Savills plc
Annual Report
& Accounts
2020
Savills plc | Annual Report and Accounts 2020
Our vision
To be the property partner of choice for
private, institutional and corporate clients
seeking to acquire, manage, lease, develop
or realise the value of prime residential
and commercial property in the world’s
key locations.
Culture and values
Savills has a strong and well embedded
culture, founded on an entrepreneurial
approach and underpinned by our values
and operational standards. We recognise
our responsibility as a global corporate
citizen and we are committed to doing the
right thing in the right way.
01
Our values
Pride in
everything
we do
Group highlights
Take an
entrepreneurial
approach to
business
Help our people
fulfil their true
potential
Always act
with integrity
Revenue
£1,741m
(2019: £1,913m*)
Underlying profit**
£96.6m
(2019: £143.4m)
Underlying earnings
per share**
56.8p
(2019: 78.0p)
Breadth of service
(non-transactional)
62%
(2019: 57%)
Operating cash
generation
£248.6m
(2019: £95.4m)
Statutory profit
after tax
£68.0m
(2019: £83.6m)
Underlying profit
margin**
5.6%
(2019: 7.5%*)
Statutory earnings
per share
49.0p
(2019: 60.6p)
Property under
management (sq. ft.)
2.3bn
(2019: 2.3bn)
Assets under
management
€21.1bn
(2019: €20.8bn)
Statutory pre-tax
profit margin
4.8%
(2019: 6.0%)
Geographical
spread (% non-UK)
59%
(2019: 62%)
* See Note 2.29 for details on the prior year restatement of revenue.
** Underlying profit is calculated by adjusting reported pre-tax profit for profit/loss on disposals, share-based payment
adjustments, amortisation of acquired intangible assets (excluding software), significant restructuring costs, acquisition-
related costs and other items that are considered exceptional by size or nature. Refer to Note 2.3 to the financial statements
for further explanation of underlying profit measures.
Overview
Strategic Report
Governance
Financial Statements
62 Corporate Governance
122 Independent Auditors’
Statement
Report
01 Group highlights
02 Savills at a glance
04 Chairman’s statement
08 Our business explained
10 Market insights
16 Key Performance
Indicators
18 Chief Executive’s review
26 Chief Financial Officer’s
62 Chairman’s introduction
64 Board of Directors
68 Group Executive Board
72 Corporate Governance
83 Audit, Risk and Internal
review
Control
30 Principal and emerging
risks and uncertainties
facing the business
39 Viability statement
40 Stakeholder
engagement with s.172
45 Responsible business
61 Non-financial
information statement
2020
84 Audit Committee
Report
92 Directors’ Remuneration
Report
117 Directors’ Report
121 Statement of Directors’
responsibilities
in respect of the
financial statements
See more online at
https://ir.savills.com
132 Consolidated income
statement
133 Consolidated statement
of comprehensive
income
134 Consolidated and
Company statements of
financial position
135 Consolidated statement
of changes in equity
136 Company statement of
changes in equity
137 Consolidated and
Company statements of
cash flows
138 Notes to the financial
statements
215 Shareholder information
OVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTS
02
Savills at a glance
Offices and
associates
600+
Staff
c.39,000
Savills is a
global real
estate services
provider listed
on the London
Stock Exchange.
Savills plc | Annual Report and Accounts 2020 03
Our services
Savills is a global real estate services provider listed on the London Stock Exchange. We have an
international network of over 600 offices and associates and circa 39,000 staff throughout the
Americas, the UK, Continental Europe, Asia Pacific, Africa and the Middle East, offering a broad range
of specialist advisory, management and transactional services to clients all over the world.
Transaction
Advisory
Investment
Management
The Transaction
Advisory business
stream comprises
commercial,
residential, leisure and
agricultural leasing,
tenant representation
and investment
advice on purchases
and sales.
Investment
management
of commercial
and residential
property portfolios
for institutional,
corporate or private
investors, on a
pooled or segregated
account basis.
See pages 21 – 23
See page 25
Property and
Facilities
Management
Management
of commercial,
residential, leisure and
agricultural property
for owners. Provision
of a comprehensive
range of services to
occupiers of property,
ranging from strategic
advice through
project management
to all services relating
to a property.
See pages 23 – 24
Consultancy
Provision of a
wide range of
professional property
services including
valuation, project
management and
housing consultancy,
environmental
consultancy, landlord
and tenant, rating,
development,
planning, strategic
projects, corporate
services and research.
See pages 24 – 25
Locations
North
America
United
Kingdom
Europe and the
Middle East
Asia Pacific
12%
of revenue
41%
of revenue
14%
of revenue
33%
of revenue
Revenue
£213.4m
(2019: £293.0m)
Revenue
£710.7m
(2019: £727.5m)
Offices
36
(2019: 35)
Employees
833
(2019: 825)
Offices
129
(2019: 134)
Employees
6,939
(2019: 6,388)
Revenue
£240.7m
(2019: £265.8m*)
Offices
48
(2019: 46)
Revenue
£575.7m
(2019: £627.1m)
Offices
58
(2019: 58)
Employees
2,135
(2019: 2,032)
Employees
29,160
(2019: 29,912)
* See Note 2.29 for details on the prior year restatement of revenue.
OVERVIEWSTRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTS 04
Chairman’s statement
Savills performed
well in very
challenging
conditions, by
maximising cash
flow and focusing
on assisting our
clients around
the globe.
Underlying profit
£96.6m
(2019: £143.4m)
Underlying profit
margin
5.6%
(2019: 7.5%)
Savills plc | Annual Report and Accounts 2020 05
Results
Against the backdrop of
significantly reduced leasing
and capital transaction volumes
in all major real estate markets,
the Group’s revenue declined by
9% to £1.74bn (2019: £1.91bn*)
with reductions in Transaction
Advisory revenues mitigated
by both share gains in our
major markets and a resilient
revenue performance from our
less Transactional service lines.
Underlying profit for the year
declined by 33% to £96.6m
(2019: £143.4m). The Group’s
statutory profit before tax
decreased by 28% to £83.2m
(2019: £115.6m).
Overview
Savills delivered a resilient
revenue and profit performance
in 2020 in the face of
challenging market conditions.
The relative stability of our
less Transactional businesses,
particularly Property
Management, helped to offset
the impact of material COVID-19
related declines in transaction
volumes across the world.
Currency movements had a
marginal effect on the Group,
decreasing revenue by £4.3m
and increasing underlying profit
and statutory profit before
taxation by £0.1m.
Overall, our Transaction
Advisory revenue declined by
19%, our Consultancy business
revenue declined by 5% and our
Property Management revenue
grew by 2%. The UK Commercial
Transaction Advisory business
delivered a resilient performance
with a revenue decline of
15% against a 19% decline in
investment transaction volumes
for the market as a whole.
Our UK Residential business
had an extraordinary year;
having lost the spring selling
season in the first lockdown,
its recovery was strong and
sustained as buyers sought
greater space and amenities.
Revenues grew by 10% year-
on-year driven in large part
by the strength of regional
country markets. In Asia
Pacific, the pandemic closed a
number of key markets early
in the year and subsequent
actions saw recovery stutter
in a number of markets before
improving towards the year end.
Commercial and Residential
Transaction Advisory revenues
both declined by 25% year-on-
year in the Asia Pacific region.
In both Continental Europe and
the Middle East (‘CEME’) and
North America the decline in
transaction volumes resulted
in losses for the year. In CEME,
Commercial Transaction
revenues declined by 23%
year-on-year. In North America,
where we are almost wholly
focused on corporate occupier
transactions, we delivered a
resilient performance (revenue
decline of 30%) against a
market decline in transaction
volumes of c. 40%.
Savills Investment Management
had a stronger year than
originally anticipated after
a “supernormal” year of
performance fees in 2019. A
number of important product
launches and significant capital
deployed increased Assets
Under Management (‘AUM’)
to £19.0bn (2019: £17.7bn).
The reduction in transaction
volumes globally alongside and
growth in our lower margin but
stable Property Management
business, resulted in a reduction
to Group underlying profit
margin to 5.6% (2019: 7.5%*).
* See Note 2.29 for details on the prior year restatement of revenue.
The impact of the
aforementioned factors on the
Group underlying profit margin
were partially offset by lower
acquisition-related charges
and restructuring costs and
decreased amortisation of
intangible assets acquired on
business combinations. The
statutory pre-tax profit margin
declined to 4.8% (2019: 6.0%).
COVID-19 impact
and response
Savills has shown considerable
resilience in a year in which the
sector faced many challenges,
particularly to our transactional
advisory businesses worldwide.
The cycle of lockdowns and
other measures, such as travel
restrictions, from Q1 2020 had
a significant global impact on
the ability and preparedness of
both investors and occupiers
of real estate to transact. As a
consequence, in major markets,
both investment and leasing
volumes contracted markedly
compared with 2019 and
previous periods.
The Group was quick to adopt
a number of operational and
financial initiatives to minimise
the impact of the pandemic
on the business as a whole.
Savills strategy was to minimise
discretionary expenditure while
maintaining our staffing levels
to ensure seamless service to
clients around the world. In
addition the Board suspended
distributions to Shareholders
pending greater visibility of
future market recovery. The
consequence, particularly of
retaining our staff, has been
improved market share in
most of our markets. This both
partially mitigated the impact of
volume declines in transactional
markets and improved our
win ratio of tenders for less
Transactional real estate
services such as Consultancy
and Property Management.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 06
Chairman’s statement continued
Additional cash management
activities, including taking the
opportunity in H1, at no cost,
to defer certain predominantly
VAT/sales tax payments of
£49.2m (repayable through
2021), ensured that the Group
remained in a robust financial
position through the period and
finished the year with net cash
of £177.7m (2019: £28.5m).
Business development
and focus on technology
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. Despite
the pandemic, we continued to
focus on strategic development
of the business enabled by the
Group’s strong balance sheet.
In the UK, we were awarded the
property management contract
for the majority of shopping
centres formerly part-owned
and managed by Intu plc, which
comprised approximately 13m
sq. ft. of retail management
and necessitated significant on-
boarding costs as we took on
related staff and systems.
In CEME, we acquired OMEGA
Immobilien Management
GmbH and OMEGA Immobilien
Service GmbH (‘Omega’) in
August 2020, which provides
us with a small but high quality
Property Management business
in Germany upon which we will
build over the coming years.
In North America, we acquired
Macro Consultants LLC (‘Macro’)
in March 2020, a national Project
Management specialist and part
of our strategy to broaden our
less Transactional service lines
in the region.
Finally in Asia Pacific, we
recruited in both Consulting
services and brokerage, most
notably in the Greater Bay
area of China and in Japan.
In Singapore, we merged our
mass market residential
agency business into Huttons
Capital Pte Ltd, our long
standing associate, in which
we hold a significant minority
equity interest.
The pandemic has accelerated
technology adoption in almost
every industry, and real estate is
no exception. As the pandemic
spread across the globe, much
of the early focus was on
ensuring staff could continue to
advise clients remotely which,
due to the investment in our
underlying technology platform
across the Group in recent years,
was swiftly enacted.
In many sectors and
geographies we quickly adapted
or extended our services. In the
UK, where we are one of the
largest property auctioneers,
we pivoted to offering live-
streamed remote auctions
within days. This capitalised
on the recent launch of our
bespoke auctioning platform
and, enabled us to increase our
market share by over 50%.
“Virtual viewings” were swiftly
adopted for both residential and
commercial properties, through
virtual tours and individual
client-tailored and accompanied
remote viewings. Our recently
upgraded public facing websites
received over 35 million visitors
during the year, an increase
of approximately 50% year
on year.
Despite the pandemic we
continued to maintain, and
in some places increase, our
capital expenditure into our
internal technology initiatives
particularly in respect of the
digitisation of processes and
the use of data to provide
commercial insight.
As a leading property manager
across the world we continue
to be at the forefront of
technology advice and adoption
for building management. This
has become particularly relevant
during the pandemic to enable
safe reopening after lockdown.
The increasing focus in recent
years on sustainability, coupled
with the continued need to
improve the efficiency of
buildings, has driven substantial
innovation in this arena. As a
consequence of this trend, we
now advise landlords on the
technology fit-out and running
of their assets through our
Smart Building Consultancy.
We have continued to develop
our technology offering for
occupiers within our Knowledge
Cubed platform that continues
to be deployed into new clients
across the world. This “app
based” platform supports
the management of an
occupier’s real estate portfolio
providing an award-winning
analytics capability.
Savills plc | Annual Report and Accounts 2020 07
Many of these initiatives, and
numerous others, continue to
capitalise on the investments
in our centralised data
consolidation across real
estate, client, financial and
other geospatial data, and
investment into the latest
platforms for its visualisation.
We continued to manage our
portfolio of investments through
Grosvenor Hill Ventures, our
technology-focused investment
subsidiary. Of particular note
was YOPA, the digital hybrid
estate agency, which continued
to take market share in the
mainstream UK residential
markets, and VU.CITY whose
online city collaboration
continues to attract new
architects, developers and
planning clients as well as being
utilised by numerous teams
across our own business.
Board
As previously announced, on
1 January 2021 Philip Lee and
Richard Orders joined the
Plc Board as Non-Executive
Directors. Rupert Robson will
retire from the Board at the
Annual General Meeting in May
and Tim Freshwater will retire
from the Board on 31 December
2021. I thank them both for
their enormous contribution to
the Board over the years. Tim
also stepped down as Senior
Independent Non-Executive
Director on 31 December 2020,
and has been replaced in this
capacity by Stacey Cartwright.
Dividends
As a result of the uncertainty
caused by the pandemic, the
final dividend and supplemental
interim dividend for 2019
were cancelled and no interim
ordinary dividend was declared
during 2020.
A final ordinary dividend
of 17.0p is recommended,
reflecting the resilience of the
less Transactional business
performance in 2020, making
the aggregate ordinary dividend
17.0p for the year (2019: 4.95p,
interim ordinary dividend). Due
to the impact of the pandemic
on the Group’s transactional
profits during 2020 and the
advisability of maintaining liquid
resources through 2021, no
supplemental interim dividend
is declared. The final ordinary
dividend of 17.0p per
ordinary share will, subject to
Shareholders’ approval at the
AGM on 12 May 2021, be paid
on 18 May 2021 to Shareholders
on the register at 9 April 2021.
People
Our strategy was to maintain
our staff strength and continue
to ensure the future growth of
the business. To that end, we
maintained both our graduate
recruitment programme and the
emerging leaders programmes
we run across the globe.
I would like to express my
thanks to all our staff worldwide
for their hard work, their flexible
approach during challenging
times and relentless focus on
client service, which enabled the
Group to deliver these results.
Summary and Outlook
Savills delivered a good
performance in 2020 in some
of the most challenging market
conditions experienced by
this sector. This reflects the
strength and resilience of our
global diversified business as
we continued to grow our less
Transactional service lines and
outperform in many of our
transactional markets.
Whilst it remains too early to
predict the direction of market
activity in the near term, global
investor demand for secure
income, restricted supply and
expectations of continued
low interest rates underpin
the medium and long term
attraction of real estate as
an asset class. The pace and
efficacy of mass vaccination
programmes and consequent
release from lockdowns and
travel restrictions will dictate
the rate at which transactional
markets recover from here to
reflect underlying demand.
With the operating environment
currently restricted in most
markets, and the range of
potential outcomes for 2021
being unusually broad, the
Board considers it inappropriate
to resume guidance at this
stage. However, in general
terms, we currently expect
transactional activity to remain
broadly suppressed in the first
half of 2021 with improvement
commencing in some individual
markets thereafter with the
potential for progressive
recovery through the balance
of the year.
We remain focused on
growing our less Transactional
businesses, increasing our share
of the global transactional
markets and enhancing the
resilience of the business
overall. While we continue to
monitor the impact of global
uncertainties on investor
and occupier demand for
real estate, we have made a
good start to 2021 and see
opportunities for business
development activity emerging
during the course of the year.
Nicholas Ferguson CBE
Chairman
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 08
Our business explained
Our business model illustrates
in simple terms how we create
Shareholder value through
improving the strength of our
premium brand, and through
the delivery of profits and
dividends to Shareholders.
We treat every client as an
individual and take time to
understand what they need
and how we can best
service them.
We have built our brand and
reputation on the quality of
our people, relationships,
resources and processes.
Savills has a strong and well
embedded culture, founded on
an entrepreneurial approach
and founded on our values
and operational standards. All
that we do is underpinned by
strong governance, a disciplined
approach to risk management
and high standards of
responsibility, which supports
the sustainable development of
our business. More detail of our
governance structure, policies
and practices can be found later
in this Annual Report on pages
62 to 121.
Our resources & relationships
Our business model
Outstanding people
Local knowledge
Entrepreneurial approach
Intellectual property
Market intelligence
Brand and reputation
Long-term client
relationships
Client care programmes
High quality service
Financial
Prudent capital structure
Strong cash generation
Defensive, scale business
Property
and facilities
management
39%
Consultancy
19%
Investment
management
4%
Revenue
by business
Commercial
transactions
28%
Residential
transactions
10%
Cyclical high-margin businesses
Savills plc | Annual Report and Accounts 2020 09
We are committed to delivering
the highest levels of client
service and creating long-
term relationships with our
clients. Because of our personal
approach to business, our
people are fundamental to our
business and we encourage an
inclusive, open and supportive
culture in which every individual
is respected. We strive to
provide an environment in
which our people can flourish
and succeed. This allows us
to recruit, motivate and retain
talented people and build on our
status as an employer of choice.
We firmly believe that our
people are key to delivering
excellent service to our
clients and achieving our
objectives; they give us a
unique perspective of the
markets in which we operate
and connect our clients with
real estate opportunities and
market intelligence. To be the
real estate adviser of choice
in our markets, and deliver
superior financial performance,
we aim to employ people of
the highest quality supporting
the delivery of the highest
standards of client service.
By choosing Savills, our
clients have access to over
39,000 staff with a broad
range of experience, skills
and local knowledge, based
in offices in key real estate
locations across the globe,
and benefit from our extensive
market research material.
Underpinned by
Our values
• Pride in everything
we do
• Take an entrepreneurial
approach to business
• Help our people fulfil their
true potential
• Always act with integrity
Governance
• Board oversight
• High standards of
governance
Disciplined
approach to risk
• Risk mitigation to limit
exposure to any one
market or economy
• Business and geographic
diversification
Underlying
earnings per
share
56.8p
Our value creation
Shareholders
Dividends
Underlying
profit
17.0p
£96.6m
People
Developing talent
Employee engagement
Diversity and Inclusion
Clients
High quality service –
Client relationship
Client care – Client relationship
management team
Community
Reducing environmental impact –
Carbon emission reduction
Community investment –
Community engagement
programmes
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 10
Market insights
UK Commercial
2020 saw the combination of COVID-19 and Brexit
uncertainty affect both occupational and investment
market activity across most sectors of the UK
commercial property market. Overall investment
turnover was however only 12% down year-on-year, due
to a strong first and last quarter of the year. The final
quarter of 2020 was particularly strong, with £16.7bn of
commercial property investments traded, only 5% lower
than the same quarter in 2019.
Despite the difficulties that COVID-19 brought to
international travel, non-domestic investors remained
active in the UK commercial property market,
accounting for 50% of all purchases in 2020, and 76%
of purchases of central London office investments.
Investment activity only rose year-on-year in two
sectors, retail warehousing (+7%) and logistics (+35%).
Deal activity in most occupational markets and sectors
fell year-on-year, with the regional office markets
generally seeing a smaller fall in activity than the central
London office market. The one exception to this trend
was the logistics sector, where a rise in online shopping
and Brexit-related contingency planning led to a record
level of leasing activity in 2020 (50m sq ft, a 50% rise
on the previous year).
Case study: Shopping Centre Portfolio Transition
In doing so we:
The task
Major Shopping Centre Portfolio Transition
• Delivered the largest retail management
Working alongside a number of longstanding
asset management clients Savills was appointed
to manage the migration of Property Management
services to 12 of the most high-profile shopping
centres in the UK post administration of the
INTU group.
migration that has ever taken place across the
industry in the UK
• In a timescale that many thought was simply
impossible to achieve
• In the middle of a global pandemic and regional
lockdowns
We successfully mobilised and took on
responsibility for the Property Management of
12 high-profile, trophy asset shopping centres
comprising 12 million square feet of retail and
leisure space necessitating:
• 1650 transferring to Savills PM by way of TUPE
• Administration of complex ownership structures
for a variety of clients
• Transition of over 32 UIT systems and numerous
contractual relationships
The exercise was completed in a three to four
month time period and we are now assisting in
the management of schemes as operators and
customers plan for a post Covid return.
Savills plc | Annual Report and Accounts 2020 11
UK Residential
The UK housing market was the surprise package
of 2020. Having got off to a strong early start to
the year, the housing market was effectively closed
during the first lockdown.
The experience of that lockdown caused people to
reassess their housing needs and this, in combination
with the introduction of a stamp duty holiday,
brought an unexpected sense of urgency to the
market once the market re-opened.
As a result there was a strong recovery in
transactional activity, particularly in higher price
bands where households were in the best position to
transact. Consequently transaction levels across the
market as a whole ended the year at 1.05 million, just
11% below 2019 levels, while the average UK house
price rose by 7.3% according to the Nationwide.
This, combined with ongoing government support in
the form of Help to Buy, supported the housebuilding
sector, allowing new housing delivery to return to
pre-pandemic levels in the third and fourth quarter
of the year.
At the top end of the market there was a resurgence
of demand for country property, particularly
from London based buyers. While demand in the
prime central London market was constrained
by international travel restrictions, activity levels
continued to be underpinned by demand from UK
domestic buyers and domestic non-doms. As a result
transaction levels in the market above £1m across
England and Northern Ireland were 11% higher than
in 2019, with activity in the fourth quarter of the year
some 43% above the same period a year earlier.
Case study:
Ashe House –
Guide price
£18m
Immaculate estate with
a classically beautiful
unlisted period house
with restored interiors
in the centre of its own
parkland. We launched
Ashe Park in early
summer, predicting
that the prime market
would improve. It sold
for over its guide price
and was probably the
highest open-market
country house sale
for 2020.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 12
Market insights continued
US
The COVID-19 pandemic caused significant
dislocation across the US economy and commercial
real estate markets. After peaking at 14.7% in April,
US unemployment steadily declined during the year
and stood at 6.7% in December (though progress
slowed as rising coronavirus cases continued to
weigh on the recovery). Full-year GDP shrank by
3.5% in 2020, marking the first time the economy has
contracted for the year since the Great Recession.
Overall, the economy was more resilient in the
second half of the year, closing in fairly good shape
with GDP increasing at a 4% rate on an annualised
basis in the fourth quarter.
Office demand declined substantially over the year
as leasing volume was down 40% nationally from
2019, with larger declines in dense urban cores
including New York, San Francisco and Chicago. The
rapid addition of sublease space pushed US-wide
availability up to 20.8% at the end of 2020, marking a
360-basis-point increase over the year. Big tech firms
were a bright spot as FAANG giants continued to
expand their presence in key tech hubs – even
amid uncertainty. The industrial sector remained
resilient, particularly with the rise in e-commerce seen
throughout the pandemic, and net absorption in the
sector was up 27% over the year.
At the onset of the pandemic, investment sales
plummeted and pricing became challenged. Activity
shut down in the second quarter amidst lockdowns,
but the pace of declines moderated into later
quarters as investors gained an understanding
of how to navigate the challenges of completing
deals in current circumstances. Overall commercial
volume declined by 31% year over year. Investor
interest turned to property sectors that exhibited
more resilience during the downturn, including the
industrial and apartments sectors. The demand
for industrial was so strong that it outpaced office
volume. Overall, office investments declined by
40%, apartments by 28% and industrial by 16%.
Unsurprisingly, the hotel sector was the hardest hit,
seeing a 68% decline in volume over the year.
Case study: Panasonic Avionics
Corporation – Orange County,
California: June 2020
Savills executed a 275,000 SF transaction on behalf
of Panasonic Avionics Corporation (Panasonic
Avionics), which engineers, manufactures, and
installs in-flight entertainment and communications
solutions for airlines. The transaction represented
the largest commercial office deal of the year for
Orange County, California. Savills has represented
Panasonic Avionics globally for over a decade.
Savills improved the efficiency of the company’s
space and solved material deficiencies that existed
at its previous campus.
Savills plc | Annual Report and Accounts 2020 13
Europe
The total European investment volumes reached
approximately €258.3bn in 2020, marking a 17.8%
drop compared to 2019 and an 8.3% decrease on the
past five year average. As expected, due to lockdown
restrictions, the volume of non-domestic capital
reaching the European real estate market decreased
to 42.3% of the total volume compared to 47% in
2019. We expected the European end-year volume to
range between €250bn and €280bn (-3% and +9%
compared to last year).
European office take-up reached 7.8m sq m during
2020, down 32% on the five-year average. Most
markets observed a marked fall in demand as a result
of the COVID-19 pandemic. Due to waning demand,
we have observed a rise in office vacancy rates. Over
the past 12 months, average European office vacancy
rates have risen from record lows of 5.5% to 6.8% at
end Q4 2020. However, average prime headline rents
held stable across the majority of markets over the
past six-month period to Q4 2020.
The pandemic has triggered behavioural changes
creating uncertainty about the future of occupational
demand for certain types of assets. Multifamily has
proven to be the most resilient sector during 2020,
representing a 4.7% increase YoY to €46.3bn and
remains the second most active sector, accounting
for 18% of the total volume. The share of office
investment has fallen from 39% in 2019 to 34%
during 2020, as we observe proportional increases
in logistics (from 12% to 15%) and multifamily
(from 14% to 18%).
European logistics take-up reached 29.8 million sq
m during 2020, marking a record year of demand,
up 12% on the level observed during 2019 and 18%
above the five-year average. Vacancy rates remain at
record lows across the European markets, hovering
at 5.3% at end Q4 2020. Prime logistics rents rose
by an average of 1% over the last 12 months. We
anticipate rental growth to resume again this year,
with potential for secondary rental growth in core
markets, driven by the undersupply of existing and
future stock.
Case study: Savills advises on
largest leasing deal in Germany
In May 2020, Treptowers GmbH, a subsidiary of
Blackstone Real Estate Partners IV, agreed a long
term lease with Deutsche Rentenversicherung Bund,
with the latter taking c. 87,000 sq m (c. 936,460 sq
ft) space at Berlin’s ‘Treptowers’, An den Treptowers
3. The lease is one of the largest ever to complete
in Germany and Europe and underlines the strong
demand for office space in Berlin and its submarket
‘Mediaspree’. The building will undergo extensive
renovation until the end of 2022 after which the new
tenant will move in. An interdisciplinary Savills team,
combining investment and office agency expertise,
brokered and managed the transaction.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 14
Market insights continued
Investment Management
150 private equity real estate funds raised total
capital of $110bn in 2020. The number of funds
raising has fallen sharply from 337 in 2017,
highlighting the trend for increasingly large funds
dominating the market. Fundraising for industrial
funds accounted for 81% of single-sector funds raised
in 2020. Retail, office, and hospitality-focused funds
all dropped significantly. Meanwhile, demand for
opportunistic funds dropped in 2020, decreasing
from 52% in 2019 to 32%. 36% of investors increased
their real estate allocation in 2020, versus 32% who
decreased, while 68% of investors reported being
underweight in their allocation to private real estate
at the end of the year. This was despite the average
real estate investor increasing their allocation to the
asset class from 7.65% in 2019 to 8.46% in 2020.
Number of closed-ended real estate funds
closed in 2020:
150
(down from 181 in 2019)
Total capital raised in 2020:
$110.7bn
(-32%)
Case study: Acquisition of central Poland logistics asset
Savills Investment Management (Savills IM)
exchanged contracts to acquire a logistics property
in Łódź, Poland, for EUR 65.5 million on behalf of
the Vestas European Strategic Allocation Logistics
Fund (VESALF I).
leased to leading Danish transport company DSV
in Tholen, the Netherlands, strategically situated
between Europe’s two largest ports, Rotterdam
and Antwerp.
The 100,000 sq m+ property is leased to
Castorama, a French retailer specialising in DIY
and home improvement supplies, on a 6.7-year
term. This asset adds to a number of others that
Savills IM has acquired in Łódź – a logistics hotspot
due to its central location within the country and
accessibility to the rest of Europe via road and rail.
The total area of Savills IM’s logistics assets
in Poland now exceeds 1 million sq m.
Pan-European logistics fund VESALF I, launched
in late-2020, is among the first ‘blind’ funds
raised solely from Korean institutional investors to
invest in European real estate. It targets core and
core-plus logistics assets of between EUR 40–140
million across all key European markets. The fund
was seeded with a new Grade A 115,000 sq m unit
Savills plc | Annual Report and Accounts 2020 15
Asia Pacific
Having managed the virus with some success, three
major economies actually posted positive GDP
growth in 2020 including China (2.3%), Taiwan (3.1%)
and Vietnam (2.9%). China’s strong rebound augurs
well for the region as a whole which looks likely to
emerge from this crisis ahead of other major global
economic blocks including Europe and the US.
Transactions volumes of income-producing
properties in Asia-Pacific fell by 20% year on year
over the year as a whole but the region presented a
more mixed picture at a country level. Volumes had
already begun to stage a strong rebound of 84%
QoQ in the last quarter of the year and the region’s
most active markets included Japan (US$38.9bn),
China (US$34.3bn), South Korea (US$25.6bn),
Australia (US$18.5bn) and India (US$6.2bn).
While the impact of COVID was for obvious reasons
the major market focus, other themes remained
relevant including the emergence of logistics as
a highly sought after asset class, the growing
significance of datacentres alongside the advent of
5G, cloud computing and online retail, and a shift in
manufacturing processes out of China to elsewhere
in Asia.
The policy environment remains extremely
supportive and corporate distress has so far been
kept to a minimum. Interest rates at or close to
historical lows have provided a strong foundation for
regional residential markets. Buoyant stock markets
in the region have also had a positive impact on
investment sentiment.
Travel restrictions have limited cross border flows
of people and capital, and the retail and hospitality
sectors have been particularly hard hit as a result but
the year-end saw substantial amounts of unallocated
capital in the region (US$40bn by some estimates)
with deal making likely to become increasingly
competitive in 2021. Industrial is again proving to
be the favoured asset class.
Zara Tenjin Nishidori was sold to the Japan Retail
Fund REIT for JPY 5.0 billion, matching pre-pandemic
price expectations.
Case study: Zara Tenjin Nishidori, Fukuoka
Savills Japan was engaged by a European real
estate fund to market the prime Zara Tenjin Nishidori
retail store.
Result
Challenge
Marketing coincided with a nationwide lockdown
when many retailers were requesting rent holidays
or rent reductions.
Solution
Buyer candidates were pre-qualified to confirm it
would be viable to secure approval for an acquisition
in the midst of a nationwide lockdown. Supporting
market analysis was provided to reinforce the
strength of the location and encourage strong
offers despite the challenging environment.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 16
Key Performance Indicators
Financial KPIs
Revenue
Cash generation
Underlying profit
£1,740.5m £248.6m £96.6m
2020
2019
2018
£1,740.5m
2020
£248.6m
2020
£96.6m
£1,913.4m*
2019
£95.4m
£1,746.8m*
2018
£104.3m
2019
2018
£143.4m
£143.7m
The measure
The measure
The measure
Revenue growth is the
increase/decrease in
revenue year-on-year.
The amount of cash the
business has generated
from operating activities.
The target
The target
To deliver growth in
revenue from expansion
both geographically and
by business segment.
To maintain strong cash
generation to fund working
capital requirements,
Shareholder dividends
and strategic initiatives
of the Group.
Underlying profit growth
is the increase/decrease
in underlying profit year-
on-year.
The target
To deliver sustainable
growth in underlying profit.
Underlying earnings
per share
56.8p
Statutory profit
after tax
£68.0m
Statutory earnings
per share
49.0p
2020
2019
2018
56.8p
2020
£68.0m
2020
49.0p
78.0p
2019
£83.6m
2019
75.8p
2018
£77.2m
2018
60.6p
56.2p
The measure
The measure
The measure
Earnings per share (‘EPS’)
is the measure of profit
generation. Underlying EPS
is calculated by dividing
underlying profit by the
weighted average number
of shares in issue.
The target
To deliver growth in
underlying EPS to enhance
Shareholder value.
Statutory profit after tax
growth is the increase/
decrease in statutory profit
after tax year-on-year and
over a longer term.
The target
To deliver sustainable long-
term growth in statutory
profit after tax.
Statutory EPS is the
measure of statutory profit
generation and is calculated
by dividing statutory profit
after tax by the weighted
average number of shares
in issue.
The target
To deliver long-term growth
in statutory EPS to enhance
Shareholder value.
* See Note 2.29 for details on the prior year restatement of revenue.
Savills plc | Annual Report and Accounts 2020 Underlying profit margin
5.6%
2020
2019
2018
5.6%
7.5%*
8.2%
The measure
Profitability after all
operating costs but before
the impact of exceptional
costs and taxation.
The target
To deliver growth in
operating margin by
improving the efficiency
with which services
are offered.
17
Non-Financial KPIs
Breadth of service
offering
Geographical
spread
61.7%
59.2%
(% non-transactional income)
(% non-UK)
2020
2019
2018
61.7%
2020
59.2%
57.1%
53.8%
2019
2018
62.3%
62.4%
The measure
The measure
Revenue by type of
business.
The target
To maintain a healthy
balance of transactional and
less or non-transactional
business revenues.
Geographical diversity is
measured by the spread
of revenues by region.
The target
To progressively balance
the Group’s geographical
exposure through
expansion in our chosen
geographic markets.
Property under
management
2,347.5
(million sq. ft.)
Assets under
management
€21.1bn
2020
2019
2018
2,347.5m
2020
2,301.5m
2019
€21.1bn
€20.8bn
2,025.6m
2018
€18.2bn
The measure
The measure
Total square footage
property under
management.
The target
To progressively increase
the global square footage
under management.
Growth in assets under
management of our
investment management
business, Savills Investment
Management.
The target
To increase the value
of investment portfolios
through portfolio
management, new
mandates and the launch
of new funds.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 18
Chief Executive’s review
Our strategy is to
deliver value as a leading
real estate advisor to
private, institutional and
corporate clients seeking
to occupy, acquire,
manage, lease, develop
or realise the value of
prime residential and
commercial property in
the world’s key locations.
The key components of our business
strategy are as follows:
Commitment to clients by delivering the
highest standards of client service
Business
diversification
Maintenance
of our financial
strength
Geographical
diversification
Strength in
all real estate
sectors
Savills plc | Annual Report and Accounts 2020 19
Key operating highlights
The diversity of the Group, both geographically and in our service offering and the resilience
of our residential businesses underpinned a resilient performance in 2020.
Resilient performance
reflects geographic
diversity (59% non-UK
revenue) and strength of
less transactional service
lines (62% of Group
revenue, versus 57%
in 2019).
Increased Commercial
Transaction Advisory
market share,
outperforming in many
markets including North
America, Asia Pacific
and UK Commercial.
Savills Investment
Management
outperformed
expectations (against a
record 2019 comparative
boosted by strong
performance fees) with
revenue down 11% and
increased Assets Under
Management (‘AUM’) to
£19.0bn (2019: £17.7bn).
Less transactional
services revenues down
1% as Property and
Facilities Management
businesses performed
well, underlying profit
up 4% to £91.1m.
Savills global Transaction
Advisory revenues
declined by 19% as the
pandemic significantly
reduced the volume of
transactions worldwide.
UK profits down only 4%
to £78.8m, supported by
Property Management
and Consultancy.
Savills UK Residential
grew revenues by 10%
as the market recovered
strongly from mid-year.
Continued investment
in people, technology
leadership and
innovation in
sustainability.
Overall the Group’s
underlying profit
declined to
£96.6m
(2019: £143.4m)
On a statutory basis, profit
before tax decreased by
28% to
£83.2m
(2019: £115.6m)
Our Strategy
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
UK
Asia Pacific
Europe & the Middle East*
North America
Unallocated
Total
2020
2019 % growth
710.7
575.7
240.7
213.4
–
727.5
627.1
265.8
293.0
–
1,740.5 1,913.4
(2)
(8)
(9)
(27)
n/a
(9)
* See Note 2.29 for details on the prior year restatement of revenue.
2019 % growth
2020
78.8
42.3
(2.2)
(8.4)
81.9
42.6
15.8
17.3
(13.9)
(14.2)
96.6
143.4
(4)
(1)
n/a
n/a
n/a
(33)
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 20
Chief Executive’s review continued
On a constant currency basis Group revenue declined by 9% to £1,744.8m, underlying profit
decreased 33% to £96.5m and statutory profit before tax decreased by 28% to £83.1m. Our Asia
Pacific business represented 33% of Group revenue (2019: 33%) and our overseas businesses as
a whole represented 59% of Group revenue (2019: 62%). Our performance by service line is set
out below:
Revenue £m
Underlying profit/(loss) £m
Transaction Advisory
Property and Facilities Management*
Consultancy
Investment Management
Unallocated
Total
2020
2019 % growth
667.2
681.9
320.6
70.8
–
828.2
667.9
338.1
79.2
–
1,740.5 1,913.4
(19)
2
(5)
(11)
n/a
(9)
2020
19.4
44.8
31.5
14.8
69.8
35.2
34.5
18.1
(13.9)
(14.2)
96.6
143.4
(72)
27
(9)
(18)
n/a
(33)
2019 % growth
Overall, our Commercial and Residential Transaction Advisory business revenues together
represented 38% of Group revenue (2019: 43%). Of this, the Residential Transaction Advisory
business represented 10% of Group revenue (2019: 9%). Our Property and Facilities Management
businesses continued to perform well, with year-on-year revenue growth, representing 39% of
Group revenue for the year (2019: 35%). Our Consultancy businesses represented 19% of revenue
(2019: 18%) reflecting a year-on year decrease of 5%. The Investment Management business had
a solid performance, after a record year in 2019, which included a number of one-off performance
fees, with revenue declining by 11%. It represented 4% of Group revenue (2019: 4%).
People
The UK business won a number of national
awards including ‘Global Real Estate Adviser
of the Year’ at the 2020 Estates Gazette
Awards, ‘Residential Consultancy of the Year’
at the 2020 Property Week RESI Awards,
‘Alternatives Team of the Year’ at the 2020
Property Week Property Awards as well as
‘Agent of the Year’ Award at the Property Week
Student Accommodation Awards for the third
year running. This year Savills celebrated being
named the Times Graduate Employer of Choice
in property for the 14th consecutive year and
No.1 UK Real Estate Super brand, also for the
14th consecutive year.
The European business won ‘European
Investment Sales Broker of the Year’ at REFI’s
2020 awards, for the third year running. Savills
also came first in nine categories for the annual
Euromoney Real Estate Survey rankings for
Western Europe and the UK, taking the top
spot in categories including overall developers,
residential and innovative green development.
We were also named best real estate consultant
in Spain for the ninth consecutive year and
voted top in ten other categories.
In Australia, Savills won a number of awards
including the ‘Project Management Team of
the Year’ at the RICS Awards 2020, marking
the seventh time in eight years of RICS award
wins. Our Investment Management business
was awarded first-place price at the annual CEE
Investment and Manufacturing Awards in both
the Warehouse Investor and Investment Asset
Management Firm categories.
These awards are a testament to the strength
of our people, their use of technology and
approach to client service and I thank them for
their continued commitment, loyalty and hard
work, particularly in such challenging times.
Savills plc | Annual Report and Accounts 2020 21
The Savills Group advises on commercial, residential, rural and leisure property. We also provide
corporate finance advice, investment management and a range of property-related financial
services. Operations are conducted internationally through four business streams:
Transaction Advisory
Revenue
£667.2m
Underlying profit
£19.4m
Contribution to
Group revenue (%)
2020
£667.2m
2020
£19.4m
38%
2019
2018
£828.2m
2019
£69.8m
£813.5m
2018
£81.1m
62%
-19%
YOY
change
-72%
YOY
change
Transaction Advisory
Rest of Group
Those markets which are typically most
dependent upon cross border capital were
particularly affected, namely Singapore, Hong
Kong and Australia. Conversely, those countries
with strong domestic trade, namely China,
South Korea and Vietnam, were better able to
withstand the impact. Indeed in South Korea and
Vietnam we experienced strong year-on–year
growth in transactional revenues. In Australia and
Singapore, the combination of lockdowns, lack
of incoming cross-border activity and continued
recruitment costs, resulted in the commercial
transaction businesses making a loss for the year.
Overall, leasing markets remained subdued as
corporates continued to defer significant long
term decisions. In general, having been first into
the pandemic, the region was also the first to start
to see signs of recovery as lockdowns eased.
As a result of the reduction in revenues and
despite a significant level of cost reduction, the
underlying profits in the region declined by 73%
to £3.3m (2019: £12.4m).
Transaction Advisory
Overall, our Transaction Advisory revenues
declined by 19% (at both prevailing rates and in
constant currency) to £667.2m (2019: £828.2m).
Globally our Commercial Capital Transaction
business revenue declined by 24% and our
Leasing and Occupier focused transactional
revenues declined by 26%. Our Global Residential
business revenue increased by 3%.
Underlying profits decreased 72% to £19.4m
(2019: £69.8m), with a reduced underlying profit
margin of 2.9% (2019: 8.4%), as a result of the
effect of the global pandemic on market activity
throughout the period.
Asia Pacific Commercial
Revenue from the Asia Pacific Commercial
Transaction business decreased by 25% to
£103.9m (2019: £138.6m), a fall of 24% in
constant currency.
The pandemic took effect earliest in mainland
China and Hong Kong and spread to affect
transaction volumes significantly, not least
through the imposition of travel restrictions
which slowed both domestic and cross-border
capital flows. In both markets, Savills increased
market share despite significantly reduced
transaction volumes to finish the year as the
leading commercial investment adviser in
Greater China.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 22
Chief Executive’s review continued
UK Commercial
Europe and the Middle East
Revenue from the UK Commercial Transactional
business decreased by 15% to £79.8m (2019:
£94.2m) as the COVID-19 pandemic affected
both the investment and leasing markets.
Despite the arduous trading conditions
our national Investment teams maintained
continuous contact with clients despite the
challenge of remote working and delivered
a resilient performance in a market where
investment transaction volumes fell year-on-year.
National Logistics continued to be the growth
sector and despite market leasing volumes in
the office sector declining by 50-70% in some
locations, our increased market share resulted
in revenues outperforming the market. In
London, where the market volume declines were
significant, we also out-performed the market
in both the investment and leasing sectors.
As a result of the declining revenues, partially
offset by discretionary cost saving measures
implemented during the year, underlying
profit before tax was down 23% to £9.5m
(2019: £12.3m).
North America
Being overwhelmingly a transactional business
primarily focused on occupiers, the North
American business was materially affected by
the COVID-19 pandemic. The general theme
was one of corporate occupiers postponing
longer term strategic decisions in favour of
short term roll-over transactions, with leasing
market volumes falling by 40% nationally and
by between 50% and 68% in some of the larger
Metro Office markets (e.g. New York, Chicago
and San Francisco).
Against that backdrop, the Savills business saw
a revenue decline of 30% to £205.2m (2019:
£293.0m), a fall of 29% in constant currency.
This relative outperformance was due to some
significant head office transactions in both
the Technology and Healthcare/Life Sciences
sectors and a robust performance by our US
Government transaction teams. The regions
where we most significantly out-performed the
market were Northern New Jersey, South Florida,
Houston, Atlanta and Philadelphia.
During the period we undertook a CEO
succession programme and sought to minimise
discretionary expenditure. As a result of the
above factors the North American transactional
business recorded an underlying loss of £7.5m
(2019: £17.3m profit) for the year as a whole.
In Europe and the Middle East transaction
fee income declined by 23% to £98.2m (2019:
£127.5m), a fall of 24% in constant currency.
This reflected subdued investment and leasing
markets as a result of significant lockdown
periods and an inability to travel across all of
our markets. Those markets which are typically
dependent upon cross-border activity suffered
the worst declines in market volume. Ireland,
one of our historically strongest markets with
significant exposure to US capital, was the most
affected with revenue declining by 57% year-on-
year. In Germany, Spain, the Netherlands, Belgium
and Sweden we successfully outperformed the
market volume declines, however restructuring
costs (Germany and Ireland) and recruitment
in a number of locations (Sweden, Portugal
and Czech Republic) further impacted the
performance of the transactional business. The
effect of all these factors was that the business
produced an underlying loss of £12.3m for the
year (2019: £5.4m underlying profit).
UK Residential
Our UK Residential Transaction business
experienced an extraordinary recovery from the
end of the first lockdown through to the year
end. Revenue increased by 10% year-on-year to
£153.2m (2019: £139.1m). Our second hand agency
business increased revenue by 18% year-on-year,
benefiting from the surge in activity after the first
national lockdown from June onwards as people
reassessed their housing needs, coupled with the
effect of lower stamp duty rates.
This was particularly the case outside of the
capital, with the number of exchanges increasing
by 26% year-on-year, and the average value of
residential properties sold by Savills increased by
11% from £1.13m to £1.26m. In London, whilst the
recovery was slower to emerge, the number of
exchanges was up 25%, with the average value of
residential properties sold by Savills decreasing
by 8% from £2.13m to £1.96m, reflecting a greater
proportion of activity and market share gains in
the Core London market (values c. £1.5m).
The new homes and prime London markets were
slower to recover, with the inability of overseas
buyers to travel during and between lockdowns,
which limited the ability to transact. As a
consequence, our new homes revenues fell by
11% year-on-year. The number of exchanges fell
by 10% to 3,505 (2019: 3,905) with the average
value of properties sold by Savills increasing by
1% year-on-year.
Savills plc | Annual Report and Accounts 2020 23
Property and Facilities Management
Revenue
£681.9m
Underlying profit
£44.8m
Contribution to
Group revenue (%)
2020
2019
2018
£681.9m
2020
£44.8m
39%
£667.9m*
2019
£35.2m
£572.2m*
2018
£32.2m
61%
+2%
YOY
change
+27%
YOY
change
Property and Facilities
Management
Rest of Group
Our PRS residential transactional business
had another strong year of market leadership
advising on some of the largest transactions
ever undertaken in the UK such as the £4.7bn
IQ student portfolio.
The combination of higher revenues and
discretionary cost savings resulted in underlying
profit increasing by 29% year-on-year to £23.0m
(2019: £17.8m).
Asia Pacific Residential
Revenue from the Asia Pacific Residential
Transaction business decreased by 25% to
£26.9m (2019: £35.8m), a fall of 24% in constant
currency. There were significant reductions in
activity levels in Hong Kong, Australia, Singapore
and Vietnam. However, in mainland China
which is our biggest revenue contributor in this
segment, a reasonably robust market emerged
from lockdown enabling us to maintain revenues
broadly in line with the prior year. International
residential sales in Hong Kong continued to
perform well as individuals sought investment
opportunities overseas.
Underlying profits of £3.4m were 26% lower
than the prior year (2019: £4.6m) reflecting a
lower profit contribution from our joint venture
in Singapore, but offset by cost reductions,
most notably in Australia as a result of the
cost rationalisation programme of 2019.
Property and Facilities Management
Our Property and Facilities Management
businesses continued to perform well despite the
global pandemic, with revenues growing by 2%
at £681.9m (2019: £667.9m*). Savills total area
under management increased by 2% to 2.35bn
sq. ft. (2019: 2.30bn sq. ft.). Underlying profit
increased by 27% to £44.8m (2019: £35.2m),
28% in constant currency.
