Jones Lang LaSalle (JLL) 5 May 202020 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the JLL Q1 2020 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] Thank you.

I would now like to turn the call over to your speaker today, Chris Stent, Executive Managing Director, Corporate Finance and Investor Relations at JLL. Please go ahead sir.

morning. good and you, Thank Welcome to Lang call Jones XXXX first Incorporated. quarter LaSalle conference for our Earlier issued our morning, our the the this we presentation prepared Investor available which slide Relations on remarks. is section to of intended website, with our along supplement earnings release Please ir.jll.com. visit

During the our financial non-GAAP non-GAAP slides. measures GAAP in reference will release financial believe and we of which call, include information useful reconciliations we earnings supplemental provide for certain measures, investors. We to

being website. webcast as and annual this results disclaims is and result made to in a and recorded. the statements. also results a or XX-K of of in call discussed As factors plans, objectives the reminder, future revise report transcript company any live any conference with Actual year statements. filed Form be and SEC. statements A ended today’s XX, the fiscal expectations of The other undertaking about forward-looking performance, those and posted December Any performance will are XXXX, update from on call forward-looking may on our publicly forward-looking statements differ reports

remarks. and And Executive over to President the with Officer, like call I Ulbrich, our for that, turn Christian would to opening Chief

Thank us you, of times. result quarter morning review to of first you welcome today all Chris. Good and joining our this unprecedented for in these

to sympathy by quarter, support for touched Before our would like of I have we and take performance to moment delve the our pandemic. offer into a to those the financial been all who

of healthcare workers, on and extend JLL, would to the tremendous of the this our gratitude everyone at behalf to responders everyone crisis. I on front lines Further, first like

serving most JLL employees clients. we and the around our what focus moves productive, keeping our safe pandemic COVID-XX is that on world, communities continue supporting at our and to and the While matters

global participation participating we businesses to Action of being the ways are the global operations, facilities other rapid to collaborative local projects and the Economic many deployment including pandemic, partnering coordinated in temporary support are from Forum, in alongside responding to projects. COVID we in Among clients Platform. many communities with WEFs efforts by healthcare In World global

of crisis spreading activity general later been lines aspects The pandemic pandemic and January, global on across all the government of The a of of effects were It and multitude significant cessation globe parts the across has on the The repercussions and through go will our of initially impact business. world. profound. weeks company beyond responses which and China the our service concentrated in economy this truly in this the in year. regions industry, will of a is well likely throughout have that on required

the early developed reimagine pandemic recover prepare, the as progressed are future. JLL helping world. clients across world We the teams and the acted and respond, around our

the practical deployed lockdown support rapidly full we instance, in safety For range health measures phases. of continuing and wide essential facilities, to operate to

have In operations, and we developing partnered reopening lockdown with once tailored addition, phases eased. clients gearing up plans strategies are and for in

navigate to business this, the new to pandemic launched XX designed of an As clients global illustration products Solutions help has our crisis. Corporate date

One essential is of the of course most factors healthcare. critical

anticipate to continued and We working for vaccine, run at them COVID-XX biotech perform have facilities as develop peak to that clients a services performance are helping they operations. to management safety XX/X moving

executed space warehouse instrumental temporary deals in COVID-XX are facilities. ensuring such been facilitating as as response. equipment for hospital and many have the creating mission-critical Furthermore, have various part in of medical supplies storing we capacities in We involved been

infection. World advice following government are the we of and spread order people, prevent guidelines and our to Health employees protect in COVID-XX to Turning Organization and the

March their platform have our we from impact over end homes several office staff work in grateful XX% made for over of in past technology to are of enabled safely productivity. limited our the years, with by We investments the the which

regard first years. growth the in market first economic as hit halt in making particularly came for With real activities regions across some canceled March, later. impacted and the drop an quarter noticeable in the to macroeconomic Office market than for saw those greater the and pandemic were for sales leasing so delayed, the cases abrupt the global first the economy X% the fundamentals activity quarter, XX global quarter, with softened Investment as down all estate quarter. the first XX% a of well, deals declines experienced quarter. the to contraction in down Areas by in

prospects estate investment function Despite long-term of an for remain optimistic investors continue many of duration Though will rethinking we world, commercial real be of capital. inevitably the estate crisis uncertainty the depths commercial core as our the of estate force and real of see will necessary aspects to industry. the an still about crisis, attractive the the of the and will real

evaluate preferred occupiers full-service and and global optimize real estate well times partner and to expertise a look Our real platform investors us, and uncertain experienced estate deep hands. assets as positions in their and as trusted these particularly

and topline, pandemic across We to as bottom expect unfolds. impact negative all free full operating the flow a year segments cash line our for the

to to priority year the operating flexibility navigate our base. prudently ensure effectively fiscal through We we acted cash for and is strategic crisis. manage our decisively and to and cost liquidity, operating Our adjust investment to have early on focus flow this spend the

