AON - Earnings call transcript Q2 2021

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Operator

Good morning and thank you for holding. Welcome to Aon plc's Second Quarter 2021 Conference Call. At this time, all parties will be in a listen-only mode until the question-and-answer portion of today’s call. I would like to remind all parties that this call is being recorded. If anyone has an objection, you may disconnect your line at this time. Private note constitute of forward-looking certain as by to today’s comments in important of defined may Act call statements the is that the some in nature XXXX. It Reform Securities that are Such that cause statements from results actual uncertainties anticipated. materially could or differ are those certain to and to historical subject risks results on quarter concerning our having press release the risk described are in as factors Information well our website. that XXXX second differences being as could posted cause such results, covering

it of the Case, Now, pleasure over call turn is to Aon my to Greg CEO plc.

Greg Case

good Thank our you, Andersen, Davies, operator, our everyone. and by CFO; I’m our morning, President. call. quarter joined Christa virtually second conference Eric to and Welcome

website. colleagues to XX,XXX We thanking our As their clients. for by want detailed previous in we our posted begin Aon quarters, focused a on dedication serving on financial presentation

team has with work benefit uncertainty. XX% the with Towers behalf some certainly our more metrics, provide of results for team forward translated colleagues, growth risk year QX how manage work every termination to around across first continue to Over a with integration. this particular XX%, deliver still our across to half. free line our outstanding perhaps we preparing flow delivering accomplished global XX% customers. our the top Today, of led that financial and particular the while regulatory colleagues which through in service also cover and What revenue greater Watson support all substantial have each QX all combination in My shareholders. plan Willis QX world innovation extraordinary. line, with constraint of will our record commercial strength employees, and year-to-date, return organic EPS move without best remarks or the for and of outstanding the at every from how to At growth Aon, however in value great to has enabling adjusted strength note and solution financial wrestled is performance our of go our a bottom organization and organic last mid-single-digit into to driven volatility observations the speak on In and cash I'd XX% key growth clients, for by delivered delivering revenue with excellent growth and on forward

revenue organic of X% organic for the half or Our our solutions first growth growth reflects four revenue mid-single-digit five lines. from greater

is strong United Aon generation Our strategy retention. ongoing delivering new net and business

in won with quarter transaction planning solutions across work the We risk Aon common address more portions capital around organization discretionary yet commercial together solutions. Aon and client challenge. security cyber business, of colleagues fantastic double-digit also came growth overall design. including [ph] to a in United related our saw liability, significant, We lines human within project the

we Capital Our while a Commercial Solutions clients' retaining retracting cyber our with cyber rapidly Practice Rewards The well factors the an of I risk three benchmark also defense that to and offering common growing and conditions potential their Colleagues impacts business. repeatable our as HR Cyber unique their pandemic. quarter, continued note clients align and area security organization as Human government expertise These teams for vaccine variant, macroeconomic faced we and talent clients within Risk as global our GDP practices our affect way. rollout, stimulants the the are the manage and compensation. in access factors have technology of the efficient top client for we Those and for would risk. Group overall a of best do talent risk since to results result the from that combined need including macro in was the through Aon key [indiscernible] cyber that our execute cost virus, and Delta their our increasing growth. risk cost drive is our and saw to within beginning strategy. in solutions a helps organizational where within conditions to with on many cyber from their more and of strong The in increasing

greater Data continue Services. Analytic and for over we to our growth the these events impact mid-single-digit factors, organic outlook year For term. to we and example, the see for full the expect and current to travel Considering practice or continue XXXX long revenue within

our Watson of Willis for Aon, announced counterparts companies. the we Turning mutual now the to Towers I'd their agreement with XX to combination forward our We move at two Watson. thank Towers over since like professionalism Willis announced months termination to past recently independent as transaction. behalf the of On our

of financial U.S. our our our mitigation toward Similarly, existing ongoing drive key and shareholder well would and through untenable to We have metrics. potential significantly globally to combination respect path us never because have had European clear. and of combinations the as approval U.S. our the the The ability many from creation accept exception impacted demands United into team. the our the priorities The level momentum, and business current have significant have capabilities. of was to the notably truly business, continue Ultimately, know on was XXXX demands the would against we by close innovation the getting stifled choice as our utmost The from not these colleague Meeting progress thoroughly reduced our that made the and evaluated would States. serving for combination. U.S. were courts jurisdictions appear them simply vetted approval Justice enjoyed delay. to transaction. including to client Department Commission could regulatory client the We value compromise and well take

clients, clarity is and pay decision end to this move about decision applied confident new confidence the create our and our in exceptional for shareholders. our termination for to performance right how energy Our for our continue opportunity the financial delivering with colleagues we and colleagues, certainty for forward and firm, combination our innovative clients, we're the shareholders. forward and and solutions We for fee ability move and

three when there and important that important points are the we are forward we As and deeply more clear were now. announced combination look

is impact First, the accelerating need a floods the eastern challenges the globally the world the to of at of behalf, Western Europe, working of in socio-economic and partner and just cyber capable look on America from innovation more remotely. hacking, pandemic, becoming clients volatile sponsored their the the state rise in fires

