Willis Towers Watson Public Limited Company · NASDAQ:WTW
Willis Towers Watson Public — Willis Group Holdings — Q2 2011 Earnings Presentation
32 slides from Willis Towers Watson Public's earnings presentation, Sep 9, 2011
Slide 1: Willis Group Holdings Fact Book, quarter ended June 30, 2011
WILLIS GROUP HOLDINGS FACT BOOK For the quarter ended June 30, 2011
Slide 2: Note on change to reporting structure
2 Note on change to reporting structure Effective January 1, 2011, the Company changed its internal and external reporting structure: Global Markets International, previously reported within the International segment, is now reported in the Global division In addition, Mexico Retail, which was previ
Slide 3: Willis snapshot
3 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
Slide 4: Group financial summary - 2Q 2011
4 Group financial summary - 2Q 2011 8 percent reported growth and 3 percent organic growth in commissions and fees (C&F) - improved client retention and solid new business generation 6 percent organic growth in International, 3 percent organic growth in Global (reinsurance and specialties), and Flat
Slide 5: Group financial summary - 2Q YTD 2011
5 Group financial summary - 2Q YTD 2011 6 percent reported growth and 3 percent organic growth in commissions and fees (C&F) - strong new business generation and steady retention 6 percent organic growth in International, 6 percent organic growth in Global (reinsurance and specialties), and 1 percen
Slide 6: Organic growth in commissions and fees exceeds peers
6 Organic growth in commissions and fees exceeds peers Average 2006 - 2010 Willis 4% Peers 0% Note: Peer averages are based on Willis estimates using public information from AJG, AON, BRO, MMC 2005 2006 2007 2008 2009 2010 2QYTD 2011 Willis 0.05 0.08 0.03 0.04 0.02 0.04 0.03 Peer Average 0 0.03 0 -0
Slide 7: Growth driven by strong new business production
7 Growth driven by strong new business production % Organic growth in commissions and fees 6% average net new underlying business 2006 - 2010 2005 2006 2007 2008 2009 2010 2Q YTD 2011 Net new underlying business 0.06 0.08 0.04 0.06 0.05 0.06 0.04 Changes in rate and other market factors -0.01 0 -0.0
Slide 8: Strong adjusted operating margins
8 2005 2006 2007 2008 2009 2010 2Q YTD 2011 Willis 0.21 0.23 0.24 0.21 0.22 0.23 0.276 Peer Average 0.19 0.21 0.19 0.19 0.21 0.21 0.222 Strong adjusted operating margins Average 2006 - 2010 Willis 23% Peers 20% Note: Peer averages are based on Willis estimates using public information from AJG, AON,
Slide 9: Segment highlights - 2Q 2011
9 Segment highlights - 2Q 2011 NORTH AMERICA INTERNATIONAL Organic C&F flat; good net new business generation offset by economic weakness and continued soft market Positive growth in Employee Benefits, and Atlantic and Canada; Loan Protector business down due to one-time benefit from accounting adju
Slide 10: Willis North America overview
10 Category 1 Northeast 0.12 Midwest 0.18 Atlantic 0.19 Western 0.14 Southeast 0.16 CAPPPS+ 0.14 Other Regions 0.08 Willis North America overview Segment overview 2010 commissions and fees 2010 = $1,369 million Extensive retail platform with leading positions in major markets Distribution network fo
Slide 11: Willis International overview
11 Category 1 Europe 0.42 UK 0.23 Latin America 0.13 Southern Hemisphere 0.09 Asia 0.08 Eastern Europe 0.05 Segment overview 2010 commissions and fees Willis International overview Retail operations outside North America Network of subsidiaries, affiliates and correspondents in more than 100 countri
Slide 12: Willis Global overview
12 Category 1 Reinsurance 0.45 Other 0.05 Aerospace / Inspace 0.1 Marine 0.08 Construction 0.04 Energy 0.05 Finex 0.06 Faber & Dumas 0.08 Global Markets International 0.09 Segment overview 2010 commissions and fees 2010 = $994 million Willis Global overview Reinsurance Willis Re One of only three gl
Slide 13: Willis Global overview (continued)
13 Segment overview 2010 commissions and fees Willis Global overview (continued) Global Specialties Strong global positions in Aerospace/Inspace FINEX and Financial Solutions - political risks and UK financial institutions Marine Energy Construction London Market Wholesale includes Faber & Dumas - w