salaries their parts right executive year. many or the of the from world onwards by the global have for of senior compensation. the base their To XX% our board top, also all leaders the colleagues And of base rest capped send from deferred the cut April around tone have of

until actions compensation have have operating including our significant many of of costs the by reduction voluntary been colleagues consideration taken offered we be employees, will who our on clients our the how and In suspend our dividend we our visibility we impacted world, during crisis, will shareholders this therefore have have impacted. decided better to on be payment the and to business our

economic all companies unprecedented. to have societal the financial about a mindful of their actions. we be challenge of all position, the the is and facing strong is and While leading are And totality world in extraordinary currently

performance. quarter financial of Through provide that now brief first backdrop, will a I our overview

start to to We X% local led performance the billion and increased pleased and Americas & strong gains solid $X.X fee report Consolidated Management Development & revenue by currency. revenue in continued billion to Revenue our in are $X.X Capital Project Services rose were XX% businesses. Facility to year. Property a markets,

on totaled by items first reached that quarter for quarter achieved management our per business. record and million Stephanie net Services impacted $X.XX, the commentary adjusted will provide $XX.X LaSalle's share under diluted We noncash performance billion. Real Estate in $XX.X income both Adjusted earnings assets shortly. totaled further

HFF. Turning to

business markets capital overall Americas and despite in the performed EMEA the well successfully conditions to the and integrate continued March. specifically business We softening

excellent We for progress cost first nine the synergies have made months. on realizing

certainly multitude in the but remain of be the very will lines. targets synergy incremental we revenue revenue near-term in service the confident across significant pandemic, drive impacted by to our long-term Our potential

we quarter our quarter, pausing we $XXX $XX on Board of first in the repurchases by XXXX million the approved of term. the portion in During executed share of utilizing the repurchase authorization first also any a near are share goal Obviously, our further completing that million share repurchases.

from on the Now, Stephanie detail for quarter and color financials. first we some hear will

everyone to on Thank and Christian welcome our you, call.

diversified lines footprint Our and first the spread a our our context is in of global quarter business performance the of of reflection COVID-XX.

Europe the Transactional for April Asia pandemic. March and spread declined China the the As latter into the significant Christian part while continued of of progressively in full activity felt Southeast almost and to quarter, the Southern throughout mentioned, impacted impact March. in U.S. due the pandemic

estate achieved across XXXX. start the We growth in X% the are with X% lines We the to by fee services XX% increasing revenue of fee quarter achieved respectively. grew attributable in led service solid Real reflecting record and XX% continued first were all the strength XX% revenue Increases Americas. revenue and pleased consolidated M&A. organic and

integration which The gains in HFF and ongoing reflects complemented XXXX acquisition organic success. closed July

segment and we office was global fee noted. a driven report unless volumes for by This grew strength local Americas. continued significantly. currency otherwise As noteworthy in revenue Leasing reminder, the leasing quarter especially results in considering service declined the X% the line

compared XXXX. the perspective to quarter first market dropped For XX%

XX% increased reflecting HFF quarter against progress and excellent first Our XXXX fee capital resilience markets integration. revenue on

impact Markets the Capital growth. fee revenue organic HFF Excluding delivered of X%

facility for the Slide to XX the growth Project driven Asia and in revenue fee the Pacific. grew EBITDA supplemental expansions by and wins Solutions and Development We on & of contributed in Pacific. slower Corporate Services materials adjusted X% Asia albeit management upon Americas on the touch provided quarter the will highlights. information additional I

prior Adjusted Strong year. for the from acquired of compared than were from in pandemic. HFF that basis the two Real and EBITDA margin non-cash the organic margin resulted was charges fee-revenue X.X% accretion calculated on impact gains by offset notable Estate the in with Services the more X.X% directly a business quarter

business had by XXX multifamily reserves In Combined our valuation a results co-investment we increased loss million. the in or loan share. a million point for $XX LaSalle margins our two net these Americas, And non-cash $X.XX to charges per impact decline $XX portfolio. basis reflect

to We ensure liquidity, the the liquidity from strong. at million operational flexibility. of and was sheet management remained investment-grade $X.X to net sheet end and Total Turning balance maintain quarter billion $XXX year-end. our sufficient our balance increase debt of representing debt an

variable X.X against we increase year-end performance. adjusted no XXXX. compensation debt to maturities Net months reflects have paid debt-to-trailing XX until was annual timing the quarterly and of related The times EBITDA XXXX

growth. financial fortify apply As continue Christian strong to noted, long-term strategically we have foundation support to and in our will cost-mitigation of actions our

home. have through across significant have occupancy operational to ensuring expenses spending fees, employees the and technology our reduced reductions equipment efficiently we from while and including discretionary First, proper professional board training, marketing, in work the

benefits. most that The such our portions and businesses have the dedicated discretionary performance in Americas. reaping to commissions investments flex and notably follow and naturally It of note made systems important in we bonuses ERP in are financial as Leasing is scaled our that Markets compensation Capital variable

cash our conversion. direct solid we're a with managing Second, focus to our position on financial preserve and liquidity actively foundation our cash

office Third, capital investments, expenditures and deferred we have and certain moves. reduced

and undermine not with strategic potential growth targeted decisions. our being so these will long-term We we're