of value the mindset. cemented model to XX term operating and sources to and one Over events honed our have of clients. of AON deliver our crystalized the ability months the [ph] new Second, together we've this to our power United past work time,

have of this new better of with efficiency connected work point We across opportunities, the value growth, uncovered distraction. and integration countless firm none and all this investment and our at we’re

we’re forward momentum. Third, and strength platform with the and moving operating proven of position are a from

by approaching quality and decade. we’re scores, and levels demonstrated client feedback the rating for As highest past our

build position flow colleagues free in United In our experience decade retention a performance bottom-line And solution in Our expansion second our the to and growth and the top and strategy. over financial Aon on operating of never on quarter and been half. first growth results and momentum summary, deliver has progress our cash XX% of key by a margin better and demonstrated our platform decades. organic all lines, in the firm, first demonstrate XX% metrics. generation X% growth success operating in delivering Aon are our Business the quarter, organic client over half business almost revenue driving efficiency digitized net client revenue our as strongest new is Services enabling and two Aon improving this across growth

positioned better We’re a never support deliver position shareholder clients, operating and from generate and of been colleagues to we've our value. for strength

Now results, our financial of creation. I'd long-term value for outlook termination for and Christa, to the to shareholder thoughts over on like Christa? call turn our impact the continued the her

Christa Davies

including income, both much very I’d delivered our first first growth, and and year, our in an everyone. power strong quarter into we reflect of the progress in performance growth and flow of demonstrating share the to revenue continued Thanks United cash further impressive QX. morning translated Through organic on earnings free We digit Greg the operating growth half year. the organic revenue through half like strategy. the per XX% year-to-date, the of Aon double good

growth second year-to-date. and As quarter X% revenue was the Greg XX% in organic noted,

continue revenue driven impact most was reported digit greater growth revenue over the in and XXXX total organic also weaker currencies. XX% expect from year We rates full versus that U.S. and the or to the long-term. up in XX% for favorable FX a dollar by note mid-single including QX I would year-to-date, changes

ongoing in and QX strong through operational the of growth the half of growth adjusted XX% and revenue discipline income operating to first Our XX% year. contributed

to there are two margins, points and further. expenses to describe I Turning wanted key

to COVID which before to growth. to previously in speak First, communicated of our spend re-patterning expenses XXXX compared impact the I’ll I of as to XXXX, the describe any wanted impact

margins a we of million timing into the is points, $XXX impact of negatively QX, by potential basis potential is XXX XXX expenses in prepared is to of $XXX of expenses resulting and the the impact to In macroeconomic for of impacted expense that we expenses contraction took total points. be highlighted approximately QX. moved approximately our actions communicated re-patterning last COVID-XX due QX This As QX QX, margin we and this as million operating year reduced from in The discretionary distress. year-over-year, changing X.X% XXXX basis base. such

points by XXX in in QX first basis half margins of XXX impact, expanded Excluding the this and basis would XXXX. points have

before, relative strong we re-patterning, total the As investment. impacting of QX outpaced move QX. QX of million expense further $XX the significantly to key out for impact pace A growth. expenses into revenue a growth of second of a expected has QX, growth been factor $XXX and we said our revenue margins In moving million excluding from of

ROIC our We continue framework. investments evaluate to using

will during While long-term expenses we growth, second incurred in were up to the technology enable with investments people, not in the QX, investments of deliberate year. ramp these operations and associated made half fully the and

points of costs and retightening some points from increase potential our the the modest potential contraction office. first investment We margin also of expense estate as from headwind in T&E of growth, real expansion the slow half and colleagues resumption XX as to of more to QX compared in Collectively, XXXX. were XXX [ph] tailwind return factors margin with basis main the the and driving anticipate basis

historically, we've the margin as to deliver for expansion said forward and expected XXXX over Looking long-term. full we

strong translated growth in EPS the operating we XX% XX% year-to-date. quarter, income back Turning results adjusted and of to into in growth QX, the

a approximately $X.XX per As today's share impact QX expect year-to-date. to $X.XX favorable currency to a materials, FX noted of $X.XX and rates, impact earnings impact and QX. in QX per at If remain stable translation favorable in our share $X.XX was in favorable we'd

billion $X agreed Towers were In two combination as fee the our to Willis Justice Willis immediately Aon mentioned, combination. With U.S. as completing we forward essential to move this have and are Department termination businesses paid our continuing to the defend of Greg the uncertainty business well divestitures fee, respect independent agreements the serve Watson remedy mutually to combination business termination terminate challenge, and As the firms. business and additional the accordance that to fee primary that Watson. Towers of clients delay the our from to ability in as to paid focus we agreement,

in million actions model. as of These incurred $XXX Aon $XXX QX related related including related a terminate well all clean transaction the cost small part approximately a part our with Towers and divestitures. to we compensation of termination, in will As They to number are operating QX Willis combination, charges to United of as the of further expenses, costs on million also related additional to Watson. close be incur and to expect step break to charges as

connection The steps colleagues over and our outstanding taken those who to includes and done offered cash Given majority the have growth the of last paid we've QX. the colleagues share ensure the combination. have internally bonuses potential going retention these in we forward XX of our in previously past to in work charges QX firm relating the this months, with

the impacts Aside going our from and transaction these transaction from financials any on significant further forward. not termination costs, expect we do

cash. and XXXX fee, Excluding $X.X free our in in and billion, year-to-date Free to flow for by the strong. and outlook primarily forward XX% growth the cash cash remained operating decline going income increased flow of strong termination performance growth structural driven use

