Savills plc: Results for the year ended 31 December 2016

Disclaimer: Forward-looking statements

These slides contain certain forward-looking statements including the Group’s financial

condition, results of operations and business, and management’s strategy, plans and

objectives for the Group. These statements are not guarantees of future performance and

are subject to risks, uncertainties and other factors, some of which are beyond the Group’s

control, are difficult to predict and could cause actual results to differ materially from those

expressed or implied or forecast in the forward-looking statements. These factors include,

but are not limited to, the fact that the Group operates in a highly competitive environment.

All forward-looking statements in these slides are based on information known to the Group

on the date hereof. The Group undertakes no obligation publically to update or revise any

forward-looking statements, whether as a result of new information, future events or

otherwise.

2

Results

1

2

3

Introduction, Highlights &

Business Development

Financial Review

Markets, Outlook &

Summary

3

Highlights

4

Performance overview Drivers

Group Revenue £1,445.9m

+12.7% (cc 5.6%)

Group UPBT £135.8m

+11.9% (cc 4.4%)

Transaction advisory revenues up 7%,

strong growth in Continental Europe,

market share gains in Asia Pacific (China)

and resilient performance in the UK

growth of Less Transactional

businesses (PM up 21% Consultancy up

4%)

Savills IM revenue growth of 62%

reflecting benefits of SEB Acquisition

Group UEPS 72.5p

+14.7%

Net Cash £187.8m

+24.4%

Dividend 29.0p

+11.5%

cc = constant currency

Savills Diversified Business Model

5

Defensive, Scale Businesses Revenue by Business Cyclical, High-Margin Businesses

Property Management – 33%

Consultancy – 16%

Investment Management – 5%

Commercial Transactions – 35%

Residential Transactions – 11%

• Recurring revenue streams with less

exposure to transaction environment

• 1.76bn ft2 under management

• Strong Property Management business

• €16.2bn AUM

• High-return, but cyclical earnings

• 76:24 split Commercial vs. Residential

• 56:44 Commercial split Tenant rep/leasing

vs. Capital markets

46% 54%

Combination of cyclical and less cyclical service lines

Ten Year Revenues

6

-

200

400

600

800

1,000

1,200

1,400

1,600

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

£m

Transactional "Less Transactional"

49%

51% 54%

46%

£316.6m £785.1m

52% 54%

46% 48%

Broad Geographic Spread

Over 32,000 employees in 700* offices in more than

60 countries

5,136 Employees

130 Offices

£578.3m Revenue

40% of Total

United Kingdom

25,446 Employees

60 Offices

£485.9m Revenue

33% of Total

Asia Pacific

1,103 Employees

35 Offices

£170.6m Revenue

12% of Total

Europe

676 Employees

30 Offices

£211.1m Revenue

15% of Total

North America

* Includes associates

-

200

400

600

800

1,000

1,200

1,400

1,600

2013 Acquired Organic 2016

Re

ven

ue

£

m

UK (Smiths Gore; New Offices; New Teams)

Asia-Pacific (Cordeau Marshall; China & Singapore teams)

Continental Europe (Tagis, New Offices)

North America (Savills Studley + bolt on acquisitions)

Investment Management (SEB, Merchant Capital)

Business Development since 2013

8

Region (and main contributors to growth)

