WTW posts robust growth for Q2 2024, raises full-year targets
WTW posts robust growth for Q2 2024, raises full-year targets | Insurance Business Canada
Insurance News
WTW posts robust growth for Q2 2024, raises full-year targets
Organisation saw an increase of 5% in revenue
Insurance News
By
Jonalyn Cueto
WTW, a global advisory, broking, and solutions company, announced its financial results for the second quarter of 2024. The company reported a 5% increase in revenue, reaching almost US$2.3 billion, with organic growth of 6%.
“WTW delivered a strong second quarter, generating significant EPS growth and margin expansion through robust organic growth, operating efficiency, and the continued execution of our transformation program,” said Carl Hess, CEO of WTW. “These results show that our efforts to grow, simplify, and transform WTW continue to create sustainable value for shareholders, clients, and colleagues.”
Financial results
Revenue for Q2 2024 stood at about US$2.27 billion, up from US$2.16 billion in Q2 2023, marking a 5% increase year over year. Excluding foreign currency impacts, revenue grew by 6%.
Net income for Q2 2024 was US$142 million, a significant 48% increase from US$96 million in Q2 2023.
Diluted earnings per share (EPS) were US$1.36, up 55% from US$0.88 in the prior year. Adjusted diluted EPS rose 24% to US$2.55, compared to US$2.05 in Q2 2023.
Operating margin improved to 9.4%, up 280 basis points from the previous year. Adjusted operating margin increased by 240 basis points to 17.0%.
WTW generated US$431 million in operating cash flow for Q2 2024, similar to the previous year. Free cash flow for the first half of 2024 increased by US$11 million to US$361 million, driven by operating margin expansion. The company repurchased US$200 million of its outstanding shares during the quarter.
Segment performance
The Health, Wealth & Career (HWC) segment saw revenue of US$1.26 billion in Q2 2024, a 4% increase from US$1.22 billion in Q2 2023. The segment’s organic growth, according to the company statement, was driven by increased project work in North America, strong client retention, and expansion of the Global Benefits Management client portfolio. Operating margins in HWC rose to 21.9%, up 360 basis points.
The Risk & Broking (R&B) segment reported revenue of US$979 million, up 9% from US$900 million in Q2 2023. Corporate Risk & Broking saw organic growth due to higher levels of new business activity, strong client retention, and renewal increases across all regions. Operating margins in R&B improved to 20.6%, a 450-basis point increase.
Outlook and future targets
WTW has raised the lower end of its full-year targets for adjusted operating margin to 23.0%-23.5% and adjusted diluted EPS to US$16.00-US$17.00 following the results for the first half of 2024. The company also increased its annual cost savings target, from US$425 million to US$450 million.
WTW will host a conference call to discuss these results on July 25, 2024, at 9:00 a.m. Eastern Time. The webcast and call will be accessible on the company’s website, with a replay available shortly after the event.
WTW provides data-driven, insight-led solutions in the areas of people, risk, and capital, helping organizations enhance strategy, resilience, and performance. Serving 140 countries and markets, WTW collaborates closely with clients to uncover opportunities for sustainable success.
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