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| Statement |
|---|
| We are financially well positioned for growth, margin improvements and further capital structure enhancements once consistent market growth returns |
| Net-net, leasing is looking really solid for us and it's a global strength at Cushman & Wakefield |
| Every day, we are working to improve our financial position and flexibility and to create momentum both internally and with our clients so that we are poised to capitalize when the market inevitably rebounds |
| A very, very healthy look at the business and really a long-term focus, as I say, to drive long-term accretion |
| If we look at where we saw it, essentially, it was in the project management, where we saw a slight slowdown but property management and facilities management were very strong and we saw particularly strong growth in Asia Pacific, where we have large services businesses and those businesses performed well |
| Our services businesses remained resilient, growing revenues at 3% in 2023 on top of double-digit growth in 2022 |
| Cost management is clearly a focus and a discipline that we're very good at over time and will continue |
| So we feel good about what we achieved and just very proud of what the teams did throughout the world in achieving those cost savings |
| In conclusion, in 2023, we solidified the balance sheet and significantly improved free cash flow, ending the year with positive momentum |
| And that certainly has positioned us well as we go into '24 to be able to use that capital in the most accretive manner |
| Taking a look at our longer-term view, the work we did on the cost side in '23 has set us up well for margin accretion when brokerage comes back |
| If we think specifically about the first quarter, what we do expect to be able to drive approximately 100 basis points of margin improvement in the first quarter as we see a net benefit of our '23 cost savings |
| And finally, we see significant opportunities to organically expand our services businesses, thanks to our global scale and client-centric strategy |
| Facilities management and property management were strong |
| So as I said on the call, we were exceptionally pleased with the work that our teams did to drive free cash flow in 2023 |
| Through our commitment to streamlining our cost structure, enhancing our balance sheet and cash flow and strengthening our client-facing initiatives, we are poised to create meaningful value as the market returns to growth |
| We expect to achieve a slight year-over-year improvement in EBITDA as last year's cost actions are expected to more than offset first quarter cost increases |
| It took a global effort and significant cross functional cooperation to increase our working capital efficiency and deliver these strong results |
| While the macro environment in 2023 was persistently challenging, we proactively enhanced our balance sheet strength and flexibility, prudently cut costs and improved our free cash flow conversion through better working capital efficiency, all of which position us well for a market recovery |
| I am very proud of our team's work to improve free cash flow generation |
| Leasing revenues grew 5% versus prior year, the first positive result we have reported in this segment since third quarter 2022 as we saw improved results in each of our reported regions |
| Partially offsetting these declines, PM/FM revenue grew 3% for the full year, supported by strong growth in facilities management and property management |
| Our APAC region reported another solid quarter with leasing revenue up 14% and capital markets up 5%, driven by strong growth in Southeast Asia and India |
| Adjusted EBITDA in EMEA grew 48% with adjusted EBITDA margins up 670 basis points, driven by the change in mix to higher-margin leasing revenue as well as tight cost discipline |
| We continue to believe that long-term fundamentals in the multifamily market are compelling and we expect results in this business to stabilize in 2024 |
| In the fourth quarter, leasing revenue grew year-over-year in all 3 of our reported regions due to growth in large office and industrial deals in the U.S |
| This should help people get more comfortable about taking 5-year, 10-year and 15-year risk, providing a pathway to a more active market |
| I guess, what's it going to take to get that leverage metric down to a more comfortable level? Neil Johnston Michael, look, if we think about '23, we had a very strong free cash flow year |
| and strength in Europe and APAC |
| We feel like we're in a good place |
| Statement |
|---|
| Americas adjusted EBITDA of $139 million declined 16% or $24 million versus prior year, with $14 million of the decline attributable to our Greystone joint venture as FHA volumes remained under significant pressure in the quarter |
| Adjusted earnings per share for the quarter was $0.45, down $0.01 from the prior year |
| Capital Markets revenue declined 32% in the fourth quarter as transactional markets continue to be impacted by interest rate volatility and uncertainty |
| Adjusted EBITDA for the fourth quarter was $213 million, down $7 million from the prior year |
| PM/FM revenues was down 11%, primarily reflecting lower project management activity due to reduced CapEx budgets as well as our focus on driving profitable growth |
| In the Americas, we saw a 10% year-over-year decline in brokerage revenues with capital markets revenue down 36% and leasing revenue up 2% |
| For the full year 2023, we generated fee revenue of $6.5 billion, a 10% decrease over the prior year |
| For the fourth quarter, fee revenue was $1.8 billion, a 3% decrease from the prior year |
| Capital markets declined 41%, leasing was down 12% and valuation and other was down 11% |
| We achieved adjusted EBITDA of $570 million, a 37% decrease from 2022 with adjusted EBITDA margins of 8.7% |
| But as I've mentioned before, we are not satisfied with this level of growth |
| If we think about '23, it was really project management where we saw the decline, especially in the fourth quarter |
| With the inverted curve that we have today, people are hesitant to borrow and lend law |
| But certainly, as CapEx budgets got constrained during the year, it was the more ad hoc property management which declined |
| On the project management side and certainly, as we look at making the business more efficient, that was really what drove the decline in services in EMEA |
| However, sustained growth is unlikely to occur before the second half of this year when we anticipate a more conducive interest rate environment |
| On the cost side, we anticipate some cost pressure in 2024, driven by normal inflation as well as higher incentive comp as we focus on positioning the company for market growth |
| EMEA brokerage revenue declined 1% in the quarter, with capital markets down 26% and leasing up 13% with particular strength in the U.K |
| I mean, are you seeing a more concerted effort for these occupiers of particularly office real estate to make decisions around leasing? I mean, we've heard, I guess, more on the REIT side, that large occupiers are still kind of delayed in making these big decisions |
| This change will continue to impact the first half of the year, resulting in a roughly $50 million headwind to fee revenue but no impact to EBITDA |
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