Asia Pacific
The Asia Pacific Property Management business
showed stability throughout the year with
a revenue decrease of 1% to £368.3m (2019:
£372.5m), an equivalent decline in constant
currency. Revenue reductions in South Korea,
China and Australia were almost entirely offset
by higher revenues as a result of contract
wins and ad hoc fees in Hong Kong, Vietnam,
Singapore and Japan, with the latter benefitting
from additional set-up fees on new contracts.
A number of the terminating contracts, most
notably in South Korea, were in facilities
management with no contribution to margin.
In addition, the effect of the pandemic and
lockdown on the retail and leisure industries
in particular meant that staff cost inflation,
which has been an issue in recent years, abated
significantly in Hong Kong and mainland
China. These factors, together with cost saving
measures implemented in Australia, Hong Kong
and Singapore led to a significant increase in
underlying profit to £27.7m (2019: £19.2m).
* See Note 2.29 for details on the prior year restatement
of revenue.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 24
Chief Executive’s review continued
Consultancy
Revenue
£320.6m
Underlying profit
£31.5m
Contribution to
Group revenue (%)
2020
£320.6m
2020
£31.5m
2019
2018
£338.1m
2019
£34.5m
£294.4m
2018
£33.1m
19%
81%
-5%
YOY
change
-9%
YOY
change
Consultancy
Rest of Group
UK
The UK Property Management business was
able to demonstrate the beneficial effect of
a diversified offering by growing revenues
and profits despite the prolonged periods of
lockdown throughout 2020. Revenue grew by
6% to £245.0m (2019: £231.1m) and some very
significant contracts were won during the period,
which should benefit 2021 and beyond. The
Residential Property Management Lettings team,
which is also included in this segment, remained
resilient, with revenues falling by only 2% despite
the challenging market conditions impacting
London lettings significantly.
The higher revenues, along with a continued drive
to improve efficiencies, enabled the underlying
profit to increase by 9% to £17.2m (2019: £15.8m).
Europe and the Middle East
In the Europe and Middle East Property
Management business revenues were up by
£4.3m (7%) to £68.6m (2019: £64.3m*), which
was 6% on a constant currency basis. At the
end of August we acquired a German property
management business, OMEGA Immobilien
Management GmbH and OMEGA Immobilien
Service GmbH (‘Omega’), which contributed
£3.6m of revenue to this segment. There was
also revenue growth in the Middle East and the
Netherlands, offsetting reductions in Sweden,
Ireland and France.
In addition to the Omega acquisition, there were
significant recruitment costs to enhance our
capabilities in Spain, France, Italy, the Czech
Republic and the Middle East, which resulted in
an underlying loss for the year of £0.1m (2019:
£0.2m profit).
Consultancy
Global Consultancy revenue decreased by 5%
to £320.6m (2019: £338.1m) and underlying
profit fell by 9% to £31.5m (2019: £34.5m).
Currency movements had a negligible impact
on results in the Consultancy business.
UK
The UK Consultancy businesses mainly
comprised of Valuations, Planning, Development,
Housing Services, Building and Project
Consultancy, Energy Projects and Rural. With
the exception of Rural, Housing Consultancy and
Lease Consultancy, all of these services showed
resilience despite experiencing slightly reduced
activity as a result of the COVID-19 pandemic.
The main consequence was the delay or deferral
of a number of consultancy projects into 2021.
Revenues of £205.8m were 10% below the prior
year (2019: £229.9m).
Underlying profit fell by 13% to £23.5m
(2019: £27.0m).
Asia Pacific
The Asia Pacific Consultancy business showed
considerable resilience during the pandemic.
Revenues, which primarily comprise Valuations,
Research and Project Management, decreased
by 1% to £69.1m (2019: £69.6m), slightly ahead of
the prior year on a constant currency basis. The
biggest contributors to this robust performance
were Australia, Japan, Singapore and South
Korea, predominantly as a result of increased
levels of portfolio advisory valuation and research
activity which outweighed the decline in the
security valuations associated with transaction
volumes. Singapore was further buoyed as
investments made in previous years started to
gain traction. The project management revenues
remained resilient, particularly in Australia.
Savills plc | Annual Report and Accounts 2020 25
Investment Management
Revenue
£70.8m
Underlying profit
£14.8m
Contribution to
Group revenue (%)
2020
£70.8m
2020
£14.8m
2019
2018
£79.2m
2019
£18.1m
4%
96%
£66.7m
2018
£11.0m
-11%
YOY
change
-18%
YOY
change
Investment
Management
Rest of Group
Resilient revenues together with cost savings
led to an increase in underlying profits of 41% to
£6.5m (2019: £4.6m).
Europe and the Middle East
In the Europe and Middle East business, which
is primarily made up of valuations, revenues
decreased by £1.1m (3%) to £37.5m (2019:
£38.6m), down 4% on a constant currency basis.
Reductions in Ireland, Spain and France were
partially offset by growth in Germany, Poland
and the Netherlands and the commencement of
new Consultancy services in the Czech Republic
and the Middle East.
Underlying profits fell by £0.5m (17%) to £2.4m
(2019: £2.9m) at both prevailing exchange rates
and on a constant currency basis.
North America
As part of our strategy to diversify our
income streams in North America by
building our Consultancy practices, in March
2020 we announced the acquisition of
Macro Consultants LLC, a national project
management consultancy business.
As a result of the effect of the lockdowns
on the construction industry, the business
experienced some hiatuses with a consequent
effect on revenue and profits. However we also
won a number of exciting new assignments
both in North America and through referrals
from the US into other regions. North America
Consultancy revenues were £8.2m (2019: £nil)
with an underlying loss of £0.9m (2019: £nil).
Investment Management
Having enjoyed a supernormal year of
performance fees in 2019, we anticipated a
reduction in both revenue and profit in 2020.
In the event, revenue from our Investment
Management business reduced by 11% to £70.8m
(2019: £79.2m) and the business performed
ahead of our expectations with both new fund
launches and strong investment performance
from the majority of our products. The
pandemic did have an impact on capital raising
and deployment as our strategy was to adopt a
cautious approach to the deployment of capital
in markets where, for much of the period, there
was limited price transparency.
Despite this, we raised a total of approximately
£1.7bn (2019: £3.1bn) for real estate equity,
and our associate, DRC Capital, raised over
£1.0bn for debt strategies. We successfully
launched two new pooled funds in the Asia
Pacific region and two in Europe. Our Assets
Under Management increased by 7% to £19.0bn
(2019: £17.7bn) and base fund management
fees remained highly resilient. Our transaction
fee income declined by 23% over the period,
reflecting reduced deployment, and our
performance fees declined by a similar amount;
both of these were better than anticipated at
the start of the pandemic.
As a result of the above factors, underlying
profit decreased by 18% to £14.8m (2019: £18.1m).
Mark Ridley
Group Chief Executive
* See Note 2.29 for details on the prior year restatement
of revenue.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 26
Chief Financial Officer’s review
Control over
discretionary
expenditure and
resilient trading
considerably
enhanced the
Group’s financial
position during
the year.
Savills plc | Annual Report and Accounts 2020 27
Gross borrowings at year end
decreased to £160.6m (2019:
£181.4m). These principally
comprise £150.0m (2019:
£150.0m) of 7, 10 and 12 year
fixed rate notes which were
issued in June 2018, along with
£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
(2019: £32.5m), with £397.2m
(2019: £373.3m) of undrawn
borrowing facilities in total
available to the Group. At the
year end, net cash was £177.7m
(2019: £28.5m).
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 £248.6m
(2019: £95.4m).
Underlying profit margin
Underlying profit margin
decreased to 5.6% (2019:
7.5%), reflecting the
significantly lower levels of
transactional activity as a
consequence of the global
pandemic and the greater
proportion of lower margin,
but stable revenues from our
less Transactional service lines.
Taxation
The tax charge for the year
decreased to £15.2m (2019:
£32.0m), reflecting an effective
tax rate on statutory profit
before tax of 18.3% (2019:
27.7%). The Group’s effective
reported tax rate is marginally
lower than the UK effective
rate of tax of 19% reflecting
lower permanent disallowable
expenses and higher non-
assessable income.
The underlying effective
tax rate reduced to 18.5%
(2019: 25.1%).
Restructuring and
acquisition-related costs
During the year the Group
recognised a total of £6.5m in
restructuring and acquisition-
related costs (2019: £25.2m).
These comprised an aggregate
restructuring charge of £1.5m
(2019: £11.5m), which related
principally to the ongoing
costs of deferred shares issued
in relation to the restructuring
upon acquisition of Aguirre
Newman in 2017.
The reduction in acquisition-
related costs in 2020 to
£5.0m (2019: £13.7m) reflected
a reduction in corporate
acquisition activity year-on-
year. These costs related
to future consideration
payments, associated with past
acquisitions, which are subject
to a future service condition.
The largest components
of this charge relate to the
acquisitions of Currell Group
in 2018 and Aguirre Newman
in 2017.
These charges have been
excluded from the calculation
of underlying profit in line
with Group policy.
Earnings per share
Basic earnings per share
decreased 19% to 49.0p
(2019: 60.6p), reflecting a
19% decrease in statutory
profit after tax. Adjusted on a
consistent basis for exceptional
pension charges, restructuring,
acquisition-related costs,
profits and losses on disposals,
certain share-based payment
adjustments and amortisation
of acquired intangible
assets (excluding software),
underlying basic earnings per
share decreased 27% to 56.8p
(2019: 78.0p).
Fully diluted earnings per
share decreased by 19% to
47.9p (2019: 58.8p). The
underlying fully diluted
earnings per share decreased
27% to 55.5p (2019: 75.7p).
Cash resources,
borrowings and liquidity
Gross cash and cash equivalents
at year end increased 61% to
£338.3m (2019: £209.9m). This
increase primarily reflected
the effect of cost savings
and a positive year-on-year
movement in working capital
together with the cancellation
of the final dividend for 2019
and no declaration of an interim
dividend for 2020. In addition
the Group took the opportunity
to defer tax (primarily sales
tax) payments of £49.2m, at no
cost during the initial lockdown
period. The majority of which is
expected to be paid by the
end of 2021.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 28
Chief Financial Officer’s review continued
Net assets
Net assets as at 31 December
2020 were £581.6m (2019:
£503.2m). This movement
reflects the Group’s trading
performance alongside the
actuarial gain on the UK
defined benefit pension plan.
Key performance
indicators (‘KPIs’)
The Group uses a number
of KPIs to measure its
performance and review the
impact of management
strategies. These KPIs are
detailed under the Key
Performance Indicators
section on pages 16 and
17. The Group continues to
review the mix of KPIs to
ensure that these best
measure its performance
against its strategic objectives,
in both financial and non-
financial areas.
Financial policies and
risk management
The Group has financial
risk management policies
which cover financial risks
considered material to the
Group’s operations and results.
These policies are subject
to continuous review in light
of developing regulation,
accounting standards and
practice. Compliance with
these policies is mandatory
for all Group companies and
is reviewed regularly by the
Board. Refer to Note 3 to the
financial statements for further
information on financial risk
management.
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. Given the significant
pandemic-related decline in
transactional activity in 2020,
this strategy underpinned the
financial stability of the Group’s
balance sheet.
Capital and Shareholders’
interests
During the year no shares
(2019: 45,176) were issued
to participants under the
Performance Share Plan
and 8,504 (2019: 87,938)
new shares were issued to
participants on exercise of
options under the Group’s
SAYE schemes. The total
number of ordinary shares in
issue at 31 December 2020
was 143.1m (2019: 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 during the
year primarily as a result of an
increase in asset values. The
plan was in a liability position
of £2.6m at the year-end
(2019: £9.4m liability).
During the prior year the
Group incurred an additional
exceptional charge of £0.7m
in respect of the equalisation
of the Guaranteed Minimum
Pension (‘GMP’) on the UK
defined benefit pension plan.
Treasury policies and
objectives
The Group Treasury policy
is designed to reduce the
financial risks faced by the
Group, which primarily relate to
funding and liquidity, interest
rate exposure and currency
rate exposures. The Group
does not engage in trades
of a speculative nature and
only uses derivative financial
instruments to hedge certain
risk exposures. The Group’s
financial instruments comprise
borrowings, cash and liquid
resources and various other
items such as trade receivables
and trade payables that arise
directly from its operations.
Surplus cash balances are
generally held with A rated
banks or better.
Interest rate risk
The Group finances its
operations through a mixture
of retained profits and
borrowings, at both fixed
and floating interest rates.
Borrowings issued at variable
rates expose the Group cash
flow to interest rate risk, which
is partially offset by cash held
at variable rates. Borrowings
issued at fixed rates expose the
Group to fair value interest rate
risk. Group policy is to maintain
at least 70% of its borrowings
in fixed rate instruments.
Liquidity risk
The Group prepares an annual
funding plan which is approved
by the Board and sets out the
Group’s expected financing
requirements for the next 12
months. These requirements
are ordinarily expected to be
met through existing cash
balances, loan facilities and
expected cash flows for
the year.
Savills plc | Annual Report and Accounts 2020 29
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
represented a £4.3m decrease
in revenue (2019: £20.7m
increase) and a £0.1m increase
to underlying profit (2019:
£1.4m increase). Refer to Note
3.2 to the financial statements
for further information on
foreign exchange risk.
Simon Shaw
Group Chief Financial Officer
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 30
Principal and emerging risks and
uncertainties facing the business
“ The Board is
responsible for the
Group’s system of
risk management
and internal control.
Risk management is
recognised as an
integral part of the
Group’s activities.”
Savills plc | Annual Report and Accounts 2020 31
evolve to reflect the reduction/
increase in identified principal
risks and the emergence of
new principal risks. Where it is
considered that a risk can be
mitigated further to the benefit
of the business, responsibilities
are assigned and action plans
are agreed. Principal risks
are those to which the Board
and senior management pay
particular attention and which
could cause the delivery of
the Group’s strategy, results,
financial condition or prospects
to differ materially from
expectations. Emerging risks
are those which have unknown
components, the impact of
which could crystallise over
a longer period of time.
The Group Director of Risk &
Assurance facilitates the risk
assessment and evaluation
process with Group and
regional /business unit
management on behalf of
the Board and challenges
risk findings and the internal
control framework to ensure
that these are effective.
Group policies and delegated
authority levels set by the
Board provide the basis against
which potentially principal risks
are reviewed and escalated to
the appropriate level within
the Group, up to and including
the Board, for review and
confirmation.
We have a clear framework for
identifying and managing risk,
both at a financial, operational
and strategic level. Our risk
identification and mitigation
processes have been designed
to be appropriate to the ever-
changing environments in
which we operate.
Identifying and
managing our risks
The Board determines the
Group’s appetite for risk in
pursuit of strategic objectives,
and the level of risk that can
be taken by the Group and
its operating companies.
Savills businesses worldwide
are responsible for executing
their activities in accordance
with the risk appetite set by
the Board, complemented
by the Code of Conduct,
Group policies and delegated
authority limits.
Risk is assessed across the
Group using a systematic risk
management model covering
both external and internal
factors and the potential
impact and likelihood of
those risks occurring. Risk
assessments are incorporated
into risk registers at Group
and business level, which
Plc Board
Plc Audit Committee
Group Executive Board
Group Risk Committee
Executive Committees
Group Risk
Heads of Group
functions
Heads of operating
companies
Key risks:
Heads of Group
functions identify the
key risks and develop
mitigation actions
Key risks:
Heads of operating
companies create
a register of their
principal risks and
mitigation actions
Review and confirmation
Review and confirmation by the Board.
Process
Risks and mitigation reviewed by Audit Committee
after validation by the Group Risk Committee and
Executive Boards/Committees.
Ongoing review and control
There is ongoing review of the risks and the controls
in place to mitigate these risks.
Review and assessment
Group Director of Risk & Assurance consolidates the
operating companies’, functional and Group risks
to compile the Group’s key risks. Any significant
programme/project risks are also considered.
The Savills Investment Management business has its own comprehensive and
regulatory-compliant framework for identifying and managing risk, reporting
to the PLC Audit Committee and Board.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 32
Principal and emerging risks and uncertainties facing the business continued
Roles and responsibilities
The Board continuously reviews
the Group’s key risks and is
supported in the discharge of
this responsibility by various
committees, and in particular
the Audit Committee and the
Group Risk Committee.
The risk management roles and
responsibilities of the Board,
its Committees, and business
management are set out below,
and all of these responsibilities
have been discharged during
the year.
1. Board
Responsibilities
• Approve the Group’s strategy
• Determine Group appetite
for risk in achieving its
strategic objectives
• Establish the Group’s systems
of risk management and
internal control.
The Audit Committee supports
the Board by monitoring risk
and reviewing the effectiveness
of internal controls, including
systems to identify, assess,
manage and monitor risks.
Actions
• Receive regular reports on
Internal and External Audit
and other assurance activities
• Receive regular risk updates
from the businesses
• Determine the nature
and extent of the principal
Group risks and assess
the effectiveness of
mitigating actions
• Annually review the
effectiveness of risk
management and internal
control systems
• Approve the Group risk
management policy.
2. Group Executive Board
Actions
• Review key risks and
mitigation plans
• Review results of
assurance activities
• Escalate key risks to Group
Management and Group
Executive and Plc Boards.
4. Heads of the Group
functions and operating
companies
Responsibilities
• Maintain an effective system
of risk management and
internal control within their
function/operating company.
Actions
• Regularly review operational,
project, functional and
strategic risks as well as
emerging risks
• Review mitigating controls,
whether financial, operational
or compliance and mitigation
plans to address control gaps
• Plan, execute and report
on assurance activities as
required by region or Group.
The Group’s overall risk
management framework
is further enhanced by the
contributions of specialist
committees, for example, IT
Security. Where appropriate,
certain businesses also have
their own risk committees.
Savills continuously reviews
and enhances its risk
management process and
seeks advice from independent
advisors where applicable.
Responsibilities
• Strategic leadership of the
Group’s operations
• Ensure that the Group’s risk
management and other
policies are implemented
and embedded
• Monitor that appropriate
actions are taken to manage
material strategic risks and
key risks arising within the
risk appetite of the Board
• Consider emerging risks in
the context of the Group’s
strategic objectives
• Approve Group Policies
• Monthly/quarterly finance
and performance reviews
• Receive updates from Group
Risk Committee
• Monitor the application of risk
appetite and the effectiveness
of risk management
processes. The Group Risk
Committee and Board also
consider the Group’s overall
risk appetite in the context of
the negative impact that the
Group can sustain before it
risks the Group’s continued
ability to trade.
Actions
Review of risk management
and assurance activities
and processes.
3. Subsidiary Executive
Committees’
Responsibilities
Responsibilities
• Responsible for risk
management and internal
control systems within their
regions/businesses
• Monitor the discharge of
their responsibilities by
operating companies.
Savills plc | Annual Report and Accounts 2020 33
Principal and emerging risks
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.
Our consideration of the key risks and uncertainties relating to the Group’s operations, along
with their potential impact and the mitigations in place, is set out below. There may be risks and
uncertainties other than those listed below which may also adversely affect the Group and its
performance. More detail can be found in the Audit Committee Report on pages 69 to 77.
This year we have conducted a formal exercise to identify and assess emerging risks. While
assessing potential emerging risks we have considered our risk exposure across a number of
themes e.g. finance and economics, geopolitical and security, social, technological, climate and
sustainability. Emerging risk and horizon scanning are integrated as part of regular risk discussions
and reported at both regional and Group level and we will continue to embed this further
going forward.
In summary, our material existing and emerging risks (not in order of priority) are:
1. Business conditions, general
economy and geopolitical
issues
2. Achieving the right market
positioning in response to
the needs of our clients
3. Recruitment and retention
of high-calibre staff
4. Reputational and brand risk
8. Business conduct
5. Legal risk
6. Failure or significant
interruption to IT systems
causing disruption to
client service
7. Operational resilience/
Business continuity
9. Changes in the regulatory
environment/regulatory
breaches
10. Acquisition/integration risk
11. Environment and
sustainability
Risk
Description
Mitigations
1 Business conditions, general economy and geopolitical issues
Change
from
2019
Strategic objective:
Geographic
diversification/
Financial strength
Global market conditions are currently
volatile, with political and economic
uncertainty in many sectors and markets.
The time that it will take several major
economies within which we operate to
recover from the economic recessions
caused by the COVID-19 pandemic
is unknown.
Group earnings and our financial
condition could be adversely affected
by these and other macro-economic
uncertainties. Savills operates in
a number of countries where the
transactional business is the largest
component and thereby increases the
level of economic risk.
There is a currency risk from operating
in a large number of countries.
The strength of Savills business and brand
and the focus on client service.
Unchanged
Our strategy of diversifying our service
offering and geographic spread mitigates
the impact on the business of economic
downturns and weak market conditions
in specific geographies, but these factors
cannot entirely mitigate the overall risk to
earnings. To manage these risks, we maintain
a continuous focus on our cost base and
seek to improve operational efficiencies.
Contingency plans are in place to enable us
to respond quickly to market information,
economic trends and adverse events.
Continual monitoring of market conditions,
market changes and other events against
our Group strategy, supported by the
reforecasting and reporting in all of our
businesses, are key to our ability to respond
rapidly to changes in our operating
environment.
Our exposure to countries with economies
which are currently weak is balanced
by our business in more stable markets.
When considering new market entry we
undertake due diligence including the impact
assessment of political and economic issues
in that particular country.
We manage currency risk in local operations
through natural hedging and matching
revenue and costs in the same currency.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 34
Principal and emerging risks and uncertainties facing the business continued
Risk
Description
Mitigations
2 Achieving the right market positioning in response to the needs of our clients
Strategic objective:
Business
diversification/
Strength in
Residential and
Commercial markets/
Geographical
diversification/
Commitment
to clients
The markets in which we operate are
highly competitive. Competition could
lead to a reduction in market share and/
or a decline in revenue. Our focus is
on retaining existing clients as well as
engaging with new clients. Our service
offering continuously evolves and
improves to meet the changing needs
of our clients and this will continue as
any changes to our clients’ utilisation
of real estate emerge as a result of the
COVID-19 pandemic.
3 Recruitment and retention of high-calibre staff
Strategic objective:
Financial strength/
Commitment
to clients
We recognise that the future success of
our business is dependent on attracting,
developing, motivating and retaining
people of the highest quality. Further, the
motivation of our people and retaining
our collaborative culture is essential to
the delivery of our strategic objectives.
Change
from
2019
Unchanged
To remain competitive in all markets, we
continue to promote and differentiate our
strengths whilst focusing on providing the
quality of service that our clients require.
We continue to invest in the development
of client relationships globally and
associated systems/digital technology to
support, enhance and extend our client
service offering.
We continue to invest in the development of
our people and our training and development
programmes across the businesses.
Unchanged
Our partnership style culture and profit-
sharing approach to remuneration is
combined with selective use of share-based
and other rewards to incentivise and retain
our best people for the long-term benefit
of the Group.
We aim to develop talent and promote
from within. Our diversity and Inclusion
strategy, health and wellbeing programme
and encouragement of charitable and
community-based work all combine to
ensure that employee retention
remains high.
4 Reputational and brand risk
Strategic objective:
Strength in
Residential and
Commercial markets/
Commitment
to clients
‘Savills’ is a strong, well-recognised and
valued brand with an excellent reputation
in the markets in which we operate. The
Group’s reputation could be damaged
due to an action or event that results in
negative media coverage.
We recognise that our brand strength is vital
to maintaining market share in established
and new markets. A brand management
programme is in place to ensure the brand’s
positioning and identity is clearly and
consistently promoted.
Unchanged
We recognise the need to maintain this
reputation by ensuring the quality of
the service we provide and as described
below, requiring our people to operate to
the highest ethical standards.
Our social media policy is supported by
guidance and training as well as ongoing
monitoring. All external statements have to
be appropriately approved.
We recognise that the quality of the service
we offer is vital to maintaining the brand. We
have in place policies, controls and processes
to monitor the quality of our client service
to support our programme of continuous
improvement.
The Group has well established corporate
social responsibility programmes as set out
in Responsible Business on pages 35 to 46.
Savills plc | Annual Report and Accounts 2020 35
Change
from
2019
Unchanged
Risk
Description
Mitigations
5 Legal risk
Strategic objective:
Financial strength/
Commitment
to clients
The Group has a range of policies in place
including client acceptance, legal and
regulatory compliance, data protection,
procurement, contractor management
and valuation.
We have Best Practice groups, policies,
procedures and training which are
designed to deliver the relevant contractual
obligations and thereby mitigate against the
risk of such actions/claims being made and
where such claims occur, to limit liability,
particularly in relation to consultancy
services such as valuations. Such policies
are regularly reviewed.
The Group maintains professional indemnity
insurance to respond to and mitigate the
Group’s financial exposure to such claims.
As described below, our strong emphasis
on appropriate business conduct by all
our employees, contractors and associates
further mitigates this risk.
Failure to fulfil our legal or contractual
obligations to clients could subject the
Group to action and/or claims from
clients. The adverse outcome of such
actions/claims could negatively impact
our reputation, financial condition
and/or the results of our businesses.
For example:
• In accepting client engagements,
Group companies may be subject to
duty of care obligations. Failure to
satisfy these obligations could result in
claims being made against the relevant
operating Company.
• In our Property and Project
Management businesses, we may
be responsible for appointing or
overseeing third party contractors
that provide construction and
engineering services. Failure to
discharge these responsibilities in
accordance with our obligations
could result in claims being made
against the operating companies.
• In our valuation consultancy
businesses, we can be subject to
claims alleging the over-valuation
of properties.
6 Failure or significant interruption to our IT systems causing disruption to client service
Strategic objective:
Financial strength/
Commitment
to clients
Major failures in our IT systems may result
in client service being interrupted or data
being lost/corrupted causing damage to
our reputation and consequential client
and/or revenue loss.
There is a risk that an attack on our
infrastructure by a malicious individual
or group could be successful and impact
the availability of critical systems.
Unchanged
Specific back-up and resilience
requirements are built into our systems.
Our critical infrastructure is set up so far as is
reasonably practical to prevent unauthorised
access and reduce the likelihood and impact
of a successful attack.
Our data centres are accredited to
international information security standards.
Our IT strategy is to diversify our services
utilising cloud and hosting in order to avoid
a single point of failure.
Penetration testing and vulnerability testing
is carried out regularly.
Business continuity and disaster recovery
plans are in place to cover the residual risks
that cannot be mitigated.
We are continuously reviewing our resilience
to cyber security attacks due to the constant
threat. Cyber insurance cover is in place.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 36
Principal and emerging risks and uncertainties facing the business continued
Risk
Description
Mitigations
7 Operational resilience/ Business Continuity (including pandemics)
Strategic objective:
Financial strength/
commitment
to clients
Significant non-IT events may affect
continuity of service to clients,
consequential revenue loss and
reputational damage.
Business continuity plans are in place across
our businesses worldwide to enable us to
respond to external incidents which threaten
the continuity of our operations.
Change
from
2019
Unchanged
COVID-19 may continue to have an
impact on transactional activity globally
in 2021, but it is difficult to predict
this impact accurately in a dynamic
environment.
Continuity plans encompass a range of
events that could impact on our people or
buildings such as pandemics, terrorist events
and natural disasters.
Appropriate plans/measures have been put
in place for the COVID-19 pandemic, and we
are closely monitoring the on-going impacts.
The welfare of our staff and clients continues
to be paramount and we have implemented
risk management measures consistent with
government guidance in relation to affected
locations. Any longer-term impacts will also
be considered and monitored as appropriate,
for example, ability to travel.
8 Business conduct
Strategic objective:
Business
diversification/
Geographical
diversification/
Commitment
to clients
We operate in international markets that
may present business conduct-related
risks involving, for example, fraud, bribery
or corruption.
We have programmes to promote
compliance with our Code of Conduct,
particularly in areas of higher risk such
as procurement.
Unchanged
Failure by the Group and its employees
to observe the highest standards of
integrity and conduct in dealing with
clients, suppliers and other stakeholders
could result in civil and/or criminal
penalties, regulatory sanction, debarring
and/or reputational damage.
We have a zero tolerance approach to
breaches of our Code of Conduct.
Savills plc | Annual Report and Accounts 2020 37
Change
from
2019
Unchanged
Risk
Description
Mitigations
9 Changes in the regulatory environment/regulatory breaches
Our Group Policy Framework, which sets out
our standards for professional, regulatory,
statutory compliance and business conduct,
is reviewed regularly.
To support this Framework each business
has its own regulatory compliance resources
who monitor regulatory developments and
maintain the internal processes and controls
required to fulfil our compliance obligations.
Our compliance environment, at all levels, is
subject to regular review by internal audit
and external assurance providers.
Strategic objective:
Commitment
to clients
We are required to meet a broad range
of regulatory compliance requirements in
each of the markets in which we operate.
For example:
Some of our operations have
regulatory licences:
• In the UK, Savills Capital Advisors
and Savills Investment Management
are authorised and regulated by the
Financial Conduct Authority (‘FCA’)
in respect of activities conducted
pursuant to the Markets in Financial
Instruments Directive (‘MIFID’) and
Alternative Investment Fund Managers
Directive (‘AIFMD’).
• Some Savills Investment Management
entities are variously authorised by the
Bank of Italy, MAS in Singapore, BaFin
in Germany, JFSC in Jersey, CSSF in
Luxembourg, ASIC in Australia. Savills
Group companies also hold financial
services advisory licences in Japan
and USA. Our entities across the
Group employ resources and maintain
a framework of controls aimed at
preventing our business being used to
facilitate financial crime, and to comply
with complex financial sanctions
regimes which are continually
changing in response to global events.
• Some of our service businesses are
regulated by The Royal Institution
of Chartered Surveyors (‘RICS’), for
example Savills UK.
Failure to satisfy regulatory compliance
requirements may result in fines being
imposed, adverse publicity, brand/
reputation damage and ultimately the
withdrawal of regulatory approvals. We
also have a number of key statutory
obligations including the protection of
the health, safety and welfare of our staff
and others affected by our activities.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 38
Principal and emerging risks and uncertainties facing the business continued
Risk
Description
Mitigations
10 Acquisition/integration risk
The structuring and integration of
acquisitions is critical to realising the
benefits sought. People, systems and
processes are key components.
We apply the Group Acquisitions Policy
and procedures and use professional
advisers in the due diligence process, and
allocate responsibility and accountability to
individuals for integration. Post-acquisition
reporting keeps the Board aware of progress
against plan.
Strategic objective:
Business
diversification/
Geographical
diversification/
Strength in
Residential and
Commercial
markets/Financial
strength
11 Environment and sustainability
Change
from
2019
Down
Strategic objective:
Commitment to
clients/Financial
strength
Savills offers its clients expert advice on
a growing range of environmental and
sustainability matters, particularly in key
markets such as the UK, Australia and
some European markets. Looking
forward more widely, it seeks to expand
and develop these services. In doing so
the Group considers that it must
uphold similar standards in support
of its credentials in this area.
Environment and sustainability matters
are a rising consideration for investors
and employees.
Savills, like all listed companies, has
commitments and targets to meet in
accordance with the legislation of the
relevant jurisdictions.
New
We apply the Group Environment &
Corporate Responsibility Policy and employ
appropriately qualified and skilled teams.
We are continuously enhancing our services
in this area to ensure that we can provide
clients, investors and employees with top
quality advice and information.
We collect data and report in accordance
with the relevant legislation and regulatory
framework (refer to Environment and CR
report pages 45 to 60).
Savills plc | Annual Report and Accounts 2020 39
Board briefings provided by
the Heads of the Principal
Businesses on the progress
made by those businesses.
These reviews consider both
the market opportunity and
the associated risks. These
risks are considered within
the Board’s risk appetite
framework.
Confirmation of
longer-term viability
Based on the Group’s strong
net cash position and undrawn
£360m Revolving Credit
Facility at the year end, as
described in the Chief Financial
Officer’s review, combined
with the assessment explained
above and in accordance with
the UK Corporate Governance
Code, the Directors confirm
that they have a reasonable
expectation that the Group
will be able to continue to
operate and meet its liabilities
as they fall due, over the
three-year period ending
31 December 2023. The
Directors also considered
it appropriate to prepare
the financial statements on
the going concern basis as
explained in Note 2.2 to
the accounts.
Viability statement
Viability Statement
In addition to the going
concern statement, the
Directors have considered the
viability of the business. The
UK Corporate Governance
Code (the ‘Code’) requires the
Company to issue a viability
statement stating whether
the Board believes that the
Group is able to continue to
operate and meet its liabilities,
taking into account its current
position and principal risks. In
accordance with Provision 31 of
the UK Corporate Governance
Code, the Directors have
assessed the viability of the
Company over a three year
period to 31 December 2023,
taking account of the Group’s
current position and prospects,
the Group’s strategic plan,
and the Group’s principal
risks and the management of
those risks, as detailed in the
Strategic Report on pages 4
to 47. The Group’s emerging
risks are also disclosed in the
Strategic Report. This longer-
term assessment supports the
Board’s statements on both
viability, as set out below, and
going concern as set out on
page 107.
Period for Assessment
The Directors concluded
that three years would be an
appropriate time frame for this
assessment being consistent
with the period covered by
the Group’s strategic plan and
the cyclical nature of property
markets. In assessing viability
the Directors considered a
number of factors including the
resilience of the Group, taking
account of its current position
and prospects, the Group’s
strategic plan, the principal
risks and uncertainties facing
the business and the Board’s
risk appetite as detailed in the
Strategic Report on pages
4 to 47. The strategy and
associated principal risks which
underpin the Group’s three
year plan, are reviewed by the
Directors at least annually.
The Directors also satisfied
themselves that they have the
evidence necessary to support
the statement in terms of the
effectiveness of the internal
control environment in place
to mitigate risk.
The assessment process
and key assumptions
Sensitivity analysis was
undertaken on the three year
plan, including financing
projections, to flex the financial
forecasts under a variety of
severe downside scenarios,
which involve applying
different assumptions to the
underlying forecast both
individually and in aggregate.
These scenarios assess the
potential impact from several
macro-economic risks,
including a severe global
economic downturn analogous
to that experienced during
the Global Financial Crisis in
2008/09 (the impact of which
on the Group’s results has so
far not been replicated since)
and a prolonged suppression
of activity in some individual
markets as a result of
continued COVID-19 lockdown
measures and restrictions.
The results of this sensitivity
analysis showed that the Group
would maintain significant
facility covenant headroom
to be able to withstand the
impact of such scenarios over
the period of the financial
forecast, as a result of the
resilience and diversity of our
business across the Group,
underpinned by a strong
balance sheet. Performance
against the three year plan
is monitored on an ongoing
basis, including regular
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 40
Stakeholder engagement
Engaging with our stakeholders
The following disclosure is made in line with the Companies (Miscellaneous Reporting) Regulations
2018 which requires companies to report on employee and stakeholder engagement. The Board
remains committed to strengthening further its dialogue with employees and the Company’s wider
stakeholder group. The Board recognises that engagement is fundamental to the success of the
Company and, in performing its duties under s.172, considers the views of key stakeholders in its
decision-making, recognising that they are central to the long-term prospects of the Company.
The Directors consider the groups detailed below to be the Company’s key stakeholders. These
stakeholders are grouped under six key categories and we have provided an overview of the
manner in which the Board considered these groups when making key strategic decisions. We do
this through various methods including direct engagement with Board members and receiving
presentations and reports from the Executive Directors and in relation to business for which they
have responsibility, senior management from across the group. While the Board will engage directly
with stakeholders on certain issues, stakeholder engagement will often take place at an operational
level, particularly in relation to employees, clients and suppliers, with the Board receiving regular
updates on stakeholder views from the Executive Directors and senior management.
Our
Clients
Our clients are key to the
success of our business.
Our
Community
We believe that the
community engagement
programmes that we have
developed have a positive
impact on the areas where our
people live and ensure that
Savills is firmly engaged
with the communities
we serve.
Our
People
Our people are our
most valuable asset.
We firmly believe that our
people are key to delivering
excellent service to our
clients and achieving our
objectives.
Our
Shareholders
We believe that engaging
with our Shareholders and
encouraging an open, meaningful
dialogue between Shareholders
and the Company is vital
to ensuring mutual
understanding.
Our
Environment
We are committed to
improving the impacts
our operations have on the
environment, managing climate
related risks and working together
with our clients, suppliers
and local communities
towards delivering a more
sustainable future.
Our
Suppliers
Our businesses have regular
engagement with their key
suppliers, who are required to
operate with high service levels
and the ethical standards that are
set out in our Code of Conduct.
We regularly monitor the
relationship and engagement
approach with our third-
party suppliers.
Savills plc | Annual Report and Accounts 2020 41
Stakeholder Group
How we engaged them in 2020
Our Clients
Our businesses are in continuous contact with our clients, to understand their requirements,
to listen to their feedback on our service levels and to understand their expectations in
terms of the development of our service offering.
As part of our client relationship management programme, it is the responsibility of our
dedicated client relationship leads to gain a deep understanding of our clients’ businesses
through regular dialogue and to share this knowledge with the wider client relationship and
business leadership teams.
2020 saw unprecedented challenges for our clients and their customers, across industries,
sectors and geographies, and we were absolutely committed to helping our clients navigate
through these unprecedented times. We maintained staffing levels throughout the pandemic
to ensure that we could still provide the highest level of client service. Our ability to provide
insight into changing consumer attitudes as well as provide data analysis across the large
number of markets and sectors of which we have deep knowledge and expertise had been
essential to helping our clients.
During 2020, we helped our clients respond to the challenges they faced and adapt to the
new circumstances. We also increased the frequency of client contact in response to the
pandemic, tailored our research to address client concerns arising from the pandemic and
moved our client engagement to virtual formats, welcoming 27,000 clients to 173 webinars
over the course of the year, which allowed clients to share their experiences with other
property owners, tenants and managers.
The quality of our service performance continues to be regularly assessed by independent
reviewers. This helps us better understand how we are managing the relationship and what
we need to change to deliver the service and added value our clients expect.
Our client relationship leads also act as a focal point for client servicing enquiries and it is
their responsibility to quickly identify and resolve any service issues.
This feedback helps us maintain the highest levels of client service and develop and extend
our client offering.
Our People
Our people are at the heart of the culture of our business.
Our long-standing focus and business philosophy is founded on the premise that staff in
our sector are motivated through highly incentive and performance based (and, therefore,
variable) remuneration consistent with our partnership style culture. We firmly believe
that this approach best aligns Shareholders’ and management’s interests and incentivises
superior performance and the creation of long-term shareholder value.
We continue to be a responsible employer in our approach to our people, ensuring
we communicate and engage regularly in a variety of ways. We are always looking for
opportunities to improve and in 2020, in response to the pandemic, we increased the
opportunity for staff to feed back, by introducing regular and succinct pulse surveys,
thereby allowing us to be more responsive, and in particular focus the initiatives developed
in response to the pandemic, especially those relating to staff well-being.
As part of our commitment to helping of all our people to understand the Group’s growth
strategy and to raise other questions they have about the Group, the Board has established
communication channels to further encourage the two way flow of information between the
Group’s businesses and workforce, and in particular to allow staff feedback to flow to the
Board direct. These include:
(a) the promotion of our digital platform which allows direct employee communication
(in local languages) with Non-Executive Directors (including the Chairman) in areas
of focus (such as strategy, training & development opportunities; measurement of
staff performance and promotion criteria; diversity; and flexible working); and
(b) as social distancing rules and travel restrictions allow, Board members attending staff
‘Town Hall’ / Employee Briefing sessions by region, without management present.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 42
Stakeholder engagement continued
Stakeholder Group
How we engaged them in 2020
Our Community
Our Environment
Our Shareholders
Our Suppliers
Savills Corporate Responsibility Steering Group (‘CR Steering Group’) co-ordinates the
Group’s corporate responsibility activity to deliver Savills agreed goals and ensures that key
CR responsibilities and achievements are communicated to all staff globally and externally
to interested parties. Our community engagement programmes across the Group have been
developed to have a positive impact on the areas where our people live and ensure that
Savills is firmly engaged with the communities we serve.
The CR Steering Group monitors Group-wide corporate responsibility progress and
performance, identifying to the Group Executive Board areas where action needs to be
taken. The progress made on corporate responsibility matters and the achievements of the
Group’s Principal Businesses in each year are considered by the Board and included in the
Group’s Report & Accounts annually.
Examples of our community initiatives during 2020 are on pages 54 and 55. In particular we
increased the level of contributions to charities in the front line of the response to COVID-19.
Across our global business, Savills is committed to reducing the impact that our operations
have on the natural environment. By actively seeking to reduce our environmental impact,
we are able to achieve increased operational efficiencies and savings, both internally and for
our clients.
In 2020, our GHG emissions fell further to 7,169 tonnes CO2e, notwithstanding the extension
of the scope of our data collection to 285 offices from 282 offices in 2019.
The reported energy and GHG emissions data can be found on page 60.
The Group Chief Executive and Group Chief Financial Officer have primary responsibility for
investor relations and lead a regular programme of meetings and presentations with analysts
and investors. This includes presentations following the publication of the Company’s full
and half year results. This programme maintains a continuous two-way dialogue between
the Company and Shareholders. By actively engaging with Shareholders we can respond
to views expressed in relation to an number of topics such as company performance, and
future growth plans.
The AGM provides the Board with an opportunity to engage with our Shareholders. All
resolutions put to Shareholders at the 2020 AGM were supported with over 90% approval.
The arrangements for the 2021 AGM have been designed to support continued shareholder
participation and engagement, whilst ensuring the safety of individuals during the
coronavirus pandemic.
The Chairman and Stacey Cartwright as the Senior Independent Director are also available
to meet Shareholders at all times as required.
Our property management businesses work with a broad and diverse range of supply
partners to ensure that we can deliver the best services for our clients. The close
relationships we foster with supply partners across a variety of property management
clients ensures we have good access to quality partners. During the pandemic regular
engagement with their key suppliers has been essential in ensuring continuity of service
and responding to the impacts of the pandemic.
All suppliers are required to operate with high service levels and the ethical standards that
are set out in Savills Code of Conduct.
We regularly monitor the relationship and engagement approach with our third-party
suppliers including communications relating to the Company’s whistleblowing policy.
Savills plc | Annual Report and Accounts 2020 43
Section 172(1) Statement
The Board of Directors of Savills Plc consider, both individually and together, that they have acted
in the way they consider, in good faith, would be most likely to promote the success of the Company
for the benefit of its members as a whole. In doing this, the Directors have had regard to the
stakeholders and amongst other matters to those set out in s172(1) (a-f) of the Act in the decisions
taken during the year ended 31 December 2020:
Section 172 matters
How the Board had regard to these matters during the year
(a) likely
consequences
of any
decisions in
the long term
We consider our stakeholders when developing and executing our strategy which is reviewed on
an annual basis. This year the review took place by video conference and considered a number of
growth initiatives, as set in the Governance Report ‘what the Board did in 2020’.
The Board remains mindful that its strategic decisions can have both short and long term implications
for the Group and its stakeholders and these implications are considered carefully. During the year
the Board adopted a number of operational and financial initiatives to minimise the impact of the
pandemic on the business as a whole. Our strategy was to minimise discretionary expenditure and
conserve cash while maintaining our staffing levels to ensure the highest levels of service to clients
around the world. In addition the Board suspended distributions to Shareholders pending greater
visibility of future market recovery.
The consequence, particularly of retaining our employees, is increased in our market share in key
markets, which is materially in employees and Shareholders longer-term interests and positions the
Group to support our client needs as markets improve.
(b) interests of
the Company’s
employees
We recognise our people are fundamental to the long-term success of our business. Their health,
safety and wellbeing is one of our primary considerations in the way we operate and the support
we provide to them.
During 2020, we focused on both the physical and mental health of our people. Our response to
the COVID-19 pandemic prioritised the safety and wellbeing of our people through a variety of
initiatives deployed across the business. Resources were provided to managers to support their
teams working from home as well as those returning to office working and set up support networks
for those employees that were furloughed, with regular virtual meetings led by our HR team. Virtual
employee events were designed to keep people in touch and promote ways of maintaining and
improving good physical and mental health. We also introduced a rich variety of digital learning
content to help employees and their families and have provided regular guidance and blogs posted
on our intranet relating to health, and safety and wellbeing, and made available facilities such as
‘MyndUp’ to support mental health wellbeing.
During the year we also held a number of town hall meetings within our principal businesses
and events focusing wellbeing and mental health issues supported by webinars provided by
external providers.
The decision taken by the Board during the COVID-19 pandemic to maintain staffing levels across
the Group meant that we could continue to deliver a seamless and continuous high class service to
our clients.
The Board reviewed the 2021-2023 Business Plan which included the importance of focusing on (i)
delivering the highest standards of client service by having motivated and engaged staff by providing
an environment in which our people can succeed so sustaining the inclusive, diverse and supportive
culture that is encapsulated in our business philosophy; and (ii) continuing to innovate and extend
our client offering to ensure that we can meet the evolving requirements of our clients, in particular in
areas such as sustainability.
(c) need to foster
the Company’s
business
relationships
with suppliers,
clients and
others;
(d) impact of the
Company’s
operations
on the
community and
environment
The Board supports the management’s approach to Environmental, Social and Governance matters
and we are committed to strengthening our understanding of climate-related risks to our own
operations as well as helping our clients to improve the resilience of their portfolios.
We recognise the need for action in addressing the climate crisis and transitioning to a greener,
safer and more resilient economy. We are committed to improving the impacts that our operations
have on the environment, managing the climate-related risks and working together with our clients,
suppliers and local communities towards delivering a more sustainable future.
The 2030 agenda for sustainable development, adopted by all United Nations member states in
2015, provides a shared blueprint, recognised globally. We have chosen nine of the UN sustainable
development goals (SDGs) to be the focus of our sustainability initiatives. These SDGs are those
where we feel we can make the largest impact and which are most relevant to our business.
2019 marked the end of our three year Greenhouse Gas emissions (GHG) reduction plan and we
reported a reduction of 30% in GHG intensity. We continue to work to develop emission reduction
targets for our operations across all business units globally and in 2020 our UK business committed
to achieving Net Zero carbon in operation by 2030.
By actively seeking to reduce our environmental impact, we are able to create better workplaces for
our staff and clients and achieve increased operational efficiencies and savings, both for our benefit
and that of our clients.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 44
Stakeholder engagement continued
Section 172 matters
How the Board had regard to these matters during the year
(e) Company’s
reputation for
high standards
of business
conduct
Savills Code of Conduct, which underpins our social, ethical and environmental commitments,
clearly sets out the standards of behaviour that we expect our people to demonstrate and adhere
to at Savills.
We are committed to ensuring that we take all appropriate steps to prevent Modern Slavery
from occurring in our business or supply chain and continue to publish our annual Modern Slavery
Statement on our website, which sets out Savills zero tolerance approach to Modern Slavery
in our organisation and supply chain. It reflects our commitment to acting ethically and with
integrity in all our business relationships and to implementing and enforcing effective systems
and controls to ensure Modern Slavery is not taking place in our supply chains.
The Board is committed to maintaining the highest standards of corporate governance, which are
fundamental to discharging our responsibilities.
Our Governance Report explains how robust and effective corporate governance practices enable
the Group to deliver its strategy and create long-term Shareholder value. The Board is committed
to ensuring that its membership provides the necessary balance of diversity, skills experience,
independence and knowledge to ensure we continue to run the business effectively and deliver
sustainable growth.
In 2020 the Nomination & Governance Committee led the search for two new Non-Executive
Directors. The Committee considered the Board’s blend of skills and experience and ongoing
commitment to ensure the Group has a balanced Board. The Committee was unanimous in its
recommendation to the Board that both Philip Lee and Richard Orders be appointed as additional
independent Non-Executive Directors as they bring extensive experience in relation to the Asia
Pacific market, improving the skill set of the Board.