Moving organic a first growth Markets over across Americas tough in all segments, fee the to increases leasing led first fee our XX% XX% prior of prior year comp gains grew X% broad-based of Capital quarter. impressive Growth the lines. was by in revenue X% reflecting year. quarter the an Despite, service increased reporting revenue and

critical it and is in fare Market the more industrial recovery sector pandemic. retail the sectors importance indicates industrial the The that residential in logistics. in of and chains strength and pandemic during research highlighting creates supply offset better volume the as post were demand by office, from declines could than

the approximately our represented For fee leasing quarter, industrial first the revenue. sector X/X of

across for which market in the carried momentum U.S. Capital up into X% contributed Growth moved quarter. $XXX fee led driven contracted but growth was of sales. and Organic XXX% January fee million was XXXX as the was revenue revenue. by investment markets HFF the by March pandemic February,

for strong Americas adjusted XX.X% performance improvement was include XX-basis-point organic a gains. largely and that results million for Mae split loss EBITDA was increase year-on-year margin loans. and reflects quarter. the noncash $XX to reserves the loan Note HFF The Fannie multifamily between

the sentiment of and increased by Capital XXXX. capital revenue to fee revenue U.K., markets. impressive quarter. Total much revenue XX% was with up improved in our Turning the hold. X% fee markets Markets and EMEA EMEA on double-digit X% many first Development growth largest the EMEA. the revenue first in Despite driven for quarter placed transactions Brexit growth reflecting activity Services. Organic for an leasing fee fee pandemic stalled X%, declined & the in quarter region was compared Project

softer quarter strong a a Brexit that had was uncertainty. U.K. impacted in due part to by The XXXX

closed Project MENA. of delivered increased & large XX% addition, results, existing Development due In which did several solid Services expansions mandates France, as to Germany in transactions.

a strong of in was property management fee divestiture business. improvement an revenue X.X%, our basis higher-margin the the growth half XX%, in Capital due during XXXX. primarily businesses second Continental of of year-on-year Facility decreased EBITDA primarily points margin & of XXX management to Property Adjusted Europe Markets negative the result

Markets saw all that except primarily to impacted Moving saw across revenue lockdowns first negatively countries Capital declined decline XX%. Fee the revenue paused which reflected Australia. Asia nationwide and fee lockdown XXXX. In pronounced impact. Pacific, sales investment Leasing transactions. XX% declined transactions. the lower most quarter declined the The segment We pandemic-driven China, over pandemic X%

following pandemic of While Hong in the the second political half Kong, was by unrest in the market impacted further XXXX. the

Consulting sales fee occurred revenues investment & our XX%. showing well as Estate Real declined double-digit & businesses notable leasing as transactional Services decline and most Facility Greater China in in the as despite Property Management up The lockdown. resilience stalled. revenue were Advisory

RES Greater X% XXXX perspective, comprised For China about of fee total revenue.

relief Asia EBITDA the adjusted mitigation from was Pacific improvement aggressive XXX-basis-point plans. government cost primarily margin for year-on-year programs quarter X.X% and a

noncash LaSalle's quarter business. of adjusted Management to Investment The full co-investment by the XX.X%. double-digit fee perspective, quarter growth. more year grew negative our first charge revenue a annuity XX% margin fee EBITDA of continued to a increased valuation net quarter the million related by the $X of quarter. an consecutive Turning was the From fees could was LaSalle X% than of $XX activity marking vary. run indicative Advisory phasing our declines fifth margins for incentive offset although rate, in million portfolio. expansion is

achieved To summarize, in factor impacting the fee all duration year emerging revenue our and across of solid QX, service performance biggest depth pandemic lines global full the be we underlying will margin results. expansion, single growth and with headwinds. The despite

communicated organic previously fee range in for Given of of and potential year, the this are outcomes EBITDA XXXX withdrawing year. February adjusted we the current and targets our revenue lack the of wide visibility

would thank to uncertain best-in-industry these talent JLL and period. long-term teams our our we navigate pandemic to beyond our I believe and talented strategy, us balance adapting this employees as to through our are and and the the their are presented continuous We platform, to world, culture together. to Across unprecedented full-service challenges enable these occasion. In through these strong successfully being for by closing in sheet contributions admirably shines dedication clients, like moments global navigate disruptions the during remarkable times the rising

the will remarks. call Christian I Christian? to now turn final for back

Thank you, Stephanie.

the rest at outlook the looking of Now for XXXX.

