Final Results

RNS Number : 2714E

Savills PLC

10 March 2022

Savills plc

("Savills" or "the Group")

PRELIMINARY RESULTS FOR THE FULL YEAR ENDED 31 DECEMBER 2021

RECORD REVENUE AND PROFITS RESULTING FROM EXTRAORDINARILY STRONG TRADING RECOVERY.

Savills plc, the international real estate advisor, today announces its preliminary results for the year ended 31 December 2021.

Key financial highlights

· Group revenue up 23% to £2.15bn (2020: £1.74bn)

· Underlying* profit before tax up 107% to £200.3m (2020: £96.6m)

· Reported profit before tax up 120% to £183.1m (2020: 83.2m)

· Reported basic earnings per share ('EPS') up 114% to 104.9p (2020: 49.0p)

· Aggregate dividend of 55.4p to be paid in May 2022, includes a one-time special dividend of 27.05p

· Net cash** £340.7m (2020: £177.7m)

* Underlying profit before tax ('underlying profit') is calculated on a consistently reported basis in accordance with Note 3 to this Preliminary Statement.

** Net cash reflects cash and cash equivalents net of borrowings and overdrafts in the notional pooling arrangement (see Note 8).

Key operating highlights

· 2020's strategy of maintaining full operating strength and high levels of client service positioned the Group well for the progressive recovery in 2021.

· Transactional Advisory revenues up 34% in recovering markets; Commercial Transaction revenue increased 35% overall with strong growth in the UK and Asia Pacific. Residential Transaction revenue up 31%.

· Less transactional businesses, in aggregate 58% of Group revenue, continue to perform well with revenue up 17%.

· Property and Facilities Management revenue up 9%, Consultancy revenue up 24%.

· Savills Investment Management revenue up, driven by base management fees growth of 30%. Assets under Management ('AUM') up 22% at €25.8bn.

· The Group entered a significant strategic partnership between Savills Investment Management and Samsung Life Insurance ('SLI') to accelerate the future growth of the Savills Investment Management business.

· Continued investment in people, technology leadership and innovation in sustainability including the launch of Savills Earth consultancy services.

Commenting on the results, Mark Ridley, Group Chief Executive, said:

"Savills delivered a record performance in 2021 reflecting the significant recovery in both residential and commercial transactional markets supported by growth in our less transactional Investment Management, Property Management and Consultancy businesses.

The war in Ukraine has shocked the world and, in response, Savills is providing support both through international charities and via our Polish operation, focussing particularly on Ukrainian refugees. Our thoughts are with everyone affected in the region and we can only hope for a peaceful resolution as quickly as possible.

At this stage it is too early to predict the economic, including longer term inflationary, impact of the Ukrainian crisis on the world's real estate markets. Subject to this key uncertainty, we would anticipate real estate transaction volumes and discretionary spend to normalise in the year ahead, alongside the continued recovery of global markets as they emerge from pandemic-related disruptions.

The Group has started 2022 in line with our expectations and the strength of our balance sheet supports our growth strategy to pursue further complementary acquisitions and significant recruitment across our global business."

The analyst presentation will be held at 9.30am today by webinar. For joining instructions please contact nrichards@savills.com. A recording of the presentation will be available from noon at www.ir.savills.com .

For further information, contact:

Savills	020 7409 8934
Mark Ridley, Group Chief Executive Simon Shaw, Group Chief Financial Officer

Tulchan Communications	020 7353 4200
Mark Burgess Elizabeth Snow

Chairman's statement

The Group experienced an extraordinarily strong trading recovery in 2021, resulting in record revenue and profits.

Results

The Group's revenue increased by 23% to £2.15bn (2020: £1.74bn), with strong trading in the last quarter of the year led by the UK and Asia Pacific regions. Both Continental Europe and the Middle East ('CEME') and North American regions recovered to reverse 2020's losses delivering better than expected profits for 2021. With more than half of the revenue growth from the Transaction Advisory business, and reduced levels of discretionary expenditure, underlying profit for the year substantially increased by 107% to £200.3m (2020: £96.6m), reflecting a margin of 9.3% (2020: 5.6%). The Group's reported profit before tax increased by 120% to £183.1m (2020: £83.2m).

Overview

Savills delivered a record revenue and profit performance in 2021, reflecting both the robustness and geographic diversity of our business and the strategy of maintaining staffing levels throughout the course of the pandemic. Overall, our Transaction Advisory revenue increased 34%, our less transactional businesses of Consultancy and Property Management grew revenue by 24% and 9% respectively. The UK Residential Transaction Advisory business delivered a record performance with a revenue increase of 38%.

Despite the backdrop of pandemic-related uncertainty in 2021, the UK performed exceptionally well across all business lines. There were notably strong performances from the Transactional Business lines, albeit Commercial office leasing volumes remained below historic averages in the majority of markets. Savills strengths in both logistics and retail warehousing, both of which enjoyed significant volume increases year-on-year, also contributed to our overall outperformance. The UK prime residential market continued to perform extremely strongly and volumes in the Prime Central London market clearly began to improve through the last quarter of the year.

In Asia Pacific, the business as a whole had a good finish to the year. Hong Kong sales activity and market share were strong and Australia, Singapore and Japan also enjoyed strong trading activity in the final quarter. In both CEME and North America the increase in transaction volumes resulted in profits in both regions for the year. Commercial Transaction revenues increased 27% and 28% year-on-year in CEME and North America respectively.

Savills Investment Management outperformed expectations, as a result of new fund launches and strong investment performance from the majority of our products, together with the benefit of the acquisition of DRC Capital LLC ('DRC') from the end of May in attractive markets for real estate debt investment. Capital raising and deployment were robust following the cautious approach adopted across the markets during the pandemic. A number of new funds successfully launched during the year and Assets Under Management ('AUM') increased 22% to €25.8bn (2020: €21.1bn).

The increase in transaction volumes, alongside substantially lower levels of discretionary expenditure (travel, entertainment and marketing events all remained severely curtailed), resulted in an increase to the Group underlying profit margin to 9.3% (2020: 5.6%).

The impact of the above factors on the Group underlying profit margin delivered an increase in reported profit before tax of 120% to £183.1m, representing an 8.5% reported pre-tax profit margin (2020: 4.8%).

Currency movements in the year decreased revenue by £49.8m, underlying profit by £4.1m and reported profit before taxation by £3.2m.

Impact of COVID-19 and war in Ukraine

The real estate sector has shown resilience in the face of the pandemic. Global real estate investment volumes substantially recovered during the year, with volumes 59% higher than 2020. Office investment remains below pre-pandemic levels, however volumes in the highly sought-after industrial sector were up 61% on 2019 levels. Residential became the largest sector for investment globally during 2021, with investors attracted to its secure, income generating qualities.

Globally, office leasing volumes have been the slowest transactional segment to recover as Corporate Occupiers assess both return to work strategies for their staff and, increasingly, the Environmental, Social and Governance ('ESG') impact of their leasehold estates.

The UK housing market performed strongly in 2021, delivering double digit house price growth and the highest level of transactional activity since 2007. The prime housing markets performed particularly strongly with activity levels remaining buoyant even after the end of an extended stamp duty holiday, despite reduced levels of publicly marketed stock during the second half of the year. Prime transactions were more heavily weighted to the markets beyond London, as buyers continued to reassess their housing needs in the search for space.

In the Asia-Pacific region, investors were resilient in the face of varied pandemic-related restrictions and geopolitical concerns in 2021 with an estimated 30% rise in volumes compared with 2020. In many countries which experienced significant lockdowns, real estate markets appear to have learned how to manage on a "business as usual" basis.

In Europe, there was also a strong rebound in European commercial and residential investment volumes in 2021 despite the ongoing pandemic-related disruptions. European investment volumes reached an apex during the final quarter of 2021, marking a 25% jump in volumes on the past 5-year average.

In North America, corporate office leasing markets improved during the period, which became increasingly apparent in the last quarter of 2021. The tech and life science sector continues to lead demand as the five prominent American tech giants expanded in key talent hubs with buildings that will incentivise in-office employee collaboration and satisfaction, even as hybrid work policies remained largely in force. Demand for industrial space also continued at a record pace and average vacancy has reduced to 4.5% across the US.

It is too early to predict the impact of the crisis in Ukraine on the world's real estate markets. Savills derives immaterial revenues (<0.1%) from clients of Russian origin and we have suspended our long- standing franchise relationship with an agency in Moscow. The Group does not have operations in Ukraine.

Sustainability in real estate

Decarbonising the real estate sector is an urgent and pressing need; a challenge that COP26 highlighted. Consequently, ESG considerations are increasingly defining both investor and occupier decisions. In Europe, ESG is already actively shaping the assets and geographies in demand, a trend set to spread globally over coming periods. Throughout the period, Savills engaged our in-house sustainability expertise to audit the Group's footprint and recommend the strategy for progressing to net Zero. The 2021 Annual Report contains the Group's first report under the Task Force on Climate-Related Financial Disclosures ('TCFD') framework. In summary, we have achieved significant reductions in Scope 1 and 2 CO2 emissions since 2016, which represented 6,738 tonnes CO2e in 2021. We are committing to Science-Based Targets to deliver our goals, consistent with a no greater than 1.5°C temperature increase, of achieving Scope 1 and 2 net zero by 2030 and net zero in our value chain (i.e. Scope 3, including assets under the Group's control) by 2040.

Business development

Savills strategy is to be a leading multi-sector property advisor in the key markets in which we operate. Our global strategy is delivered locally by our experts on the ground with flexibility to adapt quickly to changes in circumstances and opportunities. They are supported by our global cross-border investment, residential and occupier services specialists. Over the last few years we have acquired a number of complementary businesses and added teams and individual hires to our strong core business.

