Cbre Group Inc · NYSE:CBRE
Cbre — Q3 2024 Earnings Presentation
37 slides from Cbre's earnings presentation, Oct 24, 2024
Slide 1: Q3 2024 CBRE Earnings Call
CBRE cctober 2 | aaa O3 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
Q3 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 our business outlook, our business plans and cap
Slide 4: Conference Call Participants
Q3 2024 EARNINGS CONFERENCE CALL Conference Call Participants "1 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
Q3 2024 EARNINGS CONFERENCE CALL Consolidated Results Summary - Revenue and core earnings exceeded expectations as all three business segments posted double-digit revenue and segment operating profit growth, with significant operating leverage - Capital markets transaction activity has passed an inf
Slide 6: Advisory Services
Q3 2024 EARNINGS CONFERENCE CALL Advisory Services $in millions, totals may not sum due to rounding Net Revenue $2,371 $1,992 $984 $827 $477 Q3'23 Q3'24 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)
Q3 2024 EARNINGS CONFERENCE CALL Global Workplace Solutions (GWS) $ in millions, totals may not sum due to rounding Net Revenue $2,652 $2,232 $872 Q3'23 Q3'24 =Facilities Mangement ™ Project Management Definitions and reconciliations are provided at the end of this presentation GWS net revenue rose
Slide 8: Real Estate Investments
Q3 2024 EARNINGS CONFERENCE CALL Real Estate Investments Investment management operating profit increased significantly year-on-year driven by incentive fees and higher co- investment returns, reflecting improving market conditions Development operating loss driven by the absence of any significant
Slide 9: Free Cash Flow and Net Leverage
Q3 2024 EARNINGS CONFERENCE CALL Free Cash Flow and Net Leverage CBRE TTM Free Cash Flow 141% 119% 1,564 175 Le sas Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Mar-24 Jun-24 Sep-24 @EFCF ==Conversion Free cash flow improved meaningfully to $494M in Q3 2024 On a trailing 12-month basis, FCF conversion improve
Slide 10: Updated Outlook
Q3 2024 EARNINGS CONFERENCE CALL Updated Outlook Prior Outlook ! Current Outlook - Expect mid-to-high teens SOP growth Better Advisory expectations driven by improved transaction activity - Expect over 20% SOP growth - Better Advisory expectations driven by improved transaction activity Advisory - E
Slide 11: Appendix
Appendix
Slide 12: Revenue
Q3 2024 EARNINGS CONFERENCE CALL Revenue $in millions, totals may not sum due to rounding ® Advisory © Global Workplace Solutions (GWS) @ Real Estate Investments (REI) $277 $9,036 +14.8% vs. Q3'23 (+15.4% LC) Q3'23 Sales Leasing Rest of Adv. OMSRs GWS REI Pass-through Q3'24, & Other 2024 CBRE, Inc.
Slide 13: Core EBITDA
Q3 2024 EARNINGS CONFERENCE CALL Core EBITDA $in millions, totals may not sum due to rounding ® Advisory © Global Workplace Solutions (GWS) @ Real Estate Investments (REI) S60 $688 +57.8% vs. Q3'23 (+58.9% LC) Q3'23 Advisory OMSRs GWS REI Corporate Q3'24 Ex OMSRs Overhead 2024 CBRE, Inc. |13 Definit
Slide 14: TTM Q3'24 Revenue
Q3 2024 EARNINGS CONFERENCE CALL TTM Q3’24 Revenue $in millions, totals may not sum due to rounding Global o Property Loan p Property Investment oO Leasing Sales CMO Servicing Valuation Management Workplace Development Management Total Revenue TTM Q3'24 $3,760 $1,608 $539 $327 $737 $2,135 $24,202 $3
Slide 15: Q3'24 Revenue
Q3 2024 EARNINGS CONFERENCE CALL Q3’'24 Revenue $in millions, totals may not sum due to rounding Global o Property Loan p Property Investment oO Leasing Sales CMO Servicing Valuation Management Workplace Development Management Total Revenue Q3'24 $984 $422 $163 $81 $178 $567 $6,346 $106 $196 $9,036
Slide 16: Non-GAAP Measures and Definitions
Non-GAAP Measures and Definitions
Slide 17: Non-GAAP Financial Measures
Q3 2024 EARNINGS CONFERENCE CALL Non-GAAP Financial Measures The following measures are considered “non-GAAP financial measures” under SEC guidelines: 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
Q3 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
Q3 2024 EARNINGS CONFERENCE CALL Debt, Leverage and Liquidity $ in millions, totals may not sum due to rounding CBRE Capital Structure as of September 30, 2024 Maturity Profile as of September 30, 2024 Revolving Credit Facility 683 Senior Term Loans, net 718 5.950% Senior Notes, net 975 5.500% Senio
Slide 21: TTM Q3'23 Revenue
Q3 2024 EARNINGS CONFERENCE CALL TTM Q3’'23 Revenue $in millions, totals may not sum due to rounding Global ; Property Loan 9 Property Investment o Leasing Sales CMO Servicing Valuation Management Workplace Development Management Total Revenue TTM Q3'23 $3,490 $1,722 $395 $313 $719 $1,884 $21,707 $4
Slide 22: Q3'23 Revenue
Q3 2024 EARNINGS CONFERENCE CALL Q3’23 Revenue $in millions, totals may not sum due to rounding Global ; Property Loan 9 Property Investment o Leasing Sales CMO Servicing Valuation Management Workplace Development Management Total Revenue Q3'23 $827 $370 $107 $81 $163 $465 $5,649 $73 $137 $7,868 Les
