Cbre Group Inc · NYSE:CBRE
Cbre — CB Richard Ellis Group — Investor Day (May 2006)
27 slides from Cbre's investor day presentation, May 17, 2006
Slide 1: Business Review Day Corporate Overview
Exhibit 99.1 Business Review Day Corporate Overview May 17, 2006 Brett White, President & Chief Executive Officer Ken Kay, Senior Executive Vice President & Chief Financial Officer
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, including statements regarding our growth momentum in 2006, future operations and future financial performance. These statements shoul
Slide 3: Industry Overview
Industry Overview CB Richard Ellis | Page 3
Slide 4: Favorable Trends – Investment Sales
Favorable Trends – Investment Sales • Investment Sales Strong capital flows and improving ($ in billions) property income continue to underpin a strong environment for investment $70 sales $59 $60 Properties are being purchased with $51 more equity capital, lower leverage and $50 $44 higher cash yie
Slide 5: Favorable Trends – Leasing
Favorable Trends – Leasing TWR Rent Index, % change year ago - Office Sector Vacancy rate, % 15 18 Forecast 10 16 Leasing Markets 5 14 Strong net absorption of U.S. 0 12 commercial real estate -5 10 Metropolitan areas dominated by trade -10 8 linkages, tourism, technology and -15 6 banking showed th
Slide 6: Company Overview
Company Overview CB Richard Ellis | Page 6
Slide 7: The World Class Commercial Real Estate Services Provider
The World Class Commercial Real Estate Services Provider 100 years Leading Leading Global Global 50 countries Brand Brand #1 in key cities in U.S., Europe and Asia #1 commercial real estate brokerage #1 appraisal and valuation Broad Broad #1 property and facilities management Capabilities Capabiliti
Slide 8: Global Reach & Diversified Client Base
Global Reach & Diversified Client Base 2005 Revenue by Region 2005 Revenue by Client Type Global Investment Government Offshore Investors Other Management Asia Equity/ Pacific Opportunity Funds Corporate 4% 2% 4% 3% 6% Conduits/ 5% Wall St. Firms EMEA 4% 30% 21% REITS 8% 69% 13% Pension 18% Funds 13
Slide 9: Superior Platform Drives Outperformance
Superior Platform Drives Outperformance Competitive Landscape Q1 2003 TTM - Q1 2006 TTM CAGR CBRE (1) JLL TCC Best In 53% Class Business Services (2) CBRE 36% 24% 24% 19% JLL 16% 12% 9% C&W EBITDA Revenue TCC Business (2) CBG JLL TCC Services Services Platform FY06 P/E 21.3x 22.5x 19.3x 21.4x (as of
Slide 10: Key Growth Strategies
Key Growth Strategies CB Richard Ellis | Page 10
Slide 11: Growth Drivers
Growth Drivers INDUSTRY TRENDS RELATED STRATEGY Leverage demographic-driven investment trends and globalization of capital flows Increased capital allocations to real estate Leverage expertise across all property types Aggregate the fragmented private client market Match risk/return profiles Institu
Slide 12: Growth Drivers (continued)
Growth Drivers (continued) INDUSTRY TRENDS RELATED STRATEGY Single point-of-contact management Emphasize multi-market/cross-border capabilities Corporate outsourcing Focus on Fortune 500 penetration Invest in enabling IT platforms Capitalize on cross-selling opportunities Increased vendor Leverage g
Slide 13: 2005 & 2006 In-Fill Acquisitions
2005 & 2006 In-Fill Acquisitions Groupe Axival, Inc. CB Richard Ellis Gunne Austin Adams Easyburo SAS Immobiliere Developpement & Gestion Rutter & Strutz Dalgleish Noble Gibbons IKOMA Advocate Consulting Group, Inc. CB Richard Ellis Charlotte, LLC Columbus Commercial Realty Project Advantage, Inc. D
Slide 14: Financial Overview
Financial Overview CB Richard Ellis | Page 14
Slide 15: Consistent Long Term Growth
Consistent Long Term Growth ($ in millions) $3,052 $2,911 $2,365 $492.6 $461.3 $1,630 $300.3 $1,324 $1,213 $1,171 $1,170 $1,035 $183.2 $730 $150.5 $583 $127.2 $117.4 $130.7 $468 $115.0 $392 $429 $90.1 $360 $62.0 $33.7 $41.5 $20.2 $25.9 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Slide 16: Q1 2006 Business Performance Highlights
Q1 2006 Business Performance Highlights (In millions, except EPS) Revenue Normalized EBITDA¹ 26% 59% $680.1 $84.0 $538.3 $52.7 Net Income, as adjusted¹ EPS, as adjusted 1,2 111% 108% $40.1 $0.52 $19.0 $0.25 Q1 2005 Q1 2006 Record Q1 2006 Performance 1. Normalized EBITDA, net income, as adjusted and
Slide 17: Q1 2006 Revenue Breakdown
Q1 2006 Revenue Breakdown 5% 4% 1% 8% 34% 9% 39% ($ in millions) 2006 2005 % Change Sales 229.5 182.1 26 Leasing 265.4 205.5 29 Property and Facilities Management 59.4 50.2 18 Appraisal and Valuation 54.8 41.1 33 Investment Management 31.7 21.1 50 Commercial Mortgage Brokerage 30.6 31.1 (2) Other 8.
