Buy
Sell
Share Name Share Symbol Market Type Share ISIN Share Description
Marsh & Mclennan Cos. Inc LSE:MHM London Ordinary Share COM US$1
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 81.00 289 00:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Nonlife Insurance 14,950.0 2,244.0 326.0 24.8 43,821

MARSH & MCLENNAN: Marsh McLennan Reports First Quarter 2022 Results

21/04/2022 12:01pm

UK Regulatory (RNS & others)


Marsh & Mclennan Cos (LSE:MHM)
Historical Stock Chart


From Dec 2021 to Dec 2022

Click Here for more Marsh & Mclennan Cos Charts.
TIDMMHM 
 
 

Marsh McLennan (NYSE: MMC), the world's leading professional services firm in the areas of risk, strategy and people, today reported financial results for the first quarter ended March 31, 2022.

 

Dan Glaser, President and CEO, said: "Marsh McLennan started 2022 with an excellent first quarter. We generated underlying revenue growth of 10%, adjusted operating income growth of 12%, and adjusted EPS growth of 16%. We are well-positioned for another solid year."

 

"The current war in Ukraine has reminded us that risk and uncertainty are constants, and I am proud of the work our colleagues are doing to help one another and our clients navigate the widespread challenges created by this horrific situation."

 

Consolidated Results

 

Consolidated revenue in the first quarter of 2022 was $5.5 billion, an increase of 9% compared with the first quarter of 2021. On an underlying basis, revenue increased 10%. Operating income was $1.4 billion, an increase of 6% from the prior year. Adjusted operating income, which excludes noteworthy items as presented in the attached supplemental schedules, rose 12% to $1.6 billion.

 

Net income attributable to the Company was $1.1 billion, or $2.10 per diluted share, compared with $1.91 in the first quarter of 2021. Adjusted earnings per share rose 16% to $2.30 per diluted share compared with $1.99 a year ago.

 

Risk & Insurance Services

 

Risk & Insurance Services revenue was $3.5 billion in the first quarter of 2022, an increase of 10%, or 11% on an underlying basis. Operating income rose 6% to $1.1 billion, and adjusted operating income was $1.2 billion, an increase of 12% versus a year ago.

 

Marsh's revenue in the first quarter was $2.5 billion, an increase of 11% on an underlying basis. In U.S./Canada, underlying revenue rose 10%. International operations produced underlying revenue growth of 11%, reflecting 17% growth in Asia Pacific, 16% growth in Latin America, and 9% growth in EMEA.

 

Guy Carpenter's revenue in the first quarter was $999 million, an increase of 11% on an underlying basis.

 

Consulting

 

Consulting revenue was $2.0 billion in the first quarter of 2022, an increase of 7%, or 10% on an underlying basis. Operating income increased 8% to $392 million, and adjusted operating income increased 9% to $402 million.

 

Mercer's revenue in the first quarter was $1.3 billion, an increase of 6% on an underlying basis. Career revenue of $202 million was up 16% on an underlying basis. Health revenue of $524 million increased 9% on an underlying basis, and Wealth revenue of $617 million increased 2% on an underlying basis.

 

Oliver Wyman's revenue in the first quarter was $667 million, an increase of 17% on an underlying basis.

 

Other Items

 

The Company repurchased 3.2 million shares of stock for $500 million in the first quarter.

 

In March, Marsh McLennan announced it would exit all of its businesses in Russia and transfer ownership of its Russian business to local management who will operate independently in the Russian market.

 

Conference Call

 

A conference call to discuss first quarter 2022 results will be held today at 8:30 a.m. Eastern time. To participate in the teleconference, please dial +1 866 437 7574. Callers from outside the United States should dial +1 409 220 9376. The access code for both numbers is 3058039. The live audio webcast may be accessed at marshmclennan.com. A replay of the webcast will be available approximately two hours after the event.

