10-QPeriod: Q2 FY2022

CBRE GROUP, INC. Quarterly Report for Q2 Ended Jun 30, 2022

Filed August 5, 2022For Securities:CBRE

Summary

CBRE Group, Inc. reported a significant increase in revenue for both the three and six months ended June 30, 2022, compared to the prior year, driven by growth across all its major segments: Advisory Services, Global Workplace Solutions, and Real Estate Investments. The company's Global Workplace Solutions segment showed robust growth, partly attributed to the full quarter impact of the Turner & Townsend acquisition. Despite the revenue growth, the company recorded an asset impairment charge of $26.4 million in its Real Estate Investments segment related to inflation impacting construction costs for the Telford Homes business. Additionally, a new provision of $37.5 million was accrued for potential fire and building safety remediation liabilities related to Telford Homes' operations. The company also repurchased a substantial amount of its common stock under its repurchase program, indicating a commitment to returning capital to shareholders.

Financial Highlights

45 data points
Beta

Revenue

$7.77B

22.1% Gross Margin

Net Income

$487.32M

6.3% Net Margin

EPS (Diluted)

$1.48

Total Assets

$20.44B

Cash & Equivalents

$1.19B

Free Cash Flow

$399.76M

Financial Statements
Beta
Revenue$7.77B
Cost of Revenue$6.05B
Gross Profit$1.72B
Operating Income$516.94M
Net Income$487.32M
EPS (Basic)$1.50
EPS (Diluted)$1.48
Shares Outstanding (Basic)325.42M
Shares Outstanding (Diluted)329.84M

Key Highlights

  • 1Total revenue increased by 20.3% to $7.77 billion for the three months ended June 30, 2022, compared to the prior year.
  • 2Net income attributable to CBRE Group, Inc. increased to $487.3 million for the three months ended June 30, 2022, from $442.6 million in the prior year.
  • 3The Global Workplace Solutions segment experienced strong revenue growth of 20.2%, benefiting from the Turner & Townsend acquisition.
  • 4An asset impairment charge of $26.4 million was recorded in the Real Estate Investments segment due to increased construction costs.
  • 5The company accrued $37.5 million for potential fire and building safety remediation liabilities related to its Telford Homes business.
  • 6Cash used in financing activities was $760.5 million for the six months ended June 30, 2022, significantly driven by $993.8 million in share repurchases.
  • 7The company maintained a strong liquidity position with $1.2 billion in cash and cash equivalents and $3.0 billion available under revolving credit facilities as of June 30, 2022.

Frequently Asked Questions

Revenue growth was primarily driven by increases across all three business segments: Advisory Services, Global Workplace Solutions, and Real Estate Investments. The Global Workplace Solutions segment, in particular, saw strong growth partly due to the full quarter impact of the Turner & Townsend acquisition.

CBRE recorded an asset impairment charge of $26.4 million in its Real Estate Investments segment due to inflation impacting construction costs for the Telford Homes business. Additionally, the company accrued $37.5 million for potential fire and building safety remediation liabilities related to Telford Homes.

As of June 30, 2022, CBRE had $1.2 billion in cash and cash equivalents and $3.0 billion available under its revolving credit facilities, indicating a strong liquidity position. The company also actively engaged in share repurchases, utilizing $993.8 million for repurchases during the first six months of 2022.

CBRE acknowledges the impact of macroeconomic conditions such as inflation, rising interest rates, and geopolitical events like the war in Ukraine. While the company has diversified its business to mitigate some of these risks and noted its business has inherent protections against inflation, it continues to monitor these factors and their potential effects on its operations and financial condition.