AON - Earnings call 3 2023

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Operator

Good morning, and thank you for holding. Welcome to Aon plc's Third Quarter 2023 Conference Call. [Operator Instructions]. I would also like to remind all parties that this 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 results the Such third could that cause well statements our are cause as from results such actual uncertainties concerning quarter anticipated. Information in materially could or differ differences are those been certain press to risk having and our posted to historical website. subject XXXX release risks covering results factors as described that on

the It Aon is now call my over Greg pleasure of to CEO turn Case, to Plc.

Gregory Case

morning, our Good call. Davies, CFO; conference and quarter Eric President. our Welcome everyone. Andersen, third Christa I'm joined by our to

posted website. on financial As in a previous detailed quarters, our we presentation for reference, your

The constant begin in all clients is concerned conflict and priority. in to is we'd take like families our our always As their call violence world Israel occurs team and full highly way. And our the today, and ongoing to about anywhere leaders our reflect safety our in the we their in a families the colleagues, harm's that our well-being with on Israel condemn to top Gaza. our We moment and in ensure and support. have contact colleagues of remain

every our As clients. support we to our to the a colleagues Aon reflect to they day you on and the thank around do quarter, for we with want to each huge start support world other all

results Turning financial progress quarter our that to the contribute in metrics. year-to-date strong against financial We to key delivered performance.

performance. Health and to adjusted basis operational growth the by Technology in and XX% improvement across Solution have quarter Strategy and and with In operating organic expansion revenue Reinsurance of revenue delivered another X% strong growth highlighted strong Group. organic grew ongoing double-digit our growth revenue Treaty, X% a in XX% points margin lines. and Fac Reinsurance Solutions of Year-to-date, was very Solutions our growth, income Solutions. growth, adjusted operating contributed strong XX Organic quarter

our business. already drive renewals. Health their We revenue underlying Solutions to quarter, well-being the engagement. organic strong with our and a strong delivering and team team to as XX% costs, clients clients such health new from on prepare medical for growth strong continued helping talent addition to is another inflation, focus and quarter also address ongoing trends see very delivered population In focus workforce renewal as and wage impacting health, overall care XXXX

continue pension Solutions, organic Within of teams risk strength clients sell reflected our and growth Wealth regulatory transfer with retirement to X% change. as in

organic risk commercial Pacific. Finally, revenue reflected internationally growth EMEA the in new strong renewals with strength net and X% of and business

IPO However, overall impacted organic as revenue we M&A previously. external markets, negatively by the growth was and communicated

United, faster Aon and our Today, go we're will announce restructuring and to accelerate our actions also further on plan to we elements our of strategy. will describe program excited key

our actions are need. always, As client driven by

and our of as difficult For face everywhere evident world is with increasing current the risk. the measuring challenges, understanding, clients, reality dealing they

private and trend risk Management details Weather geographies over landscape. Technology, industries. public and sizes input Stability Trade, Risk Global Workforce forthcoming this simple of clients from Our X,XXX survey today's in are all forces with across and

complexity are is these new increase connectivity individually leaders. risk and exposures, business in impacting forces to of each the compounding challenges While presenting

business, directly outcomes actions client their years further These strategy. that evolving our Aon actions series increasing will and our accelerate to demand over protect the of we a are clients' and to demand. address advancing needs deliver they'll next Responding and build taken X United

decisions much and and improve scope them. our will our make Specifically, stronger we This bring quality their expand their we in service companies. the available better will solutions work a clients tools to analytic support substantially improve of and to to put position availability quality experience to and clients,

Aon this X unlock years. The in capability client leveraging set new middle clients client delivery, leadership X across requirements and plan business tools. also include: XxX segments Internally, client We we demand; across business and further solutions plan. our model call second, and analytic enterprise first, market third, delivering large X new accelerating will expand integrated Aon new core our this next next-generation structuring service accomplish unit on capital for to commitments standard embedding services in a but the our the over risk address commitments by capital our to and strengthen to and relationships;

shareholders. And Clients continuing investors is relevance, to exceptional client our better and Colleagues higher our capability clients This win and a and win client in sustained colleagues, growth. clients greater The tool next-generation clients. and to resets demand. our client double-digit win flow our capability increasing and accrue demand. serve standard meet meet Today, better work through benefits provides impact margin greater with to serve to free analytic this service. leadership and them their and service solutions this client to with and to tools and required with of work plan team cash improvement our focus solutions provides

And have have now a and could time, benefits accelerate we decided proven achieved while we these instead over back strategy.

