Savills plc Results for the year ended 31 December 2019 12 March 2019 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 & Key Priorities & 1 2 3 Financial Review Business Development Summary & Outlook 3
Introduction, Highlights & Business Development
Highlights Performance Overview Drivers ➢ Transaction advisory revenues up 2% with Group Revenue £1,930.0m growth in North America and Europe & +9.6% ( cc 8.4%) Middle East offset by decline in Asia Pacific ➢ Strong growth in less transactional services – Group UPBT £143.4m Property Management revenue up 17%, -0.2% ( cc -1.2%) Consultancy revenue up 15% Group UEPS 78.0p ➢ Continued growth in North America with (2018: 77.8p) revenues up 11% and underlying profit up 35% Net Cash £28.5m (2018: £73.9m) ➢ SIM reported record year with revenues up 19%, profits up 65% and AuM up 8% to Dividend 32.0p £17.7bn +2.6% cc = constant currency 5
‘Key Strategic Goals – A Recap’
Priorities & Focus Enhance Business Balance ▪ Emphasis on growth of less transactional businesses Maintain Core Strengths ▪ Focus on growing transactional market share Accelerate Growth in Underscale Geographies ▪ Develop EMEA, North America, accelerate growth in core markets in Asia Pac Integrate Acquisitions & Leverage Organic Growth ▪ Broadgate Estates, Currells and DRC, and maximise benefits of recruitment Support Growth of SIM Under New CEO (Alex Jeffrey) ▪ Europe and Asia Pac, with new fund development 7
Ten Year Revenues Total Revenue £m £1,930.0m Transactional Percentage of Revenue £828.2m 2,500 “Less - Total Revenue Transactional” £677.0m £1,101.8m Commercial Transactions – 34% 2,000 Transactional £270.7m 46% 43% Residential Transactions – 9% “Less - 47% 46% Transactional” 1,500 47% £406.3m 46% 48% 57% 1,000 Percentage of Revenue 46% 54% 40% 53% 39% 54% Property Management – 35% 38% 40% 52% 500 54% 60% 61% Consultancy – 18% 62% 60% Investment Management – 4% - 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Transactional "Less-Transactional" 8
Broad Geographic Spread Over 39,000* employees in 71 countries 825 2,032 6,388 29,912 Employees Employees Employees Employees 35 46 134 58 Offices Offices Offices Offices Revenue Revenue Revenue Revenue 580 £627.1m £282.4m £293.0m £727.5m (32% of Total) Employees (15% of Total) (15% of Total) (38% of Total) *Staff numbers – weighted average for 2019 9
UK Business Development Focus: Market Dynamics Integration & growth of Property Management, Macro themes Consultancy, New Services in Debt Advisory & ▪ Sluggish GDP growth (1%) with continuing risk of Corporate Finance Revenue Brexit affecting market confidence Property Management £727.5m ▪ Weak sterling and comparative pricing maintains ▪ Successfully integrated Broadgate Estates, as well as attraction to non domestic investors Growth expanding existing portfolio to 444m sq. ft (+16% YoY) ▪ ‘Boris bounce’ post the Election, buoys confidence in 10% YOY ▪ Acq Parkes & Associates (Property Management, December (may be tempered by Covid 19) Guernsey) Consultancy Market statistics ▪ Acq KKS (Design & Workplace Consultancy) ▪ Commercial Investment volumes down (-17%), more ▪ Expanded Occupier Services Platform so in Central London Offices (-34%), ▪ Opened new Brighton Office ▪ Office Leasing volumes decline, Nationally (-10%), ▪ Developed Life Sciences team London (-15%), strong rental growth in prime offices (London: +14-16%) Residential Sales & Lettings ▪ Integrated Currells (6 offices in London) ▪ Retail suffers rental falls, Investment Volumes remain extremely low (-10%) ▪ Grew PRS & Lettings in Manchester ▪ Logistics: Strong conditions continue, but take up fell Transactional (-9%) and Investment volumes reduced (-14%) ▪ New Logistics Occupier Advisory Service ▪ UK Housing transaction volumes down (-1%), greater ▪ Expanded Corporate Finance business reduction above £1m (-2%) but volumes increase in ▪ Created International Prime Retail Team PCL (+14%)
Asia Pacific Market Dynamics Business Development Focus: Accelerated Organic Growth in core markets & new Macro themes openings in India ▪ GDP growth of 4.4% across the region with Revenue improvements in Japan, Vietnam, India & China, but £627.1m lower growth in Australia & Singapore Hong Kong ▪ Strengthened Property Management & FM with new contract ▪ Growth Disturbances in Hong Kong in H2 resulted in GDP wins fall (-1.15%) 7% YOY China ▪ Trade disputes impact markets (US / China & Japan ▪ Opened new offices in Haikou and expanded in Changsa, / South Korea) focussed on Property Management, Retail & Commercial Leasing Australia & New Zealand Market statistics ▪ Significant growth in Logistics (NSW & Victoria), Office Leasing ▪ Hong Kong Commercial Investment falls significantly (NSW) & Property Management in H2 (-42% YoY) with Office Leasing volumes also ▪ New Head of NZ & growth of Valuation & Office Leasing adversely impacted (-33%) South East Asia ▪ Residential Secondary Sales sharply reduced ▪ Focus on Singapore, new Capital Markets team, growth of (-9.5%), price discounts in all markets Facilities Management & Valuation ▪ China less impacted (-0.8%) with increased Cross ▪ New leadership teams in Malaysia & Indonesia Border activity to Shanghai and Beijing ▪ Vietnam – growth of Property Management ▪ Volumes increase in Japan (+4.6%) & Singapore India (+26.4%) , but declines in South Korea (-7.9%) & ▪ 6 new offices since 2019, headcount now 300, full service offer, Australia (-0.3%) including Tenant Rep, Capital Markets, Project Management, ▪ Overall regional volumes for the year fell (-5%) Valuation, Leasing & Residential Sales ▪ Grade A Office Leasing volumes fell (23% YoY) 11
North America Business Development Focus: Market Dynamics Continued growth of occupier focused business (Office & Logistics), with selective new office openings Macro themes ▪ Annual GDP growth of 2.3%, but Global trade policy Central Management Revenue & Political uncertainty drag on growth (-60-80 bps) ▪ Strengthened Management team & rebranded National platform £293.0m ▪ Unemployment rate at all time low (3.5%) with in March estimated 1.8m new jobs created Growth Tenant Representation ▪ Federal Bank eases rates in October to stimulate ▪ Organically grew Tenant Rep teams in 21 offices nationally 11% YOY growth Logistics ▪ Grew US & Canadian Logistics platform across 7 offices Market statistics New Offices ▪ Commercial Office Leasing volumes up (+3% YoY), ▪ Opened new offices in Calgary, Connecticut, Detroit & Nashville New York recovers strongly with demand from TMT Project Management & Consultancy (+35%) ▪ Growth of Workplace & Project Management nationally ▪ Vacancy rates tighten in main Office markets, Capital Markets particularly Washington , Chicago & LA ▪ Restructured the business, with focus on greater National ▪ Office rents grow nationally (+5.1%) and Investment coverage volumes increase (+2%) WorkThere ▪ Liquidity remains principal constraint on Investment ▪ Launched our WorkThere flexible office platform in New York & activity, estimate $327bn of ‘dry powder’ looking to Atlanta enter the market Technology ▪ Continued investment in award winning Technology (K3) & CRM platform across all markets
Recommend
More recommend
