Aon Plc · NYSE:AON
Aon — Q1 2025 Earnings Presentation
30 slides from Aon's earnings presentation, Apr 25, 2025
Slide 1: Earnings Conference Call First Quarter 2025
Earnings Conference Call First Quarter 2025 April 25, 2025 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement This communication contains certain statements related to future results, or states Aon’s intentions, beliefs and expectations or predictions for the future, all of which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1
Slide 3: Explanation of Non-GAAP Measures
Explanation of Non-GAAP Measures This communication includes supplemental information not calculated in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), including Organic revenue growth, free cash flow, adjusted operating income, adjusted operating margin,
Slide 4: Executive Summary
Executive Summary
Slide 5: Key Messages
Key Messages Aon delivered another quarter of mid-single-digit Organic revenue growth, which reached 5% and with 1 continued strong margins powered 12% Adjusted Operating Income growth and $5.67 Adjusted EPS, marking a strong start to 2025 Our growth is being driven by robust demand for our Risk Cap
Slide 6: Summary Financial Results
Summary Financial Results1 ($ in millions, except per share data) Q1’24 Q1’25 Inc/(Dec.) Total revenue $4,070 $4,729 16% Organic revenue growth (Non-GAAP) 5% 5% Operating income $1,465 $1,461 –% Adjusted operating income (Non-GAAP) $1,615 $1,816 12% Adjusted operating margin (Non-GAAP) 39.7% 38.4% (
Slide 7: Quarterly Performance
Quarterly Performance
Slide 8: Organic Revenue – Strong Growth Across All Solution Lines
Organic Revenue¹ – Strong Growth Across All Solution Lines • Organic revenue growth of +5% overall in the first quarter, driven by net new business and ongoing strong retention • Reported revenue growth of 16%, reflecting Organic revenue growth, contribution from NFP, and a 2% unfavorable impact fro
Slide 9: Adjusted Operating Margin – Remains Robust at 38.4%
Adjusted Operating Margin1 – Remains Robust at 38.4% • Adjusted operating income up 12%, reflecting 5% Organic revenue growth, the impact from NFP and net restructuring savings, partially offset by increased expenses and investments in long-term growth • Adjusted operating margin of 38.4%, down 130
Slide 10: Non-Operating Financials
Non-Operating Financials ($ millions) Q1’24 Q1’25 Interest Income $28 $5 Interest Expense $(144) $(206) Adjusted Other Income (Expense)1 $(7) $(30) Effective Tax Rate¹ 22.6% 20.9% Noncontrolling Interest $(22) $(17) Actual Common Shares Outstanding2 200.1 217.9 1. Adjusted Other Income (Expense) and
Slide 11: Strong Financial Flexibility And Free Cash Flow
Strong Financial Flexibility And Free Cash Flow1 Balance Sheet ($ millions) Dec 31, 2024 Mar 31, 2025 Free Cash Flow ($ millions) Cash $1,085 $964 $261 Short-term Investments $219 $366 (68)% Total Debt $17,016 $17,632 Leverage Ratio1 3.4x 3.5x $84 Shareholders’ Equity $6,121 $7,004 Q1'24 Q1'25 1. Fr
Slide 12: 2025 Guidance
2025 Guidance Supplemental Financial Guidance Information Organic Revenue Mid-Single-Digit or Greater Net NFP: ~(20) bps Adj. Operating Margin Fiduciary Income: ~(20) bps Expansion Restructuring: ~85 bps Operating Leverage: ~35 – 45 bps Expected Tax Rate1: 19.5% – 20.5% Adj. EPS Strong Growth Non-Ca
Slide 13: Long Term Strategy and Track Record
Long Term Strategy and Track Record
Slide 14: Our 3x3 Plan to Drive Ongoing Acceleration of Aon United
Our 3x3 Plan to Drive Ongoing Acceleration of Aon United • Client need continues to evolve and increase, and Aon United enables a connected, stronger firm for clients and colleagues, as demonstrated by our long-term track record of progress • While we’ve made progress on Risk Capital, Human Capital,
Slide 15: NFP: Driving Value Across Four Key Dimensions in Large, Fast-Growing Middle Market
NFP: Driving Value Across Four Key Dimensions in Large, Fast-Growing Middle Market Independent and Top-Line Growth and Connected Shared Success • NFP is an established Risk, Health and Our culture is based on a one-firm Driving organic revenue growth Wealth broker with strong growth and clients-firs
Slide 16: Aon Business Services – Ongoing Evolution Of Our Operations
Aon Business Services – Ongoing Evolution Of Our Operations Operating principles and our track record of progress… …are the foundation for our next stage of value creation Standardized Platforms • Investing in standardizing, digitizing and connecting platforms and technology across our Aon Business
