Attached files
| file | filename |
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| EX-99.1 - EXHIBIT - JONES LANG LASALLE INC | exhibit991secondquarter201.htm |
| 8-K - 8-K - JONES LANG LASALLE INC | q22014earningrelease-form8k.htm |
Supplemental Information Second-Quarter Earnings Call 2014
Market & Financial Overview
Q2 & FY Capital Markets & Leasing Markets Volumes JLL Research Leasing Activity Improving Investment Volume Strength Varies 3 HISTORICAL FORECAST Q2 2014 v. Q2 2013 Q2 TTM 2014 v. Q2 TTM 2013 FY 2014 v. FY 2013 Market Volumes Market Volumes Market Volumes Capital Markets(1) Americas 30% 34% ~ 25% EMEA 49% 42% ~ 15% Asia Pacific -2% 12% ~ 10% Total 28% 32% ~ 20% HISTORICAL FORECAST Q2 2014 v. Q2 2013 Q2 TTM 2014 v. Q2 TTM 2013 FY 2014 v. FY 2013 Gross Absorption Gross Absorption Gross Absorption Leasing Americas (U.S. only) 0% 5% ~ 0-5% EMEA (Europe only) 11% -3% ~ 5% Asia Pacific (select markets) 20% 7% ~ 15-20% Total 5% 3% ~ 5% (1) Market volume data excludes multi-family assets. Source: JLL Research, July 2014
Selected Business Wins and Expansions 4 Americas EMEA Asia Pacific - Royal Bank of Scotland – 1.4M sf - Desjardins – 600K sf - Samsung Telecommunications Americas – 800K sf - 225 Bush, San Francisco – $350M - 61 Broadway, New York – $200M - HSBC Tower, London - Sapphire Portfolio, Dublin – €375M - Les Ateliers du Parc, Paris – €155M - European Hotel Portfolio – 18 Assets - AstraZeneca, Sydney - Bharti Airtel Limited, Gurgaon – 475K sf - TiT International Square, Taiwan – $132M - Westpac Place, Sydney – AUD 435M - Novotel, New York – $274M - Volkswagen, Poland - BNY Mellon, New York – 350K sf - Foley & Lardner, New York – 83K sf - Hilal Tower, Abu Dhabi – 375K sf - International Quarter, London – 248K sf - Levent 199, Istanbul – 323K sf - Talan Towers, Kazakhstan – 1.3M sf - Sofitel Sydney Wentworth – $181M - Shanghai Tower, Shanghai – 2.3M sf - Poly International Plaza T1, Beijing – 660K sf - Capital Place, Jakarta – 974K sf
Prime Offices – Projected Changes in Values, 2014 5 + 10-20% + 5-10% + 0-5% - 0-5% - 5-10% Singapore Capital Values Rental Values Moscow Moscow, Sao Paulo Sao Paulo *New York – Midtown, London – West End, Paris - CBD. Nominal rates in local currency. Source: JLL Research, July 2014 Dubai, London*, Tokyo Beijing, San Francisco, New York* Boston, Mexico City Stockholm, Hong Kong, Seoul Paris*, Sydney, Frankfurt Chicago, Los Angeles, Toronto, Washington DC Shanghai, Madrid, Brussels, Mumbai Tokyo, Boston, Chicago Madrid, New York*, Los Angeles San Francisco, Mexico City Dubai, London* Seoul, Sydney, Beijing Frankfurt, Singapore Stockholm, Paris*, Toronto Washington DC, Shanghai, Mumbai Brussels, Hong Kong
Financial Information
$908.3 $1,086.0 2013 2014 $234.1 $309.0 2013 2014 $407.4 $493.6 2013 2014 $205.0 $214.4 2013 2014 7 Q2 2014 Revenue Performance Note: Equity earnings of $9.1M and $12.5M in 2013 and 2014, respectively, are included in segment results, however, excluded from Consolidated totals. Year-over-year increases shown fee-based have been calculated using fee revenue, which excludes gross contract costs. Americas EMEA Asia Pacific LaSalle Consolidated ($ in millions; % change in local currency) 22% (27% gross) 24% (39% gross) 8% (21% gross) 18% (28% gross) $431.6 Fee revenue Gross contract costs $71.0 $81.5 2013 2014 13% $545.1 $267.6 $395.6 $228.4 $267.5 $989.4 $1,277.2
