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MARSH & MCLENNAN COMPANIES, INC. 8-K Report, Financial Results (Apr 18, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed April 18, 2024
Period End
April 18, 2024
Securities
MRSHMMC
In the record · 2016–202610-K1110-Q338-K115

MRSH filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 115 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Mar ’18Mar ’18
  2. Leadership change8-K · Mar ’20Mar ’20
  3. Leadership change8-K · Mar ’22Mar ’22
  4. Material agreement8-K · Jun ’26Jun ’26

01—Abstract

Summary

Summary of the 8-K filed April 18, 2024. Cited figures are marked; the original filing is the authoritative source.

Marsh McLennan (NYSE: MMC) reported first-quarter 2024 results on April 18, 2024, with broad-based growth.

GAAP revenue rose 9% to $6.47 billiona, and underlying revenue (excluding currency, acquisitions, and dispositions) also rose 9%. GAAP operating income grew 12% to $1.93 billion, and adjusted operating income grew 11% to $1.97 billion. Adjusted operating margin expanded about 80 basis points to 32.0%.

GAAP diluted EPS rose 14% to $2.82b, and adjusted EPS rose 14% to $2.89. Risk & Insurance Services revenue grew 9% to $4.27 billion, with Marsh up 8% on an underlying basis and Guy Carpenter up 8%. Consulting revenue also grew 9% to $2.21 billion.

Oliver Wyman led with 13% underlying growth, Mercer grew 6%, and Mercer Health grew 10% underlying. Management said it is well positioned for another good year in 2024. Investors should note that the quarterly operating cash flow of negative $781 millionc is seasonal, reflecting a $1.8 billion reduction in accrued compensation.

Capital activity included $300 milliond of share repurchases (1.5 million shares), $1 billion of new senior notes offset by $1 billion of maturing notes, and continued bolt-on M&A, including SeaTec Consulting, Querbes & Nelson, Louisiana Companies, and Vanguard's U.S. OCIO business. The results were furnished under Item 2.02 and are not considered filed for Section 18 purposes.

02—Key points

Key Highlights

  1. GAAP revenue rose 9% to $6.47 billion, with underlying revenue also up 9%, indicating growth that was not driven by currency or acquisitions.
  2. GAAP operating income increased 12% to $1.93 billion; adjusted operating income increased 11% to $1.97 billion.
  3. Adjusted operating margin reached 32.0%, up about 80 basis points from 31.2% in Q1 2023.
  4. Diluted EPS rose 14% to $2.82 (GAAP) and adjusted EPS rose 14% to $2.89.
  5. Risk & Insurance Services revenue grew 9% to $4.27 billion, and Consulting revenue grew 9% to $2.21 billion; Oliver Wyman posted 13% underlying growth.
  6. The company repurchased 1.5 million shares for $300 million and refinanced $1 billion of senior notes, with $1 billion issued and $1 billion repaid.
  7. Operating cash flow was negative $781 million, a seasonal outflow driven by the annual payment of accrued compensation, with cash and equivalents at $1.45 billion at March 31, 2024.

03—Questions

Frequently Asked Questions

  1. How strong was Marsh McLennan's organic growth in Q1 2024?

    Underlying revenue growth was 9%, the same as reported GAAP growth, which means currency and acquisitions contributed little to the increase. Marsh and Guy Carpenter each grew 8% underlying, Mercer grew 6%, and Oliver Wyman grew 13%.

  2. Did margins improve?

    Yes. Adjusted operating margin was 32.0%, up from 31.2% a year earlier, while GAAP operating margin was 29.7%. Risk & Insurance Services adjusted margin rose to 39.1% from 38.6%, and Consulting adjusted margin rose to 20.7% from 20.3%.

  3. Why is operating cash flow negative, and should investors be concerned?

    The negative $781 million operating cash flow reflects the seasonal payment of accrued compensation, which fell by $1.78 billion in the quarter. Net receivables also rose. The filing does not indicate a structural problem, but investors should evaluate full-year cash generation rather than a single quarter.

  4. What were the main capital allocation actions?

    The company repurchased $300 million of stock, paid $354 million in dividends, issued $1 billion of senior notes, repaid $1 billion of maturing notes, and completed several acquisitions for about $301 million net of cash acquired. Dividends payable of $349 million were recorded at quarter-end.

  5. Does this release change guidance or outlook?

    The release does not provide formal numerical guidance. Management said the strong start positions the company well for another good year in 2024. Forward-looking risks cited include geopolitical conditions, cyber threats, regulatory and tax changes, competition, and talent retention.

04—Continue

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