Cushman e Wakefield

(69.19% of share capital through EXOR S.A.)

 

The data presented and commented on below is taken from C&W Group’s consolidated accounting data as of and for year ended December 31, 2012, prepared in accordance with International Financial Reporting Standards (“IFRS”), unless otherwise noted.

    Change
US$ million 2012 2011 Amount %
Net revenues (Commission and service fee)  (A) 1.597,0 1.572,3 24,7 1,6
Reimbursed costs - managed properties and other costs (B) 453,1 423,4 29,7 7,0
Gross revenues (A+B) 2.050,1 1.995,7 54,4 2,7
EBITDA 127,7 111,1 16,6 14,9
Operating income 79,1 64,5 14,6 22,6
Loss Income attributable to owners of the parent 43,2 14,9 28,3 n.s.
US$ million 12/31/2012 12/31/2011 Change
       
Equity attributable to owners of the parent 825,6 779,1 46,5
Consolidated net financial position (87,4) 9,0 (96,4)

In 2012 C&W continued to increase market share by enhancing the firm's delivery of consistent, high-quality service to its clients in key markets across the globe, and pursued expansion into key locations to fill out strategic service line and regional needs.

As part of its strategic initiatives, C&W is focused on enhancing its recurring revenue streams, as evidenced in the Corporate Occupier & Investor Services (“CIS”) business’ revenue growth of 16.7% in the U.S. for full-year 2012, as compared with 2011, and its winning 435 million square feet of new and renewal business in 2012, including significant assignments.

Additionally, CIS’s acquisition of the third-party client services business of Cousins Properties will provide enhanced client support capabilities in two key, strategic growth areas, including Dallas and Atlanta. 

In addition to the CIS-related wins, the following are some of the other successes C&W Group achieved across its regions and service lines during 2012:

  • ­Completed the two largest office leases in San Francisco to date. Represented Salesforce.com in the lease of 401,786 square feet in San Francisco’s Financial District, the largest long-term office lease signed in the area in more than a decade, and represented Hudson Pacific Properties Inc. in the 250,000-square-foot office lease to Square Inc.;
  • Advised the iconic British brand Burberry on the pre-lease of 127,000 square feet of office space in one of Central London’s largest leases for this year;
  • Arranged a $610 million sale of Boston’s 100 Federal Street Tower on behalf of Bank of America, which represents one of the largest property sales transactions in the U.S. this year;
  • Completed two of the largest transactions in Hong Kong this year, including the sale of Monetary Court in Jardine Lookout and the sale of Kowloon Commercial Centre in Kowloon;
  • Acquired its third asset for the PURetail Fund - a 100 percent occupied retail property in France;
  • Ranked No. 3 in National Real Estate Investor’s Top Brokerages survey;
  • Won the Real Estate Board of New York’s Most Ingenious Deal of the Year Award for arranging Conde Nast’s one million-square-foot office lease at One World Trade Center on behalf of the Port Authority of New York and New Jersey;
  • Arranged the $230 million senior mortgage loan for  100 Church Street, a 1.05-million-square-foot office building in Manhattan;
  • As part of its global alignment initiative, C&W reinforced its commitment to the iDesk by establishing the Asia iDesk in New York to drive an increase in cross-border transactions and enhance its ability to service clients across markets more efficiently and effectively;
  • Advised The Crown Estate on the £87 million purchase of BAFTA Headquarters in London;
  • Opened new offices in Brisbane, Australia; Ahmadabad, India; Ulaanbaatar, Mongolia; Manila, Philippines and added an office in Shanghai; along with four Alliance firms in the U.S. and one in Canada;
  • Symantec renewed C&W’s contract to provide Transaction Management, Project Management, Facilities Management, and Property Management for its 5 million-square-foot global portfolio;
  • Represented ownership of 75 Rockefeller Plaza in a 99-year, triple-net lease to RXR Realty in Manhattan;
  • Arranged the €302 million sale of Junction LP’s UK retail portfolio;
  • Completed the largest industrial deal in the UK in the last two years – Sainsbury’s lease of more than one million square feet at Prologis’ Daventry International Rail Freight Terminal; and
  • Represented H&M in a high-profile lease at 4 Times Square in Manhattan and in the lease of its biggest store in the world at 589 Fifth Avenue, the largest Midtown Manhattan retail transaction of 2012.

