Cbre Group Inc · NYSE:CBRE
Cbre — CB Richard Ellis Group — Investor Presentation (August 2007)
29 slides from Cbre's investor presentation, Aug 21, 2007
Slide 1: Investor Presentation August 2007
Investor Presentation August 2007
Slide 2: Forward Looking Statements
1 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 2007, future operations and future financial performance. These statements sho
Slide 3: Company/Market Overview
CB RICHARD ELLIS Company/Market Overview
Slide 4: CBRE company overview and key facts
3 (1) As of 6/30/2007. (2) Combined Revenue includes $523.4 million for TCC for the period July 1, 2006 through December 20, 2006. (3) EBITDA excludes one-time items, including merger-related costs, integration costs related to acquisitions, and a loss on trading securities acquired in the TCC acqui
Slide 5: Global Reach & Local Leadership
4 Global Reach & Local Leadership Individuals/Partnerships 2006 Revenue by Client Type (1) Corporate REITS Insurance Companies/Banks Pension Funds Government Other Conduits/Wall St. Firms Equity/Opportunity Funds Offshore Investors Q2 2007 TTM Combined Revenue by Region Diversified revenue spread ac
Slide 6: #1 Position in a Fragmented Market
5 The market is large but still highly fragmented and has grown at a 4.3% CAGR from 1996 to 2006. #1 Position in a Fragmented Market $26 Billion US Commercial Real Estate Services Industry (1) U.S. Market Share Top 4 = 20.7% Share Source: Full year 2006 external public filings and management estimat
Slide 7: 2007 Revenue Breakdown
6 2007 Revenue Breakdown (1) Excludes Trammell Crow Company’s operations, which were not purchased until 12/20/2006. (2) Includes Trammell Crow Company’s operations prior to the acquisition on 12/20/2006. The financial information including Trammell Crow Company is presented for informational purpos
Slide 8: US Key Market Drivers
7 US Key Market Drivers GDP Growth(1) Absorption & Rental Rates(2) (1) Source: Bureau of Economic Analysis (2) Source: Torto Wheaton Research (3) Source: RCA and BLS Commercial leasing business drivers are still strong Average 2.9% Construction(2) Construction Costs are expensive(3) % Change in Stoc
Slide 9: Impacts on Capital Markets Transactions
8 Impacts on Capital Markets Transactions Historical 10-year Treasury Rates(1) CMBS Delinquency Rates(2) Both delinquencies and interest rates are very low by historic standards The volatility in the credit markets has incrementally raised the cost of commercial real estate transactions Some margina
Slide 10: Leasing
9 Leasing Global economic expansion fuels improved leasing markets and higher rents In U.S., office rental growth increased an average of 6.4% yoy in 2Q 07(1) High leasing levels in Europe produce strong rent gains in London, Paris, Madrid and a growing number of cities In Asia, market conditions ar
Slide 11: Sales
10 (1) Source: IREI and ULI (2) Includes TCC revenue for the period December 20, 2006 through December 31, 2006. (3) Includes TCC revenue for the period December 20, 2006 through June 30, 2007. (4) Source: Real Capital Analytics (5) Derived from YTD Q2 2007 results. Sales Rising rents continue to un
Slide 12: Outsourcing Services
11 Outsourcing Services 85 of the Fortune 100 Sq. ft. Millions CAGR: 10% Global Property and Facilities Management(1) Global Project Management Corporate Services Over 250 clients with 19 added through Q2 2007 (1) Represents combined data for CBRE and TCC. Does not include joint ventures and affilia
Slide 13: Investment Management
12 Investment Management Americas EMEA Asia Pacific Investment Management growing faster than the 13% growth in institutional ownership of real estate(1) CBRE’s Assets Under Management ($ in Billions) Revenue ($ in Millions) (1) Source: IREI and ULI CAGR: 41% 127.3 228.0 CAGR: 27% Carried Interest I
Slide 14: Development Services Overview
13 Development Services Overview Development Services is a merchant development business Co-invests alongside equity of institutional partners Develops properties for user/investor clients on a fee basis without co-investing in the projects Does not seek to own development projects long term Revenue
Slide 15: 2005–2007 YTD In-Fill Acquisitions
