Diluted earnings per share were $1.37, up from a loss of $0.19 last year; adjusted diluted earnings per share1 were $1.78, up from $0.71 CHICAGO, May 6, 2024 /PRNewswire/ -- Jones Lang LaSalle Incorporated (NYSE:JLL) today reported operating performance for the first quarter of 2024. Modestly higher Transactional revenues, following a softer 2023, complemented continued Resilient business line revenue growth and the benefits of cost mitigation actions taken over the last twelve months to drive strong profit performance. First-quarter revenue was $5.1 billion, up 9% in local currency1 Resilient6 revenues collectively increased 12% in local currency and Transactional6 revenues collectively increased 1% in local currency Work Dynamics achieved double-digit growth, highlighted by continued momentum in Workplace Management from recent wins Property Management, within Markets Advisory, increased 8% with contributions from most geographies Capital Markets delivered broad-based growth, up 6%, despite first-quarter investment sales market volumes being at a 12-year low Leasing, within Markets Advisory, increased 2% as performance in the U.S. office sector outpaced declines in other regions and sectors Bottom-line improvement reflected revenue growth and the benefit of cost mitigation actions "JLL's strong start to 2024 was driven by growth in both our resilient and transactional business lines. In addition, the impact of our cost actions over the last year allowed us to meaningfully improve our profitability while still investing in our business to take advantage of growth opportunities ahead," said Christian Ulbrich, JLL CEO. "With an uncertain outlook, our clients are relying on JLL's advisory services, data capabilities and real estate expertise more than ever. We continue to execute on our strategy, focusing on helping our clients navigate a difficult commercial real estate environment and delivering value for our stakeholders." Summary Financial Results  ($ in millions, except per share data, "LC" = local currency) Three Months Ended March 31, 2024 2023 % Change in USD % Change in LC Revenue $                              5,124.5 $                              4,715.5 9 % 9 % Net income (loss) attributable to common shareholders $                                   66.1 $                                   (9.2) 818 % 883 % Adjusted net income attributable to common shareholders1 86.0 34.2 151 167 Diluted earnings (loss) per share $                                   1.37 $                                 (0.19) 821 % 871 % Adjusted diluted earnings per share1 1.78 0.71 151 168 Adjusted EBITDA1 $                                 187.1 $                                 112.9 66 % 70 % Cash flows from operating activities $                               (677.5) $                               (716.3) 5 % n/a Free Cash Flow5 (720.7) (765.6) 6 n/a Note: For discussion and reconciliation of non-GAAP financial measures, see the Notes following the Financial Statements in this news release.   Consolidated First-Quarter 2024 Performance Highlights: Consolidated   ($ in millions, "LC" = local currency) Three Months Ended March 31, % Change in USD % Change in LC 2024 2023 Markets Advisory $                              950.1 $                              906.4 5 % 5 % Capital Markets 377.6 357.1 6 6 Work Dynamics 3,639.5 3,276.2 11 11 JLL Technologies 53.9 61.4 (12) (12) LaSalle 103.4 114.4 (10) (8) Total revenue $                           5,124.5 $                           4,715.5 9 % 9 % Gross contract costs5 $                           3,498.7 $                           3,133.3 12 % 12 % Platform operating expenses 1,509.9 1,528.7 (1) (1) Restructuring and acquisition charges4 1.7 35.7 (95) (96) Total operating expenses $                           5,010.3 $                           4,697.7 7 % 7 % Net non-cash MSR and mortgage banking derivative activity1 $                                (9.0) $                                (1.8) (400) % (405) % Adjusted EBITDA1 $                              187.1 $                              112.9 66 % 70 % Note: For discussion and reconciliation of non-GAAP financial measures, see the Notes following the Financial Statements in this news release. Percentage variances in the Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted. Revenue Revenue increased 9% compared with the prior-year quarter. Businesses with Resilient revenues continued to deliver strong revenue growth, collectively up 12%, highlighted by Workplace Management, within Work Dynamics, up 15%, and Property Management, within Markets Advisory, up 8%. Transactional-revenue businesses were collectively up just over 1% as economic uncertainty and the current interest rate environment continued to weigh on client decision making. Transaction performance was led by Investment Sales, Debt/Equity Advisory and Other, within Capital Markets, which grew 8%. Refer to segment performance highlights for additional detail. The following chart reflects changes in revenue ($ in millions), and percentage changes, for the first quarter of 2024 compared with 2023. Net income and Adjusted EBITDA Net income attributable to common shareholders for the first quarter was $66.1 million, compared with a loss of $9.2 million in 2023, and Adjusted EBITDA was $187.1 million, compared with $112.9 million last year. Diluted earnings per share for the first quarter were $1.37 compared with diluted loss per share of $0.19 in the prior year. Adjusted diluted earnings per share