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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 1, 1999
CB RICHARD ELLIS SERVICES GROUP, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 001-12231 52-1616016
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
533 South Fremont Avenue, Los Angeles, California 90071
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (213) 613-3123
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On June 1, 1999, the management of CB Richard Ellis Services, Inc. (the
"Company") will make a presentation at the NationsBanc Montgomery Property
Services Conference in New York, New York based on written materials to be
distributed regarding past accomplishments of the Company and the Company's
plans and objectives. A copy of the written materials to be distributed at the
conference is attached as Exhibit 99.1 and hereby incorporated by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
The following exhibit is filed as part of this report:
99.1 Analyst Presentation Materials distributed and dated June 1, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CB RICHARD ELLIS SERVICES, INC.
Date: June 1, 1999 By: /s/ Walter V. Stafford
-----------------------------------
Walter V. Stafford
Senior Executive Vice President and
General Counsel
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Exhibit 99.1
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[LOGO OF CB RICHARD ELLIS]
(NYSE: CBG)
Bank of America Securities
Property Services Conference
June 1, 1999
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Forward-looking Statement
=========================
A number of statements we will be making in our presentation and in the
accompanying slides will not be based on historical fact, but will be "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements involve risks and
uncertainties, such as statements of the company's plans, objectives,
expectations, estimates and intentions, that are subject to change based on
various important factors (some of which are beyond the company's control).
Such forward-looking statements speak only as of the date of this presentation
and the company expressly disclaims any obligation to update or revise any
forward-looking statements found herein to reflect any changes in company
expectations or results or any change in events. The following factors, among
others, could cause the company's financial performance to differ materially
from the plans, objectives, expectations, estimates and intentions expressed in
any forward-looking statement made herein or by management of the company:
commercial real estate vacancy levels; employment conditions and their effect on
vacancy rates; property values; rental rates; any general economic recession
domestically or internationally; and general conditions of financial liquidity
for real estate transactions.
[LOGO OF CB RICHARD ELLIS]
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Company Highlights
==================
. World's largest vertically integrated commercial real estate services company
with a geographically diversified network
. Strong global brand name and leading market share position across all
business segments
. Strong operating performance; strong cash flow growth
. Experienced management with aligned interests - 16% employee ownership
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Vision Statement
================
"...to be the preeminent, globally capable, vertically integrated
commercial real estate services firm, delivering solutions through
local knowledge worldwide."
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Company Profile
===============
<TABLE>
<S> <C>
. Revenues - analyst projections* $1,238 million
. EBITDA - analyst projections* 151 million
. Market Cap. - Equity 400 million
. Enterprise Value - Equity + Debt 814 million
. Enterprise Value/EBITDA* 5.4 times
. Number of Employees 10,000
. Number of Offices 230
. Number of Countries 32
</TABLE>
* Most current analyst consensus estimates for 1999; the company
does not provide revenue or EBITDA projections.
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Geographically Diversified Service Network
==========================================
[MAP APPEARS HERE]
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Overview of Recent Acquisitions
===============================
<TABLE>
<CAPTION>
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Acquisition Date Value Business Description Rationale
($ mill)
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<S> <C> <C> <C> <C>
Koll Real Estate 8/97 190 Brokerage & Property Management Build market share
Services
Mortgage Banking 2/98-6/98 15 Mortgage banking Expand mortgage banking
Cos. (4)
REI Limited 4/98 104 Full range of real estate services Create international presence
Mathews Click 6/98 12 Brokerage & Property Management Fill out U.S. network
Hillier Parker 7/98 97 Full range of real estate services Establish United Kingdom
presence
Canada 9/98 14 Brokerage & Property Management Consolidate ownership
Australia 10/98 22 Brokerage & Property Management Consolidate ownership
PROFI 2/99 5 Brokerage & Corporate Services Fill out global network
Ikoma 4/99 JV Brokerage, Property Management & Fill out global network
Consulting Services
----
Total $459
</TABLE>
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Involvement in All Phases of Real
Estate Investment Cycle
=================================
[DIAGRAM APPEARS HERE]
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Activity Levels
===============
<TABLE>
<CAPTION>
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Activity Volume/Size Run Rate
Revenue
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<S> <C> <C>
Brokerage *28,800 transactions per year $650
Investment Sales *1,600 transactions a year 190
*$14.6 billion in value
Asset Services *312 million sq. ft. under management 86
Valuation *13,000 appraisals yearly 75
Corporate Services *120 million sq. ft. under management 75
Investment Advising *$7.0 billion under management 60
*$1.2 billion in transactions annually
Mortgage Banking *$7.0 billion in originations 50
*$10.7 billion in servicing
Market Research *2,500 subscribers 12
Real Estate Mutual Funds *$600M under management 2
------
$1,200
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</TABLE>
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Key Business Drivers
====================
. Increasing globalization
. Industry consolidation
. Institutional ownership and corporate outsourcing trends
. Application of technology
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Business Strategy
=================
. Complete development and integration of global service network
. Acquire strategic businesses
. Leverage competitive advantages
- One-stop shopping
- Brand equity
- Diversified geographic service network
- Unparalleled market research
. Continue to invest in technology and personnel
[LOGO OF CB RICHARD ELLIS]
