CWK - Earnings call transcript Q1 2019 | Cushman & Wakefield plc

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Operator

Welcome to Cushman & Wakefield's First Quarter 2019 Earnings Conference Call [Operator Instructions]. It is now my pleasure to introduce Bill Knightly, EVP of Investor Relations and Treasurer for Cushman & Wakefield. Mr. Knightly, you may begin the conference.

Bill Knightly

Thank you, and welcome again to Cushman & Wakefield's First Quarter 2019 Earnings Conference Call. a announcing issued for financial we period. the today, press our release results Earlier be our use found along can release This on presentation that along. with Investor pages you follow can to today's website, Relations materials be at ir.cushmanwakefield.com. These can found Statements. turn Please labeled the page to Forward-Looking contains on our forward-looking of and current based events. statements presentation forecast estimate Today's future should be and These estimates statements actual results only, considered may differ materially.

Reconciliations the like measures may uses refer earnings current underlying our business. Appendix adjusted as currency tables EBITDA, SEC to investors guidelines. measures are and our to outlined that remind and financial non-GAAP improve within performance financial we of of non-GAAP to call, you our release to today's the the results fee of revenue, local analyzing financial share I'd During of per company to today's found GAAP by adjusted and of comparability assist earnings in presentation.

You earnings X-K will financial XX-K. these the detailed of on report in tables financial and more and Form release non-GAAP measures find our annual definitions of the today's information and Form

addition, note local the growth comparisons and and the that are of currency. would to to In presentation, rates in comparable throughout period like I XXXX

you And the our will presentation, with along on Page and CEO, to begin Chairman Executive X. of our call those with For like following I'd to that, we turn over White. Brett

Brett White

business momentum and first our us pleased revenue to I'm in in the today. strong report in and joining to Thank quarter. for Bill, continue see all EBITDA you, good you thank double-digit adjusted we fee with growth

top growth that an a result estate of Our continued remains services. sustained on real environment our is and strong our focus priorities favorable for performance

saw to growth operational delivery in growing to focus: of are here continued and global margin strength through businesses share at the areas we recurring quarter top fee infill in continue strategic property growth by first discipline. recruiting management service leasing bottom best-in-class performance our our double-digit through service XX% to EBITDA our As expand facilities and continuation a M&A large the strong and our revenue and platform, growth adjusted growing differentiated XXXX. our was first the and measures, a and good led of strategic strong leveraging the in our by revenue of and quarter momentum by By clients, lines. revenue in these and We reminder, experienced our project throughout XX%, the and lines

We operational a quarter also the continued focus will first in efficiency. speak improvement through results later. detail our more on to margin Duncan bit

share strong our Cushman documentation and I'd of few principal we our other to to shares of in shareholders. Further quarter. in can Wakefield's the site. Relations Investor & notable performance, secondary be financial a like around found announced some highlights addition from March, In a offering offering detail that In

organization of to our first proud M&A. and shareholders. our value building provide people platform our stakeholders, these We're Diversity. designations the for evidence they we we're clients, that infill our that including Employer third-party earn Best recognized Our the global strong Company, Commercial as brand again by leading XXXX, named to first Real the being estate and outsourcing recognition the number Global Lipsey for Brand IAOP Forbes by in quarter Estate being real top an because quarter, In our continued through by honors global receiving many further to as provides the of continued expand including X

business to As is the of report management January in Inc., acquired facility well. Quality we that quarter our that QSI smoothly business North to performing American markets. QSI, call, We're Solutions, earlier we continues pleased integration on across expand the fourth and the mentioned to capabilities our run the

business a acquired in saw Services will Smith their our in continue Occupier Global market new platform. occupier to quarter, estate Australia, South the facilities Cushman real in first expand revenue we while which services addition, also strong Wakefield Brothers recurring as In Group, that business choose in outsourcing. corporates strong the momentum & to mandates for continued winning quarter our large on building important

we global assignment provide organization for real financial foot management approximately West facilities awarded strategy provide new Hewlett-Packard awarded won transaction portfolio, new square quarter for portfolio. administration and facilities the assignment million we a real provide lease to with global X management Bank with to example, million the contract integrated their portfolio. leading a their a management, to were new first for and integrated Enterprise were For foot square X.X services entire in We estate of estate a