With respect to its financial performance for 2012, gross revenue, which includes reimbursed costs – managed properties and other costs, increased $54.4 million, or 2.7%, or 4.7% excluding the impact of foreign exchange, to $2,050.1 million, as compared with $1,995.7 million for the same period in the prior year, while net revenues increased $24.7 million, or 1.6%, or 3.8% excluding the impact of foreign exchange, to $1,597.0 million for the year ended December 31, 2012, as compared with $1,572.3 million for the prior year, despite the slow transactional activity due to the continued global economic uncertainty that existed throughout 2012. The growth in net revenues and the reduction in operating expenses partially offset by an increase in cost of services sold and slightly higher commission expense drove a year-over-year increase in C&W Group’s EBITDA of $16.6 million to $127.7 million, as compared with $111.1 million in the prior year. This positive growth and a reduction in interest expense, other expenses, net and income tax expense led to an improvement in the income attributable to owners of the parent of $28.3 million to $43.2 million for the full-year 2012, as compared with $14.9 million for the prior year

The following presents the breakdown of full-year gross and commission and service fee revenues by geographical area.

    Change
US$ million 2012 2011 Amount %
Americas 1.484,2 72,4% 1.425,8 71,4% 58,4 4,1
EMEA 424,3 20,7% 434,7 21,8% (10,4) (2,4)
Asia 141,6 6,9% 135,2 6,8% 6,4 4,7
Gross revenues2.050,1 100,0% 1.995,7 100,0% 54,4 2,7
Americas 1.135,9 71,1% 1.100,2 70,0% 35,7 3,2
EMEA 347,2 21,7% 361,9 23,0% (14,7) (4,1)
Asia 113,9 7,2% 110,2 7,0% 3,7 3,4
Net revenues 1.597,0 100,0% 1.572,3 100,0% 24,7 1,6

During 2012, C&W Group’s global service lines, including Leasing, CIS, Capital Markets, Valuation & Advisory (V&A) and Global Business Consulting comprised 52.5%, 21.5%, 13.6%, 11.3% and 1.1% of commission and service fee revenues, respectively, as compared with 53.3%, 20.5%, 14.0%, 10.8% and 1.4%, respectively, for 2011.

Commission and service fee revenue experienced positive growth across all regions, with the exception of EMEA, which reported a decline, primarily due to the ongoing challenging economic and market conditions.

From a service line perspective, the year-over-year growth in commission and service fee revenue was driven by continued CIS performance throughout 2012, with the largest increase in the Americas, where revenue increased by $21.2 million, or 11.4%, continued growth in the V&A business, also led by the Americas region, which increased $10.1 million, or 8.4%, modest growth in Leasing and essentially flat revenues in Capital Markets, with the Leasing and Capital Markets year-over-year performance being largely attributable to a strong finish in the fourth quarter of 2012 despite the negative impact from foreign exchange and slow transactional activity resulting from the continued global economic uncertainty that existed throughout 2012. These increases were partially offset by a decline in Global Business Consulting, primarily in the U.S., due to the merger of the Business Consulting segment of Global Business Consulting into the Capital Markets service line effective January 1, 2012.

Commission expense increased $20.9 million, or 4.0%, to $546.8million for the full-year 2012, as compared with $525.9 million for 2011, while commission expense as a percentage of commission and service fee revenues increased to 34.2%, up 0.8 percentage points from 33.4% for the prior year. Foreign exchange decreased commission expense by $0.5 million, or 0.1 percentage points.

