Willis Towers Watson Public Limited Company · NASDAQ:WTW
Willis Towers Watson Public — Willis Group Holdings — FY2009 Earnings Presentation
30 slides from Willis Towers Watson Public's earnings presentation, Feb 24, 2010
Slide 1: Willis Group Holdings Fact Book for the Year Ended December 31, 2009
WILLIS GROUP HOLDINGS FACT BOOK FOR THE YEAR ENDED DECEMBER 31, 2009
Slide 2: Executive summary
2 Executive summary Willis 2009 performance* Industry leading 2 percent organic commissions and fees growth for FY2009; positive organic North America growth in 4Q09 Substantially completed major HRH acquisition; delivered integration synergies and other cost savings of $205 million Delivered Shapin
Slide 3: Group financial summary – 2009
3 Group financial summary – 2009 2 percent organic growth in commissions and fees (C&F), driven by growth of 4 percent in both of our Global (specialties and reinsurance) and International segments* Maintained solid adjusted operating margin Stringent cost discipline while investing North America me
Slide 4: Organic growth in commissions and fees exceeds peers
4 Organic growth in commissions and fees exceeds peers* Average 2004 – 2009 Willis 4% Peers 0% 4% 1% 5% 0% 8% 3% 3% 0% 4% (1)% 2% (2)% 2004 2005 2006 2007 2008 2009 Willis Peer Average Note: Peer Average includes public filing information from AJG, AOC, BRO, MMC * See important disclosures regarding
Slide 5: Growth driven by strong new business production
5 Growth driven by strong new business production* % Organic growth in commissions and fees Net new avg. 6% 2004 2005 2006 2007 2008 2009 6 (2) 6 (1) 8 4 (1) 6 (2) 5 (3) Net new underlying business Changes in rate and other market factors * See important disclosures regarding Non-GAAP measures on pa
Slide 6: Adjusted operating margin exceeds peers
6 Adjusted operating margin exceeds peers* 27% 22% 21% 19% 23% 21% 24% 19% 21% 19% 22% 21% 2004 2005 2006 2007 2008 2009 Willis Peer Average Note: Peer Average includes public filing information from AJG, AOC, BRO, MMC Average 2004 – 2009 Willis 23% Peers 20% * See important disclosures regarding No
Slide 7: Segment highlights - 2009
7 Segment highlights - 2009* NORTH AMERICA INTERNATIONAL Organic C&F growth (3) percent for 2009 with soft market and economic headwinds; 1percent positive growth in 4Q09 Integration synergies and other cost savings of approximately $205m realized Operating margin 23.7 percent, up 830 basis points c
Slide 8: Willis North America overview
8 Willis North America overview Positioned for continued profitable growth Extensive retail platform Leading positions in major markets Industry and specialty practice groups leverage expertise Client centric approach Distribution network for all core businesses Segment overview 2009 commissions and
Slide 9: Willis International overview
9 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 Offices designed to grow business locally around the world, making use of the skil
Slide 10: Willis Global overview
10 Comprised of Global Specialties and Reinsurance Aerospace/Inspace – Market leaders in airlines and helicopters FINEX – market leader in Political Risks and UK financial institutions Marine – growing global presence Energy – significant growth opportunity Faber & Dumas, our wholesale brokerage div
Slide 11: Capital management
11 Capital management Outlook raised to “Stable” by Moody’s and Standard & Poor’s Pre funded maturity of 2010 $250m bonds; $160m tendered New issue of $300m 10yr bonds at 7.0 percent Significantly improved debt maturity profile Completed recapitalization of Gras Savoye – removed the Gras Savoye “put
Slide 12: 2010 Focus
2010 Focus ES |
Slide 13: The Willis Cause
13 The Willis Cause Continue to drive industry leading revenue growth Continue to execute Shaping our Future Funding for Growth - incremental savings to fund growth initiatives Complete integration of HRH and leverage growth opportunities from expanded footprint in key markets Main priorities * See
Slide 14: The Willis Cause … with integrity
14 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 The Willis Cause … WITH INTEGRITY * See important disclosures regarding forward-looking sta
