Cushman & Wakefield Ltd. · NYSE:CWK
Cushman & Wakefield — Investor Presentation (August 2023)
31 slides from Cushman & Wakefield's investor presentation, Aug 1, 2023
Slide 1: Company Overview August 2023
Exhibit 99.1 CUSHMAN & WAKEFIELD COMPANY OVERVIEW AUGUST 2023 CUSHMAN & WAKEFIELD 1
Slide 2: Disclaimer
DISCLAIMER This disclaimer applies to this document and the verbal or written comments of any person presenting it. This document, taken together with any such verbal or written comments, is referred to herein as the “presentation.” This presentation is for informational purposes only and you should
Slide 3: Non-GAAP Financial Measures and Other Financial Information
NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION This presentation uses the following financial measures, which are considered non-GAAP financial measures under SEC guidelines: i. Free cash flow; ii.Adjusted earnings before interest, taxes, depreciation and amortization ( Adjusted EBITDA
Slide 4: Diverse Global Platform
DIVERSE GLOBAL PLATFORM
Slide 5: A Globally Scaled Leader in Real Estate Services
CUSHMAN & WAKEFIELD: A GLOBALLY SCALED LEADER IN REAL ESTATE SERVICES Professional services firm with no direct asset ownership Key Statistics Fee Revenue by Service Line (% of LTM Jun-23) Valuation & Other 52K+ ~$10B (1) Services • Valuation & Advisory Employees LTM Jun-23 53% Worldwide • Property
Slide 6: Strong & Experienced Management Team, Proven Across Cycles
STRONG & EXPERIENCED MANAGEMENT TEAM, PROVEN ACROSS CYCLES Real Estate and Public Company expert with more than 30 Specialist in finance and audit with more than 25 years of years of experience, serving in senior executive positions experience in public, private and global companies. and on several
Slide 7: Complete Platform of Real Estate Services for Owners & Occupiers
COMPLETE PLATFORM OF REAL ESTATE SERVICES FOR OWNERS & OCCUPIERS Multiple touchpoints throughout each stage of the real estate lifecycle (1) Global Occupier Services (or “GOS”) business primarily provides Integrated Facilities Management CUSHMAN & WAKEFIELD 7 (2) Greystone JV primarily provides Mort
Slide 8: Scale Creates Significant Opportunity in a Consolidating Market
SCALE CREATES SIGNIFICANT OPPORTUNITY IN A CONSOLIDATING MARKET $220B Real Estate Services C&W is a Top 3 Player in a Fragmented Competitive Landscape (1) Addressable Market Global ~30% Premium brands with global service offerings Geography ~70% (2) Top Firms Regional All Other Providers Specialized
Slide 9: Near-Term Environment Challenging, Long-Term Secular Tailwinds
NEAR-TERM ENVIRONMENT IS CHALLENGING, BUT LONG-TERM SECULAR TAILWINDS ARE DRIVING MARKET EXPANSION INVESTORS INCREASING ALLOCATION TO REAL ESTATE COMPANIES SPENDING MORE ON FACILITIES MANAGEMENT (1) (3) Target Investor Allocation to Real Estate (% of Total) In-house + Outsourced Facilities Managemen
Slide 10: Diversified Platform Designed to Benefit from Global Trends
DIVERSIFIED PLATFORM DESIGNED TO BENEFIT FROM GLOBAL TRENDS C&W Has a Global Platform and Real Estate Market is Increasingly Global Revenue Base (1) Fee Revenue by Geographic Segment Professionally Managed Global Real Estate Value by Country ($T) (LTM Jun-23) Americas EMEA APAC $1.0B (15%) Nordics $
Slide 11: Business Strategically Diversified Across Property Types
BUSINESS IS STRATEGICALLY DIVERSIFIED ACROSS REAL ESTATE PROPERTY TYPES Structural Growth in Industrial and Investment Activity Continues to Manage a Balanced Portfolio of Other Leasing Post-COVID Broaden Across Property Types Real Estate Across Property Types (1) (1) (2) Leasing Transaction Volume
Slide 12: Resilient Business with Large Base of Stable Services Revenue
(1) RESILIENT BUSINESS WITH LARGE HISTORICAL BASE OF STABLE SERVICES REVENUE Mid-single digit revenue CAGR since 2018 (1) Large and Stable Base of Services Revenue (1) (1) Services Historical Services Fee Revenue Growth ($M) 53% Revenue (% of LTM) 3,557 3,481 3,185 2,970 2,949 Contract 2,622 Multi-y
Slide 13: Brokerage & Valuation Supports Historical Baseline of Activity
BROKERAGE & VALUATION SUPPORTS A HISTORICAL BASELINE OF ACTIVITY ACROSS ECONOMIC CYCLES In 2020, during a COVID-related pause in decision-making, our brokerage & valuation businesses generated $2.5B in revenue 2020 Results Reflected a Recent Baseline Level of Expected Upcoming Lease Expiries Create
Slide 14: Demonstrated Ability to Identify and Execute in Growth Markets
DEMONSTRATED ABILITY TO IDENTIFY AND EXECUTE IN GROWTH MARKETS Case Study: Historical Investments in Multifamily Driving Strong Market Share Gains Historical Investments Have Driven Share Gains in an Key Multifamily Historical Description Focus Area Investments Attractive Growth Sector (1) Historica
Slide 15: Financial Overview
FINANCIAL OVERVIEW
Slide 16: Q2'23 Earnings Highlights and 2023 Outlook
