Slide 1: Second Quarter 2015 Earnings Conference Call
Cbre group, inc. Second Quarter 2015: Earnings Conference Call July 29, 2015
Slide 2: 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 future growth momentum, operations, financial performance, business outlook, adjusted earnings per share expectations, expecta
Slide 3: Conference Call Participants
Conference Call Participants Bob Sulentic President and Chief Executive Officer Gil Borok Deputy Chief Financial Officer and Chief Accounting officer Jim Groch Chief Financial Officer and Global Director of Corporate Development Steve Iaco Investor Relations and corporate communications CBRE GROUP,
Slide 4: Q2 2015 Region Highlights
Q2 2015 Region Highlights Business Overview Americas EMEA Asia Pacific Revenue 16% (18% local currency) Normalized EBITDA 23% (24% local currency) Revenue 15% (32% local currency) Normalized EBITDA 75% (103% local currency) Revenue 9% (21% local currency) Normalized EBITDA 21% (41% local currency) C
Slide 5: Q2 2015 Performance Overview
Q2 2015 Performance Overview Revenue Fee Revenue1 EBITDA Normalized EBITDA2 Fee Revenue Margin3 Net Income4 EPS4,5 Q2 2015 $ 2,391 M $ 1,780 M $ 297 M $ 304 M 17.1% GAAP $ 125 M Adjusted $ 140 M GAAP $ 0.37 Adjusted $ 0.42 Q2 2014 $ 2,127 M $ 1,592 M $ 260 M $ 263 M 16.5% GAAP $ 105 M Adjusted $ 119
Slide 6: Q2 2015 Business Line Revenue
Revenue ($ in millions) Contractual Revenue Sources Leasing Capital Markets Other Global Corporate Services1 Asset Services1 Investment Management Valuation Leasing Sales Commercial Mortgage Services Development Services Other Total Gross Revenue Q2 2015 $ 746 $ 255 $ 94 $ 128 $ 610 $ 413 $ 116 $ 12
Slide 7: Americas Revenue
($ in millions) Global Corporate Services & Asset Services1 Leasing Sales Gross Fee2 Q2 2015 $ 542 $ 170 $ 446 $ 264 USD3 10% 9% 10% 23% Local Currency3 12% 11% 11% 25% 1. Global Corporate Services (GCS) and Asset Services revenue excludes associated leasing and sales revenue, most of which is contr
Slide 8: EMEA Revenue
($ in millions) Global Corporate Services & Asset Services1 Leasing Sales Gross Fee2 Q2 2015 $ 362 $ 185 $ 93 $ 86 USD3 12% 9% 12% 37% Local Currency3 28% 25% 33% 62% EMEA revenue Q2 2015 fee revenue up 14% in USD or 33% in local currency 1. Global Corporate Services (GCS) and Asset Services revenue
Slide 9: Asia Pacific Revenue
($ in millions) Global Corporate Services & Asset Services1 Leasing Sales Gross Fee2 Q2 2015 $ 96 $ 35 $ 70 $ 63 USD3 21% 8% 0% 8% Local Currency3 31% 19% 12% 24% Asia Pacific revenue Q2 2015 fee revenue up 3% in USD or 17% in local currency 1. Global Corporate Services (GCS) and Asset Services reve
Slide 10: Global Corporate Services Highlights
Q2 YTD Q2 New 37 63 Expansions 32 51 Renewals 14 27 Global Corporate Services Most total contracts signed in any quarter Strong growth of existing client relationships Increased opportunities in specialty practices Mission critical facilities Heath care 2015 TOTAL CONTRACTS Facilities Management Tra
Slide 11: Global Investment Management
Q2 Global Investment management CAPITAL RAISED1 ASSETS UNDER MANAGEMENT (AUM) ($ in billions) ($ in billions) Financial results Revenue Rental Carried Interest Asset Management Acquisition, Disposition & Incentive Capital to deploy: approx. $6,300 million3 Co-Investment: $142.1 million3 ($ in millio
Slide 12: Development Services
Revenue Pro-forma Revenue3 Development Services 1 $131.8 million of co-investments at the end of Q2 2015 $14.5 million in repayment guarantees on outstanding debt balances at the end of Q2 2015 Financial results PROJECTS IN PROCESS/PIPELINE ($ in billions) ($ in millions) 2 See slide 15 for footnote
