Jones Lang Lasalle Incorporated · NYSE:JLL
Jones Lang Lasalle — Q4 2018 Earnings Presentation
30 slides from Jones Lang Lasalle's earnings presentation, Feb 12, 2019
Slide 1: Supplemental Information 4th Quarter 2018 Earnings Call
Supplemental Information th 4 Quarter 2018 Earnings Call February 12, 2019
Slide 2: Global market overview
Global market overview Q4 2018 Macro-economic operating environment ▪ Global economy remains resilient despite trade ▪ U.S. growth continues; trade policy continues to tensions and policy uncertainties negatively impact growth ▪ Economic growth maintained in Q4 2018; expected ▪ European sentiment we
Slide 3: Consolidated financial results
Consolidated financial results Q4 2018 Highlights 2018 Commentary ▪ Record fee revenue growth $2.1B $418M $5.99 ▪ Real Estate Services fee revenue reflects Fee Adjusted Adjusted double-digit growth in Leasing and continued revenue Corporate Solutions momentum EBITDA diluted EPS ▪ LaSalle revenue dri
Slide 4: Q4 2018 Real Estate Services fee revenue
Q4 2018 Real Estate Services fee revenue ($ in millions; % change over Q4 2017) Americas EMEA Asia Pacific Total RES % Change % Change % Change % Change USD LC USD LC USD LC USD LC Leasing $591.9 34% 35% $118.2 3% 7% $113.4 10% 16% $823.5 25% 27% Capital Markets $156.5 5% 5% $170.2 (13)% (10)% $54.1
Slide 5: FY 2018 Real Estate Services fee revenue
FY 2018 Real Estate Services fee revenue ($ in millions; % change over 2017) Americas EMEA Asia Pacific Total RES % Change % Change % Change % Change USD LC USD LC USD LC USD LC Leasing $1,711.3 16% 17% $323.3 9% 7% $268.9 15% 18% $2,303.5 15% 15% Capital Markets $490.5 7% 7% $440.9 (2)% (4)% $162.1
Slide 6: JLL Capital Markets & Leasing performance
JLL Capital Markets & Leasing performance QUARTERLY FULL YEAR FULL YEAR Q4 2018 Year-to-Date 2018 2019 Actual Research Actual Research Current Forecast Leasing JLL Revenue Gross Absorption JLL Revenue Gross Gross Absorption Absorption Local Currency Square Feet Local Currency Square Feet Square Feet
Slide 7: Consolidated adjusted EBITDA margin performance
Consolidated adjusted EBITDA margin performance LaSalle Positive RES organic growth Investments in technology Strong leasing performance, recent Increased incentive fees & Americas Corporate Solutions wins Strategic investments to drive expansion of annuity margins and EMEA improvements organic marg
Slide 8: Balance sheet & cash flow
Balance sheet & cash flow Cash Use ($ in millions) 2018 2017 Highlights M&A (Including deferred) (1) $174 $74 Investment Grade ▪ Investment grade ratings Co-investment (2) 7 (5) Ratings reflect financial and balance sheet strength Dividends 38 33 Moody’s: Baa1 (Stable) S&P: BBB+ (Stable) Capital Exp
Slide 9: Segment Details
Segment Details © 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Slide 10: Americas financial summary
Americas financial summary Q4 2018 Highlights 2018 Commentary ▪ Double-digit organic revenue growth with notable $1.0B $203M 19.3% performance in Leasing and Property & Facilities Fee Adjusted Adjusted Management revenue EBITDA EBITDA ▪ Broad-based leasing performance across U.S. margin markets ▪ St
Slide 11: EMEA financial summary
EMEA financial summary Q4 2018 Highlights 2018 Commentary ▪ Revenue expansion led by Property & Facility $574M $104M 18.2% Management and Project & Development Services Fee Adjusted Adjusted revenue EBITDA EBITDA ▪ Solid leasing results; Noteworthy performance in UK, Germany and France margin • JLL
Slide 12: Asia Pacific financial summary
Asia Pacific financial summary Q4 Q42018 2018Highlights Highlights 2018 Commentary ▪ Fee revenue growth led by Leasing and Project & $352M $75M 21.3% Development Services Fee Adjusted Adjusted ▪ Leasing performance reflects strong market revenue EBITDA EBITDA demand and team productivity margin ▪ Ca
Slide 13: LaSalle Investment Management results
LaSalle Investment Management results FY 2018 Highlights 2018 AUM Highlights $512M $162M 31.7% $60.5B $6.1B $6.8B Fee Adjusted Adjusted AUM Capital Dry Revenue EBITDA EBITDA raised powder margin ▪ Strong revenue growth led by incentive fee Assets Under Management By geography & type performance Asia
Slide 14: 2019 Operating framework
2019 Operating framework 2019 JLL Priorities ▪ Convert Corporate Solutions strong pipeline and drive further margin expansion ▪ Strengthen Capital Market teams and drive productivity ▪ Accelerate early successes in digital journey; digital services and products to contribute over $100 million in dir
Slide 15: Appendix
