Jones Lang LaSalle Incorporated

Good morning. At this time, I'd like to welcome everyone to the Jones Lang LaSalle Incorporated second quarter earnings conference call. For your information, this conference call is being recorded. 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. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, press the pound key. Thank you. I would now like to turn the conference over to Chris Stent, Executive Managing Director of Investor Relations. Please go ahead.

Thank you, and good morning. Welcome to our second quarter 2020 conference call for Jones Lang LaSalle Incorporated. Earlier this morning, we issued our earnings release, which is available on the Investor Relations section of our website, along with the slide presentation intended to supplement our prepared remarks. please visit ir.jll.com. During the call, we will reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include reconciliations of non-GAAP financial measures to GAAP in our earnings release and supplemental slides. As a reminder, today's conference call is being webcast live and recorded. A transcript is of this call will also be posted on our website. Any statements made about future results and performance, plans, expectations, and objectives are forward-looking statements. Actual results and performance may differ from those forward-looking statements as a result of factors discussed in the annual report on Form 10-K of the fiscal year ended December 31, 2019, and in other reports filed with the SEC. The company disclaims any undertaking to publicly update or revise any forward-looking statements. I will now turn the call over to Christian Ulbrich, our President and Chief Executive Officer, for opening remarks.

Thank you, Chris. Good morning and welcome to our second quarter call. I'm pleased to welcome Karen Brennan, our newly appointed CFO, to her first earnings call. In addition to Karen, we have Richard Bloxham, CEO Capital Markets and Valuations, as well as Neil Murray, CEO of our Corporate Solutions business, with us for the Q&A portion of the call. On behalf of everyone at JLL, we would like to extend our appreciation to Stephanie Plains for her service as CFO. We wish Stephanie all the best in her next chapter. When we spoke on the first quarter earnings call, the COVID-19 pandemic had proliferated across the world, leaving many wondering how to successfully operate in a lockdown environment. With the experience of the second quarter behind us, I'm very encouraged by JLL's ability to rapidly respond and adapt to the challenges presented. We concentrated our focus on three priorities in the second quarter. First, the safety and well-being of our employees. Second, our clients. And third, cash management. With respect to our clients, our teams have been available during all phases of the lockdown, brilliantly advising and supporting them on best practices and procedures to ensure that their workspaces meet the safety standards and social distancing guidelines necessary for their employees to feel comfortable with reentry. In addition, we are providing clients with thoughtful advice about how we will all need to rethink the function and design of commercial real estate in a post-pandemic future. On a personal note, I can tell you that I have never received so many thank you letters from clients before for all the great work our JLL colleagues have been doing. As I remarked during the first quarter's earnings call, These are the times where we are positioned to gain market share because the outstanding culture of JLL, the team spirit, and the ethics are highly valued by our clients. Moving on to cash management, the entire organization showed tremendous discipline. We responded early by lowering costs and reducing non-crucial investments, applying for government support programs to prevent extensive job cuts, and collecting our receivables in a very efficient manner. All of these actions executed by our management teams led to record cash generation in the second quarter. It is important to note that we balanced our spend reduction without compromising our long-term growth potential. Turning to the overall second quarter operating environment, the backdrop was obviously not favorable. Macroeconomic and real estate fundamentals illustrate the effects of the pandemic as signs of global declining economic activity, intensified throughout the majority of the second quarter, indicating the world is facing a deep recession. In the office leasing market, volumes were down 60% for the quarter, with decreases across all regions. I will turn now to the discussion of our second quarter financial performance. Consolidated revenue fell 13% to 3.7 billion and fee revenue declined 22% to 1.2 billion in local currency. Adjusted net income totaled 37 million for the quarter and adjusted diluted earnings per share totaled 71 cents. Leasing and capital markets were the most severely impacted service lines. as the pace of transactional activity slowed as investors were sidelined due to travel restrictions, mounting uncertainty, and rising economic headwinds. Activity in April and May was ahead of our expectations, driven by a strong pre-COVID pipeline, though the pace slowed in June. Corporate solutions continued to show its resiliency as a scaled global platform, posting a modest 2% decline for the quarter. The facility management business performed especially well. In addition to delivering on our long-term contracts, we were able to offer newly designed products to help our clients mitigate the impacts from the pandemic on the usage of their real estate footprint. Our mobile engineering business in the United Kingdom and parts of our interior fit-out business in Europe were the most impacted by the site closures and lockdowns. resulting in the overall modest revenue decline in corporate solutions. Turning to HFF, I'm happy to report that we have successfully integrated HFF into the JLL platform. Since the acquisition closed, we realized 28 million of synergies in line with our 12-month target. The lockdown environment has helped to significantly accelerate the integration of HFF. Our teams have been focused on identifying cross-selling opportunities, learning from each other, and enhancing our superior technology platform. We continue to be bullish on the strategic rationale of the transaction, the potential for even more meaningful cross-selling opportunities, and our glide path to establishing the premier capital markets platform within the industry. Now we will hear from Karen Brennan for more detail on the second quarter results.