Slide 13: Key Takeaways
key takeaways The business has positive underlying momentum and is greatly benefiting from steps taken to enhance service delivery and fortify our market position Global Workplace Solutions will afford us the opportunity to self-perform facilities management services virtually anywhere in the world
Slide 14: Supplemental Slides and GAAP Reconciliation Tables
Supplemental slides and GAAP Reconciliation tables
Slide 15: Footnotes
footnotes Slide 5 1. Fee revenue excludes both client reimbursed costs largely associated with employees that are dedicated to client facilities and subcontracted vendor work performed for clients. 2. Normalized EBITDA excludes certain carried interest incentive compensation expense and integration
Slide 16: U.S. Market Statistics
U.S. Market Statistics U.S. VACANCY U.S. ABSORPTION TRENDS (in MSF) 2Q14 2Q15 3Q15 F 4Q15F 2Q14 2Q15 2014 2015F Office 14.5% 13.5% 13.3% 13.3% 15.4 21.0 54.2 55.0 Industrial 10.8% 9.8% 9.7% 9.7% 56.1 67.1 245.9 203.0 Retail 11.8% 11.4% 11.0% 10.5% 8.8 4.3 27.7 30.0 Source: CBRE Econometric Advisors
Slide 17: Mandatory Amortization and Maturity Schedule
Mandatory Amortization and Maturity Schedule ($ in millions) 1. $2,600.0 million revolver facility and term loan A mature in January 2020. As of June 30, 2015, the revolver was undrawn. Available Revolver As of June 30, 20151 Global Cash 2,876 6 22 25 34 59 350 800 425 - 500.0 1,000.0 1,500.0 2,000.
Slide 18: Capitalization
Capitalization 1. Excludes $58.4 million of cash in consolidated funds and other entities not available for Company use at June 30, 2015. 2. Excludes $743.6 million of aggregate warehouse facilities outstanding at June 30, 2015. 3. Excludes non-recourse notes payable on real estate of $24.8 million
Slide 19: Reconciliation of Gross Revenue to Fee Revenue
Three Months Ended June 30, ($ in millions) 2015 2014 GCS revenue 1 $ 745.8 $ 682.5 Less: Client reimbursed costs largely associated with employees dedicated to client facilities and subcontracted vendor work performed for clients 477.1 428.6 GCS fee revenue 1 $ 268.7 $ 253.9 AS revenue 1 $ 254.6 $
Slide 20: Reconciliation of Gross Revenue to Fee Revenue by Segment
Three Months Ended June 30, ($ in millions) 2015 2014 Americas revenue $ 1,434.5 $ 1,235.7 Less: Client reimbursed costs largely associated with employees dedicated to client facilities and subcontracted vendor work performed for clients 372.0 334.6 Americas fee revenue $ 1,062.5 $ 901.1 EMEA revenu
Slide 21: Reconciliation of Normalized EBITDA to EBITDA to Net Income
Three Months Ended June 30, ($ in millions) 2015 2014 Normalized EBITDA $ 303.8 $ 262.8 Adjustments: Integration and other costs related to acquisitions 4.8 - Carried interest incentive compensation 1 2.1 2.6 EBITDA 296.9 260.2 Add: Interest income 1.4 1.1 Less: Depreciation and amortization 70.6 63
Slide 22: Reconciliation of Net Income to Adjusted Net Income and EPS
Three Months Ended June 30, ($ in millions, except per share amounts) 2015 2014 Net income attributable to CBRE Group, Inc. $ 125.0 $ 105.5 Amortization expense related to certain intangible assets attributable to acquisitions, net of tax 10.8 11.7 Integration and other costs related to acquisitions
Slide 23: Other Financial Metrics
Other Financial metrics Three Months Ended June 30, ($ in millions) 2015 2014 Depreciation $ 34.3 $ 31.0 Normalized amortization 1 21.6 16.3 Net interest expense 24.8 27.3 Normalized income taxes 83.1 69.4 Normalized income tax rate 37% 37% Projected full-year normalized income tax rate of approxima