We growth, the income XX CAGR of cash free of growth continue operating the to on over reduced record based long-term to our improvements and on structural capital track flow over expect long-term last cash. uses working XX% drive years, building

we QX, for modestly we full in As the we to to communicated drive expect in CapEx increase invest as continue year-over-year, business to technology year growth.

to remain outlook for flow we our approximately capital X.X continue term $XXX Given the second share return quarter repurchased expect million. opportunities shares to for on to long million cash allocation. approximately capital repurchases our the growth, free highest we In

also and in address capabilities innovative to unmet needs. inorganically We and continue to content invest organically to expect client

investments Our cyber, solutions a within helping with of engagements like with benefits, of workforce intellectual digital on [ph] access priority property the solutions areas forms focused volatility addressing such like better and addressing as and capital solutions, build new rethinking are around employee clients CoverWallet. resilient unserved to

innovation on activity by biggest the Our at scale our Aon M&A challenges, pipeline focused delivered United. client's bringing is of to

our balance well-laddered to capacity. confident strength manage debt turning of the a Now and balance liquidity profile. sheet We maturity in sheet our debt remain risk and through

as for balance estimate ratings. the discretionary current return of profile while maintaining June ratios, financial we past XX months, and the we credit leverage termination $X.X second of has improved use half sheet, fee, XX have billion and historical our capacity Our additional we over the grade our considering investment in debt to payment the

Over strength the top growth bottom the opportunity the term on highest performance, grown. investments to with United intended, term, has in our of position driving flow was capital. ended in we free not growing expect only cash half, Watson long best to Aon the are this we quarter first second second to on intend the and strong stronger cash Willis based combination of growth. we the in be a return to outcome use and we out the In generation is termination as note return and practice for Aon in seasonally our of than originally past Towers while strategy line allocate I'd summary, Further, our long that debt-to-EBITDA half

turn As long increased this creation with long be to we’d the will and and happy approach I’ll our your With the term questions. term. combined debt take provides financial to to back return significant on growth capital call shareholder expected flexibility that, cash free opportunity over to unlock flow the operator, value

Operator

is [Operator with Greenspan Elyse Instructions] from Our Fargo. first question in the Wells queue

now is line Your open.

Elyse Greenspan

Hi is thanks, question buybacks. first good on morning. My

the alluded you pointed that $X.X then you in the cash to guys guys one the of guys could half. last free and out and flow issue. half turns The you first flow, second that incremental than maybe a billion cash in you half So, half stronger typically free year additional you debt had second an

share year? see repurchase the around is $X we of So of that that back meant billion to half apply could in this incremental

Christa Davies

been but and mentioned, give cash is cash don’t we Elyse So repurchase, flow generating the second can in we say guidance half you is, remains on cash the the half would into expect as we flow invest the share to on year. buyback what substantial capital our of year highest the allocate or of I strongest in our capital two on shareholders, second very for seasonally repurchases the quarters, organic second opportunity. and that on the of of that half fantastic do We've and for Even firm we basis M&A and debt prices, the that whether have cash have do is share cash a investment QX return clear therefore back that repurchase, based today's on additional in opportunity return year, on it to substantial billion QX. return we capital, cash at note $X.X returns, we on

Elyse Greenspan

just be basis is give then the were past but trended, the you I employee think the pandemic, line has there? in expectations, Right, of the retention you're take a how been things sense normal regulatory of receiving confirm mentioned can quarter, to with for can then second will was the I of the us that? during have merger sense or on the retention that so to past levels over And that transaction can you a for year with why came months have even in has that going my review, us give folks charges but couple question, in trending want been how retention the you eligible just think and going you, payments, I third the some the been

Christa Davies

Sure.

costs, additional expenses, our really Towers to combination. with offered the with part United cost retention compensation taken to the would these small clean our Then Willis Aon firm of those have of well So, the the expenses they're work the though who in to growth XX related break of the bonuses previously related to over number terms outstanding of that and potential as I done as say transaction further colleagues Watson. million includes as million in have the $XXX colleagues operating a regarding that to steps QX, are the charges related in in past ensure $XXX we've of steps connection charges really model. forward and of terminating in going our share a months, combination

with Aon. hand So that I'll for to talk overall at retention Eric to

Eric Andersen

the we And headlines growth just areas the remarks. have quartile just Voluntary up team that I hearing. commentators you reject with been great for too about all a premise certainly Christa. don't us. facts. or outlined a I'll great to much the people thanks Look, for for just attrition say to we've Sure, a really did her attention attract and continue would Elyse Christa poll engagement disruption excellent we top and and that couple be pay June scores talk ended that of in in survey of We the We continues and colleagues. in our to give key expertise talent, strategic

