The other factor is technology, right. And transformation is not just about – it’s certainly not just about workforce relocation, but it is about automation and efficiency. And we do see a role for that going forward now that, technology is not free, right. There’s a spend default there. So, you may see a shifting in some line items here as we continue to optimize how we run this.
Andrew Kligerman: Got it. Okay. And I was really intrigued by the smart connections example that you provided earlier. Could you tell a little bit about, if HWC recommends a big opportunity to CRB and they’re successful. Is there some compensation to the referral people within WTW? And maybe, you could elaborate if there is?
Carl Hess: Well, I’m not going to go into details of our compensation programs for obvious competitive reasons, Andrew. But I will say that as the world’s leading compensation consultant and that includes sales compensation, we have a very good advisor internally on how we structure programs to make sure we maximize the value of the internal cost.
Operator: Thank you. One moment for our next question. Our next question comes from Mark Hughes with Truist Securities. Please go ahead.
Mark Hughes: Yes. Thank you. Good morning. Carl, you talked about the opportunity and pension derisking et cetera, the organic in Wealth at 3%. Do you anticipate that’ll pick back up?
Carl Hess: We’ve characterized back our Investor Day, right, as a low-to-mid single-digit growth business. So, it’s performing within the – those sort of areas of expectation. We do see the environment for pension risk management as being one, where we continue to pay a valuable role for our clients over the upcoming year. We see that there continues to be interest in opportunities, whether those annuity buy-ins and buyouts, we’re probably less favorable environment for bulk lump sums. But we think that other derisking actions will make up for those opportunities. And as we alluded to during the first part of the call, right, that it’s not just about derisking for some clients, actually, we have seen clients reopening their pension plans to take advantage of utilizing surplus to actually improve their overall compensation programs.
Mark Hughes: Right. And then the interest expense for this year, can you give us a sense of what you’re looking for?
Andrew Krasner: Yes, sure. So, remember, we took on some incremental debt at the – in the first quarter. And we’re sitting on the cash related to a large portion of that related to the maturity that we have coming up in June. Again, that’s $650 million. We took out $750 million. So, you’ll see a temporary uptick in interest expense as we’re carrying both components of that for a couple of months.
Operator: Thank you. One moment for our next question. Our next question comes from Bob Huang with Morgan Stanley. Please go ahead.
Jian Huang: Good morning. My first question is on just a high-level question on growth outlook. First quarter U.S. GDP 1.6%, European Union has been more or less in a weaker spot as well. Given well as this material business in Europe and U.S., can you maybe talk about what the clients are seeing? What you’re expecting for rest of the year, specifically the European business and also at the geopolitical concerns become more complex over time? Curious to hear your view on that.
Carl Hess: Yes, sure. Thanks. I guess I’d look at it this way. The current tightened risk landscape and potentially changing rate environment creates more opportunities for us to help our clients manage their risk profile given the scale and depth of the solutions we can offer them. And given the demand we see in the marketplace; we feel good about delivering on our top-line targets of mid-single digit organic revenue growth and at least $9.9 billion in revenue. In R&B, we see opportunities for growth given our ability to help our clients address complex and challenging risks, such as natural disasters, social inflation, things like media impact and litigation in total reform and public sentiment all factor their way into that.
Geopolitical conflicts, where Europe is sort of on the edge of a couple of those. And more importantly, we’re seeing increased demand for our customized tools and specialized solutions. So that will ensure that clients receive the best return for their premium dollar across their entire portfolio of risks. And given the success we’ve seen from these efforts, we’ll continue to grow and expand this strategy into additional geographies, industry verticals. You heard us talk earlier about specialization now making its way into select industries in Europe, and international. So, we think this is a very sound footing for us. In HWC, right, that complexity in the human capital landscape continues to increase. Our clients need for sound advice and risk management solutions intensified.
As a result, they turn to us to provide solutions and help them navigate issues surrounding benefits, pension plans, workforce management. For example, we help health clients address rising health care costs by providing effective plan management, specialty solutions that can improve their population pulse status. We also provide comp benchmarking. And – but I guess a couple of things or looking at Europe specifically to get down the point you’re trying to drilling on, we identify EU Pay transparency as a tailwind for us. It’s also the peak valuation year in Great Britain, and that typically brings some of a spike in workforce. That’s probably tempered a little bit this year because of the fact that pension plans are well funded, so they need a bit less support in managing trustee corporate negotiations over contributions.
But in general, the unsettled landscape that you led your question with tends to be a driver for business for us rather than a challenge.
Jian Huang: Got it. That’s very helpful. Thank you. A follow-up question. I know that you addressed part of this. Just trying to put everything together. Obviously, on the Slide 21, your cash flow walk you mentioned that cash investment in transformation will subside after 2024. Obviously, on the first quarter 2024 earnings free cash flow decreased because of transformation discretionary comp payments. Just curious how much of that was transformation in the first quarter? And I understand that it’s now linear, but can you maybe help us think about how we should think about that transformation impact for 2024 on free cash flow?
Andrew Krasner: Yes. I think we expect for the full-year for it to be marginally higher than last year. And we – from a payment timing perspective, we’ll bleed into 2025, right? But the incurrence of all the costs will be in ‘24. There will be a couple of month lag as payments go out. So, we do expect a net headwind there year-over-year for free cash flow margin.
Operator: Thank you. One moment for our next question. Our next question comes from Michael Zaremski with BMO. Please go ahead.
Michael Zaremski: Hey, good morning. First question, in regards to the Risk and Broking segment, continued excellent organic growth levels. Curious if Willis has been the beneficiary of like reverse book sales that are aiding growth like meaning you’ve been book sale buyer? Or would that be netted out within the book sales line item, I think, that you’ve disclosed?