 

About Marsh McLennan

 

Marsh McLennan (NYSE: MMC) is the world's leading professional services firm in the areas of risk, strategy and people. The Company's 83,000 colleagues advise clients in 130 countries. With annual revenue of approximately $20 billion, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses. Marsh provides data-driven risk advisory services and insurance solutions to commercial and consumer clients. Guy Carpenter develops advanced risk, reinsurance and capital strategies that help clients grow profitably and pursue emerging opportunities. Mercer delivers advice and technology-driven solutions that help organizations redefine the world of work, reshape retirement and investment outcomes, and unlock health and well being for a changing workforce. Oliver Wyman serves as a critical strategic, economic and brand advisor to private sector and governmental clients. For more information, visit marshmclennan.com, follow us on LinkedIn and Twitter or subscribe to BRINK.

 

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

 

This press release contains "forward-looking statements," as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management's current views concerning future events or results, use words like "anticipate," "assume," "believe," "continue," "estimate," "expect," "intend," "plan," "project" and similar terms, and future or conditional tense verbs like "could," "may," "might," "should, " "will" and "would".

 

Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed or implied in our forward-looking statements. Factors that could materially affect our future results include, among other things:

   -- the impact of geopolitical or macroeconomic conditions on us, our clients 
      and the countries and industries in which we operate, including from 
      conflicts such as the war in Ukraine, capital markets volatility and 
      inflation; 
   -- the increasing prevalence of ransomware, supply chain and other forms of 
      cyber attacks, and their potential to disrupt our operations and result 
      in the disclosure of confidential client or company information; 
   -- the impact from lawsuits or investigations arising from errors and 
      omissions, breaches of fiduciary duty or other claims against us in our 
      capacity as a broker or investment advisor, including claims related to 
      our investment business' ability to execute timely trades in light of 
      increased trading volume; 
   -- the financial and operational impact of complying with laws and 
      regulations, including domestic and international sanctions regimes, 
      anti-corruption laws such as the U.S. Foreign Corrupt Practices Act, U.K. 
      Anti Bribery Act and cybersecurity and data privacy regulations; 
   -- our ability to attract, retain and develop industry leading talent; 
   -- our ability to compete effectively and adapt to competitive pressures in 
      each of our businesses, including from disintermediation as well as 
      technological change, digital disruption and other types of innovation; 
   -- our ability to manage potential conflicts of interest that may arise 
      across our businesses given our expanding client base, the broad scope of 
      our work and the significant volume of our engagements; 
   -- the impact of changes in tax laws, guidance and interpretations, or 
      disagreements with tax authorities; and 
   -- the regulatory, contractual and reputational risks that arise based on 
      insurance placement activities and insurer revenue streams. 
 

The factors identified above are not exhaustive. Marsh McLennan and its subsidiaries (collectively, the "Company") operate in a dynamic business environment in which new risks emerge frequently. Accordingly, we caution readers not to place undue reliance on any forward-looking statements, which are based only on information currently available to us and speak only as of the dates on which they are made. The Company undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date on which it is made.

 

Further information concerning Marsh McLennan and its businesses, including information about factors that could materially affect our results of operations and financial condition, is contained in the Company's filings with the Securities and Exchange Commission, including the "Risk Factors" section and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of our most recently filed Annual Report on Form 10-K.

 
 
Marsh & McLennan Companies, Inc. 
 Consolidated Statements of Income 
 (In millions, except per share data) 
 (Unaudited) 
 
 
                                            Three Months Ended 
                                             March 31, 
                                                2022       2021 
Revenue                                     $   5,549     $5,083 
Expense: 
Compensation and benefits                       3,100      2,807 
Other operating expenses                        1,004      918 
Operating expenses                              4,104      3,725 
Operating income                                1,445      1,358 
Other net benefit credits                       62         71 
Interest income                                 1          -- 
Interest expense                                (110   )   (118  ) 
Investment income                               26         11 
Income before income taxes                      1,424      1,322 
Income tax expense                              338        324 
Net income before non-controlling 
 interests                                      1,086      998 
Less: Net income attributable to 
 non-controlling interests                      15         15 
Net income attributable to the Company      $   1,071     $983 
Net income per share attributable to the 
Company: 
- Basic                                     $   2.13      $1.93 
- Diluted                                   $   2.10      $1.91 
Average number of shares outstanding: 
- Basic                                         503        509 
- Diluted                                       509        514 
Shares outstanding at March 31                  502        509 
 
 

Marsh & McLennan Companies, Inc.