During the pandemic, the Group has continued to focus on strategic development of the business, which has been enabled by the Group's strong balance sheet. In the first half of the year, Savills Investment Management completed the accelerated acquisition of the outstanding 75% of DRC Capital (a related party), the specialist European Real Estate Debt Investment Manager.

In December 2021, the Group entered a significant strategic partnership between Savills Investment Management and Samsung Life Insurance ('SLI') to accelerate the future growth of the Savills Investment Management business. The Group sold an initial 25% stake in the Savills Investment Management business to SLI for consideration of £71.7m (of which £63.7m was received on completion). SLI, in turn, is committed to investing in excess of US$1bn into Savills Investment Management products over the initial five year term of the relationship.

Earlier in the year, the Group acquired T3 Advisors, a leading Real Estate advisor in the Life Science and Technology sectors in North America. In Q4 we enhanced our Asia Pacific project management and real estate consulting capabilities through the acquisition of 60% of the Merx Group of companies headquartered in Singapore. The Group also further strengthened our market leading position in Spain by acquiring a largely retail property management business.

Since the end of the year, the Group has also entered into a business venture with leading Berlin-based real estate agent Thomas Zabel as part of our expansion strategy in the European residential market.

In addition to the acquisitive growth in our business, we continue to undertake organic growth initiatives across the platform, with significant recruitment across all our regions, with particular focus on North America, Greater China and CEME.

Focus on technology

Technology continues to be an important focus for the Group, and we benefit from the investments we have made both internally and externally, through Grosvenor Hill Ventures (our technology investment subsidiary).

Across the Group data-led insight continues to help us solve many of the most complex real estate challenges our clients face. While markets around the world are at different phases of data transparency, our regional centres of excellence closely aligned to client facing teams help match real estate understanding with data expertise.

In the summer our award-winning Knowledge Cubed platform underwent a significant upgrade with the launch of a host of new "apps" to help corporate occupiers manage their real estate interests. In the UK auction market, we have continued to take market share by utilising our bespoke live-stream auctioning platform, and off this success have further expanded our commercial auction offering.

As employees return to offices across the world, there is an increasing focus on tenant experience with landlord clients and their customers increasingly looking to deploy technology that reduces day-to-day points of friction. We've observed an evolution from the pre-pandemic objective of "community building" particularly within the multi-tenant office environment to platforms that genuinely improve the occupational experience. Post year-end we completed the acquisition of one such platform "Cureoscity" which is currently being rolled out to our UK Property Management clients to enhance tenant security and experience.

Our technology-enabled flexible office brokerage Workthere capitalised on the increased demand for flexible workspace across the globe. It delivered a very strong end to the year and has a good pipeline for 2022, with particularly strong performances from the UK, US, Netherlands and France.

During the year we led a funding round into Income Analytics through Grosvenor Hill Ventures, alongside MSCI. This exciting business is a data technology firm which provides investors with proprietary global rental default risk measures on commercial real estate income at tenant, asset, fund and portfolio levels.

Board

As previously announced, in January 2021 Philip Lee and Richard Orders joined the Board as Non-Executive Directors. Rupert Robson retired from the Board at the Annual General Meeting in May 2021 and Tim Freshwater retired from the Board on 31 December 2021. I thank them both for their enormous contribution to the Board over the years and Tim in particular for his valuable counsel latterly as Senior Independent Director.

Dividends

A final ordinary dividend of 12.75p is recommended by the Board (2020: 17.0p), alongside a supplemental interim dividend of 15.6p (2020: nil). In addition, in view of the Group's very strong recovery and cash generation since the lockdowns of 2020, the Board is also proposing a one-time special dividend of 27.05p being similar to the 2019 final ordinary and supplementary dividends which were cancelled as COVID-19 took hold in March 2020.

The aggregate dividend of 55.4p will, subject to Shareholder approval for the recommended final dividend at the AGM on 11 May 2022, be paid on 17 May 2022 to Shareholders on the register at 8 April 2022. The total paid and recommended ordinary, supplemental and special dividend for the 2021 financial year comprises an aggregate distribution of 61.4p (2020: 17.0p).

People

The strength of our recovery is an absolute testament to the commitment of our entire global workforce and I would like to express my thanks to all our staff worldwide for their hard work, their flexible approach during challenging times and relentless commitment to client service.

Summary and Outlook

Savills delivered a record performance in 2021 despite the backdrop of pandemic-related uncertainty in the year. This was a result of our strategy to maintain full operating strength and high levels of client service through the pandemic, enabling the Group to successfully service clients into the progressive recovery of many markets in which we operate. Our balance sheet remains strong and we continue to focus on developing our global businesses through the coming periods through acquisitions and organic growth.

Looking forward, at this stage it is too early to predict the economic, including longer term inflationary, impact of the Ukrainian crisis on the world's real estate markets. Subject to this key uncertainty, we would anticipate real estate transaction volumes to normalise in the year ahead, alongside the continued recovery of global markets as they emerge from pandemic-related disruptions. In addition, inflationary pressures in many markets will result in costs increasing at the highest rate for many years and we anticipate that discretionary costs will progressively normalise.

The Group has started the new year in line with our expectations.

Nicholas Ferguson CBE

Chairman

Review of operations

Savills geographic and business diversity were key to achieving the year's result. Our performance analysed by region was as follows:

	Revenue £m			Underlying profit/(loss) £m
	2021	2020	% growth	2021	2020	% growth
UK	925.6	710.7	30	129.5	78.8	64
Asia Pacific	626.5	575.7	9	59.2	42.3	40
CEME	301.2	240.7	25	15.4	(2.2)	n/a
North America	293.7	213.4	38	15.1	(8.4)	n/a
Unallocated	-	-	n/a	(18.9)	(13.9)	n/a
Total	2,147.0	1,740.5	23	200.3	96.6	107

On a constant currency basis Group revenue increased by 26% to £2,196.8m, underlying profit increased 112% to £204.4m and reported profit before tax increased by 124% to £186.3m. Our Asia Pacific business represented 29% of Group revenue (2020: 33%) and our overseas businesses as a whole represented 57% of Group revenue (2020: 59%). Our performance by service line is set out below:

	Revenue £m			Underlying profit/(loss) £m
	2021	2020	% growth	2021	2020	% growth
Transaction Advisory	892.9	667.2	34	97.6	19.4	403
Property and Facilities Management	745.6	681.9	9	49.1	44.8	10
Consultancy	396.7	320.6	24	47.0	31.5	49
Investment Management	111.8	70.8	58	25.5	14.8	72
Unallocated	-	-	n/a	(18.9)	(13.9)	n/a
Total	2,147.0	1,740.5	23	200.3	96.6	107

Overall, our Commercial and Residential Transaction Advisory business revenues together represented 42% of Group revenue (2020: 38%). Of this, the Residential Transaction Advisory business represented 11% of Group revenue (2020: 10%). Our Property and Facilities Management businesses continued to perform well, growing year-on-year and representing 35% of Group revenue (2020: 39%). Our Consultancy businesses represented 18% of revenue (2019: 19%). The Investment Management business had a strong performance, with revenue increasing by 58%. It represented 5% of Group revenue (2020: 4%).

Transaction Advisory

Overall, our Transaction Advisory revenues increased by 34% (38% on constant currency basis) to £892.9m (2020: £667.2m). Globally our Commercial Capital Transaction business revenue increased by 44% and our Leasing and Occupier focused transactional revenues grew by 30%. Our Global Residential business revenue increased by 31%.

Underlying profits grew 403% to £97.6m (2020: £19.4m), with an increased underlying profit margin of 10.9% (2020: 2.9%), as a result of the upturn in activity across most of our key markets.

Asia Pacific Commercial

Revenue from the Asia Pacific Commercial Transactional business increased by 47% to £153.0m (2020: £103.9m), an increase of 51% in constant currency, and exceeding 2019 revenues by 10%.

Investment markets recovered in the majority of our key markets, notably Hong Kong, Australia, Singapore and Japan as investors started to deploy capital after the slow-down in 2020. The exceptions were in Mainland China and South Korea where demand remained somewhat subdued. In China, both continued pandemic-related restrictions and the impact of recoverability of the bonds issued by certain major developers, affected investor sentiment. In South Korea by contrast, 2021 represented a reversion to more normal levels of activity after an unusually strong performance in 2020.

Leasing activity in the region also improved, notably in Australia and Singapore, as corporates which had delayed making longer term lease decisions during 2020, began to commit to new leases.

Overall the Asia Pacific Commercial Transactional business resulted in an underlying profit of £20.6m, more than six times higher than the previous year (2020: £3.3m) with a margin of 13.5% (2020: 3.2%).

UK Commercial

UK Commercial Transactional revenue grew by 44% to £115.2m (2020: £79.8m), reflecting improvement in both the investment and leasing sectors.

Our capital markets revenues increased by 53%, representing a combination of market share gains and overall market recovery; UK commercial property investment volumes in 2021 were approximately £65bn, being 38% higher than the same period in 2020. Retail warehousing and industrial sectors experienced the strongest recovery, sectors in which Savills enjoys strong market positions. Our leasing revenues grew by 36% on 2020 (13% growth on 2019), with growth across our sector specialisms including Retail.

Improved revenue allied to significantly reduced discretionary costs in comparison with normal market conditions, combined to improve Underlying profit by 126% to £21.5m (2020: £9.5m 2019: £12.3m) representing a significant increase in margin to 18.7% (2020: 11.9%).

