Jones Lang Lasalle Incorporated · NYSE:JLL
Jones Lang Lasalle — William Blair's 43rd Annual Growth Stock Conference 2023
35 slides from Jones Lang Lasalle's conference presentation, Jun 8, 2023
Slide 1: JLL Overview
JLL Overview We shape the future 14.88 of real estate for a better world. Christian Ulbrich, CEO Karen Brennan, CFO
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: JLL awards & recognition
JLL awards & recognition Fortune | 2017-2023 Fortune | 2015-2023 Bloomberg | 2020-2022 Ethisphere | 2008-2023 World’s Most Admired Fortune 500 - #190 Gender-Equality Index World’s Most Ethical Companies Companies P&G | 2022 Energy Star | 2012-2022 Human Rights Campaign Foundation | Dow Jones | 2016-
Slide 4: JLL Today
JLL Today A global professional services firm specializing in real estate and investment management An industry leader with global scale A Fortune 200 company with An industry leader across Operations in 80 countries with more than $20 billion of annual each of our service lines over 300 offices glo
Slide 5: JLL serves global clients through five business segments
JLL serves global clients through five business segments LaSalle Markets • Leasing • Property Management 5% Markets JLL Advisory Advisory • Advisory, Consulting and Other Technologies 41% 2% Capital • Investment Sales, Debt/Equity Advisory and Other • Valuation Advisory Share of 2022 Fee Revenue Wor
Slide 6: Industry tailwinds provide a foundation for future growth
Industry tailwinds provide a foundation for future growth 1 2 3 4 5 Growth in Rising capital Increased Tech-driven Sustainability outsourcing allocations urbanization fourth industrial in real estate revolution ~70% of corporations Real Estate Cities house 55% Transformation Reducing carbon manage R
Slide 7: JLL is differentiated in a highly fragmented market
JLL is differentiated in a highly fragmented market Top 5 firms JLL Differentiation Factors of global investment Global Scale ~28% sales activity1 Technology & Data of total commercial real ~5% estate outsourcing market 2 “One JLL” 1 RCA brokerage data for fiscal year 2022 2 Frost & Sullivan and JLL
Slide 8: Our "One JLL" culture brought to life
Our “One JLL” culture brought to life Situation Result A large bio-tech client with real estate needs across multiple service line: • Client used multiple service providers 5x Increase in fee revenue over the last ten years • Lacked a holistic approach to managing their real estate 2M • Business was
Slide 9: Markets Advisory
Markets Advisory Advisory, Consulting and Other 41% Markets Advisory share of Consolidated 2022 Fee Revenue 4% Property Management 15% 18,200 Share of Markets Advisory Agency leasing 2022 Fee Revenue transactions Leasing 24,400 81% Tenant representation transactions Markets Other 6% Advisory 3.0B SF
Slide 10: Capital Markets
Capital Markets Loan Servicing 29% Capital Markets share of Consolidated 2022 Fee Revenue 7% Investment Sales, Debt/Equity Advisory and Other Valuation 78% Advisory 15% $1.1B Share of Capital Markets Transactions every 2022 Fee Revenue working day of 2022 $134B Approximate loan servicing portfolio I
Slide 11: Work Dynamics
Work Dynamics 23% Work Dynamics share of Consolidated 2022 Fee Revenue Portfolio Services Workplace and Other Management 14% 40% 1.6B SF Share of Work Dynamics Transactions every 2022 Fee Revenue working day of 2022 Project 6+ Years Management 46% Average client Work relationship Dynamics 500+ Other
Slide 12: JLL Technologies
JLL Technologies 2% JLL Technologies share of Consolidated 2022 Fee Revenue Long-term value creation Build Buy We’re curating a best-of-breed technology portfolio to tech-enable JLL and our clients JLL Invest Partner Technologies JLL Spark ~$320M ~$500M • Launched Spark Venture Fund in 2018 • Invest
Slide 13: LaSalle
