Q1 2022 Cushman & Wakefield PLC Earnings Call
Welcome to Cushman, and Wakefield first quarter 2022 earnings conference call.
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It's now my pleasure to introduce Lynn.
Len Texter head of Investor Relations.
Controller, and Chief Accounting officer for Cushman and Wakefield.
Mr. Texter, you may begin the conference.
Thank you and welcome to Cushman and Wakefield first quarter 2022 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, Dr. Cushman Wakefield Dot com.
Please turn to the page labeled cautionary note on forward looking statements. Today's presentation contains forward looking statements based on 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 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 our financial tables of our earnings release and appendix of today's presentation. Also please note that throughout the presentation.
Comparison and growth rates are two comparable periods of 2021, and our local currency unless otherwise stated.
For those of you following along with our presentation, we'll begin on page four and with that I'd like to turn the call over to Brett White, our executive Chairman Brian .
Thank you Anne.
And thank you to everyone joining us again today.
Joining me this afternoon, and John Forrester, our CEO , who will give us an update on our operations and the broader market.
Neil Johnston, our CFO , who will review our financial results for the quarter.
Before we begin I want to recognize our local leaders and colleagues in central and Eastern Europe , who have been doing everything they can to alleviate the human impact of the crisis in Ukraine.
I'm incredibly proud of our employees, who have been supporting their colleagues throughout this region.
Turning to our results I am pleased to report another strong quarter of earnings in the first quarter, we reported fee revenue of $1 $7 billion up 29% over last year, and adjusted EBITDA of $214 million up a 118% over last year, both of which represent first quarter Records.
For the company.
Our brokerage business continues to perform exceptionally well as investors seek attractive returns and yield in commercial real estate national inflation hedge is increasingly attractive in today's market. Additionally, our leasing activity continues to strengthen.
The return to the office gains momentum and demand for industrial assets remains robust.
Overall, we are optimistic about our business outlook for 2022.
We are an industry leader with a comprehensive service offering that positions us well to capitalize on strong industry fundamentals and secular trends around the world, while delivering value to our shareholders.
I'll turn the call over to our CEO John Forrester John .
Thank you Brett.
We're certainly off to a very pleasing starting 2022, a record first quarter marked by strong top line growth across all segments and service lines.
Brokerage revenues were well above prior year, which was impacted by the pandemic, but more significantly first quarter revenues were 32% higher than for the first quarter 2019.
Similarly, our PM FM business continued to demonstrate strength growing double digits versus prior year as we continue to win mandates of increasing scale.
These results highlight the real progress we are making on our multi year strategy of focusing and investing in the fastest growing sectors in our industry.
Which in turn is driving a diversification and therefore resilience in our earnings profile as well as our continuing profile of material margin expansion.
On our last earnings call I touched on some of the secular trends that are powering the largest full service providers in our industry.
On this call I will go a little deeper and provide some additional comments on how cushman and Wakefield continues to benefit and capitalize on these trends in four of the industry's largest sectors and service lines, namely.
Namely multifamily logistics.
Office and corporate outsourcing.
Against rising forecast for the cost of debt capital inflows to the commercial real estate sector continue to rise as investors seek assets that deliver competitive and attractive returns.
U S multifamily space accounted for nearly 63 billion of transaction volume was 37% of total market volume in the quarter, which is an increase of 56% versus prior year.
This is a sector where through both acquisition and organic investment we have built the U S. Its first large scale full service platform.
As evidenced in the first quarter. According to real capital analytics overall U S transaction volumes remain elevated with 171 billion volume transacted up 56% versus last year and as Bret noted commercial real estates ability to reprice rent some grow yield to offset inflation.
<unk> is a significant driver of these inflows.
And the ongoing performance of the logistics sector. There was no evidence of stalling momentum.
Quarter, one was the strongest first quarter on record in terms of absorption with U S occupancy at an all time high of 96, 7%.
And rental growth of 15, 3% year over year nearly double the current rate of inflation.
