Attached files
| file | filename |
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| 8-K - 8-K - JONES LANG LASALLE INC | a8kq12014earningrelease.htm |
| EX-99.1 - EX99-1 FIRST QUARTER 2014 EARNINGS RELEASE - JONES LANG LASALLE INC | exhibit991firstquarterearn.htm |
Supplemental Information First-Quarter Earnings Call 2014
Market & Financial Overview
Q1 & FY Capital Markets & Leasing Markets Volumes Leasing Activity Uneven; Signs of Improvement Investment Volume Strength Varies 3 HISTORICAL FORECAST Q1 TTM 2014 v. Q1 TTM 2013 FY 2013 v. FY 2012 FY 2014 v. FY 2013 Market Volumes Market Volumes Market Volumes Capital Markets(1) Americas 30% 18% ~ 20% EMEA 32% 37% ~ 5% Asia Pacific 18% 29% ~ 10% Total 28% 27% ~ 15% HISTORICAL FORECAST Q1 TTM 2014 v. Q1 TTM 2013 FY 2013 v. FY 2012 FY 2014 v. FY 2013 Gross Absorption Gross Absorption Gross Absorption Leasing Americas (U.S. only) 4% 7% ~ 5% EMEA (Europe only) -6% -4% ~ 5% Asia Pacific (select markets) -4% -12% ~ 10-15% Total 0% 1% ~ 5-10% (1) Market volume data excludes multi-family assets. Source: JLL Research, April 2014
Selected Business Wins and Expansions 4 Americas EMEA Asia Pacific Multi-Regional - Scania – 100 countries - Credit Suisse – 5M sf - Volkswagen of America – 4.9M sf - Amazon.com – 3.5M sf - Commonwealth Edison – 3M sf - 12 East 88th Street, New York – $105M - Gdanski Office Center, Warsaw – 506K sf - Zorlu Center, Turkey – 710K sf - Urbil Shopping Centre, San Sebastian – €61M - Prisma Tower, Paris – (Price Confidential) - E9 Building, Beijing – 907K sf - Godrej & Boyce, Mumbai – 450K sf - 1 William Street, Brisbane – AUD395M - Nanjing IFC, Nanjing – $406M - 2550 M Street, Washington, D.C. – $86M - InterContinental Barclay, New York – $300M - Zurich American, Schaumburg, IL – 735K sf - Raytheon Company, Richardson, TX – 489K sf - Marriott Grosvenor Square, London – $194M - Nestle, Warsaw – 108K sf - Pepsico, Moscow – 140K sf - ING, London – 130K sf - Six Senses Laamu, Maldives – $70M - Deloitte, Hong Kong – 210K sf - LandCorp, Perth – 862K sf - Intergraph, Hyderabad – 172K sf
Prime Offices – Projected Changes in Values, 2014 5 + 10-20% + 5-10% + 0-5% - 0-5% - 5-10% Dubai, London*, New York* San Francisco, Hong Kong, Tokyo Singapore Capital Values Rental Values Frankfurt, Paris*, Boston, Chicago Los Angeles, Toronto, Washington DC Mexico City, Beijing, Seoul, Mumbai Shanghai, Stockholm Brussels, Madrid Moscow, Sydney Tokyo, New York* San Francisco, Madrid Dubai, London*, Boston, Chicago Los Angeles, Frankfurt Seoul, Singapore, Paris*, Shanghai, Mumbai Washington DC, Toronto Mexico City, Beijing, Hong Kong Sydney, Stockholm, Brussels Sao Paulo Moscow Sao Paulo *New York – Midtown, London – West End, Paris - CBD. Nominal rates in local currency. Source: JLL Research, April 2014
Financial Information
$780.5 $877.8 2013 2014 $210.7 $234.0 2013 2014 $342.4 $406.5 2013 2014 $168.0 $173.6 2013 2014 7 Q1 2014 Revenue Performance Note: Equity earnings of $5.5M and $8.9M in 2013 and 2014, respectively, are included in segment results, however, excluded from Consolidated totals. Year-over-year increases shown fee-based have been calculated using fee revenue, which excludes gross contract costs. Americas EMEA Asia Pacific LaSalle Consolidated ($ in millions; % change in local currency) 25% (20% fee) 22% (6% fee) 21% (11% fee) 22% (13% fee) $361.7 Fee revenue Gross contract costs $64.9 $72.6 2013 2014 11% $447.3 $244.9 $311.8 $190.0 $214.6 $856.0 $1,037.4
