Savills H1 2026 Earnings Report

Savills EPS Results

• Actual EPS: GBX 17.90
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Savills Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Savills Announcement Details

• Quarter: H1 2026
• Date: 8/13/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, August 13, 2026
• Conference Call Time: 4:00AM ET

Founded in the UK in 1855, Savills (LON:SVS) is one of the world's leading property agents. Our experience and expertise spans the globe, with 600 offices across the Americas, Europe, Asia Pacific, Africa and the Middle East. Our scale gives us wide-ranging specialist and local knowledge, and we take pride in providing best-in-class advice as we help individuals, businesses and institutions make better property decisions.

Savills H1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong first-half performance: Revenue rose 8.7% to more than £1.2 billion, underlying EBITDA increased 32% to nearly £74 million, and underlying PBT climbed 47% to £34.3 million, supported by market-share gains, improving transaction volumes and cost savings.
• Positive Sentiment: Transactional revenues increased 14%, led by 22% growth in capital transactions and 23% growth in occupier advisory, particularly in North America. Savills said its U.K. capital transactions revenue rose 17% despite a 12% market decline, indicating significant market-share gains.
• Positive Sentiment: The completed Eastdil Secured acquisition is expected to be earnings-enhancing and materially improve Savills’ exposure to the U.S. market. On a pro forma basis, combining first-half results would have increased underlying PBT by £21 million, or 60%, before synergies.
• Negative Sentiment: U.K. residential remained challenging, with revenue down 9% and profits falling to £2.1 million, primarily because of the one-time revenue-recognition impact of the Renters’ Rights Act. Management expects the market to remain needs-based until greater policy clarity emerges.
• Neutral Sentiment: Management maintained its full-year 2026 expectations, citing strong pipelines and resilient less-transactional businesses, while cautioning that the timing of transaction completions remains difficult to predict. Restructuring and Eastdil-related integration costs are expected to remain elevated in the second half, while net debt to EBITDA is targeted at 1.5x or less by year-end.

Presentation

[Simon Shaw, Group CEO at Savills]

I'll take you through the highlights of our performance during the first half. Nick will take you through the financial higher details. I also want to spend a little time looking at the context for our performance, which you'll see in a moment is very important. I'll then remind you of the strategy which we talked about back in March, together with some of the steps we've taken, both in business development, standalone at Savills, but also with Eastdil Secured Savills. Then we'll try and do a bit of crystal ball gazing for 2026 as a whole. Let's crack on. This is a very strong set of results in conditions that were far from easy in many of the markets in which we operate. I'm particularly delighted with them.

[Simon Shaw, Group CEO at Savills]

You can see from the charts on the right of this slide that all the major metrics are moving in the right direction. This is essentially driven by three factors. First of all, our transactional business generally improving, which was, and I'm particularly glad to see, significantly assisted by a strong performance in our North American occupier-facing leasing market. Our capital transaction business also significantly improved, despite the fact, and this is important you'll see in a minute, that we had very little exposure to the driver of world capital transaction volumes in the U.S. market during the period. Secondly, our less transactional business grew as we anticipated, and you'll see later on with significant improvement to the bottom line. Finally, and these two are connected actually, we started to see the benefits of our cost-saving initiatives of last year.

[Simon Shaw, Group CEO at Savills]

We've also worked hard to broaden and deepen our bench during this period with some key recruitment and team loads. Of course, Eastdil Secured Savills joined the group at the 31st of July, just two weeks ago. Frankly, we're both delighted now to be able to get on with business. You'll see later that they actually unsurprisingly, had a very strong first half too, and I'll talk a bit about what we're doing in terms of integration, et cetera, with them. Finally, on this slide, reflecting our confidence and the normal operation of our ordinary dividend, we've declared an interim dividend of 7.8p up 5.5% or so year on year. Let's start by looking at the capital market context for our performance. What these charts show is the 12-month rolling investment market volumes quarter by quarter since 2020.

[Simon Shaw, Group CEO at Savills]

The reason we do that, it's the best way to minimize background noise and seasonality from the data. What you'll see during the last six months from the top left is that global volumes were recovering nicely, up 18% half year on half year. If you look to the top right, you can see that the U.S. market has driven that global growth. You'll have also picked that up from the results of our peer group companies with large exposure to the U.S. over the last couple of weeks or so. Bear in mind that the U.S. capital market represented 60% of global volumes, and it grew by 24% half year on half year. Remember, we had next to no exposure to that market during the first half of 2026. Thankfully, we've got Eastdil in the hutch now.

