Savills plc

Results for the six months ended 30 June 2019

8 August 2019

Disclaimer: Forward-looking statements

2

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.

Results

1 Introduction, Highlights & Market Update 2 Financial Review 3 Management Progress

3

Introduction, Highlights and Market Update

4

Highlights

5

Group Revenue £847.0m

+16.4% (cc +14.3%)

Group UPBT £38.4m

-9.4% (cc -12.3%)

Significant growth from less transactional

businesses with revenue up 20%, profit up 26%

Commercial Transaction revenue growth

driven by strong North American performance

(up 31%) mitigating effect of reduced activity in

Transactional markets in UK and Hong Kong

UK Residential Transactional revenue down

1.5% against a market backdrop of considerably

lower sales volumes; UK Residential Lettings up

26%

Property and Facilities Management revenue

up 27%, Consultancy revenue up 5%

Savills Investment Management revenue up

20% as a result of fund performance and

increased activity in Continental Europe. Period

end AuM up 13% to €18.3bn

Group UEPS 20.9p

(2018 H1: 23.4p)

Net Debt £139.0m

(2018 H1: £94.6m)

Dividend 4.95p

+3.1%

cc = constant currency

Performance Overview Drivers

Savills Diversified Business Model

6

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

Property Management – 39%

Consultancy – 16%

Investment Management – 4%

Commercial Transactions – 32%

Residential Transactions – 9%

• Recurring revenue streams with less

exposure to transaction environment

• Strong Property Management business

• 2.12bn ft2 under management

• €18.3bn AUM

• High-return, but cyclical earnings

• 79:21 split Commercial vs. Residential

• 63:37 Commercial split Tenant rep/leasing

vs. Capital markets

41%(2018-H1: 43%)59%

(2018-H1: 57%)

Combination of cyclical and less cyclical service lines

Broad Geographic Spread

7

Over 31,000 employees in 700 offices in more than 60 countries

580Employees

6,323Employees

133Offices

1,726Employees

43Offices

29,985Employees

63Offices

Revenue

£131.7m

(16% of Total)

811Employees

32Offices

*Staff numbers –

Weighted average to

30th June 2019

Revenue

£303.6m

(36% of Total)

Revenue

£113.3m

(13% of Total)

Revenue

£298.4m

(35% of Total)

Over 39,000* employees in 70 countries

227Employees

8Offices

UK

Market Dynamics

Macro themes

• Sluggish GDP growth of 0.3% in the last 3 months with

uncertainty increasing

• Sterling devaluation continues (-4.65% v $ this year) as risk of no

deal Brexit increases

• Structural change continues in the Retail markets with high

numbers of CVA’s

Market statistics

• UK Commercial property investment volumes down 32% year on

year (43% in Central London, the weakest first half since 2009)

• Office take up outside London experienced a record first half

across top 10 regional cities (3.19m sq. ft), with London office

markets resilient

• Logistics take up in H1 19 stands at 15.4 million sq. ft, 28%

above long term average

• UK Housing transactions volumes down 4.5% in H1 but

mainstream national prices increase 1.2% (-4.4% in London)

Revenue

£303.6m

Growth

8% YOY

Revenue

£298.4m

Growth

19% YOY

0

100

200

300

400

500

600

700

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

£b

illio

ns

Asia Pacific Investment Volumes

Q1 Q2 Q3 Q4

9

Market Dynamics

Macro themes

• Caution increasing in a number of key markets, particularly Hong Kong and China with trade tensions, political unrest and slower GDP growth (6.3% H1 China)

• Commercial confidence is increasing in Australia following the General Election

• GDP growth is increasing in Japan, with continued political stability

• Cooling measures have had an impact on the residential market in Singapore, with market slowdowns in Australia and Shanghai

Market statistics

• Hong Kong office investment volumes down 34% in H1 over the previous year, with Retail volumes down 52%

• Overall investment volumes across China increased by 17% over H1, but outbound capital flows remained subdued

• Overall Leasing volumes reduced by c.20%, but with rental growth in a number of core markets

• Total investment activity across Asia Pacific in Q2 was up 1.3% - Offices, 11.5% - Industrial and down 18.5% - Retail

