JLL Supplemental Slides Q1 2016

JLL Supplemental Slides Q1 2016

Supplemental Information Earnings Call First-Quarter 2016 JLL Research market volume & outlook Investment volumes moderate from record Q1 2015; FY 2...

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Supplemental Information Earnings Call First-Quarter 2016

JLL Research market volume & outlook Investment volumes moderate from record Q1 2015; FY 2016 forecast revised to 5 percent down from $704 billion in 2015 Market Volumes Capital Markets(1)

Actual

Forecast

Q1 2016 v. Q1 2015

FY 2016 v. FY 2015

USD

USD

Americas

-16%

flat to -5%

EMEA

-15%

-10%

-5%

-5 to -10%

-14%

-5%

Asia Pacific

Total

Leasing volumes flat; FY 2016 forecast revised to flat to 5 percent up from 41 million square meters in 2015 Gross Absorption Leasing (in square meters)

Actual

Forecast

Q1 2016 v. Q1 2015

FY 2016 v. FY 2015

Americas

-10%

flat to 5%

EMEA

14%

-5%

Asia Pacific

7%

10 to 15%

Total

-1%

flat to 5%

(1) Market volume data excludes multi-family assets. Source: JLL Research, April 2016 2

Selected business wins and expansions Multi-Regional

Americas

Lenovo Texas Medical Center

Pasadena Towers, Los Angeles

Time Warner

CareFirst, Inc, Maryland

GlaxoSmithKline

Entegris Headquarters, Massachusetts

Alecta Portfolio, U.S. & UK

EMEA

Ellipse Tower, Brussels

Commerzbank, Hamburg

Catinvest Retail Portfolio, France

SAP, Germany

Echo Prime Properties, CEE

Gateway, Dublin

Hotel Villa Magna, Spain

Tabcorp, Australia

Asia Pacific

CapitalOne, Philippines World Square Shopping Centre, Sydney

Shanghai Electric Power, Shanghai China Ping An Insurance, Hong Kong Ctrip, Guangzhou

46 - 48 Cochrane Street, Hong Kong

3

Prime offices projected changes in values, 2016 Rental Values + 10-20%

Capital Values Madrid, Stockholm

+ 5-10%

Tokyo, Sydney, Dubai*, Boston, Chicago, San Francisco, Los Angeles, Madrid, Hong Kong, Shanghai, Stockholm

Brussels, Tokyo, Shanghai, Dubai*, Boston, Chicago, Los Angeles, San Francisco, Moscow

+ 0-5%

London*, Frankfurt, Seoul, Paris*, New York*, Toronto, Washington DC, Beijing, Milan, Brussels, Moscow

Sydney, London*, Hong Kong, Milan, Paris*, Seoul, New York*, Toronto, Washington DC, Beijing, Frankfurt

- 0-5%

Mumbai, Mexico City

Mumbai, Mexico City

- 5-10%

Sao Paulo

Sao Paulo

- 10-20%

Singapore

Singapore

NOTES: *New York – Midtown, London – West End, Paris - CBD, Dubai - DIFC. Nominal rates in local currency. Source: JLL Research, April 2016

4

Consolidated revenue performance Q1 2016

($ in millions)

Gross Revenue $1,337

Fee Revenue $1,118 Asia Pac 18% Fee - $206

LaSalle 10% $113

Asia Pac 20% Gross - $264

EMEA 23% Fee - $256

LaSalle 8% $113

EMEA 27% Gross - $369

Americas 45%

Americas 49%

Gross - $604

Fee - $555

Q1 2016 YOY % Growth Fee Revenue

Gross Revenue

Segment

LC

USD

LC

USD

Americas

12%

11%

11%

9%

EMEA

5%

1%

18%

13%

Asia Pacific

14%

9%

16%

11%

LaSalle

17%

16%

17%

16%

Consolidated

11%

9%

14%

11%

Note: Equity earnings of $13M in Q1 2016 are included in segment results, however, excluded from Consolidated totals. Year-overyear increases shown fee-based have been calculated using fee revenue, which excludes gross contract costs. 5

Q1 2016 Real Estate Services revenue ($ in millions; % change in local currency over QTD 2015)

Americas Leasing

EMEA

Asia Pacific

Total RES

$249.0

9%

$43.5

(7%)

$27.3

2%

$319.8

6%

$78.6

6%

$64.6

(11%)

$26.5

(2%)

$169.7

(3%)

