Attached files
| file | filename |
|---|---|
| 8-K - 8-K - JONES LANG LASALLE INC | q32014earningrelease-form8k.htm |
| EX-99.1 - EXHIBIT - JONES LANG LASALLE INC | exhibit991thirdquarter2014.htm |
Supplemental Information Third-Quarter Earnings Call 2014
Market & Financial Overview
Capital Markets & Leasing Markets Volumes JLL Research Leasing Activity Uneven But Outlook Positive Investment Volumes Maintaining Healthy Momentum 3 HISTORICAL FORECAST Q3 2014 v. Q3 2013 FY 2014 v. FY 2013 FY 2015 v. FY 2014 Market Volumes Market Volumes Market Volumes Capital Markets(1) Americas 25% 25-30% 15-20% EMEA 13% ~ 15% 5-10% Asia Pacific 1% ~ -5% 5-10% Total 15% 15-20% 10-15% HISTORICAL FORECAST Q3 2014 v. Q3 2013 FY 2014 v. FY 2013 FY 2015 v. FY 2014 Gross Absorption Gross Absorption Gross Absorption Leasing Americas (U.S. only) -6% Flat ~ 5% EMEA (Europe only) -6% Flat 0-5% Asia Pacific (select markets) 10% 15-20% 10-15% Total -5% Flat ~ 5% (1) Market volume data excludes multi-family assets. Source: JLL Research, October 2014
Selected Business Wins and Expansions 4 Americas EMEA Asia Pacific - American Red Cross – 13.8M sf - Google – 2.9M sf - Xerox – 5.7M sf - U.S. Healthcare Portfolio – $283M - 110 N. Wacker, Chicago – $116M - Morgan Lewis, Washington, D.C. – 270K sf - Pier 1 Imports, Dallas – 409K sf - Logistics Portfolio, Czech Republic – €523M - MesseTurm Tower, Frankfurt – €250M - Pollen Estate, London – £381M - Acorn Portfolio, Ireland – €170M - One Tower Bridge, London – 366K sf - Neovia Logistics, Belgium – 215K sf - Dalkia, Paris – 90K sf - Samsung, Beijing – 197K sf - World Finance Center, Chongqing – 2.2M sf - DLF Residential Portfolio, Chennai – 4.1M sf - Microsoft – 900K sf - Yingyao Plaza, Guangzhou – $755M - Anson House, Singapore – SGD 172M - DEXUS Bus. Park, New South Wales – AUD 190M Multi-Regional CACIB – 30+ countries Technip – 5.8M sf UCB Pharma – 2.9M sf
Prime Offices – Projected Changes in Values, 2015 5 + 10-20% + 5-10% + 0-5% - 0-5% - 5-10% Tokyo, Beijing Capital Values Rental Values *New York – Midtown, London – West End, Paris – CBD. Nominal rates in local currency. Source: JLL Research, October 2014 San Francisco, New York*, Boston Chicago, Los Angeles, London* Sydney, Dubai Hong Kong, Singapore, Paris* Seoul, Madrid, Toronto, Washington DC Mexico City, Stockholm, Mumbai, Frankfurt Shanghai, Brussels San Francisco, New York*, Boston Chicago, Los Angeles, London* Sydney, Seoul, Madrid, Dubai Paris*, Stockholm, Toronto Washington DC, Mexico City Mumbai, Frankfurt, Singapore, Shanghai Hong Kong, Brussels Sao Paulo Tokyo, Beijing Sao Paulo Moscow Moscow
Financial Information
2013 2014 2013 20142013 2014 2013 2014 7 Q3 2014 Revenue Performance Note: Equity earnings of $6.6M and $19.6M in 2013 and 2014, respectively, are included in segment results, however, excluded from Consolidated totals. Year-over-year increases shown fee-based have been calculated using fee revenue, which excludes gross contract costs. Americas EMEA Asia Pacific LaSalle Consolidated ($ in millions; % change in local currency) 16% (21% gross) 9% (12% gross) 7% (15% gross) 19% (23% gross) $484.1 Fee revenue Gross contract costs 2013 2014 121% $581.6 $318.4 $368.6 $237.0 $272.9 $1,106.8 $1,366.0 $452.1 $521.0 $265.7 $298.2 $203.4 $218.5 $73.9 $162.4 $988.5 $1,180.6
2013 2014 50% 2013 2014 2013 2014 2013 2014 2013 2014 8 YTD 2014 Revenue Performance Note: Equity earnings of $21.1M and $40.9M in 2013 and 2014, respectively, are included in segment results, however, excluded from Consolidated totals. Year-over-year increases shown fee-based have been calculated using fee revenue, which excludes gross contract costs. Americas EMEA Asia Pacific LaSalle Consolidated ($ in millions; % change in local currency) 19% (24% gross) 13% (24% gross) 8% (19% gross) 17% (24% gross) $1,277.3 Fee revenue Gross contract costs $1,573.9 $830.9 $1,076.1 $655.4 $755.0 $2,952.2 $3,680.6 $710.5 $841.2 $1,421.0 $1,201.8 $576.4 $606.5 $209.8 $316.5 $2,677.3 $3,144.3
