Willis Towers Watson Public Limited Company · NASDAQ:WTW
Willis Towers Watson Public — Willis Group Holdings — Q1 2013 Earnings Presentation
27 slides from Willis Towers Watson Public's earnings presentation, May 10, 2013
Slide 1: Fact Book First Quarter 2013
Exhibit 99.1 Fact Book First Quarter 2013 WILLIS GROUP HOLDINGS May 2013
Slide 2: A leading global risk advisor, insurance and reinsurance broker
A leading global risk advisor, insurance and reinsurance broker Willis Global Franchise 2012 Commissions and Fees by Segment North International America 30% 38% Global 32% Willis Subsidiaries and Associates 2012 C&F: $3.46 billion With roots dating to 1828, we operate today on every continent, with
Slide 3: Summary Q1 2013 financial results
Summary Q1 2013 financial results Q1 2013 Q1 2012 Organic 4.1% 2.1% Q1 2013 organic commission and fee commission and growth was well balanced across all fee growth three business segments Reported 27.3% 31.3% operating margin Adjusted 31.7% 32.6% operating margin Reported EPS $1.24 $1.28 Adjusted E
Slide 4: Organic Q1 2013 commissions and fees growth
Organic Q1 2013 commissions and fees growth Q1 2013 1Q 2012 Growth across all segments Global 4.1% 4.7% Global Solid high single-digit growth in North America 4.3% (2.0)% Reinsurance; low single digit growth in International 3.8% 4.3% Global Specialty Willis Group 4.1% 2.1% North America Growth well
Slide 5: Q1 2013 financial results
Q1 2013 financial results Reported operating margin 27.3%; Adjusted operating margin 31.7% Adjusted operating margin down 90 bps from prior year quarter, primarily driven by: Higher salaries and benefits and lower investment and other income Partially offset by positive growth in commissions and fee
Slide 6: WSH & Peers – Organic growth trends
WSH & Peers – Organic growth trends Average 2008-2012: WSH: 3% 6% Peers: 1% 4% 4% 4% 4% 3% 2% 2% 2% 1% 2008 2009 2010 2011 2012 1Q13 -1% -2% WSH Peers Note: Peer averages are based on Willis estimates using public information regarding insurance brokerage operations of AJG, AON, BRO, MMC | 6 See imp
Slide 7: Strong cash flow from operations
Strong cash flow from operations ($ millions) 2012 corporate/non-operating uses of cash $524 Dividends $185 million $489 $419 $439 Capex $135 million Share buyback $100 million M&A expenditures of $69 million $253 2008 2009 2010 2011 2012 $85 million increase in cash flow from operations in 2012 $53
Slide 8: Leverage ratios
Leverage ratios Adjusted EBITDA $894 million in LTM March 2013 Debt outstanding $2.4 billion as at March 31, 2013 3.8x 2.7x 2.7x 2.5x 2.6x 2.6x 2008 2009 2010 2011 2012 LTM Mar 2013 (a) Includes impact from acquisition of HRH as of 10/1/2008. | 8 See important disclosures regarding Non-GAAP measures
Slide 9: Segment Overviews
SEGMENT OVERVIEWS Willis
Slide 10: Willis North America overview
Willis North America overview Segment overview 2012 commissions and fees – by region Extensive retail platform Able to leverage industry and specialty West practice group expertise across Willis 14% network South Atlantic 17% 22% Major practice groups include: Human Capital (approximately 24% of 201
Slide 11: Willis International overview
Willis International overview Segment overview 2012 commissions and fees – by region Retail operations in Western and Eastern Europe United Kingdom Latin America Latin America 17% Australasia UK Asia Pacific 18% 7% South Africa South Africa Middle East 2% Asia Provide services to businesses locally
Slide 12: Willis Global overview
Willis Global overview Segment overview 2012 commissions and fees – by business Specialist risk management and consulting services include Reinsurance, Aerospace / Specialty, Placement and Willis Capital Inspace Marine Construction 3% Markets & Advisory (WCM&A) 8% 8% Energy 5% Finex Other 6% 6% Will
Slide 13: Willis Global overview (continued)
