Cbre Group Inc · NYSE:CBRE
Cbre — CB Richard Ellis Group — Investor Presentation (August 2008)
30 slides from Cbre's investor presentation, Aug 13, 2008
Slide 1: Investor Presentation August 2008
Investor Presentation August 2008 CB Richard Ellis Group, Inc.
Slide 2: Forward Looking Statements
CB Richard Ellis | Page 2 Forward Looking Statements This presentation contains statements that are forward looking within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our momentum in and possible scenarios for 2008 and 2009, future operations,
Slide 3: Global Leader in Commercial Real Estate Services
CB Richard Ellis | Page 3 Global Leader in Commercial Real Estate Services 100+ years 57 countries #1 in key cities in America, Europe and Asia Pacific #1 commercial real estate brokerage #1 outsourcing #1 appraisal and valuation $43.7 billion in assets under management1 #2 commercial mortgage broke
Slide 4: 2008 Milestones
CB Richard Ellis | Page 4 2008 Milestones One of the world’s leading outsourcing companies #1 brand for seven consecutive years World’s Most Powerful Brokerage Firm World’s Top Brokerage and Property Management Firm #1 Brokerage and Capital Markets Firm U.S. EPA 2008 ENERGY STAR Partner of the Year
Slide 5: Diverse Client Base
CB Richard Ellis | Page 5 Diverse Client Base 2007 Revenue by Client Type Corporations 34% Individuals/ Partnerships 11% REITs 6% Conduits/Wall Street Firms 4% Opportunity Funds 6% Offshore Investors 1% Pension Funds/ P F Advisors 14% Insurance Co's/Banks 19% Other 4% Government 1% Diversified reven
Slide 6: #1 Position in a Fragmented Market
CB Richard Ellis | Page 6 #1 Position in a Fragmented Market 4.4% 2.8% 1.9% 53.2% 25.0% 12.7% CBRE C&W JLL GBE Other/Third Party Self Providers $27 Billion U.S. Commercial Real Estate Market(1) Large and growing market—4.2% CAGR 1997-2007 Highly fragmented—top four firms have 21.8% market share Sour
Slide 7: Segment Revenue Performance
CB Richard Ellis | Page 7 Segment Revenue Performance1 Americas 1,842 2,173 2,507 3,690 3,533 2004 2005 2006 2007 Q2 2008 TTM EMEA 551 707 934 1,314 1,300 2004 2005 2006 2007 Q2 2008 TTM Global Investment Management 94 127 228 348 261 2004 2005 2006 2007 Q2 2008 TTM Asia Pacific 160 187 355 549 626
Slide 8: Segment Contribution
CB Richard Ellis | Page 8 Segment Contribution Q2 2008 TTM Revenue Q2 2008 TTM Normalized EBITDA1 1. Normalized EBITDA excludes merger-related charges, integration costs related to acquisitions, and the write down of impaired investments. Americas 60% EMEA 22% Development Services 3% Global Investme
Slide 9: Revenue Breakdown 2nd Quarter 2008
CB Richard Ellis | Page 9 32% 19% 7% 3% 2% 2% 33% 2% Leasing Property & Facilities Management Sales Appraisal & Valuation Investment Management Development Services Commercial Mortgage Brokerage Other Revenue Breakdown 2nd Quarter 2008 ($ in millions) 2008 2007 % Change 2008 2007 % Change 436.2 465.
Slide 10: Outsourcing
CB Richard Ellis | Page 10 Outsourcing % of Q2 2008 Total Revenue 32% Global Square Footage Managed (SF in billions) 1.2 1.3 1.4 1.6 1.7 2004 2005 2006 2007 Q2 2008 Outsourcing Services Global property and facilities management Global project management Global corporate services 1 88 of the Fortune
Slide 11: #1 Provider Of Every Outsourced Real Estate Service
CB Richard Ellis | Page 11 #1 Provider Of Every Outsourced Real Estate Service * - Including affiliates Note: Statistics are as of 12/31/07 Transaction Management Project Management Property and Facilities Consulting Global execution of transactions with a portfoliowide focus Optimize portfolio Leas
Slide 12: U.S. Market Stats
CB Richard Ellis | Page 12 U.S. Market Stats 8.5% 9.4% 12.6% 4Q06 10.6 208.0 79.8 2006 13.7 0.1 13.3 9.9% 10.3% 9.6% Retail -31.8 -33.0 160.7 10.9% 10.3% 9.4% Industrial 0.6 5.0 56.1 14.3% 13.2% 12.6% Office 2008 F 2Q08 2007 4Q08 F 2Q08 4Q07 US Absorption Trends (in millions of square feet) US Vacan
Slide 13: Leasing Q2 2008 Business Update
CB Richard Ellis | Page 13 Leasing Q2 2008 Business Update US and UK leasing volumes declined notably Overall, EMEA leasing grew 6% but the rate of growth has slowed Asia Pacific leasing growth rate was 31% Vacancy rates expected to increase modestly versus prior downturns Global Leasing Revenue ($
Slide 14: Sales Q2 2008 Business Update
CB Richard Ellis | Page 14 Sales Q2 2008 Business Update A slowing global macro economy and unsettled international credit markets have impacted investor confidence Lower sales activity is reflective of limited credit availability and polarized buyer and seller expectations Plenty of equity capital
Slide 15: Global Investment Management
CB Richard Ellis | Page 15 Global Investment Management Annual Revenue 57.1 68.4 94.0 99.3 126.3 259.2 - - - 28.0 101.7 88.7 57.1 68.4 94.0 127.3 228.0 347.9 2002 2003 2004 2005 2006 2007 Assets Under Management 11.4 14.4 15.1 17.3 28.6 37.8 43.7 2002 2003 2004 2005 2006 2007 Q2 2008 Q2 Revenue 59.3