9 Q3 2014 Real Estate Services Revenue ($ in millions; % change in local currency over Q3 2013) 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. Leasing $255.9 10% $66.6 11% $44.4 9% $366.9 10% Capital Markets & Hotels $72.3 55% $90.8 5% $29.9 (16%) $193.0 15% Property & Facility Management - Fee $106.2 9% $58.8 16% $95.6 10% $260.6 11% Gross Revenue $166.8 30% $81.6 25% $128.8 15% $377.2 24% Project & Development Services - Fee $57.2 19% $35.8 18% $19.6 14% $112.6 18% Gross Revenue $57.2 18% $83.4 20% $40.8 57% $181.4 26% Ad isory, Consulting & Other $30.2 14% $46.2 (2%) $28.8 21% $105.2 8% Total RES Operating Fee Revenue $521.8 16% $298.2 9% $218.3 7% $1,038.3 12% Total Gross Revenue $582.4 21% $368.6 12% $272.7 15% $1,223.7 17% Americas EMEA Asia Pacific Total RES
10 YTD 2014 Real Estate Services Revenue ($ in millions; % change in local currency over YTD 2013) 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. Leasing $694.1 19% $188.3 8% $119.5 15% $1,001.9 17% Capital Markets & Hotels $172.5 25% $238.6 11% $81.2 (19%) $492.3 8% Property & Facility Management - Fee $315.7 17% $171.2 24% $278.1 15% $765.0 17% Gross Revenue $467.0 37% $246.7 54% $381.7 27% $1,095.4 36% Project & Development Services - Fee $153.2 20% $98.5 16% $51.2 9% $302.9 17% Gross Revenue $154.8 21% $257.9 37% $96.1 48% $508.8 34% Ad isory, Consulting & Other $85.1 10% $144.6 9% $76.4 16% $306.1 11% Total RES Operating Fee Revenue $1,420.6 19% $841.2 13% $606.4 8% $2,868.2 15% Total Gross Revenue $1,573.5 24% $1,076.1 24% $754.9 19% $3,404.5 23% Americas EMEA Asia Pacific Total RES
• Assets Under Management reach $53 billion • New capital raised of $7.3 billion YTD through September 2014 • Continued incentive fee potential as legacy funds liquidate in future quarters LaSalle Investment Management Note: AUM data reported on a one-quarter lag. Q3 2014 Highlights Q3 2014 AUM = $53.0 Billion U.K. $18.0 Continental Europe $4.8 North America $13.2 Asia Pacific $5.2 Public Securities $11.8 Revenue Q3 2014 Q3 2013 Advisory Fees $ 61 $ 55 Transaction Fees & Other 11 3 Incentive Fees 70 9 Operating Revenue $ 142 $ 67 Equity Earnings 20 7 Total Revenue $ 162 $ 74 Adjusted EBITDA $ 68 $ 17 Adjusted EBITDA Margin 41.9% 23.3% ($ in millions) ($ in billions) 11 Separate Accounts $28.2 Commingled Funds $13.0 Public Securities $11.8
Solid Balance Sheet Position Year-to-Date Highlights ($ in millions) 12 Balance Sheet Q3 2014 Q4 2013 Q3 2013 Cash and Cash Equivalents $ 163 $ 153 $ 120 Short-Term Borrowings 43 25 35 Credit Facility 250 155 445 Net Bank Debt $ 130 $ 27 $ 360 Long-Term Senior Notes 275 275 275 Deferred Business Acquisition Obligations 112 135 130 Total Net Debt $ 517 $ 437 $ 765 (1) Excludes investments in joint venture entities, capitalized leases and tenant improvement allowances that are required to be consolidated under U.S. GAAP (2) Includes deferred business acquisition payments and earn outs paid during the period for transactions closed in prior periods (3) Includes distributions of $49M partially offset by capital contributions of $34M • Investment grade balance sheet; Baa2 (Stable) / BBB- (Positive) – In June 2014, Standard & Poor’s revised its outlook on JLL rating to Positive from Stable – Reduced net debt by $248 million from Q3 2013 • Semi-annual dividend increased by 9% to $0.25 per share from $0.23 per share – To be paid December 15, 2014 • Low cost debt driving reduced interest expense – YTD Q3 2014 net interest expense of $22 million down from $27 million for YTD Q3 2013 • YTD Q3 2014 Investment Spending YTD Q3 2014 – Capital Expenditures (1) $78 million – M&A (2) $62 million – Co-Investment (3) ($15) million