years led connecting change, to and defining as that's of a accomplished and concept is conclusion. more a It that cultural came part team embraced that meaningful connected and must our Aon where by describe viable which is demonstrated colleagues. [indiscernible] only a The a DNA. more XX-plus is be this our have me firm through firm, capable Let last structural

ahead creation in travel the invested free and at plenty meaningful for year-end capital growth currently full compound including made have progress, for been on return measured And engagement value XXXX the XXXX XX% from of and a flow shareholders, support; an of and XX.X% for year though to margin, to XXXX by and a at XXXX and of clients, have year innovation in a terms all-time journey even sustainable colleagues excitement results cash operating of we remain of high; we XX.X%. and with opportunity to improve, form on distance

requirement. However, going further give observations is X conviction us faster that a

based And record, the second work our is on plan demand. execution have track confidence the The we [ already first diligent the proven increasing underway. is and XxX action our ] defined client

Accelerating greater release, announced in will our execute X upfront as $XXX And areas. our investment. this press plan requires program a we on focused restructuring million through

changes on driving First deliver is by as and second risk to capability in integrating Services business and operating planning our on Business skills capability opportunity and operations, innovation. workforce strengthen workforce the client-serving our platforms required plan embedded AI capital on on services And accelerating product well to capital. Aon is focusing digital-first align the standardized to human and as

describe million direct in and investment cumulative of team rate our This detail. will we year-end Christa that client the savings and of excited as work run to take also result have of this very drive strengthen option is about which our plans opportunity leadership Overall, the to XXXX, more annual opportunity to fortunate colleagues. the our $XXX by a accelerate will step

expect near free continue improvements. over XXXX mid-single-digit greater the working will expect to program expect flow operating drive to and And the flow in double-digit long income growth further cash continue cash free while ongoing of capital contribute to to over to expansion. by term, term, term. growth We deliver will impact the driven We annual we and margin or long organic savings the the these revenue course

Aon us operational for adjusted strong creates our of and performance, It summary, of our margin continue points strategic colleague expansion strong revenue to creation. long-term strategy. capital, leadership and shareholder record down Services. X% XX will adjusted to our steps In our XX% us human and continue income client around opportunity growth, value the commitments our model including enable on risk basis organic evolving demand, Business against demonstrates improve year-to-date operating growth, client operating momentum These address track capital, to double outcomes

call the financial Now on I'd her outlook. and Christa for thoughts results like our over to to Christa? long-term turn

Christa Davies

Thanks so and Greg, morning, good much, everyone.

and X of translated expansion year, adjusted adjusted Through the growth Greg highlighted, growth. the of income XX% delivered margin revenue into quarter strong XX and in months operating As year-to-date. we first points the basis third organic X% we operating results

in on forward We These position the year. continue we head the into XXXX very over to long results building as of driving look results momentum term. quarter and us this to last well the

year-to-date, As Greg X% noted, on revenue as I organic our performance growth year-to-date. QX and reflect in was X%

greater mid-single-digit expect or XXXX the to term. full revenue long organic growth year and continue We for over the

FX year also X%, year-to-date primarily the note that in includes from and prior million stronger a a prior year-to-date. changes a income, revenue I of with organic weaker by currencies QX versus compared not of most which revenue an revenue growth also U.S. dollar period. fiduciary I'd revenue driven would to revenue year of most in and favorable of versus in primarily period. in $XXX dollar from XX% impact or Reported the impact U.S. X% includes investment X%, compared highlight total is FX reported unfavorable million $XX by changes to in growth in total of QX X% QX X% included currencies growth year-to-date, driven

an to adjusted operating X margins strong XX.X%, Moving overcoming We increase growth. improvement growth, including delivered technology of basis performance. efficiencies the by Aon colleagues revenue growth, first investments year of from long-term of XX Services, driven to operating and points, in expense months with Business operational the through drive

QX in into X% operating income and adjusted double-digit of XX% year-to-date. growth adjusted translated We growth EPS

noted XXXX. QX $X.XX our $X.XX per for an impact favorable FX per impact remains year an at per in unfavorable of $X.XX share an and If quarter, year-to-date. would share the of As we rates, fourth unfavorable in in currency earnings unfavorable the had impact $X.XX of full share today's material, totaling of expect impact share approximately a per stable

and change X% an as an the in expense unfavorable year sheet periodic pension share businesses in impact reflects I'd remeasurement expense from or current in prior increase the This had impact noncash impact balance per and year-to-date. period also in net nonoperating share on $X.XX period. $X.XX a the or note X% unfavorable well a gain per of QX other unfavorable sale a FX as in