14 Purchase price for these 39 acquisitions was approximately $290 million Associated annual revenue estimated to be approximately $485 million which includes the consolidation of revenue from CBRE Technical Services and the now majority owned IKOMA EBITDA margins expected to be consistent with CBRE
Slide 16: Financial Overview
CBRE CB RICHARD ELLIS Financial Overview 16
Slide 17: Consistent Long Term Growth
16 Consistent Long Term Growth(1) CBRE has consistently outpaced industry growth. (1) No reimbursements are included for the period 1992 through 1996 as amounts were immaterial. Reimbursements for 1997 through 2001 have been estimated. For 2002 through Q2 2007 TTM combined, reimbursements are includ
Slide 18: Q2 2007 Record Business Performance Highlights
17 Q2 2007 Record Business Performance Highlights(1) 2006 2007 65% (In millions, except EPS) 80% Revenue Normalized EBITDA(2) 99% 94% Net income, as adjusted(2) EPS, as adjusted(2)(3) (1) Q2 2006 does not include TCC activity. (2) Normalized EBITDA, net income, as adjusted and earnings per share, as
Slide 19: Normalized EBITDA Margins
18 Normalized EBITDA Margins(1) CBRE has consistently improved its EBITDA margin. (1) Normalized EBITDA margins exclude merger-related and other non-recurring costs, integration costs related to acquisitions, one-time IPO-related compensation expense and gains/losses on trading securities acquired i
Slide 20: Debt Highlights
19 ($ in millions) Debt Highlights Notes: Normalized EBITDA excludes merger-related and other non-recurring costs, integration costs related to acquisitions, one-time IPO-related compensation expense and gains/losses on trading securities acquired in the TCC acquisition. 2006 combined normalized EBI
Slide 21: Normalized Internal Cash Flow
20 Strong cash flow generator Low capital intensity Utilization of internal cash flow Debt reduction Co-investment activities Development In-fill acquisitions (1) Represents capital expenditures, net of concessions. Q2 2007 TTM Normalized Internal Cash Flow ($ millions) Internal Cash Flow 451 Net In
Slide 22: 2007 Key Drivers of Earnings Growth
21 2007 Key Drivers of Earnings Growth Revenue Growth Margin Expansion Market growth Market share gains Cross selling In-fill acquisitions Synergy savings Operating leverage Fixed cost controls Deleveraging Balance Sheet Term loan pay down Revenue growth, margin expansion and deleveraging allow CBRE
Slide 23: Key Investment Points
22 Diversified global platform with the most extensive service lines in the industry Strong organic revenue growth Operating leverage leads to margin expansion Trammell Crow Company integration going well, including net expense synergy savings increasing by 38% to $90M Continuing debt reduction (of
Slide 24: Appendix
CBRE CB RICHARD ELLIS Appendix
Slide 25: Reconciliation of Normalized EBITDA to EBITDA to Net Income (Loss)
24 Reconciliation of Normalized EBITDA to EBITDA to Net Income (Loss) ($ in millions) Q2 2007 TTM 2006 2005 2004 2003 2002 Normalized EBITDA 849.1 652.5 461.3 300.3 183.2 130.7 Less: Merger-related and other non-recurring charges 34.7 - - 25.6 36.8 - Loss (Gain) related to trading securities acquire
Slide 26: Reconciliation of Normalized EBITDA to EBITDA to Net Income
25 Reconciliation of Normalized EBITDA to EBITDA to Net Income ($ in millions) 2007 2006 Normalized EBITDA 267.6 148.9 Adjustments: Integration costs related to acquisitions 12.5 1.9 Merger-related charges 2.9 - EBITDA 252.2 147.0 Add: 6.0 3.0 Less: 27.5 12.3 42.2 13.3 - 22.3 47.4 37.8 Net income 14
Slide 27: Reconciliation of Net Income to Net Income, As Adjusted
26 Reconciliation of Net Income to Net Income, As Adjusted ($ in millions) 2007 2006 Net income 141.1 64.3 Amortization expense related to net revenue backlog, incentive fees and customer relationships acquired, net of tax 6.0 (0.2) Integration costs related to acquisitions, net of tax 7.8 1.1 Loss
Slide 28: Reconciliation of Net Income to Net Income, As Adjusted TTM
27 (a) Amortization expense related to net revenue backlog, incentive fees and customer relationships acquired(1) (b) Integration costs related to acquisitions(1) (c) Loss on trading securities acquired in the Trammell Crow Company acquisition(1) (d) Merger-related costs(1) (e) Costs of extinguishme
Slide 29: CBRE CB Richard Ellis
28 CBRE CB RICHARD ELLIS
CB Richard Ellis Group — Investor Presentation (August 2007) on 6ix