JLL’s global executive board have slashed their salaries in half for the rest of the year as the company prepares for “a negative impact to our topline, bottom line and free cash flow” while the effects of Covid-19 rage on.
In the agent’s earnings call on its Q1 results, JLL president and CEO Christian Ulbrich said that the impact of the pandemic “has truly been profound” and that the crisis will have “significant repercussions on the global economy and on our industry, which will go well beyond this year”.
He outlined the company’s approach to weathering the crisis and how the company will bolster itself against the fallout of Covid-19.
“We expect a negative impact to our topline, bottom line and free cash flow across all operating segments for the full year as the pandemic unfolds,” he said. “Our strategic priority for the fiscal year is to focus on liquidity, cash flow and prudently manage our operating and investment spend to ensure we have the operating flexibility to effectively navigate through this crisis.”
As well as JLL’s executive global board leaders agreeing to cut their pay in half, Ulbrich said senior leaders around the world had “capped or deferred parts of their base compensation”.
Dividend payments to shareholders have been suspended “until we have better visibility on how the world, our clients and therefore our business will be impacted”, Ulbrich said.
He added that although 2020 will be a “challenging year” and that “recovery might take longer than many would like”, he remained bullish on the agent’s ability to weather the storm.
“We remain confident in the strength and resiliency of the JLL platform and our ability to manage effectively in an environment built with uncertainty.”
To help clients navigate through coronavirus disruption, Ulbrich said the company has launched 22 new products, as well as playing a role in creating temporary hospital facilities and identifying warehouse space for storing medical supplies and equipment as part of the Covid-19 response.
JLL posted yesterday that coronavirus had dented its Asia Pacific business performance over the course of Q1 2020.
In its financial results for the three months ending 31 March, the agent said its Asia Pacific business “realised the most notable impact” from coronavirus.
Revenue in the region was $712.1m (£576.3m), compared with $748.7m in the same period of 2019, and fee revenue fell to $177.7m compared with $198.2m.
However, adjusted EBITDA increased to $9.4m from $7.3m a year ago, as a result of $5.4m of grants and subsidies from government relief programmes as well as “the impact of cost mitigation plans”.
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