Appendix © 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Slide 16: Currency overview
Currency overview Currency EPS impact Currency exchange rate summary Currency Impact FX Rates Adjusted EPS (QTD Average Rate) Favorable/(Unfavorable) Q4 2018 Q4 2017 % Change Q1 2018 0.01 GBP £ 1.29 1.35 (4)% Q2 2018 0.02 EUR € 1.13 1.20 (6)% Q3 2018 (0.06) AUD $ 0.72 0.78 (8)% JPY ¥ 114 113 (1)% Q4
Slide 17: Prime Offices - Capital Value Clock
Prime Offices - Capital Value Clock The JLL Property ClocksSM Notes: • Based on notional capital values for Grade A space in CBD or equivalent 17 • Source: JLL Research, February 2019. The JLL Property Clocks SM
Slide 18: Prime Offices - Rental Clock
Prime Offices - Rental Clock The JLL Property ClocksSM Notes: • Based on notional capital values for Grade A space in CBD or equivalent 18 • Source: JLL Research, February 2019. The JLL Property Clocks SM
Slide 19: Q4 2018 select business wins
Q4 2018 select business wins Corporate Solutions Capital Markets Leasing & Management Hewlett Packard Enterprise, State of Illinois Hammes Portfolio Houston Americas Jacksonville Naval Air Station 530-536 Broadway, New York Pier 70, San Francisco University of Phoenix 950 Nicollet, Minneapolis Lumen
Slide 20: Q4 2018 fee revenue growth drivers
Q4 2018 fee revenue growth drivers YoY Growth M&A Organic Currency USD Contribution Growth Impact Americas 22.2% 0.3% 22.9% (1.0)% EMEA 1.6% —% 5.3% (3.7)% APAC (1.7)% 0.3% 2.9% (4.9)% LaSalle 66.1% 4.5% 64.3% (2.7)% Consolidated 13.5% 0.4% 15.8% (2.7)% Notes: • Refer to pages 25-29 for definitions
Slide 21: FY 2018 fee revenue growth drivers
FY 2018 fee revenue growth drivers YoY Growth M&A Organic Currency USD Contribution Growth Impact Americas 13.6% 0.2% 13.9% (0.5)% EMEA 9.3% —% 6.9% 2.4% APAC 4.1% 0.4% 5.4% (1.7)% LaSalle 53.6% 1.2% 50.9% 1.5% Consolidated 13.1% 0.2% 12.7% 0.2% Notes: • Refer to pages 25-29 for definitions and reco
Slide 22: Supplemental EBITDA margin information
Supplemental EBITDA margin information The tables below are intended to aid comparability of 2017 to 2018 by showing, on a pro forma basis, the estimated changes in indirect bonus expense that would have been recorded in conjunction with the changes in pre-tax earnings from the revenue timing change
Slide 23: Q4 2018 Real Estate Services GAAP revenue
Q4 2018 Real Estate Services GAAP revenue ($ in millions; % change over QTD Q4 2017) Americas EMEA Asia Pacific Total RES % Change % Change % Change % Change USD LC USD LC USD LC USD LC Leasing $602.7 33% 34% $121.1 4% 7% $119.8 15% 21% $843.6 25% 27% Capital Markets $155.9 1% 2% $176.0 (13)% (9)% $
Slide 24: FY 2018 Real Estate Services GAAP revenue
FY 2018 Real Estate Services GAAP revenue ($ in millions; % change over 2017) Americas EMEA Asia Pacific Total RES % Change % Change % Change % Change USD LC USD LC USD LC USD LC Leasing $1,754.1 16% 17% $333.0 10% 8% $285.0 20% 22% $2,372.1 16% 16% Capital Markets $500.3 6% 6% $464.1 —% (2)% $181.0
Slide 25: Fee revenue / fee-based operating expenses reconciliation
Fee revenue / fee-based operating expenses reconciliation Three Months Ended December 31, Year Ended December 31, ($ in millions) 2018 2017 2018 2017 Revenue $ 4,889.7 $ 4,343.0 $ 16,318.4 $ 14,453.2 Reimbursements (2,068.3) (1,847.1) (7,228.9) (6,485.8) Revenue before reimbursements 2,821.4 2,495.9
Slide 26: Reconciliation of GAAP Net Income to Adjusted Net Income and Diluted EPS
Reconciliation of GAAP Net Income to Adjusted Net Income and Diluted Earnings Per Share Three Months Ended December 31, Year Ended December 31, ($ in millions except per share data) 2018 2017 2018 2017 GAAP net income attributable to common shareholders $ 201.1 $ 76.2 $ 484.1 $ 276.0 Shares (in 000s
Slide 27: Reconciliation of GAAP Net Income to Adjusted EBITDA
Reconciliation of GAAP Net Income attributable to common shareholders to Adjusted EBITDA Three Months Ended Year Ended December 31, December 31, ($ in millions) 2018 2017 2018 2017 GAAP net income attributable to common shareholders $ 201.1 $ 76.2 $ 484.1 $ 276.0 Interest expense, net of interest in
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: Cautionary note regarding forward-looking statements
Cautionary note regarding forward-looking statements Statements in this news release regarding, among other things, future financial results and performance, achievements, plans, objectives and dividend payments may be considered forward-looking statements within the meaning of the Private Securitie
Slide 30: © 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.