On October 27, 2023, Aon PLC (AON, Financial) released its Q3 2023 earnings report, revealing a 10% increase in total revenue to $3.0 billion, including a 6% organic revenue growth. The operating margin improved by 150 basis points to 23.4%, and the EPS increased by 16% to $2.23. For the first nine months of 2023, cash flows from operations amounted to $2,174 million, while free cash flow decreased by 4% to $1,971 million.
Financial Highlights
Aon's Q3 report also highlighted the repurchase of 2.6 million class A ordinary shares for approximately $850 million. The company announced the acceleration of its Aon United strategy across Aon Business Services, Risk Capital, and Human Capital, including a cash restructuring charge of ~$900 million, expected to drive ~$350 million in annual, run-rate savings by the end of 2026.
Acquisitions and Expansion
Aon announced the acquisition of NGS Seguros and signed a definitive agreement to acquire Global Insurance Brokers, both expected to expand presence and Risk Capital capabilities in Latin America and India, respectively.
Income Statement Analysis
Net income attributable to Aon shareholders increased 12% to $456 million, or $2.23 per share on a diluted basis, compared to $408 million, or $1.92 per share on a diluted basis, in the prior year period. The net income per share attributable to Aon shareholders, adjusted for certain items, increased 15% to $2.32 on a diluted basis.
CEO Commentary
“Our global team delivered strong operating results in the third quarter, including 6% organic revenue growth and 120 basis points of adjusted operating margin improvement, contributing to 7% organic revenue growth and 80 basis points of adjusted margin expansion year to date, demonstrating the strength of our Aon United strategy,” said Greg Case, Chief Executive Officer.
Outlook
Aon's Q3 report indicates a strong financial performance, with significant increases in revenue, operating margin, and EPS. The company's strategic acquisitions and expansion plans suggest a positive outlook for future growth and profitability.
Explore the complete 8-K earnings release (here) from Aon PLC for further details.
