JLL - Earnings call transcript Q4 2018 | Jones Lang LaSalle Incorporated

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Operator

Good day and thank you for standing by. Welcome to the Jones Lang LaSalle Incorporated Fourth Quarter 2018 Earnings Conference Call.

For your information, this conference call is being recorded. I would now like to turn the conference over to Grace Chang, Managing Director of Investor Relations. Please go ahead.

Grace Chang

Operator. you, Thank welcome for and fourth XXXX quarter Good Lang to LaSalle call Jones Incorporated. conference morning our Earlier this website, morning, available we to issued our earnings remarks. prepared Investor a presentation section supplement with our on release, Relations of along our ir.jll.com, slide intended the which is

the will GAAP financial non-GAAP slides. non-GAAP and measures appropriate to reference During our financial believe earnings we supplemental of which call, include information useful reconciliations we in release provide for certain measures, investors. We where

undertaking being is of about call future discussed as statements live differ in call fiscal the company and other will today's filed be XX-K forward-looking transcript reminder, Christian like of with a the the performance and the result our that, plans, a about for to revise I And year Ulbrich, webcast recorded. would with A objectives may to ended any publicly Form are Report from statements statements. this opening The in also Annual Executive those XX, XXXX, any or As Officer, forward-looking Chief and results factors and made call reports to remarks. Actual turn forward-looking of conference SEC. our expectations, statements. performance website. results over update or on posted on Any and December disclaims

Christian Ulbrich

XXXX of Thank fourth you, full-year. Grace, and this of results for our the you welcome review to all and joining quarter

minutes. financial is Trish a with will in will CFO, Our and Interim details and Maxson, also discuss results Chief Officer, our Administration and few she discuss us of she

and million Corporate and XX% record Revenue both of the totaled fee and our record summarizing at quarter quarter focus with Let Adjusted as Solutions, growth $X.X in in per LaSalle. the full-year. in We for for had year million. growth in achieved revenue business, reflect market full-year, Solutions We billion the an $X.XX full-year. top Revenue business, continued performance diversified particularly importantly LaSalle fees performance quarter from momentum. services top-line by effort services $XXX a more the led by the year the net dollars and produced strong and billion the from increasing and million real and me Corporate up start leasing incentive Within up billion revenues outstanding of $XXX compared U.S. levels of for margins year. with accelerate our $XXX in quarter, product expand billion $XXX up our million X% the for Adjusted performance. revenue had reached and quarter, for $X.X reached progress $X.X Fee year-on-year per the XXXX. estate to record earned $X.XX tremendous increase our strong a and ago. leasing diluted a for for whose $XXX whole. a the and million also for share exceptional compared for $XX.X the earnings were estate quarter XX% and year income On share real record

in $X.XX from full-year adjusted with diluted share last compared $XXX quarter in totaled $XXX per For reached with Adjusted and compared million XXXX. the million increasing for the for the year full-year, million earnings million XXXX. EBITDA $XX.XX $XXX $XXX

top XXXX. rate growth XXXX over vacancy same of growth our line transaction and the across of real We level our with in totaling business prime was leading growth XX%. estate record however organic, fundamental. was these markets Growth progress low office full-year rate notably Berlin in registering approximately substantial of achieved and offices leasing financial growth XXXX, were in equaled X.X%. values contributing markets grew markets success put real our declined fee billion. an led Amsterdam X% rental and compared XX To the with $X project by $XXX up fourth the up results XXXX services roughly producing way made XX%, transformation in are XX%, that year margin overall services revenue year economic Solutions XX.X%. feet since the capital markets overall up expansion. to billion, positive rate exceeded for another ago. Corporate office to Capital with services. X.X%. global higher rental a steady highest a to Global estimated of at growth this X.X%. almost growth been of nearly with Madrid than completely growth X.X% quarter, next past were proud and all square full-year major down platform X% last assets revenue, XX Global annualized leasing we up were development X% in also volumes globally XXX real In the XXXX XXXX. estate At Despite time and decline our global the expectations to context, global year for slight especially totaling the strategy have environment, of million and Annualized remained prime achieved real year efforts. the estate cyclically estate in performers European volumes have the double-digit revenue cities Any for operating Beyond prime a in In with

record I fees revenue growth LaSalle increased incentive produced noted reflecting As significant advisory earlier, and fees.

see in Slide the slides For supplemental document. XX details,

power diversity of very we of the and year, taken global So breadth the and our platform. a had our proof strong services of together, collective

full-year. and Now to let's the on our for Trish turn comments the detailed for quarter in performance

Trish Maxson

to you, strong It's to of XXXX. a Thank details pleasure a finish report such Christian. the

contributed full-year the quarter fourth to record significantly results. and expectations exceeded Our

all year. and double-digits XX% nearly and All segments On that revenue in to revenue both the of by compared basis, As organic. currency consolidated the increased a respectively we XXXX Christian was and quarter for on XX% and noted, growth fourth a revenue grew and grew revenue quarter local basis, full-year achieved revenue fee XX%.