$X.X Blackstone. a win recent in include: sale Raffles X-office represented the of Singapore execute market A capital markets a that first the represented their in companies of in continue from lease announcement Wakefield We square for Corporation New portfolio million, Place very WarnerMedia foot And represented we the in quarter. price and assignments the the businesses in an sale-leaseback A XXX,XXX in Group We largest in property & and at $XXX headquarters in of few that that securing in property. recent should a for We deals leasing related purchase XXX,XXX loan global represented a years. Madrid one York our large brokered Zurich square the a foot transaction Chicago. in addition, company's would USG sale approximately AT&T Rockpoint Ascot hospitality the which advised securing of to represents and In billion quarter. second to $XXX in close examples Cushman million

among metrics for dashboard our estate These to assess forecast. business and commercial provide estate our and demand to the turning real estate on X, foundation a for to monitor real see which Now supply the global market, to continued you'll we services. favorable reign primary real Page are commercial

the real with continued metrics pleased estate strong. is on and GDP remains XXXX, X.X% In IMF respectively. and You for our remains in GDP with forecasting demand momentum demand. generally X.X% business. remain Supply see for The at growth can solid. Global we are global pace currently summary, very XXXX

for a coupled Duncan XXXX. our start to conditions Chief the performance share Palmer, favorable outlook quarter good Financial and very first our year. financial our discuss will strong now Our more with Officer, is economic continued on results

Duncan Palmer

everyone. To Brett, start X, our for and key quarter. good summarizes financial Thanks, turn to data which page the let's first afternoon,

we billion, Brett nearly to said, fee revenue increase deliver our of of XX%. each Today, an three $X.X quarter reported operating reported strong growth first we results. of segments. continued XXXX As across We double-digit

million, First quarter up $XX was adjusted EBITDA XX%.

expansion increase. and adjusted Our basis focus performance a of Margin X.X% revenue EBITDA driven strong margin by XX operating represents on efficiency. continued point was

in operating of last quarter Recall second earnings per was and third year. lower Adjusted share by was per First we the expense. earnings quarter share driven adjusted off our strong lien results interest $X.XX. performance paid

X segment Moving show Pages and XX we service growth and line. revenue on where fee to rates by by

our cash and of services, APAC. and which perform Our very XX%. grew XX%, and quarter generates a Americas annualized fee QSI, have with management single-digit acquisition. occupier markets. typically flow representing to-date we PM/FM, XX% project leasing subcontract was integration our half strong facilities service strongly revenue leasing has outsourcing, and represents Americas service comprises we growth stream, services of or in of service earlier. our management a pleased In The in growth. under key basis quarter. low this the the management just the first which performance double-digit on facilities operations, stable of business the Fee XX%, service of double variety revenue. call mentioned property project facilities facilities in progress the in all grew line line, our Globally, typically PM/FM PM/FM Within by on we We're line Brett solid This services grew part particularly across rest revenue through in PM/FM, leasing Globally, X our major services the driven grew a an which segments both the at operations with acquisition strong and made grew property digits. line, rate. on growing

PM/FM overall that, We on expect more starting our in growth service With the double-digit continued the XX. start with of XXXX. detailed Page Americas a segments line in will review we revenue

digits by grew Within PM/FM our services our Our revenue were line XX%, a and at was rest Growth line, Americas low Americas up fee service rate. and respectively. operations revenue clients and service half Facilities PM/FM, over grew revenue. segment of double existing XX%. at our XX% PM/FM growth services business the double-digit of strong The which fee fee a wins. little from driven represent new leasing was facilities up

We expect double-digit in XXXX. line in this growth service

X.X%. quarter. by Adjusted up continued valuation EBITDA Americas as million the was driven Our and adjusted well other line efficiency. flat Americas was management's for $XX was adjusted of revenue margin on EBITDA as focus operating XX%, performance strong the and service EBITDA was

of double-digit our revenue Page on increased XX%. This EMEA across on Moving was growth fee lines. service all to driven by XX,

and in respectively. EBITDA than in in the quarter. grew X $X line valuation grew the represents EMEA markets XX% service first improvement Capital Adjusted XX%, around our PM/FM of the and regions XX%, less and segment overall leasing quarter, million. for other of an breakeven and XX% other was Our

transaction I million in comparison Asia segment Capital PM/FM was XXXX, in growing the very to the Adjusted double respectively. in all X%. Hong was growth in strong revenue and of other X capital PM/FM and APAC the represents first for of more performed rest Facilities Kong, by for due strongly, $XX offset XX% just segment. revenue The operations for the strong and substantial in mentioned. Kong. Now service APAC were transaction markets X/X the valuation services The line quarter. markets Pacific was XX%. than PM/FM, Page XX. which up established down by on our the X% Fee benefit grew digits. fee strong down EBITDA quarter a the XX%, leasing Hong XX%, of very which substantial included of roughly in tough grew revenue