$X CapEx year year in of projects drive the a $XX to was million executed we first elevated months X the prior number CapEx. in compared a from technology cash the as to flow of increase quarter growth. $XXX million Free offset to double-digit negative million long-term million lumpy Cash to the in delays we CapEx implementation decreased and primarily tax invoicing decreased X% cash by to we capital with operations caused of growth, previously, quarter impact mentioned the reflecting approximately by Turning higher $X third part temporary flow. to the billion, by payments system. flow operating and associated working fourth CapEx to XXXX. of to a in in total driven quarter-to-quarter, moderate income $XXX new Of investment be expect cash in note, year-over-year, free as period the could CapEx

As going disciplined expect before, manage all we've the our like we on forward. investments of it and to CapEx we said basis, business a ROIC grow

more our share Aon me accelerating details let Now United about program.

doubling are in we will capital human highlighted, in Aon down strategy. on drive and risk Greg turn clients, for unlock commitments Aon leadership commitments, X which and As colleagues to enables Together, us our value Services, client and these shareholders. including strategic capital advancers Business more accelerating

Aon will our development. platforms; Services The proven already innovation integrating now in increasing areas on the number operating mentioned and more see accelerate. across X-year benefit see product which combined and operations, two, our made model our service work We've operations; Business development drive considerable product we and to standardizing one, lines. investment significant integrated Number we've focuses progress provide business. scale. and within X at standardize standardized same And operating platforms, three, previously. doing but to We operating number standard opportunities we're delivery operations effective how additional integrated do opportunity with we operations, will solution standardize both enables new to innovation and platforms, The accelerate

development more across be new in be learning the advances standardization cycle and platforms, in deliver fewer able further portfolio. to we'll the the accelerating accelerate unlock establishing machine place, leverage this With entire portfolio. to the tools able By and more integrated to we'll clients portfolio to across product analytical efficiencies across colleagues and AI infrastructure and underlying

more a the about provide bit me Let financial strategic investment. detail

X% long-term Cash XXXX, We do expect to in flow million margin note, sustainable of we material $XXX restructuring with expect We XXXX. be to ongoing cash million you and million Of $XXX note, flow than restructuring think savings can years,, XXXX of be annual XXXX. of total contributing $XXX $XXX base achieved free over as savings to the expansion. savings to time $XXX charge cost reflects a a in the of the in million million to of approximately ramp annual $XXX I'd savings and of X.Xx the savings of in-year ratio to [indiscernible] XXXX, X million impacts in as $XXX billion. not or XX% cash expect our expected and charges takeout million over in to savings $X relative technology largely workforce underlying optimization. costs cash less cost next and

additional significant the guidance we an impairments. expect in with grow incremental $XXX charges, of asset in to related business XXXX. the future million expect and also $XXX with We will to and from noncash lease line not program, in We million expect do associated largely CapEx CapEx our million of $XXX the

and of each In $X going quarter. incurred third quarter we'll the charges the forward restructuring Contemplating million program. charges, communicate savings of and XXXX, we

and greater long growth XXXX over organic we continue the As year forward, look the or expect mid-single-digit full revenue term. for we to

to We XXXX, over margin XXXX will expect contribute sustainable margin term. expect expansion expansion savings the in and and long-term deliver ongoing program long to

the XX margin or As we've points years, about average. we've expansion X,XXX on noted previously, a over last year basis basis delivered points of XX

Our flow strong. cash outlook free remains for

I'd to in QX, this on contemplates expect single-digit restructuring restructuring deliver flow flow to we material We do the flow this on note free cash impact from so impact free not guidance in cash year. cash XXXX. high have a expect

in growth capital will cash long operating While trajectory to flow free the growth working the improvements. reduced driven we flow over of double-digit term by be term, restructuring, ongoing return cash our income to by and near expect free

margin we free as in cash client-facing across delivering opportunity that this previously, we our strategy Business the long-term key we've revenue in financial metrics: flow will Aon at growth, know said result growth. expansion and our look Services As against capability, and progress organic

Now turning to capital allocation.

believe nearly highest $X for Given to we our opportunity cash capital billion significantly our market on of today, remain repurchase capital share the free continue We undervalued repurchase expect strong outlook by we're in share to flow, for year-to-date. return allocation. highlighted

unmet expect to can in and also we organically that continue needs. inorganically client to address and to invest We capabilities content scale

pipeline Our growing to scalable priority solutions continues that and evolving global challenges. on M&A to our will clients be areas bring focused

allocation We capital to decisions manage actively portfolio assess the an will and continue all on basis. ROIC

through profile over a as debt to now add and debt well-laddered We our balance term expect sheet debt a to profile. Turning investment-grade balance sheet capacity. long liquidity strength credit in the confident maturity of strong remain our manage and maintaining risk grows the incremental and while EBITDA

and value operational summary, long-term and an Services In of Strategy quarter our and in line by stage sustainable expect next performance, results United strong top see the growth platform. contribute investment to United our shareholder driven financial the Aon Aon this strategy to Business and year-to-date accelerate will and reflect We creation. our strong bottom ongoing our Aon opportunity

take to that, With your the delighted to the be I'll call questions. over turn and back operator, we'd