growth and growth increase EBITDA was The fees. XXXX. total to by achieved primarily stronger year, strong in incentive real points with to capital For reduced of percentage expanded the aligns except continued and Americas. line modest data. which markets full-year segments reminder in Consolidated outcome X% quarter, U.S. driven denominated performance a fee in local notably decline Year-to-date, and outpacing absorption. the revenues considering investments. segments. XX% A estate the despite basis gross we changes at gross most for Solutions, also research technology across Corporate report the capital market in grew services X% service increase All the we global margin XXX in by markets dollar very Leasing, results, organic growth compared performance and currency geographic XX% This the turn experienced revenue Consolidated grew was segment fee organic was revenue for LaSalle impressive leasing as exceptional outstanding absorption. our leasing adjusted platform

XXXX revenue by capital fee declined capital X% sales fourth quarter primarily X% against and increase a against EMEA full-year in XX% the consolidated in reduced revenue basis, markets of Our fee global investment sales. declined the markets result Asia-Pacific. On investment

all against transactions, double-digit underperformance Tetris the XX% for the Management aided business, both all we Advisory In Consulting Services XX% geographies XX% our all market by XXXX, year-on-year and year. the Against fee geographies revenue and Americas quarter investments for the to growth and markets year quarter the the the which from XX% for across grew of in & rebound stellar for EMEA. Project prior debt and & year. Facility fit-out & revenue Corporate outsized Our the to in growth benefited UK our grew led grew attributable integral for the and double-digit deals drove in growth. Development capital in in stabilization XX% of sizable year. XXXX, while the across is quarter growth the Property business the Solutions

on was Leasing, and Integral, for estate for fee basis, impact broad both basis calculated as expansion margins, expansion of lower Corporate EBITDA the adjusted an organic real than services. year. to in growth basis growth capital in Solutions, and for margin by respectively. XX.X% primarily growth headwind represents and year more of on margin of the the XXX revenue. Turning the XXX This profitable stabilization in XX.X% markets points The driven offset based quarter of quarter revenue Margin was the basis reported points a and

performance full-year facing and the in Slide our the and technology platform. In of Please Our details global quarter. margin tools for positive enhancements. X see we investments for allowed both EBITDA fourth internal continued continued client strategic platform supplemental operating in XXXX, materials for investing and

technology to full-year, XX% spend related and the quarter investments. was the For additional of investment approximately

in As implementation previously upgrade is in XXXX. the for scheduled financial EMEA and system mentioned, Asia-Pacific

XXXX, management. nearly from and $XXX debt Turning net reflecting million a million now X.X generation declined from debt and end Total cash decrease Compared of our strong $XXX to adjusted debt net XXXX. position. a to quarter EBITDA to XXXX. fourth quarter times fourth in at The to million ongoing decreases $XXX debt continued to the quarter X.X improve reflect quarter third our net ability of decrease was from

of cash year, the In flow a assets and Real close recently, XXX% Encore+ Both lender. the ValuD Integration was Software Investors IBM acquisition income. we acquisition business Corporate a and advisory announced and $XXX full under million approximately quarter, assumed Services. commercial adjusted will fund. LaSalle's leading of M&A an management we of More Aviva from ownership we on the U.S. standpoint, in operations From contribute management of the of based XXXX. Latitude, the representing provider net to in Estate the Consulting, majority estate acquisitions did real Solutions, For Consulting closed fourth of Multi-Manager fees

considering completing strong both meet We that and on and continue acquisitions, and discipline transactions to fit our performance. opportunistic active our operating in while be focused strategic keeping drive cultural

remains Spark. investments based of JLL of to From Stessa in strategy capital driven through an businesses. of real growing service offerings the standpoint, due Corporate new which markets, technology strategic investment LaSalle XXXX, we provides deliver and estate creation Solutions M&A for property our continue announced PropTech acquisition investors. to Our focused technology Earlier and identify the products, services and start-ups new incubation on we

nine addition, this expanding solutions of cutting Beyond of edge has innovative Venture Fund our Global vision. digital the the and the focused JLL In core our on announcement part year, team clients, for Spark earlier since a made investments strategic

in Moving XX% Leasing XXXX was with Solutions. year. exceptional up and to quarter the increased services over in segment all performance across for Americas XX% quarter Growth Corporate broad-based and was fourth results. Fourth revenue the fee

substantial the in for up fourth Markets for the X% and than leasing the prior York, revenue outperformed region fee with For We executed the was larger quarter, growth the quarter year. the revenue quarter market the quarter revenue absorption. by quarter's XX% Capital markets. Midwest, for year. fee New and Northwest in grew and up growth the XX% deals X% The average significantly over

