Cbre Group Inc · NYSE:CBRE
Cbre — Investor Presentation (June 2017)
37 slides from Cbre's investor presentation, Jun 12, 2017
Slide 1: CBRE Group, Inc. - Global market leader in integrated commercial real estate services
CBRE group, inc. Global market leader in integrated commercial real estate services June 2017 Exhibit 99.1
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. These include statements regarding CBRE’s future growth momentum, operations, market share, business outlook, and financial performance expectations. These state
Slide 3: Global Leadership With Broad Capabilities
Global Leadership With Broad Capabilities #1 Leasing #1 Property Sales #1 Outsourcing #1 Appraisal & Valuation $86.5 billion AUM Investment Management1 Scale And Diversity 450+ offices worldwide2 Serves clients in over 100 countries2 Serves over 90% of the Fortune 100 $322 billion of sales and lease
Slide 4: The Leading Global Brand
Fortune 500 company since 2008; ranked #214 in 2017 Ranked #1 brand for 16 consecutive years Global Real Estate Advisor of the Year five years in a row Ranked among the Most Admired Companies for five consecutive years Ranked among the top few outsourcing service providers across all industries for
Slide 5: CBRE Serves Investors And Occupiers
CBRE Serves Investors And Occupiers Integrated, best-in-class offering creates value for clients at every stage of the life cycle CBRE Serves Investors And Occupiers Integrated, best-in-class offering creates value for clients at every stage of the life cycle Investor Investment Strategy Valuation A
Slide 6: Track Record Of Long-Term Growth
Revenue +5% Adjusted EPS2 +19% Q1 2016 To Q1 2017 Track Record Of Long-Term Growth 2003 To TTM Q1 2017 Revenue CAGR +16% Adjusted EBITDA1 CAGR +18% See slide 36 for footnotes
Slide 7: Positioned For Long-Term Growth
Capitalizing on our #1 position to further extend our competitive advantage Positioned For Long-Term Growth Consolidation Leasing and capital markets service providers continue to consolidate but remain highly fragmented Occupier Outsourcing Recurring contractual revenues Still in early stage of pen
Slide 8: Mergers & Acquisitions
Mergers & Acquisitions Transactions driven by top down macro strategy: Strategic in-fill acquisitions sourced principally by lines of business Highly targeted larger, transformational transactions Completed approximately 40 acquisitions since 2013 and over 110 since 2003, including five large, strat
Slide 9: Advantaged Position in Mergers and Acquisitions
Advantaged Position in Mergers and Acquisitions Notes: Revenues of private companies are estimated; CBRE 2015 gross revenue includes four months of actual gross revenue from the acquired GWS business while under our ownership, annualized for illustrative purposes; other public companies are as repor
Slide 10: Fee Revenue Mix (FY 2006 Versus FY 2016)
72% of total fee revenue5 See slide 36 for footnotes Fee Revenue Mix (FY 2006 Versus FY 2016) Significant growth, especially in contractual revenue Total Fee Revenue4: $4,742 Other1 Capital Markets2 $1,403 (37%) Leasing $1,479 (40%) Contractual Sources3 $798 (21%) 2006 61% of total fee revenue5 4.6x
Slide 11: Q1 2017 Revenue by Business Line
Revenue ($ in millions) Contractual Sources Leasing Capital Markets Other Occupier Outsourcing2 Property Management2 Investment Management Valuation Leasing Sales Commercial Mortgage Services Development Services Other Total Gross Revenue Q1 2017 $ 1,474 $ 269 $ 90 $ 116 $ 533 $ 348 $ 121 $ 11 $ 19
Slide 12: CBRE Key Takeaways
CBRE Key Takeaways Operates in an industry with strong underlying growth dynamics The global leader across virtually all business lines Industry-leading profitability Leveraging digital and data with expertise and scale Has a balanced business with a more stable growth profile Is an investment grade
Slide 13: Business Line Slides
BUSINESS LINE SLIDES CBRE