North America

Revenue from the North America Transactional business increased by 28% to £263.6m (2020: £205.2m), an improvement of 36% in constant currency.

Being mainly a transactional business focused primarily on occupiers, the business recovered as anticipated from the impact of Covid in 2020. The overwhelming majority of North American revenue relates to occupier leasing transactions and improved by 27% to £240.6m (2020: £190.1m). This compares favourably with the overall leasing volume in the US market, which increased 20% over 2020.

Capital markets revenues improved by 52% to £23.0m (2020: £15.1m).

In addition, during the period discretionary expenditures such as travel and entertainment were suppressed, helping to deliver a recovery to underlying profit of £10.3m (2020: loss of £7.5m)

Continental Europe and the Middle East

In CEME, transaction fee income increased by 27% to £124.4m (2020: £98.2m); an improvement of 30% in constant currency. Our Investment revenues grew year-on-year by 25%, with significant recovery across the region, most notably in Ireland and Spain, whilst investment volumes in EMEA (excluding UK) reached €261bn in 2021, 4% above the previous five year average. Leasing revenues also recovered in 2021, with all three of our principal sectors up year-on-year (office by 18%, industrial by 41% and retail by 14%).

Our three largest contributors in this segment are Ireland, Germany and Spain. Ireland recovered significantly, having fallen by 65% in 2020, reaching 88% of the 2019 pre-pandemic level. The majority of this improvement derived from capital transactions where Savills is clear market leader. Revenues in Germany were down 2%, but up 1% on a constant currency basis, with reductions in Investment and Office leasing offset by growth in Industrial transactions. On a constant currency basis, revenues in Germany were 3% higher than in 2019, having been one of the few global locations to have achieved revenue growth in 2020. The 12% increase in revenues in Spain was also principally due to improved investment markets. In general transactional activity, particularly in respect of investment, progressively recovered across the rest of CEME region which collectively delivered revenues of approximately 98% of 2019 pre-pandemic levels.

As a result underlying profit increased to £1.4m (2020: £12.3m loss, 2019: £5.4m profit).

UK Residential

UK Residential Transactional revenue grew by 38% to £210.7m (£153.2m), with significant improvement in second hand agency revenues (up 48% year-on-year), supported by robust performances in both new homes and our Private Rented Sector (PRS) capital markets teams.

The UK housing market performed strongly in 2021 delivering double digit house price growth and the highest level of transactional activity since 2007. The prime housing markets performed particularly strongly with activity levels remaining buoyant despite the end of the extended stamp duty holiday, although there were reduced levels of available stock by the end of the year. Prime transactions were more heavily weighted to the regional markets outside London, as buyers continued to reassess their housing needs in the search for space. The prime central London market continued to be predominantly driven by UK resident buyers and activity was resilient; indeed sales in the £5m+ market exceeded £5.5bn for the first time since 2014. Overall Savills saw transaction levels increase by 45% on 2020, with exchanges of 7,412 in 2021 (2020: 5,128). The strong housing market underpinned sales of new homes which, in turn, fed strong demand for consented and strategic development land.

Revenue in the New Homes business increased by 13% in 2021. The Regional business outperformed 2020 with revenue increasing by 27% and London revenues remained stable. The Regional teams recorded 3,208 (70%) of the total reservations; a 24% improvement on 2020. In the London new homes market sales activity outside the central zone enjoyed similarly robust market conditions as the UK generally. However, in the more central prime locations, which are more dependent upon international buyers, activity continued to be relatively subdued as a result of international travel restrictions during much of the year.

Underlying profit increased by 69% to £38.9m (2020: £23.0m) reflecting a pre-tax margin of 18.5% (2020: 15.0%).

Asia Pacific Residential

Revenue from the Asia Pacific Residential Transaction business decreased by 3% to £26.0m (2020: £26.9m), a fall of 1% in constant currency. Whilst there was revenue growth in many of our markets including Mainland China and Australia, and an increased contribution from our joint venture in Singapore (Huttons), this was more than offset by reductions in activity in Hong Kong, where fewer prime transactions with mainland buyers took place during the period.

Underlying profits grew by £1.5m to £4.9m (2020: £3.4m) supported by the higher profit contribution from Huttons, our residential joint venture agency in Singapore, and the benefit of cost reductions across the region.

Property and Facilities Management

Our Property and Facilities Management businesses continued to perform well, with revenues growing by 9% to £745.6m (2020: £681.9m); 12% in constant currency. Savills total area under management increased by 4% to 2.45bn sq. ft. (2020: 2.35bn sq. ft.). Underlying profit increased by 10% to £49.1m (2020: £44.8m), 13% in constant currency.

Asia Pacific

In our Asia Pacific Property Management segment, revenues were £356.7m, a decline of 3% year-on-year (2020: £368.3m); a 1% increase in constant currency. There was 10% revenue reduction in facilities management (40% of the total revenue in this segment) as a result of certain contracts not being renewed in Hong Kong and South Korea, which was partially offset by a 2% increase in property management (which accounts for the other 60% of revenue in this segment). In Singapore, our investment in 2020 resulted in trading ahead of our expectations in 2021.

Underlying profits in 2021 were affected by the removal of 2020's COVID-19 employment subsidies comprising a net year-on-year reduction of approximately £5m. The trail effect of 2020 subsidies meant that the underlying profit margin for the region continued to be the top end of the normalised margin range of 7.2% (2020: 7.5%) for this service line. In absolute terms, profit declined by only £1.9m (£0.7m on a constant currency basis) to £25.8m.

The UK Property Management business grew revenues by 23% to £300.6m (2020: £245.0m) reflecting significant contracts won in 2021 and the full year effect of contracts won in 2020. The Residential Property Management Lettings team, which is also included in this segment, had a successful year, with revenues increasing by 10%, primarily as a result of the number of managed and tenanted properties increasing by 11% and 9% respectively.

The higher revenues, along with a continued drive to improve efficiencies, increased underlying profit by 28% to £22.0m (2020: £17.2m).

Continental Europe and the Middle East

In the CEME Property Management business revenues were up by £19.7m (29%) to £88.3m (2020: £68.6m); 33% on a constant currency basis. During August 2020 we acquired a German property management business, OMEGA Immobilien Management GmbH and OMEGA Immobilien Service GmbH ('Omega'), which contributed £11.5m of revenue to this segment in 2021 (2020: £3.6m). There was also revenue growth in the Middle East, following expansion in Egypt and an increase in ownership of the business in Saudi Arabia (previously a joint venture interest). Elsewhere, contract wins in Ireland, Spain and the Netherlands, and the full year effect of 2020 wins in France all contributed to the growth in this segment.

The Building and Project Consultancy platform, which is included in this segment at this early stage of its development, continued to expand with recently created teams in Italy, France, Poland and Sweden supplementing the significant growth in the Middle East.

As a result of the above factors underlying profit increased to £1.3m (2020: underlying loss of £0.1m).

Consultancy

As clients across the Globe sought advice through the pandemic and in preparation for recovery, global Consultancy revenue increased by 24% to £396.7 (2020: £320.6m); 25% on a constant currency basis. Underlying profit increased by 49% to £47.0m (2020: £31.5m); 52% on a constant currency basis.

The UK Consultancy businesses, comprising a broad range of advisory activities, increased revenue by 19% to £244.0m (2020: £205.8m). Our Housing teams saw significant revenue growth through the impact of Government legislation on the sector and increased post lockdown access to housing stock for survey work, which had been delayed from 2020. The remaining principal Consultancy services (Building Consultancy, Planning, Development and Valuations) all registered increased revenue through the progressive recovery in general activity and increased focus on ESG in all aspects of Real Estate. This element of our advisory service, which is addressed by a suite of services branded "Savills Earth" now comprises c. 120 professionals and is becoming a significant driver of Real Estate decisions across all sectors.

Underlying profit increased by 41% to £33.1m (2020: £23.5m).

Asia Pacific

In the Asia Pacific Consultancy segment, revenues increased by 18% to £81.3m (2020: £69.1m); 19% on a constant currency basis. Three of our largest businesses in the region (China, Hong Kong and Singapore) experienced increased market demand, whilst in Australia where we currently offer the broadest suite of services in the region, pandemic restrictions were significant throughout the period and revenues increased by 2%, with growth in Valuations being offset by reductions in Project Management due to COVID-19-related contract delay and/or cancellations.

Cost increases and the impact of an internal re-organisation between segments in China, restricted profitability overall with underlying profit increasing by 2% (6% on a constant currency basis) to £6.6m (2020: £6.5m).

Continental Europe and the Middle East

Revenues increased by 10% to £41.3m (2020: £37.5m), 14% on a constant currency basis.

In Spain, which represents approximately 25% of CEME Consultancy, revenue increased by 14%, whilst in Germany, lower volumes of transactional related valuation work led to a 21% decline in revenue year-on-year. All other countries collectively registered good growth in revenue.

Underlying profits grew by 4% on a reported basis to £2.5m (2020: £2.4m); 13% in constant currency.

North America

As part of our strategy to diversify our income streams by building up our Consultancy practices, in March 2020 we announced the acquisition of Macro Consultants LLC, a national project management consultancy business, and in June 2021 we acquired T3 Advisors, a workplace solutions advisory firm specialising in the life science and technology sectors.

As a result of a strong performance of these two acquisitions, the North America Consultancy revenues were £30.1m (2020: £8.2m) with an underlying profit of £4.8m (2020: underlying loss of £0.9m).

