Savills plc Results for the six months to 30 June 2015 6 August 2015 1
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
Results 1 Introduction & Highlights 2 Financial Review 3 Business Review 4 Management Focus 5 Summary & Outlook 3
Highlights Group revenue up 27% (25% in constant currency) to 547.0m (H1 2014: 430.8m) Group underlying profit before tax up 28% (24% in constant currency) to 38.4m (H1 2014: 30.1m) Transaction Advisory revenue growth of 55% as strong UK Commercial, Asia Pacific and US performances offset weaker UK Residential activity US revenues up substantially on full period effect of Savills Studley, with organic revenue growth of 24%. Several bolt-on acquisitions completed in the period Savills Investment Management revenue growth of 10% (14% in constant currency). Assets under Management increased 25% to 7.9bn (H1 2014: 6.3bn) and SEB acquisition expected to close imminently 4
Business Development 5
Financial Review 6
Summary Underlying Results 6 months ended June ( millions) 2015 2014 % chg Revenue 547.0 430.8 27.0% Underlying profit before tax 38.4 30.1 27.6% Underlying PBT margin 7.0% 7.0% - Underlying basic earnings per share 20.0p 17.2p 16.3% Interim Dividend 4.0p 3.75p 6.7% Net (debt) / cash (24.3) 2.5 n/a 7
Underlying PBT Reconciliation 6 months ended June ( millions) 2015 2014 Reported profit before tax 26.4 24.7 Intangible assets amortisation 1.5 1.1 Share-based payment adjustment (0.6) (0.4) Restructuring costs 0.5 0.5 Profit on disposal of available-for-sale investments - (2.2) Acquisition related costs 10.6 6.4 Underlying profit before tax 38.4 30.1 8
Global Revenue and Underlying PBT 6 months ended June ( millions) Revenue UPBT 2015 2014 % chg 2015 2014 % chg Transaction Advisory 258.2 166.1 55.4% 24.3 16.3 49.1% Property Management 178.4 158.5 12.6% 7.7 7.6 1.3% Consultancy 96.4 93.5 3.1% 7.8 8.4 (7.1)% Investment Management 14.0 12.7 10.2% 2.5 1.6 56.3% Other - - - (3.9) (3.8) (2.6)% Total 547.0 430.8 27.0% 38.4 30.1 27.6% UPBT margin 7.0% 7.0% 9
Revenue and Underlying Profit by Region 6 months ended June ( millions) Revenue UPBT 2015 2014 % chg 2015 2014 % chg UK 222.7 209.6 6.3% 20.7 20.8 (0.5)% Asia Pacific 184.9 158.1 17.0% 12.8 12.1 5.8% Europe 38.7 39.3 (1.5)% (1.2) 0.1 n/a United States 86.7 11.1 681.1% 7.5 (0.7) n/a Investment Management 14.0 12.7 10.2% 2.5 1.6 56.3% Other - - - (3.9) (3.8) (2.6)% Total 547.0 430.8 27.0% 38.4 30.1 27.6% 10
Constant Currency Equivalent 6 months ended June ( millions) Revenue UPBT 2015 2014 % chg 2015 2014 % chg UK 222.7 209.6 6.3% 20.7 20.8 (0.5)% Asia Pacific 176.3 158.1 11.5% 12.1 12.1 - Europe 43.6 39.3 10.9% (1.0) 0.1 n/a United States 79.4 11.1 615.3% 6.7 (0.7) n/a Investment Management 14.5 12.7 14.2% 2.8 1.6 75.0% Other - - n/a (3.9) (3.8) (2.6)% Total 536.5 430.8 24.5% 37.4 30.1 24.3% 11
Transaction Advisory Business 6 months ended June ( millions) Revenue UPBT 2015 2014 % chg 2015 2014 % chg - Asia Pacific 46.1 35.7 29.1% 4.5 3.5 28.6% Commercial Transactions - UK 41.9 30.3 38.3% 5.9 2.5 136.0% - Europe 19.0 20.5 (7.3)% (0.1) 1.1 n/a - United States 86.7 11.1 681.1% 7.5 (0.7) n/a Total Commercial Transactions 193.7 97.6 98.5% 17.8 6.4 178.1% Residential Transactions - UK 51.8 59.6 (13.1)% 5.4 8.4 (35.7)% - Asia Pacific 12.7 8.9 42.7% 1.1 1.5 (26.7)% Total Residential Transactions 64.5 68.5 (5.8)% 6.5 9.9 (34.3)% Total 258.2 166.1 55.4% 24.3 16.3 49.1% UPBT margin 9.4% 9.8% 12
Non-Transactional Business 6 months ended June ( millions) Revenue UPBT 2015 2014 % chg 2015 2014 % chg - Asia Pacific 111.1 99.1 12.1% 6.2 5.7 8.8% Property Management - UK 54.4 47.9 13.6% 3.3 3.6 (8.3)% - Europe 12.9 11.5 12.2% (1.8) (1.7) (5.9)% Total Property Management 178.4 158.5 12.6% 7.7 7.6 1.3% - UK 74.6 71.8 3.9% 6.1 6.3 (3.2)% Consultancy - Asia Pacific 15.0 14.4 4.2% 1.0 1.4 (28.6)% - Europe 6.8 7.3 (6.8)% 0.7 0.7 - Total Consultancy 96.4 93.5 3.1% 7.8 8.4 (7.1)% Investment Management 14.0 12.7 10.2% 2.5 1.6 56.3% Total 288.8 264.7 9.1% 18.0 17.6 2.3% UPBT margin 6.2% 6.6% 13
