Aon : Q3 FY2023 Earnings Slides

Aon plc

Third Quarter 2023 Results

October 27, 2023

Greg Case

Chief Executive Officer

Christa Davies

Chief Financial Officer

Eric Andersen

President

Safe Harbor Statement

This communication contains certain statements related to future results, or states Aon's intentions, beliefs and expectations or predictions for the future, all of which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors. These forward-looking statements include information about possible or assumed future results of Aon's operations. All statements, other than statements of historical facts, that address activities, events or developments that Aon expects or anticipates may occur in the future, including such things as its outlook, the impacts of the Accelerating Aon United Program, future capital expenditures, growth in commissions and fees, changes to the composition or level of its revenues, cash flow and liquidity, expected tax rates, expected foreign currency translation impacts, business strategies, competitive strengths, goals, the benefits of new initiatives, growth of its business and operations, plans, and references to future successes, are forward-looking statements. Also, when Aon uses words such as "anticipate", "believe", "continue", "could", "estimate", "expect", "forecast", "intend", "looking forward", "may", "might", "plan", "potential", "opportunity", "commit", "probably", "project", "should", "will", "would" or similar expressions, it is making forward-looking statements.

The following factors, among others, could cause actual results to differ from those set forth in or anticipated by the forward looking statements: changes in the competitive environment, due to macroeconomic conditions (including impacts from instability in the banking or commercial real estate sectors) or otherwise, or damage to Aon's reputation; fluctuations in currency exchange, interest, or inflation rates that could impact our financial condition or results; changes in global equity and fixed income markets that could affect the return on invested assets; changes in the funded status of Aon's various defined benefit pension plans and the impact of any increased pension funding resulting from those changes; the level of Aon's debt and the terms thereof reducing Aon's flexibility or increasing borrowing costs; rating agency actions that could limit Aon's access to capital and our competitive position; volatility in Aon's global tax rate due to being subject to a variety of different factors, including the adoption and implementation of OECD tax proposals; changes in Aon's accounting estimates or assumptions on Aon's financial statements; limits on Aon's subsidiaries' ability to pay dividends or otherwise make payments to Aon; the impact of legal proceedings and other contingencies, including those arising from acquisition or disposition transactions, errors and omissions and other claims against Aon; the impact of, and potential challenges in complying with, laws and regulations in the jurisdictions in which Aon operates, particularly given the global nature of Aon's operations and the possibility of differing or conflicting laws and regulations, or the application or interpretation thereof, across jurisdictions in which Aon does business; the impact of any regulatory investigations brought in Ireland, the U.K., the U.S. and other countries; failure to protect intellectual property rights or allegations that Aon infringes on the intellectual property rights of others; general economic and political conditions in different countries in which Aon does business around the world; the failure to retain, attract and develop experienced and qualified personnel; international risks associated with Aon's global operations, including impacts from military conflicts or political instability, such as the ongoing Russian war in Ukraine and the Israel-Hamas conflict; the effects of natural or man-made disasters, including the effects of the COVID-19 and other health pandemics and the impacts of climate change; any system or network disruption or breach resulting in operational interruption or improper disclosure of confidential, personal, or proprietary data, and resulting liabilities or damage to our reputation; Aon's ability to develop, implement, update and enhance new systems; the actions taken by third parties that perform aspects of Aon's business operations and client services; the extent to which Aon is exposed to certain risks, including lawsuits, related to actions Aon may take in being responsible for making decisions on behalf of clients in Aon's investment businesses or in other advisory services that Aon currently provides, or may provide in the future; Aon's ability to continue, and the costs and risks associated with, growing, developing and integrating acquired business, and entering into new lines of business or products; Aon's ability to secure regulatory approval and complete transactions, and the costs and risks associated with the failure to consummate proposed transactions; changes in commercial property and casualty markets, commercial premium rates or methods of compensation; Aon's ability to develop and implement innovative growth strategies and initiatives intended to yield cost savings (including the Accelerating Aon United Program), and the ability to achieve such growth or cost savings; the effects of Irish law on Aon's operating flexibility and the enforcement of judgments against Aon; and adverse effects on the market price of Aon's securities and/or operating results.

