Willis Towers Watson Public Limited Company · NASDAQ:WTW
Willis Towers Watson Public — Willis Group Holdings — Q4 2012 Earnings Presentation
21 slides from Willis Towers Watson Public's earnings presentation, Feb 13, 2013
Slide 1: Fourth Quarter 2012 Results
Exhibit 99.2 Willis Group Holdings FOURTH QUARTER 2012 RESULTS February, 2013
Slide 2: 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 3: 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 4: Balance sheet and cash flow highlights
Balance sheet and cash flow highlights Dec 31, Dec 31, As of 2012 2011 Cash $500 $436 $64 million increase in cash at end of 2012 vs. prior year Total debt $2.35 bn $2.37 bn $15 million debt repayment in 2012 Dec 31, Dec 31, Year ended 2012 2011 Cash flow from $524 $439 $85 million increase in cash
Slide 5: Summary financial results
Summary financial results Q4 2012 Q4 2011 FY 2012 FY 2011 Organic 7.5% (2.3)% 3.1% 1.8% commission and fee growth Adjusted $166m $153m $752m $775m operating income 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 $2.74 4 See im
Slide 6: Total expenses
Total expenses Q4 Q4 Q4 2012 total adjusted expenses $ millions 2012 2011 up 5.9%, or 6.5% on an underlying Total expenses – reported 1,646 738 123.0% basis North America segment (492) - Primarily driven by 8.6% growth goodwill impairment in adjusted S&B 2012 cash bonus accrual (252) - Other operati
Slide 7: Salaries and benefits
Salaries and benefits Q4 Q4 Q4 2012: 8.6% adjusted and $ millions 2012 2011 underlying S&B growth, driven by: Salaries and benefits – 967 510 89.6% reported Difficult comparison as Q4 2011 included largest savings from 2011 2012 cash bonus accrual (252) - operational review Write-off unamortized (20
Slide 8: Salaries and benefits assuming cash bonus accrued throughout 2012
Salaries and benefits – assuming cash bonus accrued throughout 2012 $ millions Q1 Q2 Q3 Q4 FY Salaries and benefits $ 506 500 502 515 $ 2,023 – adjusted Amortization of cash (59) (51) (46) (48) (204) $48 m retention awards increase 2012 cash bonus 63 63 63 63 252 accrual Salaries and benefits $ 510
Slide 9: Impact on adjusted EPS assuming cash bonus accrued throughout 2012
Impact on adjusted EPS – assuming cash bonus accrued throughout 2012 Q1 Q2 Q3 Q4 FY Adjusted EPS – as $1.32 $0.59 $0.22 $0.45 $2.58 disclosed Adjusted EPS – assuming $1.31 $0.54 $0.15 $0.38 $2.38 cash bonus accrued Difference $(0.01) $(0.05) $(0.07) $(0.07) $(0.20) If we had been accruing for a cash
Slide 10: Other operating expenses
Other operating expenses Q4 Q4 Q4 2012: Other operating expenses $ millions 2012 2011 declined 1.9% on an adjusted basis Other operating 150 194 (22.7)% On an underlying basis (excluding expenses – reported FX movement), other operating Insurance recovery 5 - expenses were up a modest 0.6% Write-off
Slide 11: Adjusted operating margin
Adjusted operating margin Q4 Q4 Adjusted operating margin up 40 bps 2012 2011 driven by Operating margin – (89.0)% 9.9% NM Higher commissions and fees reported Offset by higher S&B and lower Operating margin – 19.1% 18.7% +40bps investment income adjusted 10 See important disclosures regarding Non-G
Slide 12: Appendices
APPENDICES Willis
Slide 13: Commissions and fees analysis
Important disclosures regarding non-GAAP measures Commissions and fees analysis Foreign Organic currency Acquisitions commissions 2012 2011 Change translation and disposals and fees growth ($ millions) % % % % Three months ended December 31, 2012 Global $237 $213 11.3 (0.3) - 11.6 (a) North America
Slide 14: Operating income and adjusted operating income
Important disclosures regarding non-GAAP measures Operating income and adjusted operating income 2011 2012 (In millions) 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY Operating Income $239 $156 $90 $81 $566 $317 $179 $70 ($775) ($209) Excluding: Goodwill impairment charge - - - - - - - - 492 492 Write-off of unamor
Slide 15: Net income to adjusted net income
Important disclosures regarding non-GAAP measures Net income to adjusted net income 2011 2012 (In millions, except per share data) 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY Net Income $35 $84 $60 $24 $203 $225 $107 $26 ($804) ($446) Excluding the following, net of tax: Goodwill impairment charge - - - - - - - -
Slide 16: Adjusted EBITDA and Debt/Adjusted EBITDA
Important disclosures regarding non-GAAP measures Adjusted EBITDA and Debt/Adjusted EBITDA 2011 2012 (In millions) 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY Operating Income $239 $156 $90 $81 $566 $317 $179 $70 ($775) ($209) Excluding: Goodwill impairment charge - - - - - - - - 492 492 Write-off of unamortized
Slide 17: Total expenses - 2012
Total expenses - 2012 $ millions 2012 2011 Total expenses – reported 3,689 2,881 28.0% North America segment (492) - goodwill impairment 2012 cash bonus accrual (252) - Write-off unamortized cash (200) - retention awards Insurance recovery 10 - Loss on disposal (3) 4 2011 Operational review - (180)
Slide 18: Salaries and benefits - 2012
Salaries and benefits - 2012 $ millions 2012 2011 Salaries and benefits – 2,475 2,087 18.6% reported 2012 cash bonus accrual (252) - Write-off unamortized (200) - retention awards 2011 Operational review - (135) Salaries and benefits – 2,023 1,952 3.6% adjusted Y-o-Y FX movement 34 Salaries and bene
Slide 19: Other operating expenses - 2012
Other operating expenses - 2012 $ millions 2012 2011 Other operating expenses 581 656 (11.4)% – reported Insurance recovery 10 - Write-off of uncollectible (13) (22) accounts receivable 2011 Operational review - (40) India JV (11) - FSA settlement - (11) Other operating expenses 567 583 (2.7)% – adj
Slide 20: IR Contacts
IR Contacts Peter Poillon Tel: 212-915-8084 Email: peter.poillon@willis.com Mark Jones Tel: 212-915-8796 Email: mark.p.jones@willis.com 19
Slide 21: Fourth Quarter 2012 Results
Willis Group Holdings FOURTH QUARTER 2012 RESULTS February, 2013
Willis Group Holdings — Q4 2012 Earnings Presentation on 6ix