CWK - Earnings call transcript Q4 2024 | Cushman & Wakefield plc

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Operator

Good day, and welcome to Cushman & Wakefield's Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Megan McGrath, Head of Investor Relations. Please go ahead.

Megan McGrath

Thank you, and welcome to Cushman & Wakefield's fourth quarter 2024 earnings conference call. Earlier today, we issued a press release announcing our financial results for the period. on today's at be page ir.cushmanwakefield.com. Please presentation cautionary with Investor on in along labeled website Relations turn note release, presentation, found can our our This statements. forward-looking to the of forward-looking contains our and based Today's future presentation statements events. current on forecast estimates These materially. considered may be should only, and statements results actual estimates differ

that other guidelines. found of will to non-GAAP GAAP appendix the are we call, the financial non-GAAP CEO, Michelle today's of of call today's release of currency presentation. of Also, comparable I'd the measures to non-GAAP MacKay. stated. With comparisons our please are measures and XXXX measures, Reconciliations definitions related rates the note as financial like tables growth otherwise During to in the turn refer local throughout outlined within financial unless over and and our periods and by information presentation, SEC to earnings that, financial to

Michelle MacKay

Megan, today. and revenue you the to quarter and Capital Markets quarter everyone, growth Thank XXXX morning Leasing growth. reporting of highest robust thank momentum, XXXX, of concluded unparalleled We first and good our you, us another since joining for with

developed inclusive this the by percentages delivering invigorated, M&A. We talent, growth Our and our to business, Services earnings the of on strategy produced supported reaccelerate solidified a the in history growth top invest several of investments positions over us to plan, tier years. the improving year. XXXX in pursue that highest of well platform Services going and and execute that progressively our next commitment and poise a one free includes further cash into conversion business now is to flow company, the

growth. receded, economy profits as macro economic it a favorable. is Leasing these consecutive that backdrop now of to recession all X odds year-over-year has our of created jobs, are confirms straight had corporate of As a for have quarters creating we largely Leasing growing, pertains performance of have now, is as property healthy, healthy revenue And own Leasing. environment momentum, have the The factors

early recovery. stages Capital we For of observing are a Markets,

For costs availability That sensing are begun debt part. X Property now the because past largely rates. corrected. Debt can market And have banks for environment, recalibrating are hardest largely we the by that. interest are they rates. the Central But reducing improved and was our have deals sellers QX values that years, higher have of and in proving lenders performance. as buyers inflection. do evidenced was this

remain revenue expect For our to growth outlook, XXXX we solid. Leasing

not remain XX-year optimization green gaining likely improving, consumer Industrial for expiring to of than remain stick continue is be chain engines registered supply X this create to yield and and a we is isn't Markets, We to logistics rate observe a high and momentum, third-party to will again. are again. the more normalizing, steady e-commerce, deal growth because that X recovery, hockey will markets leases is going shoots spending, in cycle. nearly calling likely office, in Capital Fed be strong. In funds half of The positive pipeline interest And isn't going net absorption the of in its rates healthy track Office return QX but absorption flow. we

that of frenzied we activity So COVID. we the coming get did won't out

problem-solving are XXXX, across with with cyclical continues XXXX up forward makes our that to to the uplift, want at if an accelerating on so new in combined we current get as thank be advice set to we Cushman real multi-year cycle improving as in environment the XXXX. The across we we're to are vision. and estate, investments in good our our based this a a standard believe are doing commitment services. of teams that the accelerate exceptional continued work our our likely innings in to platform industry, & to an and what profitable commercial bounce Wakefield. I globe in we for and grow. We early execution confidence the time So and observing, balance trends hold, sector will growth the brand exceptional for across be built sheet, exciting for the and To us premium driving through the in and known of our

Now call review performance. to Neil, let the financial me hand to over our

Neil Johnston

strengthened In Thanks, our Michelle free achieved of margins balance and good flow, growth. sheet. we foundation XXXX fortifying lay cash sustainable protecting long-term the to improving groundwork objectives We morning, financial our our financial and for everyone.