£905m

£1,446m

£297m

£244m

Financial Review

9

Summary Underlying Results

10

Year ended December (£ millions) 2016 2015 % chg

Revenue 1,445.9 1,283.5 +13%

Underlying profit before tax 135.8 121.4 +12%

Underlying PBT margin 9.4% 9.5% -0.1% pts

Underlying basic earnings per share 72.5p 63.2p +15%

Dividend per share 29.0p 26.0p +12%

Net cash 187.8 151.0 +24%

Net assets 407.0 365.0 +12%

Dividends

11

Year ended December (pence) 2016 2015 % chg

Interim ordinary (“Less Transactional”) 4.4p 4.0p +10%

Final ordinary (“Less Transactional”) 10.1p 8.0p +26%

Supplemental (“Transactional”) 14.5p 14.0p +4%

Total distribution (pence) 29.0p 26.0p +12%

Total distribution (£m) 38.8 34.7 +12%

Cashflow performance

12

151.0 187.8

135.8

31.9

17.1 0.9 27.1

17.5

36.3 24.8

7.2

0

50

100

150

200

250

300

350

Net cash at 31-Dec-2015

UPBT Non-cash items

Working capital

Acquisition spend -

current & deferred

Capex Dividends paid

Tax Foreign exchange

Other Net cash at 31-Dec-2016

Cash generation from operations of £117.8m £m

Revenue and Underlying PBT by business

13

618.0

390.7

230.3

44.5

660.8

472.8

240.3

72.0

0

100

200

300

400

500

600

700

2015

2016

+21%

+4%

+62%

Revenue

76.9

21.1 24.7

10.9

80.0

23.6 25.9

17.6

0

10

20

30

40

50

60

70

80

90

+12% +5%

+61%

Transaction

Advisory

Property

Management Consultancy

Investment

Management

UPBT

+7%

+4%

Margin 12.4% 12.1% 5.4% 5.0% 10.7% 10.8% 24.5% 24.4%

£m

Revenue and Underlying PBT by business:

Constant currency equivalent

14

618.0

390.7

230.3

44.5

612.7

441.0

234.6

67.0

0

100

200

300

400

500

600

700

2015 2016

Revenue

£m

Transaction

Advisory Property

Management Consultancy

UPBT

£m

1,283.5

1,355.3

1,240

1,260

1,280

1,300

1,320

1,340

1,360

1,380

Total

121.4

126.8

118

119

120

121

122

123

124

125

126

127

128

(1)%

+6%

+4%

Group margin of 9.4%

(2015: 9.5%)

Divisional UPBT total excludes other central overheads of £11.3m in

2016 and £12.2m in 2015

Investment

Management

76.9

21.1 24.7

10.9

74.5

22.2 25.4

16.0

0

10

20

30

40

50

60

70

80

90

2015 2016

(3)%

+13%

+2%

+51%

+5% +3%

+47%

Revenue and Underlying PBT by region

15

560.1

401.1

192.5

129.8

578.3

485.9

211.1 170.6

0

100

200

300

400

500

600

700

2015

2016

Revenue

UK Asia Pacific North America

UPBT

+3%

Continental Europe

71.7

34.2

18.8

8.9

72.1

42.6

18.9 13.5

0

10

20

30

40

50

60

70

80 +1%

+21%

+10%

+31%

+25%

+52% +1%

£m

Margin 12.8% 12.5% 8.5% 8.8% 9.8% 9.0% 6.9% 7.9%

The above excludes other costs of £11.3m (2015 £12.2m) not allocated to the

operating activities of the Group’s business segments

Commercial Transaction Advisory

16

2016 Revenue £498m (+8%) 2016 UPBT £59m (+6%)

Asia Pacific market share gains in Mainland China, Australia and Singapore, 4% revenue growth in constant

currency

UK market share gains partially mitigating the effect of substantially lower market volumes

Europe constant currency growth in revenues of 14%, with stronger transactional markets in Germany, France

and the Netherlands, partially offset by reduced volumes in Irish market

North America constant currency decline in revenues of 3%; slow down in lead up to the Presidential Election.

