Aon Plc · NYSE:AON
Aon — FY2013 Earnings Presentation
19 slides from Aon's earnings presentation, Jan 31, 2014
Slide 1: Fourth Quarter and Full Year 2013 Results
Aon plc Fourth Quarter and Full Year 2013 Results January 31, 2014
Slide 2: Presenters: Greg Case and Christa Davies
Greg Case Chief Executive Officer Christa Davies Chief Financial Officer 1
Slide 3: Safe Harbor Statement
Safe Harbor Statement This communication contains certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future which are forward- looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Thes
Slide 4: Key Metrics – Positive Performance Across All Four Metrics
Key Metrics* – Positive Performance Across All Four Metrics Q4 2013 Q4 Organic Revenue 1. Organic Revenue1 +4% +3% Solid growth with organic revenue of +3% in Risk Solutions and +8% in HR Solutions Prior Year +4% +4% Delivered strong growth of +11% in Outsourcing in HR Solutions Q4 Operating Mar
Slide 5: Organic Revenue – Strong Growth in HR Solutions
Organic Revenue¹ – Strong Growth in HR Solutions Q4 2013 Q4 Americas: Strong growth in Latin America and Risk Solutions record new business in US Retail Americas 4% 5% International: Strong growth across emerging International 2% 2% markets, New Zealand and Asia, partially offset by a decline in
Slide 6: Investment in the Business – Positioned for Long-Term Growth
Investment in the Business – Positioned for Long-Term Growth “We believe Aon is in a unique position. Solid long-term operating performance, combined with expense discipline and strong cash flow, continues to enable substantial investment in colleagues and capabilities to better serve clients.” Risk
Slide 7: EPS – Delivered Double-Digit Earnings Growth
EPS* – Delivered Double-Digit Earnings Growth “Our fourth quarter and full year results reflect double-digit earnings growth highlighted by strong operating performance and effective capital management. We finished 2013 having made significant investments across the firm to further position our indu
Slide 8: Operating Margins – Progress Against Long-Term Targets
Operating Margins* – Progress Against Long-Term Targets ($ millions) Q4 2013 Risk Solutions Q4 Positive Impact Operating Income1 $484 $1,749 Organic revenue growth of +3% Y-o-Y change +2% +6% Restructuring savings of ~$9 million Negative Impact Operating Margin1 23.6% 22.5% Unfavorable impact
Slide 9: Long-Term Operating Margin Targets
Long-Term Operating Margin Targets 26% Risk Solutions* 1. Deliver $30 million of remaining restructuring savings by the end of 2014 22.5% 22.4% 2. Continued rollout of Revenue Engine 21.6% 21.6% 21.7% internationally 3. Aon Broking and GRIP related initiatives 18.2% 18.7% 4. Increases in short-term
Slide 10: Unallocated Expenses & Non-Operating Segment Information
Unallocated Expenses & Non-Operating Segment Information ($ millions) Comments Quarterly Unallocated expenses reflects an increase in Q4’12 Q4’13 Guidance certain long-term employee incentive compensation programs Unallocated Expenses1 ($48) ($54) ($45) Interest expense reflects an increase in c
Slide 11: Solid Balance Sheet and Free Cash Flow Generation
Solid Balance Sheet and Free Cash Flow Generation Balance Sheet Cash Flow from Operations ($ mil) ($ mil) Q4 and 2013 reflects $1,633 significantly improved Sept 30, Dec 31, $649 working capital 2013 2013 $1,419 $552 performance Cash $369 $477 Includes a $70 million decrease in pension contribut
Slide 12: Significantly Increasing Free Cash Flow
Significantly Increasing Free Cash Flow* Aon has the opportunity to double free cash flow from 2012 over the next three to five years driven by three key areas: 1. Operational improvement as the firm makes progress towards its long-term operating margin targets 2. Declining required uses of cash for
Slide 13: Summary – Continued Long-Term Value Creation
Summary – Continued Long-Term Value Creation Positioned for sustainable long-term growth Significant leverage to an improving global economy and insurance pricing Investing in colleagues and capabilities around the globe to better serve clients Opportunity for long-term operating margin impr
Slide 14: Appendix
Appendix . AON
Slide 15: Appendix A: Reconciliation of Non-GAAP Measures – Organic Revenue and Free Cash Flow
Appendix A: Reconciliation of Non-GAAP Measures – Organic Revenue and Free Cash Flow Three Months Ended Less: Less: Acquisitions, Organic Dec. 31, Dec. 31, Percent Currency Divestitures Revenue Commissions, Fees and Other (millions) 2013 2012 Change Impact (1) & Other (2) Risk Solutions Segment: Ret
Slide 16: Appendix B: Reconciliation of Non-GAAP Measures – Operating Margin and Diluted EPS
Appendix B: Reconciliation of Non-GAAP Measures – Operating Margin and Diluted Earnings per Share Three Months Ended December 31, 2013 Twelve Months Ended December 31, 2013 Unallocated Unallocated Risk HR Income & Risk HR Income & (millions) Solutions Solutions Expense Total Solutions Solutions Expe
Slide 17: Appendix C: Reconciliation of Non-GAAP Measures 2006-2011
Appendix C: Reconciliation of Non-GAAP Measures 2006-2011 Full Year ended December 31, 2006 Full Year ended December 31, 2007 Full Year ended December 31, 2008 Full Year ended December 31, 2009 Full Year ended December 31, 2010 Full Year ended December 31, 2011 Risk HR Risk HR Risk HR Risk HR Risk H
Slide 18: Appendix D: Intangible Asset Amortization Schedule
Appendix D: Intangible Asset Amortization Schedule Intangible Amortization by Segment ($ millions) 2009 2010 2011 2012 2013 2014 2015 2016 2017 Risk Solutions $93 $114 $129 $126 $115 $100 $85 $74 $61 HR Solutions - $40 $233 $297 $280 $243 $212 $177 $141 Total $93 $154 $362 $423 $395 $343 $297 $251 $
Slide 19: Investor Relations
Investor Relations Scott Malchow [email protected] Office: +44 (0) 20 7086 0100 Erika Shouldice [email protected] Office: 312-381-5957