Asia Pacific

Source: Real Capital Analytics

Source: Savills

North America

Revenue

£131.7m

Growth

31% YOY

Market Dynamics

Macro themes

• Real GDP growth of 2.1% for Q2 (3.5% Q2 2018)

• Slowing domestic growth and recent interest rate cut, seen as

an insurance measure to maintain economic momentum

• Unemployment rate reduced to 3.6% (3.9% Q2 2018) with a

slowdown in corporate earnings beginning to emerge

Market statistics

• Office Leasing volumes remain strong in Q2, with 65 million

sq. ft taken up, 8.4% up on Q1

• Activity focused on New York, Los Angeles and Washington,

but with increases in other top tier markets

• Take up growth fueled by growth sectors including

Technology, Financial Services and Co-Working, with overall

US availability down 60 bps, a 3.9% increase year on year

• Commercial office investment volumes up 15.2% across

major metros with particular emphasis on New York and San

Francisco

Market Dynamics

*Source: Real Capital Analytics, Savills, Includes all Commercial Property Types

$0

$50

$100

$150

$200

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

US Commercial Investment Volumes – Major Metros

Q1 Q2 Q3 Q4

$bn

To

tal v

olu

me (

sq

ft;

millio

n)

Source: Savills, Includes New Leases and Renewals

0

50

100

150

200

250

300

350

2014 2015 2016 2017 2018 H1 2019

US Annual Commercial Office Leasing Volume

Europe & Middle East

Revenue

£113.3m

Growth

17% YOY

Market Dynamics

Macro themes

• GDP growth slowing substantially in Germany and Italy, also

affecting France and the Netherlands

• Continued regional political and global economic uncertainty

affecting UAE

• Investor demand strong, but polarised towards less risky assets

and volumes affected by lack of liquidity

Market statistics

• European Investment volumes down 15% YOY in H1 2019

• Major country investment down in largest markets, but sharply up

in Spain (53%), Sweden (71%) and Italy (46%)

• Paris eclipses London as the most popular destination for Cross

Border Investment in H1 (€6.5 bn, London: €5.6 bn)

• Office Leasing volumes up 3%, but with significant increases in

Madrid (+25%) and Brussels (+20%)

• Middle East: Stable office market dynamics and increased

activity in Saudi Arabia. Over supply an issue in some markets

Savills Investment Management

Percentage AUM outperforming respective benchmarks figures to Q1 2019

65%

86% 89%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Target Actual Actual

Last 5 yrs Last 3 yrs

Market Dynamics

• Brexit and European geopolitical concerns impacting

on investment activity and equity raising

• Concerns around general pricing across all asset

classes – late cycle

• Increasing level of regulatory and risk compliance

• Trend to consolidation of small investment managers

• Managers fees continue to be under the spotlight

• Overall equity raised by Managers in H1 significantly

lower than H1 18 in European markets

• Weight of money targeting the sector remains above

average for real estate given the need for income

Revenue

£32.5m

Growth

20% YOY

0

5

10

15

20

25

30

35

40

45

0

20

40

60

80

100

120

140

Cap

ital

Rai

sed

(U

SD b

n)