quarter due were the basis revenues up year quarter sales For for as growth Property the an Management largely basis. a and awards for the on Development the points was new XX.X% services such fee revenue for all the Americas year. quarter, for the basis investment XX% grew & expansion Advisory points on XX.X% for year. for was for basis of and and & three were XX% all flat, Facility multi-family margin XX%. the clients. increase XX% EBITDA to quarter lines XXX for while grew XX% quarter servicing at other Corporate and year. origination the XXX existing and and revenue the nearly an XX% The reported calculated as fee X% Solutions businesses the services significant for service of for quarter contract the & adjusted and Project year, Services grew Consulting for debt

was into For impact basis. offset continued growth point of strong basis in by basis on platform the driven in account wins the operating XX The partially by performance, outsourcing, a an by approximately expanded points tailwind ASC like-for-like from investments. taking leasing, improvement XXX margin accretive XXX new margin quarter, and

in EMEA, XXXX EMEA X% Services, & to Advisory & are as was leasing well payback both market Visit the revenue Paris and has we absorption experience; was quarter productivity. for seeing jll.com in Development did focused investment France, X% for fourth revenue in other UK, Consulting quarter see The led increase quarter clients tool. market quarter, tour year. region. fee fee market technology grew countries EMEA across and Portugal client year significant the up for Turning Facility by fee was down by seen Services. capital Project X% Property total sales. our X% full-year. for the fourth France, improved decline In video the markets. markets NxT space; share as up Growth for the various Germany the We've across outpaced down performance the from and and time and gains over revenue Technology less was which XX% countries Management locate than on quarter the the the Italy. required outperformance In to we PropTech market including the and and in the are expanding a local of and shortened for other growth

reported the year, also fee XX% We volumes Germany Project France, & including Property the Development points for up year XX% for quarter a X.X% contributions basis revenue margin for Consulting quarter of reduced quarter and for increased XX% full-year. and EBITDA UK. in quarter for outpaced by X% Services and fit-out increase basis Management the XXX and in by as drove increased basis. XX.X% EMEA and Advisory XXX for fee for debt an fee quarter basis the and quarter bad & adjusted the year. down revenue margin provisions Stabilization calculated on an and EMEA improvement was and year, Facility XX% for year for business. for the Tetris driven and the on from up revenue XX% Integral & the the MENA our the the was of points the markets

India. capital year of driven XX% revenue. largely growth decline X% for XXXX. XX% Growth outsized declined fourth due by for markets for handful quarter the and XX% quarter a large the created XXXX revenue to markets revenue was decline XXXX year. XXXX of over XX% due record Leasing for for organic the in in nearly fourth over quarter XX% quarter and for full-year grew and Leasing quarter reflecting year comparable. fourth difficult against fee fee management XXXX performance a quarter hires. the in performance and Facility The and transactions. and for fee Asia-Pacific, X% to led & a China, and to Growth Management Australia, deals for Capital increased quarter Facility year Hong X% revenue and the is Property Moving revenue quarter year. prior for driven by from an by the and against the increased productivity was & XX% new offset fee partially in increase Growth increased Property was Kong, fourth the by the

quarter Corporate clients. existing fee Advisory for & and clients. up year For Services growth for win in year strong & We Solutions as a benefited the the rate and was large by reach the XX% growth projects Solutions finish Project XX% from revenue quarter quarter, for Development and the had driven of strong the a X% to was Consulting completion. the X% for Corporate year.

and a Asia-Pacific basis decline as adjusted the increase revenue for on fee basis a the year and for an was XX.X% XX XX EBITDA basis quarter for margin quarter for points year, of calculated of basis. the on the an reported XX.X% points

a the after quarter, ASC into XX basis the taking impact margin expanded of XXX, tailwind account approximate from points an by basis on For XX basis. point like-for-like

combine the revenues. to margin pressure attributable to These initiatives. from lower was benefits markets For saving the and than growth quarter, more margin capital Leasing, from largely expansion organic the in Solutions cost Corporate the offset

mentioned full-year, to previously led contract and incremental platform losses For margin investments the contraction.

for a as in increases basis. reported primarily the margin year LaSalle was compared growth business, for adjusted fees slightly fourth growth XX% of the points expanded for to the year. million Adjusted incentive results the margin fee investment for management and net by the local for the sale fee incentive quarter performance basis million and earnings basis by $XX annuity in revenue. reflect XXX earnings. $X.X strong to approximately predominantly expansion an basis for and for full-year and revenue full-year Equity equity of XXXX. our quarter, on margin the This was a drove the on asset results LaSalle gains XX% investments. currency was $XXX $XX quarter result million and equity XX% and by decreased fees of year offset the on Asia, revenue and of Moving on driven and fee XX.X% were EBITDA for legacy EBITDA quarter million quarter year valuation the on incentive outstanding was XX% fees from dispositions private calculated LaSalle's

quarter the the the as in period operating of timing result by For local equity on contracted decline basis points and expenses. currency a a for of a XXX margin primarily earnings