$135.8 $154.0 2013 2014 12% $444.9 $543.0 2013 2014 $1,688.8 $1,963.7 2013 2014 $749.8 $900.1 2013 2014 $372.9 $388.0 2013 2014 8 YTD 2014 Revenue Performance Note: Equity earnings of $14.6M and $21.4M in 2013 and 2014, respectively, are included in segment results, however, excluded from Consolidated totals. Year-over-year increases shown fee-based have been calculated using fee revenue, which excludes gross contract costs. Americas EMEA Asia Pacific LaSalle Consolidated ($ in millions; % change in local currency) 21% (26% gross) 16% (31% gross) 9% (21% gross) 16% (25% gross) $793.3 Fee revenue Gross contract costs $992.4 $512.6 $707.5 $418.3 $482.1 $1,845.4 $2,314.6
9 Q2 2014 Real Estate Services Revenue ($ in millions; % change in local currency over Q2 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 $249.6 26% $67.6 7% $48.0 27% $365.2 23% Capital Markets and Hotels & Hospitality $60.1 13% $93.4 38% $29.6 (29%) $183.1 12% Property & Facility Management - Fee $103.6 21% $60.3 35% $93.3 17% $257.2 22% Gross Revenue $154.3 43% $88.5 77% $130.4 34% $373.2 46% Project & Development Services - Fee $51.3 23% $34.1 16% $17.5 12% $102.9 19% Gross Revenue $52.1 23% $92.5 56% $33.5 64% $178.1 46% Ad isory, Consulting & Other $28.0 3% $53.6 21% $26.0 6% $107.6 12% Total RES Operating Fee Revenue $492.6 22% $309.0 24% $214.4 8% $1,016.0 19% Gross Revenue $544.1 27% $395.6 39% $267.5 21% $1,207.2 29% Americas EMEA Asia Pacific Total RES
10 YTD 2014 Real Estate Services Revenue ($ 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 $438.2 25% $121.7 7% $75.0 19% $634.9 21% Capital Markets and Hotels & Hospitality $100.3 9% $147.8 14% $51.3 (21%) $299.4 4% Property & Facility Management - Fee $209.6 21% $112.4 30% $182.7 17% $504.7 21% Gross Revenue $300.3 41% $165.1 75% $252.9 33% $718.3 44% Project & Development Services - Fee $96.0 21% $62.7 15% $31.5 6% $190.2 16% Gross Revenue $97.6 23% $174.5 48% $55.4 43% $327.5 38% Ad isory, Consulting & Other $54.8 7% $98.4 15% $47.6 13% $200.8 12% Total RES Operating Fee Revenue $898.9 21% $543.0 16% $388.1 9% $1,830.0 16% Gross Revenue $991.2 26% $707.5 31% $482.2 21% $2,180.9 26% Americas EMEA Asia Pacific Total RES
LaSalle Investment Management Note: AUM data reported on a one-quarter lag. Q2 2014 Highlights Q2 2014 AUM = $50.0 Billion U.K. $16.9 Continental Europe $4.8 North America $12.6 Asia Pacific $4.8 Public Securities $10.9 Revenue Q2 2014 Q2 2013 Advisory Fees $ 60 $ 55 Transaction Fees & Other 4 5 Incentive Fees 6 1 Operating Revenue $ 70 $ 61 Equity Earnings 12 10 Total Revenue $ 82 $ 71 Adjusted EBITDA $ 23 $ 20 Adjusted EBITDA Margin 27.9% 28.4% ($ in millions) ($ in billions) 11 Separate Accounts $26.1 Commingled Funds $13.0 Public Securities $10.9 • Assets Under Management reach $50 billion • New capital raised of $2.3 billion through YTD June 2014 • Continued incentive fee potential as legacy funds liquidate in future quarters
Solid Balance Sheet Position Q2 2014 Highlights ($ in millions) 12 Balance Sheet Q2 2014 Q4 2013 Q2 2013 Cash and Cash Equivalents $ 151 $ 153 $ 122 Short-Term Borrowings 25 25 51 Credit Facility 410 155 479 Net Bank Debt $ 284 $ 27 $ 408 Long-Term Senior Notes 275 275 275 Deferred Business Acquisition Obligations 113 135 151 Total Net Debt $ 672 $ 437 $ 834 (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 paid during the period for transactions closed in prior periods (3) Includes distributions of $23m partially offset by capital contributions of $19m. • Investment grade balance sheet; Baa2 (Stable) / BBB- (Positive) – In June 2014, Standard & Poor’s improved its outlook on JLL rating to positive from stable – Reduced net debt by $162 million from Q2 2013 • Low cost debt driving reduced interest expense – YTD Q2 2014 net interest expense of $14.3 million down from $17.0 million for YTD Q2 2013 • YTD Q2 2014 Investment Spending YTD Q2 2014 – Capital Expenditures (1) $42 m – M&A (2) $57 m – Co-Investment (3) ($4 m)
