Willis Towers Watson(US:WTW)2023-10-26 16:42Revenue Performance - Revenue for Q3 2023 was $2.166 billion, an increase of $213 million, or 11%, compared to Q3 2022[138] - Organic revenue growth for Q3 2023 was 9%, while for the nine months ended September 30, 2023, it was 8%[138] - Revenue for the three months ended September 30, 2023, was $2.166 billion, representing an 11% increase compared to $1.953 billion in the same period of 2022[146] - HWC segment revenue for the three months ended September 30, 2023, was $1.282 billion, a 10% increase from $1.162 billion in the same period of 2022[151] - R&B segment revenue for the three months ended September 30, 2023, was $855 million, a 12% increase from $765 million in the same period of 2022[157] - HWC segment revenue for the nine months ended September 30, 2023, was $3.784 billion, a 6% increase from $3.565 billion in the same period of 2022[154] - R&B segment revenue for the nine months ended September 30, 2023, was $2.659 billion, a 6% increase from $2.508 billion in the same period of 2022[159] - For the nine months ended September 30, 2023, the company generated revenue of $6,569 million, reflecting a 7% increase compared to the same period in 2022[221] Cost and Expenses - Total costs of providing services for Q3 2023 were $2.007 billion, up from $1.799 billion in Q3 2022[137] - Total costs of providing services for the three months ended September 30, 2023, were $2.0 billion, an increase of 12% from $1.8 billion in the same period of 2022[160] - Total costs of providing services for the nine months ended September 30, 2023, were $6.0 billion, an increase of 5% from $5.7 billion in the same period of 2022[160] - Salaries and benefits for the three months ended September 30, 2023, were $1.4 billion, an increase of 11% from $1.2 billion in the same period of 2022[161] - Restructuring charges for Q3 2023 under the Transformation program totaled $17 million, compared to $9 million in Q3 2022[133] Income and Profitability - Net income attributable to the company for Q3 2023 was $136 million, a decrease from $190 million in Q3 2022[137] - Net income attributable to WTW for Q3 2023 was $136 million, a decrease of 28% from $190 million in Q3 2022[176] - Net income attributable to WTW for the nine months ended September 30, 2023 was $433 million, an increase of 3% from $421 million in the same period of 2022[177] - Income from operations for the three months ended September 30, 2023, was $159 million, a slight increase from $154 million in the same period of 2022[170] - Adjusted operating income for Q3 2023 was $351 million, up from $284 million in Q3 2022, representing a 23.5% increase[225] - For the nine months ended September 30, 2023, adjusted operating income increased to $1.1 billion from $969 million, a growth of 11.4%[225] - Adjusted EBITDA for Q3 2023 was $436 million, compared to $408 million in Q3 2022, reflecting a 6.9% increase[228] - Adjusted EBITDA for the nine months ended September 30, 2023, remained at $1.4 billion, a decrease of $26 million compared to the same period in 2022[229] Cash Flow and Financing - Cash flows from operating activities for the nine months ended September 30, 2023 were $823 million, compared to $437 million for the same period in 2022, an increase of 88%[189] - Cash flows used in investing activities for the nine months ended September 30, 2023 were $1.0 billion, compared to $58 million in the same period of 2022[191] - Cash flows used in financing activities for the nine months ended September 30, 2023 were $728 million, significantly lower than $3.1 billion in the same period of 2022[193] - Free cash flow for the nine months ended September 30, 2023, was $707 million, up from $337 million in the same period of 2022, representing a 109% increase[243] - Cash and cash equivalents at September 30, 2023 totaled $1.2 billion, a decrease from $1.3 billion at December 31, 2022[186] - The company repurchased $804 million of shares during the nine months ended September 30, 2023, with remaining authorization to repurchase an additional $1.5 billion[180] - During the three months ended September 30, 2023, the company repurchased 1,681,385 shares at an average price of $208.16, totaling an aggregate repurchase cost of $350 million[203] Taxation - Provision for income taxes for Q3 2023 was $25 million, up from $1 million in Q3 2022, an increase of 2400%[174] - The U.S. GAAP tax rate for Q3 2023 was 15.5%, significantly higher than 0.7% in Q3 2022[240] - The adjusted income tax rate for Q3 2023 was 24.3%, up from 16.8% in Q3 2022, reflecting changes in tax benefits[241] Transformation Program - The company expects to generate annual cost savings in excess of $380 million by the end of 2024 from its Transformation program[132] - Cumulative costs for the Transformation program are expected to be approximately $630 million, with total investment projected at $900 million[132] - The company identified an additional $23 million of annualized run-rate savings during Q3 2023 from newly-realized opportunities[134] Market and Risk Management - The company maintains a global investment policy to diversify cash investments and minimize counterparty risk[246] - There were no material changes in market risk exposure compared to the previous year, as disclosed in the Annual Report on Form 10-K[245] - If short-term interest rates change by 25 basis points, the annualized interest income from fiduciary funds would increase or decrease by approximately $6 million[247] Assets and Liabilities - Total debt as of September 30, 2023 was $5.214 billion, an increase from $4.721 billion as of December 31, 2022[195] - As of September 30, 2023, the company reported total current assets of $243 million and total non-current assets of $1,007 million[214] - The company held $2.2 billion in fiduciary funds invested in interest-bearing accounts as of September 30, 2023[247] - The company's intercompany balances with non-guarantor subsidiaries were net receivables of $1.0 billion as of September 30, 2023[212] Earnings Per Share - Adjusted diluted earnings per share for Q3 2023 was $2.24, compared to $2.20 in Q3 2022, an increase of 1.8%[232] - Adjusted diluted earnings per share for the nine months ended September 30, 2023, decreased to $7.13 from $7.20 in the same period of 2022[235]