Slide 16: Global Investment Programs
CB Richard Ellis | Page 16 Global Investment Programs Description Q2 2008 Statistics Typical Fee Structure Separate Accounts $20.8 billion of assets under management (2% growth over Q2 2007) Management fees Transaction fees Incentive fees Sponsored Funds $17.9 billion of assets under management (179
Slide 17: Development Services
CB Richard Ellis | Page 17 Development Services Develops properties for user / investor clients on a fee and / or co-investment basis $147 million co-invested at quarter end $2 million in recourse debt to CBRE Annual N ormalized EBITDA 15.9 31.3 34.8 37.3 73.9 2003 2004 2005 2006 2007 1. Includes Tr
Slide 18: In-fill acquisitions 2005 - present
CB Richard Ellis | Page 18 In-fill acquisitions 2005 - present Groupe Axival, Inc. CBRE Alberta Tempest Advocate Consulting Group CBRE Charlotte Columbus Commercial Realty Project Advantage The Polacheck Company CBRE Hawaii Marshall & Stevens’ Cost Segregation Businesses Krombach Partners CBRE Techn
Slide 19: Financial Overview
CB Richard Ellis | Page 19 Financial Overview
Slide 20: Q2 2008 Performance Highlights
CB Richard Ellis | Page 20 Q2 2008 Performance Highlights $153.1 million or 57% lower than prior year quarter $114.5 million Normalized EBITDA2 $153.2 million or 61% lower than prior year quarter $99.0 million EBITDA Decreased 86% as compared to $0.59 EPS for prior year quarter Decreased 76% as comp
Slide 21: Consistent Long Term Growth
CB Richard Ellis | Page 21 5.6% 6.6% 7.9% 8.9% 10.6% 11.9% 10.7% 8.4% 9.9% 8.4% 9.6% 10.1% 11.3% 14.4% 16.2% 16.1% 12.9% 360 392 429 469 583 759 1,187 1,403 1,518 1,362 1,362 1,810 2,647 3,194 4,032 6,036 5,878 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 TTM Q2 20
Slide 22: Debt Highlights
CB Richard Ellis | Page 22 $486 $450 $635 $378 $128 $2,252 $1,874 $1,693 4.2x 3.4x 3.5x 2.5x 2.8x 0.3x 1.3x 1.6x $2,502 $2,036 $2,118 $577 $635 $798 $530 $544 2001 2002 2003 2004 2005 2006 2007 Q2 2008 Net Debt Total Debt Net Debt to Normalized EBITDA . Normalized EBITDA: $115 $131 $183 $300 $461 $7
Slide 23: Q2 2008 TTM Normalized Internal Cash Flow
CB Richard Ellis | Page 23 Internal Cash Flow Integration & merger related costs Development net gains impacted by purchase accounting Cap Ex D&A Net Income, as adjusted ($ millions) Q2 2008 TTM Normalized Internal Cash Flow Strong cash flow generator Low capital intensity Utilization of internal ca
Slide 24: Key Investment Points
CB Richard Ellis | Page 24 Key Investment Points Uniquely positioned to succeed in tough market –Most diversified revenue base (geography and services) –Strong balance sheet –Variable cost structure –Strong cash flow generation Opportunity to gain share / grow –Cross selling –Industry consolidation
Slide 25: GAAP Reconciliation Tables
CB Richard Ellis | Page 25 GAAP Reconciliation Tables
Slide 26: Reconciliation of Normalized EBITDA to EBITDA to Net Income (loss)
CB Richard Ellis | Page 26 Reconciliation of Normalized EBITDA to EBITDA to Net Income (loss) Notes: 1. Includes activity related to discontinued operations for the three months ended December 31, 2007, including interest income of $0.01 million, depreciation and amortization of $0.4 million, intere
Slide 27: Reconciliation of Net Income to Net Income, As Adjusted
CB Richard Ellis | Page 27 Reconciliation of Net Income to Net Income, As Adjusted ($ in millions) 2008 2007 Net income 16.6 $ 141.1 $ Amortization expense related to net revenue backlog, incentive fees, and customer relationships acquired, net of tax 2.5 6.1 Integration costs related to acquisition
Slide 28: Reconciliation of Normalized EBITDA to EBITDA to Net Income
CB Richard Ellis | Page 28 Reconciliation of Normalized EBITDA to EBITDA to Net Income ($ in millions) 2008 2007 Normalized EBITDA 114.5 $ 267.6 $ Adjustments: Integration costs related to acquisitions 3.6 12.5 Write down of impaired investments 11.9 - Merger-related charges - 2.9 EBITDA 99.0 252.2
Slide 29: Reconciliation of Normalized EBITDA to EBITDA to Net Income (Loss)
CB Richard Ellis | Page 29 Reconciliation of Normalized EBITDA to EBITDA to Net Income (Loss) Notes: 1. Includes interest income related to discontinued operations of $0.01 million for the year ended December 31, 2007. 2. Includes depreciation and amortization related to discontinued operations of $
Slide 30: Net Income, As Adjusted
CB Richard Ellis | Page 30 Net Income, As Adjusted (d) (c) (b) (a) Reported Net Income Reconciliation of Net Income to Net Income, As Adjusted TTM Q2 2008 Results 274 16 18 13 18 339 (a) Amortization expense related to net revenue backlog, incentive fees and customer relationships acquired1 (b) Inte
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