Operator

[Operator is Instructions] with Goldman Rob Our Sachs. first Cox question from

Robert Cox

make is exactly sounds is the I invoicing just free issue. sure the the mentioned this it it you flow. understand on and want guide year, free like cash driving flow the lower a to because was temporary restructuring, I curious Just material cash what

to exactly trying is driving guide just what the lower. So understand

Christa Davies

the Yes. the invoicing could We had QX. see that in And It's fourth we system working while really to delay, impacts issue, the in about capital temporary we're quarter. continue temporary addressing to Rob.

Robert Cox

program, peers, with workforce your restructuring little the maybe the program And an it. history, on just a a of rationalization. Got ratio programs conservative these seems element includes and just that for some Okay. compared saving to X.Xx

views $XXX management beyond if just million? to savings could and the come we curious So more as light that it see way if potentially

Gregory Case

it's to exactly asked really certainly very you it. back little accomplished than worth a glad is and stepping different before, we're this because it. Listen, sure us trying you making We we're from you appreciate we're I and understand here what bit the excited seen ever think question. Rob, here anything get about

demanding solutions. said better We've colleagues, they're our our before, clients and look,

those through some challenges but clear, day, the and see our risk faster lines really around every go You're this. and asking identified capital. United, seeing I they're delivering us human about Aon be of solution And on demanding further beyond we it solutions they're described we're capital survey to they the

incredibly Our clear. opportunity to And excited ability the about us, colleagues see deliver is it, and on our for they're it.

the in Business We've Services. got Aon We've platform place. got

but to and client-facing stronger by build have on We go faster a XX,XXX can it, long strategy can supported way around terms. we know the clients, we and colleagues, and this accelerate it objective we a accomplish do

the say focus to all be teams have got we're operating do. connected the what have analytics, the integrated, aligned on. got to to trying accomplish be exactly to I clear, goal easy basically do. So to hard platforms and we're path is that's mean, that's this And but the and of be to data to

important to And a we now going of is believe Christa observed, compelling bring accelerate most really I'm life, to it. return in And view? that to firm on it's to it one for standpoint what as client we're just does everyone going capital, a so exactly How Eric, around obsesses from up But show the doing. your we're be this this investment understands thinking, invested ever.

Eric Andersen

developments, I'll to Sure, looking might maybe Greg. which at two insight, that analytics so they're are mind and today. easiest exposures is quickly way to maybe bring just example topic these that's come it light because as And a the for clients more such an climate, evolving it's be to pressing more and one do around us these

of about with was had their terms how they weather because obligations it they are Pacific to asked them, fore coming. are to baseline was we to [ that financial how their risk disclosure. engage today, us And going affect as began affect really future. climate edge their going and required talk ]. had their a was of the client in asked loan us We them to to were They was portfolio, a that severe Asia coming future really exposures in just the it we at that about looking and which press for But physical climate cutting analytics starting loan to

And integrating as so a doing their modeling they're they they're at into forward go what is analytics risk today business. with their as themselves climate looking it

at another. deliver put as to to they put be in guess they ending and being starting that provides I the to it to can that allows one they're own of But Business point format business physical being as to climate able of risk, go to but use be forward, that usable And brought and model to business, types look data, be capability developed their form is market able to in their build Aon analytics going really from engine to the be all it's those it often the to into clients the able Services aggregate forward. own in able it place

So replicate about climate what globe pressed all the to we're risk. understand and to that type of their financial really gives excited being are the ability this across institutions us as

Christa Davies

or full expect terms go charge XXXX million restructuring don't $XXX And revenue financial of to do deliver to expect, guidance. mid-single-digit of year it year XXXX. We in -- expect cash over in Rob, financial guidance, of then is the above in in the just We of growth piece, $XXX savings to million term. continue terms that to long and greater the for organic

long we expect full adjusted ongoing the operating term. these long-term savings for and will over And margin deliver to program expect We contribute XXXX full to XXXX, the year sustainable expansion. margin year

record. we of lastly, ongoing flow return we the And be double-digit the term, investments free metrics, as and ultimately impacted while to by Aon will income want reiterate, investments will across the accelerate long-term all creation capital investment work I It basis. And on line working in cash firm driven most key disciplined look and on on our of to to track different. is lay growth all improvements. cash, then a in focus free And intensely trajectory said, across with shareholder basis. our at across cash great we short ROIC to these our Greg think flow operating and we this contribute over no we're long the doing term, This expect to value then disciplined about

