Slide 1: Fourth Quarter 2013: Earnings Conference Call
CBRE GROUP, INC. Fourth Quarter 2013: Earnings Conference Call February 5, 2014
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 and ability to successfully integrate businesses w
Slide 3: Conference Call Participants
CONFERENCE CALL PARTICIPANTS Bob Sulentic PRESIDENT AND CHIEF EXECUTIVE OFFICER Gil Borok CHIEF FINANCIAL OFFICER Steve Iaco SENIOR MANAGING DIRECTOR, INVESTOR RELATIONS AND CORPORATE COMMUNICATIONS
Slide 4: 2013 Highlights
Q4 Revenue1 11% (12% in local currency) Normalized EBITDA2,3 12% Adjusted EPS4,5 22% $0.67 Full Year Revenue1 10% (11% in local currency) $7.2 billion Normalized EBITDA2,3 11% $1.0 billion Adjusted EPS4,5 17% $1.43 2013 HIGHLIGHTS See slide 22 for footnotes.
Slide 5: Business Overview: Full Year 2013 Business Line Highlights
BUSINESS OVERVIEW Full Year 2013 Business Line Highlights Revenue ($ in millions) Leasing1 Property, Facilities & Project Management1 Sales Investment Management1 Appraisal & Valuation Commercial Mortgage Brokerage1 Development Services Other Total 20132 2,052.2 2,475.5 1,290.4 538.6 414.5 312.0 50.
Slide 6: Acquisitions 2013
ACQUISITIONS 2013 Approximately £385 million ($629 million) revenue3 Cash purchase price of approximately £265.5 million ($434 million4) Provides capability to self perform building technical engineering services in EMEA Adds expertise in critical environments Significant cross-selling opportunities
Slide 7: Q4 2013 Performance Overview
Q4 2013 PERFORMANCE OVERVIEW Revenue1 EBITDA2 Normalized EBITDA2,3 Normalized EBITDA Margin3 Net Income4 EPS4,5 Q4 2013 $2,234.3 M $358.3 M $392.7 M 17.6% GAAP $114.6 M Adjusted $221.3 M GAAP $0.34 Adjusted $0.67 Q4 2012 $2,011.5 M $345.7 M $351.7 M 17.5% GAAP $173.0 M Adjusted $181.9 M GAAP $0.53 A
Slide 8: Global Corporate Services Wins
2013 Q4 96 new 32 new 61 renewals 13 renewals 53 expansions 10 expansions GLOBAL CORPORATE SERVICES WINS Facilities Management Transaction and Portfolio Services Project Management Strategic Consulting 2013 REGIONAL CONTRACTS 2013 INDUSTRY CONTRACTS EMEA Asia Pac Health Care Government 27 11 13 17 $
Slide 9: Americas Revenue: Major Components
Total Q4 2013 revenue up 9% in USD or 10% in local currency AMERICAS REVENUE: MAJOR COMPONENTS ($ in millions) Full Year Q4 SALES LEASING PROPERTY, FACILITIES & PROJECT MANAGEMENT 15% or 16% in local currency 10% or 10% in local currency 9% or 10% in local currency 8% or 9% in local currency 15% or
Slide 10: U.S. Vacancy, Absorption Trends and Market Statistics
U.S. VACANCY U.S. ABSORPTION TRENDS (in millions of square feet) 4Q12 3Q13 4Q13 4Q14 F 4Q15F 2012 2013 2014F 2015F 4Q12 4Q13 Office 15.4% 15.1% 14.9% 14.5% 13.9% 28.9 36.1 33.5 36.7 8.9 14.2 Industrial 12.7% 11.7% 11.3% 11.0% 10.8% 133.8 233.0 145.4 128.9 55.0 71.6 Retail 12.7% 12.2% 12.0% 10.6% 9.7
Slide 11: EMEA Revenue: Major Components
Total Q4 2013 revenue up 21% in USD or 18% in local currency EMEA REVENUE: MAJOR COMPONENTS ($ in millions) Full Year Q4 SALES LEASING PROPERTY, FACILITIES & PROJECT MANAGEMENT 36% or 35% in local currency 8% or 7% in local currency 21% or 20% in local currency 49% or 46% in local currency 4% or 2%
Slide 12: Asia Pacific Revenue: Major Components
Total Q4 2013 revenue up 3% in USD or 14% in local currency ASIA PACIFIC REVENUE: MAJOR COMPONENTS 39% or 50% in local currency (5%) or 2% in local currency 3% or 11% in local currency Full Year 31% or 46% in local currency (7%) or 2% in local currency (2%) or 9% in local currency Q4 ($ in millions)
Slide 13: Global Investment Management
3 2012 2013 483.4 538.6 Rental Carried Interest Q4 Full Year GLOBAL INVESTMENT MANAGEMENT Asset Management Acquisition, Disposition & Incentive REVENUE 20% 49% 28% 40% Q4 Full Year NORMALIZED EBITDA1 ($ in millions) ($ in millions) Margin: 4 FINANCIAL RESULTS 2 2 5 4 Investment Management Carried In