Willis Global overview (continued) Segment overview 2012 commissions and fees – by business Global Specialty, with strong global positions in: Aerospace – includes Inspace Aerospace / Inspace Marine Construction 8% 3% Energy Marine & Energy 8% 5% Finex Other Construction 6% 6% Financial & Executive
Slide 14: Appendix
APPENDIX Willis
Slide 15: The Willis Cause
The Willis Cause The WillisGause We thoroughly. understand our clients’ needs and their industries, We develop client solutions with the bést markets, price and terms. N @ ‘we eres cenver, quality client giok ae bas o£ Willis ss
Slide 16: 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 17: 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 18: Operating Income to Adjusted Operating Income
Important disclosures regarding Non-GAAP measures (continued) Operating Income to Adjusted Operating Income 2008 2009 2010 2011 2012 (In millions) FY FY FY FY FY Operating Income $503 $690 $753 $566 ($209) Excluding: (b) Goodwill impairment charge - - - - 492 (c) Write-off of unamortized cash retent
Slide 19: Operating Income to Adjusted Operating Income (Q1)
Important disclosures regarding Non-GAAP measures (continued) Operating Income to Adjusted Operating Income 2012 2013 (In millions) 1Q 1Q Operating Income $317 $287 Excluding: (a) Expense reduction initiative - 46 (f) Write-off of uncollectible accounts receivable and legal fees 13 - Adjusted Operat
Slide 20: Net Income to Adjusted Net Income
Important disclosures regarding Non-GAAP measures (continued) Net Income to Adjusted Net Income 2008 2009 2010 2011 2012 (In millions, except per share data) FY FY FY FY FY Net Income $302 $434 $455 $203 ($446) Excluding the following, net of tax: Goodwill impairment charge (b) - - - - 458 Write-off
Slide 21: Net Income to Adjusted Net Income (Q1)
Important disclosures regarding Non-GAAP measures (continued) Net Income to Adjusted Net Income 2012 2013 (In millions, except per share data) 1Q 1Q Net Income $225 $219 Excluding the following, net of tax: (a) Expense reduction initiative - 38 (f) Write-off of uncollectible accounts receivable and
Slide 22: Adjusted EBITDA and Debt/Adjusted EBITDA
Important disclosures regarding Non-GAAP measures (continued) Adjusted EBITDA and Debt/Adjusted EBITDA 2008 2009 2010 2011 2012 (In millions) FY FY FY FY FY Operating Income $503 $690 $753 $566 ($209) Excluding: Goodwill impairment charge (b) - - - - 492 Write-off of unamortized cash retention award
Slide 23: Adjusted EBITDA and Debt/Adjusted EBITDA (quarterly)
Important disclosures regarding Non-GAAP measures (continued) Adjusted EBITDA and Debt/Adjusted EBITDA 2012 2013 (In millions) 2Q 3Q 4Q 1Q LTM Operating Income $179 $70 ($775) $287 ($239) Excluding: (a) Expense reduction initiative 46 46 (b) Goodwill impairmentcharge 492 - 492 (c) Write-off of unamo
Slide 24: Commissions and Fees Analysis
Important disclosures regarding Non-GAAP measures (continued) Commissions and Fees Analysis Foreign Organic currency Acquisitions commissions 2013 2012 Change translation and disposals and fees growth % ($ millions) % % % Three months ended March 31, 2013 Global $383 $370 3.5 (0.4) (0.2) 4.1 North A
Slide 25: Commissions and Fees Analysis (full year)
Important disclosures regarding Non-GAAP measures (continued) Commissions and Fees Analysis Foreign Organic currency Acquisitions commissions and 2012 2011 Change translation and disposals fees growth ($ millions) % % % % 2012 Full year Global $1,124 $1,073 4.8 (1.3) - 6.1 North America 1,306 1,314
Slide 26: Notes to the GAAP to non-GAAP reconciliations
Important disclosures regarding Non-GAAP measures (continued) Notes to the GAAP to non-GAAP reconciliations (a) $46 million pre-tax charge associated with expense reduction initiative in 1Q13. (b) Impairment charge to reduce carrying value of North America segment goodwill. (c) Charge to write-off u
Slide 27: Willis Group Holdings
WILLIS GROUP HOLDINGS Fact Book First Quarter 2013 WILLIS GROUP HOLDINGS May 2013
Willis Group Holdings — Q1 2013 Earnings Presentation on 6ix