[Simon Shaw, Group CEO at Savills]

APAC and EMEIA were markets that performed slightly differently, and they are markets where our traditional investment agency strength lies. What you see from the bottom left is APAC coming back nicely but from a low base. Critically, sentiment in EMEIA, really for obvious reasons, was affected by its nature as the most hydrocarbon import-dependent market on the planet for obvious reasons that caused a lot of issues over the course of this period. The three conclusions to draw from this slide are that, number one, market share gains in our markets outside the U.S. has enabled us to perform as well as we did do during the first half in some difficult conditions. Number two, it is self-evident why we desired the quality exposure to the U.S. that Eastdil Secured Savills provides us.

[Simon Shaw, Group CEO at Savills]

Finally, this is an implication rather than overt on the slide, the resilience and profitable growth of our less transactional business has been and will remain hugely important to the performance of our organization overall, both in terms of our client service and our financial performance. With that in mind, let us have a quick look at the revenue highlights. In these couple of slides, I am going to focus on revenue. Nick will talk you through profitability, but you will see that every business line has improved during this period on the bottom line. Across the board in our transactional business, it is a story of gains in market share, enabling us to perform as we have and show the growth in revenues that we have. We start with the commercial transaction business.

[Simon Shaw, Group CEO at Savills]

Revenue is up 19% overall, with capital transactions up 22%, well ahead of market in what was described in Q2 as a delayed, not destroyed, continuation of recovery in EMEIA in particular. Of note was U.K. growth of 17% against a market where volumes actually declined by 12%, half year on half year. Very strong performance. In APAC, it was again a market share story, with our business development activities of last year starting to come good in Australia during the ramp-up phase, and importantly, the market in Greater China beginning to turn more positive, again, off a low base. Finally, we saw different levels of market recovery across continental Europe with, broadly speaking, the further south you get, the better, the further north, the more compromised. Our occupier advisory business, particularly in the U.S., was very strong.

[Simon Shaw, Group CEO at Savills]

23% growth in revenues year on year, which is really good to see. Nick will talk a bit more about the profitability improvement in due course. Residential was more mixed. We had revenues up 3% overall, and this is a very good performance in some tricky market conditions. Particularly given the largest part of our residential business, being the U.K., was down 9%, and Nick will talk about the impact of the Renters' Rights Act in a moment, because that is the predominant reason for that decline. The brightest was our secondary sales or conventional estate agency, if you will, where we saw growth of 2%, again, driven against declines in market volumes, but increase in our market share of transactions above GBP 5 million. Finally, the Middle East was up 34% on a very strong first quarter before conflict escalation constrained new development sales from Q2.

[Simon Shaw, Group CEO at Savills]

One thing I will point out here is we've seen no evidence to date of expat repatriation from the region, which is important as we look forward. Let's turn to our less transactional lines. Here you'll see significant, in due course, profit growth from these businesses in a moment. But if we start with PM and FM, we saw revenue growth in line with our long-term expectations of mid to high single digits, and that is net of the impact of last year's restructuring in China, which reduced revenue. For your notes, it's about 170 basis points of reduction in revenue simply through that restructuring, but improved profits. Elsewhere, we're winning new business across EMEIA and in Asia Pacific, and broadening the client offering in Singapore, where we're pushing into government-mandated integrated facilities management contracts, much aided by the acquisition of Alpina in that market last year.

[Simon Shaw, Group CEO at Savills]

MEIT Consultants is a small business, but I put it there and reference it because it brings critical M&E and environmental engineering capability into the data center sector for us in EMEIA. Moving on to our consulting business, it grew revenue by 2%, with strong valuations and building consultancy contributing in EMEIA, and the successful integration of our move and change management business, Hoffman, in the U.S. These were offset at the revenue line by a significant reduction in project management pass-through costs in India. Zero profit impact, but again, another reduction in revenue. And the impact of last year's restructuring in China as well, which had a small impact on the revenue line here. Again, positive impact on profits. I should note that in many of these consultancy lines, we are beginning to benefit significantly from investment in data curation and digitization.

[Simon Shaw, Group CEO at Savills]

Finally, Savills Investment Management grew revenues by 8%, despite a still very challenging capital-raising market across EMEIA. And it was higher transaction fees and asset management fees that drove that growth. We've also made some management changes in there in both Europe and Asia, and now working on the next five-year plan for that business. All in all, our less transactional businesses performed well and really anchored the performance of the group overall. I'll now turn to our newest family member, Eastdil Secured, which obviously didn't affect our performance during this first six months, other than that we had to recognize some of the costs of acquisition before the period end. Their first half momentum, both in revenue and in pipeline, evidence why we are so excited about this combination. The mix of revenue was well-balanced, roughly 60% equity-related, 40% debt-related.

[Simon Shaw, Group CEO at Savills]

I would draw your attention to the fact that actually that debt advisory business is the Eastdil Secured Savills equivalent of the recurring revenue line, which is important to us as we go forward. I'd also draw your attention to the fact, as you see from the chart below, that Eastdil Secured Savills was number one in the U.S. public M&A market advisory league table during this period, which was an exceptional performance in both senses of that word, exceptional. Don't expect that necessarily to continue through the second half, but it's great to see it. And it definitely helped drive their revenue growth in the U.S. up 33%, versus the European revenue growth up a healthy 23% during the period.