(f) need to act fairly
as between
members of the
Company
We are in regular contact with our major Shareholders and potential Shareholders.
Our active engagement programme with our Shareholders involves a regular, scheduled
programme of meetings as part of our continuing commitment to open and transparent dialogue,
including the Group’s approach to remuneration.
During the year the Group Chief Executive and Group Financial Officer undertook their regular
programme of engagement which included: the financial reporting cycle comprising full-year and
half-year financial results; one-to-one investor meetings (virtual) and calls.
Investors interests were considered as part of the Board’s decisions throughout 2020 including
with regard to the cancellation of the final dividend and supplemental dividend for 2019 in order
to retain sufficient cash reserves within the Group in light of uncertainty caused by the pandemic.
The disclosures set out on this page are some examples of how the Directors have had regard to the
matters set out in Section 172(1)(a) to (f) when discharging their Section 172 duties and the effect of
that on certain of the decisions taken by them. More detail on how our Board operates, including the
matters it discussed and debated during the year are in the Governance Report on pages 62 to 121.
Illustrations of how Section 172 factors have been applied by the Board can be found throughout the
Strategic Report. For example, for details on how we have considered the impact of the Company’s
operations on the environment see pages 56 to 60 of Responsible Business. For further details of how
we have considered our clients see page 47 of Responsible Business.
Savills plc | Annual Report and Accounts 2020 45
Responsible business
Savills is committed to
being a good corporate
citizen in all aspects
of its operations and
activities.
The Company, therefore, holds itself
accountable for its social, environmental
and economic impacts on the people and
places where it does business. All of our
businesses are required to comply with local
legal standards as an absolute minimum,
while our localised approach provides the
flexibility required to have meaning and
impact at a local level.
We focus on those key areas where we
believe we can make a difference and
endeavour to manage our impact in a
responsible and sustainable manner. To
fulfil this aim the Group actively embraces
a range of policies and practices that foster
a positive approach towards corporate
responsibility as an integral part of our
day-to-day activities.
At Savills, we learn through experience and
we actively encourage our businesses to
share their experiences and develop best
practice to ensure that we continue to
improve as an organisation.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 46
Responsible business continued
Main responsibilities
CR Steering Group
• Co-ordinates Corporate Responsibility (‘CR’) activity
to deliver Savills agreed goals.
• Oversees Savills CR Strategy for the Group globally
and recommends changes to it when appropriate.
• Monitors Group-wide CR progress and performance
and identifies to the Group Executive Board areas
where action needs to be taken.
• Ensures that key CR responsibilities and
achievements are communicated to all staff globally
and externally to interested parties.
• Gathers and records information about all existing
CR programmes and initiatives taking place within
the Group.
• Helps to determine indicators and measures that will
be used to ascertain performance against prioritised
CR impact areas.
• Helps to identify on any external indices, initiatives,
codes and standards for Savills to use or adopt to
help validate CR performance.
• Responsible for overseeing preparation of the non
financial information section of the Annual Report.
Our resources & relationships
Value
Group Chief Executive
and the Board
Responsibility for Our Corporate
Responsibility programme sits
with the Group Chief Executive
and the Board
Corporate Responsibility
Steering Group
Our CR Steering Group,
comprising senior
representatives from our
businesses and central teams,
co-ordinate Our Corporate
Responsibility strategy
Corporate Responsibility
Strategy
The strategy is implemented
and delivered at country level
focusing on the key aspects of
corporate responsibility which
we believe are key to the success
of our business and where we
believe we can make the most
difference
Pride in
Everything We Do
Take an
Entrepreneurial
Approach to Business
Help our People Fulfil
Their True Potential
Always Act
with Integrity
Savills plc | Annual Report and Accounts 2020 47
Developing Our People It is our vision to be the real estate advisor of choice in our selected markets and deliver
superior financial performance and this can only be achieved through the dedication, commitment and excellence
of our people.
Reinforcing Culture We are committed to doing the right thing in the right way and this is reflected in the
Savills Code of Conduct.
Environment Across our global business, Savills is committed to reducing the impact that our operations have on
the natural environment. By actively seeking to reduce our environmental impact, we are able to achieve increased
operational efficiencies and savings, both internally and for our clients.
Social Matters We believe that the community engagement programmes that we have developed have a positive
impact on the areas where our people live and ensure that Savills is firmly engaged with the communities we serve.
Our Clients
Taking an Entrepreneurial approach to Business, we:
• Seek out new markets and opportunities for clients.
• Take a creative and entrepreneurial approach to delivering value.
• Are forward thinking, and always aim to build long-term client relationships.
• Aim to be a leader in every market we enter.
2020 saw unprecedented
challenges for our clients
and their customers, across
industries, sectors and
geographies, and we were
absolutely committed to helping
our clients navigate through
these unprecedented times and
to help them respond to the
challenges they faced and adapt
to the new circumstances.
The decision taken by the Board
early during the pandemic to
maintain staffing levels across
the Group meant that we could
continue to deliver a seamless
and continuous first class
service to our clients. It also put
us in a strong position to retain
and win new mandates.
In addition to having had a clear
focus on helping our clients
respond to the challenges
presented in the short-term, it
was also critical that we could
support them by showing how
market drivers and changes
in consumer behaviour could
impact our clients’ markets
moving forward and present
further challenges, but also
opportunities. This was
particularly evident in the
Office FiT survey conducted
which gathered opinions of
office workers on the future of
the office, and the subsequent
introduction of a new service
line, Savills Flex.
Our ability to provide insight
into changing consumer
attitudes as well as provide data
analysis across the large number
of markets and sectors of
which we have deep knowledge
and expertise was essential to
helping our clients. Our client
engagement moved to virtual
formats and we welcomed
27,000 clients to 173 webinars
over the course of the year,
covering key topics such as the
implications of the pandemic,
early learnings from Asia,
future real estate trends as well
as countless market specific
updates. Another strategic
priority for our clients continues
to be ESG and this was another
key focus at numerous webinars,
research updates, as well as
client specific briefings.
Staying close to our clients and
gaining a deep understanding
of their evolving challenges,
needs and priorities, as well
as maintaining excellent
communication was a key
focus in 2020. Drawing on our
established client relationship
management programme,
with dedicated client leads,
meant we could be proactive in
providing ideas and solutions.
We also commissioned
independent client reviews to
better understand how we were
managing client relationships,
any areas that we needed to
refine and added value that we
can provide.
Our focus on providing our
people at all levels with client
skills training continued and was
successfully adapted to a virtual
setting. Staying connected with
colleagues and sharing of client
insights was hugely important
in the new virtual world and
the collaboration tools we
introduced to the business
in 2019 proved invaluable in
facilitating this.
Our investment into developing
a client centric culture, increased
collaboration among our teams
both in-country and cross-
border and technology that
supports our client relationship
management approach meant
that we could adapt quickly
and be resilient in light of the
challenging market conditions
we faced in 2020.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 48
Responsible business continued
Our People
Our people strategy remains focused on supporting
delivery of the highest standards of client service
through motivated and engaged people.
Helping our people fulfil their true potential, we:
• Encourage an open and supportive culture
• Believe that a rewarding workplace inspires
in which every individual is respected.
and motivates.
• Help our people to excel through
appropriate training and development.
• Share success and reward achievement.
• Recognise that our people’s diverse
strengths combined with good teamwork
produce the best results.
• Strive to provide an environment in which
our people can flourish and succeed – this
allows us to recruit, motivate and retain
talented people and build on our status as
an employer of choice.
• Engage with our people to communicate
our vision and strategy through well-
established internal channels.
Employee engagement
Deeply engaged and motivated
teams are fundamental to our
success. We continue to focus
on employee engagement
through a number of areas of
focus. For example, in the UK
we are improving the capability
of our leaders and managers
through our key programmes
Empower, Engage and Inspire.
We also have a specific project
on improving the effectiveness
of all managers in role. We have
improved the clarity of our
reward and benefits through
the use of, for example, in
the UK, a new Total Reward
Statement, so that all our
employees clearly see the
full reward package. We take
employee wellbeing seriously
and have an established
wellbeing programme, and we
are committed to the Time to
Change pledge.
We are always looking for
opportunities to improve and in
2020 we moved away from a
more formal engagement survey
to more regular and succinct
pulse surveys as a means
of seeking feedback more
frequently from employees,
thereby allowing us to be more
responsive, and in particular
focus the initiatives developed
in response to the pandemic,
especially those relating to
staff well-being.
Developing talent for
the future
We firmly believe in the value of
developing future talent from
within the Group and we want
people to grow their careers at
Savills. We work hard to help
nurture the entrepreneurs and
leaders of the future.
We continue to invest
significantly in the development
of all our people, for whom
we recognise that career
development and progression
is very important. We deliver
training and development in all
areas including management
and leadership, client and
business skills and professional
and technical skills. We
recognise that personal
development occurs in many
ways and we encourage all our
staff to attend conferences,
internal events, and participate
in projects to supplement
their Continuous Professional
Development (‘CPD’). We have
responded to COVID-19 by
providing online services for
development and training, and
putting in place extra support
for our people’s wellbeing. For
example, in the UK we have
set up a dedicated Wellbeing
intranet page for employee
wellbeing with resources and
guidance for coping with stress,
anxiety and uncertainty.
Savills plc | Annual Report and Accounts 2020 49
In order to manage individual
development and ongoing
learning, we use a Learning
Management System (‘LMS’)
in the UK which has now been
rolled out across Europe,
Middle East and the US. This
has been indispensable during
the pandemic to deliver
training and wellbeing support,
including mental health, across
the regions. The LMS is mobile
compatible, allows individuals
to track and manage their
development, watch video
podcasts and download
course materials.
In Asia, we are progressively
extending our CPD programme,
tailoring it as appropriate to best
meet local requirements.
The UK business celebrated
being named the Times
Graduate Employer of Choice
in property for the 14th
consecutive year. We are proud
to have continued with our
Graduate programme this year.
Graduates are surrounded by
experienced professionals and
team members from whom
they can seek advice and learn.
With responsibility from the
day they join the business, in
teams which highly value their
contribution, our graduates are
involved in some of the world’s
most high-profile transactions
and developments. We look for
graduates with entrepreneurial
flair and diverse skills.
The UK business celebrated
being named No.1 UK Real
Estate Super brand, also for
the 14th consecutive year. We
were also ranked No.1 in Rate
My Placement for the Savills
Summer placement scheme.
In the US, we are continuing
to run our Young Leaders
Programme, now in its third
year. Savills US Academy, a
multi-year business mentorship
programme aimed at harnessing
the talent of the rising stars, is
now in its fourth year.
In the US, in 2020, we have
expanded our learning
management platforms,
LinkedIn Learning and
myLearning, as well as
introduced the Junior Brokers
Training programme.
In New York and Washington,
an intensive course structured
over 15 months with the goal for
the associates enrolled in the
programme to take on the role
of a full time broker at the end of
the course. Further roll outs are
planned in 2021 across the US.
In order to help foster a diverse,
equitable and inclusive workplace,
we have launched two new
employee resource groups, The
Black Excellence United Group
and The Women’s Initiative.
In Asia Pacific, our Inspire
course, a two-year course for
our next generation leaders of
the business is well established.
The programme is split into four,
three day workshops spread
over the two year period. A key
part of the programme is for
the candidate spending time
with the Asia Pacific Executive
Committee to discuss strategic
intent and present ideas for
growth. Each candidate is
assigned a lifetime mentor from
within the business to help guide
and support them through the
programme and beyond.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 50
Responsible business continued
Our People continued
Inclusion and Diversity
We look to create an inclusive culture in
which difference is accepted and valued.
We believe that our inclusive approach gives
us a competitive advantage and underpins
the success of our business by giving us the
ability to select our people from the highest
quality individuals in the widest available
pool of talent.
As an organisation committed to diversity in
its workforce, we will continue to strengthen
our policies, processes and practices to develop
our diversity and inclusion plans within the
Group’s markets and geographies, in alignment
with our corporate goals. We will continue to
endeavour to improve the representation of
women at Board and senior levels within the
organisation and to sustain an inclusive culture
in which all talent can thrive.
Area of Focus
Objectives
Implementation
Examples of progress on achieving objectives
Age
Encourage a wider age profile within the
property industry by focusing on ensuring that
appropriate support is available and offered at
all stages of an individual’s career
• Flexible Working
• Improving Internal
• We support a significant number of people flexibly for different reasons to accommodate
personal and professional requirements
Communication of existing
• In the UK, ‘Making your Mentoring programme relevant for the modern workplace’, Savills
and new policies
has adopted a flat mentoring scheme for many years, allowing both mentor and mentee
• Promoting Mentoring and
to benefit from their involvement
Rewarding Loyalty
• Working with Carers UK to provide support to those with caring responsibilities
• Ensuring that policies and
support are offered for
Working Carers
Disability
Ensure all staff feel included and supported
regardless of any disability (discernible or
hidden). We want to highlight the benefits
of having a business that is aware of and
understands the needs of employees, clients,
tenants, visitors and all those that interface
with Savills that have any form of disability
• Raising awareness through
• We are committed to being a Valuable 500 business, which is a pledge to encourage
supporting internal and
500 companies across the globe to sign up and agree to be more inclusive in terms
• Implement compulsory diversity
• Savills achieved certification as a Disability Confident Committed Employer (Level 2)
external events
of disability
and equality awareness training
in the UK
across the business
• For UN International Day of Persons with Disabilities we created a video using stories from
• Engaging with a number of
Savills offices across the world
Our Strategic Approach
Ethnicity
Increase the ethnic diversity of people working
within Savills and the wider property industry
by embracing a rich, diverse cultural mix to
promote inclusion and engagement between
all staff and clients
Our commitment is to promote on
merit regardless of any other factors,
creating equal opportunities for career
progression and ensuring that every
single person within the Savills Group
has a sense of belonging.
Savills policy is to embrace diversity
and provide a platform and a supportive
environment for everyone to be the best
they can be.
We are committed to developing a culture of
inclusivity and diversity within the property
profession with six key areas of focus:
gender, disability, LGBTQ+, socio-economic,
ethnicity and age. We have led on this with
our programme in the UK, and our Diversity
Group in the UK is now in its sixth year and
continuing to develop our programme across
the Group. The main objective is to highlight the
diversity of our business and ensure that we are
communicating clearly and effectively about
our people and our clients:
Gender
To create a strategy that provides an equal and
fair platform for everyone to be the best they
can be
LGBTQ+
Embrace diversity and provide a platform and a
supportive environment for everyone to be the
best they can be.
Improve LGBTQ+ inclusion in the work place
Socio
Economic
Create a strategy that provides an equal and
fair platform for everyone to be the best they
can be regardless of their socio economic
background
professional bodies and diversity
groups and will ask for their
assistance and expertise
• Removing the stigma –
promote awareness of mental
health issues
• Ensuring zero tolerance of
• Savills has signed up to the Race at Work Charter, an initiative designed to improve
harassment and bullying
outcomes for Black, Asian and Minority Ethnic (BAME) employees in the UK
• Making equality in the
• In the UK we have held a number of recruitment events for potential BAME employees
workplace the responsibility
• Supported Black History Month with educational material about key black role models
of all leaders and managers
• Our US Building Inclusivity and Diversity Group regularly hosts speaker and panel-
• Taking action that supports
discussion events for our employees and clients to encourage awareness and constructive
ethnic minority career
dialogue regarding diversity and inclusion
progression
• In the US we launched an Employee Resource Group ‘Black Excellence United’ focusing on
recruiting, retention, collaboration & advancement of diverse communities
• Continue to ensure that
• We are working hard to redress our balance of men and women in more senior roles
our training fully supports
our approach to diversity
and inclusion
through a number of initiatives
• Our ‘Women in Leadership positions’, determined in accordance with the Hampton-
Alexander Review criteria, was 31% as at 31 December 2020. Whilst this progress reflects
• Relaunched our gender
our commitment to improve diversity, in a sector where historically there has been a
equality and unconscious
shortage of women leaders, we fully acknowledge that we need to remain focused into the
bias training, to further raise
medium term on further improving diversity
awareness of diversity
• We will continue to evolve our approach to meet the needs of our clients and people
• Launched a Communication
• In the US we launched Employee Resource Group Women’s Initiative Network
Skills programme for women
focused on public speaking and
participating in panel events
• Raising Awareness
• Hosted virtual Pride Celebrations
• Recruit and Retain best people
• As part of LGBTQ+ History Month Savills highlighted one inspirational LGBTQ+
figure each week
• Creating a workplace that
• In the UK, Savills with Schools initiative now in place across 26 regional offices, to date
provides an equal and fair
the business has engaged with over 5,000 pupils
platform for everyone to be the
• Founding sponsor of Rethink Food, providing vertical farming towers in primary schools
best they can be regardless of
in the UK
their socio economic background
• Supporting London based charity, The Big House, which works with care leavers who
• Increasing diversity of talent pool
are at a high risk of social exclusion by providing a platform to participate in the making
• Inspiring the next generation to
of theatre
consider property for their career
Savills plc | Annual Report and Accounts 2020 51
Area of Focus
Objectives
Implementation
Examples of progress on achieving objectives
Age
Encourage a wider age profile within the
property industry by focusing on ensuring that
appropriate support is available and offered at
all stages of an individual’s career
• Flexible Working
• Improving Internal
Communication of existing
and new policies
• Promoting Mentoring and
• We support a significant number of people flexibly for different reasons to accommodate
personal and professional requirements
• In the UK, ‘Making your Mentoring programme relevant for the modern workplace’, Savills
has adopted a flat mentoring scheme for many years, allowing both mentor and mentee
to benefit from their involvement
Rewarding Loyalty
• Working with Carers UK to provide support to those with caring responsibilities
• Ensuring that policies and
support are offered for
Working Carers
Disability
Ensure all staff feel included and supported
regardless of any disability (discernible or
hidden). We want to highlight the benefits
of having a business that is aware of and
understands the needs of employees, clients,
tenants, visitors and all those that interface
with Savills that have any form of disability
• Raising awareness through
supporting internal and
external events
• We are committed to being a Valuable 500 business, which is a pledge to encourage
500 companies across the globe to sign up and agree to be more inclusive in terms
of disability
• Implement compulsory diversity
and equality awareness training
across the business
• Savills achieved certification as a Disability Confident Committed Employer (Level 2)
in the UK
• For UN International Day of Persons with Disabilities we created a video using stories from
• Engaging with a number of
Savills offices across the world
Ethnicity
Increase the ethnic diversity of people working
within Savills and the wider property industry
by embracing a rich, diverse cultural mix to
promote inclusion and engagement between
all staff and clients
Gender
To create a strategy that provides an equal and
fair platform for everyone to be the best they
can be
LGBTQ+
Embrace diversity and provide a platform and a
supportive environment for everyone to be the
best they can be.
Improve LGBTQ+ inclusion in the work place
Socio
Economic
Create a strategy that provides an equal and
fair platform for everyone to be the best they
can be regardless of their socio economic
background
professional bodies and diversity
groups and will ask for their
assistance and expertise
• Removing the stigma –
promote awareness of mental
health issues
• Ensuring zero tolerance of
harassment and bullying
• Making equality in the
workplace the responsibility
of all leaders and managers
• Taking action that supports
ethnic minority career
progression
• Savills has signed up to the Race at Work Charter, an initiative designed to improve
outcomes for Black, Asian and Minority Ethnic (BAME) employees in the UK
• In the UK we have held a number of recruitment events for potential BAME employees
• Supported Black History Month with educational material about key black role models
• Our US Building Inclusivity and Diversity Group regularly hosts speaker and panel-
discussion events for our employees and clients to encourage awareness and constructive
dialogue regarding diversity and inclusion
• In the US we launched an Employee Resource Group ‘Black Excellence United’ focusing on
recruiting, retention, collaboration & advancement of diverse communities
• Continue to ensure that
• We are working hard to redress our balance of men and women in more senior roles
our training fully supports
our approach to diversity
and inclusion
• Relaunched our gender
equality and unconscious
bias training, to further raise
awareness of diversity
• Launched a Communication
Skills programme for women
focused on public speaking and
participating in panel events
through a number of initiatives
• Our ‘Women in Leadership positions’, determined in accordance with the Hampton-
Alexander Review criteria, was 31% as at 31 December 2020. Whilst this progress reflects
our commitment to improve diversity, in a sector where historically there has been a
shortage of women leaders, we fully acknowledge that we need to remain focused into the
medium term on further improving diversity
• We will continue to evolve our approach to meet the needs of our clients and people
• In the US we launched Employee Resource Group Women’s Initiative Network
• Raising Awareness
• Recruit and Retain best people
• Hosted virtual Pride Celebrations
• As part of LGBTQ+ History Month Savills highlighted one inspirational LGBTQ+
figure each week
• Creating a workplace that
provides an equal and fair
platform for everyone to be the
best they can be regardless of
their socio economic background
• Increasing diversity of talent pool
• Inspiring the next generation to
consider property for their career
• In the UK, Savills with Schools initiative now in place across 26 regional offices, to date
the business has engaged with over 5,000 pupils
• Founding sponsor of Rethink Food, providing vertical farming towers in primary schools
in the UK
• Supporting London based charity, The Big House, which works with care leavers who
are at a high risk of social exclusion by providing a platform to participate in the making
of theatre
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 52
Responsible business continued
Our People continued
Inclusive Culture
We believe that we have
created a culture in which
those skills, experience and
perspectives are nurtured and
encouraged. As an example of
our commitment to diversity,
in the UK we are focused on
increasing the diversity of our
business in order to reflect the
needs of our clients and have
achieved the RICS Equality
Mark. We are fully engaged in a
diversity programme ‘Changing
the Face of Property’ which
focuses on improving diversity
across social and economic
background, disability, LGBT,
age and gender. We have also
improved our maternity policy,
introduced mentoring and
coaching for women and held
a number of virtual events with
clients and keynote speakers. In
addition, we proactively review
our promotions to ensure that
the numbers going forward for
promotion, by gender, are in line
with the make-up of the division.
We believe that creating an
inclusive and diverse culture
supports the attraction and
retention of talented people
and supports effective
performance. We respect our
people for who they are, their
knowledge, skills and experience
as individuals and as valued
members of the Savills team.
We work together to bring out
the best in each other and to
sustain the strong working
relationship ethic that has
nurtured our ‘can do’ attitude.
Gender Balance
In accordance with
Companies Act 2006, as at
31 December 2020 our total
global workforce of 39,349
colleagues comprised 21,433
males and 17,916 females.
Of these, 235 were senior
executives (196 males,
39 females) comprising
members of the Group
Executive Board and Board
members of the corporate
entities whose financial
information is incorporated
in the Group’s 2020
consolidated accounts in this
Annual Report. During the
year, the Company’s Board
of Directors comprised eight
members – five males and
three female.
In accordance with the
Equality Act 2010, Savills
UK, as an employer with
250 or more UK employees
publishes its gender
pay picture (calculated
in accordance with the
published requirements) on
the Savills UK’s website.
There was a greater focus on
mental health during the year
and resources were provided to
managers to support employees
working from home as well
as those returning to office
working. In the UK we now have
200 Mental Health Champions
who run campaigns and virtual
employee events designed
to keep people in touch and
promote ways of maintaining
and improving good physical
and mental health.
We will continue to develop
and make available to all
employees a number of
wellbeing initiatives and
benefits to raise awareness
of health and lifestyle issues
affecting mental health
and wellbeing.
Wellbeing
We continue to focus on
supporting our employees’
wellbeing. Our response to the
COVID-19 pandemic prioritised
the safety and wellbeing our
people through a variety of
initiatives deployed across the
business. To move to working
from home was a tremendous
organisational effort, enabled by
our technology infrastructure,
collaboration tools, HR policies
and online training. We
introduced a rich variety of
digital learning content to help
employees and their families and
have provided regular guidance
and blogs posted on our
intranet relating to health, and
safety and wellbeing.
During the year we held a
number of town hall meetings
across the Group and events
focusing on wellbeing and
mental health issues and
celebrated events such as the
Time to Talk Day and World
Mental Health Day. This has
been supported by webinars
provided by external providers
including Lionheart, Talking
Talent and MyndUp.
Savills plc | Annual Report and Accounts 2020 53
Culture
Always acting with integrity, we:
• Behave responsibly.
• Act with honesty and respect for other people.
• Adhere to the highest standards of professional ethics.
We believe that a positive culture
is essential to the delivery of
the highest standards of client
service. This positive culture is
encapsulated in our business
philosophy and our values. Our
reputation has been built on our
people and we believe that staff
whose behaviours reflect in our
business philosophy deliver the
excellent client service that we
strive to provide. Our business
philosophy also captures
our commitment to ethical,
professional and responsible
conduct and our entrepreneurial,
value-enhancing approach.
Savills has a strong and well
embedded culture, founded on
an entrepreneurial approach
and underpinned by our values
and operational standards. All
that we do is underpinned by
strong governance, a disciplined
approach to risk management
and high standards of
responsibility, which supports
the sustainable development
of our business.
To facilitate the Savills Board’s
assessment and monitoring of
culture, the Board has in place a
number of KPIs, set out on page
76 of the Governance Report.
Our approach to
Human Rights
We recognise our responsibility
as a global corporate citizen
and we are committed to doing
the right thing in the right way
and this is reflected in the Savills
Code of Conduct. The Code,
which underpins our social,
ethical and environmental
commitments, clearly sets out
the standards of behaviour that
we expect our employees to
demonstrate and adhere to in
their day to day working life at
Savills. As an absolute minimum,
our people policies comply
with local legislation in the
jurisdictions in which we operate.
Savills is committed to
conducting its business ethically
and in line with all relevant
legislation including human
rights laws. We fully support the
principles of UN Global Compact,
the UN Declaration of Human
Rights and the International
Labour Organization’s (ILO)
Core Conventions. Any breaches
of our Code of Conduct may
be reported in accordance with
the Company’s whistleblowing
procedure.
Modern Slavery
The Modern Slavery Act came
into force in 2015. We believe
the risk of slavery or human
trafficking in the recruitment and
engagement of our employees
is low. To ensure it remains
low, we have provided training
on modern slavery and taken
steps to make sure our staff and
supply chain partners are aware
of the Act and its requirements.
Savills has published Modern
Slavery Act Statements since the
introduction of the Act which
detail the steps taken to tackle
modern slavery and human
trafficking. Our current Modern
Slavery and Human Trafficking
Statement is available on the
Savills website.
Savills has a zero tolerance
approach to bribery and
other forms of corruption.
Our Code of Conduct sets out
our commitment to operate
responsibly wherever we work in
the world, to work professionally,
fairly and with integrity and to
engage with our stakeholders
to manage the social,
environmental and ethical impact
of our activities in the different
markets in which we operate.
We empower and support our
employees to always make
the right decisions consistent
with this policy. Our corporate
conduct is based on our
commitment to act responsibly
at all times. We will uphold
laws relevant to countering
bribery and corruption in all the
jurisdictions in which we operate.
Whistleblowing
Savills Group is committed
to maintaining high ethical
standards and a culture
of openness, integrity and
accountability in all its business
dealings and practices. Savills
takes any malpractice (i.e. fraud,
bribery, illegal or unethical
conduct or wrongdoing)
very seriously. We recognise
that employees are often the
first to know when someone
connected with the Group is
doing something wrong and
they should be encouraged
to raise any concerns they
may have about the conduct
of others in the business or
the way the business is run
at an early stage and in an
appropriate way. Savills has a
Group Whistleblowing policy
which applies to all employees
and supply chain partners of the
Group’s businesses worldwide.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 54
Responsible business continued
Social Matters
Our offices and our people are actively involved in their
communities through our support of charitable causes
and other social and business organisations, including
making financial, in kind and time contributions.
UK – Row the Atlantic
Alex Soskin, Savills London
Development Land Director,
and his fellow crew members
of ‘Oardacity’ rowed across
the Atlantic Ocean in the
Talisker Whisky Atlantic
Challenge, a race that covers
3,000 miles. Considered
the world’s toughest rowing
races, they finished the
race in 40 days, 6 hours
and 35 minutes. The race
started from La Gomera
in the Canary Islands, it
finished across the Atlantic
in English Harbour, Antigua.
They raised funds for mental
health charities Mind and the
Christina Noble Children’s
foundation.
FTSE4Good
We are a membership of FTSE4Good,
evidencing our commitment to
meeting globally recognised
corporate responsibility standards.
The FTSE Group confirms that Savills plc
has been independently assessed
according to the FTSE4Good criteria,
and has satisfied the requirements to
remain a constituent of the FTSE4Good
Index Series. Created by the global index
company FTSE Group, FTSE4Good is an
equity index series that is designed to
facilitate investment in companies that
meet globally recognised corporate
responsibility standards. Companies in
the FTSE4Good Index Series have met
stringent environmental, social and
governance criteria, and are positioned
to capitalise on the benefits
of responsible business practice.
China Yellow Star
Savills China launched the “Savills Yellow Star”
CSR program in 2017 to support a number of
community initiatives including those focused on
supporting children with autism making financial,
in kind and time contributions.
Savills plc | Annual Report and Accounts 2020 55
UK Covid Good Vibes
Campaign ran between
March and July 2020.
The campaign ran on
Savills UK intranet and
Social media for 18 weeks.
Savills published 75 stories
daily to support our
employees stories.
Savills Investment Management Cookbook
‘Trees for Cities’
Trees for Cities is the only UK
charity working at a national
and international scale to
improve lives by planting
trees in cities. Around Savills
Investment Management in
49 Recipes is a culinary tour of
the 13 countries where Savills
Investment Management
has offices, providing a taste
of the varying cultures that
make up our global business.
The inspiration stemmed
from colleagues sharing
their culinary exploits via
the Company’s social media
platform in 2020, which
helped many through
COVID-19 lockdowns. All
recipes were contributed by
Savills IM employees, and 100%
of cookbook proceeds donated
to Trees for Cities.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 56
Responsible business continued
Sustainability and Environment
“ We are committed to improving the impacts our
operations have on the environment, managing
climate-related risks and working together with our
clients, suppliers and local communities towards
delivering a more sustainable future.”
11.9% decrease in our
Greenhouse Gas
emissions in 2020
Move further towards
our 9 Sustainable
Development Goals
globally
Align to Task Force
for Climate-related
Disclosure (TCFD)
Move further on
journey towards our
Net Zero Goals
Governance and Risk
Management
Environmental, Social and
Governance (ESG) risks,
including climate-related risks,
form part of the Group’s risk
register, covering the potential
impact and likelihood of those
risks occurring. The Group
Director of Risk & Assurance
facilitates the climate-related
risk identification, assessment
and evaluation processes with
the Group and regional business
management teams, ensuring
effectiveness of our internal
control framework. Our CR
Steering Group co-ordinates the
implementation of the Group’s
Corporate Responsibility
strategy worldwide and
supports the ESG risk
management processes.
Strategy
Global shifts, posed by climate
change are expected to provide
both opportunities and risks
for our business to consider,
across differing activities and
regions in which we operate. We
recognise these factors will vary
in magnitude and likelihood in
terms of specific impacts.
We are committed to strengthen
our understanding of climate-
related risks to our own
operations as well as helping
our clients to improve resilience
of their portfolios. The Group is
in the process of undertaking
the regional reviews and a
more detailed assessment
of the climate-related risks
and opportunities, and the
associated mitigation and
adaptation measures.
In 2020, the COVID pandemic
increased the focus and
attention, not only on health
and wellbeing, but also on our
inevitable connection with
nature and the risks facings our
planet. We recognise the need
for action in addressing the
climate crisis and transitioning
to a greener, safer and more
resilient economy. We are
committed to improving the
impacts that our operations
have on the environment,
managing the climate-related
risks and working together with
our clients, suppliers and local
communities towards delivering
a more sustainable future.
The 2030 agenda for
sustainable development,
adopted by all United Nations
member states in 2015, provides
a shared blueprint, recognised
globally. We have chosen nine
of the UN sustainable
development goals (SDGs) to
be the focus of our sustainability
initiatives. These SDGs are
those where we feel we can
make the largest impact and
which are most relevant to our
business. They will also provide
a common worldwide language
for sustainability when reporting
to our key stakeholders.
Savills plc | Annual Report and Accounts 2020 57
Our chosen Environmental SDGs
We have adopted these nine SDGs in our UK pilot and are now agreeing underlying objectives to
support our delivery against these in our regional businesses.
SDG Goal
Savills Objective
Good Health &
Well-Being
We provide healthy workplaces, encourage healthy lifestyles and raise awareness
of mental health & wellbeing
Quality Education
We create opportunities for growth and development to our people and within
the communities we operate in
Gender Equality
We promote gender equality and create a diverse and inclusive environment for all
Affordable &
Clean Energy
We aim to maximise energy efficiency and seek to purchase green tariffs,
where possible
Decent Work And
Economic Growth
We are committed to operating responsibly and offering a fair, safe and
diverse workplace
Sustainable Cities
And Communities
We work to create sustainable places and are committed to supporting
communities and local initiatives
Responsible
Consumption and
Production
We seek to reduce our environmental impacts through active operational
management and responsible procurement
Climate Action
We aim to achieve Net Zero carbon for our workplaces and Company owned
vehicles by 2050
Life on Land
We expect our suppliers to operate responsibly and seek to protect
biodiversity and ecosystems
The Group’s Environmental
Policy sets out our approach
to achieving our environmental
objectives, and the
responsibilities of the Group and
its operating companies. We
are committed to the evaluation
and continuous improvement of
our environmental performance,
pursuing reductions in
resource consumption and
promoting the provision of
services to clients in a way
that takes appropriate account
of sustainability issues. Each
operating company business is
responsible for ensuring that the
Group’s Environmental Policy
is implemented whilst assuring
compliance with national
and local legislation. Our CR
Steering Group assesses the
Group’s overall environmental
performance against the
Policy on at least an annual
basis, including a review of
opportunities for improvement,
performance against existing
environmental objectives, the
scope for introducing new ones,
and any operational system
changes that may be required
to improve the efficiency and
effectiveness of the Policy.
Across all our regions worldwide
we are continuing to implement
practical initiatives to improve
the environmental performance
of the workspaces that we
occupy, including in the design
of new offices, the retrofitting of
existing ones, and the ongoing
active management of both.
Initiatives underway across
many of our locations globally
currently include:
• driving improvements
in energy efficiency by
introducing LED light
replacements and installing
motion sensors;
• reducing unnecessary
electricity usage in line with
reduced building occupancy;
• reducing print / paper
wastage by promoting use of
electronic documents instead
of hard copies, as well as
encouraging to go paperless;
• improving waste management
and encouraging recycling;
e.g. by introduction of new
recycling streams;
• using sustainable materials
in the fit-out of our premises
wherever possible;
• transitioning our energy
supplies to green energy
contracts;
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 58
Responsible business continued
Sustainability and Environment continued
• choosing zero or low
emission vehicles; and
• encouraging use of virtual
meetings to reduce the need
to travel.
For example in 2020 in Munich
we implemented a number of
sustainability measures as part
of the refurbishment of the
office. Besides the LED light
replacements, the sustainability
measures included ensuring the
highest efficiency standards for
all electric devices in the lounge
area, selecting a Blue Angel
eco and CRI Green Label Plus
certified carpet, installation of a
water tap for still and sparkling
drinking water and a green wall
in the entrance area.
To support the development of
our environmental objectives,
we are undertaking a review of
the green building certifications
across the offices we occupy.
In North America, for example,
we have 18 offices in LEED or
Energy Star certified buildings,
of which four are certified
to LEED Platinum. When we
moved to our new office is
Houston, the LEED Platinum
certification was amongst the
selection criteria. In Australia,
three out of four of our largest
offices are in the buildings
certified under NABERS. Our
Melbourne office, into which
we moved in 2020, is in a
newly developed building with
objectives to attain the NABERS
Energy and Water ratings, and
the Green Star certification.
Within the UK, our business
now has 113 offices within the
scope of an Environmental
Management System,
certified to ISO14001:2015.
The Savills UK environmental
management system provides
a uniform method of evaluating
environmental risks that pose
a threat to the business at
micro and macro level and
ensures compliance with
relevant legislation. The system
also ensures that appropriate
persons are adequately trained
and aware in terms of the
role they can play in helping
minimise the environmental
impacts of the UK operating
companies.
In addition, in the UK and
across continental Europe,
we have over 80 energy and
sustainability consultants who
are the primary sustainability
advisors to a host of leading
property companies and funds.
In 2020, these advisors worked,
for example, on the delivery
of multiple renewable energy
projects; advised on strategies
for energy from waste, ‘blue’ and
‘green’ hydrogen production
and sub-sea power cables both
as interconnectors and from off-
shore wind farms. The forestry
team in the UK have overseen
over 2,370 Ha of new woodland
creation schemes, which is
expected to result in over
4,000,000 trees planted when
these schemes are complete.
Responsible land management
on behalf of clients has also
helped to improve biodiversity
net gain and undertake
peatland restoration.
To further develop our
sustainability strategy, the next
steps include setting regional
sustainability objectives and
commitments, which will
then be consolidated into our
Group Sustainability Strategy.
For example, in the UK we are
introducing specific objectives
aligned to our chosen UN SDGs.
Our UK business commitments
include achieving Net Zero
carbon in operation by 2030
and to be advocates for carbon
neutrality across the wider
industry. The Net Zero target
commits us to eliminate GHG
emissions from our own UK
workplaces and from Company
owned vehicles and is aligned
with the World Green Building
Council’s Net Zero Carbon
Buildings Commitment. To
do that, we are consistently
working to improve our
monitoring and reporting,
reduce our operational
emissions via increased energy
efficiency and to purchase
certified green energy supplies.
We have also commenced the
development and review of our
regional sustainability objectives
across North America, Asia
Pacific, and EMEA.
Managing climate-
related risks
The Group supports the
recommendations of the
Task Force on Climate-
related Financial Disclosures
(TCFD) and has been taking
actions to incorporate these
recommendations into our risk
management processes. We will
report on the detailed plans that
we have developed in response
to the TCFD recommendations,
when we report on these in the
2021 Annual Report.
Metrics and Targets
The Group reports annually
on its global Scope 1 and 2
Greenhouse Gas emissions,
and associated energy use and
emissions intensity metrics. This
year we enhanced our disclosure
to include the regional overview.
We will continue to evaluate
our reporting to ensure we are
providing our stakeholders with
adequate information on our
environmental performance
and management of climate-
related issues.
Savills plc | Annual Report and Accounts 2020 59
2019 marked the end of our
three year Greenhouse Gas
emissions (GHG) reduction plan
and we reported a reduction of
30% in GHG intensity. In 2020,
our UK business has committed
to achieving Net Zero carbon in
operation by 2030 and we are
working to develop emission
reduction targets for our
operations across all business
units globally.
Greenhouse Gas
Emissions
Our Greenhouse Gas (GHG)
Emissions Statement includes
all emission sources required
under the Companies Act
2006 (Strategic Report and
Directors’ Reports) Regulations
2013 and the Companies
(Directors’ Report) Regulations
2018 for the financial year to
31 December 2020.
Reporting Methodology
We report our GHG Emissions
using the revised edition of
the GHG Protocol Corporate
Accounting and Reporting
Standard, the GHG Protocol
Scope 2 Guidance and the
UK Government Guidance on
Streamlined Energy and Carbon
Reporting (SECR). Our GHG
emissions reporting boundary
is based on an operational
control approach and includes
emissions from Savills PLC and
Group subsidiaries. Reported
Scope 1 emissions relate to
emissions from business travel
by the Group owned or leased
vehicles and the combustion
of fuels within our occupied
offices. Scope 2 emissions are
reported using both ‘market-
based’ and ‘location-based’
methodologies and relate to
electricity use in our occupied
offices. Scope 1 and Scope
2 ‘location-based’ emissions
are calculated using regional/
national emission factors
published by International
Energy Agency (IEA), the UK
Government GHG Conversion
Factors for Company Reporting,
US Environmental Protection
Agency (EPA), Swedish
Environmental Protection
Agency (SEPA), Australian
Department of the Environment
and Energy and other national
agencies and internationally
recognised guidelines for
each reporting period. Under
the Scope 2 ‘market-based’
method, no emissions have
been accounted for electricity
supplies backed with the
Renewable Energy Guarantees
of Origin and, where possible,
residual mixes were used to
account for the remaining
consumption.
To coordinate the global
collection of GHG emissions
data, a network of
Environmental Reporting
Nominees (ERN) has been
established within Savills,
reporting to the Group Legal
Director & Company Secretary.
Specialist third party verified
environmental reporting
software has been adopted to
manage data quality review and
verification process. Through
the ERN network, reported
greenhouse gas emissions
have been collated using actual
activity data wherever possible.
In some instances, where
activity data was not found
to be wholly reliable or readily
available, we have estimated
the relevant emissions by using
a range of standard carbon
accounting measures,
including extrapolating data
and use of comparator indicator
based estimation.
To allow easier comparison
between reporting locations
and year on year results, a
standardised intensity ratio has
also been applied. In previous
years we reported the emissions
intensity per average number
of full-time equivalent office-
based employees. With the
recent COVID-19 impacts to
our working arrangements
and a growing shift towards
more flexible workplaces, we
have reassessed our reporting
measures and have instead
selected two key alternative
intensity metrics to report on
our performance. The first of
these calculates our global
Scope 1 and 2 ‘market-based’
emissions intensity, expressed
per Group revenue. In the
second, we report on Scope 1
and 2 ‘location-based’ emissions
intensity per square metre
across our offices globally.
The GHG intensity ratio of
our offices excludes business
travel and is focused on driving
improvements in operational
energy efficiency in buildings.
Performance
Our environmental performance
has been considerably impacted
by COVID-19 and the resulting
temporary office closures across
all regions. Our absolute Scope
1 and 2 GHG emissions in 2020
show a year on year decrease
of 965 tonnes CO2e (equal to
11.9%), despite an increase in
our GHG reporting scope. A
significant part of this reduction
can be attributed to less energy
use within our offices as a result
of office closures and partial
occupation. The increase in our
Scope 1 emissions from the use
of fuels within our premises,
related to more offices reporting
the data, was offset by reduced
emissions from business travel,
driven by remote working.
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 60
Responsible business continued
Sustainability and Environment continued
With the data available at the time of this report, it is hard to accurately assess how much of the
overall reduction was due to our efforts to improve energy efficiency and eliminate energy waste
across our offices versus the impacts of COVID-19. However, placed in context, the longer term trend
is still towards a continuing improvement in environmental performance. In 2019, we achieved a 30%
GHG intensity reduction against the 2016 baseline year (per average number of full-time equivalent
office-based employees), with an 8% year on year improvement in 2017, 9% in 2018 and an additional
13% in 2019. We reported a 17.9% year on year decrease in our absolute Scope 1 GHG emissions
between 2018 and 2019, predominately as a result of our initiatives to reduce business travel. The
12.3% year on year decrease in our location-based Scope 2 emissions in 2020 was supported by our
proactive management of energy use within many of the partial unoccupied offices, reducing the
electricity and fuels usage where possible. Furthermore, we are continuing to transition our energy
supplies to green energy contracts, with most progress to date across our UK offices, which is notable
within the regional variance between the GHG market-based emissions and the proportion of global
energy use.
We have further increased our data coverage and reported actual or estimated data for all offices
where we have operational control for managing environmental performance. This resulted in the
data being reported for 285 of 285 offices in 2020, compared to 282 out of 305 offices in 2019. The
reported energy and GHG emissions data includes estimates where actual data was unavailable. We
continue to work on improving quality and accuracy of the underlying data.
Global GHG Emissions tonnes CO2e
Scope 1 (Direct)
Scope 2 (Indirect, market-based)
Total Scope 1 and 21
Scope 2 (Indirect, location-based)
GHG financial intensity ratio (tonnes CO2e / £ million revenue)
GHG intensity ratio of our offices (tonnes CO2e / m2)
2020
1,680
5,489
7,169
5,871
4.12
0.042
2019
1,775
6,358
8,133
6,719
4.25
0.048
2018
2,162
6,299
8,460
6,697
4.80
nr
2020
24,097
2019
25,938
2018
27,079
Global Energy Use MWh
Total energy use
Performance by region
Region
Asia Pacific
Europe & the Middle East
North America
United Kingdom
Total
Notes:
Energy Use
GHG emissions
Scope 1 and 21
MWh
4,647
6,377
4,766
8,307
%
19%
26%
20%
34%
24,097
100%
tonnes CO2e
2,293
2,046
1,535
1,294
7,169
%
32%
29%
21%
18%
100%
1. Total Scope 1 and 2 emissions and GHG financial intensity ratio are calculated using the market-based Scope 2 emissions.
2. GHG intensity ratio of our offices is calculated using the location-based Scope 2 emissions.
change
vs 2018
-22.3%
-12.9%
-15.3%
-12.3%
-14.3%
nr
change
vs 2018
-11%
GHG
intensity
ratio of our
offices2
tonnes
CO2e / m2
0.050
0.033
0.045
0.038
0.042
Savills plc | Annual Report and Accounts 2020 61
Non-financial information statement 2020
The Non-Financial Reporting requirements are contained in sections 414CA and 414CB of the
Companies Act 2006. The non-financial information provided in our Strategic Report summarises
the material issues Savills has identified in line with the requirements.
The table below, and the information it refers to, is intended to help stakeholders understand our
position on key non-financial matters.
Reporting
Requirement
Environmental
matters
Employees
Policies and standards
which govern our approach
Where to read about
our impact in this report
• Environmental Policy
• ‘Environment’ section of
Responsible Business
• H&S Policy
• Equality & Diversity Policy
• Code of Conduct
• Whistleblowing Policy
• CEO Review
• Business Model
• ‘People’ section of Responsible Business
• ‘Culture’ section of Responsible Business
• ‘People and culture’ Principal Risk in
the Principal and Emerging Risks
and Uncertainties
Page
56 to 60
18 to 25
8 and 9
48 to 52
53
30 to 38
Human Rights
Social matters
Financial Crime
(Anti Money
Laundering and
Anti Bribery and
corruption)
Outcome of non-
financial policies
and standards
Business model
• S172 (1) Companies Act statement – People
• Corporate Governance Report
• Remuneration Report
43
62 to 83
92 to 116
• ‘Culture’ section of Responsible Business
53
• ‘Social Matters’ section of
Responsible Business
54 and 55
• Culture section of Responsible Business
• Corporate Governance Report
53
62 to 83
• Code of Conduct
• Modern Slavery Statement
• Code of Conduct
• Modern Slavery Statement
• Tax Strategy
• Code of Conduct
• Whistleblowing Policy
• Anti-Bribery and
Corruption Policy
• Carbon emissions reporting
• Gender Diversity reporting in
• ‘Environment’ section of
Responsible Business
accordance with the Corporate
Governance Code 2018
• Corporate Governance Report
56 to 60
62 to 83
• Our business model section of the
8 and 9
Strategic Report
53
Due diligence
processes in place
in pursuance of
promoting non-
financial policies
and standards
• All employees required to
read and adhere to the Code
of Conduct
• Whistleblowing reports
reviewed by the Board
• Anti-corruption and anti-bribery
training and monitoring
FINANCIAL STATEMENTSGOVERNANCEOVERVIEWSTRATEGIC REPORT 62
Chairman’s introduction
“ Ensuring that we do the right thing in the
right way requires the right leadership and it
is a fundamental part of my role as Chairman
to ensure that the Board has the right blend
of skills and experience.”
