Cbre Group Inc · NYSE:CBRE
Cbre — CB Richard Ellis Group — Investor Day (March 2005)
24 slides from Cbre's investor day presentation, Mar 23, 2005
Slide 1: Business Review Day: CBRE Overview
Business Review Day CBRE Overview Brett White, President Ken Kay, CFO March 23, 2005 CBRE
Slide 2: 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 statements should be considered as estimates only and actual results may ultimately differ from these estimates. Except to the
Slide 3: Overview
Overview
Slide 4: The World Class Confluence of Scale, Diversity and Earnings Power
The World Class Con » 99 years Peading,elcbal > 50 countries Brand » #1 in key cities in U.S., Europe and Asia > #1 commercial real estate brokerage > #1 appraisal and valuation > #1 property and facilities management > #2 commercial mortgage brokerage > $15.1 billion in investment assets under mana
Slide 5: Global Reach & Local Leadership
Global Reach & Local Leadership 2004 Revenue by Region Leadi Market Positions Global Investment New York Asia Management Pacifi : London 4" Los Angeles EMEA Chicago \ Sydney ] ' Paris i % Washington, D.c. Madrid QLNLLNARNAAS — Singapore Americas offering customers global coverage and leading local e
Slide 6: Superior Platform Drives Outperformance
Superior Platform Drives Outperformance Competitive Landscape Global Reach FY 2001 - 2004 CAGR —_ o a = Business, Services Platform ceG Jit Tec services TOS PE sectsNeO) 17% 200172, __ 21m CBRE® LL Tec 1%) Wi revenuellll EBITDA Best In Clase Business Senices® latform has allowed us to outperform com
Slide 7: Growth Drivers
Growth Drivers INDUSTRY TRENDS increased vendor consolidation Corporate outsourcing increased capital allocations to real estate institutional ownership of real estate RELATED STRATEGY Capitalize on cross-seling opportunities Leverage geographic diversity of ptattorm Capitalize on breaath of service
Slide 8: Remember Who We Are
> A growth-oriented business services enterprise with 215 offices around the world > A full service provider with a diverse suite of services to address any commercial real estate need > More than 2x the size of our nearest competitor in terms of 2004 revenue > Focused on growing existing client rel
Slide 9: Financial Overview
Financial Overview
Slide 10: CBRE has consistently outpaced industry growth
Pci eon en mmo Po ai ore en son as pve! 1928 a 1200 samt 91.170 ia L Tae ord 160 2 PEEEEEI ee ee ee ee ee ee ee ee ee ee ee Organic em Acquéion Normalized EBITDA, CBRE has consistently outpaced industry growth.
Slide 11: 2004 Financial Results vs 2003
2003 Incl. (Gin millions) 2004 Reported’ _% Change _Insignia’_% Change Revenue 2,366.1 1,630.1 45 1,948.8 21 Cost of Senices 1,203.8 796.4 51 968.9 24 Operating, Admin. & Other 909.8 678.4 34 826.9 10 Merger-Related Charges 25.6 36.8 30 36.8 30 Equity Income 19.5 14.4 36 14.4 36 EBITDA, 245.4 132.8
Slide 12: Strong Momentum Across Business Segments
Strong Momentum Across Business Segments 2004 Revenue Breakdown Growth in Business Segments torbage | Wavagenent sroteage |\ 6 Appraraiana Propery ana wovagimert lesen voy zona ___ 003 (a) ea. Investment Sales sor 42% Leasing 328 eM Property & Facilities Mamt 185: 18 om Appraisal & Valuation 166 1 a
Slide 13: EBITDA Margins
EBITDA Margins 18 Continued margin improvement due to: > Robust revenue growth > Productivity improvements > Operating leverage %of Revenue 7003 2008 Revenue 1000 t000 6 rote variable Costs ssa sro Tul Year Ges na naona| ua otal Fixed Costs 334 303 2008 tt mm |Normaized EBITDA? 112 127 sos nr @ 2003
Slide 14: 2004 Normalized Internal Cash Flow
2004 Normalized Internal Cash Flo nos » Strong cash flow generation ae @ > Low capital intensity ° I | 1 438 » 2004 capital expenditures exclude $12.0 million related to the integration of Insignia Cap Bx Net Income, as adjusted (3) Intemal Cash Flow (a Reconcliaton of netinoome te netincome, ar adu
Slide 15: Capitalization as of December 31, 2004
As of % (6 in milions) 12/31/2004 12/31/2003 _ Change Cash 2569 163.9 87 Revolver P : - Tranche B loan 274 2978 a Other debt! 25 99.2 43 99% senior notes 1300 200.0 35 11'*% senior subordinated notes? 205.0 226.2 E Total CB Richard Ellis Senices debt 6B 7629 47 16% senior notes E 35 100 Total debt 6
Slide 16: Current Debt Maturity
Current Debt Maturity As of December 31, Maturity Ain itions) Eos Eoce Date Revolver Facility! 3/81/2009 Senior Debt? 3/91/2010 9 %4% Senior Notes 5/16/2010 114 %4% Senior Subordinated Notes 6/16/2011 Other Debt? Various Total Debt Management: > Projected minimal usage of the revolver facility > Ana
Slide 17: Key Drivers of Earnings Growth
ey Drivers of Earnin Revenue Margin Deleveraging Expansion Balance Sheet Significant Growth EPS Growth >» Market growth ee > Operating mms |} High teens to leverage low 20% annual debt paydown EPS growth » Market share » 12% 14% targeted gains: annual EBITDA growth > 7% -9% annual revenue growth ven
Slide 18: Supply / Vacancy Outlook
Supply / Vacancy Outlook 130 20 18 2 18 14 e Vacancy Rate, % Mi 0 of @ 9 of 95 95 GF of 99 M Of M TB OF oF oO OF OB [EE Absorption tse Completions ~e—Vacency Rete eciatgee marta CBRE 7 CB RICHARO ELLE
Slide 19: 2005 Guidance
2005 Guidance: 2004 2005 Revenues $2.4B 8% Growth Net Income $118M $149M- $156M (26% - 32% Growth) ” EPS $1.65 $1.95 - $2.05 (18%- 24% Growth) © 41. Excluding residual onesie Insignia and debt buy-back charges of approximately 515 milion pre-tax. CBRE 12 CB RICHARO ELLE
Slide 20: CBRE
CBRE CB RICHARD ELLIS
Slide 21: Appendix
Appendix
Slide 22: Reconciliation of Net Income to Net Income, As Adjusted
Reconc’ 2004 Results 10 amex 10 Repoted @ OO Net income (®_ Net Income, As Adjusted 24 me to Net Income, As Adjusted (a) Intangible asset amortization expense related to Insignia net revenue backlog (b) Insignia merger and integration related costs (c) One-time IPO related compensation expense (d) C
Slide 23: Consolidated Net Income to EBITDA Reconciliation
‘onsolidated Net Income to EBITDA Reconc! (sii Twelve Months Ended December 31 2004 2003 Net Income (Loss) $64.7 (634.7) Add Depreciation and amortization 54.9 92.6 Interest expense 65.4 M3 Loss on extinguishment of debt 214 13.5 Provision (benefit) for income taxes 43.5 (6.3) Less Interest income 4
Slide 24: Searchable text section of graphics
Searchable text section of graphics shown above Bus iness Review Day CBRE Overview Brett White, President Ken Kay, CFO March 23, 2005 [GRAPHIC] [LOGO] For ward Looking Statements This presentation contains statements that are forward looking within the meaning of the Private Securities Litigation Re