Cushman & Wakefield Ltd. · NYSE:CWK
Cushman & Wakefield — Q3 2018 Earnings Presentation
22 slides from Cushman & Wakefield's earnings presentation, Nov 13, 2018
Slide 1: Q3 Earnings Presentation
Cushman & Wakefield Q3 Earnings Presentation November 13, 2018
Slide 2: Cautionary Note on Forward-Looking Statements
Cautionary Note on Forward-Looking Statements All statements in this presentation (and oral statements made regarding the subjects of this presentation) other than historical facts are forward-looking statements, which rely on a number of estimates, projections and assumptions concerning future even
Slide 3: Non-GAAP Financial Measures and Other Financial Information
Non-GAAP Financial Measures and Other Financial Information The following measures are considered “non-GAAP financial measures” under SEC guidelines: i. Fee revenue and fee-based operating expenses ii. Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") and Ad
Slide 4: Today's Presenters
Today's Presenters Brett White Duncan Palmer Bill Knightly Executive Chairman & CEO Chief Financial Officer Investor Relations & Treasurer Cushman & Wakefield | Q3 2018 Earnings Conference Call 4
Slide 5: Business Highlights
Business Highlights Strong performance with double-digit fee revenue growth and substantial Adjusted EBITDA growth ⦁ Fee revenue growth 18% Q3 and 13% YTD ⦁ Adjusted EBITDA growth 77% Q3 and 61% YTD ⦁ Double-digit fee revenue growth in all three geographic segments for the quarter ⦁ Capital Markets
Slide 6: Global Real Estate Market Outlook as of Q3 2018
Global Real Estate Market Outlook as of Q3 2018 • Global GDP forecast remains healthy at approx. 3.7% for both 2018 and 2019 Global Macro-Economic Trends • Real estate fundamentals are strong amid stock market volatility, trade tensions and rising interest rates • Investment volumes expected to be h
Slide 7: Financial Overview
Financial Overview
Slide 8: Q3 and YTD Financial Highlights
Q3 and YTD Financial Highlights USD in Millions, unless otherwise indicated Fee Revenue Adj. EBITDA Adj. EBITDA Margin Adjusted EPS $1,509 $179 11.9% Q3 $0.45 +18% Growth +77% Growth +400 bps $4,199 $424 10.1% YTD $1.02 +13% Growth +61% Growth +300 bps Led by strong Capital Driven by revenue flow- D
Slide 9: Q3 and YTD Fee Revenue by Segment
Q3 and YTD Fee Revenue by Segment Third Quarter and Nine Months Ended Performance (USD $m) Three Months Ended September 30, % Change Nine Months Ended September 30, % Change 2018 2017 LC 2018 2017 LC Americas $1,051 $882 20% $2,892 $2,540 14% EMEA 212 178 21% 575 487 12% APAC 246 231 11% 732 671 8%
Slide 10: Q3 and YTD Fee Revenue by Service Line
Q3 and YTD Fee Revenue by Service Line Q2 & YTD 2018 Service Line Performance Third Quarter and Nine Months Ended Performance (USD $m) Three Months Ended September 30, % Change Nine Months Ended September 30, % Change 2018 2017 LC 2018 2017 LC Prop, Fac & Proj Management $652 $615 8% $1,925 $1,820 5
Slide 11: Americas - Q3 and YTD Performance
Americas - Q3 and YTD Performance Second Quarter 2018 Performance: Americas Third Quarter and Nine Months Ended Performance (USD $m) Three Months Ended September 30, % Change Nine Months Ended September 30, % Change 2018 2017 LC 2018 2017 LC Prop, Fac & Proj Management $427 $409 6% $1,258 $1,207 5%
Slide 12: EMEA - Q3 and YTD Performance
EMEA - Q3 and YTD Performance Second Quarter 2018 Performance: EMEA Third Quarter and Nine Months Ended Performance (USD $m) Three Months Ended September 30, % Change Nine Months Ended September 30, % Change 2018 2017 LC 2018 2017 LC Prop, Fac & Proj Management $60 $46 33% $178 $132 27% Leasing 67 5
Slide 13: APAC - Q3 and YTD Performance
APAC - Q3 and YTD Performance Second Quarter 2018 Performance: APAC Third Quarter and Nine Months Ended Performance (USD $m) Three Months Ended September 30, % Change Nine Months Ended September 30, % Change 2018 2017 LC 2018 2017 LC Prop, Fac & Proj Management $165 $160 8% $489 $481 1% Leasing 41 3
Slide 14: Outlook
Outlook Full year 2018 guidance for Adjusted EBITDA is $630m to $650m, reflecting solid market fundamentals globally Q4 is typically our strongest revenue and EBITDA quarter. Business momentum is strong We expect to grow revenue and Adjusted EBITDA across our segments in 2019. 2019 guidance will be
Slide 15: Q&A
Q&A
Slide 16: Supplemental slides and reconciliations of GAAP to Non-GAAP financial measures
Supplemental slides and reconciliations of GAAP to Non-GAAP financial measures
Slide 17: New Revenue Recognition Standard – ASC 606
New Revenue Recognition Standard – ASC 606 ⦁ Gross Up of Third Party Costs: Increase in gross pass- 3Q18 QTD 3Q18 YTD through expenses and reimbursed revenue Impact Impact (USD $m) ⦁ Acceleration of At-Risk Incentive Fees: Upfront GAAP revenue $123.0 351.4 recognition of incentive fees required if p
Slide 18: Reconciliation of GAAP Revenue to Fee Revenue
Reconciliation of GAAP Revenue to Fee Revenue Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended (USD $m) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Americas Segment Total Revenue 1,475.6 1,137.4 4,053.9 3,253.3 Less: Gross contract costs (424.
Slide 19: Reconciliation of Total Costs and Expenses to Fee-based Operating Expenses
Reconciliation of Total Costs and Expenses to Fee-based Operating Expenses Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended (USD $m) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Total costs and expenses 2,065.0 1,763.9 5,855.2 5,082.1 Less: Gro
Slide 20: Reconciliation of Fee-based Operating Expenses by Segment
Reconciliation of Fee-based Operating Expenses by Segment to Consolidated Fee-based Operating Expenses Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended (USD $m) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Americas Fee-based operating expenses
Slide 21: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income (Loss) to Adjusted EBITDA Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended (USD $m) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Net income / (loss) (48.7) (78.6) (172.9) (245.6) Add/(less): Depreciation and amortiz
Slide 22: Reconciliation of Net Income to Adjusted Net Income
Reconciliation of Net Income to Adjusted Net Income Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended (USD $m, unless otherwise indicated) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Net income / (loss) (48.7) (78.6) (172.9) (245.6) Add / (less