Cbre Group Inc · NYSE:CBRE
Cbre — CB Richard Ellis Group — Investor Presentation (February 2009)
27 slides from Cbre's investor presentation, Feb 23, 2009
Slide 1: Investor Presentation February 2009
Investor Presentation February 2009 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 2009, future operations, expenses,
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 $38.5 billion in assets under management1 #2 commercial mortgage broke
Slide 4: Diverse Client Base
CB Richard Ellis | Page 4 Diverse Client Base Diversified revenue spread across broad base of clients with no concentration. 2008 Revenue by Client Type Corporations, 39% Insurance Co's/Banks, 23% Pensions Funds/P F Advisors, 11% Individuals/Partnerships, 9% REITs, 5% Opportunity Funds, 4% Governmen
Slide 5: #1 Position in a Fragmented Market
CB Richard Ellis | Page 5 #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 6: Segment Contribution
CB Richard Ellis | Page 6 Segment Contribution 2008 Revenue 2008 Normalized EBITDA1 1. Normalized EBITDA excludes integration costs related to acquisitions, cost containment and the write-down of impaired assets. Americas 63% EMEA 21% Asia Pacific 11% Global Investment Management 3% Development Serv
Slide 7: Revenue Breakdown
CB Richard Ellis | Page 7 Revenue Breakdown 35% 35% 13% 7% 3% 2%1% 4% Property & Facilities Management Leasing Sales Appraisal & Valuation Investment Management Development Services Commercial Mortgage Brokerage Other 4th Quarter 2008 1. Includes revenue from discontinued operations, which totaled $
Slide 8: Global Square Footage Managed
CB Richard Ellis | Page 8 Global Square Footage Managed (SF in billions) 1.2 1.3 1.4 1.6 1.9 2004 2005 2006 2007 2008 Outsourcing Services Global property and facilities management Global project management Global corporate services 1 88 of the Fortune 100 1. Represents combined data for CBRE and TC
Slide 9: #1 Provider Of Every Outsourced Real Estate Service
CB Richard Ellis | Page 9 #1 Provider Of Every Outsourced Real Estate Service * Including affiliates, statistics are as of 12/31/08 • Global execution of transactions with a portfoliowide focus • Optimize portfolio • Lease administration services • Multipletransaction focus • Full service outsourcin
Slide 10: US Market Statistics
CB Richard Ellis | Page 10 US Market Statistics 7.7% 9.5% 12.6% 4Q06 22.7 206.8 82.8 2006 -3.5 -0.6 13.9 11.3% 10.4% 8.7% Retail -103.2 -94.1 166.7 12.6% 11.4% 9.5% Industrial -50.0 17.8 55.8 16.8% 14.0% 12.6% Office 2009 F 2008 2007 4Q09 F 4Q08 4Q07 US Absorption Trends (in millions of square feet)
Slide 11: Leasing Q4 2008 Business Update
CB Richard Ellis | Page 11 Leasing Q4 2008 Business Update Vacancy rates increased significantly across all property types in the U.S. as a result of the economic downturn. In EMEA leasing activity weakened in major markets while rents fell. Office vacancy rose in 14 of 17 Asian markets tracked by C
Slide 12: Global Investment Management Revenue and AUM
CB Richard Ellis | Page 13 Annual Revenue 57.1 68.4 94.0 99.3 126.3 259.2 160.8 - - - 28.0 101.7 88.7 0.4 57.1 68.4 94.0 127.3 228.0 347.9 161.2 2002 2003 2004 2005 2006 2007 2008 Q4 Revenue 33.6 32.7 38.6 6.4 7.2 2007 2008 YTD Revenue 120.4 140.7 138.8 20.1 88.7 0.4 2007 2008 Global Investment Mana
Slide 13: Global Investment Programs
CB Richard Ellis | Page 14 Global Investment Programs Description Q4 2008 Statistics Typical Fee Structure Separate Accounts $17.5 billion of assets under management Management fees Transaction fees Incentive fees Sponsored Funds $16.4 billion of assets under management Management fees Transaction f
Slide 14: Development Services
CB Richard Ellis | Page 15 Normalized EBITDA ($ in millions) 15.9 31.3 34.8 37.3 73.9 17.9 2003 2004 2005 2006 2007 2008 Development Services Develops properties for user / investor clients on a fee and / or co-investment basis $94 million co-invested at quarter end $4.1 million in recourse debt to