Nicholas Ferguson CBE,
Chairman of Savills plc
Overview
Chairman’s
Introduction 62 and 63
Board Leadership
and Company
Purpose
64 to 77
Nomination
and Governance
Report
79 to 82
Audit, Risk and
Internal Control
83
Division of
responsibilities
Audit Committee
Report
84 to 91
78
Composition,
Succession and
Evaluation
79 to 82
Remuneration
Report
92 to 116
Applying the Principles of the 2018 UK Corporate
Governance Code
Compliance Statement
The Company reported against the 2018 UK Corporate
Governance Code (the ‘Code’) and the Companies
(Miscellaneous Reporting) Regulations 2018. Our Governance
Report reflects these requirements as they apply to Savills and
includes cross references to relevant sections of the Strategic
Report, the Directors Remuneration Report and other related
disclosures. As part of this reporting, a Section 172(1) statement
can be found on pages 43 and 44 of the Strategic Report.
A copy of the Code is available from the Financial Reporting
Council’s website at www.frc.org.uk. It is the Board’s view that
for the financial year ended 31 December 2020 Savills has been
fully compliant with all of the Principles and Provisions set out
in the Code.
Responsibility for good governance lies with the
Board. The Board is committed to maintaining the
highest standards of corporate governance, which are
fundamental to discharging our responsibilities. We
set out our governance framework in this report and
explain how robust and effective corporate governance
practices enable the Group to deliver its strategy and
create long-term Shareholder value. Further information
on our strategy and business model can be found on
pages 8 and 9.
Ensuring that we do the right thing in the right way
requires the right leadership and it is a fundamental part
of my role as Chairman to ensure that the Board has the
right blend of skills and experience. As an international
business, we benefit from our Non-Executive Directors’
knowledge of and involvement with other businesses
across Asia, Europe and the US. All of the Non-Executive
Directors are considered by the Board to be independent,
meaning that at least half of the Board members
throughout the year were independent Non-Executive
Directors (excluding me, as Chairman). The details of their
skills and experience are, along with those of the other
Board members, set out on pages 64 to 67.
In accordance with the 2018 UK Corporate Governance
Code (the ‘Code’), all of the Directors with the exception
of Rupert Robson who has announced his intention
to retire from the Board at the conclusion of the 2021
Annual General Meeting (the ‘2021 AGM’), will stand
for re-election or re-appointment at the 2021 AGM on
12 May 2021. The Board also reviews Non-Executive
Director independence on an annual basis and takes into
account the individual’s experience, their behaviour at
Board meetings and their contribution to unbiased and
independent debate. The Board considers that all of the
Non-Executive Directors bring considerable management
expertise and strong independent oversight.
As highlighted in the Strategic Report on pages 4 to 61,
COVID-19 has had a significant impact on how we have
conducted our business in 2020. Our primary concern
throughout the pandemic has been the continuation of
client service at the highest levels and the well-being
of our staff. The Board, as well as our employees across
the Group have adapted to changes in 2020 to our
normal ways of working, implemented in response to the
pandemic. The Board has conducted its meetings which
increased in frequency in response to the pandemic, and
those of its Committees, remotely via video conferencing
since April 2020. We are comfortable that the integrity of
our governance structure has been maintained during this
period, notwithstanding the practical changes that have
been made. The framework setting out the various Board
Committees, principal management committee and other
key committees is set out on page 73.
Savills plc | Annual Report and Accounts 2020 63
We recognise fully that at the heart of every successful
organisation is a strong and healthy culture supported
by a robust governance structure. As custodian of Savills
culture the Board demands openness and transparency
to maintain an environment in which honesty, integrity
and fairness are valued and practised by our people every
day. Our Code of Conduct is readily accessible in all local
languages to all staff to support their day to day decision
making. We demand the highest professional standards
from all of our people all of the time and we have a zero
tolerance approach to breaches of the Code of Conduct.
Our whistleblowing policy enables employees to raise any
matters of concern anonymously and is embedded into
our business.
The Board is collectively responsible for the long-
term success of the Group and how it is directed
and controlled, so we test Board effectiveness and
performance annually through a formal evaluation.
Alice Perkins of AP Consulting externally facilitated the
review in 2019, so this year’s evaluation was conducted
in-house, led by me and facilitated by the Group
Legal Director & Company Secretary. The process, key
conclusions and areas of focus for 2021 are set out on
page 82. Following this review, I am satisfied that the
Board continues to perform effectively and in particular
I am confident that the Board has the right balance of
skills, experience and diversity of personality to continue
to encourage open, transparent debate and challenge.
The Board is committed to a culture that attracts
and retains talented people to deliver outstanding
performance and further enhance the success of the
Group. A good board is formed of a diverse group of
individuals, each contributing different experiences, skills
and backgrounds and which enables independent and
effective leadership. Diversity and inclusion remain a
priority for the Board and across the Group. We aim to be
truly representative of all sections of society and for each
employee to feel respected and able to give their best.
The Company’s policy on diversity applies across all levels
of the Group and further details of the policy can be
found in the Strategic Report on pages 4 to 61.
Rupert Robson, who has served on the Board since 2015,
retires at the conclusion of the 2021 AGM. Given Rupert
Robson’s retirement at the conclusion of the 2021 AGM
in May, Richard Orders has succeeded him as Chairman
of the Remuneration Committee. Tim Freshwater, who
has served on the Board since 2012, will retire from the
Board on 31 December 2021. Tim, having served nine
years on the Board, stepped down as Senior Independent
Non-Executive Director effective 31 December 2020,
when he was succeeded in this capacity by Stacey
Cartwright. I would like to thank Rupert for his
considerable contribution to the Board and its
Committees during his term.
During the year, the Nomination & Governance
Committee and the Board agreed that it would be
appropriate to appoint additional Non-Executive
Directors to further expand the range of skills, experience
and knowledge available to the Board. I am pleased
to report that, following an extensive search process
supported by an independent specialist search firm
(as set out in detail in the Nomination & Governance
Committee Report on pages 79 to 82), on 1 January
2021 Philip Lee and Richard Orders were appointed as
additional independent Non-Executive Directors. Both
Philip and Richard have extensive experience which will
complement and further enhance the wide-ranging skills
and experience of the Board and its Committees.
Risk management remains a fundamental element of
the Board and Audit Committee’s agendas and our
governance efforts across the Group as a whole. The
Audit Committee’s Report on pages 84 to 91 sets out
in more detail the systems of risk management and
internal control. Details of our principal existing and
emerging risks and uncertainties can be found on
pages 30 to 38.
Included within this Report is our Annual Report
on Directors’ Remuneration, will be presented to
Shareholders for approval at the 2021 AGM.
We believe that engaging with our Shareholders and
encouraging an open, meaningful dialogue between
Shareholders and the Company is vital to ensuring mutual
understanding. We are in regular contact with our major
Shareholders and potential Shareholders and in 2020
continued our regular, scheduled programme of meetings
by way of video conference as part of our continuing
commitment to this open and transparent dialogue. You
can read more about Shareholder engagement on page
77 and in the meantime, my fellow Directors and I look
forward to continuing our dialogue with Shareholders.
Overall I remain happy with the Board’s activity across
our governance agenda. However, we will continue to
challenge ourselves and the business and to consider and
to learn from our decisions to ensure that we build upon
the existing strength of our governance structure.
Nicholas Ferguson CBE
Chairman
10 March 2021
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 6464 Savills plc | Annual Report and Accounts 2020
Board of Directors
Nicholas Ferguson CBE
Chairman of Savills plc and
Chairman of the Nomination
& Governance Committee
Mark Ridley
Group Chief Executive Officer
Appointment to the Board
Appointment to the Board
Mark joined Savills in 1996 and was
appointed to the Board on 1 May 2018.
Background and relevant experience
Mark is a Fellow of the Royal Institution
of Chartered Surveyors. He was Chairman
of Savills Commercial from May 2008,
then Chief Executive Officer of Savills
UK from 2013 and additionally of Savills
Europe from 2014 until he was appointed
as Deputy Group Chief Executive on
1 May 2018. As of 1 January 2019, Mark
was appointed as Group Chief
Executive Officer.
Other appointments
Trustee of Reading Real Estate Foundation.
Policy Committee Member, British Property
Federation.
Committee Membership
Nomination & Governance Committee.
Nicholas was appointed to the Board
as a Non-Executive Director on
26 January 2016 and became Chairman
in May 2016.
Background and relevant experience
Nicholas has held a number of leadership
roles in the private equity and investment
sectors. He was co-founder of Schroder
Ventures (the private equity group which
later became Permira) of which he served
as Chairman from 1984 to 2001. He later
served as Chairman of SVG Capital plc,
a publicly quoted private equity group,
from April 2005 to November 2012.
Other appointments
Nicholas was Chairman of Sky Plc from
April 2012 to May 2016, having been
appointed to the board as a Non-Executive
Director in June 2004 and having
previously served as Deputy Chairman
and Senior Independent Non-Executive
Director. Chairman of African Logistical
Properties; and Chairman and founder
of The Kilfinan Group, which provides
mentoring by Chairmen and CEOs to
heads of charities. Nicholas is also non-
executive Director of Wendel Group.
Committee Membership
Remuneration, Nomination & Governance
Committees.
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
6565
Simon Shaw
Group Chief Financial Officer
Tim Freshwater
Independent Non-Executive Director
Appointment to the Board
Simon joined Savills as Group Chief
Financial Officer in March 2009.
Appointment to the Board
Tim was appointed to the Board as a
Non-Executive Director on 1 January 2012.
Background and relevant experience
Background and relevant experience
Simon is a Chartered Accountant.
He was formerly Chief Financial Officer
of Gyrus Group PLC, a position he held
for five years until its sale to the Olympus
Corporation. Simon was Chief Operating
Officer of Profile Therapeutics plc for
five years and also worked as a corporate
financier, latterly at Hambros Bank Limited.
Other appointments
Non-Executive Chairman of
Synairgen plc.
Committee Membership
None.
Tim is Chairman of Goldman Sachs
Asia Bank Limited and was formerly
Chairman of Corporate Finance for
Goldman Sachs (Asia).
Before joining Goldman Sachs, Tim
worked at Jardine Fleming, becoming
Group Chairman in 1999, and was a
partner at Slaughter and May from 1975
to 1996. Tim has been resident in Hong
Kong for over 30 of the last 40 years.
Other appointments
Non-Executive Director of Swire Pacific
Limited, Corney & Barrow Group Limited
and Chelsfield Asia Limited. Tim is a former
director of Hong Kong Exchanges and
Clearing Limited and a former member
of the Hong Kong Trade Development
Council and the Financial Services
Development Council.
Committee Membership
Nomination & Governance Committee.
6666 Savills plc | Annual Report and Accounts 2020
Board of Directors continued
Rupert Robson
Independent
Non-Executive Director
Stacey Cartwright
Independent Non-Executive
Director; Senior Independent
Director and Chair of the
Audit Committee
Florence
Tondu-Mélique
Independent
Non-Executive Director
Appointment to the Board
Appointment to the Board
Appointment to the Board
Rupert was appointed to the
Board as a Non-Executive Director
on 23 June 2015.
Stacey was appointed to the
Board as a Non-Executive Director
on 1 October 2018.
Florence was appointed to the
Board as a Non-Executive Director
on 1 October 2018.
Background and relevant
experience
Background and relevant
experience
Rupert has held a number of
senior roles in financial institutions,
most recently Chairman of TP
ICAP plc, Charles Taylor plc and
EMF Capital Partners and Non-
Executive Director of London Metal
Exchange Holdings Limited, Tenet
Group Limited and OJSC Nomos
Bank. Prior to that he was Global
Head, Financial Institutions Group,
Corporate Investment Banking
and Markets at HSBC and Head of
European Insurance, Investment
Banking at Citigroup Global
Markets.
Other appointments
Chairman of Sanne Group plc.
Committee Membership
Audit and Nomination
& Governance Committees.
Stacey most recently served as
Chief Executive and then Deputy
Chairman of Harvey Nichols Group
until 2018, and prior to that was
EVP and CFO of Burberry Group
plc. She previously served as CFO
of Egg plc and spent her early
career in a number of finance
roles at Granada Group PLC. She
was a Non-Executive director at
GlaxoSmithKline PLC from 2011 to
2016 and the Senior Independent
Non-Executive Director of the
English Football Association from
2018 to 2020. She qualified as a
Chartered Accountant with Price
Waterhouse.
Other appointments
Non-Executive Director of AerCap
Holdings N.V, Genpact Ltd and
Majid al Futtaim (MAF) LEC. She
is also the Chair of MAF Lifestyle
Advisory Committee and OVO
Energy plc.
Committee Membership
Audit, Remuneration and
Nomination & Governance
Committees.
Background and relevant
experience
Florence is currently Chief
Executive Officer of Zurich France,
and a member of Zurich’s Group
Leadership Team.
She was previously Chief
Operating Officer of Hiscox
Europe, prior to which she held
senior executive roles at AXA Real
Estate and AXA Investment
Managers. She spent her early
career at McKinsey & Company.
Other appointments
Non-Executive Director of the
French-American Foundation.
Non-Executive Director of Auchan
Retail International.
Committee Membership
Audit and Nomination
& Governance Committees.
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
6767
Dana Roffman
Independent
Non-Executive Director
Philip Lee
Independent
Non-Executive Director
Richard Orders
Independent Non-Executive
Director and Chair of the
Remuneration Committee
Appointment to the Board
Appointment to the Board
Appointment to the Board
Dana was appointed to the
Board as a Non-Executive Director
on 1 November 2019.
Philip was appointed to the
Board as a Non-Executive Director
on 1 January 2021.
Richard was appointed to the
Board as a Non-Executive Director
on 1 January 2021.
Background and relevant
experience
Background and relevant
experience
Background and relevant
experience
Dana was most recently a partner
and founding member of the
Real Estate Private Equity group
at Angelo Gordon, a privately
held alternative investment firm.
During her 25 year tenure, ending
in December 2019, she served as a
manager and leader of investment
teams across all major US markets,
and served as a Member of the
Investment Committees for the
firm’s US Opportunistic, Core Plus
and Value Real Estate Funds. She
spent her early career in real estate
valuation and advisory at Arthur
Andersen LLP in Washington, DC.
Other appointments
Advisory Board of NYU Schack
Institute of Real Estate.
Committee Membership
Remuneration and Nomination
& Governance Committees.
Richard Orders is currently a
managing director at Moelis
& Company a leading global
independent investment bank,
heading the Firm’s Hong Kong
office having founded its
predecessor firm, Asia Pacific
Advisors, in 2009. Prior to this,
Richard was with ABN AMRO
(1996-2008), latterly from 2004-
8 as Vice Chairman and Head
of Global Clients Asia, having
previously been Executive
Chairman and CEO of ABN AMRO
Asia Corporate Finance. Previously,
Richard held various roles in
Barings Bank, which he joined in
1976, latterly as Head of Barings
Investment Banking business
in Asia, ex Australia and Japan
(1994-96) and Director of Barings
Corporate Finance London (1996).
Other appointments
None.
Committee Membership
Remuneration and Nomination
& Governance Committees.
Philip Lee is currently Vice
Chairman of Global Banking,
South East Asia, HSBC Bank and
is a member of the Global Banking
Vice Chairman and Banking
Leadership Forums. He is also an
independent board director of
Heliconia Capital Management,
an investment firm owned by
Temasek focused on growth-
oriented Singapore companies,
and is Chairman of the Singapore
Government’s Health Promotion
Board. Philip was previously with
Deutsche Bank (2013-2018) as Vice
Chairman of South East Asia and
Chief Country Officer for the Bank
in Singapore. Prior to 2013, Philip
was with JP Morgan (1995-2013),
where he was CEO South East Asia
Investment Banking and Senior
Country Officer, Singapore, after
having worked in senior positions
for various other banks in the
region before then. Since 2006,
he has also held roles on various
advisory bodies and Statutory
Boards established by the
Singapore government.
Other appointments
None.
Committee Membership
Audit and Nomination
& Governance Committees.
6868 Savills plc | Annual Report and Accounts 2020
Group Executive Board
Mark Ridley
Group Chief Executive Officer
(effective 1 January 2019)
Deputy Group Chief Executive
(from 1 May 2018 to 31 December 2018)
(see Board of Directors on pages 64
to 67 for full biography)
Simon Shaw
Group Chief Financial Officer
(see Board of Directors on pages 64
to 67 for full biography)
James Sparrow
Chief Executive Officer, UK & EMEA
Appointment to the
Group Executive Board:
James was appointed to the Group
Executive Board on 1 May 2018.
Background and relevant experience
He became Chief Executive of Savills
UK & EMEA in September 2018, having
previously been Chief Executive of Savills
UK since 1 May 2018. Prior to this James
held the position of Head of Professional
Services, Savills UK and was a member of
the Savills UK Executive Board since 2013
when it was established. Before that James
was a member of the Executive Board of
Savills Commercial, having joined Savills
in 1988.
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
6969
Chris Lee
Group Legal Director
& Company Secretary
Appointment to the
Group Executive Board
Chris joined Savills in June 2008 and was
appointed to the Group Executive Board
in August 2008. He has responsibility for
legal and compliance issues globally.
Background and relevant experience
He held equivalent roles with Alfred
McAlpine plc, Courts plc and Scholl plc
between 1997 and 2008, prior to which he
was deputy group secretary of Delta plc
from 1990 to 1997.
Raymond Lee
Chief Executive – Hong Kong,
Macau and Greater China
Appointment to the
Group Executive Board
Raymond was appointed to the Group
Executive Board in January 2011.
Background and relevant experience
He joined Savills in 1989. In 2003,
Raymond became the Managing Director
in Hong Kong and Macau and in 2010
was appointed CEO of Greater China.
Raymond is a Fellow member of the Hong
Kong Institute of Directors and holds
an honorary fellowship at the Quangxi
Academy of Social Science. Raymond is
also an Honorary Doctor of Management at
Lincoln University and holds a Fellowship
at the Asian College of Knowledge
Management (ACKM). He became a fellow
member of the Royal Institute of Chartered
Surveyors (RICS) in 2016.
7070 Savills plc | Annual Report and Accounts 2020
Group Executive Board continued
Christian Mancini
Chief Executive Officer –
Asia Pacific (ex Greater China)
Appointment to the
Group Executive Board:
Christian was appointed to
the Group Executive Board on
1 July 2016.
Background and relevant
experience
Christian was made CEO of Savills
Japan in 2007 and appointed CEO
of Savills Northeast Asia in 2012.
Other appointments
Christian also serves as non-
executive director in Savills Asset
Advisory, the wholly-owned asset
management subsidiary of Savills
Japan Co, Ltd created in May 2012.
Simon Hope
Global Head of Capital Markets
Mitchell E. Rudin
Chairman & CEO – Savills Inc
Appointment to the
Group Executive Board:
Appointment to the
Group Executive Board:
Simon was appointed to the Group
Executive Board when it was
formed in February 2008.
Background and relevant
experience
He joined Savills in September
1986 and he is Head of our Global
Capital Markets business. He is
also a member of the Board of
the Charities Property Fund,
Chairman of Tilstone LLP, co-
founder and non-executive of the
Warehouse REIT, Chair of Racing
Homes, Trustee of Racing Welfare,
The Jockey Club’s charity, and
Governor of Magdalen College
School, Oxford.
Mitch was appointed to the Group
Executive Board in January 2019.
Background and relevant
experience
Mitch joined Savills Studley as
President in 2019, bringing more
than 30 years of leadership in the
commercial real estate industry.
He has served as CEO of Mack-
Cali Realty Corporation, Brookfield
Office Properties U.S. Commercial
Operations, and CBRE’s (formerly
ESG and Insignia) New York Tri-
State Region. Through strategic
financial management, operational
logistics, client representation,
market positioning and a long
time commitment to diversity
and inclusion, Mitch successfully
guided each company in periods
of rapid growth and dramatic
transformation. His leadership
led to increased revenue, profit
margins, and brand capital.
Other appointments
Mitch is on the boards of the NYC
Police Foundation, NYU Schack
Institute, Police Athletic League
and St. Francis Friends of the Poor.
He is also a Governor of the Urban
Land Institute.
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
7171
Alex Jeffrey
Chief Executive Officer – Savills
Investment Management
Appointment to the
Group Executive Board:
Alex was appointed to the
Group Executive Board on
1 November 2019.
Background and relevant
experience
Alex became Global CEO of
Savills Investment Management
on 1 November 2019 and was
appointed to Savills Group
Executive Board at that time. Alex
was previously Head of Asia Pacific
for M&G Investments based in
Singapore, with responsibility for
the development and leadership
of that company’s business across
all investment sectors in Asia
Pacific. Prior to this, he was Chief
Executive of M&G Real Estate,
based in London, where he led
the significant growth of the firm
from c. £15bn AUM in 2012 to over
£30bn in 2018. Before that he was
Chief Investment Officer and CEO
Europe of MGPA Limited.
72
Corporate Governance
Board Leadership and Company Purpose
Overview of the Board’s responsibilities
• Has primary responsibility for providing
entrepreneurial leadership for the Group
• Oversees the overall strategic development of the
Group and approves the strategy to achieve the
Group’s strategic aims
• Sets the Group’s values and standards
• Ensures effective governance and risk management
and that the Group’s businesses act ethically and
that obligations to Shareholders are understood
and met
• Delegates the management of the day-to-day
operation of the business to the Group Chief
Executive, supported by the Group Executive Board
subject to appropriate risk parameters
The Board has adopted a formal schedule of matters specifically
reserved to it for decision-making. A full schedule of matters reserved
for the Board’s decision along with the Terms of Reference of the
Board’s principal Committees can be found on the Company’s website
at http://ir.savills.com
Board Committees
The Board has established three principal Committees
to which it has delegated certain of its responsibilities,
as set out below. The roles, membership and activities
of these Committees can be found in the pages
which follow.
Group Executive Board (‘GEB’)
The Group Chief Executive is supported by the GEB.
The GEB is the key management committee of the
Group. It is chaired by the Group Chief Executive and
comprises the Group Chief Financial Officer, the Heads
of the Principal Businesses and the Group Legal Director
& Company Secretary. The GEB meets regularly and
under the leadership of the Group Chief Executive, the
GEB is responsible for the day to day management of
the Group including overseeing the development and
implementation of strategy, capital expenditure, and
investment budgets, for the ongoing review and control
of the Group’s principal existing and emerging risks and
uncertainties as detailed on pages 30 to 38 and reporting
on these areas to the Board for approval, implementing
Group policy, monitoring financial and operational
performance of the Group and other specific matters
delegated to it by the Board. The Group Chief Executive
is also supported by Regional Service Strategy Groups
which are tasked with the continuous development of
service line offerings and client relationship management
in each region, in particular to ensure that the Group’s
offering across its key service lines continues to evolve to
meet new client requirements and to ensure consistent
approach across the Group. An explanation of how the
Group creates and preserves value, and the strategy
for delivering its objectives is included in the Strategic
Report on pages 4 to 61.
Savills plc | Annual Report and Accounts 2020
73
Corporate Governance Structure
Board (Chairman, two Executive Directors and seven Non-Executive Directors).
Audit Committee
Remuneration Committee
Nomination &
Governance Committee
Group Chief Executive
• Responsible for the broad
policy governing senior
staff pay and remuneration
• Responsible for size,
• Responsible for the
structure and composition
of the Board
day-to-day management
of the Group
• Responsible for assisting
the Board in fulfilling
its financial and risk
responsibilities, and in
particular for ensuring that
the financial statements
are fair, balanced and
understandable
• Oversees external
financial reporting,
internal control, risk
management and reviews
the work of the Internal
and External auditors
• Advises the Board on
the appointment of the
External auditors
Chair: Stacey Cartwright
Number of meetings
in the year: 5
For more information
see pages 84 to 91
• Sets the actual levels
of all elements of the
remuneration of the
Executive Directors, and
Group Executive Board
members
Chair: Richard Orders
(who has succeeded
Rupert Robson as chair)
Number of meetings
in the year: 5
For more information
see pages 92 to 116
• Reviewing and progressing
appointments to the Board
• Responsible for succession
planning to ensure that
the Board is refreshed
progressively such that
the balance of skills and
experience available to
the Board remains
appropriate to the needs
of the business
• Makes recommendations
to the Board on the
membership of the
principal Committees
of the Board
• Monitoring of the
Company’s compliance
with applicable codes and
other requirements of
Corporate Governance
Chair: Nicholas Ferguson
Number of meetings
in the year: 3
For more information
see pages 79 to 82
Group Executive Board
• Key executive management
committee of the Group
• Responsible for the
day-to-day management
of the Group
• Oversees the development
and implementation
of strategy, capital
expenditure, and
investment budgets, for
the ongoing review and
control of Group risks,
reporting on these areas to
the Board for approval
• Implements Group policy
• Monitors financial and
operational performance
of the Group and other
specific matters delegated
to it by the Board
Chair: Group Chief Executive
Composition: Group
Chief Financial Officer,
the Heads of the Principal
Businesses, the Global Head
of Capital Markets and the
Group Legal Director &
Company Secretary
CR Steering Group
Executive Committees
• Co-ordinates Corporate Responsibility (‘CR’) activity to
• Lead each Principal
deliver Savills agreed goals
Business
• Oversees Savills CR Strategy for the Group globally and
• Responsible for the
recommending changes to it when appropriate
• Monitors Group-wide CR progress and performance and
identifying to the Group Executive Board areas where action
needs to be taken
• Ensures that key CR responsibilities and achievements
are communicated to all staff globally and externally to
interested parties
• Gathers and records information about all existing CR
programmes and initiatives taking place within the Group
• Helps to determine indicators and measures that will be used
to ascertain performance against prioritised CR impact areas
• Helps to identify on any external indices, initiatives, codes
and standards for Savills to use or adopt to help validate
CR performance
• Responsible for overseeing preparation of the non financial
information section of the Annual Report
Chair: Group Legal Director & Company Secretary
For more information see page 46
day-to-day management
of the relevant Principal
Business
Group Risk Committee
• Oversee the development
• Identifies and evaluates
and implementation
of strategy, capital
expenditure, and
investment budgets for
the ongoing review and
control of Group risks,
reporting on these areas to
the Group Executive Board
and, as necessary, the
Board for approval
• Implements Group policy
• Monitor financial and
operational performance
of the relevant Principal
Business and other
specific matters delegated
to them by the Group
Executive Board
Group level risks
• Reviews and challenges
risks reported by
subsidiaries
• Champions the ongoing
Group-wide development
of risk management and
the internal controls
framework
• Monitors Internal Audit and
other sources of assurance
on the effectiveness of
internal controls
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 74
Corporate Governance continued
Corporate Governance Structure continued
What the Board did in 2020
The Board has formally adopted a schedule of matters
reserved to it for decision. A full schedule of matters
reserved for the Board’s decision along with the Terms
of Reference of the Board’s principal Committees can be
found on the Company’s website at http://ir.savills.com.
Each year one of the Board’s meetings conducts a
strategy review to identify key strategic issues facing
Savills to be presented to the Board.
The agreed strategy is then used as a basis for developing
the upcoming budget and three year operating plans. The
Board met 10 times during the year to consider the items
noted below.
Resilient and robust decision making
during the pandemic
In order to better assess the impact of the COVID-19
pandemic, to make timely well informed decisions and
to consider how the pandemic might impact the
Group’s business and operations, and to assess our
response to the critical needs of the business, its
people, its clients and the communities in which it
operates, the Board increased the frequency of its
meetings from March for the remainder of the year.
The Board generally met virtually, using audio-video
conferencing, to enable Directors located in different
time zones and locations to participate in meetings,
with individuals from across the Principal Businesses
providing updates and presentations. The agendas for
these meetings included the latest information on the
Group’s operational response to the pandemic, the
impact of government measures across the Group
including lockdowns and closures, and scenario
planning for the potential impact on the Savills business.
A key priority was to ensure that employees were
protected through appropriate COVID-19 secure
working protocols, with a focus on wellbeing and
mental health.
Our learning and understanding from our global business
leaders continued unabated through virtual channels.
In 2020, the Board additionally considered the growth
plans across the Group, and approved material acquisition
and recruitment plans, specifically in relation to the
acquisitions of Macro Project Consultants in the US and
Omega Property Management in Germany, as well as the
selective strengthening of our teams in various markets.
One of the Board’s meetings during the year was
specifically devoted to the review of the Group’s strategy.
The key areas of Board activity during the year are set
out as follows:
Summary of Board Activity in 2020
Leadership and people
• Reviewed the composition and performance of the
Board and its Committees
Developing a successful strategy
• Reviewed the potential impact of Brexit
• Reviewed the performance and growth of the Group’s
Principal Businesses
• Held the annual strategy review through video
conference to consider the Group’s strategy in depth
• Considered and approved the following growth
initiatives consistent with the Group’s strategic plan:
– the further growth of the Group’s Asia Pacific platform
– the continued up-scaling of the Group’s CEME
business, with a particular focus on consultancy and
property management
– the further broadening of the Group’s US platform, in
particular to build on the acquisition of Macro Project
Consultants in 2020 to extend the consultancy
offering; and
– to extend the Savills Investment Management
platform, with a particular focus on Asia
Implementing Governance and ethics and monitoring risk
• Reviewed and confirmed the principal existing and
emerging risks and uncertainties facing the Group which
are described in detail on pages 30 to 38
• Approved increasing the number of Board meetings
during the year in the light of the COVID-19 pandemic
• Reviewed the Group’s risk register and the effectiveness
of the systems of internal control and risk management
• Received updates on the risk and internal control
environments within the Group’s Asia Pacific, US,
European and UK businesses and Savills Investment
Management
• Received updates on regulatory and governance
developments
• Received regular reports in relation to the operational
response to the emergence and impact of the pandemic
• Received regular reports in relation to material
legal matters
• Reviewed and discussed the evaluation of the
performance of the Board, its Committees and individual
Directors and conflicts of interest to ensure that they
continued to be effective in support of Group strategy,
policy and practice
• Considered feedback from ‘Employee Voice’ engagement
initiatives, as refined in response to the pandemic
• Reviewed issues raised through the Group’s Confidential
Reporting (‘Speak Up’) channels
Savills plc | Annual Report and Accounts 2020 75
Ensuring appropriate financial management
Attendance at Board and Committee meetings
• Reviewed the 2021-23 Business Plan and approved
the 2021 Budget
Attendance at all Board and Committee meetings by
Directors is as shown in the table below.
• Reviewed business performance, profit delivery
and cash management performance, and in each
case, assessed performance in these areas against
the Group’s strategy, objectives, business plans
and budgets to ensure that the financial resources
generated by the Group’s businesses were applied to
the creation of additional value, costs were controlled
and that resources could be made available at the
appropriate time to realise business opportunities
• Considered and approved the Going Concern and
Viability Statements
• Reviewed and approved the Company’s 2020
Tax Strategy
• Approved annual and half year results and trading
updates, and accounting policies so as to ensure
that communication with the Group’s Shareholders
is fair, balanced and understandable; and, subject
to Shareholder approval, the appointment and the
remuneration of the External Auditor
Stakeholder engagement
• Received and considered feedback collated by the
Company’s corporate brokers from road-shows,
presentations and meetings between investors and
the Group Chief Executive and/or Group Chief
Financial Officer
• Received updates on workforce engagement during
the year
• Received regular client feedback from the Group
Chief Executive
Board and Committee meetings are structured
to allow open discussion. To enable the Board to
discharge its duties, each Director receives appropriate
and timely information. Board papers are circulated
electronically via a secure portal, giving Directors
sufficient time to consider and digest their contents.
In 2020, when Directors are unable to attend a Board
or Committee meeting, their views on the key items of
business to be considered at that meeting are relayed in
advance to the Chairman of that meeting in order that
these can be presented at the meeting and be considered
in the debate.
Regular attendance at Board meetings by the Heads
of Principal Businesses on matters of significance
ensure that the Board has the opportunity to discuss
business risks and opportunities with leaders from
across the Group. The Chairman, together with the
Group Legal Director & Company Secretary, ensures that
the Directors receive management information, including
financial, operating and strategic reports, in advance
of Board meetings.
At its meetings during the year, the Board discharged
its responsibilities and received updates on the Group’s
financial performance, key management changes,
material new projects, investment proposals, financial
plans, and legal and regulatory updates.
Non-Executive Directors
Nicholas Ferguson1
Stacey Cartwright
Tim Freshwater
Rupert Robson
Florence Tondu-Mélique
Dana Roffman
Executive Directors
Mark Ridley3
Simon Shaw3
Board
meetings
attended
Meetings
eligible to
attend
Audit
Committee
meetings
attended
Meetings
eligible to
attend
Nomination &
Governance
Committee
meetings
attended
Meetings
eligible to
attend
Remuneration
Committee
meetings
attended
Meetings
eligible to
attend
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
–1
5
5
5
5
5
–4
–5
–1
5
5
5
5
5
–4
–5
3
3
3
3
3
3
2
3
3
3
3
3
3
2
–2
4
5
5
5
5
–2
5
5
5
5
5
1. The Chairman attended two Audit Committee meetings by invitation.
2. The Chairman attended five Remuneration Committee meetings by invitation.
3. Members of the Group Executive Board.
4. The Group Chief Executive attended two Audit Committee meetings by invitation.
5. The Group Chief Financial Officer attended five Audit Committee meetings by invitation.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 76
Corporate Governance continued
Corporate Governance Structure continued
Purpose, Culture and Values
Listening to our employees
We have built our brand and reputation on the quality
of our people, relationships, resources and processes.
Savills has a strong and well embedded culture, founded
on an entrepreneurial approach and underpinned
by our values and operational and ethical standards.
Everything that we do is underpinned by strong
governance, a disciplined approach to risk management
and high standards of responsibility, which supports the
sustainable development of our business. Our Code of
Conduct underpins our social, ethical and environmental
commitments and sets out the standards of behaviour
we expect our employees to demonstrate and adhere to.
Our whistleblowing policy supports the culture within
the Group where genuine concerns may be reported and
investigated without reprisal for whistleblowers enabling
employees to raise any matters of concern anonymously.
All disclosures are investigated promptly by the Group
Legal Director & Company Secretary and escalated to the
Board as appropriate, with follow up action being taken
as soon as practicable thereafter. The Board as part of its
overall review of the Group’s system of internal control,
reviews the procedures in place during the year and is
satisfied that they are appropriate to the size and scale
of the Group.
In addition to facilitate the Savills Board’s assessment
and monitoring of culture a number of KPIs have been
adopted:
• Staff turnover, retention and absenteeism rates
• Staff wellbeing
• Training & Development (programme overview
and outputs)
• Recruitment, reward and promotion decisions
(overview)
• Whistleblowing, grievance and ‘speak-up’ data
• Employee surveys, particularly in the context of the
COVID-19 pandemic, including pulse surveys
• Exit interviews
• Promptness of payments to suppliers
Our employees are at the heart of the culture of our
business. In accordance with the Code, the Board has
reviewed the mechanisms that it uses to engage with
its workforce. Last year, the Board considered the three
mechanisms set out in the Code and determined that in
particular reflecting the Group’s geographic spread, that it
would be beneficial for all of the Non-Executive Directors
to engage in the workforce engagement programme, with
each Non-Executive Director to focus on specific regions
reflecting their own domiciles, and should therefore to
be “designated” for workforce engagement purposes,
(rather than nominating a single Non-Executive Director).
The Board believes this enhances each of the Director’s
engagement with, and understanding of, workforce views,
leverages cultural awareness and is more efficient (in that
it does not require a single designated Non-Executive
Director to engage across all of the Group’s diverse
geographic markets).
As part of our commitment to helping all of our people
to understand the Group’s growth strategy and to raise
other questions they have about the Group, the Board
has established communication channels to further
encourage the two way flow of information between the
Group’s businesses and workforce, and in particular to
allow feedback from the Group’s Principal Businesses to
flow to the Board direct. These include:
(a) the promotion of our digital platform which allows
direct employee communication (in local languages)
with Non-Executive Directors (including the
Chairman) in areas of focus (such as strategy, training
& development opportunities; measurement of staff
performance and promotion criteria; diversity; and
flexible working); and
(b) as social distancing rules and travel restrictions allow,
Board members attending staff ‘Town Hall’ / Employee
Briefing sessions by region.
These communication channels will be further developed
in the light of emerging practice.
More detail about our commitment to our people is set
out in the Responsible Business section of this Annual
Report and Accounts in the Strategic Report on pages
4 to 61.
Savills plc | Annual Report and Accounts 2020 77
In accordance with the Company’s Articles of Association,
electronic and paper proxy appointments and voting
instructions must be received not later than 48 hours
before a general meeting.
Details of the resolutions to be proposed at the 2021 AGM
can be found in the Notice of Meeting which accompanies
this Annual Report and Accounts. The Group’s website
includes a specific investor relations section containing all
RNS announcements, share price information and annual
reports available for download. The Company has taken
advantage of the provisions within the Companies Act
2006 which allow communications with Shareholders
to be made electronically where Shareholders have
not requested hard copy documentation. Details of the
information available to Shareholders can be found on
page 216.
Conflicts of Interest
The Companies Act 2006 places a duty on each Director
to avoid a situation in which he or she has or can have a
direct or indirect interest which conflicts or may conflict
with the interests of the Company. A Director will not
be in breach of that duty if the relevant matter has been
authorised by the other Directors in accordance with
the Company’s Articles of Association. Procedures are in
place for the disclosure by Directors of any interest that
conflicts, or possibly may conflict, with the Company’s
interests and for the appropriate authorisation to be
sought if a conflict arises. The Board, or the Nomination
& Governance Committee on its behalf, reviews actual
and situational conflicts of interest at least annually and
as necessary if and when a new potential situational
conflict is identified or a potential conflict situation
materialises. During 2020, the actual and situational
conflicts of interest that were identified by each Director
were reviewed and authorised by the Board, subject to
appropriate conditions in accordance with the guiding
principles. The procedures adopted to deal with conflicts
of interest continue to operate effectively and the Board’s
authorisation powers continue to be exercised properly in
accordance with the Company’s Articles of Association.
Board engagement with stakeholders
In accordance with the Code, the Board recognises the
importance of engagement with all stakeholder groups
and more information on this is set out in the Strategic
Report on pages 4 to 61. The Group Chief Executive and
Group Chief Financial Officer have primary responsibility
for investor relations and lead a regular programme of
meetings and presentations with analysts and investors.
This includes presentations following the publication of
the Company’s full and half year results. This programme
maintains a continuous two-way dialogue between the
Company and Shareholders, and helps to ensure that
the Board is aware of Shareholders’ views on a timely
basis. The full Board is kept informed of any issues
raised at these meetings and the views of Shareholders
on a regular basis to ensure that they understand the
views of Shareholders. The Board also normally receives
feedback twice each year from its corporate brokers
on investors’ and the market’s perceptions of the
Company. The Chairman and Stacey Cartwright as the
Senior Independent Director are also available to meet
Shareholders at all times as required.
The Annual General Meeting (‘AGM’) provides the
Board with an opportunity to communicate with,
and answer questions from, private and institutional
Shareholders. In previous years, the whole Board would
have been available before the meeting, in particular,
for Shareholders to meet new Directors. The Chairman
of each of the Committees would have been available
at the AGM to answer questions. Directors would
have been available before and during the meeting to
answer questions from Shareholders and to meet with
Shareholders following the conclusion of the formal part
of the meeting. However, given current UK Government
guidance and restrictions on social gatherings in light of
COVID-19, it is proposed that the 2021 AGM will be held
as a closed meeting, save for those Shareholders
permitted to attend the meeting to satisfy quorum
requirements. The Board is, however, keen to maintain
engagement with Shareholders and accordingly, the
Directors have made available to Shareholders the ability
to submit questions relevant to the business of the AGM
ahead of the AGM. These questions will then be answered
at the AGM, which Shareholders will be permitted to
access via an internet link.
The level and manner of voting of proxies lodged on
each resolution at the AGM is declared at the meeting
and published on the Company’s website. The notice of
the AGM is sent out at least 20 working days before the
meeting and at least 15 working days’ notice would be
given before other general meetings.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 78
Corporate Governance continued
Division of Responsibilities
Roles on the Board
The roles of Chairman and Group Chief Executive are
distinct and separate and their roles and responsibilities are
clearly established. The Chairman is responsible for:
• leading the Board and its overall effectiveness;
• demonstrating objective judgement;
• promoting a culture of openness and constructive
challenge and debate between all Directors;
• facilitating constructive Board relations and the effective
contribution of all Non-Executive Directors; and
• ensuring Directors receive accurate, clear and
timely information.
The Group Chief Executive has responsibility for all Group
businesses and acts in accordance with the authority
delegated by the Board. There are a number of areas
where the Board has delegated specific responsibility to
management, including responsibility for the operational
management of the Group’s businesses as well as reviewing
strategic issues and risk matters in advance of these being
considered by the Board and/or its Committees.
To help ensure a proper dialogue with all Directors, the
Chairman meets periodically with the Directors individually
and the Non-Executive Directors as a group (and without
the Executive Directors).
The Senior Independent Director, formerly Tim Freshwater
and since 31 December 2020 Stacey Cartwright, acts as
intermediary for other Directors, if needed, and is available
to respond to Shareholder concerns when contact through
the normal channels is inappropriate.
Time commitment and conflicts
The following section sets out the Company’s compliance
with Code Provisions 7 and 15. All potential new Directors
are asked to disclose their other significant commitments.
The Nomination & Governance Committee takes this into
account when considering proposed appointments to
ensure that Directors can discharge their responsibilities
to the Group effectively. This means not only attending
and preparing for formal Board and Committee meetings,
but also making time to understand the business, and to
undertake training. The time commitment is agreed with
each Non-Executive Director on an individual basis. In
addition, all Directors must seek approval before accepting
any significant new commitment. The Board is satisfied
that the Chairman and each of the Non-Executive Directors
committed sufficient time during the year to enable them
to meet their Board responsibilities and fulfil their duties as
Directors of the Company.
For the year ended 31 December 2020 and as at the date
of publication of this Annual Report, the Board is satisfied
that none of the Directors is over-committed and that each
of the Directors allocates sufficient time to his or her role in
order to discharge their responsibilities effectively.
Information provided to the Board
The Group Legal Director & Company Secretary, whose
appointment is a matter reserved for the Board, is
responsible for advising and supporting the Chairman and
the Board on company law and corporate governance
matters and for ensuring that Board procedures are
followed, as well as ensuring that there is a smooth flow of
information to enable effective decision making. The Group
Legal Director & Company Secretary is further responsible
for ensuring that the Directors receive regular updates on
developments in legal and regulatory matters.
All the Directors have access to the advice and services of
the Group Legal Director & Company Secretary and through
him have access, if required, to independent professional
advice in respect of their duties at the Company’s expense.
Savills plc | Annual Report and Accounts 2020 79
Composition, Succession and Evaluation
Nomination & Governance Committee Report
Main responsibilities
• Responsible for size, structure and composition of the Board
• Reviewing and progressing appointments to the Board
• Responsible for succession planning to ensure that the Board is refreshed progressively such that the balance
of skills and experience available to the Board remains appropriate to the needs of the business
• Makes recommendations to the Board on the membership of the principal Committees of the Board
• Monitoring of the Company’s compliance with applicable codes and other requirements of corporate governance
The Nomination & Governance Committee (‘Committee’) has a key role to play in ensuring that the Board and its
principal Committees have the right mix of skills, experience and diversity to deliver Group strategy and to create
value. The Committee keeps under review and evaluates the composition of the Board and its Committees to maintain
the appropriate balance of skills, knowledge and independence to be able to function effectively.
Membership and meetings
Committee Members
Nicholas Ferguson (Chair*)
Stacey Cartwright
Tim Freshwater
Rupert Robson (retires 12 May 2021)
Florence Tondu-Mélique
Dana Roffman
Philip Lee (appointed 1 January 2021)
Richard Orders (appointed 1 January 2021)
Mark Ridley (Executive Director)
Key Objectives
The primary objectives of the Committee are:
• to review the size and composition of the Board and its key Committees and to plan for
the Board’s progressive refreshing, with regard to balance and structure
• to monitor the Company’s compliance with applicable codes and other requirements
of corporate governance including the Code
* save in circumstances where the Chairman’s succession is considered.
The Committee met three times during 2020. Individual attendance by Directors at this meeting is shown in the table
on page 75. Members of the Committee also normally attend the Company’s AGM at which there is an opportunity
to meet with Shareholders. Any other Director, the Group Legal Director & Company Secretary or an external advisor
may be invited by the Committee to attend the meetings from time to time, as appropriate.
Changes to the Board and Committees
During the year to 31 December 2020 and since the year end, there were the following changes to the Board:
• Philip Lee and Richard Orders were appointed Non-Executive Directors; Philip was appointed as a Member of the
Audit Committee and the Committee on 1 January 2021; Richard was appointed as a Member of the Remuneration
Committee and the Committee on 1 January 2021.
Key Responsibilities
Principal Activity during 2020
• Responsible for size, structure and composition of the Board
• Reviewing and progressing appointments to the Board
• Responsible for succession planning to ensure that the Board
is refreshed progressively such that the balance of skills and
experience available to the Board remains appropriate to the
needs of the business
• Responsible for overseeing the development of a diverse
The Committee has standing items that it considers regularly under its
Terms of Reference; for example, the Committee considered and approved
Directors’ potential conflicts of interest and reviewed its own Terms of
Reference (which are reviewed at least annually or as required, eg to reflect
changes to the Code or as a result of changes in regulations or best practice).
Specifically during the year, the Committee:
• Considered Board succession planning including the tenure, mix and
pipeline for succession to senior management
• Makes recommendations to the Board on the membership
diversity of skills and experience of the existing Board Members in the
context of the Group’s strategy
of the principal Committees of the Board
• Considered the proposed reappointment of the Non-Executive
• To keep under review the Company’s compliance with
applicable Codes and other requirements of corporate
governance
Directors, before making a recommendation to the Board that each
Non-Executive Director be proposed to Shareholders for re-election
at the 2021 AGM
More detailed information on the role and responsibilities of
the Committee can be found in the Committee’s Terms of
Reference which can be accessed on the Company’s website
at http://ir.savills.com.
• Considered and authorised the actual and potential conflicts of interests
of Directors
• Led the process which resulted in the appointment of Philip Lee and
Richard Orders to the Board
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 80
Corporate Governance continued
Composition, Succession and Evaluation continued
Assessment of the Independence of Non-Executive Directors
The Chairman is committed to ensuring the Board comprises a majority of independent Non-Executive Directors who
objectively challenge management, balanced against the need to ensure continuity on the Board. On an annual basis, the
Board reviews the independence of its Non-Executive Directors, particularly those with long service. The Non-Executive
Directors are responsible for bringing independent and objective judgement and scrutiny to matters before the Board
and its Committees. The Board considers that all of the Non-Executive Directors bring considerable expertise, strong
independent oversight and are Independent Non-Executive Directors, being independent of management and having
no business or other relationship which could interfere materially with the exercise of their judgement.
Board composition
In line with the requirements of the Code, the Board comprises a majority of independent Non-Executive Directors.
We consider the independence of our Non-Executive Directors annually, having regard to the independence criteria
set out in the Code. As part of this process, the Board keeps under review the length of tenure of all Directors, which
can affect independence. The Committee has sought to maintain a balance of skills and experience on the Board and
its Committees. We believe the Board’s composition gives us the necessary balance of diversity, skills experience,
independence and knowledge to ensure we continue to run the business effectively and deliver sustainable growth.
