Jones Lang Lasalle Incorporated · NYSE:JLL
Jones Lang Lasalle — Q3 2018 Earnings Presentation
30 slides from Jones Lang Lasalle's earnings presentation, Nov 6, 2018
Slide 1: Supplemental Information: 3rd Quarter 2018 Earnings Call
Supplemental Information rd 3 Quarter 2018 Earnings Call November 6, 2018
Slide 2: Global market overview
Global market overview Q3 2018 Macro-economic operating environment ▪ Global upturn resilient to trade tension and policy ▪ U.S. outlook stable and optimism growing; buoyant uncertainties labor markets and tax stimulus support growth ▪ Economic growth momentum maintained and ▪ European sentiment wea
Slide 3: Consolidated financial results
Consolidated financial results Q3 2018 Highlights ▪ Record fee revenue growth up 14% in local currency $1.6B ▪ Real Estate Services fee revenue reflects double-digit growth in Leasing and Fee continued Corporate Solutions momentum revenue ▪ LaSalle revenue driven by stellar incentive fee performance
Slide 4: Q3 2018 Real Estate Services fee revenue
Q3 2018 Real Estate Services fee revenue ($ in millions; % change over QTD Q3 2017) Americas EMEA Asia Pacific Total RES % Change % Change % Change % Change USD LC USD LC USD LC USD LC Leasing $413.3 15% 15% $78.4 13% 14% $65.4 30% 35% $557.1 16% 17% Capital Markets $109.8 2% 2% $102.6 —% —% $35.6 (
Slide 5: YTD Q3 2018 Real Estate Services fee revenue
YTD Q3 2018 Real Estate Services fee revenue ($ in millions; % change over YTD Q3 2017) Americas EMEA Asia Pacific Total RES % Change % Change % Change % Change USD LC USD LC USD LC USD LC Leasing $1,119.4 9% 9% $205.1 13% 7% $155.5 20% 20% $1,480.0 10% 10% Capital Markets $334.0 9% 9% $270.7 8% 2%
Slide 6: JLL Capital Markets & Leasing performance
JLL Capital Markets & Leasing performance QUARTERLY YTD PERFORMANCE FULL YEAR Q3 2018 Year-to-Date 2018 2018 Actual Research Actual Research Current Forecast Prior Forecast Capital Markets JLL Revenue Market Volume JLL Revenue Market Volume Market Volume Market Volume USD USD USD USD USD USD America
Slide 7: Consolidated adjusted EBITDA margin performance
Consolidated adjusted EBITDA margin performance LaSalle Positive organic contribution Technology Strong leasing performance, recent Increased incentive fees & Americas Corporate Solutions wins Continued planned strategic expansion of annuity margins and EMEA improvements investments Q3 2018 Consolid
Slide 8: Balance sheet & cash flow
Balance sheet & cash flow Cash Use ($ in millions) YTD Q3 2018 YTD Q3 2017 Highlights M&A (Including deferred) (1) $95 $60 ▪ July 2018 S&P upgrade to Investment Grade Co-investment (2) (2) 2 Ratings BBB+ reflects financial and balance sheet strength Dividends 19 16 Moody’s: Baa1 (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 Q3 2018 Highlights Q3 2018 Highlights ▪ Revenue growth across all service lines $774M $124M 16.0% ▪ Broad-based leasing performance across U.S. Fee Adjusted Adjusted markets revenue EBITDA EBITDA ▪ Ramp-up of Corporate Solutions wins supports margin Property & Facility Man
Slide 11: EMEA financial summary
EMEA financial summary Q3 2018 Highlights Q3 2018 Highlights ▪ Revenue expansion led by Leasing and Project & $397M $23M 5.7% Development Services Fee Adjusted Adjusted revenue EBITDA EBITDA ▪ Capital Markets flat; strength in France and Portugal margin ▪ Adjusted EBITDA margin expansion reflects: Y
Slide 12: Asia Pacific financial summary
