Cbre Group Inc · NYSE:CBRE
Cbre — CB Richard Ellis Group — Non-Deal Roadshow (September 2004)
28 slides from Cbre's roadshow presentation, Sep 27, 2004
Slide 1: CB Richard Ellis Investor Meetings
CB Richard Ellis Investor Meetings September 27 - 29, 2004 CBRE
Slide 2: Forward Looking Statements
Forward) Looking) Statements This presentation will contain statements that are forward looking. These statements should be considered as estimates only and actual results may ultimately differ from these estimates. CB Richard Ellis undertakes no obligation to update or publicly revise any of the fo
Slide 3: Ray Wirta, Brett White, Ken Kay
Ray Wirta Chief Executive Officer Brett White President Ken Kay Chief Financial Officer +37 years of real estate industry experience +22 years with CBRE + Named CEO in 1999 +20 years of real estate industry experience + Joined CBRE as a sales trainee in 1984 + Named President in 2001 +24 years of pu
Slide 4: Company and Industry Overview
= Company and Industry Overview « Financial Review = Summary = Questions and Answers = Appendix CBRE 3 CE RICHARD ELUS
Slide 5: Leading Global Brand, Scale and Earnings Power
al) allots Sarees > 98 years » 48 countries > #1 in key cities in U.S., Europe and Asia Leading Global Brand > #1 commercial real estate brokerage » #1 appraisal and valuation » #1 property and facilities management » #9 commercial mortgage brokerage » $14.4 billion in investment assets under manage
Slide 6: Global Reach & Local Leadership
Global Reach & Local Leadership to. , Leading Year-to-Date 2004 Revenue by Region Makerbentione Asia Pacific New York , Los Angeles EMEA Chicago 20% Washington, D.c. London Madrid Paris Singapore Sydney Americas LLL NRANAAS CBRE i in offering customers global coverage and leading local expe! CBRE
Slide 7: Blue Chip Client Base
fied Blue Chip Client Base Revenue by Client Type Representative Clients Cardinal Sir. a: Equity! ) Opportunity ®& Lloyds TsB Funds Corporate y Individuats/ Partnerships ee RENTS _| AQ Pension = Funds Insurance Companies! SDE Top 20 customers are less than 9% of total revenu:
Slide 8: CBRE Recent Wins
CBRE Recent Wins = Sears Tower — management and leasing for 3.8 million square foot building in Chicago = Royal Bank of Canada — 3.6 million square foot outsourcing of U.S. portfolio = Time Warner — acquisition of 420,000 square foot building in London for magazine publishing division headquarters =
Slide 9: Fragmented Industry
Fragmented | Indust $22 Billion US Commercial Real Estate Services Industry (1) Market Share lr caw2a% Other 30d Panty an The market has grown at a 4.8% CAGR from 1993 to 2003
Slide 10: Superior Platform Drives Outperformance
Superior Platform Drives Outperformance Competitive Landscape 2001 to 2003 CAGR Beat CBRE JIL TCC) GBE Glass Organic Business 18% Senicas® Global Reach cas) 3) «t = id Services Platform
Slide 11: Favorable Industry Conditions
Favorable Industry Conditions Improving Supply / Demand Outlook 10 @ a) y9s8 1988-2000 aot, 2m 2ONME | DOSE © -2OMHE | NOTE OKRE EmmAbsomtion —mmCompletions —e—Vacancy Rate CBRE 10 CE RICHARD ELUS
Slide 12: Economy/Industry and Company Highlights
= Economy/Industry v Meaningful job growth v Robust investment property sales market v Strong U.S. financing market v Improving leasing fundamentals = Company y Successful Insignia integration v Successful IPO vy Significant debt repayment v Strong free cash flow CBRE 4 CE RICHARD ELUS
Slide 13: Financial Review
= Company and Industry Overview = Financial Review * Summary = Ques lions and Answers * Appendix CBRE 12 CE RICHARD ELUS
Slide 14: Consistent Long Term Growth
onsiste! ong Term Gro Pe Gh millers) ari os r $2,007 | cs t “a | S171 $1,170 | $2058 . BEE on ee ee ee ee ee ee ee ee ee ee Organic MENAcqué tion —e-Normalzed EBITDA CBRE has consistently outpaced industry growth.
