Willis Towers Watson (WTW) has shown resilience in the third quarter of 2020, generating a modest revenue increase of 1% to $2.0 billion, compared to $1.99 billion for the same period in the prior year. Year to date revenue was $6.59 billion, an increase of 4% from the $6.35 billion generated in the first nine months of 2019.
Net income - total revenue minus total expenses - for the third quarter of 2020 was $122 million, an increase from net income of $80 million for the prior-year third quarter. For the nine months ending September 30, 2020, net income was $537 million, an increase from $522 million in 2019.
The brokerage and risk solutions company also reported year-to-date cash flows from operating activities of $1.2 billion, up 95% compared to $620 million in the prior year, and year-to-date free cash flow of $1.0 billion, up 130% compared to $445 million in the first nine months of 2019.
“I’m very pleased with the company’s financial results for the third quarter and year to date. Despite the challenging operating environment brought on by the COVID-19 pandemic, we delivered solid margins, strong free cash flow growth, and adjusted EPS growth,” said John Haley, Willis Towers Watson’s chief executive officer.
“The third quarter results are reflective of our prudent cost-management and liquidity preservation efforts. Though there is looming uncertainty around the duration and severity of business disruptions, I’m encouraged by the resilience we have demonstrated to date, and we remain confident in our ability to drive improvements and deliver value for our clients and shareholders.”
While the brokerage has successfully retained stability, it remains braced for COVID-19 to negatively impact its revenue and operating results for the remainder of 2020, and beyond. During Q3, the COVID crisis had a negative impact on revenue growth, particularly in businesses that are discretionary in nature.
“Some of our discretionary, project-based businesses saw a reduction in demand, and potential negative impacts on our revenue and operating results may lag behind the developments thus far related to the COVID-19 pandemic,” WTW announced in its Q3 earnings report. “We continue to closely monitor the spread and impact of COVID-19 while adhering to government health directives.
“We have thorough business continuity and incident management processes in place that have been activated. We are prioritizing the safety and wellbeing of our colleagues. We are communicating frequently with clients and critical vendors, while meeting our objectives via remote working capabilities, overseen and coordinated by our incident management response team.”