Board Composition as at 31 December 2020
Balance of Non-Executive Directors – Executive Directors
Gender Balance
2
1
5
3
Executive Directors
Non-Executive Chairman
Non-Executive Directors
5
Male
Female
Tenure of Non-Executive Directors
including Chair
2
1
3
0-3
3-5
5-9
Board appointments
The Board recognises the benefit of progressively refreshing its membership and therefore commenced the search
for additional independent Non-Executive Directors in 2020. The Committee led the process which resulted in the
appointments of Philip Lee and Richard Orders to the Board. In this search the Board was conscious of its objective of
further strengthening diversity at Board level. The Committee assessed the balance of skills, knowledge, independence,
experience and diversity of the Board and, in view of this assessment, a description of the role and competencies needed
was agreed, with a view to appointing the best qualified individuals for the role. Odgers Berndtson was selected to lead
the search due to its specialist knowledge of recruiting at Board level. Odgers Berndtson has no other connection with
the Group and is a signatory to the Voluntary Code of Conduct of Executive Search Firms.
Odgers Berndtson provided a long list of potential candidates and first stage interviews were led by the Chair of the
Committee. In making the recommendation to the Board on the proposed appointment, the Nomination & Governance
Committee specifically considered the expected time commitment of the proposed Non-Executive Director and the
other commitments that they already had. A final shortlist of candidates was selected for final stage interviews with
the Committee members, the Group Chief Executive Officer and the Group Chief Financial Officer. The Committee
was unanimous in their recommendation to the Board that Philip Lee and Richard Orders be appointed as additional
independent Non-Executive Directors, and was delighted to welcome Philip and Richard to the Board on 1 January 2021.
Details of the different stages of the appointment process that the Committee followed in relation to the appointment
process of Philip and Richard are set out below:
Step 1
Step 2
Step 3
Engage with Odgers
Berndtson and provide
them with a search
specification
Shortlisting of
candidates by
the Committee
Interview process with Committee Members,
the Group Chief Executive, and the Group
Chief Financial Officer
Step 4
Step 5
Recommendation
to the Board
of the chosen
candidates
Appointment
terms drafted
and agreed
Philip Lee’s biography
See page 67
Richard Orders’s biography
See page 67
Savills plc | Annual Report and Accounts 2020 81
Succession planning
We recognise the importance of planning for the future and of having succession plans in place which introduce
new skills and perspectives to the Board and which complement the experience of the existing Board members. The
Committee will continue to monitor the needs of the Board and its Committees in the context of the delivery of the
Group’s strategy, with the aim of ensuring that the Group’s succession planning policy evolves such that there is an
identifiable supply of talent and experience available to the Board and its Committees from which to select successors.
No Director is involved in decisions regarding his or her own succession. The Committee also monitors the
development of the executive team below the Board to ensure that there is a diverse supply of senior executives and
potential future Board members with appropriate skills and experience. The biographies of the Board members appear
on pages 64 to 67.
Diversity & Inclusion
The Committee is responsible for overseeing the development of a diverse pipeline for succession to senior
management. We continue to make good progress in terms of diversity and inclusion initiatives. The appointments of
Stacey Cartwright, Florence Tondu-Mélique and Dana Roffman to the Board mean that the percentage of women on
the Board increased to 37.5%, exceeding the Hampton-Alexander Review target of 33% female Board representation
be achieved by FTSE 350 companies by 2020. We note the recommendations of the Parker Review Committee
published in October 2017 relating to ethnic diversity on Boards. With the appointment of Philip Lee on 1 January 2021,
the Board now includes one BAME member, meeting the minimum recommendation of the Parker Review Committee
in relation to diversity of board membership.
Diversity is more than just gender based and the Board will continue to focus on this important issue in the wider
context. All appointments to the Board are made on merit and within this context, the Board continues to view
diversity in the widest sense, with a view to appointing the best-placed individual for the role. Appointing the best
people to the Board is critical to the success of the Company and our focus remains on attracting the right talent and
skills irrespective of gender or diversity.
Diversity across the Group remains a key area of focus. For the purposes of complying with the requirements of the
Code Provision 23, Senior Management is defined as the Group Executive Board (‘GEB’). As at 31 December 2020 the
GEB members and their direct reports totalled 109 of which 33 were female, 76 were male. Accordingly, our Group
Women in Leadership percentage (determined in accordance with the Hampton-Alexander Review criteria) was 30.3%
as at 31 October 2020. Our previous year Group Women in Leadership percentage as reported by the Hampton-
Alexander Review was 22.5% (as at 30 June 2019).
More information on our commitment to diversity is set out on pages 50 and 51 of the Strategic Report.
Review of Board and Committee effectiveness and performance
The Board undertakes a rigorous and formal evaluation of its performance and that of its Committees and its Directors
annually. In accordance with the Code requirements, the Board believes that an external independent evaluation of
Board effectiveness and performance and that of its principal Committees at least every three years brings further
insight into its performance. As well as looking to continually improve the Board’s processes, the evaluation process is
used to reflect on areas that the Board would like to see more focus on.
In line with the requirements of the Code we continue to test the Board’s effectiveness and performance annually
through a formal evaluation.
This is facilitated by an independent external consultant at least once every three years. Alice Perkins, of AP Consulting
externally facilitated the review in 2019, so this year’s evaluation was conducted in-house, led by the Chairman and
facilitated by the Group Legal Director & Company Secretary. The process, key conclusions and areas of focus for 2021
are set out on page 82.
The evaluation carried out this year involved every Board member completing a questionnaire which was then
used as the basis of a confidential interview. The matters covered by the evaluation included Board structure, Board
effectiveness, working practices, relationships with Shareholders and interaction between Board members and
management.
The output of the evaluation was presented in a report to the Board in March 2021 and the Directors discussed the
points raised by the review.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 82
Corporate Governance continued
Composition, Succession and Evaluation continued
The overall conclusion from the 2020 Board Review was that the Board and its Committees continue to operate to a high
standard and work well and effectively. All of the Board members are very committed to the Company’s success and
were keen to use this review as an opportunity to identify ways to improve performance further. Reflecting the output
from the 2020 Board Review a number of further enhancements to the Board’s 2021 Work Plan were agreed, including:
• to ensure that the Group continues to maintain the highest standards of client service, a key client or clients to be
invited to present to the Board to provide client insight into the strengths of and opportunities to further improve
the service offering;
• to ensure that the Board maintains a good understanding of investor views, the Company’s brokers to attend a
Board meeting at least once a year to report to the Board on shareholder views; and
in relation to the annual Strategy Day, the strategy review to be spread over 1.5 days to allow greater time for
consideration of the proposals, and the agenda to include a presentation from an appropriate external expert on
emerging trends in real estate, particularly in relation to proptech developments.
As a result of the evaluation, the Board considers the performance of each Director to be effective and concluded that
both the Board and its Committees continue to provide effective leadership and exert the required levels of governance
and control. Shareholders would therefore be recommended to re-elect Board Members at the AGM in May.
The Chairman is regarded as fulfilling his role very successfully and is much respected. He chairs meetings well, takes
the trouble to encourage all participants to take a full part in discussions, involves the Non-Executive Directors in
planning the future work of the Board and has embraced engaging with employees to good effect.
There have been significant changes to the Board over the last two years which will continue with the retirement
of two Non-Executive Directors in 2021 and the appointment of two new Non-Executive Directors on 1 January
2021. These changes have markedly increased the diversity of the Board’s membership in terms of gender, ethnic
representation, age, geographical coverage and sector experience. While the Board is still in transition, these changes
have been welcomed and the Board is benefiting from them. It will keep succession under review taking account of the
changing environment in which it is working.
The Committee is working well and is thought to be well-chaired and supported.
Support to the Board is professional. The minutes and papers are clear and the Secretariat facilitates contact between
the Non-Executive Directors and the Company very positively.
Following this review, we are satisfied that the Board continues to perform effectively and in particular are confident
that the Board has the right balance of skills, experience and diversity of personality to continue to encourage open,
transparent debate and challenge.
Board Induction, training and development
To ensure a full understanding of Savills and its businesses, following their appointment to the Board, each Director
undergoes a comprehensive and tailored induction programme which introduces the Director to the Group’s
businesses, its operations, strategic plans and key risks. New Directors are also provided with information on relevant
share dealing policies, Directors’ duties, Company policies and governance. The induction also includes one to one
briefings from the Heads of the Principal Businesses and an introduction to each Group business’s development
strategy.
Governance
The Committee reviewed the Company’s compliance with the Code and was satisfied that the Company complied with
the Code. The Committee will continue to receive updates on corporate governance developments and will consider
the impact of those developments on the Company.
Nicholas Ferguson CBE
Chairman of the Nomination & Governance Committee
10 March 2021
Savills plc | Annual Report and Accounts 2020 83
Audit, Risk and Internal Control
Review of the effectiveness of the Risk Management and Internal control systems
The principal existing and emerging risks and uncertainties faced by the Group and the associated mitigating actions for
these are set out on pages 30 to 38.
The Board, assisted by the Audit Committee, is responsible for reviewing the operation and effectiveness of the Group’s
internal controls. The internal control system is designed to manage rather than eliminate the risk of failure to achieve
business objectives and can provide only reasonable and not absolute assurance against material misstatement or loss.
The Board is also responsible for ensuring that appropriate systems are in place to enable it to identify, assess and manage
key risks. This responsibility includes the determination of the nature and extent of the principal risks the Board is willing
to take to achieve its strategic objectives and for ensuring that an appropriate culture has been embedded throughout the
organisation. The Board’s attitude and appetite to risk is communicated to the Group’s businesses through the strategy
planning processes.
The Board is supported by the Audit Committee in discharging its oversight duties with regard to internal control and
risk management. During the year, the Audit Committee on behalf of the Board, reviewed the effectiveness of the risk
management systems and internal control systems, including financial, operational and compliance controls. The Board did
not identify any significant failings or weaknesses in the year. Taking into account the principal existing and emerging risks
and uncertainties set out on pages 30 to 38, the ongoing work of the Audit Committee in monitoring the risk management
and internal control systems on behalf of the Board, the Board remains satisfied that the review of internal controls did not
reveal any significant weaknesses and they continue to operate effectively.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 84
Audit Committee Report
“ As Chair of the Audit Committee (the
‘Committee’), I am pleased to present the
Audit Committee’s report for the financial
year ended 31 December 2020.”
Stacey Cartwright,
Chair of the Audit Committee
The aim of this report is to explain the work undertaken by
the Audit Committee (the ‘Committee’) during the year and
how it has met the disclosure requirements as set out in the
Code. The key matters considered in the year are set out on
pages 87 and 88.
This report provides an overview of the significant issues
that the Audit Committee assessed and details the
Committee’s major considerations and activities during
the 2020 financial year in ensuring that the Company’s
governance processes remain appropriate, robust, of a
high standard and are rigorously applied.
The Committee has a key role in ensuring the integrity of
the Group’s Financial Statements, internal controls and
the effectiveness of its risk management processes. The
Committee also has a role in representing the interests
of Shareholders by monitoring the activities and conduct
of management and the External and Internal Auditors.
In 2020, the Committee focused on the effectiveness of
the Group’s internal controls and reviewed the Group’s
principal risks and uncertainties, to ensure the alignment of
these with the Company’s strategic objectives. It monitored
the effectiveness of the control environment through
the review of reports from Internal Audit, management
and the External Auditor and ensured the quality of the
Company’s financial reporting by reviewing the 2020
Half Year Financial Statements and this year’s Annual
Report and Accounts. The Committee also monitored the
handover process between the current External Auditor
PricewaterhouseCoopers LLP (‘PwC’) and the incoming
External Auditor Ernst & Young LLP (‘Ernst & Young’) whose
appointment will be proposed for approval by Shareholders
at the upcoming 2021 AGM.
The Committee also considered the processes supporting
the assessment of the Group’s longer-term solvency and
liquidity in support of the Viability Statement, particularly
given the potential impact of COVID-19. Looking ahead,
the Committee will continue to monitor changes in
regulation and continue to focus on the audit, assurance
and risk processes within the Principal Businesses. The
Committee considered its compliance with the Code and
the FRC Guidance on Audit Committees. The Committee
believes that it has addressed both the spirit and the
requirements of both.
The members of the Committee need to have the
right balance of skills and experience to deliver its
responsibilities. In accordance with our three year Board
and Board Committee performance evaluation cycle,
during the year, the Board carried out an internally
facilitated evaluation of its performance and that of its
Committees. The Board is satisfied that the Committee
members possess relevant experience and appropriate
levels of independence and that its members have the
depth of financial and commercial experience across
various industries which is essential for the effective
working of the Committee. In order to ensure that the
Committee remains effective, every three years the
Board appoints an external organisation to perform an
independent review of the Committee to evaluate its
performance. The last independent review was performed
in March 2019 and concluded that the Board members
considered the Committee to be thorough and fully
effective in meeting its objectives. In 2020 an internal
review of the Board and Committee effectiveness was
undertaken. The review concluded that the Committee
continued to function well, that it was well chaired and that
it had the appropriate access to senior management, the
External and Internal Auditors and it had the necessary
company secretarial support.
I would like to welcome Philip Lee, who joined the
Committee on his appointment to the Board in January
2021 and has extensive relevant experience in similar
organisations gained over many years. I would also like to
thank Tim Freshwater and Dana Roffman, who retired from
the Committee with effect from 31 December 2020, for their
contributions to the Committee since their appointments
in respectively January 2012 and November 2019.
At the request of the Board, the Committee has
reviewed the content of this year’s Annual Report
and Accounts and has advised the Board that, in its
opinion, the Report taken as a whole is fair, balanced
and understandable and it provides the information
necessary for Shareholders to assess the Group’s position,
performance, business model and strategy. The Committee
noted the unqualified opinion from the External Auditor
on the 2020 Annual Report.
Stacey Cartwright
Chair of the Audit Committee
Savills plc | Annual Report and Accounts 2020 85
Main responsibilities
• Responsible for assisting the Board in fulfilling its
financial and risk responsibilities, and in particular
for ensuring that the Financial Statements are fair,
balanced and understandable
• Oversees external financial reporting, internal
control, risk management and reviews the work of
the Internal and External Auditors
• Advises the Board on the appointment of the
External Auditor
Role of the Committee
The Committee is authorised to investigate any
matter within its Terms of Reference (a copy of
which can be found in the governance section of the
Company’s website at http://ir.savills.com (which are
reviewed at least annually or as required).
The Committee has access to the services of the
Group Legal Director & Company Secretary and,
where necessary, the authority to obtain external
legal or other independent professional advice to
fulfil its duties.
The Committee’s key role is to assist the Board
in discharging its duties and responsibilities for
financial reporting, internal control, the effectiveness
of the risk management process and in making
recommendations to the Board on the appointment
of the External auditor.
The Committee is responsible for the scope
and results of the External Audit work, its cost
effectiveness and for ensuring the independence and
objectivity of the External Auditor.
Composition
The Committee is a fundamental element of the Company’s
governance framework. The Committee is chaired by Stacey
Cartwright. Five Independent Non-Executive Directors,
Stacey Cartwright, Tim Freshwater, Rupert Robson,
Florence Tondu-Mélique and Dana Roffman were members
of the Committee during the year. Philip Lee joined the
Committee on 1 January 2021. Tim Freshwater and Dana
Roffman retired from the Committee with effect from
31 December 2020.
Members of the Committee are appointed by the
Board following recommendations by the Nomination
& Governance Committee and membership is reviewed
annually by the Nomination & Governance Committee as
part of the annual Board performance evaluation.
As at 31 December 2020 and up to the date of this report,
the Committee comprised entirely independent Non-
Executive Directors. The members of the Audit Committee
have been chosen to provide the wide range of financial and
commercial experience needed to undertake its duties and
each member of the Audit Committee brings an appropriate
balance of financial and commercial experience, combined
with a sound understanding of the Company’s business, and
is therefore considered by the Board to be competent in
the Company’s sector. The expertise and experience of the
members of the Audit Committee are summarised on pages
66 and 67.
The Board considers that each member of the Committee
is independent within the definition set out in the Code
and is capable of assessing the work of management and
the assurances provided by the Internal and External Audit
functions. The Board also considers that Stacey Cartwright,
as Chair of the Committee, possesses significant, recent
and relevant financial experience and that all Committee
members have relevant financial experience as required by
the Code.
All members of the Committee receive an appropriate
induction, which includes an overview of the business, its
financial dynamics and risks, and meetings with senior
management. Committee members are expected to have an
understanding of the principles of, and recent developments
in, financial reporting, including the applicable accounting
standards and statements of recommended practice, key
aspects of the Company’s policies, financing, internal control
mechanisms, and matters that require the use of judgement
in the presentation of accounts and key figures as well as
the role of Internal Audit and the External Auditor.
Engagement
The Chair of the Committee meets informally and is in
regular contact with key individuals involved with the
Company’s governance, including the Group Chief Financial
Officer, Group Director of Risk & Assurance, the Head of
Internal Audit of Savills Investment Management (‘SIM’) and
the Group Legal Director & Company Secretary and prior to
each Committee meeting, meets with each of them and the
External Auditor individually.
In addition to its members, a standing invitation has
been extended by the Committee to the Non-Executive
Chairman and Group Chief Executive Officer to attend the
Committee’s meetings. The Group Chief Financial Officer,
Group Financial Controller, Group Director of Risk
& Assurance, the Head of Internal Audit of SIM, Group Legal
Director & Company Secretary and the External Auditor
attend each of the Committee’s meetings. Other senior
executives from across the Group are invited to present
reports to assist the Committee in discharging its duties.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 86
Audit Committee Report continued
At least once a year, the Committee meets with the External Auditor and the Group Director of Risk & Assurance without
management being present.
The Chair of the Committee also normally attends the AGM to respond to Shareholder questions on its activities.
The remuneration of the members of the Committee and the policy with regard to the remuneration of the Non-Executive
Directors are set out on pages 92 to 116.
The Committee met five times during the year and reports to the Board after each Committee meeting. Attendance
at meetings during 2020 is shown in the table below:
Committee member
Stacey Cartwright
Tim Freshwater
Rupert Robson
Florence Tondu-Mélique
Dana Roffman
Member since
October 2018
January 2012
June 2015
October 2018
November 2019
Meetings
attended
Meetings
eligible to
attend
5
5
5
5
4
5
5
5
5
5
Subsequent to the year-end, Dana Roffman and Tim Freshwater retired from the Committee and Philip Lee was
appointed as a Committee Member.
Activities of the Committee during the year
To enable the Committee to carry out its duties and responsibilities effectively it works to a structured programme
of activities and meetings aligned with the annual financial reporting cycle. This includes items that the Committee
considers regularly in accordance with its Terms of Reference. In addition to its core work, the Committee undertakes
additional work in response to the evolving audit and external reporting landscape.
The Committee relies on information and support from management across the business, receiving reports and
presentations from business management, the Heads of Key Group functions, Internal Audit and the External Auditor,
which it challenges as appropriate. Following each meeting, the Chair of the Committee reports on the main discussion
points and any actions arising from these to the Board.
COVID-19
The COVID-19 crisis has had a range of implications on risk
management and corporate reporting in the period. The
key considerations are summarised below.
Principal existing and emerging risks
and uncertainties
The impact of COVID-19 on the Group’s principal and
emerging risks and uncertainties has been reviewed in
depth together with related mitigations. The principal
existing and emerging risks and uncertainties are
summarised on pages 30 to 38.
Corporate governance
External Audit: In response to governmental advice
and restrictions regarding social distancing and travel,
the Group’s employees involved in the preparation of
ongoing management information, financial reporting
and supporting the external audit worked remotely, as
did the PwC’s audit teams. This required a different way
of working during the year-end financial close process.
Remote user access to our financial systems for these
employees, software collaboration tools for the collation
of audit evidence and regular status meetings have
proved invaluable during the preparation of the financial
results and execution of the external audit.
Internal controls systems
We have reviewed our financial controls and have
concluded that except for a limited number of changes
required as a result of remote working, the ongoing
operation of our financial controls is substantially
unaffected by COVID-19 restrictions. This is a function
of the tools, processes and controls that have enabled
effective remote access working for finance teams. We
also performed a re-assessment of the Internal Audit plan
for FY21 to ensure priorities were re-aligned with areas of
higher risk in view of the current operating environment.
Financial reporting
We considered the significant financial reporting
judgements as set out on page 88.
Long-term Viability Statement
The Committee provides advice to the Board on the
form and basis of conclusions underlying the Viability
Statement as set out on page 39 and the going concern
assessment. In response to COVID-19, the Committee
challenged management on its financial risk assessment
as part of its consideration of the long-term Viability
Statement and the forecasts over the going concern
period. Certain elements of this exercise supplemented
the normal annual process and assessment of the Group’s
prospects made by management.
Savills plc | Annual Report and Accounts 2020 87
Responsibilities
How the Committee discharged its responsibilities
Mar
June
Aug
Oct
Dec
Financial
Reporting
Reviewed and discussed the key accounting considerations and judgements
reflected in the Group’s results for the half year
Reviewed and discussed the key accounting considerations and judgements
reflected in the Group’s results
Reviewed the assessment supporting the going concern basis of accounting
Reviewed the Viability Statement and considered the processes supporting
the assessment of the longer-term solvency and liquidity
External Audit
Agreed the External Audit strategy and scope
Considered and, where appropriate, approved the instruction of the Group’s
External Auditor’s provision of non-audit services
Reviewed and considered the External Auditor’s Report, including the External
Auditor’s observations on the Group’s internal control environment
Discussed the External Auditor performance
Met with the External Auditor without management present to discuss their
remit and any concerns
Discussed and agreed the External Auditor remuneration in respect of
audit services provided
Assessed the External Auditor’s independence
Internal Audit
Considered and approved the remit of the Internal Audit function and the
Internal Audit plan
Internal Controls
and Risk
Management
Systems
Received and considered reports from the Group’s Internal Audit team covering
various aspects of the Group’s operations, controls and processes and monitored
the progress made by management in addressing recommendations arising out
of these reports
Monitored and reviewed the effectiveness of the Group’s Internal Audit function
in the context of the Group’s overall risk management arrangements
Met with the Group Director of Risk & Assurance privately to discuss his remit
and any concerns
Reviewed the effectiveness of the Group’s risk management system and internal
controls in place to manage the Group’s material existing and emerging risks
Reviewed and considered the Group’s risk register
Reviewed risk management arrangements for the Group’s regional businesses
by receiving presentations from the Chief Operating/Financial Officers of the
Principal Businesses
Reviewed the Committee’s own performance, composition and Terms of
Reference, and recommended any changes the Committee considers necessary
for Board approval
Reviewed the reports provided by the Group’s Legal Director & Company
Secretary on significant legal matters
During the year, in addition to its established review processes, the Committee considered and reviewed a number of
other areas. These included updates on the risk and internal control environments within the Group’s UK, US, Asia Pacific,
Investment Management and EMEA businesses. In addition, the Committee examined the IT systems strategy including the
Group’s global approach to cyber security. The Committee specifically considered the processes and assessment of the
Group’s prospects and viability made by management to support the Viability Statement which can be found at page 39.
The Committee’s review included consideration of the time period adopted, the processes supporting the assessment of
the Group’s longer-term solvency and liquidity which support the Viability Statement disclosure.
The Committee considered and provided input into the determination of which of the Group’s principal risks might have an
impact on the Group’s longer-term solvency and liquidity. It also reviewed the results of management’s scenario modelling,
including severe downside modelling, and the stress testing of those financial models supporting the viability analysis and
challenged management as to the appropriateness of the assumptions made.
Following discussions with management and the External Auditor, the Committee approved the disclosures of these
accounting policies and practices which are set out in Note 2 to the Financial Statements on pages 138 to 149.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 88
Audit Committee Report continued
Significant financial reporting estimates and judgements
As part of its monitoring of the integrity of the Financial Statements, the Committee considers the appropriateness
of the accounting policies proposed for adoption and whether management has made appropriate estimates and
judgements. To support its decision-making, the Committee seeks support from the External Auditor in these areas.
This section outlines the main areas of judgement that have been considered by the Committee and ensure that
appropriate rigour has been applied. The key reporting estimates and judgements considered by the Committee and
discussed with the External Auditor during the year were:
Matter considered
Action
Risk of fraud in revenue recognition
The Committee considered the presumed risk of fraud as defined by the International
Accounting Standards.
Recoverability of trade receivables
The Committee discussed and actively challenged management’s conclusions in respect of revenue
recognition policies, satisfying itself that the approach applied to determine revenue recognised in
FY20 was appropriate, consistent across the Group and in line with the Group’s accounting policies.
The Committee also received and discussed the External Auditor reports setting out its work,
testing and conclusions in this area. The Committee, having actively challenged and considered
both management’s judgements and the External Auditor’s conclusions, agreed that there were no
material issues in this area and that the approach taken was appropriate.
The Committee considered and challenged, with the support of the External Auditor, the judgements
regarding the recoverability of trade receivables made, including with respect to the expected credit
losses across the Group. In particular it considered how management had reflected the impact of
COVID-19 into its provisioning estimates. The Committee considered the results of the work of the
External Auditor in this area. Following its review, the Committee was satisfied that the judgements
taken by management were reasonable and supported by appropriate evidence in relation to the
specific receivables.
Goodwill impairment assessment
The Committee considered management’s approach in relation to the carrying value of the
Group’s businesses, including goodwill, in particular in relation to North America and the
Middle East.
The Committee reviewed and considered the detailed analysis of the key inputs to forecast
future cash flows and the process by which they were drawn up. The Committee considered
the appropriateness of the assumptions used and reviewed the impact of sensitivity analysis.
The Committee also considered if there were any reasonably possible changes in assumptions
that would result in a material impairment and therefore require further disclosure in the
Financial Statements.
The Committee also considered a report from the External Auditor setting out its analysis and
conclusions in this area.
The Committee was satisfied with the assumptions and judgements applied by management.
The Committee received regular updates on new and existing claims being made against the Group
and the extent to which these had been provided for. The Committee focused its review on the
provisions held in relation to significant legal matters and assessed the appropriateness of those
provisions as at 31 December 2020.
As part of this review the Committee took into account the Group’s insurance cover and the advice
received from external legal counsel to ensure that the appropriate provisions had been made.
The Committee also discussed the matter with the External Auditor and determined that
management had made reasonable judgements in their assessment process for determining the
level of provisions held.
The Committee considered the appropriateness of management disclosures in the Financial
Statements in respect of the impact of the current environment and the increased uncertainty on
certain accounting estimates and considered these to be appropriate.
Provisions for litigation
Impact of COVID-19
Savills plc | Annual Report and Accounts 2020 89
External Audit
The Committee has primary responsibility for
overseeing the relationship with the External Auditor,
including assessing the External Auditor’s performance,
independence and effectiveness, recommending the
appointment, re-appointment or removal of the External
Auditor, and negotiating and agreeing the External Audit
fees. The Committee holds private meetings with the
External Auditor at the March and August Committee
meetings to provide additional opportunity for open
dialogue and feedback to/from the Committee and the
External Auditor without management being present.
The Chair of the Committee also meets with the external
lead audit partner outside the formal Committee process
throughout the year.
The Committee monitored the performance of the
External Auditor during the year and carried out a review
of the effectiveness of the External Audit process and
the appropriateness of its fees. The review covered a
broad range of matters including amongst other matters,
the quality of staff, its expertise, resources and the
independence of the audit. The Committee considered
the External Audit plan for the year and assessed how the
External Auditor had performed including consideration
of the robustness of the External Auditor’s challenge and
findings on areas which required judgement, the strength
and depth of the lead partners and feedback from the
Group’s management.
The Committee formally concluded the assessment of
the performance of the External Auditor at the December
Committee meeting. There were no significant findings
arising from the evaluation this year and the Committee
concluded that both the audit and the audit process
were effective.
An important aspect of managing the External Auditor
relationship, and of the annual effectiveness review, is
ensuring that there are adequate safeguards to protect
auditor objectivity and independence. In conducting its
annual assessment, the Committee reviews the External
Auditor’s own policies and procedures for safeguarding
its objectivity and independence. As one of the ways
in which it seeks to protect the independence and
objectivity of the External Auditor, the Committee has
a policy governing the engagement of the External
Auditor to provide non-audit services and its assessment
of PwC’s independence is underpinned by this policy.
In accordance with the Group’s policy in place to
31 December 2020, the following non-audit services
were not provided by the External Auditor:
• Bookkeeping or other services related to the
accounting records or Financial Statements
• Taxation services (except for de minimis amounts,
outside of Europe and outside the scope of the
Group audit)
• Financial information systems design and
implementation
• Internal Audit outsourcing services
• Management functions or human resources advice
• Advising on senior executive (including Executive
Director) remuneration
Audit and non-audit fees
To further safeguard the independence of the Company’s
External Auditor and the integrity of the audit process,
recruitment of senior employees from the External
Auditor is not allowed for an appropriate period after
they cease to provide services to the Company.
During the year, PwC was paid £2.5m for audit services
and £0.1m for non-audit services, principally for audit-
related assurance services relating to the interim review.
Details of the fees paid to the External Auditor can be
found in Note 8.2 to the Financial Statements on page
161. During the financial year ended 31 December 2020
contracts for non-audit services in excess of £0.1m
require Committee approval and the Chair of the Audit
Committee is notified of new instructions for the delivery
of non-audit services below this level.
The Committee was satisfied that in view of their
knowledge and experience of the Company, that
when PwC was used, it was best placed to provide
such non-audit services and that their objectivity and
independence had not been impaired by reason of this
further work. In line with the Company’s policy for the
financial year ended 31 December 2020 on the provision
of non-audit work, the Committee reviewed the provision
of non-audit work provided by the External Auditor on a
case-by-case basis. The Committee was satisfied that the
overall levels of audit related and non-audit fees were not
material relative to the income of the External Auditor
firm as a whole.
The Directors confirm that, insofar as they are each
aware, there is no relevant audit information of which
PwC is unaware and each Director has taken the steps
that ought to have been taken as a Director to be aware
of any relevant audit information and to establish that
PwC is aware of that information.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 90
Audit Committee Report continued
Audit Tender
Following a formal tender process in the previous
financial year and the Committee’s recommendation to
the Board, the Board approved the appointment of Ernst
& Young as the External Auditor (subject to Shareholder
approval) for financial years commencing on or after
1 January 2021 , which will be proposed for Shareholder
approval at the 2021 AGM. Going forward, the Committee
anticipates that the audit will be put out to tender at
least every 10 years.
It was a key objective of the Committee to ensure that
Ernst & Young become familiar with all aspects of the
Group that were relevant to the External Audit process.
EY have been “shadowing” PwC during the 31 December
2020 year-end audit process. This included attendance to
observe at Group Audit Committee meetings.
During the year, the Company confirms that it has
complied with the provisions of The Statutory Audit
Services for Large Companies Market Investigation
(Mandatory Use of Competitive Tender Processes and
Audit Committee Responsibilities) Order 2014.
Financial Reporting
The Committee’s primary responsibility in relation to the
Group’s financial reporting is to review, with management
and the External Auditor, the appropriateness of the half-
year and annual Financial Statements.
The Committee focuses on:
• the quality and acceptability of accounting policies
and practices;
• material areas in which significant judgements have
been applied or where significant issues have been
discussed with the External Auditor;
• an assessment of whether the Annual Report, taken as
a whole, is fair, balanced and understandable;
• the clarity of the disclosures and compliance with
financial reporting standards and relevant financial and
governance reporting requirements;
• providing advice to the Board on the form and basis
underlying the long-term Viability Statement; and
• any correspondence from regulators in relation to our
financial reporting.
Fair, balanced and understandable
The Committee assessed whether the Annual Report,
taken as a whole, is fair, balanced and understandable
and provides the information necessary for Shareholders
to assess the Company’s position and performance,
business model and strategy. The Committee reviewed
the processes and controls that underpin its preparation.
This included the financial reporting responsibilities of the
Directors under Section 172 of the Companies Act 2006
to promote the success of the Company for the benefit
of its members as a whole as well as considering the
interests of other stakeholders which will have an impact
on the Company’s long-term success of the entity.
Regulators and our financial reporting
The FRC publishes thematic reviews to help companies
improve the quality of corporate reporting around new
accounting standards. The FRC also issued a range of
guidance and performed a number of detailed reviews
related to the year-end reporting process across public
companies. The Group has reviewed the output of these
reviews and their impacts on the Group’s reporting. In
March 2020, the FRC issued guidance for companies
during the COVID-19 crisis. The Group has reviewed this
guidance and updated disclosures accordingly. The Group
also follows the FRC’s Lab projects, notably preparations
for the European Single Electronic Format (‘ESEF’)
regulations that come into effect for the 2021
financial year.
Savills plc | Annual Report and Accounts 2020 91
Assessment of Group’s system of internal
control, including the risk management
framework
The Committee, on behalf of the Board, undertook a
robust review of the effectiveness of the system of risk
management and internal control.
In performing its review of effectiveness, the Committee
reviewed and assessed the following reports and activities:
• internal Audit reports on the review of the controls across
the Group and its monitoring of management actions
arising from these reviews;
• management’s own assessment of risk and the
performance of the system of risk management and
internal control during 2020;
• reports from the Group Director of Risk & Assurance
including reports on Group-wide risk assessment activity
and annual self-assessment findings;
• reports from the SIM Head of Risk & Compliance and the
SIM Head of Internal Audit; and
• reports from the External Auditor on any issues identified
during the course of their work.
The Committee and the Board considered that the
information received was sufficient to enable a review of the
effectiveness of the Group’s internal controls in accordance
with the FRC’s Guidance on Risk Management, Internal
Control and Related Financial and Business Reporting.
Internal Control and Risk Management
Internal Audit
During 2020, Internal Audit services were delivered by
the Group’s Director of Internal Audit with support in
delivery by RSM LLP and Grant Thornton LLP. SIM has
its own Head of Internal Audit who has responsibility
for Internal Audit planning and delivery within SIM with
support from RSM.
The Board’s responsibility for internal control and risk is
detailed on page 91 and is incorporated into this report by
reference.
The Committee approved the annual Group Internal
Audit plan and the SIM Internal Audit plan, and received
progress against those plans during the year. Reflecting
the emergence and impact of the COVID-19 pandemic,
activity was refocused on key risk and control priorities
resulting from the pandemic and Internal Audit provided
assurance to the Board on matters such as maintenance
of key financial controls in a home working environment
and the effectiveness of cyber security measures. The
Committee ensured that Internal Audit was appropriately
resourced with the skills and experience relevant to the
operations of the Group and that information was made
available to it to enable it to fulfil its mandate to the
appropriate professional standards.
The Committee reviewed Internal Audit reports from both
Group and SIM on a regular basis and the Group Director
of Risk & Assurance, the Group Director of Internal Audit
and the SIM Head of Internal Audit attended meetings
and presented to the Committee where appropriate.
The Committee monitors the status of all Internal Audit
recommendations and management’s responsiveness to
their implementation and challenges both Internal Audit
and management where appropriate to provide assurance
that the control environment is robust and effective.
In assessing the performance of Internal Audit, the
Committee considered and monitored its effectiveness in
the context of the Company’s risk management system
and took into account management’s assessment of and
responsiveness to the Internal Auditor’s findings and
recommendations and reports from the External Auditor
on any issues identified during the course of their work.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 92
Directors’ Remuneration Report
2016–2020 Overview
–29%
Underlying
profit
–39%
Dividend
Payments to
Shareholders*
–42%
Executive
Director
Remuneration**
+23%
Total
Shareholder
Return
*
The dividend cost for 2020 comprises the cost of the final dividend recommended by the Board
(amounting to £23.8m), payment of which is subject to shareholder approval at the Company’s Annual
General Meeting (‘AGM’) scheduled to be held on 12 May 2021 (payable to Shareholders on the Register
of Members as at 9 April 2021).
** Executive Director remuneration comprises the remuneration paid to the Group Chief Executive Officer
and Group Chief Financial Officer job holders between 1 January 2016 and 31 December 2020.
Richard Orders, Chairman
of the Remuneration Committee
“ On behalf of the Board,
I am pleased to introduce
our 2020 Directors’
Remuneration Report (the
‘Report’) which sets out
Savills philosophy and policy
in relation to Directors’
remuneration and how this
was implemented in the year
ended 31 December 2020.”
Annual statement
Governance
This Report has been prepared on behalf of the
Board by the Remuneration Committee (the
‘Committee’) in accordance with the requirements
of the Companies Act 2006 and the Large and
Medium-sized Companies and Groups (Accounts
and Reports) (Amendment) Regulations 2008
(as amended) (‘Regulations’) and the auditable
disclosures referred to in the External Auditor’s
Report on pages 122 to 131 as specified by the UK
Listing Authority and the Regulations.
Dear Shareholder
On behalf of the Board, I am pleased to introduce
our 2020 Directors’ Remuneration Report (the
‘Report’). Included within this Report we have
summarised the Directors’ Remuneration Policy (the
‘Policy’) approved by Shareholders at the 2020 AGM
rather than reproduce the Policy in full. This gives an
overview on the Directors’ annual remuneration
framework and the full Policy is available on our
website. The Annual Report on Directors’
Remuneration will be presented to Shareholders
for approval at the AGM on 12 May 2021.
Savills plc | Annual Report and Accounts 2020 93
Our remuneration philosophy
As previously reported, our long-standing focus and
business philosophy is founded on the premise that staff
in our sector are motivated through highly incentive and
performance based (and, therefore, variable) remuneration
consistent with our partnership style culture. We firmly
believe that this approach best aligns Shareholders’
and management’s interests and incentivises superior
performance and the creation of long-term shareholder
value. This approach also ensures that our reward
arrangements are consistent with and sensitive to the
cyclical nature of real estate markets.
The Policy is designed to deliver these objectives and to
provide the reward potential necessary for the Company
to attract, retain and motivate the high-calibre individuals
on whom its continued growth and development depend.
Reflecting this philosophy, the salaries for the Executive
Directors, Group Executive Board members and senior
fee-earners are set significantly below market medians
for similar businesses, with a greater emphasis on the
performance-related elements of profit share and/or,
outside the UK, commission in the total reward package.
The Committee is mindful of its responsibility to reward
appropriately, but not excessively. As such, it places
great emphasis on the calibration of Executive Director
remuneration and structure against internal relativities,
whilst also rigorously assessing external competitive
positioning in setting remuneration. Finally, it determines
targets to ensure that reward properly reflects performance,
that it supports the delivery of our strategic and
operational objectives and that it is fair to management
and Shareholders alike. Overall, we continue to target staff
employment costs over the cycle to be in the range of
65%–70% of revenues which the Committee regards as
the key metric from a shareholder’s perspective.
COVID-19
As highlighted elsewhere in this Annual Report, COVID-19
has had a significant impact on investor and occupier
activity throughout the world. After a dynamic start to the
year, the impact of lockdowns and the inability to travel
or conduct viewings significantly reduced the volume of
transactional activity which could be conducted.
Our primary concern throughout the pandemic has been
the well-being of our staff, clients and suppliers both
in respect of our own businesses and, as a substantial
Property and Asset Manager, in respect of the occupiers
and users of the portfolio under our management.
The Group was also quick to adopt a number of
operational and financial initiatives to minimise the impact
of the pandemic on the business as a whole including:
• reductions in discretionary expenditure;
• reductions and deferment of capital expenditure (save
in respect of long term data and digitisation projects);
• cancellation of the 2019 Final Dividend but the
recommendation of a 2020 Final Dividend of 17.0p
per ordinary share;
• limited acceptance of Government Support Schemes,
aimed at those business lines expressly prevented
from operating during lockdown, principally our UK
Residential Transaction business; all support from UK
arrangements has subsequently been repaid in full;
• maximisation of cash flows including deferral of certain
tax payments, predominantly sales tax, totalling
£49.2m; and
• senior management salary deferrals (with payment
conditional upon the Group being profitable in 2020)
of 20% in 2020 which are due to be paid in 2021.
2020 performance and remuneration
Annual performance-related profit share
Against the backdrop of the COVID-19 pandemic, the
Group has delivered a resilient full year performance
reflecting both the robustness and geographic diversity
of our business and the mitigating actions taken by staff
across the globe, the Group delivered underlying profit
for the year to 31 December 2020 of £96.6m.
Key financial highlights for the year included:
• Revenue of £1.74bn, representing a reduction of 9.8%
on 2019
• Underlying profit before tax of £96.6m, 32.6% down
on 2019 (2019: £143.4m)
• Transaction Advisory revenues down 19%, Consultancy
revenues by 5% and Property Management stable
year-on-year
• Further progressing our strategy of being a leading
advisor in the key markets in which we operate, by
adding complementary businesses and teams to our
strong core business. In particular during 2020 we:
– Maintained our strong focus on client service,
maintaining staffing levels to ensure that our service
delivery remained at the highest level
– Acquired the Macro Consultants project management
business in the US, further broadening our North
American service offering
– Acquired Omega Property Management in Germany,
establishing national property management capability
across Germany and allowing us to offer a pan-
European Savills property management service
across all key EC markets
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 94
Directors’ Remuneration Report continued
Annual statement continued
– Improved our market share in most of our markets,
as explained elsewhere in this Report & Accounts,
for example:
– In Asia Pacific, increasing our share of commercial
investment transaction volumes across a number of
key markets, including Hong Kong (c.57%), Greater
China (c.31%) and Korea (c.25%), whilst across the
Asia Pacific region, our market share increased
to c.20%;
– in the UK and EMEA, maintaining our leading position
in prime UK residential markets, increasing our share
(c.25%) in London commercial investment (c.29%), as
well as making gains in CEME (for example, in Spain,
increasing to c.34%); and
– in North America, outperforming Leasing market
declines in major centres including Washington, Los
Angeles, San Francisco and Orange County.
These market share gains in most of our markets, which
are likely to be of material long term benefit to our
Shareholders, were an important factor in the Committee’s
consideration of the appropriate 2020 bonuses. The
Committee had set the financial targets for the 75% of
the 2020 the performance-related profit share relating
to the delivery of Underlying Profit before Tax (‘UPBT’)
in a pre-COVID-19 context. These financial targets, which
had been significantly increased from the equivalent 2019
targets, were not reviewed to reflect the onset of and
likely impact of the pandemic. Against that backdrop, it is
unsurprising that the targets were not achieved despite
our increasing market share in most of our markets. While
the Committee has a very strong default to allowing the
formulaic outturn to stand and will only exercise discretion
exceptionally, it recognises its wider duty to ensure that the
overall result is fair and appropriate. Given both this strong
increase in market share and the misalignment between the
two Executive Directors and other colleagues, it was felt
appropriate to exceptionally adjust the formulaic outturn.
The Committee has always sought to ensure that total staff
employment costs sit within a relatively tight band of 65-
70% of revenues and is also conscious of the need to ensure
that overall pay is equitable and appropriate in the context
of the low base salaries of the Executive Directors relative
to market medians and the wider workforce where most
staff will have earned bonuses. Accordingly, the Committee
approved a payment of 21% of the maximum potential for
the financial element (a 73% reduction for the financial
element year on year). The Committee considered that
these strong gains in market share, specifically achieved
by a strategy set by senior management of maintaining
staff levels, rather than reducing staff numbers, to ensure
continuity of client service at the highest level were
materially in Shareholders’ long-term interests.
In relation to the objectives-based element which
accounts for up to 25% of annual award, the Executive
Directors were determined to have performed at the upper
end of their achievable personal strategic and operational
objectives and additional requirements necessitated to
navigate the pandemic.
The overall result is that total remuneration reduced by
45% (annual performance-related profit share by 52.4%)
compared to a TSR decline of 14% and UPBT reduced
by 32.6%.
We note that total remuneration costs at 66.3% of revenues
were at the lower end of the target level range.
Full details of the annual performance-related profit share
awards approved by the Committee for the Executive
Directors are included along with the other elements of
remuneration in the total remuneration table on page 101
of this Report.
Savills plc | Annual Report and Accounts 2020 95
Performance Share Plan
The end of the 2020 financial year was also the
end of the three-year performance period for our
Performance Share Plan (“PSP”) awards made in
April 2018. In this regard:
• the 50% of PSP award shares subject to a TSR
condition measured against the FTSE 250 Index
(excluding investment trusts) are anticipated to vest at
46% for this part, reflecting relative TSR performance
outperforming the Index by 2.3% p.a.; and
• the 50% of PSP award shares subject to an EPS
condition are anticipated not to vest for this part.
The Committee determined that it would be appropriate
for annual performance-related profit share outcomes
to be determined as described above and for the April
2018 PSP awards to vest in April 2023 without further
adjustment as both were valid reflections of overall
performance by the Company.
The Committee exercised discretion in determining the
award in relation to the 75% of the 2020 performance-
related profit share relating to the delivery of UPBT.
There were no other exercises of judgement or discretion
by the Committee save as detailed in this report.
2021 Remuneration
We were very pleased that Shareholders gave 90%
approval to our renewal of our Policy at the 2020 AGM and
we are not seeking to amend our Policy at the 2021 AGM.
An overview of the key decisions for 2021 is as follows:
• Base salaries: we have an established approach of
offering low base salaries relative to market medians
(which approach applies to the Executive Directors,
Group Executive Board Members and other senior fee
earners). Salaries continue to be reviewed each year
(although not necessarily increased). For 2021, there
will be no increase in the base salaries of the Executive
Directors or Group Executive Board Members.
• Pension: for all new appointments the pension
contribution will be aligned to the wider UK workforce
contribution rate, which is currently 8% of salary
at Savills UK (although subject to periodic review).
As approved by Shareholders, for the two existing
Executive Directors, employer pension contributions
continue to be set at respectively 14% and 18% of
annual base salary for the reasons set out below.
– The Group Chief Executive Officer was a member of
the defined benefit Savills Pension Plan when that
Plan was closed to future benefit accrual in 2010.
The Plan was historically an “all employee” scheme.
When the Plan was closed to future benefit accrual
in 2010, it was agreed that all the then Plan members
should subsequently be entitled to a 14% of salary
employer pension contribution or equivalent. There
remain a significant number of other long-standing
employees who are former members of the Plan and
who remain on the same 14% rate, so the Group Chief
Executive Officer is fully aligned with staff with an
equivalent level of service to him. For these reasons,
his rate is aligned with the wider workforce who have
an equivalent level of service and the Committee does
not believe there should be a requirement to adjust
the Group Chief Executive Officer’s pension
contribution rate.
– The Group Chief Financial Officer joined the Company
in March 2009, at which time the approach when the
issue was raised as part of the recruitment dialogue
was for the Company to agree a pension contribution
at the same level as that then being paid as the
employer contribution to the Plan, after which the
individual contribution would be fixed and would
not adjust up or down in line with future actuarial
assumption changes. The Group Chief Financial
Officer has, therefore, a long-standing contractual
right to receive an 18% of salary contribution. However,
recognising shareholder expectations, Mr Shaw has
agreed that his contribution should reduce to the
same 14% rate from the end of 2022.
• Benefits: no changes are proposed.
• Annual performance-related profit share: maximum
opportunity to be increased in line with increases in
RPI annually (or if no increase in RPI to remain
unchanged) to incentivise and reward the Executive
Directors for delivering further strong performance.
For 2021, the cap on the profit share opportunity will
therefore be, for the Group Chief Executive Officer,
£2.267m and for the Group Chief Financial Officer,
£1.7m, being 1.2% higher than the cap applying in 2020,
reflecting year on year growth in RPI (2020 caps: Group
Chief Executive Officer £2.240m; Chief Financial Officer
£1.679m). Annual awards will continue to be determined
as follows:
– 75% based on Group UPBT performance
– 25% on the achievement of pre-set personal strategic
and operational objectives
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 96
Directors’ Remuneration Report continued
Annual statement continued
No more than one third of the maximum award will be
payable for threshold performance. As the UPBT outturn
moves above this threshold, payouts will increase on a
straight-line basis, with two-thirds of the maximum
payable at the midpoint (which is effectively 50% of the
bonus opportunity above the threshold). Consistent with
market practice, the actual range is commercially
sensitive and will be disclosed in next year’s report.