in as the made Corporate within renewals. position. strides a new enter to we Momentum our with continued pleased are business and quarter Solutions mandates We second strong

when Capital across periods. taken has the Leasing at difficult and pandemic of made history through the world. Markets Our highs business its record were way many long A JLL us

quarters disproportionate market are depth extent lines duration back the cushion previous the the on of a service know as decline should The impact which and market geographies. and of market to crisis, the win expect performance. in the share, on across don't but QX our QX and we short-term difficult show We financial downturns, but this of our impact uncertain, assumptions all as

considering mindful to the the addition In impacts, short are longer-term we of implications. term

years increasing estate believe have a longer-term trends real global and outsourcing capital continue No taken fresh for macro rising trends and allocations will trends strategic the at drive look come. these growth real revolution doubt sector longer-term be our within supporting in and be all industrial but force strong real the We be to tech-driven urbanization there continue several impacted to will have estate growth of drivers our been We corporate sector, growth. these for adjustments, vision for to will the will they our that years. estate, to

capabilities and an trend is corporate awareness global sustainability will real as better in ecosystem. driver building benefit we stronger fragility for shaping industry society believe an the We investing emerged from and those continue pandemic corporate purpose within post in macro trend responsibility real estate estate of and on the a the of fifth focus a major a sustainability. social This advice, greater of and with consistent by even world. has future JLL services part driven our acknowledged leader our of

carbon ambitious determined delighted target Paris Moreover, pandemic. the science-based play to initiative were impact our end, despite in the Climate target XX% we an our short-term To we to our approved part attention JLL's operations way exemplary emissions the line are in manage XXXX that we the a all to own of Agreement. reduction the commitment with the that in for by

as Index our and Ethical a World's and on named and recognition Campaign recognitions we earning Companies the Rights many the proud Bloomberg of are diversity Most including We the XXth also to being for the awards received, Gender-Equality Forbes Human commitment year by of for XXXX's place one inclusion. very and

yet To expressing close each work this entire several have in to gratitude have our other through support pandemic, lives circumstances. these of the upheavals remarks, the their my significant who by I result and and personal team, to as continued weeks want to professional clients a witnessed diligently end trying JLL and these over past

successfully Throughout turbulent longer Nonetheless, XXXX uncertainty. XXXX remarkable and effectively world year be take against longer results company, environment through has of the stated for challenging confident our the for all not might and our in stakeholders previously our only our business, built will the deliver would will with we term. JLL to manage times history long-term capacity continue of many than the and targets. Recovery to overall. over execute but a like. navigate shown of our remain We excellent strength the ability an platform to growth in resiliency JLL a

process. Operator, please the Q&A explain

Paolone first from Your from [Operator question Anthony JPMorgan. Instructions] comes

line Your is open.

guess you. handle us how can Excuse you at any looked work and color some is and me. or to it's I internally data XQ whether Thank surveying get looking XQ give first out what question April on you're can brokers my on what actually today?

is this Tony Stephanie. Hi,

you think brokerage as heard a Americas, that Christian's a in seen the I in very you date and but business volume. business obviously notable leasing and the see we performance we strong across particularly our seen to in with So remarks rolls that in have softening market the pandemic have

And of in can information the in now. So right give was have where the further any Americas in a we to particularly a is lot pandemic, chain. What QX particularly on been we strength of results supply as saw don't I in there's terms demand you our say that, industrial our know business. you

we with have that performance which exposed of total our So to. about our specific in very XX% we pleased sector, leasing were Americas

Okay.

do what and happened and have But on I differently, tail maybe the looking back end. bit little a magnitude could the the at out of around? for go this may more to compressed we period things you mean, if cut think you period I GFC order sales took asked in think to we that time of guess, at be that's I a unwind. But look it a leasing time of

Tony, the to or would health faced it's current compare financial banks, GFC their situation. the ones. a caution currently to afraid predominantly of to whereas health in with of stability causing their creating a leads and lack Christian. personal be which the I GFC beloved the trust of was are we about virus The people

That an uncertainty. amount is of creating enormous

impact very And then which is therefore clients, way down the will that our global so unclear. us economy then comes the to and still

the within that is to differences big a and predominantly bifurcated times companies, XXXX, has the so with a of of have to less couple who strategic you their XXXX, clients as industry our their in way business business doing compared One business. the are in across the partners

And kind of bad in good and those are times. in strategic to continuing relationships operate

And just is overall these due to client higher, ago ours enhanced a business of so resilience compared relationships. significantly the like years XX to

then a good Christian you to seemed that a And impacted more mentioned all that, lines quarter. on business follow-up talk negatively little Can would that, a And Okay. show, first organic had the Solutions? in Corporate about specifically growth, here. you bit just be your very

levers piece, that transactional we be is -- what that environment? like should or down, there the a that, to bring the Like watching are this would number takes in puts and What that would for? what there, are

Well.

