10-QPeriod: Q1 FY2022

Aon plc Quarterly Report for Q1 Ended Mar 31, 2022

Filed April 29, 2022For Securities:AON

Summary

Aon plc reported solid financial results for the first quarter of 2022, with total revenue increasing by 4% to $3.7 billion year-over-year. This growth was primarily driven by an 8% organic revenue increase across its key segments: Commercial Risk Solutions, Reinsurance Solutions, and Health Solutions. Net income attributable to Aon shareholders rose to $1.023 billion, or $4.73 per diluted share, compared to $913 million, or $4.00 per diluted share, in the prior year period. The company demonstrated strong operational efficiency, with an operating margin of 37.2%, an improvement from 35.3% in Q1 2021, driven by organic revenue growth and effective expense management. Despite a decrease in cash provided by operating activities to $463 million, largely due to higher incentive compensation payments, Aon maintained robust liquidity with ample credit facilities and a strong balance sheet. The company also continued its capital return program, repurchasing approximately $828 million in shares during the quarter, reflecting confidence in its financial position and future prospects.

Financial Highlights

51 data points
Beta

Revenue

$3.67B

Net Income

$1.02B

27.9% Net Margin

EPS (Diluted)

$4.73

Total Assets

$33.49B

Cash & Equivalents

$595.00M

Free Cash Flow

$440.00M

Financial Statements
Beta
Revenue$3.67B
Operating Expenses$2.30B
Operating Income$1.37B
Interest Expense$91.00M
Net Income$1.02B
EPS (Basic)$4.75
EPS (Diluted)$4.73
Shares Outstanding (Basic)215.30M
Shares Outstanding (Diluted)216.40M

Key Highlights

  • 1Total revenue increased by 4% to $3.7 billion, driven by 8% organic revenue growth.
  • 2Net income attributable to Aon shareholders rose to $1.023 billion, with diluted EPS increasing to $4.73 from $4.00.
  • 3Operating income grew to $1.367 billion, resulting in an improved operating margin of 37.2% from 35.3% in the prior year.
  • 4Commercial Risk Solutions, Reinsurance Solutions, and Health Solutions all showed strong organic revenue growth.
  • 5Cash provided by operating activities decreased by 17% to $463 million, primarily due to higher incentive compensation payments.
  • 6The company significantly increased share repurchases to $828 million in Q1 2022, up from $50 million in Q1 2021.
  • 7Aon maintained a strong liquidity position with $1.75 billion in available credit facilities and no borrowings under these facilities at quarter-end.

Frequently Asked Questions

Aon plc reported a 4% increase in total revenue for the first quarter of 2022, reaching $3.7 billion compared to $3.5 billion in the same period of 2021. This growth was primarily driven by an 8% organic revenue increase, underscoring the company's ability to generate growth from its core operations.

Aon demonstrated improved profitability, with Net income attributable to Aon shareholders increasing by 12% to $1.023 billion. Diluted earnings per share rose to $4.73 from $4.00 in the prior year's quarter. The operating margin also saw an improvement, reaching 37.2% compared to 35.3% in Q1 2021, reflecting strong revenue growth and effective cost management.

Aon continued its aggressive share repurchase program, buying back approximately $828 million of its stock in the first quarter of 2022, a substantial increase from $50 million in the prior year period. This, along with ongoing dividend payments, demonstrates a commitment to returning capital to shareholders.

Aon maintains a strong liquidity position with $7.3 billion in cash, cash equivalents, and funds held on behalf of clients as of March 31, 2022. The company has access to $1.75 billion in committed credit facilities and had no borrowings under these facilities at the end of the quarter. Management believes its current liquidity, cash flow generation, and access to capital markets are sufficient to meet its operating needs, debt obligations, and strategic investments.