How did Marsh & McLennan perform in the second quarter of 2024?

The company delivered solid results: GAAP revenue grew 6% to $6.2 billion, operating income grew 13% to $1.6 billion, and diluted GAAP EPS rose 10% to $2.27. Adjusted EPS rose 10% to $2.41. Growth was broad-based across Marsh, Guy Carpenter, Mercer, and Oliver Wyman, with the strongest segment growth in Guy Carpenter and Mercer Health.

Is the company increasing its dividend, and what are the capital return plans?

Yes. The board raised the quarterly dividend 15% to $0.815 per share, payable with the third-quarter dividend on August 15, 2024. In Q2 the company repurchased 1.5 million shares for $300 million, bringing first-half buybacks to 3.0 million shares for $600 million.

Which business segments drove growth, and where were the weak spots?

Risk & Insurance Services was the primary driver, with underlying revenue up 7% in Q2, led by Guy Carpenter (up 11% underlying) and Marsh (up 7%). Consulting grew 4% underlying, with Mercer Health up 9%. Weaker areas included Mercer Wealth, up only 3% underlying, and Oliver Wyman, which slowed to 3% underlying growth in Q2 after 8% growth in the first half.

Does the filing indicate any concerns about cash flow or balance sheet strength?

First-half operating cash flow declined to $434 million from $665 million, mainly due to higher accrued compensation payments and increased net receivables, which are typical seasonal and timing factors but worth monitoring. Total debt was about $13.5 billion at June 30, 2024, with the company repaying $600 million of maturing notes, and total equity rose to $13.6 billion.

Is this 8-K a filed or furnished document, and are the figures audited?

The earnings press release is attached as Exhibit 99.1 and is 'deemed furnished, not filed' for purposes of Section 18 of the Securities Exchange Act of 1934. The financial statements and supplemental information in the release are unaudited. Investors should review the company's Form 10-Q for the quarter for the formally reviewed financial statements.

MRSH/MMC 8-K: Earnings & Results

01—Abstract

Summary

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

Marsh & McLennan (MMC, which the filing and user label as MRSH) reported second quarter 2024 results on July 18, 2024, showing continued broad-based growth.

GAAP revenue rose 6% to $6.2 billion^a (6% underlying), operating income rose 13% to $1.6 billion, and adjusted operating income rose 11% to $1.7 billion. Diluted GAAP EPS grew 10% to $2.27 and adjusted EPS grew 10% to $2.41, with adjusted operating margin expanding about 130 basis points to 29.0%. For the first half, GAAP EPS rose 12% to $5.08 and adjusted EPS rose 12% to $5.30.

Segment performance was mixed but generally solid. Risk & Insurance Services grew underlying revenue 7%^b in the quarter, led by Marsh (7% underlying) and Guy Carpenter (11% underlying). Consulting grew underlying revenue 4%, with Mercer's Health business up 9% and Oliver Wyman's underlying growth slowing to 3% in the quarter, though it remained at 8% for the first half.

Mercer Wealth grew only 3% underlying, a relative soft spot. Capital allocation was shareholder-friendly: the company repurchased $300 million^c of stock in the quarter ($600 million year to date), repaid $600 million of matured senior notes, completed the Fisher Brown Bottrell acquisition, and the board raised the quarterly dividend 15% to $0.815 per share.

Investors should note that the filing is a furnished (not filed) 8-K attaching the earnings press release, and the figures are unaudited. Free cash flow in the first half was weaker than earnings, with operating cash flow of $434 million^d versus $665 million a year earlier, largely reflecting seasonal accrued compensation payments and receivables growth.

02—Key points

Key Highlights

GAAP revenue rose 6% to $6.2 billion in Q2 2024; underlying revenue also grew 6%, with foreign exchange reducing reported growth by about 1 point.
Operating income rose 13% to $1.64 billion and adjusted operating income rose 11% to $1.72 billion; adjusted operating margin expanded roughly 130 bps to 29.0%.
Diluted GAAP EPS rose 10% to $2.27 and adjusted EPS rose 10% to $2.41 in Q2; first-half adjusted EPS rose 12% to $5.30.
Risk & Insurance Services underlying revenue grew 7%, with Marsh up 7% and Guy Carpenter up 11%; Consulting underlying revenue grew 4%, with Mercer Health up 9% and Oliver Wyman up 3%.
Quarterly dividend increased 15% to $0.815 per share, and the company repurchased $300 million of stock in Q2 ($600 million year to date).
First-half operating cash flow fell to $434 million from $665 million, driven by higher accrued compensation payments and receivables growth, a notable offset to strong earnings.
The company repaid $600 million of matured senior notes in Q2 and completed the acquisition of Fisher Brown Bottrell Insurance, one of the largest bank-affiliated insurance agencies in the U.S.

03—Questions

Frequently Asked Questions

How did Marsh & McLennan perform in the second quarter of 2024?
The company delivered solid results: GAAP revenue grew 6% to $6.2 billion, operating income grew 13% to $1.6 billion, and diluted GAAP EPS rose 10% to $2.27. Adjusted EPS rose 10% to $2.41. Growth was broad-based across Marsh, Guy Carpenter, Mercer, and Oliver Wyman, with the strongest segment growth in Guy Carpenter and Mercer Health.
Is the company increasing its dividend, and what are the capital return plans?
Yes. The board raised the quarterly dividend 15% to $0.815 per share, payable with the third-quarter dividend on August 15, 2024. In Q2 the company repurchased 1.5 million shares for $300 million, bringing first-half buybacks to 3.0 million shares for $600 million.
Which business segments drove growth, and where were the weak spots?
Risk & Insurance Services was the primary driver, with underlying revenue up 7% in Q2, led by Guy Carpenter (up 11% underlying) and Marsh (up 7%). Consulting grew 4% underlying, with Mercer Health up 9%. Weaker areas included Mercer Wealth, up only 3% underlying, and Oliver Wyman, which slowed to 3% underlying growth in Q2 after 8% growth in the first half.
Does the filing indicate any concerns about cash flow or balance sheet strength?
First-half operating cash flow declined to $434 million from $665 million, mainly due to higher accrued compensation payments and increased net receivables, which are typical seasonal and timing factors but worth monitoring. Total debt was about $13.5 billion at June 30, 2024, with the company repaying $600 million of maturing notes, and total equity rose to $13.6 billion.
Is this 8-K a filed or furnished document, and are the figures audited?
The earnings press release is attached as Exhibit 99.1 and is 'deemed furnished, not filed' for purposes of Section 18 of the Securities Exchange Act of 1934. The financial statements and supplemental information in the release are unaudited. Investors should review the company's Form 10-Q for the quarter for the formally reviewed financial statements.

04—Continue

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