or that's or call corporate is to noted, kind the annuity-type sale revenues. transactional the down As which like, building, is down the you of for management. related facility to a the and headline a where annuity very services leaseback like transactional headquarter the would much very impact. it question, you revenues And have of differences of whether include, services Solutions and corporate services is series a already something Corporate what we to

is business at management the with And growing because clients, resilient. is business, the resilient. that is equipment is of being the the part Frankly, within maintenance big engineering facility may vacant. incredibly done most management because the early, that be premises moment facility Our many

impact the would maintenance so of as when And at drastic, scale. as in full be they that is not it run

on kind discretionary which would of to on liquidity. preserve then But their hand, just you have the people services, other pause

But expect Solutions this do will we business. all how prevail. not our it's again, on overall pandemic question, the to massive So a impact down Corporate long

liquidity. business. there XX months, point more months, of around couple more any If a will not in in will ends time probably XX, it impact it cautioned for on their be continues and be some at more our If companies

one Okay. And me. just last then for

from benefit way you Can the industrial with impact to home long office is chains mentioned, the You technologically. from on you business? and thoughts the world supply comment moving term might the any on the and have work

on have footprint. to this Well, to will office a point. I from opinions conclusions, opinions there are term, on what would work lot draw and is read read on be everybody of -- a lot there the especially of caution estate or to business the real commercial at longer many impact be too home

in alternative difference back send to I'm about But to technology brilliantly. of a very then a home we to work will is XX% all because In is a to like the like at And this office all. ours work from easy you the see A crisis talking home not not no normal technology. had are productivity. environment, work into company issue people, our at if

still the But driving office, your you're an results to home. when better interaction working compared getting people inspiration the at sitting with you're is colleagues, in

they quite home, week. came or And so, then something most the working home before. to working lots And from they global was which parts office were of the people normal companies of had from We for was travelling.

to So will back that. we go

in but don't seen to working they massive, helpful, from from that home. also Everybody immediately, But from it working work. learned the aspects the an it people has negative expect that shift And now I office home in is future. very have a massive from can

to keen work And think the flexibility from into office less majority the only come happy see employees. and And vast to people be home. made should to home. recently back were We office. the back a amongst get than survey so, sometimes And have work wants from our to very X% we own I the to

for you Thank Okay. that.

Jade Rahmani question next KBW. comes from Your from

Your line is open.

say question, a everybody, the I the But although you uncertainties. to doing Thank you will company do hope very from you hopefully hear profitable, remain wanted basic think overall much. I two all to for ask well. nice the I And three next quarters? to recognize are

is Stephanie. Jade, Hi, this

saw went profitable. through So, obviously, as the as remained we strong company and you the GFC,

this like Christian the As that. to obviously, everything, we pandemic are business. said But is doing nothing manage

profitability. liquidity or is maintain that Our discretionary side obviously everything side to expense that

business I annuity is the what's based. important emphasize a and think based that is portion transaction our to of is portion

As you on Christian happening amplify heard in that business from areas Solutions which there other China we've And on the Corporate softening. our are went to there prepared the and it's continue that globe. business works are ones, are our of different parts around first.

Asia So the impact you're most seeing on in top demonstrative our Pacific line.

improve. margins But also seen you've continue to

So if I planning you our through EBITDA best the look how results, the of to we're at business COVID. testament run that's now think right

that one-off the exclude see have expanded across you'll margins that mentioned, you all If businesses. the two charges I've

Okay.

doubt will on So line. that. And the I'm -- have an crisis you this Now sure impact this know no bottom

course. about and markets. of volumes I something Yes, mean, in we XX% similar are in assuming capital leasing declines

to the financial the side, flow the crisis operations. as company Do well? be expect positive cash that liquidity from the case maintained you during On

Again, forward. the visibility going is very poor

we first see I in and so refrain went. what to would see from see April And on We that. you commenting quarter how like our

in best Xth. months, will to know. very excellent our has and First as strength the being we past. level time of what's we And are on been the that quarter and for smiling next on the it keep over this well happening do company still we went couple May don't But financial

that billion Is facility, believe credit XXXX. currently correct? in the $X.X And which capacity matures on of borrowing there's available I

Yeah. Jade. correct, That's

taken our So debt that's about our It's we prior year, X.X, the is but credit utilization QX to we have is where elevated about have that leverage XX% of over facility. a ratio expected. of due which had HFF And as we on. slightly

ratings touch all? will at able do company be investment-grade agencies you And Have in you status? the been believe with maintain to

are business as rating profitability, So the And with as of we're flow that in you. sense course discretionary the imagine. in Jade, to constant accordingly monitoring business, that all cash you driving we're making choices can normal and and the agencies available contact running

a that maintain the investment-grade focus. sheet and we It's strong our So unchanged balance COVID remains pandemic. through

the Okay. wanted ask about charges. I to noncash two

could to extent say credit on a impact X.X multifamily be multifamily future ongoing years methodology are, did so pulls the loan be reserve to there that would the booking next you loss potential sufficient On the expect loss to apply quarterly loss basis? have reserve the that this yet forward a this of you reserve, through-cycle So to cover defaults or reserves market? losses

