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Savills plc Results for the six months to 30 June 2015 6 August 2015 1

Transcript of Savills Navy templatesavills-plc.production.investis.com/~/media/Files/S/Savills-PLC/Annual... ·...

Savills plc Results for the six months to 30 June 2015

6 August 2015

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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.

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Results

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Introduction & Highlights

Financial Review

Business Review

Management Focus

Summary & Outlook

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Group underlying profit before tax up 28% (24% in constant currency) to £38.4m

(H1 2014: £30.1m)

Highlights

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Group revenue up 27% (25% in constant currency) to £547.0m (H1 2014:

£430.8m)

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

Transaction Advisory revenue growth of 55% as strong UK Commercial, Asia

Pacific and US performances offset weaker UK Residential activity

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

Business Development

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Financial Review

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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

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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

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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%

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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%

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Transaction Advisory Business

6 months ended June

(£ millions)

Revenue UPBT

2015 2014 % chg 2015 2014 % chg

Commercial Transactions

- Asia Pacific 46.1 35.7 29.1% 4.5 3.5 28.6%

- 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%

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Non-Transactional Business

6 months ended June

(£ millions)

Revenue UPBT

2015 2014 % chg 2015 2014 % chg

Property Management

- Asia Pacific 111.1 99.1 12.1% 6.2 5.7 8.8%

- 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%

Consultancy

- UK 74.6 71.8 3.9% 6.1 6.3 (3.2)%

- 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

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Commercial Transaction Advisory

• 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

6 months ended June

(£ millions)

Revenue UPBT

2015 2014 % chg 2015 2014 % chg

Commercial Transactions

- Asia Pacific 46.1 35.7 29.1% 4.5 3.5 28.6%

- 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%

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Residential Transaction Advisory

• 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

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%

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Property Management

• 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

6 months ended June

(£ millions)

Revenue UPBT

2015 2014 % chg 2015 2014 % chg

Property Management

- Asia Pacific 111.1 99.1 12.1% 6.2 5.7 8.8%

- 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%

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Consultancy

• 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

6 months ended June

(£ millions)

Revenue UPBT

2015 2014 % chg 2015 2014 % chg

Consultancy

- UK 74.6 71.8 3.9% 6.1 6.3 (3.2)%

- 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%

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Investment Management

• 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

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%

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Business Diversification

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Savills Diversified Business Model

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Geographic Breadth

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Looking Ahead

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Pursuing US growth opportunities (acquisition/recruitment)

Management Focus

Integrating key acquisitions

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Developing and integrating Europe and UK businesses

Deliver integration of SEB from completion

Strong first half performance due to market strength in key transactional

services

Summary & Outlook

Commercial markets generally strong, residential markets showing signs

of improvement.

Emphasis on delivery from period of expansionary activity

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Savills well placed to serve worldwide occupiers and Investors

Connecting people and

property since 1855