Nu

mb

er o

f fu

nd

s

Historical Fundraising

Number of funds Aggregate Capital Raised USD bn

Financial Review

13

Summary Underlying Result

14

6 months ended 30 June (£m) 2019 2018 % chg

Revenue 847.0 727.8 +16.4%

Underlying PBT 38.4 42.4 (9.4)%

Underlying PBT margin 4.5% 5.8% (1.3)% pts

Underlying basic earnings per share 20.9p 23.4p (10.7)%

Dividend per share 4.95p 4.80p +3.1%

Net debt 139.0 94.6 +46.9%

Net assets 461.5 432.3 +6.8%

Revenue and underlying PBT by business

15

311.3

263.7

125.8

27.0

346.3 335.5

132.7

32.5

0

50

100

150

200

250

300

350

400

2018

2019

+27%

+5%

+20%

Revenue

19.7

12.810.8

2.9

9.9

16.2

11.5

5.6

0

5

10

15

20

25

+27%

+6%

+93%

Transaction

Advisory

Property

Management Consultancy

Investment

Management

UPBT

+11%

(50)%

Margin 6.3% 2.9% 4.9% 4.8% 8.6% 8.7% 10.7% 17.2%

£m

The figures in these charts

exclude costs of £4.8m in

2019-H1 (2018-H1 £3.8m) not

allocated to the operating

activities of the group’s

business segments

Combined revenue and UPBT growth of 20% and 26% respectively

Revenue and underlying PBT by region

16

280.5

250.4

100.3 96.6

303.6 298.4

131.7113.3

0

50

100

150

200

250

300

350

2018

2019

Revenue

UK Asia Pacific North America

UPBT

+8%

CEME

23.7

18.6

0.63.3

22.2

15.5

6.7

(1.2)-5

0

5

10

15

20

25(6)%

+19%

+31% +17%

(17)%

n/a+1,017%

£m

Margin 8.4% 7.3% 7.4% 5.2% 0.6% 5.1% 3.4% (1.1)%

The figures in these charts

exclude costs of £4.8m in

2019-H1 (2018-H1 £3.8m) not

allocated to the operating

activities of the group’s

business segments

£38.4m

£6.0m

£2.0m

£172.7m

£6.0m £15.2m£14.0m

£36.4m

£13.5m

£1.5m

Net debtb/f

UPBT Non-cashitems

Workingcapital

Acquisitionspend -

current &deferred

Capex Investmentcash flows

EBT Dividends Tax Other Net debt c/f

Cashflow Performance

171 Cash used in operations include “principal elements of lease payments” which are included within financing activities in the statutory cash flow

Cash used in operations1 of £128.3m

(2018 H1: £77.2m)

Net cash

Net debt

£73.9m

£139.0m

£(50.0)m

£50.0m

-

£100.0m

£(100.0)m

At 30 June 2019 – Net debt of £139.0m

(net cash outflow in H1 of £212.9m)

At 30 June 2018 – Net debt of £94.6m

(net cash outflow in H1 of £193.2m)

£(150.0)m

£150.0m

£730m£34m

£28m

£51m £12m

£398m

£107m

£215m

£151m

Net cashat

30 Jun 2013

Underlying profitbefore tax

Non-cash items Working capital Acquisitions andcapex

Investment cashflows

EBT Dividends Tax Other Net debtat

30 Jun 2019

Net cash/(debt) reconciliation – 6 years to June 2019

18

£3m

£(139)m

UPBT

2013 H2 £ 49.2m

2014 £100.5m

2015 £121.4m

2016 £135.8m

2017 £140.5m

2018 £143.7m

2019 H1 £38.4m

Total £729.5m

£25m

£75m

£20m

£84m

£59m

£21m£8m

£8m

£11m

£8m

£56m

£23m

-

£20m

£40m

£60m

£80m

£100m

£120m

£140m

£160m

2013 2014 2015 2016 2017 2018 2019

H1 H2

Profile of Acquisitions/Capex Investment

Commercial Transaction Advisory

19

2019 Revenue £274.3m (+17%) 2019 UPBT £5.0m (-53%)

Asia Pacific: Investment growth in Japan, China and Singapore, decline in Hong Kong and Australia.

UK: slow down in UK Capital Transactions due to lower stock availability and Brexit related uncertainty.

CEME: significant growth costs, particularly in Germany and Sweden, good pipeline for H2.

North America: strong Occupier Leasing revenues; reduction in Capital Markets losses, continued investment in platform.

68.2

31.443.0

131.7

-

20

40

60

80

100

120

140

Asia Pacific UK CEME North America

Growth +14% (7)% +4% +31%

4.2

1.3

(7.2)

6.7

(8)

(6)

(4)

(2)

-

2

4

6

8

Asia Pacific UK CEME North America

Growth (26)% (54)% n/a 1,017%

Residential Transaction Advisory

20

2019 Revenue £72.0m (-5%) 2019 UPBT £4.9m (-46%)

UK: second-hand sales down marginally due to lower average values, however number of exchanges ahead of last

year. Significant market outperformance against UK market volume declines.

UK: reduced volume of Development sales. Reservations remain robust.

Asia Pacific: Hong Kong remains resilient but slow down in Australia, China and Singapore.

