2020 Annual Report Jones Lang LaSalle Incorporated Shaping the future of real estate for a better world Shaping the future of real estate for a better world A letter to our stakeholders From Christian Ulbrich President and Chief Executive Officer 1 | JLL 2020 Annual Report Any reflection on 2020 is obviously dominated by the changes brought to our lives by the Covid-19 pandemic. From a JLL perspective, we can be very proud of how our 91,000 people around the world responded to the extraordinary challenges of the pandemic, and proud also of the strength and bonds of trust within our client relationships. Equally important is the role we played together with our clients in rapidly adapting to changed circumstances, maintaining essential operations and supporting the wider community. In addition to delivering impressive annual results for 2020, we also completed a major two-year transformation program, significantly progressed our commitments toward sustainability, accelerated our journey to becoming the industry leader in technology and data, and further intensified our focus on promoting diversity and inclusion in all areas of our business. We have laid the foundations to support strong and sustained profitable growth over the next decade, guided by our purpose of shaping the future of real estate for a better world. 2020 performance highlights The significant growth of our Corporate Solutions, Property & Facility Management and Project & Development Services JLL closed the year with resilient financial performance and businesses over the last decade countered the declines in record operating cash flow, despite the considerable impact of transactional revenues in 2020. The value of trusted client the Covid-19 pandemic on businesses and economies across relationships, and the substantial capacity of JLL’s global the globe through much of 2020. Consolidated revenue declined platform to quickly adapt services and advice to the rapidly 8% year-on-year to $16.6 billion, while fee revenue was down changing needs of our clients across all industry types, 14% at $6.1 billion. Adjusted EBITDA for the year was $860 underpinned solid and dependable revenues and pipelines. million, 24% lower than in 2019. Adjusted diluted earnings per share were down 34% year-on-year at $9.46. Cash generated Turning to our LaSalle Investment Management business, the by operating activities was $1.1 billion in 2020, compared with anticipated decline from near-record 2019 incentive fees was $484 million in 2019, predominantly the result of solid operating the primary driver of lower year-on-year fee revenue. However, results and strong cash collection on receivables, while also LaSalle effectively countered this with solid advisory fees and helped by government-sponsored relief programs, and lower continued strong private equity capital raising. cash payments for taxes. Overall, as pandemic-related lockdowns slowed global Transformation landmark economic activity, the impact on commercial real estate fell most heavily on transactional business. For JLL, lower Capital During 2020, we achieved an important landmark in our Beyond Markets and Leasing fee revenue reflected a sharp year-on- long-term strategic growth plan, completing a major two-year year drop in total market volumes. However, the fourth quarter transformation program. In early 2019, we began by globally saw the beginnings of a recovery in Capital Markets, with JLL’s aligning all our corporate functions. Later that year, Corporate activity boosted by our diverse and comprehensive offering Solutions and Valuation Advisory moved to global business across products and asset classes, and by the ongoing success line structures, and we established JLL Technologies to bring of the 2019 acquisition of HFF. together all our internal and external technology and data JLLJLL 2020 2020 Annual Annual Report Report | | 2 2 capabilities. At the start of 2020, Capital Markets moved to a global business line structure, including the newly integrated HFF business. In November, we announced the final key step on this transformation journey with all other local and regional services moving into global alignment within our new Markets business, effective January 1, 2021. This fully-aligned structure will drive new growth while Left to right:Ingrid Jacobs, Sheila Penrose and Bobby Mehta ensuring our clients receive seamless service around the world, enhancing the connectivity between countries and regions, facilitating knowledge flows, and accelerating the deployment In January 2021, Ingrid Jacobs (pictured) joined JLL in a new of new technology and other innovations. dedicated senior global role as Head of Diversity & Inclusion. In February 2021, JLL was named to the Bloomberg Gender- Equality Index for the second successive year. People Our commitment to diversity and inclusion, and all other Reflecting on a year like no other, this annual report is in part a aspects of our culture and values, stems from the most senior celebration of the resilience and achievements of our people. levels of the organisation. The tone is set at the top. After 15 We