Investment Management

Our Investment Management business achieved revenue growth of 58% to £111.8m (2020: £70.8m); 60% in constant currency. Base Management fees (representing 70% of revenue) increased by 30% year on year including the benefit of the acquisition of the remaining partnership interests in Real Estate Debt investor, DRC Capital LLP (May 2021). These were supplemented by a 12% increase in transaction fees and a supernormal increase of over 90% in performance fees.

During the year we announced the strategic relationship with Samsung Life Insurance of South Korea ('SLI), The transaction completed on 31 December 2021 involving the sale of 25% of Savills Investment Management to SLI and the latter's commitment to invest at least $1bn, predominantly seed capital, into funds managed by Savills Investment Management through the initial 5 year term of the agreement.

Assets under management at 31 December 2021 increased by 14% to £21.7bn (2020: £19.0bn) and £2.5bn of capital was raised during the year (2020: £1.7bn).

Underlying profit, which was enhanced by the supernormal level of performance fee income increasing profit margin to 22.8%, grew 72% to £25.5m (2020: £14.8m); 75% in constant currency.

Financial review

Profit margin

Underlying profit margin increased to 9.3% (2020: 5.6%), reflecting the significantly higher levels of transactional activity and the abnormally low levels of discretionary expenditure in respect of travel, entertaining and marketing events in particular.

Reported pre-tax profit margin increased to 8.5% (2020: 4.8%).

Taxation

The tax charge for the year increased to £36.4m (2020: £15.2m), representing an effective tax rate on reported profit before tax of 19.9% (2020: 18.3%). The Group's effective reported tax rate is marginally higher than the UK effective rate of tax of 19% as a result of profits in higher tax jurisdictions and non-deductible transaction-related costs.

The underlying effective tax rate increased to 18.7% (2020: 18.5%).

Transaction-related costs

During the year the Group recognised a total of £17.0m in transaction-related costs (2020: £5.0m). This increase reflects a higher volume of business development activity year-on-year. These costs primarily relate to future consideration payments, associated with acquisitions, which are subject to a future service condition (2021: £13.9m, 2020: £4.0m). The largest individual components of this charge in 2021 relate to the acquisition of DRC Capital LLP and the acquisition of Macro Consultants LLC in 2020.

These charges have been excluded from the calculation of underlying profit in line with Group policy.

Earnings per share

Basic earnings per share increased 114% to 104.9p (2020: 49.0p), reflecting a 116% increase in reported profit after tax. Adjusted on a consistent basis for exceptional restructuring, transaction-related costs, profits and losses on disposals, certain share-based payment adjustments, amortisation and impairment of intangible assets arising from business combinations, impairments of goodwill and exceptional fair value gains and losses, underlying basic earnings per share increased 105% to 116.5p (2020: 56.8p).

Fully diluted earnings per share increased by 108% to 99.8p (2020: 47.9p). The underlying fully diluted earnings per share increased 100% to 110.9p (2020: 55.5p).

Cash resources, borrowings and liquidity

Cash and cash equivalents, net of overdrafts in notional pooling arrangements, at year end increased 45% to £491.2m (2020: £338.3m). This increase reflected: strong trading results, the higher cash outflows associated with corporate acquisition activity and the reinstatement of dividend payments in the year, together with the cash proceeds received from the sale of the Group's 25% interest in Savills Investment Management.

Gross borrowings at year end decreased to £150.5m (2020: £160.6m). These principally comprise £150.0m (2020: £150.0m) of 7, 10 and 12 year fixed rate notes which were issued in June 2018, in 2020 borrowings also included £11.4m drawn under a revolving credit facility in North America. The Group's UK revolving credit facility ('RCF') was undrawn at the end of the year (2020: undrawn), with a total of £422.2m (2020: £397.2m) of undrawn borrowing facilities available to the Group. At the year end, cash and cash equivalents net of gross borrowings was £340.7m (2020: £177.7m).

Cash is typically retained in a number of subsidiaries in order to meet the requirements of commercial contracts or capital adequacy. In addition, cash in certain territories is retained to meet future growth requirements.

The Group's net inflow of cash is typically greater in the second half of the year. This is as a result of seasonality in trading and the major cash outflows associated with dividends, profit related remuneration payments and related payroll taxes in the first half. The Group cash inflow for the year from operating activities was £302.7m (2020: £241.4m).

With a large proportion of the Group's revenue typically being transactional in nature, the Board's strategy is to maintain low levels of gearing, but retain sufficient credit facilities to enable it to meet cash requirements during the year and finance the majority of business development opportunities as they arise.

Capital and Shareholders' interests

During the year 1.1m (2020: 8,504) new ordinary shares were issued on the exercise of options by participants of the Group's SAYE schemes. The total number of ordinary shares in issue (before the impact of shares held by the Savills plc 1992 Employee Benefit Trust and the Savills "Rabbi" Trust) at 31 December 2021 was 144.2m (2020: 143.1m)

Savills Pension Scheme

The funding level of the defined benefit Savills Pension Scheme in the UK, which is closed to future service-based accrual, improved substantially during the year primarily as a result of the increase in the yield on AA-rated corporate bonds. The plan was in a surplus position of £17.4m at the year-end (2020: £2.6m liability).

Net assets

Net assets as at 31 December 2021 were £753.4m (2020: £581.6m). This movement reflects the Group's trading performance alongside the actuarial gain on the defined benefit pension plans and proceeds from the sale of the Group's 25% interest in the Savills Investment Management group to Samsung Life in December 2021.

Foreign currency

The Group operates internationally and is exposed to foreign exchange risks. As both revenue and costs in each location are generally denominated in the same currency, transaction related risks are relatively low and generally associated with intra Group activities. Consequently, the overriding foreign currency risk relates to the translation of overseas profits and losses into sterling on consolidation. The Group does not actively seek to hedge risks arising from foreign currency translations due to their non-cash nature.

The net impact of foreign exchange rate movements during the year represented a £49.8m decrease in revenue and a £4.1m decrease in underlying profit.

Principal risks and uncertainties

The Directors have carried out a robust assessment of the principal risks facing the Company - including those that would threaten its business model, future performance, solvency or liquidity. Further detail on these principal risks will be provided in the Group's Annual Report and Accounts 2021, which will be available on publication at www.ir.savills.com on 4 April 2022. The identified principal risks are summarised below:

· Business conditions, general economy and geopolitical issues

· Achieving the right market positioning in response to the needs of our clients

· Recruitment and retention of high-calibre staff

· Reputational and brand risk

· Legal risk

· Failure or significant interruption to IT systems causing disruption to client service

· Operational resilience/Business continuity

· Business conduct

· Changes in the regulatory environment/regulatory breaches

· Acquisition/integration risk

· Environment and sustainability

Savills plc

Consolidated income statement

for the year ended 31 December 2021

		2021	2020 restated*
	Note	£m	£m

Revenue	2	2,147.0	1,740.5
Less:
Employee benefits expense		(1,413.1)	(1,153.7)
Depreciation		(63.4)	(64.3)
Amortisation of intangible assets		(14.2)	(9.6)
Impairment of intangible assets arising from business combinations and goodwill		(5.2)	-
Other operating expenses		(465.2)	(419.1)
Impairment losses on financial assets		(4.0)	(8.7)
Other net gains		2.0	0.7
Share of post-tax profit from joint ventures and associates		12.6	10.2
Operating profit		196.5	96.0

Finance income		1.9	3.4
Finance costs		(15.3)	(16.2)
		(13.4)	(12.8)

Profit before income tax		183.1	83.2

Income tax expense	4	(36.4)	(15.2)
Profit for the year		146.7	68.0

Attributable to:
Owners of the parent		146.2	67.6
Non-controlling interests		0.5	0.4
		146.7	68.0

Earnings per share
Basic earnings per share	6(a)	104.9p	49.0p
Diluted earnings per share	6(a)	99.8p	47.9p

* See Note 1(b) for details on the prior year restatement.

Supplementary income statement information

Reconciliation to underlying profit before income tax
Profit before income tax		183.1	83.2
- restructuring and transaction-related costs		17.3	6.5
- other underlying adjustments		(0.1)	6.9
Underlying profit before income tax	2 and 3	200.3	96.6

Savills plc

Consolidated statement of comprehensive income

for the year ended 31 December 2021

	2021	2020
	£m	£m
Profit for the year	146.7	68.0

Other comprehensive income/(loss)
Items that will not be reclassified to profit or loss:
Re-measurement of defined benefit pension scheme and employee benefit obligations	21.3	6.5
Changes in fair value of equity investments at FVOCI	(4.4)	(6.9)
Tax on other items that will not be reclassified	(4.3)	(1.2)
Total items that will not be reclassified to profit or loss	12.6	(1.6)

Items that may be reclassified subsequently to profit or loss:
Currency translation differences	(8.9)	1.8
Tax on items that may be reclassified	(1.1)	(0.3)
Total items that may be reclassified subsequently to profit or loss	(10.0)	1.5

Other comprehensive income/(loss) for the year	2.6	(0.1)

Total comprehensive income for the year	149.3	67.9

Total comprehensive income attributable to:
Owners of the parent	148.8	67.5
Non-controlling interests	0.5	0.4
	149.3	67.9