to Page XXXX. our summary, our performance the overall to we businesses now economy The are continues we to across Turning be as growth of start conducive in delighted businesses. XX, global with

momentum we $XXX million. that range to in XXXX. to call, guidance On continue be the million expect $XXX good, profitably last to we our Our to XXXX of in grow is expect EBITDA adjusted provided we and

much operator results contributor to track portion quarter, that, to guidance. are call. the the the against With we for on turn I the the year too of Q&A caution While is year extrapolating with the XXXX first from our consistent in today's lowest overall, call full which back I'll

Operator

Anthony Your [Operator comes the Paolone JPMorgan. of first Instructions] from line question from

Anthony Paolone

about with you're for environment larger just can the is and a if markets of kind recruiting what question how or the talk your M&A seeing couple first acquisition into what's happening capital on the in folks shops strategy? been infill plays there, you given of either that My front

Brett White

and Anthony. hi, Sure,

owner as it I business moved gone clearly we has I has offer to firms years everyone that not talk markets full to all, their is of a about to And equity the involving distinct a to that think it's ability the clients trade, where moved full for good saw clear clear these the think investor, back the services. competitive all dynamic. What capital clearly we indication platform. can everything very is business asset, the compete the just that the while in -- that we First another of market announced having just become realize had advantage by, to and service an

frankly, and about So it, remain going to winning best which which on lose, The because going makes clearly are does market for has mean recruit what talent to markets of we the to side that and capital to that are win are active. ledger. and spoken the the retain us? easier terrific. It platforms It's easier platforms

we and I small their in quarter very seeing the But transactions in extremely too active shows activity comments, quarter. an we were conclusions out first that New in the transaction of First we're large the pleased say, EMEA largest closed good. numbers, the even prepared draw large closing, the what transaction New in mentioned quarter. that saw York We we or first marketplace. are an is from York in extremely wouldn't should certainly, many -- as I is I And that with are

good and to So next be environment, projected The at a Anthony. XX-year year. the and moment, to this buyers is seems year reasonable X% under -- pricing sellers. is we think It's

Anthony Paolone

other to more headwind business geography? become is you do if relates think question line around in were business see economically your Okay. tariffs, where by we'd that either And or as that then my to it the prominent first globe,

Brett White

when for market So business came And of tariffs just a reiterate either matter or today, themselves we haven't have seen really that our any on on China and in impact anywhere tariffs I'll been for of the year greater while. or existence threat the increased based last up mentioned the of in the tariffs. else increased we now tariffs, threat question and as this actually

anywhere probably environment able that would now underscore see come just China impact have through market for probably the in Coast West Australia, for places than no say, of on look be GDP is new the think I not more look long-standing that U.S. or moment, the at this in been tariffs else. that a of and tariffs or is steep been market to more the The than see to of time. Anthony, being It's going I But time, at threats at we some many to leasing insidious think just growth long me -- lower numbers want I impact. some the in and a the the we would term, thing.

Operator

Vikram from of Morgan next comes Stanley. the Your from Malhotra question line

Vikram Malhotra

certainly It's had something talked amount on strength in momentum you've past. about side. PM/FM of You quite the and the

wondering opportunities also as cross-sell you maintaining just momentum? sort something I'm past And terms lines. just in of seems here the the business of impact can forward, as other about look opportunity, how you the well. that you've from emphasized talk curious in then incremental could Just the that sort of

Brett White

Sure.

estate activities for the as corporate for or the So real clearly I core our as large before, industry, trend, in firm and of continuing benefits this to not we it them about to their on think footprint And as -- it a and differentially. the going side talked players benefits the three momentum, players whole, to that three pertains largest trend this industry is change. look, that outsource around

opportunities the very, at in of and very Wakefield, where other corporates to that, services the we're we either to be definitely and or environment time across in the provide more operate mentioned have the to outsource I've of make platform line to again, all beginning activities services. or the other to an competitors. estate sell the every our underscore has of It's cross two line that in their everyday happy business Cross-selling to first are early the real the Cushman to decision all cross-sell to opportunities business true. we us are model we the important So I'll either before our for mine & days every firm. to larger opportunity here,

businesses I of businesses have to support or say be the think true. Cushman businesses won't will that can't it's businesses, that at build rest We always the it we fair here in Wakefield. of family invest buy & that

firms services the marketplace we better are about Cushman and you Wakefield, think from should platforms our as but trends benefit family continued have us & see think we to the full of platform. about permanently. those think globally in about And as you more So or benefit and we the we're benefit cross-selling now, seeing that going trends from industry, services of as better at this and across get the those