Operator

from is Piper Newsome Our with next Sandler. question Paul

Jon Paul Newsome

is sometimes quarter. not charge the Congratulations wanted looking the I really need ongoing other and to charge have about the to on -- here whether a to to improvement? margin to cost expansion? words, additive restructuring the that restructuring do ask the effort savings continue expansion. there's happen more here margin to that or need extraordinary this that the have I given how think from good wonder In you continue to you we're at people margin -- if if are, things margins limit

Christa Davies

greater revenue But so margin free we think double-digit the accelerate Thanks Paul. for next this also then savings the organic and 'XX cash 'XX, term, look, do And in to the holistically, year expansion 'XX say long long in strategy, expect flow going growth and about question, term. the expansion is think and much contribute margin guidance year. We we us way help in full we'd term growth to over we to financial forward the expect is expansion Paul. about program margin what long mid-single-digital the

year, each to so this. say we've continued And

and we've And XXXX to than you've we seen for as in met that margin continued We invest. expansion where what we shareholders, technology. gross that's generate well, to invest have calendar continue year a higher in

can technology to up. we're investing where platforms long-term in CapEx, You see productivity. technology expenses long-term drive

generate great for shareholders results investing in every we and And strategy as a each so year. long-term we're

Gregory Case

see insight we asking on is they a Eric Business to hadn't simply The That an and shareholders. it's example a about provided see really would this, between value value. other Paul. is point incremental game, like Services it We basis. described When just analytics. this client, often treated around a like I We colleagues the it's around think the before, Maybe clients asked we zero-sum possible Aon asked don't is question almost way. not add margin, one and split on get it around about that without you scale a

really get compensated is drives obviously provide that That over actually value. for -- We margin contribution that. We what time. incremental

So margin. greater value means more

more hearing continue greater more And for margin we're now improvement, which going improvement is to so time. and engine how so confident to to capability really we're today, what of why with sort around this the value is deliver over that's you're that so invest clients, create even margin investment

Jon Paul Newsome

it's pointed lot what been anything larger charges of you've taking morning a of done these this savings you me structurally planning to some you've is the folks as on out past? to done other sort -- in of historically, stages to have efforts different efforts that restructuring So there the that compared you the of successfully. -- the charge Is ongoing where efforts end folks here the and relative doing are with you're other done on that

Christa Davies

It different. Paul. Yes, it is is very

here. And to and a see client we track on developed leaders capital building X-year and brought we're in capital, we I strategies. is need as Aon ever but needs, together where which to a that drives our clients needs, you have that Greg Services and client said and think we it's client Aon this say, unmet So catalyst strengthen we saw new significant risk further than firm. meeting leadership really set Services And survey a connect and the earlier, our our strategy Aon success, and of And seeing Business Business would client record before. of more what human responding unmet are proven risk a of and catalyst, are

standardize product strategy standardized to and accelerates deliver ability scale. on platforms, innovative this operations And our

clients, than really development strategy is very shareholders. benefit much more different we've colleagues before, to long-term and benefit is that that what so to Paul, going going to done And going that's sustainable and benefit

Gregory Case

approaching human can with do and better talking done the Eric how scale Everyone We're We've better. talk work that for capital reinforcement world? then good you example over it risk about regard. of a about Paul. clients around and Think the and about client. that, keep piece and in that And individual how capital and that it we're tremendous when got all do an getting really, taking you're

together without us really that our our talent do world brought of Aon think XX,XXX ability can't ] integrated outside mean of Services. actually that. that colleagues I Christa, is obviously in by extraordinary how You team help And [ Business the analytics. around is about to or from new and with this brought many scale strength led a industry to evolve the

This investment we is the much do can now see structural faster. that we

do over because very fact, us done before. demanding, different. would much the is we're anything That's what's it time. clients have our And it than different we In clients excited reason to faster is This you've than are requiring fundamentally again, excited so help are move seen structural on really in history. investing are ever already is a strategy structural will that it. bets this deliver to doubling our And down way colleagues progress. it that we're really and it We've scale the is a made more This on and innovate about effectively.

Operator

Charlie Our with Citi. next question Lederer is from

Charlie Lederer

program. ask another the acceleration on I'll

play a differentiate about I can a talk digesting lot like ways, you revenue that competitors? of from how correctly? too. synergy you sounds your will in it And So Am it

Christa Davies

Yes.