Hi, Stephanie. Jade. This is

So I right. that said think you

a million versus view exactly related those expected loan only losses $XX that's pandemic. there's and So reserve all noncash of COVID-XX of the our it's to

it the time. So estimation at future our losses this is of

Okay.

delinquencies I've increase So reserves be would nonrecurring. been my modeling assuming In a gradual that a loss in triggering not charge. one-time

a certainly we this to -- adjustments time. a the the make to business. do just We'll it the multifamily view we'll we normal need at -- And our our reexamine our if that So of of this expected and for do exposure. is is course future losses related all factors further throughout year as

questions. taking Thank you for the

Your comes next William question from from Blair. Lamers Josh

open. line Your is

good Thank Hi, morning. you.

in specifically the contracts. any and thinking touched specifically just but of Wondering the overruns EMEA? about more in bit, You potential any a the what's FM regions in on it maybe contracts, the cost fixed-price probably for FM

I sale then of the want in revenue FM to wanted Thanks. the ask for that to I you whether ahead. baseline quarter and my also I similar runoff called sure looking what the from And region make that the to business have just about it's business quarter, in fourth in out the

through are second I imagine will dealing over them Stephanie. what and this we taking very, proactively overruns. with part question, sure with Josh, I'm to very helping not quite hand our mean the you you the of and first I'm I the can cost clients crisis. part mean as

relationships for in is paid which to very line our And else And much relationships, estimated partner cost we as with get do contractual and we that tend obligations everything strategic usually goes to on I be whatever said our beyond an those basis. serve. very

not I'm raising So, which is are quite any sure issue, there. whether there you

it in Yeah. reference. just was No,

preparation, cleaning kind that increase in costs. I You remarks, an near-term mentioned prepared a your there think, was facilities in of engineering had in increase

to planned the so negatively question fixed in could not whether than expect margins. for impact to higher related contracts And which be you or price just there cost, a was labor

that Okay, the the issue because as obviously couple our when requirements, no, they weeks. and over the day, clients been times hasn't we additional will deliver But over got sub-providers facilities they then day a last it. three their contract move in would cleaning being or that pay ourselves. do cleaned two of have to an this for pass-through And we once are which a not cleaning

has clients we which work scale within used is sometimes clients. the not of have reduce have offset by whether anymore. of -- because what contractual asked that anything that that scope by such minimal the contract, additional which a there's us could requirements were been But other with premises If we confronted is

Okay.

the divestiture Josh, asset And management about of the part our I'll business. Okay. your second take question European of property

revenue. think So mentioned we had million QX, I that a it on in impact $X

it's for million. $X about So QX,

If you think EMEA rate, we about in of our PSM revenue XX%. a growth had decline

of X%. would adjust for have decline you that about If a it

or And spacious any about environment operate projects year a for JLL a at remain later of in then I'm sustainably create to again, bit properties Thanks. a kind the this the whether wondering capacity of post-COVID these rate. in if to kind take you then reset current but additional not higher creates prepared I mentioned of stuff said, again on order infill office in in And or the refitting, helpful. to, your to projects. or has industrial more expanded and like maybe retrofitting, world. to redevelopment that's the No, a thinking pickup opportunity those to just I'm And remarks, environment

to Sure. one us. coming of the obviously I mean that opportunities is

engaged fully spaces in are lots again as their with around many of now, in you space. our again. spaces already reopening Asia are of the We and starting we clients reopen Pacific are And Europe already now running to

our busy XX So last and couple operations, office services. we products weeks and and We we that our have have optimization around in we building of that. our space wellness and -- is Solutions are launched said, part of delivering Corporate as the teams over health very which different business overall created

the the move as capacity possible. there regions certainly ours best have are bring and companies as from to ability also And to pandemic, Pacific the are the help and the which to coming to making to And experience, the get business productivity who so, across Asia for in obviously that with all we opportunities practice the knowledge. quickly companies negativity other like back

then And me. had I you. Thank in Okay. said last that following one LaSalle first in January closed around mid-April. from China deal its the that lockdowns

in we reason resumed APAC normal -- you should a –again, tell, operations have expect a course? line but similar in can regions? And So other somewhat expect in we time other should best to

First not operations as levels, not all. at resumed have to of all, pre-crisis

or talk you If pre-negotiated have most or pre-COVID. in which which the transactions markets closed about closed transactions, of been capital are transactions March markets in have been which late been have capital May April

enough are see there of moment, we evidence to of start a so, really the can't give a capital to shortly What advice understand lot in you are business they markets and The this you that for developments, government a still encouragement in perform interest environment developments. for out investment the And the the on that to coming will ability on and activities. looking China new sales locked-down how restart there by back the new yet. side is and developers because is there's at after lot

interest with also, which this and I most will pricing kind buyers what's important be markets around will executing And there on is transactions. discussions But new is, feel both that a match-on-price time until of pricing there and is an capital something comfortable again. sellers find expectations. mean, and take obviously, sides impact

a couple of will that so, of bit a months. time, And take

Thank Okay. you.

