NEW YORK, October 19, 2023 – Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, today reported financial results for the third quarter ended September 30, 2023.

John Doyle, President and CEO, said: "Marsh McLennan's third quarter results were outstanding, reflecting strength across the business. We had another quarter of double-digit underlying revenue growth, strong adjusted EPS growth and margin expansion. We achieved these results while also continuing to make significant investments for the future."

"With our performance through the third quarter, we are on track for another terrific year."

Consolidated Results

Consolidated revenue in the third quarter of 2023 was $5.4 billion, an increase of 13% compared with the third quarter of 2022. On an underlying basis, revenue increased 10%. Operating income was $996 million, an increase of 26% from a year ago. Adjusted operating income, which excludes noteworthy items as presented in the attached supplemental schedules, rose 24% to $1.1 billion. Net income attributable to the Company was $730 million, or $1.47 per diluted share, compared with $1.08 in the third quarter of 2022. Adjusted earnings per share rose 33% to $1.57 per diluted share compared with $1.18 a year ago and included a benefit of 10 cents per share from favorable discrete tax items.

For the nine months ended September 30, 2023, consolidated revenue was $17.2 billion, an increase of 9%, or 10% on an underlying basis compared to the prior period. Operating income was $4.2 billion, an increase of 16% from the prior year period. Adjusted operating income rose 17% to $4.4 billion.

Net income attributable to the Company was $3.0 billion, or $6.01 per diluted share, compared with $5.11 in the first nine months of 2022. Adjusted earnings per share increased 17% to $6.31 per diluted share compared with $5.38 for the first nine months of 2022.

Risk & Insurance Services

Risk & Insurance Services revenue was $3.2 billion in the third quarter of 2023, an increase of 12%, or 11% on an underlying basis. Operating income rose 21% to $640 million, and adjusted operating income was $671 million, an increase of 19% versus a year ago. For the nine months ended September 30, 2023, revenue was $10.8 billion, an increase of 12% both on a GAAP and underlying basis. Operating income rose 22% to $3.2 billion, and adjusted operating income was $3.3 billion, an increase of 18% versus a year ago.

Marsh's revenue in the third quarter was $2.7 billion, an increase of 8% on an underlying basis. In U.S./Canada, underlying revenue rose 6%. International operations produced underlying revenue growth of 10%, reflecting 14% growth in Latin America, 10% growth in Asia Pacific, and 9% growth in EMEA. For the nine months ended September 30, 2023, Marsh’s underlying revenue growth was 9%.

Guy Carpenter's revenue in the third quarter was $359 million, an increase of 8% on an underlying basis. For the nine months ended September 30, 2023, Guy Carpenter’s underlying revenue growth was 10%.

Consulting

Consulting revenue was $2.2 billion in the third quarter of 2023, an increase of 13%, or 9% on an underlying basis. Operating income increased 21% to $424 million, while adjusted operating income increased 24% to $447 million. For the first nine months ended September 30, 2023, revenue was $6.4 billion, an increase of 6%, or 7% on an underlying basis. Operating income of $1.2 billion rose 1% versus a year ago, while adjusted operating income increased 11% to $1.3 billion.

Mercer's revenue in the third quarter was $1.4 billion, an increase of 8% on an underlying basis. Health revenue of $496 million increased 8% on an underlying basis. Wealth revenue of $635 million increased 7% on an underlying basis. Career revenue of $294 million increased 7% on an underlying basis. For the nine months ended September 30, 2023, Mercer’s revenue was $4.1 billion, an increase of 7% on an underlying basis.

Oliver Wyman’s revenue in the third quarter was $781 million, an increase of 12% on an underlying basis. For the nine months ended September 30, 2023, Oliver Wyman’s revenue was $2.3 billion, an increase of 8% on an underlying basis.

Other Items

The Company repurchased 1.6 million shares of stock for $300 million in the third quarter of 2023. Through nine months ended September 30, 2023, the Company has repurchased 5.1 million shares of stock for $900 million.

In the third quarter of 2023, the Company issued $1.6 billion of senior notes.

In August, Marsh McLennan Agency (MMA) acquired Graham Company, a leading risk management consultancy and one of the top independent insurance and employee benefits brokers in the U.S.

Conference Call

A conference call to discuss third quarter 2023 results will be held today at 8:30 a.m. Eastern time. The live audio webcast may be accessed at marshmclennan.com. A replay of the webcast will be available approximately two hours after the event. The webcast is listen-only. Those interested in participating in the question-and-answer session may register here to receive the dial-in numbers and unique PIN to access the call.

