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

• bjectives 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

• n 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

• therwise.

2

Results

1 2 3 4

Introduction, Highlights & Business Development Financial Review Management Focus Summary & Outlook

3

Highlights

4

Performance overview Drivers Group Revenue £622.7m +13.8% (cc 10.3%) Group UPBT £42.8m +11.5% (cc 7.8%)

• Transaction advisory revenues up 5%.
• Strong Residential and International

Commercial market performances offset reduction in UK Commercial volumes.

• Continued expansion in the US through

bolt-on acquisitions and recruitment.

• Global property management revenue

up 23%.

• Consultancy revenue up 9%.
• Savills IM revenue growth of 96%

reflecting significant contribution from SEB (acquired 31 August 2015).

Group UEPS 21.8p +9.0% Net Cash £34.7m n/a Dividend 4.4p +10.0%

cc = constant currency

Savills Diversified Business Model

5

Defensive, Scale Businesses Revenue by Business Cyclical, High-Margin Businesses Property Management – 35% Consultancy – 17% Investment Management – 4% Commercial Transactions – 32% Residential Transactions – 12%

• Recurring revenue streams with less

exposure to transaction environment

• 1.95bn ft2 under management
• Strong Property Management business
• €17.1bn AUM
• High-return, but cyclical earnings
• 73:27 split Commercial vs. Residential
• 58:42 Commercial split Tenant rep/leasing
• vs. Capital markets

44% 56%

Combination of cyclical and less cyclical service lines

Ten Year H1 Revenues

6

• 100

200 300 400 500 600 700 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 £m Transactional "Non-Transactional"

48% 52% 44% 56% £136.2m £351.6m £288.8m 53% 47%

Broad Geographic Spread Over 31,000* employees in 700 offices in more than 60 countries

7

580

Employees

5,066

Employees

126

Offices

1,104

Employees

35

Offices

24,887

Employees

59

Offices

Revenue £94.4m

(15% of Total)

664

Employees

28

Offices

*Staff numbers – weighted average for 2016 H1

Revenue £255.8m

(41% of Total)

Revenue £63.1m

(10% of Total)

Revenue £209.4m

(34% of Total)

Business Development / Highlights

8

UK

UK North America Asia Pacific Europe Investment Management Growth Initiatives / Recruitment

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

Financial Review

9

Summary Underlying Results

10

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%

Revenue and underlying PBT by business

11 258.2 178.4 96.4 14.0 271.1 219.0 105.1 27.5

50 100 150 200 250 300

2015 2016

+23% +9% +96%

Revenue

24.3 7.7 7.8 2.5 23.3 10.2 8.2 3.9

5 10 15 20 25 30 +32% +5% +56% Transaction Advisory Property Management Consultancy Investment Management

UPBT

+5%

• 4%

Margin

9.4% 8.6% 4.3% 4.7% 8.1% 7.8% 17.9% 14.2% £m

Revenue and underlying PBT by region

12 231.0 184.9 86.7 44.4 255.8 209.4 94.4 63.1

50 100 150 200 250 300

2015 2016

Revenue

UK Asia Pacific North America

UPBT

+11% Continental Europe 22.5 12.8 7.5 (0.5) 24.8 13.1 7.8 (0.1)

• 5

5 10 15 20 25 30 +10% +13% +9% +42% +2% n/a +4%

£m

Margin

9.7% 9.7% 6.9% 6.3% 8.7% 8.3% (1.1)% (0.2)%

The above excludes other costs of £2.8m (2015-H1 £3.9m) not allocated to the

• perating activities of the group’s business segments

Cashflow performance

13

151 35 43 5 18 1 9 90 23 9 15 29 8 50 100 150 200 250

Net cash at 31-Dec-2015 UPBT Non-cash items Working capital Acquisition spend - current & deferred Net capex Net cash received from JV & associates Purchase of EBT shares Dividends paid Tax Foreign exchange Other Net cash at 30-Jun-2016

£m

Cash used in operations of £56m

At 30 June 2016 - Net cash of £34.7m At 30 June 2015 - Net debt of £(24.3)m

Commercial Transaction Advisory

14

2016 Revenue £197.6m (+2%) 2016 UPBT £12.9m (-28%)

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.

48.7 32.1 22.4 94.4

• 10

20 30 40 50 60 70 80 90 100 Asia Pacific UK Europe North America Growth

+6% (23)% +18% +9% 3.6 2.7 (1.2) 7.8

(2) (1)

• 1

2 3 4 5 6 7 8 9 Asia Pacific UK Europe North America Growth

(20)% (54)% n/a +4%

Residential Transaction Advisory

15

2016 Revenue £73.5m (+14%) 2016 UPBT £10.4m (+60%)

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.

16.3 57.2

10 20 30 40 50 60 70 Asia Pacific UK Growth

+28% +10% 3.0 7.4

• 1

2 3 4 5 6 7 8 Asia Pacific UK Growth

+173% +37%

Property Management

16

2016 Revenue £219.0m (+23%) 2016 UPBT £10.2m (+32%)

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.

128.0 73.7 17.3

• 20

40 60 80 100 120 140 Asia Pacific UK Europe Growth

+15% +35% +34% 6.3 4.9 (1.0)

(2) (1)

• 1

2 3 4 5 6 7 Asia Pacific UK Europe Growth

+2% +48% +44%

Consultancy

17

2016 Revenue £105.1m (+9%) 2016 UPBT £8.2m (+5%)

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.

81.1 16.4 7.6

10 20 30 40 50 60 70 80 90 UK Asia Pacific Europe Growth

+9% +9% +12% 7.2 0.2 0.8

1 2 3 4 5 6 7 8 UK Asia Pacific Europe Growth

+18% (80%) 14%

Investment Management

18

2016 Revenue £27.5m (+96%) 2016 UPBT £3.9m (+56%)

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.

11.7 15.8

• 2

4 6 8 10 12 14 16 18 UK Europe Growth

2.6 1.3

• 0.5

1.0 1.5 2.0 2.5 3.0 UK Europe Growth

+177% +41% +86% +44%

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

20

New markets – eg Philippines, India, South America Grow Savills IM and continue successful integration of SEB

Strong first half performance from diverse Group (geographical/business line)

Summary & Outlook

Brexit impact: a near term concern for markets, but also an opportunity to grow market share

21

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

• utcomes has broadened

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