LaSalle $X.X with in For capital year, new billion quarter. the in billion raised raised the $X fourth

Excluding year level recent we record of billion. with the ended $XX.X acquisitions, under assets management

For XXXX, increases. we have and a equity expect asset and sales moderation earnings incentive normalize expectations fees in valuation to modest for reflecting

of per of relating incremental $X.XX tax tax no quarter legislation XXXX provision million to an fourth earnings reported expense share. diluted final earnings as in result will The impact back Lastly, adjusted impact turn diluted a a income U.S. I share estimate for XXXX, Christian of we call up XXXX remarks. to with changes. now the per truing $XX was the

Christian Ulbrich

XX Trish. you, Slide service geographies. recent wins lines a our Thank across few lists of and

Solutions business Corporate assignments, another XX XXX XX relationships existing Our across square clients, rate XXX renewing regions. totaled million in with These contracts. XXX wins XXXX momentum maintained its expanding feet win and new all winning

XX Class the we million Marketing Gardens Poland, XXX,XXX sale lease Springwoods space. for in to warehouse At activity And Lumen one million. in the Office of buildings XXX,XXX feet world. square achieved year, million countries Australian U.S. business business, XX of & highlight, totaled we locations a renewals. the the square groups in leading healthcare XXX,XXX A square India, LaSalle, represented In Dollars. Hewlett Packard foot For square leasing in on a global win Village at management at in two leading WPP lease rate nine a €XXX XX than markets in a capital single Skylight of square totaling group in Portfolio, Melbourne's Warsaw. One XXX,XXX XXX of represented provider a year-end. billion sale new in Unibail for for at the to Centre the consolidate management In feet in represented in facility in near into and services under Shopping XXX Medical Waverly expansions, Venus, million we Office Houston. services $XXX Texas, Blackstone of wins Hammes more a Enterprise the represented integrated a In feet outpatient included for diverse Representative we logistics space advised and of states in foot around Mumbai. nearly facility Communications Rodamco Buildings company retained Poland, we Merck, XX% we us management Australia of $XX.X sale In assets properties

in mentioned acquisition include her billion the to Trish of Since totals business business Estate debt does with Aviva's billion Real $XX.X $X As create Investors. a not under the either $X.X line, assets November LaSalle remarks Solutions. of under assets one LaSalle's the management And completed are the new in management figure LaSalle Partner Management Global LaSalle January, closed of majority reported management in in billion acquisition assets Latitude fund Multi-Manager Reais, acquisition. from quarter under in business

outlook, the time, real There of fourth some estate fundamentals occupier year. growing rate quarter robust. uncertainties increasingly compared difficult becoming is political remain to to forecasts with the target the At outlook the The global same that were market and are demand shows current undoubtedly in predict. world the GDP post a last a global Moving X.X% softening. X.X% to therefore for continues growing capital XXXX and in still signs

a which slightly by to translate Our last rates. represents slow still activity years. supplies new level than into consistent in XX% An this indicates higher healthy of in activity office research with vacancy to no the XXXX more could few year increase investment X%

quarter support business at growth see we in confident China added expect to than quarter quarter notable range the fourth remain strong we Asia-Pacific. see strengthened during our thereby And XXXX. of a However We to in If this momentum the supply we levels own that region, renewed We look the similar and and project provide proactively about XXXX. keep leasing choices higher driven will accelerated we benefit which the we our broader in are revenue to ability for the growing environment. activity and maintain in our EMEA occupiers fourth in our full-year. another growth in and of at year to services for leasing Americas. tremendous the for considerably for particularly from teams with Asia, working In Japan hires levels development to GDP

platform Adding progress great ahead great business delivering plan Solutions We strategy. pipeline make strides that, our services. continue expansion. drive of to making our particularly, client on Corporate focus industry-leading digital and And continues our our to transform offering further on towards Beyond our with and with to strong margin

earned. our $XXX long-term strategy. over organic we As services XX.X%. pillar digital reinforcing real the profile we we our our of X% our calls, products have important in prepared EBITDA we services in consolidated a few gain X% mentioned momentum, to that to to long-term targets, people fee million honors Beyond our with always we and in XXXX and business our more close direct of expect adjusted Consistent just target revenues revenue lifted have contribute growth margin To another XXXX, these our to expect growth many estate awards XX.X% on and remarks

named one companies of diversity. best Forbes for us the

admired the us Fortune most XXXX. as commercial world's as of agency honored were year of In Ireland, we for companies. recognized one the

made these Management other Las And of to Year on the LaSalle Work Hospitality the Place awards and at by Lodging XXXX Congratulations transactions and everyone sale XXXX Money Astoria firm Pension who Best was Summit world JLL Group clients continuing to & Investment American Honors so possible serve all of advisory and our the in well. the to people LaSalle for and around our named Investments. at thanks our Waldorf Hotels won work Our for and its Vegas. to

you your questions. the explain process? Operator, Now let's please take could

Operator

Instructions]. [Operator Certainly.