Appendix
14 Prime Offices – Capital Value Clock, Q3 2013 v Q3 2014 Based on notional capital values for Grade A space in CBD or equivalent. US positions relate to the overall market Source: JLL Research, October 2014 Americas EMEA Asia Pacific Q3 2014 Q3 2013 Capital Value growth slowing Capital Value growth accelerating Capital Values bottoming out Capital Values falling Capital Value growth slowing Capital Value growth accelerating Capital Values bottoming out Capital Values falling Toronto, Washington DC Hong Kong, Amsterdam Sao Paulo Mexico City, Moscow Houston, San Francisco Chicago, Los Angeles Boston, New York, Stockholm Dallas Seoul, London Tokyo Mumbai Madrid Beijing Milan Paris Brussels Frankfurt, Sydney Berlin Shanghai Singapore Hong Kong Singapore, Mexico City, Toronto Shanghai, Washington DC London Seoul Tokyo Beijing, Stockholm Brussels, Mumbai, Paris Amsterdam Berlin Frankfurt Milan Boston, Chicago, Los Angeles New York, San Francisco Houston Sydney, Dallas Sao Paulo Moscow Madrid The Jones Lang LaSalle Property Clocks SM
15 Prime Offices – Rental Clock, Q3 2013 v Q3 2014 Americas EMEA Asia Pacific Q3 2014 Q3 2013 Rental Value growth slowing Rental Value growth accelerating Rental Values bottoming out Rental Values falling Rental Value growth slowing Rental Value growth accelerating Rental Values bottoming out Rental Values falling Houston San Francisco Toronto Boston, Tokyo Chicago, Hong Kong Brussels New York, Istanbul, Dubai Los Angeles Washington DC Sao Paulo Dallas Mexico City Mumbai Shanghai Singapore Beijing Seoul Johannesburg Paris Milan Madrid London Frankfurt Berlin, Moscow Stockholm Amsterdam Sydney Seoul Mumbai Boston, Stockholm, Tokyo London, New York Hong Kong Singapore Berlin, Frankfurt Brussels, Paris, Sydney Washington DC Amsterdam, Chicago, Dubai, Milan Istanbul Johannesburg Madrid Moscow, Toronto Sao Paulo Beijing, Los Angeles Mexico City, Shanghai Houston San Francisco Dallas Based on rents for Grade A space in CBD or equivalent. US positions relate to the overall market Source: JLL Research, October 2014 The Jones Lang LaSalle Property Clocks SM
16 Q3 2014 Adjusted EBITDA* Performance Americas EMEA Asia Pacific LaSalle Consolidated * Refer to slide 22 for Reconciliation of GAAP Net Income to Adjusted EBITDA for the three months ended September 30, 2013, and 2014, 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 excludes restructuring and acquisition charges. Consolidated Adjusted EBITDA is the sum of the Adjusted EBITDA of the four segments. ($ in millions) 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 $56.2 $59.6 $23.0 $22.7 $21.9 $18.6 $17.2 $68.1 $118.3 $169.0
17 YTD 2014 Adjusted EBITDA* Performance Americas EMEA Asia Pacific LaSalle Consolidated * Refer to slide 22 for Reconciliation of GAAP Net Income to Adjusted EBITDA for the nine months ended September 30, 2013, and 2014, for details relative to these Adjusted EBITDA calculations. Segment Adjusted EBITDA is calculated by adding the segment’s depreciation and amortization to its reported operating income, which excludes restructuring and acquisition charges. Consolidated Adjusted EBITDA is the sum of the Adjusted EBITDA of the four segments. ($ in millions) 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 $128.3 $150.3 $44.5 $53.5 $43.9 $41.9 $51.1 $107.7 $267.8 $353.4
