Cbre Group Inc · NYSE:CBRE
Cbre — Q2 2024 Earnings Presentation
38 slides from Cbre's earnings presentation, Jul 25, 2024
Slide 1: Q2 2024 CBRE Earnings Call
CBRE Q2 2024 CBRE Earnings Call
Slide 2: Contents
Contents Page # Section 5 Bob Sulentic, CEO Remarks 6 Emma Giamartino, CFO Remarks 11 Appendix 16 Non-GAAP Measures and Definitions 19 Supplemental Slides, GAAP Reconciliation Tables
Slide 3: Forward-Looking Statements
Q2 2024 EARNINGS CONFERENCE CALL Forward-Looking Statements This presentation contains statements that are forward looking within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning expected benefits and synergies from the combina
Slide 4: Conference Call Participants
Q2 2024 EARNINGS CONFERENCE CALL Conference Call Participants i Bob Sulentic Emma Giamartino Chandni Luthra Chair & Chief Financial Officer EVP - Global Head of Chief Executive Officer FP&A and IR 2024 CBRE, Inc. |4
Slide 5: Consolidated Results Summary
Q2 2024 EARNINGS CONFERENCE CALL Consolidated Results Summary - Revenue, core earnings and cash flow exceeded expectations led by outperformance in all three business segments - Made capital investments consistent with our strategy - Quick progress on the cost challenges identified last quarter - Ex
Slide 6: Advisory Services
Q2 2024 EARNINGS CONFERENCE CALL Advisory Services $in millions, totals may not sum due to rounding Net Revenue $2,194 $2,020 $884 $814 $510 Q2'23 Q2'24 o = Rest of Advisory ™ Capital Markets” ™ Advisory Leasing 1. Includes Property Management, Valuation and Loan Servicing 2. Includes Property Sales
Slide 7: Global Workplace Solutions (GWS)
Q2 2024 EARNINGS CONFERENCE CALL Global Workplace Solutions (GWS) $ in millions, totals may not sum due to rounding Net Revenue $2,547 $2,205 $850 Q2'23 Q2'24 =Facilities Mangement ™ Project Management Definitions and reconciliations are provided at the end of this presentation GWS net revenue rose
Slide 8: Real Estate Investments
Q2 2024 EARNINGS CONFERENCE CALL Real Estate Investments Development operating loss driven by the absence of meaningful asset sales activity in the quarter Investment management operating profit exceeded the prior-year driven by higher co- investment returns AUM impacted by lower asset values and ad
Slide 9: Capital Allocation
Q2 2024 EARNINGS CONFERENCE CALL Capital Allocation CBRE Capital Allocation (S billions) YTD 3-YTD® Capital Allocation Strategy - By thoughtfully using our balance sheet, we made targeted, opportunistic investments while other investors have largely been on the sidelines - M&A, entirely in our resil
Slide 10: Updated Outlook
Q2 2024 EARNINGS CONFERENCE CALL Updated Outlook Prior Outlook ! Current Outlook - We continue to expect mid-teens SOP growth Advisory expectations are unchanged unless economic conditions take a sharp turn for the worse - We now expect mid-to-high teens SOP growth - Better Advisory expectations dri
Slide 11: Appendix
Appendix
Slide 12: Revenue
Q2 2024 EARNINGS CONFERENCE CALL Revenue $in millions, totals may not sum due to rounding ® Advisory © Global Workplace Solutions (GWS) @ Real Estate Investments (REI) $179 $8,391 $342 ($24) $4 $2 $7,720 me ($12) +8.7% vs. Q2’23 (+9.4% LC) Q2'23 Sales Leasing Rest of Adv. OMSRs Gws REI Pass-through
Slide 13: Core EBITDA
Q2 2024 EARNINGS CONFERENCE CALL Core EBITDA $in millions, totals may not sum due to rounding ® Advisory © Global Workplace Solutions (GWS) @ Real Estate Investments (REI) $25 ($23) ($30) 0.3% vs. Q2’23 (1.7% LC) Q2'23 Advisory OMSRs GWS REI Corporate Q2'24 Ex OMSRs Overhead 2024 CBRE, Inc. |13 Defi
Slide 14: TTM Q2'24 Revenue
Q2 2024 EARNINGS CONFERENCE CALL TTM Q2’24 Revenue $in millions, totals may not sum due to rounding Global a Property Loan a Investment o Leasing Sales CMO Servicing Valuation Management Workplace Development Management Total Revenue TTM Q2'24 $3,605 $1,557 $482 $326 $721 $23,504 $342 $590 $33,144 L
