Cbre Group Inc · NYSE:CBRE
Cbre — Investor Presentation (November 2022)
33 slides from Cbre's investor presentation, November 2022
Slide 1: CBRE Investor Overview
CBRE Investor Overview November 2022
Slide 2: Forward-Looking Statements
INVESTOR OVERVIEW 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 prospects, including operations, market share, capital deplo
Slide 3: CBRE is the Global Leader in a Growing Industry
INVESTOR OVERVIEW CBRE is the Global Leader in a Growing Industry +100 ~500 Countries Where Offices Globally Clients are Served $27.7B 116 Years 2021 Revenue Continuous operations C R E S E RV I C E S M A R K E T CA P MARKET LEADERSHIP LEADING GLOBAL BRAND AS OF SEPTEMBER 30, 2022 • #1 Leasing • Lip
Slide 4: Serving Global Clients Through Three Business Segments
INVESTOR OVERVIEW Serving Global Clients Through Three Business Segments Full-year 2021, Segment Operating Profit | $ in millions REI $520 CBRE works in every dimension of commercial real estate and is the global leader in our industry. GWS We engage with our global clients through three business se
Slide 5: CBRE Drivers of Long-Term Growth
INVESTOR OVERVIEW CBRE Drivers of Long-Term Growth Tailwinds for • Increasing institutional ownership of CRE driving demand for institutional quality CRE services CRE Services • Occupier demand for CRE outsourcing services remains robust Sector • Clients coalescing around market leaders, with CBRE b
Slide 6: Structural Tailwinds for Commercial Real Estate Services Sector
INVESTOR OVERVIEW Structural Tailwinds for Commercial Real Estate Services Sector Institutional Real Estate Shift to Outsourcing Industry Leaders Taking Market Share Ownership Rising Estimated Integrated Facilities Mgt. % Institutional C B R E G l o b a l P r o p e r t y S a l e s S h a r e (4) M k
Slide 7: Client Size and Diversity Have Increased with CBRE’s Capabilities
INVESTOR OVERVIEW Client Size and Diversity Have Increased with CBRE’s Capabilities Large Clients Now Represent Industry Diversity of Top 50 Larger Share of Total Revenue Clients has Improved Over Time 50.0% Real Estate Government 40.0% Energy/Industrial/Materials 30.0% IT/Telecom 20.0% Health Care
Slide 8: Geographic Breadth Allows CBRE to Better Serve Large Global Clients
INVESTOR OVERVIEW Geographic Breadth Allows CBRE to Better Serve Large Global Clients # of Countries in which CBRE’s 10 Largest Clients Generate Substantial Revenue from CBRE serves clients Multiple Regions Americas APAC EMEA >100 Client 1 ●●● ●●● ●●● Client 2 ●●● ●●● 60 Client 3 ●●● ●●● ●●● +1.7x C
Slide 9: Market-Leading Scale Enables Significant Cross-Selling
INVESTOR OVERVIEW Market-Leading Scale Enables Significant Cross-Selling 2021 Services Revenue Characteristics Among Our 10 Largest Clients (5) Client Rank Client Industry Leasing Capital Markets Facilities Mgmt. Project Mgmt. Other Financial Client 1 Services ●●● ●● ●●● ●●● ● ~80% of top 100 client
Slide 10: Development Business is a Differentiated Driver of CBRE’s Growth
INVESTOR OVERVIEW Development Business is a Differentiated Driver of CBRE’s Growth In-Process Portfolio (6) Development Line of Business Operating Profit (7) $ Billions $ Millions $18.5 $351 $14.9 $13.0 $9.0 $187 $6.7 $6.8 $153 $6.6 $120 $121 $5.4 $114 $90 $72 2014 2015 2016 2017 2018 2019 2020 2021
Slide 11: Ample Capacity to Fund Future Investments
INVESTOR OVERVIEW Ample Capacity – Strong free cash flow generation combined with fortified balance sheet positions us to pursue dynamic, disciplined capital allocation to further enhance resiliency and diversification to Fund Future – Deployed $1.7 billion to discretionary share buybacks over the l