$131.3

17%

$52.2

7%

$104.5

16%

$288.0

15%

$177.3

10%

$72.3

2%

$143.2

14%

$392.8

10%

$64.2

24%

$47.3

57%

$19.9

22%

$131.4

34%

$67.0

28%

$140.1

81%

$38.8

39%

$245.9

56%

Advisory, Consulting & Other

$31.6

6%

$48.9

7%

$27.6

37%

$108.1

13%

Total RES Operating Fee Revenue

$554.7

12%

$256.5

5%

$205.8

14%

$1,017.0

10%

$603.5

11%

$369.4

18%

$263.4

16%

$1,236.3

14%

Capital Markets & Hotels Property & Facility Management Fee Gross Revenue

Project & Development Services - Fee Gross Revenue

Total Gross Revenue

Note: Segment and Consolidated Real Estate Services (“RES”) operating revenue exclude Equity earnings (losses). Fee revenue presentation of Property & Facility Management, Project & Development Services and Total RES Operating Revenue excludes gross contract costs.

6

Q1 Highlights

Q1 2016 AUM = $58 Billion ($ in billions)

• •

• •

Successful capital raising with $1.9 billion for the quarter Assets Under Management reach a record high of $58 billion, up from $56 billion at year end; reflects net foreign currency reduction of $0.5 billion Equity earnings of $12.7M, primarily from valuation increases Notable transaction fees from successful listing of LaSalle Logiport REIT

U.K. $18.5 Continental Europe $3.9

Public Securities $13.5

Asia Pacific $6.9

North America $15.5

Separate Accounts $33.1 Commingled Funds $11.7 Public Securities $13.5

Note: AUM data reported on a one-quarter lag. 7

Investment-grade balance sheet Net Debt

Highlights $ millions

• Investment-grade ratings; Baa2 (Positive) / BBB+ (Stable) ◦ ◦



Cash and Cash Equivalents

Q1 2016

$

Moody's outlook revised up to Positive in December 2015 Two S&P rating increases to BBB+ since December 2014 Short Term Borrowings

Q1 2016 net interest expense $9M reflects higher

Credit Facility ($2B capacity)(4)

average borrowings related to continued investments and acquisitions

Net Bank Debt

Cash Spend $ in millions

2016

2015

M&A(1)

$78

$4

47 36 $161

5 19 $28

(Including Deferred)

Co-investment(2) Capital Expenditures(3) Total Spend

(1) (2) (3) (4)

$

Dec 2015 Q1 2015

240 $ 217 $ 198 24

49

21

800

255

335

584 $

87 $ 158

Long Term Senior Notes(4)

275

275

275

Deferred Business Acquisition Obligations

113

98

113

Total Net Debt

$

972 $ 460 $ 546

Includes payments made at close plus guaranteed deferred payments and earn outs paid during the period for transactions closed in prior periods Capital contributions are offset by distributions, and includes amounts attributable to consolidated investments if we have an equity interest. Excludes investments in joint venture entities, capitalized leases and tenant improvement allowances that are required to be consolidated under U.S. GAAP Principal balances shown exclude debt issuance costs of $17M, $18M, and $21M for Q1 2016, December 2015, and Q1 2015, respectively.

8

Appendix

9

Prime Offices Capital Value Clock, Q1 2015 v Q1 2016 The JLL Property Clocks SM

Americas EMEA Asia Pacific Based on notional capital values for Grade A space in CBD or equivalent. US positions relate to the overall market Source: JLL Research, April 2016

10

Prime Offices Rental Clock, Q1 2015 v Q1 2016 The JLL Property Clocks SM

Americas EMEA Asia Pacific Based on rents for Grade A space in CBD or equivalent. US positions relate to the overall market Source: JLL Research, April 2016

11

Adjusted EBITDA performance 60

($ in millions)

Q1 2016

50 Americas 60%

$ (Millions)

40

Consolidated $85

$53

30 EMEA

20

Asia Pac 2% $2

(5)%

($4)

LaSalle 43% $34

10 Americas 60.7% $49

0 -10

Americas

EMEA

Asia Pac

LaSalle

Adj. EBITDA Margin, Fee Revenue

Q1

Segment

2016

2016 at constant rates

2015

2014 at constant rates

Americas EMEA Asia Pacific LaSalle Consolidated

9.5% (1.7%) 0.9% 30.4% 7.6%

9.3% (2.0%) 0.6% 29.7% 7.2%

10.2% 0.9% 4.3% 29.2% 8.7%

7.6% —% 2.5% 23.9% 6.2%

Refer to page 15 for Reconciliation of GAAP Net Income to Adjusted EBITDA for the three months ended March 31, 2016, for details relative to these Adjusted EBITDA calculations. Segment Adjusted EBITDA is calculated by adding the segment’s depreciation and amortization to its reported operating income, which includes equity earnings and excludes restructuring and acquisition charges. Consolidated Adjusted EBITDA is the sum of the Adjusted EBITDA of the four segments.