were $1.78 for the first quarter compared with $0.71 in 2023. The effective tax rates for the first quarters of 2024 and 2023 were 19.5% and 20.9%, respectively. Refer to Note 4 in the footnotes following the financial statements for detail on the lower restructuring and acquisition charges. The growth in consolidated profit was primarily attributable to (i) higher revenues, particularly Resilient revenues as well as certain Transactional revenue streams like investment sales within Capital Markets, and (ii) the benefit of cost reduction actions executed in the last twelve months coupled with continued cost discipline. The following chart reflects the aggregation of segment Adjusted EBITDA for the first quarter of 2024 and 2023. Cash Flows and Capital Allocation: Net cash used in operating activities was $677.5 million for the first quarter of 2024, compared with $716.3 million in the prior-year quarter. Free Cash Flow5 was an outflow of $720.7 million this quarter, compared with an outflow of $765.6 million in the prior year. The year-over-year improvement was primarily due to an increase in cash provided by earnings driven by improved business performance. In the first quarter of 2024, the company repurchased 110,726 shares for $20.1 million. There were no share repurchases in the first quarter of 2023. As of March 31, 2024, $1,073.5 million remained authorized for repurchase. Net Debt, Leverage and Liquidity5: March 31, 2024 December 31, 2023 March 31, 2023 Total Net Debt (in millions) $                         1,900.8 1,150.3 2,099.3 Net Leverage Ratio 1.9x 1.2x 2.0x Corporate Liquidity (in millions) $                         2,301.7 3,085.0 1,735.4 The increase in Net Debt from December 31, 2023, reflected typical seasonality and was primarily attributable to annual incentive compensation payments made in the first quarter. The Net Debt reduction from March 31, 2023, was largely attributable to improved cash flows from operations over the trailing twelve months ended March 31, 2024, compared with the twelve-month period ended March 31, 2023.   Markets Advisory First-Quarter 2024 Performance Highlights: Markets Advisory   ($ in millions, "LC" = local currency) Three Months Ended March 31, % Change in USD % Change in LC 2024 2023 Revenue $                              950.1 $                              906.4 5 % 5 % Leasing 497.3 487.0 2 2 Property Management 429.7 400.2 7 8 Advisory, Consulting and Other 23.1 19.2 20 20 Segment operating expenses $                              871.7 $                              850.8 2 % 3 % Segment platform operating expenses 566.8 571.7 (1) (1) Gross contract costs5 304.9 279.1 9 10 Adjusted EBITDA1 $                                95.3 $                                71.6 33 % 33 % Note: For discussion and reconciliation of non-GAAP financial measures, see the Notes following the Financial Statements in this news release. Percentage variances in the Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted. Markets Advisory revenue growth was largely driven by Property Management and a mid-single digit increase in U.S. Leasing revenue. Higher Property Management revenue was primarily attributable to portfolio expansions in the U.S., UK and Canada, including incremental revenue associated with pass-through expenses. U.S. Leasing growth, which follows a softer prior-year quarter, was led by the office sector, which saw increased deal size and transaction volumes. The current quarter growth in U.S. office was partially offset by industrial, globally, where deal size decreased. Consistent with the trend from recent quarters, economic uncertainty has delayed commercial real estate decision making, particularly for large-scale leasing actions where JLL has a greater presence. The Adjusted EBITDA increase was predominantly driven by revenue growth and the continued impact of cost management actions taken in the last twelve months. Capital Markets First-Quarter 2024 Performance Highlights: Capital Markets   ($ in millions, "LC" = local currency) Three Months Ended March 31, % Change in USD % Change in LC 2024 2023 Revenue $                              377.6 $                              357.1 6 % 6 % Investment Sales, Debt/Equity Advisory and Other 258.7 240.6 8 8 Value and Risk Advisory 80.2 79.1 1 2 Loan Servicing 38.7 37.4 3 3 Segment operating expenses $                              378.4 $                              365.2 4 % 4 % Segment platform operating expenses 364.8 355.9 3 3 Gross contract costs5 13.6 9.3 46 50 Net non-cash MSR and mortgage banking derivative activity1 $                                 (9.0) $                                 (1.8) (400) % (405) % Adjusted EBITDA1 $                                25.0 $                                10.7 134 % 145 % Note: For discussion and reconciliation of non-GAAP financial measures, see the Notes following the Financial Statements in this news release. Percentage variances in the Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted. Capital Markets revenue increased across all business lines though market uncertainty persisted, especially around the future of interest rates. Investment Sales and Debt/Equity Advisory revenue increased compared to the prior-year quarter across most asset classes, with strength in Japan and Germany, most notably office. Investment Sales and Debt/Equity Advisory growth in the U.S. was low single digits but outperformed the broader market for investment sales, which declined 12% according to JLL Research. The