Jones Lang Lasalle Incorporated · NYSE:JLL
Jones Lang Lasalle — Q4 2022 Earnings Presentation
30 slides from Jones Lang Lasalle's earnings presentation, Feb 28, 2023
Slide 1: Earnings Presentation Fourth Quarter 2022
Earnings Presentation Fourth Quarter 2022 February 28, 2023
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 market highlights
Fourth quarter market highlights
Slide 4: Capital markets industry highlights
Capital markets industry highlights Real estate investment volumes by region, 2007 – 2022 Quarterly investment volumes by sector, Q1 2021 – Q4 2022 $1,400 $175 Residential $1,265 Office $1,200 $150 $1,059 $1,029 Industrial $1,000 $886 $125 Retail Hotels US$ Billions $803 $800 $100 Healthcare $600 $4
Slide 5: Capital markets industry trends
Capital markets industry trends Global fundraising for closed-end funds, 2007 – 2022 Dry powder in closed-end funds, 2007 – 2022 $500 $250 700 $214 $408 $391 $386 600 $400 $200 $188 $347 $167 US$ Billions # of funds 500 US$ Billions $139 $156 $300 $150 400 $100 300 $200 $159 200 $50 $100 100 $0 0 $0
Slide 6: Office leasing industry highlights
Office leasing industry highlights Global office leasing volumes by region, 2007 – 2022 Rental growth for prime office assets - quarterly 50 6% 45 44 41 4% Rental change (q-o-q %) 40 35 2% 35 32 0% Millions sqm 30 26 25 -2% 20 -4% 15 10 -6% 10 6 8 5 -8% 0 -10% U.S. EMEA Asia Pacific Fourth Quarter H
Slide 7: Industrial leasing industry highlights
Industrial leasing industry highlights U.S. EMEA Asia-Pacific Net Absorption Gross Leasing Net Absorption 14.0 14.0 14.0 12.0 12.0 12.0 millions sq m 10.0 10.0 10.0 8.0 8.0 8.0 6.0 6.0 6.0 4.0 4.0 4.0 2.0 2.0 2.0 0.0 0.0 0.0 5-year Q4 Avg Q4 2021 Q4 2022 5-year Q4 Avg Q4 2021 Q4 2022 5-year Q4 Avg Q
Slide 8: Consolidated fourth quarter 2022 financial results
Consolidated fourth quarter 2022 financial results Margins in local currency; growth rates represent % change over three months ended Q4 2021 ’22/’21 % Chg. Local Q4 2022 Q4 2021 ’22/’21 % Chg. USD Currency Revenue $5,605M $5,946M (6)% (2)% Fee Revenue $2,214M $2,748M (19)% (16)% Operating I
Slide 9: Business segments results
Business segments results @ JLL SEE A BRIGHTER WAY
Slide 10: Fourth quarter 2022 financial results – Business segments
Fourth quarter 2022 financial results – Business segments $M. Growth rates and margins in local currency; growth rates represent % change over three months ended Q4 2021 Revenue Fee Revenue Adjusted EBITDA Adjusted EBITDA Margin Markets $1,186 $915 $150 17.4% Advisory (10)% (14)% (24)% 230 b
Slide 11: Markets Advisory
Markets Advisory Margins in local currency; growth rates represent % change over three months ended Q4 2021 Fee Revenue Adjusted EBITDA $M $1,101 $39 $M, % of fee revenue $217 $134 $915 $39 $137 $150 $929 $740 19.7% 17.4% Q4 2021 Q4 2022 Q4 2021 Q4 2022 Leasing Property Management Advisory & Consult
Slide 12: Capital Markets
Capital Markets Margins in local currency; growth rates represent % change over three months ended Q4 2021 Fee Revenue Adjusted EBITDA $M $947 $41 $M, % of fee revenue $109 $225 $599 $37 $104 $116 $797 $458 23.7% 19.3% Q4 2021 Axis Title Q4 2022 Q4 2021 Q4 2022 Fourth Quarter Highlights • Fee revenu
Slide 13: Work Dynamics
Work Dynamics Margins in local currency; growth rates represent % change over three months ended Q4 2021 Fee Revenue Adjusted EBITDA $M $M, % of fee revenue $84 $534 $504 $82 $69 $94 $250 $233 $177 $202 13.6% 14.7% Q4 2021 Q4 2022 Q4 2021 Q4 2022 Workplace Management Project Management Portfolio Ser
Slide 14: JLL Technologies
JLL Technologies Margins in local currency; growth rates represent % change over three months ended Q4 2021 Fee Revenue Adjusted EBITDA $M $M, % of fee revenue $54 $52 $40 128.7% (67.9%) ($36) Q4 2021 Q4 2022 Q4 2021 Q4 2022 Fourth Quarter Highlights • Fee revenue growth of 36% local currency (35% U
Slide 15: LaSalle
LaSalle Margins in local currency; growth rates represent % change over three months ended Q4 2021 Fee Revenue Adjusted EBITDA $M $M, % of fee revenue $156 $60 $56 $111 $9 $11 $6 $25 $89 $96 38.1% 22.7% Q4 2021 Q4 2022 Q4 2021 Q4 2022 Advisory Fees Transaction Fees Incentive Fees Fourth Quarter High