Asia Pacific financial summary Q3 2018 Highlights Q3 2018 Highlights ▪ Fee revenue growth led by Leasing and Project & $252M $28M 11.2% Development Services Fee Adjusted Adjusted ▪ Capital Markets performance reflects outsized revenue EBITDA EBITDA prior-year performance and deal timing margin ▪ Adj
Slide 13: LaSalle Investment Management results
LaSalle Investment Management results Q3 2018 Highlights Q3 2018 AUM Highlights $168M $59M 35.2% $60B $2.1B $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 in Asi
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 ▪ Unfavorable impact YTD 2018 largely Q3 Spot attributable to weakening of Asia Pacific 2018 2017 % Change 11/1/2018 currencies vs. the USD GBP £ 1.30 1.30 —% 1.30 EUR € 1.17 1.18 (1)% 1.14 AUD $ 0.73 0.79 (8)% 0.71 Currency EPS Im
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, November 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, November 2018. The JLL Property Clocks SM
Slide 19: Q3 2018 business wins
Q3 2018 business wins Corporate Solutions Capital Markets Leasing & Management Fulton Financial The Plaza Hotel, New York 120 S LaSalle, Chicago Red Sky Capital/JZ Capital Americas TIAA Partners Portfolio, Brooklyn The Abbey Group, Boston 303 East Wacker, Chicago BBVA Plumtree Court, London Servicep
Slide 20: Q3 2018 fee revenue growth drivers
Q3 2018 fee revenue growth drivers YoY Growth M&A Organic Currency USD Contribution Growth Impact Americas 12% —% 12% —% EMEA 4% —% 5% (1)% APAC 2% —% 7% (5)% LaSalle 75% —% 76% (1)% Consolidated 12% —% 14% (2)% Notes: • Refer to pages 24-28 for definitions and reconciliations of non-GAAP financial
Slide 21: Supplemental EBITDA margin information
Supplemental EBITDA margin information The tables below 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: Q3 2018 Real Estate Services GAAP revenue
Q3 2018 Real Estate Services GAAP revenue ($ in millions; % change over QTD Q3 2017) Americas EMEA Asia Pacific Total RES % Change % Change % Change % Change USD LC USD LC USD LC USD LC Leasing $424.0 15% 15% $80.1 13% 14% $69.3 34% 39% $573.4 16% 17% Capital Markets $115.6 —% —% $108.9 2% 3% $39.5
Slide 23: YTD Q3 2018 Real Estate Services GAAP revenue
YTD Q3 2018 Real Estate Services GAAP revenue ($ in millions; % change over YTD Q3 2017) Americas EMEA Asia Pacific Total RES % Change % Change % Change % Change USD LC USD LC USD LC USD LC Leasing $1,151.4 9% 9% $211.9 14% 8% $165.2 24% 24% $1,528.5 11% 10% Capital Markets $344.4 8% 8% $288.1 9% 3%
Slide 24: Fee revenue / fee-based operating expenses reconciliation
Fee revenue / fee-based operating expenses reconciliation Three Months Ended September 30, Nine Months Ended September 30, ($ in millions) 2018 2017 2018 2017 Revenue $ 3,969.8 $ 3,522.2 $ 11,428.7 $ 10,110.2 Reimbursements (1,756.1) (1,541.5) (5,160.6) (4,638.7) Revenue before reimbursements 2,213.
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 September 30, Nine Months Ended September 30, ($ in millions except per share data) 2018 2017 2018 2017 GAAP net income attributable to common shareholders $ 134.9 $ 98.3 $ 283.0 $ 199.8 Shares
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 Nine Months Ended September 30, September 30, ($ in millions) 2018 2017 2018 2017 GAAP net income attributable to common shareholders $ 134.9 $ 98.3 $ 283.0 $ 199.8 Interest expense, net of in
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, 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.