Business tell across standardizing the this learning operations, catalyst. that's really Services; me whether you then innovation XX,XXX data at thought is platforms your AI is scale drive you or I about you let see every services standardized for of on machine could end Aon Greg What scale And and generative greater Business clients. actually strategy those then is X,XXX apply Aon -- around platforms and clients. analytical Business describe. you to and Eric, here? people, machine create to platforms building and this day top that people driving those as these insight scientists and the if analytics, said, I with the drive and Aon products mean, AI, And think clients, Services really would greater So then But all value at for as what you using data analytics, in is a creating Services of about bring if it, absolutely

Eric Andersen

and where by the It client Absolutely, predicated knowledge more for we're and is the is be doesn't of commercial can talk clients largest, side, as do it health colleagues Chris. the an and strategy We those most we capital needs and a able Listen, deliver care reinsurance bringing business, examples happen just accident. clients. other be the things. whole strategy do all can needs That needs Parametric well to actually our able to which usual complex connectivity, to using on It bonds right enterprise capital where on about needs together to at risk to resiliency upon capabilities clients. analytics, it capability. bringing human lot

excited about really Paul. So the opportunity,

Charlie Lederer

you talent have Got today it. this And like those part this? in kind I Or science feel data the guys your are to have of of guess, do plan? workforce hires you

Eric Andersen

X,XXX data risk scientists our We capital across business. have

And so in that like we're cutting we feel area. edge

Gregory Case

other these and this connect them the -- describing pieces tremendous is of to more own you They're in come right. what is to kind are mechanism They're Christa phenomenal. What effectively. around The their individual the piece firm. wiring, is back the

So analytics just analytics, X,XXX. client around and it's prioritization against interconnected not strategy X,XXX against issues. a a It's around specific

going our business that. the are can to now they're have as and change And that strategy the on going to we do This asking. is time, a it's So that what's done we that we're services. actually relevance clients. down These profile acceleration, for execute questions would thoughtful day the over double

ends the commercial And of analytics so across just or example data huge. Eric Reinsurance. can analytics is and we'll And we'll you going in world. together. up talent, Eventually, given And not on the upon have cut X,XXX is to across it level risk whatever -- is work platform with to so and is just just over cut that health, around have time, it's the talent that top they're execute it integrated that and to not X,XXX single the comparable it's the of the going how becoming

Christa has And compelling. come industry brought has that to some the opportunity differently, they folks in, world understand the at analytics, from from they and see of are the risk have an really find incredibly who volatility and world, class and [indiscernible] in, outside up brought companies literally it

about talking these types going be is our And opportunity lot unlocks issues. colleagues great in clients because a that to really a so a view of this them opportunity of way for they're for is to

Operator

is Our Elyse next Greenspan question Wells from with Fargo.

Elyse Greenspan

color Growth hoping that slowdown else is risk. in question there IPO get and activity? the Is that -- the in quarter. on going was on there I a Or business driving to something M&A that. first My slowed the within commercial quarter? in what's still is on more

Eric Andersen

Eric. is this Elyse,

We look across business, for. EMEA, continue see strong slowdown Very you all and continue [ in P&C. to that and We retention, would core Pacific activity the sort solid see underpinnings it's a of to M&A new reps in warranties, which it's off things of like continue lot the pretty of a the down one-off, services, whether mergers and quarter. that M&A slow ] and whether are things did significantly to that, acquisitions, DL come

Gregory Case

absorb we'll here unbelievably capability. confident this we've well such positioned. come capability transactions and but very We're some And team in future back I they this call, in great got the that this of love invest process, and team. to bullish this behind time, category. the just They last when think will Elyse, we And area and in on do, phenomenal. the said continued very, time and kind are content on quite Eric We the headwind double at have down we're point

Elyse Greenspan

the the within activity to like until would you there X% commercial quarter? expect in stay Or risk So to X% organic range? anything was unique a growth third like the comes back, to

Eric Andersen

When We've world, has way the to strong team excited solid with like areas the the performance. There are we been was future the of of happy some the opportunity. nothing at third quarter. comes and that look around that and when construction held about very some the We're businesses business really back. the specialty unique continue have the performing in area pretty

Elyse Greenspan

to come program. I savings back then to the want And

location, Are slides on -- changes. that the workforce break the is some the in as by you XXXX. Can there can driving fall technology, So you specifically to down the that expecting million are then that the bucket million as of know there's you to line? $XXX bottom platform savings? you mentioned the entirety areas comments in And by well your $XXX I guys

