Willis Towers Watson PLC Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Gregory Peters - Raymond James - Analyst : Good morning, everyone. So thanks for the detail in your comments, and just some a question around the tariff and trade uncertainty. Hi, Carl. You mentioned the career business and the investment businesses having some pressure. Andrew, you talked about the health business, being high-single digit component. Maybe you can give us some more color on how this is going to unfold and generate this mid-single digit type growth that you're forecasting for health, wealth, and career for the year?

Question: Gregory Peters - Raymond James - Analyst : Absolutely. I'm not sure if you guys heard it or not, but I'll certainly go at it again. So first of all, good morning, but then secondly, in your comments, Carl, you talked about some headwinds from tariffs on and potential economic volatility on the career business and the investment business. Andrew, in your comments, you talked about the health business being up high-single digits for the year. Maybe give us some additional color, what's driving your expectation for mid-single digits in health, wealth and career for the year, given all the give the puts and takes? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 1:00PM, WTW.OQ - Q1 2025 Willis Towers Watson PLC Earnings Call

Question: Gregory Peters - Raymond James - Analyst : That is excellent detail. Thank you. I guess, I'd like to just take the same question and apply it to the risk and broken segment. Because, the tariffs are a popular topic among all the conference calls and management, dealing with the challenges there and the potential for economic slowdown, maybe you can give us some additional detail on how you're thinking about organic revenue growth and the risk invoking business for the year?

Question: Gregory Peters - Raymond James - Analyst : Got it. Thanks for the answers.

Question: Elyse Greenspan - Wells Fargo - Analyst : Hi, thanks. Good morning. My first question is on HWC. I think in the fourth quarter you guys had alluded to some timing, right, revenue being pushed from Q4 to Q1 in Korea and perhaps in other areas and did that revenue come online in the Q1, or is that now getting pushed back a bit further in, when you guys are talking about a stronger half year to this year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 1:00PM, WTW.OQ - Q1 2025 Willis Towers Watson PLC Earnings Call

Question: Elyse Greenspan - Wells Fargo - Analyst : Thanks and then, my follow up, was on free cash flow if you can just talk about your expectations for the full year and just walk us through, any puts and takes. I know you mentioned Andrew some of the TRANZACT, first half versus the second half and your opening comments, but anything else that we should be thinking about, for free cash flow this year?

Question: Rob Cox - Goldman Sachs - Analyst : Hey thanks. First question I wanted to ask about M&A, you all talked about increasingly emphasizing M&A back at the Investor Day and then here today in the comments and we've seen one deal so far which is a little bit lighter than some of the public and private broker run rate but so I was just curious, did you think you would have acquired more businesses by now when you outlined the strategy back in December and are you still seeing deals out there and what's stopping you from doing more?

Question: Rob Cox - Goldman Sachs - Analyst : Appreciate the color maybe as a follow up on the macro environment, I mean, given Willis is a global business, I'm curious when you look out at the operating environment and based on your client conversations are you seeing any more economic weakness or uncertainty in certain geographies?

Question: Rob Cox - Goldman Sachs - Analyst : Thank you.

Question: Paul Newsome - Piper Sandler & Co. - Analyst : Good morning. Thanks for the call. I was hoping you could give us a little additional color on in the risk and broken business on carrier competition. We're hearing a lot about weakness in the large account business and maybe some resilience elsewhere, and, obviously Willis has a mix of business between middle and large, that's close, but we know it's important. So any thoughts on both what you're seeing in the marketplace plus the implications for your businesses?

Question: Paul Newsome - Piper Sandler & Co. - Analyst : That's one. That's very helpful. Thank you. Alternative question, a little bit more of a modeling approach question. So I'm getting quite a bit of questions from investors about market implications, equity, financial market implications on wealth and career, and I think you've touched on this, but maybe a few thoughts would be great just to talk about sort of the sensitivity. Of those businesses directly, it is simply a matter of just looking at the assets and the management and the relationship there, but I suspect there's way more to it, but any thoughts there that I think help folks who are trying to model this from an asset management perspective?

Question: Paul Newsome - Piper Sandler & Co. - Analyst : Thank you. I really appreciate the help as always. Very much appreciated.

Question: Brian Meredith - UBS - Analyst : Yeah, thank you. I -- first one, Lucy, just could you remind us how big is the transactional business as a part of your overall business and is that going to be a headwind at all here as we look forward? I know it's been relatively low, but I thought it picked up second half of last year.

Question: Brian Meredith - UBS - Analyst : Okay, thanks. And then, second question, I'm just curious on share buyback in the quarter. I appreciate that the first quarter is usually the weaker or the free cash flow quarters, but I would have thought with the correction your stock had post fourth quarter results as you've been a little bit more aggressive with share buyback, was there anything else to kind of think about, that may be prevented you from buying back more shares in the in the quarter?

Question: Brian Meredith - UBS - Analyst : Great. Thanks.

Question: David Motemaden - Evercore ISI - Analyst : Hey, good morning. I wanted to focus on wealth and BD&O, where I think you, guys had called out a few areas of project activity, timing that negatively impacted you guys. Wondering if you could size that impact that each of those had on each of the segment organic growth rates and then maybe just elaborate a bit more on your visibility into those coming online over the rest of the year? I get that demand for your services has gone up, but if it's project work, it sounds kind of discretionary in nature. So just wondering what your conversations with clients have been on those and what gives you some confidence that we're going to see that revert back?

Question: David Motemaden - Evercore ISI - Analyst : Great thank you thanks for that that makes sense. And then maybe Andrew, just following up on the free cash flow you had mentioned, the TRANZACT sale was the headwind of free cash flow this quarter and it will be next quarter as well. I'm wondering if you could just size that how much of a headwind it was to free cash flow this quarter, and then the expectation for the headwind for next quarter just so I can sort of break down the components?

Question: David Motemaden - Evercore ISI - Analyst : Perfect, thank you.

Question: Mark Hughes - - Analyst : Yeah, thank you. Good morning. In the ICT, the organic 3%, this quarter last quarter is 11%. Was that just timing of new business or was there any sort of fundamental transition or inflection there?

Question: Mark Hughes - - Analyst : Very good. And then on the reinsurance, JB, any change in your estimate for cost for the full year and any quick comments on how that's ramping? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 1:00PM, WTW.OQ - Q1 2025 Willis Towers Watson PLC Earnings Call

Question: Mark Hughes - - Analyst : Understood. Thank you.

Question: Mark Marcon - Robert W. Baird & Company - Analyst : Good morning, Carl. In your prepared remarks, you went through a number of new business wins, and I was wondering, it sounded to me like there's a greater proportion of them, that you mentioned than you've historically mentioned or even going back to John. So I'm wondering, number one, do you have any sort of qualification with regards to the number of new business wins and the magnitude of the potential revenue that's coming on relative to prior quarters or any sort of quantification at all? Number one. And number two, to what extent is it coming from some of the new talent that you've added relative to some of the existing folks, is it a sign of increasing productivity from some of the new hires? Thank you.