[Simon Shaw, Group CEO at Savills]

Obviously, H1 was pre-acquisition, and therefore, doesn't directly benefit Savills shareholders during the period. What I do think it does do, though, is it underpins the rationale structure and ultimately the board decision to go ahead with that transaction when we did. If you hold that thought,

[Simon Shaw, Group CEO at Savills]

I will hand over to Nick to take you through the detail of our finances.

[Nick Sanderson, Group CFO at Savills]

Thank you, Simon. Morning, everyone. As you reckon, Simon, hot summer's day, very impressed to see a few ties in the room, and thankfully no shorts from Clyde. Let's turn to the headline results, where the group has delivered strong earnings growth driven by an increase in revenue along with positive margin progression. Revenue of more than GBP 1.2 billion is up 8.7%, predominantly organically generated, with underlying EBITDA up 32% to almost GBP 74 million. Underlying PBT at GBP 34.3 million is up 47%, or almost 49% on a constant currency basis, delivering underlying EPS of GBP 0.179. This strong EPS growth means the interim dividend has again been increased at a rate well ahead of inflation, with the 5.4% uplift delivering a payout of GBP 0.078 per share.

[Nick Sanderson, Group CFO at Savills]

As you can see, we ended the period with net debt of less than GBP 50 million, although we moved back to a net cash position at the end of July ahead of completion of the Eastdil acquisition. As you heard from Simon, revenue growth was delivered across all Savills' main business areas, including transactional revenues up 14% overall, driven by a strong commercial performance, particularly in North America, offsetting some of the headwinds in EMEIA residential. Less transactional revenues again rose, up 6%. Overall, less transactional revenues of GBP 776 million represented 63% of group total revenues, a critical component of Savills' diversified and well-balanced business model. As you can see bottom right, the consistent revenue growth delivered by the group over the last four years is up by more than 20%.

[Nick Sanderson, Group CFO at Savills]

This strong performance delivered not only revenue growth, but also a significant increase in underlying profit before tax too, which was up 47%. There was a significant reduction in first half losses on the commercial transactional side, driven by improved performances, notably in the U.S., Hong Kong, Germany, Italy, and the U.K. The group also benefited from the inherent operational leverage within the business. Residential advisory activities delivered a profit of GBP 2.1 million. Although this was down from last year, principally due to the one-time negative income recognition effect of the imposition of the Renters' Rights Act in the U.K. First half profits on the less transactional side were up 28% to GBP 42.2 million, with a particularly strong uplift of 74% on the consultancy side, largely resulting from the restructuring activities last year in China and strong progress year to date in North America.

[Nick Sanderson, Group CFO at Savills]

The property and facilities management business delivered another resilient performance, and the group continues to focus on lifting the investment management margin. With first half underlying profits of GBP 34.3 million, you can see in the bar chart that margin growth momentum continues to build across the business, one of the group's key strategic priorities. Equally, this improved level of profit came through across all of the group's regions, with the smallest uplift but highest profits coming from EMEIA, where an improved performance on the continent was largely offset by lower U.K. residential profits. APAC performed strongly, delivering a 75% increase in profit, driven by a strong capital markets performance and cost-saving measures in China. Following our targeted investments in the region, particularly in Australia and Japan, there should be more profit in coming periods.

[Nick Sanderson, Group CFO at Savills]

North America generated a profit of GBP 2.6 million, a positive GBP 9 million swing year-on-year, driven by both our transactional and consultancy activities delivering positive margins. On the occupier leasing side, there was an increase in larger office deals and overall pipelines for the second half are strong across both office and industrial. Pulling this all together with the group's customary reconciliation of underlying profit to IFRS-reported profits. There are two key points to highlight alongside the more detailed reconciliation included in the appendices. Firstly, the GBP 7.2 million of restructuring costs includes the previously guided GBP 3 million overhang from last year's restructuring activities, with the balance linked to the further right-sizing of certain service lines, predominantly in APAC and on the continent.

[Nick Sanderson, Group CFO at Savills]

For the second half, a similar quantum is expected as the group completes its strategic restructuring activities, including some Eastdil-related integration costs, which as you would expect are predominantly in Europe. In total, the full year's restructuring and integration costs are likely to be around half of last year's GBP 30 million charge, and are expected to benefit the group's profits and margin in future years. Secondly, the GBP 13.5 million of transaction costs includes professional advisor fees related to the Eastdil purchase. Following successful closing of the deal, the balance of the advisory costs and fees associated with the acquisition mean group transaction costs are expected to be higher in the second half than the first. Whilst the group's profits are consistently second half weighted, this has been a strong first half for the Savills team, with underlying EPS up 53%.

