Cbre Group Inc · NYSE:CBRE
Cbre — Investor Presentation (August 2015)
32 slides from Cbre's investor presentation, Aug 21, 2015
Slide 1: Global Market Leader in Integrated Commercial Real Estate Services
August 2015 CBRE Group, Inc. Global Market Leader in Integrated Commercial Real Estate Services
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 qualitative and quantitative statements regarding our future growth momentum, operations, financial performance, business outlook and our ability to cl
Slide 3: The Global Market Leader
the global market leader CBRE is the premier global provider of integrated services to commercial real estate investors and occupiers As of December 31, 2014; includes affiliates. As of June 30, 2015. GLOBAL LEADERSHIP WITH BROAD CAPABILITIES #1 Leasing #1 Property Sales #1 Outsourcing #1 Appraisal
Slide 4: The Leading Global Brand
The Leading global brand CBRE is recognized as the foremost commercial real estate authority Fortune 500 company since 2008; ranked #321 in 2015 Ranked #1 brand for 14 consecutive years Top real estate services and investment company in “green” rankings Global Real Estate Advisor of the Year three y
Slide 5: CBRE Serves Investors and Occupiers
CBRE Serves investors and occupiers CBRE’s integrated, best-in-class offering creates value for clients at every stage of the life cycle
Slide 6: Track Record of Long-Term Growth
Revenue increased 5.3x from 2003 to TTM Q2 2015 Revenue CAGR of 16% Normalized EBITDA1 increased approximately 6.9x from 2003 to TTM Q2 2015 Normalized EBITDA CAGR of 18% TTM Q2 2015 vs TTM Q2 2014 performance: Revenue is up 19% Adjusted EPS increased 15% Track record of long-term growth See slide 3
Slide 7: Positioned for Long-Term Growth
Consolidation Core leasing and capital markets remain highly fragmented Outsourcing Still in early stage of penetration with occupiers Drives largely recurring leasing revenues Capability With scale and focus, we continue to extend our globally integrated offering Positioned for long-term growth CBR
Slide 8: Key Strategic Priorities
Capitalize on our unique leadership position to widen our competitive advantages in the marketplace Continue to: Drive market share gains in our core leasing and capital markets businesses Enhance depth and breadth of our Global Corporate Services business Enrich our operating platform (IT, Research
Slide 9: Mergers & Acquisitions Strategy
Transactions generally fall into two categories: Strategic in-fill acquisitions sourced principally by lines of business Larger, transformational transactions driven by macro strategy Since the beginning of 2013: Completed 26 acquisitions with an initial aggregate purchase price of $730 million1 and
Slide 10: GWS - Transaction Rationale
GWS - transaction Rationale GWS furthers our strategy of creating real advantages for occupier clients by aligning every aspect of how they lease, own, use and operate real estate to enhance their competitive position Facilities Management has been CBRE’s fastest growing and most stable line of busi
Slide 11: GWS - Complementary Outsourcing Clients
GWS - complementary Outsourcing clients Industrial Life Sciences Technology Financial Services Healthcare Other Balanced Client Mix 9% 2% 15% 35% 9% 30% CBRE - GCS 24% 13% 20% 18% 6% 19% CBRE - GCS & GWS
Slide 12: GWS - Combined View of Fee Revenue Mix
GWS - Combined view of fee revenue Mix Total Fee Revenue: $3,742 Combined Total Fee Revenue: $8,7434 5.4x Acquisition solidifies a more stable, resilient long-term growth-oriented revenue and earnings profile See slide 32 for footnotes. Contractual Sources 3 $798 (21%) Contractual Sources 3 $4,337 (
Slide 13: Q2 2015 Business Line Revenue
Revenue ($ 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 14: YTD 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 YTD Q2 2015 $ 1,441 $ 507 $ 204 $ 236 $ 1,057 $ 722 $
Slide 15: Key Takeaways
CBRE leads an industry with strong underlying growth dynamics Positioned to continue our track record of long-term growth Our business model continues to significantly evolve Contractual fee revenue has increased 3.1x from 2006 to TTM Q2 2015 Contractual fee revenue and Leasing, which is largely rec
Slide 16: Appendix
APPENDIX . CBRE
Slide 17: Global Corporate Services
Global Corporate Services (GCS) revenue excludes associated sales and leasing revenue, most of which is contractual. As of December 31, 2014; includes affiliates. Per International Association of Outsourcing Professionals (IAOP). New 63 Expansions 51 Renewals 27 Historical revenue1 Full service offe
Slide 18: Asset Services
Historical revenue1 overview Key strategic accounts ($ in millions) Asset Services revenue excludes associated sales and leasing revenue, most of which is contractual. As of December 31, 2014; includes affiliates. Asset Services manages buildings for investors Highly synergistic with property leasin