Strong pipeline heading into 2017

130

86 71

211

0

50

100

150

200

250

Asia Pacific UK Europe North America

Growth +16% (13)% +27% +10%

20

15

5

19

0

5

10

15

20

25

Asia Pacific UK Europe North America

Growth +26% (13)% +25% +1%

Residential Transaction Advisory

17

2016 Revenue £163m (+3%) 2016 UPBT £21m (0%)

UK impact of reduction in secondary sales revenue mitigated by strong performance in Development sales

Asia Pacific 13% constant currency growth in revenues; strong performances in Hong Kong, Vietnam and

Mainland China. Non-recurring reorganisation costs in Australia affected profitability

38

125

0

20

40

60

80

100

120

140

Asia Pacific UK

Growth +25% (3)%

3

18

0

2

4

6

8

10

12

14

16

18

20

Asia Pacific UK

Growth +6% (2)%

Property Management

18

2016 Revenue £473m (+21%) 2016 UPBT £23m (+12%)

Asia Pacific growth in Hong Kong, Japan and Korea offset decline in Australia and SE Asia (8% constant

currency growth)

UK Organic growth of 9% (Incl. Residential Lettings up 8%). Full year effect of Smiths Gore (rural) and 2016

acquisition of GBR Phoenix Beard (Midlands). Profitability impacted by expansion costs in Rural, Energy and

Projects

Europe revenue growth of 23% in constant currency with significant contribution from France, the

Netherlands, Spain and Sweden

274

159

40

0

50

100

150

200

250

300

Asia Pacific UK Europe

Growth +20% +19% +38%

14

11

-2 -4

-2

0

2

4

6

8

10

12

14

16

Asia Pacific UK Europe

Growth +15% +4% +8%

Consultancy

19

2016 Revenue £240m (+4%) 2016 UPBT £26m (+5%)

UK strong performances in Hospitality and Leisure, Building and Project Consultancy, Planning and

Professional and Financial Services, offset by reduced activity in Development, Rural and Energy Consultancy

Asia Pacific 11% growth in constant currency. Growth in Singapore, Australia (valuations), Vietnam, Korea

and Taiwan. PI costs in Australia impacted profitability

Europe 5% growth in constant currency improved performances in Germany, France, Spain, Poland and the

Netherlands. Profitability enhanced by 2015 recruitment

183

38

19

0

20

40

60

80

100

120

140

160

180

200

UK Asia Pacific Europe

Growth 0% +22% +17%

22

3 1

0

5

10

15

20

25

UK Asia Pacific Europe

Growth +2% +9% +86%

Investment Management

20

2016 Revenue £72m (+62%) 2016 UPBT £18m (+61%)

Fee income substantially improved through full year effect of 2015 acquisition of SEB

Total volume of transactions exceeded €5bn (ranked 5th in EMEA)

Large volume disposals during the year as part of the dissolution of the German open-ended funds

Assets under management decreased by 5% to €16.2bn (2015: €17.1bn) - effect of liquidation distributions

to unit holders in the SEB German Open Ended Funds outweighing the €1.7bn new capital raised

26

40

6

0

5

10

15

20

25

30

35

40

45

UK Europe Asia Pacific

Growth

7

9

2

0

1

2

3

4

5

6

7

8

9

10

UK Europe Asia Pacific

Growth n/a +55% n/a +49% +43% +42%

21

Markets and Outlook

Key Market Themes

US

Post Election mood in the US amongst corporate occupiers is reasonably positive

UK

Brexit negotiations fuel uncertainty

Trading volumes remain relatively subdued

Some UK Occupiers delaying expansion decisions

UK remains prime location for international investors

Continental Europe

Some Election concerns, but markets stable and international investors remain attracted to Europe

Asia

Some concerns over China financial restrictions cooling the high end Residential market (Shanghai)

and also reducing domestic capital outflows into overseas real estate

Continued significant appetite from Asian investors for global Real Estate

22

Management Focus for 2017

Continue investment in the US and Europe

Integrate new acquisitions / teams

Selective investment in technology

Continue investment in less transactional businesses - PM, Consultancy

Development of Savills Investment Management’s platform

Reviewing new markets

23

2016 another record year despite the headwinds

Summary

Global breadth and resilient UK business

Strong growth in Less Transactional Businesses including Investment

Management

2017 variable market conditions and geopolitical uncertainty in US/UK

markets

24

Good start to the year and our 2017 expectations remain unchanged

Savills plc: Results for the year ended 31 December 2016