Slide 15: Financial Overview
CB Richard Ellis | Page 16 Financial Overview
Slide 16: 2008 Performance Overview
CB Richard Ellis | Page 17 2008 Performance Overview $369 million or 38% lower than prior year $601 million Normalized EBITDA4 $377 million or 45% lower than prior year $457 million2 EBITDA Decreased 77% as compared to $1.66 EPS in prior year Decreased 54% as compared to $2.11 EPS in prior year GAAP
Slide 17: Cost Cutting Initiatives
CB Richard Ellis | Page 18 Cost Cutting Initiatives Update on Previous $190 million Plan Total permanent run rate savings of $190 million realized as announced on the Q3 2008 call Additionally 2008 incentive compensation was reduced by over $350 million due to weaker operating results Additional $19
Slide 18: Consistent Long Term Growth
CB Richard Ellis | Page 19 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% 11.7% 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 5,130 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Orga
Slide 19: Debt Highlights: Net Debt to Normalized EBITDA
CB Richard Ellis | Page 20 $486 $450 $635 $378 $128 $1,693 $1,874 $1,950 4.2x 3.4x 3.5x 2.5x 1.6x 1.3x 0.3x 3.2x $544 $530 $798 $635 $577 $2,118 $2,036 $2,109 2001 2002 2003 2004 2005 2006 2007 2008 Net Debt Total Debt Net Debt to Normalized EBITDA Debt Highlights 1. Normalized EBITDA excludes merge
Slide 20: Capitalization
CB Richard Ellis | Page 21 Capitalization 1. Represents notes payable on real estate in Development Services that are recourse to the company. Excludes non-recourse notes payable on real estate of $613.6 million and $459.4 million at December 31, 2008 and 2007, respectively. 2. Excludes $210.5 milli
Slide 21: Debt Covenants & Maturity Schedule
CB Richard Ellis | Page 22 CBRE Debt Covenants & Maturity Schedule Covenant Hurdle 6/30/08 9/30/08 12/31/08 Leverage Ratio =3.75x 2.91 3.16 3.28 Interest Coverage Ratio =2.25x 6.20 5.63 4.72 Year Amount Due 2009 ~ $52 million per quarter 2010 ~ $75 million per quarter Debt Covenants Debt Maturity Sc
Slide 22: Internal Cash Flow
CB Richard Ellis | Page 23 Internal Cash Flow Cap Ex D&A Net Income, as adjusted 2008 Normalized Internal Cash Flow Strong cash flow generator Low capital intensity Utilization of internal cash flow 1.Debt reduction 2.Co-investment activities 209 90 (40) 259 1 1. Represents capital expenditures, net
Slide 23: Business Outlook
CB Richard Ellis | Page 24 Business Outlook In investment sales, we expect the environment to remain weak, but believe we may see modest improvement by year end We anticipate leasing will remain weak until global economies show signs of stabilizing Outsourcing should continue to grow, approaching $2
Slide 24: GAAP Reconciliation Tables
CB Richard Ellis | Page 25 GAAP Reconciliation Tables
Slide 25: 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 twelve months ended December 31, 2008, including revenue of $1.2 million, interest income of $0.1 million, depreciation and amortizatio
Slide 26: Reconciliation of Normalized EBITDA to EBITDA to Net Income
CB Richard Ellis | Page 27 Reconciliation of Normalized EBITDA to EBITDA to Net Income Notes: 1. Includes EBITDA related to discontinued operations of $6.5 million for the year ended December 31, 2007. 2. Includes interest income related to discontinued operations of $0.01 million for the year ended
Slide 27: Reconciliation of Net Income to Net Income, As Adjusted
CB Richard Ellis | Page 28 Reconciliation of Net Income to Net Income, As Adjusted ($ in millions) 2008 2007 Net income 83.9 $ 390.5 $ Cost containment, net of tax 18.4 - Impairment of assets, net of tax 67.5 - Amortization expense related to net revenue backlog, incentive fees, and customer relatio
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