What was the impact of COVID-19 on Marsh & McLennan's first quarter 2020 results?

While the COVID-19 pandemic created significant global economic uncertainty, Marsh & McLennan reported solid financial results for the first quarter of 2020. The company successfully transitioned nearly all of its employees to a remote work environment with virtually no disruption to client service. The full extent of the pandemic's impact on future operations remains uncertain and is being monitored daily.

How did the JLT acquisition affect the company's financial performance?

The acquisition of JLT, completed in April 2019, significantly impacted the first quarter 2020 results. JLT's operations are now included in the consolidated results, contributing to revenue growth. However, the integration and restructuring efforts related to the acquisition resulted in $80 million of associated costs during the quarter. The company expects to incur approximately $700 million in total integration and restructuring charges but is on track to achieve its targeted cost savings.

What is the company's current liquidity position?

As of March 31, 2020, Marsh & McLennan maintained a strong liquidity position. The company reported $1.5 billion in cash and cash equivalents. Additionally, it had $1.0 billion outstanding under its revolving credit facility, and a new $1 billion unsecured revolving credit facility was entered into in April 2020, providing ample financial flexibility.

How did the company's different business segments perform?

The Risk and Insurance Services segment reported a revenue increase of 20% to $2.9 billion and operating income of $854 million. The Consulting segment's revenue grew 5% to $1.8 billion, with operating income at $282 million. Both segments showed underlying revenue growth, although the Consulting segment's growth was partially offset by disposals and foreign currency translation.

MRSH/MMC 10-Q Quarterly Report Q1 FY2020 — Revenue, Net Income, EPS

Summary

Marsh & McLennan Companies, Inc. reported solid financial results for the first quarter of 2020, demonstrating resilience despite the onset of the COVID-19 pandemic. Total revenue increased by 14% year-over-year to $4.7 billion, driven by underlying growth and the inclusion of JLT's operations. Net income attributable to the company rose to $754 million, or $1.48 per diluted share, up from $716 million, or $1.40 per diluted share, in the prior year period. The company highlighted its ability to adapt to the pandemic by transitioning nearly all employees to remote work with minimal disruption to client service. While acknowledging the uncertainties and potential impacts of COVID-19 on future operations, the company maintained a strong liquidity position and continued to invest in strategic acquisitions. Integration costs related to the JLT acquisition remain a significant factor impacting reported expenses, but the company is on track to achieve its targeted cost savings.

Financial Highlights

51 data points

Beta

Revenue

$4.65B

Net Income

$767.00M

0.2% Net Margin

EPS (Diluted)

$1.48

Total Assets

$31.39B

Cash & Equivalents

$1.48B

Free Cash Flow

-$756.00M

Financial Statements

Beta

Revenue	$4.65B
Operating Expenses	$3.58B
Operating Income	$1.07B
Interest Expense	$127.00M
Net Income	$767.00M
EPS (Basic)	$1.49
EPS (Diluted)	$1.48
Shares Outstanding (Basic)	505.00M
Shares Outstanding (Diluted)	510.00M

Key Highlights

1Revenue increased 14% to $4.7 billion, with underlying revenue growth of 5%.
2Net income attributable to the company rose to $754 million, resulting in diluted EPS of $1.48, an increase from $1.40 in Q1 2019.
3The company successfully transitioned nearly all employees to a remote work environment with minimal disruption to client service amid the COVID-19 pandemic.
4JLT integration and restructuring costs totaled $80 million in the quarter, with an expected total of $700 million for the combined businesses.
5Operating income for the Risk & Insurance Services segment increased 16.5% to $854 million, while the Consulting segment's operating income saw a modest increase of 1% to $282 million.
6The company ended the quarter with a strong liquidity position, including $1.5 billion in cash and cash equivalents, and $1.0 billion drawn under its revolving credit facility.
7The company reaffirmed its commitment to share repurchases, with approximately $2.4 billion remaining under its authorized program as of March 31, 2020.

MARSH & MCLENNAN COMPANIES, INC. Quarterly Report for Q1 Ended Mar 31, 2020

Summary

Financial Highlights

Key Highlights

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