Supplemental Information - Revenue Analysis

Three Months Ended March 31

 

(Millions) (Unaudited)

 

The Company conducts business in 130 countries. As a result, foreign exchange rate movements may impact period-to-period comparisons of revenue. Similarly, certain other items such as acquisitions and dispositions, including transfers among businesses, may impact period-to-period comparisons of revenue. Underlying revenue measures the change in revenue from one period to the next by isolating these impacts.

 
                                             Components of Revenue Change* 
                                  % 
                                   Change                 Acquisitions/ 
                Three Months       GAAP      Currency      Dispositions/   Underlying 
                Ended March 31,    Revenue    Impact       Other Impact     Revenue 
                 2022     2021 
Risk and 
Insurance 
Services 
Marsh           $2,546   $2,325   10 %       (2  ) %      1   %            11 % 
Guy Carpenter    999      895     12 %       (1  ) %      2   %            11 % 
Subtotal         3,545    3,220   10 %       (2  ) %      1   %            11 % 
Fiduciary 
 interest 
 income          4        5 
Total Risk and 
 Insurance 
 Services        3,549    3,225   10 %       (2  ) %      1   %            11 % 
Consulting 
Mercer           1,343    1,288   4  %       (2  ) %      --               6  % 
Oliver Wyman 
 Group           667      585     14 %       (2  ) %      (1    ) %        17 % 
Total 
 Consulting      2,010    1,873   7  %       (2  ) %      --               10 % 
Corporate 
 Eliminations    (10  )   (15  ) 
Total Revenue   $5,549   $5,083   9  %       (2  ) %      1   %            10 % 
 
 

Revenue Details

 

The following table provides more detailed revenue information for certain of the components presented above:

 
                                             Components of Revenue Change* 
                                  % 
                 Three Months      Change                 Acquisitions/ 
                 Ended March       GAAP      Currency      Dispositions/   Underlying 
                 31,               Revenue    Impact       Other Impact     Revenue 
                 2022    2021 
Marsh: 
EMEA             $842    $837     1  %       (4  ) %      (4    ) %        9  % 
Asia Pacific      321     274     17 %       (4  ) %      5   %            17 % 
Latin America     104     90      15 %       (1  ) %      --               16 % 
Total 
 International    1,267   1,201   6  %       (4  ) %      (2    ) %        11 % 
U.S./Canada       1,279   1,124   14 %       --           4   %            10 % 
Total Marsh      $2,546  $2,325   10 %       (2  ) %      1   %            11 % 
Mercer: 
Wealth           $617    $623     (1   ) %   (3  ) %      --               2  % 
Health            524     487     8  %       (2  ) %      1   %            9  % 
Career            202     178     13 %       (3  ) %      --               16 % 
Total Mercer     $1,343  $1,288   4  %       (2  ) %      --               6  % 
 
 
* Components of revenue change may not add due to rounding. 
 
 

Marsh & McLennan Companies, Inc.

Reconciliation of Non-GAAP Measures

Three Months Ended March 31

 

(Millions) (Unaudited)

 

Overview

 

The Company reports its financial results in accordance with accounting principles generally accepted in the United States (referred to in this release as in accordance with "GAAP" or "reported" results). The Company also refers to and presents certain additional non-GAAP financial measures, within the meaning of Regulation G in accordance with the Securities Exchange Act of 1934. These measures are: adjusted operating income (loss), adjusted operating margin, adjusted income, net of tax and adjusted earnings per share (EPS). The Company has included reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated in accordance with GAAP in the following tables.

 

The Company believes these non-GAAP financial measures provide useful supplemental information that enables investors to better compare the Company's performance across periods. Management also uses these measures internally to assess the operating performance of its businesses, to assess performance for employee compensation, and to decide how to allocate resources. However, investors should not consider these non-GAAP measures in isolation from, or as a substitute for, the financial information that the Company reports in accordance with GAAP. The Company's non-GAAP measures include adjustments that reflect how management views its businesses, and may differ from similarly titled non-GAAP measures presented by other companies.