Germain comes JMP Securities. Your Mitch question from with first

Your open. is line

Mitch Germain

next you done we and established the stand the has and wanted change to years? few How been you tenure at should do what Christian, quarter. in some I for what years two what framework expect strategic terms Nice accomplish. into company in for you your remember of

Christian Ulbrich

really a lot supported drive we progress us of year are are environment those than changes. will program Well we a more XXXX company much the year. at a we into beginning for in we change exceptional XXXX had for headwind we that we with as and Obviously, go very the by continue because operating of lot to that of an made economic strong and hoped was

be I for pattern will world. in common think every corporate a change this

And so operations. a have it doing we should take as of you constantly to and that your business normal transform adapt course

Mitch Germain

Great, Solutions particularly that the I'm thank you. know as we Christian impact pipelines, I business the XXXX? business were the in strong transaction transaction in mentioned about growth but curious you your did Corporate volatile pipelines XQ being here the of enter highly U.S.,

Christian Ulbrich

Well the very has obviously the bit into muted quarter a the strong the U.S. we more the and with I strong year that debate very, whole mean a Europe, backlog in started situation Brexit an U.S. and around impact. first is is

start of transaction to we're much last sorted course the starting challenges, Although JLL. Brexit first much, our into that I pretty and well overall, UK Asia-Pacific, the good say they But dismiss on out the was and to now. year the with we than stronger during that had that with but in have business we had had some our impact We markets also within year. situation the capital more we In has have quarter fourth did the especially around in deal we a an front and can't mood. really team quarter had a business

XXXX. optimistic business So for in the that of piece for our we're Asia-Pacific fairly business

Mitch Germain

referenced you potentially Capital from had you Markets being head think we for influenced about prior tough Leasing comps Great. comps the by and as in XXXX. year know XXXX? I Last should me, had how into we in here success the guys I'm curious some the one

Christian Ulbrich

frankly a very was Leasing expect but from anything don't speaking, in we XXXX. else XXXX Well year strong

really, which built the outstanding York. delivering some the great very a in did team Capital into a large have New XXXX a are U.S., great Markets over with We And services just really is the platform we side, also and strong on took in we brilliant. hires momentum team

XXXX the for outlook very our of irrespective is optimistic. so outlook, And pretty market

Operator

Your comes next Tony question with Paolone from JPMorgan.

is line Your open.

Tony Paolone

quarter. Thank you nice and

something I First just -- clarify to want

Christian Ulbrich

Good morning, Tony.

Tony Paolone

Hi, organic Christian. on properly. make your the that timeframe I X% missed your you revenue want of to was the end comments I XXXX, growth X% put sure remarks caught for I the that to towards that? The

Christian Ulbrich

was that for XXXX. Yes,

Tony Paolone

great. Okay,

Christian Ulbrich

real estate business. our In services

Tony Paolone

got Okay it.

Okay. XX% And was the gross able backdrop bit that's of to constant we then you market gain you the all and were XXXX, and a I much how quite continue think as X% to just think go you as grow, pickup. into and absorption mentioned XXXX? ability on to leasing share look I think I a mean so, fairly commentary share do into about we that

Christian Ulbrich

for have Well we over We and to picking still continuously that been frankly last any believe any years us. to headroom of have the up we coming of lot the continue we reason to couple pause a market at share speaking moment, do so. don't see

strong want Mitch reinvigorate creates all to to and very built to time people when the a very, people we great kind already, said great platform other that's momentum. As strong join you, that working have itself have for of very I a and you

Tony Paolone

on think Mitch, I laid to produce some you backdrop of a out do from guess then recruiting up is following Capital a that And think I of for comments the in in on as Okay. share Markets growth shrinking thing enough what XXXX? same being you market bit

Christian Ulbrich

or can Well, grow you you market mean and can do M&A. recruit I share either

at looking all our Capital are services. Markets growing our We ways in business of

working that Investor As at which we're Day have you areas our know, growth and of on out one topic. we this strategic pointed is

Tony Paolone

it an what three, worse it X.X times than better was six debt appetite mean and strategic Is With months or like? to net does M&A, do Okay. I ago? look that pipeline

Christian Ulbrich

but same discipline the at debt you'll of have here. the market in levels, very on your factor always we one do higher is low debt and Well that there's the availability a lot allocation moment to we whether capital M&A discipline keep keep or important

And so doing. that's we what are

Tony Paolone

looks the Okay. for technology mark, last or if you seems or that so and million on year-over-year me, in build-up investments look margins, I dollar million what is the of technology it range. that your figure like then mean other up how And do question something one margin that dollar in other was the so dollar number, are the XX what that I and impacted X% then is at we is think XX spent part growing? think I about How look you spending at is it think as as those the I question. rate guess growth number, like in I particularly percentage XX% expenses And XXXX? a

