What is the current status of Aon's proposed combination with Willis Towers Watson (WTW)?

Aon and WTW entered into a Business Combination Agreement on March 9, 2020. The transaction is subject to Irish Takeover Rules and regulatory approvals, including from the U.S. Department of Justice and the European Commission. The parties are working towards closing the combination in the first half of 2021, subject to these approvals and customary closing conditions.

How did Aon's revenue performance vary across its service lines in Q1 2021?

Aon reported revenue growth across most service lines. Commercial Risk Solutions saw a 12% increase, Reinsurance Solutions grew by 9%, Retirement Solutions by 9%, and Health Solutions by 7%. Data & Analytic Services revenue increased by 6%, although organic revenue for this segment saw a slight decline of 2% primarily due to a decrease in the travel and events practice.

What is Aon's approach to managing market risks, such as foreign exchange and interest rates?

Aon is exposed to foreign exchange and interest rate risks. The company uses derivative instruments, primarily forward contracts and options, to manage these exposures. These are used to hedge against fluctuations in foreign currency rates impacting cash flows and to manage interest rate risk on fiduciary investment income. Aon states that these derivatives are not used for trading or speculative purposes.

How is Aon managing its liquidity and financial condition amidst ongoing economic uncertainty?

Aon believes its balance sheet and strong cash flow provide adequate liquidity. Primary sources include cash from operations, cash reserves, and debt capacity. Uses of liquidity cover operating expenses, investments, capital expenditures, acquisitions, and dividends. The company has taken proactive steps, such as early repayment of debt and reduced discretionary spending, to enhance liquidity. Aon expects cash from operations and available credit facilities to meet its needs for the next 12 months and beyond.

AON 10-Q Quarterly Report Q1 FY2021 — Revenue, Net Income, EPS

Summary

Aon plc reported strong financial results for the first quarter of 2021, with total revenue increasing by 10% to $3.5 billion, driven by robust organic revenue growth of 6% and a positive foreign currency translation impact. Net income rose 18% to $933 million, leading to a diluted earnings per share of $4.00, up from $3.29 in the prior year period. The company also demonstrated significant improvement in cash flow from operations, which increased by 66% to $561 million, contributing to a substantial rise in free cash flow by 91% to $532 million. The company is continuing to advance its proposed business combination with Willis Towers Watson (WTW), which remains subject to regulatory approvals. Despite ongoing integration efforts and potential regulatory hurdles, Aon highlights its solid financial position and operational execution. Management is focused on delivering value through its core businesses and strategic initiatives, aiming to strengthen the firm's capabilities and efficiency.

Financial Highlights

50 data points

Beta

Revenue

$3.52B

Net Income

$913.00M

0.3% Net Margin

EPS (Diluted)

$4.00

Total Assets

$32.17B

Cash & Equivalents

$822.00M

Free Cash Flow

$532.00M

Financial Statements

Beta

Revenue	$3.52B
Operating Expenses	$2.28B
Operating Income	$1.25B
Interest Expense	$79.00M
Net Income	$913.00M
EPS (Basic)	$4.02
EPS (Diluted)	$4.00
Shares Outstanding (Basic)	227.10M
Shares Outstanding (Diluted)	228.10M

Key Highlights

1Total revenue increased by 10% to $3.5 billion in Q1 2021, driven by 6% organic growth and a 4% favorable foreign currency translation.
2Net income grew by 18% to $933 million, resulting in diluted EPS of $4.00, an increase from $3.29 in Q1 2020.
3Operating income improved significantly, with operating margin expanding to 35.3% from 32.1% year-over-year.
4Cash flow from operating activities saw a substantial increase of 66% to $561 million, indicating strong operational performance.
5Free cash flow increased by 91% to $532 million, demonstrating enhanced cash-generating capabilities.
6The company made progress on its proposed business combination with Willis Towers Watson, with efforts focused on obtaining regulatory approvals.
7Share repurchases continued, with $50 million allocated in Q1 2021, reflecting a commitment to returning capital to shareholders.

Aon plc Quarterly Report for Q1 Ended Mar 31, 2021

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions