Cushman & Wakefield Ltd. · NYSE:CWK
Cushman & Wakefield — Investor Day (March 2020)
28 slides from Cushman & Wakefield's investor day presentation, Mar 10, 2020
Slide 1: Cushman & Wakefield Investor Day 2020
CUSHMAN & WAKEFIELD INVESTOR DAY 2020 MARCH 10, 2020
Slide 2: Cautionary Note on Forward-Looking Statements
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS All statements in this presentation (and oral statements made regarding the subjects of this presentation) other than historical facts are forward- looking statements, which rely on a number of estimates, projections and assumptions concerning future eve
Slide 3: Non-GAAP Financial Measures and Other Financial Information
NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION We have used the following measures, which are considered "non-GAAP financial measures" under SEC guidelines: i. Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") and Adjusted EBITDA margin; and ii.
Slide 4: Agenda
AGENDA Strategy Brett White, Executive Chairman & CEO Financial Update Duncan Palmer, CFO Q&A Cushman & Wakefield / Investor Day 2020 3
Slide 5: Cushman & Wakefield Today: Leading position
CUSHMAN & WAKEFIELD TODAY Leading position We are a leading global real estate services firm that delivers exceptional value for real estate owners and occupiers. Top-tier firm in the Iconic brand recognized Track record for delivering Truly global platform commercial real estate throughout the worl
Slide 6: Strategic Roadmap
STRATEGIC ROADMAP • Solid industry fundamentals continue to drive growth Client • Leading market positions in key end markets Experience • Global size and scale • Comprehensive real estate services business model Client-centric organization that delivers the value of the enterprise to each engagemen
Slide 7: Industry Fundamentals Continue to Support Underlying Growth Trends
INDUSTRY FUNDAMENTALS CONTINUE TO SUPPORT Client Experience UNDERLYING GROWTH TRENDS Global GDP growth continues Closely monitoring the potential impact of the coronavirus Occupier demand for real estate services continues to grow Institutional investors own a greater proportion of global re
Slide 8: Global Platform with Size and Scale
Client GLOBAL PLATFORM WITH SIZE AND SCALE Experience Europe, Middle East Americas Asia Pacific Consolidated and Africa 2019 Fee revenue ($m) $4,372 (68)% $1,099 (17)% $929 (15)% $6,400 (100)% Adjusted EBITDA ($m) $500 (69)% $124 (17)% $100 (14)% $724 (100)% Adjusted EBITDA margin 11.4% 11.3% 10.8%
Slide 9: Competitor Landscape
Client COMPETITOR LANDSCAPE Experience Global Premium brands with global service offerings Geography Regional Narrow Scope of service offerings Broad Cushman & Wakefield / Investor Day 2020 8
Slide 10: Comprehensive Real Estate Services Business Model
Client COMPREHENSIVE REAL ESTATE SERVICES BUSINESS MODEL Experience OCCUPIER SERVICES OWNER / INVESTOR SERVICES A PLATFORM BUILT TO SERVICE CLIENTS IN ALL MAJOR MARKETS, GLOBALLY Cushman & Wakefield / Investor Day 2020 9
Slide 11: Diversified Business with Substantial Recurring Revenue
DIVERSIFIED BUSINESS WITH SUBSTANTIAL RECURRING Client Experience REVENUE Fee Revenue by Segment (2019) Fee Revenue by Service Line (2019) EMEA Capital Markets 15% 16% Property, Facilities & Project Management 46% Valuation & Other Recurring1 APAC 8% 17% Highly Visible2 Americas 68% Leasing 30% 46%
Slide 12: Industry-Leading Capabilities in Acquisitions and Integration
INDUSTRY-LEADING CAPABILITIES IN ACQUISITIONS Operational Excellence AND INTEGRATION M&A Track Record M&A Opportunity and Strategy • Demonstrated track record of accretive M&A and broker 2014 onboarding ‒ Acquisitions since merger performing at or better than 26 In-Fill M&A Deals underwriting case,
Slide 13: Strong Operator with a Proven Ability to Drive Margin Accretion
STRONG OPERATOR WITH A PROVEN ABILITY TO DRIVE Operational Excellence MARGIN ACCRETION Adj. EBITDA Margin Integration and processes efficiencies 20141 - 7.4% • Identified best-in-class service line and market leaders 2014 – 2017 • Integration of back office - began standardizing back office process
Slide 14: A Leaner, Faster, More Efficient Organization Executing Strategic Realignment