18 Q3 2014 Real Estate Services Revenue ($ in millions; % change in USD over Q3 2013) 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. Leasing $255.9 10% $66.6 13% $44.4 10% $366.9 11% Capital Markets & Hotels $72.3 55% $90.8 10% $29.9 (15%) $193.0 17% Property & Facility Management - Fee $106.2 8% $58.8 20% $95.6 10% $260.6 11% Gross Revenue $166.8 29% $81.6 30% $128.8 15% $377.2 24% Project & Development Services - Fee $57.2 18% $35.8 21% $19.6 15% $112.6 19% Gross Revenue $57.2 18% $83.4 22% $40.8 58% $181.4 27% Advisory, Consulting & Other $30.2 14% $46.2 1% $28.8 22% $105.2 10% Total RES Operating Fee Revenue $521.8 15% $298.2 12% $218.3 7% $1,038.3 13% Total Gross Revenue $582.4 20% $368.6 16% $272.7 15% $1,223.7 18% Americas EMEA Asia Pacific Total RES
19 YTD 2014 Real Estate Services Revenue ($ in millions; % change in USD over YTD 2013) 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. Leasing $694.1 19% $188.3 12% $119.5 13% $1,001.9 17% Capital Markets & Hotels $172.5 24% $238.6 17% $81.2 (21%) $492.3 10% Property & Facility Management - Fee $315.7 15% $171.2 30% $278.1 11% $765.0 17% Gross Revenue $467.0 34% $246.7 62% $381.7 22% $1,095.4 35% Project & Development Services - Fee $153.2 19% $98.5 21% $51.2 5% $302.9 17% Gross Revenue $154.8 20% $257.9 43% $96.1 43% $508.8 35% Advisory, Consulting & Other $85.1 9% $144.6 14% $76.4 14% $306.1 13% Total RES Operating Fee Revenue $1,420.6 18% $841.2 18% $606.4 5% $2,868.2 15% Total Gross Revenue $1,573.5 23% $1,076.1 29% $754.9 15% $3,404.5 23% Americas EMEA Asia Pacific Total RES
Fee Revenue / Expense Reconciliation Note: Consolidated revenue and fee revenue exclude equity earnings (losses). Restructuring and acquisition charges and intangible amortization related to the King Sturge acquisition are excluded from adjusted operating income margin. • Reimbursable vendor, subcontractor and out-of-pocket costs reported as revenue and expense in JLL financial statements have been increasing steadily • Gross accounting requirements increase revenue and costs without corresponding profit • Business managed on a fee revenue basis to focus on margin expansion in the base business 20 ($ in millions) 2014 2013 2014 2013 Revenue $1,366.0 $1,106.8 $3,680.6 $2,952.2 Gross contract costs (185.4) (118.3) (536.3) (274.9) Fee revenue $1,180.6 $ 988.5 $3,144.3 $2,677.3 Operating expenses $1,238.5 $1,019.7 $3,476.8 $2,779.2 Gross contract costs (185.4) (118.3) (536.3) (274.9) Fee-based operating expenses $1,053.1 $ 901.4 $2,940.5 $2,504.3 Operating income $ 127.5 $ 87.1 $ 203.8 $ 173.0 Ad : Restructuring and acquisition charges 0.0 4.9 41.4 14.7 King Sturge intangible amortization 0.5 0.6 1.6 1.7 Adjusted operating income $ 128.0 $ 92.6 $ 246.8 $ 189.4 Adjusted operating income margin 10.8% 9.4% 7.9% 7.1% Three Months Nine Months Ended September 30 Ended September 30
21 Reconciliation of GAAP Net Income to Adjusted Net Income and Earnings per Share ($ in millions, except per share data) 2014 2013 2014 2013 GAAP net income attributable to common shareholders $ 104.3 $ 62.9 $ 192.0 $ 122.3 Shares (in 000s) 45,291 45,063 45,242 45,071 GAAP diluted earnings per share $ 2.30 $ 1.39 $ 4.24 $ 2.71 GAAP net income attributable to common shareholders $ 104.3 $ 62.9 $ 192.0 $ 122.3 Restructuring and acquisition charges, net 0.0 3.6 5.1 11.0 King Sturge intangible amortization, net 0.3 0.5 1.2 1.3 Adjusted net income $ 104.6 $ 67.0 $ 198.3 $ 134.6 Shares (in 000s) 45,291 45,063 45,242 45,071 Adjusted diluted earnings per share $ 2.31 $ 1.49 $ 4.38 $ 2.99 Three Months Nine Months Ended September 30 Ended September 30
22 Reconciliation of GAAP Net Income to Adjusted EBITDA JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. ($ in millions) 2014 2013 2014 2013 GAAP net income $ 104.7 $ 63.1 $ 193.2 $ 125.8 Interest expense, net of interest income 7.4 9.6 21.7 26.6 Provision for income taxes 34.9 20.9 29.9 41.7 Depreciation and amortization 22.0 19.8 67.2 59.0 EBITDA $ 169.0 $ 113.4 $ 312.0 $ 253.1 Restructuring and acquisition charges 0.0 4.9 41.4 14.7 Adjusted EBITDA $ 169.0 $ 118.3 $ 353.4 $ 267.8 Ended September 30 Ended September 30 Three Months Nine Months