Adjusted EBITDA improvement was largely attributable to the revenue growth described above and the benefit associated with cost management actions taken over the trailing twelve months. These drivers overcame $5.7 million of headwind attributable to the year-over-year non-cash change in loan loss credit reserves as the slight increase to the reserve this quarter followed a decrease to the reserve last year. Work Dynamics First-Quarter 2024 Performance Highlights: Work Dynamics   ($ in millions, "LC" = local currency) Three Months Ended March 31, % Change in USD % Change in LC 2024 2023 Revenue $                           3,639.5 $                           3,276.2 11 % 11 % Workplace Management 2,871.7 2,497.2 15 15 Project Management 656.4 676.3 (3) (3) Portfolio Services and Other 111.4 102.7 8 8 Segment operating expenses $                           3,610.4 $                           3,270.0 10 % 10 % Segment platform operating expenses 439.8 435.8 1 1 Gross contract costs5 3,170.6 2,834.2 12 12 Adjusted EBITDA1 $                                50.9 $                                25.7 98 % 102 % Note: For discussion and reconciliation of non-GAAP financial measures, see the Notes following the Financial Statements in this news release. Percentage variances in the Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted. Work Dynamics revenue growth was led by continued strong performance in Workplace Management, as 2023 contract wins and mandate expansions in the Americas further ramped up this quarter. This was partially offset by Project Management, where lower pass-through costs drove the decrease in revenue while management fees were flat. In addition, the quantum of new project contracts reflected softer leasing activity in 2023. The increase in Adjusted EBITDA was primarily attributable to the (i) top-line performance described above, most notably from Workplace Management, (ii) the absence of $9 million of Tetris contract losses recognized in 2023, and (iii) continued cost discipline. JLL Technologies First-Quarter 2024 Performance Highlights: JLL Technologies   ($ in millions, "LC" = local currency) Three Months Ended March 31, % Change in USD % Change in LC 2024 2023 Revenue $                                53.9 $                                61.4 (12) % (12) % Segment operating expenses $                                63.5 $                                83.5 (24) % (24) % Segment platform operating expenses(a) 62.3 79.9 (22) (22) Gross contract costs5 1.2 3.6 (67) (68) Adjusted EBITDA1 $                                 (5.1) $                              (18.2) 72 % 73 % Note: For discussion and reconciliation of non-GAAP financial measures, see the Notes following the Financial Statements in this news release. Percentage variances in the Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted. (a) Included in Segment platform operating expenses is a reduction in carried interest expense of $0.1 million for the first quarter of 2024 and carried interest expense of $0.7 million for the first quarter of 2023 related to Equity (losses) earnings of the segment.   The decline in JLL Technologies revenue was partially due to 2023 cost-out activities in the business's go-to-market approach aimed at improving profitability and resulted in lower contract signings in the second half of 2023. In addition, the lower revenue reflected delayed decisions on technology spend from existing solutions clients, which included certain contract renewals. The improvement in Adjusted EBITDA was driven by the reduction of certain expenses associated with cost management actions and improved operating efficiency over the trailing twelve months, which outpaced the impact of lower revenue. LaSalle First-Quarter 2024 Performance Highlights: LaSalle   ($ in millions, "LC" = local currency) Three Months Ended March 31, % Change in USD % Change in LC 2024 2023 Revenue $                              103.4 $                              114.4 (10) % (8) % Advisory fees 92.3 100.5 (8) (7) Transaction fees and other 8.9 10.4 (14) (10) Incentive fees 2.2 3.5 (37) (38) Segment operating expenses $                                84.6 $                                92.5 (9) % (9) % Segment platform operating expenses 76.2 85.4 (11) (11) Gross contract costs5 8.4 7.1 18 19 Adjusted EBITDA1 $                                21.0 $                                23.1 (9) % (2) % Note: For discussion and reconciliation of non-GAAP financial measures, see the Notes following the Financial Statements in this news release. Percentage variances in the Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted. LaSalle's decrease in revenue was primarily due to lower advisory fees, attributable to (i) valuation declines in assets under management ("AUM"), particularly in North America and (ii) lower fees in Europe as a result of structural changes to a lower-margin business. Transaction fees and incentive fees reflected the on-going global trend of dampened investment sales transaction volumes. The slight decline in Adjusted EBITDA reflected lower revenues which were nearly offset by the benefit of cost management actions over the last twelve months and lower variable compensation accruals. As of March 31, 2024, LaSalle had $89.7 billion of AUM. Compared with AUM of $93.5 billion as of March 31, 2023, the AUM as of March 31, 2024, decreased 4% in USD (3% in local currency). The net decrease in AUM over the trailing twelve months resulted from (i) $4.4 billion of ...