Jones Lang Lasalle Incorporated · NYSE:JLL
Jones Lang Lasalle — Q2 2018 Earnings Presentation
30 slides from Jones Lang Lasalle's earnings presentation, Aug 8, 2018
Slide 1: Supplemental Information: 2nd Quarter 2018 Earnings Call
Supplemental Information nd 2 Quarter 2018 Earnings Call August 8, 2018
Slide 2: Global market overview
Global market overview Q2 2018 Macro-economic operating environment ▪ Global economic growth continues despite recent ▪ U.S. growth firm in face of trade tensions and rising equity market volatility and escalating trade friction interest rates; tax stimulus and domestic demand boost ▪ Global growth
Slide 3: Consolidated financial results
Consolidated financial results Q2 2018 Highlights ▪ Healthy consolidated fee revenue growth $1.5B ▪ Real Estate Services fee revenue reflects strength in Americas transactional Fee businesses and continued Corporate Solutions momentum revenue ▪ LaSalle growth driven by strong incentive fee performan
Slide 4: Q2 2018 Real Estate Services fee revenue
Q2 2018 Real Estate Services fee revenue ($ in millions; % change over QTD Q2 2017) Americas EMEA Asia Pacific Total RES % Change % Change % Change % Change USD LC USD LC USD LC USD LC Leasing $412.8 9% 9% $69.7 7% —% $55.3 11% 9% $537.8 9% 8% Capital Markets $116.0 18% 18% $84.1 (9)% (15)% $43.4 26
Slide 5: YTD Q2 2018 Real Estate Services fee revenue
YTD Q2 2018 Real Estate Services fee revenue ($ in millions; % change over YTD Q2 2017) Americas EMEA Asia Pacific Total RES % Change % Change % Change % Change USD LC USD LC USD LC USD LC Leasing $706.1 6% 6% $126.7 12% 3% $90.1 13% 10% $922.9 7% 6% Capital Markets $224.2 12% 12% $168.1 13% 3% $72.
Slide 6: JLL Capital Markets & Leasing performance
JLL Capital Markets & Leasing performance QUARTERLY YTD PERFORMANCE FULL YEAR Q2 2018 Year-to-Date 2018 2018 Actual Research Actual Research Current Forecast Prior Forecast Capital Markets JLL Revenue Market Volume JLL Revenue Market Volume Market Volume Market Volume USD USD USD USD USD USD America
Slide 7: Consolidated adjusted EBITDA margin performance
Consolidated adjusted EBITDA margin performance LaSalle Positive organic Technology Other contribution Americas transactional performance partially Continued planned Increased incentive fees offset by EMEA strategic investments Various discrete items Q2 2018 Consolidated Adjusted EBITDA Margin Notes
Slide 8: Balance sheet & cash flow
Balance sheet & cash flow Cash Use ($ in millions) H1 2018 H1 2017 Highlights M&A (Including deferred) (1) $52 $42 ▪ S&P upgrade to BBB+ Investment Grade (7) — Ratings reflects financial strength Co-investment (2) and continued leverage Dividends 19 16 Moody’s: Baa1 (Stable) reduction Capital Expend
Slide 9: Segment Details
Segment Details © 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
Slide 10: Americas financial summary
Americas financial summary Q2 2018 Highlights Q2 2018 Highlights ▪ Revenue growth led by transactional businesses $768M $128M 16.7% ▪ Strong capital markets performance specifically Fee Adjusted Adjusted related to debt placement revenue EBITDA EBITDA ▪ Northwest, New York and Mid-Atlantic markets m
Slide 11: EMEA financial summary
EMEA financial summary Q2 2018 Highlights Q2 2018 Highlights ▪ Revenue expansion led by Property & Facility $388M $11M 2.9% Management and Project & Development Services Fee Adjusted Adjusted revenue EBITDA EBITDA ▪ Capital Markets lower in UK and Germany due to deal timing margin ▪ Adjusted EBITDA
Slide 12: Asia Pacific financial summary
Asia Pacific financial summary Q2 2018 Highlights Q2 2018 Highlights ▪ Revenue growth led by Capital Markets and $251M $30M 12.0% Advisory, Consulting and Other Fee Adjusted Adjusted ▪ Healthy Capital Markets investment sales revenue EBITDA EBITDA performance in Japan and Singapore; margin balanced
Slide 13: LaSalle Investment Management results
LaSalle Investment Management results Q2 2018 Highlights Q2 2018 AUM Highlights $86M $24M 28.5% $60B $1.2B $8B Fee Adjusted Adjusted AUM Capital Dry Revenue EBITDA EBITDA raised powder margin Assets Under Management ▪ Strong revenue growth driven by incentive fees By geography & type performance in