[Nick Sanderson, Group CFO at Savills]

We are pleased to report the same for our new colleagues at Eastdil Secured Savills too, who had a particularly strong first half. You can see in the second column, Eastdil's H1 revenues were GBP 225 million, the $302 million Simon referred to earlier. This delivered an underlying EBITDA of GBP 38.4 million for the six months, presented on the same U.S. GAAP basis as Eastdil's GBP 84 million EBITDA for the full year 2025 that were disclosed back in March. Further down the page, you can see that this EBITDA of GBP 38.4 million would translate into an illustrative estimated underlying PBT of GBP 37.8 million, or margin of 17%, post conversion to IFRS, and adjusting for depreciation and other items.

[Nick Sanderson, Group CFO at Savills]

This underlying profit is presented on a consistent basis with the Savills standalone underlying PBT, including adjustments for the amortization expense relating to the historic one-time Eastdil SIP put in place in 2025. As disclosed on purchase, the five-year SIP results in a non-cash annual charge of around GBP 30 million, or GBP 15 million for each six months, which will continue to be reflected in reported profits until maturity in 2030. To give you a sense of the pro forma group profitability pre synergies, we have combined the standalone Eastdil and Savills H1 performances, along with the expected initial interest expense associated with the $800 million of acquisition financing, which should of course fall over time as the debt is paid down from free cash flow.

[Nick Sanderson, Group CFO at Savills]

Taken together on a pro forma illustrative basis, the combination would have increased the H1 group UPBT by GBP 21 million to GBP 55 million, an uplift of 60%. This reaffirms the board's view that the combination should not only deliver better client outcomes, but also meaningful earnings accretion and strong returns for shareholders too. Looking ahead to the full year 2026 numbers for the enlarged group, which will include Eastdil's contribution from August through to December. With Eastdil historically having a much less skewed profit weighting to the second half than Savills standalone, current expectations are for a five-month profit contribution to the group, broadly similar to the Eastdil profit performance in the first half. We will, of course, be able to provide actual rather than illustrative financials at year-end, and we will give you clear line of sight of Eastdil's performance, as well as updating our segmental reporting.

[Nick Sanderson, Group CFO at Savills]

Finally from me, the group remains committed to maintaining a strong balance sheet with the cash flow generation of the group, including the underpin from Savills' resilient less transactional earnings, supporting a capital allocation policy of running with some low financial leverage. To facilitate the combination with Eastdil, the team successfully arranged an attractive $800 million bridge facility from existing group lenders. GBP 450 million of this has already been refinanced with a three plus one plus one-year term bank loan, which has pricing and covenants in line with the group's existing main revolving credit facility, which matures in 2030. The remaining GBP 350 million is expected to be refinanced within the next 12 months through the issuance of new fixed coupon, medium-term U.S. private placement notes in a market well known to Savills. These combined U.S. dollar facilities are expected to have an all-in cost between 5.5% and 6%.

[Nick Sanderson, Group CFO at Savills]

Looking ahead, the expected strong cash generation of the enlarged group is set to deliver a net debt to EBITDA of 1.5x or less by year-end 2026, and around 1x at the end of 2027, all else equal. The enlarged group's through-the-year cash flow profile will be similar to Savills' historic profile, so you should continue to see a higher leverage ratio at half year than full year. Taken together, the board remains committed to maintaining the group's strong balance sheet and attractive shareholder distribution policy, while still having some scope to pursue further growth opportunities. Always taking a disciplined approach. With these positive financial results, along with the technical guidance slide included in the appendix, you should hopefully have all the key data points to update your models.

[Nick Sanderson, Group CFO at Savills]

Now back to Simon to talk about strategy.

[Simon Shaw, Group CEO at Savills]

Thank you, Nick. I will not take too long now. Before I get into that, I would just like to reemphasize around the Eastdil Secured transaction, and articulate so clearly and directly how I believe it benefits all the stakeholders of Savills, because I am genuinely confident on all three counts I am about to give you. First of all, and most importantly, the clients. Clients gain a partner who can help them from the very largest, most complex of transaction, down through leasing and other services that we provide to the day-to-day management of their assets and portfolios. Our people benefit from a larger playing field, broader and deeper client relationships, and more opportunity in a genuinely global franchise. And finally, our shareholders gain, as you have heard, an earnings-enhancing transaction that lifts our margin trajectory, provides attractive returns, and strengthens the global position of this group.

[Simon Shaw, Group CEO at Savills]

Let us look at that in the context of what has become affectionately known as the pyramid of promise, which is our strategic slide, because that really is the heart of the story. And you will have seen this in March when I put it up for the first time for you. But if we start at the base of that pyramid, we have always had a focus on building our less transactional business lines around the world. That is property management, facilities management. They represent our constant practical touch point with our clients, and corporately, they act as the keel on the ship in all weathers. We then move up through the pyramid, through investment management, and into the transactional element of our business via consultancy as well. The transactional business element has its own hierarchy of volatility and profitability.