Slide 16: Capital allocation and balance sheet
Capital allocation and balance sheet
Slide 17: Debt and leverage
Debt and leverage Highlights: • Strong balance sheet with ample liquidity provides operational flexibility Investment Grade Credit Ratings • Net debt increase primarily attributable to higher year-over-year annual incentive compensation and Moody’s: Baa1 commission payments, share repurchases, and n
Slide 18: Return of capital to shareholders
Return of capital to shareholders $M $601 $343 $100 $38 $43 2018 2019 2020 2021 2022 Dividend Share Repurchase Highlights • Strong balance sheet provides flexibility to invest in the business while also returning cash to shareholders • Full year 2022 share repurchases of over $600 million have drive
Slide 19: Investments Rollforward
Investments Rollforward $M $1,000 $44 $4 $(16) $900 $138 $40 $0 $(25) $874 ($1) $36 $(13) $24 $(54) $800 $103 $746 $37 $700 $367 $600 $355 $500 $400 $300 $483 $200 $354 $100 $0 2021 Net Investment Equity Earnings FX/Other 2022 JLL Technologies/Spark LaSalle Other 19 | © 2023 Jones Lang LaSalle IP, I
Slide 20: Historical Equity Earnings
Historical Equity Earnings $M $209 $6 $141 $51 $33 $36 $4 $3 $2 $0 $1 $8 $63 $47 $30 $33 $15 $6 $0 ($13) 2018 2019 2020 2021 2022 LaSalle JLL Technologies Other Highlights • 2021 equity earnings outsized compared to historical average attributable to valuation increases to JLLT’s investments in earl
Slide 21: Financial Targets
Financial Targets @ JLL SEE A BRIGHTER WAY
Slide 22: 2023 and Mid-Term Financial Targets
2023 and Mid-Term Financial Targets 2023 Consolidated Financial Targets 2025 Consolidated Financial Targets Adj. EBITDA Margin 14-16% Fee revenue $10-11B 2023 Adj. EBITDA Margin target assumes: Adj. EBITDA Margin 16-19% • Minimal equity earnings • $140M of cost savings on an annualized basis, with $
Slide 23: Supplemental materials & non-GAAP reconciliations
Supplemental materials & non-GAAP reconciliations
Slide 24: Consolidated FY 2022 financial results
Consolidated FY 2022 financial results Margins in local currency; growth rates represent % change over twelve months ended Q4 2021 ’22/’21 % Chg. Local FY 2022 FY 2021 ’22/’21 % Chg. USD Currency Revenue $20,862M $19,367M 8% 11% Fee Revenue $8,302M $8,018M 4% 7% Operating Income $868M $1,044
Slide 25: FY 2022 financial results – Business segments
FY 2022 financial results – Business segments $M. Growth rates and margins in local currency; growth rates represent % change over twelve months ended Q4 2021 Revenue Fee Revenue Adjusted EBITDA Adjusted EBITDA Margin Markets $4,416 $3,360 $528 16.0% Advisory 8% 8% 1% 110 bps Capital $2,488
Slide 26: Fee revenue / fee-based operating expenses reconciliation
Fee revenue / fee-based operating expenses reconciliation Three Months Ended Dec 31 Twelve Months Ended Dec 31 ($M) 2022 2021 2022 2021 Revenue $5,604.8 $5,945.7 $20,862.1 $19,367.0 Gross contract costs (3,392.5) (3,181.8) (12,549.1) (11,290.2) Net non-cash MSR and mortgage banking derivative activi
Slide 27: Reconciliation of net income attributable to common shareholders to adjusted EBITDA
Reconciliation of net income attributable to common shareholders to adjusted EBITDA Three Months Ended Dec 31 Twelve Months Ended Dec 31 ($M) 2022 2021 2022 2021 Net income attributable to common shareholders $174.8 $421.4 $654.5 $961.6 Interest expense, net of interest income 26.1 9.5 75.2 40.1 Pro
Slide 28: Fee revenue / fee-based operating expenses reconciliation
Fee revenue / fee-based operating expenses reconciliation Three Months Ended Dec 31 Twelve Months Ended Dec 31 ($M except per share data) 2022 2021 2022 2021 Net income attributable to common shareholders $174.8 $421.4 $654.5 $961.6 Shares (in 000s) 48,263 51,619 49,341 52,071 Diluted earnings per s
Slide 29: 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 30: Non-GAAP measures (cont.)
Non-GAAP measures (cont.) Restructuring and Acquisition Charges primarily consist of: (i) severance and employment-related charges, including those related to external service providers, incurred in conjunction with a structural business shift, which can be represented by a notable change in headcou