The first element of any award (equal to up to 100% of
base salary) will be paid as cash. Above the level of this
first element, 50% of any award will be deferred in the
form of shares for three years, receipt of which will be
contingent on continued employment (subject to normal
good leaver protections). The minimum cash threshold
reflects Savills highly unusual approach of a low base
salary which with regard to bonus deferral unfairly
penalises Executive Directors relative both to internal
and external comparators.
• Performance Share Plan (“PSP”): this is due to expire in
May 2021. The Committee has reviewed the PSP and
determined it remains appropriate and is therefore
requesting shareholder approval at the forthcoming
AGM to extend the PSP for a further 10 years. In 2021,
the annual grant will be made at the existing award
level of 200% of base salary for the Group Chief
Executive Officer and the Group Chief Financial Officer.
For the 2021 awards, the EPS growth, relative total
shareholder return and ROE targets will continue to be
used with equal weightings. Awards that have satisfied
the performance conditions attaching to them
(measured over a three-year performance period)
will vest once a further two-year holding period has
passed, that is, on the fifth anniversary of grant.
• Share Ownership Guidelines are 500% of salary, which
can be achieved through purchase or the retention of
any after-tax shares which vest until the guideline is
met. In addition to the annual performance-related
profit share deferral period and PSP holding period that
remain in place for departing Executive Directors, an
additional post-cessation shareholding requirement
applies at 250% of salary, which will need to be held
for two years post cessation.
Governance developments
As announced in December 2020, Rupert Robson will
be retiring from the Board at the conclusion of the 2021
AGM. Accordingly I have taken over as Chair of the
Committee. On behalf of the Board, I thank Rupert for
his leadership of the Committee from 2015. I also thank
Tim Freshwater and Florence Tondu-Mélique, who
retired from the Committee with effect from 31 December
2020, for their contributions to the Committee since their
respective appointments in January 2012 and
October 2018.
During the year the Company continued to be subject
to the 2018 UK Corporate Governance Code and the
Committee was responsible for setting all elements of the
remuneration of the Group Executive Board members in
addition to the Executive Directors. The Committee also
received a report on workforce remuneration during
the year.
As a Committee, we continue to monitor best practice
developments in executive remuneration and consider
whether any amendments to the Policy are appropriate.
The Committee is appreciative of the significant
shareholder support that it has enjoyed in recent years
and welcomed Shareholders’ endorsement of the 2019
Annual Remuneration Report along with the renewal of
the Policy at the 2020 AGM. We hope that you find this
year’s Annual Remuneration Report equally clear and
informative and that you will continue to support us by
voting in favour of the resolution at this year’s AGM on
12 May 2021.
Richard Orders
Chairman of the Remuneration Committee
Savills plc | Annual Report and Accounts 2020
97
Annual Report on Remuneration
Role of the Committee
The principal role of the Committee is to support the Group to achieve its strategic objectives by designing a
remuneration policy consistent with the Group’s business model such that we have the ability to attract, recruit,
retain and motivate the high-calibre individuals needed to deliver the Group’s strategy so promoting the long-term
interests of the Company. The Committee also considers the broader implications of the Policy in the context of
environmental, social or governance considerations and how the Policy best supports the Group’s delivery of its
objectives in these areas. The Committee is responsible for the broad policy governing senior staff remuneration. It
sets the actual levels of all elements of the remuneration of the Executive Directors, the Chairman of the Company and
the Group Executive Board members. The Committee also reviews workplace remuneration and related policies and
the alignment of incentives and rewards with culture; and when setting the policy for Executive Director remuneration
takes those matters into account. The Policy remains under periodic review to ensure that it remains consistent with
the Company’s scale and scope of operations, supports business strategy, its environmental, social and governance
strategy and its growth plans and helps drive the creation of shareholder value. The Committee also oversees the
operation of Savills employee share schemes.
Committee members and attendees
As shown in the table below, during the year the Committee comprised the following Independent Non-Executive
Directors, with the following attendees:
Committee member
Position
Rupert Robson
Chair of the Committee
Stacey Cartwright
Member of the Committee
Status
Independent
Independent
Tim Freshwater
Member of the Committee
Independent
Dana Roffman
Member of the Committee
Florence Tondu-Mélique Member of the Committee
Independent
Independent
Committee attendee
Position
Status
Nicholas Ferguson
Non-Executive Chairman
Mark Ridley
Group Chief Executive Officer
Chris Lee
Group Legal Director &
Company Secretary
Attended by invitation (except when his own
remuneration is discussed)
Attended by invitation (except when his own
remuneration is discussed)
Provided advice and support (except when his own
remuneration is discussed) as well as acting as
Secretary to the Committee
Simon Shaw, Group Chief Financial Officer, was invited to attend meetings to provide an overview of market conditions
and the Group’s prospective financial performance.
Subsequent to the year-end, Rupert Robson, Tim Freshwater and Florence Tondu-Mélique retired from the Committee
and Richard Orders and Nicholas Ferguson were appointed as Committee Members. The Committee is now chaired by
Richard Orders.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 98
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
The Committee is satisfied that the advice received
from FIT Remuneration Consultants during the year was
entirely objective and independent. The Committee will
continue to keep these arrangements under review to
ensure that they remain appropriate to the needs of the
Committee in developing remuneration policy to support
the delivery of Group strategy.
The Committee is also advised internally by the Group
Legal Director & Company Secretary (save in relation to
matters concerning his own remuneration).
Given the fundamental role that remuneration plays in
the success of the Group, in terms of the recruitment,
motivation and retention of high-quality staff, the Group
Chief Executive Officer attends meetings by invitation
and is consulted on the remuneration package of the
Group Chief Financial Officer and other Group Executive
Board members.
Terms of Reference
The Committee’s Terms of Reference, which are reviewed
annually, or by exception to take account of regulatory
changes or best practice, are available from the Group
Legal Director & Company Secretary upon request or can
be viewed on the Company’s website (www.savills.com).
Meetings
2020 Attendance table
Committee member
Rupert Robson
Stacey Cartwright
Tim Freshwater
Florence Tondu-Mélique
Dana Roffman
Meetings
attended
Meetings
eligible to
attend
5
4
5
5
5
5
5
5
5
5
As at 31 December 2020 and up to the date of this
Report, the Committee wholly comprised Independent
Non-Executive Directors. Biographical details relating to
each of the Committee members are shown on pages
65 to 67.
The Committee met five times during 2020. The principal
agenda items considered by the Committee during the
year were as follows:
• reconfirming the Directors’ Remuneration Policy in the
context of best practice and corporate governance
developments and taking account of workforce
remuneration across the Group;
• agreeing performance targets for both the annual
performance-related profit share and Performance
Share Plan awards;
• preparing an Annual Remuneration Report consistent
with the legislation relating to executive remuneration;
• agreeing the remuneration packages of the Executive
Directors and Group Executive Board members; and
• approving the grant of Performance Share Plan awards.
Advisors to the Committee
In determining Executive Director remuneration, the
Committee has access to detailed external information
and research on market trends and peer practice
provided by its independent external advisor, FIT
Remuneration Consultants. FIT Remuneration Consultants
were appointed by the Remuneration Committee
following a tender process and are members of the
Remuneration Consultants Group and adhere to the
voluntary code of conduct in relation to executive
remuneration consulting in the UK. FIT Remuneration
Consultants’ fees are based on a time and material basis,
within the parameters of an overall annual budget. In
2020, FIT Remuneration Consultants received fees of
£30,244 plus VAT in relation to advice provided to the
Committee. FIT Remuneration Consultants provided no
other services to the Group during the year.
Savills plc | Annual Report and Accounts 2020 99
Remuneration Policy
As approved by Shareholders at the Company’s AGM held on 25 June 2020 and
documented in the Report and Accounts for the year ended 31 December 2019 available at
https://ir.savills.com/financial-results
The Group’s remuneration arrangements for the Executive Directors, Group Executive Board members and senior
fee-earners are structured to provide a competitive mix of variable performance-related (i.e. annual performance profit
share and longer-term incentives) and fixed remuneration (principally base salary) to reflect individual and corporate
performance. The objective is to set targets which provide an appropriate balance between being achievable and stretching.
In determining the remuneration of the Executive Directors and reviewing that of the Group Executive Board members, the
Committee reviews the role and responsibility of the individual, their performance, the arrangements applying across the
wider employee group and internal pay relativities. It also considers sector and broader market practice in the context of
the prevailing economic conditions and corporate performance on environmental, social and governance issues.
Overview of the Policy
A summary of the proposed policy for Executive Directors, the proposed amendments to the current Policy and how
it will be applied for 2021 is set out below.
Element
Summary of approach
Application of Policy for 2021
Base salary
Base salaries are set significantly below market median
levels, in line with the Group’s philosophy to place greater
emphasis on variable, performance-related remuneration.
The Committee has determined that there will be no
increase in base salaries.
Salaries in 2021 will therefore be as follows:
• Group Chief Executive Officer: £295,000
• Group Chief Financial Officer: £225,500.
Pension
Pension benefits are provided through a Group personal
pension plan, as a non-pensionable salary supplement or as
a contribution to a personal pension arrangement.
Pension contributions/salary supplements for 2021 are:
• Group Chief Executive Officer: 14% of salary
• Group Chief Financial Officer: 18% of salary.
Benefits
Annual
performance-
related profit
share
Performance
Share Plan
The Group Chief Executive Officer will be entitled to a
pension from the legacy defined benefit pension plan but
no longer accrues benefits under the plan.
Benefits include:
• Medical insurance benefits;
• Annual car / car allowance (up to £9,000);
• Permanent Health Insurance;
• Life Insurance; and
• Relocation expenses.
The Committee is committed to having all pension
contributions limited to the wider employer workforce
contribution rate in Savills UK for staff with an equivalent
level of service from 1 January 2023.
For any new appointments, the pension contribution will be
aligned to the wider UK workforce contribution rate.
Benefits in line with Policy.
Reflects the Group’s annual profit performance and
personal performance against pre-set objectives and
overall contribution.
In line with the Group’s philosophy that there is greater
emphasis (than is the norm for listed companies) on variable
performance-related pay. Consequently, 50% of any award
payable above an amount equal to base salary is deferred
into shares for three years.
Malus and clawback provisions apply.
The maximum potential annual profit share awards for
2021 are:
• Group Chief Executive Officer: £2.267m
• Group Chief Financial Officer: £1.7m.
For 2021 profit share awards, 75% will be based on the
Group’s annual profit performance and 25% will be based on
the delivery of strategic and operational performance goals.
The Committee reserves its ability to vary these proportions
or apply different/additional measures in future years.
Awards of shares are made subject to a three-year
performance period. Any awards which satisfy the
three-year performance conditions attaching to them will
then be subject to an additional two-year holding period
before vesting.
The maximum award potential remains at 200% of base
salary, subject to an overall annual maximum of shares
with a value of £1m on award per participant.
The awards for 2021 will be up to 200% of base salary.
For 2021 Performance Share Plan awards, one-third of
the award will vest subject to Earnings Per Share
performance, one-third will vest subject to relative TSR
performance against the FTSE Mid 250 Index (excluding
investment trusts) and one-third will vest subject to ROE
performance, measured over the three year period starting
on 1 January 2021.
Malus and clawback provisions apply.
Share Ownership
Guidelines
Achieved through share purchase and/or retention of any
after-tax shares which vest pursuant to the Group’s share
plans until the guideline is met.
500% of base salary for the Group Chief Executive Officer
and Group Chief Financial Officer while in post. 250% of
salary applying for two years post-cessation.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 100
Directors’ Remuneration Report continued
Remuneration Policy continued
Non-Executive Director fees, which are set consistent with the median for the FTSE 250 and which are subject to
annual review, with any increase capped at RPI. Fees will not be increased in 2021. Additional fees, again set consistent
with the median for the FTSE 250, which are payable to the Senior Independent Director and Committee Chairs to
recognise their additional responsibilities; these fees will also not be increased in 2021. The Chairman’s fee, which again
is set at levels consistent with the median for the FTSE 250 and is subject to annual review, capped at RPI.
The Chairman’s fee will not be increased in 2021.
The Committee has ensured that the Directors’ Remuneration Policy and practices are consistent with the six factors
set out in Provision 40 of the Corporate Governance Code:
Clarity – Our Directors’ Remuneration Policy is well understood by our senior executive team and has been clearly
articulated to our Shareholders and representative bodies (both on an ongoing basis and during consultation when
changes are being made).
Simplicity – The Committee is mindful of the need to avoid overly complex remuneration structures which can be
misunderstood and deliver unintended outcomes. Therefore, a key objective of the Committee is to ensure that our
Directors’ Remuneration Policy and practices are straightforward to communicate and operate.
Risk – Our Directors’ Remuneration Policy has been designed to ensure that inappropriate risk-taking is
discouraged and will not be rewarded via (i) the balanced use of both annual incentives and long-term incentives
which employ a blend of financial, non-financial and shareholder return targets, (ii) the significant role played by
shares in our incentive plans including the deferral under the annual performance-related profit share (together with
in employment and post cessation shareholding guidelines) and (iii) malus/clawback provisions within all our
incentive plans.
Predictability – Our incentive plans are subject to individual caps, with our share plans also subject to market standard
dilution limits. The use of shares within our incentive plans means that actual pay outcomes are highly aligned to the
experience of our Shareholders.
Proportionality – There is a clear link between individual awards, delivery of strategy and our long-term performance.
In addition, the significant role played by incentive/‘at-risk’ pay, together with the structure of the Executive Directors’
service contracts, ensures that poor performance is not rewarded.
Alignment to culture – Our executive pay policies are fully aligned to the Company’s culture through the use of
metrics in both the Annual performance-related profit share and PSP that measure how we perform against key
aspects of our strategy, which has the objective of delivering sustainable growth in profit and ROE. A similar structure
operates across the Group.
Savills plc | Annual Report and Accounts 2020 101
Annual Report on Remuneration
Total remuneration for 2020
Set out below are details of Executive Director remuneration for 2020.
Executive Directors’ ‘single figure’ for the financial year ended 31 December 2020 and as a comparison for the financial
year ended 31 December 2019 (audited).
Salary paid(1)
Salary receivable(1)
Benefits(2)
Pension: contribution
Total fixed remuneration
Annual profit share – cash
Annual profit share – deferred shares
Near term remuneration
Mark Ridley
Simon Shaw
2020
£
2019
£
2020
£
2019
£
249,750
289,000
190,925
221,000
44,250
11,127
41,160
–
11,035
40,460
33,825
11,216
40,455
–
15,639
39,780
346,287
340,495
276,421
276,419
575,900 1,047,770
433,859
785,560
280,900
755,770
208,359
564,500
1,203,087 2,144,035
918,639 1,626,479
The aggregate near term remuneration paid to the Executive Directors in the year ended 31 December 2020 was
£2.12m (2019: £3.77m).
Gain on long-term share-based awards
Performance Share Plan – performance
element(3) (notional)
Mark Ridley
Simon Shaw
2020
£
2019
£
2020
£
2019
£
96,598
210,000
101,658
210,000
Performance Share Plan – share appreciation element(3) (notional)
(5,856)
22,827
(6,163)
22,827
Long-term share-based reward (non-cash – notional)(3)
90,742
232,827
95,495
232,827
Total variable remuneration
Total i.e. ‘Single Figure’ (part notional)
947,542 2,036,367
737,713 1,582,887
1,293,829 2,376,862 1,014,134 1,859,306
The information in both parts of this table has been audited by the External Auditor, PricewaterhouseCoopers LLP.
Notes:
1. The Executive Directors agreed a 20 per cent reduction in salary payable during the period between April and December 2020. As the Group was profitable in
2020, the salary receivable amounts in respect of this period will be paid in March 2021.
2. Benefits comprise private medical insurance and car allowance. For Simon Shaw in 2019 this also includes £4,423 being the cash equivalent of additional
holiday entitlement accruing under the Company’s loyalty holiday reward scheme (and reflecting Simon Shaw’s 10th year of service).
3. For 2020 the notional value of the PSP award with a performance period which ended on 31 December 2020 (i.e. where the award will vest in April 2023) has
been valued based on the number of shares that will vest and the three month average share price for the period to 31 December 2020 (917.3p) per share). For
2019 the notional value of the PSP award with a performance period which ended on 31 December 2019 (i.e. where the award will vest in May 2022) has been
valued based on the number of shares that will vest and the three month average share price for the period to 31 December 2019 (977.3p) per share). The actual
value has been split between the relevant value on the date of the original award of the relevant shares (the PSP – performance element) and subsequent
increase in value (PSP – share price appreciation).
Performance-related remuneration for 2020
Annual performance-related profit share
UPBT performance-related element
This information has been audited by the External Auditor, PricewaterhouseCoopers LLP.
The following near-term performance measures applied to the 2020 annual performance-related profit share arrangements:
75% of the award was based on profit performance, defined as UPBT performance. The target range and Savills
performance were as follows:
Minimum (33% of element)
£120m
Note:
Mid-point
(66.7% of element)
£136.2m
Maximum target
(100% of element)
£160m
Savills UPBT performance1
£84.7m
Bonus award
(% of element)
21%
1. UPBT for these purposes is calculated before the benefit of wage-related subsidies received from governments globally, principally in Asia, in respect of employment
support schemes due to the COVID-19 pandemic; actual UBPT for the year was £96.6m.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 102
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
There was straight-line vesting between the minimum and mid-point and the mid-point and maximum.
Reflecting the Group’s resilient performance in 2020, the Committee approved awards at 21% of the maximum
potential (being below the pre-pandemic threshold level set initially) having regard to both the performance of
the Group and the impact on other stakeholders, were earned by the Executive Directors in respect of the UPBT
performance-related element (2019: 79.7%).
The remaining 25% of annual performance-related profit share awards was based on individual performance against
key strategic and operational objectives. The Executive Directors were each awarded 90% of this 25%.
The Committee set strategic and operational objectives for the Executive Directors consistent with ensuring that the Group
remained in a robust financial position through the period, staffing and client service levels were maintained and which
were aligned with longer-term value creation for Savills.
Details of Mark Ridley’s achievement against the key objectives set included the following:
• Further diversifying and broadening the Group’s Consultancy service offering in key markets, including in particular
the acquisition and successful integration of the Macro Consultants project and workplace consultancy business in
the US and of Omega property management in Germany
• Continuing to accelerate growth of the Asia Pacific platform, focused on markets across South East Asia and India,
developing Consultancy and Property Management services
• Introducing and ensuring the effective operation of the Group’s new Regional Service line Strategy Boards, focusing
on developing client service, sharing best operational practice, in particular enhancing Savills Smart Building
Technology consultancy offering, and facilitating the provision of joined-up cross border service for global and
regional clients
• Sponsoring the development of Savills Sustainability consultancy capability globally, driving the Group’s ESG
initiatives; resulting in the launch in 2020 in the UK of Savills first client services ‘Sustainability Hub’, which is the
model for the planned progressive launches of similar service offerings in the Group’s principal markets
• Continuing to promote greater diversity in the Group’s business generally and in Savills management structures,
with clear succession plans to accelerate this evolution with in particular the result that the proportion of women
in senior leadership positions (as defined by Hampton Alexander) rose to 30.3% as at 31 October 2020
(31 December 2019: 22.5%)
Details of Simon Shaw’s achievement against the key objectives set included the following:
• Ensuring that the Group was prepared for Brexit in whatever form at the end of the transition period on
31 December 2020, with specific measures implemented as necessary to address all reasonably foreseeable
eventualities and allow the seamless continuation of the Group’s businesses, particularly in the UK and Europe
• Sponsoring the delivery of key add-value (in terms of securing competitive advantage, attracting top talent,
reducing operating costs or enhancing client service) technological innovations. Specific examples being:
– the launch of a UK Valuations Digitisation programme and our UK online auction platform
– the second US launch of the ‘Workthere’ tenant platform
– the progressive harmonisation of accounting systems across the Group based upon AX Dynamics implementations
• Ensuring that operating margins remained an area of key management focus for each Regional Business, including
identifying and sponsoring cost and operating efficiency improvements and in response to the pandemic
implementing cost saving initiatives to conserve the Group’s cash, with the result that the Group ended the year with
net cash of £177.7m (2019: £28.5m)
In line with the Policy, 50% of the overall awards to Mark Ridley and Simon Shaw, above an amount equal to their
respective base salaries, was deferred for a further three-year period in the form of shares.
Savills plc | Annual Report and Accounts 2020 103
Long-term incentives
The PSP award granted in 2018 is subject to performance in the three years to 31 December 2020. Following an
assessment of Savills performance against targets set at grant, the Committee determined that 23% of the award had
met the performance criteria and will vest at the end of the two-year holding period in April 2023. The targets and
Savills performance were as follows:
Relative TSR versus FTSE Mid 250 index
(excluding investment trusts)
% EPS growth
Weighting
50%
Threshold
target (25%
vesting)
Maximum
target (100%
vesting)
Equal to
index
Outperform
index by
8% p.a.
50%
RPI plus
3% p.a.
compounded
RPI plus
8% p.a.
compounded
Savills
performance
Outperform
index by
2.3% p.a.
Below
threshold
Vesting
(% of
maximum)
46.0%
0%
The information in the above table has been audited by the External Auditor, PricewaterhouseCoopers LLP.
Non-Executive Directors fees (audited)
The Non-Executive Director fees for 2020 were as follows:
Nicholas
Ferguson
(Chairman)
Stacey
Cartwright
Tim
Freshwater
Rupert
Robson
Florence
Tondu-Mélique
Dana Roffman
(appointed
1 November
2019)
£182,750
£46,495
£46,495
£46,495
£46,495
£46,495
£32,250
£8,205
£8,205
£8,205
£8,205
£8,205
£8,000
£10,000
£215,000
£215,000
£15,000
£69,700
£62,700
£64,700
£54,700
£54,700
£63,728
£62,000
£64,000
£54,000
£9,117
Basic fee paid(1)
Basic fee receivable(1)
Additional fees(1)
Senior Independent Director
Remuneration Committee Chairman
Audit Committee Chairman
2020 Total
2019 Total
Notes:
1. The Chairman and Non-Executive Directors agreed a 20 per cent reduction in basic fees paid during the period between April and December 2020.
As the Group was profitable in 2020, the salary receivable amounts in respect of this period were paid in January 2021.
The information in this table has been audited by the External Auditor, PricewaterhouseCoopers LLP.
The fees payable to the Non-Executive Directors are determined by the Non-Executive Chairman and the Executive
Directors after considering external market research and individual roles and responsibilities. The fees for the Non-
Executive Chairman are determined by the Remuneration Committee.
The current fee payable to Nicholas Ferguson as Chairman is £215,000 p.a. (2019: £215,000 p.a.).
The current base fee for the Non-Executive Directors is £54,700 p.a., with additional fees payable to the Senior
Independent Director (£8,000 p.a.), the Audit Committee Chairman (£15,000 p.a.) and the Remuneration Committee
Chairman (£10,000 p.a.). These fees are unchanged from the previous year.
The Non-Executive Directors do not participate in incentive arrangements or share schemes.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 104
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
Operation of Policy in 2021
Base salary
The Committee has determined, on the recommendation of the Executive Directors, that no increases should be
applied for 2021. The base salaries of the Executive Directors will therefore be as follows:
• Group Chief Executive Officer: £295,000; and
• Group Chief Financial Officer: £225,500.
In line with our Policy, the base salaries for the Executive Directors continue to be positioned significantly below
market median against the FTSE 250.
Variable remuneration
Annual performance-related profit share
The maximum annual performance-related profit share opportunity for 2021 will be:
• £2.267m for the Group Chief Executive Officer; and
• £1.7m for the Group Chief Financial Officer.
For the 2021 performance-related profit share, 75% of award potential will reflect the Group’s UPBT performance and
25% of award potential will reflect delivery against a mix of personal, strategic and operational objectives.
The Committee considers prospective disclosure of individual objectives to be commercially sensitive and disclosure
will therefore be on a retrospective basis.
The Committee retains a general discretion to reduce the payout level to reflect exceptional events over the
performance period.
Performance Share Plan
The remuneration policy is for maximum awards of 200% of base salary. The PSP awards for 2021 will be up to 2x each
Executive Director’s base salary.
Awards will vest subject to the satisfaction of EPS targets for one-third of the award, TSR performance for one-third of
the award and Return on Equity targets for the remaining one-third of the award. The Committee is still in the process
of agreeing the precise targets and full details of these will be set out in the RNS announcement issued immediately
after the PSP award is granted.
The awards made to Executive Directors will also be subject to a holding period so that any PSP awards for which
the performance vesting conditions are satisfied will not normally be released for a further two years from the third
anniversary of the original award date. Dividend accrual for PSP awards will continue until the end of the
holding period.
Savills plc | Annual Report and Accounts 2020 105
Relative spend on pay
To provide context and outline how remuneration for Executive Directors compares with other disbursements, such
as dividends and general employment costs the table below illustrates general employment costs, Executive Director
reward, tax charges and dividend payments to Shareholders in 2020 and 2019.
Employment costs
Underlying profit before tax
Dividend payment to Shareholders
Executive Director remuneration
Tax
2020
£m
2019
£m
% increase
1,154.2
1,240.5
96.6
23.8
2.3
143.4
6.7
4.2
103.2
122.4
-7
-32.6
+255
-45
-15.7
• Employment costs (excluding arrangements for Executive Directors) comprise basic salaries, profit share and
commissions, social security costs, other pension costs and share-based payments
• Tax comprises corporation tax, employers’ social security and business rates and equivalent payments
• The dividend cost for 2020 comprises the cost of the final dividend recommended by the Board (amounting to
£23.8m), payment of which is subject to shareholder approval at the Company’s AGM scheduled to be held on
12 May 2021, (payable to Shareholders on the Register of Members as at 9 April 2021) and is based on the number
of shares in issue as at 31 December 2020
• Executive Director remuneration is the remuneration paid to the Group Chief Executive Officer and Group Chief
Financial Officer role holders and comprises basic salaries, profit share, social security costs, pension costs and
share-based payments
Total shareholder return and Group Chief Executive Officer remuneration
The total shareholder return delivered by the Company over the last 10 years is shown in the chart below. Over this
period the Company has delivered total shareholder return of 13% per annum (FTSE 250 (excluding investment trusts):
9% per annum; FTSE 350 Super Sector Real Estate: 7% per annum). Savills was ranked 51st by TSR performance in the
FTSE 250 (excluding investment trusts) and ranked ninth (of 27 companies) by performance in the FTSE 350 Super
Sector Real Estate over the 10 years to 31 December 2020.
Total Shareholder Return (‘TSR’)
500
400
300
200
100
0
Dec
10
Dec
11
Dec
12
Dec
13
Dec
14
Dec
15
Dec
16
Dec
17
Dec
18
Dec
19
Dec
20
Savills
FTSE 250 (excluding investment trusts)
FTSE 350 Super Sector Real Estate
The Board believes that the FTSE 250 Index (excluding investment trusts) remains the most appropriate index against
which to compare TSR over the medium term as it is an index of companies of similar size to Savills. Savills TSR
relative to that of the FTSE 350 Super Sector Real Estate Index is also shown, as this index better reflects conditions
in real estate markets over recent years.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 106
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
Pay for performance
Year
Chief Executive
Officer
2020
Mark Ridley
2019
2018
2017
2016
2015
2014
2013
2012
2011
Mark Ridley
Jeremy Helsby
Jeremy Helsby
Jeremy Helsby
Jeremy Helsby
Jeremy Helsby
Jeremy Helsby
Jeremy Helsby
Jeremy Helsby
Total
Single Figure
Remuneration
£’000
1,294
2,377
2,196
2,507
2,595
2,298
3,279
2,630
1,786
1,268
UPBT
£m
96.6
143.4
143.7
140.5
135.8
121.4
100.5
75.2
58.6
50.4
UPBT
annual
% change
Annual variable element:
performance-related profit
share – annual award against
maximum potential %
Long-term Incentive
to vest (maximum
potential of award)
100%
-32.6
-0.2
+ 2.3
+3.5
+12
+21
+34
+28
+16
+7
38
84
82
80
98
100
100
86
65
49
23
50
41
84
50
N/A
100
100
100
0
Total remuneration in the years 2012 to 2020 includes, as required, the notional value of PSP awards and executive
share options which vested (but were not exercised) in those years (note that no PSP awards were made in 2013 with
the consequent effect on Total Single Figure Remuneration in 2015 compared to the 2013, 2014, 2016, 2017, 2018 and
2019 years). The awards granted in 2008 lapsed in 2011.
Annual Percentage Change in Remuneration of Directors and employees
As required by the 2019 regulations, the table below shows a comparison of the annual change of each individual
Director’s pay to the annual change in average employee pay. Average employee pay is based on a Full Time
Equivalent (FTE) calculation.
Mark Ridley
Simon Shaw
Nicholas Ferguson
Stacey Cartwright(1)
Tim Freshwater
Rupert Robson
Dana Roffman(2)
Florence Tondu-Mélique
All UK employees
Percentage change in remuneration from 31/12/2019 to 31/12/2020
Percentage change in
base salary / fee %
Percentage change
in benefits %
Percentage change in
profit share award %
2%
2%
0%
9%
1%
1%
–
1%
1%
-28%
-52.5%
-52.5%
–
–
–
–
–
–
–
–
–
–
–
–
-2.4%
2.8%
-7.3%
Notes:
1. Appointed Audit Committee chair May 2019.
2. Appointed 1 November 2019.
Salary, benefits and bonus is compared against full-time equivalent UK employees.
Savills plc | Annual Report and Accounts 2020 107
CEO to employee pay ratio
The table below shows how the CEO’s single figure remuneration (as taken from the single figure remuneration table
on page 101) compares to the equivalent single figure remuneration for full-time equivalent UK employees, ranked at
the 25th, 50th and 75th percentile:
Year
2020
2019
Method
25th percentile pay ratio
Median pay ratio
75th percentile pay ratio
Option A
Option A
64 : 1
86 : 1
40 : 1
58 : 1
22 : 1
32 : 1
Notes to the CEO to employee pay ratio:
The regulations provide three options which may be used to calculate the pay for the employees at the 25th
percentile, median and 75th percentile. We have used Option A, following guidance that this is the preferred approach
of some proxy advisors and institutional Shareholders. Option A captures all relevant pay and benefits
for all employees in line with the single figure for remuneration calculated for Executive Directors.
The ratios shown are representative of the FTE 25th percentile, median and 75th percentile pay for UK employees
within the Group as measured on 31 December 2020.
The pay for part-time employees has been grossed-up to one FTE.
The Committee has reviewed the employee data and believes the median pay ratio to be consistent with the pay,
reward and progression policies for the Company’s UK employees over the period.
The CEO’s pay is based on the single figure of remuneration set out on page 101 of this report. Because a large portion
of the CEO’s pay is variable, the pay ratio is heavily dependent on the outcomes of variable pay plans and, in the case
of long-term share-based awards, share price movements.
The total pay and benefits and the salary component of total pay and benefits for the employee at each of the 25th
percentile, the median and the 75th percentile are shown below:
Year
2020
25th
percentile
£19,537
Salary
Median
£27,333
Total pay and benefits
75th
percentile
£41,774
25th
percentile
£20,144
Median
75th
percentile
£32,001
£60,062
Pensions disclosure
Mark Ridley receives a non-pensionable salary supplement equal to 14% of pensionable earnings. This salary
supplement is at the same level as pension contributions or non-pensionable salary supplements as are received by
all former members of the Savills Defined Benefit Pension Plan (the ‘Plan’) across the Group. For the Group Chief
Financial Officer, the Company contributes 18% per annum of pensionable earnings to his personal pension plan in line
with his service contract agreed at the time of appointment.
Mark Ridley no longer accrues a pension benefit under the Plan. The value of the legacy benefit is shown below:
Executive Director
Mark Ridley
Defined benefit
pension accrued at
31 December 2020
Defined benefit
pension accrued at
31 December 2019
35,763
34,815
Mark Ridley’s accrued pension ceased to be linked to salary from 29 February 2016, at which point the accrued
pension was £31,875 p.a. The pension now increases in line with the standard revaluation provisions of the Plan that
apply to all deferred pensioners. The amounts shown include revaluation to 31 December 2019 and 31 December 2020
respectively. No additional benefit is due in the event of early retirement.
This information has been audited by the External Auditor, PricewaterhouseCoopers LLP.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 108
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
Share interests
Details of shares in the Company which the Directors beneficially held or had a beneficial interest in as at
31 December 2020 are shown below.
Where the performance conditions attaching to any PSP award have been satisfied and the award is due to vest
in the future, the PSP award shares (discounted for anticipated tax liabilities) will count towards the shareholding
requirements:
Executive Directors
Mark Ridley
Simon Shaw
Number of shares
(including beneficially held
under the SIP)
Unvested shares
subject to performance
conditions (PSP)
Deferred share bonus
plan awards (vesting not
subject to performance
conditions) (DSBP)
210,321
182,579
189,461
160,205
171,611
175,537
Extent to which
shareholding
guideline met
136%
154%
The Company currently applies shareholding requirements that the Group Chief Executive Officer and Group Chief
Financial Officer hold shares to the value of five times their respective base salaries. New Executive Directors will be
expected to build holdings to this level over time, principally through the retention of shares released to them (after
settling any tax due) following the vesting of share awards.
Non-Executive Directors
Nicholas Ferguson
Stacey Cartwright
Tim Freshwater
Rupert Robson
Dana Roffman
Florence Tondu-Mélique
At
31 December
2020
29,286
4,983
–
7,981
–
–
As at 10 March 2021, no Director had bought or sold shares since 31 December 2020.
The Sharesave Scheme
No Directors hold outstanding options under the Sharesave Scheme and no options were exercised during the year.
This information has been audited by the External Auditor, PricewaterhouseCoopers LLP.
Scheme interests granted in 2020
This information has been audited by the External Auditor, PricewaterhouseCoopers LLP.
The following table sets out details of awards made to Executive Directors under the PSP in 2020. The Remuneration
Committee acknowledged that, at the time of grant in common with many other companies there had been a fall
in the share price since the end of February as a result of the COVID-19 pandemic. Under the rules of the PSP, the
Remuneration Committee has full discretion to ensure that the final outturns reflect all relevant factors, including
consideration of any windfall gains.
Type of
award
Nil-cost
options
Nil-cost
options
Mark Ridley
Simon Shaw
Basis of award
(face value)
200% base
salary
Performance
period
% vesting
for threshold
performance
% vesting
for maximum
performance
£590,000
£451,000
1 January
2020 to 31
December
2022
25%
100%
Performance criteria
– One-third of award Earnings per share growth
– One-third of award Relative total shareholder
return against the FTSE 250 (excluding
investment trusts) – One-third of award Return
on Equity
Savills plc | Annual Report and Accounts 2020 109
Awards will vest subject to the satisfaction of EPS targets for one-third of the award as follows:
• 25% (i.e. threshold) of the element to vest if the Company’s EPS growth is RPI plus 3% p.a. compounded;
• 100% (i.e. the maximum) of the element to vest if the Company’s EPS growth is RPI plus 8% p.a. compounded
or more; and
with straight-line vesting between the two points.
The Committee considers that if EPS growth of RPI plus 8% p.a. were achieved from the strong 2019 EPS base starting
position, this would represent outstanding performance for Shareholders.
A further one-third of the award will vest subject to the satisfaction of relative TSR performance versus the FTSE
Mid 250 Index (excluding investment trusts) (‘the Index’) as follows:
• 25% (i.e. threshold) of the element to vest if the Group’s TSR performance equals that of the Index;
• 100% (i.e. the maximum) of the element to vest if the Group’s TSR performance outperforms the Index by
8% p.a.; and
with straight-line vesting between the two points.
A further one-third of the award will vest subject to the satisfaction of Return on Equity targets as follows:
• 25% (i.e. threshold) of the element to vest if the Company’s ROE is 24%;
• 100% (i.e. the maximum) of the element to vest if the Company’s ROE is 32.5% or more; and
with straight-line vesting between the two points. ROE is defined as underlying profit before tax (‘UPBT’) / average
ordinary Shareholders’ equity, for the last financial year of the performance period.
The awards made to Executive Directors will also be subject to a holding period so that any PSP awards for which the
performance vesting conditions are satisfied will not normally vest for a further two years from the third anniversary of
the original award date. Dividend accrual for PSP awards will continue until the end of the holding period.
Awards were also made during the year under the Deferred Share Bonus Plan. Details of awards under this plan are set
out on the following page.
The Performance Share Plan (‘PSP’)
Number of shares
Directors
Mark Ridley
Simon Shaw
At 31
December
2019
47,646
43,010
62,997
–
–
–
–
70,828
47,646
45,263
48,174
–
–
–
–
54,141
Awarded
during year
Vested
during year
Lapsed
during year
At 31
December
2020
Date of
grant
Closing mid-
market price of
a share the day
before grant
Market
value at
date of
vesting
–
–
–
–
–
–
–
–
23,823
23,823
22.05.17
–
–
–
43,010
16.04.18
62,997
15.04.19
70,828
30.06.20
23,823
23,823
22.05.17
–
–
–
45,263
16.04.18
48,174
15.04.19
54,141
30.06.20
881.5p
976.5p
917.5p
833.0p
881.5p
976.5p
917.5p
833.0p
–
–
–
–
–
–
–
–
First
vesting
date
22.05.22
16.04.23
15.04.24
30.06.25
22.05.22
16.04.23
15.04.24
30.06.25
The PSP award granted in 2017 was subject to performance in the three years to 31 December 2019. Following the
assessment of Savills performance against targets set at grant, the Committee determined that 50% of the award had
met the performance criteria and will vest at the end of the two-year holding period in May 2022. The remainder of the
award lapsed during the year.
No awards vested under the PSP to Executive Directors during the year and therefore the total pre-tax gain on awards
vested during the year was nil.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 110
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
The Deferred Share Bonus Plan (‘DSBP’)
Number of conditional share awards
Directors
Mark Ridley
Simon Shaw
At 31
December
2019
47,954
46,492
39,673
Awarded
during year
Vested
during year
At 31
December
2020
Date of
grant
Closing mid-
market price of
a share the day
before grant
Market
value at
date of
vesting
First
vesting
date
–
–
–
47,954
–
18.04.17
929.0p
882.3p
18.04.20
–
–
–
46,492
16.04.18
39,673
15.04.19
85,446
27.04.20
976.5p
917.5p
884.5p
–
–
–
16.04.21
15.04.22
27.04.23
46,824
–
18.04.17
929.0p
882.3p
18.04.20
–
–
–
52,534
16.04.18
59,182
15.04.19
63,821
27.04.20
976.5p
917.5p
884.5p
–
–
–
16.04.21
15.04.22
27.04.23
–
85,446
46,824
52,534
59,182
–
–
–
–
63,821
Awards granted under the DSBP to Executive Directors during the year were based on 50% of the 2019 annual
performance-related profit share above an amount equal to their respective base salaries in line with the Policy. Under
the DSBP awards over 94,778 shares and 7,437 shares in lieu of dividends vested to Executive Directors during the
year. The total pre-tax gain on awards vested during the year was £901,881. No DSBP awards lapsed.
During the year, the aggregate gain on the exercise of share options and shares vested was £901,881. The mid-market
closing price of the shares at 31 December 2020, the last business day of the year, was 954.5p and the range during
the year was 651p to 1,258p.
Payments to past Directors
No payments to past Directors were made during the year.
Payments for loss of office
No payments for loss of office were made during the year.
External directorships
Savills recognises that its Executive Directors may be invited to become non-executive directors of other companies.
Such non-executive duties can broaden experience and knowledge which can benefit Savills. Subject to approval by
the Board and any conditions which it might impose, the Executive Directors and Group Executive Board members are
allowed to accept external non-executive directorships and retain the fees received, provided that these appointments
are not likely to lead to conflicts of interest. For non-executive directorships which are considered to arise by virtue of
an Executive Director’s or Group Executive Board member’s position within Savills, the fees are paid directly to Savills.
During 2020, Simon Shaw received a fee of £45,000 in relation to his continuing appointment as Non-Executive
Chairman of Synairgen plc which he was permitted to keep (as this appointment is not linked to his role within
the Company).
Service contracts
The Executive Directors have rolling service contracts which are terminable on 12 months’ notice by either the
Company or the Executive Director.
Directors
Mark Ridley
Simon Shaw
Contract date
1 May 2018
16 March 2009
Savills plc | Annual Report and Accounts 2020 111
The Non-Executive Directors and the Chairman have letters of appointment. In line with the UK Corporate Governance
Code, all Directors are subject to annual re-election at the AGM. The Chairman’s letter of engagement allows for six
months’ notice. Appointment of other Non-Executive Directors may be terminated by either party with three
months’ notice.
Director
Stacey Cartwright
Nicholas Ferguson
Tim Freshwater
Philip Lee
Richard Orders
Rupert Robson
Dana Roffman
Date appointed
to Board
1 October 2018
26 January 2016
1 January 2012
1 January 2021
1 January 2021
23 June 2015
1 November 2019
Florence Tondu-Mélique
1 October 2018
End date of current letter
of appointment
30 September 2021
26 January 2022
31 December 2021
31 December 2023
31 December 2023
22 June 2021
31 October 2022
30 September 2021
The Directors’ service contracts and letters of appointment are available for inspection at our City office, 15 Finsbury
Circus, London EC2M 7EB.
Shareholder votes on remuneration matters
The table below shows the voting outcomes for the 2019 Annual Remuneration Report and the Directors’
Remuneration Policy at the AGM held on 25 June 2020.
2019 Annual Directors’
Remuneration Report
Number
of votes
‘For’ and
discretionary
% of
votes
cast
Number
of votes
‘Against’
% of
votes
cast
Total
number of
votes cast
Number
of votes
‘Withheld’*
112,340,342
97.04%
3,432,654
2.96%
115,655,458
13,094
Directors’ Remuneration Policy
97,392,274
90.00%
10,824,622
10.00%
108,216,896
7,569,193
* A vote withheld is not a vote in law.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 112
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
Policy table extract from the Directors’ Remuneration Policy approved by Shareholders
at the 2020 AGM
The following sets out the table of remuneration elements from the Remuneration Policy, which was approved by
Shareholders at the 2020 AGM. To provide consistency with the remainder of the Report, salaries shown are 2021
salaries and annual performance-related profit share levels have been updated for the operation of the Policy in 2021.
Policy table
The following table sets out the Policy for each component of Executive Directors’ remuneration.
Purpose and
link to strategy
Base salary
• A core component
of the total
reward package,
which package
overall is designed
to attract, motivate
and retain
individuals of the
highest quality.
Operation
Potential
Performance measures
The Committee considers base salary levels
annually taking into consideration:
• the Group’s philosophy to place greater
emphasis on variable performance-related
remuneration;
Set significantly below market median levels
with greater emphasis on the performance-
related elements of reward. For 2021 the
Committee has determined that there will be
no increase in base salaries.
n/a
• the individual’s experience;
• the size and scope of the role;
• the general level of salary reviews
across the Group; and
• appropriate external market
competitive data.
Salaries in 2021 will therefore be as follows:
• Group Chief Executive Officer: £295,000.
• Group Chief Financial Officer: £225,500.
The Committee retains the flexibility to
award base salary increases taking into
consideration the factors considered as part
of the annual review.
• The annual base salary for any existing
Executive Director shall not exceed
£500,000.
Savills plc | Annual Report and Accounts 2020 113
Operation
Potential
Performance measures
Purpose and
link to strategy
Pension
• Provides
appropriate
retirement benefits.
• Rewards sustained
contribution.
Defined contribution pension arrangements
are provided.
HMRC approved salary and profit share
sacrifice arrangements are in place. Pension
benefits are provided either through a Group
personal pension plan, as a non-pensionable
salary supplement, contribution to a
personal pension arrangement, or equivalent
arrangement for overseas jurisdictions.
For 2021 the pension contributions/
supplements are:
• Group Chief Executive Officer: 14% of
annual base salary.
• Group Chief Financial Officer: 18% of
annual base salary.
n/a
As part of the funding arrangements agreed
when Savills Defined Benefit Pension Plan
(‘the Plan’) was closed to future accrual
in 2010, the Group Chief Executive Officer
receives a minimum contribution of 14%. The
maximum contribution will be no more than
the general rate available for other former
members of the Plan. The maximum annual
pension contribution for the current Chief
Financial Officer is 18%.
The Plan is closed to future accruals.
However, legacy arrangements will be
honoured.
New recruits would normally participate in
defined contribution arrangements or take a
non-pensionable salary supplement.
The level of contribution would be
determined at the time of appointment and
the maximum level will be aligned to the
wider employer workforce contribution rate,
which is currently 8% of salary in Savills UK.
For international appointments, the
Committee may determine that alternative
pension provisions will operate, and when
determining arrangements, the Committee
will have regard to the cost of the
arrangements, market practice in the
relevant international jurisdiction and the
pension arrangements received elsewhere
in the Group.
Car allowance (currently up to a maximum
of £9,000 p.a.).
n/a
There is no overall maximum as the cost
of insurance benefits depends on the
individual’s circumstances, but the provision
of taxable benefits will normally operate
within an annual limit of 30% of an Executive
Director’s annual base salary.
The Committee will monitor the costs in
practice and ensure that the overall costs do
not increase by more than the Committee
considers to be reasonable in all the
circumstances.
Relocation expenses may be provided for a
limited period and are subject to a maximum
limit of £200,000 (£300,000 in the case of
an international relocation) plus, if relevant,
the cost of tax equalisation.
Benefits
• To provide market
competitive
benefits.
Benefits currently comprise:
• Medical insurance benefits.
• Car/car allowance.
• Permanent Health Insurance.
• Life insurance.
Other benefits may be provided if the
Committee considers it appropriate.
Where an Executive Director is located in
a different international jurisdiction,
benefits may reflect market practice in
that jurisdiction.
In the event that an existing Executive
Director or new Executive Director is required
by the Group to relocate, other benefits may
be provided including (but not limited to) a
relocation allowance, housing allowance and
tax equalisation.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 114
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
Purpose and
link to strategy
Operation
Annual performance-related profit share
• To encourage the
achievement of
challenging financial,
strategic and/or
operational targets.
• Further alignment
with Shareholders’
interests through
deferral of a
significant amount
of any award into
shares.
Annual profit share awards reflect the Group’s
annual profit performance and personal
performance and contribution.
Awards are delivered part in cash and part in
shares subject to a minimum cash threshold of
100% of annual salary. Thereafter, 50% of any
award is delivered in shares.
The share element of any award is normally
deferred for a period of three years.
The number of shares in that part of the
award deferred for three years is increased
at the time of vesting to reflect the value of
dividends declared over the deferral period.
Alternatively, the cash equivalent is paid.
The Committee may exercise its judgement
to adjust (on a downwards only basis)
individual annual bonus payouts should they
not reflect overall business performance or
individual contribution.
Malus/clawback provisions apply, allowing
for the reduction of awards as explained in
the notes to this table.
Potential
Performance measures
In line with the Group’s
philosophy, there is greater
emphasis on variable
performance-related pay,
while base salaries are set
significantly below market
median levels.
The maximum potential
annual profit share awards
for 2021 are:
• £2.267m for the Group
Chief Executive Officer.
• £1.7m for the Group
Chief Financial Officer.
