Cbre Group Inc · NYSE:CBRE
Cbre — Investor Presentation (November 2016)
34 slides from Cbre's investor presentation, Nov 16, 2016
Slide 1: Forward-Looking Statements
Forward-Looking Statements This presentation contains statements that are forward looking within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements regarding CBRE’s future growth momentum, operations, market share, business outlook, and financial performanc
Slide 2: The global market leader
the global market leader CBRE is the premier global provider of integrated services to commercial real estate investors and occupiers GLOBAL LEADERSHIP WITH BROAD CAPABILITIES #1 Leasing #1 Property Sales #1 Outsourcing #1 Appraisal & Valuation $87.9 billion AUM Investment Management1 SCALE AND DIVE
Slide 3: The leading global brand
The Leading global brand CBRE is recognized as the foremost commercial real estate authority Fortune 500 company since 2008; ranked #259 in 2016 Ranked #1 brand for 15 consecutive years Global Real Estate Advisor of the Year five years in a row Ranked among the Most Admired Companies for four consec
Slide 4: CBRE serves investors and occupiers
CBRE Serves investors and occupiers CBRE’s integrated, best-in-class offering creates value for clients at every stage of the life cycle
Slide 5: Track record of long-term growth
Revenue up 29% Adjusted EPS2 up 10% From YTD Q3 2015 to YTD Q3 2016: Track record of long-term growth From 2003 to TTM Q3 2016: 17% Revenue CAGR 18% Adjusted EBITDA1 CAGR See slide 33 for footnotes
Slide 6: Positioned for long-term growth
Positioned for long-term growth Consolidation Leasing and capital markets services continue to consolidate but remain highly fragmented Outsourcing Recurring contractual revenues Still in early stage of penetration with occupiers Contributes to largely recurring leasing revenues Strategic Position C
Slide 7: Key strategic priorities
Key strategic priorities Capitalize on our leadership position to widen our competitive advantages in the marketplace Continue to: Drive market share gains in our core leasing and capital markets businesses with leadership and innovation Enrich our operating platform (Technology & Data Enablement, R
Slide 8: Capital deployment
Capital DEPLOYMENT Mergers & acquisitions Transactions generally fall into two categories: Strategic in-fill acquisitions sourced principally by lines of business Larger, transformational transactions driven by macro strategy Completed over 30 acquisitions since 2013 and over 100 since 2005, includi
Slide 9: Fee revenue mix (FY 2006 versus TTM Q3 2016)
fee revenue Mix (FY 2006 versus TTM Q3 2016) Total Fee Revenue4: $3,742 Total Fee Revenue4: $8,613 4.6x Note – TTM Q3 2016 includes GWS acquired revenue starting September 1, 2015. See slide 33 for footnotes Significant growth in contractual revenue Contractual Sources 3 $798 (21%) Contractual Sourc
Slide 10: YTD Q3 2016 revenue
YTD Q3 2016 REVENUE Contractual revenue & leasing, which is largely recurring1, is 73% of fee revenue Revenue ($ in millions) Contractual Sources Leasing Capital Markets Other Occupier Outsourcing2 Property Management2 Investment Management Valuation Leasing Sales Commercial Mortgage Services Develo
Slide 11: Key takeaways
Key takeaways CBRE: Leads an industry with strong underlying growth dynamics Is well positioned to continue its track record of long-term growth Has developed into a balanced business with a more stable growth profile Is an investment grade company with significant liquidity Is continuing to extend
Slide 12: Key takeaways
KEY TAKEAWAYS CBRE: core Leads an industry with strong underlying growth dynamics ls well positioned to continue its track record of long-term growth Has developed into a balanced business with a more stable growth profile Is an investment grade company with significant liquidity Is continuing to ex
Slide 13: Occupier Outsourcing
Q3 YTD Q3 New 35 122 Expansions 52 130 Renewals 26 69 Historical revenue1 Full service offering 2016 Total Contracts Facilities Management – approximately 2.3 billion square feet globally2 Project Management Transaction Services Strategic Consulting Ranked among the top few outsourcing service provi
Slide 14: Property management
Historical revenue1 overview Key strategic accounts ($ in millions) Manages buildings for investors Highly synergistic with property leasing Manages approximately 2.9 billion square feet globally2 300+ premier properties in major CBDs (approximately 450 million square feet) Property management Optim
Slide 15: Investment management
CAPITAL RAISED1 Assets under Management (AUM)* $87.9B as of 9/30/2016 overview ($ in billions) INVESTMENT MANAGEMENT Performance Across Risk/Return Spectrum Globally YTD Q3 See slide 34 for footnotes Performance-driven global real estate investment manager More than 500 institutional clients Equity
Slide 16: Appraisal & Valuation
Premier clients ($ in millions) 147,000+ assignments in 2015 Euromoney Global Valuation Advisor of the Year for five consecutive years Clients include lenders, life insurance companies, special servicers and REITs overview Appraisal & Valuation Serving Clients Globally Historical revenue YTD Q3 $385
Slide 17: Leasing
overview U.S. Leasing volume Advise occupiers and investors in formulating and executing leasing strategies Tailored service delivery by property type and industry/market specialization Strategic insight and high-level execution driving significant market share gains #1 global market position – $104