Savills plc

Consolidated statement of financial position

at 31 December 2021

			2021	2020 restated*
	Note		£m	£m
Assets: Non-current assets
Property, plant and equipment			66.3	64.9
Right of use assets			232.6	252.8
Goodwill			411.3	379.4
Intangible assets			72.6	49.8
Investments in joint ventures and associates			32.8	51.8
Deferred income tax assets			36.1	42.8
Financial assets at fair value through other comprehensive income ('FVOCI')			30.4	27.4
Retirement benefit surplus			18.1	-
Contract assets			3.4	1.4
Trade and other receivables			41.2	31.8
			944.8	902.1
Assets: Current assets
Contract assets			9.3	8.0
Trade and other receivables			602.6	496.6
Income tax receivable			0.9	1.9
Derivative financial instruments			0.1	0.4
Cash and cash equivalents**			689.7	547.4
			1,302.6	1,054.3
Liabilities: Current liabilities
Borrowings	11		2.1	12.2
Overdrafts in notional pooling arrangement**			198.5	209.1
Lease liabilities			48.0	45.2
Derivative financial instruments			0.9	0.3
Contract liabilities			14.5	10.8
Trade and other payables			738.5	604.9
Income tax liabilities			15.9	10.2
Employee benefit obligations			16.9	19.2
Provisions			9.2	8.3
			1,044.5	920.2
Net current assets			258.1	134.1
Total assets less current liabilities			1,202.9	1,036.2
Liabilities: Non-current liabilities
Borrowings	11		148.4	148.4
Lease liabilities			237.0	259.0
Derivative financial instruments			2.6	0.6
Other payables			20.0	10.5
Retirement and employee benefit obligations			20.3	14.9
Provisions			20.0	15.6
Deferred income tax liabilities			1.2	5.6
			449.5	454.6
Net assets			753.4	581.6

Equity:
Share capital			3.6	3.6
Share premium			104.4	97.2
Other reserves			76.2	90.0
Retained earnings			540.0	390.1
Equity attributable to owners of the parent			724.2	580.9
Non-controlling interests		10	29.2	0.7
Total equity			753.4	581.6

* See Note 1(b) for details on the prior period restatement.

** Included within cash and cash equivalents are cash balances of £201.5m (2020: £242.0m) that are operated within a notional cash pooling arrangement together with overdraft balances of £198.5m (2020: £209.1m) presented above in current liabilities. See Note 8 for further details.

Savills plc

Consolidated statement of changes in equity

for the year ended 31 December 2021

	Attributable to owners of the parent
	Share capital	Share premium	Other reserves	Retained earnings	Total	Non-controlling interests	Total equity
	£m	£m	£m	£m	£m	£m	£m
Balance at 1 January 2021	3.6	97.2	90.0	390.1	580.9	0.7	581.6
Profit for the year	-	-	-	146.2	146.2	0.5	146.7
Other comprehensive income/(loss):
Re-measurement of defined benefit pension scheme and employee benefit obligations	-	-	-	21.3	21.3	-	21.3
Changes in fair value of financial assets at FVOCI	-	-	(4.4)	-	(4.4)	-	(4.4)
Tax on items taken to other comprehensive income/(loss)	-	-	-	(5.4)	(5.4)	-	(5.4)
Currency translation differences	-	-	(8.9)	-	(8.9)	-	(8.9)
Total comprehensive (loss)/income for the year	-	-	(13.3)	162.1	148.8	0.5	149.3
Employee share option scheme:
- Value of services provided	-	-	-	23.7	23.7	-	23.7
- Tax on employee share option schemes	-	-	-	4.7	4.7	-	4.7
Issue of share capital	-	7.2	-	-	7.2	-	7.2
Tax on other items taken to reserves	-	-	-	0.6	0.6	-	0.6
Purchase of treasury shares	-	-	-	(49.0)	(49.0)	-	(49.0)
Disposal of financial assets at FVOCI	-	-	(0.3)	0.2	(0.1)	-	(0.1)
Dividends	-	-	-	(31.9)	(31.9)	(0.4)	(32.3)
Transaction with non-controlling interest	-	-	-	39.3	39.3	28.2	67.5
Transfer between reserves	-	-	(0.2)	0.2	-	-	-
Additions through business combinations	-	-	-	-	-	0.2	0.2
Balance at 31 December 2021	3.6	104.4	76.2	540.0	724.2	29.2	753.4

	Attributable to owners of the parent
	Share capital	Share premium	Other reserves	Retained earnings	Total	Non-controlling interests	Total equity
	£m	£m	£m	£m	£m	£m	£m
Balance at 1 January 2020	3.6	97.2	95.5	306.2	502.5	0.7	503.2
Profit for the year	-	-	-	67.6	67.6	0.4	68.0
Other comprehensive income/(loss):
Re-measurement of defined benefit pension scheme and employee benefit obligations	-	-	-	6.5	6.5	-	6.5
Changes in fair value of financial assets at FVOCI, net of tax	-	-	(6.9)	-	(6.9)	-	(6.9)
Tax on items taken to other comprehensive income/(loss)	-	-	-	(1.5)	(1.5)	-	(1.5)
Currency translation differences	-	-	1.8	-	1.8	-	1.8
Total comprehensive (loss)/income for the year	-	-	(5.1)	72.6	67.5	0.4	67.9
Employee share option scheme:
- Value of services provided	-	-	-	19.8	19.8	-	19.8
Purchase of treasury shares	-	-	-	(8.3)	(8.3)	-	(8.3)
Disposal of financial assets at FVOCI	-	-	(0.4)	(0.2)	(0.6)	-	(0.6)
Dividends	-	-	-	-	-	(0.4)	(0.4)
Balance at 31 December 2020	3.6	97.2	90.0	390.1	580.9	0.7	581.6

Savills plc

Consolidated statement of cash flows

for the year ended 31 December 2021

		2021	2020 restated*
	Note	£m	£m
Cash flows from operating activities
Cash generated from operations	7	348.3	282.6
Interest received		1.8	3.4
Interest paid		(14.0)	(15.0)
Income tax paid		(33.4)	(29.6)
Net cash generated from operating activities		302.7	241.4
Cash flows from investing activities
Proceeds from sale of property, plant and equipment		1.0	0.1
Proceeds from sale of equity investments		1.7	1.9
Proceeds from sale of interests in joint ventures		0.7	0.7
Dividends received from joint ventures		6.6	5.7
Dividends received from associates		6.0	5.1
Repayment of loans by joint ventures		0.1	-
Repayment of loans by associates		-	0.1
Loans to joint ventures		(0.6)	(1.4)
Loans to other parties		(7.4)	(5.5)
Acquisition of subsidiaries, net of cash and overdrafts acquired		(40.5)	(11.2)
Deferred consideration paid in relation prior year acquisitions		(5.9)	(8.1)
Purchase of property, plant and equipment		(18.6)	(12.8)
Purchase of intangible assets		(5.9)	(5.3)
Purchase of equity investments		(9.8)	(5.0)
Purchase of investment in joint ventures		(0.4)	-
Purchase of investment in associates		(0.3)	(0.5)
Net cash used in investing activities		(73.3)	(36.2)
Cash flows from financing activities
Proceeds from issue of share capital		7.2	-
Proceeds from transaction with non-controlling interest		63.7	-
Transaction costs incurred on transactions with non-controlling interest		(0.9)	-
Proceeds from borrowings		26.9	46.1
Repayments of borrowings		(38.2)	(67.3)
Financing fees paid		(0.5)	-
Principal elements of lease payments		(47.2)	(47.7)
Purchase of treasury shares		(49.0)	(8.3)
Dividends paid		(32.3)	(0.4)
Net cash used in financing activities		(70.3)	(77.6)
Net increase in cash, cash equivalents and bank overdrafts		159.1	127.6
Cash, cash equivalents and bank overdrafts at beginning of year		338.2	209.8
Effect of exchange rate fluctuations on cash and cash equivalents held		(7.3)	0.8
Cash, cash equivalents and bank overdrafts at end of year		490.0	338.2

* See Note 1(b) for details on the prior period restatement.

NOTES

1(a). Basis of preparation

The results for the year ended 31 December 2021 have been extracted from the audited financial statements. The financial statements have been prepared in accordance with UK adopted international accounting standards.

The financial statements are prepared on a going concern basis and under the historical cost convention as modified by the revaluation of loans receivable, equity investments and derivative financial instruments held at fair value.

The financial information in this statement does not constitute statutory accounts within the meaning of s434 of the Companies Act 2006. The statutory accounts for the year ended 31 December 2021, on which the auditors have given an unqualified audit report, have not yet been filed with the Registrar of Companies.

The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.

1(b). Prior year restatement

Notional cash pooling arrangement

For internal cash management purposes, the Group maintains a notional cash pooling arrangement with Barclays Bank PLC, whereby credit cash balances (cash) and debit cash balances (overdrafts) for the participating bank accounts are notionally offset. There is no overdraft cost or charge associated with any pooled overdraft that is offset by pooled cash balances. Refer to Note 8 for further details.

While the Group has legal right of offset of these balances in the arrangement, it was determined that the cash pooling arrangement did not meet the requirements for offsetting in accordance with IAS 32: "Financial Instruments: Presentation" for each period presented and the pooled cash and pooled overdraft balances within the notional pooling arrangement cannot be presented net in the statement of financial position. Accordingly, the presentation has been amended to show these balances on a gross basis separately on the statement of financial position as at 31 December 2021 in accordance with IAS 32. The prior period comparative has been restated in accordance with IAS 8: "Accounting Policies, Changes in Accounting Estimates and Errors" to meet the presentation requirements of IAS 32. The change in presentation increases cash and cash equivalents within current assets and increases current liabilities with the overdraft balances in the notional pooling arrangement but does not have an impact on the reported net assets, net current assets, profit for the period, the statement of cash flows or cash and cash equivalents net of overdrafts disclosed by the Group.