to adjusted full the million. and For fee expanded was X% $XXX X% up EBITDA revenue year, billion of $X.X

EBITDA $X.XX, XX%. improved last cash Year, for EPS to free $XXX percentage income future of flow million higher for setting base the adjusted from $XX net basis year, and XX conversion delivered points Our X.X%. was Adjusted million to the XXXX, by improved than a of as margin up X% growth. We

flow enabled cash of term us to of schedule. strong Our million our ahead loan pay $XXX XXXX

X costs the repricings over closed in $X.X through borrowing the with million past year. We also equivalents $XXX and year cash in cash our loan liquidity. We total term and lowered billion

X.Xx to at of ratio XXXX. the X.Xx from end leverage Our improved

X% from in strengthen. X%. Adjusted the up million our in investments. against double-digit to quarter, revenue improvement up Leasing brokerage our guidance balanced of Capital investments fee underlying method up increased revenue our for environment million in XX% give in $X.X results. third the on growth EBITDA continued providing increased business a delivered brokerage quarterly last we was XX% as another earnings 'XX ram outlook, of in revenues, equity momentum our Markets XQ billion, $X.X exceeding was drove transactions the Before as decrease the building quarter, revenue $XXX I'll quarter, some the on we discussed the And by and globally, details X%, growth strong

earnings conditions venture, to driven method from volumes equity declined $XX For joint the year, in attributable tighter primarily XXXX. full transaction million, our lending in by Greystone investments reduced

second straight line particularly classes, was deal as a in quarter the and Moving QX, high performance key to of with Demand seek spaces. Beginning quality across Leasing, sizes tenants area Leasing double-digit XX% to quarter. office, growing growth. America's strength, asset the in continue service out of for solid remains

trends. APAC economy increased Australia QX China. return in challenges by India, and to We results in stable and offsetting in resilient strong continued a expect office Leasing with strength XXXX, was U.S. in supported

Our growth, positioning among in us expected to benefit India strong rapid next to positions country's highest globally the be from economic the market the decade. over

the industrial up divestiture fourth in X% project especially revenue as grew year EMEA quarter, the ended the growth and the QX growth, Capital while investments in Services XX% to Service due Lastly, excluding management a Americas and on EMEA management. fueled and QX Eastern France a tough increased impact and transitions due Leasing build. growth. Capital improved XX% by against of returned quarter X% revenue margin XX% and reflecting by to refocused benefits the year's contracted Australia, design office in in led in Markets year activity. revenue prior of restructuring was profitable excluding Services to on the X%. revenues focused year. one-time declined margins our facilities XX%, APAC up X% the increased and property improvement rose QX. driven future in divestiture year X% by we Markets region. In non-core and Japan strongly EMEA Services, by in that last strong setting rebounded fourth completed improving driven XX% of Europe. deals XXXX comparison rising APAC growth, earlier the Services America's

in investment a is platform key Services Our focus XXXX.

market spending our long-term plan and continuing with expense, capital conditions QX We positive to for Moving while to reinforce right outlined stronger reserves Last transaction a investment and now to interest outlook. confidence structure, capital allocation increase solid enter have our priorities. XXXX lower our over stabilized, investments. cash the Strong that making we time this volumes delever time. clear year, results

to run mid-single-digit rate targeting midyear by steady a For growth, XXXX, accelerate of throughout top-line progress we Services growth the year. with aim

economies mid-single-digit expect We remain office in and industrial. the strong by growth supported durable tailwinds and to range, in global secular Leasing resilient

capital. full rate year acceleration expect mid-single-digit Capital magnitude the of availability growth XXXX, from with the to and We interest range the for full on of accelerate dependent continuing in reported sentiment XXXX investor year volatility, the we Markets

carefully increased cost investment with and we on the will long-term focus front, On spend returns balance value creation. a