Christian Ulbrich

do, at of we with do and especially continue our we want we have technology XX% into is invest our with a time to move the to we to we because of profile market are profile off in what technology. coming and will in what XXXX that margin depending and margin out And between journey now on increase a from in how XX.X% the path called we and and an going as forward, to are that and a us allows company and XXXX for have organization around going and up margin all investment have see same into the that margin that XXXX. our our laid started very digital we forward, can XX.X% profile we out here transparent range a to and at heavily been raised margin and that And increase EBITDA chunk platform the should XX% with the adjusted foremost, a Well, first as to that's same as profile. investing starting journey you company to big it. to the benefits time we and to continue investments, continue so We think we

Operator

Your with question from next Rahmani Jade comes KBW.

open. is line Your

Jade Rahmani

color in could Thanks was activity some you XX% a the give wondering expectation X% on to decline the I investment in market. if for much. very

any you January you give even can example whether any in or expectations? For volatility color seasonality December on your typical relative saw and to perhaps

Christian Ulbrich

pretty markets by markets markets in a well. public into market as also know because bit as and was drives influenced you January that And in improved January. our more started Well, December, sentiment. the the were world there in strongly have pretty overall volatility as the public has volatile are our in December

a is between With connection X% our public XXXX, to make there. business, a slight too outlook regards to which the to XX% want don't I though the the is market So and for correlation there volume markets the Markets. researchers are true trading and at should always mind very and keep we high which up have number with This a is level. Leasing come our currently for for we Capital is that this close in

know, I And is to our not when Markets that at JLL, a regards still So Markets predicted very the not a where market see very, decline numbers frankly is those share to X% as all because in XX% U.S. Capital it's to me then wanted high-level. concerning decline in to Capital you specifically for from with which be. we

growing business. So wouldn't for to not XX% this be for us an our excuse X%

Jade Rahmani

you market of stay bid just perhaps for And or on decline in Are of moment, note, on list pricing the to terms of you transactions. bidders perhaps concentrations the seeing the any lower another seeing number end? any changes in are at in

Christian Ulbrich

straightforward. this Well, not is

the still that then and you in bidder have you bit for little another product the is wants the into of a and into get they're going very sideline one is estate a have product you there real sudden of see decrease capital levels overall; queue the bidding again strong a a to which up which as and market new real a Overall, we are list. building market to of you at of record all capital market. on estate know get in Sometimes, sitting is trying a lot the which

very still trend to is have coming be fundamental of it in the we interest also as expectations we slightly in So had generally around have in I back the that but I amount as And in see December now that moment obviously underlying with changed volatility increase the may at rates bit a we seen the and normal U.S. influenced is strong. said, going a regards think the will XXXX. to very, of

Jade Rahmani

executed for based terms target M&A strategic JLL, is or that's the Capital for on I market Markets, In more that hiring? to be agree large of opportunity strategic share U.S. going really

Christian Ulbrich

we before, disciplined around stick for really we be Strategic and happy But can Well allocation. I as for we do have being, so. to hiring an do opportunity only our M&A, said we time of capital if a the if principles strategic would to lot very

Jade Rahmani

you're ranked what's And right terms so? share, target the probably X now of I think in market or

Christian Ulbrich

Leasing, don't to itself. like one as Yes, want our in Markets we number in number the Capital have we we which market any areas be a Usually and or have two target in world in strategic markets.

we Now way it. the in we're so far U.S., to go are off we on still working have long a and

Just with stay that. tuned on us

Jade Rahmani

because make operating offices is in those the open, need Capital you and can already business U.S. fixed brokers them quite same of number you of leverage or do put to significant have hire investment? Capital And in leasing cost of the in you office that Markets Markets any terms

Christian Ulbrich

in I office mean very U.S. we footprint a strong the have

over to existing So need any don't open the offices further above ones. and we

So identify with to into we and if discipline and of results outstanding talent And that challenge for that try can we on type the an the use have a existing right organization our outcome kind to you is those culture, get can with that right to with that people is us. then values, platform. to end, get for find clear The them the good clients. the of

Jade Rahmani

In technology driven half completions? and finally the is how by the is it particularly driven by more much is also seeing construction new much we co-working and second terms dramatic of have how driven of XXXX, sector been broadly the that how much of growth by

Christian Ulbrich

in And are them. But and quite Flex them we in was market additional become see doing us active technology I our based another focusing other have growth. and Well, that sector we of which are have growth share what part from technology that is would out mean is market. the industries very the other on technology you really And the well. that us also the we high a clearly, coming amongst all a proportion for for a to they have and strong client a very piece -- call as really the say sector pointed economy, can we significant companies decline the base doing companies have already are talk been client successful you about in of well tend the the so potential it I despite important base that those companies.

so to in XXXX. shown we as are have with able we also have growth strong that, And that

Jade Rahmani

China's comment with particularly you APAC trends the to segment seeing on growth Can slowing? the you're about concerns in respect

Christian Ulbrich

first understood first of I'm I what part the not was quite of sure your your part the whether sentence, sentence?

