Willis Towers Watson PLC Q3 2024 Earnings Call Transcript

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

Question: Mitch Rubin - Raymond James Financial Inc. - Analyst : This is Mitch Rubin on behalf of Greg Peters. Can you clarify the impact of the sale of TRANZACT on Q3 organic results and free cash flow?

Question: Mitch Rubin - Raymond James Financial Inc. - Analyst : As a follow-up, can you provide some additional color on the impact of new hires and growth and exposure units on organic growth inside risk and broking?

Question: Elyse Greenspan - Wells Fargo & Co. - Analyst : So my first question, Carl, you started off by saying positive, there's a tailwind to this year's margin guide. And Andrew, you lowered the tax guidance and up the buyback guidance but you guys have not changed the EPS guidance for the year. Is there just some conservatism built in? Do you expect to be at the high end of the range? How do we think about these positive updates relative to the lack of change in overall 2024 EPS guide?

Question: Elyse Greenspan - Wells Fargo & Co. - Analyst : And then my follow-up was on repurchase. I appreciate, right, that you guys did this year's guidance by $150 million, but you guys are coming into good amount of cash last year. We have the earn-out from [Gallagher 750], right, something in the range, just [$100 million] from the TRANZACT divestiture. So when you think about all this cash coming in door, Carl, I think you said a balanced approach to M&A. So I'm just trying to think about how you're going to balance like incremental repurchase. And my assumption is if M&A is considered, it will probably be more bolt-on things. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 1:00PM, WTW.OQ - Q3 2024 Willis Towers Watson PLC Earnings Call

Question: Rob Cox - Goldman Sachs Asset Management LP - Analyst : Just following up on the organic growth question. I mean it appears that risk broking organic, excluding investment income and book settlements might have accelerated in the quarter. Can you talk about what continues to drive the strong performance there? And if you see anything that would lead you to believe growth would be materially different in the fourth quarter as you head into kind of your largest revenue quarter there.

Question: Rob Cox - Goldman Sachs Asset Management LP - Analyst : Okay. Appreciate that color. And then as my follow-up, I was hoping you guys could comment on what type of magnitude of the tax shield might be expecting from the sale of the TRANZACT business? And kind of secondly, like the tax rate is actually getting better this year, but could you comment on if you're seeing any potential pressure into 2025, given some of the global regulatory changes on taxes?

Question: Mark Hughes - Truist Securities Inc. - Analyst : Carl, you talked about seeing better productivity from your new talent and you've got a lot of capital that's available. Are you kind of redoing this acceleration in hiring that you did a couple of years ago post the transaction? I mean, is that something that you're pursuing? Or could you give us some sense of how that hiring pace has continued in the last 6, 12 months?

Question: Mark Hughes - Truist Securities Inc. - Analyst : And then Andrew, the transformation program, I think you've got some disclosures in the presentation. But the cash impact, the cash headwinds from that transformation program for full year 2024, can you give us a sense of what that number is? And then how much of that cash impact extends over into early 2025? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 1:00PM, WTW.OQ - Q3 2024 Willis Towers Watson PLC Earnings Call

Question: Peter Knudsen - Evercore ISI - Analyst : Carl, you mentioned some optimism coming from a rebound in global M&A activity. I'm just wondering, could you give us some more color on what your team is seeing today that's causing that optimism?

Question: Peter Knudsen - Evercore ISI - Analyst : Okay. Got it. That's helpful. And then for my second question, on the continued temper demand in consulting services. I'm just curious what the conversations with clients are like similarly, are you seeing any green shoots of this returning as well? And just any commentary on when you might expect this headwind to go away would be great.

Question: Peter Knudsen - Evercore ISI - Analyst : No, that was for ICT, yeah.

Question: Katie Sakys - Autonomous Research US LP - Analyst : I just wanted to ask about you guys' perspective on specifically middle markets. We've seen quite a bit of pickup in big main deal activity there. And I'm curious what Willis' own strategy and approach towards the middle market opportunity is as we think about the next year ahead? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 1:00PM, WTW.OQ - Q3 2024 Willis Towers Watson PLC Earnings Call

Question: Mark Marcon - Robert W. Baird & Co. - Analyst : Nice results. Wondering if you can talk a little bit more about HWC in two respects. First of all, with regards to the health side, you've obviously -- Carl, you've been through multiple election cycles, how do you think the healthcare consulting portion of the business is going to be impacted by the changes that could potentially happen one way or the other on that part of the business?

Question: Mark Marcon - Robert W. Baird & Co. - Analyst : That's my suspicion. And then going on to the wealth side and specifically with regards to pension, I'm sure you've seen all the news with regards to Boeing. And I'm just wondering to what extent that could end up spurring some actions on the pension side, particularly with regards to de-risking. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 1:00PM, WTW.OQ - Q3 2024 Willis Towers Watson PLC Earnings Call