Willis Towers Watson Public Limited Company · NASDAQ:WTW
Willis Towers Watson Public — Willis Group Holdings — Q1 2014 Earnings Presentation
28 slides from Willis Towers Watson Public's earnings presentation, May 20, 2014
Slide 1: Fact Book First Quarter 2014
Exhibit 99.1 Fact Book First Quarter 2014 WILLIS GROUP HOLDINGS May 2014
Slide 2: 2014 financial reporting changes (effective January 1)
2014 financial reporting changes (effective January 1) Operational changes: Moved Willis UK from International to Global Moved Mexico from North America to International Moved Facultative Reinsurance and Captives Consulting from North America to Global Allocation changes: Amortization of intangibles
Slide 3: Global risk adviser and broker
Global risk adviser and broker Client Insurer Globally diverse Adviser Broker Placed ~$50 billion client base in >150 in premium in 2013 countries Broad P&C Specialty More than 2,500 Segmented: Large Human Capital & Benefits carrier corporates, small Reinsurance relationships and middle market Capit
Slide 4: Global risk advisor and broker
Global risk advisor and broker Global North America International 2013 revenue - $3.7 billion With roots dating to 1828, Willis operates today on every continent, with approximately 18,000 employees in over 400 offices Across geographies, industries and specialties, Willis provides its local and mul
Slide 5: 1Q 2014 Commissions and fees growth
1Q 2014 Commissions and fees growth 1Q 2014 Reported Organic North America 3.9% 4.7% International 5.7% 7.2% Global 3.5% 2.0% Group 4.2% 4.2% North America – Organic 4.7% Growth well distributed across geographic regions and in most product and industry practices. Construction up low teens and Human
Slide 6: Q1 2014 summary financial results
Q1 2014 summary financial results Q1 2014 Q1 2013 Adjusted operating income $ 326 m $ 327 m Adjusted EPS $1.36 $1.46 Adjusted tax rate 22% 19% Average diluted shares outstanding 182 m 176 m Q1 2014 versus Q1 2013: FX movements : $0.03 per diluted share negative impact Higher tax rate : $0.05 per dil
Slide 7: Q1 2014 operating margins
Q1 2014 operating margins Q1 2014 Q1 2013 Change FX Impact Change (ex FX) North America 25.9% 23.0% 290 bps - 290 bps International 29.9% 29.3% 60bps - 60 bps Global 40.6% 43.7% (310) bps 80 bps (230) bps Group (adjusted) 29.7% 31.1% (140) bps 50 bps (90) bps | 7 See important disclosures regarding
Slide 8: Organic commissions and fees growth
Organic commissions and fees growth | 8 See important disclosures regarding non-GAAP measures starting on page 18
Slide 9: Strong cash flow from operations
Strong cash flow from operations ($ millions) 2013 corporate/non-operating uses of cash Dividends $193 million Capex $112 million M&A expenditures of ~$34 million $36 million increase in cash flow from operations in 2013 $734 million of cash and cash equivalents at March 31, 2014 | 9
Slide 10: Leverage ratios
Leverage ratios Adjusted LTM EBITDA $854 million as of March 31, 2014 Debt outstanding $2.3 billion as at March 31, 2014 Debt / Adjusted EBITDA | 10 See important disclosures regarding non-GAAP measures starting on page 18
Slide 11: Segment Overviews
SEGMENT OVERVIEWS Willis
Slide 12: Willis North America overview
Willis North America overview Segment 2013 commissions and fees – by region • More than 5,000 associates delivering West industry and product specific solutions to 12% South our clients Atlantic 11% 15% • Over 100 locations, broad geographic CAPPPS (1) reach with ability to connect with Willis 11% n
Slide 13: Willis International overview
Willis International overview Segment 2013 commissions and fees – by region • Approximately 6,000 associates in over 40 Latin America countries 20% • Offices designed to grow business locally Australasia around the world, making use of the skills, 9% industry knowledge and expertise available South
Slide 14: Willis Global overview