Slide 15: Delivering the Willis Cause
15 Delivering the Willis Cause CLIENT UNDERSTANDING SERVICE QUALITY CLAIMS PAID BEST SOLUTION Segments Specialization Analytics Client profitability Sales operations Client advocacy Placement proposition Programs & facilities Placement organization WillPlace Willis Quality Index Willis Capital Marke
Slide 16: Driving growth
16 Further develop aggressive sales culture Further enhance Client Advocacy Continue to make strategic hires Reinsurance International Specialty lines (Energy, Marine, Aerospace) Build on already strong client retention Monitor specific growth metrics for all regions, countries and lines Improve tra
Slide 17: Shaping our Future continues to deliver
17 Shaping our Future continues to deliver Key priorities for 2010 remain: Greater emphasis on retention, cross-selling and pipeline initiatives Further development of global marketing capabilities Further develop Retail platform initiatives Continued focus on strategic hires and investments Cumulat
Slide 18: Funding for Growth 2010
18 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 19: Integration success across all fronts
19 Integration success across all fronts Built a great leadership team: 7 regions, 129 offices, 20 practices Moved everyone together in a little over a year: 80 projects, 5,500 associates impacted Realized $205m of synergies and other cost savings in North America; achieved North America operating m
Slide 20: Wrap up
20 Wrap up Willis 2009 performance* Industry leading 2 percent organic commissions and fees growth for FY2009; positive organic North America growth in 4Q09 Substantially completed major HRH acquisition; delivered integration synergies and other cost savings of $205 million Delivered Shaping our Fut
Slide 21: Appendix
Appendix ES «|
Slide 22: Important disclosures regarding forward-looking statements
22 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 created by those laws. These forward-looking statements inc
Slide 23: Forward-looking statements (continued)
23 material changes in the commercial property and casualty markets generally or the availability of insurance products or changes in premiums resulting from a catastrophic event, such as a hurricane, or otherwise; the volatility or declines in other insurance markets and premiums on which our commi
Slide 24: Forward-looking statements (continued)
24 the potential costs and difficulties in complying with a wide variety of foreign laws and regulations and any related changes, given the global scope of our operations; our involvement in and the results of any regulatory investigations, legal proceedings and other contingencies; our exposure to
Slide 25: Important disclosures regarding Non-GAAP measures
25 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 26: Operating Income to Adjusted Operating Income
26 Important disclosures regarding Non-GAAP measures (continued) Operating Income to Adjusted Operating Income 2004 2005 2006 2007 2008 2009 (In millions) FY FY FY FY FY FY Operating Income, GAAP Basis $630 $451 $552 $620 $503 $694 Excluding: Net (gain)/loss on disposal of operations -11 -78 4 -2 -
Slide 27: Net Income from Continuing Operations to Adjusted Net Income
27 Important disclosures regarding Non-GAAP measures (continued) Net Income from Continuing Operations to Adjusted Net Income from Continuing Operations 2004 2005 2006 2007 2008 2009 (In millions, except per share data) FY FY FY FY FY FY Net Income from Continuing Ops, GAAP Basis $402 $281 $449 $409
Slide 28: Commissions and Fees Analysis
28 Commissions and Fees Analysis Important disclosures regarding Non-GAAP measures (continued) (in millions) 2009 2008 % Foreign Acquisitions Organic commissions change currency translation and and fees growth disposals 2009 Full year Global $822 $784 5% -3% 4% 4% North America 1,368 905 51% 0% 54%
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 (a) Severance costs excluded from adjusted operating i
Slide 30: Willis Group Holdings Fact Book for the Year Ended December 31, 2009
WILLIS GROUP HOLDINGS FACT BOOK FOR THE YEAR ENDED DECEMBER 31, 2009