I months, our and we've the the with result are connectivity also Willis Watson and six think to over of been pandemic. the these Towers last combination, flexibility the just the with know colleagues not support trends, all You the giving but

that, you other colleague, the think firm it thought going of team be? really we're you across of the we and the of spend and just and just it's been anyone also story can about I well a their our investment all great tried talent, The world, planning, cetera. as thing to this opportunities, the that importance innovation, for we the forward. table we with level what capability now in to the and their have, development innovation on opening evolved to good add have really The do, feel top that amplifies of comments positioned as we pandemic of bench, so and here greater Maybe about you're a the And with would would a challenges, the and the clients I et sitting from just want a cyber, need where around listening have. property, the that's intellectual in highlight

these have or come together value to that's all terms So in form to I managed been ways. our really integration, to see the every but only they've proposition way colleagues showing months what been over and through want the shape call make things just around clients, the of for all just magnificent it's unique, in XX up different quite last pieces but not in they've just also how out done multiple extraordinary

Christa Davies

Okay, thanks for color. the

Operator

queue Next Citi. Suneet with from question the Kamath is in

now is line open. You

Suneet Kamath

Christa free start, back Thanks your pre-Willis talked you guidance Towers about double-digit Watson cash sort today's in to good if cash growth, for about flow morning. growth guess growth. talk think flow typically of I In just I of to rate. deck, terms you free

achieve? different free over is what trying cash something think double-digit is in long positioned said just you the figure past what the you've that's flow or growth I'm you guys to relative still So are term do to to there out

Christa Davies

free growth revenues, so there. and the over believe about in incredibly free flow the term, the of cash strange long margins absolutely flow term, and nothing long we're the in cash terms double-digit over growth we potential Suneet, excited

Suneet Kamath

relative that? sort quarter I there down cash was that quarter second the Is Okay unusual of maybe did year. free drove anything and last of XX% then, second to flow the in note

Christa Davies

quarter-to-quarter would No, would course at things. cash during the lumpy at nothing. cash free I look flow we year-to-date year, about been should of flow and growth say look, free We're the free really XX%. there XXXX, and have absolutely We just cash the grow you very excited over growth say will flow

Suneet Kamath

you're to would you side, post on, experience of terms you've Okay, picture bigger Towers are on ask question guess in this makes things there the expecting just given thoughts months in Greg, What that Should you with thinking your sense. M&A? Willis be how M&A about Watson, or your the mentioned growth? And for thinking about XX just smaller past be inorganic I deck. want maybe do we transformative

Greg Case

how got perhaps months you have the out an to a super focal for to gave performance, positive up Aon Suneet, point ability with is truly return XX And which over really into that's and revenue carried through last it just really invested and flow. back that's free -- that is we it in cash what the come cash comes and that on cash bit grow comes free Christa just question, showing translating Yes invest Elyse's to on flow ago back what we capital. and enormously we

shapes of always we that. opportunities looking all So the applying to on opportunities shareholder to and inorganic take opportunities cash to the way return, going continue for we're with steps on and we maximize in very means sizes, that invested have the organic all return appropriate tremendous sort actually forward we'll or in look look value, do cash and and capital to to cash driving much

Christa Davies

on that, areas basis. about access got innovative incredibly and and intellectual and of obviously an as in just reinvestment to like to on both EBITDA underserved the ability year clients growth the we've helping focused areas a build the add the might of and addressing with And our on the as our property inorganically actually a cash return workforce, it's resilient clients, cyber, CoverWallet. grows, addressing number half mentioned, of capital I second maybe enormous through say like And the like for buyback volatility organically, we priority new a will really we've capital then excited investments meeting got on And going rethinking grow look, and forward. cash potential firm, in are debt we amount and M&A the of I invest, invest flow to

and exciting we're investments in, an forward. that to So so going the about are growth array continuing we've excited invest we potential really got of

Suneet Kamath

Okay, thank you.

Operator

is JPMorgan. with Next Bhullar, Jimmy from question

Your line is now open.

Jimmy Bhullar

Hi, good morning.

mentioned growth had comps And well, as what on in to obviously easy, are in activity your release was commercial of the were positive, of and some continue but be things at most So the just organic are pricing a things I of I just either but are the peers least you catch think main other for guys trying modest term? might you was for pretty assess sustainable comps related might they to a obviously sort what a because the question that than of business. not that business things or up drivers XX% your in near that? it versus other strong in

Greg Case

Certainly, we've I the start to seen the different of around tremendous continue talk able about geographies and with strength new on a pieces, thoughts couple can evolve. strength Eric, where world will be to

continued a early form. For got through we're position build strong back catch the to way last in that us or just in there was year, any shape up really We to very and no pandemic.