Slide 15: Q2'24 Revenue
Q2 2024 EARNINGS CONFERENCE CALL Q2’24 Revenue $in millions, totals may not sum due to rounding Global o Property Loan 5 Property Investment oO Leasing Sales CMO Servicing Valuation Management Workplace Development Management Total Solutions Revenue Q2'24 $884 $386 $125 $84 $184 $555 $5,944 $83 $149
Slide 16: Non-GAAP Measures and Definitions
Non-GAAP Measures and Definitions
Slide 17: Non-GAAP Financial Measures
Q2 2024 EARNINGS CONFERENCE CALL Non-GAAP Financial Measures The following measures are considered “non-GAAP financial measures” under SEC quidelines: i Net revenue ii Core EBITDA iil Business line operating profit/loss iv. Segment operating profit on revenue and net revenue margins v. Free cash flo
Slide 18: Definitions
Q2 2024 EARNINGS CONFERENCE CALL Definitions Core adjusted Net Income and Core adjusted Earnings Per Diluted Share: Core adjusted net income and core earnings per diluted share (or core EPS) exclude the effect of select items from GAAP net income and GAAP earnings per diluted share as well as adjust
Slide 19: Supplemental Slides, GAAP Reconciliation Tables
Supplemental Slides, GAAP Reconciliation Tables
Slide 20: Debt, Leverage and Liquidity
Q2 2024 EARNINGS CONFERENCE CALL Debt, Leverage and Liquidity $ in millions, totals may not sum due to rounding CBRE Capital Structure as of June 30, 2024 Maturity Profile as of June 30, 2024 Revolving Credit Facility 940 Senior Term Loans, net 713 5.500% Senior Notes, net 495 5.950% Senior Notes, n
Slide 21: TTM Q2'23 Revenue
Q2 2024 EARNINGS CONFERENCE CALL TTM Q2’23 Revenue $in millions, totals may not sum due to rounding Global A Property Loan 4 Property Investment a Leasing Sales CMO Servicing Valuation Management Workplace Development Management Total Solutions Revenue TTM Q2'23 $3,653 $1,952 $419 $310 $732 $1,877 $
Slide 22: Q2'23 Revenue
Q2 2024 EARNINGS CONFERENCE CALL Q2’23 Revenue $in millions, totals may not sum due to rounding Global A Property Loan 4 Investment Leasing Sales CMO Servicing Valuation Management Workplace Development Management Total® Revenue Q2'23 $814, $398 $90 $79 $180 $5,426 $105 $151 $7,720 Less pass-through
Slide 23: Summarized Cash Flow Activity
Q2 2024 EARNINGS CONFERENCE CALL Summarized Cash Flow Activity $in millions, totals may not sum due to rounding Six Months Ended June 30, 2024 2023 Net cash used in operating activities (205) (756) Net cash used in investing activities (1,307) (370) Net cash provided by financing activities 1,242 1,
Slide 24: Reconciliation of Free Cash Flow
Q2 2024 EARNINGS CONFERENCE CALL Reconciliation of Free Cash Flow $ in millions, totals may not sum due to rounding Three Months Ended June 30, 2024 2023 Net cash provided by (used in) operating activities 287 an Less: Capital Expenditures (67) 75 Free Cash Flow $220 $(86) 1. CBRE has not reconciled
Slide 25: Other Financial Metrics
Q2 2024 EARNINGS CONFERENCE CALL Other Financial Metrics Totals may not sum due to rounding Three Months Ended, June 30, March 31, December 31, September June 30, (in millions) 2024 2024 2023 30, 2023 2023 OMSR Gains $23.3 $12.6 $23.7 $22.2 $211 Amortization ($33.5) ($34.5) ($35.0) ($35.4) ($371) Q2
Slide 26: Reconciliation of Net Income to Core Adjusted Net Income and Core EPS
Q2 2024 EARNINGS CONFERENCE CALL Reconciliation of Net Income to Core Adjusted Net Income and Core Earnings Per Share 1 $ in millions, except for per share data, totals may not sum due to rounding Three Months Ended June 30, 2024 2023 Net income attributable to CBRE Group, Inc. $130 $201 Adjustments
Slide 27: Reconciliation of Net Income to Core EBITDA
Q2 2024 EARNINGS CONFERENCE CALL Reconciliation of Net Income to Core EBITDA $ in millions, totals may not sum due to rounding Three Months Ended June 30, 2024 2023 Net income attributable to CBRE Group, Inc. $130 $201 Net income attributable to non-controlling interests 12 5 Net income 142 206 Add:
