Cushman & Wakefield

Cushman & Wakefield

(69.16% 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 the quarter ended March 31, 2013, prepared in accordance with International Financial Reporting Standards (“IFRS”), unless otherwise noted. 

In order to correctly interpret C&W Group’s performance, it should be noted that a significant portion of C&W Group’s revenue is seasonal, which can affect its ability to compare the financial condition and results of operations on a quarter-by-quarter basis. Historically, this seasonality has caused its revenue, operating income, net income and cash flows from operating activities to be lower for the first two quarters and higher in the third and fourth quarters of each year. The concentration of earnings and cash flows in the fourth quarter is due to a number of factors, including an industry-wide focus on completing transactions toward the calendar year-end. This has historically resulted in lower profits, or a loss, for the first and second quarters, with profits growing or losses decreasing in each subsequent quarter.

US$  million QI 2013 QI 2012
Amount %
Net revenues (Commission and service fee)(A) 311,1
14,4 4,9
Reimbursed costs - managed properties and other costs (B) 140,2
Gross revenues (A+B) 451,3
402,8 48,5
Negative EBITDA (11,5) (13,5)
Operating loss (24,1) (24,3) 0,2
Loss attributable to owners of the parent (22,4) (25,2) 2,8
US$ million 3/31/2013 12/31/2012  Restated (a)
Change12/31/2012 Reported
Equity attributable to owners of the parent 783,9 804,6
Consolidated net financial position (133,8) (87,4)
a) Following application of the amendment to IAS 19 – Employee benefits, retrospectively, from January 1, 2013, figures previously reported in the statement of financial position at December 31, 2012 have been restated in accordance with the requirements of IAS 1.

The Capital Markets pipeline of transactions continued to grow compared to prior year, as the market dynamics globally are improving as evidenced in the significant financing and investment sales mandates in all geographies, including in the Americas, Europe, Middle East and Africa (“EMEA”) and Asia Pacific regions.  The Corporate Occupier & Investor Services (“CIS”) business had a solid first quarter with all regions showing positive revenue gains as compared with last year.  CIS had a number of notable wins in the first quarter, including with iconic brands such as Coca Cola, Honeywell, Blackstone and Royal Bank of Scotland.  For the Valuation & Advisory (“V&A”) business, the momentum from 2012 carried through the first quarter with 8% growth year-over-year.  Revenue growth was primarily due to a significant focus on specialty practices including Hospitality & Gaming, Retail and Senior Housing in the US, more portfolio opportunities in EMEA, and growth in specific countries in Asia Pacific such as Hong Kong.

The following are some of the specific successes that C&W Group achieved across its regions and service lines during the first quarter of 2013:

  • appointed by Coca Cola to provide facilities management services for a 1.2 million square foot portfolio in China;
  • won the property management of a 13 million square foot portfolio for DLF, the largest developer in India;
  • executed an acquisition for Advance Resi in Tokyo ($95 million), the sale of Project MX in Hong Kong ($340 million) and the Bekasi Square sale in Jakarta ($35 million);
  • received a mandate for the portfolio valuation of India REIT, the largest domestic fund in India, as well as mandates from David Jones – an iconic Australian retail brand - Alpha Investment Trust portfolio and from GE in Japan;
  • arranged the 400 million Euro sale of Rosengardcentre, Denmark’s second largest shopping center, located in Odense on Funen;
  • won multiple mandates in the first quarter including:  Capital One – 12.5 million square feet (multiple services – global portfolio); Honeywell (APAC) for 6.4 million square feet across Asia as the exclusive provider of account management, portfolio planning, transaction management and brokerage services; and IndCor - a property management mandate for its industrial US portfolio; 
  • extended its contract with a key UK client, Everything Everywhere; 
  • won over 1 million square feet of new instructions including replacing CBRE as joint leasing agent on Brookfield’s iconic 16 story, 600,000 square foot development, Principal Place, EC2, and winning the leasing mandate agents on WR Berkley’s 400,000 square foot iconic development - The Scalpel; and
  • continue to win major high profile leasing mandates, including several major shopping center mandates – for example, the new 184,000 square foot TAU Gallery in Russia.

For the three months ended March 31, 2013, gross revenue increased $48.5 million, or 12.0%, or 13.2% excluding the impact of foreign exchange, to $451.3 million, as compared with $402.8 million for the prior year quarter.  Net revenue increased $14.4 million, or 4.9%, or 6.3% excluding the impact of foreign exchange, to $311.1 million for the current year quarter, as compared with $296.7 million for the same quarter in the prior year. The net revenue growth for the quarter was driven by year-over-year, double-digit growth in CIS, Capital Markets and Business Consulting and 8.2% growth in V&A, partially offset by a modest decline in Leasing revenue of 3.2%. CIS revenue increased across all regions, with the Capital Markets and V&A growth being led by EMEA and the Americas, respectively.

The following presents the breakdown of gross and net revenues by geographical area.

US$ million QI 2013 Q1 2012 Amount %
Americas 336,2
74,5% 294,6
73,1% 41,6
EMEA 80,5
17,8% 81,420,2% (0,9)
Asia  34,6
7,7% 26,8
6,7% 7,8
Gross revenues 451,3
100,0% 402,8
100,0% 48,5
Americas 222,2
71,4% 216,8
73,0% 5,4
EMEA 63,0
20,3% 60,1
20,3% 2,9
Asia  25,9
8,3% 19,8
6,7% 6,1
Net revenues 311,1
100,0% 296,7100,0% 14,4 4,9

For the first quarter of 2013, C&W Group’s global service lines, including Leasing, CIS, Capital Markets, V&A and Global Business Consulting comprised 46.2%, 28.0%, 12.0%, 12.8% and 1.0% of net revenues, respectively, as compared with 50.1%, 25.4%, 11.2%, 12.4% and 1.0%, respectively, for the first quarter of 2012.