 

Adjusted Operating Income (Loss) and Adjusted Operating Margin

 

Adjusted operating income (loss) is calculated by excluding the impact of certain noteworthy items from the Company's GAAP operating income (loss). The following tables identify these noteworthy items and reconcile adjusted operating income (loss) to GAAP operating income (loss), on a consolidated and reportable segment basis, for the three months ended March 31, 2022 and 2021. The following tables also present adjusted operating margin. For the three months ended March 31, 2022 and 2021, adjusted operating margin is calculated by dividing the sum of adjusted operating income and identified intangible asset amortization by consolidated or segment adjusted revenue.

 
                       Risk & 
                       Insurance                     Corporate/ 
                       Services      Consulting       Eliminations     Total 
Three Months Ended 
March 31, 2022 
Operating income 
 (loss)                $1,121        $   392         $    (68  )       $1,445 
Operating margin        31.6 %           19.5 %           N/A           26.0 % 
Add (deduct) impact 
of noteworthy 
items: 
Restructuring (a)       15               7                8             30 
Changes in contingent 
 consideration (b)      10               --               --            10 
JLT 
 acquisition-related 
 costs and other (c)    12               1                --            13 
JLT legacy E&O 
 provision (d)          --               (10  )           --            (10  ) 
Legal claims (e)        30               --               --            30 
Deconsolidation of 
 Russian businesses 
 and other related 
 charges (f)            40               12               --            52 
Operating income 
 adjustments            107              10               8             125 
Adjusted operating 
 income (loss)         $1,228        $   402         $    (60  )       $1,570 
Total identified 
 intangible 
 amortization 
 expense               $78           $   13          $    --           $91 
Adjusted operating 
 margin                 36.5 %           20.6 %           N/A           29.7 % 
 
 
Three Months Ended 
March 31, 2021 
Operating income 
 (loss)                $1,060        $   361         $    (63  )       $1,358 
Operating margin        32.9 %           19.3 %           N/A           26.7 % 
Add (deduct) impact 
of noteworthy 
items: 
Restructuring (a)       17               11               6             34 
Changes in contingent 
 consideration (b)      6                (6   )           --            -- 
JLT 
 acquisition-related 
 costs (c)              11               1                --            12 
Other                   (2   )           3                --            1 
Operating income 
 adjustments            32               9                6             47 
Adjusted operating 
 income (loss)         $1,092        $   370         $    (57  )       $1,405 
Total identified 
 intangible 
 amortization 
 expense               $86           $   14          $    --           $100 
Adjusted operating 
 margin                 36.6 %           20.5 %           N/A           29.6 % 
 
 
(a)    Restructuring activities reflect costs related to the Company's global 
       information technology and HR functions, JLT integration costs, Marsh 
       (RIS) operational excellence and adjustments to restructuring 
       liabilities for future rent under non-cancellable leases. 
(b)    Primarily includes the change in fair value of contingent consideration 
       related to acquisitions and dispositions as measured each quarter. 
(c)    Includes retention costs and legal charges related to the acquisition 
       of JLT. 
(d)    Reflects recoveries under indemnities for a legacy JLT E&O matter 
       relating to suitability of advice provided to individuals for defined 
       benefit pension transfers in the U.K. 
(e)    Settlement charges and legal costs related to strategic recruiting. 
(f)    Loss on deconsolidation of Russian businesses and other related 
       charges. The loss on deconsolidation is included in revenue and 
       excluded from underlying revenue calculations and adjusted operating 
       margin. 
 
 

Marsh & McLennan Companies, Inc.

Reconciliation of Non-GAAP Measures

Three Months Ended March 31

(In millions, except per share data)

 

(Unaudited)

 

Adjusted income, net of tax is calculated as the Company's GAAP income from continuing operations, adjusted to reflect the after tax impact of the operating income adjustments in the preceding tables and the additional items listed below. Adjusted EPS is calculated by dividing the Company's adjusted income, net of tax, by average number of shares outstanding-diluted for the relevant period. The following tables reconcile adjusted income, net of tax to GAAP income from continuing operations and adjusted EPS to GAAP EPS for the three month periods ended March 31, 2022 and 2021.