Jade Rahmani

What's your view regarding the the segment? overall in macro APAC environment

Christian Ulbrich

Okay, okay.

Jade Rahmani

respect to China's And growth with concerns specifically slowing? about

Christian Ulbrich

there very is see into have What that busy. are business. are added we they amount I We China. of are of people smart a Well, can significant employees growth business a China so analyzing mean we a healthy far our still very who the lot of and

because corporate I to way professionalizing, grow think want the there and offices. in place also companies real is tremendous are for our have high on their industry they a room to their people Chinese ambitions still estate they

is them. which around if can China, of very we anything more And so China slows down to us talent employ just currently lack it's we there we find we would and in if people employ a XX,XXX amount deliver, tremendous on services of the happy be and could

that I would we haven't come but seen or so play far China any going to discussions and say. slowing if down impact something U.S. the going from But we that into forward, may good so And far -- see China. discussions is so that between so trade around

Jade Rahmani

what to performance fourth quarter exceeded adjusted in turning but revenue I'm our Okay. EBITDA was modeled. fee the dramatically projections segment the LaSalle we the close to

increase whether impact within you in was any in if business? the segment an that lines wondering by the there driven the whether completed securities mark-to-market I'm acquisitions or So expense there was

Christian Ulbrich

much way by some to might it fact is regard you with that going outsized going into mean expected those will performance. it. driven the driving is obviously again that in equity have a business than different result I partly there's come its forward be LaSalle's I have mean earnings had lower forward, which we Well more as and the fees. that But much incentive still in we expenses timing as also fourth quarter like and normal

income will So underlying couple made in obviously great and of fees a XXXX. trajectory that years than on to and we over progress margin the less in see continue we have increase last had on but XXXX annuity our we will the we are incentive

Operator

Lynch. with Ridley-Lane Bank from comes David question of Merrill America next Your

Your line is open.

David Ridley-Lane

Thank repeating how was now Real the if could in be you. margin Estate more color have Services Wondering sense XXXX? much stabilized, that a provide you on drag I has a XXXX in in do that XXXX, you little that of Integral know margins a of won't

Christian Ulbrich

I strong on driven the our by will that we And is of Integral. Frankly driven make will a will pretty as Integral. you margin answer. basis be be Services impact much to the by XXXX. that points. percentage it a on much overall I XX that is about we progress speaking Well of continue Estate an I have company. The important Europe how whether we of not you XXXX that can much can't to Real give high tremendous from level progress We mean progress that give how further optimistic made that's investment in improvement XXXX are as hand would that in that for up detail

David Ridley-Lane

I the that but different in ask you've that slightly been an question asked sort way. is to will spending on I then a European technology of margins know And XXXX? Understood. drag already incremental

Christian Ulbrich

ERP. technology You spending? said Oh, European

David Ridley-Lane

Yes.

Trish Maxson

Yes.

Christian Ulbrich

so I a thought European, sorry, European. ERP as I'm

the will leave question Trish. ERP; I You mean to

Trish Maxson

us. a for we do some, said We I as completing we looking it a this PeopleSoft. but will need of that spin that technology over because tremendous and that don't to in complete may in implementation Yes, was about actually -- increase that the has for have it are we expenses about That do so XXXX, was for some for year implementation anticipate drag XXXX be we to XXXX XXXX. our Asia-Pacific still come into so continue half and EMEA

David Ridley-Lane

me, you And level the characterize normalize. us fees? of level really then all as one you would you Can expect the say remind transaction and normal to when last fees for or expect incentive you for quickly LaSalle you incentive fees

Trish Maxson

to normal the given fees this volatility. of define mentioned I think somewhere to for that's That's $XX might $XX range we lower really difficult though so the Yes, incentive LaSalle expect than to in million. earlier, bit what million a you little of come as

Operator

Blair. William Sheldon with Stephen Your comes from next question

open. is line Your

Stephen Sheldon

Good morning. you. Thank

Christian Ulbrich

Stephen. Hi,

Stephen Sheldon

X% So costs revenue just a tech given both spending fee close little spending commentary you've detail, you been IT for tax base looking some have and but I on think to investments. more on strategic

seeing And between guess the base specifically categories you will you guess in those will you composition would look in to base year? allow I strategic continue that different. in So side and tech more the strategic costs expect are much XXXX. leverage I this two IT that invest to IT