12

Q1 2016 Real Estate Services revenue ($ in millions; % change in USD over QTD 2015)

Americas Leasing Capital Markets & Hotels Property & Facility Management Fee Gross Revenue

EMEA

Asia Pacific

Total RES

$249.0

9%

$43.5

-10%

$27.3

-3%

$319.8

5%

$78.6

5%

$64.6

-14%

$26.5

-5%

$169.7

-5%

$131.3

15%

$52.2

1%

$104.5

11%

$288.0

11%

$72.3

-3%

$143.2

9%

$392.8

5%

$19.9

15%

$131.4

30%

$245.9

51%

$177.3

7%

$64.2

22%

$47.3

52%

$67.0

25%

$140.1

75%

$38.8

Advisory, Consulting & Other

$31.6

4%

$48.9

3%

$27.6

31%

$108.1

9%

Total RES Operating Fee Revenue

$554.7

11%

$256.5

1%

$205.8

9%

$1,017.0

8%

$369.4

13%

$263.4

11%

$1,236.3

11%

Project & Development Services - Fee Gross Revenue

Total Gross Revenue

$603.5

9%

32%

Note: Segment and Consolidated Real Estate Services (“RES”) operating revenue exclude Equity earnings (losses). Fee revenue presentation of Property & Facility Management, Project & Development Services and Total RES Operating Revenue excludes gross contract costs. 13

Fee revenue / expense reconciliation ($ in millions) • Reimbursable vendor, subcontractor and out-of-pocket costs reported as revenue and expense in JLL financial statements have been increasing steadily

• Gross accounting requirements increase revenue and costs without corresponding increase to profit • Business managed on a fee revenue basis to focus on margin expansion in the base business Three Months Ended March 31

2016

2015

1,336.8 (219.3) 1,117.5

$

1,307.4 (219.3) 1,088.1

$

$

$ $

29.4 7.6 3.3 4.4

$ $

52.7 0.8 0.1 1.8

$

44.7

$

55.4

Revenue Gross contract costs Fee revenue

$

Operating expenses Gross contract costs Fee-based operating expenses

$

Operating income Restructuring and acquisition charges MSRs - net non-cash activity Amortization of acquisition-related intangibles Adjusted operating income Adjusted operating income margin

$

$

$

4.0%

$

$

1,203.5 (174.4) 1,029.1 1,150.8 (174.4) 976.4

5.4%

Note: Consolidated revenue and fee revenue exclude equity earnings (losses). Restructuring and acquisition charges, Mortgage servicing rights (MSRs) net non-cash activity, and Amortization of acquisition-related intangibles are excluded from adjusted operating income margin. 14

Reconciliation of GAAP Net Income to Adjusted Net Income and Earnings Per Share ($ in millions) Three Months Ended March 31

2016 GAAP net income attributable to common shareholders

$

Shares (in 000s)

2015 25.7 $

45,483

41.9 45,374

GAAP diluted earnings per share

$

0.56 $

0.92

GAAP net income attributable to common shareholders

$

25.7 $

41.9

Restructuring and acquisition charges, net MSRs - net non-cash activity, net Amortization of acquisition-related intangibles, net Adjusted net income $

Shares (in 000s)

5.7

0.6

2.5

0.1

3.3

1.4

37.2 $ 45,483

Adjusted diluted earnings per share(1) $

0.82 $

44.0 45,374 0.97

(1) Calculated on a local currency basis, the results for the first quarter 2016 include a $0.05 favorable impact due to foreign exchange rate fluctuations as compared to a $0.07 unfavorable impact for the first quarter 2015.

15

Reconciliation of GAAP Net Income to Adjusted EBITDA ($ in millions)

Three Months Ended March 31

2016 GAAP net income

$

2015 25.2 $

43.3

Interest expense, net of interest income

8.9

6.0

Provision for income taxes

8.3

14.7

31.2

24.9

73.6 $

88.9

Depreciation and amortization EBITDA

$

Restructuring and acquisition charges MSRs - net non-cash activity Adjusted EBITDA

7.6

0.8

$

3.3 $

0.1

$

84.5 $

89.8

JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. 16