LaSalle Incentive Fees 5% LaSalle share of Consolidated 2022 Fee Revenue 6% Transaction Fees and Other 9% $79B Share of LaSalle Global assets under 2022 Fee Revenue management Advisory Fees $367M 85% JLL co-investment portfolio LaSalle 500+ Other 19% Office 32% Investor clients $39B 1Q23 AUM By Asse
Slide 14: History of high single digit Fee Revenue growth
History of high single digit Fee Revenue growth Fee Revenue ($B) $8.3B 8.6% CAGR $5.1B 2016 2017 2018 2019 2020 2021 2022 Organic CAGR (2016-2019) of ~7.5% prior to HFF acquisition and COVID disruption 14 | © 2023 Jones Lang LaSalle IP, Inc. All rights reserved. Refer to appendix for definitions and
Slide 15: Margin expansion has resulted in low double digit Adjusted EBITDA growth
Margin expansion has resulted in low double digit Adjusted EBITDA growth Adjusted EBITDA ($M) Adjusted EBITDA Margin (%) $1,247 10.7% +160 bps 15.0% CAGR 13.4% $679 2016 2017 2018 2019 2020 2021 2022 2016 2017 2018 2019 2020 2021 2022 15 | © 2023 Jones Lang LaSalle IP, Inc. All rights reserved. Refe
Slide 16: Adjusted EPS has grown faster than both Adjusted EBITDA and Fee Revenue
Adjusted EPS has grown faster than both Adjusted EBITDA and Fee Revenue Adj. EPS Growth $15.71 11.0% CAGR $8.38 2016 2017 2018 2019 2020 2021 2022 16 | © 2023 Jones Lang LaSalle IP, Inc. All rights reserved. Refer to appendix for definitions and reconciliations of non-GAAP financial measures
Slide 17: Track record of growing greater than 3x global GDP
Track record of growing greater than 3x global GDP Global GDP and JLL Fee Revenue Growth (Correlation of JLL Fee Revenue growth and global GDP growth: ~0.9) 40% 30% 20% JLL Fee Growth 9.4% Average 10% JLL Fee Growth Global GDP Growth 3.1% Average Global GDP Growth 0% -10% -20% 2008 2009 2010 2011 20
Slide 18: Resilient revenue base and variable cost structure position the business to recover quickly
Resilient revenue base and variable cost structure position the business to recover quickly from a downturn Resilient fee Variable cost Fixed cost revenue base actions Rapid recovery from economic downturns 18 | © 2023 Jones Lang LaSalle IP, Inc. All rights reserved.
Slide 19: Clear capital allocation priorities
Clear capital allocation priorities 1 2 3 Investments in the Return capital business to drive Selective M&A to shareholders future growth All while maintaining an investment grade balance sheet 19 | © 2023 Jones Lang LaSalle IP, Inc. All rights reserved.
Slide 20: Investment grade Balance Sheet allows for pursuit of capital allocation priorities
Investment grade Balance Sheet allows for pursuit of capital allocation priorities Historical Reported Net Leverage Key Metrics Peak Year-end 2.5x Current Credit Ratings • Moody’s: Baa1 Target • Standard and Poor’s: BBB+ 2.0x maximum 1.5x Balance Sheet (Mar. 31, 2023) • Total Net Debt of $2.1B 1.0x
Slide 21: Committed to returning capital to shareholders
Committed to returning capital to shareholders Return of Capital Our Approach $M $700 $600 Reduced • Flexibility to pursue programmatic and $500 share count by opportunistic share repurchases ~8% over last $400 • Currently active in the market - $1.2B three years remaining on our share repurchase $3
Slide 22: JLL is well positioned in a highly fragmented market
IN SUMMARY JLL is well positioned in a highly fragmented market Resilient business grows at 3x GDP over the cycle – supported by industry tailwinds Differentiation factors lead to market share gains Our “One JLL” culture enables cross-selling opportunities Clear roadmap for Fee Revenue and Adjusted
Slide 23: Multiple levers to achieve financial targets
Multiple levers to achieve financial targets Superior data and advice drives Expand product market share gains offering to existing Leverage global shared clients Utilize services platform technology to drive productivity 23 | © 2023 Jones Lang LaSalle IP, Inc. All rights reserved.