Christian Ulbrich

working and that's are Exactly, happening. that’s for we what's what

mentioned call IT we pushing tremendous will applications. we We of fees same down percentage down. are have that is are going infrastructure where But continue spend, progress to X% as and the investment client do facing higher time, what the that base up mean infrastructure. making last And is I so. targeting but at end application that you made are you revenue. in And cost which X%. is to client is within the base a couple in our spend going the IT we on percentage fees a increasing our years at strides over the And

Stephen Sheldon

on Can been it, you've Asia-Pacific. hiring? and service helpful. then about lines XXXX provide Got trends should some Japan that And which in that's help in you detail you in talked China hiring

Christian Ulbrich

the rate the side, size Japan can we economy, many the for still long been. way around it the board many, predominantly a of specifically build kind to transaction very, we Markets in Capital more strong have grow And property as but broader Markets management across continue China our the very In a grow management the on business services. business the to transactional considering have and and side at same of GDP is are services, to years we there of Japan Leasing facility Capital of overall and and the again has continue Japan,

Stephen Sheldon

search? I CFO from then Got the it. on me, update last just guess And one any

Christian Ulbrich

me I smiling a good sitting Well to and great she's have CFO that's so a start. next me, at

I to are around and good But allocations. again say. would quite it's we progress, Now we having making we capital working it are are on the discipline similar

We are us. here is perfect the the person keeping to fit for our find which ideally discipline

Unfortunately, it no Trish as are are will currently. CFO we on great it. our not under are to we going are we working because doing team We But forward. pressure a still continue as

Operator

comes from Your with Sidoti. next Marc question Riddick

Your line open. is

Marc Riddick

I of I answered for high on I about kind mean of actually what get wanted acquisition general view questions several see feel a you. to some is just understand follow-up multiples available I my discipline the but So to your were on on around prior get wanted marketplace sense can as opposed, a but there you're mean things to level just to looking keeping you? did you the guess bit what the I might maybe of little of you sort how of out your current be want the on and commentary Thank that attractive questions

Christian Ulbrich

Well at many availabilities to a career; so has. I've with market never least seen in as which currently my has regards M&A it

think probably quite normal. I that's

and companies new moment in upturn a home. of currently at in lot so long are a cycle late interested finding a a swing are We

quite not we great have we're pretty regards of multiple and less we so multiple strong in. Investor of hasn't areas Day interest at us and interested the have expecting clear companies to lot But analyzing And to great really which opportunity. changed. our companies on been work different With than a a that going are in

who the really squeeze overpay And you that’s hand the outstanding a are other want don't one good want JLL. companies so obvious hand, on to you only to for on buy the fit

Marc Riddick

XXXX. there how appreciated to on you. back ERP might I prepared any going of the one around of through then year the flow Thank the particular spend thinking needs around or be to is And circle into sort commentary thing spending Okay. was did about it wondering IT I for? should and be if commentary that was I concentration the we the want and

Christian Ulbrich

APAC, mean in HR up side the our as we said, we we alluded on on just Well I the side. to platform it, finished are and finance Trish ERP finishing EMEA already

are into information driving And a invest next regards the the still. kind supporting those around those of Trish have into are next pretty will to that which revenue we concentration going then revenues revenues direct are one a to be for that first time to organization, type strong client have priority client So which And to we of applications, we now the applications. us so and of room existing client have for on which mentioned. real streams expecting we from the that with bit forward is continue given applications applications area of additions like

Operator

Your comes next question from KBW. with Jade Rahmani

line is Your open.

Jade Rahmani

much. Thanks very

sector? estate the mergers you in for M&A services commercial compelling companies see the rationale side, between On strategic do any public real

Christian Ulbrich

great The not they a on whether whether bother end that they so isn't really is us whether companies would whether fit us. anything question that public are which for Well doesn't those on public make for are a public are public. they they and or are us not or are difference whether

does to it whether your also position. think your it if And which with to to those type an to company market doing provides offering you drive make services in say or more of something which a easier I can services. way down is helps is the which of offers but sense you question and merge the scale one yes It strengthen sense, you same then service. to costs really your drive kind the exactly value goes directly -- are is complementing makes it complementing a same question, your obviously

were and opportunities in doing when pretty UK King We drive the was which it did once your our that that exactly same Sturge. type have was what those great at decision we King UK, the done a doing value size UK in you much it And doing the we makes of were relatively my they size. that the have sense was happens but really knowledge shareholders. only for of rarely business it XXXX that to in boosted and Sturge and time exactly

Operator

no There call for to further turn over back this management the are I'll now time. closing questions comments. at

Christian Ulbrich

With again quarter. we speaking following questions, no further first close for Thank today's to you thank with call. we forward the you and look Well, you. participating

Operator

Ladies this and gentlemen, program. does conclude the

a day. disconnect. now Everyone, have may wonderful You

Jones Lang LaSalle (JLL) 12 Feb 192018 Q4 Earnings call transcript