Cushman & Wakefield plc

Welcome to the Cushman and Wakefield Third Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. It is now my pleasure to introduce Megan McGrath, Head of Investor Relations for Cushman & Wakefield. Ms. McGrath, you may begin the conference.

Thank you, and welcome to Cushman & Wakefield's third quarter 2023 earnings conference call. Earlier today, we issued a press release announcing our financial results for the period. This release, along with today's presentation, can be found on our Investor Relations website at ir.cushmanwakefield.com. Please turn to the page in our presentation labeled Cautionary Note on Forward-looking Statements. Today's presentation contains forward-looking statements based on our current forecasts and estimates of future events. These statements should be considered estimates only, and actual results may differ materially. During today's call, we will refer to non-GAAP financial measures as outlined by SEC guidelines. Reconciliations of GAAP to non-GAAP financial measures, definitions of non-GAAP financial measures, and other related information are found within the financial tables of our earnings release and the appendix of today's presentation. Also, please note that throughout the presentation, comparisons and growth rates are to the comparable periods of 2022 and in local currency unless otherwise stated. And with that, I'd like to turn the call over to our CEO, Michelle McKay.

Thank you, Megan, and thank you, everyone, for joining us this afternoon. I'm excited to kick off my second earnings call as CEO. Before we get into the numbers, I've often been asked what differentiates me as a leader, and the answer is simple. I have a bias to action, and you can see that in what we've accomplished during the third quarter. We made significant progress transforming our capital stack as we refinanced $1.4 billion of our 2025 term loan. This initial move has pushed out our maturities and will reduce the company's leverage by approximately $200 million in 2025. There was strong interest in the offering. It was well oversubscribed with more than 100 lenders in our term loan and more than 125 lenders in our bonds. Additionally, we are ahead of schedule on our $130 million cost-out target for this year. The strong execution contributed to the sequential increase in our Q3 adjusted EBITDA margin of 9.4%. Our Q3 adjusted EBITDA performance of $150 million outpaced our Q2 performance despite softening market conditions as we continue to make choices that are in the company's long-term interest, regardless of the macro environment. It's true, uncertainties remain, and we saw the transaction markets take another pause in mid-August when rates moved higher. But even as transactional markets were idle during the quarter, we were not. We stayed focused, taking the deliberate actions I just discussed to improve our balance sheet and reduce our cost structure. What's really clear is that we have the right people, processes, and capabilities to deliver for our clients, employees, and investors. We've done the things that we need to do to stabilize the business, which puts us in the seat to make prudent and disciplined investments to ensure that we can capitalize on opportunities as they arise for the future. Now, let me share some more detail on where we are in our strategic review and, more importantly, our go-forward strategy. As I previewed on our last earnings call, over the past several months, we have completed a very thorough assessment of our business segments, including detailed financial and capital allocation reviews, rigorous scenario planning, and long-term secular and industry analysis. These activities were part of a strategic roadmap we have created, and I'll share a bit more of that roadmap with you today. The debt financing cost-out efforts and strategic reviews that we executed on during the third quarter comprised of the first phase of our strategic roadmap, strengthening our core. I feel very good about what we've accomplished in a very short period of time, enabling us to move to the next stage, creating flexibility and optionality. This means putting our company in the best possible position, both operationally and from a balance sheet perspective, to make investments at the right time in the cycle. To this end, we are focused on reducing our absolute level of leverage. As I noted earlier, we announced our intention to pay down the remaining balance of the term loan of $193 million, and we are developing a plan for further incremental debt reduction over the next several years. At the same time, we will also invest in compelling organic growth opportunities in both services and brokerage. As part of this plan, we remain committed to hiring and retaining with the ability to flex our spending as appropriate. This will help ensure we're properly staffed both now and as the markets recover so that we capitalize on future growth opportunities. We expect to achieve these balance sheet and investment goals by improving our internally generated free cash flow, which Neil will expand on in a moment, and by identifying and monetizing small non-core assets. We believe that this sharpened focus on the optimal balance between reducing debt and accelerating growth will be a long-term driver for shareholder value. The final stage in our roadmap is all about sustainable long-term growth. We intend to achieve this by continuing to diversify our revenue and drive market share gains through a differentiated, agile, and client-centric strategy. This means further partnering with our clients to help drive their business forward. We're not just hiring brokers, but arming these brokers with proprietary data, analytics, and insights. One example of how we've recently levered the power of the Cushman platform is a mandate that we've won with a large global EV company by creating a cross-functional team from advisory services, technology, and business development. We brought the client a bespoke solution informed by our unique expertise and perspective and the knowledge of a full spectrum of professionals. When we do that, I'll bet on our team against anyone else's. We are also using our analytical capabilities to develop a view on where this company and our clients should be positioned 5, 10, and even 20 years down the road. We are looking closely at megatrends in the built world, factors such as technology, urbanization, geopolitics, climate change, and demographics, and layering these megatrends into distinct real estate subsectors across the stages of a typical real estate cycle. This helps us to understand where in each cycle each sector sits and identify segments that we believe will be disproportionately benefited in terms of both growth and resiliency. This valuable proprietary analysis led by our independent research team is only one example of how we are positioning the company to be opportunistic while continuing to provide independent, data-driven, and highly tailored advice and solutions for our clients. It's clear to me the companies who will win in today's complex, built world are those that can provide owners and occupiers expert, data-driven advice and solutions, as well as flawless execution. Our best-in-class analytics and the strength of our newly integrated team positions us not only to uniquely meet that need, but also to gain share in a highly fragmented market. As you can see, over the past several months, we have made significant strides in fine-tuning and beginning to execute on our plan. We are pushing hard to create a more agile, resilient, and efficient Cushman & Wakefield that anticipates market trends and captures first mover advantage where and when it really matters. We will share more details each quarter as we pursue these goals. I view this process as an ongoing evolution of the company as we solidify our position as the premier global advisor in the built world. And as I finish, I'd like to thank all of our employees for their continued hard work as we navigate through this uncertain operational environment. You impress me every day with your drive and dedication to go the extra mile for our clients. And now, I'd like to hand the call over to Neil for a review of our third quarter financial results.