MAY 7, 2020 Q1 2020 EARNINGS CALL
F O R W A R D - L O O K I N G S T A T E M E N T S This presentation contains statements that are forward looking within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements regarding the impact of the COVID- 19 pandemic on our business operations and financial position, CBRE’s future growth momentum, operations, market share, business outlook, capital deployment, acquisition integration and financial performance expectations. These statements are estimates only and actual results may ultimately differ from them. Except to the extent required by applicable securities laws, we undertake no obligation to update or publicly revise any of the forward-looking statements that you may hear today. Please refer to our first quarter earnings release, furnished on Form 8-K, our most recent annual report filed on Form 10-K and our most recent quarterly report filed on Form 10-Q, and in particular any discussion of risk factors or forward-looking statements therein, which are available on the SEC’s website (www.sec.gov), for a full discussion of the risks and other factors that may impact any forward-looking statements that you may hear today. We may make certain statements during the course of this presentation, which include references to “non-GAAP financial measures,” as defined by SEC regulations. Where required by these regulations, we have provided reconciliations of these measures to what we believe are the most directly comparable GAAP measures, which are included in the appendix. CBRE 1Q 2020 EARNINGS CONFERENCE CALL | CBRE GROUP, INC. | 2
C O N F E R E N C E C A L L P A R T I C I P A N T S Bob Sulentic President and Chief Executive Officer Leah Stearns Chief Financial Officer Kristyn Farahmand Vice President, Investor Relations & Corporate Finance CBRE 1Q 2020 EARNINGS CONFERENCE CALL | CBRE GROUP, INC. | 3
C O N S O L I D A T E D R E S U L T S S U M M A R Y $ IN MILLIONS EXCEPT PER SHARE FIGURES Local al 1Q20 1Q20 1Q19 1Q19 US USD Curre rrency 1 Revenu nue $5,889 $5,136 ▲ 15% ▲ 15% Fee R ee Rev evenue $2,693 $2,429 ▲ 11% ▲ 12% Adjusted ed E EBITD TDA $430 $450 ▼ (4%) ▼ (4%) Ear arnings gs P Per D Diluted Sh d Shar are $0.51 $0.48 ▲ 5% ▲ 5% Adj djusted E d Ear arnings gs P Per D Diluted Sh Shar are $0.75 $0.79 ▼ (5%) ▼ (5%) • First quarter results solid despite impact of the emergence of COVID-19 pandemic issues in most markets towards the end of the quarter • Strength in Advisory Services nearly offset REI results which were negatively impacted by lower co-investment returns due to mark-to-market adjustments 1. Local currency percent changes versus prior year is calculated by comparing current year results at prior year exchange rates versus prior year results. CBRE 1Q 2020 EARNINGS CONFERENCE CALL | CBRE GROUP, INC. | 4 Definitions and reconciliations are provided at the end of this presentation.
BOB S SULENT ENTIC CHIEF EXECUTIVE OFFICER
L E A D E R S H I P I N T H E F A C E O F C O V I D - 1 9 Intermediate- Near-Term Long-Term Term • Challenges • Every economic • Strong balance expected crisis catalyzes sheet and fundamental industry-leading • Economic change for position should contraction and commercial real help us extend logistical issues estate leadership post- require clear crisis leadership • Focused on positioning the • Believe secular • Helping clients, business to demand drivers communities and capitalize on remain firmly employees evolution post- intact through crisis crisis CBRE 1Q 2020 EARNINGS CONFERENCE CALL | CBRE GROUP, INC. | 6
LEAH S STEA EARNS RNS CHIEF FINANCIAL OFFICER
A D V I S O R Y S E R V I C E S $ IN MILLIONS, TOTALS MAY NOT SUM DUE TO ROUNDING Fee Revenue Adj. EBITDA $1,674 $ 1,602 $293 $264 $607 (36%) $623 (39%) $554 (33%) $507 (32%) 16.5% 17.5% Fee Fee $513 (31%) Margin Margin $472 (29%) 1Q19 1Q20 1Q19 1Q20 Advisory Leasing Capital Markets Property & Advisory Proj. Mgt., Valuation & Loan Servicing Investment property sales increased 12% globally, 3% in the US • Leasing contracted 2% globally as well as in the US • Strong margin improvement across Advisory segment • Covid-19 impacts to transactional business activity emerged in mid-March • CBRE 1Q 2020 EARNINGS CONFERENCE CALL | CBRE GROUP, INC. | 8 Definitions and reconciliations are provided at the end of this presentation.
