10-QPeriod: Q1 FY2021

CBRE GROUP, INC. Quarterly Report for Q1 Ended Mar 31, 2021

Filed April 29, 2021For Securities:CBRE

Summary

CBRE Group, Inc. (CBRE) reported its first-quarter 2021 financial results, indicating a solid start to the year with revenue increasing by 0.8% to $5.9 billion year-over-year, reaching $5,938,879 thousand. This growth was primarily driven by an increase in the Global Workplace Solutions segment, particularly in facilities and project management, alongside an increase in investment management fees in the Real Estate Investments segment. Despite a slight decrease in Advisory Services revenue due to ongoing impacts from COVID-19 on sales and leasing, the company demonstrated resilience and improved profitability, with net income attributable to CBRE Group, Inc. rising to $266.2 million from $172.2 million in the prior year period. This improvement was supported by a decrease in asset impairments compared to Q1 2020, and a significant increase in equity income from unconsolidated subsidiaries. The company also strengthened its balance sheet by issuing $500 million in 2.500% senior notes, which were used partly to manage its debt profile. CBRE continues to execute its strategy focused on more stable, contractual revenue streams, while navigating the evolving market conditions. The company remains committed to returning capital to shareholders, evidenced by its ongoing stock repurchase program.

Financial Highlights

45 data points
Beta

Revenue

$5.94B

20.5% Gross Margin

Net Income

$266.20M

4.5% Net Margin

EPS (Diluted)

$0.78

Total Assets

$17.25B

Cash & Equivalents

$1.91B

Free Cash Flow

-$223.04M

Financial Statements
Beta
Revenue$5.94B
Cost of Revenue$4.72B
Gross Profit$1.22B
Operating Income$269.08M
Net Income$266.20M
EPS (Basic)$0.79
EPS (Diluted)$0.78
Shares Outstanding (Basic)335.86M
Shares Outstanding (Diluted)339.58M

Key Highlights

  • 1Consolidated revenue increased by 0.8% to $5.94 billion for the first quarter of 2021 compared to the same period in 2020.
  • 2Net income attributable to CBRE Group, Inc. significantly increased by 54.6% to $266.2 million, up from $172.2 million in Q1 2020.
  • 3Global Workplace Solutions segment revenue grew due to strong performance in facilities and project management.
  • 4Advisory Services segment revenue saw a slight decrease due to ongoing impacts of COVID-19 on sales and leasing activities.
  • 5The company issued $500 million in 2.500% senior notes in March 2021, strengthening its financial position.
  • 6Equity income from unconsolidated subsidiaries surged by 305.2% to $83.6 million, boosting overall profitability.
  • 7Cash used in operating activities was $193.4 million for Q1 2021, an increase from $128.8 million in Q1 2020, primarily due to changes in net working capital.

Frequently Asked Questions

CBRE's consolidated revenue increased by 0.8% to $5,938,879 thousand ($5.94 billion) for the three months ended March 31, 2021, compared to $5,889,168 thousand ($5.89 billion) for the same period in 2020. This growth was primarily driven by the Global Workplace Solutions segment, while the Advisory Services segment experienced a slight decrease due to the ongoing impact of COVID-19 on sales and leasing.

The substantial increase in net income attributable to CBRE Group, Inc. to $266.2 million in Q1 2021 from $172.2 million in Q1 2020 was due to several factors. These include a significant rise in equity income from unconsolidated subsidiaries, a large decrease in asset impairments compared to the prior year ($0 in Q1 2021 versus $75.2 million in Q1 2020), and improved operating income across segments, particularly in Global Workplace Solutions and Real Estate Investments.

CBRE actively managed its debt structure. In March 2021, the company issued $500.0 million in 2.500% senior notes due 2031. Additionally, they redeemed their 5.25% senior notes totaling $425.0 million in December 2020. As of March 31, 2021, the company had $2.8 billion available under its revolving credit facility and a remaining capacity of $285.9 million under its stock repurchase program.

The COVID-19 pandemic continued to impact CBRE. The Advisory Services segment experienced revenue decreases, particularly in sales and leasing, due to ongoing transaction hesitancy. Conversely, the Global Workplace Solutions segment benefited from growth in its contractual facilities management and project management services, demonstrating resilience. The company noted that while economic conditions were improving in some regions, operating challenges persist due to high caseloads and limited business travel.