Q4 snap: very strong organic revenue growth

AON delivered Q4 EPS of $2.35, in line with consensus. The highlight was the strong organic revenue growth of 6% in the quarter, well above consensus of 4%. Total revenues of $2.91bn were 3% above consensus. Importantly, there was a strong rebound in Commercial Risk wtih +5% organic revenue growth. Adjusted operating margin expansion of 200bp lifted the margin to 27.5%, in line with consensus, and helped to deliver a 3% beat at the adjusted operating income line. Other positives included organic revenue growth of 8% in Reinsurance and 12% in Data & Analystics. Cost savings targets were increased by a further $50m in 2019 to $450m and tax guidance for 2018 was set at 19%. Overall, we view this as a very good result.