57.3

14.7

0

10

20

30

40

50

60

70

UK Asia Pacific

Growth (2)% (17)%

3.5

1.4

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

UK Asia Pacific

Growth (44)% (48)%

Property Management

21

2019 Revenue £335.5m (+27%) 2019 UPBT £16.2m (+27%)

Asia Pacific: good revenue growth; mobilisation costs on new Hong Kong FM contracts restricts profit growth

in period.

UK: strong organic growth including Residential Lettings (up 26%) boosted by the addition of the Broadgate

Estates contracts (14% revenue growth) acquired during 2018-H2.

Europe: organic revenue growth in Ireland and France supported by the Cluttons acquisition in the Middle

East (7% of the revenue growth).

189.8

107.6

38.1

-

20

40

60

80

100

120

140

160

180

200

Asia Pacific UK CEME

Growth +28% +28% +23%

8.6

6.8

0.8

-

1

2

3

4

5

6

7

8

9

10

Asia Pacific UK CEME

Growth +6% +39% n/a

Consultancy

22

2019 Revenue £132.7m (+5%) 2019 UPBT £11.5m (+6%)

UK: strong performances in Building, Projects and Planning offset reduced activity in Housing, Lease and Leisure

consultancy.

Asia Pacific: revenue growth in China, Japan & South Korea offset by reductions in Singapore/Australia and recruitment costs.

Europe: organic growth of 18% (Germany/France/Spain) boosted by first time contribution of Middle East.

93.4

22.916.4

0

10

20

30

40

50

60

70

80

90

100

UK Asia Pacific CEME

Growth 0% +11% +36%

8.4

1.0

2.1

0

1

2

3

4

5

6

7

8

9

UK Asia Pacific CEME

Growth (1)% (41)% +250%

Investment Management

23

2019 Revenue £32.5m (+20%) 2019 UPBT £5.6m (+93%)

Revenue: growth from increased activity in UK/Europe (incl performance fees). Asia revenue impacted by

dissolution of Japan I (end of term) pre-launch of Japan II.

Assets under management: increased by 13% to €18.3bn (H1 2018: €16.2bn).

Performance: 85% of AUM consistently beating benchmarks over rolling 5 years; supports capital raising.

13.9

15.8

2.8

-

2

4

6

8

10

12

14

16

18

UK CEME Asia Pacific

Growth

2.2

3.1

0.3

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

UK CEME Asia Pacific

Growth+31%+22% +138%+83%(20)% (25)%

Management Progress

24

25

Key Priorities

Continued growth of our Less Transactional Businesses

Maintenance of Transactional bench strength and targeted recruitment for

sector coverage

Continued diversification of service lines eg Project Management/Consultancy

Drive integration and performance of recent acquisitions and team lifts

Maintain strong fund performance in Investment Management

Flexible response to market conditions and opportunities alongside prudent

cost management

26

Summary & Outlook

A resilient H1 despite some market challenges

Corporate occupiers remain active, “Lower for Longer” interest rates and security of

income underwrites continued attractiveness of real estate investment

Near term macro level uncertainties restraining transaction volumes in some markets

Continued growth in less transactional service lines & developing markets

The Board’s expectations for the full year currently remain unchanged

Appendices

27

Period ended 30 June (£m) 2019 2018

Reported profit before tax 24.7 26.7

Acquired intangible assets amortisation 3.7 2.6

Share-based payment adjustment (1.1) (0.3)

Profit on disposal of available for sale investment / joint venture (0.3) (0.1)

Restructuring costs 4.3 2.8

Acquisition - related costs 7.1 10.7

Underlying profit before tax 38.4 42.4

28

Underlying PBT Reconciliation

29

280.5250.4

100.3 96.6

303.6 289.9

124.6 114.1

0

50

100

150

200

250

300

350 2018

2019

Revenue

Asia PacificUK United States

UPBT

727.8

832.2

0

200

400

600

800

1,000

Total

42.437.2

-5

1015202530354045

+8%+14%

(12)%

Group margin of 4.5%

(2018: 5.8%)Revenue / UPBT total includes unallocated net costs, primarily central overheads of

£4.8m in 2019-H1 and £3.8m in 2018-H1.