[Simon Shaw, Group CEO at Savills]

If you look at the debt element, as I mentioned earlier, that is much more of a recurring business line, despite it being transactional. And at the apex, M&A and strategic advice is perhaps the most profitable, but also inherently variable. So building on our historic strengths in capital transactions, Eastdil Secured Savills fills out that part of the portfolio of services by enhancing that strategic M&A advisory, portfolio recapitalization, debt and equity capability, and most importantly, at scale, both in EMEIA and in North America. And if you recall my slide right at the beginning, that is really important to us. Overall, as I have just said, the combination dramatically increases our ability to serve our clients from the discrete conversation in the boardroom, down through the execution of real estate transactions into the day-to-day management of underlying real estate portfolios and assets.

[Simon Shaw, Group CEO at Savills]

I am just going to turn now to another slide I put up in March. I am not going to go through the whole lot. You have seen most of this before. But on the left-hand side are the many reasons why this investment banking business of Eastdil is attractive to us. But I want to just underline two further points. First of all, it enables us to access and partner with top global investors in real estate at the very highest level before there is a transaction or an asset management strategy in mind, and that is critical. Secondly, debt advisory at scale enables us to serve every element of the cap table of the world's real estate investors. Those are the two at heart important things about this deal. Finally, I do believe that this is a genuinely symbiotic relationship between the two sides of our business.

[Simon Shaw, Group CEO at Savills]

Our respective service lines are compatible and complementary, and there is opportunity going both ways, as this slide tries to show, and it will catalyze our ability to develop the global portfolio of our traditional service lines over the coming years as well. It is important in many different ways. If we turn to the business itself, some practical elements around our modus operandi. There is nothing particularly new here in that we referenced that this was going to be our strategy back in March. You will recall that this is a combination which, unusually for a sizable deal in our sector, carries very little overlap between the two businesses. This is important, as it should help to mitigate revenue attrition, which inevitably occurs in major mergers of this type. Critically, too, our respective cultures are very similar.

[Simon Shaw, Group CEO at Savills]

The one thing I would say is that with the broader and deeper interactions we have had between the businesses, between our people, since March, that factor has just become ever more clear and more obvious to both of us, which is great. What we have done from an operating perspective is to ensure that Eastdil Secured Savills retains its existing modus operandi, its existing operating model, a single global P&L, a single global bonus pool, with the frontline connectivity between us managed via something called the buddy system, which is an awful phrase, but we remember it because it is awful. Under which Savills individuals and their respective counterparts at Eastdil develop assisted relationships across service lines and sectors to know how to work together to go with joint offerings to the client or as a conduit for referrals.

[Simon Shaw, Group CEO at Savills]

From a governance perspective, Eastdil Secured's CEO and President have both joined the group executive board, which is chaired by me, and it is the primary committee responsible for running this business overall around the globe. Finally, I am particularly pleased that even in the two weeks since we have actually consummated the transaction, we are already starting to see potential opportunities across referrals, but also joint approaches to market and indeed, joint appointments. That is great news. Our results today, turning to other strategic priorities apart from the Eastdil position, are important because they reflect the standalone strategic and tactical initiatives we have taken over previous periods.

[Simon Shaw, Group CEO at Savills]

I set out all these other strategic priorities in March, so I am not going to go through them all in detail, but I would categorize them as classic growth and infill strategies as we seek to bring the appropriate segments of that pyramid of promise to our clients and markets around the world over time. You will see we have done quite a lot over the last few months from the bottom of this slide. Much of it, from China to the private office to Savills Investment Management, has been about enhancing our roster of leaders and senior team members. We are still keeping a very close eye on cost and on both individual and team performance across the business.

[Simon Shaw, Group CEO at Savills]

Alongside some focused growth initiatives, which you will have heard about, from recruiting of the leading data center team in Japan and a native investment management leader there as well, through to investing into our proprietary CRM systems in global residential, and broader initiatives in data curation, and dare I use the acronym, AI as well, where we have got a lot going on. We are also at the planning stage, I should say, for the launch of future service line enhancements in North America over the coming periods. There will be more about that over the next few years. There is a lot going on, but with some very clear strategic filters in place to ensure that we make the best use of both our human and capital resources. I look forward to updating you more fully in future periods along these lines.

[Simon Shaw, Group CEO at Savills]

We finish by looking into that crystal ball, and after a strong H1, we are in a good place with significant pipelines. But I am constantly reminded of my new colleague, Mike Van Konynenburg, CEO of Eastdil, and his great line, which resonates, "Pipeline's great, but you can't eat it." It obviously has to convert into closed transactions and revenue over the course of this period. To be frank, that execution timing is the hardest thing to predict in current market conditions in many, many markets in which we operate. Which also include, I should say, the new political landscape in the U.K. too, in advance of the budget in October. That said, our less transactional businesses are giving us both the resilience and the growth we expect, which together with those pipelines means that our expectations for the full year remain unchanged.