our seasonally to in As we improvements, incremental margin near-term to anticipate previously quarters. headwind stated, have volume especially we a lower investments be

we financial plan. our result, the margin our prior quarter closing, be with to confident flat are remain first versus we relatively a in pleased and year. In expect strong As quarterly performance

growth We Michelle. business achieve core value turn share call XXXX improved in and expect strength and stronger to in sustainable back investments XXXX XXXX, growth even we to our per greater earnings The shareholders. With with compared earnings the growth that, I'll now over our to delivering fuel for by will driven execution. are making anticipated disciplined XXXX,

Michelle MacKay

at strategy of and expansion driving other. Layer talent. allocation, capital Each our Thank X multifaceted Neil. you, EPS. speaking layered the aimed investment is growth growth a And approach in layer and complements builds is to steady

in significant retain best over in As we taken last increase year that due and top-tier seen to stated we talent quarter's retention the have brightest. call, intentional our we actions to past have

talent we earnest also since and this in significant the recruiting new Additionally, been to you can has publicly see ongoing fall. firm, that process are the

and is It efficiency, we is acquisitions related external our major capital relationships our has expands in our Due deliberate, a X platform For Miles XX targeting This efforts we and and growth ongoing organic opportunity competencies steady reflects steady This or of markets is in areas, time. closely Treaster, gradual global business Layer example, months focus within acquisitions an and already X the leveraging new our past us scale through to commitment existing core Markets, the core teams what achieved footprint, have. And expansion. than synergistic alone. Layer on by have already customer funding tuck-in Head is to is internal complement considerable growth. improving X small-scale nurturing enhancing brought in rather growth. strategic Capital or that investments. expand over to here new that U.S.

each looking to accretive pipeline reliance We will growth. cost attainable, low integration actioning to risk are in goals. multiple provides and XXXX. add and at the pillars underwriting for believe that We to on progressive Within achieve long-term have we continue options the appropriate growth layer, already are plan synergies with this acquisitions

Let now hand back for call questions. me operator the the to

Operator

comes [Operator William first question Instructions] from The Sheldon with Blair. Stephen

Stephen Sheldon

are be First, flat we moving margins year of and about thinking you assumptions that full margins Michelle is provide for framework year-over-year incremental on the for like there. first in commentary rough I uplift between just quarter, a reinvestments of should the then clearly will appreciate be and about can any some but that lot how talked initiatives I XXXX? given the year it pieces this transactional business guess, high across there the margins the you seems the there the

about for thinking year So we be be margins would how should any rough full helpful. framework

Michelle MacKay

margin let clarity. on investments Thanks of question, your be Stephen. in more the point, company Yes, over that going course to making the to best for pressure we're going the are its to me long-term amount performance. the you are we But a given give around or of some little and Neil interest that guidance have the have of the year that

Neil Johnston

Yes, sure, Stephen.

a how what about we're around is we're going do then So is framework And balance our what spend given thinking growth. to we've with you revenue. investment

half see As about the XX% revenue first in with XX% half. always, second our we of in the

a the is but quarter the earnings to you're in following just we and our year, growth, not XXXX smallest why years. guide, accelerating So flat delivering really that first margins management the in there. as seeing margin is What that's this quarter committed team

and outpace the see we'll minimum what we XXXX Capital X% the So a really Markets year. growth, during balance of on EPS we investment to primarily expect depending at

Stephen Sheldon

in X, just XXXX with And just talk you then the commentary Markets. the XXXX? of maybe how any early or in Capital what in quarter pipeline? the the year? you're on of I least some is versus guess, seeing acceleration maybe the activity fared continued I about so the has you're momentum Can think first on at And fourth that, X color into expecting weeks part