fundamentals, client to to the year, and it increased, into clients fourth third we all ever on XXXX, up of connecting we're applying with as behalf of bringing United and build, and we're That geography, business stronger and and we has ability for world continued continued the about to first As thoughts? also of really is is all to, how until generation got is moved the them come increase, foundation in so year around see you the an through the stories, last colleagues as of Aon than clients, world quarters generally forced when around Eric now last time firm and effort how the ended the related they it relate a to to the strengthened lot really every best and growth. it chassis ongoing last United and actually of strategy new our It's and react generation. grown, to the and with year, of beyond Aon, that of the lot clients months, supporting is this the business before. you you five XX are our areas, really just new organic day the reinforce half clients the But going serve but the for underscore quarter mid-single-digit good highs really by it and really why need of Aon we on real out on and a think

Eric Andersen

about, Listen, around, work there's business type whether growth, liability, I a all world. and transaction was had construction so risk the in digit we things had in of really that core cyber, PNC of Christa growth couple quarter up really think continued the for the around work, project The sets across strong discretionary the commercial out. all very sure. couple things equally Yes, it other were really well, point a great that a world, well, talked and was really to it geographies which it was right. performed rollover, so pleased about everywhere, Greg the also strong performing but which in you double our really is, One each way really retention, future

had we excited really performance So everywhere and about really solid it obviously. we're a

Jimmy Bhullar

the just like then it seeing seem underwriters, on positive, be pricing, mentioned what would and what's than are what we've you sort what -- -- on modest would Okay, modest been color a with your seen of a given but positive better just that?

Eric Andersen

then past, the on and because do things them choices up say always always to make them I've prices listen, risk per too. the and translate unit transfer. that It's risk And then then of when And coinsurance, clients, we there price of and I to right of the people of risk that doesn't a clients clients this handle mentioned would one to them it. and across in that just with the when carrier up, prices identify they get question and as intermediaries risks sure. the amount manage to why choices buy, move trade part try decide try if first And of make go The they where they and things help wonder use I the the you they down, manage. side. up the or ultimately sort risk, great they deductibles, do show more direct the think have, the Yes, we themselves transfer without of insurance they can finance it

budget have that transfer. they spend them on For risk to like topics the

publishes a to they're never actually the client line what to as direct transfer. it's for risk from a does trying a carrier So what that rate

real they pricing that increasing talking before it it and or market. And finance manage a get and they the try around heightened those clients and is try have about, so transfer time themselves on when it themselves they very into we're how a risk areas all specific focus during

Jimmy Bhullar

seeing like you're more from on seems price on? hikes, positive what's it Are on the underwriter pretty pushback because going side commentary still clients is from

Eric Andersen

a market but listen, similar risk, what a certainly I just sophisticated. So don't to after they've is continued want of three for ultimately think get they've clients pay years done rising to more more

I think and choices how make we've handle be and them insight been analytics able better our with to risks. they able around the to to data help

Operator

with Raymond Next James. question is from Greg Peters

Your now open. line is

Greg Peters

will morning. first My on Thanks just good Hi, questions. for question stay organic. taking my focused

call Greg, very did some two headwind had health. you analytics. solutions in I reinsurance or in strong you out and And a risk commercial results data Beyond in think

are permanent get in was it snap going of organic mid-single-digit to for of and about how I second we think the guidance back here trying forward? how what Your of much forward. terms a quarter guess how is result better going much should is I'm at

Greg Case

year for commitment about the greater to thought, XXXX growth for -- and of terrific. for or appreciate we rest around this Greg, think profile, the the the Listen, coming I we of question keep and idea and beyond. the the the back mid-single-digit as

it, lines are first that. opportunities, the we in trajectory. analytic pressure to four think colleagues is clients meeting and highlighted business in through the and expect, were data did lines. within got seeing still Look with finding a and tremendous there's standard No but would under as I services. you fighting travel you're that great five doubt finding about that ways our of connect amount our still to that, we solution solution half are we I variants

feel mid-single-digit snap really We've or we us back. about before, and for that was no made there good greater. So commitment

growth connect certainly and to even I said amplified XXXX. ability throughout the into has the As probably and and pandemic with sustained clients before drive sustained

we strong why So, about that's quite outlook. the feel

Unidentified Analyst

go gradually Got are normal we whatever as we going it, to new like, to I have don't expensive you're or like and measure what looks XXXX, when is a back or if the on was, quarter-over-quarter on know expense return to projections, here then normal quarterly to on forward? back which in when of you get we what the repatterning, and basis going the sort and another XXXX bar, Christa think new things we can experiencing the old comment about to I but repatterning,

Christa Davies

with and should going extensively basis, new consistent expect the we is it So this forward. pattern

XXXX say from reflecting And so would it's changes a is, I expense what COVID really, impacted base.