So maybe some supply constraints in the near future. This is a long term global growth sector in Asia Pacific as an example, there is tremendous potential as this region gets wealthier and claims the online learning curve.
With some $4 6 billion of potential customers versus 331 million in total in the U S.
Turning now to the office sector, we continue to see positive data points around office leasing fundamentals signaling a return to higher volume activity in the space.
Firstly global cities are leading the jobs recovery and they are also leading the office recovery in.
In addition to growing number of global cities, we're absorbing office space again with preliminary data showing that 45% of office markets globally registered positive demand for office space in the first quarter.
We're also seeing this reflected in total global office leasing activity were preliminary data shows an increase of 19, 1% in the first quarter versus prior year.
This is in line with the nine to U S markets, the Cushman and Wakefield trucks, where total leasing activity was up 19% in the first quarter compared to prior year.
On a trailing 12 month basis was up 41% from the same period a year ago.
Plus a activity accelerated as an even greater pace of 47% against prior year as occupiers continue to seek out high quality buildings to improve their employee experience.
And as you may have seen from the castle systems data. This.
This indicates a return to office across the U S metropolitan districts that has more than doubled from December 21 compared to present.
Given the complete cross section of return to office dynamics that we're seeing globally. It is worth noting that our brokerage operations benefit from activity not just the amount of space occupied.
As occupiers and investors reconsider that portfolios. What is clear is that change is a given.
And in this change whether to align space with changing occupancy demands or to meet sustainability objectives. Each move is provides a revenue opportunity not only for our brokers, but also for our project and development service teams.
As a final service line. An example of our increasingly diversified platform. We are continuing to see momentum in corporate outsourcing with major occupiers in all sectors within key supplier relationships on a global scale.
On earlier earnings calls, we have highlighted our multiyear focus on building a world class occupier outsourcing business to serve the largest global multinational clients ultimately taking advantage of this highly attractive and very large market.
While continuing revenue growth and earnings expansion in this area reflects our fast maturing capabilities.
I am excited to share with you today that in the first quarter. We were awarded one of the industry's largest contracts by a major global financial institution based in the U S.
For 17 million square foot portfolio across all service lines in the United States.
This win represents another major milestone in our strategy to create value for large corporate clients seeking to outsource across multiple service lines and geographies.
Our diverse talents and platform expertise integrated technology capabilities and solution oriented commercial model, where all differentiating factors.
As we have previously discussed and made clear by our word and action ESG.
ESG is an important pillar for how we operate and work with our clients.
In addition to being a driver so how owners and occupiers CCAR expertise E S.
<unk> is a core focus internally at Cushman <unk> Wakefield.
As an example of how intentional we have become in this area. We recently amended our revolving credit facility and in doing so are there incentives linked to sustainability features.
Just on our greenhouse gas emissions targets.
This is a true testament to Cushman <unk> Wakefield is commitment to its ESG initiatives.
Before turning the call over to Neil I'd like to make some remarks on the humanitarian crisis in Ukraine.
In March we announced our decision to divest our business in Russia to a local operator.
We believe this transition of business will allow the new owners to best support employees and maintain continuity of essential services to clients.
I'd like to thank our colleagues for their hard work and dedication while recognizing the extra ordinary circumstances and uncertainty those colleagues are experiencing.
We are continuing to support our Ukrainian colleagues, including direct financial support to our global employee assistance fund.
To our employees and neighboring countries, who are responding to the humanitarian crisis in a variety of ways.
Cushman and Wakefield stands firmly with the global community and the hope for peace.
Overall, we remain optimistic and confident about the performance of our business in 2022.
Despite the fluid geopolitical and monetary policy environment.
And lingering uncertainty of the COVID-19 pandemic.
We remain confident in our strategy for three fundamental reasons.
Firstly, cushman and Wakefield as one of the top when leading firms in the industry benefits is one of the few globally diversified and comprehensive commercial real estate providers.
A leading cost management disciplined capital deployment.
