Savills plc: Results for the year ended 31 December 2016

Transcription

1 Savills plc: Results for the year ended 31 December 216

2 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

3 Results 1 Introduction, Highlights & Business Development 2 Financial Review 3 Markets, Outlook & Summary 3

4 Highlights Performance overview Group Revenue Group UPBT Group UEPS 72.5p +14.7% Net Cash 1,445.9m +12.7% (cc 5.6%) 135.8m +11.9% (cc 4.4%) 187.8m +24.4% Dividend 29.p +11.5% Drivers Transaction advisory revenues up 7%, strong growth in Continental Europe, market share gains in Asia Pacific (China) and resilient performance in the UK growth of Less Transactional businesses (PM up 21% Consultancy up 4%) Savills IM revenue growth of 62% reflecting benefits of SEB Acquisition cc = constant currency 4

5 Savills Diversified Business Model Defensive, Scale Businesses Revenue by Business Cyclical, High-Margin Businesses Property Management 33% Consultancy 16% Commercial Transactions 35% Residential Transactions 11% Investment Management 5% Recurring revenue streams with less exposure to transaction environment 1.76bn ft 2 under management Strong Property Management business 54% 46% High-return, but cyclical earnings 76:24 split Commercial vs. Residential 56:44 Commercial split Tenant rep/leasing vs. Capital markets 16.2bn AUM Combination of cyclical and less cyclical service lines 5

6 Ten Year Revenues m 1,6 1, m 785.1m 1,2 46% 1, 8 46% 48% % 54% 52% 54% 2 49% Transactional "Less Transactional" 6

7 Broad Geographic Spread Over 32, employees in 7* offices in more than 6 countries North America 676 Employees 3 Offices 211.1m Revenue 15% of Total United Kingdom 5,136 Employees 13 Offices 578.3m Revenue 4% of Total Europe 1,13 Employees 35 Offices 17.6m Revenue 12% of Total Asia Pacific 25,446 Employees 6 Offices 485.9m Revenue 33% of Total * Includes associates

8 Revenue m Business Development since 213 1,6 1,4 244m 1,446m 1,2 297m 1, 8 95m Region (and main contributors to growth) UK (Smiths Gore; New Offices; New Teams) Asia-Pacific (Cordeau Marshall; China & Singapore teams) Continental Europe (Tagis, New Offices) North America (Savills Studley + bolt on acquisitions) Investment Management (SEB, Merchant Capital) Acquired Organic 216 8

9 Financial Review 9

10 Summary Underlying Results Year ended December ( millions) % chg Revenue 1, , % Underlying profit before tax % Underlying PBT margin 9.4% 9.5% -.1% pts Underlying basic earnings per share 72.5p 63.2p +15% Dividend per share 29.p 26.p +12% Net cash % Net assets % 1

11 Dividends Year ended December (pence) % chg Interim ordinary ( Less Transactional ) 4.4p 4.p +1% Final ordinary ( Less Transactional ) 1.1p 8.p +26% Supplemental ( Transactional ) 14.5p 14.p +4% Total distribution (pence) 29.p 26.p +12% Total distribution ( m) % 11

12 Cashflow performance m Cash generation from operations of 117.8m Net cash at 31-Dec-215 UPBT Non-cash items Working capital Acquisition spend - current & deferred Capex Dividends paid Tax Foreign exchange Other Net cash at 31-Dec

13 Revenue and Underlying PBT by business Revenue m Transaction Advisory +7% Property Management % Consultancy % 24.3 Investment Management % 72. UPBT % % +5% % Margin 12.4% 12.1% 5.4% 5.% 1.7% 1.8% 24.5% 24.4% 13

14 Revenue and Underlying PBT by business: Constant currency equivalent Transaction Advisory Property Management Consultancy Investment Management Total (1)% % 1,38 1,36 +6% 1,355.3 Revenue m % % 67. 1,34 1,32 1,3 1,28 1,26 1,283.5 UPBT m (3)% Divisional UPBT total excludes other central overheads of 11.3m in 216 and 12.2m in % +3% % 16. 1, % Group margin of 9.4% (215: 9.5%)

15 Revenue and Underlying PBT by region UK Asia Pacific North America Continental Europe m 7 +3% % % 3 +31% % % % 3 +52% Margin 12.8% 12.5% 8.5% 8.8% 9.8% 9.% 6.9% 7.9% Revenue UPBT 15 The above excludes other costs of 11.3m ( m) not allocated to the operating activities of the Group s business segments

