10-KPeriod: FY2021

MARSH & MCLENNAN COMPANIES, INC. Annual Report, Year Ended Dec 31, 2021

Filed February 16, 2022For Securities:MRSHMMC

Summary

Marsh & McLennan Companies, Inc. (MRSH) reported strong financial performance for the year ended December 31, 2021, with consolidated revenue reaching $19.8 billion, a 15% increase from the prior year. Both the Risk and Insurance Services segment and the Consulting segment demonstrated robust underlying revenue growth of 10%, driven by increased demand for their advisory and consulting services and a recovering global economy. The company's operating income saw a significant increase of 41% to $4.3 billion, with diluted earnings per share rising 56% to $6.13, reflecting improved operational performance and strategic initiatives. The company continues to execute its growth strategy, including strategic acquisitions, with Marsh & McLennan Agency (MMA) completing several transactions and Marsh India seeing increased ownership. Marsh McLennan also demonstrated a commitment to returning value to shareholders through $1.2 billion in share repurchases during the year and consistent dividend payments. The company's robust financial health is supported by a strong balance sheet and consistent operating cash flow generation.

Financial Highlights

51 data points
Beta

Revenue

$19.82B

Net Income

$3.14B

15.9% Net Margin

EPS (Diluted)

$6.13

Total Assets

$44.01B

Cash & Equivalents

$1.75B

Free Cash Flow

$3.11B

Financial Statements
Beta
Revenue$19.82B
Operating Expenses$15.51B
Operating Income$4.31B
Interest Expense$444.00M
Net Income$3.14B
EPS (Basic)$6.20
EPS (Diluted)$6.13
Shares Outstanding (Basic)507.00M
Shares Outstanding (Diluted)513.00M

Key Highlights

  • 1Consolidated revenue increased by 15% to $19.8 billion in 2021, driven by strong performance in both Risk and Insurance Services (17% increase) and Consulting (12% increase) segments.
  • 2Underlying revenue growth for both segments was 10%, reflecting robust demand for services and a positive economic environment.
  • 3Operating income surged by 41% to $4.3 billion, indicating improved operational efficiency and profitability.
  • 4Diluted earnings per share (EPS) rose significantly by 56% to $6.13, outpacing revenue growth.
  • 5The company actively managed its capital structure, repurchasing approximately $1.2 billion in shares and paying $1.0 billion in dividends.
  • 6Strategic acquisitions, such as PayneWest Insurance by MMA, were completed to expand market reach and service offerings.
  • 7The company maintained strong liquidity, with $1.75 billion in cash and cash equivalents at year-end.

Frequently Asked Questions

Revenue growth was primarily driven by strong demand for advice and services across both the Risk and Insurance Services and Consulting segments, fueled by an improving global economic outlook. Specific factors included new business wins, solid client retention, and favorable market pricing within the insurance sector.

Marsh McLennan demonstrated a balanced approach to capital management. They repurchased approximately 7.9 million shares for $1.2 billion during 2021, indicating confidence in their financial position. Additionally, the company paid out $1.0 billion in dividends to shareholders, signaling a commitment to consistent returns.

The company is nearing completion of the integration of JLT, with remaining costs expected in 2022. They continue to pursue strategic acquisitions to enhance their market position and service capabilities, as evidenced by the multiple acquisitions completed in 2021 across various business units like MMA.

Key risks include cybersecurity threats and data protection failures, potential non-compliance with evolving privacy and data security laws (like GDPR and CCPA), technological disruptions, competition, reliance on third-party providers, and macroeconomic uncertainties. The company also highlights risks related to its defined benefit pension plan obligations and foreign currency fluctuations due to its significant international operations.