Slide 1: First Quarter 2014: Earnings Conference Call
CBRE GROUP, INC. First Quarter 2014: Earnings Conference Call April 30, 2014
Slide 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 future growth momentum, operations, financial performance, business outlook and ability to successfully integrate businesses w
Slide 3: Conference Call Participants
CONFERENCE CALL PARTICIPANTS Bob Sulentic PRESIDENT AND CHIEF EXECUTIVE OFFICER Jim Groch CHIEF FINANCIAL OFFICER Gil Borok DEPUTY CHIEF FINANCIAL OFFICER Steve Iaco INVESTOR RELATIONS AND CORPORATE COMMUNICATIONS
Slide 4: Q1 2014 Region Highlights
Q1 2014 Region Highlights BUSINESS OVERVIEW Americas EMEA Asia Pacific Revenue 10% Led by property sales with an increase of 17% Occupier outsourcing increased 13% Leasing grew by double-digits for third consecutive quarter Revenue127% (122% in local currency) Double digit organic growth in every ma
Slide 5: Q1 2014 Business Line Revenue
Revenue ($ in millions) Contractual Revenue Sources Capital Markets Global Corporate Services and Asset Services2 Investment Management Appraisal & Valuation Leasing Sales Commercial Mortgage Services Development Services Other Total Q1 2014 869.3 112.5 95.8 411.3 267.2 74.4 10.2 20.1 1,860.8 % of Q
Slide 6: Q1 2014 Performance Overview
Q1 2014 PERFORMANCE OVERVIEW Includes discontinued operations. See slide 21 for details. Normalized EBITDA excludes integration and other costs related to acquisitions and certain carried interest incentive compensation expense. Adjusted net income and adjusted EPS exclude amortization expense relat
Slide 7: Americas Revenue: Major Components
Total Americas Total U.S. Total Q1 2014 revenue up 10% in USD or 11% in local currency AMERICAS REVENUE: MAJOR COMPONENTS SALES LEASING GCS & ASSET SERVICES1 17% USD 19% LC 10% USD 11% LC 9% USD 10% LC 38% USD ($ in millions) Q1 Global Corporate Services (GCS) and Asset Services revenue excludes all
Slide 8: EMEA Revenue: Major Components
Total Q1 2014 revenue up 127% in USD or 122% in local currency Excluding Norland up 32% in USD or 27% in local currency EMEA REVENUE: MAJOR COMPONENTS SALES LEASING ($ in millions) Q1 Including Norland Excluding Norland 276% USD 272% LC 16% USD 11% LC 61% USD 54% LC 30% USD 25% LC GCS & ASSET SERVIC
Slide 9: Asia Pacific Revenue: Major Components
Total Q1 2014 revenue up 8% in USD or 18% in local currency ASIA PACIFIC REVENUE: MAJOR COMPONENTS Q1 ($ in millions) SALES LEASING 1% USD 12% LC 5% USD 13% LC 26% USD 38% LC GCS & ASSET SERVICES1 Global Corporate Services (GCS) and Asset Services revenue excludes all associated leasing and sales re
Slide 10: Global Investment Management
GLOBAL INVESTMENT MANAGEMENT Includes discontinued operations. See slide 21 for details. Excludes securities business. As of April 30, 2014. As of March 31, 2014. In 2011, CBRE acquired the real estate investment management operations of ING Group in Europe, Asia and its global securities business.
Slide 11: Development Services
DEVELOPMENT SERVICES 3 $87.6 million of co-investments at the end of Q1 2014 $7.7 million in recourse debt to CBRE and repayment guarantees at the end of Q1 2014 Q1 FINANCIAL RESULTS PROJECTS IN PROCESS/PIPELINE HIGHLIGHTS Includes discontinued operations. See slide 21 for details. Pro-forma revenue
Slide 12: Global Corporate Services
Facilities Management Global New 25 Expansions 24 Renewals 14 GLOBAL CORPORATE SERVICES Q1 2014 TOTAL CONTRACTS Best-in-class building technical engineering services in Europe Fits perfectly with growing international adoption of outsourcing High-growth, largely recurring business Prestigious, stick
Slide 13: Business Outlook: 2014 Expectations
CBRE’s many strengths were evident in Q1 2014 Most business lines performed materially better than the market Good momentum in the business continues Expectations for balance of 2014: Property Sales should continue strong, double-digit growth pace expected to moderate from Q1’s robust level more dif
Slide 14: Business Outlook: 2014 Expectations
See more upside than downside to full-year guidance Q1 is a relatively small portion of the year’s earnings and not an adequate barometer of full-year performance Year-over-year earnings comparisons will be more challenging in the quarters ahead At the present time, not updating our earnings expecta
Slide 15: Supplemental Slides and GAAP Reconciliation Tables
SUPPLEMENTAL SLIDES AND GAAP RECONCILIATION TABLES
Slide 16: U.S. Market Statistics
U.S. VACANCY U.S. ABSORPTION TRENDS (in millions of square feet) 1Q13 1Q14 2014F 2015F 1Q13 1Q14 2013 2014F 2015F Office 15.4% 14.8% 14.6% 14.2% 3.8 5.5 35.8 29.9 35.5 Industrial 12.2% 11.1% 10.8% 10.6% 61.8 43.5 233.5 188.9 128.9 Retail 12.5% 11.9% 10.8% 10.0% 7.0 8.2 26.8 39.0 47.5 U.S. MARKET STA
Slide 17: Mandatory Amortization and Maturity Schedule
As of March 31, 2014 MANDATORY AMORTIZATION AND MATURITY SCHEDULE ($ in millions) $1,200.0 million revolver facility matures in March 2018. As of March 31, 2014, the outstanding revolver balance was $359.5 million. 1 Global Cash Available Revolver 1,232 30 40 68 255 440 2 352 198 800 - 250.0 500.0 7
Slide 18: Capitalization
CAPITALIZATION Excludes $27.2 million of cash in consolidated funds and other entities not available for Company use at March 31, 2014. Represents notes payable on real estate in Development Services that are recourse to the Company. Excludes non-recourse notes payable on real estate of $127.9 milli
Slide 19: Reconciliation of Normalized EBITDA to EBITDA to Net Income
Three Months Ended March 31, ($ in millions) 2014 20131 Normalized EBITDA $ 198.8 $ 161.3 Adjustments: Carried interest incentive compensation2 1.6 - Integration and other costs related to acquisitions - 1.5 EBITDA 197.2 159.8 Add: Interest Income 1.6 2.0 Less: Depreciation and amortization 65.2 46.
Slide 20: Reconciliation of Net Income to Net Income, as Adjusted
Three Months Ended March 31, ($ in millions) 2014 2013 Net income attributable to CBRE Group, Inc. $ 67.7 $ 37.5 Amortization expense related to certain intangible assets attributable to acquisitions, net of tax 13.7 4.6 Carried interest incentive compensation, net of tax1 1.0 - Integration and othe
Slide 21: Reconciliation of Discontinued Operations
Discontinued Operations for the Three Months Ended March 31, 2013 ($ in millions) Global Investment Management Development Services Total CBRE Revenue $ 0.7 $ 3.3 $ 4.0 EBITDA1 $ 0.6 $ 3.8 $ 4.4 Less: Depreciation & amortization 0.1 0.2 0.3 Interest expense 0.5 1.3 1.8 Provision for income taxes - 0