Cost of services sold increased $10.2 million, or 11.1%, to $102.0 million for the year ended December 31, 2012, as compared with $91.8 million in 2011, primarily due to higher CIS revenues. Foreign exchange had the impact of reducing the increase in cost of services sold by $10.1 million, or 11.0 percentage points. The increase in cost of services sold was driven by increases in Latin America, the U.S., Canada and EMEA of $6.7 million, or 10.2%, $2.7 million, or 79.4%, $0.6 million, or 85.7%, and $0.4 million, or 2.9%, respectively, partially offset by a decrease in Asia Pacific of $0.2 million, or 2.4%. The increase in Latin America was also attributable to the recognition of $3.0 million relating to the recording of certain contingencies in Brazil.

Operating expenses for the full-year 2012 decreased $21.0 million, or 2.4%, to $869.1 million, as compared with $890.1 million for the prior year. Foreign exchange had the impact of reducing operating expenses by $19.2 million, or 2.2 percentage points. The decrease in operating expenses was primarily due to the impact from foreign exchange, lower incentive compensation expenses, professional services fees and restructuring costs due to the termination in 2011 of the Planning and Hospitality teams in the UK and the recognition in 2012 of a non-recurring reduction in expenses in connection with the Company’s profit sharing arrangement in Europe, partially offset by higher employment expenses, largely driven by merit increases, higher headcounts, higher severance costs primarily in the EMEA and U.S regions and the recognition in 2012 of employee benefit plan non-recurring charges in the Asia Pacific region, and an overall increase in other costs to support the Company’s strategic growth initiatives.

At the operating income level, C&W Group’s operating income increased by $14.6 million, or 22.6%, to $79.1 million for the full-year 2012, as compared with operating income of $64.5 million for the prior year.

Other expenses, net (which are not included in operating results) decreased $1.6 million, or 59.3%, to $1.1 million for the full-year 2012, as compared with $2.7 million for the prior year, primarily due to higher other miscellaneous income of $5.5 million, largely attributable to a $2.7 million non-recurring gain in the current year and non-recurring charges of $3.0 million in the prior year period, higher dividend income of $0.8 million from NorthMarq Real Estate Services LLC, a venture formed by Group in September 2011, lower management fees of $0.8 million and lower foreign exchange losses of $0.6 million, partially offset by an unfavorable variance related to the non-controlling shareholders put option liability of $6.1 million.

Interest expense, net decreased $2.7 million, or 23.9%, to $8.6 million, for the year ended December 31, 2012, as compared with $11.3 million for 2011, primarily due to the recognition in the prior year of interest expense of $1.1 million related to non-recurring charges and the full-year effect of lower interest rates in 2012 resulting from the refinancing of our Credit Facility at the end of the second quarter of 2011, partially offset by $1.5 million of interest expense in 2012 related to certain contingencies in Brazil.

The increase in operating income and the reductions in other expenses, net and interest expense drove an increase in C&W Group’s pre-tax income of $18.9 million, or 37.4%, to $69.4 million for the full-year 2012, as compared with $50.5 million for the prior year.

The income tax provision decreased $9.3 million, or 26.1%, to $26.3 million for the full-year 2012, as compared with $35.6 million for the prior year, primarily due to certain non-recurring income tax net benefits, partially offset by an increase in pre-tax income.

As a result of the above factors, the income attributable to owners of the parent increased by $28.3 million to $43.2 million for the full-year 2012, as compared with $14.9 million for the prior year.

C&W Group’s net financial position decreased $96.4 million to a negative $87.4 million (principally debt in excess of cash) as of December 31, 2012, as compared with a positive $9.0 million (principally cash in excess of debt) as of December 31, 2011. The decrease is primarily due to a year-over-year increase in working capital, excluding cash and debt, caused primarily by the increase in fourth-quarter revenue in 2012 and the timing of cash receipts and disbursements at the current year-end and an increase in 2012 spending on acquisitions.

Under difficult market conditions and while still investing in the firm’s growth initiatives, C&W was able to complete 2012 with an increase in year-over-year net revenues and EBITDA growth of 1.6% and 14.9%, respectively, with a positive trend demonstrated by the fourth quarter 2012 activity. 

Cushman & Wakefield's management team remains focused on enhancing market share in key markets around the globe and looks forward to taking advantage of its strong brand and the optimism for further economic recovery in 2013.

Commercial Register No.64236277 Legal notes | Credits