10-KPeriod: FY2018

CBRE GROUP, INC. Annual Report, Year Ended Dec 31, 2018

Filed March 1, 2019For Securities:CBRE

Summary

CBRE Group, Inc. (CBRE) demonstrated robust financial performance in 2018, highlighted by a significant increase in revenue and net income. The company's diverse service offerings, spanning advisory, global workplace solutions, and real estate investments, contributed to this growth. Key drivers included strong organic growth in occupier outsourcing, property management, leasing, and capital markets activities, augmented by positive foreign currency translation effects. Despite increased costs associated with growth and reorganization, CBRE maintained healthy operating margins and demonstrated strong cash flow generation from operations. The company's strategic acquisitions, such as FacilitySource, further bolstered its capabilities. CBRE's commitment to shareholder returns is evident in its active share repurchase program. Looking ahead, CBRE is well-positioned to capitalize on evolving market trends in commercial real estate services, supported by its global platform and a diversified client base.

Financial Highlights

49 data points
Beta

Revenue

$21.34B

22.9% Gross Margin

Net Income

$1.06B

5.0% Net Margin

EPS (Diluted)

$3.10

Total Assets

$13.46B

Cash & Equivalents

$777.22M

Free Cash Flow

$903.45M

Financial Statements
Beta
Revenue$21.34B
Cost of Revenue$16.45B
Gross Profit$4.89B
Operating Expenses$20.27B
Operating Income$1.09B
Interest Expense$107.27M
Net Income$1.06B
EPS (Basic)$3.13
EPS (Diluted)$3.10
Shares Outstanding (Basic)339.32M
Shares Outstanding (Diluted)343.12M

Key Highlights

  • 1CBRE reported a substantial increase in revenue to $21.34 billion in 2018, up 14.6% from $18.63 billion in 2017, driven by strong performance across its service lines and positive foreign currency impacts.
  • 2Net income attributable to CBRE Group, Inc. rose significantly to $1.06 billion in 2018, a substantial increase from $697.1 million in 2017, indicating improved profitability.
  • 3The company generated robust net cash provided by operating activities of $1.13 billion in 2018, demonstrating strong operational cash flow.
  • 4CBRE completed the FacilitySource acquisition in June 2018 for approximately $266.5 million, enhancing its tech-enabled supply chain capabilities for the occupier outsourcing industry.
  • 5The company's Global Investment Management segment saw its Assets Under Management (AUM) grow to $105.5 billion at the end of 2018, up from $103.2 billion in 2017.
  • 6CBRE continued its share repurchase program, with the board authorizing a new program to repurchase up to $300 million of Class A common stock over three years, effective March 11, 2019.
  • 7The company's financial performance is subject to seasonality, with revenues and earnings typically being lowest in the first quarter and highest in the fourth quarter due to transaction completion cycles.

Frequently Asked Questions

CBRE experienced strong financial performance in 2018, with revenue increasing by 14.6% to $21.34 billion and net income attributable to CBRE Group, Inc. increasing significantly to $1.06 billion. This growth was driven by robust organic performance across its business segments and positive contributions from foreign currency translations.

As of the filing date, CBRE reported results across five segments: Americas, EMEA, Asia Pacific, Global Investment Management, and Development Services. The Americas segment was the largest contributor to revenue. Growth was observed across most segments, particularly in occupier outsourcing, property management, leasing, and capital markets activities. The Global Investment Management segment saw its Assets Under Management (AUM) increase.

CBRE maintained a strong liquidity position, with $777.2 million in cash and cash equivalents at the end of 2018. The company had significant availability under its revolving credit facility. It also redeemed $800 million of senior notes in March 2018, demonstrating active management of its debt obligations. CBRE also continued its share repurchase program.

CBRE's performance is significantly tied to general economic conditions and the health of the commercial real estate market. Key risks include economic slowdowns, rising interest rates, credit market disruptions, and geopolitical uncertainties like Brexit. Additionally, the company faces competition, potential integration challenges from acquisitions, and risks associated with its global operations, including currency fluctuations.