Slide 14: Occupier Outsourcing
Q1 New 30 Expansions 52 Renewals 27 Historical Revenue1 Overview 2017 Total Contracts Full service offering Facilities Management – approximately 2.2 billion square feet globally as of 12/31/2016 Project Management Transaction Services Strategic Consulting Ranked among the top few outsourcing servic
Slide 15: Total Addressable Opportunity for Real Estate Outsourcing Services
A&T2: Advisory services on transactions, leasing, labor analytics, etc. Significant Total Addressable Opportunity for Real Estate Outsourcing Services $140B+ Outsourcing Spend Available $ in Billions Market Size1 Market size is as of 2015. CBRE A&T revenue reported in leasing. CBRE Integrated Facili
Slide 16: Property Management
Historical Revenue1 Overview Selected Strategic Accounts ($ in millions) Manages buildings for investors Highly synergistic with property leasing Manages approximately 3.1 billion square feet globally as of 12/31/162 300+ premier properties in major CBDs (approximately 450 million square feet) See s
Slide 17: Investment Management
Capital Raised1 Assets under Management (AUM)* $86.5B as of 3/31/2017 Overview ($ in billions) Performance-driven global real estate investment manager More than 500 institutional clients Equity to deploy: approx. $5,300 million1,2 Co-Investment: $154.0 million2 ($ in billions) *Approximately 60% of
Slide 18: Appraisal & Valuation
Premier Clients ($ in millions) Euromoney Global Valuation Advisor of the Year for five consecutive years Clients include lenders, life insurance companies, special servicers and REITs Overview Historical Revenue Appraisal & Valuation Serving Clients Globally YTD Q1 ($ in millions) YTD Q1 $414 $461
Slide 19: Leasing
Overview Advise occupiers and investors in formulating and executing leasing strategies Tailored service delivery by property type and industry/market specialization Strategic insight and high-level execution driving significant market share gains #1 global market position – $110.8 billion lease vol
Slide 20: U.S. Leasing
U.S. Leasing Largely Recurring Business Over Time1 With Increasing Market Share 2016 U.S. Leasing Volume - $82 billion See slide 36 for footnotes Asset Class 2% 17% 11% 70% Retail Office Industrial Other Client Rep 42% 58% Tenant Rep Landlord Rep
Slide 21: Property Sales
Increased Ownership by Active Portfolio Managers Drives Sales Velocity Strategic advisor (sellers and buyers) in commercial real estate #1 global market share, based on Real Capital Analytics 800 basis point advantage over #2 firm for full year 2016 #1 global market position – $211.4 billion sales v
Slide 22: U.S. Property Sales
2016 U.S. Sales Transactions U.S. Property Sales Highly Diverse Business Across Transaction Size and Asset Class Transaction Value $110B 32% 29% 39% Under $25M $25-$100M $100M+ Asset Class (based on value) 8% 2% 12% 35% 15% 28% Retail Industrial Land Office Multi-Housing Other
Slide 23: Commercial Mortgage Services
United States United States Germany Lexin Capital Banyan Street Capital / Oaktree Capital Management Bank of America Merrill Lynch / Goldman Sachs $85 Million $100 Million $1.8 Billion Acquisition Financing Refinancing Acquisition Financing Recent Transactions A leading strategic advisor for debt an
Slide 24: Development Services
Park District The Boardwalk LA Plaza Principio Commerce Park Dallas, TX Mixed-Use Newport Beach, CA Office Los Angeles, CA Mixed-use North End, MD Industrial 2 Projects In Process/Pipeline1 Overview Recent Projects A premier brand in U.S. development 65+ year record of excellence Partner with leadin
Slide 25: Appendix
APPENDIX CBRE
Slide 26: Q1 2017 Financial Metrics
Q1 2017 Financial Metrics Three Months Ended March 31, ($ in millions) 2017 2016 Depreciation $ 38.4 $ 37.4 Adjusted amortization 1 28.7 24.7 Net interest expense 31.6 33.3 Adjusted income tax rate 2 29.2% 35.5% Q1 2017 Currency Effects vs. Prior Year Q1 currency translation as well as other exchang
