Savills plc Results for the six months ended 30 June 2016 - PowerPoint PPT Presentation

Savills plc Results for the six months ended 30 June 2016

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 Business Development 2 Financial Review 3 Management Focus 4 Summary & Outlook 3

Highlights Performance overview Drivers  Transaction advisory revenues up 5%. Group Revenue £622.7m  Strong Residential and International +13.8% ( cc 10.3%) Commercial market performances offset reduction in UK Commercial volumes. Group UPBT £42.8m +11.5% ( cc 7.8%)  Continued expansion in the US through bolt-on acquisitions and recruitment. Group UEPS 21.8p +9.0%  Global property management revenue up 23%. Net Cash £34.7m n/a  Consultancy revenue up 9%.  Savills IM revenue growth of 96% Dividend 4.4p reflecting significant contribution from SEB +10.0% (acquired 31 August 2015). cc = constant currency 4

Savills Diversified Business Model Defensive, Scale Businesses Revenue by Business Cyclical, High-Margin Businesses Property Management – 35% Commercial Transactions – 32% Consultancy – 17% Residential Transactions – 12% Investment Management – 4% • Recurring revenue streams with less • High-return, but cyclical earnings 44% 56% exposure to transaction environment • 73:27 split Commercial vs. Residential • 1.95bn ft 2 under management • 58:42 Commercial split Tenant rep/leasing vs. Capital markets • Strong Property Management business • € 17.1bn AUM Combination of cyclical and less cyclical service lines 5

Ten Year H1 Revenues £m £351.6m £288.8m £136.2m 700 600 500 44% 47% 400 300 52% 200 56% 53% 100 48% - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Transactional "Non-Transactional" 6

Broad Geographic Spread Over 31,000* employees in 700 offices in more than 60 countries 1,104 Employees 5,066 35 Employees Offices 126 Offices 24,887 664 Employees Employees 59 28 Offices Offices Revenue Revenue Revenue Revenue 580 £94.4m £209.4m £255.8m £63.1m (15% of Total) Employees (34% of Total) (41% of Total) (10% of Total) *Staff numbers – weighted average for 2016 H1 7

Business Development / Highlights North Investment UK UK Asia Pacific Europe America Management New Jersey Integration of SEB New Residential New COO Management expansion Offices in Maida changes: Joint Substantial new Vale & Primrose Hill CEO’s Retail Agency in mandates New York Retail Paris team City Capital New Australia CEO German Retail fund Markets team Growth Office Agency in Industrial Team in launched Munich China Capital Initiatives / Memphis / Cleveland Licensed Leisure Markets - Beijing & New Sydney office Recruitment team Warsaw Industrial Shanghai Atlanta Expansion team expansion New Shanghai office Acquisition of Chainbow – New Offices / Teams Barcelona expansion Japan Recruitment Retail asset/fund in North Carolina Residential PM management team lift Occupier Services Successful Expansion integration of Smiths Gore Cross Border Secondments YOPA investment 8

Financial Review 9

Summary Underlying Results 6 months ended 30 June (£m) 2016 2015 % chg Revenue 622.7 547.0 +13.8% Underlying PBT 42.8 38.4 +11.5% Underlying PBT margin 6.9% 7.0% (0.1)% pts Underlying basic earnings per share 21.8p 20.0p +9.0% Dividend per share 4.4p 4.0p +10.0% Net cash / (debt) 34.7 (24.3) n/a Net assets 346.7 313.1 +10.7% 10

Revenue and underlying PBT by business Transaction Property Investment Advisory Management Consultancy Management £m +5% 300 271.1 258.2 +23% 2015 250 219.0 2016 200 178.4 +9% Revenue 150 105.1 96.4 100 +96% 50 27.5 14.0 0 30 -4% 24.3 23.3 25 20 +32% 15 UPBT +5% 10.2 8.2 10 7.8 7.7 +56% 3.9 5 2.5 0 Margin 9.4% 8.6% 4.3% 4.7% 8.1% 7.8% 17.9% 14.2% 11

Revenue and underlying PBT by region UK Asia Pacific North America Continental Europe £m +11% 300 255.8 2015 +13% 250 231.0 209.4 2016 184.9 200 Revenue +9% 150 +42% 94.4 86.7 100 63.1 44.4 50 0 +10% 30 24.8 25 22.5 20 +2% 13.1 12.8 15 +4% UPBT 7.8 10 7.5 5 n/a 0 (0.1) (0.5) -5 Margin 9.7% 9.7% 6.3% 8.7% 8.3% (1.1)% (0.2)% 6.9% The above excludes other costs of £2.8m (2015-H1 £3.9m) not allocated to the 12 operating activities of the group’s business segments

