Cbre Group Inc · NYSE:CBRE
Cbre — CB Richard Ellis Group — Q2 2006 Earnings Presentation
28 slides from Cbre's earnings presentation, Jul 27, 2006
Slide 1: Second Quarter 2006 Earnings Conference Call
E CB Richard Ellis Group, Inc. Second Quarter 2006 Earnings Conference Call July 27, 2006
Slide 2: Forward Looking Statements
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 2006, future operations, the impact of acquisitions and future financial perform
Slide 3: Conference Call Participants
Conference Call Participants Brett White President & Chief Executive Officer Ken Kay Senior Executive Vice President & Chief Financial Officer Calvin Frese President, The Americas Shelley Young Director, Investor Relations
Slide 4: Q2 2006 Summary
Q2 2006 Summary Strong performance across virtually all business lines and geographies Leasing markets continue to improve with higher occupancy and increased rental rates Strong gains in Asset Services and Corporate Services businesses, fueled by global outsourcing trend U.S. investment sales marke
Slide 5: Q2 2006 Performance Highlights
Q2 2006 Performance Highlights Revenue $836.2 million $164.0 million, or 24% higher than the prior year quarter 15 th straight quarter of double-digit year-over-year organic revenue growth Net Income $13.8 million, or 27% higher than the same quarter last year $25.7 million, or 48% higher than the s
Slide 6: Q2 2006 Financial Results
Q2 2006 Financial Results ($ in millions) 2006 2005 % Change Revenue 836.2 672.2 24 Cost of Services 412.5 338.7 22 Operating, Administrative & Other 283.6 241.7 17 Equity Income from Unconsolidated Subsidiaries 8.4 15.4 -45 Minority Interest Expense 1.5 0.7 114 EBITDA 147.0 106.5 38 One Time Charge
Slide 7: YTD 2006 Financial Results
YTD 2006 Financial Results ($ in millions) 2006 2005 % Change Revenue 1,516.3 1,210.4 25 Cost of Services 752.9 606.7 24 Operating, Administrative & Other 548.7 464.9 18 Equity Income from Unconsolidated Subsidiaries 16.8 19.4 -13 Minority Interest Expense 1.8 1.4 29 EBITDA 229.7 156.8 46 One Time C
Slide 8: 2006 Revenue Breakdown
2006 Revenue Breakdown 2 nd Quarter , 2006 ($ in millions) 2006 2005 % Change 2006 2005 % Change Sales 299.2 261.3 15 528.7 443.5 19 Leasing 324.9 255.3 27 590.3 460.8 28 Property and Facilities Management 65.4 50.3 30 124.8 100.5 24 Appraisal and Valuation 66.5 47.3 41 121.2 88.4 37 Commercial Mort
Slide 9: Normalized EBITDA Margins
Normalized EBITDA Margins Significant margin improvement Note: EBITDA margins exclude integration expenses related to acquisitions. 10% 17% 0 5 10 15 20 2005 2006 2005 16.2 14.2 2006 17.8 16.6 2nd Quarter TTM 2nd Quarter
Slide 10: Q2 Earnings Per Share Dynamics
Q2 Earnings Per Share Dynamics 1 1. All EPS information is based upon diluted shares. GAAP EPS Integration charges related to acquisitions Adjusted EPS $0.27 $0.01 $0.34 2005 2006 GAAP EPS Integration charges related to acquisitions Adjusted EPS Loss on extinguishment of debt $0.22 $0.005 $0.005 $0.
Slide 11: Consolidated Balance Sheets
Consolidated Balance Sheets 1. Represents Freddie Mac loan receivables, which are offset by the related non-recourse warehouse line of credit facility. ($ in millions) 06/30/2006 12/31/2005 Variance Assets Cash and cash equivalents 127.3< /font> 449.3 (322.0) Restricted cash 3.9 5.2 (1.3) Receivable
Slide 12: Consolidated Balance Sheets (cont.)