Any or all of Aon's forward-looking statements may turn out to be inaccurate, and there are no guarantees about Aon's performance. The factors identified above are not exhaustive. Aon and its subsidiaries operate in a dynamic business environment in which new risks may emerge frequently. Accordingly, you should not place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. In addition, results for prior periods are not necessarily indicative of results that may be expected for any future period. Further information concerning Aon and its businesses, including factors that potentially could materially affect Aon's financial results, is contained in Aon's filings with the SEC. See Aon's Annual Report on Form 10-K for the year ended December 31, 2022 for a further discussion of these and other risks and uncertainties applicable to Aon and its businesses. These factors may be revised or supplemented in subsequent reports filed with the SEC. Aon is not under, and expressly disclaims, any obligation to update or alter any forward-looking statement that it may make from time to time, whether as a result of new information, future events or otherwise.

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2023 U.S. GAAP Financials

	Q3'23	YTD'23
Total Revenue Growth	+10%	+7%
Operating Margin	23.4%	30.1%
Earnings Per Share	$2.23	$10.03
Cash Flows from Operations		$2,174

Explanation of Non-GAAP Measures

This communication includes supplemental information not calculated in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"), including organic revenue growth, free cash flow, adjusted operating income, adjusted operating margin, adjusted earnings per share, adjusted net income attributable to Aon shareholders, adjusted diluted net income per share, adjusted effective tax rate, adjusted other income (expense) - pensions, adjusted other income (expense), and adjusted income before income taxes that exclude the effects of intangible asset amortization and impairment, pension settlements, Accelerating Aon United Program expenses, capital expenditures, and certain other noteworthy items that affected results for the comparable periods. Organic revenue growth includes the impact of intercompany activity and excludes foreign exchange rate changes, acquisitions, divestitures, transfers between revenue lines, fiduciary investment income, and gains or losses on derivatives accounted for as hedges. Currency impact represents the effect on prior year period results if they were translated at current period foreign exchange rates. Reconciliations to the closest U.S. GAAP measure for each non-GAAP measure presented in this communication are provided in the attached appendices. Supplemental organic revenue growth information and additional measures that exclude the effects of certain items noted above do not affect net income or any other U.S. GAAP reported amounts. Free cash flow is cash flows from operating activity less capital expenditures. The adjusted effective tax rate excludes the applicable tax impact associated with expenses for estimated intangible asset amortization and impairment, and certain other noteworthy items. Management believes that these measures are important to make meaningful period-to- period comparisons and that this supplemental information is helpful to investors. Management also uses these measures to assess operating performance and performance for compensation. Non-GAAP measures should be viewed in addition to, not in lieu of, Aon's Consolidated Financial Statements. Industry peers provide similar supplemental information regarding their performance, although they may not make identical adjustments.

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Table of Contents

01 Executive	02 Quarterly	03 Delivering Long-
Summary	Performance	Term Growth

04 Free Cash Flow	05 Appendices
Drives Long-Term
Shareholder Value

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1.	Includes approximately $55 billion of captive premium.	6
2.	As of 6/30/2022, includes non-discretionary assets advised by Aon and its global affiliates which includes retainer clients and clients in which Aon and its global affiliates have performed project services for
	over the past 12 months. Project clients may not currently engage Aon at the time of the calculation of assets under advisement as the project may have concluded earlier during preceding 12-month period.

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Executive Summary

Quarterly Performance and Focus on Long-Term Strategy¹

Quarterly Performance on Key Financial Metrics

• Organic Revenue growth of +6%; driven by ongoing strong retention, management of the renewal book, and net new business generation
• Adjusted Operating Margin expansion of +120 basis points and adjusted operating income growth of +15%; reflecting organic revenue growth and increased fiduciary investment income, partially offset by increased expenses and investments in long-term growth
• Adjusted Earnings per Share (EPS) growth of +15%; primarily reflecting strong organic revenue growth and effective capital management, partially offset by a ($0.01) unfavorable impact from FX

Accelerating our Aon United strategy with 3 commitments to be delivered over the next 3 years

• Leveraging our Risk Capital and Human Capital structure and capability to unlock new integrated solutions across our core business that also address new requirements in client demand
• Embedding the Aon Client Leadership model across our structure to further strengthen and expand our client relationships
• Accelerating Aon Business Services to set a new standard for service delivery and next generation analytical tools by standardizing operation, integrating operating platforms and increasing product innovation and development

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1. The results presented on this page are non-GAAP measures that are reconciled to their corresponding U.S. GAAP measures in the Appendices of this presentation.