The table below shows the impact of the prior period restatement on the primary financial statements:

	31 December 2020 reported £m	Restatement £m	31 December 2020 restated £m
Statement of financial position
Cash and cash equivalents	338.3	209.1	547.4
Assets: Current Assets	845.2	209.1	1,054.3

Overdrafts in notional pooling arrangement	-	209.1	209.1
Liabilities: Current Liabilities	711.1	209.1	920.2

As at 1 January 2020, the value of cash and cash equivalents and overdrafts in the notional pooling arrangement that were offset totalled £160.8m. Accordingly, the adjustment resulted in an increase in cash and cash equivalents from £209.9m to £370.7m and the separate presentation of overdrafts within the notional pooling arrangement of £160.8m. The adjustment therefore increases the total current assets from £790.1m to £950.9m and total current liabilities from £723.6m to £884.4m as at 1 January 2020.

Presentation of deferred consideration linked to continuing employment within the Statement of Cash Flows

In accordance with the requirements of IAS 7: "Statement of Cash Flows", the Group's policy is to classify payments of deferred/contingent consideration in relation to historic business acquisitions that are linked to continuing employment within cash flows used in operating activities and all other payments of deferred/contingent considerations under IFRS 3: "Business Combinations" are classified as cash used in investing activities. Following a review prompted by an enquiry carried out by the Financial Reporting Council ('FRC') on the Group's 2020 Annual Report & Accounts, it was noted that certain cash flows relating to employment linked deferred consideration payments were incorrectly classified as an investing activity as opposed to an operating activity in the Group's consolidated Statement of Cash Flows. This has been corrected in this Annual Report and Accounts, with prior year comparatives for the period ended 31 December 2020 represented accordingly in accordance with IAS 8.

The scope of the review performed by the FRC was to consider the Group's compliance with UK reporting requirements. Due to their inherent limitations these reviews are not intended to provide assurance that corporate accounts are correct in all material aspects. The FRC's review does not benefit from a detailed knowledge of the business or an understanding of the underlying transactions entered into. The FRC's letters are written on the basis that the FRC accepts no liability for reliance on them by the Company or any third party.

The table below shows the impact of the prior year restatement on the Group's Statement of Cash Flows and Note 7 - Cash Generated From Operations:

	31 December 2020 reported £m	Restatement £m	31 December 2020 restated £m
Statement of cash flows
Cash generated from operations	289.8	(7.2)	282.6
Net cash generated from operating activities	248.6	(7.2)	241.4

Deferred consideration paid in relation to prior year acquisitions	(15.3)	7.2	(8.1)
Net cash (used in)/generated from investing activities	(43.4)	7.2	(36.2)


Note 7 - Cash Generated From Operations
Increase in trade and other payables and contract liabilities	18.6	(7.2)	11.4
Cash generated from operations	289.8	(7.2)	282.6

This prior year restatement does not have an impact on reported profit, earnings per share, assets, liabilities or the overall net cash flows disclosed by the Group and relates solely to classification within the Statement of Cash Flows.

Presentation of share of post-tax profit from joint ventures and associates within the Income Statement

Following a review of the Group's share of post-tax profit from joint ventures and associates and the presentation of this in the Group's Income Statement, management have determined that the Group's joint ventures and associates are an integral part of the business and the share of post-tax profit from joint ventures and associates should have been included within operating profit, consistent with IASB's view in IAS 1.BC56. This position has been corrected in the current year and prior period comparatives have been restated in accordance with IAS 8.

The table below shows the impact of the prior year restatement on Group's Income Statement:

31 December 2020

reported

£m

Restatement

£m

31 December 2020

restated

£m

Income statement

Operating profit

85.8

10.2

96.0

This prior year restatement does not have an impact on reported profit after tax, earnings per share, the Statement of Financial Position or the Statement of Cash Flows.

2. Segment analysis

	Transaction Advisory	Consultancy	Property and Facilities Manage- ment	Investment Manage- ment	Unalloc-ated	Total
Year ended to 31 December 2021	£m	£m	£m	£m	£m	£m
Revenue
United Kingdom - commercial	115.2	193.6	256.4	55.1	-	620.3
United Kingdom - residential	210.7	50.4	44.2	-	-	305.3
Total United Kingdom	325.9	244.0	300.6	55.1	-	925.6
CEME	124.4	41.3	88.3	47.2	-	301.2
Asia Pacific - commercial	153.0	81.3	356.7	9.5	-	600.5
Asia Pacific - residential	26.0	-	-	-	-	26.0
Total Asia Pacific	179.0	81.3	356.7	9.5	-	626.5
North America	263.6	30.1	-	-	-	293.7
Revenue	892.9	396.7	745.6	111.8	-	2,147.0
Underlying profit/(loss) before tax
United Kingdom - commercial	21.5	24.6	17.9	14.0	(18.9)	59.1
United Kingdom - residential	38.9	8.5	4.1	-	-	51.5
Total United Kingdom	60.4	33.1	22.0	14.0	(18.9)	110.6
CEME	1.4	2.5	1.3	10.2	-	15.4
Asia Pacific - commercial	20.6	6.6	25.8	1.3	-	54.3
Asia Pacific - residential	4.9	-	-	-	-	4.9
Total Asia Pacific	25.5	6.6	25.8	1.3	-	59.2
North America	10.3	4.8	-	-	-	15.1
Underlying profit/(loss) before tax	97.6	47.0	49.1	25.5	(18.9)	200.3

	Transaction Advisory	Consultancy	Property and Facilities Manage- ment	Investment Manage- ment	Unalloc-ated	Total
Year ended to 31 December 2020	£m	£m	£m	£m	£m	£m
Revenue
United Kingdom - commercial	79.8	164.1	204.9	26.9	-	475.7
United Kingdom - residential	153.2	41.7	40.1	-	-	235.0
Total United Kingdom	233.0	205.8	245.0	26.9	-	710.7
CEME	98.2	37.5	68.6	36.4	-	240.7
Asia Pacific - commercial	103.9	69.1	368.3	7.5	-	548.8
Asia Pacific - residential	26.9	-	-	-	-	26.9
Total Asia Pacific	130.8	69.1	368.3	7.5	-	575.7
North America	205.2	8.2	-	-	-	213.4
Revenue	667.2	320.6	681.9	70.8	-	1,740.5
Underlying profit/(loss) before tax
United Kingdom - commercial	9.5	17.6	13.8	5.6	(13.9)	32.6
United Kingdom - residential	23.0	5.9	3.4	-	-	32.3
Total United Kingdom	32.5	23.5	17.2	5.6	(13.9)	64.9
CEME	(12.3)	2.4	(0.1)	7.8	-	(2.2)
Asia Pacific - commercial	3.3	6.5	27.7	1.4	-	38.9
Asia Pacific - residential	3.4	-	-	-	-	3.4
Total Asia Pacific	6.7	6.5	27.7	1.4	-	42.3
North America	(7.5)	(0.9)	-	-	-	(8.4)
Underlying profit/(loss) before tax	19.4	31.5	44.8	14.8	(13.9)	96.6

Operating segments reflect internal management reporting to the Group's chief operating decision maker, defined as the Group Executive Board ('GEB'). The GEB primarily manages the business based on the geographic location in which the Group operates.

The operating segments are identified as the following regions: the UK, CEME, Asia Pacific and North America. The Savills Investment Management business is also considered a separate operating segment. The reportable operating segments derive their revenue primarily from property-related services. Within the UK and Asia Pacific, both commercial and residential services are provided. Other segments are largely commercial-based.

The GEB also reviews the business with reference to the nature of the services in each region. Therefore, the Group has presented its segment analysis below in a matrix with the primary operating segments based on regions in which the Group operates.

The GEB assesses the performance of operating segments based on a measure of underlying profit before tax which adjusts reported pre-tax profit by profit/(loss) on disposals, share-based payment adjustment, significant restructuring costs, significant transaction-related costs, amortisation and impairment of intangible assets arising from business combinations, impairment of goodwill and other items that are considered non-operational and material (fair value gain on associates/joint ventures and fair value loss on a transaction-related call option in the current year, GMP equalisation charge in the prior year).

A reconciliation of underlying profit before tax to reported profit before tax is provided in Note 3.

3. Underlying profit before tax

The Directors believe that the consistent presentation of underlying profit before tax provides additional useful information to Shareholders on the underlying trends and comparable performance of the Group over time by excluding significant non-operational costs/income from the GAAP measures. This 'underlying' measure is also used by the Group for internal performance analysis and incentive compensation arrangements for employees.

These terms are not defined terms under IFRS and may therefore not be comparable with similarly-titled profit measures reported by other companies. They are not intended to be a substitute for, or superior to, GAAP measures. The non-GAAP measures may be materially higher or lower than GAAP measures and should not be regarded as a complete picture of the Group's financial performance.

	2021 £m	2020 £m
Reported profit before tax	183.1	83.2
Adjustments:
Amortisation of intangible assets arising from business combinations	8.1	4.9
Impairment of goodwill and intangible assets arising from business combinations	5.2	-
Share-based payment adjustment	(10.8)	1.2
(Profit)/loss on disposal of joint ventures and associates	(0.4)	0.1
Restructuring costs	0.3	1.5
Transaction-related costs	17.0	5.0
Fair value gain on step acquisitions of subsidiaries previously classified as associates/joint ventures	(4.0)	-
Fair value loss on transaction-related call option	1.8	-
GMP equalisation charge	-	0.7
Underlying profit before tax	200.3	96.6

The adjustment for share-based payments relates to the impact of the accounting standard for share-based compensation. The annual bonus is paid in a mixture of cash and deferred shares and the proportions can vary from one year to another. Under IFRS, the deferred share element is amortised to the income statement over the vesting period whilst the cash element is expensed in the year. The adjustment above addresses this by adding to or deducting from profit the difference between the IFRS 2: "Share based payments" charge in relation to outstanding bonus-related share awards and the estimated value of the current year bonus pool to be awarded in deferred shares. This adjustment is made to align the underlying staff cost in the year with the revenue recognised in the same period.

