Arthur J. Gallagher & Co. (AJG) Q1 2022 Earnings Call Transcript

For the period ending March 31, 2022

April 28, 2022 5:15 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good afternoon and welcome to the Arthur J. Gallagher & Company First Quarter 2022 Earnings Conference Call. Today’s call is being recorded. If you have any objections, you may disconnect at this time.

Some of the comments made during this conference call, including answers given in response to questions, may constitute forward-looking statements within the meaning of the securities laws. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the cautionary statements and risk factors contained in the company’s 10-K, 10-Q and 8-K filings for more detail on its forward-looking statements. In addition, for reconciliations of the non-GAAP measures discussed on this call as well as other information regarding these measures, please refer to the earnings release and other materials in the Investor Relations section of the company’s website.

It is now my pleasure to introduce J. Patrick Gallagher, Chairman, President and CEO of Arthur J. Gallagher & Company. Mr. Gallagher, you may begin.

J. Patrick Gallagher - Chairman, President and CEO

Thank you. Good afternoon, everyone and thank you for joining us for our first quarter 2022 earnings call. On the call with me today is Doug Howell, our Chief Financial Officer as well as the heads of our operating divisions.

We had a fantastic start to the year. For the first quarter, our combined Brokerage and Risk Management segments posted 30% growth in revenue, more than 10% organic growth, net earnings growth of 28%, adjusted EBITDAC growth of 34%, and adjusted earnings per share growth of 26%. And we were named a world’s most ethical company for the 11th year in a row, an outstanding achievement on its own and a testament to our nearly 40,000 professionals around the globe. As you can tell, I am extremely proud of how the team performed during the quarter.

So, let me give you some more detail on our first quarter Brokerage segment performance. During the quarter, reported revenue growth was 32%. Of that, 9.6% was organic, which is just excellent. Rollover revenues of $380 million were pretty consistent with our March IR Day expectations and mostly driven by the December Reinsurance Brokerage acquisition. Doug will have some further comments on rollover revenues in his prepared remarks. Net earnings growth was 27%. Adjusted EBITDAC growth was 35%. And we expanded our adjusted EBITDAC margin by about 50 basis points, an outstanding all-around quarter for the brokerage team.