Results for 6 months ending 30 June 2020 6 August 2020 Mark Ridley - PowerPoint PPT Presentation

Savills plc Results for 6 months ending 30 June 2020 6 August 2020 Mark Ridley & Simon Shaw

Disclaimer: Forward-looking statements These slides contain certain forward- looking statements including the Group’s financial condition, results of operations and business, and management’s strategy, plans and objectives for the Group. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the Group’s control, are difficult to predict and could cause actual results to differ materially from those expressed or implied or forecast in the forward-looking statements. These factors include, but are not limited to, the fact that the Group operates in a highly competitive environment. All forward-looking statements in these slides are based on information known to the Group on the date hereof. The Group undertakes no obligation publically to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 2

Results Introduction, Highlights & 1 2 3 Financial Review Summary & Outlook Business Development 3

Introduction, Highlights & Business Development

Highlights Drivers Performance Overview  Property and Facilities Management revenue up 4%, Group Revenue £791.4m Consultancy revenue up 1%, helping to mitigate the -6.6% ( cc -7.0%) significant impact of Covid-19, particularly in Q2 on global leasing and investment market volumes Group UPBT £13.2m -65.6% ( cc -66.4%)  Commercial Transaction revenue reduced 23% overall with Asia Pacific and North America particularly affected Group UEPS 7.0p (2019 H1: 20.9p)  UK Residential revenue down 8%, reflecting significant reductions in transactional activity during lockdown, partially mitigated by a strong recovery in June Net Cash/(Debt) £9.4m (2019 H1: -£139.0m)  Savills Investment Management revenue down 6% as a result of lower performance fees. Base management fees Dividend 0.00p up 9%, with period end AUM up 11% at € 20.4bn (2019 H1: 4.95p) cc = constant currency 5

Savills Diversified Business Model Defensive, Scale Businesses Revenue by Business Cyclical, High-Margin Businesses Property Management – 43% Commercial Transactions – 27% Consultancy – 18% Residential Transactions – 8% Revenue Investment Management – 4% £278.5m 35% Revenue  Recurring revenue streams with less  High-return, but cyclical earnings (2019-H1: 41%) £512.9m exposure to transaction environment  77:23 split Commercial vs. Residential 65% (2019-H1: 59%)  Strong Property Management  65:35 Commercial split Tenant business rep/leasing vs. Capital markets  2.3 billion sq. ft under management  € 20.4bn AUM within SIM Balance of the Global business is now weighted to 2/3 rd less cyclical revenue 6

Operational Status During Pandemic – Covid-19 2,099 853 29,613 6,496 Employees Employees Employees Employees 44 35 58 133 Offices Offices Offices Offices Offices closed 23 March, Offices closed from 31 January, Offices closed 17 March, phased Offices closed from phased re-opening from 18 phased re-opening from end re-opening from 4 May, now over 14 March, phased re- May (Residential), the February, now 90% open but with 60% open, but with restrictions in opening from 27 April, remainder from 26 May, now restrictions in place in Australia, Hong place in California, Pennsylvania & now 100% open 100% open Kong, Singapore & India Texas Staff numbers: weighted Average to 30 June 2020 7

Management Actions & Response to the Pandemic Cost control:  Senior Management salary cuts (20%)  Reductions in discretionary expenditure  Reduction and deferment of capital expenditure  Cancellation of 2019 final dividend  Limited application of Government support schemes Continued strategic growth:  Focus on Consultancy and Property Management  Sector growth in Logistics, Multi-Family and Life Sciences  Maintained bench strength of Global workforce  Opportunities for organic recruitment  Maintained Graduate programme 8

United Kingdom: Market Dynamics Revenue : £298.8m | Growth : -2% YOY | Employees : 6,496 | Offices : 133 UK Commercial Investment Volumes 2000-2020 Q1 Q2 Q3 Q4 80 Macro themes 70  60 Unprecedented GDP fall over first five months, (April registering -20.5%) 50  Extensive Government intervention from April, tapering down from August 40 £ billion  PMI index falls to all time low and unemployment rises significantly (+650,000 in 30 Q2) 20  10 Return to work programme for many corporates delayed until September, 0 prolonging impact on City Centre activity Source: Property Data, Savills Market statistics Country London Residential Sales -£1m+ 3,000  UK Commercial Investment volumes down 62% in Q2 (weakest ever) 2,500  Office take up in H1 reduced by 37% with London the most heavily 2,000 impacted market 1,500  Logistics take up rose to a record 22.5 million sq. ft, a second quarter rise of 81% 1,000  UK Housing Transaction Volumes down 25% in H1, (down 47% in Q2) although 500 strong recovery is underway particularly in the country markets 0