Slide 24: 2023 and Mid-Term Financial Targets
2023 and Mid-Term Financial Targets 2023 Consolidated Financial Targets 2025 Consolidated Financial Targets* Fee Revenue $10-11B Adj. EBITDA Margin 14-16% Adj. EBITDA Margin 16-19% Net Debt / Adj. EBITDA < 2x *Presented at November 2022 Investor Briefing 24 | © 2023 Jones Lang LaSalle IP, Inc. All r
Slide 25: Appendix & non-GAAP reconciliations
Appendix & non-GAAP reconciliations
Slide 26: Two decades of strong Fee Revenue growth
Two decades of strong Fee Revenue growth Fee Revenue ($B) $8.3B 12.0% CAGR $0.9B 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 26 | © 2023 Jones Lang LaSalle IP, Inc. All rights reserved. Revision to 2016 Fee Revenue definition as part of AS
Slide 27: Fee Revenue growth drivers
Fee Revenue growth drivers Expand Product Offering Market Share Gains • Cross selling Industry Tailwinds • Expansion of services • Global scale across property types • Organic share gains from • Growth in outsourcing • Focus on growth industries smaller players • Increasing allocations to • Superior
Slide 28: Faster Adjusted EBITDA growth, with rapid rebounds from macro downturns
Faster Adjusted EBITDA growth, with rapid rebounds from macro downturns $1.2B Adjusted EBITDA ($B) 13.1% CAGR $107M 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 28 | © 2023 Jones Lang LaSalle IP, Inc. All rights reserved. Refer to appendix
Slide 29: Adjusted EBITDA growth drivers
Adjusted EBITDA growth drivers Operational Efficiencies Technology • Drive operational and Revenue Growth process improvements • Producer productivity • Expand shared service • Higher quality leads centers • Proven ability to deliver top line results drives • System rationalization Adjusted EBITDA d
Slide 30: Fee revenue / fee-based operating expenses reconciliation
Fee revenue / fee-based operating expenses reconciliation Twelve Months Ended Dec 31 ($M) 2016 2020 2021 2022 Revenue $12,991.2 $16,589.9 $19,367.0 $20,862.1 Gross contract costs (7,893.4) (10,464.4) (11,290.2) (12,549.1) Net non-cash MSR and mortgage banking derivative activity (23.5) (66.6) (59.3)
Slide 31: Reconciliation of net (loss) income to adjusted net income and adjusted diluted EPS
Reconciliation of net (loss) income to adjusted net income and adjusted diluted earnings per share Twelve Months Ended Dec 31 ($M except per share data) 2016 2020 2021 2022 Net (loss) income attributable to common shareholders $329.3 $402.5 $961.6 $654.5 1 Diluted Shares (in 000s) 45,528 52,282 52,0
Slide 32: Reconciliation of net income to adjusted EBITDA
Reconciliation of net income (loss) attributable to common shareholders to adjusted EBITDA Twelve Months Ended Dec 31 ($M) 2002 2016 2020 2021 2022 Net income (loss) attributable to common shareholders $27.1 $329.3 $402.5 $961.6 $654.5 Interest expense, net of interest income 17.0 45.3 52.8 40.1 75.
Slide 33: Reconciliation to Net Debt
Reconciliation to Net Debt Twelve Months Three Months Ended Dec 31 Ended Mar 31 ($M) 2022 2023 Cash and cash equivalents $519.3 $485.4 Total Debt 1,763.2 2,584.9 Short-term borrowings 164.2 104.3 Credit facility 1,225.0 2,100.1 Long term senior notes 374.0 380.5 Total Net Debt $1,243.9 $2,099.5 33 |
Slide 34: 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 35: 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
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