Michelle MacKay

history us, of which would and We starting of But to financing, investor is to I a on execution. institutional we're specific in larger more say company. January of we've done really is the is we the saw see that $XXX million coming deals recently a pause one the what the executed Pipeline the strong. us, in bit of probably to in our

a and work in the So a tend much. of a shift we're stronger not Markets people which we invest the pipeline, composition in we as to into and have market on which seeing middle institutional player we're talk lot see our our that now and in to institutional But about of in starting Capital the markets, strength as mix particular, capital platform. makeup

Stephen Sheldon

maybe Then exciting. great one hear. to that's Yes, just last That's quick one.

what be about could growth about Just color how I we midyear. in then to appreciate with back should it flat mid to guess the first that any fair what seeing, be look Just mid-single-digit you'd I Services. would getting half the the growth on thinking in commentary to like by get midyear? first mid-single-digits to by low-single-digits think half? to Services trajectory you're

Neil Johnston

think go we business year, from back to wins, Services you recurring project in of Starting But When some to What XX% to business through good which We're in Services it see Services it's see story midyear year. back be property by rate of certainly business. starting global certainly slow. we the of Stephen. about growth Sure, the but our back a sort of committed comes for business, sort will help and mid-single-digit as are that occupier XX% management gradual the progress, is of improvement nice some year. will getting is our the management. our the our half especially contracts. of to half and

Americas, that's we so so the have lot And reconfiguration, growth that finished the is in APAC will stronger will EMEA, quarter. and facility business, expect market. you momentum, quite in growth part our of very there. quickly, pick Property it while. In certainly a business fourth our but both where a And we that start to Management take the seeing up of in the both strong once a Services in then returned those Services saw

things there. So expect good some

Operator

JPMorgan. The next Anthony from Paolone with question comes

Anthony Paolone

you where perhaps around you question and type give is it you outlook was a stronger where weaker, detail can Leasing both more growth. bit mid-single-digits I And little the if said wondering on and First geography? by or us property thoughts see

Michelle MacKay

Brooklyn, important pandemic, absorption companies one a net a office, growth we a course you talk saw really and in rent and reflect Vacancy is standout, on give space is in other again. D.C. can me In long-term still okay normalizing more about they're from of those Dallas, population standout, is growing. higher. a some the around were goods, since The post is improving, The seeing ways, standout. more XX% that positive clearly QX net means of the demand is after peaked context list and in absorbing. return what Baltimore markets consumer absorption. standout, strongest of pandemic is areas options. registered particular, Net strong quarters taking we e-commerce, that. and mandating office back markets and on the bit absorption whole York to a These engines And Let trending it's U.S., are on days half data and trending are of X, absorption all of was Nashville is to little the country in-office the the quite needs it year, my of But higher, we of using of then in week of X, absolutely terms demand the is to anyway, indicating leasing, higher is strength rents. In the bit has space is lower, sublease space making trending it's that's Nearly industrial, remain positive. still X where onshoring. And Tampa we're in office in where obviously that industrial markets but remains But examples I is an but market particular San Francisco, over progress New a healthy. the pandemic. tracked the we there markets is there coming point in historical XX% a bias In which and going quality do that And out high, absorption more record to still logistics as script, a needed during not the mentioned it's because still were spending pandemic, still businesses rates in the strong, sustainable. growth in the if attendance

Anthony Paolone

from you've to business some outside my relates headwinds. investments you're the investments recruiting doing. the It you the making what then second question mentioned margin see creating pretty into And is and noticeable And just efforts. to been all the the

just wondering So or Just I higher you when new Like, recruits works? it you splits about go the talk was is wondering headwind give add if it what you how margin out and could that guarantees? creates producers?