Asia Pacific: Market Dynamics Revenue : £279.7m | Growth : -6% YOY | Employees : 29,613 | Offices : 58 Macro themes Asia Pacific Commercial Investment Volumes 120  Asia Pacific GDP is forecast to fall by 0.2% in 2020, rebounding strongly in 2021 (7.4%) 100  Downside risks include the resurgence of Covid-19 in Hong Kong, Singapore and Australia and its 80 Q4 continued spread in India 60 Q3 40 Q2  Significant Government intervention across the region, including massive monetary easing, Q1 interest rate reductions, creating a rebound on the regions stock markets 20 0 Market statistics 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 £bns  Asia Pacific H1 investment activity fell by -40%, with Retail -53%, Offices -41% and Industrial -9% Asia Pacific Commercial Investment Volume by Market 30  Market recovery at variable speeds, with investment volumes in China increasing by 67% in Q2 25 2015 20  Strength maintained in Tokyo with vacancy rate of 0.4%, stronger market recovery also 2016 experienced in Korea and Vietnam 15 2017 10 2018  Given the travel restrictions, cross border investment activity fell by 43% year on year 2019 5 1H/2020 -  Sector weighting focused on logistics, multi-family in growth economies, with Singapore likely to experience stronger demand due to China tensions £bns 10

North America: Market Dynamics Revenue : £105.5m | Growth : -20% YOY | Employees : 853 | Offices : 35 US Commercial Investment Volumes – Major Metros Macro themes $200  $160 Real GDP declined 32.9% on an annualised basis in Q2 $120  Unemployment increased to 14.7% in April (3.6% in April 2019), reflecting the Q4 nationwide lockdown and business closures $80 Q3 Q2 $40  All states have entered phased reopening at this point, but many companies Q1 continue to implement work from home/hybrid measures $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $bn Source: Real Capital Analytics, Savills, Includes all Commercial Property Types Market statistics US Annual Commercial Office Leasing Volume  Many organisations have put real estate decisions on hold and national Office 350 Leasing volumes declined 31% compared to H1 2019 Total volume (sq ft; million) 300  Markets most impacted include New York and San Francisco, where tenant 250 controlled space has swelled, but greater resilience in markets including 200 Washington DC and Atlanta 150  Commercial investment volumes fell 26% compared to H1 2019, with a sharp 100 decline in Q2 50  Strong take up across the national Logistics markets, weak demand in Retail 0 sector 2014 2015 2016 2017 2018 2019 H1 2020 Source: Savills, Includes New Leases and Renewals

Europe & Middle East: Market Dynamics Revenue : £107.4m | Growth : -5% YOY | Employees : 2,099 | Offices : 44 GDP Growth Forecast 2.0% 1.9% 5.0% Macro themes 1.5% 1.4% 1.3% 1.3% 1.1% 1.0% 1.1% 1.0% 0.9% 0.3% 2.5%  GDP likely to slump by 8% in 2020, the biggest fall since World War 2, with strong 0.0% rebound anticipated in 2021 -2.5%  Significant regional variations, with resilience experienced in Germany, Netherlands and -5.0% -3.5% -3.6% -4.4% -4.8% 2020 the Nordics, whilst Spain, France and Italy all experienced significant GDP declines -5.7% -7.5% -6.1% -7.4% 2020-2025 pa -8.0% -10.0%  Concerns of second wave with restrictions re-imposed in Spain -9.3% -10.6% -10.6% -10.8% -12.5% -15.0% Market statistics  European investment volumes in H1 fell by (-2.5%), but Q2 volumes dropped by 48%  Investment activity in Germany increased by 31.5% in H1, with Luxembourg, Portugal, European Investment Volumes Belgium and the CEE region all recording higher H1 results 350  Office leasing volumes fell by 33% during H1 2020 Q4 300  Sector demand weighted towards Logistics, Prime Offices and Multi-Family, with Retail Billion Euros 250 Q3 experiencing the weakest demand with significant downward price correction 200 Q2  In the Middle East, impact on oil prices (-33% yoy) and have adversely affected 150 markets in Dubai, with residential sales volumes reducing by -40% in Q2 Q1 100 50 5-year H1 average 0 2013 2014 2015 2016 2017 2018 2019 2020