next question America. Michael Bank from Funk of comes Your from

open. is line Your

all morning, A well. very you're could. I you hope I if Thank much. doing Good few everyone. Yeah.

on current I'm Your for here trying what comments everyone, of your about the at deviation. to -- you're wouldn't you Wall what standard it's at that financial to us $X.XX EPS, more hear Street. some to crisis, you model obviously, And and your differences consensus earlier some I'm looking would seeing there is, trying compare And getting situation really that is XXXX visibility and and a the low expectations. the global love thoughts I

GFC very Street. you information a be certainly the for activity on once to step what of would the being low kind kind and back so capital with incremental leasing and the with you're can any contributing I'm But, comparison in the that, on little -- Now, with us, give thoughts The again, of seeing helpful. market

repeat a I Well, was can the GFC, in the myself, financial stability only again, lack of trust of banks.

to So market again. what trust and then to was develop into that the was had get to the be done starting back economy

which a affecting Here we personally. is people have virus,

that health that exposed. not is needed is their confidence their have what people is So

muted in was, most to know vaccine but the the for have We that any lockdowns at business are don't And, big of people anything was comfortable would of end be delivered. And the again. operate didn't continuing every guess, mean, that the more really that. buildings time for I we fashion, people waiting feel or operating. at was that everybody to will a And difference they day, when many like

the difference. the in, At And a of And that any have two. moment, the is mode. between hard it operate in comparisons to we therefore, is countries still we massive most make very a lockdown

an we I bit What fully see the little be economy operational going you patient as we think have can impact that, are I forward. organization. a all and on the to assure real

demand, client is help of deliver there, the can being There's markets we and on kinds technology every out to side. deals leasing cover. capital the So all used on which

I renew principle. renewals you have little less, to their at because spectrum They bit will of people When have renew take a the anyway, renewals. full space, mean, you space. look the happen side, in they but will will leasing may

And into usually location, be move had I will to of they location tend major continue. slowed, kind piece that And different will tend decided a deal deals. the those a that I then if my but want They strategic to continue. -- continue. So to

is that to developing. want economy time happen, anything What how for But the to is slightly planned of taking being, leasing kind additional they additional which because the the on space. is is They things. belated. smaller That mainly floor, of XX% out, Companies see push for impacted, but side. tends the of kind is strategic

capital before as than happening. sellers. seen matching Obviously, that and still we price buyers the but the is are at there of would transactions find said is a the nothing there to markets between crisis. On new It's COVID earlier, I kind not the side, rate much have need lower happening,

time sell. price so, the until to And will have that people the take that right buy this to confidence that is they think or

going down statement Understood. do understand frame the just please kind coming income bit. business? time much you margin that’s into little appreciate this of demand believe, incremental GFC. Can -- a I how's top you commentary of the the I in and dollar this So about out the how shock EBITDA? than of additional more paraphrase a the to to the translate, for stepped also of every line,

we difference versus the and things in, the a we're on translate GFC how see So, don't through our to situation business.

most terms is in markets So Corporate our our of the and And business our we with portfolio businesses. leasing profitable lines capital and balance LaSalle Solutions.

margin been hasn't in expansion. regard. businesses a there driving So are All and the that shift growth profitable fundamental

in the can see past quarter's results. that you think I

laser-focused is cash conversion. very on obviously focused continued the crisis on on pandemic we're particularly what to Additionally, and be during

cash in getting So thoughtful continuing DSOs prudent crisis. that to making DPOs we convert can flow so this we're and and our through this that exactly convert sure to being manage very pandemic

if please could time one and the today. really I And I more appreciate

mentioned renewals, about right the out obviously, And all environment, for quarter you of comes then remind reach are and in or first of that current proactively seeing large customers what asking leasing percentage each is me extend blend of a just it You your part too from now? second early business. renewals? revenue Maybe

are Because business the is call a are make XX lot kind on quite a clients who and make months longer-term you of of that really who There months or is and a and if need before what to your obviously, ask moving trying don't contracts their renewal XX decision just there out a lease you know that extend what for push bit. they blend where economy commitment. does to to

I that part hand in the happening. at bringing statistic is any on that our so how side. portfolio are of our or And is we revenues don't much which have leasing of

The business different slightly renewal obviously is market-by-market.

renewal just for to just have more little levels for You very you to where coming contract very a fees renewals But are have business. for there is us fee And markets contract. similar to it's brand-new I fair fee generally profitable think where say than renewals. any new the is markets for speaking the levels us

Okay. Thank hope and all all for are you time today you well.