Q2’23 EARNINGS HIGHLIGHTS AND 2023 OUTLOOK Reported sequential improvements in line with expectations (1) (1) Q2’23 Earnings Highlights 2023 Outlook › Q2’23 fee revenue of $1.6 billion, down 14% versus Q2’22 › Full Year Adjusted EBITDA Margins of 9-10% ‒ PM/FM fee revenue grew 3%, demonstrating cont
Slide 17: Proven Track Record of Accretive Growth
PROVEN TRACK RECORD OF ACCRETIVE GROWTH Continual Operating Efficiency and Operating Leverage Long-Term Mid Single Digit Revenue Growth Driving Double Digit EBITDA Growth Fee Revenue ($M) Adjusted EBITDA ($M) 899 886 7,248 6,891 6,400 724 5,951 659 5,466 5,320 4,859 4,840 4,694 529 504 475 418 346 2
Slide 18: Management of Cost Base Provides Defensible Margin
MANAGEMENT OF COST BASE PROVIDES A DEFENSIBLE LEVEL OF MARGIN THAT IS EXPECTED TO IMPROVE AS BROKERAGE RECOVERS Active Management of Cost Base Stable Margin Level Expected to Improve Protects Baseline Margin as Brokerage Recovers › Brokerage business has highly variable cost structure which (1) flex
Slide 19: Strong Liquidity with Manageable Leverage Profile
STRONG LIQUIDITY WITH MANAGEABLE LEVERAGE PROFILE Our Liquidity Position is Strong Operating Within Recent Leverage Levels (1) Net Debt to Adjusted EBITDA › Stable business profile as nearly half of our fee revenue is recurring 4.3x 4.3x › Strong liquidity of $1.6B, comprised of our undrawn revolvin
Slide 20: Proactive Balance Sheet Management
PROACTIVE BALANCE SHEET MANAGEMENT Maturity Profile is Well Laddered with Recent Refinancing and Risk Management Activities Nearest Maturity in 2025 (1) Debt Maturity Schedule ($M) › Outstanding debt consists of $2.6B of Term Loan B maturing August 2025 and January 2030 and $650M Secured Notes 1,593
Slide 21: Appendix I – Additional Financial Detail
APPENDIX I – ADDITIONAL FINANCIAL DETAIL
Slide 22: Expect 2023 to Follow Normal Business Seasonality
EXPECT 2023 TO FOLLOW NORMAL BUSINESS SEASONALITY 2023 started with challenging comparables given atypical phasing in 2022 2018 2019 2020 2021 2022 H1’23 $659M | 11.1% $724M | 11.3% $504M | 9.2% $886M | 12.9% $899M | 12.4% 567 477 462 422 415 Adjusted 315 320 EBITDA ($M) 263 245 207 189 H1'18 H2'18
Slide 23: Improving Free Cash Flow Conversion
IMPROVING FREE CASH FLOW CONVERSION Asset light business with a strong FCF profile Bridging Items Between Adjusted EBITDA and (1) Free Cash Flow ($M) Free Cash Flow › Cash taxes – Adjusted Effective Tax Rate estimated to be approximately 28% 496 BAU › Net working capital – average net working capita
Slide 24: Appendix II – Service Line Descriptions
APPENDIX II – SERVICE LINE DESCRIPTIONS
Slide 25: Brokerage & Valuation Businesses – Overview of Key Offerings
BROKERAGE & VALUATION BUSINESSES – OVERVIEW OF KEY OFFERINGS Revenue generated based on level of transactional activity ‘22 Fee Revenue Service Offering Fee Model Fee Revenue ($M) (% of Total) 2,083 Leading Global platform serving both real estate occupiers and owner / investors 1,921 1,605 • Tenant
Slide 26: Services Businesses – Overview of Key Offerings
SERVICES BUSINESSES – OVERVIEW OF KEY OFFERINGS Stable revenue generated based on multi-year contracts to installed base of real estate Service Offering Fee Model • Bundled services for large multi-national occupiers of real estate Integrated Facilities • Multi-year contracts Management • Comprehens
Slide 27: Appendix III – Non-GAAP Reconciliations
APPENDIX III – NON-GAAP RECONCILIATIONS
Slide 28: Reconciliation of Net (Loss) Income to Adjusted EBITDA
(1) RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA Twelve Twelve Twelve Twelve Twelve Twelve Twelve Months Months Months Months Months Months Months 2014 Pro 2015 Pro Ended Dec Ended Dec Ended Dec Ended Dec Ended Dec Ended Dec Ended Dec (in millions) (unaudited) Forma Forma 31, 2016 31, 2017
Slide 29: Reconciliation of Net (Loss) Income to Adjusted EBITDA and Margin
(1) RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN Six Months Six Months Six Months Six Months Six Months Six Months Six Months Six Months Six Months Six Months Six Months Ended Jun Ended Dec Ended Jun Ended Dec Ended Jun Ended Dec Ended Jun Ended Dec Ended Jun End
Slide 30: Free Cash Flow
FREE CASH FLOW Average Twelve Twelve Twelve Twelve Twelve Twelve Months Months Months Months Months Months Ended Dec Ended Dec Ended Dec Ended Dec Ended Dec Ended Dec 31, 2019 & 31, 2021 & (1) (1) (1) (1) (in millions) (unaudited) 31, 2019 31, 2020 31, 2021 31, 2022 Dec 31, 2020 Dec 31, 2022 Net cas
Slide 31: Net Debt
NET DEBT Twelve Months Twelve Months Twelve Months Twelve Months Ended Dec 31, Ended Dec 31, Ended Dec 31, Ended Dec 31, LTM Ended Jun (in millions) (unaudited) 2019 2020 2021 2022 30, 2023 (1) Cash and cash equivalents $ 813.2 $ 1,074.8 $ 770.7 $ 644.5 $ 502.3 (1) Long-term debt, net 2,637.5 3,253.
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