Slide 18: Leasing: largely recurring business with increasing market share
LEASING Largely Recurring Business With Increasing Market Share U.S. Leasing transactions 12% 71% 15% 2% Asset Class $76.4B 2015 Transaction Value Retail Office Industrial Other
Slide 19: Property Sales
INCREASED institutional OWNERSHIP DRIVES SALES VELOCITY Strategic advisor (sellers and buyers) in commercial real estate #1 global market share, based on Real Capital Analytics 780 basis point advantage over #2 firm for full year 2015 #1 global market position – $206.2 billion sales volume in 2015 O
Slide 20: Property Sales: diverse across transaction size and asset class
Property Sales Highly Diverse Business Across Transaction Size and Asset Class 2015 U.S. sales transactions
Slide 21: Commercial mortgage services
United States United States Germany Southeast Residential Portfolio (SERP) Parmenter Realty Partners FMS-Wertmanagmeent (FMS) $500 Million $120 Million $660 Million Acquisition Financing Bridge Financing Loan Sale Recent transactions A leading strategic advisor for debt and structured finance soluti
Slide 22: Development Services
Park District The Boardwalk McMillan The Brickyard Dallas, TX Mixed-Use Newport Beach, CA Office Washington, DC Healthcare Los Angeles, CA Industrial 2 Projects in process/pipeline1 overview Recent projects A premier brand in U.S. development 65+ year record of excellence Partner with leading instit
Slide 23: Development Services
DEVELOPMENT SERVICES Trammell Crow Company — A Premier Brand in U.S. PROJECTS IN PROCESS/PIPELINE* OVERVIEW (Sin btons) , uy , , _* Apremier brand in U.S. development iin Process? = Pipeline’ + 65+ year record of excellence * Partner with leading institutional capital sources a of . * $126.2 million
Slide 24: Other financial metrics
Other Financial metrics Nine Months Ended September 30, ($ in millions) 2016 Forecast 2016 2015 Depreciation approx. $ 150 $ 112.7 $ 102.6 Adjusted amortization 1 approx. $ 110 75.5 66.2 Net interest expense approx. $ 140 103.5 78.2 Adjusted income tax rate 2 34.5% 33.8% 35.6% YTD Q3 2016 Currency E
Slide 25: Mandatory amortization and maturity schedule
Mandatory Amortization and Maturity Schedule ($ in millions) $2,800 million revolving credit facility matures in March 2021. As of September 30, 2016, the revolving credit facility balance was $83 million. As of September 30, 20161 Global Cash Global Cash Available Revolving Credit Facility 425 3,08
Slide 26: Capitalization
Capitalization ($ in millions) As of September 30, 2016 Cash1 $ 367 Revolving credit facility 83 Senior term loan A2 470 Senior term loan B-12 261 Senior term loan B-22 126 Senior notes – 5.00%2 790 Senior notes – 4.875%2 591 Senior notes – 5.25%2 422 Other debt3,4 - Total debt $ 2,743 Stockholders’
Slide 27: Non-GAAP financial measures
Non-Gaap financial measures The following measures are considered “non-GAAP financial measures” under SEC guidelines: fee revenue contractual fee revenue net income attributable to CBRE Group, Inc., as adjusted (which we also refer to as “adjusted net income”) diluted income per share attributable t
Slide 28: Reconciliation of Adjusted EBITDA to EBITDA to Net Income
Twelve Months Ended ($ in millions) September 30, 2016 December 31, 2003 Adjusted EBITDA $ 1,510.1 $ 183.2 Adjustments: Cost elimination expenses 118.9 36.8 Integration and other costs related to acquisitions 97.5 13.6 Carried interest incentive compensation expense1 19.1 - EBITDA 1,274.6 132.8 Add:
Slide 29: Reconciliation of Net Income to Adjusted Net Income and EPS
Nine Months Ended September 30, ($ in millions, except per share amounts) 2016 2015 Net income attributable to CBRE Group, Inc. $ 308.0 $ 367.1 Cost elimination expenses 78.4 - Amortization expense related to certain intangible assets attributable to acquisitions 81.8 46.8 Integration and other cost
Slide 30: Reconciliation of revenue to fee revenue
Reconciliation of revenue to fee revenue Twelve Months Ended ($ in millions) September 30, 2016 December 31, 2006 Consolidated revenue $ 12,948.0 $ 4,032.0 Less: Client reimbursed costs largely associated with employees dedicated to client facilities and subcontracted vendor work performed for clien
Slide 31: Reconciliation of revenue to fee revenue and contractual fee revenue
Nine Months Ended September 30, ($ in millions) 2016 2015 Occupier Outsourcing revenue 1 $ 4,438.0 $ 2,436.8 Less: Client reimbursed costs largely associated with employees dedicated to client facilities and subcontracted vendor work performed for clients 2,786.0 1,580.5 Occupier Outsourcing fee rev
Slide 32: Footnotes
Footnotes Slide 10 Other includes Development Services revenue (1% in both 2006 and TTM Q3 2016) and Other revenue (1% in both 2006 and TTM Q3 2016). Capital Markets includes Sales revenue (33% in 2006 and 19% in TTM Q3 2016) and Commercial Mortgage Services revenue (4% in 2006 and 6% in TTM Q3 2016
Slide 33: Footnotes
Footnotes Slide 16 Excludes global securities business. As of September 30, 2016. Slide 23 As of December 31 for each year presented, except Q3 2016, which is as of September 30. In Process figures include Long-Term Operating Assets (LTOA) of $0.2 billion for Q3 2016, $0.1 billion for Q4 2015, $0.3
Slide 34: Footnotes
FOOTNOTES Slide 4 1. Historical revenue for Occupir Outsourcing line of busines (fame Global Crprate Serices or GCS, now caled Global Workplace Scutons)exchdes associated soles and leasing revenue, mest of whch is corvacial 2. Aso Decomber 31,2085 5. 2015 revenue incdes four months of contribution f