CBRE Group, Inc. (NYSE:CBG) today reported strong financial results for the year and fourth quarter ended December 31, 2017.
“Our fourth-quarter results capped another excellent year for CBRE,” said Bob Sulentic, the company’s president and chief executive officer. “Fee revenue was up 9% in local currency and adjusted earnings per share rose 6%. Our performance significantly exceeded the expectations we discussed on our third quarter earnings call, and was led by occupier outsourcing and leasing fee revenue growth of 17% and 11% respectively, in local currency.”
2017 Full Year Highlights
GAAP EPS of $2.03, up 20%
Adjusted EPS of $2.71, up 18%
8th Consecutive Year of Double-Digit Adjusted EPS Growth
Revenue and Fee Revenue up 9% and 8%, respectively
“Revenue and earnings for 2017 reached all-time highs, and we made important strategic gains across the company,” he added. 2017 marked the 8th consecutive year of double-digit adjusted earnings per share growth for CBRE.
Looking ahead to 2018, Mr. Sulentic said: “We regard the macro environment as a supportive backdrop for our business, and we continue to operate within an industry poised for long-term growth. This is due to the growing acceptance of outsourced commercial real estate services, the increasing capital allocation to commercial real estate as an institutional asset class, and the continuing consolidation of activity within our industry to the highest-quality, globally diversified market leaders.”
For full year 2018, CBRE expects to achieve adjusted earnings per share in the range of $3.00 to $3.15. This represents an increase of 13% at the midpoint of the range with 8% attributable to EBITDA growth and 5% attributable to the combined net effect of a lower expected tax rate due to U.S. corporate tax reform, interest savings and higher depreciation & amortization.
Full-Year 2017 Results
Fourth-Quarter 2017 Results
Fourth-Quarter 2017 Segment Review
The following tables present highlights of CBRE segment performance during the fourth quarter of 2017 (dollars in thousands):
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Americas |
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EMEA |
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APAC |
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% Change from Q4 2016 |
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% Change from Q4 2016 |
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% Change from Q4 2016 |
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Q4 2017 |
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USD |
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LC |
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Q4 2017 |
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USD |
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LC |
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Q4 2017 |
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USD |
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LC |
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Revenue |
$ |
2,341,276 |
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11% |
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12% |
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$ |
1,332,825 |
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17% |
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9% |
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$ |
526,603 |
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13% |
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11% |
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Fee revenue |
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1,688,991 |
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9% |
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9% |
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780,705 |
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16% |
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8% |
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349,445 |
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8% |
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7% |
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EBITDA |
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324,796 |
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13% |
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13% |
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132,133 |
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36% |
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25% |
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69,338 |
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2% |
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2% |
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Adjusted EBITDA |
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324,796 |
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4% |
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4% |
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132,133 |
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8% |
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-1% |
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69,338 |
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— |
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-1% |
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Global Investment Management |
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Development Services (6) |
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% Change from Q4 2016 |
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% Change from Q4 2016 |
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Q4 2017 |
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USD |
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LC |
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Q4 2017 |
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USD |
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LC |
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Revenue |
$ |
103,193 |
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12% |
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7% |
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$ |
32,315 |
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60% |
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60% |
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EBITDA |
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17,038 |
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-29% |
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-34% |
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34,534 |
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-28% |
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-28% |
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Adjusted EBITDA |
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21,402 |
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44% |
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36% |
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34,534 |
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-28% |
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-28% |
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Excluding the impact of all currency movement including hedging activity, adjusted EBITDA growth rates for the fourth quarter of 2017 were: 5% in the Americas, -1% in EMEA, -4% in APAC and 46% in Global Investment Management.
CBRE produced solid revenue growth in all three of its global regions in the fourth quarter of 2017.
Revenue growth across CBRE’s global business lines was largely organic.
CBRE also announced plans to call its $800 million of 5% bonds due in 2023 in March 2018, which will be funded with cash on hand and borrowings under its credit facility.