For 2021 the weighting will be 75% in
relation to the Group’s annual profit
performance, defined as underlying profit
before tax performance, and 25% in relation
to delivery against a mix of personal,
strategic and operational objectives. The
Committee reserves the right to vary these
proportions in subsequent years and/or to
add additional or substitute measures to
ensure that incentive remains appropriate
to business strategy.
The scale for the profit share element
of any award will be disclosed annually
in arrears.
For a new Executive
Director, the Committee
would determine the
appropriate normal
maximum taking into
account the role and
responsibility, subject to a
maximum of £2.267m p.a..
Unless the Committee determines
otherwise, this scale will normally be
adjusted for any acquisitions/disposals in a
single year which impact (on an annualised
basis) UPBT by more than 7.5%. In such
cases the scale will be adjusted to neutralise
the benefit of any overage above the
7.5% level.
Each of these caps will
increase in line with the
rate of any increase in RPI
for the preceding financial
year (if there is no increase
in RPI, the cap will remain
unchanged).
If there is significant transaction that results
in the scale becoming inappropriate then
Shareholders will be consulted about any
adjustment to the scale.
The award potential at threshold is one-
third of maximum. As the arrangement is an
annual profit share there is no pre-set award
level for on-target performance.
Performance Share Plan (‘PSP’)
• To drive and
reward the delivery
of longer-term
sustainable
shareholder value,
aid retention and
ensure alignment of
senior management
and shareholder
interests.
Awards of shares subject to a performance
period of normally no less than three years.
A holding period will apply so that Executive
Directors may not normally exercise vested
PSP awards until the fifth anniversary of the
award date.
PSP awards may be in the form of nil cost
options or conditional awards over shares.
The Committee awards dividend equivalents
on a reinvested basis in respect of dividends
paid over the vesting or any subsequent
holding period.
Malus/clawback provisions apply, allowing for
the reduction of awards as explained in the
notes to this table.
Maximum annual award
potential of 200% of
salary (plan rules limit).
Subject to an overall
maximum of £1m per
annum per participant.
For a new Executive
Director, the Committee
would determine the
appropriate normal
maximum taking into
account the role and
responsibility, subject
to a maximum of 200%
of base salary p.a. (or if
lower £1m p.a.).
The Committee may adjust vesting of awards
if it considers that the outcome of the
measurement of the performance conditions
does not accurately reflect the underlying
performance or financial health of the Company.
In the event the Committee proposed to make
an upward adjustment the Committee would
consult with major Shareholders in advance.
The Committee may adjust or amend awards
in accordance with the PSP rules.
Performance conditions for future awards
are reviewed annually to ensure that
the measures and their targets remain
appropriate to business strategy and
are sufficiently challenging, and that
the relative balance of the performance
measures remains appropriate for properly
incentivising and rewarding the creation of
longer-term sustainable shareholder value.
Performance conditions are initially
proposed to be based on three measures:
• Relative TSR against the FTSE 250
(excluding investment trusts) or other
appropriate comparator group;
• Earnings per share; and
• Return on Equity
The Committee may review the
performance measures for the PSP to
ensure they remain aligned to the Group’s
strategy. The Committee would consult with
major Shareholders in advance of a change
in performance measures used for the PSP.
No more than 25% of an award vests for
threshold performance.
Savills plc | Annual Report and Accounts 2020 115
Purpose and
link to strategy
Operation
UK tax advantaged all-employee share plans
Potential
Performance
measures
• Share plans available
to all UK employees
in the Group who
satisfy the statutory
requirements.
Executive Directors are eligible to participate in
any of the Group’s all-employee share plans on the
same terms as other UK employees.
Maximum Partnership Shares in accordance
with statutory limits. The Company does not
presently offer Free Shares, Matching Shares or
Dividend Shares.
n/a
Shareholding Guidelines
• To encourage share
ownership by the
Executive Directors
and ensure interests
are aligned.
Executive Directors are expected to purchase and/
or retain all shares (net of tax) which vest under
the Group’s share plans (or any other discretionary
long-term incentive arrangement introduced in
the future) until such time as they hold a specified
value of shares.
Only beneficially owned shares and PSP awards
subject to a holding period (discounted for
anticipated tax liabilities) may be counted during
the holding period for the purposes of the
guidelines. Share awards do not otherwise count
towards this requirement.
Once shareholding guidelines have been met,
individuals are expected to retain these levels as a
minimum. The Committee will review shareholdings
annually in the context of this Policy.
500% of base salary for all Executive Directors.
n/a
From the adoption of this policy at the 2020
AGM, a guideline will apply additionally for a period
of two years from the date on which an executive
director stands down from the Board. The
requirement in these circumstances will be to retain
shares with a value equivalent to the lower of
either: 250% of base salary; or the value of shares
held at the date of standing down from
the Board. In these circumstances, however, the
requirement will not apply either to shares
purchased by an Executive Director with their
own funds or obtained under awards granted
at recruitment to buy-out awards from a
previous employer.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 116
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
Malus and clawback
Malus (being the reduction or forfeiture of bonus or unvested awards) and clawback (being the ability of the Company
to reclaim paid amounts as a debt) provisions apply to the annual performance-related profit share and the PSP. These
provisions may be applied where the Committee considers it appropriate to do so following: a material misstatement
of the Group’s financial results; serious misconduct by the individual; a factual error in calculating an award or vesting;
and other exceptional developments which have an actual or potential material adverse effect on the value or
reputation of the Group as determined by the Committee.
Clawback will apply for a two-year period post the vesting of awards. In the event of a regulatory or criminal inquiry being
ongoing at that point, the clawback period will be extended to a six-month period post the conclusion of such an inquiry.
Remuneration Policy for Non-Executive Directors
Approach to fees
Operation
Other items
Fees for the Chairman and other Non-
Executive Directors are set at an appropriate
level taking into consideration individual roles
and responsibilities, the time commitment
required and external market practice.
Fees will generally be reviewed annually in
line with increases in RPI over the previous
12 months.
All fees for membership of the Board are
subject to the maximum payable to Non-
Executive Directors as stated in the Company’s
Articles of Association (currently £500,000
for the Chairman and NED base fees) and
within an additional limit determined by the
Non-Executive Chairman and the Executive
Directors on behalf of the Board of £200,000
for any additional responsibility or other
special fees.
Fees payable to the Non-Executive Directors
are determined by the Non-Executive
Chairman and the Executive Directors on
behalf of the Board.
Fees payable to the Chairman are determined
by the Committee.
The Non-Executive Director fee policy is
to pay:
• a basic fee for membership of the Board; and
• Committee chairmanship and Senior
Independent Director fees to reflect
the additional responsibilities and time
commitment of the roles.
The Chairman receives an all-inclusive fee
for the role.
Additional fees for membership of a Committee
or chairmanship or membership of subsidiary
boards or other fixed fees may be introduced,
if considered appropriate.
Non-Executive Directors are not entitled to
participate in any of the Group’s incentive
arrangements or share schemes.
Non-Executive Directors do not currently
receive any taxable benefits (however, they
are covered by Directors and Officers
liability insurance).
Expenses incurred in the performance of
Non-Executive duties for the Company may
be reimbursed or paid for directly by the
Company, including any tax due on
the benefits.
Additional benefits may be provided in the
future if the Board considered this appropriate.
Savills plc | Annual Report and Accounts 2020 117
Directors’ Report
In accordance with the UK Financial Conduct Authority’s
Listing Rules (LR 9.8.4C), the information to be included
in the Annual Report and Accounts, where applicable,
under LR 9.8.4, is set out in this Directors’ Report.
Other information incorporated into this Report by
reference can be found at:
Strategic Report
Principal developments
Principal and emerging risks and
uncertainties
Statement of Directors’ responsibilities
Corporate Governance Statement
Engagement with UK employees
Greenhouse gas emissions
Engagement with suppliers, customers and
others in a business relationship
Page/Note
5
21
30
121
62
41
59
41
Operations
The Company and its subsidiaries (together the ‘Group’)
operate through a network of offices and associates
throughout the Americas, the UK, Continental Europe,
Asia Pacific, Africa and the Middle East.
Results and dividends
The results for the Group are set out in the consolidated
income statement on page 132 which shows a reported
profit for the financial year attributable to the Shareholders
of the Company of £67.6m (2019: £82.9m).
It is recommended that a final dividend of 17.0p per
ordinary share (amounting to £23.8m) is declared by
the Company at the AGM on 12 May 2021 and, subject to
Shareholder approval, paid on 18 May 2021 to Shareholders
on the register of members as at the close of business on
9 April 2021. More details of the proposed dividend and the
Company’s performance can be found in the Chairman’s
statement on pages 5 to 7.
Going concern
The Group’s business activities, together with the factors
considered likely to affect its future development,
performance and position are set out in the Strategic
Report on pages 5 to 61. The financial position of the
Group, its cash flows, liquidity position and borrowing
facilities are described on pages 27 to 29. In addition,
Note 3 to the financial statements includes the Group’s
objectives, policies and processes for managing its
capital, its financial risk management objectives, details
of its financial instruments and hedging activities, and its
exposures to credit risk and liquidity risk.
The Group has considerable financial resources, including
a £360m committed revolving credit facility that extends
to June 2024. The Group has a broad geographic
presence, service offering and extensive client spread
ensuring that the Group is not over-dependent on one
geography, service line or client. As a consequence, the
Directors believe that the Group is well placed to manage
its business risks successfully.
The Directors have reviewed the current and projected
financial position of the Group, making reasonable
assumptions about future trading performance. On the
basis of this review, and after making due enquiries,
the Directors have a reasonable expectation that the
Company and the Group have adequate resources to
continue as a going concern for a period of at least 12
months from the date of the approval of the financial
statements. Accordingly, they continue to adopt the
going concern basis in preparing the Annual Report and
Accounts. Note 2.2. to the financial statements gives
further explanation as to why the Directors continue to
adopt the going concern basis of accounting in preparing
the consolidated financial statements.
Directors
Biographical details of the current Directors are shown
on pages 65 to 67. All the Board members served
throughout the year save for Philip Lee and Richard
Orders who were appointed as Independent Non-
Executive Directors with effect from 1 January 2021.
As at 31 December 2019 the Board comprised the Non-
Executive Chairman, two Executive Directors and five
Non-Executive Directors.
Interests in the issued share capital of the Company
held at the end of the period under review and up to
the date of this Report by the Directors or their families
are set out on page 108 of the Remuneration Report.
Details of share options held by the Directors pursuant
to the Company’s share option schemes are provided
in the Remuneration Report on pages 109 and 110. It is
the Board’s policy that the GEB Members should retain
at least 105,000 shares (value at 31 December 2020:
£1,002,225) in the Company and that the Group Chief
Executive and Group Chief Financial Officer hold shares
to the value of five times their respective base salaries
(£1,475,000 and £1,127,500 respectively).
Directors’ interests in significant contracts
No Directors were materially interested in any contract
of significance.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 118
Directors’ Report continued
Indemnification of Directors
In accordance with the Company’s Articles of Association,
and to the extent permitted by law, the Directors and the
Group Legal Director & Company Secretary are granted
an indemnity, in respect of any liabilities incurred as a
result of their holding office. Such indemnities were in
force during the financial year to 31 December 2020
and up to the date of this Report. The Company also
maintains appropriate insurance cover in respect of legal
action against its Directors and Officers.
Management Report
This Directors’ Report, on pages 117 to 121, together
with the Strategic Report on pages 5 to 61, form the
Management Report for the purposes of DTR 4.1.5R.
Additional Information Disclosure
Pursuant to regulations made under the Companies
Act 2006 the Company is required to disclose certain
additional information. Those disclosures not covered
elsewhere within this Annual Report are as follows:
Share capital and major shareholdings
The issued share capital of the Company as at
31 December 2020 comprised 143,065,222 2.5p ordinary
shares, details of which may be found on pages 198
and 199.
The Company has only one class of share capital formed
of ordinary shares. All shares forming part of the ordinary
share capital have the same rights and each carries
one vote.
Votes may be exercised at general meetings of the
Company, by members in person, by proxy or by
corporate representatives (in relation to corporate
members). The Articles provide a deadline for the
submission of proxy forms (electronically or by paper)
of not less than 48 hours before the time appointed for
the holding of the general meeting or the adjourned
meeting (as the case may be).
There are no unusual restrictions on the transfer of
ordinary shares. The Directors may refuse to register
a transfer of a certificated share unless the instrument
of transfer is: (i) lodged at the registered office of the
Company or any other place as the Board may decide
accompanied by the certificate for the shares to be
transferred and such other evidence as the Directors
may reasonably require to show the right of the transferor
to make the transfer; or (ii) in respect of only one class
of shares.
The Directors may also refuse to register a transfer
of a share (whether certificated or uncertificated),
whether fully paid or not, in favour of more than four
persons jointly.
As at 31 December 2020 the Company had been notified of the following interests in the Company’s ordinary share
capital in accordance with DTR 5. It should be noted that these holdings are likely to have changed since notified to
the Company. However, notification of any change is not required until an applicable threshold is crossed.
Shareholders
Jupiter Fund Management Plc
Aberdeen Asset Managers Limited (and/or acting for its affiliates) as discretionary
investment manager on behalf of multiple managed portfolios
Liontrust Investment Partners LLP
Standard Life Investments (Holdings) Limited
BlackRock, Inc.
Heronbridge Investment Management LLP
Aggregate of Standard Life Aberdeen plc affiliated investment management entities
with delegated voting rights on behalf of multiple managed portfolios
Old Mutual Plc
1. As at date of notification.
Number of shares1
8,739,464
7,189,327
7,210,255
6,723,563
not disclosed
7,131,812
7,068,920
6,685,646
%1
6.10
5.07
5.04
<5.00
<5.00
4.99
4.98
4.71
Note: Between 31 December 2020 and 10 March 2021, BlackRock, Inc. made a further five notifications in accordance with DTR 5. In the latest of those
notifications, on 10 March 2021, BlackRock, Inc. disclosed a shareholding of 5.07%. No other changes to the above have been disclosed to the Company
in accordance with DTR 5, between 31 December 2020 and 10 March 2021.
As at 31 December 2020, the Savills plc 1992 Employee Benefit Trust (the ‘EBT’) held 3,524,326 ordinary shares and the
Savills Rabbi Trust held 1,055,676 ordinary shares. Any voting or other similar decisions relating to these shares held in trust
are taken by the trustees, who may take account of any recommendation of the Company. The EBT waives its right to
receive Savills plc dividends. The Savills Rabbi Trust put a dividend waiver in place in February 2021. For further details of
the trusts please refer to Note 2.22 to the financial statements.
Savills plc | Annual Report and Accounts 2020 119
Repurchase of shares
In accordance with the Listing Rules, at the
AGM on 25 June 2020 Shareholders gave authority for a
limited purchase of Savills shares of up to 10% of the issued
share capital of the Company. During the year, no shares
were purchased under the authority.
Annual General Meeting
The AGM is to be held at Finsbury Circus House,
15 Finsbury Circus, London EC2M 7EB at 12 noon on
12 May 2021; details are contained in the AGM Notice
circulated to Shareholders with this Annual Report
and Accounts.
The Board proposes to seek Shareholder approval at the
AGM on 12 May 2021 to renew the Company’s authority
to make market purchases of its own ordinary shares
of 2.5p each for cancellation, to be held in treasury,
sold for cash or (provided Listing Rule requirements
are met) transferred for the purposes of or pursuant
to an employee share scheme. Details of the proposed
resolution are included in the Notice of AGM circulated
to Shareholders with this Annual Report and Accounts
(the ‘AGM Notice’).
Change of control
There are no significant agreements which take effect,
alter or terminate in the event of change of control of the
Company except that under its banking arrangements,
a change of control may trigger an early repayment
obligation.
Articles of Association
The Company’s Articles are governed by relevant statutes
and may be amended by special resolution of the
Shareholders in a general meeting.
The Company’s rules about the appointment and
replacement of its Directors are contained in the Articles.
The powers of the Directors are determined by UK
legislation and the Articles in force from time to time.
Unless determined by ordinary resolution of the
Company, the number of Directors shall be not less than
three and not more than 18. A Director is not required to
hold any shares in the Company by way of qualification.
However, as more fully described on page 115, in
accordance with Board policy, the members of the GEB
(which includes the Executive Directors) are expected to
build-up and maintain a shareholding in the Company.
The Board may appoint any person to be a Director and
such Director shall hold office only until the next AGM
when he or she shall then be eligible for re-appointment
by the Shareholders. The Articles provide that each
Director shall retire from office at the third AGM after
the AGM at which he or she was last elected. A retiring
Director shall be eligible for re-election. However, in
accordance with the Code, all Directors of the Company
are subject to annual re-election.
Half Year Report
Like many other listed public companies, we no longer
circulate printed Half Year reports to Shareholders.
Instead, Half Year results statements are published on the
Company’s website. This is consistent with our target to
reduce printing and distribution costs.
Political contributions
The Company made no political contributions during the
year (2019: £nil).
Employees’ policies and involvement
The Directors recognise that the quality, commitment and
motivation of Savills staff is a key element to the success
of the Group; see page 41 for more information as to
employee engagement.
The Group provides regular updates covering
performance, developments and progress to employees
through regular newsletters, video addresses, the Group’s
intranet, social media and through formal and informal
briefings. These arrangements also aim at ensuring that
all of our staff understand our strategy and to build
knowledge on the part of employees of matters affecting
the performance of the Group. The Group also consults
with employees so as to ascertain their views in relation
to decisions which are likely to affect their interests.
Employees are able to share in the Group’s success
through performance-related profit share schemes
(see page 114 for more details) and for UK employees
(including Executive Directors), share plans which
include a Sharesave Scheme and a Share Incentive Plan
(‘SIP’). The Sharesave Scheme is an HMRC-approved
save-as-you-earn share option scheme which allows
participants to purchase shares out of the proceeds of
a linked savings contract at a price set at the time of
the option grant. Participants may elect to save up to
£500 per month and options may normally be exercised
in the six months following the maturity of the linked
three-year savings contract. The potential for extending
the Sharesave Scheme internationally remains under
consideration. The SIP is also HMRC-approved and
through which participants may make regular purchases
of shares (up to the current statutory limit of £150 per
month) from pre-tax income. Shares under the SIP
normally vest after five years and are free from income
tax and national insurance contributions.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 120
Directors’ Report continued
Human rights and equal opportunities
We support the principles of the UN Universal
Declaration of Human Rights and the Core Principles
of the International Labour Organization.
It is Group policy to provide employment on an
equal basis irrespective of gender, sexual orientation,
marital or civil partner status, gender reassignment,
race, colour, nationality, ethnic or national origin, religion
or belief, disability or age. In particular, the Group gives
full consideration to applications for employment from
disabled persons. Where existing employees become
disabled, it is the Group’s policy wherever practicable
to provide continuing employment and to provide
training and career development and promotion to
disabled employees.
Whistleblowing
The Group encourages staff to report any concerns
which they feel need to be brought to the attention of
management. Whistleblowing procedures, which are
published on the Group’s intranet site, are available to
staff who are concerned about possible impropriety,
financial or otherwise, and who may wish to ensure that
action is taken without fear of victimisation or reprisal.
Independent auditors
In accordance with section 489 of the Companies Act
2006, PricewaterhouseCoopers LLP were re-appointed
as auditors of the Company at the 2020 AGM in respect
of the financial year ended 31 December 2020. As
previously announced, Ernst & Young LLP are to be
proposed as auditors of the Company for the financial
year ending 31 December 2021 and their appointment
will be recommended to Shareholders for approval at
the AGM to be held on 12 May 2021. This proposed
appointment follows a competitive tender process which
took place in 2019. This process concluded with the
Audit Committee recommending to the Board that
Ernst & Young LLP be appointed as External Auditor
for financial years commencing on or after 1 January
2021. The competitive tender process was undertaken
in accordance with mandatory External Auditor
rotation rules.
Disclosure of information to the auditor
Each Director confirms that, so far as he/she is aware,
there is no relevant audit information of which the
Company’s auditors are unaware and that each of the
Directors has taken all the steps that he/she ought to
have taken as a Director to make himself/herself aware
of any relevant audit information and to establish that
the Company’s auditors are aware of that information.
This confirmation is given pursuant to section 418 of
the Companies Act 2006 and should be interpreted in
accordance with and subject to that section.
Engagement with UK employees
In accordance with Section 172 of the Companies Act
2006 our statement on engagement with UK employees
is on page 41.
Engagement with suppliers, customers
and others in a business relationship with
the Company
In accordance with Section 172 of the Companies Act
2006 our statement on engagement with suppliers,
customers and others in a business relationship with
the Company is on pages 41 and 42.
By order of the Board
Chris Lee
Group Legal Director & Company Secretary
10 March 2021
Savills plc
Registered in England No. 2122174
Savills plc | Annual Report and Accounts 2020 121
Statement of Directors’ responsibilities in respect of the financial statements
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulation.
Each of the Directors, whose names and functions
are listed in pages 64 to 67 confirm that, to the best of
their knowledge:
• the Group and parent Company financial statements,
which have been prepared in accordance with IFRSs
as adopted by the European Union, give a true and
fair view of the assets, liabilities, financial position
and profit of the Group and profit of the parent
Company; and
• the Directors’ Report includes a fair review of the
development and performance of the business and
the position of the Group and parent Company,
together with a description of the principal risks and
uncertainties that it faces.
In the case of each Director in office at the date the
Directors’ Report is approved:
• so far as the Director is aware, there is no relevant audit
information of which the Group and parent Company’s
auditors are unaware; and
• they have taken all the steps that they ought to have
taken as a Director in order to make themselves aware
of any relevant audit information and to establish that
the Group and parent Company’s auditors are aware of
that information.
On behalf of the Board
Mark Ridley
Group Chief Executive
Chris Lee
Group Legal Director & Company Secretary
Forward-looking statements
Forward-looking statements have been made by the
Directors in good faith using information up until the
date on which they approved the Annual Report and
Accounts. Forward-looking statements should be
regarded with caution due to uncertainties in economic
trends and business risks.
10 March 2021
Under that law the Directors have prepared the Group
and parent Company financial statements in accordance
with international accounting standards in conformity
with the requirements of the Companies Act 2006 and
in accordance with international financial reporting
standards adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union. Under
company law the Directors must not approve the financial
statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Group and
parent Company and of the profit or loss of the Group
and parent Company for that period. In preparing the
financial statements, the Directors are required to:
• select suitable accounting policies and then apply
them consistently;
• state whether applicable IFRSs as adopted by the
European Union have been followed, subject to any
material departures disclosed and explained in the
financial statements;
• make judgements and accounting estimates that are
reasonable and prudent; and
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Group and parent Company will continue in business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Group and parent Company’s transactions
and disclose with reasonable accuracy at any time the
financial position of the Group and parent Company and
enable them to ensure that the financial statements and
the Directors’ Remuneration Report comply with the
Companies Act 2006 and, as regards the Group financial
statements, Article 4 of the IAS Regulation.
The Directors are also responsible for safeguarding the
assets of the Group and parent Company and hence for
taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors are responsible for the maintenance and
integrity of the Group and parent Company’s website.
Legislation in the United Kingdom governing the
preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
The Directors consider that the annual report and
accounts, taken as a whole, is fair, balanced and
understandable and provides the information necessary
for Shareholders to assess the Group and parent
Company’s performance, business model and strategy.
FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCEOVERVIEW 122
Independent Auditors’ Report
to the members of Savills plc
Report on the audit of the financial statements
Opinion
In our opinion, Savills plc’s Group financial statements and Company financial statements (the “financial
statements”):
give a true and fair view of the state of the Group’s and of the Company’s affairs as at 31 December 2020 and
of the Group’s profit and the Group’s and Company’s cash flows for the year then ended;
have been properly prepared in accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report & Accounts (the “ Annual Report ”),
which comprise: the Consolidated and Company statements of financial position as at 31 December 2020; the
Consolidated income statement, the Consolidated statement of comprehensive income, the Consolidated statement of
changes in equity, the Company statement of changes in equity and the Consolidated and Company statements of cash
flows for the year then ended; and the notes to the financial statements, which include a description of the significant
accounting policies.
Our opinion is consistent with our reporting to the Audit Committee.
Separate opinion in relation to international financial reporting standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union
As explained in Note 2 to the financial statements, the Group, in addition to applying international accounting
standards in conformity with the requirements of the Companies Act 2006, has also applied international financial
reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
In our opinion, the Group financial statements have been properly prepared in accordance with international
financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable
law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the
financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard
were not provided to the Group.
Other than those disclosed in the Audit Committee Report, we have provided no non-audit services to the Group in
the period under audit.
Our audit approach
Overview
Audit scope
We conducted full scope audits of the complete financial information in the UK, Germany, Spain, Ireland, the
United States of America, Hong Kong, China (Shanghai), the Republic of Korea and Australia. The UK and Hong
Kong components were considered to be financially significant due to their contribution to the Group’s underlying
profit before tax.
In addition, we carried out specified audit procedures over balances and transactions of entities in Dubai,
Singapore and Japan.
We carried out full scope audit procedures on parts of the business which accounted for 84% (2019: 85%) of
Group revenues and 84% (2019: 86%) of the Group’s underlying profit before tax.
As the Group audit team, we maintained regular contact with our component teams, in particular with the Hong
Kong team throughout the planning and execution of their work.
Savills plc | Annual Report and Accounts 2020 123
Key audit matters
Risk of fraud in revenue recognition in relation to cut-off for transaction income in the investment management
and transactional advisory businesses (Group)
Goodwill impairment assessment in respect of the United States of America and Middle East businesses (Group)
Provisions for litigation (Group)
Recoverability of trade receivables (Group)
Impact of COVID-19 (Group and Company)
Materiality
Overall Group materiality: £6,000,000 (2019: £7,100,000) based on approximately 5% of Group's three year
average of underlying profit before tax as defined in Note 2.3 to the financial statements (2019: 5% of Group
underlying profit before tax).
Overall Company materiality: £3,000,000 (2019: £2,500,000) based on 1% of total assets.
Performance materiality: £4,500,000 (Group) and £2,250,000 (Company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
financial statements.
Capability of the audit in detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined in the Auditors’ responsibilities for the audit of the financial statements section,
to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with
laws and regulations related to the Listing Rules, Pensions legislation, UK tax legislation, UK employment legislation
and UK financial services regulations and equivalent local laws and regulations applicable to significant components,
and we considered the extent to which non-compliance might have a material effect on the financial statements. We
also considered those laws and regulations that have a direct impact on the preparation of the financial statements
such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override of controls), and determined that the principal
risks were related to posting inappropriate journal entries to increase revenue and management bias in accounting
estimates and judgements. The Group engagement team shared this risk assessment with the component auditors
so that they could include appropriate audit procedures in response to such risks in their work. Audit procedures
performed by the Group engagement team and/or component auditors included:
Gaining an understanding of the legal and regulatory framework applicable to the Group and the industry in
which it operates and considering the risk of acts by the Group which were contrary to applicable laws and
regulations, including fraud. We held discussions with management, internal audit and the Group’s legal team and
external legal counsel, including consideration of known or suspected instances of non-compliance with laws and
regulation and the results of whistleblowing procedures and related investigations, that could give rise to a
material misstatement in the Group and Company financial statements.
Challenging assumptions and judgements made by management in its significant accounting estimates, in
particular in relation to litigation provisions, recoverability of trade receivables and impairment of goodwill
(see related key audit matters below).
We did not identify any key audit matters relating to irregularities, including fraud. We also addressed the risk of
management override of internal controls, including testing journals, and evaluated whether there was evidence
of bias by the Directors that represented a risk of material misstatement due to fraud.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that are not closely related to events and transactions
reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher
than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example,
forgery or intentional misrepresentations, or through collusion.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 124
Independent Auditors’ Report continued
to the members of Savills plc
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the
audit of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) identified by the auditors, including those which had the greatest effect
on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement
team. These matters, and any comments we make on the results of our procedures thereon, were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
The impact of the COVID-19 pandemic on the Group is a new key audit matter this year. In our 2019 audit opinion,
we included a key audit matter in respect of the recognition of right-of-use-assets and leased liabilities, following the
first year adoption of IFRS 16. This is no longer a key audit matter. Otherwise, the key audit matters below are
consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Risk of fraud in revenue recognition in relation
to cut-off for transaction income in the investment
management and transactional advisory
businesses (Group)
Our specific audit focus was on the risk that revenue
may be recorded in the incorrect period in respect
of transaction fees in the transactional advisory and
investment management businesses, in light of the
incentive schemes for management in those businesses
designed to reward performance. The recognition of
revenue is largely dependent on the date the underlying
transaction is deemed to be completed.
We performed the following procedures in the UK and
ensured that the equivalent procedures were performed
by our in-scope component teams
• We examined the appropriateness of the Group's
accounting policy for revenue recognition, and its
compliance with accounting standards, and tested the
application of this policy. For a sample of transactions,
we evaluated the contractual terms and the revenue
recognition policy adopted and determined that the
related revenue had been recorded in accordance with
above accounting policy;
• We tested revenue recognition through agreeing a
sample of revenue transactions to underlying contracts
and third-party documentation, for example, property
sales completion statements, determining that these
sales had taken place and were recorded in the correct
period; and
• We also tested journal entries posted to revenue
accounts to identify any unusual or irregular items
and tested the reconciliations between the revenue
subledgers used by the Group and their financial ledgers.
There were no material issues identified by our testing of
revenue recognition in the year.
Savills plc | Annual Report and Accounts 2020 125
Key audit matter
How our audit addressed the key audit matter
Goodwill impairment assessment in respect of North
America and Middle East businesses (Group)
We performed the following audit procedures in relation
to the US Transaction Advisory and Middle East goodwill:
The Group carried £379.4m of goodwill at 31 December
2020 (2019: £374.2m). The carrying value of goodwill is
contingent on future cash flows of the underlying cash
generating units (‘CGUs’) and there is a risk that if these
cash flows do not meet the Directors’ expectations, the
goodwill will be impaired. A particular focus during our
testing was the goodwill balance of £144.3m in relation
to the US Transaction Advisory business, on the basis of
its reliance on transactional revenue from the office
leasing market.
We also focused on the recoverability of £13.9m of
goodwill in relation to the Middle East business which
was acquired in 2018.
No goodwill impairment charge was recorded in the
Group’s financial statements. In performing sensitivity
analysis, we determined that the recoverability of the US
Transaction Advisory goodwill is sensitive to reasonably
possible changes in key assumptions. Accordingly,
assumptions and sensitivities have been disclosed in the
Group’s financial statements in accordance with IAS 36.
• We evaluated and challenged the Directors’ future cash
flow forecasts and the process by which they were
drawn up and tested the mathematical accuracy of the
underlying value in use calculations;
• We compared management’s forecasts with the latest
Board-approved budget/strategy review numbers and
found them to be consistent;
• We challenged the key assumptions such as revenue
growth and profit margins in the forecasts by
comparing them with historical results, as well as
comparing those assumptions to relevant economic
and property market forecasts. This included assessing
the reasonableness of assumptions of recovery of those
markets to pre-pandemic levels and reviewing lease
expiration data reflecting future demand in respect of
the US business. We also reviewed certain contracts,
both short-term and long-term, reflecting future
demand in respect of the Middle East business;
• We evaluated the discount rate used in the calculations
by assessing the cost of capital for the Group and
comparable organisations and assessed the specific
risk premium applied to each CGU. We involved PwC
valuation experts to determine a range of acceptable
discount rates, with reference to valuations of similar
companies and other relevant external data and
compared this range with the discount rates adopted
by the Group. The discount rates adopted by the Group
were slightly below the discount rates determined by
the valuation experts in respect of the US business;
whereas the discount rate adopted by the group for the
Middle East business was above the range determined
by our valuation experts.
• We performed sensitivity analysis on the key
assumptions within the cash flow forecasts which
included sensitising the discount rate applied to
the future cash flows, and the short and long term
growth rates and profit margins. We also considered
the appropriateness of assumptions in relation to the
recovery of performance following COVID-19. We
ascertained the extent to which a change in these
assumptions both individually or in aggregate would
result in goodwill impairment and considered the
likelihood of such events occurring. We ensured that
appropriate disclosure in accordance with IAS 36,
‘Impairment of assets’, was made.
Overall, we were satisfied that no impairment of goodwill
was required.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 126
Independent Auditors’ Report continued
to the members of Savills plc
Key audit matter
How our audit addressed the key audit matter
Provisions for litigation (Group)
The Group is subject to a number of legal claims in the
normal course of business. The calculation of provisions
against these claims is judgemental, given the range of
possible outcomes on each claim.
Our audit procedures considered both the potential
exposure and the extent to which liabilities are likely to
crystallise, as well as the adequacy of the insurance cover
held by the Group. The Group provision for litigation as at
31 December 2020 is £14.5m (2019: £11.5m).
Recoverability of trade receivables (Group)
The Group is exposed to a risk of default in respect of
trade receivables. This risk is factored into our audit
approach with respect to the provision against trade
receivables. At 31 December 2020 the total trade
receivables balances was £388.9m (2019: £463.0m) less
provisions of £29.9 m (2019: £25.6m) included in Note
22.1. The recoverability of trade receivables and the level
of provisions for expected credit losses are considered
to be a key risk due to the significance of these balances
to the financial statements and the judgements required
in making appropriate provisions. Given the current
economic impact of COVID-19, there may be additional
risk in the trade receivables balance as customers may be
experiencing cash flow problems and recoverability may
be in greater doubt.
In order to assess the accuracy and completeness of the
provisions held at the balance sheet date, we performed
the following procedures:
• Where relevant, obtained and read legal claim letters
and accompanying third party documentation received
by the Group;
• Obtained and read insurance contracts, and verified
that the terms were appropriately accounted for;
• Met with the Group’s internal and external legal
counsels to discuss material developments and the
latest status of legal matters, including the potential
exposure after taking into account the Group’s
insurance cover;
• Verified the amounts and other details in respect of
new claims to the relevant supporting documentation;
• Assessed the outcome of prior year estimates of
litigation provisions to help assess the reliability of the
estimates this year;
• Examined the available evidence in respect of legal
cases settled during the year including, where
relevant, tracing the related cash payments to bank
statements; and
• Examined Board minutes, legal expenses incurred
during the year and any litigation-related matters
arising after the year-end.
We determined based on these procedures that the
Directors had made reasonable judgements in their
assessment process for determining the level of
provision held.
In order to test the recoverability of trade receivables, we
performed the following procedures:
• A sample of trade receivables invoices were agreed
to the post year end cash receipts by vouching to
bank statements. Where cash had not been received
post year-end, we performed alternative procedures,
by agreeing amounts recorded to underlying sales
contracts and completion documentation;
• Discussed and assessed the reasons that the amounts
were not yet paid with local management teams. We
also evaluated the Group’s credit control procedures,
and assessed the ageing profile of trade receivables,
focusing on older debts;
• We reviewed management’s loss allowance provision
for trade receivables calculations and ensured that these
were consistent with Group policy, and the expected
credit loss model as stipulated by IFRS 9. In addition,
agreed the provision reflects the risk of uncollected
debts given to individual counterparty credit risk and
the general economic conditions in each jurisdiction,
including the effects of COVID-19; and
• We challenged management as to the recoverability
of the older, unprovided amounts, corroborating
management explanations with underlying
documentation and correspondence with the customer.
Based upon the above, we are satisfied that
management had taken reasonable judgements that
were supported by the available evidence in respect of
the relevant receivables.
Savills plc | Annual Report and Accounts 2020 127
Key audit matter
How our audit addressed the key audit matter
Impact of COVID-19 (Group and Company)
The COVID-19 pandemic has had a considerable
impact on the performance of the Group during the
current year. As a result, the pandemic has increased
estimation uncertainty to certain areas of the financial
statements. The key areas of the financial statements
most impacted by the increased estimation uncertainty
are described below:
We validated that the cash flow forecast models used
across the goodwill impairment, going concern and
viability assessments were consistent. Our procedures
in respect of the goodwill and indefinite-lived intangible
asset impairment assessments are covered in the related
key audit matter above.
With respect to management’s going concern
assessment, we:
• The budgets and models supporting the goodwill
• Evaluated management’s base case and downside
and intangibles impairment assessments have been
updated to reflect management’s best estimate of
the impacts of COVID-19. The assumptions applied
in this analysis have been determined internally, but
incorporate external views and other third-party data
sources, where relevant. Consideration of the impact on
the carrying value of goodwill and intangible assets is
described in the related key audit matter above.
• These models and related assumptions also
underpin management’s going concern and viability
assessments. Management has modelled a variety of
scenarios, including severe but plausible downside
scenarios, to its base case trading forecast. Having
considered these models, together with a robust
assessment of planned and possible mitigating actions,
the Directors have concluded that the Group remains a
going concern, and that there is no material uncertainty
in respect of this conclusion.
• The recoverability of trade receivables has been
considered in light of the increased uncertainty over
customer liquidity and the ability of Savills to collect
amounts due from customers, as considered in the key
audit matter above.
In addition, management’s ways of working, including the
operation of controls, has been impacted as a result of a
large number of staff having to work remotely. This has
inevitably resulted in an increase in risk due to the remote
accessing of IT systems and a potentially heightened
cyber risk.
scenarios, challenging the key assumptions;
• Considered the Group’s available financing and
maturity profile to assess liquidity through the
assessment period;
• Tested the mathematical integrity of the forecasts
and the models and reconciled these to Board
approved budgets;
• Recalculated the Group’s forecast compliance with
its banking covenants;
• Performed our own independent sensitivity analysis
to assess further appropriate downside scenarios for
both liquidity and covenant compliance; and
• We assessed the reasonableness of management’s
planned or potential mitigating actions within the
downside scenarios.
Our conclusions in respect of going concern are set out
separately within this report.
Our procedures in respect of the recoverability of
receivables are covered in the related key audit
matter above.
We performed additional procedures to assess any
implications over the control environment arising from
the impact of the pandemic, including inquiries regarding
the operation of IT and other key business processes
especially purchase and payables, and whether there
had been any impact on the Group given the heightened
cyber risk. Based on the inquiries performed and the
results of our audit procedures, we did not identify
any evidence of a material deterioration in the control
environment.
We increased the frequency and extent of our oversight
over component audit teams, using video conferencing
and remote working paper reviews, to satisfy ourselves
as to the appropriateness of audit work performed at
significant and material components.
We considered the appropriateness of management
disclosures in the financial statements in respect of the
impact of the current environment and the increased
uncertainty on certain accounting estimates and consider
these to be appropriate.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 128
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How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial statements as a whole, taking into account the structure of the Group and the Company, the accounting
processes and controls, and the industry in which they operate.
The Group’s accounting process is structured around a local finance function in each of the territories in which the
Group operates. In Europe, these functions maintain their own accounting records and controls and report to a Head
Office finance team in the UK through submission of management reporting packs. In Asia Pacific, these functions
report to a regional finance team in Hong Kong, and in North America the local functions report to the North
America finance team in New York. At a Group level, a separate finance team consolidates the reporting packs of
Europe & the Middle East, Asia Pacific, UK, North America and the central functions.
In our view, due to their significance and/or risk characteristics, businesses in the UK, Germany, Spain, Ireland, the
United States of America, Hong Kong, China (Shanghai), the Republic of Korea and Australia required an audit of
their complete financial information. We used component auditors from PwC network firms who are familiar with the
local laws and regulations in each of the identified territories outside the UK to perform this audit work.
Based upon Group materiality, other than in Spain, Ireland and Germany we did not carry out detailed audit
procedures on Savills Europe.
In order to direct and supervise the Group audit, the Group engagement team sent detailed instructions to
component audit teams. This included communication of the areas of focus and other required communications.
Given the restrictions on overseas travel as a result of COVID-19, the Group engagement team increased the
frequency and extent of oversight over component audit teams, particularly in respect of our financially significant
component team in Hong Kong. This included regular video conferences and remote working paper reviews to
direct and supervise the work of these teams, and to satisfy ourselves as to the appropriateness of the audit work
performed. The Group audit team also joined the audit clearance meetings for each of the above locations that were
subject to full scope audit procedures, as well as holding video calls with the regional management teams of Asia
Pacific, Europe and North America.
The Group consolidation, financial statement disclosures and a number of complex items were audited by the Group
engagement team at the head office. These included pensions, share-based payments, tax disclosures, and goodwill
impairment assessments. Taken together, these procedures gave us the evidence we needed for our opinion on the
financial statements as a whole.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and
in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – Group
Financial statements – Company
Overall materiality
£6,000,000 (2019: £7,100,000).
How we determined it
Rationale for
benchmark applied
Approximately 5% of Group's three-year average of
underlying profit before tax as defined in Note 2.3 to the
financial statements (2019: 5% of Group underlying profit
before tax)
Based on our professional judgement, we determined
materiality by applying a benchmark of underlying profit
before tax, as the primary measure used by management
and the Shareholders in assessing the performance of the
Group and is a generally accepted auditing benchmark. We
have applied a three-year average to the underlying profit
before tax of the financial years 2018, 2019 and 2020, due
to the substantial impact that COVID-19 pandemic has had
on the business in 2020. We consider this to be appropriate
as COVID-19 is considered to have a one-off effect on the
performance of the business and it is expected to recover in
future with no underlying structural change to the business.
£3,000,000
(2019: £2,500,000).
1% of total assets
The parent Company is
a non-trading holding
company and accordingly
we conclude that the total
assets is an appropriate
benchmark.
Savills plc | Annual Report and Accounts 2020 129
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group
materiality. The range of materiality allocated across components was £0.4 million to £5.7 million. Certain
components were audited to a local statutory audit materiality that was also less than our overall Group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality
in determining the scope of our audit and the nature and extent of our testing of account balances, classes of
transactions and disclosures, for example in determining sample sizes. Our performance materiality was 75% of
overall materiality, amounting to £4,500,000 for the Group financial statements and £2,250,000 for the Company
financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls – and concluded that an amount at the upper end
of our normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above
£0.3m (Group audit) (2019: £0.3m) and £0.3m (Company audit) (2019: £0.3m) as well as misstatements below those
amounts that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group's and the Company’s ability to continue to adopt the going
concern basis of accounting included:
We are required to report if we have anything material to add or draw attention to in respect of the Directors’
statement in the financial statements about whether the Directors considered it appropriate to adopt the going
concern basis of accounting in preparing the financial statements and the Directors’ identification of any material
uncertainties to the Group’s and the Company’s ability to continue as a going concern over a period of at least
12 months from the date of approval of the financial statements.
We are required to report if the Directors’ statement relating to Going Concern in accordance with Listing Rule
9.8.6R(3) is materially inconsistent with our knowledge obtained in the audit.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Group's and the Company’s ability to
continue as a going concern for a period of at least 12 months from when the financial statements are authorised
for issue.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
As not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group's and the
Company's ability to continue as a going concern.
In relation to the Company’s reporting on how they have applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the Directors’ statement in the financial statements about
whether the Directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the
relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and
our auditors’ report thereon. The Directors are responsible for the other information. Our opinion on the financial
statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to
the extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material
inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a
material misstatement of the financial statements or a material misstatement of the other information. If, based on
the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report based on these responsibilities.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 130
Independent Auditors’ Report continued
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With respect to the Strategic Report and Directors’ Report, we also considered whether the disclosures required by
the UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic
Report and Directors’ Report for the year ended 31 December 2020 is consistent with the financial statements and
has been prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the Group and Company and their environment obtained in the
course of the audit, we did not identify any material misstatements in the Strategic Report and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the Directors’ statements in relation to going concern, longer-term viability
and that part of the corporate governance statement relating to the Company’s compliance with the provisions of
the UK Corporate Governance Code specified for our review. Our additional responsibilities with respect to the
corporate governance statement as other information are described in the Reporting on other information section of
this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
corporate governance statement is materially consistent with the financial statements and our knowledge obtained
during the audit, and we have nothing material to add or draw attention to in relation to:
The Directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
The disclosures in the Annual Report & Accounts that describe those principal risks, what procedures are in place
to identify emerging risks and an explanation of how these are being managed or mitigated;
The Directors’ statement in the financial statements about whether they considered it appropriate to adopt the
going concern basis of accounting in preparing them, and their identification of any material uncertainties to the
Group’s and Company’s ability to continue to do so over a period of at least 12 months from the date of approval
of the financial statements;
The Directors’ explanation as to their assessment of the Group's and Company’s prospects, the period this
assessment covers and why the period is appropriate; and
The Directors’ statement as to whether they have a reasonable expectation that the Company will be able to
continue in operation and meet its liabilities as they fall due over the period of its assessment, including any
related disclosures drawing attention to any necessary qualifications or assumptions.
Our review of the Directors’ statement regarding the longer-term viability of the Group was substantially less in
scope than an audit and only consisted of making inquiries and considering the Directors’ process supporting their
statement; checking that the statement is in alignment with the relevant provisions of the UK Corporate Governance
Code; and considering whether the statement is consistent with the financial statements and our knowledge and
understanding of the Group and Company and their environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following
elements of the corporate governance statement is materially consistent with the financial statements and our
knowledge obtained during the audit:
The Directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and
understandable, and provides the information necessary for the members to assess the Group’s and Company's
position, performance, business model and strategy;
The section of the Annual Report that describes the review of effectiveness of risk management and internal
control systems; and
The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the Directors’ statement relating to the
Company’s compliance with the Code does not properly disclose a departure from a relevant provision of the Code
specified under the Listing Rules for review by the auditors.
Savills plc | Annual Report and Accounts 2020 131
Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Statement of Directors' responsibilities in respect of the financial statements,
the Directors are responsible for the preparation of the financial statements in accordance with the applicable
framework and for being satisfied that they give a true and fair view. The Directors are also responsible for such
internal control as they determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to
cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using
data auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than
testing complete populations. We will often seek to target particular items for testing based on their size or risk
characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population
from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website
at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving
these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
we have not obtained all the information and explanations we require for our audit; or
adequate accounting records have not been kept by the Company, or returns adequate for our audit have not
been received from branches not visited by us; or
certain disclosures of Directors’ remuneration specified by law are not made; or
the Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the members on 30 April 2001 to
audit the financial statements for the year ended 31 December 2001 and subsequent financial periods. The period of
total uninterrupted engagement is 20 years, covering the years ended 31 December 2001 to 31 December 2020.
John Waters (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
10 March 2021
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 132
Consolidated income statement
for the year ended 31 December 2020
Revenue
Less:
Employee benefits expense
Depreciation
Amortisation of intangible assets
Other operating expenses
Impairment losses on financial assets
Other operating income
Other (losses)/gains
Operating profit
Finance income
Finance costs
Share of post-tax profit from joint ventures and associates
Profit before income tax
Income tax expense
Profit for the year
Attributable to:
Owners of the parent
Non-controlling interests
Earnings per share
Basic earnings per share
Diluted earnings per share
Supplementary income statement information
Reconciliation to underlying profit before income tax
Profit before income tax
– restructuring and acquisition-related costs
– other underlying adjustments
Underlying profit before income tax
* See Note 2.29 for details on the prior year restatement of revenue and other operating expenses.
