Willis Towers Watson PLC on Thursday reported organic revenue growth of 2% for the first quarter as its top executives said events in Ukraine are likely to dampen short-term dampening of price growth.
Willis reported total sales of $ 2.16 billion, a 3% decrease from $ 2.23 billion over the same period last year. Excluding an effect of 2% due to currency fluctuations, revenues increased by 1%.
Net income for the first quarter was $ 125 million, a decrease of 83% from $ 736 million during the same period last year.
CEO Carl Hess said in a results conversation with analysts that the first quarter marked a “solid start to the year”, with results that were in line with expectations.
“We continue to build momentum and believe that our progress has us on track to reach our financial goals for 2022 and to become a $ 10B + company by 2024,” said Mr. Hess. Willis expects to deliver a medium-term revenue increase this year, he said.
Employment during the quarter was at the highest level since 2019, said Mr. Hess.
Willis incurred a non-cash loss on disposal of $ 57 million and a non-cash impairment loss of $ 81 million related to its decision to transfer ownership of its Russian operations to the local management of the companies.
Its Russian operations accounted for about 1% of the Group’s revenues for 2021 and were mainly in the risk and brokerage segment, said CFO Andrew Krasner during the conversation.
Lost profits from Russia’s operations will create “headwinds with modest margins” for the company in 2022 and beyond, Krasner said.
“The first quarter saw dramatic macroeconomic and geopolitical changes that required us to navigate rapid and significant changes in our markets that we expect will continue to evolve throughout the year,” he said.
Monetary policy and inflationary forces are expected to result in saturated asset values and exposures ultimately translating into premium growth, Krasner said.
Willis’ risk and brokerage segments reported first-quarter revenue of $ 891 million, down 4% from the previous year, and unchanged on an organic basis.
The growth in its insurance consulting and technology operations was offset by a decrease in revenue in corporate risk and brokerage due to the lingering effect of bookkeeping sales noted last year.
Following the failed merger with Aon PLC, Willis sold its reinsurance business to Arthur J. Gallagher & Co. The sale of its London-based unit Miller Insurance Services LLP was also completed in 2021.
Excluding book sales, corporate risk and brokerage saw a modest increase in revenue, primarily from new business in North America in the financial, executive and professional (FINEX) and mergers and acquisitions, said Mr. Hess.
Willi’s Health, Prosperity and Career Segments reported revenue of $ 1.24 billion, an increase of 1% from $ 1.23 billion over the same period last year, and an increase of 2% on an organic basis.
Willis recorded $ 11 million in restructuring costs and $ 3 million in investments during the quarter and has realized savings of $ 36 million since its restructuring program was announced last year.
Approximately $ 2.3 billion in share repurchases were completed during the quarter, achieving the short-term $ 4 billion share repurchase target set on Investor Day in September last year.