Cbre Group Inc · NYSE:CBRE
Cbre — CB Richard Ellis Group — CSFB 7th Annual Global Services Growth Conference (March 2005)
32 slides from Cbre's conference presentation, Mar 15, 2005
Slide 1: CSFB 7th Annual Global Services Growth Conference
CBRE CB RICHARD ELLIS CSFB 7* Annual Global Services Growth Conference March 15, 2005
Slide 2: Forward Looking Statements
Forward Looking Statements CBRE 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
Slide 3: Participants
CB RICHARD ELUS Participants CBRE Brett White - President Ken Kay — Senior Executive Vice President and Chief Financial Officer
Slide 4: Overview
CBRE CB RICHARD ELUS Overview
Slide 5: CBRE Real Estate Services Provider
CBRE | Real Estate Services Provider comicwano cine » 99 years Leading Clohal > 50 countries Brand » #1 in key cities in U.S., Europe and Asia > #1 commercial real estate brokerage » #1 appraisal and valuation Broad Capabilities > #1 property and facilities management > #2 commercial mortgage broker
Slide 6: Global Reach & Local Leadership
2004 Revenue by Region Global Pacific vestors ‘Americas Global Reach & Local Leadership CBRE Leadi Market Po: New York ions London Los Angeles Chicago Sydney Paris Washington, D.c. Madrid SES etark SAS Singapore CBRE offering customers global coverage and lea: é S 3 4 g Hd =
Slide 7: Diversified Blue Chip Client Base
CBRE Diversified Blue Chip Client Base CB RICHARD ELUS 2004 Revenue by Client Type Representative Clients ral i. government “her EDP (=) Cardinal corporate 7) Lloyds TSB Oppartity x CalPERS Aberdeen ners I peor | Fist ‘SUISSE | BOSTON lotchore Investors Conduits? Pension Funds Insurance companies? I
Slide 8: Full Services Platform
Full Services Platform CBRE CB RICHARD ELUS 2004 Americas Revenue Advisory Services Outsourcing Services Revenue Resenen: Generation Generation Leasing, sales, divestitures Commission " 4 Manages pronerte= (al Comins owners Comprehensive corporate Contractual real estate services Mortgage brokerage
Slide 9: Fragmented Industry
Fragmented Industry $22 Billion US Commercial Real Estate Services Industry (1) U.S. Market Share Top Share ceRE 59% caw 2m Tec 1.8% GBE 1.3% sett Providers 258 suLt2% Other 30d Party ots The market has grown at a 4.8% CAGR from 1993 to 2003. once: Eremalpsoie ge aa marapemester tate a of 129103, "T
Slide 10: Superior Platform Drives Outperformance
Superior Platform Drives Outperformance CBRE Competitive Landscape FY 2001 - 2004 CAGR eran A! Service® Global Reach an i reverue Meera Business: Services Platform ceo wk tee Services ™ FYO5 PIE ae of S105) Ae 1034 a7 21g Our full-service, global platform has allowed us to outperform comp.
Slide 11: Capitalize on Favorable Industry Conditions
Capitalize on Favorable Industry Conditions CBRE CB RICHARD ELUS Improving Supply / Demand Outlook a ‘© sm = 3 i © ony sme fa 20m mame na UE SE | ITE ae. SSAtsorption mmm Completions —e_—Vacancy Rate 10
Slide 12: Markets Clustering at Bottom of Cycle
CBRE Markets Clustering at Bottom of Cycle CO RICHARD ELUS Rents Rents Rental Rental Falling Bottoming Growth Growth Out Accelerating Maturing SS Brussels Milan Amsterdam Hong Kona@) im (5 London *. Munich’ Washington D.C. O-O new vork Stockholm + The markets do not necassarly move along the curve i
Slide 13: Key Growth Strategies
CBRE CB RICHARD ELUS Key Growth Strategies 2
Slide 14: Growth Drivers
Growth Drivers INDUSTRY TRENDS: Increased vendor consolidation Corporate outsourcing Increased capital allocations to real estate Institutional ownership of real estate CBRE CB RICHARD ELUS RELATED STRATEGY > Capitalize on crass-selling opportunities > Leverage geographic diversity of platform > Cap
Slide 15: Pursue Vendor Consolidation Opportunities
CBRE Pursue Vendor Consolidation Opportunities CB RICHARD ELIS » CBRE is the exclusive service provider for Avaya’s AVAYA portfolio » Transaction Management, Facilities Management and “P 360 locations » 52 countries » Over7 million square feet CBRE d rs global soluti ns through leading local experti
Slide 16: Promote Cross-Selling
CBRE Promote Cross-Selling CB RICHARD ELIS V\)) Washington Mutual Facies Management off fe iccseiinisidion gf lf rraiienoimanaiaint Bs ae ws Strategic Planning SOSeON | Location Consutting > 23.4M square feet of facilities managed, 60% growth since 2000 > 117% growth in project management (2003 over
Slide 17: Grow Investment Management Business
