10-QPeriod: Q2 FY2021

CBRE GROUP, INC. Quarterly Report for Q2 Ended Jun 30, 2021

Filed July 30, 2021For Securities:CBRE

Summary

CBRE Group, Inc. reported strong financial performance for the second quarter and first half of 2021, demonstrating significant recovery and growth compared to the same periods in 2020. Total revenue increased by 20.0% to $6.5 billion for the quarter and 10.0% to $12.4 billion for the first six months. Net income attributable to CBRE Group, Inc. surged to $442.6 million in Q2 2021, a substantial increase from $81.9 million in Q2 2020, reflecting robust operational execution across all segments, particularly Advisory Services and Global Workplace Solutions. The company's improved profitability is driven by strong revenue growth, outperforming cost increases, and a strategic shift towards more stable, contractual revenue sources. The Global Workplace Solutions segment saw continued growth in facilities management, while Advisory Services benefited from a rebound in sales commissions and leasing activity. Real Estate Investments also showed significant improvement with increased development services and investment management fees. Management highlighted the positive impact of foreign currency translation and strategic acquisitions as contributing factors to the strong results, while also noting ongoing investments in technology and business growth.

Financial Highlights

45 data points
Beta

Revenue

$6.46B

22.3% Gross Margin

Net Income

$442.64M

6.9% Net Margin

EPS (Diluted)

$1.30

Total Assets

$18.46B

Cash & Equivalents

$2.14B

Free Cash Flow

$374.22M

Financial Statements
Beta
Revenue$6.46B
Cost of Revenue$5.02B
Gross Profit$1.44B
Operating Income$366.48M
Net Income$442.64M
EPS (Basic)$1.32
EPS (Diluted)$1.30
Shares Outstanding (Basic)335.64M
Shares Outstanding (Diluted)339.50M

Key Highlights

  • 1Revenue increased by 20.0% to $6.46 billion for the three months ended June 30, 2021, compared to $5.38 billion for the same period in 2020.
  • 2Net income attributable to CBRE Group, Inc. rose to $442.6 million for the three months ended June 30, 2021, from $81.9 million for the same period in 2020.
  • 3The Advisory Services segment saw significant revenue growth of 46.9% driven by increased sales and leasing activity, property management, and valuation services.
  • 4Global Workplace Solutions segment revenue increased by 8.3%, primarily due to growth in facilities management and project management services.
  • 5Real Estate Investments segment revenue grew by 50.6%, driven by increased real estate sales and investment management fees.
  • 6The company's balance sheet remains strong with $2.14 billion in cash and cash equivalents as of June 30, 2021.
  • 7Subsequent to the quarter, CBRE announced the acquisition of a 60% ownership interest in Turner & Townsend Holdings Limited for approximately $1.3 billion, expected to close in Q4 2021.

Frequently Asked Questions

The primary driver of CBRE's revenue growth in Q2 2021 was a broad-based increase across all three business segments. Advisory Services experienced significant growth due to higher sales commissions and leasing activity, Global Workplace Solutions benefited from expansion in facilities and project management, and Real Estate Investments saw gains from development services and investment management fees. Foreign currency translation also had a positive impact.

Profitability significantly improved. Net income attributable to CBRE Group, Inc. surged to $442.6 million in Q2 2021, a substantial increase from $81.9 million in Q2 2020. This improvement was driven by strong revenue growth outpacing cost increases, particularly in the Advisory Services segment, and a rebound in economic activity post-pandemic.

The outlook appears positive across segments. Advisory Services and Global Workplace Solutions showed strong recovery and growth, driven by transactional activity and contractual services respectively. Real Estate Investments also performed well, indicating a healthy market for development and investment management. The recent announcement of the Turner & Townsend acquisition signals continued strategic investment and expansion in the Global Workplace Solutions segment.

As of June 30, 2021, CBRE maintained a strong liquidity position with $2.14 billion in cash and cash equivalents. Long-term debt, net of current maturities, was approximately $1.85 billion. The company also has access to a $2.8 billion revolving credit facility. The company's leverage ratios remain healthy, with a consolidated EBITDA to consolidated interest expense coverage of 39.78x and a leverage ratio of (0.02)x.