[Simon Shaw, Group CEO at Savills]

I want to finish by thanking all our colleagues around the world for their hard work, resilience in some tricky market conditions, and their relentless focus on client service and rigorous execution, without which none of this would be possible. As we go into questions, I will leave a concluding slide up for you, which I think just sets out how we as management feel about Savills at the moment. This slide speaks to the breadth of our business, both by geography and by service line, which provides overall diversification, but also critically, good growth potential. It speaks too to our financial strength and the discipline with which we use it, and to our focus on margin improvement.

[Simon Shaw, Group CEO at Savills]

I do believe that this set of characteristics supports the enlarged Savills strategy, which pursued with conviction and a relentless focus on client needs, will enable us to deliver very attractive shareholder returns over coming periods. Thank you. That concludes the formal part this morning. We will now take some questions. If you have any, please do state your name and your institution for the record. I think Susie is going to govern any questions that come in online as well. I have even a microphone for Clyde, although you probably don't need it, to be fair.

[Clyde Lewis, Analyst at Peel Hunt]

I probably don't. Thank you. Thank you. Clyde Lewis, Peel Hunt. First question was on market share. Sounds like you're doing a cracking job in U.K. in particular, but it'd be fascinating to know a little bit more about how you've been so successful there, and also what sort of response have you seen from the competitors, I suppose?

[Simon Shaw, Group CEO at Savills]

Yeah. I suppose it differs across the different service lines, but if you take one of the most acute pieces of evidence around that would be in the residential market, which you know only too well. Clearly it hasn't been a great overall market for U.K. residential for all sorts of well-rehearsed reasons we don't need to go into. I think the laser-eyed focus of our teams on proper advice to clients, in an environment where one can end up with agents bidding for the business with overvaluation, et cetera, has made a significant difference to us. I think also, if you've followed us for many years, as you know, in difficult market conditions, there is a tendency for a flight to quality and a flight to a degree of certainty of execution when it's necessary. I think we always benefit from that.

[Simon Shaw, Group CEO at Savills]

Certainly, in my nearly 18 years, we've always benefited in more difficult market conditions. I think there are two quite important factors there. I think in the commercial side of our business, we've just really stuck at it through thick and thin. I think about, for instance, the retail market over previous years, and we start to benefit from the business that is there. I would also say that there is an element also of the halo effect of the Eastdil Secured transaction in many markets, it's particularly the case in the U.S., I would suggest. Even though what we do in the U.S. today is leasing, there is a halo effect benefit to our organization from being aligned to Eastdil Secured Savills, which is obviously much better known in the U.S. than it is necessarily over here. So those are a couple of factors.

[Clyde Lewis, Analyst at Peel Hunt]

Second one on acquisition pipeline. I mean, obviously you've done smaller bolt-on deals fairly consistently over time. Is there going to be a bit of a pause given obviously the big deal's done, you've got an awful lot of work to do, I mean, the organic opportunities from Eastdil obviously are humongous.

[Simon Shaw, Group CEO at Savills]

Yeah.

[Clyde Lewis, Analyst at Peel Hunt]

Does that get parked?

[Simon Shaw, Group CEO at Savills]

I think no, not parked, but really the next six months plus is all about generating the mutual benefit out of this last transaction we've done. We will still do bolt-on infill things that I referenced earlier, which is the normal course of events. Where we have a gap to fill, we will fill it. But I wouldn't expect a hero style deal over the next few months at all. It's all about making the best of what we've now got, which is very exciting.

[Clyde Lewis, Analyst at Peel Hunt]

If I do one more and then I'll-- The buddy system and I suppose opportunities for Savills to piggyback on Eastdil and vice versa. I mean, six months on nearly from when the deal was announced, you've had an awful lot of, I'm sure, interaction with them. Where have your thoughts around the biggest opportunities for organic development sort of evolved to? What's the sort of top two or three areas that you can see evolving?

[Simon Shaw, Group CEO at Savills]

I think, in no particular order, the obvious one is with a debt advisory business of scale in the organization. We already have one in the U.K. Small, effective, but small and U.K. focused. But our clients around the globe could well do with that debt advisory capability that comes from the Eastdil side. That is almost a no-brainer. I think the other area which is very exciting, and we have been bolstering our roster, as you heard in this over the course of the last few months as well, is the whole area of digital infrastructure and data centers. I am particularly interested in how Eastdil Secured Savills and Savills can work together in the APAC region, which I think is incredibly exciting. It will be the case in EMEIA as well, but APAC is almost virgin territory for us.