 
                  Three Months Ended         Three Months Ended 
                   March 31, 2022             March 31, 2021 
                                 Adjusted                   Adjusted 
                  Amount          EPS        Amount          EPS 
Net income 
 before 
 non-controlling 
 interests, as 
 reported                $1,086                    $998 
Less: 
 Non-controlling 
 interest, net 
 of tax                   15                        15 
Subtotal                 $1,071  $   2.10          $983     $   1.91 
Operating income 
 adjustments      $125                       $47 
Investments 
 adjustment (a)    (9 )                       -- 
Income tax 
 effect of 
 adjustments 
 (b)               (18)                       (9) 
                          98         0.20           38          0.08 
Adjusted income, 
 net of tax              $1,169  $   2.30          $1,021   $   1.99 
 
 
 
(a)    Represents mark-to-market gains primarily related to the Company's 
       investment in Alexander Forbes ("AF"). 
(b)    For items with an income tax impact, the tax effect was calculated 
       using an effective tax rate based on the tax jurisdiction for each 
       item. 
 
 
 
 
Marsh & McLennan Companies, Inc. 
 Supplemental Information 
 Three Months Ended March 31 
 (Millions) (Unaudited) 
 
 
                                               Three Months Ended 
                                                March 31, 
                                               2022          2021 
Consolidated 
Compensation and benefits                      $   3,100     $2,807 
Other operating expenses                           1,004      918 
Total expenses                                 $   4,104     $3,725 
 
Depreciation and amortization expense          $   89        $97 
Identified intangible amortization expense         91         100 
Total                                          $   180       $197 
 
Stock option expense                           $   5         $21 
 
Risk and Insurance Services 
Compensation and benefits                      $   1,801     $1,610 
Other operating expenses                           627        555 
Total expenses                                 $   2,428     $2,165 
 
Depreciation and amortization expense          $   43        $50 
Identified intangible amortization expense         78         86 
Total                                          $   121       $136 
 
Consulting 
Compensation and benefits                      $   1,164     $1,074 
Other operating expenses                           454        438 
Total expenses                                 $   1,618     $1,512 
 
Depreciation and amortization expense          $   26        $29 
Identified intangible amortization expense         13         14 
Total                                          $   39        $43 
 
 
 
 
Marsh & McLennan Companies, Inc. 
 Consolidated Balance Sheets 
 (Millions) 
 
 
                                        (Unaudited) 
                                         March 31,      December 31, 
                                         2022            2021 
ASSETS 
Current assets: 
Cash and cash equivalents               $   772         $   1,752 
Net receivables                             5,963           5,586 
Other current assets                        1,053           926 
Total current assets                        7,788           8,264 
 
Goodwill and intangible assets              18,974          19,127 
Fixed assets, net                           865             847 
Pension related assets                      2,246           2,270 
Right of use assets                         1,825           1,868 
Deferred tax assets                         530             551 
Other assets                                1,460           1,461 
TOTAL ASSETS                            $   33,688      $   34,388 
 
LIABILITIES AND EQUITY 
Current liabilities: 
Short-term debt                         $   1,191       $   17 
Accounts payable and accrued 
 liabilities                                3,084           3,165 
Accrued compensation and employee 
 benefits                                   1,400           2,942 
Current lease liabilities                   331             332 
Accrued income taxes                        308             198 
Dividends payable                           273             -- 
Total current liabilities                   6,587           6,654 
 
Fiduciary liabilities                       10,461          9,622 
Less - cash and cash equivalents held 
 in a fiduciary capacity                    (10,461  )      (9,622   ) 
                                            --              -- 
Long-term debt                              10,552          10,933 
Pension, post-retirement and 
 post-employment benefits                   1,515           1,632 
Long-term lease liabilities                 1,831           1,880 
Liabilities for errors and omissions        352             355 
Other liabilities                           1,695           1,712 
 
Total equity                                11,156          11,222 
TOTAL LIABILITIES AND EQUITY            $   33,688      $   34,388 
 