Aon United - Driving Top and Bottom-Line Results1,2

Committed to Mid-Single-Digit or Greater Organic Revenue Growth Over the Long-Term

• Track record of +4% average annual organic revenue growth from 2010-2022, with +6% organic revenue growth in 2022
• Driven by three areas: Delivering client value with continued improvement in core businesses, portfolio mix-shift towards areas of faster growing client demand and data-driven solutions, and net new opportunities that increase our total addressable market

Sustainable Operating Margin Expansion Net of Investment in Long-Term Growth

• From 2010-2022, increased adjusted operating margins by +1,120 bps or over +90 bps per year
• Driven by three areas: Top-line growth, portfolio mix-shift to higher contribution margin businesses, and increased operating leverage from ongoing productivity improvements from our Aon Business Services platform

Expected Free Cash Flow Growth Over the Long-Term

• Expect to deliver high-single-digit free cash flow growth in 2023. While free cash flow will be reduced in the near term by the restructuring program, we expect to return to our trajectory of double-digit free cash flow growth over the long term, driven by growth in operating income and ~$500 million long-term improvement opportunity in working capital

Disciplined Portfolio Management and Capital Allocation based on Return on Invested Capital (ROIC)

• Strong history of M&A and portfolio management, including completion of 164 acquisitions for ~$5.8 billion and 141 divestitures for ~$5.8 billion from 2010-2022³
• All capital allocation decisions based on ROIC. Share repurchase continues to be our highest return opportunity, based on our strong free cash flow generation outlook, noting history of $22.5 billion in share buyback from 2010-2022, or a net share reduction of approximately 38%4, and $4.1 billion remaining repurchase authorization as of the end of Q3 2023
• Significant financial flexibility to deploy capital driven by strong free cash flow generation and opportunity for increased debt

Translating into a Significant Shareholder Value Creation Opportunity

•	Going forward, we expect to build on our demonstrated track record of free cash flow growth combined with an expected reduction in total shares
	outstanding, representing a significant long-term shareholder value creation opportunity
1.	The results presented on this page are non-GAAP measures that are reconciled to their corresponding U.S. GAAP measures for historical periods in the Appendices of this presentation.
2.	Reflects the Company's best estimates as of October 27, 2023, and the Company disclaims any obligations to update whether a result of new information, future events, or otherwise. Actual results	9
	may differ materially.

1. Includes asset deals and share transactions with joint venture partners.
2. Calculated as the change in actual shares outstanding from December 31, 2010 to December 31, 2022.

2023 Supplemental Financial Information¹

Organic Revenue:

• Expect to deliver mid-single-digit or greater organic revenue growth for full year 2023 and over the long-term

Expense Outlook:

• Expect to deliver adjusted operating margin expansion for full year 2023 and over the long-term

Foreign Currency:

• If currency were to remain stable at today's rates, the Company would expect a favorable impact of $0.03 per share in the fourth quarter of 2023, totaling an unfavorable impact of approximately $(0.17) per share for full year 2023

Free Cash Flow:

• Expect to deliver high-single-digit free cash flow growth in 2023. While free cash flow will be reduced in the near term by the restructuring program, we expect to return to our trajectory of double-digit free cash flow growth over the long term, driven by operating income growth and ongoing working capital improvements

Interest Expense:

• Based on the Company's debt structure at the end of the third quarter, expect $126 million of interest expense in the fourth quarter of 2023, compared to $119 million of interest expense in the third quarter

Other Income (Expense) - as adjusted:

• Based on current assumptions, expect ~$15m of non-cash pension expense in the fourth quarter of 2023, totaling ~$66 million of non-cash pension expense for full year 2023, excluding all other items we do not forecast that could be favorable or unfavorable in any given period

Accelerating Aon United Program:

• Expect to deliver total annual, run-rate savings of ~$350 million, to be achieved by the end of 2026
• Savings will ramp over the program with annual, run-rate savings of ~$100 million in 2024, contributing to long-term margin expansion
• Cash restructuring charges of ~$900 million, for a savings ratio of 2.6x, largely for technology costs and workforce rationalization
• Additional ~$100 million of non-cash restructuring charges, largely for asset impairment of legacy software and lease impairments aligned with Smart Working

1. Reflects the Company's best estimates as of October 27, 2023, and the Company disclaims any obligations to update whether a result of new information, future events, or otherwise. Actual results

may differ materially.

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