Christa Davies

thanks so for much Elyse. the So question,

the earlier. in the invest made line. year. obviously, as I drop $XXX to example in described months do The in investments the are X million the is first we've that bottom A of of the continuing the we technology yes, good answer is first expect We, to business, to

in needs. in product that platforms expense, technology see our long-term to our meet You technology up, and and operations, development client funding CapEx expense both investments being

then And bottom savings long in the drop of margin the term; of context breakout, for workforce optimization. are growth mid-single-digit of in to do is technology our the $XXX long-term double-digit long primarily to expansion will so 'XX and flow term; they we growth. we And see those 'XX, 'XX but expense expect free organic million line, which the financial the guidance, overall the or and greater terms revenue the breakout in cash be and in

and have on specific on it We each will that, quarter. report not details we provided

Operator

with question JPMorgan. Bhullar is Our from next Jimmy

Jamminder Bhullar

on has first, will sense growth, versus slower an less the So either organic ago, Are or just been results normal have able you your -- quantify to in a be headwind your get how how M&A transaction-related maybe sense a how to activity year much just of of peers versus much that? absolute that maybe growth. versus we of and so

Eric Andersen

And is the Eric. with that would is to just say, say don't maintained This from show outside year-on-year, will I headwinds. that it. number, but recovers, down you and continues certainly just maintained as sources, I Sure. disclose the We've would track listen, recover M&A We've We we that relationships. XX% if team.

hold will that for we clients. in invest be continue react, provides value to business ultimate there we very We great a to those when good the think it right them. and And stay clients continue it's us. they We team. But with and them to close and to really

Jamminder Bhullar

once done? should XXXX get the program Earlier cash than it it free growth is on flow, double-digit then assume we And is after that? Or to in will that? that

Christa Davies

timing. we growth. flow given run free What long-term on We guidance firm we specific on the flow. cash is absolutely the cash expect So we haven't have said free that

and driven free improvements. cash We bullish flow long-term capital income growth working are extremely growth by operating on

will this to so that. contribute absolutely And

very, term. outlook excited the very we're long about so And for free cash flow growth

Jamminder Bhullar

reputational business able to just or the that a then you have Or any questions of And And Okay. regulatory anything impact your seen sort lot discuss your filing? we've you or the do you're beyond on West gotten on lastly, otherwise? from fallout. financial expect what's impact in of

Eric Andersen

-- view Listen, I would Christa, I'm say go a ahead, sorry. from best

Christa Davies

go, No, you Eric.

Eric Andersen

best being other say to very whether view our monitor replace is them continue that one and will have way many is continue to options with we involved just that carefully, would to situation process expectation been clients I our done parties it's whether And the as it's areas. to of Listen, working in it continue through. And the reinsurance, helping lost the capital. evolve see bankruptcy work its that their business provide we to works

Operator

Our Evercore next ISI. with David from question Motemaden is

David Motemaden

accelerated sounds so opportunity. I we Aon program, that little revenue how big just growth side like organic to greater. digit had making guess a question can in the changes the aren't the I'm and that. think surprised I more United a on any your or a on about you mid-single It outlook

would put I'm program to internally. you It be look organic to could some how to it accelerated about sure helpful maybe growth? much talk guys around just contribute it. So this expect just would maybe you numbers at you

trying can opportunity the for just a get here. about I'm we yes, sense think how to revenue So

Gregory Case

is have issues terms and digit time. we relevance, growth. expansion think, well. back be David, or impact clear want help staying progress. to very mid-single more revenue of this continuing that and growth, do cash about matter to client think us clients is free to We're greater literally relevant What on Eric of most double-digit is I to and in I organic be them. over sort about What That flow the though, would will margin going the come this described, just as innovate

strategy increase we're form. and against For delivers that it. opportunity that. that every story, its this you just about there's start us, with way, beyond what love We that does if success and will excited in fantastic. which And or be story. really probability is that, that the And validation certainly with shape and this on accelerates that But incredibly

David Motemaden

maybe you United the then X acceleration And a guys it. Aon strategy -- you maybe -- years Got Aon the is I had of United. this it strategy. ago instituted initially believe But X, an number that was

pandemic? but you we So I'm past, if historically program the looking I at I'm just to United much guess, maybe program. of if organic the not up thinking to saw, wondering Aon in that any Is there this -- how you COVID contributed to that way leading instituted that new size about once program, growth the