Slide 12: CBRE’s Business Mix is Increasingly Resilient to Economic Cycles
INVESTOR OVERVIEW CBRE’s Business Mix is Increasingly Resilient to Economic Cycles Trailing Twelve-Month Net Revenue Portion of Segment Operating Profit from Contributions as of Q3 2022 (8) Highly Resilient Business Lines (9) $ Millions Asset Mgmt. Fees, $534 40% Valuation, $771 Property Management,
Slide 13: CBRE Cost Structure Remains Highly Variable
INVESTOR OVERVIEW CBRE Cost Structure Remains Highly Variable Total Costs ($B) • Cost reductions represent most immediate tool to react to potential downturn • CBRE's cost structure is highly $10.7 variable, with 42% of costs being pass-through and 42% tied to revenue • Operating expenditures also h
Slide 14: CBRE’s Property Exposure is Increasingly Diversified
INVESTOR OVERVIEW CBRE’s Property Exposure is Increasingly Diversified (10) Office Retail Industrial Multi-Housing Other 2012 2021 2012 2021 2012 2021 2012 2021 2012 2021 U.S. Leasing 72% 55% 10% 8% 16% 33% n/a n/a 2% 3% U.S. Sales 33% 17% 13% 7% 16% 32% 30% 33% 8% 12% Development 43% 19% 3% 1% 15%
Slide 15: Advisory Segment Lines of Business Resilient Through the Cycle
INVESTOR OVERVIEW Advisory Segment Lines of Business Resilient Through the Cycle 100.0% Trailing-Twelve Month Revenue Growth 80.0% 60.0% 40.0% 20.0% 0.0% (20.0%) (40.0%) (11) Property Valuation Loan Servicing Advisory Leasing Advisory Sales Commerical S&P 500 Management Mortgage TTM 1Q'21 TTM 1Q'22
Slide 16: CBRE vs. S&P 500 – Earnings per Share Growth is over 3x the S&P
INVESTOR OVERVIEW CBRE vs. S&P 500 – Earnings per Share Growth is over 3x the S&P 500 TTM Core EPS (12) since 12/31/2011 600% CBRE: +518% 500% 400% 300% 200% S&P 500: +121% 100% 0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 CBRE, Inc. | 16 Definitions, endnotes and reconciliations a
Slide 17: CBRE’s Valuation vs. S&P 500 Remains Below Historical Average
INVESTOR OVERVIEW CBRE’s Valuation vs. S&P 500 Remains Below Historical Average CBRE Forward P/E as a % of S&P 500 Forward P/E (13) 140% 130% 120% 110% 100% 90% 80% 70% 60% 50% Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 NTM P/E Avg. +1 Std Dev -1 Std Dev 2022 CBRE,
Slide 18: Corporate Responsibility
Corporate Responsibility
Slide 19: Sustainability and Social Responsibility
INVESTOR OVERVIEW Sustainability and Social Responsibility As of 12/31/21 $3.2B $20.2M Net Zero Spent with small & diverse Charitable Giving By 2040 commitment suppliers (incl. employee donations) ENERGY STAR $2B 5,941 Green Financing bonds / notes issued (CBRE IM) registered buildings (346.9 millio
Slide 20: High-Quality and Well-Aligned Corporate Governance
INVESTOR OVERVIEW High-Quality and Well-Aligned Corporate Governance Board Diversity Race & Ethnicity Gender Independence Tenure 0-4 Years 6 36% 27% 91% 5-8 Years 3 Diverse Women Independent 8+ Years 2 2021 NEO “At Risk” Performance-Based Compensation 86% Variable 14% 21% 37% 28% Base Salary Annual
Slide 21: Non-GAAP Measures and Definitions
Non-GAAP Measures and Definitions
Slide 22: Non-GAAP Financial Measures
INVESTOR OVERVIEW Non-GAAP Financial The following measures are considered “non-GAAP financial measures” under SEC guidelines: Measures i. ii. iii. Net revenue Core EBITDA Business line operating profit/loss iv. Segment operating profit on revenue and net revenue margins v. Net debt vi. Core adjuste
Slide 23: Definitions