Slide 14: Strong cash flow from operations
14 ($ millions) Strong cash flow from operations 2005 2006 2007 2008 2009 2010 LTM 2Q11 Willis 328 147 275 253 419 489 461 Ongoing cash generation Cash and cash equivalents of $317 million at June 30, 2011
Slide 15: Improved debt and maturity profile
15 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Willis 195 110 114 191 366 300 600 300 500 March 2011 Issued $300 million of 5 year, 4.125% Senior Notes and $500 million of 10 year, 5.75% Senior Notes Redeemed and/or repurchased $500 million of 12.875% Senior Notes (1) Total debt of $
Slide 16: Looking ahead
16 Looking ahead
Slide 17: The Willis Cause
17 See important disclosures regarding forward-looking statements on page 23 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 .... WITH INTEGRI
Slide 18: Delivering the Willis Cause
18 Delivering the Willis Cause See important disclosures regarding forward-looking statements on page 23 Realigning our business model to further grow the Company and deliver the Willis Cause - our value proposition to clients - more consistently and efficiently. For example, current and targeted in
Slide 19: Delivering the Willis Cause - example initiatives
19 Delivering the Willis Cause - example initiatives CLIENT UNDERSTANDING SERVICE QUALITY CLAIMS PAID Segments Specialization Sales 2.0 Global Solutions Willis Research Network Analytics Willis Quality Index Global Placement Programs, Panels & Facilities Willis Capital Markets & Advisory Target Oper
Slide 20: Operational review rationale
20 Operational review rationale See important disclosures regarding forward-looking statements on page 23 External environment remains challenging Ongoing soft rate environment Slow pace of economic recovery in major western economies To support our growth strategy and delivery of the Willis Cause i
Slide 21: Wrap up
21 Wrap up Willis 2Q11 performance 3 percent organic growth in C&F, driven by strength in International and Global segments Improved client retention and solid new business generation Recorded much of the remaining 2011 operational review charge $115 million out of anticipated $130 million 2011 char
Slide 22: Appendix
Appendix Willis iia
Slide 23: Important disclosures regarding forward-looking statements
23 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 24: Non-GAAP financial measures
24 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 25: Operating Income to Adjusted Operating Income
25 Important disclosures regarding Non-GAAP measures (continued) See related footnotes on page 29 Operating Income to Adjusted Operating Income
Slide 26: Operating Income to Adjusted Operating Income
26 Important disclosures regarding Non-GAAP measures (continued) Operating Income to Adjusted Operating Income See related footnotes on page 29
Slide 27: Net Income to Adjusted Net Income
27 Important disclosures regarding Non-GAAP measures (continued) Net Income to Adjusted Net Income See related footnotes on page 29
Slide 28: Net Income to Adjusted Net Income
28 Important disclosures regarding Non-GAAP measures (continued) Net Income to Adjusted Net Income See related footnotes on page 29
Slide 29: Notes to the reconciliations
29 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 $18 million pre-tax charge in 2Q11 ($115 million in 2Q
Slide 30: Commissions and Fees Analysis
30 Commissions and Fees Analysis (a) Important disclosures regarding Non-GAAP measures (continued) (a) Effective January 1, 2011, the Company's internal reporting structure has changed. The primary changes are: Global Markets International, previously reported within the International segment, is no
Slide 31: Commissions and Fees Analysis (continued)
31 Effective January 1, 2011, the Company's internal reporting structure has changed. The primary changes are: Global Markets International, previously reported within the International segment, is now reported in the Global segment. In addition, Mexico Retail, which was previously reported within t
Slide 32: Willis Group Holdings Fact Book, quarter ended June 30, 2011
WILLIS GROUP HOLDINGS FACT BOOK For the quarter ended June 30, 2011
Willis Group Holdings — Q2 2011 Earnings Presentation on 6ix