Willis Towers Watson (WTW) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 27, 2023 9:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning. Welcome to the WTW Second Quarter 2023 Earnings Conference Call. Please refer to the wtwco.com for the press release and supplemental information that is issued earlier today. Today's call is being recorded and will be available for the next 3 months on WTW's website.

Some of the comments in today's call may constitute forward-looking statements within the meaning of the Private Securities Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties. Actual results may differ materially from those discussed today, and the company undertakes no obligation to update these statements unless required by law. For a more detailed discussion of these and other risk factors, Investors should review the forward-looking statements section of the earnings press release issued this morning, as well as, other disclosures in the most recent Form 10-K and in other Willis Towers Watson SEC filings.

During the call, certain non-GAAP financial measures may be discussed. For reconciliation of the non-GAAP measures as well as other information regarding these measures, please refer to the most recent earnings release and other materials in the Investor Relations section of the company's website.

I'll now turn the call over to Carl Hess, WTW's Chief Executive Officer. Please go ahead.

Carl Hess

Good morning, everyone. Thank you for joining us for WTW Second Quarter 2023 Earnings Call. Joining me today is Andrew Krasner, our Chief Financial Officer.

We continue to see our strategic initiatives resonate strongly in the marketplace as reflected in the 7% organic revenue growth we recorded in the second quarter. This solid result reflected continued strong growth across our entire portfolio of businesses despite significant challenges from outsized book of business sales in each of our segments in the prior year. Excluding book of business activity, organic revenue growth at the enterprise level would have been 9%. We're very encouraged by the sustained top line momentum and the positive response we've seen from clients to our investments in talented technology across all our businesses.

At the same time, we faced margin headwinds from those investments as well as wage inflation in prior year book sales that limited our progress on driving margin expansion and earnings growth this quarter. The continued success of our transformation program, which exceeded our expectations yet again partially offset these headwinds. All in all, adjusted operating margin declined by 90 basis points for the quarter, which resulted in adjusted earnings per share of $2.05. Though we had a decline in adjusted operating margin this quarter, as we've said before, our progress in margin expansion won't always be linear. However, we don't expect margin declines in any full year period.