[Simon Shaw, Group CEO at Savills]

I think those are two areas where you can really point to activity and potential quite quickly. I think the rest of it is a long burn. We talked about synergies at the March announcement. I have got every confidence that the sort of numbers we put out there are going to be obliterated in real life over a number of years as we look out.

[Clyde Lewis, Analyst at Peel Hunt]

Okay.

[Chris Millington, Analyst at Deutsche]

Morning, Chris Millington at Deutsche.

[Simon Shaw, Group CEO at Savills]

You have cooled down a bit, Clyde.

[Chris Millington, Analyst at Deutsche]

Just about. Running a little bit late this morning. First one's just a quick checking question about the dividend. Obviously, as you say, ahead of inflation, but somewhat lacking earnings growth. Is there any reason to think there's any sort of change there going forward or think we should keep a similar cut?

[Nick Sanderson, Group CFO at Savills]

No change to the policy at all. I think clearly the one thing that we'll need to work through is that we'll have a five-month contribution this year, from Eastdil, but all the shares have been issued. But the approach around progressively growing the ordinary dividend dependent by the less transactional plus the supplemental dividend absolutely pertains in place.

[Chris Millington, Analyst at Deutsche]

Yeah. That's what I was hoping to hear. Next one is restructuring. What do you think the benefit this year is in terms of cost savings? I know it's always a bit difficult to get underneath, but what do you think the[crosstalk].

[Simon Shaw, Group CEO at Savills]

I think it's very difficult because obviously you've got uncovered business development costs as well. Take our Australia business, we've invested a lot in Australia and starting to see the results, both in reality in the P&L but also in pipelines, interestingly.

[Chris Millington, Analyst at Deutsche]

Okay.

[Simon Shaw, Group CEO at Savills]

If you took a gross benefit before that additional cost load, I would suggest it is around half the GBP 13 million, around half, about GBP 6 million of it, that we guided to last year in this period.

[Chris Millington, Analyst at Deutsche]

Very helpful. Given they were quick, I am going to do two more. APAC, the page you showed the kind of backdrop of market conditions, and APAC looks fairly flat. Now, we know it is not flat, and you would need to go a little bit further back in the chart to show that. Perhaps you can give us a context of where Asia is now, where it used to be perhaps a bigger focus on mainland China, Hong Kong, which are clearly heartland fields.

[Simon Shaw, Group CEO at Savills]

Yeah, I think, not to go on about it for too long, but I think one of the big differences is that our Asia business has historically been very Sino-centric. It has been really around Greater China, so mainland China, Hong Kong, and indeed, Taiwan, Chinese Taipei as well. We have consciously sought to build our business in Australia and Japan over time. Those are the two markets that have actually strengthened somewhat over the course of this first 6 months. We have also seen a strengthening of the Chinese market, both Hong Kong and mainland China, but candidly off a very low base of last year.

[Simon Shaw, Group CEO at Savills]

I would expect to see further growth coming through in the next 18 months or so in that traditional heartland of the Sino axis. I am also very excited about the things that we are doing in Australia and Japan that will leverage underlying market growth in those markets. Not to leave aside Singapore, Korea, et cetera, but those are the material ones where there is significant value on an international scale.

[Chris Millington, Analyst at Deutsche]

Sorry, this is the final one. Investment management, the only bit which did not really move forward. What is the outlook for capital raising in the second half? Also, do you think the business now needs additional scale to kind of keep up where you are? I mean, is that still a big focus point to move that ahead?

[Simon Shaw, Group CEO at Savills]

Yeah, I think we are looking into it at the moment under new leadership, both at the chief executive level and also in the crucial Japanese market, where we have recruited a very strong individual from the market to run our business there. The honest answer is that raising capital for core and potentially core plus blind pool real estate funds is very, very difficult. We are doing a lot more in the region of joint ventures and partnerships with almost this local operating partner, with private equity. I do see that as a significant part of the long-term future. What I am doing at the moment is allowing new leadership to come up with their plan for the next period, which of course, we will be discussing with Samsung, our partner in Savills Investment Management.

[Chris Millington, Analyst at Deutsche]

Thank you.

[Zachary Gauge, Analyst at UBS]

Good morning. Zachary Gauge from UBS. Just one question from me on U.K. residential. Obviously, challenging first half for obvious reasons, but are you seeing any light at the end of the tunnel into 2H? I guess with the Renters' Rights Act specifically, that will continue to drag because you need to build up a 12-month run rate of monthly collections for that to revert to normal. But then more obvious on the sales market, are we seeing anything to be slightly more positive about? People talking about help to buy potentially coming back. Just any thoughts you had around that market picking up, or is it just going to remain difficult?