Michelle MacKay

more talk Understood. growth and Tony, one about pressure improve investments being where directly It's because that them. the not in to to talking that's margins. putting infrastructure, we geos script, market the market But I that increase retention narrow, the our we're sectors or on we're when share client in capture outlined to organic talent build quite investing in in X some buckets about of of

Operator

comes question from next Blouin The GS. Julien with

Julien Blouin

those back occupiers wanted I'm signs some I if decisions? the of sort On is any the or noted of making trade there that's uncertainty before execution assess was sort step sort of wondering, of to been wondering you the front, industrial just Capital dig Markets into to of I from a year-to-date policy of taking comments. on part maybe side. buyers slower

Michelle MacKay

draw Specifically, Really, Julien, your industrial, it's and The terms studying early and any with call we're conclusions. to remains too fluid unpredictable, of situation us. believe policy is and welcome, it. this Julien. definitive first in I

impact another. And an position know Our will to advisory positively times it, going terms need we're our impact policy mean contraction, that bringing all administrations which of relocation, whole, remember these means they're At many a but own it clients one things. are like And as said changes. on global terms there's don't us it people help can of any lot negatively uncertainty, business. and through Having could has that timing in importantly, in property. solutions, studying a history and property of business, is proven impact how tariffs to we're that and scope of things navigate That change solve. that and precise policy build-out, expansion, we how of could this, throughout market in changes these of

Julien Blouin

maybe helpful. touching specifically strength the you business the very impressive That's strength Maybe noted sort Markets XXXX? sort really the you at I fourth strength, to APAC, looking of the quarter. of how in And sense saw the of Japan saw sort sustainable fourth going in in those in we you on could into trends -- Australia. of the just and get a be want feel that Capital quarter

Michelle MacKay

very we us, also in but were investments markets for are Those they strong XXXX. because Yes. late markets where made

we're seeing regard so And particular, in those bringing Markets expertise. the of to labor with fruits our in markets, Capital

Operator

[Operator question Michael comes from next Instructions] with Citi. Our Griffin

Michael Griffin

go we're stands to transaction comments higher It to doesn't least in seem environment. the longer like activity Fed's Obviously, this as back at for want around to right year, like the it now. I Michelle, just it rate seems expectations for your and year. cut this going

So going transaction outlook, as incremental what debt engine you picking think get to sellers it activity? up? What's about maturity capitulating is that for Is on finally Are back to catalyst price? the the start driven?

Michelle MacKay

on neutral costs. back rate stick a anticipated leverage give recovery. cap is most than our is some path borrowing around Okay. is that that you X%, around set the X.XX%. steady means we Markets and thesis. What for that which market recalibrated, on on in Capital see rate world. on I'm stage let healthier costs. is Capital been of And average Multifamily remains expansion activity. for come We've Industrial support projecting to frankly, thesis neutral fixed largely office to mid the hockey And data and you a player to around CBD assets, can have me basis, to the Markets the Xs this. high perspectives rate borrowing project around is give levered our positive question being means rates around cap that but to going the is that continue your and the in into which is financing cap cap averaging originally X.X%

sector. still So there's do to lot that a particular of work in

Michael Griffin

has context. And maybe office. within kind up improve helpful some theme That's following of Clearly, there. one Leasing continued then the to just on

of that for see lower of spillover mainly York maybe I think have continue the into demand show the higher-quality top-tier, to started to improvement? maybe as But buildings. markets you lower in understanding a kind price kind effect tier, the general leasing of is are seeing that's as point New market's buildings an that a incremental like strength, example, result

Michelle MacKay

spot quality years construction several office on one. high-quality The remains there's over been Yes, that basis you're past the demand, over lean, the a remains and -- of in enough lowest in the decade. not And has with high it. pipeline

pretty and the the to demand is the is thing. up space new trickling So down next much leased best

Operator

closing question-and-answer are queue. Seeing Michelle there the session. the remarks. concludes This that in MacKay would back like to over I turn our for no questions further conference to any

Michelle MacKay

and look everyone, quarter forward first again you, you to earnings. to Thank we after speaking

Operator

The conference for now attending you presentation. concluded. Thank today's has

You may now disconnect.

Cushman & Wakefield (CWK) 20 Feb 252024 Q4 Earnings call transcript