14/04/2023 - Jones Lang LaSalle Inc.: 2022 Annual Report

China, and spikes in inflation and interest rates. Transactional activity declined sharply, a downturn which has continued into the early months of 2023, while additional uncertainty created by the collapse of SVB Bank will impact the coming months.

Fortunately, the longer-range outlook is far brighter, driven by the structural macro-trends that have been guiding the long-term growth of our industry.

2022 performance overview

During 2022, the combination of higher interest rates, currency headwinds and geopolitical events exerted considerable downward pressure on the global economy. Real estate markets were hit particularly hard - after a buoyant start to the year, the onset of rising interest rates acted as a sharp break on investment sales activity in the second half of the year, with leasing activity also slowing during the fourth quarter, particularly within the office sector.

Against this backdrop, JLL reported solid full-year revenue growth and resilient overall business performance laying the foundation for strong and sustained growth once economic conditions brighten. Consolidated 2022 revenue rose 11% to $20.9 billion, with fee revenue rising 7% year-on-year to $8.3 billion. Adjusted EBITDA for the year was $1.2 billion, down

14% on the prior year. Adjusted diluted earnings per share were $15.71, down by 17% compared with 2021.

Offsetting the slowdown in transactional market activity, the resilience and diversification of our platform was evident in strong fee revenue growth across our annuity businesses, especially so for Work Dynamics which recorded an impressive 15% year-on-year increase in fee revenue to $1.9 billion. This resilient balance of transactional and annuity services across our platform positions JLL extremely well to weather economic downturns and deliver strong and profitable growth as market conditions improve. The organizational changes which we have executed in recent years will allow us to drive further efficiencies into our platform and reduce our overall cost to serve. Full

JLL / Annual Report 2022

details on our 2022 performance can be found in the enclosed 10-K starting on page 8.

Our One JLL promise

Reorientation to a global segment structure reflects our commitment to offer our clients a fully integrated )

. -1$ , ensuring we bring the best of JLL to each assignment. It has been a landmark step on the 4*) strategic journey we embarked upon in 2017 to guide JLL's success and profitable growth through to 2025 and longer-term.

It is worth remembering the global real estate services industry we see today grew out of what remained, until late in the 20th century, a densely interwoven localised patchwork of specialist brokerages and agencies operating in different market combinations. Today, JLL has achieved seamless global alignment across our five core business segments - Capital Markets, Markets Advisory (which includes our Leasing business), Work Dynamics (dedicated to advising our corporate occupier clients), JLL Technologies and LaSalle Investment Management. The resulting ability to optimise our service delivery to exactly meet each client's needs, guaranteeing both quality and consistency, embodies our ) promise.

Real estate industry macro-trends

Back in 2017, when we set out our 4*) strategic vision to drive JLL's long-term success and profitable growth, we identified four prevalent macro-trends shaping and defining the future of the real estate industry - corporate real estate outsourcing, capital flows, urbanization, and technology. Soon after, we added a fifth macro-trend into our strategic planning and thinking - sustainability. Notwithstanding the pandemic and geopolitical upheavals of the early 2020s, these five trends remain of paramount and enduring significance to the whole industry - and will likely continue to do so through this decade and well beyond.

The top five real estate

05macro-trends

Rising capital allocations to real estate

Although the near-term macroeconomic environment is temporarily stemming capital flows into real estate, the long- term appetite from investors represents a clear upward trend, attracted by the unique investment characteristics and returns from real estate investment. Substantial volumes of capital wait patiently on the side-lines for market conditions to stabilize and certainty around pricing to return. Investors will get used to living with much higher interest rates than those we have seen over the last decade. Increases in interest rates that began in the second half of 2022 will most likely lead to a trough in the market cycle in 2023, creating tremendous opportunities through the subsequent upswing in the not-too-distant future. Once predictability returns, the long-term trend of rising capital flows into real estate will surely resume.

Increasing urbanization

Even the Covid crisis could not really impact the decades-long global urbanization trend. As more people are drawn toward the world's thriving cities, it will spur further sustained growth and investment in the multifamily residential sector, as well as providing bigger and more concentrated markets for all aspects of real estate services.

Fourth Industrial Revolution

Technology and data are key components in answering many of the questions facing mankind, ranging from mundane everyday tasks to vital solutions to pressing global needs and challenges. Many major economies are facing demographic shifts that

are putting their wealth creation at risk, with working age populations shrinking in proportion to the elderly and otherwise out-of-work. Despite the economic downturn that began in mid- 2022, we still see very tight employment markets across most larger economies and keen competition for talent. Solving all of this will further accelerate the Fourth Industrial Revolution, the rolling transformation that technology innovation is bringing to the ways in which we live and work. Through a real estate lens, we forecast 78% of our corporate clients will be using corporate real estate technology by 2025, with 99% needing

a technology partner to manage their portfolio. From JLL's perspective, equipping our people with the best technology and data to provide unrivalled insights and advice is a key goal, as is maintaining and extending our lead in 'proptech' products and data analytics.

Sustainability

With around 40% of global carbon emissions emanating from the built environment, the real estate sector has a fundamental collective responsibility to set and achieve ambitious needle- moving sustainability targets. JLL is committed to playing a leading part in addressing this existential challenge - from setting aggressive sustainability targets for our own operations, through providing the best sustainability products and advice for our corporate and investor clients, to developing thought- leadership and collaboration with industry bodies. An example is our prominent ongoing partnership with the World Economic Forum on its Green Building Principles. With ESG requirements rising ever higher on our clients' priority lists, JLL will continue to advance and expand delivery of sustainability expertise and solutions - presenting a growth opportunity and a key aspect of delivering on our company's purpose. Full details of our sustainability targets and services are available in our annual Global Sustainability Report and on our sustainability web pages.