Slide 28: Reconciliation of Revenue to Net Revenue
Q2 2024 EARNINGS CONFERENCE CALL Reconciliation of Revenue to Net Revenue $in millions, totals may not sum due to rounding Three Months Ended June 30, 2024 2023 Revenue $8,391 $7,720 Less: Pass through costs also recognized as revenue 3,420 3,242 Net Revenue $4,971 $4,478 2024 CBRE, Inc.| 28
Slide 29: Reconciliation of Revenue to Net Revenue and Net Margin
Q2 2024 EARNINGS CONFERENCE CALL Reconciliation of Revenue to Net Revenue and Net Margin $in millions, totals may not sum due to rounding Three Months Ended June 30, 2024 2023 Advisory Revenue $2,218 $2,042 Less: Pass through costs also recognized as revenue 23 21 Advisory Net Revenue $2,195 $2,021
Slide 30: Reconciliation of Revenue to Net Revenue and Net Margin
1 Q2 2024 EARNINGS CONFERENCE CALL Reconciliation of Revenue to Net Revenue and Net Margin $in millions, totals may not sum due to rounding Three Months Ended June 30, 2024 2023 Global Workplace Solutions revenue $5,944 $5,426 Less: Pass through costs also recognized as revenue 3,397 3,221 Global Wo
Slide 31: Reconciliation of Revenue to Net Revenue
Q2 2024 EARNINGS CONFERENCE CALL Reconciliation of Revenue to Net Revenue $in millions, totals may not sum due to rounding Three Months Ended June 30, 2024 2023 Global Workplace Solutions Facilities Management revenue $4,127 $3,686 Less: Pass through costs also recognized as revenue 2,430 2,247 Glob
Slide 32: Reconciliation of Revenue to Net Revenue
Q2 2024 EARNINGS CONFERENCE CALL Reconciliation of Revenue to Net Revenue $in millions, totals may not sum due to rounding Three Months Ended June 30, 2024 2023 Turner & Townsend revenue $528 $442 Less: Pass through costs also recognized as revenue 84 65 Turner & Townsend net revenue $444 $377 2024
Slide 33: Reconciliation of Real Estate Investments Business Line Operating Profit
Q2 2024 EARNINGS CONFERENCE CALL Reconciliation of Real Estate Investments Business Line Operating Profit to Segment Operating Profit $in millions, totals may not sum due to rounding Three Months Ended June 30, 2024 2023 Investment Management Operating Profit $39 $38 Development Operating Loss (26)
Slide 34: Q2'24 Resilient and Transactional Revenue
Q2 2024 EARNINGS CONFERENCE CALL Q2’24 Resilient and Transactional Revenue $in millions, totals may not sum due to rounding Less pass-through Revenue costs associated with Net Revenue revenue Leasing 884 - 884 Property Sales 385 - 385 CMO 125 - 125 Development & Other REI 101 -- 101 Transactional $1
Slide 35: Q2'23 Resilient and Transactional Revenue
Q2 2024 EARNINGS CONFERENCE CALL Q2’23 Resilient and Transactional Revenue $in millions, totals may not sum due to rounding Less pass-through Revenue costs associated with Net Revenue revenue Leasing 814 - 814 Property Sales 398 - 398 CMO 90 -- 90 Development & Other REI 120 - 120 Transactional $1,4
Slide 36: Reconciliation of Resilient and Transactional to Segment Operating Profit
Q2 2024 EARNINGS CONFERENCE CALL Reconciliation of Resilient and Transactional to Segment Operating Profit $in millions, totals may not sum due to rounding Year ended 2023 Segment Operating Profit Advisory Services 1,364 Global Workplace Solutions 1,006 Real Estate Investments 239 Total Reportable S
Slide 37: Reconciliation of Net Income to Core EBITDA
Q2 2024 EARNINGS CONFERENCE CALL Reconciliation of Net Income to Core EBITDA $in millions, totals may not sum due to rounding Year Ended December 31, 2023 2022 2021 2020 2019 Net income attributable to CBRE Group, Inc. $986 $1,407 $1,837 $752 $1,282 Net income attributable to non-controlling interes
Slide 38: Debt and Leverage
Q2 2024 EARNINGS CONFERENCE CALL Debt and Leverage $in millions, totals may not sum due to rounding i , Non-Recourse Cash ‘Cedi t nea Senior Powtion d eae Total Debt|Less: Cash| Net debt /TTM Core) Net ie Notes Payable erm loans o le fo) Real Facility @ notes LTD® @) (net cash)| EBITDA |leverage Cre