Jones Lang Lasalle Incorporated · NYSE:JLL
Jones Lang Lasalle — Q2 2023 Earnings Presentation
30 slides from Jones Lang Lasalle's earnings presentation, Aug 3, 2023
Slide 1: Earnings Presentation Second Quarter 2023
Earnings Presentation Second Quarter 2023 August 3, 2023
Slide 2: Cautionary note regarding forward-looking statements
Cautionary note regarding forward-looking statements Statements in this presentation regarding, among other things, future financial results and performance, achievements, plans, objectives and shares repurchases may be considered forward-looking statements within the meaning of the Private Securiti
Slide 3: Second quarter industry highlights
Second quarter industry highlights
Slide 4: Capital markets industry highlights
Capital markets industry highlights Real estate investment volumes by region, 2007 – Q2 2023 YTD Quarterly investment volumes by sector, Q2 2021 – Q2 2023 $1,400 $175 Residential $1,273 Office $1,200 $150 $1,067 $1,054 Industrial $1,000 Retail $887 $125 Hotels US$ Billions $807 $800 $100 $598 $600 $
Slide 5: Capital markets industry trends
Capital markets industry trends Global fundraising for closed-end funds, 2007 – Q2 2023 Dry powder in closed-end funds, 2007 – Q2 2023 YTD $500 $250 $229 800 $415 $192 $396 $386 $404 $161 700 $400 $356 $200 $189 600 US$ Billions # of funds $300 US$ Billions $139 500 $150 400 $200 $163 $100 300 $58 $
Slide 6: Office leasing industry highlights
Office leasing industry highlights Global office leasing volumes by region, 2007 – Q2 2023 YTD Rental growth for prime office assets, Q2 2007 – Q2 2023 50 6% 44 45 41 4% Rental change (q-o-q %) 40 35 2% 35 32 0% Millions sqm 30 26 25 -2% 20 18 15 -4% 15 14 -6% 10 5 -8% 0 -10% U.S. EMEA Asia-Pacific
Slide 7: Industrial leasing industry highlights
Industrial leasing industry highlights millions sq m Second Quarter Highlights • Activity in the industrial sector moderated during the second quarter of 2023, with Asia-Pacific showing positive net absorption during the quarter while gross leasing volumes in North America and Europe slowed • North
Slide 8: Consolidated financials
Consolidated financials @ JLL SEE A BRIGHTER WAY
Slide 9: Consolidated second quarter 2023 financial results
Consolidated second quarter 2023 financial results Margins in local currency; growth rates represent % change over three months ended Q2 2022 ’23/’22 % Chg. Q2 2023 Q2 2022 ’23/’22 % Chg. USD Local Currency Revenue $5,053M $5,278M (4)% (4)% Fee Revenue $1,847M $2,139M (14)% (13)% Operating I
Slide 10: JLL Technologies
JLL Technologies JLLT Investments Portfolio ~$405M ~$500M Invested Value of portfolio as of 6/30/2023 as of 6/30/23 • Launched Spark Venture Fund in 2018 • Invested in more than 50 proptech companies • Focused on future of work, smart buildings & sustainability JLL Technologies Why We Invest • Enabl
Slide 11: Business segments results
Business segments results @ JLL SEE A BRIGHTER WAY
Slide 12: Second quarter 2023 financial results – Business segments
Second quarter 2023 financial results – Business segments $M. Growth rates in local currency; growth rates represent % change over three months ended Q2 2022 Adjusted EBITDA Margin Adjusted EBITDA Margin Revenue Fee Revenue Adjusted EBITDA (USD) (Local Currency) Markets $1,025 $741 $99 13.4% 13.2% A
Slide 13: Markets Advisory
Markets Advisory Margins in local currency; growth rates represent % change over three months ended Q2 2022 Fee Revenue Adjusted EBITDA $M $856 $M, % of fee revenue $30 $741 $22 $122 $131 $134 $99 $704 $588 13.2% 15.7% Q2 2023 Q2 2022 Q2 2023 Q2 2022 Leasing Property Management Advisory, Consulting
Slide 14: Capital Markets
Capital Markets Margins in local currency; growth rates represent % change over three months ended Q2 2022 Fee Revenue Adjusted EBITDA $M $M, % of fee revenue $661 $40 $436 $92 $127 $39 $87 $528 $36 $310 8.2% 19.2% Q2 2023 Axis Title Q2 2022 Q2 2023 Q2 2022 Investment Sales, Debt/Equity Advisory Val
Slide 15: Work Dynamics
Work Dynamics Margins in local currency; growth rates represent % change over three months ended Q2 2022 Fee Revenue Adjusted EBITDA $M $M, % of fee revenue $478 $467 $58 $56 $60 $67 $230 $215 $188 $185 11.6% 12.4% Q2 2023 Q2 2022 Q2 2023 Q2 2022 Workplace Management Project Management Portfolio Ser
Slide 16: JLL Technologies