Slide 27: Mandatory Amortization And Maturity Schedule
Mandatory Amortization And Maturity Schedule ($ in millions) $2,800 million revolving credit facility matures in March 2021. As of March 31, 2017, the revolving credit facility balance was $120 million. As of March 31, 20171 Global Cash Undrawn Revolving Credit Facility 3,500 3,000 2,500 2,000 1,500
Slide 28: Capitalization
Capitalization ($ in millions) As of March 31, 2017 Cash1 $ 460 Revolving credit facility 120 Senior term loan A2 405 Senior term loan B-12 230 Senior term loan B-22 110 Senior notes – 5.00%2 791 Senior notes – 4.875%2 591 Senior notes – 5.25%2 422 Other debt3,4 - Total debt $ 2,669 Stockholders’ eq
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures The following measures are considered “non-GAAP financial measures” under SEC guidelines: fee revenue contractual fee revenue net income attributable to CBRE Group, Inc., as adjusted (which we also refer to as “adjusted net income”) diluted income per share attributable t
Slide 30: Reconciliation of Adjusted EBITDA to EBITDA to Net Income
Twelve Months Ended ($ in millions) March 31, 2017 December 31, 2003 Adjusted EBITDA $ 1,581.5 $ 183.2 Adjustments: Integration and other costs related to acquisitions 120.4 13.6 Cost-elimination expenses 66.11 36.8 Carried interest incentive compensation (reversal) expense to align with the timing
Slide 31: Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS
Three Months Ended March 31, ($ in millions, except per share amounts) 2017 2016 Net income attributable to CBRE Group, Inc. $ 129.6 $ 82.2 Amortization expense related to certain intangible assets attributable to acquisitions 27.0 24.8 Integration and other costs related to acquisitions 11.9 17.2 C
Slide 32: Reconciliation of Net Income to Adjusted EBITDA and After-Tax ROIC
Reconciliation of Net Income (Loss) to EBITDA to Adjusted EBITDA to Adjusted After-Tax Earnings Before Interest to After-Tax ROIC Twelve Months Ended December 31, ($ in millions) 2016 2015 2014 2013 Net income (loss) attributable to CBRE Group, Inc. $ 572.0 $ 547.1 $ 484.5 $ 316.5 Add: Depreciation
Slide 33: Reconciliation of Net Income to Adjusted EBITDA and After-Tax ROIC (continued)
Reconciliation of Net Income (Loss) to EBITDA to Adjusted EBITDA to Adjusted After-Tax Earnings Before Interest to After-Tax ROIC Includes depreciation and amortization related to discontinued operations of $0.9 million for the year ended December 31, 2013. Includes interest expense related to disco
Slide 34: Reconciliation of Revenue to Fee Revenue
Reconciliation of Revenue to Fee Revenue Twelve Months Ended ($ in millions) December 31, 20161 December 31, 2006 Consolidated revenue $ 13,071.6 $ 4,032.0 Less: Client reimbursed costs largely associated with employees dedicated to client facilities and subcontracted vendor work performed for clien
Slide 35: Reconciliation of Revenue to Fee Revenue (Q1)
Three Months Ended March 31, ($ in millions) 2017 20162 Occupier Outsourcing revenue 1 $ 1,474.2 $ 1,413.3 Less: Client reimbursed costs largely associated with employees dedicated to client facilities and subcontracted vendor work performed for clients 915.1 877.0 Occupier Outsourcing fee revenue 1
Slide 36: Footnotes
Footnotes Slide 6 Adjusted EBITDA excludes (from EBITDA) certain carried interest incentive compensation (reversal) expense to align with the timing of associated revenue, cost-elimination expenses and integration and other costs related to acquisitions. Adjusted EPS excludes the effect of select ch
Slide 37: Footnotes (continued)
Slide 17 Excludes global securities business. As of March 31, 2017. Slide 24 As of December 31 for each year presented except Q1 2017. In Process figures include Long-Term Operating Assets (LTOA) of $0.2 billion for Q1 2017, $0.2 billion for Q4 2016, $0.1 billion for Q4 2015, $0.3 billion for Q4 201