Slide 15: Q2 YTD 2004 Operating Results
Q2 YTD 2004 Operating Results inmilions, except EPS results) 2004 Reported % Change PF Combined % Change Revenue 9919 585 4 694 8655 148 Normalized EBITDA oad 62.0 81s 57.0 656 Net Income, As Adjusted" 198 66 200.0 123 61.0 Diluted EPS, As Adjusted" 0.29 016 813 NA NA, ‘Excludes one-time items indud
Slide 16: 2004 Forecast EPS
TIN Full year revenue is anticipated to be approximately $2.1 billion $1.55 $0.16 $1.45 $0.12 a, | $0.31 $0.84 $0.74 GAAP EPS Range Insignia TPO Résted Amortization of Premiumand ‘Adjusted EPS Range Merger and Compensation Insigniarevenue DFC Writeotf Integration Expense backlog on Dabt Payments cha
Slide 17: Cost Management
ost Manageme! § in millions % of Revenue Pre-MBO. LTM 2001 6130/04 Revenue 100.0 100.0 Total Variable Costs 53.5 56.5 Total Fixed Costs 367 32.4 Normalized EBITDA“ 98 114 WE xoludes mergerrelated charg integration coats, and one-time IPO costs for 2004, Variable cost structure ensures cons! 16 stron
Slide 18: 2004 Forecast Internal Cash Flow
2004 Forecast Internal Cash Fl 2004 Forecast Results » Low capital intensity ‘milla c= 8) Cap Bx » Strong cash flow generation 10 supports debt reduction >» LTM 6/30/04 debt to normalized EBITDA ratio of a 24x » Objective to obtain rating agency upgrade 2 Net Income, as adjusted (3) Intemal Cash Flo
Slide 19: Significant Debt Reduction from IPO
Significant Debt Reduction from Il 9.314% Senior Notes 11.1142 Senior Subordinated Notes ay 18% Senior Notes, Hotes $145 Million Debt Reduction CBRE 18 CE RICHARD ELUS
Slide 20: Capitalization as of 6/30/04
As of 6/30/04 (Sin millions) 12131403 Reported Post IPO? Cash 163.9 179.6 59.6 Revolver - - - Term B Loan 2 280.0 280.0 Other Debt ' 39.2 307 30.7 9 3/4% Senior Notes 200.0 200.0 130.0 411 1/4% Senior Subordinated Notes 226.2 204.9 204.9 Total CB Richard Ellis Services Debt 762.9 715.6 645.6 16% Sen
Slide 21: Key Drivers of Earnings Growth
Revenue Growth >» Market growth > Market share > 7% -9% annual revenue growth Key Drivers of Earnings Grow Margin Expansion » Cost synergies from In acquisition Operating leverage 12% - 14% annual EBITDA growth Deleveraging Balance Sheet paydown per year targeted Significant EPS Growth > High teens
Slide 22: Summary
= Company and Industry Overview aF ial Rev = Summary * Questions and Answers * Appendix CBRE 24 CE RICHARD ELUS
Slide 23: Summary of Investment Highlights
« Attractive Industry Dynamics = Leading Global Real Estate Services Platform = Powerful, Attractive Business Model — Diversified, Recurring Revenue Base — Variable Cost Structure — High Free Cash Flow — Significant Growth Opportunities = Operating and Financial Leverage to Enhance EPS Growth » Attr
Slide 24: Questions and Answers
= Company and Industry Overview aF ial Rev = Summary * Questions and Answers = Appendix CBRE 23 CE RICHARD ELUS
Slide 25: Appendix: Reconciliation of Normalized EBITDA to Net Income
Append Reconc jon of Normalized EBITDA to EBITDA to Net ss) Income vm TATTLE, um Tar REET Shee Zorg fo phd ROTC _ sna FF Fy FOr Tepereees acter as 23 2 ssn 68 ¥ 8 ne eampe ea) expense 180 - : 180 reba Bie halo omg ‘promt as morta nr 125 to ws o28 2s ma enstegee os 33 Gh oor ma fas Son Geert pout br
Slide 26: Appendix: Reconciliation of YTD Net Income
Appendix (Biomilions,exceptshare dat) Net loss) inoome Amortization related net revenue backlog acquired inthe Insignia caution, net of tax ‘Merger-rlated charges related to the Ireignia acquisition, net of tx Integration costs related tothe Insignia aoquétion, net oft Gnetime compensation ecperce e
Slide 27: Appendix: Reconciliation of Forecast Net Income
Appendix - Reconciliation of Forecast Net Income to Net Income, As Adjusted 2004 Forecast Results (a) Intangible asset amortization a expense related to Insignia net revenue backlog (b) Insignia merger and integration related costs (c) One-time IPO related compensation expense (d) One-time premium c
Slide 28: Searchable text section of graphics shown above
Searchable text section of graphics shown above CB Ric hard Ellis Investor Meetings September 27 - 29, 2004 [GRAPHIC] [LOGO] For ward Looking Statements This presentation will contain statements that are forward looking. These statements should be considered as estimates only and actual results may
CB Richard Ellis Group — Non-Deal Roadshow (September 2004) on 6ix