16 Commercial Transaction Advisory 216 Revenue 498m (+8%) 216 UPBT 59m (+6%) Asia Pacific UK Europe North America Asia Pacific UK Europe North America Growth +16% (13)% +27% +1% Growth +26% (13)% +25% +1% Asia Pacific market share gains in Mainland China, Australia and Singapore, 4% revenue growth in constant currency UK market share gains partially mitigating the effect of substantially lower market volumes Europe constant currency growth in revenues of 14%, with stronger transactional markets in Germany, France and the Netherlands, partially offset by reduced volumes in Irish market North America constant currency decline in revenues of 3%; slow down in lead up to the Presidential Election. Strong pipeline heading into

17 Residential Transaction Advisory 216 Revenue 163m (+3%) 216 UPBT 21m (%) Asia Pacific 125 UK Asia Pacific 18 UK Growth +25% (3)% Growth +6% (2)% UK impact of reduction in secondary sales revenue mitigated by strong performance in Development sales Asia Pacific 13% constant currency growth in revenues; strong performances in Hong Kong, Vietnam and Mainland China. Non-recurring reorganisation costs in Australia affected profitability 17

18 Property Management 216 Revenue 473m (+21%) 216 UPBT 23m (+12%) Asia Pacific UK Europe Asia Pacific UK Europe -2 Growth +2% +19% +38% Growth +15% +4% +8% Asia Pacific growth in Hong Kong, Japan and Korea offset decline in Australia and SE Asia (8% constant currency growth) UK Organic growth of 9% (Incl. Residential Lettings up 8%). Full year effect of Smiths Gore (rural) and 216 acquisition of GBR Phoenix Beard (Midlands). Profitability impacted by expansion costs in Rural, Energy and Projects Europe revenue growth of 23% in constant currency with significant contribution from France, the Netherlands, Spain and Sweden 18

19 Consultancy 216 Revenue 24m (+4%) 216 UPBT 26m (+5%) UK Asia Pacific Europe UK Asia Pacific Europe 1 Growth % +22% +17% Growth +2% +9% +86% UK strong performances in Hospitality and Leisure, Building and Project Consultancy, Planning and Professional and Financial Services, offset by reduced activity in Development, Rural and Energy Consultancy Asia Pacific 11% growth in constant currency. Growth in Singapore, Australia (valuations), Vietnam, Korea and Taiwan. PI costs in Australia impacted profitability Europe 5% growth in constant currency improved performances in Germany, France, Spain, Poland and the Netherlands. Profitability enhanced by 215 recruitment 19

20 Investment Management 216 Revenue 72m (+62%) 216 UPBT 18m (+61%) UK Europe Asia Pacific UK Europe Asia Pacific 2 Growth +55% +43% n/a Growth +49% +42% n/a Fee income substantially improved through full year effect of 215 acquisition of SEB Total volume of transactions exceeded 5bn (ranked 5 th in EMEA) Large volume disposals during the year as part of the dissolution of the German open-ended funds Assets under management decreased by 5% to 16.2bn (215: 17.1bn) - effect of liquidation distributions to unit holders in the SEB German Open Ended Funds outweighing the 1.7bn new capital raised 2

21 Markets and Outlook 21

22 Key Market Themes US Post Election mood in the US amongst corporate occupiers is reasonably positive UK Brexit negotiations fuel uncertainty Trading volumes remain relatively subdued Some UK Occupiers delaying expansion decisions UK remains prime location for international investors Continental Europe Some Election concerns, but markets stable and international investors remain attracted to Europe Asia Some concerns over China financial restrictions cooling the high end Residential market (Shanghai) and also reducing domestic capital outflows into overseas real estate Continued significant appetite from Asian investors for global Real Estate 22

23 Management Focus for 217 Continue investment in the US and Europe Integrate new acquisitions / teams Selective investment in technology Continue investment in less transactional businesses - PM, Consultancy Development of Savills Investment Management s platform Reviewing new markets 23

24 Summary 216 another record year despite the headwinds Global breadth and resilient UK business Strong growth in Less Transactional Businesses including Investment Management 217 variable market conditions and geopolitical uncertainty in US/UK markets Good start to the year and our 217 expectations remain unchanged 24

25 Savills plc: Results for the year ended 31 December 216