JLL’s EMEA division reports double-digit revenue and fee growth

By James Wallace - Tuesday, May 08, 2018 13:24

JLL’s EMEA division reported a 41% decrease in first quarter operating loss to $20m, despite a 15% increase in both revenue and fees in local currencies, which doubled to 30% when converted back to US dollars, at $783.6m and $350.4m, respectively.

JLL’s considerable revenue and fee expansion – including notable investment sales in Germany, France and the UK – were offset by a 7% increase in operating expenses, excluding reimbursed expenses, to $647.6m. In addition, fee-based operating expenses, excluding restructuring and acquisition charges, increased 9 percent to $370.4m, compared with 2017.

Adjusted EBITDA reduced from $20.6m in Q1 last year to a loss of $7.4m this year. Adjusted EBITDA margin, calculated on a fee-revenue basis, was -2.1% in US dollars, compared with -7.6%.

JLL’s EMEA capital markets business segment grew year on year revenues by 32% in local currencies, which rose to 50% when converted back to US dollars, at $84m. JLL’s project & development services climbed 38% in local currencies, rising to 56% in US dollars, to $64.9m. A noteable contribution came from the Tetris fit-out business.

“The improved performance was driven by revenue growth noted above along with the management of platform cost increases,” JLL explained in a statement. “In addition, prior year performance was negatively affected by $10.1m of costs and charges that did not recur in 2018.”

At the group level, JLL’s adjusted EBITDA increased 51% to $107.7m. The consolidated results reflect strong performance in LaSalle and Americas and year-over-year improvement in EMEA, partially offset by a slight decline in Asia Pacific. LaSalle revenue growth and overall performance were primarily due to higher incentive fees earned on the disposition of real estate assets on behalf of its clients.

Consolidated revenue and consolidated fee revenue growth was broad-based across all four segments and increased 10% and 9%, respectively, compared with the prior year. JLL said the results also reflect continued increases to investments in data, technology and people, including amounts attributable to platform transformation and client-facing products.

Christian Ulbrich, JLL CEO, said: “Broad organic revenue growth and margin expansion drove our strong first-quarter performance. We achieved these results while continuing to invest in – and make significant progress on – our global digital agenda. With healthy economic and real estate fundamentals in most markets globally, and despite geopolitical challenges, we anticipate continued growth this year.”

Diluted earnings per share were $0.88, compared with $0.16 in 2017, and adjusted diluted earnings per share were $0.97, up from $0.37 last year.

James Wallace is a freelance consultant and can be reached via Linkedin or email: jawallace32@gmail.com

 

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