Cbre Group Inc · NYSE:CBRE
Cbre — CB Richard Ellis Group — Investor Presentation (May 2008)
30 slides from Cbre's investor presentation, May 19, 2008
Slide 1: Investor Presentation May 2008
Investor Presentation May 2008 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 growth momentum in 2008, future operations and future financial performan
Slide 3: Global Leader in Commercial Real Estate Services
CB Richard Ellis | Page 3 Global Leader in Commercial Real Estate Services 100+ years 55 countries #1 in key cities in America, Europe and Asia Pacific #1 commercial real estate brokerage #1 outsourcing #1 appraisal and valuation $42.2 billion in assets under management1 #2 commercial mortgage broke
Slide 4: 2008 Milestones
CB Richard Ellis | Page 4 2008 Milestones One of the world’s leading outsourcing companies #1 brand for seven consecutive years World’s Most Powerful Brokerage Firm World’s Top Brokerage and Property Management Firm #1 Brokerage and Capital Markets Firm U.S. EPA 2008 ENERGY STAR Partner of the Year
Slide 5: Diverse Client Base
CB Richard Ellis | Page 5 Diverse Client Base 2007 Revenue by Client Type Corporations 34% Individuals/ Partnerships 11% REITs 6% Conduits/Wall Street Firms 4% Opportunity Funds 6% Offshore Investors 1% Pension Funds/ P F Advisors 14% Insurance Co’s/Banks 19% Other 4% Government 1% Diversified reven
Slide 6: #1 Position in a Fragmented Market
CB Richard Ellis | Page 6 #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 $27 Billion U.S. Commercial Real Estate Market(1) Large and growing market—4.2% CAGR 1997-2007 Highly fragmented—top four firms have 21.8% market share Sour
Slide 7: Segment Revenue Performance
CB Richard Ellis | Page 7 Segment Revenue Performance1 Americas 1,842 2,173 2,507 3,690 3,681 2004 2005 2006 2007 Q1 2008 TTM Strong Growth Across All Segments EMEA 551 707 934 1,314 1,331 2004 2005 2006 2007 Q1 2008 TTM Global Investment Management 94 127 228 348 302 2004 2005 2006 2007 Q1 2008 TTM
Slide 8: Segment Contribution
CB Richard Ellis | Page 8 Segment Contribution Q1 2008 TTM Revenue Q1 2008 TTM Normalized EBITDA1 1. Normalized EBITDA excludes merger-related charges, integration costs related to acquisitions, and the write down of an impaired investment. Americas 61% EMEA 22% Asia Pacific 10% Global Investment Ma
Slide 9: Q1 2008 Revenue Breakdown
CB Richard Ellis | Page 9 Q1 2008 Revenue Breakdown 33% 32% 19% 7% 3% 2% 2% 2% Property & Facilities Management Leasing Sales Appraisal & Valuation Investment Management Development Services Commercial Mortgage Brokerage Other ($ in millions) 2008 2007 % Change 413.2 307.8 34 394.5 328.5 20 227.9 33
Slide 10: US Market Statistics
CB Richard Ellis | Page 10 US Market Statistics US Vacancy US Absorption Trends (in millions of square feet) 2006 2007 2008 PF 2008 CF 2006 2007 2008 PF 2008 CF Office 12.6% 12.6% 13.7% 14.7% 79.8 56.1 13.6 -5.2 Industrial 9.4% 9.4% 9.9% 10.2% 208.0 160.7 94.0 47.6 Retail 8.2% 9.2% 8.7% 9.3% 10.1 13
Slide 11: Leasing Q1 2008 Business Update
CB Richard Ellis | Page 11 Leasing Q1 2008 Business Update Leasing results were strong globally In U.S., rational levels of new construction in 2008 should support continued increase in rents, albeit at a slower pace Trends in vacancy and absorption reflect softness in U.S. and European economies As
Slide 12: Sales Q1 2008 Business Update
CB Richard Ellis | Page 12 Sales Q1 2008 Business Update Ongoing challenges in credit markets impacted sales in the Americas and EMEA Asia showed stability in Q1 but investment sentiment is softening in several markets Continued high level of capital allocation to real estate Lower interest rates su
Slide 13: Outsourcing Services
CB Richard Ellis | Page 13 Outsourcing Services Global property and facilities management Global project management Global corporate services Global Square Footage Managed (SF in millions) 1,203 1,248 1,444 1,579 2004 2005 2006 2007 Outsourcing % of Q1 2008 Total Revenue 33% 1 88 of the Fortune 100
Slide 14: #1 Provider Of Every Outsourced Real Estate Service
CB Richard Ellis | Page 14 #1 Provider Of Every Outsourced Real Estate Service * Including affiliates Transaction Management Project Management Property and Facilities Consulting Global execution of transactions with a portfolio-wide focus Optimize portfolio Lease administration services Multiple-tr
Slide 15: Global Investment Management
CB Richard Ellis | Page 15 Global Investment Management Annual Revenue 57.1 68.4 94.0 99.3 126.3 259.2 - - - 28.0 101.7 88.7 57.1 68.4 94.0 127.3 228.0 347.9 2002 2003 2004 2005 2006 2007 Assets Under Management 11.4 14.4 15.1 17.3 28.6 37.8 42.2 2002 2003 2004 2005 2006 2007 Q1 2008 Q1 Revenue 39.2