Strong balance sheet all position the company for success.
Second we believe our investment in markets with secular demand drivers will differentiate cushman and Wakefield, especially through periods of market volatility.
Instance, on investment and Greystone is expected to benefit from the chronic under supply of U S housing and a wide range of economic growth or interest rate environments.
Similarly, the continued shift to ecommerce has a long runway and will drive warehouse logistics demand for years to come.
And lastly, because of our people.
Everything we do at Cushman <unk> Wakefield is empowered and enhanced by the great talent focus and dedication of our people and teams around the world.
With that I'd like to turn the call over to Neil to discuss our financial performance Neil.
Thank you John and good afternoon, everyone.
Overall, we are encouraged by the strong start to 2022 for the first quarter fee revenue of $1 7 billion and adjusted EBITDA of $214 million resulted in adjusted EBITDA margins of 12, 6% an increase of 512 basis points compared to the prior year driven primarily by.
Brokerage revenue.
Adjusted earnings per share for the quarter was 48 cents, an increase of 37 tenths of a prior year.
Taking a look at our fee revenue by service line in the first quarter leasing and capital markets revenue increased 58% and 76% respectively.
It is an easier prior year comparison as a result of the impact of Covid in the first quarter of 2021.
This equates to brokerage growth of 64% in the first quarter, which is a similar growth rate to what we experienced in the second half of 2021, which grew at 67% versus the comparable period.
Leasing fee revenue in the first quarter also exceeded pre pandemic levels, increasing 22% over the first quarter of 2019.
Leasing activity was driven by improvements in the Americas office sector. In addition to ongoing strength in the industrial logistics sector with demand continues to outpace supply.
And capital markets investment appetite remains strong with fee revenue growth of 51% compared to pre pandemic levels in the first quarter of 2019, driven largely by the Americas segment with nearly all property sectors showed growth.
As for the first quarter.
In EMEA and APAC, we generated adjusted EBITDA of $17 million and $22 million, respectively, which represents an improvement of $14 million and $2 million, respectively versus the first quarter of 2021.
This performance reflects strong revenue growth of 19% and 17%, respectively led by brokerage activity, where fee revenue improved 28% in EMEA and 43% in APAC for the quarter.
Both EMEA and APAC brokerage were above 2019, pre pandemic levels up 5% and 9% respectively.
Our financial position remains strong.
We ended the first quarter with $1 6 billion of liquidity consisting of cash on hand of $612 million and availability on our revolving credit facility of 1 billion.
We had no outstanding borrowings on our revolver.
Net leverage was two six times at the end of the first quarter down from two eight times, we reported at the end of 2021.
Also as you heard from John earlier subsequent to the first quarter, we amended our revolving credit facility, increasing availability from 1 billion to $1 1 billion and extending the maturity date out to 2027.
We are well positioned to continue to fund operations and invest in future accretive infill M&A and broker onboarding opportunities, while maintaining optionality within our capital allocation framework.
We have an active pipeline, which we're constantly evaluating to determine the best return for our shareholders.
In summary, we are delighted with the performance of our entire portfolio to start the year, including both the continuing strength of our brokerage business as well as the stable growth of recurring revenue in our <unk> business, we anticipate our brokerage businesses to continue to perform at record levels for 2022.
On balance we believe the global economy continues to be conducive for growth in our business. This year.
While it is our practice not to update guidance at this time of year, we remain optimistic given the momentum in our business and look forward to revisiting. This at the end of the third quarter.
With that I'll turn the call back to the operator for the Q&A portion of today's call.
Thank you.
At this time, we'll be conducting a question and answer session.
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One moment, please while we poll for questions.
Our first question is from Anthony alone.
With Jpmorgan. Please go ahead.
Great. Thank you.
I guess just to understand on the guidance I know youre not updating it but how should we think about some of the brackets that you put around the different businesses.
Last quarter.
<unk>.
What what you think could play out as you kind of look at the world today.
Yes sure Tony.
