'Strong growth' in NZ brings boost to global firm

by Chinwe Akomah 03 Feb 2014

'Strong growth' in NZ brings boost to global firm

Strong growth in New Zealand and Asia has helped boost Aon’s international organic revenue by 2%, as the firm’s retail brokerage organic revenue increased 3% reflecting revenue growth in both the Americas and International businesses in the fourth quarter of 2013.

Reinsurance organic revenue was flat compared to the prior year quarter due primarily to growth in capital markets transactions and advisory business, as well as net new business growth in treaty placements, offset by an anticipated unfavorable impact from timing in the quarter.
Aon’s global net income jumped to $475m for the fourth quarter of 2013, compared to $376m for the corresponding quarter in the prior year.

Total revenue increased 3% to $3.46bn when compared to the prior year quarter primarily driven by a 4% increase in organic revenue, partially offset by a 1% unfavorable impact from foreign currency translation.

Total operating expenses for the fourth quarter increased 2% to $3.25bn when compared to the prior year quarter due primarily to an increase in expense associated with 4% organic revenue growth and a $35.7m increase in formal restructuring costs, partially offset by savings related to the restructuring programs, an $21.6m favourable impact from foreign currency translation, a $14m decrease in expenses related to acquisitions, net of divestitures, and an $12.99m decrease in intangible asset amortization.

Net income per share attributable to Aon shareholders, adjusted for certain terms, increased 21%.

Depreciation expense decreased 2% to $77.9m when compared to the prior year quarter.

Intangible asset amortization expense decreased 10% to $122.28m when compared to the prior year quarter due to a $6m decrease in Risk Solutions and a $5.41m decrease in HR Solutions.

Restructuring expenses increased $35.71m to $80.08m when compared to $44.37m in the prior year quarter.  The company has closed and completed all restructuring activities and incurred 100% of the total costs for the Aon Hewitt restructuring program.  An analysis of restructuring-related costs by type and segment are detailed on page 14 of this press release.

"Our results reflect a strong finish to the year with improvement across each key financial metric for both the quarter and full year," said Greg Case, president and CEO. "In 2013, we made significant strategic investments across the firm, delivered record cash flow from operations of US$1.6bn and created significant value for shareholders through the repurchase of more than $1.19bn of ordinary shares. As we look ahead to 2014, our industry-leading platform is positioned for continued long-term growth, improved operational performance, strong free cash flow generation and significantly increased financial flexibility."