 
 
 
Marsh & McLennan Companies, Inc. 
 Consolidated Statements of Cash Flows 
 (Millions) (Unaudited) 
 
 
                                              Three Months Ended 
                                              March 31, 
                                                  2022       2021 
Operating cash flows: 
Net income before non-controlling interests   $   1,086     $998 
Adjustments to reconcile net income to cash 
used for operations: 
Depreciation and amortization                     180        197 
Non cash lease expense                            77         79 
Deconsolidation of Russian businesses             39         -- 
Share-based compensation expense                  105        78 
Net (gain) loss on investments, disposition 
 of assets and other                              (17    )   (9    ) 
 
Changes in assets and liabilities: 
Accrued compensation and employee benefits        (1,528 )   (1,167) 
Net receivables                                   (429   )   (404  ) 
Other changes to assets and liabilities           (6     )   4 
Contributions to pension and other benefit 
 plans in excess of current year credit           (125   )   (102  ) 
Operating lease liabilities                       (84    )   (82   ) 
Net cash used for operations                      (702   )   (408  ) 
Financing cash flows: 
Purchase of treasury shares                       (500   )   (112  ) 
Net proceeds from issuance of commercial 
paper                                             825        -- 
Repayments of debt                                (4     )   (4    ) 
Net issuance of common stock from treasury 
 shares                                           (100   )   (58   ) 
Net distributions of non-controlling 
 interests and deferred/contingent 
 consideration                                    (20    )   (40   ) 
Dividends paid                                    (272   )   (237  ) 
Increase in fiduciary liabilities                 926        190 
Net cash provided by (used for) financing 
 activities                                       855        (261  ) 
Investing cash flows: 
Capital expenditures                              (122   )   (69   ) 
Net (purchase) sale of long-term investments 
 and other                                        (9     )   2 
Dispositions                                      (4     )   -- 
Acquisitions                                      (24    )   -- 
Net cash used for investing activities            (159   )   (67   ) 
Effect of exchange rate changes on cash, 
 cash equivalents, and cash and cash 
 equivalents held in a fiduciary capacity         (136   )   (36   ) 
Decrease in cash, cash equivalents, and cash 
 and cash equivalents held in a fiduciary 
 capacity                                         (142   )   (772  ) 
Cash, cash equivalents, and cash and cash 
 equivalents held in a fiduciary capacity at 
 beginning of period                              11,375     10,674 
Cash, cash equivalents, and cash and cash 
 equivalents held in a fiduciary capacity at 
 end of period                                $   11,233    $9,902 
 
 
Reconciliation of cash, cash equivalents, and cash and cash 
equivalents held in a fiduciary capacity to the Consolidated Balance 
Sheets 
Three Months Ended March 31,                      2022       2021 
(In millions) 
Cash and cash equivalents                     $   772       $1,120 
Cash and cash equivalents held in a 
 fiduciary capacity                               10,461     8,782 
Total cash, cash equivalents, and cash and 
 cash equivalents held in a fiduciary 
 capacity                                     $   11,233    $9,902 
 

Media Contact:

Erick R. Gustafson

Marsh McLennan

+1 202 263 7788

erick.gustafson@mmc.com

 

Investor Contact:

Sarah DeWitt

Marsh McLennan

+1 212 345 6750

 

sarah.dewitt@mmc.com

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220420006129/en/

 
    CONTACT: 

Marsh & McLennan

 
    SOURCE: Marsh & McLennan 
Copyright Business Wire 2022 
 

(END) Dow Jones Newswires

April 21, 2022 07:01 ET (11:01 GMT)

1 Year Marsh & Mclennan Cos Chart

1 Year Marsh & Mclennan Cos Chart

1 Month Marsh & Mclennan Cos Chart

1 Month Marsh & Mclennan Cos Chart
Your Recent History
LSE
MHM
Marsh & Mc..
Register now to watch these stocks streaming on the ADVFN Monitor.

Monitor lets you view up to 110 of your favourite stocks at once and is completely free to use.

Log in to ADVFN
Register Now

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V:gb D:20221209 23:43:50