Aon Reports Fourth Quarter and Full Year 2023 Results

Total operating expenses in the fourth quarter increased 23% to $2.6 billion compared to the prior year period due primarily to an increase in expense associated with 7% organic revenue growth, investments in long-term growth, a $197 million charge in connection with certain accrued actual or anticipated legal settlement expenses, and a $40 million unfavorable impact from foreign currency translation.

Foreign currency translation in the fourth quarter had a $6 million, or $0.03 per share, favorable impact on U.S. GAAP net income and a $7 million, or $0.03 per share, favorable impact on adjusted net income. If currency were to remain stable at today's rates, the Company would expect a favorable impact of approximately $0.03 per share, or an approximately $9 million increase in adjusted operating income, in the first quarter of 2024, and a favorable impact of approximately $0.02 per share, or an approximately $6 million increase in adjusted operating income, for full year 2024.

Effective tax rate for the fourth quarter was 16.7%, compared to  6.1% in the prior year period, primarily driven by changes in the geographical distribution of income and a lower net favorable impact from discrete items than in the prior year period. After adjusting to exclude the applicable tax impact associated with certain non-GAAP adjustments, the adjusted effective tax rate for the fourth quarter of 2023 was 18.2% compared to 9.0% in the prior year period. The primary drivers of the change in the adjusted tax rate were the geographical distribution of income and a lower net favorable impact from discrete items than in the prior year period. These adjustments are discussed in "Reconciliation of Non-GAAP Measures - Operating Income and Diluted Earnings Per Share" on page 10 of this press release.

Weighted average diluted shares outstanding decreased to 202.0 million in the fourth quarter compared to 209.3 million in the prior year period. The Company repurchased 2.3 million class A ordinary shares for approximately $0.8 billion in the fourth quarter. As of December 31, 2023, the Company had approximately $3.3 billion of remaining authorization under its share repurchase program.

FULL YEAR 2023 CASH FLOW SUMMARY

The full year 2023 cash flow summary provided below includes supplemental information related to free cash flow, which is a non-GAAP measure that is described in detail in "Reconciliation of Non-GAAP Measures - Organic Revenue Growth and Free Cash Flow" on page 9 of this press release.

Cash flows provided by operations for 2023 increased $216 million, or 7%, to $3,435 million compared to the prior year period, reflecting strong operating income growth and overall working capital optimization, partially offset by a negative impact to working capital due to temporary invoicing delays associated with the implementation of a new system, and higher cash tax payments.

Free cash flow, defined as cash flow from operations less capital expenditures, increased 5%, to $3,183 million in 2023 compared to the prior year, reflecting an increase in cash flows from operations, partially offset by a $56 million increase in capital expenditures, due primarily to ongoing investments in Aon Business Services-enabled technology platforms and technology to drive long-term-growth.

FOURTH QUARTER 2023 REVENUE REVIEW

The fourth quarter revenue reviews provided below include supplemental information related to organic revenue, which is a non-GAAP measure that is described in detail in "Reconciliation of Non-GAAP Measures - Organic Revenue Growth and Free Cash Flow" on page 9 of this press release.

Total revenue increased $245 million, or 8%, to $3,375 million, compared to the prior year period, including organic revenue growth of 7% driven by ongoing strong retention, net new business generation, and management of the renewal book, a 2% favorable impact from foreign currency translation, and a 1% favorable impact from fiduciary investment income, partially offset by a 2% unfavorable impact from acquisitions, divestitures and other.

Commercial Risk Solutions organic revenue growth of 4% reflects solid growth across most major geographies driven by strong retention, management of the renewal book, and net new business generation. Growth in retail brokerage was highlighted by double-digit growth in Asia and the Pacific, driven by continued strength in core P&C. The U.S. grew modestly driven by strength in property, casualty, and construction, partially offset by the impact of external M&A and IPO markets. On average globally, exposures and pricing were positive, resulting in modestly positive market impact.

Reinsurance Solutions organic revenue growth of 14% reflects strong growth in treaty, driven by strong retention and continued net new business generation, as well as strong growth in facultative placements and investment banking. Market impact was modestly positive on results in the quarter. The majority of revenue in our treaty portfolio is recurring in nature and is recorded in connection with the major renewal periods that take place throughout the first half of the year, while the second half of the year is typically driven by facultative placements, capital markets activity, and advisory work that is more transactional in nature.

Health Solutions organic revenue growth of 11% reflects strong growth globally in core health and benefits brokerage primarily from net new business generation and management of the renewal book. Strength in the core was highlighted by double-digit growth in most major geographies. Results also reflect double-digit growth in Consumer Benefit Solutions and modest growth in Talent.

Wealth Solutions organic revenue growth of 5% reflects strong growth in Retirement, driven by advisory demand and project-related work related to pension de-risking and ongoing impact of regulatory changes. In Investments, a modest increase in AUM-based delegated investment revenue was offset by a decline in advisory.

FOURTH QUARTER 2023 EXPENSE REVIEW

		Three Months Ended December 31,
(millions)		2023		2022		$ Change		% Change
Expenses
Compensation and benefits		$         1,671		$         1,539 Werbung Mehr Nachrichten zur Aon Plc. Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 16:39 - dpa-AFX Ukraine: Russisches Minenräumboot versenkt 16:16 - dpa-AFX Iran bestätigt indirekte Gespräche mit den USA 16:00 - wallstreet:online ... Paradigmenwechsel: Stehen Value-Aktien nach der Magnificent-Seven-Rallye vor einem Comeback?