10-KPeriod: FY2017

CBRE GROUP, INC. Annual Report, Year Ended Dec 31, 2017

Filed March 1, 2018For Securities:CBRE

Summary

CBRE Group, Inc. (CBRE) reported strong revenue growth in its 2017 fiscal year, with total revenue reaching $14.2 billion, an increase of 8.7% from the prior year. This growth was primarily driven by robust performance in occupier outsourcing and property management services, along with increased leasing and sales activity across its global segments. The company's diversified business model, spanning advisory and transaction services, property and facilities management, and investment management, positions it well to benefit from global real estate market trends. While the company experienced increased operating expenses, largely due to higher compensation and integration costs from recent acquisitions, it also saw an improvement in its operating income. CBRE continues to focus on expanding its global services platform and leveraging its strong market position. The company's financial health appears stable, supported by healthy cash flow from operations and a revolving credit facility, though it faces the typical industry risks associated with economic cycles and credit market conditions.

Financial Highlights

49 data points
Beta

Revenue

$18.63B

23.2% Gross Margin

Net Income

$697.11M

3.7% Net Margin

EPS (Diluted)

$2.05

Total Assets

$11.72B

Cash & Equivalents

$751.77M

Free Cash Flow

$716.37M

Financial Statements
Beta
Revenue$18.63B
Cost of Revenue$14.31B
Gross Profit$4.32B
Operating Expenses$17.57B
Operating Income$1.08B
Interest Expense$136.81M
Net Income$697.11M
EPS (Basic)$2.06
EPS (Diluted)$2.05
Shares Outstanding (Basic)337.66M
Shares Outstanding (Diluted)340.78M

Key Highlights

  • 1Reported total revenue of $14.2 billion for fiscal year 2017, an increase of 8.7% compared to 2016.
  • 2Occupier outsourcing and property management segments showed strong organic growth.
  • 3Operating income increased to $1.07 billion in 2017 from $815 million in 2016.
  • 4Assets Under Management (AUM) for Global Investment Management grew to $103.2 billion at year-end 2017 from $86.6 billion in 2016.
  • 5The company operated in over 450 offices worldwide with more than 80,000 employees.
  • 6CBRE maintained a strong financial position, with a leverage ratio of 0.79x as of December 31, 2017.
  • 7The company did not declare or pay any cash dividends and intends to reinvest earnings for growth and debt reduction.

Frequently Asked Questions

CBRE's primary revenue drivers in 2017 were strong organic growth in occupier outsourcing (up 12.0%) and property management (up 9.0%), alongside increased leasing activity (up 7.1%) and property sales (up 5.4%).

The company's growth has been significantly fueled by strategic acquisitions. The filing mentions the 2015 Global Workplace Solutions (GWS) acquisition as a major contributor to revenue growth in 2016 and 2017. While acquisitions bring growth, they also incur integration costs, which were noted as a factor in increased operating expenses.

CBRE has not declared or paid any cash dividends on its common stock and does not anticipate doing so in the foreseeable future. The company intends to retain earnings to finance future growth, reduce debt, or repurchase stock.

Foreign currency fluctuations had a negative impact on total revenue in 2017, estimated at $34.5 million, primarily due to the weakness in British pound sterling and Venezuelan bolivar, partially offset by the strength in the euro. Conversely, foreign currency movements had a positive impact on cost of services.