Jones Lang Lasalle Incorporated · NYSE:JLL
Jones Lang Lasalle — Q4 2023 Earnings Presentation
31 slides from Jones Lang Lasalle's earnings presentation, Feb 27, 2024
Slide 1: Earnings Presentation Fourth Quarter 2023
Earnings Presentation Fourth Quarter 2023 14.88 February 27th, 2024
Slide 2: Cautionary note regarding forward-looking statements
Cautionary note regarding forward-looking statements Statements in this presentation regarding, among other things, future financial results and performance, achievements, plans, objectives and shares repurchases may be considered forward-looking statements within the meaning of the Private Securiti
Slide 3: Fourth quarter 2023 industry highlights
Fourth quarter 2023 industry highlights
Slide 4: Capital markets industry highlights
Capital markets industry highlights Benchmark yields, 2006 – Dec 2023 Real estate investment volumes by region, 2007 – 2023 Direct investment volumes (US$ billion) 1,400 7% 1M SOFR 10-year Treasury Asia Pacific EMEA Americas $1,273 Euro Area 10-year Government Bond Yields Asia 10-year Government Bon
Slide 5: Capital markets industry trends
Capital markets industry trends Quarterly investment volumes by sector, Q4 2021 – Q4 2023 Dry powder in closed-end funds, 2007 – 2023 $175 Residential $500 $476 $150 Office $410 $405 Industrial $400 $392 $125 Retail $351 US$ Billions US$ Billions $100 Hotels $300 $75 $200 $163 $50 $100 $25 $0 $0 Q4
Slide 6: Office leasing industry highlights
Office leasing industry highlights Global office leasing volumes by region, 2007 – 2023 Rental growth for prime office assets, 2007 – 2023 50 25% U.S. Europe Asia Pacific 44 19.9% 41 20% 40 35 15% millions sqm 32 32 10% 30 26 3.6% 5% 3.4% 0.1% 0.2% 0% 20 -5% -2.8% 10 -10% -15% 0 -20% Fourth Quarter
Slide 7: Industrial leasing industry highlights
Industrial leasing industry highlights North America Gross Leasing Europe Gross Leasing Asia Pacific Net Absorption 100 30 18 36% 90 80 16 25 70 14 Millions sqm 60 20 12 50 -42% -29% 10 15 40 8 30 10 6 20 4 5 10 2 0 0 0 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021
Slide 8: Consolidated financials
Consolidated financials @ JLL SEE A BRIGHTER WAY
Slide 9: Consolidated fourth quarter 2023 financial results
Consolidated fourth quarter 2023 financial results Margins in local currency; growth rates represent % change over Q4 2022 ’23/’22 % Chg. Q4 2023 Q4 2022 ’23/’22 % Chg. USD Local Currency Revenue $5,881M $5,605M 5% 4% Fee Revenue $2,180M $2,214M (2)% (2)% Operating Income $290M $255M 14%
Slide 10: Business segments results
Business segments results @ JLL SEE A BRIGHTER WAY
Slide 11: Fourth quarter 2023 financial results – Business segments
Fourth quarter 2023 financial results – Business segments $M. Growth rates in local currency; growth rates represent % change over Q4 2022 Adjusted EBITDA Margin Adjusted EBITDA Margin Revenue Fee Revenue Adjusted EBITDA (USD) (Local Currency) Markets $1,197 $896 $161 17.9% 18.0% Advisory ↔% (3)%
Slide 12: Markets Advisory
Markets Advisory Margins in local currency; growth rates represent % change over Q4 2022 Fee Revenue Adjusted EBITDA $M $896 $915 $M, % of fee revenue $31 $39 $161 $150 $155 $137 $709 $740 18.0% 16.4% Q4 2023 Q4 2022 Q4 2023 Q4 2022 Leasing Property Management Advisory, Consulting and Other Fourth Q
Slide 13: Capital Markets
Capital Markets Margins in local currency; growth rates represent % change over Q4 2022 Fee Revenue Adjusted EBITDA $M $599 $37 $M, % of fee revenue $116 $532 $38 $104 $103 $76 $458 $391 14.5% 19.4% Q4 2023 Axis Title Q4 2022 Q4 2023 Q4 2022 Investment Sales, Debt/Equity Advisory Value and Risk Advi
Slide 14: Work Dynamics
Work Dynamics Margins in local currency; growth rates represent % change over Q4 2022 Fee Revenue Adjusted EBITDA $M $M, % of fee revenue $582 $534 $121 $84 $82 $84 $258 $250 $240 $202 21.0% 15.7% Q4 2023 Q4 2022 Q4 2023 Q4 2022 Workplace Management Project Management Portfolio Services Fourth Quart
Slide 15: JLL Technologies
JLL Technologies Margins in local currency; growth rates represent % change over Q4 2022 Fee Revenue Adjusted EBITDA $M $62 $M, % of fee revenue $54 (111.3%) (66.8%) ($36) ($69) Q4 2023 Q4 2022 Q4 2023 Q4 2022 Fourth Quarter Highlights • Fee revenue growth of 14% local currency / USD driven by growt
Slide 16: LaSalle
