Cbre Group Inc · NYSE:CBRE
Cbre — CB Richard Ellis Group — Investor Presentation (August 2006)
36 slides from Cbre's investor presentation, Aug 21, 2006
Slide 1: Investor Presentation August 2006
Investor Presentation August 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 and future financial performance. These statements shoul
Slide 3: Company Overview
CBRE Company Overview
Slide 4: The World Class Commercial Real Estate Services Provider
2x nearest competitor Thousands of clients, more than 70% of Fortune 100 Q2 2006 TTM Revenue of $3.2 billion Q2 2006 TTM Normalized EBITDA of $532.7 million(1) Strong organic revenue and earnings growth #1 commercial real estate brokerage #1 appraisal and valuation #1 property and facilities managem
Slide 5: Global Reach & Local Leadership
8% 4% Global Reach & Local Leadership CBRE is unique in offering customers global coverage and leading local expertise. Leading Market Positions ü ü ü ü ü ü ü ü ü Q2 2006 TTM Revenue by Region New York London Los Angeles Chicago Sydney Paris Washington, D.C. Madrid Singapore
Slide 6: Diversified Blue Chip Client Base
Diversified Blue Chip Client Base Individuals/ Partnerships Top 20 customers are less than 9% of total revenue. 2005 Revenue by Client Type Representative Clients Corporate REITS Insurance Companies/ Banks Pension Funds Government Other Conduits/ Wall St. Firms Equity/ Opportunity Funds Offshore Inv
Slide 7: Full Services Platform
Full Services Platform Advisory Services Leasing and sales Commission Revenue Generation Mortgage brokerage Commission and Servicing Fees Valuations, appraisals, research Assignment and Subscription Fees Q2 2006 TTM Americas Revenue Outsourcing Services Manages properties for owners Contractual Reve
Slide 8: $24 Billion US Commercial Real Estate Services Industry
$24 Billion US Commercial Real Estate Services Industry (1) U.S. Market Share Top 5 = 16.9% Share Fragmented Industry Source: External public filings and management estimates as of 12/31/05. (1) Excluding investment management. The market has grown at a 4.2% CAGR from 1995 to 2005.
Slide 9: Superior Platform Drives Outperformance
Superior Platform Drives Outperformance Our full-service, global platform has allowed us to outperform competitors. Competitive Landscape Services Platform CBRE JLL C&W TCC Global Reach Q2 2003 TTM - Q2 2006 TTM CAGR (1) Excluding merger-related charges, integration expenses and IPO-related compensa
Slide 10: Industry / Company Trends
CBRE Industry / Company Trends
Slide 11: Favorable Trends – Leasing
Strong net absorption of U.S. commercial real estate Metropolitan areas dominated by trade linkages, tourism, technology and banking showed the strongest pace of improvement Recovery in office leasing is now evident across much of Europe Across Asia, increased office demand has accelerated rental ra
Slide 12: Favorable Trends – Investment Sales
($ in billions) Favorable Trends – Investment Sales Strong capital flows and improving property income continue to underpin a strong environment for investment sales Properties are being purchased with more equity capital, lower leverage and higher cash yield expectations Investment sales activity a
Slide 13: Favorable Trends – Commercial Property & Corporate Facilities Management
Favorable Trends – Commercial Property & Corporate Facilities Management U.S. Property Management Growth2 Total portfolio1 14.5% Number of properties 11.5% Average client fee 10.1% Selected 2nd Quarter 2006 Wins JP Morgan Chase - 1.8 million sq. ft. of office properties in the Chicago area. National
Slide 14: Favorable Trends – Investment Management
CAGR: 16.9% Favorable Trends – Investment Management Investment Management growing faster than the 5.8% growth in institutional ownership of real estate1 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 Carried
Slide 15: Key Growth Strategies
CBRE Key Growth Strategies 1“
Slide 16: Industry Trends and Related Strategy – Corporate Outsourcing and Consolidation
INDUSTRY TRENDS RELATED STRATEGY Customer Relationship Management initiative Expanded “dash-board” for landlord/agency and tenant rep specialists Foster cross-market referrals and multi-market business development Improving leasing fundamentals Growth Drivers Corporate outsourcing Capitalize on cros
Slide 17: Industry Trends and Related Strategy – Investment Management and Capital Markets
INDUSTRY TRENDS RELATED STRATEGY Match risk/return profiles Develop innovative investment vehicles Grow assets under management Capitalize on “feet on the ground” global platform Institutional ownership of real estate Growth Drivers Increased capital allocations to real estate Leverage demographic-d
Slide 18: 2005 & 2006 In-Fill Acquisitions
2005 & 2006 In-Fill Acquisitions Easyburo SAS CPMS Artequation DTZ Queensland McCann Property and Planning Rafter and O’Hagan Advocate Consulting Group, Inc. CB Richard Ellis Charlotte, LLC Columbus Commercial Realty Project Advantage, Inc. The Polacheck Company Rutter & Strutz Groupe Axival, Inc. N
Slide 19: Vendor Consolidation / Cross Selling
Vendor Consolidation / Cross Selling Services CAGR1 1998 2006 Property Mgmt Leasing Investment Sales Research Valuation Corporate Services Project Management Total fees 67% Valuation 94% Investment Sales 52% Lease & manage portfolio 19% 1 Compound Annual Growth Rate 2003-2005 Lease & Management Port