talk a lot about the importance of culture and our values years in the role, Sheila Penrose (pictured) decided to step down of teamwork, ethics and excellence. The past year provides a as Chairman of the JLL Board of Directors during 2020. Sheila’s unique illustration of why this is so important. We have seen role in guiding and shaping JLL’s values, culture and sustained compassion and commitment in abundant measures. We have success has been highly significant. We are delighted that she also seen great agility in adapting advice and services, rethinking continues as a member of the Board. processes, and generating new products and solutions, always Unanimously elected as Sheila’s successor, Bobby Mehta characterised by those hallmark JLL values of teamwork, ethics (pictured) became JLL’s new Chairman of the Board of Directors and excellence. on June 1, 2020, having originally joined the Board in 2019. Along with most other businesses, we implemented rapid Bobby has a wealth of experience from his former CEO roles at temporary changes to the ways we work. I would like to place TransUnion and major divisions of HSBC, and service on several on record my thanks to all my colleagues who so quickly and other boards. Like Sheila before him, Bobby brings superb efficiently adapted to working from home, and to all those business acumen, leadership and judgment to the role, and he who participated in furloughs and similar arrangements. is an excellent global ambassador for JLL. I would also like to give special thanks to the thousands of our people around the world who continued working on client sites throughout the pandemic, many supporting medical Places and other essential facilities, as well as key links in supply and distribution chains. The onset of the pandemic has accelerated trends that were already changing the way we live and work, bringing with them Looking ahead, even in this highly innovative digital age, the considerable implications and opportunities for the real estate sustained success of our business will always remain primarily industry. Most obviously, the sudden shift of office populations dependent on the culture, values and commitment of our to home working has raised debate around the future of the people. JLL seeks to attract the very best talent in all areas of office and, more broadly, the future of cities. The changing our work with the employee value proposition Achieve Your dynamics of retail and residential property have also been Ambitions. The successful completion of our transformation accentuated by the pandemic, while sectors such as logistics program, globally aligning all our core business lines and and industrial, healthcare and other specialist asset types have functions, further enhances the excellent career progression risen to new prominence. opportunities we provide. Working in very close partnership with our clients, JLL is at the A central strategic priority is to significantly advance our progress forefront in predicting, understanding and responding to these toward creating a truly diverse and inclusive business at all changes and opportunities. Through 2020 and into 2021, our levels. For the last several years, we have been moving the Reimagine series of products and research has helped clients needle in the right direction but going forward we would like respond to the pandemic, re-enter their marketplaces, and plan to accelerate that journey. In 2020, we further expanded our for the next normal in a post-pandemic era. existing programs and commitments, including through hosting the first annual Black Excellence Summit for our Americas region It is our strong belief, borne out by our client surveys and in November, adding to numerous other gender and ethnic detailed research analysis, that the prospects for the world’s diversity-oriented events around the world throughout the year. major cities and urban hubs are bright and exciting. As the 3 | JLL 2020 Annual Report pandemic recedes, the allure of the concentration of culture, Building on many years of growing and expanding our services creativity, learning, opportunity, innovation and convenience and expertise in countries and business lines around the — and much more besides — will again draw populations into world, in January 2021 we appointed Guy Grainger – previously the world’s leading cities. our EMEA CEO – as our first Global Head of Sustainability Services & ESG, a senior role tasked with aligning and driving The way we use offices, especially those in central business exponential growth in all aspects of this vital work. Our Global district locations, will continue to change. The hybrid model Executive Board has identified this as a core strategic priority, of part remote, part office-based working looks set to hold reflecting our guiding purpose of shaping the future of real sway. However, offices will remain at the beating heart of estate for a better world. leading organisations — the gathering places for shared working, learning, creative hubs, social events, client and customer meetings — and symbolic of the culture and identity of each employer.