8 Q1 2014 Real Estate Services Revenue ($ in millions; % change in local currency over Q1 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 $188.6 24% $54.0 6% $27.8 5% $270.4 18% Capital Markets and Hotels & Hospitality $40.2 4% $54.4 (11%) $20.9 (7%) $115.5 (6%) Property & Facility Management - Fee $106.3 21% $52.1 24% $89.4 17% $247.8 20% Gross Revenue $146.2 39% $76.5 73% $122.6 32% $345.3 42% Project & Development Services - Fee $44.6 20% $28.7 13% $14.1 1 0% $87.4 14% Gross Revenue $45.5 22% $82.1 40% $21.9 22% $149.5 31% Advisory, Consulting & Other $26.6 11% $44.8 9% $21.5 22% $92.9 12% Total RES Operating Fee Revenue $406.3 20% $234.0 6% $173.7 11% $814.0 14% Gross Revenue $447.1 25% $311.8 22% $214.7 21% $973.6 23% Americas EMEA Asia Pacific Total RES
LaSalle Investment Management Note: AUM data reported on a one-quarter lag. Q1 2014 Highlights Q1 2014 AUM = $48.0 Billion U.K. $16.0 Continental Europe $4.9 North America $12.4 Asia Pacific $4.7 Public Securities $10.0 Revenue Q1 2014 Q1 2013 Advisory Fees $ 56 $ 57 Transaction Fees & Other 5 3 Incentive Fees 3 0 Operating Revenue $ 64 $ 60 Equity Earnings 9 5 Total Revenue $ 73 $ 65 Adjusted EBITDA $ 17 $ 14 Adjusted EBITDA Margin 23.2% 21.2% ($ in millions) ($ in billions) 9 Separate Accounts $25.0 Commingled Funds $13.0 Public Securities $10.0 • Capital raising momentum continues into 2014; nearly $1 billion raised with strong pipeline for the second quarter • Assets under Management and advisory fees stable with portfolio liquidations offset by new acquisitions; investor allocations to real estate remain steady • Positive equity earnings from investment performance in the first quarter
Solid Balance Sheet Position Q1 2014 Highlights ($ in millions) 10 Balance Sheet Q1 2014 Q4 2013 Q1 2013 Cash and Cash Equivalents $ 140 $ 153 $ 133 Short-Term Borrowings 17 25 38 Credit Facility 443 155 470 Net Bank Debt $ 320 $ 27 $ 375 Long-Term Senior Notes 275 275 275 Deferred Business Acquisition Obligations 136 135 220 Total Net Debt $ 731 $ 437 $ 870 • Investment grade balance sheet; Baa2 / BBB- (Stable) – Reduced net debt by $139 million from Q1 2013 – Net debt increased from year end 2013, driven by incentive compensation payments and consistent with seasonal borrowing patterns • Low cost debt driving reduced interest expense – Q1 2014 net interest expense of $6.6 million down from $7.9 million in Q1 2013 • Q1 Investment Spending Q1 2014 – Capital Expenditures (1) $16 m – M&A (2) $11 m – Co-Investment ($3 m) (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 acquisition payments and earn outs
Appendix
New York, Chicago Boston, Los Angeles 12 Prime Offices – Capital Value Clock, Q1 2013 v Q1 2014 Based on notional capital values for Grade A space in CBD or equivalent. US positions relate to the overall market Source: JLL Research, April 2014 Q1 2014 Capital Value growth slowing Capital Value growth accelerating Capital Values bottoming out Capital Values falling Q1 2013 Capital Value growth slowing Capital Value growth accelerating Capital Values bottoming out Capital Values falling Paris Beijing Milan Madrid Brussels Shanghai London Frankfurt Moscow Berlin, San Francisco Washington DC, Toronto Amsterdam Dallas Mexico City, Sydney New York, Chicago, Sao Paulo Boston, Los Angeles, Stockholm Houston Hong Kong Seoul Tokyo Singapore Mumbai Amsterdam, Madrid Berlin, Sydney, Shanghai Brussels San Francisco Houston, Frankfurt London Milan Paris Mexico City, Moscow Stockholm Tokyo Beijing Dallas, Seoul Singapore Washington DC Sao Paulo Toronto Hong Kong Americas EMEA Asia Pacific Mumbai
13 Prime Offices – Rental Clock, Q1 2013 v Q1 2014 Based on rents for Grade A space in CBD or equivalent. US positions relate to the overall market Source: JLL Research, April 2014 Q1 2014 Rental Value growth slowing Rental Value growth accelerating Rental Values bottoming out Rental Values falling Q1 2013 Rental Value growth slowing Rental Value growth accelerating Rental Values bottoming out Rental Values falling Washington DC Boston Los Angeles, Dubai San Francisco Houston Brussels, Singapore, Shanghai Dallas, London Paris Milan Frankfurt Moscow Berlin Stockholm Amsterdam, Sao Paulo Chicago, Madrid Mexico City Toronto Beijing Hong Kong Sydney Seoul Mumbai Rome Brussels, Paris, Madrid Beijing, Hong Kong, Sydney Singapore Seoul New York, Stockholm Tokyo Boston Shanghai Amsterdam Berlin, Frankfurt Johannesburg London Milan Moscow Los Angeles, Istanbul, Mumbai Chicago, Dubai San Francisco Washington DC Houston Toronto Mexico City Sao Paulo Dallas Americas EMEA Asia Pacific New York Johannesburg Istanbul, Tokyo