JLL Technologies Margins in local currency; growth rates represent % change over three months ended Q2 2022 Fee Revenue Adjusted EBITDA $M $M, % of fee revenue $57 $13 $48 27.0% (186.9%) ($105) Q2 2023 Q2 2022 Q2 2023 Q2 2022 Second Quarter Highlights • Fee revenue growth of 18% local currency / USD
Slide 17: LaSalle
LaSalle Margins in local currency; growth rates represent % change over three months ended Q2 2022 Fee Revenue Adjusted EBITDA $M $M, % of fee revenue $136 $36 $107 $1 $6 $8 $30 $28 $94 $98 21.7% 26.0% Q2 2023 Q2 2022 Q2 2023 Q2 2022 Advisory Fees Transaction Fees Incentive Fees Second Quarter Highl
Slide 18: Capital allocation and balance sheet
Capital allocation and balance sheet
Slide 19: Debt and leverage
Debt and leverage Highlights: • Strong balance sheet with ample liquidity provides operational flexibility • Sequential quarter decline in net debt primarily attributable to positive cash flow from operating activities Investment Grade Credit Ratings • Leverage ratio increase was entirely driven by
Slide 20: Return of capital to shareholders
Return of capital to shareholders $M $601 $343 $100 $20 $43 2019 2020 2021 2022 Q2 2023 YTD Dividend Share Repurchase Highlights • Strong balance sheet provides flexibility to invest in the business while also returning cash to shareholders • Resumed share repurchase activity in Q2 2023 with $20 mil
Slide 21: Financial Targets
Financial Targets @ JLL SEE A BRIGHTER WAY
Slide 22: Mid-Term Financial Targets
Mid-Term Financial Targets 2025 Consolidated Financial Targets* Fee Revenue $10-11B Adj. EBITDA Margin 16-19% Net Debt / Adj. EBITDA < 2x *Unchanged from the November 2022 Investor Briefing 22 | © 2023 Jones Lang LaSalle IP, Inc. All rights reserved.
Slide 23: Supplemental materials & non-GAAP reconciliations
Supplemental materials & non-GAAP reconciliations
Slide 24: Consolidated YTD 2023 financial results
Consolidated YTD 2023 financial results Margins in local currency; growth rates represent % change over six months ended Q2 2022 ’23/’22 % Chg. Q2 2023 YTD Q2 2022 YTD ’23/’22 % Chg. USD Local Currency Revenue $9,768M $10,080M (3)% (2)% Fee Revenue $3,431M $4,039M (15)% (14)% Operating Incom
Slide 25: YTD 2023 financial results – Business segments
YTD 2023 financial results – Business segments $M. Growth rates in local currency; growth rates represent % change over six months ended Q2 2022 Adjusted EBITDA Margin Adjusted EBITDA Margin Revenue Fee Revenue Adjusted EBITDA (USD) (Local Currency) Markets $1,932 $1,368 $171 12.5% 12.3% Advisory
Slide 26: Fee revenue / fee-based operating expenses reconciliation
Fee revenue / fee-based operating expenses reconciliation Three Months Ended Jun 30 Six Months Ended Jun 30 ($M) 2023 2022 2023 2022 Revenue $5,052.5 $5,278.4 $9,768.0 $10,079.8 Gross contract costs (3,205.8) (3,128.4) (6,339.1) (6,032.9) Net non-cash MSR and mortgage banking derivative activity 0.6
Slide 27: Reconciliation of net income to adjusted EBITDA
Reconciliation of net income (loss) attributable to common shareholders to adjusted EBITDA Three Months Ended Jun 30 Six Months Ended Jun 30 ($M) 2023 2022 2023 2022 Net income (loss) attributable to common shareholders $2.5 $193.9 $(6.7) $339.5 Interest expense, net of interest income 40.5 15.7 66.
Slide 28: Reconciliation of net income to adjusted net income and adjusted diluted EPS
Reconciliation of net income (loss) to adjusted net income and adjusted diluted earnings per share Three Months Ended June 30 Six Months Ended June 30 ($M except per share data) 2023 2022 2023 2022 Net income (loss) attributable to common shareholders $2.5 $193.9 $(6.7) $339.5 Shares (in 000s)(1) 48
Slide 29: Non-GAAP measures
Non-GAAP measures Management uses certain non-GAAP financial measures to develop budgets and forecasts, measure and reward performance against those budgets and forecasts, and enhance comparability to prior periods. These measures are believed to be useful to investors and other external stakeholder
Slide 30: Non-GAAP measures (cont.)
Non-GAAP measures (cont.) Restructuring and Acquisition Charges primarily consist of: (i) severance and employment-related charges, including those related to external service providers, incurred in conjunction with a structural business shift, which can be represented by a notable change in headcou