Willis Group Posts $117 Million Net Q1 Income

April 24, 2003

International broker Willis Group Holdings Limited reported record results for the quarter ended March 31, 2003, with net income of $117 million, or $0.69 per diluted share compared to $68 million, or $0.43 per diluted share, for the same period in 2002

“Excluding non-cash compensation for performance-based stock options, adjusted net income increased 48% to $123 million for the quarter ended March 31, 2003 from $83 million in the same period last year, while adjusted net income per diluted share rose 46% to $0.73 from $0.50 a year ago,” said the company.

Willis also posted significant revenue gains for the period with total revenues increasing 23% to $555 million, up from $451 million for the corresponding quarter last year. Some of the gain, 7 percent was due to the effect of foreign currency exchange rate movements and approximately 2 percent were attributable to the effect of acquisitions and disposals. “Adjusting for these items, total revenues on an underlying (organic) basis were 18% higher in the first quarter of 2003 compared with 2002,” said the bulletin.
Chairman and CEO Joe Plumeri Stated: “Our first quarter results reaffirm our business model and acknowledge our sales culture and discipline. The majority of our organic revenue growth was attributable to net new business rather than higher premium rates. This illustrates that our pipelines are robust, that our sales efforts are succeeding and that clients endorse our client-advocate model which builds all efforts around them and their unique business needs.”

The report also noted that “At March 31, 2003, total long-term debt was $499 million, down 35% from $767 million a year ago. Total stockholders’ equity at quarter end was approximately $970 million. The capitalization ratio, or the ratio of total long-term debt to total long-term debt and stockholders’ equity, declined to 34% at quarter end compared to 50% a year ago. There was approximately $93 million of immediately available cash at March 31, 2003, providing significant financial flexibility to support the cash needs of the Company.”

“During the first quarter, we made further debt reductions and improved our capitalization ratio,” Plumeri continued. “This progress, as well as our improved financial performance over the past year, was recognized during the first quarter of 2003 as one of the major rating agencies upgraded our debt ratings and reaffirmed a positive outlook on the Company.”

Commenting on the current insurance marketplace, Plumeri indicated that, “Insurance premium rates continue to rise in most lines and geographies. These increases have moderated in some areas, principally property related, as new capacity has allowed placements to be completed at reasonable rates. Our global reach and expertise means we are well-placed to solve our clients’ problems in this difficult marketplace.

“We are confident in the outlook for future growth at Willis, and are on course to exceed our goal to grow adjusted net income per diluted share by 25% or better in 2003. Our long-term goal is to grow these earnings by 15% or better each year, in all market environments,” he concluded.

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