LaSalle Margins in local currency; growth rates represent % change over Q4 2022 Fee Revenue Adjusted EBITDA $M $111 $M, % of fee revenue $108 $8 $9 $7 $6 $96 $25 $93 $18 17.7% 22.2% Q4 2023 Q4 2022 Q4 2023 Q4 2022 Advisory Fees Transaction Fees Incentive Fees Fourth Quarter Highlights • Fee revenue
Slide 17: Capital allocation and balance sheet
Capital allocation and balance sheet
Slide 18: Debt and leverage
Debt and leverage Highlights: • Strong balance sheet with ample liquidity provides operational flexibility • Sequential quarter decline in net debt primarily attributable to positive cash flow from operating activities Investment Grade Credit Ratings • Leverage ratio increase year-over-year was enti
Slide 19: Return of capital to shareholders
Return of capital to shareholders $M $601 $343 $100 $43 $62 2019 2020 2021 2022 2023 Dividend Share Repurchase Highlights • Strong balance sheet provides flexibility to invest in the business while also returning cash to shareholders • Shares repurchases totaled $62 million in 2023 which offset stoc
Slide 20: Financial targets
Financial targets @ JLL SEE A BRIGHTER WAY
Slide 21: 2024 and Mid-Term Financial Targets
2024 and Mid-Term Financial Targets 2024 Consolidated Financial Targets Mid-Term Consolidated Financial Targets Fee Revenue $10-11B Adj. EBITDA Margin Adj. EBITDA Margin 12.5%-14.5% 16-19% Net Debt / Adj. EBITDA *Beginning in 1Q 2024 reported Adj. EBITDA dollars and < 2x margin will exclude JLL Tech
Slide 22: Supplemental materials & non-GAAP reconciliations
Supplemental materials & non-GAAP reconciliations
Slide 23: Investments Rollforward
Investments Rollforward $M $68 $8 $8 $874 $37 ($24) $24 $23 $68 ($8) $817 ($177) $8 $31 $68 ($193) $367 $388 $483 $398 2022 Net Investment Equity Earnings FX/Other 2023 JLL Technologies LaSalle Other 23 | © 2024 Jones Lang LaSalle IP, Inc. All rights reserved.
Slide 24: Historical Equity Earnings
Historical Equity Earnings $M $209 $6 $141 $51 $33 $3 $36 $2 $8 $4 $1 $63 $47 $8 $30 $33 $15 $6 ($25) ($13) ($177) ($194) 2018 2019 2020 2021 2022 2023 LaSalle JLL Technologies Other Highlights • JLL Technologies’ 2021 and 2022 equity earnings of $141 million and $47 million, respectively, are attri
Slide 25: Consolidated YTD 2024 financial results
Consolidated YTD 2024 financial results Margins in local currency; growth rates represent % change over FY 2022 ’23/’22 % Chg. Q4 2023 YTD Q4 2022 YTD ’23/’22 % Chg. USD Local Currency Revenue $20,761M $20,862M ↔% ↔% Fee Revenue $7,403M $8,302M (11)% (11)% Operating Income $577M $868M (34)%
Slide 26: YTD 2023 financial results – Business segments
YTD 2023 financial results – Business segments $M. Growth rates in local currency; growth rates represent % change over FY 2022 Adjusted EBITDA Margin Adjusted EBITDA Margin Revenue Fee Revenue Adjusted EBITDA (USD) (Local Currency) Markets $4,122 $2,968 $417 14.0% 14.1% Advisory (6)% (11)% (2
Slide 27: Fee revenue / fee-based operating expenses reconciliation
Fee revenue / fee-based operating expenses reconciliation Three Months Ended Dec 31 Twelve Months Ended Dec 31 ($M) 2023 2022 2023 2022 Revenue $5,881.4 $5,604.8 $20,760.8 $20,862.1 Gross contract costs (3,709.7) (3,392.5) (13,375.9) (12,549.1) Net non-cash MSR and mortgage banking derivative activi
Slide 28: Reconciliation of net income to adjusted EBITDA
Reconciliation of net income attributable to common shareholders to adjusted EBITDA Three Months Ended Dec 31 Twelve Months Ended Dec 31 ($M) 2023 2022 2023 2022 Net income attributable to common shareholders $172.4 $174.8 $225.4 $654.5 Interest expense, net of interest income 31.5 26.1 135.4 75.2 I
Slide 29: Reconciliation of net income to adjusted net income and adjusted diluted EPS
Reconciliation of net income to adjusted net income and adjusted diluted earnings per share Three Months Ended Dec 31 Twelve Months Ended Dec 31 ($M except per share data) 2023 2022 2023 2022 Net income attributable to common shareholders $172.4 $174.8 $225.4 $654.5 Shares (in 000s) 48,394 48,263 48
Slide 30: Non-GAAP measures
Non-GAAP measures On February 15, 2024, management received a letter from the SEC Staff informing the Company of the Staff’s objection to the Company’s “Fee revenue” and “Fee-based operating expenses” non-GAAP measures, citing questions 100.04 and 100.01 of the SEC Staff’s non-GAAP Compliance & Disc
Slide 31: Non-GAAP measures (cont.)
Non-GAAP measures (cont.) 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 and warehousing activity and (ii) gains recogniz