Appendix
14 Prime Offices – Capital Value Clock, Q2 2013 v Q2 2014 Based on notional capital values for Grade A space in CBD or equivalent. US positions relate to the overall market Source: JLL Research, July 2014 Americas EMEA Asia Pacific Capital Value growth slowing Capital Value growth accelerating Capital Values bottoming out Capital Values falling Q2 2014 Capital Value growth slowing Capital Value growth accelerating Capital Values bottoming out Capital Values falling Q2 2013 Boston, Chicago San Francisco, Houston, Berlin Washington DC, Amsterdam Toronto Sao Paulo, Paris Mexico City, Frankfurt Dallas, Singapore New York, Los Angeles, Stockholm Beijing Shanghai Mumbai Seoul, Tokyo Sydney Milan Madrid Brussels London Moscow ` Hong Kong Hong Kong Sydney, Singapore Shanghai London Seoul Tokyo Mumbai, Beijing Amsterdam Paris Madrid Milan Brussels Stockholm San Francisco Houston, Frankfurt Berlin Toronto, Mexico City Moscow Washington, DC Dallas Boston, Chicago New York, Los Angeles Sao Paulo
15 Prime Offices – Rental Clock, Q2 2013 v Q2 2014 Based on rents for Grade A space in CBD or equivalent. US positions relate to the overall market Source: JLL Research, July 2014 Americas EMEA Asia Pacific Rental Value growth slowing Rental Value growth accelerating Rental Values bottoming out Rental Values falling Q2 2014 Rental Value growth slowing Rental Value growth accelerating Rental Values bottoming out Rental Values falling Q2 2013 Chicago Hong Kong Singapore Brussels Dallas, Frankfurt Houston San Francisco Toronto Los Angeles, Seoul, Shanghai Tokyo Washington, DC Mexico City Sao Paulo Paris Mumbai, Boston Sydney Beijing Johannesburg Milan Madrid New York Istanbul, Dubai London Berlin, Moscow Stockholm Amsterdam Shanghai New York, Stockholm Tokyo Singapore Los Angeles, Mumbai Boston Washington, DC Madrid, Milan Paris, Brussels Hong Kong Sydney Seoul Chicago, Dubai Istanbul, Beijing London Frankfurt Berlin Moscow Amsterdam Dallas Houston San Francisco Johannesburg Toronto Sao Paulo Mexico City
16 Q2 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 June 30, 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) $18.1 $30.3 2013 2014 $16.5 $19.0 2013 2014 $20.2 $22.8 2013 2014 $101.7 $132.4 2013 2014 $46.9 $60.3 2013 2014
17 YTD 2014 Adjusted EBITDA* Performance Americas EMEA Asia Pacific LaSalle Consolidated * Refer to slide 22 for Reconciliation of GAAP Net Income to Adjusted EBITDA for the six months ended June 30, 2013, and 2014, for details relative to these adjusted EBITDA calculations. Segment EBITDA is calculated by adding the segment’s depreciation and amortization to its reported operating income, which excludes restructuring and acquisition charges. Consolidated adjusted EBITDA is the sum of the EBITDA of the four segments. ($ in millions) $72.0 $90.6 2013 2014 $21.5 $30.8 2013 2014 $22.0 $23.3 2013 2014 $33.9 $39.6 2013 2014 $149.5 $184.4 2013 2014
