MMC, 9M2019: revenue up 10.2% y-o-y

29 October 2019 —
Marsh & McLennan Companies (MMC) consolidated revenues rose by 10% year-on-year at the end of first nine months of 2019. The total revenues were around USD 12.4 billion (9M2018: USD 11.2 billion).

Marsh risk & insurance services together with Mercer consulting lines of business were the core activities of the group, generating more than 77% of the total revenue.


MMC first nine months of 2019 figures (vs. 9M2018)

  • Revenue: USD 12,388 million (+10.2% change year-on-year), of which:
    • Marsh: USD 5,795 million (+14.2%)
    • Guy Carpenter: USD 1,328 million (12.2%)
    • Mercer: USD 3,695 million (+5.4%)
    • Oliver Wyman: USD 1,563 million (+6.3%)
  • Operating income: USD 2,085 million (-2.6%)
  • Operating expenses: USD 10,303million (+13.2%)
  • Net Income (attributable to the company): USD 1,351million (-9.8%)


3Q/9M 2019 results, per business type

For the nine months ended September 30, 2019, Risk & Insurance Services revenue was USD 7.2 billion, an increase of 14%, or 4% on an underlying basis. Operating income declined 1% to USD 1.5 billion, and adjusted operating income rose 12% to USD 1.7 billion.

Consulting revenue in the third quarter was $1.8 billion, an increase of 8%, or 4% on an underlying basis. Operating income increased 9% to USD 317 million, and adjusted operating income increased 9% to USD 320 million. For the first nine months of 2019, revenue was USD 5.3 billion, an increase of 6%, or 4% on an underlying basis. Operating income of USD 874 million increased 9%, and adjusted operating income increased 13% to USD 916 million.

MMC repurchased 2.1 million shares of its common stock for USD 200 million in the third quarter. Through nine months, the Company has repurchased 3.1 million shares for USD 300 million.


3Q/9M 2019 results, per business branch

Marsh's revenue in the third quarter was USD 1.9 billion, an increase of 5% on an underlying basis. In U.S./Canada, underlying revenue rose 6%. International operations produced underlying revenue growth of 3%, reflecting 7% underlying revenue growth in Asia Pacific, 2% in EMEA and a decline of 1% in Latin America. For the nine months ended September 30, 2019, Marsh's underlying revenue growth was 4%.

Guy Carpenter's revenue in the third quarter was USD 273 million, an increase of 11% on an underlying basis. For the nine months ended September 30, 2019, Guy Carpenter's underlying revenue growth was 4%.

Mercer's revenue was USD 1.3 billion in the third quarter, an increase of 3% on an underlying basis. Health, with revenue of USD 441 million, was up 7% on an underlying basis. Career revenue of USD 247 million increased 5% on an underlying basis, and Wealth revenue of USD 592 million was flat on an underlying basis. For the nine months ended September 30, 2019, Mercer's revenue was USD 3.7 billion, an increase of 2% on an underlying basis.

Oliver Wyman's revenue was USD 505 million in the third quarter, an increase of 7% on an underlying basis. For the first nine months ended September 30, 2019, Oliver Wyman's revenue was USD 1.6 billion, up 9% on an underlying basis.

On April 1, 2019, MMC completed its previously announced acquisition of Jardine Lloyd Thompson Group (JLT), JLT's results of operations for the three months ended September 30, 2019 are included in the Company's results of operations for the third quarter of 2019. Prior periods in 2018 do not include JLT's results.

Prior to being acquired by the Company, JLT operated in three segments, Specialty, Reinsurance and Employee Benefits. As of April 1, 2019, the historical JLT businesses were combined into MMC operations as follows: JLT Specialty was included by geography within Marsh, JLT Reinsurance was included within Guy Carpenter and the majority of the JLT Employee Benefits business was included in Mercer Health and Wealth.

The JLT Transaction had a significant impact on the Company's results of operations in 2019. The Company believes that in addition to the change in reported GAAP revenue, a comparison of 2019 revenue to the combined 2018 revenue of MMC and JLT would provide investors useful information about the year-over-year results.


Dan GLASER, President and CEO of MMC, said:

"We are pleased with our third quarter results, which reflect excellent performance across the Company. In the quarter, we produced 13% revenue growth, 5% underlying revenue growth including growth across both segments, and 10% adjusted operating income growth. For the nine months of 2019, we achieved 4% underlying revenue growth, adjusted operating income grew 13%, and the adjusted operating margin increased 110 basis points to 22.0%."



More financial information about MMC can be found at www.mmc.com


Source: mmc.com

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