10-QPeriod: Q1 FY2022

MARSH & MCLENNAN COMPANIES, INC. Quarterly Report for Q1 Ended Mar 31, 2022

Filed April 21, 2022For Securities:MRSHMMC

Summary

Marsh & McLennan Companies, Inc. (MRSH) reported a solid first quarter for 2022, with consolidated revenue increasing by 9% year-over-year to $5.5 billion, driven by robust performance in both its Risk & Insurance Services and Consulting segments. The company saw underlying revenue growth of 10% driven by strong client demand for its advisory and solutions. Net income attributable to the company rose to $1.07 billion, or $2.10 per diluted share, up from $983 million, or $1.91 per diluted share, in the prior year's quarter. Despite a $52 million loss related to the deconsolidation of its Russian businesses, the company demonstrated resilience. Marsh McLennan also continued to return capital to shareholders through share repurchases, amounting to $500 million in the first quarter, and authorized an additional $5 billion in buybacks. The company maintains a strong liquidity position with significant available credit facilities and a stable outlook from credit rating agencies.

Financial Highlights

49 data points
Beta

Revenue

$5.55B

Net Income

$1.07B

19.3% Net Margin

EPS (Diluted)

$2.10

Total Assets

$33.69B

Cash & Equivalents

$772.00M

Free Cash Flow

-$824.00M

Financial Statements
Beta
Revenue$5.55B
Operating Expenses$4.10B
Operating Income$1.45B
Interest Expense$110.00M
Net Income$1.07B
EPS (Basic)$2.13
EPS (Diluted)$2.10
Shares Outstanding (Basic)503.00M
Shares Outstanding (Diluted)509.00M

Key Highlights

  • 1Consolidated revenue increased 9% to $5.5 billion, with underlying revenue growth of 10%, indicating strong client demand.
  • 2Net income attributable to the Company grew to $1.07 billion, leading to a diluted EPS of $2.10, a 10% increase year-over-year.
  • 3Risk and Insurance Services segment revenue increased 10% to $3.5 billion, while Consulting segment revenue rose 7% to $2.0 billion.
  • 4The company recorded a $52 million loss related to the deconsolidation of its Russian businesses due to geopolitical events.
  • 5Operating expenses increased 10% primarily due to higher headcount and incentive compensation.
  • 6The company repurchased $500 million of its common stock in Q1 2022 and announced an additional $5 billion share repurchase authorization.
  • 7Interest expense decreased to $110 million, reflecting lower average debt levels.

Frequently Asked Questions

Marsh McLennan recorded a loss of $52 million in the first quarter of 2022 related to the deconsolidation of its Russian businesses. The company announced its decision to exit its operations in Russia due to evolving sanctions and counter-sanctions, which impacted its ability to effectively manage these businesses. This loss was partially offset by strong revenue growth in other segments.

The company experienced strong revenue growth across both its Risk & Insurance Services (up 10%) and Consulting (up 7%) segments, driven by continued demand for its advisory and risk management solutions. Underlying revenue growth was particularly strong, indicating healthy organic performance. The company anticipates continued demand for its services amid an increasingly complex global environment.

The company actively returned capital to shareholders during the first quarter of 2022 by repurchasing $500 million of its common stock. Furthermore, its Board of Directors authorized an additional $5 billion in share repurchases, demonstrating confidence in its financial position and commitment to shareholder value. The company also paid dividends totaling $272 million in the quarter.

Marsh McLennan maintained a strong liquidity position with no borrowings under its significant $2.8 billion revolving credit facility as of March 31, 2022. Interest expense decreased to $110 million compared to the prior year quarter, reflecting lower average debt levels. The company has a stable outlook from major credit rating agencies, indicating a sound financial footing.