WTW has published its financial results for the quarter ended June 30, 2023.
Here’s how the global brokerage performed in the second quarter:
|
Metric |
Q2 2023 |
Q2 2022 |
|---|---|---|
|
Revenue |
US$2.16 billion |
US$2.03 billion |
|
Income from operations |
US$142 million |
US$137 million |
|
Adjusted operating income |
US$315 million |
US$314 million |
|
Net income |
US$96 million |
US$114 million |
|
Adjusted net income |
US$219 million |
US$260 million |
Of the group’s segment operating income, US$145 million came from the risk & broking (R&B) segment; US$222 million from health, wealth & career (HWC). The HWC segment saw a higher operating income in the period, while R&B posted a 14% decline.
WTW noted in a release: “Operating margins in the R&B segment decreased 360 basis points from the prior-year second quarter to 16.1%, primarily due to the run-rate impact of investments in talent who are continuing to ramp up in revenue production, higher travel and expense-related items due to the increased volume of client-based travel, and headwinds from the impact of book-of-business settlement revenue in the prior year.”
Meanwhile WTW expects to deliver adjusted operating margin expansion for the full year, as well as mid-single digit organic revenue growth. Additionally, the company is increasing its 2024 target of total annualized run-rate savings to US$380 million, as a result of the continued success of WTW’s transformation plan.
Chief executive Carl Hess commented: “As our strong organic revenue growth demonstrates, our strategic initiatives continue to gain traction in the marketplace, highlighting the value of our investments in talent and technology. However, headwinds from prior-year book sales, inflationary conditions, and the costs of our investments negatively impacted our margins and earnings this quarter.
“We have reduced our 2024 adjusted operating margin and adjusted EPS (earnings per share) targets to account for these short-term trends, as well as our ongoing strategic investments and the unfavourable pension income dynamics we have previously noted. We believe we are well-positioned to resume steady growth in margins, earnings, and free cash flow from current levels.”
Earlier this month, WTW appointed Lucy Clarke and R&B head Adam Garrard as president and chair, respectively, of risk & broking. Clarke is joining next year from Marsh, with Garrard assuming his new role then.
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