Consolidated Balance Sheets (cont.) Represents the non-recourse warehouse line of credit facility, which supports the Freddie Mac loan receivables ($ in millions) 06/30/2006 12/31/2005 Variance Liabilities Current liabilities, excluding debt 634.3 853.7 (219.4) Warehouse line of credit 1 17.7 256.0
Slide 13: Capitalization
Capitalization Excludes $17.7 million and $256.0 million of warehouse facility at June 30, 2006 and December 31, 2005, respectively. ($ in millions) 06/30/2006 12/31/2005 Variance Cash 127.3 449.3 (322.0) Revolving credit facility 248.0 - 248.0 Senior secured term loan tranche B - 265.2 (265.2) 11 1
Slide 14: Strong cash flow generator
Strong cash flow generator $101 million, or 55% improvement from same period last year Low capital intensity Utilization of internal cash flow Debt reduction – full redemption of the 11¼% senior subordinated notes of $164.7 million on June 15, 2006 Co-investment activities In-fill acquisitions Q2 20
Slide 15: 2006 In-Fill Acquisitions
CPMS Artequation Austin Adams Holley Blake Oxford Property Consultants McCann Property and Planning Rafter and O’Hagan Advocate Consulting Group, Inc. Project Advantage, Inc. The Polacheck Company Rietmeijer Purchase price for these acquisitions was approximately $116 million Associated annual reven
Slide 16: Q2 2006 Segment Performance
Q2 2006 Segment Performance $554.3 ($ In millions) Revenue Normalized EBITDA Americas EMEA Asia Pacific Global Investment Management $489.9 $170.3 $123.1 $84.6 $43.3 $27.0 $15.9 $96.6 $81.6 $36.3 $13.6 $12.1 $7.6 $3.9 $6.1 13% 38% 95% 70% 18% 167% 36% 2006 2005 59%
Slide 17: Client wins and transactions
Boeing Realty Corporation - Appointed CBRE its exclusive provider of transaction management and portfolio administration services for 85 million sq. ft. on a global basis DHL Express (USA), Inc. - Selected CBRE to manage its 28 million sq. ft. portfolio of industrial and office properties in the U.S
Slide 18: Commercial Property & Corporate Facilities Management
Commercial Property & Corporate Facilities Management U.S. Property Management Growth Total portfolio 1 14.5% Number of properties 11.5% Average client fee 10.1% 2nd Quarter 2006 Wins JP Morgan Chase - 1.8 million sq. ft. of office properties in the Chicago area. National portfolio now approximately
Slide 19: Global Investment Management growth
CAGR: 16.9% CBRE’s Assets Under Management ($ in Billions) Revenue ($ in Millions) CAGR: 30.6% CAGR: 70.3% CAGR: 55.0% ANNUAL YEAR TO DATE 2nd QUARTER 127.3 57.4 27.0 0.3 Carried Interest Investment Management Investment Management Growth - - - 57.1 68.4 94.0 99.3 28.0 0 20 40 60 80 100 120 140 2002
Slide 20: Global Investment Management Carried Interest
Global Investment Management Carried Interest Carried interest pertains to certain real estate investment funds from which CBRE earns an additional share of the profits from the fund once its performance meets certain financial hurdles Dedicated fund team leaders and executives in our investment man
Slide 21: Summary
Summary Diversity and breadth of global services platform provides company with strong and stable growth trajectory Improvement underpinned by recovery of leasing markets worldwide New milestones achieved by outsourcing businesses Growth in Investment Management business at a record pace Market shar
Slide 22: Appendix
Appendix 100 , CBRE
Slide 23: Reconciliation of Net Income to Net Income, As Adjusted
Reconciliation of Net Income to Net Income, As Adjusted ($ in millions) 2006 2005 Net income 64.3 50.4 Amortization expense related to net revenue backlog acquired in acquisitions, net of tax (0.2) - Integration costs related to acquisitions, net of tax 1.1 1.7 Loss on extinguishment of de bt, net o
Slide 24: Reconciliation of Normalized EBITDA to EBITDA to Net Income
Reconciliation of Normalized EBITDA to EBITDA to Net Income Six Months Ended June 30, ($ in millions) 2006 2005 2006 2005 Normalized EBITDA 148.9 108.9 233.0 161.6 Less: Integration costs related to acquisitions 1.9 2.4 3.3 4.8 EBITDA 147.0 106.5 229.7 156.8 Add: Interest income 3.0 3.0 6.6 5.5 Less
Slide 25: Reconciliation of Normalized EBITDA, Trailing Twelve Months
Reconciliation of Normalized EBITDA to EBITDA to Net Income Trailing Twelve Months ($ in millions) Q2 2006 Q2 2005 Normalized EBITDA532.7367.5Less:Merger-related charges related to the Insignia acquisition-4.1Integration costs related to acquisitions5.610.3EBITDA527.1353.1Add: Interest income10.49.6
Slide 26: Reconciliation of Net Income to Net Income, As Adjusted (TTM)
Amortization expense related to net revenue backlog acquired in acquisitions 1 Integration costs related to acquisitions 1 Costs of extinguishment of debt 1 Tax expense related to the repatriation of foreign earnings under the American Jobs Creation Act of 2004 Reconciliation of Net Income to Net In
Slide 27: Segment Reconciliation of Normalized EBITDA to Net Income
Reconciliation of Normalized EBITDA to EBITDA to Net Income (Loss) Americas EMEA Asia Pacific Global Investment Management Three Mon ths Ended June 30, Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, ($ in millions) 2006 2005 2006 2005 2006 2005 2006 2005 Normaliz
Slide 28: CBRE
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