CEME

23.7

18.6

0.63.3

22.2

14.7

6.3

(1.2)-5

0

5

10

15

20

25(6)%

+16%

+24%+18%

(21)%

+950%n/a

Revenue and underlying PBT by region: Constant currency equivalent

Six months ended June

(£m)

2019

Actual

2018

Actual

FX gain /

(loss)

Constant

currency

2019

Actual

Constant

currency

growth

Revenue 847.0 727.8 14.8 832.2 14%

Underlying costs (808.6) (685.4) (13.6) (795.0) (16)%

Underlying PBT 38.4 42.4 1.2 37.2 (12)%

30

FX Effect on Underlying Results

UK Prime Yield

Source: Savills

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

City offices West end offices M25 offices Regional offices Standard shops Shopping centres Industrial Distribution

%

Jun-18 Jun-19

UK Commercial property – average annual rental growth

-20

-15

-10

-5

0

5

10

15

Au

g 0

0

Dec 0

0

Ap

r 01

Au

g 0

1

Dec 0

1

Ap

r 02

Au

g 0

2

Dec 0

2

Ap

r 03

Au

g 0

3

Dec 0

3

Ap

r 04

Au

g 0

4

Dec 0

4

Ap

r 05

Au

g 0

5

Dec 0

5

Ap

r 06

Au

g 0

6

Dec 0

6

Ap

r 07

Au

g 0

7

Dec 0

7

Ap

r 08

Au

g 0

8

Dec 0

8

Ap

r 09

Au

g 0

9

Dec 0

9

Ap

r 10

Au

g 1

0

Dec 1

0

Ap

r 11

Au

g 1

1

Dec 1

1

Ap

r 12

Au

g 1

2

Dec 1

2

Ap

r 13

Au

g 1

3

Dec 1

3

Ap

r 14

Au

g 1

4

Dec 1

4

Ap

r 15

Au

g 1

5

Dec 1

5

Ap

r 16

Au

g 1

6

Dec 1

6

Ap

r 17

Au

g 1

7

Dec 1

7

Ap

r 18

Au

g 1

8

Dec 1

8

Ap

r 19

An

nu

al

% c

ha

ng

e

UK Retail UK Offices UK Industrial

Source: MSCI, Savills

European (excl UK) Investment turnover

Source: Real Capital Analytics, Savills

0

50

100

150

200

250

300

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

€b

n

Q4

Q3

Q2

Q1

European (incl UK) Investment turnover

Source: Real Capital Analytics, Savills

0

50

100

150

200

250

300

350

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

€b

n

Q4

Q3

Q2

Q1

Global commercial and institutional residential investment turnover

Source: Real Capital Analytics, Savills

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019H1

Billi

on

s

Americas

APAC

EMEA

China’s debt rose to over 300% of GDP in Q1/2019.

Household debt, government debt and financial sector debt jumped to 54%, 51% and 43% of GDP respectively

China will maintain a prudent monetary policy in the year's second half, while continually reducing the actual financing costs of enterprises.

Source: The People’s Bank of China, Savills Research & Consultancy

Mainland China New Loan Growth, 2007 – 2019F

2019 figure is forecasted by Bank of China

0.0

0.5

1.0

1.5

2.0

2.5

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F

US$ trillion

Global Property Sales* in China vs All Others, Q1/2007 – Q2 2019

The global property sales volume fell by 11.3% in Q2/2019, while sales in China dropped slightly by 1.6%.

Most China transactions are accounted for by land deals.

Cross-border investors have turned their attention to China, as reflected by the increase in the cross-border net acquisitions volume in 2019 H1.

Source: Real Capital Analytics

* Includes all property types

-

100

200

300

400

500

600

Q1

Q3

Q1

Q3

Q1

Q3

Q1

Q3

Q1

Q3

Q1

Q3

Q1

Q3

Q1

Q3

Q1

Q3

Q1

Q3

Q1

Q3

Q1

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

US$ Billions China US Rest of World

Regional Grade ‘A’ Office Yields, Q2/2018 vs Q2/2019

Grade A Office yields are relatively low and stable with some signs of softening in Hong Kong and Singapore.

Source: Savills Research & Consultancy

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

Beijing Shanghai Hong Kong Taipei Tokyo Seoul Singapore Kuala Lumpur

Q22018 Q22019

Connecting people and

property since 1855