14 Q1 2014 Adjusted EBITDA* Performance Americas EMEA Asia Pacific LaSalle Consolidated * Refer to slide 18 for Reconciliation of GAAP Net Income to Adjusted EBITDA for the three months ended March 31, 2013, and 2014, for details relative to these adjusted EBITDA calculations. Segment 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 EBITDA of the four segments. ($ in millions) $25.1 $30.3 2013 2014 $3.4 $0.5 2013 2014 $5.6 $4.3 2013 2014 $13.8 $16.8 2013 2014 $47.8 $52.0 2013 2014
15 Q1 2014 Real Estate Services Revenue ($ in millions; % change in USD over Q4 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 $188.6 24% $54.0 10% $27.8 (1%) $270.4 18% Capital Markets and Hotels & Hospitality $40.2 4% $54.4 (7%) $20.9 (12%) $115.5 (4%) Property & Facility Management - Fee $106.3 19% $52.1 29% $89.4 9% $247.8 17% Gross Revenue $146.2 35% $76.5 79% $122.6 23% $345.3 38% Project & Development Services - Fee $44.6 18% $28.7 19% $14.1 (8%) $87.4 13% Gross Revenue $45.5 20% $82.1 47% $21.9 11% $149.5 32% Ad isory, Consulting & Other $26.6 10% $44.8 15% $21.5 16% $92.9 14% Total RES Operating Fee Revenue $406.3 19% $234.0 11% $173.7 3% $814.0 13% Gross Revenue $447.1 24% $311.8 27% $214.7 13% $973.6 22% Americas EMEA Asia Pacific Total RES
Fee Revenue / Expense Reconciliation Note: Consolidated revenue and fee revenue exclude equity earnings (losses). Restructuring and acquisition charges and intangible amortization related to the King Sturge acquisition are excluded from adjusted operating income margin. • Reimbursable vendor, subcontractor and out-of-pocket costs reported as revenue and expense in JLL financial statements have been increasing steadily • Gross accounting requirements increase revenue and costs without corresponding profit • Business managed on a fee revenue basis to focus on margin expansion in the base business 16 Three Months Ended March 31 ($ in millions) 2014 2013 Revenue $1,037.4 $856.0 Gross contract costs (159.6) (75.5) Fee revenue $877.8 $780.5 Operating expenses $1,052.7 $835.9 Gross contract costs (159.6) (75.5) Fee-based operating expenses $893.1 $760.4 Operating income (loss) ($15.3) $20.1 Add: Restructuring and acquisition charges 36.0 3.2 King Sturge intangible amortization 0.6 0.6 Adjusted operating income $21.3 $23.9 Adjusted operating income margin 2.4% 3.1%
17 Reconciliation of GAAP Net Income to Adjusted Net Income and Earnings per Share Three Months Ended March 31 ($ in millions) 2014 2013 GAAP net income attributable to common shareholders $15.9 $13.2 Shares (in 000s) 45,202 45,055 GAAP diluted earnings per share $0.35 $ 0.29 GAAP net income attributable to common shareholders $15.9 $13.2 Restructuring and acquisition charges, net 1.1 2.4 King Sturge intangible amortization, net 0.4 0.4 Adjusted net income $17.4 $16.0 Shares (in 000s) 45,202 45,055 Adjusted diluted earnings per share $0.39 $ 0.36
18 Reconciliation of GAAP Net Income to Adjusted EBITDA Three Months Ended March 31 ($ in millions) 2014 2013 GAAP net income $16.1 $13.3 Interest expense, net of interest income 6.6 7.9 Provision for (benefit from) income taxes (29.1) 4.4 Depreciation and amortization 22.4 19.1 EBITDA $16.0 $44.7 Restructuring and acquisition charges 36.0 3.2 Adjusted EBITDA $52.0 $47.9 JLL is a service mark of Jones Lang LaSalle Incorporated. Copyright 2014 Jones Lang LaSalle IP, Inc.