Marsh McLennan (NYSE: MMC) is the world’s leading professional services firm in the areas of risk, strategy and people. The Company’s more than 85,000 colleagues advise clients in 130 countries. With annual revenue of over $20 billion, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment through four market-leading businesses. Marsh provides data-driven risk advisory services and insurance solutions to commercial and consumer clients. Guy Carpenter develops advanced risk, reinsurance and capital strategies that help clients grow profitably and pursue emerging opportunities. Mercer delivers advice and technology-driven solutions that help organizations redefine the world of work, reshape retirement and investment outcomes, and unlock health and well being for a changing workforce. Oliver Wyman serves as a critical strategic, economic and brand advisor to private sector and governmental clients. For more information, visit marshmclennan.com, follow us on LinkedIn and X.

This press release contains "forward-looking statements," as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management's current views concerning future events or results, use words like "anticipate," "assume," "believe," "continue," "estimate," "expect," "intend," "plan," "project" and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will" and "would".

Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed or implied in our forward-looking statements. Factors that could materially affect our future results include, among other things:

•the impact of geopolitical or macroeconomic conditions on us, our clients and the countries and industries in which we operate, including from conflicts such as the war in Ukraine and the evolving events in Israel and Gaza, slower GDP growth or recession, capital markets volatility, and inflation;

•the increasing prevalence of ransomware, supply chain and other forms of cyber attacks, and their potential to disrupt our operations, or the operations of our third party vendors, and result in the disclosure of confidential client or company information;

•the impact from lawsuits or investigations arising from errors and omissions, breaches of fiduciary duty or other claims against us in our capacity as a broker or investment advisor, including claims related to our investment business’ ability to execute timely trades;

•the financial and operational impact of complying with laws and regulations, including domestic and international sanctions regimes, anti-corruption laws such as the U.S. Foreign Corrupt Practices Act, U.K. Anti Bribery Act and cybersecurity, data privacy and artificial intelligence regulations;

•our ability to attract, retain and develop industry leading talent;

•our ability to compete effectively and adapt to competitive pressures in each of our businesses, including from disintermediation as well as technological change, digital disruption and other types of innovation such as artificial intelligence;

•our ability to manage potential conflicts of interest, including where our services to a client conflict, or are perceived to conflict, with the interests of another client or our own interests;

•the impact of changes in tax laws, guidance and interpretations, such as the implementation of the Organization for Economic Cooperation and Development international tax framework, or the increasing number of disagreements with and challenges by tax authorities in the current global tax environment; and

•the regulatory, contractual and reputational risks that arise based on insurance placement activities and insurer revenue streams.

The factors identified above are not exhaustive. Marsh McLennan and its subsidiaries (collectively, the "Company") operate in a dynamic business environment in which new risks emerge frequently. Accordingly, we caution readers not to place undue reliance on any forward-looking statements, which are based only on information currently available to us and speak only as of the dates on which they are made. The Company undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date on which it is made.

Further information concerning the Company, including information about factors that could materially affect our results of operations and financial condition, is contained in the Company's filings with the Securities and Exchange Commission, including the "Risk Factors" section and the "Management’s Discussion and Analysis of Financial Condition and Results of Operations" section of our most recently filed Annual Report on Form 10-K.

(Unaudited) 

(Unaudited)

Adjusted income, net of tax is calculated as the Company's GAAP income from continuing operations, adjusted to reflect the after tax impact of the operating income adjustments in the preceding tables and the additional items listed below. Adjusted EPS is calculated by dividing the Company’s adjusted income, net of tax, by the average number of shares outstanding-diluted for the relevant period. The following tables reconcile adjusted income, net of tax to GAAP income from continuing operations and adjusted EPS to GAAP EPS for three and nine months ended September 30, 2023 and 2022.

(Millions)

(a)In the second quarter of 2023, the Company changed the presentation of fiduciary assets and liabilities on the consolidated balance sheets. Cash and cash equivalents held in a fiduciary capacity was reclassified from an offset to fiduciary liabilities to current assets, with the corresponding fiduciary liabilities reclassified to current liabilities. The presentation in the December 31, 2022 consolidated balance sheet was conformed to the current presentation.

Non-GAAP revenue isolates the impact of foreign exchange rate movements and certain transaction-related items from the current period GAAP revenue. The non-GAAP revenue measure is presented on a constant currency basis, excluding the impact of foreign currency fluctuations. The Company isolates the impact of foreign exchange rate movements period over period, by translating the current period foreign currency GAAP revenue into U.S. Dollars based on the difference in the current and corresponding prior period exchange rates. Similarly, certain other items such as acquisitions and dispositions, including transfers among businesses, may impact period over period comparisons of revenue and are consistently excluded from current and prior period GAAP revenues for comparability purposes. Percentage changes, referred to as non-GAAP underlying revenue, are calculated by dividing the period over period change in non-GAAP revenue by the prior period non-GAAP revenue.

The following table provides the reconciliation of GAAP revenue to non-GAAP revenue:

The following table provides the reconciliation of GAAP revenue to Non-GAAP revenue: