Savills Plc Results for Year Ended 31 December 2012 savills.com
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 publicly to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 2
Presentation Format Results Introduction Financial Review Business Review Management Focus Outlook 3
Highlights Revenue up 12% to 806.4m (2011: 721.5m) Underlying PBT up 21% to 60.8m (2011: 50.4m) Record UPBT in Asia of 32.6m; up 18% Record UPBT in Property Management of 18.2m; up 9% Transaction Advisory profits of 32.8m; up 36% PBT Margin improvement from 7.0% to 7.5% Underlying Basic EPS up 22% to 35.3p (2011: 29.0p) Overall dividend up 18.5% to 16p per share (2011: 13.5p) 4
Financial Review 5
Summary Underlying Results Year ended December ( millions) 2012 2011 % chg Revenue 806.4 721.5 11.8% Underlying profit before tax 60.8 50.4 20.6% Underlying PBT margin 7.5% 7.0% Underlying basic earnings per share 35.3 29.0 21.7% Dividend per share 16.0p 13.5p 18.5% Net cash 91.6 73.6 24.5% Net assets 233.1 204.4 14.0% 6
Underlying PBT Reconciliation Year ended December ( millions) 2012 2011 Reported profit before tax 54.2 40.0 Goodwill/intangible/investment impairments/amortisation 3.6 10.0 Share-based payment adjustment 0.7 0.8 Restructuring costs 4.0 1.9 (Profit)/loss on disposal of subsidiaries, joint venture & available for sale (1.7) (2.3) investments Underlying PBT 60.8 50.4 7
Global Revenue and Underlying PBT Year ended December Revenue UPBT ( millions) 2012 2011 % chg 2012 2011 % chg Transaction Advisory 310.0 275.3 12.6% 32.8 24.2 35.5% Property Management 300.6 278.6 7.9% 18.2 16.7 9.0% Consultancy 172.2 143.4 20.1% 14.8 12.6 17.5% Investment Management 23.5 20.8 13.0% 3.6 4.7 (23.4)% Unallocated / other 0.1 3.4 (97.1)% (8.6) (7.8) (10.3)% Total 806.4 721.5 11.8% 60.8 50.4 20.6% UPBT margin 7.5% 7.0% 8
Revenue and Underlying Profit by Region Year ended December Revenue UPBT ( millions) 2012 2011 % chg 2012 2011 % chg UK 375.5 328.1 14.4% 42.3 36.8 14.9% Asia Pacific 331.0 297.4 11.3% 32.6 27.7 17.7% Europe 70.2 65.5 7.2% (7.0) (9.6) 27.1% America 6.1 6.3 (3.2)% (2.1) (1.4) (50.0)% Investment Management 23.5 20.8 13.0% 3.6 4.7 (23.4)% Unallocated / other 0.1 3.4 (97.1)% (8.6) (7.8) (10.3)% Total 806.4 721.5 11.8% 60.8 50.4 20.6% 9
Transaction Advisory Business Year ended December Revenue UPBT ( millions) 2012 2011 % chg 2012 2011 % chg Commercial Transactions - Asia Pacific 98.4 80.2 22.7% 14.6 11.2 30.4% - UK 60.4 47.9 26.1% 7.0 4.6 52.2% - Europe 29.6 26.0 13.8% (6.0) (8.8) 31.8% - America 6.1 6.3 (3.2)% (2.1) (1.4) (50.0)% Residential Transactions - UK 97.0 95.0 2.1% 14.7 14.8 (0.7)% - Asia Pacific 18.5 19.9 (7.0)% 4.6 3.8 21.1% 310.0 275.3 12.6% 32.8 24.2 35.5% UPBT margin 10.6% 8.8% 10
Non-transactional Business Year ended December Revenue UPBT ( millions) 2012 2011 % chg 2012 2011 % chg Property management - Asia Pacific 186.5 172.4 8.2% 10.5 10.9 (3.7)% - UK 85.8 77.8 10.3% 8.2 6.5 26.2% - Europe 28.3 28.4 (0.4)% (0.5) (0.7) 28.6% Total Property management 300.6 278.6 7.9% 18.2 16.7 9.0% Consultancy - UK 132.3 107.4 23.2% 12.4 10.9 13.8% - Asia Pacific 27.6 24.9 10.8% 2.9 1.8 61.1% - Europe 12.3 11.1 10.8% (0.5) (0.1) (400.0)% Total Consultancy 172.2 143.4 20.1% 14.8 12.6 17.5% Investment Management 23.5 20.8 13.0% 3.6 4.7 (23.4)% Unallocated / other 0.1 3.4 (97.1)% (8.6) (7.8) (10.3)% Total 496.4 446.2 11.3% 28.0 26.2 6.9% UPBT margin 5.6% 5.9% 11
Business Review 12
Commercial Transaction Advisory Business Year ended December Revenue UPBT ( millions) 2012 2011 % chg 2012 2011 % chg Commercial Transactions - Asia Pacific 98.4 80.2 22.7% 14.6 11.2 30.4% - UK 60.4 47.9 26.1% 7.0 4.6 52.2% - Europe 29.6 26.0 13.8% (6.0) (8.8) 31.8% - America 6.1 6.3 (3.2)% (2.1) (1.4) (50.0)% Total 194.5 160.4 21.3% 13.5 5.6 141.1% UPBT margin 6.9% 3.5% Strong second half in Asia with increasing private demand for commercial assets Significant gains in Prime Central London transactions Previous UK business development activities contributing well Reduced losses in Europe - Improvements in Ireland, France and Netherlands US - Acquired final 25% in fourth quarter and restructured management 13
