Arthur J Gallagher & Co. (NYSE:AJG) Q4 2014 Earnings Conference Call - Final Transcript

Feb 04, 2015 • 09:00 am ET


Arthur J Gallagher & Co. (NYSE:AJG) Q4 2014 Earnings Conference Call - Final Transcript


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Good morning, and welcome to Arthur J. Gallagher & Company's Fourth Quarter 2014 Earnings Conference Call. All participants have been placed on a listen-only mode. Your lines will be opened for questions following the presentation. Today's call is being recorded. If you have any objections, you may disconnect at this time.

(Forward-Looking Cautionary Statements)It is now my pleasure to introduce J. Patrick Gallagher, Chairman, President and CEO of Arthur J. Gallagher & Company. Mr. Gallagher, you may begin.

J. Patrick Gallagher

Thank you, Maddy. And good morning, everyone, and thank you very much for joining us this morning. If you hear me rasp through the call this morning it's because I'm fighting my way through a cold. This morning, I'm joined by Doug Howell, our CFO as well as some of the heads of our operating divisions.

What a great quarter we had and what a great finish to an unbelievable year. And as we go into 2015, we remained very bullish. Our team performed exceptionally well everywhere across the globe and in every operating business that we're in. Strategically, I believe, 2014 was really a seminal year, a year which we established a global base that will allow us to continue to grow over the coming decades.

We're done integrating our Bollinger acquisition and our new operations in Australia, New Zealand, Canada and the UK are all integrating well and delivering results. In 2014, we went from a small retail presence in Australia, Canada and New Zealand to a top five broker with a real platform for both organic sales and mergers and our acquisition pipeline is growing there nicely.

In the UK, Oval and Giles are now Arthur J. Gallagher. Across our 70 UK offices, we are seeing good sales momentum, as well as many acquisition opportunities. I'm very pleased with how the UK team is coming together putting the days of private equity ownership behind them and selling the Gallagher brand.

In addition to our larger deals, we did 57 other acquisitions. That's more than one a week. These were classic Gallagher deals. And as (inaudible) owned looking for a home to continue to grow and build their business. In a nutshell, they see how joining Gallagher gives them access to our resources, expertise and capabilities. So they can sell more.

I want to welcome all of our new partners. Together, we will continue to grow a great business and I know you all had choices, so thanks for joining Gallagher. Let me go back to the operating results, as we said in the press release, the brokerage and risk management businesses had an outstanding quarter.

Good growth, combined revenue up 31% on an adjusted basis. Good organic growth, 5.6% all-in brokerage basic commissions and fees were up 4.2% risk management organic was 12.6% and we had nice margin expenditure in both segments.

And on top of all that growth, our clean energy investments took another big step up and generated over 50% earnings growth. Well done to all my colleagues