The growth in net revenue is attributable to increases across all the regions, except the United States, where revenue remained relatively flat.  Net revenue grew in Asia Pacific, $6.1 million, or 30.8%, Latin America, $4.4 million, or 16.8%, EMEA, $2.9 million, or 4.8%, and Canada  $2.2 million, or 11.2%.

From a service line perspective, net revenue growth for the quarter was driven by CIS, Capital Markets and V&A, with increases as compared to the same period in the prior year of $11.6 million, or 15.4%, $4.0 million, or 12.1%, and $3.0 million, or 8.2%, respectively. 

CIS revenue increased in the U.S., $7.5 million, or 29.9%, Latin America, $1.8 million, or 8.6%, Asia Pacific, $1.1 million, or 16.2%, Canada, $0.8 million and EMEA of $0.4 million, or 1.8%.  This increase in CIS revenue is primarily due to new major client wins in the latter part of 2012 in the Americas.

Capital Markets revenue increased $2.0 million, or 10.6%, in the U.S., $2.3 million, or 26.2%, in the EMEA region, and $0.4 million, or 66.7%, in Canada and was partially offset by declines in Latin America and Asia of $0.4 million, or 100.0% and $0.3 million, or 7.9%, respectively.

V&A revenue increased $1.5 million, or 6.5%, in the U.S., $0.7 million, or 26.9%, in Canada, $0.8 million, or 100.0% in Latin America and $0.1 million, or 3.2% in the Asia Pacific region, but experienced a decline of $0.1 million, or 1.1% in EMEA.

Business Consulting revenue increased $0.6 million, or 18.5%, driven by EMEA of $1.1 million, or 100.0%, and was partially offset by a decrease in the U.S. and Asia of $0.4 million, or 50.0% and $0.1 million, or 11.1%, respectively. 

These increases partially offset a decrease in Leasing revenue of $4.8 million, or 3.2%, primarily in the U.S. of $11.9 million, or 11.6%, and $0.8 million, or 4.0%, in the EMEA region, partially offset by increases of $5.2 million, or 77.6%, in the Asia Pacific region, $2.3 million, or 57.5%, in Latin America and $0.4 million, or 2.5%, in Canada.

Commission expense decreased $1.9 million, or 2.0%, to $93.7 million for the three months ended March 31, 2013, as compared with $95.6 million for the same period in the prior year. The decrease is due to decreased revenues in Leasing, partially offset by the increase in revenues in CIS, V&A, and Capital Markets. 

This decrease is primarily driven by decreases in the U.S. of $4.2 million, or 5.2%, due to decreased Leasing revenue of $11.9 million, which is decreasing the overall commission rate as a percent of revenue for the U.S. region.  Foreign exchange decreased commission expense by $0.1 million, or 0.1 percentage points.

U.S. Operations accounted for 54.5% and 57.6% of the global net revenue for the three months ended March 31, 2013 and 2012, respectively. EMEA, which has the lowest commission expense as a percentage of net revenue, accounted for 20.3% of the global net revenue for the three months ended March 31, 2013 and 2012, respectively. Total commission expense as a percentage of total net revenue was 30.1% and 32.2% for the first quarters of 2013 and 2012, respectively. The decrease of 2.1 percentage points is primarily due to the lower Leasing revenue noted above.

Cost of services sold increased $4.1 million, or 17.9%, to $27.0 million for the three months ended March 31, 2013, as compared with $22.9 million for the same period in 2012. The increase in cost of services sold is primarily driven by increases in all regions, with the exception of Canada, primarily due to increased CIS revenue and the associated costs directly related to providing these services to the Company’s clients.

In the three months ended March 31, 2013 operating expenses increased $12.0 million, or 5.9%, to $214.5 million, as compared with $202.5 million for the same period last year, primarily due to an increase in employment expenses of $11.3 million, or 9.2%, largely attributable to an increase in payroll costs due to increased headcount and annual merit increases in the U.S. and Asia partially offset by decreases in professional fees and consulting fees. Foreign exchange decreased operating expenses by $1.6 million, or 0.8 percentage points.

The operating loss decreased by $0.2 million, or 0.8%, to a loss of $24.1 million for the three months ended March 31, 2013, as compared with a loss of $24.3 million for the same period in the prior year. EBITDA, which, relative to the operating loss results, benefitted from a year-over-year decrease in the charge relating to changes in the fair value of Group’s non-controlling shareholder put option liability (not included in the operating result), increased $2.0 million, or 14.8%, to negative EBITDA of $11.5 million for the current quarter, as compared with negative EBITDA of $13.5 million for the same period in the prior year. 

The loss attributable to owners of the parent decreased $2.8 million to $22.4 million for the three months ended March 31, 2013, as compared with $25.2 million for the prior year quarter. 

C&W Group’s net financial position changed $46.4 million to a negative $133.8 million (principally debt in excess of cash) as of March 31, 2013, as compared with a negative $87.4 million as of December 31, 2012. The change is due to first quarter operational needs, which are primarily driven by seasonality and the traditionally lower net revenue in the first quarter, as compared with the fourth quarter, and the timing of the annual incentive compensation payments in the first quarter. 

As global economic conditions became less uncertain by the fourth quarter of 2012 and momentum began to pick up, the first quarter of 2013 saw increased activity across our global platform as compared to the same period last year.  Strong pipelines of transaction and assignment activity are a reflection of a more confident business environment as well as the focus and drive of our professionals to service C&W Group’s clients at the highest levels.


Commercial Register No.64236277 Note legali | Credits