Aon Q3 impacted by NFP acquisition
Net income attributable to Aon shareholders decreased 25 per cent to $343 million compared with $456 million in the prior year in the latest third-quarter figures released by the company.
Adjusted net income attributable to Aon shareholders increased 25 per cent to $594 million compared with $474 million in the prior year period.
Total revenue shot up by 26 per cent to $3.7 billion when compared with the same period last year.
However, total operating expenses were also sharply up - 37 per cent higher for the same period to $3.1 billion compared to the prior year.
Aon is one of the world’s largest global providers of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services.
It has significant intermediary business and company management in Bermuda. It is also one of Bermuda’s, and among the world’s, largest captive management companies.
Aon said that the rise in operating expenses was due primarily to the inclusion of NFP's ongoing operating expenses; an increase in intangible asset amortisation associated with the acquisition of NFP; an increase in expense associated with 7 per cent organic revenue growth; Accelerating Aon United restructuring programme charges; and investments in long-term growth, partially offset by $25 million of restructuring savings realised in the quarter.
Third Quarter Key Metrics
Total revenue was $3.7 billion, including organic revenue growth of 7 per cent
Operating margin was 16.7 per cent, and adjusted operating margin increased to 24.6 per cent
EPS was $1.57, and adjusted EPS increased to $2.72
For the first nine months of 2024, cash flows from operations was $1,835 million, and free cash flow was $1,672 million
Third Quarter Highlights
Repurchased 0.9 million class A ordinary shares for approximately $300 million
Completed six middle-market acquisitions across Commercial Risk, Health and Wealth, continuing to capitalize on the opportunity in fast-growing middle market with execution of NFP's M&A strategy
Leading in catastrophe bonds with year-to-date placement work on $6 billion in limit across 25 deals, reflecting a 13 per cent increase in issuance volumes over the prior year period
Advanced data and analytics capabilities for Human Capital clients with launch of integrated Radford McLagan compensation database
The company purchased NFP, a leading middle market property and casualty broker, benefits consultant, wealth manager and retirement plan advisor, from funds affiliated with NFP's main capital sponsor, Madison Dearborn Partners, and funds affiliated with HPS Investment Partners for an enterprise value of $13 billion, including $7 billion cash and assumed liabilities, as well as $6 billion in equity in the form of 19 million Aon shares.
Looking at the global figures, Greg Case, Aon’s chief executive commented: “Our global team delivered another quarter of excellent results in the third quarter, with 7 per cent total organic revenue growth, including all solution lines at 6 per cent or greater, which contributed to adjusted operating margin expansion and 17 per cent growth in adjusted EPS.
“Our performance through the first three quarters positions us well to deliver full-year results in line with our financial guidance, and demonstrates the success of our 3x3 Plan to bring better client solutions across Risk Capital and Human Capital, powered by Aon Business Services.”
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