Residential Transaction Advisory Business Year ended December Revenue UPBT ( millions) 2012 2011 % chg 2012 2011 % chg Residential Transactions - UK 97.0 95.0 2.1% 14.7 14.8 (0.7)% - Asia Pacific 18.5 19.9 (7.0)% 4.6 3.8 21.1% Total 115.5 114.9 0.5% 19.3 18.6 3.8% UPBT margin 16.7% 16.2% UK Prime Residential continuing to perform well Prime Central London volumes down 7% UK Country market volumes increased by 5% Development sales strong with double the transaction volumes of 2011 Asia - Government measures to control activity. Strong performance in Singapore, Thailand and mainland China 14
Property Management Year ended December Revenue UPBT ( millions) 2012 2011 % chg 2012 2011 % chg Property Management - Asia Pacific 186.5 172.4 8.2% 10.5 10.9 (3.7)% - UK 85.8 77.8 10.3% 8.2 6.5 26.2% - Europe 28.3 28.4 (0.4)% (0.5) (0.7) 28.6% Total 300.6 278.6 7.9% 18.2 16.7 9.0% UPBT margin 6.1% 6.0% Total area under management up 29% to c.1,754m sq ft (2011: 1,360m sq ft) Asia Continued revenue growth but impacted by cost pressures UK Continued growth including prime residential lettings and significant commercial contract wins 15
Consultancy Year ended December Revenue UPBT ( millions) 2012 2011 % chg 2012 2011 % chg Consultancy - UK 132.3 107.4 23.2% 12.4 10.9 13.8% - Asia Pacific 27.6 24.9 10.8% 2.9 1.8 61.1% - Europe 12.3 11.1 10.8% (0.5) (0.1) (400.0)% Total 172.2 143.4 20.1% 14.8 12.6 17.5% UPBT margin 8.6% 8.8% Strong performance from UK planning, building and housing consultancy UK Valuations Stable revenues; insurance provisions (net increase of 1.4m over 2011) Asia Pacific - increased valuation and feasibility study assignments Continental Europe 0.6m redundancy costs in Q4 increased losses 16
Investment Management Year ended December Revenue UPBT ( millions) 2012 2011 % chg 2012 2011 % chg Investment Management 23.5 20.8 13.0% 3.6 4.7 (23.4)% UPBT margin 15.3% 22.5% Assets under management increased 29% to 4.4bn Acquired IPAM in January 2012 to enhance German platform Investment costs during period formation of KAG/Paris office/portfolio managers/cio Substantial mandate wins increase investment capacity for 2013 17
Asia Pacific Summary Year ended December Revenue UPBT ( millions) 2012 2011 % chg 2012 2011 % chg Transactions 116.9 100.1 16.8% 19.2 15.0 28.0% Property Management 186.5 172.4 8.2% 10.5 10.9 (3.7)% Consultancy 27.6 24.9 10.8% 2.9 1.8 61.1% Total 331.0 297.4 11.3% 32.6 27.7 17.7% UPBT margin 9.80% 9.30% Transactions increase profit and improve UPBT margin to 9.8% (2011: 9.3%) Strong performances in Hong Kong, China, Singapore and Japan overcome weaker contribution in Australia 2013 increased control measures in Hong Kong, China and Singapore short term impact, but won t change long term fundamentals of high demand and limited supply in Prime markets 18
Europe Summary Year ended December Revenue UPBT ( millions) 2012 2011 % chg 2012 2011 % chg Commercial Transactions 29.6 26.0 13.8% (6.0) (8.8) 31.8% Property Management 28.3 28.4 (0.4)% (0.5) (0.7) 28.6% Consultancy 12.3 11.1 10.8% (0.5) (0.1) (400.0)% Total 70.2 65.5 7.2% (7.0) (9.6) 27.1% Revenue growth despite continued reduction in market volumes Weaker performances in Germany and Sweden, but stronger in Ireland and the Netherlands 2011 restructuring improvements reduced loss. Further restructuring in 2012 (negative impact on UPBT of 700k) Strengthened management teams across the region 19
Diversification 2012 Revenue by Geography 'm 2012 2011 UK 399.1 352.3 Asia-Pacific 331.0 297.4 Europe 70.2 65.5 America 6.1 6.3 2012 Revenue by Business 'm 2012 2011 Transaction Advisory 310.0 275.3 Property / Facilities Mgmt 300.6 278.6 Consultancy 172.2 143.4 Investment Management 23.5 20.8 Other 0.1 3.4 Europe 9% (2011: 9%) America 1% (2011:1%) Consultancy 21% (2011:20%) Investment Mgmt 3% (2011:3%) Asia-Pacific 41% (2011:41%) UK 49% (2011:49%) Property / Facilities Mgmt 37% (2011:39%) Transaction Advisory 38% (2011:38%) 20
Management Focus Develop our global presence and branding Locations/ service lines Drive further margin improvement over medium term UK Merger/ IT investment (CRM) / cost management Continue development of Investment Management Platform 21
Outlook We have made a strong start to 2013, particularly in London and Asia and are confident of the Group s prospects. For the year as a whole we anticipate: Further improvements in our businesses in Continental Europe and the US; Weaker market conditions in a number of economies; Mid year impact of control measures in China and Hong Kong on transaction volumes But medium and long term characteristics of these markets remain compelling. 22