Impairment of goodwill in the year relates to the Indonesia and Sweden cash generating units. Impairment on intangible assets arising from business combinations relate to property management contracts in South Korea and Japanese investment management contracts relating to closed funds.

Profit on disposal recognised primarily in relation to the disposal of holdings in joint ventures in China. In the prior year, loss on disposal was recognised in relation to disposal of a portion of the Group's holding in a joint venture in China, which is now treated as an FVOCI equity investment, and a part disposal of an associate in Singapore.

Restructuring costs includes costs of integration activities in relation to significant business acquisitions. Charges in the current and prior year primarily relate to the ongoing cost of deferred shares, with a five year vesting period, issued in relation to the restructuring upon acquisition of Aguirre Newman in 2017.

Transaction-related costs primarily relate to provisions for future payments in relation to business acquisitions, which are expensed through the income statement to reflect the requirement for the recipients to remain engaged actively in the business at the payment date (2021: £13.9m charge, 2020: £4.0m charge). The largest individual components of this charge in 2021 relate to the acquisition of DRC Capital LLP and the acquisition of Macro Consultants LLC in 2020. These costs are employee benefits expenses. In addition, transaction-related costs include a £1.4m charge relating to prepaid amounts issued as part of business acquisitions that are linked to continued active engagement in the business (2020: £2.5m), £0.6m of unwinding of interest on deferred consideration and non-current future payments in relation to business acquisitions that are linked to employment (2020: £0.3m) and £1.1m of professional fees incurred on transactions (2020: £0.7m). Of these items, prepaid amounts that are linked to active engagement in the business are recorded as employee benefits expenses in the income statement, unwinding of interest is recorded as a finance cost in the income statement and all other charges/(credits) are recorded within other operating expenses. In the prior year, transaction-related costs also included a £1.8m credit relating to the re-measurement of contingent deferred consideration payments and a £0.7m credit in relation to a working capital adjustment on the Cluttons Middle East acquisition in 2018.

In the current year, a fair value gain was recognised on the re-measurement of the Group's holding in its associate, DRC, and a joint venture in Indonesia, prior to the Group's acquisition of the remaining equity interest in these businesses (refer to Note 9 for further details on the acquisition of DRC and the Indonesian business). In addition, a fair value loss was recognised on the fair value measurement of the Samsung Life call option, which gives Samsung Life the right to purchase up to an additional 10% shareholding in the Savills Investment Management group subject to the quantum of capital it has invested in SIM products during the initial 5 year term.

Guaranteed Minimum Pension ('GMP') equalisation charge in the prior year reflects the past service cost on the UK defined benefit pension scheme, which is the estimated cost of equalising GMPs for historic transfers-out of the scheme; this follows a High Court ruling issued on 20 November 2020.

4. Income tax expense

The income tax expense has been calculated on the basis of the underlying rate in each jurisdiction adjusted for any disallowable charges.

	2021	2020
	£m	£m
United Kingdom
- Current tax	21.7	13.3
- Deferred tax	(6.8)	(4.4)

Foreign tax
- Current tax	23.8	13.2
- Deferred tax	(2.3)	(6.9)
Income tax expense	36.4	15.2

5. Dividends

	2021	2020
	£m	£m
Amounts recognised as distribution to equity holders in the year:
In respect of the previous year
Ordinary final dividend of 17.0p per share (2019: £nil)	23.6	-
In respect of the current year
Interim dividend of 6.0p per share (2020: £nil)	8.3	-
	31.9	-

The Group paid £0.4m (2020: £0.4m) of dividends to non-controlling interests.

The Board recommends a final dividend of 12.75p (net) per ordinary share (amounting to £18.4m), alongside the supplemental interim dividend of 15.6p per ordinary share (amounting to £22.5m) and a special dividend of 27.05p (amounting to £39.0m), to be paid on 17 May 2022 to Shareholders on the register at 8 April 2022. These financial statements do not reflect this dividend payable.

The total paid and recommended ordinary, supplemental and special dividend for the 2021 financial year comprises an aggregate distribution of 61.4p per ordinary share (2020: 17.0p per ordinary share).

6(a). Basic and diluted earnings per share

	2021	2021	2021	2020	2020	2020
	Earnings	Shares	EPS	Earnings	Shares	EPS
Year to 31 December	£m	million	pence	£m	million	pence
Basic earnings per share	146.2	139.4	104.9	67.6	138.0	49.0
Effect of additional shares issuable under option	-	7.1	(5.1)	-	3.1	(1.1)
Diluted earnings per share	146.2	146.5	99.8	67.6	141.1	47.9

6(b). Underlying basic and diluted earnings per share

	2021	2021	2021	2020	2020	2020
	Earnings	Shares	EPS	Earnings	Shares	EPS
Year to 31 December	£m	million	pence	£m	million	pence
Basic earnings per share	146.2	139.4	104.9	67.6	138.0	49.0
- Amortisation of intangible assets arising from business combinations after tax	6.5	-	4.7	3.3	-	2.4
- Impairment of goodwill and intangible assets arising from business combinations after tax	5.4	-	3.9	-	-	-
- Share-based payment adjustment after tax	(9.0)	-	(6.5)	1.1	-	0.8
- (Profit)/net loss on disposal of joint ventures and associates after tax	(0.4)	-	(0.3)	0.1	-	0.1
- Restructuring costs after tax	0.4	-	0.3	1.5	-	1.1
- Transaction-related costs after tax	15.5	-	11.1	4.1	-	3.0
- Fair value gain on step acquisition of subsidiaries previously classified as joint ventures/associates after tax	(4.0)	-	(2.9)	-	-	-
- Fair value loss on transaction-related call option	1.8	-	1.3	-	-	-
- GMP equalisation charge after tax	-	-	-	0.6	-	0.4
Underlying basic earnings per share	162.4	139.4	116.5	78.3	138.0	56.8
Effect of additional shares issuable under option	-	7.1	(5.6)	-	3.1	(1.3)
Underlying diluted earnings per share	162.4	146.5	110.9	78.3	141.1	55.5

7. Cash generated from operations

	2021	2020 restated*
	m	m
Profit for the year	146.7	68.0
Adjustments for:
Income tax (Note 4)	36.4	15.2
Depreciation	63.4	64.3
Amortisation of intangible assets	14.2	9.6
Impairment of goodwill and intangible assets arising from business combinations	5.2	-
Fair value gain on joint ventures and associates	(4.0)	-
Fair value loss on derivative financial instrument	1.8	-
Loss on disposal of property, plant and equipment and intangible assets	0.9	0.8
(Gain)/loss on disposal of joint ventures and associates	(0.4)	0.1
Net finance cost	13.4	12.8
Share of post-tax profit from joint ventures and associates	(12.6)	(10.2)
Increase in employee and retirement obligations	6.7	3.4
Exchange movements and fair value movements on financial instruments in operating activities	(2.5)	2.4
Increase in provisions	5.4	0.5
Charge for share-based compensation	23.7	19.8
Operating cash flows before movements in working capital	298.3	186.7
(Increase)/decrease in trade and other receivables and contract assets	(90.1)	84.5
Increase in trade and other payables and contract liabilities	140.1	11.4
Cash generated from operations	348.3	282.6

* See Note 1(b) for details on the prior period restatement.

Foreign exchange movements resulted in a £0.3m increase in current and non-current trade and other receivables (2020: £0.3m decrease) and a £5.9m increase in current and non-current trade and other payables (2020: £2.3m decrease).

8. Notional pooling arrangement

For internal cash management purposes, the Group maintains a notional cash pooling arrangement with Barclays Bank PLC, whereby credit and debit cash balances for the participating bank accounts are notionally offset. There is no overdraft cost or charge associated with any pooled overdraft that is fully offset by pooled credit cash balances. As at 31 December 2021, the notional cash pooling arrangement included cash balances of £201.5m presented in cash and cash equivalents (December 2020: £242.0m) and overdrafts of £198.5m (31 December 2020: £209.1m) presented in current liabilities. This represents as at 31 December 2021 surplus pooled credit cash balances of £3.0m (31 December 2020: surplus pooled credit cash £32.9m).