We feel really good about the start to the business you can see the first quarter exceeded even our expectations. So as we look to the rest of the year. There is really nothing that suggests that the business is slowing down as we look at the first quarter and even as we look at April and the pipeline. So we see strength throughout the year.
We see strength both in brokerage office for US was was up in the first quarter over 2019 levels and then all our recurring revenue businesses. Our PM. FM also had very nice growth above our expectations. So we see nothing on the horizon that suggests that the business is slowing down at this point.
At the same time.
It's too early in the year to update guidance. It is our policy not to update right now, we'll revisit that as we finish up the second quarter and we have a better view to the full year.
Okay. Thanks, and then second question on the.
Great. So in joint venture I think it was $16 million of equity income I am guessing the bulk of that.
With greystone.
You said it was kind of performing in line can you make any comments on like how to think about that.
Just seasonally as we look ahead and just any other further details in terms of.
How it's going so far.
Yes, the business is doing well, it's right in line with expectations.
Not significant seasonality youre right the majority of that $16 million relates to greystone.
We guided to around $70 million of EBITDA for the full year.
And we expect to be right in line with that as we finish up the year.
Okay got it and then.
Last question on <unk>, you talked about the outsourcing business generally a bit.
If I think about it.
The historical players.
You get these deals and you also gave me the opportunity to cross sell into like things like leasing and sales.
What's the opportunity today is it still.
Selling into those high margin business lines or are there other things that debt.
Youre doing with clients.
John will you take this play.
Yes.
This is John .
Basically it's all.
On the outsource market.
Very large and very sticky contracts remains.
The announcement, we made about the very large contract win in Q1 as a full service.
Contract, where we will provide all services from.
From one extreme to the other from transaction management and transaction delivery all the way through to <unk>.
And.
Integrate you'd ask them so that is.
Entirely with this we are building our outsourced model.
Ultimately there are only now three three.
<unk> companies.
What industry you have done.
The skills the capability to the infrastructure.
The stretch and geography to undertake contracts about scale.
Im not outsource market itself.
Secular growing trend.
More clients outsourcing more of their operations in more geographies all the time. So we are building.
Battleship.
Wholesome business for the future.
Good about the growth profile.
Okay. Thanks for the help.
Thanks Jay.
Thank you. Our next question is from Chandni <unk> with Goldman Sachs. Please go ahead.
Hi, Good evening and thank you for taking my question.
Could you guys, perhaps give some color on geographies outside the U S.
APAC business, obviously grew very nicely in the quarter, how do you think about business exposure across different markets, there and how should we think about performance of your JV with one key in mainland China and on similar lines could you perhaps talk about talk about what youre seeing in Europe , given obviously, the humanitarian crisis that you talked.
But just.
Broader concerns and any malaise that's spreading.
Third with investors looking to pause activity.
Or something on those lines.
John you want to take that.
Happy to happy to Hi, Jamie.
I'll try to unpack it was three questions in there all around geography and our operations.
Bye bye.
Reinforcing what we said in the prepared statements which is.
Ross all geographies in all service lines.
<unk> seen increase.
Our levels of performance.
Yes.
Yes.
Every single part of our.
All of our global platform.
So we're.
We're quite happy with our overall balance of business, which.
Very slightly year on year, but on the whole is 70% of the Americas.
Round about 15% each to EMEA and.
And APAC.
We'd like them all to be bigger than we have.
The momentum in the organization that you can see from from our numbers that growth is coming through everywhere.
On the <unk> joint venture again, reiterating our prepared statements in terms of the performance of the overall business.
The performance of that is right on top of where we expected it to.
First quarter.
It was a slightly unusual quarter in challenging cost because quite a lot of the trading.
Trading period is covered.
Very quiet period of Chinese new year, and we had a lockdown, but actually the first quarter came in exactly where we thought it would and we're pleased with that and overall, we've seen a lift in particular very strong lift in our brokerage business across day parts.
Referenced in excess of 40% royalty brokerage in APAC year over year.