Slide 19: Investment Management
CAPITAL RAISED1 Performance-driven global real estate investment manager More than 500 institutional clients Equity to deploy: approx. $6,300 million1,2 Co-Investment: $142.1 million2 Assets under Management (AUM) overview ($ in billions) As of 6/30/2015 See slide 32 for footnotes. ($ in billions) I
Slide 20: Appraisal & Valuation
Premier clients ($ in millions) 134,500+ assignments in 2014 Euromoney Global Valuation Advisor of the Year Clients include lenders, life insurance companies, special servicers and REITs overview Appraisal & Valuation Serving Clients Globally Historical revenue YTD Q2 $365 $385 $414 $461 $199 $236 2
Slide 21: Leasing
overview Recent transactions Subaru Toronto-Dominion Bank Intel Lebanon, IN Toronto, Canada Beijing, China 715,000 SF 231,000 SF 96,000 SF Advise occupiers and investors in formulating and executing leasing strategies Tailored service delivery by property type and industry/market specialization Stra
Slide 22: Property Sales
Canada Spain Australia Fortis Properties Merlin Properties DEXUS Property $430 Million $1.98 Billion $488 Million Property Sale Property Acquisition Property Acquisition Recent transactions Strategic advisor (sellers and buyers) in commercial real estate #1 global market share, based on Real Capital
Slide 23: Commercial Mortgage Services
EMEA Colorado United States ASR Dutch Prime Retail Fund Bell Partners NorthStar HealthCare Income $267 Million $190.5 Million $410 Million Acquisition Financing Equity Capital Raise Acquisition Financing $640 Million Portfolio Sale Activity includes loan originations, loan sales and affiliates. As m
Slide 24: Development Services
500 W. 2nd Street/Northshore The Boardwalk McMillan The Brickyard Austin, TX Mixed-Use Newport Beach, CA Office Washington, DC Healthcare Los Angeles, CA Industrial 2 Projects in process/pipeline1 overview Recent projects Premier brand in U.S. development 65+ year record of excellence Partner with l
Slide 25: Mandatory Amortization and Maturity Schedule
Mandatory Amortization and Maturity Schedule ($ in millions) $2,600.0 million revolver facility and term loan A mature in January 2020. As of June 30, 2015, the revolver was undrawn. In August 2015, CBRE Services, Inc. issued $600 million in aggregate principal amount of 4.875% senior unsecured note
Slide 26: Capitalization
Capitalization Excludes $58.4 million of cash in consolidated funds and other entities not available for Company use at June 30, 2015. Excludes $743.6 million of aggregate warehouse facilities outstanding at June 30, 2015. Excludes non-recourse notes payable on real estate of $24.8 million at June 3
Slide 27: Non-GAAP Financial Measures
Non-Gaap financial measures The following measures are considered “non-GAAP financial measures” under SEC guidelines: (i) Fee revenue (ii) Net income attributable to CBRE Group, Inc., as adjusted (which we also refer to as “adjusted net income”) (iii) Diluted income per share attributable to CBRE Gr
Slide 28: Reconciliation of Normalized EBITDA to Net Income
Twelve Months Ended ($ in millions) June 30, 2015 December 31, 2003 Normalized EBITDA $ 1,255.1 $ 183.2 Adjustments: Carried interest incentive compensation expense 1 19.1 - Integration and other costs related to acquisitions 8.0 13.6 Cost containment expenses - 36.8 EBITDA 1,228.0 132.8 Add: Intere
Slide 29: Reconciliation of Net Income to Adjusted Net Income and EPS
Twelve Months Ended June 30, ($ in millions, except per share amounts) 2015 2014 Net income attributable to CBRE Group, Inc. $ 529.3 $ 382.2 Amortization expense related to certain intangible assets attributable to acquisitions, net of tax 44.7 35.9 Integration and other costs related to acquisition
Slide 30: Reconciliation of Gross Revenue to Fee Revenue
Reconciliation of gross revenue to fee revenue Twelve Months Ended December 31, ($ in millions) Q2 TTM 2015 2014 Pro-forma1,2 2006 Consolidated revenue $ 9,505 $ 12,457 $ 4,032 Less: Client reimbursed costs largely associated with employees dedicated to client facilities and subcontracted vendor wor
Slide 31: Reconciliation of GCS and AS Revenue to Fee Revenue
Three Months Ended June 30, Six Months Ended June 30, ($ in millions) 2015 2014 2015 2014 GCS revenue 1 $ 745.8 $ 682.5 $ 1,440.6 $ 1,327.4 Less: Client reimbursed costs largely associated with employees dedicated to client facilities and subcontracted vendor work performed for clients 477.1 428.6 9
Slide 32: Footnotes
footnotes Slide 19 Excludes global securities business. As of June 30, 2015. Slide 24 As of December 31 for each year presented. In Process figures include Long-Term Operating Assets (LTOA) of $0.2 billion for Q2 2015, $0.3 billion for Q4 2014, $0.9 billion for Q4 2013, $1.2 billion for Q4 2012 and