01—Abstract
Summary
Summary of the 8-K filed July 25, 2024. Cited figures are marked; the original filing is the authoritative source.
On July 25, 2024, Willis Towers Watson Public Limited Company (WTW) reported second-quarter 2024 results in a press release furnished as Exhibit 99.1, alongside a supplemental slide presentation (Exhibit 99.2).
Revenue rose 5% to $2,265 milliona for the quarter (6% organic growth), while income from operations increased 49% to $212 million and net income increased 48% to $142 million. Diluted EPS was $1.36, up 55%, and adjusted diluted EPS was $2.55, up 24% from $2.05. Operating margin expanded 280 basis points to 9.4%, and adjusted operating margin reached 17.0%, up 240 basis points.
Segment performance was strong in Risk & Broking, where revenue grew 9% to $979 millionb and operating margin rose 450 basis points to 20.6%, driven by Corporate Risk & Broking. Health, Wealth & Career revenue grew 4% to $1,260 million, with operating margin up 360 basis points to 21.9%. The company spent $200 million repurchasing shares in the quarter and paid $90 million in dividends.
Free cash flow for the six months was $361 millionc, up $11 million year over year. WTW raised the low end of its 2024 adjusted operating margin target to 23.0%-23.5% and its adjusted diluted EPS target to $16.00-$17.00, and increased its expected annual transformation cost savings to approximately $450 million from approximately $425 million.
Transformation costs to achieve were raised to approximately $1.175 billiond from approximately $1.125 billion. The revenue target of $9.9+ billion and the non-cash pension income expectation of $88 million were unchanged.
02—Key points
Key Highlights
- Revenue increased 5% to $2,265 million in Q2 2024, with 6% organic growth.
- Diluted EPS was $1.36, up 55%; adjusted diluted EPS was $2.55, up 24%.
- Operating margin rose 280 basis points to 9.4%; adjusted operating margin rose 240 basis points to 17.0%.
- Risk & Broking revenue grew 9% to $979 million, with operating margin up 450 basis points to 20.6%.
- 2024 adjusted diluted EPS target raised at the low end to $16.00-$17.00; adjusted operating margin target raised to 23.0%-23.5%.
- Transformation program annual cost savings target increased to approximately $450 million from approximately $425 million.
- Repurchased $200 million of shares and paid $90 million in dividends during the quarter.
03—Questions
Frequently Asked Questions
How did WTW perform in the second quarter of 2024?
Revenue rose 5% to $2,265 million, net income increased 48% to $142 million, and diluted EPS increased 55% to $1.36. Adjusted diluted EPS was $2.55, up 24% from $2.05 a year earlier.
What changed in WTW's 2024 financial outlook?
WTW raised the low end of its adjusted operating margin target to 23.0%-23.5% from 22.5%-23.5%, and its adjusted diluted EPS target to $16.00-$17.00 from $15.40-$17.00. It also increased its transformation program annual cost savings target to approximately $450 million from approximately $425 million and its costs to achieve to approximately $1.175 billion from approximately $1.125 billion. The revenue target of $9.9+ billion was unchanged.
Which segment drove the strongest margin improvement?
Risk & Broking had the largest margin gain, with operating margin up 450 basis points to 20.6%, due to operating leverage from strong Corporate Risk & Broking revenue growth, Transformation savings and interest income. Health, Wealth & Career operating margin rose 360 basis points to 21.9%.
How much capital did WTW return to shareholders in the quarter?
WTW repurchased $200 million of its outstanding shares and paid quarterly cash dividends of $90 million, or $0.88 per common share, during the quarter ended June 30, 2024.
How is WTW's Transformation Program progressing?
WTW realized $24 million of incremental annualized savings in Q2 2024, bringing cumulative run-rate savings to $394 million since program inception. The company expects approximately $450 million of run-rate savings by year-end 2024.
04—Continue