Slide 16: Global Investment Programs
CB Richard Ellis | Page 16 Global Investment Programs Description Q1 2008 Statistics Typical Fee Structure Separate Accounts $20.4 billion of assets under management (5% growth over Q1 2007) Management fees Transaction fees Incentive fees Sponsored Funds $16.8 billion of assets under management (98%
Slide 17: Development Services
CB Richard Ellis | Page 17 Development Services Develops properties for user / investor clients on a fee and / or co-investment basis $151 million co-invested at quarter end $7 million in recourse debt to CBRE Projects In Process/Pipeline ($ in billions) 2.2 3.8 5.0 4.9 3.6 2.8 2.6 3.6 5.4 6.5 6.3 2
Slide 18: In-fill acquisitions 2005 - present
CB Richard Ellis | Page 18 In-fill acquisitions 2005 - present Groupe Axival, Inc. CBRE Alberta Advocate Consulting Group CBRE Charlotte Columbus Commercial Realty Project Advantage The Polacheck Company CBRE Hawaii Marshall & Stevens’ Cost Segregation Businesses Krombach Partners CBRE Technical Ser
Slide 19: Financial Overview
CB Richard Ellis | Page 19 Financial Overview
Slide 20: Q1 2008 Performance Highlights
CB Richard Ellis | Page 20 Q1 2008 Performance Highlights Revenue $1.2 billion $17.0 million or 1% higher than prior year quarter Net Income GAAP $20.5 million Adjusted $31.7 million $8.5 million or 71% higher than prior year quarter $33.3 million or 51% lower than prior year quarter EPS1 GAAP $0.10
Slide 21: Consistent Long Term Growth
CB Richard Ellis | Page 21 Consistent Long Term Growth1 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% 15.1% 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 6,053 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Slide 22: Debt Highlights
CB Richard Ellis | Page 22 $486 $450 $635 $378 $128 $1,693 $1,874 $2,106 4.2x 3.4x 3.5x 2.5x 2.2x 1.6x 1.3x 0.3x $544 $530 $798 $635 $577 $2,118 $2,036 $2,419 2001 2002 2003 2004 2005 2006 2007 Q1 2008 Net Debt Total Debt Net Debt to Normalized EBITDA . Debt Highlights Normalized EBITDA: $115 $131 $
Slide 23: Q1 2008 TTM Normalized Internal Cash Flow
CB Richard Ellis | Page 23 Q1 2008 TTM Normalized Internal Cash Flow Strong cash flow generator Low capital intensity Utilization of internal cash flow • Co-investment activities • Development • In-fill acquisitions • Debt reduction • Share repurchases Internal Cash Flow Integration & merger related
Slide 24: Key Investment Points
CB Richard Ellis | Page 24 Key Investment Points Uniquely positioned to thrive in tough market – Most diversified revenue base (geography and services) – Strong balance sheet – Variable cost structure – Strong cash flow generation Opportunity to gain share / grow – Cross selling – Industry consolida
Slide 25: GAAP Reconciliation Tables
CB Richard Ellis | Page 25 GAAP Reconciliation Tables
Slide 26: 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 three months ended December 31, 2007, including interest income of $0.01 million, depreciation and amortization of $0.4 million, intere
Slide 27: Reconciliation of Net Income to Net Income, As Adjusted
CB Richard Ellis | Page 27 Reconciliation of Net Income to Net Income, As Adjusted ($ in millions) 2008 2007 Net income 20.5 $ 12.0 $ Amortization expense related to net revenue backlog, incentive fees, and customer relationships acquired, net of tax 1.7 6.4 Integration costs related to acquisitions
Slide 28: Reconciliation of Normalized EBITDA to EBITDA to Net Income
CB Richard Ellis | Page 28 Reconciliation of Normalized EBITDA to EBITDA to Net Income ($ in millions) 2008 2007 Normalized EBITDA 104.6 $ 161.9 $ Adjustments: Integration costs related to acquisitions 5.5 12.1 Write down of impaired investment 10.6 - Loss on trading securities acquired in the - 33.
Slide 29: Reconciliation of Normalized EBITDA to EBITDA to Net Income (Loss)
CB Richard Ellis | Page 29 Reconciliation of Normalized EBITDA to EBITDA to Net Income (Loss) Notes: 1. Includes interest income related to discontinued operations of $0.01 million for the year ended December 31, 2007. 2. Includes depreciation and amortization related to discontinued operations of $
Slide 30: Reconciliation of Net Income to Net Income, As Adjusted
CB Richard Ellis | Page 30 Reconciliation of Net Income to Net Income, As Adjusted Net Income, As Adjusted (d) (c) (b) (a) Reported Net Income TTM Q1 2008 Results 399 20 23 15 6 463 (a) Amortization expense related to net revenue backlog, incentive fees and customer relationships acquired1 (b) Integ
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