Savills plc. Results for the six months ended 30 June 2016

Transcription

1 Savills plc Results for the six months ended 30 June 2016

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 Management Focus 4 Summary & Outlook 3

4 Highlights Performance overview Group Revenue Group UPBT Group UEPS 21.8p +9.0% Net Cash 622.7m +13.8% (cc 10.3%) 42.8m +11.5% (cc 7.8%) 34.7m n/a Dividend 4.4p +10.0% cc = constant currency Drivers 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). 4

5 Savills Diversified Business Model Defensive, Scale Businesses Revenue by Business Cyclical, High-Margin Businesses Property Management 35% Consultancy 17% Commercial Transactions 32% Residential Transactions 12% Investment Management 4% Recurring revenue streams with less exposure to transaction environment 1.95bn ft 2 under management Strong Property Management business 56% 44% High-return, but cyclical earnings 73:27 split Commercial vs. Residential 58:42 Commercial split Tenant rep/leasing vs. Capital markets 17.1bn AUM Combination of cyclical and less cyclical service lines 5

6 Ten Year H1 Revenues m m 288.8m 351.6m % % % 53% 56% % Transactional "Non-Transactional" 6

7 Broad Geographic Spread Over 31,000* employees in 700 offices in more than 60 countries 5,066 Employees 126 Offices 1,104 Employees 35 Offices 664 Employees 28 Offices 24,887 Employees 59 Offices Revenue 94.4m 580 (15% Employees of Total) Revenue 255.8m (41% of Total) Revenue 63.1m (10% of Total) Revenue 209.4m (34% of Total) *Staff numbers weighted average for 2016 H1 7

8 Business Development / Highlights 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 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 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 Integration of SEB Substantial new mandates German Retail fund launched New Sydney office New Shanghai office Retail asset/fund management team lift 8

9 Financial Review 9

10 Summary Underlying Results 6 months ended 30 June ( m) % chg Revenue % Underlying PBT % 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 % 10

11 Revenue and underlying PBT by business Revenue m Transaction Advisory +5% % 23.3 Property Management % Consultancy +9% Investment Management % UPBT % % % Margin 9.4% 8.6% 4.3% 4.7% 8.1% 7.8% 17.9% 14.2% 11

12 Revenue and underlying PBT by region m UK Asia Pacific North America +11% % Continental Europe Revenue % % % % UPBT % (0.5) n/a (0.1) Margin 9.7% 9.7% 6.9% 6.3% 8.7% 8.3% (1.1)% (0.2)% 12 The above excludes other costs of 2.8m (2015-H1 3.9m) not allocated to the operating activities of the group s business segments

13 Cashflow performance 250 Cash used in operations of 56m At 30 June Net cash of 34.7m At 30 June Net debt of (24.3)m 150 m 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 29 Dividends paid 8 Tax Foreign exchange Other 35 Net cash at 30-Jun

14 Commercial Transaction Advisory 2016 Revenue 197.6m (+2%) 2016 UPBT 12.9m (-28%) Asia Pacific UK Europe North America (1) (2) (1.2) Asia Pacific UK Europe North America Growth +6% (23)% +18% +9% Growth (20)% (54)% n/a +4% 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. 14

15 Residential Transaction Advisory 2016 Revenue 73.5m (+14%) 2016 UPBT 10.4m (+60%) Asia Pacific UK Asia Pacific UK Growth +28% +10% Growth +173% +37% 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. 15

16 Property Management 2016 Revenue 219.0m (+23%) 2016 UPBT 10.2m (+32%) Asia Pacific UK Europe (1) (2) (1.0) Asia Pacific UK Europe Growth +15% +35% +34% Growth +2% +48% +44% 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. 16

17 Consultancy 2016 Revenue 105.1m (+9%) 2016 UPBT 8.2m (+5%) UK Asia Pacific Europe UK Asia Pacific Europe Growth +9% +9% +12% Growth +18% (80%) 14% 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. 17

18 Investment Management 2016 Revenue 27.5m (+96%) 2016 UPBT 3.9m (+56%) UK Europe - UK Europe Growth +41% +177% Growth +44% +86% 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 Overall transacted 1.0bn on behalf of funds/mandates. 18

19 Strategic Progress 19

20 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 New markets eg Philippines, India, South America Grow Savills IM and continue successful integration of SEB 20

21 Summary & Outlook Strong first half performance from diverse Group (geographical/business line) Brexit impact: a near term concern for markets, but also an opportunity to grow market share 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 outcomes has broadened 21

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