Slide 23: Summarized Cash Flow Activity
Q3 2024 EARNINGS CONFERENCE CALL Summarized Cash Flow Activity $in millions, totals may not sum due to rounding Three Months Ended September 30, 2024 2023 Net cash provided by operating activities 573 383 Net cash used in investing activities (187) (167) Net cash used in financing activities (315) (
Slide 24: Reconciliation of Free Cash Flow
Q3 2024 EARNINGS CONFERENCE CALL Reconciliation of Free Cash Flow $ in millions, totals may not sum due to rounding Three Months Ended September 30, 2024 2023 Net cash provided by (used in) operating activities 573 383 Less: Capital Expenditures (79) (76) Free Cash Flow $494 $307 1. CBRE has not rec
Slide 25: Reconciliation of Free Cash Flow (TTM)
Q3 2024 EARNINGS CONFERENCE CALL Reconciliation of Free Cash Flow $ in millions, totals may not sum due to rounding Trailing Twelve Months Ended, December December December December December March June September in milli 31,2019 31, 2020 31, 2021 31, 2022 31, 2023 31, 2024 30, 2024 30, 2024 Gin mill
Slide 26: Other Financial Metrics
Q3 2024 EARNINGS CONFERENCE CALL Other Financial Metrics Totals may not sum due to rounding Three Months Ended, September March 31, December 31, September (Sin mitons) 30,2024 June 30,2024 9994 2023 30, 2023 OMSR Gains $37.9 $23.3 $12.6 $23.7 $22.2 Amortization ($36.0) ($33.5) ($34.5) ($35.0) ($35.4
Slide 27: Reconciliation of Net Income to Core Adjusted Net Income and Core EPS
Q3 2024 EARNINGS CONFERENCE CALL Reconciliation of Net Income to Core Adjusted Net Income and Core Earnings Per Share $ in millions, except for per share data, totals may not sum due to rounding Three Months Ended September 30, 2024 2023 Net income attributable to CBRE Group, Inc. $225 $191 Adjustme
Slide 28: Reconciliation of Net Income to Core EBITDA
Q3 2024 EARNINGS CONFERENCE CALL Reconciliation of Net Income to Core EBITDA $ in millions, totals may not sum due to rounding Three Months Ended September 30, pie el Monti Ended, 2024 2023 Sari se Net income attributable to CBRE Group, Inc. $225 $191 $958 Net income attributable to non-controlling
Slide 29: Reconciliation of Revenue to Net Revenue
Q3 2024 EARNINGS CONFERENCE CALL Reconciliation of Revenue to Net Revenue $in millions, totals may not sum due to rounding Three Months Ended September 30, 2024 2023 Revenue 9,036 7,868 Less: Pass through costs also recognized as revenue 3,718 3,438 Net Revenue $5,318 $4,430 2024 CBRE, Inc. |29
Slide 30: Reconciliation of Revenue to Net Revenue and Net Margin
Q3 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 September 30, 2024 2023 Advisory Revenue 2,395 2,013 Less: Pass through costs also recognized as revenue 24 21 Advisory Net Revenue $2,371 $1,9
Slide 31: Reconciliation of Revenue to Net Revenue and Net Margin
Q3 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 September 30, 2024 2023 Global Workplace Solutions revenue 6,346 5,649 Less: Pass through costs also recognized as revenue 3,694 3,417 Global W
Slide 32: Reconciliation of Revenue to Net Revenue
Q3 2024 EARNINGS CONFERENCE CALL Reconciliation of Revenue to Net Revenue $in millions, totals may not sum due to rounding Three Months Ended September 30, 2024 2023 Global Workplace Solutions Facilities Management revenue 4,370 3,844 Less: Pass through costs also recognized as revenue 2,590 2,389 G
Slide 33: Reconciliation of Real Estate Investments Business Line Operating Profit
Q3 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 September 30, 2024 2023 Investment Management Operating Profit 75 29 Development Operating Loss (8
Slide 34: Q3'24 Resilient and Transactional Revenue
Q3 2024 EARNINGS CONFERENCE CALL Q3’24 Resilient and Transactional Revenue $in millions, totals may not sum due to rounding Less pass-through Revenue costs associated with Net Revenue revenue Leasing 984 - 984 Property Sales 422 -- 422 CMO 163 - 163 Development & Other REI 165 - 165 Transactional $1
Slide 35: Q3'23 Resilient and Transactional Revenue
Q3 2024 EARNINGS CONFERENCE CALL Q3’23 Resilient and Transactional Revenue $in millions, totals may not sum due to rounding Less pass-through Revenue costs associated with Net Revenue revenue Leasing 827 - 827 Property Sales 370 - 370 CMO 107 - 107 Development & Other REI 76 -- 76 Transactional $1,3
Slide 36: Reconciliation of Net Income to Core EBITDA (Annual)
Q3 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 37: Debt and Leverage
Q3 2024 EARNINGS CONFERENCE CALL Debt and Leverage $in millions, totals may not sum due to rounding Revolvin: . ‘ can "hears SS SE rreg TD ts| Tobe ess con] te Tae tae 2019 972 - 745 1,017 - 6 1,768 972 796 2,070 0.4x 2020 1,896 - 786 595 - 7 1,387 1,896 (809) 1,898 (0.3x) 2021 2,431 - 455 1,084 - 3