For the purpose of the Statement of Cash Flows, cash and cash equivalents net of overdrafts comprise the following:

	31 December 2021	31 December 2020
	£m	£m
Cash and cash equivalents	689.7	547.4
Overdrafts in notional pooling arrangement	(198.5)	(209.1)
Bank overdrafts	(1.2)	(0.1)
	490.0	338.2

9. Acquisition of subsidiaries

The fair values of the assets acquired and liabilities assumed as part of the Group's acquisitions in the year are provisional and will be finalised within 12 months of the acquisition date. These are summarised below:

		Provisional fair value to the Group
		DRC £m	T3 £m	Other £m	Total £m
Non-current assets:	Property, plant and equipment	0.2	-	0.1	0.3
	Right-of-use asset	-	0.6	0.1	0.7
	Intangible assets	27.3	5.2	0.1	32.6
	Deferred income tax assets	-	-	0.2	0.2
	Contract assets	2.0	-	-	2.0
	Trade and other receivables	-	0.1	-	0.1
Current assets:	Trade and other receivables	0.6	2.7	5.0	8.3
	Contract assets	0.1	-	-	0.1
	Cash and cash equivalents	2.8	0.1	3.0	5.9
Current liabilities:	Borrowings	-	-	(1.6)	(1.6)
	Lease liabilities	-	-	(0.1)	(0.1)
	Trade and other payables	(5.3)	(1.2)	(9.4)	(15.9)
Non-current liabilities:	Lease liabilities	-	(0.5)	(0.1)	(0.6)
	Other payables	-	(0.2)	-	(0.2)
	Employee benefit obligations	-	-	(0.4)	(0.4)
	Deferred tax liabilities	(6.4)	-	-	(6.4)
Net assets/(liabilities)		21.3	6.8	(3.1)	25.0
Non-controlling interest share of net assets		-	-	(0.2)	(0.2)
Net assets/(liabilities) acquired		21.3	6.8	(3.3)	24.8
Goodwill		27.8	5.8	7.0	40.6
Purchase consideration		49.1	12.6	3.7	65.4

Consideration satisfied by:
Cash paid		31.3	12.6	1.3	45.2
Fair value of associate/joint venture holding, prior to acquisition		17.8	-	2.0	19.8
Deferred consideration		-	-	0.4	0.4
		49.1	12.6	3.7	65.4

DRC Capital LLP ('DRC')

On 28 September 2018, the Group acquired a 25% equity interest in DRC, a commercial real estate debt investment manager. This transaction included a call option to acquire the remaining 75% equity interest of the business on the 28 September 2021. The call option date was accelerated and exercised on 28 May 2021.

Total acquisition consideration is provisionally determined at £49.1m, £17.8m of which relates to the fair value of the initial 25% investment (equity accounted as an associate) and £31.3m was settled on completion.

In addition to the above, an earn-out is payable in September 2024 and is measured against income targets. The maximum earn-out payment under the agreement caps the total consideration for DRC at £80.0m. The earn-out consideration is deemed to be linked to continued active engagement with the business. As required by IFRS 3 (revised), the expected value of these payments will be expensed to the income statement over the relevant period of engagement.

Transaction-related costs of £0.5m have been expensed as incurred to the income statement and classified within other operating expenses.

Goodwill of £27.8m has been determined. Goodwill is attributable to the experience and expertise of the team and the strong industry reputation. It is not expected to be deductible for tax purposes. Intangible assets recognised on acquisition include £17.7m of investment management contracts, £6.7m of customer relationships and £2.9m in relation to the brand.

The acquired business contributed revenue of £16.6m and profit of £7.6m to the Group for the period from 28 May 2021 to 31 December 2021. Had the acquisition been made at the beginning of the financial year, revenue would have been £23.3m and profit would have been £11.9m. Prior to acquisition, the Group recognised its share of profits from DRC as an associate of £1.1m in the income statement and also recognised a fair value gain of £2.8m within Other gains / income in the income statement in relation to the carrying value of its investment in DRC, prior to DRC becoming a wholly owned subsidiary of the Group.

The fair value of trade and other receivables is £0.6m, all of which relates to trade receivables. The gross contractual amount for trade receivables is £0.7m, of which £0.1m is expected to be uncollectible.

T3 Advisors ('T3')

On 11 June 2021, the Group acquired 100% of the equity interest in T3, a real estate advisor and consultant for life sciences and technology sectors in the US.

Total acquisition consideration is provisionally determined at £12.6m, all of which was settled on completion.

In addition to the above, further fixed payments, retention bonuses and earn-out payments (contingent on revenue and operating margin targets) are payable in June 2024 up until June 2028. The maximum value of these payments total £8.7m and are deemed to be linked to continued active engagement with the business. As required by IFRS 3 (revised), the expected value of these payments will be expensed to the income statement over the relevant period of engagement.

Transaction-related costs of £0.6m have been expensed as incurred to the income statement and classified within other operating expenses.

Goodwill of £5.8m has been determined. Goodwill is attributable to the experience and expertise of key staff members and is deductible for tax purposes over a 15 year period. Intangible assets recognised on acquisition include £5.2m of customer relationships.

The acquired business contributed revenue of £12.6m and profit of £0.9m to the Group for the period from 11 June 2021 to 31 December 2021. Had the acquisition been made at the beginning of the financial year, revenue would have been £17.0m and profit would have been £1.8m.

The fair value of trade and other receivables is £2.7m, all of which relates to trade receivables. The gross contractual amount for trade receivables is £2.7m, all of which is expected to be collectible.

Other acquisitions

During the year, the Group acquired the remaining 51% of Cluttons Saudi Arabia Company Limited (previous 49% ownership equity accounted for as a joint venture) and the remaining 49% economic interest in the Savills Indonesia business (previous 51% economic ownership equity accounted for as a joint venture). In addition, the Group acquired 60% of Merx Holdings (SG) Pte Ltd ('Merx Group'), a project management consulting firm operating in Asia.

Cash consideration for these transactions amounted to £1.3m. The remainder of the acquisition consideration relates to deferred consideration of £0.4m, payable within one year of the reporting date, and £2.0m relates to the fair value of the initial investment in both Saudi Arabia and Indonesia (previously equity accounted for as joint ventures).

Goodwill of £7.0m has been provisionally determined. Goodwill is attributable to the experience and expertise of key staff and strong industry reputation and is not expected to be deductible for tax purposes.

10. Transactions with non-controlling interests

Under IFRS 10, transactions with non-controlling interests must be accounted for as equity transactions. During the year, the Group undertook the following transactions with non-controlling interests:

	Effective holding (disposed)/acquired	Total effective holding at 31 December 2021
Savills IM Holdings Ltd	(25%)	75%

Part disposal of interests in subsidiaries

In December 2021, the Group disposed of 25% of the shares in Savills IM Holdings Ltd ('Savills IM Group') to Samsung Life Company Ltd for consideration of £71.7m, of which £63.7m was received in cash on completion. This takes the Group's shareholding to 75%. The carrying amount of the Savills IM group net assets on the date of disposal was £112.7m. The Group recognised an increase in non-controlling interest of £28.2m. The amount recognised as a profit to retained earnings in respect of this transaction was £39.3m, which is net of transaction-related costs of £4.2m.

	2021 £m
Carrying amount of non-controlling interests disposed of	(28.2)
Consideration paid by non-controlling interest holder	71.7
Transaction-related costs	(4.2)
Excess of consideration received recognised in parent's equity	39.3

11. Borrowings

Movements in borrowings are analysed as follows:

			£m
Opening amount as at 1 January 2021			160.6
Additional borrowings, net of transaction costs paid			26.4
Repayments of borrowings (including overdraft movement)			(38.3)
Additions through business combinations (Note 9)			1.6
Amortisation of transaction costs			0.5
Foreign exchange movement			(0.3)
Closing amount as at 31 December 2021			150.5

	2021	2020
	£m	£m
Current
Bank overdrafts	1.2	0.1
Unsecured bank loans due within one year or on demand	0.9	12.1
	2.1	12.2
Non-current
Loan notes	150.0	150.0
Transaction costs (issuance of loan notes and RCF arrangement fees)	(1.6)	(1.6)
	148.4	148.4
	150.5	160.6

The Group holds a £360.0m multi-currency revolving credit facility ('RCF'), which includes a £90.0m accordion facility. In June 2021 the Group extended the maturity date of the RCF by a further year to June 2025. As at 31 December 2021 none (2020: none) of the RCF was drawn. The unsecured bank loans reflect a £0.7m working capital loan in Thailand, which is repayable on demand and denominated in Thailand baht (2020: £0.7m) and a £0.2m working capital loan in Indonesia, which is repayable on demand and denominated in Indonesian Rupiah (2020: none). The prior year unsecured bank loans also included a £11.4m utilisation of a revolving credit facility in North America for working capital purposes, which was repayable within one year and denominated in US dollars (2021: none).

The Group holds £150.0m of long term debt through the issuance of 7, 10 and 12 year fixed rate private note placements in the US institutional market, which were issued in June 2018.

The Group has the following undrawn borrowing facilities:

	2021	2020
	£m	£m
Floating rate
- expiring within 1 year or on demand	61.2	36.1
- expiring between 1 and 5 years	361.0	361.1
	422.2	397.2

12. Related party transactions

As at 31 December 2021, there were £0.2m of loans receivable from joint ventures and £1.5m of loans receivable from associates (2020: £4.1m loans receivable from joint ventures and £0.7m of loans receivable from associates).

Refer to Note 9 for information with respect to full acquisition of joint ventures and associates in the year.

There were no other material related party transactions during the period. All related party transactions take place on an arm's-length basis under the same terms as those available to other customers in the ordinary course of business.

13. Annual report and accounts

Copies of the Annual Report and Accounts for the year ended 31 December 2021 will be circulated to shareholders on 4 April 2022 and will also be available from the investor relations section of the Company website at www.ir.savills.com or from:

Savills plc, 33 Margaret Street, London, W1G 0JD

Telephone: 020 7499 8644

Directors' responsibilities in respect of the financial statements

We confirm that to the best of our knowledge:

· the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

· the Strategic Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. We consider the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

The contents of this announcement, including the responsibility statement above, have been extracted from the annual report and accounts for the year ended 31 December 2021, which will be available on publication at www.ir.savills.com. Accordingly, this responsibility statement makes reference to the financial statements of the Company and the Group and the relevant narrative appearing in that annual report and accounts rather than the contents of this announcement.

On behalf of the Board

Mark Ridley

Group Chief Executive

Chris Lee

Group Legal Director and Company Secretary

10 March 2022

Forward-looking statements

The financial information contained in this announcement has not been audited. Certain statements made in this announcement are forward-looking statements and are therefore subject to risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied because they relate to future events. These forward-looking statements include, but are not limited to, statements relating to the Company's expectations.

END

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