[Simon Shaw, Group CEO at Savills]

Yeah, I think it's a definitely needs-based market without question at the moment. I do think we are pretty resilient, but at the levels that we've talked about in the first half. On a macro level for the U.K. business, I would say our international business is performing pretty well, but is naturally a bit smaller still than the U.K. For the U.K. business as a whole, I think there is a genuine need. Markets like a degree of certainty and clarity over policy. I think when we get past the first Healey budget at the end of October, we'll start to get that clarity, which we so badly need. Obviously, any demand side incentive would be very positive, and there are plenty of house builders, quite rightly, who would like to see that. But clarity is above all what we need.

[Nick Sanderson, Group CFO at Savills]

Zach, I would just ask that on a like-for-like basis, our U.K. residential leasing business was up. Like for like. That I think is going back to one of Simon's comments earlier, in more challenging markets, and this is a more challenging environment to be a landlord, you go to the best advisors to help you. Clearly, this year's numbers will be lower within that part of the business just because of the timing of the invoicing now associated with that work. But like for like, the business is doing very well, led by Andrew over here.

[Simon Shaw, Group CEO at Savills]

That's a very good point. Anybody else?

[James Fletcher, Analyst at Berenberg]

Good morning. James Fletcher here from Berenberg. Three, if I may. Sorry about that. Can you give us a bit more color on Middle East than just its impact on transaction advisory business sentiment? I don't think we touched on it too much. Perhaps we should do one at a time.

[Simon Shaw, Group CEO at Savills]

Yeah. Okay. Well, first up, Middle East, obviously still a relatively new business in residential transactional terms for us. Very strong Q1. With the conflict, that really had an impact on new development sales. It is really a secondary sales market at the moment as people who are living there start to trade up when they see the opportunity to do so. But critically, the major developments in Dubai are somewhat slower to the market at the moment, as you can imagine, for obvious reasons. Abu Dhabi is a little bit stronger. Egypt is performing very well, too, which is excellent news. But it definitely will stall the trajectory, which was stratospheric over the last 18 months in residential sales in the Middle East. It will stall that for a bit, but that is inevitable.

[James Fletcher, Analyst at Berenberg]

Perfect. A second one was just on synergies. I wondered, you talked about data centers and debt advisory. I wondered what the U.S. client base were thinking about the prospect of having some of the less transactional services that you deliver. Is there any signs of positivity there to synergies?

[Simon Shaw, Group CEO at Savills]

Well, it is very early days. But I was lucky enough to be invited to the Eastdil Secured private equity conference in Utah about five, six, seven weeks ago now, which is C-suite of global private equity. All I can say is that the goodwill towards the Eastdil Savills combination was extraordinary. I very much hope that we would see more activity out of that. It is sort of glorified halo effect, actually, from how we described these things back in March. I am pretty sure we will see that. It will take time to kick in, but we will see it.

[James Fletcher, Analyst at Berenberg]

Great. A final one was just on, where am I? On seasonality with regards Eastdil, I think you might have mentioned this briefly, Nick. Just kind of going forward, what should we think as a normalized kind of H1, H2 split? I do not think you did give a comp for EBITDA for?

[Nick Sanderson, Group CFO at Savills]

That is partly because there is a track record associated with, given its lumpiness. What I would say is, if you look at Savills over the last 10 years, the weighting has been anywhere from 15% through to 35% profit first half versus balance in the second half. They are much nearer the kind of 35%-40% first half, second half. I think with regards to the guidance that we have given suggesting that the five-month contribution will be broadly similar to their first half is partly because the fact they had such a strong first half.

[Nick Sanderson, Group CFO at Savills]

We also know that in a market like we are having at the moment, particularly given a lot of their deals tend to be larger, there is a timing risk associated with them. The overall seasonality within the enlarged group will be lower going forward than historically.

[James Fletcher, Analyst at Berenberg]

Brilliant. Thank you.

[Simon Shaw, Group CEO at Savills]

Anything else? Susie, you have one online, I think.

[Susie Bell, Director of Investor Relations at Savills]

Yeah, I have one from Dan Cowan at BNP Paribas. "Are there any specific risks you foresee from the changed U.K. political landscape, or is it just general macro policy risk?

[Simon Shaw, Group CEO at Savills]

Well, obviously we shelter under macro policy full stop across the board in the U.K. I don't foresee any specific risks. There are a lot of sound bites all over the place, as there always are, and we're getting used to those in any given moment in the U.K. But I do think I would reemphasize that clarity is the important thing. More than anything else, that's what people can react to and work on.

[Simon Shaw, Group CEO at Savills]

You done? Unless there are any more questions, thank you very much for your attention and time today. Look forward to updating you in March. Bye-bye.

Participants

Executives

• Simon Shaw, Group CEO
• Nick Sanderson, Group CFO
• Susie Bell, Director of Investor Relations

Analysts

• Clyde Lewis, Analyst at Peel Hunt
• Chris Millington, Analyst at Deutsche
• Zachary Gauge, Analyst at UBS
• James Fletcher, Analyst at Berenberg