18 Q2 2014 Real Estate Services Revenue ($ in millions; % change in USD over Q2 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 $249.6 26% $67.6 12% $48.0 22% $365.2 23% Capital Markets and Hotels & Hospitality $60.1 13% $93.4 48% $29.6 (30%) $183.1 15% Property & Facility Management - Fee $103.6 20% $60.3 44% $93.3 13% $257.2 22% Gross Revenue $154.3 40% $88.5 89% $130.4 30% $373.2 45% Project & Development Services - Fee $51.3 21% $34.1 24% $17.5 8% $102.9 20% Gross Revenue $52.1 22% $92.5 65% $33.5 57% $178.1 48% Advisory, Consulting & Other $28.0 2% $53.6 29% $26.0 4% $107.6 14% Total RES Operating Fee Revenue $492.6 21% $309.0 32% $214.4 5% $1,016.0 20% Gross Revenue $544.1 26% $395.6 48% $267.5 17% $1,207.2 30% Americas EMEA Asia Pacific Total RES
19 YTD 2014 Real Estate Services Revenue ($ 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 $438.2 25% $121.7 12% $75.0 15% $634.9 21% Capital Markets and Hotels & Hospitality $100.3 9% $147.8 22% $51.3 (24%) $299.4 6% Property & Facility Management - Fee $209.6 19% $112.4 36% $182.7 11% $504.7 19% Gross Revenue $300.3 37% $165.1 84% $252.9 26% $718.3 41% Project & Development Services - Fee $96.0 20% $62.7 22% $31.5 1 0% $190.2 16% Gross Revenue $97.6 21% $174.5 56% $55.4 34% $327.5 40% Advisory, Consulting & Other $54.8 6% $98.4 22% $47.6 9% $200.8 14% Total RES Operating Fee Revenue $898.9 20% $543.0 22% $388.1 4% $1,830.0 17% Gross Revenue $991.2 25% $707.5 38% $482.2 15% $2,180.9 26% Americas EMEA Asia Pacific Total RES
Fee Revenue / Expense Reconciliation Note: Consolidated revenue and fee revenue exclude equity earnings (losses). Restructuring and acquisition charges and intangible amortization related to the King Sturge acquisition are excluded from adjusted operating income margin. • Reimbursable vendor, subcontractor and out-of-pocket costs reported as revenue and expense in JLL financial statements have been increasing steadily • Gross accounting requirements increase revenue and costs without corresponding profit • Business managed on a fee revenue basis to focus on margin expansion in the base business 20 ($ in millions) 2014 2013 2014 2013 Revenue $1,277.2 $ 989.4 $2,314.6 $1,845.4 Gross contract costs (191.2) (81.1) (350.9) (156.6) Fee revenue $1,086.0 $ 908.3 $1,963.7 $1,688.8 Operating expenses $1,185.5 $ 923.6 $2,238.2 $1,759.5 Gross contract costs (191.2) (81.1) (350.9) (156.6) Fee-based operating expenses $ 994.3 $ 842.5 $1,887.3 $1,602.9 Operating income $ 91.7 $ 65.8 $ 76.4 $ 85.9 Add: Restructuring and acquisition charges 5.5 6.6 41.4 9.8 King Sturge intangible amortization 0.6 0.6 1.1 1.1 Adjusted operating income $ 97.8 $ 73.0 $ 118.9 $ 96.8 Adjusted operating income margin 9.0% 8.0% 6.1% 5.7% Three Months Six Months Ended June 30 Ended June 30
21 Reconciliation of GAAP Net Income to Adjusted Net Income and Earnings per Share ($ in millions) 2014 2013 2014 2013 GAAP net income attributable to common shareholders $ 71.8 $ 46.3 $ 87.7 $ 59.4 Shares (in 000s) 45,278 45,141 45,220 45,091 GAAP diluted earnings per share $ 1.58 $ 1.03 $ 1.94 $ 1.32 GAAP net income attributable to common shareholders $ 71.8 $ 46.3 $ 87.7 $ 59.4 Restructuring and acquisition charges, net 4.1 5.0 5.2 7.4 King Sturge intangible amortization, net 0.4 0.4 0.9 0.8 Adjusted net income $ 76.3 $ 51.7 $ 93.8 $ 67.6 Shares (in 000s) 45,278 45,141 45,220 45,091 Adjusted diluted earnings per share $ 1.68 $ 1.15 $ 2.07 $ 1.50 Three Months Six Months Ended June 30 Ended June 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 $ 72.4 $ 49.5 $ 88.5 $ 62.7 Interest expense, net of interest income 7.7 9.0 14.3 17.0 Provision for (benefit from) income taxes 24.1 16.4 (5.0) 20.8 Depreciation and amortization 22.8 20.2 45.2 39.2 EBITDA $ 127.0 $ 95.1 $ 143.0 $ 139.7 Restructuring and acquisition charges 5.5 6.6 41.4 9.8 Adjusted EBITDA $ 132.5 $ 101.7 $ 184.4 $ 149.5 Ended June 30 Ended June 30 Three Months Six Months