Slide 17: Accelerating Aon United Program to Drive ~$350MM Expected Annual Savings
Accelerating Aon United Program to Drive ~$350MM Expected Annual Savings We built Aon United in response to ongoing, increasing risk and demand from our clients and are now investing in: Cumulative Annual Expected Savings ($MM) • Aon Business Services: investing in platform simplification and migrat
Slide 18: ESG at Aon — Better Decisions for a Better World
ESG at Aon — Better Decisions for a Better World At Aon, helping clients manage risk — including ESG risk — is at the core of what we do. We see significant opportunity in enhancing our impact and delivering innovative client solutions. Environmental Social Governance We remain passionate about Our
Slide 19: Appendices
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Slide 20: Commercial Risk Solutions
Commercial Risk Solutions Shifts in technology, economics and geopolitics are creating unprecedented volatility. We help clients identify, measure and manage their risk exposure. Retail Brokerage: Place over $125B • Our dedicated teams of risk professionals utilize Risk Capital’s comprehensive analy
Slide 21: Reinsurance Solutions
Reinsurance Solutions Businesses, governments and communities need to become more resilient. Our expertise and insight help re/insurers navigate uncharted territories and create more relevant solutions. Treaty: Place $60B • Addresses underwriting and capital objectives on a portfolio level, allowing
Slide 22: Health Solutions
Health Solutions Healthcare costs are skyrocketing and workers have vastly differing needs. We help companies improve employee health and wellbeing while managing costs. Health and Benefits - Consulting and Brokerage: • Develops and implements innovative, customized health and benefits strategies fo
Slide 23: Wealth Solutions
Wealth Solutions Global business is becoming increasingly difficult to navigate. We help employers, fiduciaries, and investment officers optimize results to provide a more secure future. Retirement Consulting and Pension Administration: $5.0T 1 ▪ Utilizes our deep pension expertise to deliver high-q
Slide 24: Appendix A: Reconciliation of Non-GAAP Measures – Organic Revenue Growth
Appendix A: Reconciliation of Non-GAAP Measures – Organic Revenue Growth Aon Organic Revenue Reconciliation Q1'22 Q2'22 Q3'22 Q4'22 FY'22 Q1'23 Q2'23 Q3’23 Q4'23 FY'23 Q1'24 Q2'24 Q3'24 Q4'24 FY'24 Q1'25 Commercial Risk Current period revenue 1,719 1,692 1,482 1,822 6,715 1,778 1,774 1,585 1,906 7,0
Slide 25: Appendix A: Reconciliation of Non-GAAP Measures – Organic Revenue Growth (Cont'd)
Appendix A: Reconciliation of Non-GAAP Measures – Organic Revenue Growth (Cont’d) Aon Organic Revenue Reconciliation 2017 2018 2019 2020 2021 2022 2023 2024 Total Revenue Current period revenue 9,998 10,770 11,013 11,066 12,193 12,479 13,376 15,698 Prior year period revenue 9,409 9,998 10,770 11,013
Slide 26: Appendix B: Reconciliation – Operating Income, Operating Margin, Diluted EPS
Appendix B: Reconciliation of Non-GAAP Measures – Operating Income, Operating Margin, and Diluted Earnings Per Share1 Three Months Ended March 31, Risk Capital Human Capital Corporate/Eliminations (2) Total Consolidated (millions, except percentages) 2025 2024 2025 2024 2025 2024 2025 2024 Revenue $
Slide 27: Appendix B: Reconciliation – Operating Income, Operating Margin, Diluted EPS (Cont'd)
Appendix B: Reconciliation of Non-GAAP Measures – Operating Income, Operating Margin, and Diluted Earnings Per Share1 (Cont’d) Twelve Months Ended December 31, Total Consolidated (millions, except percentages) 2014 Revenue $ 12,045 Operating income $ 1,966 Amortization and impairment of intangible a
Slide 28: Appendix C: Reconciliation of Non-GAAP Measures – Free Cash Flow
Appendix C: Reconciliation of Non-GAAP Measures – Free Cash Flow 1 Free Cash Flows (Unaudited) Three Months Ended March 31, (millions) 2025 2024 % Change Cash Provided by Operating Activities $ 140 $ 309 (55)% Capital Expenditures (56) (48) 17 % Free Cash Flows (1) $ 84 $ 261 (68)% 1. Free cash flow
Slide 29: Appendix D: Reconciliation of Non-GAAP Measures – Leverage Ratio
Appendix D: Reconciliation of Non-GAAP Measures – Leverage Ratio 1 (in millions) TTM Q4'24 TTM Q1'25 Net Income $ 2,720 $ 2,609 Interest expense 788 850 Income tax expense 742 679 Depreciation of fixed assets 183 185 Amortization and impairment of intangible assets 503 686 EBITDA $ 4,936 $ 5,009 Q4
Slide 30: Investor Relations
Investor Relations Nicole Hendry nicole.hendry@aon.com Office: 312-381-5505 30