Business Review Service Lines 14
Commercial Transaction Advisory 6 months ended June ( millions) Revenue UPBT 2015 2014 % chg 2015 2014 % chg - Asia Pacific 46.1 35.7 29.1% 4.5 3.5 28.6% Commercial Transactions - UK 41.9 30.3 38.3% 5.9 2.5 136.0% - Europe 19.0 20.5 (7.3)% (0.1) 1.1 n/a - United States 86.7 11.1 681.1% 7.5 (0.7) n/a Total Commercial Transactions 193.7 97.6 98.5% 17.8 6.4 178.1% UPBT margin 9.2% 6.6% Asia Pacific substantial market share growth in Hong Kong UK Central London investment and leasing markets remain strong. Continued strength in UK regional investment Europe constant currency growth in revenues of 4%, driven primarily by Germany US like-for-like revenue growth of 24%. Improved position in tenant rep and occupier services 15
Residential Transaction Advisory 6 months ended June ( millions) Revenue UPBT 2015 2014 % chg 2015 2014 % chg Residential Transactions - UK 51.8 59.6 (13.1)% 5.4 8.4 (35.7)% - Asia Pacific 12.7 8.9 42.7% 1.1 1.5 (26.7)% Total Residential Transactions 64.5 68.5 (5.8)% 6.5 9.9 (34.3)% UPBT margin 10.1% 14.5% UK revenues down 13% reflecting a cautious market in the run-up to the General Election Improving positioning in Core London market Signs of strengthening UK market post Election Asia Pacific strong growth in revenues, mainly in Australia. Singapore remains very weak 16
Property Management 6 months ended June ( millions) Revenue UPBT 2015 2014 % chg 2015 2014 % chg - Asia Pacific 111.1 99.1 12.1% 6.2 5.7 8.8% Property Management - UK 54.4 47.9 13.6% 3.3 3.6 (8.3)% - Europe 12.9 11.5 12.2% (1.8) (1.7) (5.9)% Total Property Management 178.4 158.5 12.6% 7.7 7.6 1.3% UPBT margin 4.3% 4.8% Area under management increased by 3% to 2.03bn sq ft (H1 2014: 1.97bn sq ft) Asia Pacific growth in Hong Kong and Singapore. Staff cost pressure in China UK Commercial new commercial management contracts and growth in rural (Smiths Gore acquisition in May) UK Lettings impacted by pre-election caution and office openings. Good pipeline leading into H2 Europe Restructuring costs affecting profits in Sweden and Ireland 17
Consultancy 6 months ended June ( millions) Revenue UPBT 2015 2014 % chg 2015 2014 % chg - UK 74.6 71.8 3.9% 6.1 6.3 (3.2)% Consultancy - Asia Pacific 15.0 14.4 4.2% 1.0 1.4 (28.6)% - Europe 6.8 7.3 (6.8)% 0.7 0.7 - Total Consultancy 96.4 93.5 3.1% 7.8 8.4 (7.1)% UPBT margin 8.1% 9.0% UK strong performances in Building, Planning and Housing & Healthcare, offset by short-term fluctuations in Development and Valuations and expansion costs. Good pipeline leading into H2 Asia Pacific strong performance in Hong Kong, growth in Vietnam and Japan offset by weaker demand from developers in China and restructuring in Australia Europe revenue up 6% in constant currency reflecting growth in Germany and Ireland 18
Investment Management 6 months ended June ( millions) Revenue UPBT 2015 2014 % chg 2015 2014 % chg Investment Management 14.0 12.7 10.2% 2.5 1.6 56.3% UPBT margin 17.9% 12.6% Fee income up 10% (14% in constant currency) Assets under management increased by 25% to 7.9bn (H1 2014: 6.3bn) Management fees represented 89% of revenue Rebranding of Cordea Savills to Savills Investment Management Acquisition of SEB Asset Management AG, anticipated to complete in August 19
Business Diversification 20
Savills Diversified Business Model 21
Geographic Breadth 22
Looking Ahead 23
Management Focus Pursuing US growth opportunities (acquisition/recruitment) Integrating key acquisitions Developing and integrating Europe and UK businesses Deliver integration of SEB from completion 24
Summary & Outlook Strong first half performance due to market strength in key transactional services Commercial markets generally strong, residential markets showing signs of improvement. Emphasis on delivery from period of expansionary activity Savills well placed to serve worldwide occupiers and Investors 25
Connecting people and property since 1855