01—Abstract
Summary
Summary of the 10-K filed February 27, 2023. Cited figures are marked; the original filing is the authoritative source.
CBRE Group, Inc. (CBRE) reported strong revenue growth of 11.1% to $30.8 billiona in 2022, primarily driven by its Global Workplace Solutions (GWS) segment, which saw a significant boost from the full-year contribution of Turner & Townsend.
Despite the overall revenue increase, net income attributable to CBRE Group, Inc. declined to $1.4 billionb from $1.8 billion in the prior year. This decrease was influenced by several factors including a $58.7 million asset impairment charge, a substantial drop in equity income from unconsolidated subsidiaries ($389.7 million decrease), and increased interest expenses. The company's business segments showed mixed performance.
Advisory Services revenue grew by 3.2%c, supported by leasing, property management, and valuation, but was hampered by challenges in the capital markets (sales and mortgage origination). The GWS segment demonstrated robust growth, with project management revenue nearly doubling, partly due to the inclusion of Turner & Townsend. The Real Estate Investments segment remained relatively flat, with investment management fees offset by lower carried interest and development revenue.
The company also highlighted a significant provision of $185.9 milliond for Telford Homes' fire safety remediation efforts, which impacted profitability. Overall, CBRE continues to navigate a challenging macroeconomic environment, marked by rising interest rates and inflation, which affected its capital markets and development businesses.
02—Key points
Key Highlights
- CBRE reported a 11.1% increase in total revenue to $30.8 billion for the year ended December 31, 2022.
- The Global Workplace Solutions (GWS) segment was the primary driver of revenue growth, up 16.1%, boosted by the full-year contribution of Turner & Townsend.
- Net income attributable to CBRE Group, Inc. decreased by 23.4% to $1.4 billion compared to the prior year.
- Advisory Services saw revenue growth of 3.2%, but capital markets business experienced a decline.
- The company recorded $185.9 million in charges related to Telford Homes' fire safety remediation efforts.
- Assets Under Management (AUM) increased by $7.4 billion to $149.3 billion at December 31, 2022.
- CBRE repurchased $1.8 billion of its common stock under its share repurchase program in 2022.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, CBRE Group, Inc. kept $0.05.
- Revenue$30.83B100.0%
- Cost of revenue−$24.24B78.6%
- Gross profit$6.59B21.4%
- Operating costs−$5.08B16.5%
- Operating income$1.51B4.9%
- Interest, other & tax−$105.0M0.3%
- Net income$1.41B4.6%
Where FY2022 revenue went
$30.83B- Cost of revenue: $24.24B, 79% of revenue
- Operating costs: $5.08B, 16% of revenue
- Net income: $1.41B, 4.6% of revenue
Kept 4.6% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 27, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $30.83B$27.75B | +11.1% |
| Cost of Revenue | $24.24B$21.58B | +12.3% |
| Gross Profit | $6.59B$6.17B | +6.9% |
| Operating Income | $1.51B$1.64B | −7.6% |
| Net Income | $1.41B$1.84B | −23.4% |
| EPS (Basic) | $4.36$5.48 | −20.4% |
| EPS (Diluted) | $4.29$5.41 | −20.7% |
| Shares Outstanding (Basic) | 322.81M335.23M | −3.7% |
| Shares Outstanding (Diluted) | 327.70M339.72M | −3.5% |
05—Questions
Frequently Asked Questions
What was CBRE's overall financial performance in 2022?
CBRE reported a 11.1% increase in total revenue to $30.8 billion in 2022. However, net income attributable to CBRE Group, Inc. decreased by 23.4% to $1.4 billion compared to 2021. This was influenced by a $58.7 million asset impairment charge, a significant decrease in equity income from unconsolidated subsidiaries, and higher interest expenses.
Which business segments performed strongest and weakest in 2022?
The Global Workplace Solutions (GWS) segment was the strongest performer, with revenue up 16.1%, largely due to the full-year inclusion of Turner & Townsend and growth in project management services. Advisory Services revenue increased by 3.2%, but the capital markets sub-segment experienced a decline. The Real Estate Investments segment was relatively flat.
What are the significant risk factors mentioned in the report for CBRE?
Key risks highlighted include the company's significant dependence on general economic, political, and regulatory conditions, adverse developments in credit markets, exposure to foreign currency fluctuations, intense competition across all business lines, and challenges related to integrating acquired businesses. Additionally, the company faces risks related to its investment management and development businesses, cybersecurity threats, and potential liabilities arising from its operations, including a significant provision for fire safety remediation in the UK.
How did macroeconomic conditions impact CBRE in 2022?
Macroeconomic conditions, particularly rising interest rates to combat inflation, significantly impacted CBRE's capital markets and development businesses. Higher interest rates limited credit availability, affecting property sales and financing activities. Inflation also increased compensation and construction input costs. While the company noted that its contractual revenue from outsourcing services provides some offset, adverse global and regional economic trends pose significant risks.
06—Continue