Cashflow performance 250 Cash used in operations of £56m 43 200 At 30 June 2016 - Net cash of £34.7m 9 At 30 June 2015 - Net debt of £(24.3)m 150 £m 100 151 90 5 23 9 50 15 18 1 35 29 8 0 Net cash at UPBT Non-cash Working Acquisition Net capex Net cash Purchase of Dividends Tax Foreign Other Net cash at 31-Dec-2015 items capital spend - received EBT shares paid exchange 30-Jun-2016 current & from JV & deferred associates 13

Commercial Transaction Advisory 2016 Revenue £197.6m (+2%) 2016 UPBT £12.9m (-28%) 100 94.4 9 7.8 8 90 7 80 6 70 5 60 3.6 48.7 4 2.7 50 3 40 32.1 2 30 22.4 1 20 - 10 (1) (1.2) - (2) Asia Pacific UK Europe North America Asia Pacific UK Europe North America Growth +6% (23)% +18% +9% (20)% (54)% n/a +4% Growth North America solid revenue growth in major cities. Europe revenue growth across the region, despite declining market volumes. UK reduced transaction volumes in advance of Brexit referendum. Leasing remains relatively robust against historical averages. Asia Pacific strong growth in revenues in mainland China and Australia. Market share growth in Hong Kong mitigating some of the effect of declining market volumes. 14

Residential Transaction Advisory 2016 Revenue £73.5m (+14%) 2016 UPBT £10.4m (+60%) 70 8 7.4 57.2 7 60 6 50 5 40 4 3.0 30 3 16.3 20 2 10 1 0 - Asia Pacific UK Asia Pacific UK +28% Growth +10% +173% Growth +37% UK prime markets impacted by stamp duty rises, secondary market volumes up in London (+14%) and Country (+23%). UK New Development sales strong (+26%). Asia Pacific strong growth in revenues, in particular the prime markets of Beijing and Shanghai. 15

Property Management 2016 Revenue £219.0m (+23%) 2016 UPBT £10.2m (+32%) 140 7 6.3 128.0 6 120 4.9 5 100 4 73.7 80 3 2 60 1 40 - 17.3 20 (1) (1.0) - (2) Asia Pacific UK Europe Asia Pacific UK Europe +15% +35% +34% Growth +2% +48% +44% Growth Asia Pacific revenue growth in Hong Kong, China, Korea and Japan. Reorganisations in Japan and Australia impacted profit growth. UK strong growth in Residential lettings and Commercial property management. Significant contribution from 2015 acquisition of Smiths Gore. Europe Significant contract wins across the region drives growth. 16

Consultancy 2016 Revenue £105.1m (+9%) 2016 UPBT £8.2m (+5%) 90 8 81.1 7.2 80 7 70 6 60 5 50 4 40 3 30 16.4 2 20 0.8 7.6 1 10 0.2 0 0 UK Asia Pacific Europe UK Asia Pacific Europe +9% Growth +9% +12% +18% (80%) Growth 14% UK strong performances in building & project consultancy, planning & development consultancy and valuations. Asia Pacific Revenue growth in Australia and Singapore more than offsetting weaker performance in Hong Kong and China (development consultancy). Profits impacted by significant recruitment. Europe revenue growth in France, the Netherlands and Poland. 17

Investment Management 2016 Revenue £27.5m (+96%) 2016 UPBT £3.9m (+56%) 18 3.0 15.8 2.6 16 2.5 14 11.7 12 2.0 10 1.3 1.5 8 6 1.0 4 0.5 2 - - UK Europe UK Europe Growth +41% +177% +44% +86% Growth Strong growth following acquisition of SEB (31 August 2015). Organic growth in revenues of 24%. Assets under management increased by 116% to € 17.1bn (2015-H1: € 7.9bn). Significant private equity mandates won in 2016. Overall transacted € 1.0bn on behalf of funds/mandates. 18

Strategic Progress 19

Management Focus Further investment in the US, bolt-ons and recruitment Grow transaction teams in key Asia markets Continue investment in Property Management UK and Europe New markets – eg Philippines, India, South America Grow Savills IM and continue successful integration of SEB 20

Summary & Outlook Strong first half performance from diverse Group (geographical/business line) Brexit impact: a near term concern for markets, but also an opportunity to grow market share Macro drivers affecting markets, but real estate fundamentals are good; Savills well placed for current environment Expectations remain currently unchanged but 2016 range of potential outcomes has broadened 21