Turning now to EMEA, we had a stellar performance in EMEA in the first quarter.
Very substantial.
EBITDA contribution from our EMEA business, which typical to our sector is normally.
Pretty good.
In terms of profit contribution in Q1, given the seasonality of not only the business, but also.
Right.
Payments of bonuses and the like.
And that record first quarter in EMEA of course.
Shows no reflection of any.
Pending all known.
Part of.
On the overall business of what we're seeing in eastern Europe .
In Ukraine.
Europe has this capability.
<unk> of providing.
Investors and particularly with alternative markets market profiles. So what we're seeing is actually a reallocation of capital through different sectors in different geographies in Europe , all adding up to record volumes in quarter. One so as you get no direct contagion of the issues, but we keep a very very.
Careful eye on it.
Daily.
That covers all the questions journey.
Just one quick one.
Any update on your partnership with Boardwalk. Thank you.
Hey, John I'll keep going sure yet so.
We go live.
At this very moment on the transition of the FM contracts, we work into our global Occupier services business, which is another example of a major contract win.
Again mentioning going back to the totals the big win we had in Q1 in that outsource business.
Full service offering including flex.
<unk> relationship with.
We work was a fundamental part and the reason why we won that bid.
So we our thesis of showing up.
<unk> delivered to clients.
<unk> end to end service of how unoccupied and utilized space.
Can experience space.
Again proving to be a very very very good part of our of our armory and weaponry as we go to market I would also.
So we're excited by <unk> performance.
We works investments and relationship building with you already.
And that is going to enhance the capabilities. Both if we work under our partnership to deliver.
Even better quality services and technologies to our clients.
Thank you very much.
Thank you our next.
Question is from rich <unk>.
Morgan Stanley . Please go ahead.
Hey, good afternoon.
Congrats on a really impressive quarter I just have two questions.
First <unk>.
We can talk about capital deployment.
You still have a fair amount of cash on balance sheet. It looks like that's growing given the strong performance.
Have your views on how to deploy that cash changed.
Given the macro backdrop over the past call it four to five months.
They havent rich if anything I think we see opportunity to grow.
The platform, we do have cash we'll be looking at.
At ways in which to grow the business.
Both organically and using some of that cash.
We.
Constantly evaluate the best use for it.
We also consider whether we should pay down debt.
<unk> is right, where we wanted to two five times, but certainly we could use cash to reduce our interest cost as we look forward at rising interest rates and then also look at other ways to return capital to shareholders, but at this stage, we still believe especially with.
With prices moving where they are that they are opportunities for us to grow the business.
Great. Thank you and maybe a bigger picture question on transaction volumes to your brokerage business being quite strong.
We track the RCA data very closely as well I.
I do think there's a lot of Heng Henry you right now about a backup in interest rates and what that will do to transaction volumes. So maybe you could just comment a little bit on what youre hearing from your clients or why do you why do investors in commercial real estate still find the asset class compelling is it is it because the unlevered return.
We're actually still pretty compelling.
For many investors here and Theyre less insulated from a rising interest rate environment. So really it's just sort of a boots on the ground question.
What are you seeing what do you think is still driving these very robust.
Transaction volumes in <unk>.
Go ahead, John Richardson.
John I think you did answer your own question in part there I think it was probably the ramps that I could give.
It is an attractive sector because so much of.
The characteristics of an income stream.
In many sectors provides.
Real hedge against inflation with rent profiles rising through the term of the lease the ability for clients to asset manage their relationship with tenants to increase income streams.
Really improve buildings in asset value as they go.
One thing I would comment on is of course.
The reality of rising debt costs have been in the system now for a number of months so.
The fed has done very recently, it's not a shock to the market its been pricing this in.
For a number of months.
Therefore, the record volumes, we saw in Q1 I think.
Speaks to the fact that the market is at this point, so ready to transact.
On attractive assets and there are attractive assets to be bought in the market ultimately is for liquidity.
