Jones Lang Lasalle Incorporated · NYSE:JLL
Jones Lang Lasalle — Q3 2023 Earnings Presentation
29 slides from Jones Lang Lasalle's earnings presentation, Nov 2, 2023
Slide 1: Earnings Presentation Third Quarter 2023
Earnings Presentation Third Quarter 2023 November 2, 2023
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: Third quarter 2023 industry highlights
Third quarter 2023 industry highlights
Slide 4: Capital markets industry highlights
Capital markets industry highlights Benchmark yields, 2006 – Sep 2023 Real estate investment volumes by region, 2007 – Q3 2023 YTD 7% 1M SOFR 10-year Treasury $1,400 Euro Area 10-year Government Bond Yields Asia 10-year Government Bond Yields $1,273 6% $1,200 $1,067 $1,063 5% $1,000 $887 $851 US$ Bi
Slide 5: Capital markets industry trends
Capital markets industry trends Quarterly investment volumes by sector, Q3 2021 – Q3 2023 Dry powder in closed-end funds, 2007 – Q3 2023 Residential $175 $500 $480 Office $413 $402 $150 Industrial $395 US$ Billions $400 $352 $125 Retail Hotels $300 $100 $200 $163 $75 $50 $100 $25 $0 $0 Q3 2021 Q4 20
Slide 6: Office leasing industry highlights
Office leasing industry highlights Global office leasing volumes by region, 2007 – Q3 2023 YTD Rental growth for prime office assets, Q3 2007 – Q3 2023 50 6% 44 45 41 4% Rental change (q-o-q %) 40 35 2% 35 32 0% Millions sqm 30 26 27 25 23 22 -2% 20 -4% 15 -6% 10 5 -8% 0 -10% U.S. EMEA Asia Pacific
Slide 7: Industrial leasing industry highlights
Industrial leasing industry highlights North America EMEA Asia Pacific Gross Leasing Gross Leasing Net Absorption 20 6 3 millions sqm 15 4 2 10 2 1 5 0 0 0 5-year Q3 Avg Q3 2022 Q3 2023 5-year Q3 Avg Q3 2022 Q3 2023 5-year Q3 Avg Q3 2022 Q3 2023 (2018-2022) (2018-2022) (2018-2022) Third Quarter High
Slide 8: Consolidated financials
Consolidated financials @ JLL SEE A BRIGHTER WAY
Slide 9: Consolidated third quarter 2023 financial results
Consolidated third quarter 2023 financial results Margins in local currency; growth rates represent % change over three months ended Q3 2022 ’23/’22 % Chg. Q3 2023 Q3 2022 ’23/’22 % Chg. USD Local Currency Revenue $5,111M $5,178M (1)% (2)% Fee Revenue $1,791M $2,049M (13)% (13)% Operating In
Slide 10: Business segments results
Business segments results @ JLL SEE A BRIGHTER WAY
Slide 11: Third quarter 2023 financial results – Business segments
Third quarter 2023 financial results – Business segments $M. Growth rates in local currency; growth rates represent % change over three months ended Q3 2022 Adjusted EBITDA Margin Adjusted EBITDA Margin Revenue Fee Revenue Adjusted EBITDA (USD) (Local Currency) Markets $992 $704 $85 12.1% 12.6% Advi
Slide 12: Markets Advisory
Markets Advisory Margins in local currency; growth rates represent % change over three months ended Q3 2022 Fee Revenue Adjusted EBITDA $M $848 $29 $M, % of fee revenue $704 $123 $132 $23 $138 $85 $696 $543 12.6% 15.6% Q3 2023 Q3 2022 Q3 2023 Q3 2022 Leasing Property Management Advisory, Consulting
Slide 13: Capital Markets
Capital Markets Margins in local currency; growth rates represent % change over three months ended Q3 2022 Fee Revenue Adjusted EBITDA $M $579 $M, % of fee revenue $41 $431 $86 $83 $38 $84 $50 $452 $309 11.7% 14.4% Q3 2023 Axis Title Q3 2022 Q3 2023 Q3 2022 Investment Sales, Debt/Equity Advisory Val
Slide 14: Work Dynamics
Work Dynamics Margins in local currency; growth rates represent % change over three months ended Q3 2022 Fee Revenue Adjusted EBITDA $M $M, % of fee revenue $498 $453 $62 $73 $59 $53 $230 $210 $195 $184 12.7% 11.8% Q3 2023 Q3 2022 Q3 2023 Q3 2022 Workplace Management Project Management Portfolio Ser
Slide 15: JLL Technologies