Grow Investment Management Business Real Estate Institutional Ownership ot : sa03 a 930 onze $570.79 7 sonnst202) seme 2514] CBRE’s Assets Under Management ws se4 1908 967 1908 1950 2m 20M 20M 2003 204 some 1 20m m1 meme Substantial cross-selling of services currently drives approximately $50 millio
Slide 18: Financial Overview
CBRE CB RICHARD ELLIS Financial Overview ”
Slide 19: Consistent Long Term Growth
Consistent Long Term Growth CBRE unt sui $1170 a ee ee ee ee ee ee ee ee ee er ee me Organic mmmAcquisttin —a_Nomalzed EBITDA" CBRE has consistently outpaced industry growth. 18
Slide 20: Annual Financial Results
Annual Financial Results CBRE CB RICHARD ELUS 2003 Incl. (6 in millions) 2004 Reported’ % Change Insignia’ % Change Revenue 2,365.1 1630.1 45 1,948.8 2 Cost of Services 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 Inc
Slide 21: Strong Momentum Across Business Segments
Strong Momentum Across Business Segments CBRE 2004 Revenue Breakdown Growth in Business Segments Comercial mesment her engage Mnagenert 1", Oy a 2m 2003 (a hgcrint Investment Sales sor $589 aa ‘Se oe Leasing 9 ath Property & Facilities Mgmt 185 1% Mm Appraisal & Valuation 168 mam Mtg Brokerage 407 2
Slide 22: EBITDA Margins
EBITDA Margins CBRE 18 Continued margin improvement due to: 18 > Robust revenue growth “4 4B > Productivity improvements fa > Operating leverage 8 6 % of Revenue 4 2003 2008 zB Revenue 100.0 100.0, ° Ful Year Htal Variable Costs 554 570 0 no eon 23 = = Ital Fixed Coste 334 303 [aoa ia ’ INometized E
Slide 23: Capitalization
CBRE Capitalization CO RICHARD ELUS As of % Gin millions) 12/31/2004 _12/31/2003_ Change Cash 2569 1639 87 Revolver P : 2 Tranche B loan a4 2978 2 Other debt! 25 99.2 43 99% senior notes 1300 200.0 35 A1'"% senio idinated a 2k Be Total CB Richard Ellis Senices debt 6B 7629 47 16% senior notes E 35 1
Slide 24: 2004 Normalized Internal Cash Flow
2004 Normalized Internal Cash Flow CBRE amex » Strong cash flow generation » Low capital intensity » 2004 capital expenditures exclude $12.0 million related to the integration of Insignia Net income, as adjusted (2) Intemal Cash Flow (@) Reconciliation of net incame to net income, as adjusted provid
Slide 25: Key Drivers of Earnings Growth
Key Drivers of Earnings Growth CBRE Revenue Margin Deleveraging Significant Growth Expansion Balance Sheet EPS Growth » Market +), Operating Ff minimum == |» High teens growth leverage $50 million to low 20% w Marne » 12% -14% debt annual EPS share gains annual Paydown seth EBITDA targeted » T%-9% g
Slide 26: 2005 Guidance
CB RICHARD ELUS __2008Guidance BRE 2004 2005 Revenues $248 8% Growth Net Income $118M $149M - $156M (26% - 32% Growth) EPS $1.65 $1.95 - $2.05 (18% - 24% Growth) 41. Excluding residual one-time Insignia and debt buy-back charges of approximately 515 milion pre-tax. 25
Slide 27: Remember Who We Are
Remember Who We Are 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
Slide 28: Appendix
CBRE CB RICHARD ELLIS Appendix a
Slide 29: Reconciliation of Net Income to Net Income, As Adjusted
Recon 2004 Results 10 10 amex Reported (@) Net income CBRE n of Net Income to Net Income, As Adjusted — conicranocus © @” @ Netincime, As Adjusted (a) Intangible asset amortization expense related to Insignia net revenue backlog (b) Insignia merger and integration related costs (c) One-time IPO rela
Slide 30: Consolidated Net Income to EBITDA Reconciliation
Consolidated Net Income to EBITDA Reconciliation CBRE CB RICHARD ELUS vil Twelve Months Ended December 31 2004 2008 Net Income (Loss) $647 (6247) Add Depreciation and amortization 54.9 92.6 Interest expense 65.4 ae Loss on extinguishment of debt 214 135 Provision (benefit) for income taxes 435 (6.3)
Slide 31: Reconciliation of Reported EBITDA to Normalized EBITDA
Reconciliation of Reported EBITDA to Normalized CBRE EBITDA CO RICHARD ELUS (silly Twelve Manths Ended December 31 2004 2003 Reported EBITDA $245.3 $132.8 One Time Costs: Merger Related Costs 25.8 36.8 Integration Costs 14.3 13.6 IPQ - Related Compensation Costs 15.0 Total One Time Costs $54.9 $604
Slide 32: Searchable text section of graphics shown above
Searchable text section of graphics shown above [ LOG O] CSFB 7 th Annual Global Services Growth Conference March 15, 2005 [ LOG O] Forward Looking Statements This presentation contains statements that are forward looking within the meaning of the Private Securities Litigation Reform Act of 1995. Th
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