Gregory Case

of moving look this. would we to track why, the going time. the is we're because relevant obviously faster We're before have to evolve that very is said, accelerate clients. described this came investments conviction this laid, to as level the because than track opening, it not in now now. make This get We're important a we we Well, and at the now. we've doing We're more we to continues this going that to all to

climate it everything. cyber, out on God, is have risk the everything later, It world If about real, my talked that. risk. you ago, XX been XX around think turns interconnected, might is increasing years right everywhere about years we real There's all the

talk innovate at truly and cannot it, are around the unless everybody on is. delivering -- certainly you're aspect fundamental supporting can that demand you and can't you to equates a clients what more other globe, deliver asking our but so for about connected firm, that And level client the it, a each

the cetera. And so step X, these double you've things what the really and has do bit how entire talent, of the in structurally risk also that's structurally the last we bring process. What capital connected human commercial us sort on spectrum seen not of that. risk, X health, time Aon et months over but on United X, Risk us. down on really analytics only given is ago, spectrum, capital, All together, just risk next that's in come across the reinsurance and

margin done Christa's Under $X capital innovation. equated Services, here on and or Aon a or really it here United services. with D&A. a capital. around impossibility So -- And into it to or This fundamental and got we've us with leadership in before. human to to Aon allowed us It's and capital value for the accelerate leading a It is risk there. what chance with the market isn't That's an capital chance do without about it do it allowed business Aon Eric or revenue United. there to us, connectivity we've ways to human now team enable Business structurally never risk

it. So accelerate before, investment today hearing our what natural saying is all And not than is level saying, you're would see colleagues in And the going doing drive "Okay, really the about we higher that and is to a you and we're have about. clients excitement this, this that's but it." us we want the ever for deliver to us, need because us today is what is that And step process. we of because evolved

Operator

Our from with Yaron is question Jefferies. Kinar next

Unknown Analyst

on Charlie for Yaron. is This

expect a You top year-over-year? guys bps multiyear bps continue of new the to to annual should be incremental pointed I Or track XX record past in should expansion. guess, on savings we have XX the of margin cost we to of roughly that? And expect program roughly

Christa Davies

much so question, Charlie. Thanks for the

you're So right.

a year. XX and what approximately we've X,XXX with a points expansion, margin full program of $XXX expansion and long-term basis sustainable year delivered million of years, we've For savings the points deliver the the said XXXX XX so in bottom expansion last year XXXX, margin long the our of are margin to is And basis where incorporated fall and part this in term. over line. They will the will we XXXX into

help long-term Business for is today. here help to investing And of what Services content that's innovative client-facing drive we're client us in the provide clients Charlie, is analytics to strategy, technology business, earlier, solve better mentioned and which and as and capability to really data colleague investing are innovation solutions the and heart to we in And doing, the really and catalyst needs, really I provide the productivity. Aon more

Unknown Analyst

to just over period? 'XX. million by savings ramp you of How have I the towards should million about $XXX the cost that $XXX same expecting guys about Okay. And guess, think we the then, talked cadence

Christa Davies

guidance given not the specific on $XXX million, have We Charlie.

do will each we what So and quarter. report charges is savings

Operator

from is Shields question with last Our Meyer KBW.

Meyer Shields

First, a guess, Eric. conceptual maybe question, for I

maybe a amounts pressure talked the to expenses there you margin are of give providing? is Can which impact current that relative space, suggests revenues. M&A thinking to about revenue us committed You disproportionate way about of the this being that

Eric Andersen

can a wouldn't with do while think we Listen, would about downturn. about think I talent there's way. that the what it I

clients and the client firm market, And so team we're redeploy work and them they still terms that use those today -- same has sets while can the and we across coverage across certainly around those to client product new to bring firm. working product that coverage, at products with But innovate expertise, trying time, the and that skill the knowledge, put that, opportunities. the can of waiting skills in out that knowledge industry we

was just thinking, the sitting what not you're that if there client but base. deploying they're So we're them into

Meyer Shields

Yes.

That thinking helpful. is Okay. ] that. specially [ Wasn't

the double-digit for from still Second question annual interesting digit Or one. flow double a growth XXXX we of is free gotten that talk we now that free cash the I've done, through good flow, expect are lower When is rate? is sort cash if XXXX? an compound -- cash expect growth this about you the of flow base once charges

Christa Davies

digits. would so much single for is that excited baseline. Meyer. It's That's Look, in free right of we're the high And flow the the question, Thanks about XXXX. note answer. I growth XXXX cash it really

last flow margin long and cash mid-single-digit growth XXXX really the term, free about long to term, exceptional. delivered organic in free long flow long free 'XX We've as CAGR from organic grow revenue long and say, term long term But term. XX double-digit cash growth the we'll and flow expansion And double-digit so cash about you free 'XX, or excited we'll report flow free we're years. is growth it's over -- you Meyer, flow and there. our would think should growth I XX% what cash greater and cash drive mid-single-digit And continue term,

Operator

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

Gregory Case

next wanted very We conversation quarter. Just for to say joining you us. much. Thanks look to everyone forward thank our

Operator

conference. Thank conclude will you. today's This

time, You at and may you your for participation. this your disconnect lines thank

Aon (AON) 27 Oct 232023 Q3 Earnings call transcript