So our XXXX unusual and XXXX to planning. back repatterning Greg, the pattern get was expense normal and we're to

is this the going the So correct across forward. performance year

Greg Case

This That is is Greg. correct.

course the think what when quarters, you trying about year, of a that to performance within we're improve. well, Christa do over to highlighted now exceptional continues this As very and

Unidentified Analyst

Thanks makes That answers. your sense. for

Operator

with Evercore David ISI. from Motemaden is question Next

is line now open. Your

David Motemaden

when looked I than bonuses. to costs little think termination looks You'd that's Good like, be $XXX half stick just of guess up wanted second on wondering, and And million CapEx I Hi, I think I morning. for cash I first bit you million the a higher still lower had seasonality, the than about also, think is And thanks. to wanted that confirm the flow. do the expect and to thought? to just I retention full was I that excluding half, year? first, $XXX

but think, think that? should take to the wanted a would I just lot seasonality, we that confirm away of So

Christa Davies

Yes.

flow expect for second it we and growth do year-to we to expenses yes, And obviously, we adjusted to be flow half. that, firstly, full year flow the, said strong cash -date. free expect very in in the the XX% cash excludes Having extremely out expect So of QX. cash free the termination the excited, about we're be strong

cash, of CapEx three things, to we capital. modestly key in forward, I improvements terms your term and drive say working year-over-year, digits of around question uses growth. technology And say to driven growth long-term, the In expect free cash in religion over that investments we income, would increase look grow by flow should by double long operating declining CapEx, going would in

our as add free well continues And so as long-term, growth cash EBITDA we're the really flow grow. to excited as ability about to debt in

Aon. amount of So substantial a back invest in cash to

David Motemaden

you in know just Got that it might And that I previous maybe are on sounds the just obviously some it then guys deal it, sort helpful. the on termination And that's forward response it any merger like sounds this have question, you sort to maybe in about spoke growth? there the retention XXXX. elaborate of on to disruption business. any a through, didn't of could a if question, payments. into the other you going I'm hearing the but stretch definitely just would I organic expect the and of want payments impact and also, Willis guess, you

Greg Case

which story half. will where be first primary growth, take directly over worth, translate just actually in last If we you the great the behind Maybe in let's XX sort things step we think start, a months, months. strong. in putting come the And context exceptionally we've and combination a of in it the the the thesis it's we'll about back as XX last shown

but to have the the transaction. right unappealing we have an and to We to the fact, others what but timeline, has simply for momentum, made Europe. unacceptable. equally to just us. before, unacceptable the Christa or were and were been the that's not never, did remedies to pattern was have the in holding the choice deal but of Obviously, a the did in know would resolved. stronger remedy, have as and and would you U.S. could answer. option, It Justice. the candidly not been We would was around jurisdiction so the in We're Eric We in Aon shareholder And from Theater, in over innovation world period European second sacrifice our noted that just just the of we the I reached every it the deal it as comp long. could we we time. strong made impasse understand, regulatory obviously, It end, form, client our and well. like DG virtually completed around that I XXXX. happen every In This And of as approval, had world. serving Department never pandemic and have damaged through you've wouldn't litigation. close like in also options. side. we into shape just have view, in the would what deal we roughly we where two couple is the answer we of completed pushed in a listen will on the right the And wait reject well XXXX our talk we strategy One described said, an not going ways, exceptionally it believe revenue is the sort heard capability it going way, And take, looked United strong hand into this too stifled But

we're position enthusiasm we by about driven are now were well you excited now, much And a strength. our the a and obviously, forward about and forward certainly where make if wanted real our of very strength how XXXX, David, where So to independently on strength, and choice, Aon we firm we team think terms position our for the of we with in move strategy. of our move United to and

the have of got we of comments up. in some sort more Eric to that's are, rough where have or if you on? we Christa, picture grow terms but So

Eric Andersen

went combination, in, Greg, the both we're little the place. in Willis maintain work into bit little about into were help momentum able when Maybe very growth. propel and operationally essentially certainly a strong sure post I'll and planning integration this to effort, strategy. going Yes, the, a maybe pandemic were to our us talk the integration back the management forward we that started revenue on to go We how Towers using client process event. work the and a with continue bit, Watson great we to And we

the of all our we our how go-to-market, the perfected Aon teams During build the teams United continue our that's to which pull these momentum. will Strategy, All benefit the of do months going delivering the really going as together last actually as well be incorporated clients. XX forward, planning, model, Aon to operating for

So, we position. strong process this in while a came I think into

position. even I think an out actually we're coming of stronger in it

Christa Davies

and flow. free agree And would in cash in our I results Completely say, financial strengthened, Eric. margins, have in growth,

basis a over stunning XXXX, year-to-date, organically, average organically basis COVID, point growth to at X% XXXX. $X.X the growth growth If financial XX in growth progress, free each last on XXXX, billion, to cash XX% the building points last a expansion X% over last year and in the in QX cash XX% you expansion and flow growth really in flow just and and delivered year-to-date, every free XX% growth over results in on margin XX% through X% strong flow look of decade years. XX.X% free we XXX years cash XXX XX building organically organic years, margin growth XX

results. phenomenal of financial So set

margin you strengthened do growth to to the would have free in Greg, results come and financial But question? we want So just cash gross say flow. our back