JLL Technologies Margins in local currency; growth rates represent % change over three months ended Q3 2022 Fee Revenue Adjusted EBITDA $M $M, % of fee revenue $56 $53 (15.5%) (29.0%) ($9) ($15) Q3 2023 Q3 2022 Q3 2023 Q3 2022 Third Quarter Highlights • Fee revenue growth of 5% local currency (6% US
Slide 16: LaSalle
LaSalle Margins in local currency; growth rates represent % change over three months ended Q3 2022 Fee Revenue Adjusted EBITDA $M $M, % of fee revenue $116 $103 $12 $7 $9 $23 $95 $95 $17 16.3% 19.7% Q3 2023 Q3 2022 Q3 2023 Q3 2022 Advisory Fees Transaction Fees Incentive Fees Third Quarter Highlight
Slide 17: Capital allocation and balance sheet
Capital allocation and balance sheet
Slide 18: Debt and leverage
Debt and leverage Highlights: • Strong balance sheet with ample liquidity provides operational flexibility • Sequential quarter decline in net debt primarily attributable to positive cash flow from operating activities Investment Grade Credit Ratings • Leverage ratio increase year-over-year was enti
Slide 19: Return of capital to shareholders
Return of capital to shareholders $M $601 $343 $100 $40 $43 2019 2020 2021 2022 Q3 2023 YTD Dividend Share Repurchase Highlights • Strong balance sheet provides flexibility to invest in the business while also returning cash to shareholders • Shares repurchases totaled $40 million Q3 2023 YTD; appro
Slide 20: Financial targets
Financial targets @ JLL SEE A BRIGHTER WAY
Slide 21: Mid-Term Financial Targets
Mid-Term Financial Targets Consolidated Financial Targets Fee Revenue $10-11B Adj. EBITDA Margin 16-19% Net Debt / Adj. EBITDA < 2x As a result of the industry-wide softness in transaction activity, we are extending the timeline to achieve all of our mid-term targets beyond 2025. We have built a res
Slide 22: Supplemental materials & non-GAAP reconciliations
Supplemental materials & non-GAAP reconciliations
Slide 23: Consolidated YTD 2023 financial results
Consolidated YTD 2023 financial results Margins in local currency; growth rates represent % change over nine months ended Q3 2022 ’23/’22 % Chg. Q3 2023 YTD Q3 2022 YTD ’23/’22 % Chg. USD Local Currency Revenue $14,879M $15,257M (2)% (2)% Fee Revenue $5,223M $6,088M (14)% (14)% Operating Inc
Slide 24: YTD 2023 financial results – Business segments
YTD 2023 financial results – Business segments $M. Growth rates in local currency; growth rates represent % change over nine months ended Q3 2022 Adjusted EBITDA Margin Adjusted EBITDA Margin Revenue Fee Revenue Adjusted EBITDA (USD) (Local Currency) Markets $2,924 $2,072 $256 12.4% 12.4% Advisory
Slide 25: Fee revenue / fee-based operating expenses reconciliation
Fee revenue / fee-based operating expenses reconciliation Three Months Ended Sep 30 Nine Months Ended Sep 30 ($M) 2023 2022 2023 2022 Revenue $5,111.4 $5,177.5 $14,879.4 $15,257.3 Gross contract costs (3,327.1) (3,123.7) (9,666.2) (9,156.6) Net non-cash MSR and mortgage banking derivative activity 7
Slide 26: Reconciliation of net income to adjusted EBITDA
Reconciliation of net income attributable to common shareholders to adjusted EBITDA Three Months Ended Sep 30 Nine Months Ended Sep 30 ($M) 2023 2022 2023 2022 Net income attributable to common shareholders $59.7 $140.2 $53.0 $479.7 Interest expense, net of interest income 37.1 23.2 103.9 49.1 Incom
Slide 27: Reconciliation of net income to adjusted net income and adjusted diluted EPS
Reconciliation of net income to adjusted net income and adjusted diluted earnings per share Three Months Ended Sep 30 Nine Months Ended Sep 30 ($M except per share data) 2023 2022 2023 2022 Net income attributable to common shareholders $59.7 $140.2 $53.0 $479.7 Shares (in 000s) 48,394 48,629 48,317
Slide 28: 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 29: 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