10-KPeriod: FY2019

CBRE GROUP, INC. Annual Report, Year Ended Dec 31, 2019

Filed March 2, 2020For Securities:CBRE

Summary

CBRE Group, Inc. (CBRE) is the world's largest commercial real estate services and investment firm, as indicated by its 2019 revenue. The company offers a broad spectrum of services to both real estate occupiers and investors globally, encompassing leasing, property sales, outsourcing, valuation, investment management, and development. CBRE has a strong global presence with over 100,000 employees across more than 530 offices in over 100 countries. The company's business model is increasingly shifting towards contractual, fee-for-service revenue streams, which are generally more stable and predictable than transaction-based commissions. This strategic shift is supported by a diversified client base, including a significant portion of Fortune 100 companies. For the fiscal year ending December 31, 2019, CBRE reported significant revenue growth, driven by strong performance across its Advisory Services and Global Workplace Solutions segments, and bolstered by the acquisition of Telford Homes. The company also highlighted progress in its Real Estate Investments segment, particularly in investment management services. However, investors should note the company's disclosure of material weaknesses in internal controls within its Global Workplace Solutions segment in the EMEA region, which management is actively working to remediate.

Financial Highlights

47 data points
Beta

Revenue

$23.89B

21.8% Gross Margin

Net Income

$1.28B

5.4% Net Margin

EPS (Diluted)

$3.77

Total Assets

$16.20B

Cash & Equivalents

$971.78M

Free Cash Flow

$929.87M

Financial Statements
Beta
Revenue$23.89B
Cost of Revenue$18.69B
Gross Profit$5.21B
Operating Income$1.26B
Net Income$1.28B
EPS (Basic)$3.82
EPS (Diluted)$3.77
Shares Outstanding (Basic)335.80M
Shares Outstanding (Diluted)340.52M

Key Highlights

  • 1CBRE is the world's largest commercial real estate services and investment firm, based on 2019 revenue.
  • 2The company operates in over 530 offices across more than 100 countries, with over 100,000 employees.
  • 3CBRE's business is increasingly focused on contractual, fee-for-service revenue, aiming for greater revenue stability.
  • 4In 2019, revenue grew to $23.9 billion, driven by organic growth and the acquisition of Telford Homes.
  • 5The company reported net income attributable to CBRE Group, Inc. of $1.3 billion for 2019.
  • 6A material weakness in internal control over financial reporting was identified in the Global Workplace Solutions segment (EMEA region), which management is addressing.
  • 7CBRE does not currently pay dividends, intending to reinvest earnings for growth and debt reduction.

Frequently Asked Questions

CBRE operates through three main segments: Advisory Services (including leasing, capital markets, property management, project management, and valuation), Global Workplace Solutions (providing integrated outsourcing services like facilities management and project management for occupiers), and Real Estate Investments (including investment management, development services, and flexible-space solutions).

In the fiscal year ended December 31, 2019, CBRE reported total revenue of $23.9 billion, an increase of 12.0% from the prior year. Net income attributable to CBRE Group, Inc. was $1.3 billion, or $3.77 per diluted share.

CBRE identified material weaknesses in its Global Workplace Solutions segment in the EMEA region, primarily related to insufficient resources, ineffective risk assessment, control deficiencies, and inadequate information/communication processes. While management stated no material misstatement was identified in the financial statements due to these weaknesses, it indicates a potential risk that such misstatements might not be prevented or detected promptly. The company is implementing remediation plans to address these issues.

No, 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 shares.