O'Shaughnessy from James. Patrick Your next Raymond question from comes

is line open. Your

or be of to along then down? revenues How naturally and expense that move going with morning. your Good Hey. fee-based variable is up much might base fluctuate

Hi., Patrick.

our the question. flexing business your a that So has GFC that variable oriented even and become difference more is now to and certainly between towards

So as and the we've leasing markets obviously that space grown us in the gives capital the business that flexibility.

works when base business on base a as obviously, So then good, comp reflect variable the business is it obviously, comp and our the fixed our softening that.

a that our continuing on percentage of to comp-and-ben fee So But expense give made growth. details financials in the P&L in on see lot our we've we as that revenue don't can a improve you progress specifically. of QX our total

basis that you compare. improved if XXX actually we've points year-on-year so And

way period. comp-and-ben structured business expense. our obviously, continue throughout So And the we'll outpacing to that is model certainly revenue pandemic is the utilize the

Okay.

$XX saves in not I that that roughly million paying guys June think you dividend cash.

more? negative typically reductions and generally cash relatively dividend savings through you the Given your walk can stem modest perceptions from on investor rationale bit this that a

Well, Patrick.

don't in First all, of we are who have people many our because stock our dividend. our stock of in

about as actions. very all Our that unprecedented. believe is challenge in was small. companies dividend we strong we leading their percentage have financial very while terms and be world position just the strongly said a earlier societal is in And And to the I are mindful facing economic

not us regards to be for And paying all right with our message would a that the we believe stakeholders. dividend

when we that where business You're million message. take your people us in for the but do not see across countries how right it the to $XX sending the is is suffering right you material very number not are

a what from is one last for then model viable it And Any in And industry? Okay. on thoughts initial the COVID-XX the business me. think post-COVID-XX still do world? you means

differentiation. something make about even and going guess, very Because space I which will is element about value to flexibility more talking by you're space, Well, of talk people industry that when which and an that important it's the has you flex flex co-working offered obviously the been the forward. is industry flex space

offices, in place. kind where you space situation, of rules offices at for the want reopen If those distancing you reopen everybody none because your to need to in of will capacity, a will more are social currently you keep full

office you so or out space. some And footprint by majority employees office either your you are of the your enhance keep picking of up to starting a flex

which once probably great industry, the is to there of starting an business we reopen have pick space going once actually economy we'll to is a the up, and flex forward. starting will So businesses element are

the you you different element because times. when that that which means next piece several was during have people Now sitting you a change to usually co-working know co-working don't the day may

so was may healthy will cool before what and see impact. forward And not so that and an that going feel certainly very safe

as of will space So lot probably a themselves as co-working players more players flex themselves those providers. who positioned going forward predominantly position

play for The that optimistic out has playing model deliver role that in a it's environment. industry confidence, And all time but to so own from business for space, or am that significantly. overall to quite demand whether flex obviously whether have their which for being. the users adjust how it's that space let's is very space those your trust are comfortable But will I space dropped see that of to they has feel looking the to companies

Appreciate you. Thank it.

final from Jade question from today comes Rahmani KBW. your And

open. is line Your

very you Thank much.

on of ordinary could in-person be wanted terms to if ask renewals take presence. continue contracts you comment In can just to leasing those without you expect place. business If resiliency, any executed I leasing, to if course

to expect be done if per if year be refinanced. industry appraisal, around $XXX finally debt that get for the which valuation you via maturities able billion can total And to debt placement, on also And course secondly ordinary desktop?

Yes.

I Okay. of three all take those.

so issue continuing. said, renewals renewals do As take not that is to an and I It's will place.

We I as see side, debt of know There beginning a even is of stumble in. kind at the in the bit On back everything much CMBS time debt better little than but now for pretty healthy. line. the a probably pretty being, will was do, are a the markets back you coming

not have – at these we we believe renewals will place. to the moment no take So that reason

Obviously, it. mean of readjust to once are that deals. kind there But all a some changing pricing may of of these we for that the for leverage ratios that market see is

so or see of the will is more that business next forward, probably two one part plain investment as even our in which than over quarters. resilient markets we capital And going sales

And the one on valuation. last

they be in can I monthly or quarterly think valuations All valuation, done half you annual or these all have to or very annual precise. desktop. be

I So who in in they those times demand demand question will continue favors strong becomes of on it's more that is usually valuation and very, in see you those. for and time JLL. mean, even the times a we higher because delivering importance usually higher very the have a brilliant challenging than

less transaction on valuations is there are one-off see will less less of valuation. If kind then for transactions is we there Where valuations. need impact an

country-by-country. And it business bit so mix a depends on little the

who is their have portfolio, growth valuation this stable impact who overall, and countries some business happening. less pretty in But in us. we for see other actually have We a have countries of the business our transactions

you very much. Thank

back the turn There further I'll time. call the to at no over presenters. are questions this

the Thank you Well call. and no to today's close again quarter. second with for forward look Stay I you. following we you questions, you. speaking Stephanie will to Thank further Thank participating. well.

participating. for today's this gentlemen, Thank and you concludes Ladies conference call.

may You now disconnect.