Vikram Malhotra

margin Okay, front. on And the question second just great. then

to of we of I'm us You aware own changed should the nuances in the of referenced has be on relative wondering can And the the your -- sort any sort gave and leverage guidance. remind EBITDA expectations us front. anything intra-quarter you margin operating of year. you of just remainder internal

Duncan Palmer

it's Duncan. Yes,

we I think think on of business. the said, front, really, on what on of margin I -- think basis will on focused the and we the very very and a of to be what a focused are believe, growing continue year-over-year we've is and I to that because continue margin, we it seasonality think

expect basis turning sure I at stuff XXXX it And to basis, improved do We that's this expect forward, we margin good 'XX, I'm But of an we'll at first in year. the roughly it. to while page not do we've not I see intra-quarter year. think. a that going is factored think some margin way expansion did XXX in. clip see year-over-year, points, that on particularly margin annual margins, to the would We of looking in to see. expansion good see kind the quarter us expansion I

more kind done So drive it to this margin had We'll operating did to revenue. continue we and see, incremental operating QSI We year. acquisitions. expected six what efficiency. year. over was continue last good time. to contribute with should to line We'll leverage incrementals, we to of what do really, They expansion infill all as We've getting we'll continue in get drive

Operator

Blair. from Sheldon line comes William question next Your the from Stephen of

Stephen Sheldon

facilities, the sounds PM/FM in revenue First Curious driven on quarter some much was how integration QSI it like of is of the the progressing. in QSI? then more that if provide detail roughly can on you the inclusion And by acceleration additionally, process.

Duncan Palmer

Yes.

sure a that, goes the a The -- bring brought can by transaction. business quickly our mean now. that it buy clients we Make that onboard the its integration's right the that's our we successful as we going businesses flow well try I the as operations, and that systems. business -- and and continues into of businesses well uninterrupted management like our well. into into momentum financial you'd team expect, and as its when and is So sure make going all and have we transition systems,

And focus. very and how benefits progress from for looking over that as Good contribute that, momentum, the that. optimistic be numbers. continue maybe about our and and we so Obviously, that from progresses some time, with year pleased will as feel synergies we're it some we'll very to our be will

talk haven't being But the very as service is. to or of line you that can revenue exactly some expect it the specifically the last we pay. about an typically But business. to year. by saw haven't in you you're I end that driven was and on multiples of this terms QSI disclosed it in that probably Americas. assume expected overall, growth obviously We we this in of from we the specifically, much QSI from PM/FM can did sure as call aware, EBITDA I'm It's see think much mainly higher strong first in at FM-oriented how we quarter, the disclosed how see We

Stephen Sheldon

it. Got

then the looked quarter? follow-up the there how potential comparisons in as leasing. thinking And the Can the growth pipeline And about talk over Okay. are the about just more some of within next end of leasing? quarters, you how you few challenging there with

Brett White

the when our we're Brett. of of one start now good you world, by growth on for that is very double-digit around critical a And moment market. every business saying is in the because think And a that environment. quarter. of showed very, them industry. everybody. our about in very This operating and question benefits the depends I much an Sure. lines to active leasing answer But Leasing would that's other competitors lines business so in virtually good this a do, primary business for and we what us course

do saw say we had our business. business, growth in quarter really strong pipelines you first would across is that what don't saw to that, and want talking leasing of April. in would place, As and through at pace exceptionally And leasing XXXX continue without throughout I I month I in because we the XXXX we about place the say talked of quarter first in those through our about the dynamics

ahead pleased across leasing the quite in leasing business pleased what we see and with we're the of we're So with geographies. three all of us durability

Operator

questions are Brett you. turn no the to time. call I back Mr. at further over There White, this

Brett White

the you look We end for time. at to the second to Terrific. forward talking Thanks everybody quarter. of your

Operator

This conference today's concludes call.

You disconnect. may now

Cushman & Wakefield (CWK) 12 May 192019 Q1 Earnings call transcript