Slide 14: 2018 Operating framework
2018 Operating framework 2018 JLL Priorities ▪ Leverage Corporate Solutions platform to drive profitable growth ▪ Broaden Capital Markets capabilities across capital stack ▪ Drive differentiation through technology ▪ Focus capital allocation strategy on transformational growth ▪ Continue working cap
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 ▪ Minimal EPS Impact in YTD 2018 largely Q2 Spot attributable to a higher mix of USD profits 2018 2017 % Change 8/1/2018 GBP £ 1.36 1.28 6% 1.31 Currency EPS Impact EUR € 1.18 1.12 5% 1.17 Favorable/(Unfavorable) AUD $ 0.75 0.75 —%
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, August 2018. 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, August 2018. The JLL Property Clocks SM
Slide 19: Q2 2018 business wins
Q2 2018 business wins Corporate Solutions Capital Markets Leasing & Management Park Tower at Transbay, San Purdue University 646 11th Avenue, New York Francisco LifeCare Management Americas Services 175 West Jackson, Chicago ATL1 Data Center, Alpharetta Rush University Medical 5 Bryant Park, New Yor
Slide 20: Q2 2018 fee revenue growth drivers
Q2 2018 fee revenue growth drivers YoY Growth M&A Organic Currency USD Contribution Growth Impact Americas 12% —% 12% —% EMEA 12% —% 5% 7% APAC 12% —% 10% 2% LaSalle 27% —% 24% 3% Consolidated 13% —% 10% 3% Notes: • Refer to pages 24-28 for definitions and reconciliations of non-GAAP financial measu
Slide 21: Supplemental EBITDA margin information
Supplemental EBITDA margin information The below tables are intended to aid comparability of 2017 to future periods 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 tim
Slide 22: Q2 2018 Real Estate Services GAAP revenue
Q2 2018 Real Estate Services GAAP revenue ($ in millions; % change over QTD Q2 2017) Americas EMEA Asia Pacific Total RES % Change % Change % Change % Change USD LC USD LC USD LC USD LC Leasing $422.9 9% 9% $72.9 9% 3% $58.1 13% 12% $553.9 9% 8% Capital Markets $117.8 13% 12% $89.9 (7)% (13)% $50.3
Slide 23: YTD Q2 2018 Real Estate Services GAAP revenue
YTD Q2 2018 Real Estate Services GAAP revenue ($ in millions; % change over YTD Q2 2017) Americas EMEA Asia Pacific Total RES % Change % Change % Change % Change USD LC USD LC USD LC USD LC Leasing $727.4 6% 6% $131.8 14% 4% $95.9 17% 14% $955.1 8% 6% Capital Markets $228.8 12% 12% $179.2 15% 4% $82
Slide 24: Fee revenue / fee-based operating expenses reconciliation
Fee revenue / fee-based operating expenses reconciliation Three Months Ended June 30, Six Months Ended June 30, ($ in millions) 2018 2017 2018 2017 Revenue $ 3,903.7 $ 3,470.3 $ 7,458.9 $ 6,588.0 Reimbursements (1,740.4) (1,595.8) (3,404.5) (3,097.2) Revenue before reimbursements 2,163.3 1,874.5 4,0
Slide 25: 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 June 30, Six Months Ended June 30, ($ in millions except per share data) 2018 2017 2018 2017 GAAP net income attributable to common shareholders $ 107.8 $ 94.3 $ 148.1 $ 101.5 Shares (in 000s)
Slide 26: Reconciliation of GAAP Net Income to Adjusted EBITDA
Reconciliation of GAAP Net Income attributable to common shareholders to Adjusted EBITDA Three Months Ended June 30, Six Months Ended June 30, ($ in millions) 2018 2017 2018 2017 GAAP net income attributable to common shareholders $ 107.8 $ 94.3 $ 148.1 $ 101.5 Interest expense, net of interest inco
Slide 27: 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 28: Non-GAAP Measures
Non-GAAP Measures Net non-cash mortgage servicing rights ("MSR") and mortgage banking derivative activity consists of the balances presented within Revenue composed of (i) derivative gains/losses resulting from mortgage banking loan commitment activity and (ii) gains recognized from the retention of
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 and objectives, and dividend payments may be considered forward-looking statements within the meaning of the Private Secur
Slide 30: © 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.