Slide 20: Investment Management Business Global Strategy / Fund Matrix
Investment Management Business Global Strategy / Fund Matrix 50% 24% 6% Compounded Annual Growth Rate for Assets Under Management(1) Yes Yes No Coinvestment Acquisition Fees Asset Management Fees LP Profits Carried Interest Acquisition Fees Asset Management Fees LP Profits Carried Interest Acquisiti
Slide 21: Financial Overview
CBRE Financial Overview
Slide 22: Consistent Long Term Growth
Consistent Long Term Growth CBRE has consistently outpaced industry growth. (1) Normalized EBITDA excludes merger-related and other non-recurring costs, integration costs related to acquisitions and one-time IPO-related compensation expense. ($ in millions) Average Annual Organic Growth: 10% (1) $11
Slide 23: YTD Q2 2006 Business Performance Highlights
YTD Q2 2006 Business Performance Highlights YTD Q2 2005 Record YTD 2006 Performance YTD Q2 2006 $1,516.3 $1,210.4 25% (In millions, except EPS) $161.6 $233.0 44% Revenue Normalized EBITDA1 $72.5 $119.3 65% $0.32 $0.51 59% Net income, as adjusted1 EPS, as adjusted1,2 1. Normalized EBITDA, net income,
Slide 24: YTD Q2 2006 Revenue Breakdown
YTD Q2 2006 Revenue Breakdown 35% 39% 8% 8% 5% 4% 1% ($ in millions) 2006 2005 % Change Sales 528.7 443.5 19 Leasing 590.3 460.8 28 Property and Facilities Management 124.8 100.5 24 Appraisal and Valuation 121.2 88.4 37 Commercial Mortgage Brokerage 69.6 60.9 14 Investment Management 59.1 37.0 60 Ot
Slide 25: Debt Highlights
($ in millions) Debt Highlights Notes: - Normalized EBITDA excludes merger-related and other non-recurring costs, integration costs associated with acquisitions and one-time IPO-related compensation expense. - Total debt excludes non-recourse debt. $544 $530 $798 $635 $577 $406 $486 $450 $634 $378 $
Slide 26: Capitalization
Excludes $17.7 million and $256.0 million of warehouse facility at June 30, 2006 and December 31, 2005, respectively. Capitalization ($ in millions) 6/30/2006 12/31/2005 Variance Cash 127.3 449.3 (322.0) 2.0 (2.0) Revolving credit facility 248.0 - 248.0 Senior secured term loan tranche B - 265.2 (26
Slide 27: Q2 2006 TTM Normalized Internal Cash Flow
Q2 2006 TTM Normalized Internal Cash Flow ($ millions) 48 277 Net Income, as adjusted D&A Cap Ex (41) 284 Represents capital expenditures, net of concessions. Internal Cash Flow 1 Strong cash flow generator $101 million, or 55% improvement from same period last year Low capital intensity Utilization
Slide 28: Key Drivers of Earnings Growth
Key Drivers of Earnings Growth Revenue Growth Margin Expansion Market growth Market share gains In-fill acquisitions Operating leverage Fixed cost controls Scalable overhead structure Deleveraging Balance Sheet Redemption of high interest rate bonds Revenue growth, margin expansion and deleveraging
Slide 29: Remember Who We Are
Remember Who We Are A growth-oriented business services enterprise with more than 200 offices around the world A full service provider with a diverse suite of services to address any commercial real estate need More than 2X the size of our nearest competitor in terms of 2005 revenue Focused on growi
Slide 30: Appendix
CBRE Appendix
Slide 31: Reconciliation of Normalized EBITDA to EBITDA to Net Income – TTM
Reconciliation of Normalized EBITDA to EBITDA to Net Income Trailing Twelve Months ($ in millions) Q2 2006 Q2 2005 Normalized EBITDA 532.7 367.5 Less: Merger-related charges related to the Insignia acquisition - 4.1 Integration costs related to acquisitions 5.6 10.3 EBITDA 527.1 353.1 Add: Interest
Slide 32: Reconciliation of Normalized EBITDA to EBITDA to Net Income (Loss)
Reconciliation of Normalized EBITDA to EBITDA to Net Income (Loss) (1) The results of operations for the year ended December 31, 2001 have been derived by combining the results of operations of the company for the period from February 20, 2001 (inception) to December 31, 2001, with the results of op
Slide 33: Reconciliation of Normalized EBITDA to EBITDA to Net Income – Six Months
Reconciliation of Normalized EBITDA to EBITDA to Net Income Six Months Ended June 30, ($ in millions) 2006 2005 Normalized EBITDA 233.0 161.6 Less: Integration costs related to acquisitions 3.3 4.8 EBITDA 229.7 156.8 Add: Interest income 6.6 5.5 Less: Depreciation and amortization 27.2 21.2 Interest
Slide 34: Reconciliation of Net Income to Net Income, As Adjusted
Reconciliation of Net Income to Net Income, As Adjusted ($ in millions) 2006 2005 Net income 101.2 65.0 Amortization expense related to net revenue backlog acquired in acquisitions, net of tax 2.0 - Integration costs related to acquisitions, net of tax 2.1 3.1 Loss on extinguishment of debt, net of
Slide 35: Reconciliation of Net Income to Net Income, As Adjusted – TTM
Reconciliation of Net Income to Net Income, As Adjusted Net Income, As Adjusted TTM 2nd Quarter 2006 Results ($ millions) 254 277 2 4 Reported Net Income (a) (b) (c) 1. Net of tax. 14 3 (d) (a) Amortization expense related to net revenue backlog acquired in acquisitions1 (b) Integration costs relate
Slide 36: CB Richard Ellis
CBRE CBRE CB RICHARD ELLIS
CB Richard Ellis Group — Investor Presentation (August 2006) on 6ix