The market that's important to our revenues not necessarily the specific <unk>.
Rice of any asset.
Got it and maybe just one follow up question to that.
You think your clients have.
Sort of pre funded.
Acquisition. So did they did they have an opportunity to lock in cheap.
Cheap debt and bank of rising interest rate environment, and therefore, they can be a little.
A little bit more acquisitive.
It would.
Overly general to say, yes on all transactions, but certainly the vast majority of.
Especially we specialize in one of the very large scale transactions high value transactions, that's a sophisticated market debt.
Invariably in place even before the bids are made.
A deal closes.
There is already.
A very structured capital proposition in place prior to any transaction.
Being attempted.
And that's why.
That's part of the sale process, making sure that all buyers are well funded and the market certainly shows continual appetite and a lot of available equity and debt.
Thank you guys kudos again.
Okay.
Yeah.
Thank you.
Our next question is from Michael Griffin with Citi. Please go ahead.
Hey, guys. Appreciate you, taking the time and I'm glad to join our call this quarter.
Given that there's been more talk of recent a potential recession on the on the medium term just curious how that's factoring into your thinking across the different business lines, particularly segments that might be more volatile and susceptible to a downturn.
Yes.
Michael There really isn't anything we see right now.
Interest rates are rising.
In terms of that and the combination.
And of that inflation doesn't really impact.
Our <unk> business, because most of those contracts effects, so feel good about that.
We see capital markets as strong as ever with a lot of capital coming in.
Family.
It was also strong and this is just so much demand that we've seen strength there. So as we look to the year.
We still feel very positive about the full year and it really is.
Nothing.
Showing up certainly in the very near term.
Yes, great no that's helpful.
I would just add sorry, sorry, Michael.
Just going to add one point there and this is something that the breadth.
As mentioned on a number of these calls ultimately looking out over the coming quarters.
The health of our industry is largely based around positive GDP.
As opposed to directly in relation to any single factor is obviously the cost of debt or inflation.
So that's really.
The strength of the economy as a whole.
Is keeping a very close eye on.
Yes, I got you I know that was a that was very helpful. And then just touching on the pms side of the business.
You mentioned, a big new client acquisition this quarter I'm curious how is your strategy has changed at all for kind of winning new clients and getting into that kind of cross selling feature that you mentioned.
We're showing.
We're seeing this thank you Bret we're seeing the fruition of a multi year strategy strategy of building out.
So any gaps we might have had historically in the queue.
Abilities of on boarding some of these extremely large and complex contracts.
Not even invited to bid on contracts like this unless the clients and their advisors.
100% sure that you can deliver.
All of the services to a very high standard over multiple years.
And that's sort of.
To that point these bids sometimes take 18 months to 24 months just to pursue the land so.
As I said in prepared remarks multi year strategy.
To build.
A really strong outsourcing business.
Secular growth area.
Got it well I appreciate the color and great quarter.
Thank you.
Yeah.
Thank you. Our next question is from Stephen Sheldon with William Blair. Please go ahead.
Hi, everyone. This is Matt <unk> on for Steven Congrats on the solid quarter and thank you for taking my questions.
First off was wondering if you could provide some additional commentary on leasing for instance, what are you seeing in terms of lease durations versus historical averages and then what portion of your leasing revenue is derived from office space.
John .
Okay.
I presume when we're talking about lease duration.
Youre, primarily focusing on office that amount because of course this growth.
In logistics for instance to longer lease terms over over the last 15 to 20 years. So let me let me be specific around the office lease term.
<unk> we are seeing.
Very significant lease term acquisitions and the tenant market.
<unk> the <unk>.
Stabilized lease terms that we saw pre pandemic.
And a low low as this business is being driven by occupies seeking to benefit from the incentives that can be achieved by taking long leases that's always been part of our.
The makeup of the market, but I think it does point to the fact that the office remains a fundamental part of the operational structure.
Companies.
About the workforce going forwards. So we are seeing very very good trend data on lease terms, particularly in the U S.
