JLL has reported declines in its EMEA revenues and earnings for its third quarter, as the pandemic continues to disrupt its transactions-based service lines.
EMEA revenues dropped 17% to $743.8m compared with Q3 2019, while fee revenue fell 22% to $324.6m. Adjusted EBITDA tumbled 66% to $7.7m, from $24.6m last year.
The agent highlighted that the UK, Germany and France were among the markets taking the biggest hits on deals-based revenues.
The EMEA division also posted a 23% decline in property and facility management fee revenues.
This was attributed to an $11m reduction in its UK mobile engineering business, as well as the absence of about $9m of prior-year revenues relating to continental European property management businesses that were sold late last year.
Outside of this, property and facility management was credited as a “steady” performer for the wider business, boosted in particular by the US arm’s corporate solutions and property management teams.
At wider group level, the firm’s consolidated revenue declined by 12% to nearly $4bn, down on $4.5bn in the previous year. Fee revenue slid by 23% to $1.4bn, while adjusted EBITDA was down 19% to $243.6m.
To mitigate the disruption caused by the Covid-19 crisis, JLL reduced its fixed costs – namely compensation and benefits expenses – by around $135m on an annualised basis.
JLL also pointed to nearly $120m in additional, non-permanent cost savings this quarter, including $34m related to government relief programmes around the world. It said these savings represent costs that are “likely to return in future periods as business volumes recover”.
Total net debt stood at $752m at the end of September, roughly halving from $1.5bn in the previous year. It has fully repaid the debt relating to its acquisition of capital markets firm HFF last year.
Around 258,000 shares were repurchased for $25m during the quarter.
Christian Ulbrich, chief executive of JLL, pointed to meaningful growth during the quarter when compared with Q2 this year.
“Leveraging our platform investments, we further enhanced our suite of products and services while driving new efficiencies and lowering our cost base,” he said.
“This allowed us to generate strong cash flow to repay HFF acquisition-related debt within just five quarters and resume share repurchases.”
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