INVESTOR OVERVIEW Definitions Core EBITDA: Core EBITDA represents earnings, inclusive of non-controlling interest, before net interest expense, write-off of financing costs on extinguished debt, income taxes, depreciation and amortization, asset impairments, adjustments related to certain carried in
Slide 24: End Notes, Supplemental Slides, GAAP Reconciliation Tables
End Notes, Supplemental Slides, GAAP Reconciliation Tables
Slide 25: End Notes
INVESTOR OVERVIEW End Notes 1) Peers include JLL, Cushman & Wakefield, Colliers, Newmark, Walker & Dunlop, Marcus & Millichap and Savills 2) Source: McKinsey’s “Six Emerging Trends in Facilities Management Sourcing,” Frost & Sullivan’s “Future of Facility Management” reports and CBRE research 3) Sou
Slide 26: Mandatory Amortization and Maturity Schedule
INVESTOR OVERVIEW Mandatory Amortization and Maturity Schedule $ in millions, totals may not sum due to rounding | As of September 30, 2022 Liquidity (1) (2) Maturity Schedule – Robust liquidity at approximately $4.5 billion, – No significant maturities until 2023 (3) enabling net leverage of around
Slide 27: Debt and Leverage
INVESTOR OVERVIEW Debt and Leverage $ in millions, totals may not sum due to rounding Twelve Months Ended Sept. 30, December 31, 2022 2021 2020 2019 2018 2017 Cash $1,125 $2,431 $1,896 $972 $777 $752 Revolving Credit Facility 283 - - - - - Senior term loans (1) 392 455 786 745 751 193 Senior notes (
Slide 28: Reconciliation of Cash Flows
INVESTOR OVERVIEW Reconciliation of Cash Flows $ in millions, totals may not sum due to rounding Twelve Months Ended December 31, 2021 2020 2019 2018 2017 Net cash provided by operating $2,364 $1,831 $1,223 $1,131 $894 activities Less: Capital Expenditures 210 267 294 228 178 Free Cash Flow $2,154 $
Slide 29: Reconciliation of Real Estate Investments Business Line Operating Profit to Segment Operating Profit
INVESTOR OVERVIEW Reconciliation of Real Estate Investments Business Line Operating Profit to Segment Operating Profit $ in millions, totals may not sum due to rounding Twelve Months Ended December 31, 2021 2020 2019 2018 2017 2016 2015 2014 Investment Management Operating Profit $206 $142 $120 $78
Slide 30: Reconciliation of Core EPS
INVESTOR OVERVIEW Reconciliation of Core EPS $ in millions, totals may not sum due to rounding Twelve Months Ended, Sept. 30, December 31, 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 Net Income attributable to CBRE Group, Inc $2,018 $1,837 $752 $1,282 $1,063 $697 $573 $547 $485 $317
Slide 31: Highly Resilient Business Lines
INVESTOR OVERVIEW Highly Resilient Business Lines $ in millions, totals may not sum due to rounding Segment Operating Profit 2011 % of Total 2021 % of Total Highly Resilient 300 32% 1,320 40% Transactional 645 68% 1,971 60% Total 945 3,291 2022 CBRE, Inc. | 31
Slide 32: TTM Q3’22 Revenue
INVESTOR OVERVIEW TTM Q3’22 Revenue $ in millions, totals may not sum due to rounding Property Loan Property Facilities Project Investment Leasing Sales CMO Servicing Valuation Management Management Management Development Management Total (1) Revenue TTM Q3’22 $3,956 $3,048 $653 $329 $771 $1,831 $15
Slide 33: Reconciliation of TTM Net Income to TTM Core EBITDA
INVESTOR OVERVIEW Reconciliation of TTM Net Income to TTM Core EBITDA $ in millions, totals may not sum due to rounding Twelve Months Ended, Sept. 30, December 31, 2022 2021 2020 2019 2018 2017 2011 Net Income attributable to CBRE Group, Inc $2,018 $1,837 $752 $1,282 $1,063 $697 $239 Net income attr