Operational A LEANER, FASTER MORE EFFICIENT ORGANIZATION Excellence EXECUTING STRATEGIC REALIGNMENT • Streamline organization to better match our service model to client buying behaviour in order to deliver more services • Enhance nimbleness and speed in the marketplace both in terms of how we serve
Slide 15: Leveraging Fully Integrated Technology Platform
Data & LEVERAGING FULLY INTEGRATED TECHNOLOGY PLATFORM Analytics Focused on leveraging our global platform to deliver data driven insights and automation solution to our clients C&W WEBSITE ENTERPRISE EMERGING CLIENT EXPERIENCE DELIVERING DATA DRIVEN INSIGHTS TO CLIENT Cushman & Wakefield / Investor
Slide 16: Leveraging Experienced Management Team
High- LEVERAGING EXPERIENCED MANAGEMENT TEAM Performance Culture Brett White Chairman & CEO More than 30 years in the industry Nathaniel Michelle Mackay Len Texter Duncan Palmer Adam Stanley John Forrester Robinson Controller / CFO Chief Operating CIO President Chief Investment Investor Relations Of
Slide 17: Building a High-Performance Culture
High- BUILDING A HIGH-PERFORMANCE CULTURE Performance Culture Develop our Modernizing our Build a culture of people manager people management inclusion skills processes Cushman & Wakefield / Investor Day 2020 16
Slide 18: Financial Overview
FINANCIAL OVERVIEW
Slide 19: Historical Financials
HISTORICAL FINANCIALS CAGR 6% (‘14 – ’19) FEE REVENUE (USD $M) $6,400 $5,951 $5,320 $4,694 $4,859 $4,840 2014 2015 2016 2017 2018 2019 CAGR 16% (‘14 – ’19) ADJUSTED EBITDA (USD $M) $724 $659 $529 $475 $418 $346 2014 2015 2016 2017 2018 2019 Margin 7.4% 8.6% 9.8% 9.9% 11.1% 11.3% Source: Historical f
Slide 20: Adjusted EBITDA Margin
ADJUSTED EBITDA MARGIN Organic growth & Operational Integration excellence +250 basis points +145 basis points 2020 and beyond 25 bps Margin accretion 120 bps drivers: 120 bps 10 bps • organic growth, 120 bps • infill M&A • operating efficiency Management focus: Annual margin accretion is a key metr
Slide 21: Margin Profile of Service Lines
MARGIN PROFILE OF SERVICE LINES Adjusted EBITDA Margin Rate Breakdown 2019 Adjusted EBITDA: $724m / 11.3% of Fee Revenue Capital Markets ~15% Valuation & Other ~10% Leasing Highly visible 10-15% 84% of Total Fee Revenue ~80% of Adj. EBITDA Recurring PM/FM/PjM 46% of Total Fee Revenue 5-10% ~1/3 of A
Slide 22: 2020 Outlook
2020 OUTLOOK Executing strategic realignment – key drivers : • Profitable organic revenue growth assuming a similar macro outlook to 2019 • Most of the operating efficiencies driven by reduced personnel costs, including • Delayering management structure • Streamlining platform to drive nimbleness an
Slide 23: 2020 Outlook
2020 OUTLOOK Financial Impact of key drivers • Guidance of $810 – 860m assumes a similar macro environment to 2019 • Expect 75bp or more of margin accretion in 2020 at the mid-point of guidance range • A significant portion of the margin accretion is generated by operating efficiency benefits • Savi
Slide 24: Disciplined Capital Deployment
DISCIPLINED CAPITAL DEPLOYMENT Applying a Consistent Framework to Capital Deployment • Prioritization driven by the most attractive returns at the lowest risk • Investment framework has been consistently applied since 2014 • We have a dynamic pipeline of opportunities which we continually reassess •
Slide 25: Capital Structure
CAPITAL STRUCTURE Our financial position is robust • Stable fee revenue generation as 46% of fee revenue is recurring and 84% represents recurring or highly visible • Track record of generating significant free cash flow • Strong liquidity in excess of $1.8B(1) at the end of 2019 • Increased revolvi
Slide 26: Appendix
APPENDIX
Slide 27: Reconciliation of GAAP Revenue to Fee Revenue
RECONCILIATION OF GAAP REVENUE TO FEE REVENUE Twelve Twelve Twelve Twelve Twelve Months Months Months Months Months (USD $m) 2014 Pro 2015 Pro Ended Ended Ended Ended Ended Forma Forma December December December December December 31, 2015 31, 2016 31, 2017 31, 2018 31, 2019 Americas Segment Total Fe
Slide 28: Reconciliation of Net Income (Loss) to Adjusted EBITDA
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA Twelve Twelve Twelve Twelve Twelve Months Months Months Months Months (USD $m) 2014 Pro 2015 Pro Ended Ended Ended Ended Ended Forma Forma December 31, December 31, December 31, December 31, December 31, 2015 2016 2017 2018 2019 Net income / (lo