01—Abstract
Summary
Summary of the 10-K filed March 1, 2019. Cited figures are marked; the original filing is the authoritative source.
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.
02—Key points
Key Highlights
- CBRE 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.
- Net 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.
- The company generated robust net cash provided by operating activities of $1.13 billion in 2018, demonstrating strong operational cash flow.
- CBRE completed the FacilitySource acquisition in June 2018 for approximately $266.5 million, enhancing its tech-enabled supply chain capabilities for the occupier outsourcing industry.
- The 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.
- CBRE 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.
- The 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.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2018, CBRE Group, Inc. kept $0.05.
- Revenue$21.34B100.0%
- Cost of revenue−$16.45B77.1%
- Gross profit$4.89B22.9%
- Operating costs−$3.80B17.8%
- Operating income$1.09B5.1%
- Interest, other & tax−$24.8M0.1%
- Net income$1.06B5.0%
Where FY2018 revenue went
$21.34B- Cost of revenue: $16.45B, 77% of revenue
- Operating costs: $3.80B, 18% of revenue
- Net income: $1.06B, 5.0% of revenue
Kept 5.0% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2018filed March 1, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $21.34B$18.63B | +14.6% |
| Cost of Revenue | $16.45B$14.31B | +15.0% |
| Gross Profit | $4.89B$4.32B | +13.1% |
| Operating Expenses | $20.27B$17.57B | +15.4% |
| Operating Income | $1.09B$1.08B | +0.9% |
| Interest Expense | $107.27M$136.81M | −21.6% |
| Net Income | $1.06B$697.11M | +52.5% |
| EPS (Basic) | $3.13$2.06 | +51.9% |
| EPS (Diluted) | $3.10$2.05 | +51.2% |
| Shares Outstanding (Basic) | 339.32M337.66M | +0.5% |
| Shares Outstanding (Diluted) | 343.12M340.78M | +0.7% |
05—Questions
Frequently Asked Questions
What was CBRE's overall financial performance in 2018?
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.
What are the key business segments of CBRE, and how did they perform?
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.
How did the company manage its debt and capital resources?
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.
What are the major risks facing CBRE?
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.
06—Continue