Willis Global overview Segment 2013 commissions and fees – by business • Reinsurance, Specialty Insurance and Global Insurance Capital Markets businesses 49% • Approximately 4,000 associates • Clients around the globe Facultative 4% Risk Willis Re Reinsurance 2% 40% Willis Capital Other Markets • On
Slide 15: Willis Global overview (continued)
Willis Global overview (continued) Global Insurance 2013 commissions and fees – by business • Combination of Global Specialty business Global Insurance and UK retail business, creating a 49% seamless client proposition • Strong global positions in: • Transport – includes aerospace, Facultative inspa
Slide 16: Appendix
APPENDIX Willis
Slide 17: 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 18: 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 19: Operating income to adjusted operating income
Important disclosures regarding non-GAAP measures (continued) Operating income (loss) to adjusted operating income FY FY FY 2011 2012 2013 (In millions) Operating income (loss) $571 ($225) $663 Excluding: (a) Fees related to extinguishment of debt - - 1 (b) Expense reduction initiative - - 46 (c) Go
Slide 20: Operating income to adjusted operating income (quarterly)
Important disclosures regarding non-GAAP measures (continued) Operating income to adjusted operating income 2013 2014 (In millions) 1Q 2Q 3Q 4Q FY 1Q Operating income $281 $167 $70 $145 $663 $326 Excluding: Fees related to the extinguishment - - 1 - 1 - of debt (a) Expense reduction initiative (b) 4
Slide 21: Net income to adjusted net income
Important disclosures regarding non-GAAP measures (continued) Net income (loss) to adjusted net income FY FY FY 2011 2012 2013 (In millions, except per share data) Net income (loss) $203 ($446) $365 Excluding the following, net of tax: (a) Fees related to the extinguishment of debt - - 1 Debt exting
Slide 22: Net income to adjusted net income (quarterly)
Important disclosures regarding non-GAAP measures (continued) Net income (loss) to adjusted net income 2013 2014 (In millions, except per share data) 1Q 2Q 3Q 4Q FY 1Q Net income (loss) from continuing operations $219 $105 ($27) $68 $365 $246 Excluding the following, net of tax: (a) - - 1 - 1 - Fees
Slide 23: Adjusted EBITDA and Debt/Adjusted EBITDA
Important disclosures regarding non-GAAP measures (continued) Adjusted EBITDA and Debt/Adjusted EBITDA FY FY FY 2011 2012 2013 (In millions) Operating income (loss) $571 ($225) $663 Excluding: (a) Fees related to the extinguishment of debt - - 1 (b) Expense reduction initiative - - 46 (c) Goodwill i
Slide 24: Adjusted EBITDA and Debt/Adjusted EBITDA (quarterly)
Important disclosures regarding non-GAAP measures (continued) Adjusted EBITDA and Debt/Adjusted EBITDA 2013 2014 (In millions) 1Q 2Q 3Q 4Q FY 1Q LTM Operating income $281 $167 $70 $145 $663 $326 $708 Excluding: (a) - - 1 - 1 - 1 Fees related to extinguishment of debt (b) - - - - Expense reduction in
Slide 25: Commissions and fees analysis
Important disclosures regarding non-GAAP measures (continued) Commissions and fees analysis Foreign Organic currency Acquisitions commissions 2014 2013 Change translation and disposals and fees growth % ($ millions) % % % Three months ended March 31, 2014 North America $369 $355 3.9 (0.1) (0.7) 4.7
Slide 26: Commissions and fees analysis (full years)
Important disclosures regarding non-GAAP measures (continued) Commissions and fees analysis Foreign Acquisitions Organic currency and commissions 2013 2012 Change translation disposals and fees growth ($ millions) % % % % 2013 Full year North America $1,349 $1,281 5.3 (0.1) 0.6 4.8 International 926
Slide 27: Non-GAAP footnotes
Important disclosures regarding non-GAAP measures (continued) (a) In August 2013, Willis bought back $521 million of outstanding 2015, 2017 and 2019 senior notes through a tender offer. In conjunction with this activity, the Company recorded a loss on debt extinguishment of $60 million. Willis also
Slide 28: Willis Group Holdings Fact Book First Quarter 2014
Fact Book First Quarter 2014 WILLIS GROUP HOLDINGS May 2014
Willis Group Holdings — Q1 2014 Earnings Presentation on 6ix