Slide 14: Global Investment Management: AUM and Capital Raised
GLOBAL INVESTMENT MANAGEMENT As of December 31, 2013. In 2011, CBRE acquired the real estate investment management operations of ING Group in Europe, Asia and its global securities business. Excludes securities. Q1 Q2 Q3 Q4 CAPITAL RAISED1,3 ($ in billions) 5.0 By Region or Business Line1 ($ in bill
Slide 15: Development Services
Three Months Ended December 31, Twelve Months Ended December 31, 2013 2012 2013 2012 Revenue1 18.8 33.3 61.1 83.7 EBITDA2 21.8 35.6 43.0 51.7 EBITDA Margin3 116% 107% 70% 62% DEVELOPMENT SERVICES 4 $83.1 million of co-investments at the end of Q4 2013 $7.2 million in recourse debt to CBRE and repaym
Slide 16: Mandatory Amortization and Maturity Schedule
As of December 31, 2013 MANDATORY AMORTIZATION AND MATURITY SCHEDULE $ in millions $1,200.0 million revolver facility matures in March 2018. As of December 31, 2013, the outstanding revolver balance was $142.5 million. 1 Global Cash Available Revolver 1,505 40 40 68 255 223 2 352 198 800 - 250.0 500
Slide 17: Capitalization
CAPITALIZATION Excludes $32.4 million and $94.6 million of cash in consolidated funds and other entities not available for Company use at December 31, 2013 and 2012, respectively. Net of original issue discount of $9.5 million at December 31, 2012. Represents notes payable on real estate in Developm
Slide 18: Business Outlook: 2014 Expectations
Market sentiment is positive Firmer economic growth in the U.S. Europe emerging from slump Slowing growth in Asia Pacific and emerging-market currencies are concerns Good momentum in most of our businesses Property sales expected to grow by double digits due to capital influx and expansion into seco
Slide 19: Business Outlook: 2014 Expectations
Service business expected to generate double-digit EBITDA growth before Norland Together, Global Investment Management and Development Services expected to perform in line with 2013 excluding carried interest Interest expense savings largely offset by higher depreciation and amortization Expect to a
Slide 20: GAAP Reconciliation Tables and Footnotes
GAAP RECONCILIATION TABLES AND FOOTNOTES
Slide 21: Footnotes
FOOTNOTES Slide 4 Includes revenue from discontinued operations of $0.4 million and $9.4 million for the three and twelve months ended December 31, 2013, respectively, and $5.7 million for both the three and twelve months ended December 31, 2012. Includes EBITDA from discontinued operations of $0.4
Slide 22: Reconciliation of Normalized EBITDA to EBITDA to Net Income
RECONCILIATION OF NORMALIZED EBITDA TO EBITDA TO NET INCOME Includes EBITDA from discontinued operations of $0.4 million and $7.9 million for the three and twelve months ended December 31, 2013, respectively, and $5.6 million for both the three and twelve months ended December 31, 2012. Carried inte
Slide 23: Reconciliation of Net Income to Net Income, as Adjusted
RECONCILIATION OF NET INCOME TO NET INCOME, AS ADJUSTED Carried interest incentive compensation is related to a funds that began recording carried interest expense in Q2 2013 and beyond. ($ in millions, except for per share data) 2013 2012 2013 2012 Net income attributable to CBRE Group, Inc. 114.6
Slide 24: Pro-forma Normalized EBITDA: Global Investment Management
Pro-forma Normalized EBITDA GLOBAL INVESTMENT MANAGEMENT As of December 31, 2013, the Company maintained a cumulative remaining accrual of carried interest compensation expense of approximately $16 million, all of which pertains to anticipated future carried interest revenue. The Company began to no