Slide 18: Normalized EBITDA Margins
Normalized EBITDA Margins 20.0% 15.8% 16.1% 15.0% 12.7% 11.2% 11.2% 9.8% 10.0% 5.0% 0.0% 2001 2002 2003 2004 2005 TTM Q1 2006 CBRE has consistently improved its EBITDA margin. Notes: Normalized EBITDA margins exclude one-time merger-related and other non-recurring costs, integration costs related to
Slide 19: Debt Highlights
Debt Highlights ($ in millions) Future debt reduction through redemption of $293 million of high coupon bonds Notes: - Normalized EBITDA excludes merger-related and other non-recurring costs, Insignia integration costs and one-time IPO- related compensation expense. - Total debt excludes non-recours
Slide 20: Capitalization
Capitalization As of ($ in millions) 3/31/2006 12/31/2005 Variance Cash 253.1 449.3 (196.2) Senior secured term loan tranche B 262.3 265.2 (2.9) 111/4 % senior subordinated notes 163.1 163.0 0.1 9 3/4 % senior notes 130.0 130.0 - Other debt¹ 30.1 19.0 11.1 Total debt 585.5 577.2 8.3 Stockholders' eq
Slide 21: TTM Q1 2006 Normalized Internal Cash Flow
TTM Q1 2006 Normalized Internal Cash Flow Strong cash flow generator ($ millions) • $99 million, or 63% 1 47 (41) improvement from same period 300 257 last year 251 250 Cap Ex D&A Low capital intensity 200 Utilization of internal cash flow 150 • Debt reduction – full redemption of the 11¼% senior 10
Slide 22: Appendix
Appendix CB Richard Ellis | Page 22
Slide 23: Reconciliation of Normalized EBITDA to EBITDA to Net Income
Reconciliation of Normalized EBITDA to EBITDA to Net Income Trailing Twelve Months ($ in millions) Q1 2006 Q1 2005 Normalized EBITDA 492.6 327.6 Less: Merger-related charges related to the - 15.6 Insignia acquisition Integration costs related to acquisitions 5.9 11.6 One-time compensation expense re
Slide 24: Reconciliation of Normalized EBITDA to EBITDA to Net Income (Loss)
Reconciliation Reconciliation of of Normalized Normalized EBITDA EBITDA to to EBITDA EBITDA to to Net Net Income Income (Loss) (Loss) Year Ended December 31, ($ in millions) 2005 2004 2003 2002 2001 (1) Normalized EBITDA 461.3 300.3 183.2 130.7 115.0 Less: Merger-related and other non- - 25.6 36.8 -
Slide 25: Reconciliation of Normalized EBITDA to EBITDA to Net Income
Reconciliation Reconciliation of of Normalized Normalized EBITDA EBITDA to to EBITDA EBITDA to to Net Net Income Income Three Months Ended March 31, ($ in millions) 2006 2005 Normalized EBITDA 84.0 52.7 Less: Integration costs related to 1.3 2.5 acquisitions EBITDA 82.7 50.2 Add: Interest income 3.6
Slide 26: Reconciliation of Net Income to Net Income, As Adjusted
Reconciliation Reconciliation of of Net Net Income Income to to Net Net Income, Income, As As Adjusted Adjusted Three Months Ended March 31, ($ in millions, except share data) 2006 2005 Net income 36.9 14.6 Amortization expense related to net revenue backlog 2.3 - acquired in acquisitions, net of ta
Slide 27: Reconciliation of Net Income to Net Income, As Adjusted (TTM)
Reconciliation Reconciliation of of Net Net Income Income to to Net Net Income, Income, As As Adjusted Adjusted TTM 1st Quarter 2006 Results a) Amortization expense related ($ millions) to net revenue backlog acquired in acquisitions¹ 300 4 2 3 251 b) Integration costs related to 240 2 acquisitions¹