Cushman & Wakefield Ltd. · NYSE:CWK
Cushman & Wakefield — Q4 2018 Earnings Presentation
23 slides from Cushman & Wakefield's earnings presentation, Feb 27, 2019
Slide 1: Q4 Earnings Presentation
Cushman & Wakefield Q4 Earnings Presentation February 27, 2019
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: Non-GAAP Financial Measures and Other Financial Information
Non-GAAP Financial Measures and Other Financial Information Adjusted net income/loss (“Adjusted net income”) and Adjusted earnings per share (“Adjusted EPS”): Management also assesses the profitability of the business using Adjusted net income. We believe that investors find this measure useful in c
Slide 5: Today's Presenters
Today's Presenters Brett White Duncan Palmer Bill Knightly Executive Chairman & CEO Chief Financial Officer Investor Relations & Treasurer Cushman & Wakefield | Q4 2018 Earnings Conference Call 4
Slide 6: 2018 Business Highlights
2018 Business Highlights Strong performance with double-digit growth in Fee revenue and Adjusted EBITDA in 2018 • Growth across all 3 Segments • Capital Markets and Leasing had particularly strong growth 2018 margin of 11.1%, up 115 bps year-over-year driven by Fee revenue growth and operating lever
Slide 7: CRE Market Outlook
CRE Market Outlook • Macro forecast favorable for CRE services • Continued strong investment appetite for CRE • Global GDP growth(1) 3.5% and 3.6% for 2019 and 2020, respectively • Reduced concern over U.S. interest rate hikes • Continued rent growth as supply/demand metrics broadly balanced • Conti
Slide 8: Financial Overview
Financial Overview
Slide 9: Full-Year 2018 and Q4 2018 Financial Highlights
Full-Year 2018 and Q4 2018 Financial Highlights USD in Millions, except for Adjusted EPS Fee Revenue Adj. EBITDA Adj. EBITDA Margin(1) Adjusted EPS Full $5,951 $659 11.1% Year +12% +26% +115 bps $1.67 Q4 $1,752 $236 13.4% $0.59 +10% (9)% (300) bps Full year driven by Full year driven by Full year dr
Slide 10: Full-Year 2018 Q4 2018 Fee Revenue by Segment
Full-Year 2018 Q4 2018 Fee Revenue by Segment Full-Year and Three Months Ended Performance (USD $m) Year Ended December 31, % Change Three Months Ended December 31, % Change 2018 2017 LC 2018 2017 LC Americas $4,043 $3,597 13% $1,151 $1,057 10% EMEA 888 785 11% 313 298 9% APAC 1,020 938 9% 288 267 1
Slide 11: Full-Year 2018 and Q4 2018 Fee Revenue by Service Line
Full-Year 2018 and Q4 2018 Fee Revenue by Service Line Full-Year and Three Months Ended Performance (USD $m) Year Ended December 31, % Change Three Months Ended December 31, % Change 2018 2017 LC 2018 2017 LC Prop, Fac & Proj Management $2,622 $2,489 6% $698 $669 7% Leasing(1) 1,921 1,651 16% 605 57
Slide 12: Americas Full-Year 2018 and Q4 2018 Performance
Second – Full-Year2018 AmericasQuarter 2018Performance: and Q4 2018 Performance Americas Full-Year and Three Months Ended Performance (USD $m) Year Ended December 31, % Change Three Months Ended December 31, % Change 2018 2017 LC 2018 2017 LC Prop, Fac & Proj Management $1,699 $1,638 4% $441 $432 3%
Slide 13: EMEA Full-Year 2018 and Q4 2018 Performance
EMEA – Full-Year Second Quarter2018 and 2018 Q4 2018 Performance Performance: EMEA Full-Year and Three Months Ended Performance (USD $m) Year Ended December 31, % Change Three Months Ended December 31, % Change 2018 2017 LC 2018 2017 LC Prop, Fac & Proj Management $262 $201 27% $84 $68 28% Leasing(1
Slide 14: APAC Full-Year 2018 and Q4 2018 Performance
APAC – Full-Year Second Quarter2018 andPerformance: 2018 Q4 2018 Performance APAC Full-Year and Three Months Ended Performance (USD $m) Year Ended December 31, % Change Three Months Ended December 31, % Change 2018 2017 LC 2018 2017 LC Prop, Fac & Proj Management $661 $650 2% $173 $169 7% Leasing(1)
Slide 15: 2019 Outlook
2019 Outlook Full-year 2019 guidance for Adjusted EBITDA is $685m to $735m, reflecting solid market fundamentals Expect to improve margin in 2019, but at a lower rate of increase than 2018 Other financial matters: • Adjusted effective tax rate(1) of ~23% • Interest rate of 6% on gross debt Project t
Slide 16: Q&A
Q&A
Slide 17: Supplemental slides and reconciliations of GAAP to Non-GAAP financial measures
Supplemental slides and reconciliations of GAAP to Non-GAAP financial measures
Slide 18: New Revenue Recognition Standard – ASC 606
New Revenue Recognition Standard – ASC 606 Gross Up of Third Party Costs: Increase in gross pass- (USD $m) 4Q18 QTD FY18 through expenses and reimbursed revenue Impact Impact Acceleration of At-Risk Incentive Fees: Upfront GAAP revenue $81.4 $432.8 recognition of incentive fees required if past expe
Slide 19: Reconciliation of GAAP Revenue to Fee Revenue
Reconciliation of GAAP Revenue to Fee Revenue (USD $m) Three Months Ended Three Months Ended Twelve Months Ended Twelve Months Ended December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 Americas Segment Total Revenue 1,670.8 1,346.9 5,724.7 4,600.2 Less: Gross contract costs (520.
Slide 20: Reconciliation of Total Costs and Expenses to Fee-based Operating Expenses
Reconciliation of Total Costs and Expenses to Fee-based Operating Expenses (USD $m) Three Months Ended Three Months Ended Twelve Months Ended Twelve Months Ended December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 Total costs and expenses 2,358.7 2,015.5 8,207.3 7,095.0 Less: Gro
Slide 21: Reconciliation of Fee-based Operating Expenses by Segment
Reconciliation of Fee-based Operating Expenses by Segment to Consolidated Fee-based Operating Expenses (USD $m) Three Months Ended Three Months Ended Twelve Months Ended Twelve Months Ended December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 Americas Fee-based operating expenses
Slide 22: Reconciliation of Net Income (Loss) to Adjusted EBITDA
Reconciliation of Net Income (Loss) to Adjusted EBITDA (USD $m) Three Months Ended Three Months Ended Twelve Months Ended Twelve Months Ended December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 Net income / (loss) (18.0) 22.2 (185.8) (221.3) Add/(less): Depreciation and amortizat
Slide 23: Reconciliation of Net Income to Adjusted Net Income
Reconciliation of Net Income to Adjusted Net Income (USD $m, unless otherwise indicated) Three Months Ended Three Months Ended Twelve Months Ended Twelve Months Ended December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 Net income / (loss) (18.0) 22.2 (185.8) (221.3) Add / (less):