10-QPeriod: Q2 FY2021

Aon plc Quarterly Report for Q2 Ended Jun 30, 2021

Filed July 30, 2021For Securities:AON

Summary

Aon plc's Q2 2021 results show solid top-line growth, with total revenue increasing 16% year-over-year to $2.9 billion, driven by an 11% organic revenue growth. This growth was broad-based across its key segments, including Commercial Risk Solutions, Reinsurance Solutions, Retirement Solutions, Health Solutions, and Data & Analytic Services. Despite revenue growth, net income attributable to Aon shareholders for the quarter decreased by 4% to $379 million, or $1.66 per diluted share, compared to the prior year. This was influenced by increased operating expenses, including costs related to the terminated combination with Willis Towers Watson (WTW) and a $1 billion regulatory termination fee paid in July 2021. For the first six months of 2021, however, net income attributable to shareholders increased by 10% to $1,292 million, or $5.66 per diluted share, demonstrating resilience over a longer period.

Financial Highlights

50 data points
Beta

Revenue

$2.89B

Net Income

$379.00M

13.1% Net Margin

EPS (Diluted)

$1.66

Total Assets

$34.58B

Cash & Equivalents

$1.09B

Free Cash Flow

$743.00M

Financial Statements
Beta
Revenue$2.89B
Operating Expenses$2.21B
Operating Income$672.00M
Interest Expense$78.00M
Net Income$379.00M
EPS (Basic)$1.67
EPS (Diluted)$1.66
Shares Outstanding (Basic)227.00M
Shares Outstanding (Diluted)228.00M

Key Highlights

  • 1Total revenue increased by 16% to $2.9 billion in Q2 2021, driven by 11% organic revenue growth.
  • 2Operating income increased by 13% year-over-year for the quarter, reflecting strong revenue growth.
  • 3Net income attributable to Aon shareholders decreased by 4% to $379 million ($1.66/share) in Q2 2021, impacted by higher operating expenses and transaction costs.
  • 4For the first six months of 2021, net income attributable to Aon shareholders increased by 10% to $1,292 million ($5.66/share).
  • 5The company paid a $1 billion Regulatory Termination Fee to Willis Towers Watson in July 2021, following the termination of their business combination agreement.
  • 6Free cash flow for the first six months of 2021 increased by 13% to $1.275 billion.
  • 7Aon maintained strong liquidity with $1.09 billion in cash and cash equivalents and $1.65 billion in available credit facilities at June 30, 2021.

Frequently Asked Questions

The primary driver of the revenue increase in Q2 2021 was strong organic revenue growth of 11%, supplemented by a 4% favorable impact from foreign currency translation and a 1% favorable impact from acquisitions, divestitures, and other.

Net income attributable to Aon shareholders decreased in Q2 2021 primarily due to an increase in operating expenses. This included higher compensation and benefits, information technology costs, and other general expenses. Notably, transaction costs related to the terminated combination with Willis Towers Watson and a $1 billion regulatory termination fee paid in July 2021 also impacted the results.

The terminated business combination with Willis Towers Watson (WTW) resulted in a $1 billion Regulatory Termination Fee paid by Aon in July 2021. This fee, along with associated transaction costs incurred during the quarter, increased operating expenses and negatively impacted net income for the period. Certain divestiture agreements related to the combination were also terminated.

Aon maintained a strong liquidity position with $1.09 billion in cash and cash equivalents and $289 million in short-term investments. The company also had $1.65 billion in available credit under its committed credit facilities, indicating ample resources to meet its financial obligations and pursue strategic initiatives.