disclosures regarding forward-looking statements on page 18
Slide 17: 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 18: Important disclosures regarding Non-GAAP measures
Important disclosures regarding Non-GAAP 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 metho
Slide 19: Operating Income to Adjusted Operating Income (annual)
Important disclosures regarding Non-GAAP measures (continued) Operating Income to Adjusted Operating Income 2007 2008 2009 2010 2011 2012 (In millions) FY FY FY FY FY FY Operating Income $620 $503 $690 $753 $566 ($209) Excluding: Goodwill impairment charge (a) - - - - - 492 (b) - - - - - 200 Write-o
Slide 20: Operating Income to Adjusted Operating Income (quarterly)
Important disclosures regarding Non-GAAP measures (continued) Operating Income to Adjusted Operating Income 2011 2012 (In millions) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Operating Income $239 $156 $90 $81 $317 $179 $70 ($775) Excluding: Goodwill impairment charge (a) - - - - - - - 492 Write-off of unamortized cas
Slide 21: Net Income to Adjusted Net Income (annual)
Important disclosures regarding Non-GAAP measures (continued) Net Income to Adjusted Net Income 2007 2008 2009 2010 2011 2012 (In millions, except per share data) FY FY FY FY FY FY Net Income $409 $302 $434 $455 $203 ($446) Excluding the following, net of tax: (a) Goodwill impairment charge - - - -
Slide 22: Net Income to Adjusted Net Income (quarterly)
Important disclosures regarding Non-GAAP measures (continued) Net Income to Adjusted Net Income 2011 2012 (In millions, except per share data) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Net Income $35 $84 $60 $24 $225 $107 $26 ($804) Excluding the following, net of tax: (a) Goodwill impairment charge - - - - - - - 458
Slide 23: Adjusted EBITDA and Debt/Adjusted EBITDA
Important disclosures regarding Non-GAAP measures (continued) Adjusted EBITDA and Debt/Adjusted EBITDA 2007 2008 2009 2010 2011 2012 (In millions) FY FY FY FY FY FY Operating Income $620 $503 $690 $753 $566 ($209) Excluding: (a) - - - - - 492 Goodwill impairment charge Write-off of unamortized cash
Slide 24: Notes to the GAAP to non-GAAP reconciliations
Important disclosures regarding Non-GAAP measures (continued) Notes to the GAAP to non-GAAP reconciliations (a) Impairment charge to reduce carrying value of North America segment goodwill. (b) Charge to write-off unamortized balance of past cash retention awards (c) Accrual for 2012 bonuses to be p
Slide 25: Commissions and Fees Analysis
Important disclosures regarding Non-GAAP measures (continued) Commissions and Fees Analysis Organic Foreign Acquisitions commissions currency and Contingent and fees 2012 2011 Change translation disposals Commissions growth (a) ($ millions) % % % % % Three months ended December 31, 2012 Global $237
Slide 26: Commissions and Fees Analysis (2011 and 2010)
Important disclosures regarding Non-GAAP measures (continued) Commissions and Fees Analysis Organic Foreign Acquisitions commissions currency and Contingent and fees 2011 2010 Change translation disposals Commissions growth ($ millions) % % % % % 2011 Full year Global $1,073 $987 8.7 2.0 - - 6.7 (a)
Slide 27: Willis Group Holdings Fact Book Fourth Quarter 2012
WILLISGROUP WILLIS GROUP HOLDINGS HOLDINGS Fact Book Fourth Quarter 2012 WILLIS GROUP HOLDINGS March 2013
Willis Group Holdings — Q4 2012 Earnings Presentation on 6ix