Greg Case

of clients, by, think much different table others systems, spent a different, virtual on up them those. on the the from Eric's and and ironically capability connectivity The been we're to created led that's our across growth powerful. and with that and incorporating situation we strongest reinforced all COVID have the new way also growth sitting then seen. WebEx ton connected ever we've a business way in what's And are Aon strategy rates that's a United All in the of WebEx where clients incredibly net and growth literally firm existing incredibly, and with I what you We important. does well, the has to history sense really of actually the about investment I so just side we on over has think point of we was your the that then months the XX questions. our give a side, a came how growth? translate last you fundamental Yes, again, to strengthened. thinking And want say, opportunities efficiency sort David, on time kind into been so of side,

game and continue winning increase do, us. sum isn't that. new. net continue is and So about well been to doing game, for take at This well it around want which does the we've create We're exceptionally it away. addition puts net as a really sum share It's this zero moment, market get I new to the to world, and share don't to zero not but about as

on we a cyber, about As tremendous those. amount spend lot, place I and around of three solutions climate, time talked and put intellectual focused the mean, property we we in just a

about digital excited beyond. grader integral lines very the we're XXXX growth So we talk why our and an across all solution prospects, in that's about

David Motemaden

disruption. appreciate showing so I yes, that helpful. color. Aon really really a sort thanks much. And Thanks up in it's not There's any appreciate of obviously I It’s definitely no lot. Great, that. that results, of mean, the so I evidence

Operator

question with KBW. is Shields Next from Meyer

Your open. line is now

Meyer Shields

single this digits even my the guess shouldn't are for a too we question of the basis from philosophy. noticing expect first sustaining indicates put organic environment I for tailwinds. do looks just hopefully that is that the a communication of I on phenomenal higher, Because wondering execution it, how And XXXX even the Thanks. traditional rate like on, it year-over-year growth is increases. probably it whether operating much I'm use with language sort back economy, and coming and

Greg Case

not cash digit extraordinary to that then in moving trying I essentially we're highlight view a in still terms listen, double an that the lot or is of economic Well, the goes. of free that what sort around. way, single confident By digit is there model of we year, investor what but wouldn't say the in standpoint, We in Meyer, as a very have volatility And means. said it greater. about of for face ongoing this it piece just world, from flow. that volatility mid out in fact, and and there's is it's wherever think We're our

what that. understand you sure ability confidence on make Aon is this, pushing basis. to want do so achieve that to reflecting high we keep in forward And, our we're And will

you it's else But about else. or that? to rebound anything want say not there's, anything Christa to So

Christa Davies

are some I haven't is Meyer think like uncertainty add that only there come events fully there is, macroeconomic and travel areas still The still would some business our back. of

phenomenal and mid results this, year, for still forward. single in greater going we so, digit will and deliver And navigate through or financial XXXX the

Meyer Shields

helpful. that's Okay, very

appreciate a accounts, question, or organic that at we've are require talent employee past? Second out the of on growth for rates any number large is comments Eric’s retention When that in brokers on attrition. we reinsurance increased I higher would that the look seen in there, I margin there guess, and competition for expansion

Greg Case

always out and but competitive would also overall, out together this, Eric is greatness, collective And less more well. wouldn't about collective well. talking model that's succeed level in I exceptionally there on the there. there? we literally individual of really been it's or and been have the what's ability it because to love comment It's is opportunity But of for today. just there's for I say terms competitive, competition and we we're served always Eric could very colleagues us as us then highlighted sort an exceptional say individual capabilities, what And at that's, a

Eric Andersen

reinsurance or very the been it's it's platforms, the agree, brokerage. Yes, I mean, I business risk brokerage always Greg. all a whether across the primary competitive

you if our and we'll fine. and that, yes, the would be anything think And have our just continue insight ultimately I bring we to to and each clients we do with think to so, best day best tools Christa every add? I

Christa Davies

point, margins margin the what any environment. can I would say in on is, guess maybe we grow and operating Yes, I

Aon we infrastructure produced You and of capabilities scale. one in organic we centers year at Business all made excellence, the of place, investments to sort we're one drive in able when X% revenue together of benefits operating all really Services, growth, place, bringing of saw margins. in our And each expanded year, productivity we've the people because last

drove for over expansion basis each the we'll continue we XXX a on foreseeable year, And year. so, to [indiscernible] the points drive margin points, margin the building the for expansion, future,

growth. each margin And so and expansion of regardless year to in XXXX thereafter, we expect drive

Meyer Shields

perfect. you that’s so much. Thank Okay,

Operator

Stefano Next question Bank. Deutsche is from Phil with

now is line open. Your

Phil Stefano

Yes, morning. thanks good and

the had about ramp of the mind, and about to a going correctly, expectations expenses heard I margin you've in to narrow. up I you in It underlying expansion. going earlier looked if near growth gap is normalizes run versus that, talked I my the think that's for I in guess, as investment think this pick talked you revenues long the future.

just to to can So this recovery? gap maybe the give in narrow the sensitivity looks economic you extent a this to like and the frame short think broader some about us which in how run, may

Christa Davies

of our the underlying think was, I point the see in invest repatterning ability expenses, excluding was expansion, making did of really I QX to growth outpaced greater so Yes, because we Phil in margin QX. a in investments, and fully technologies what operations was in and we not did business, people of the that growth some and incurred our invest to lot that drive