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Intermediate Term Targets
=========================
. Increase organic revenue and operating margins by at least 10%
. Generate organic EBITDA growth of at least 12%
. Target net debt reductions of at least $100 million
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Overview of Business
Segments
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Business Segments
=================
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Brokerage Represent owners and occupiers in the sale and lease of real
Services estate
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Financial Strategic planning and execution of acquisitions and sales of
Services investment properties; mortgage banking; investment advice;
valuation and appraisal; and research
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Asset Represent owners of real estate and maximize the value of income
Services producing properties through leasing and property management
services
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Corporate Assist corporations in their multiple-market real estate
Services strategies with strategic planning, transaction management
and facilities management services
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[LOGO OF CB RICHARD ELLIS]
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Strong Market Share Position
============================
Global Rankings
---------------
Brokerage Services -- #1
Financial Services -- Top 5
Asset Services -- Top 3
Corporate Services -- Top 3
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Brokerage Services
==================
Competitive Strengths
. Continuous service since 1906
. Professional workforce of 2,200 brokers with highest average tenure in the
industry
. 28,800 transactions in 1998 resulted in real-time, qualitative market
evaluations
. Global network promotes efficient and broad service distribution and
intelligence gathering
. Strategic use of web-based technology
Strategies
. Integrate service lines to increase market share
. Increase producer productivity by over 10%
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Financial Services
==================
Competitive Strengths
. 1,600 investment property transactions worth $14.6 billion
. $7.0 billion of commercial mortgage originations in 1998
. $7.0 billion of advisory/investment assets under management
. Leading market research and valuation services firm
Strategies
. Continue domination of investment properties market through internet
applications for market distribution
. Expand mortgage origination capabilities
. Automate the valuation process
. Expand co-investment activities
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Asset Services
==============
Competitive Strengths
. Manage 312 million sq. ft. of commercial space
. 1,000 real estate management specialists
. Recurring revenue and cash flow
Strategies
. Provide an integrated platform of real estate services to clients globally
. Incorporate technology into a service platform to achieve property
efficiencies and global consistency
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Corporate Services
==================
Competitive Strengths
. Manage 120 million sq. ft. of multiple-market facilities
. Long-term contractual relationships with a number of multinational
companies
. Able to leverage information and services from the rest
of the Company
Strategies
. Take advantage of trend towards corporate outsourcing
. Establish long-term relationships with major corporations
. Provide seamless, integrated global set of services
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Financial Information
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Revenue Growth
===============
(in U.S.$ millions)
[GRAPH APPEARS HERE]
(a) Most current analyst consensus estimates; the company does not provide
revenue projections.
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Diverse Revenue Base (a)
========================
[PIE CHART APPEARS HERE]
(a) Based on 1st quarter 1999 actual results
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Revenue by Client Type
======================
[PIE CHART APPEARS HERE]
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EBITDA Growth
==============
(in U.S.$ millions)
[GRAPH APPEARS HERE]
(a) Most current analyst consensus estimates; the company does not provide
EBITDA projections.
[LOGO OF CB RICHARD ELLIS]
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EPS
===
[GRAPH APPEARS HERE]
(a) Adjusted to exclude (1) tax valuation allowance adjustments in 1996;
(2) one-time merger-related and other charges; and (3) the effect of the
deemed dividend associated with the repurchase of convertible preferred
stock in early 1998.
(b) Most current analyst consensus estimates; the company does not provide
earnings projections.
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Revenue by Business Segment
===========================
1998 Revenues = $1,034.5 million
[PIE CHART APPEARS HERE]
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Capital Structure
=================
(in $ millions)
<TABLE>
<CAPTION>
12/31/98 3/31/99
-------- -------
<S> <C> <C>
Revolving Credit Facility 167 226
Other 46 37
New Subordinated Notes 173 173
--- ---
Total Long Term Debt 386 436
Other Long Term Liabilities 67 69
Stockholders Equity 191 185
--- ---
Total Long-term Liab. & Equity 644 690
=== ===
</TABLE>
[LOGO OF CB RICHARD ELLIS]
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Valuation Summary
=================
. Analyst Consensus Estimates for CBG for 1999:
- EPS $ 1.84
- EBITDA $ 151 million
. CBG Compares Favorably to S&P index and to Peers:
<TABLE>
<CAPTION>
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CBG GBE TCC JLL IFS Average S&P 500
--- --- --- --- --- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
P/E* 10.5 10.8 12.7 15.0 21.0 14.0 48.9
Enterprise
Value/EBITDA** 5.2 4.9 6.8 6.7 4.5 5.6 N/A
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</TABLE>
* Based on closing price as of May 21, 1999 and 1999 consensus estimates
reported on First Call.
The company does not provide earnings or EBITDA projections. S&P 500 ratio is
the top-down consensus estimate for 1999 reported on First Call.
** Source: Bank of America Securities
[LOGO OF CB RICHARD ELLIS]
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Summary
=======
. World's largest vertically integrated commercial real estate services
company with a geographically diversified network
. Strong global brand name and leading market share position across all
business segments
. Strong operating performance; strong cash flow growth
. The Real Estate Services sector is a compelling investment opportunity
. CBG is an attractive investment relative to the sector
[LOGO OF CB RICHARD ELLIS]
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[LOGO OF CB RICHARD ELLIS]
(NYSE: CBG)
Bank of America Securities
Property Services Conference
June 1, 1999
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