Was there was another part to that question.
Yes, just the last part was what portion of leasing revenue is derived from office space. If you can remind me.
Okay.
As we mentioned this on prior calls historically.
Going back again pre pandemic office leasing made up.
Getting on towards 60% of our leasing.
Total.
We expect that to.
To come back when offices are fully.
And so volume again, and we do feel we're getting towards.
Our projected 'twenty three 'twenty four full weight gain in offices, if it will come back to around about 50% and if you look at our overall leasing growth when we have material leasing growth over 2019, and those of course come.
Growth in other sectors, and new processing I would mentioned.
That hasnt been spoken about for a little while now, but we've seen some very significant upticks in retail leasing for instance in 2021.
We've seen the largest amount of net absorption in the U S market. Since 2017. So it isn't just all of that or was that play off in leasing between logistics and office we have.
Secular growth markets elsewhere in large asset classes elsewhere to consider.
Our focus on as a multidisciplinary company.
Great. That's very helpful. Thank you for all that color. One more question for me can you also talk about your ability to source labor and meet future demand, particularly within the P. S and segment with the tight labor market in mind.
Hi, John .
Yes.
So.
We have the ability.
I'll cover the question directly but also talk to inflation.
And how that shows up in the business.
We provide we provide labor to clients old resources scope.
Emissions ultimately our clients need those.
That results to show up to do the work.
And primarily in our FM.
And.
<unk> facility services business.
We pass on the cost of that labor directly to clients.
So ultimately once the labor to show up the client is prepared to pay.
Not whatever it takes but within reason to pay inflated labor costs.
Directly by the client so the resource to show up and undertake the work. So whilst it is a relatively tight labor market of course, particularly in certain skill sets in the U S. At this point, we're not seeing any particular issue around availability of labor or impacts of inflation on our margin.
That's great to hear that's it for me Congrats again on the results. Thank you.
Thank you.
Next question is from Doug Harter with Credit Suisse. Please go ahead.
Thanks.
Can you talk about that.
S M.
The contracts are coming up for bidding now.
Meaning how do you view your opportunity to kind of continue to win new clients today versus kind of pre pre COVID-19.
Right John .
So.
Excuse me our ability to to grow RSO businesses made up both of new wins, but also retention.
And of course, our existing contracts come up from time to time, they all they tend to be long and they tend to be very sticky saw win rate is very high.
Yes.
Our growth comes from basically winning more of our fair share.
In pursuits, but also.
That market is growing itself in terms of as I discussed earlier and the outsourcing so.
The pipeline at the moment as we see the outsourced market for multiple services is growing.
Yes.
Whilst we mentioned one contract actually two now.
On this call.
Onboarding, a number of very significant wins right across our facilities business, both services and facilities management.
On the pipeline looking forwards.
Also very positive so it isn't just the revenues of course were listening.
Very healthy growth and it's actually the throw off of those revenues into transactional business and into our project management business that is so attractive.
Again, it plays back to building out Cushman Wakefield globally to be able to take advantage of the secular trends that we're seeing and expanding client spend landscape.
I think the way to think about about earthbound is it doesn't really don't think about it as a <unk>.
Sine wave of velocity bids going out to market. That's just always been and always will be a regular and steady flow.
<unk> coming back to market, what's different and John talked about it is our ability to compete and win those contracts is improving every month every quarter every year, John talked about and we've mentioned in the release our winner.
<unk> Premier financial services global outsourcing contract and a big piece of that contract is evidence of our moving up the food chain ability to win more so it's really it's not that there is more contracts or less contracts coming to market with different for US is every day, we're more competitive in that market as evidenced by this most recent win.
Thank you.
That concludes today's question and answer session I will now turn the call back over to Brett White for <unk>.
Including remarks.
Great well. Thank you everyone for dialing in we look forward to talking to you at the end of the second quarter.
Thank you.
This concludes today's conference you may disconnect at this time.
You for your participation.