And really really is you would it's what exactly is, So specifically statement I what right. say Phil. a about QX said

long-term the growth growth will Over be expenses and aligned. that drive to

Phil Stefano

got it. Okay,

follow And so, my think, my up. thought I perfectly it for was

on about talked example You've an more technology. driving deliberate investments? people, in exactly that what's be investments deliberate two Can give means, what or us these little you may a color of

Christa Davies

Yes, a there's of number investing. areas I mean, that we're

Greg, to help star our So to But, them as more data you a help we're can in manage technology maybe lot investing analytic deliver based clients risk, Eric example, to health and jump retirement innovative I'll and solutions and an effectively. in.

that this? the hire investment. sort in, want is last another so, colleagues of in the a great have cyber because you one actually and firm, environment build into Greg, threat say, be greater we're to we're Eric and do talent security of and area maybe it'd is investing for The continuing but I'd So security, to area obviously become big on

Greg Case

us is comments course so have can Aon we that impact and platform risk, now. one over pointed for everyone technology quick, sort it the scale because couldn't cyber the it is, years Services, of We about Eric really one been of the Business Yes, here. When it. scale thing, create -- real add some think we to very global this of investment, would describe investment, to difficult is our

the can it So world. and around this as actually team efficient investment Christa terms in incredibly increase real make capability the how of and we guided, is

lose we is is that all fundamental new net was this It's to very, what addition bringing But areas that new capability to Christa point. Aon and in Business very about. to these So that to alluding exciting a really Services are we're want net in. don't

to capabilities, certainly on cyber is some intellectual risk, it side, Some on of property of to side, is just the connected fundamental and climate it connected side.

So terms you…? way been so in help are in about address we haven't of ability a to heretofore that Eric, that happening to we're addressed issues the lot very anything to clients that the from needed else a doing critical and that excited standpoint. them, lot they be,

Eric Andersen

just trying gave a of risk about you you if the you skills new at think it about Yes, the certainly if about and need, intellectual new you but invest there, overview about property we renewable cyber, business, think required areas, Greg, and climate how ESG our great mentioned scale and for energy, human modeling to do in capabilities capital in we clients. that

So there's happening on a whole the lot ground.

that we're and to we recognizing that seeing, growth investing the supporting to is keep we keep sure need that said growing. Christa As make

Phil Stefano

Well, thank you. Good luck.

Operator

we today the And Brian UBS. question last queue in the from have with for is that Meredith

is Your line now open.

Brian Meredith

Yes, thanks.

So, two here. questions quick

retirement one? curious that First the for one, exchange? of of you're looks It like sale revenue what's Christa, the with continuing the just impact

Christa Davies

Yes.

was So $XXX the well. retire QX you know revenue in Brian XXXX is the It businesses, for exchange million? predominantly

Brian Meredith

see you're this I'm And Willis from you'd obviously identify Aon and then of forward if this curious Towers cost savings Great. on through with going specifically savings you as curious, question, to I'm that here were if of identified a and Watson, you able lot process? cost transaction. potential going as efficiencies expensive the just a any potentially with can process second part synergies for you to help went

Greg Case

all foot highly and one connect the back and literally colleagues the we and this. with really seen and led combination and Aon talked around it over the And you but and, those specifically is XX the but to our alluding be about in and Greg. uncovered is What has done with jump improvement to world with came is opportunities, absolutely Brian Eric, growth is as Aon, clients around integration be Eric before, the expense available last this this, to on move investment I back March This of we platform, as exceptional multiple combined last going to we've strength. to integration what opportunities, months in this, our has theme. going level, capability, around opportunities, for to XXth the engage XXXX going to at Eric the on fundamental and baked platform. What XX were what in you we've forward. are world, is do we applicable months think the this led been think? We

Eric Andersen

think I Greg, Yes, two there's buckets, right.

one can do model we Services that the think client it. Aon the embedded on and been how talking the synergies, Business the Strategy, that way value on, technology world. how leverage the more just really a try was expanding were status How during been accelerate what otherwise we've do strategy, would firm are specifically pressure with to you're how do pre I Towers we're we talking the creation new. Watson the planning. combination the it That together. But we all look capability. that quo expense model efficiently? about United started fresh bring to built had that across last a of I about how in we getting actually the test, Aon call teams would the delivering also challenge better, and I about revenue you firm and context that Willis how working perfecting done certainly we've and it We're estate building we integration across really wouldn't call can in that it you really it use on necessarily our areas real really side, think, management having strategy,

Brian Meredith

you. thank Terrific,

Operator

would Thank Case call like remarks. for to the back to now turn I you. over closing Greg

Greg Case

today. thanks Thank say our want it very look appreciate much Thanks of discussion quarter. to very you. part for We and the being to to just much. next I discussion everyone, forward

Operator

for Thank participation. This call. today’s you concludes your

time. may You this at disconnect

Aon (AON) 30 Jul 212021 Q2 Earnings call transcript