G L O B A L W O R K P L A C E S O L U T I O N S ( G W S ) $ IN MILLIONS, TOTALS MAY NOT SUM DUE TO ROUNDING Fee Revenue Adjusted EBITDA Adj. EBITDA Fee Margin % $808 14.4% $100 $99 12.3% $692 1Q19 1Q20 1Q19 1Q20 1Q19 1Q20 • Renewal rate over 90% reflecting the compelling value proposition of this business • New business wins driven by large, high-quality clients in the transportation and logistics and life sciences sectors • Q1 2020 Adjusted EBITDA includes negative impact of approximately $11 million due to a client settlement; impacted Adjusted EBITDA margin by approximately 1.1% CBRE 1Q 2020 EARNINGS CONFERENCE CALL | CBRE GROUP, INC. | 9 Definitions and reconciliations are provided at the end of this presentation.
R E A L E S T A T E I N V E S T M E N T S $ IN MILLIONS, TOTALS MAY NOT SUM DUE TO ROUNDING Adjusted Revenue 1 Adjusted EBITDA $221 $203 $87 $46 $85 $35 $29 $38 $122 $106 1Q19 1Q20 1Q19 1Q20 Investment Management Development Equity Income/Other DEVELOP LOPMENT • Year started strong with several deals previously expected to close in late Q4 closing within the first 30 days of the year; impacts of COVID-19 began late in the quarter • Strong stable of equity partners positioned to hold through downturn with increased exposure to core INVESTM TMENT M NT MANAGEMENT • Co-investments were about $27 lower primarily related to the pressure in the public securities market • Recurring revenue growth of 7% vs. prior year period FLE LEXIBLE SP SPACE SO SOLU LUTIONS ( S (HAN ANA) • 5 locations opened, discussion with property owners to help meet their flexible workspace needs 1. Adjusted Revenue for Development is shown net of cost of sales . CBRE 1Q 2020 EARNINGS CONFERENCE CALL | CBRE GROUP, INC. | 10 Definitions and reconciliations are provided at the end of this presentation.
2 0 2 0 O U T L O O K P R O V I D I N G Q U A L I T A T I V E G U I D A N C E F O R T H E Y E A R • Anticipate business contraction in Q2 2020; timing of recovery dependent on remediating the impacts of COVID-19 public health crisis – Advisory expected to face significant pressure; U.S. leasing and property sales down over 40% vs. prior year since April – GWS to be relatively resilient but subdued growth expected given economic uncertainty and operational challenges onboarding clients under shelter in place orders – REI adjusted EBITDA contribution to be reduced in near-term but positioned to capitalize on potential opportunities to accelerate long-term performance 2019 Global Transaction Value by Asset Class Leasing & Sales Expect cted 2020 P 2020 Performance By A Asse sset C Class ss Multifamily Relatively Resilient Relatively Pressured & Other 21% Health Care Hotel Office Retail 50% 10% Industrial Office Industrial Select Multi-Family Retail 19% CBRE 1Q 2020 EARNINGS CONFERENCE CALL | CBRE GROUP, INC. | 11
E N H A N C E D F I N A N C I A L R E S I L I E N C Y P O S I T I O N S U S W E L L Credit Ratings Total Liquidity Net Debt to TTM Adj. 2007 EBITDA 1 $ Billions Baa1 BBB+ Q1 2020 3.7x $3.4 Below 4.25x Net Leverage Covenant Ratings ngs i improved 3 d 3 notche hes, 1.1x be below pr prior cyclical pe peak ak Inv nvestment nt gr grad ade 4.8 .8x abo above pr prior c cyclical pe peak ak 1.7x BB+ Ba1 $0.7 0.6x 2007 Q1 2020 2007 Q1 2020 S&P Moody's • Strong balance sheet with no maturities until 2023, ample liquidity and investment grade credit ratings • Enables company to focus on optimizing cost structure in response to economic environment while remaining committed to extending long-term leadership position 1. The Company adopted new revenue recognition guidance (ASC 606) in 2018. TTM Q1 2020 figures reflect ASC 606. We have not made a similar restatement for 2007, and this period continues to be reported under the accounting standards in effect at that time . CBRE 1Q 2020 EARNINGS CONFERENCE CALL | CBRE GROUP, INC. | 12 Definitions and reconciliations are provided at the end of this presentation.
H E L P I N G C L I E N T S , C O M M U N I T I E S & E M P L O Y E E S R E S P O N D T O C O V I D - 1 9 CBRE 1Q 2020 EARNINGS CONFERENCE CALL | CBRE GROUP, INC. | 13
NON-GAAP MEASURES AND DEFINITIONS
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