Savills plc: Results for the year ended 31 December 216
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 & Business Development 2 Financial Review 3 Markets, Outlook & Summary 3
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
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
Ten Year Revenues m 1,6 1,4 316.6m 785.1m 1,2 46% 1, 8 46% 48% 6 4 51% 54% 52% 54% 2 49% - 27 28 29 21 211 212 213 214 215 216 Transactional "Less Transactional" 6
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
Revenue m Business Development since 213 1,6 1,4 244m 1,446m 1,2 297m 1, 8 95m 6 4 2 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) - 213 Acquired Organic 216 8
Financial Review 9
Summary Underlying Results Year ended December ( millions) 216 215 % chg Revenue 1,445.9 1,283.5 +13% Underlying profit before tax 135.8 121.4 +12% 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 187.8 151. +24% Net assets 47. 365. +12% 1
Dividends Year ended December (pence) 216 215 % 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) 38.8 34.7 +12% 11
Cashflow performance m 35 3 25 2 15 1 5 Cash generation from operations of 117.8m 135.8 17.1.9 27.1 17.5 31.9 36.3 7.2 24.8 151. 187.8 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-216 12
Revenue and Underlying PBT by business Revenue m 7 6 5 4 3 2 1 Transaction Advisory +7% 66.8 618. Property Management 39.7 +21% 472.8 Consultancy 23.3 +4% 24.3 Investment Management 44.5 215 216 +62% 72. UPBT 9 8 7 6 5 4 3 2 1 76.9 +4% 8. 21.1 +12% +5% 23.6 24.7 25.9 +61% 17.6 1.9 Margin 12.4% 12.1% 5.4% 5.% 1.7% 1.8% 24.5% 24.4% 13
Revenue and Underlying PBT by business: Constant currency equivalent Transaction Advisory Property Management Consultancy Investment Management Total 7 6 618. (1)% 612.7 +13% 1,38 1,36 +6% 1,355.3 Revenue m 5 4 3 2 1 39.7 441. +2% 23.3 234.6 44.5 +51% 67. 1,34 1,32 1,3 1,28 1,26 1,283.5 UPBT m 9 8 7 6 5 4 3 2 1 (3)% 76.9 74.5 Divisional UPBT total excludes other central overheads of 11.3m in 216 and 12.2m in 215 21.1 215 216 +5% +3% 22.2 215 216 14 24.7 25.4 1.9 +47% 16. 1,24 128 127 126 125 124 123 122 121 12 119 118 +4% 121.4 126.8 Group margin of 9.4% (215: 9.5%)
Revenue and Underlying PBT by region UK Asia Pacific North America Continental Europe m 7 +3% 6 56.1 578.3 +21% 215 485.9 5 216 41.1 4 +1% 3 +31% 192.5 211.1 2 17.6 129.8 1 8 +1% 71.7 72.1 7 6 +25% 5 42.6 4 34.2 +1% 3 +52% 18.8 18.9 2 13.5 8.9 1 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 (215 12.2m) not allocated to the operating activities of the Group s business segments
Commercial Transaction Advisory 216 Revenue 498m (+8%) 216 UPBT 59m (+6%) 25 25 211 2 2 2 15 15 13 15 19 1 5 86 71 1 5 5 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 217 16
Residential Transaction Advisory 216 Revenue 163m (+3%) 216 UPBT 21m (%) 14 12 1 8 6 4 2 38 Asia Pacific 125 UK 2 18 16 14 12 1 8 6 4 2 3 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
Property Management 216 Revenue 473m (+21%) 216 UPBT 23m (+12%) 3 25 2 15 1 5 274 159 4 Asia Pacific UK Europe 16 14 12 1 8 6 4 2-2 -4 14 11 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
Consultancy 216 Revenue 24m (+4%) 216 UPBT 26m (+5%) 2 18 16 14 12 1 8 6 4 2 183 38 19 UK Asia Pacific Europe 25 2 15 1 5 22 3 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
Investment Management 216 Revenue 72m (+62%) 216 UPBT 18m (+61%) 45 4 35 3 25 2 15 1 5 26 4 UK Europe Asia Pacific 6 1 9 8 7 6 5 4 3 2 1 7 9 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
Markets and Outlook 21
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
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
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
Savills plc: Results for the year ended 31 December 216