Notes
6 and 7
2020
£m
1,740.5
2019
Restated*
£m
1,913.4
11.1
(1,153.7)
(1,240.5)
18 and 19
17
22.1
8.1
8.1
8
13
13
13
20.1
14
(64.3)
(9.6)
(419.1)
(8.7)
0.8
(0.1)
85.8
3.4
(16.2)
(12.8)
10.2
83.2
(15.2)
68.0
67.6
0.4
68.0
(60.6)
(10.4)
(482.0)
(6.5)
0.5
1.7
115.6
6.5
(18.3)
(11.8)
11.8
115.6
(32.0)
83.6
82.9
0.7
83.6
16.1
16.1
49.0p
47.9p
60.6p
58.8p
9
9
9
7 and 9
83.2
6.5
6.9
96.6
115.6
25.2
2.6
143.4
Savills plc | Annual Report and Accounts 2020 Consolidated statement of comprehensive income
for the year ended 31 December 2020
Profit for the year
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
Changes in fair value of equity investments at FVOCI, net of tax
Tax on other items that will not be reclassified
Total items that will not be reclassified to profit or loss
Items that may be reclassified subsequently to profit or loss:
Currency translation differences
Tax on items that may be reclassified
Total items that may be reclassified subsequently to profit or loss
Other comprehensive loss for the year, net of tax
Total comprehensive income for the year
Total comprehensive income attributable to:
Owners of the parent
Non-controlling interests
133
Notes
2020
£m
68.0
2019
£m
83.6
14
14
6.5
(6.9)
(1.2)
(1.6)
1.8
(0.3)
1.5
(0.1)
67.9
67.5
0.4
67.9
(23.2)
(0.3)
4.4
(19.1)
(21.0)
3.8
(17.2)
(36.3)
47.3
46.6
0.7
47.3
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 134134
Consolidated and Company statements of financial position
as at 31 December 2020
Assets: Non-current assets
Property, plant and equipment
Right of use assets
Goodwill
Intangible assets
Investments in subsidiaries
Investments in joint ventures and associates
Deferred income tax assets
Financial assets at fair value through other
comprehensive income (‘FVOCI’)
Contract related assets
Trade and other receivables
Assets: Current assets
Contract related assets
Trade and other receivables
Income tax receivable
Derivative financial instruments
Cash and cash equivalents
Liabilities: Current liabilities
Borrowings
Lease liabilities
Derivative financial instruments
Contract liabilities
Trade and other payables
Income tax liabilities
Employee benefit obligations
Provisions
Notes
18
19
17
17
20.3
20.1
21
20.2
6.1
22.3
6.1
22.1
27
23
25
26
27
6.1
24.1
28.2
28.1
Net current assets
Total assets less current liabilities
Liabilities: Non-current liabilities
Borrowings
Lease liabilities
Derivative financial instruments
Other payables
Retirement and employee benefit obligations
Provisions
Deferred income tax liabilities
Net assets
Equity:
Share capital
Share premium
Other reserves
Retained earnings
Equity attributable to owners of the parent
Non-controlling interests
Total equity
25
26
27
24.2
12.2 and 28.2
28.1
21
29
31
31
Group
2020
£m
2019
£m
64.9
252.8
379.4
49.8
–
51.8
42.8
27.4
1.4
31.8
902.1
8.0
496.6
1.9
0.4
338.3
845.2
12.2
45.2
0.3
10.8
604.9
10.2
19.2
8.3
711.1
134.1
1,036.2
148.4
259.0
0.6
10.5
14.9
15.6
5.6
454.6
581.6
3.6
97.2
90.0
390.1
580.9
0.7
581.6
68.9
226.2
374.2
44.5
–
51.4
32.7
32.6
1.6
27.3
859.4
7.5
568.9
3.6
0.2
209.9
790.1
33.4
45.3
0.1
10.8
589.9
17.2
16.2
10.7
723.6
66.5
925.9
148.0
221.8
–
17.7
20.5
12.6
2.1
422.7
503.2
3.6
97.2
95.5
306.2
502.5
0.7
503.2
Company
2020
£m
3.8
53.9
–
6.3
81.5
–
2.5
–
–
–
148.0
–
92.2
–
–
94.5
186.7
–
5.6
–
–
12.4
1.9
0.3
–
20.2
166.5
314.5
–
64.5
–
–
0.1
1.3
–
65.9
248.6
3.6
97.2
38.2
109.6
248.6
–
248.6
2019
£m
2.7
58.7
–
6.7
81.5
–
2.7
–
–
–
152.3
–
73.4
1.7
–
83.1
158.2
–
5.4
–
–
13.9
–
0.1
–
19.4
138.8
291.1
–
69.9
–
–
0.5
1.2
–
71.6
219.5
3.6
97.2
38.2
80.5
219.5
–
219.5
As permitted by Section 408 of the Companies Act 2006, the income statement and statement of comprehensive
income of the Company are not presented as part of these financial statements. The Company has produced its own
income statement and statement of comprehensive income for approval by its Board. The Company receives
dividends from subsidiaries and charges subsidiaries for the provision of Group-related services. The profit after
income tax of the Company for the year was £51.5m (2019: £55.6m).
The consolidated and Company financial statements on pages 132 to 137 were authorised for issue by the Board of
Directors on 10 March 2021 and were signed on its behalf by:
J J M Ridley
Savills plc
Registered in England No. 2122174
S J B Shaw
Savills plc | Annual Report and Accounts 2020
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
135
135
Consolidated statement of changes in equity
for the year ended 31 December 2020
Attributable to owners of the parent
Share
capital
£m
Share
premium
£m
Other
reserves*
£m
Retained
earnings**
£m
Notes
Non-
controlling
interests
£m
Total
£m
Total
equity
£m
Balance at 1 January 2020
Profit for the year
Other comprehensive income/(loss):
Re-measurement of defined benefit
pension scheme and employee
benefit obligations
Changes in fair value of financial assets
at FVOCI, net of tax
Tax on other items directly taken
to reserves
Currency translation differences
Total comprehensive income
for the year
Employee share option scheme:
– Value of services provided
Purchase of treasury shares
Disposal of financial assets at FVOCI
Dividends
14
3.6
–
–
–
–
–
–
–
–
–
–
97.2
95.5
306.2
502.5
–
–
67.6
67.6
6.5
6.5
(6.9)
–
(6.9)
–
1.8
(1.5)
(1.5)
–
1.8
0.7
0.4
503.2
68.0
–
–
–
–
6.5
(6.9)
(1.5)
1.8
(5.1)
72.6
67.5
0.4
67.9
–
–
19.8
19.8
(8.3)
(8.3)
(0.4)
(0.2)
(0.6)
–
–
–
19.8
(8.3)
(0.6)
–
–
–
(0.4)
(0.4)
–
–
–
–
–
–
–
–
–
–
Balance at 31 December 2020
3.6
97.2
90.0
390.1
580.9
0.7
581.6
Balance at 1 January 2019
Profit for the year
Other comprehensive income/(loss):
Re-measurement of defined benefit
pension scheme and employee
benefit obligations
Changes in fair value of financial assets
at FVOCI, net of tax
Tax on other items directly taken
to reserves
Currency translation differences
Total comprehensive income
for the year
Employee share option scheme:
– Value of services provided
Purchase of treasury shares
Shares issued
Dividends
Disposal of financial assets at FVOCI
Transactions with non-controlling
interests
Balance at 31 December 2019
Attributable to owners of the parent
Notes
Share
capital
£m
3.6
–
Share
premium
£m
96.6
–
Other
reserves*
£m
117.6
–
Retained
earnings**
£m
277.2
82.9
Total
£m
495.0
82.9
Non-
controlling
interests
£m
0.7
0.7
Total
equity
£m
495.7
83.6
14
15
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.6
–
–
–
–
(23.2)
(23.2)
(0.3)
–
(0.3)
–
8.2
8.2
(21.0)
–
(21.0)
–
–
–
–
(23.2)
(0.3)
8.2
(21.0)
(21.3)
67.9
46.6
0.7
47.3
–
–
–
–
17.8
17.8
(14.1)
(14.1)
–
0.6
–
–
–
17.8
(14.1)
0.6
(42.8)
(42.8)
(0.5)
(43.3)
(0.8)
0.8
–
–
–
–
(0.6)
(0.6)
(0.2)
(0.8)
3.6
97.2
95.5
306.2
502.5
0.7
503.2
*
Included within other reserves on the face of the statement of financial position are the capital redemption reserve, merger relief reserve, foreign
exchange reserve and revaluation reserve as disclosed in Note 31.
** Included within retained earnings on the face of the statement of financial position are treasury shares, share-based payments reserve and the
profit and loss account as disclosed in Note 31.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 136
Company statement of changes in equity
for the year ended 31 December 2020
Notes
12.2
Notes
12.2
14
Balance at 1 January 2020
Profit for the year
Other comprehensive income:
Remeasurement of defined
benefit pension scheme
Total comprehensive income
for the year
Employee share option scheme:
– Value of services provided
– Exercise of share options
Contribution to Employee
Benefit Trust
Contribution from subsidiaries
in relation to Employee Benefit
Trust funding
Balance at 31 December 2020
Balance at 1 January 2019
Profit for the year
Other comprehensive
(loss)/income:
Remeasurement of defined
benefit retirement surplus and
long term service
Tax on items directly taken
to reserves
Total comprehensive income
for the year
Employee share option scheme:
– Value of services provided
– Exercise of share options
Contribution to Employee
Benefit Trust
Contribution from subsidiaries
in relation to Employee Benefit
Trust funding
Shares issued
Dividends
Balance at 31 December 2019
Attributable to owners of the Company
Share
capital
£m
3.6
–
Share
premium
£m
97.2
–
Capital
redemption
reserve*
£m
0.3
–
Merger
relief
reserve*
£m
34.9
–
Other
reserves*
£m
3.0
–
Share-
based
payments
reserve**
£m
4.1
–
Retained
earnings**
£m
76.4
51.5
Total
equity
£m
219.5
51.5
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.4
0.4
51.9
51.9
1.6
(1.5)
–
(18.9)
1.6
(20.4)
–
(8.3)
(8.3)
–
3.6
–
97.2
–
0.3
–
34.9
–
3.0
–
4.2
4.3
105.4
4.3
248.6
Attributable to owners of the Company
Share
capital
£m
3.6
–
Share
premium
£m
96.6
–
Capital
redemption
reserve*
£m
0.3
–
Merger
relief
reserve*
£m
34.9
–
Other
reserves*
£m
3.0
–
Share-
based
payments
reserve**
£m
5.0
–
Retained
earnings**
£m
75.0
55.6
Total
equity
£m
218.4
55.6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3.6
–
0.6
–
97.2
15
–
–
–
0.3
–
–
–
34.9
–
–
–
–
–
–
–
–
–
3.0
–
–
–
(1.2)
(1.2)
1.6
1.6
56.0
56.0
1.0
(1.9)
–
(14.8)
1.0
(16.7)
–
(9.1)
(9.1)
–
–
–
4.1
12.6
–
(43.3)
76.4
12.6
0.6
(43.3)
219.5
*
Included within other reserves on the face of the statement of financial position are the capital redemption reserve, the merger relief reserve and
other reserves as disclosed above.
** Included within retained earnings on the face of the statement of financial position are share-based payments reserve and retained earnings as
disclosed above.
Savills plc | Annual Report and Accounts 2020 Consolidated and Company statements of cash flows
for the year ended 31 December 2020
Group
Company
Notes
2020
£m
2019
£m
2020
£m
2019
£m
137
Cash flows from operating activities
Cash generated from operations
Interest received
Interest paid
Income tax (paid)/received
Net cash generated from operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Proceeds from sale of equity investments
Proceeds from sale of interests in joint ventures,
associates and other investments
Dividends received from joint ventures and associates
Repayment of loans by joint ventures, associates and
loans from subsidiaries
Loans to joint ventures, associates and subsidiaries
Loans to other parties
Acquisition of subsidiaries, net of cash acquired
Deferred consideration paid in relation to prior year acquisitions
Purchase of property, plant and equipment
Purchase of intangible assets
33
289.8
132.6
3.4
(15.0)
(29.6)
248.6
0.1
1.9
0.7
10.8
0.1
(1.4)
(5.5)
(11.2)
(15.3)
(12.8)
(5.3)
20.4
18
17
6.4
(17.8)
(25.8)
95.4
0.2
4.5
2.1
10.5
(1.1)
(6.1)
(1.5)
(5.0)
(16.2)
(7.3)
–
8.0
Purchase of investment in joint ventures, associates and
equity investments
20.1–20.2
(5.5)
(8.4)
Net cash (used in)/generated from investing activities
(43.4)
(28.3)
Cash flows from financing activities
Proceeds from issue of share capital
Proceeds from borrowings
Repayments of borrowings
Financing fees paid
Principal elements of lease payments
Contribution to Employee Benefit Trust
Contribution from subsidiaries in relation to Employee Benefit
Trust funding
Purchase of treasury shares
Purchase of non-controlling interests
Dividends paid
Net cash used in financing activities
Net increase/(decrease) in cash, cash equivalents and
bank overdrafts
Cash, cash equivalents and bank overdrafts at beginning of year
Effect of exchange rate fluctuations on cash and cash
equivalents held
25
25
26
31
15
–
0.6
46.1
158.1
(67.3)
(125.2)
–
(47.7)
(1.8)
(45.0)
–
–
(8.3)
–
(0.4)
(77.6)
–
–
(14.1)
(0.1)
(43.3)
(70.8)
127.6
209.8
(3.7)
223.9
0.8
(10.4)
Cash, cash equivalents and bank overdrafts at end of year
23 and 25
338.2
209.8
11.6
1.0
(2.3)
5.9
16.2
44.5
1.2
(2.5)
2.8
46.0
–
–
–
–
–
–
–
–
(2.2)
(0.8)
–
5.0
–
–
–
–
(5.8)
(8.3)
–
–
–
–
35.0
(40.0)
–
–
–
(1.4)
(2.4)
–
(8.8)
0.6
–
–
–
(5.1)
(9.1)
4.3
12.6
–
–
–
(9.8)
11.4
83.1
–
94.5
–
–
(43.3)
(44.3)
(7.1)
90.2
–
83.1
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 138
Notes to the financial statements
Year ended 31 December 2020
1. General information
Savills plc (the ‘Company’) and its subsidiaries (together the ‘Group’) is a global real estate services Group. The
Group operates through a network of offices in the UK, Europe, Asia Pacific, North America, Africa and the Middle
East. Savills is listed on the London Stock Exchange and employs 39,067 staff worldwide.
The Company is a public limited company incorporated and domiciled in England, United Kingdom. The address of
its registered office is 33 Margaret Street, London W1G 0JD.
These consolidated financial statements were approved for issue by the Board of Directors on 10 March 2021.
2. Accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated, and are also
applicable to the parent Company.
2.1 Basis of preparation
These financial statements have been prepared in accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and in accordance with international financial reporting
standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
The financial statements are prepared on a going concern basis and under the historical cost convention as modified
by the revaluation of equity investments and derivative financial instruments held at fair value.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting
estimates and for management to exercise judgement in the process of applying the Group’s accounting policies.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are
significant to the financial statements, are disclosed in Note 5.
2.2 Going concern
The Group’s business activities, together with the factors likely to affect its future development, performance and
position are set out in the Strategic Report. The financial position of the Group, its cash flows and liquidity position
are described in the Chief Financial Officer’s Review, with details of the Group’s treasury activities and exposure to
financial risk included in Note 3 to the Consolidated Financial Statements.
As in prior years, the Board undertook a strategic business review in the current year taking account of the Group’s
current position and prospects, the Group’s strategic plan, and the Group’s principal risks and the management of
those risks, as detailed in the Annual Report. The review considered a number of factors including the resilience of
the Group, taking account of its current position and prospects, the Group’s strategic plan, the principal risks and
uncertainties facing the business and the Board’s risk appetite as detailed in the Strategic Report. Sensitivity analysis
was also undertaken, including financing projections, to flex the financial forecasts under a variety of severe
downside scenarios, which involve applying different assumptions to the underlying forecast both individually and
in aggregate. These scenarios assess the potential impact from several macro-economic risks, including a severe
global economic downturn analogous to that experienced during the Global Financial Crisis in 2008/09 (the impact
of which on the Group’s results has so far not been replicated since) and a prolonged suppression of activity in
some individual markets as a result of continued COVID-19 lockdown measures and restrictions. The results of this
sensitivity analysis showed that the Group would be able to withstand the impact of such scenarios over the
period of the financial forecast, as a result of the resilience and diversity of the Group, underpinned by a strong
balance sheet.
Based on the Group’s strong net cash position and undrawn £360.0m RCF at the year end, as described in the Chief
Financial Officer’s review, combined with the assessment explained above, the Directors have formed the judgement
at the time of approving the financial statements, that there is a reasonable expectation that the Group has
adequate resources to continue in operational existence for at least 12 months from the date of these financial
statements. For this reason, they continue to adopt the going concern basis of accounting in preparing the
Consolidated Financial Statements.
Savills plc | Annual Report and Accounts 2020 139
2.3 Use of non-GAAP measures
The Group believes that the consistent presentation of underlying profit before tax, underlying effective tax rate,
underlying basic earnings per share and underlying diluted earnings per share provides additional useful information
to Shareholders on the underlying trends and comparable performance of the Group over time. The ‘underlying’
measures are also used by Savills for internal performance analysis and incentive compensation arrangements for
employees. All the adjustments made to the GAAP measures are considered exceptional and/or non-operational in
nature. 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 term ‘underlying’ refers to the relevant measure of profit, earnings or taxation being reported excluding the
impact (pre and post-tax where applicable) of the following items:
amortisation of acquired intangible assets (excluding software);
the difference between IFRS 2 charges related to outstanding bonus-related deferred share awards and the
estimated value of the current year bonus pool expected to be allocated to deferred share awards (refer to
Note 9 for further explanation);
items that are considered exceptional by size or nature including restructuring costs, impairments of goodwill,
intangible assets and investments and profits or losses arising on disposals of subsidiaries and other
investments; and
significant acquisition costs related to business combinations.
The underlying effective tax rate represents the underlying income tax expense expressed as a percentage of
underlying profit before tax. The underlying income tax expense is the income tax expense excluding the tax effect
of the adjustments made to arrive at underlying profit before tax and other tax effects related to these adjustments.
Underlying basic earnings per share and underlying diluted earnings per share both utilise the underlying profit
after tax measure instead of GAAP earnings. The weighted average number of shares remain the same as the
GAAP measure.
The Group also refers to revenue and underlying profit on a constant currency basis which are both non-GAAP
measures. Constant currency results are calculated by translating the current year revenue and underlying profit
using the prior year exchange rates. This measure allows the Group to assess the results of the current year
compared to the prior year, excluding the impact of foreign currency movements.
A reconciliation between GAAP and underlying measures are set out in Note 9 (underlying profit before tax),
Note 10 (constant currency) and Note 16.2 (underlying basic earnings per share and underlying diluted earnings
per share).
2.4 Consolidation
The consolidated financial statements include those of the Company and its subsidiary undertakings, together with
the Group’s share of results of its associates and joint ventures.
(a) Subsidiaries
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is
transferred to the Group.
Inter-company transactions, balances and unrealised gains and losses on transactions between Group companies
are eliminated. Profits and losses resulting from inter-company transactions that are recognised in assets are also
eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
Investments in subsidiaries held by the Company are held at cost, less any provision for impairment.
(b) Acquisition of subsidiaries
The Group applies the acquisition method of accounting to account for business combinations. The consideration
transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the
equity interests issued by the Group. Identifiable assets acquired and liabilities and contingent liabilities assumed in
a business combination are measured initially at their fair values at the acquisition date. The Group recognises any
non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the
non-controlling interest’s proportionate share of the recognised amounts of the acquiree’s identifiable net assets.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 140
Notes to the financial statements continued
Year ended 31 December 2020
2. Accounting policies continued
2.4 Consolidation continued
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date.
Contingent consideration only applies to situations where contingent payments are not dependent on future
employment of vendors. Payments dependent on future employment are expensed to the income statement over
the relevant period of employment as required by IFRS 3 (revised). Subsequent changes to the fair value of the
contingent consideration that is deemed to be an asset or liability is recognised in profit or loss. Contingent
consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for
within equity.
Acquisition-related costs are expensed as incurred.
(c) Changes in ownership interests in subsidiaries without change of control
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity
transactions – that is, as transactions with the owners in their capacity as owners. The difference between fair value
of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is
recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
(d) Disposal of subsidiaries
When the Group ceases to control any retained interest in a subsidiary, the entity is remeasured to its fair value at
the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the
initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint
venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect
of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may
mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.
Profit or loss on disposal of subsidiaries is recognised in profit or loss as other gains/(losses).
(e) Associates
Associates are all entities over which the Group has significant influence but not control, generally accompanying a
shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the
equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the
carrying amount is increased or decreased to recognise the investor’s share of the profit or loss of the investee after
the date of acquisition. The Group’s investment in associates includes goodwill (net of any accumulated impairment
loss) identified on acquisition (see Note 20.1).
The Group’s share of its associates’ post-acquisition profits or losses is recognised in the income statement with a
corresponding adjustment to the carrying amount of the investment. Dividends received or receivable from
associates are recognised as a reduction in the carrying amount of the investment. When the Group’s share of losses
in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group
does not recognise further losses unless it has incurred legal or constructive obligations or made payments on
behalf of the associate.
Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s
interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of associates have been changed where necessary to
ensure consistency with the policies adopted by the Group.
The carrying amount of associates is tested for impairment in accordance with the policy described in Note 2.10.
Profit or loss on disposal of associates is recognised in profit or loss as other gains/(losses).
(f) Joint arrangements
The Group applies IFRS 11 to all joint arrangements. Under IFRS 11 investments in joint arrangements are classified as
either joint operations or joint ventures depending on the contractual rights and obligations of each investor. The
Group has assessed the nature of its joint arrangements and determined them to be joint ventures. Joint ventures
are accounted for using the equity method of accounting, the investment is initially recognised at cost, and the
carrying amount is increased or decreased to recognise the investor’s share of the profit or loss of the investee after
the date of acquisition.
Savills plc | Annual Report and Accounts 2020 141
The Group’s share of its joint venture’s post-acquisition profits or losses is recognised in the income statement with a
corresponding adjustment to the carrying amount of the investment. Dividends received or receivable from joint
ventures are recognised as a reduction in the carrying amount of the investment. When the Group’s share of losses
in a joint venture equals or exceeds its interests in the joint ventures (which includes any long-term interests that, in
substance, form part of the Group’s net investment in the joint ventures), the Group does not recognise further
losses, unless it has incurred obligations or made payments on behalf of the joint ventures.
Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the
Group’s interest in the joint ventures. Unrealised losses are also eliminated unless the transaction provides evidence
of an impairment of the asset transferred. Accounting policies of the joint ventures have been changed where
necessary to ensure consistency with the policies adopted by the Group.
The carrying amount of joint ventures is tested for impairment in accordance with the policy described in Note 2.10.
Profit or loss on disposal of joint ventures is recognised in profit or loss as other gains/(losses).
(g) Investment management funds
The Investment Management business enters in to strategic partnerships and mandates to provide asset
management or investment advisory services to external clients, and in certain instances also has an interest in the
fund general partner or in co-investment schemes. In its role as fund manager, the Investment Management business
is considered by management to be acting as an agent which does not have control under IFRS 10 and therefore the
funds are not consolidated as part of the Group.
2.5 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Group Executive Board.
A business segment is a Group of assets and operations engaged in providing products or services that are subject
to risks and returns that are different from those of other business segments. A geographical segment is engaged in
providing products or services within a particular economic environment that is subject to risks and returns that are
different from those of segments operating in other economic environments.
As the Group is strongly affected by both differences in the types of services it provides and the geographical areas
in which it operates, the matrix approach of disclosing both the business and geographical segments format is used.
Revenues and expenses are allocated to segments on the basis that they are directly attributable or the relevant
portion can be allocated on a reasonable basis.
2.6 Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial
statements are presented in sterling, which is also the Company’s functional and presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in the income statement, except when deferred in other comprehensive income as qualifying cash
flow hedges.
Translation differences on non-monetary financial assets and liabilities are reported as part of the fair value gain or
loss and are recognised in the income statement, except for equity investments, which are recognised in other
comprehensive income. Non-monetary items carried at historical cost are reported using the exchange rate at the
date of the transaction.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 142
Notes to the financial statements continued
Year ended 31 December 2020
2. Accounting policies continued
2.6 Foreign currency translation continued
(c) Group entities
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
consolidation, are translated to the Group’s presentational currency at foreign exchange rates ruling at the reporting
date. Exchange differences arising from this translation of foreign operations are taken directly to the foreign
exchange reserve. When foreign operation is disposed of, in part or in full, the relevant amount in the foreign
exchange reserve is transferred to the income statement.
The income and expenses of foreign operations are translated at an average rate for the year where this rate
approximates to the foreign exchange rates ruling at the dates of the transactions.
2.7 Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical
cost includes expenditure directly attributable to acquisition.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that the future economic benefits associated with the item will flow to the Group and the cost of
the item can be measured reliably.
Provision for depreciation is made at rates calculated on a straight-line basis to write-off the assets over their
estimated useful lives as follows:
Freehold property
Short leasehold property (less than 50 years)
Equipment and motor vehicles
50 years
Over unexpired term of lease
3–10 years
Residual values and useful lives are reviewed and adjusted if appropriate at each reporting date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
2.8 Goodwill
Goodwill represents the excess of the cost of acquisition of a subsidiary or associate over the Group’s share of the
fair value of identifiable net assets acquired.
In respect of associates, goodwill is included in the carrying value of the investment.
Goodwill is carried at cost less accumulated impairment losses. Separately recognised goodwill is tested annually
for impairment, or more frequently if events or changes in circumstances indicate potential impairment. An
impairment loss is recognised for the amount by which the carrying value exceeds the recoverable amount. The
recoverable amount is the higher of value-in-use and fair value less costs of disposal. Impairment losses on goodwill
are not reversed.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to
those cash-generating units or Groups of cash-generating units that are expected to benefit from the business
combination in which the goodwill arose. The Group allocates goodwill to each business segment in the
geographical region in which it operates (Note 17).
Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
2.9 Intangible assets other than goodwill
Intangible assets acquired as part of business combinations and incremental contract costs are valued at fair value
on acquisition and amortised over the useful life. Fair value on acquisition is determined by third party valuation
where the acquisition is significant.
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use
the specific software. Costs associated with maintaining computer software programmes are recognised as an
expense as incurred.
Savills plc | Annual Report and Accounts 2020 143
Development costs that are directly attributable to the design and testing of identifiable and unique software
products controlled by the Group are recognised as intangible assets when the following criteria are met:
it is technically feasible to complete the software product so that it will be available for use;
management intends to complete the software product and use or sell it;
there is an ability to use or sell the software product;
it can be demonstrated how the software product will generate probable future economic benefits;
adequate technical, financial and other resources to complete the development and to use or sell the software
product are available; and
the expenditure attributable to the software product during its development can be reliably measured.
Measurement subsequent to initial recognition is at cost less accumulated amortisation and impairment.
Amortisation charges are spread on a straight-line basis over the period of the assets’ estimated useful lives
as follows:
Customer relationships
Order backlogs
Contracts – investment, property management and other existing business contracts
Brands
Computer software
3–15 years
2–4 years
2–20 years
2 years
3–7 years
Acquired investment management contracts relating to open-ended funds have been attributed indefinite useful
lives, reflecting the open-ended nature of the funds, the Group’s intention to continue with the management of the
funds for the foreseeable future and the expectation that these contracts are expected to generate net cash inflows
for the Group for this foreseeable period.
2.10 Impairment of other non-financial assets
Assets that have indefinite useful lives are not subject to amortisation or depreciation and are tested annually for
impairment or whenever an indicator of impairment exists. Assets that are subject to amortisation or depreciation
are reviewed for impairment whenever an indicator of impairment exists. An impairment loss is recognised to the
extent that the carrying value exceeds the higher of the asset’s fair value less cost to sell and its value-in-use. Prior
impairments of non-financial assets (other than goodwill) are reviewed for possible reversal at each reporting date.
Value-in-use is determined using the discounted cash flow method, with an appropriate discount rate to reflect
market rates and specific risks associated with the asset.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units). Where it is not possible to estimate the recoverable amount of
an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the
asset belongs.
2.11 Financial instruments
Financial assets and liabilities are recognised on the Group’s statement of financial position at fair value or amortised
cost when the Group becomes party to the contractual provisions of the instrument. Subsequent measurement
depends on the classification and is discussed in paragraphs 2.12–2.17.
Financial assets and liabilities are offset and the net amount reported in the statement of financial position where
there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis
or realise the asset and settle the liability simultaneously.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or
when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another
party. On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and
the sum of consideration received is recognised in profit or loss.
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled
or have expired. The difference between the carrying amount of the financial liability derecognised and the
consideration paid is recognised in profit or loss.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 144
Notes to the financial statements continued
Year ended 31 December 2020
2. Accounting policies continued
2.12 Equity investments
The Group has made an irrevocable election at initial recognition for equity investments to be classified as FVOCI
(fair value through other comprehensive income). Changes in fair value are recognised through other comprehensive
income rather than profit or loss. Dividends from these investments are recognised in profit or loss as other
operating income. When such investments are disposed or become impaired, the accumulated gains and losses,
recognised in other comprehensive income, are reclassified to retained earnings and will not be recycled to the
income statement.
2.13 Trade and other receivables
Trade receivables are recognised initially at their transaction price and subsequently measured at amortised cost
less provision for impairment. Receivables are discounted where the time value of money is material.
The Group applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which
permits the use of the lifetime expected loss provision for all trade and other receivables.
2.14 Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held on call with banks, together with other short-term
highly liquid investments with original maturities of three months or less and working capital overdrafts, which are
subject to an insignificant risk of changes in value. Bank overdrafts are included under borrowings in the statement
of financial position.
2.15 Bank borrowings
Interest-bearing bank loans and overdrafts are initially measured at fair value, net of transaction costs incurred, and
subsequently measured at amortised cost using the effective interest rate method.
2.16 Trade payables
Trade payables are initially measured at fair value and subsequently measured at amortised cost using the effective
interest rate method. Trade payables are classified as current liabilities if payment is due within one year or less. If
not, they are presented as non-current liabilities.
2.17 Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured at fair value. Changes in the fair value of the Group’s derivative instruments are recognised immediately
in the income statement.
2.18 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the proceeds. When share capital is repurchased, the amount of
consideration paid, including directly attributable costs, is recognised as a charge to equity. Repurchased shares
which are not cancelled, or shares purchased for the Employee Benefit Trust and the Savills Rabbi Trust, are
classified as treasury shares and presented as a deduction from total equity.
2.19 Taxation
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement,
except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive income or directly in equity.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the year
end date in the countries where the Company and its subsidiaries operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected
to be paid to the tax authorities.
Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred
tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is not
accounted for if it arises from the initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income
tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the year end date
and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability
is settled.
Savills plc | Annual Report and Accounts 2020 145
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates
except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled
by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income tax
levied by the same taxation authority on either the same taxable entity or different taxable entities where there is
an intention to settle the balances on a net basis.
2.20 Pension obligations
The Group operates both defined benefit and defined contribution plans. A defined contribution plan is a pension
plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive
obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits
relating to employee service in the current and prior periods. A defined benefit plan is a pension plan that defines an
amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors,
such as age, years of service and compensation.
The asset or liability recognised in the statement of financial position in respect of defined benefit pension plans
is the present value of the defined benefit obligations at the reporting date less the fair value of plan assets. The
defined benefit obligations are calculated annually by independent actuaries using the projected unit credit
method. The present value of the defined benefit obligations are determined by discounting the estimated future
cash outflows.
The defined benefit scheme charge consists of net interest costs, past service costs and the impact of any
settlements or curtailments and is charged as an expense as they fall due.
All actuarial gains and losses are recognised immediately in other comprehensive income in the period in which
they arise.
The net defined benefit cost is allocated amongst participating Group subsidiaries on the basis of pensionable
salaries.
The Group also operates a defined contribution Group Personal Pension Plan for new entrants and a number of
defined contribution individual pension plans. Contributions in respect of defined contribution pension schemes are
charged to the income statement when they are payable. The Group has no further payment obligations once the
contributions have been paid. Prepaid contributions are recognised as an asset to the extent that a cash refund or
a reduction in the future payments is available.
2.21 Share-based payments
The Group operates equity-settled share-based compensation plans. The fair value of the employee services
received in exchange for the grant of the options is recognised as an expense.
All equity-settled share-based payments are measured at fair value at the date of grant. Fair value is predominantly
measured by use of the Actuarial Binomial option pricing model. The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a straight-line basis over the vesting period. Non-market
vesting conditions are included in assumptions about the number of options that are expected to vest. At the end of
each reporting period, the Group revises its estimate of the number of options that are expected to vest based on
the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income
statement, with a corresponding adjustment to equity.
Any cash proceeds received net of any directly attributable transaction costs are credited to share capital (nominal
value) and share premium when the options are exercised.
2.22 Employee Benefit Trust and Savills Rabbi Trust
The Company has established the Savills plc 1992 Employee Benefit Trust (the ‘EBT’) and the Savills Rabbi Trust (the
‘Rabbi Trust’), the purposes of which are to grant awards to employees, to acquire shares in the Company pursuant
to the Savills Deferred Share Bonus Plan and the Savills Deferred Share Plan and to hold shares in the Company for
subsequent transfer to employees on the vesting of the awards granted under the schemes. The assets and liabilities
of the EBT and Rabbi Trust are included in the Group statement of financial position. Investments in the Group’s own
shares are shown as a deduction from equity.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 146
Notes to the financial statements continued
Year ended 31 December 2020
2. Accounting policies continued
2.23 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event,
it is probable that the Group will be required to settle that obligation and the amount has been reliably estimated.
Provisions are measured at the Directors’ best estimate of the expenditure required to settle the obligation at the
reporting date and are discounted to present value where the effect is material.
(a) Professional indemnity claims
Provisions on professional indemnity claims are recognised when it is probable that the Group will be required to
settle claims against it as a result of a past event and the amount of the obligation can be reliably estimated. The
Group recognises a provision up to the limit of its self-insured liabilities in respect of any claim, with the excess of
any self-insured element settled by professional indemnity insurance cover. The professional indemnity insurance
cover is spread across a panel of insurers so that it is highly unlikely that the Group would be liable for any
settlement in excess of the self-insured element of any given claim. As a result, the amount of the claim in excess
of the self-insured element is not included in the professional indemnity claims provision.
(b) Dilapidation provisions
The Group is required to perform dilapidation repairs and restore properties to agreed specifications on leased
properties prior to the properties being vacated at the end of their lease term. Provision for such cost is made where
a legal obligation is identified and the liability can be reasonably quantified.
(c) Restructuring provisions
A provision is recognised when there is a present constructive obligation to meet the costs of restructure. This arises
when there is a detailed formal plan for the restructuring, identifying at least the business or part of the business
concerned, principal locations affected and the location, function and approximate number of employees to be
compensated for terminating their services and when the plan has been communicated to those affected by it,
raising an expectation that the plan will be carried out.
2.24 Revenue
The Group recognises revenue from the following major sources:
Residential property transactions
Commercial property transactions
Property consultancy services
Property and facilities management services
Investment management services
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts
collected on behalf of third parties. The Group recognises revenue when it transfers control of a product or service
to a customer.
(a) Residential property transactions
Generally, revenue is recognised at a point in time, when unconditional contracts are exchanged. Fees are a fixed
consideration or a fixed percentage of the transaction value and are invoiced to the client upon completion.
For new home developments revenue is recognised following the terms of the contract. In some instances revenue
is recognised on a staged basis, reflecting the Group’s obligations to find a buyer and to further support the client
after exchange of contracts through to completion of the build and contract, which can be a number of years later.
For these developments, revenue recognition commences when the underlying contracts are exchanged, with total
revenue from the contract recognised by the date of completion in accordance with contractual terms. Fees are a
fixed consideration or a fixed percentage of the transaction value and are invoiced to the client at each contractual
milestone, in line with the recognition of revenue. In other instances, the revenue will be recognised when contracts
are exchanged and the transaction is unconditional, in these instances no further support is provided to the client
after this point.
(b) Commercial property transactions
Generally, revenue is recognised at a point in time on the date of completion or when unconditional contracts have
been exchanged. Fees are a fixed consideration or a fixed percentage of the transaction value and are invoiced to
the client upon completion.
Savills plc | Annual Report and Accounts 2020 147
(c) Property consultancy services
The Group primarily provides a wide range of professional property services including valuation, building and
housing consultancy, environmental consultancy, development, planning, research, corporate services, landlord and
tenant services and strategic projects.
Generally, revenue is recognised over a period of time as services are rendered in accordance with the contract
terms. Fee arrangements include fixed fee arrangements and fee for service arrangements (‘time and materials’).
For fixed-price contracts, revenue is recognised based on the stage of completion with reference to the actual
services provided to the end of the reporting period as a proportion of the total services to be provided under the
contract. This is determined on a contract by contract basis with reference to actual costs incurred in relation to the
best estimate of total costs expected for completion of the contract or using a milestone based approach,
depending on the contract terms.
For fee for service contracts, revenue is recognised up to the amount of fees that the Group is entitled to invoice for
services performed to date based on contracted rates.
Payment arrangements vary between contracts, ranging from monthly retainers, monthly invoicing, quarterly
invoicing, invoicing upon reaching certain milestones in the contract or payment upon completion of the final
performance obligation in the contract. As a result, services rendered under a contract will often exceed
consideration received from a customer and a contract asset will be recognised. If payments exceed services
rendered, a contract liability will be recognised.
In some instances, revenue will be recognised at a point in time upon delivery of the final report to the client. This
is often the case for standalone valuation reports where the performance obligation is the provision of a property
valuation report to the client. The Group is entitled to invoice the customer when the final report has been issued,
at which point payment will be due.
(d) Property and facilities management services
The Group primarily manages commercial, industrial, residential, leisure and agricultural property for owners.
The primary performance obligation relates to the ongoing management of a property where revenue is recognised
over a period of time as services are rendered in accordance with the contract terms. Payment arrangements vary
between contracts. The majority of customers are invoiced monthly or quarterly in advance, with consideration
payable upon the issue of an invoice. Where invoicing is in advance a contract liability will be recognised.
In some property management arrangements, the Group is required to evaluate whether it is the principal (report
revenues on a gross basis) or agent (report revenues on a net basis). Where the primary performance obligation of
the contract relates to the arrangement of services for a customer rather than the responsibility to provide the
services, the Group is considered the agent and the mark-up for the sub-contracted services will be recognised as
revenue (revenues reported on a net basis).
For leasing fees and management fees on repairs or other ad hoc property management services outside of the
standard contract terms, revenue is recognised at a point in time upon completion of the performance obligation.
In these instances, the invoice would be raised to the customer upon completion of the performance obligation and
payment due at this time.
(e) Investment management services
Base management fees are received for the provision of fund and asset management services. Fund management
fees are typically either fixed or calculated as a fixed percentage of the net asset value or gross asset value of the
underlying portfolio of investments. Asset management fees are typically calculated as a fixed percentage of gross
rental income or passing rents. Revenue is recognised over a period of time as services are rendered in accordance
with the contract terms. Customers are generally invoiced quarterly in advance, as a result a contract liability will be
recognised as the payments received will exceed services rendered.
Transaction fees are received for the coordination and management of the due diligence in connection with
acquisitions and sales of assets for customers. Transaction fees are calculated as a fixed percentage on the purchase
or sales price and are recognised at a point in time upon unconditional exchange of contracts.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 148
Notes to the financial statements continued
Year ended 31 December 2020
2. Accounting policies continued
2.24 Revenue continued
Performance fees are received when a fund’s performance exceeds a designated return hurdle rate or pre-defined
benchmark or when the sale of individual assets exceeds a designated return hurdle rate. The Group estimates fees
for this variable fee arrangement using a most likely amount approach on a contract by contract basis. Variable
consideration is included in revenue only to the extent that it is highly probable that the amount will not be subject
to significant reversal when the uncertainty is resolved.
(f) Financing components
The Group does not expect to have any contracts where the period between the transfer of the promised goods or
services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not
adjust any of the transaction prices for the time value of money.
(g) Costs of obtaining a contract
In the Investment Management business the Group pays placement fees to third parties for sourcing new investors
and equity for a fund. These costs are capitalised and amortised on a straight-line basis over the life of the fund,
consistent with the pattern of transfer of service to which the asset relates.
Incremental costs of obtaining a contract are recognised as an expense when incurred when the amortisation period
of the asset that would otherwise have been recognised is less than a year.
2.25 Leases
The Group enters into lease agreements for the use of buildings, equipment and motor vehicles. Lease terms are
negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements
do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased
assets may not be used as security for borrowing purposes.
Leases are recognised as a right-of-use asset and a corresponding lease liability for future lease payables at the date
at which the leased asset is available for use by the Group. Depreciation of the right-of-use asset will be recognised
in the income statement on a straight-line basis, with interest recognised on the lease liability.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the
net present value of the following lease payments:
fixed payments (including in-substance fixed payments), less any lease incentives receivable;
variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the
commencement date;
amounts expected to be payable by the Group under residual value guarantees;
the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of
the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily
determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used,
being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of
similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are
not included in the lease liability until they take effect. When adjustments to lease payments based on an index or
rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and interest cost. The finance cost is charged to the income
statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the
liability for each period.
Right-of-use assets are measured at cost comprising the following:
the amount of the initial measurement of lease liability;
any lease payments made at or before the commencement date less any lease incentives received;
any initial direct costs; and
restoration costs.
Savills plc | Annual Report and Accounts 2020 149
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a
straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is
depreciated over the underlying asset’s useful life. An asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are
recognised on a straight-line basis as an expense in profit or loss in accordance with IFRS 16 p.5. Short-term leases
are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of
office furniture.
Extension and termination options are included in a number of property and equipment leases across the Group.
These are used to maximise operational flexibility in terms of managing the assets used in the Group’s operations.
The majority of extension and termination options held are exercisable only by the Group and not by the
respective lessor.
2.26 Dividends
Dividend distributions are recognised as a liability in the Group’s financial statements in the period in which they
are approved by the Company’s Shareholders.
Interim dividends are recognised when paid.
2.27 Government grants
The Group recognises government subsidy income when there is reasonable assurance that the financial assistance
will be received and, where applicable, when the Group is able to demonstrate its ability to comply with any
conditions of the support scheme. The income is recognised in the income statement over the period necessary to
match the income with the related cost and is deducted against the related expense in the income statement. The
majority of financial assistance received by the Group in the current financial year is in relation to employee costs
and is included as income within the employee benefits expense line.
2.28 Adoption of standards, amendments and interpretations to standards
Standards, amendments and interpretations endorsed by the EU and mandatorily effective for the first time for the
financial year beginning 1 January 2020 that are not relevant or considered to have a significant impact on the
Group and its financial statements include the following:
Amendments to IFRS 3
Amendments to IAS 1 and IAS 8
Amendments to IFRS 7, IFRS 9 and IAS 39
Amendments to IFRS 16
Definition of a business in business combinations
Definition of material
Interest rate benchmark reform impact
COVID-19 related rent concessions
There are no other standards that are not yet effective and that would be expected to have a material impact on the
entity in the current or future reporting periods and on foreseeable future transactions.
2.29 Prior year restatement
Following a review of the control over certain management companies in the CEME division, management have
determined that the Group does not have control over these entities as defined by IFRS 10. These entities have not
been consolidated in the current financial year and the prior period comparatives have been restated in accordance
with IAS 8.
The table below shows the impact of the prior year restatement on the primary financial statements:
Income statement
Revenue
Other operating expenses
2019 reported
£m
Restatement
£m
2019 restated
£m
1,930.0
(498.6)
(16.6)
16.6
1,913.4
(482.0)
No adjustment has been made to the 2019 cash flow or statement of financial position as the impact is not material.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 150
Notes to the financial statements continued
Year ended 31 December 2020
3. Financial risk management
3.1 Financial risk factors
The Group’s activities expose it to a variety of financial risks. The Group has in place a risk management programme
that seeks to limit the adverse effects on the financial performance of the Group. The Group uses financial
instruments to manage material foreign currency and interest rate risk.
The treasury function is responsible for implementing risk management policies applied by the Group and has a
policy and procedures manual that sets out specific guidelines on financial risks and the use of financial instruments
to manage these.
3.2 Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risks primarily with respect to the euro,
Hong Kong dollar and US dollar. Foreign exchange risk arises from future commercial transactions, recognised
assets and liabilities and net investments in foreign operations. When there is a material committed foreign currency
exposure the foreign exchange risk will be hedged. The Group may finance some overseas investments through the
use of foreign currency borrowings. The Group does not actively seek to hedge risks arising from foreign currency
translations due to their non-cash nature and the high costs associated with such hedging.
The sensitivity analysis has been prepared for the major currencies to which the Group is exposed. Recent historical
movements in these currencies has been considered and it has been concluded that a 5–10% movement in rates is a
reasonable benchmark.
For the years ended 31 December, if the average currency conversion rates against sterling for the year had changed
with all other variables held constant, the Group post-tax profit for the year would have increased or decreased as
shown below:
£m
2020
Estimated impact on post-tax profit
Euro
Hong Kong dollar
US dollar
Estimated impact on components of equity
Euro
Hong Kong dollar
US dollar
2019
Estimated impact on post-tax profit
Euro
Hong Kong dollar
US dollar
Estimated impact on components of equity
Euro
Hong Kong dollar
US dollar
Movement of currency against sterling
-10.0%
-5.0%
+5.0%
+10.0%
(0.9)
(1.4)
0.9
(0.2)
(18.9)
(16.6)
(1.6)
(1.0)
(0.9)
0.4
(14.2)
(16.6)
(0.5)
(0.7)
0.5
(0.1)
(9.9)
(8.7)
(0.8)
(0.5)
(0.5)
0.2
(7.5)
(8.7)
0.5
0.8
(0.5)
0.1
11.0
9.6
0.9
0.6
0.5
(0.2)
8.2
9.6
1.1
1.7
(1.1)
0.3
23.1
20.3
2.0
1.2
1.1
(0.5)
17.4
20.2
Savills plc | Annual Report and Accounts 2020 151
3.3 Interest rate risk
The Group has both interest-bearing assets and liabilities. The Group finances its operations through a mixture of
retained profits and bank borrowings, at both fixed and floating interest rates. Borrowings issued at variable rates
expose the Group cash flow to interest rate risk, which is partially offset by cash held at variable rates. Borrowings
issued at fixed rates expose the Group to fair value interest rate risk. Group policy is to maintain at least 70% of its
borrowings in fixed rate instruments.
For the year ended 31 December 2020, if the average interest rate for the year had changed with all other
variables held constant, the Group’s post-tax profit for the year and equity would have increased or decreased as
shown below:
£m
2020
Estimated impact on post-tax profit and equity
2019
Estimated impact on post-tax profit and equity
£m
2020
Increase in interest rates
+0.5%
+1.0%
+1.5%
+2.0%
0.6
0.2
1.5
2.4
0.7
1.1
3.4
1.6
Decrease in interest rates
-0.5%
-1.0%
-1.5%
-2.0%
Estimated impact on post-tax profit and equity
(1.2)
(1.9)
(1.7)
(1.6)
2019
Estimated impact on post-tax profit and equity
(0.6)
(1.1)
(1.4)
(1.1)
The rationale behind the 2.0% sensitivity analysis is based upon historic trends in interest rate movements and the
short-term expectation that any increase or decrease greater than 2.0% is unlikely to occur.
3.4 Credit risk
Credit risk arises from cash and cash equivalents, equity investments, derivative financial instruments and deposits
with banks and financial institutions, as well as credit exposures to clients, including outstanding receivables and
committed transactions. The Group has policies that require appropriate credit checks on potential customers
before engaging with them. A risk control framework is used to assess the credit quality of clients, taking into
account financial position, past experience and other factors.
Individual risk limits for banks and financial institutions are set based on external ratings and in accordance with
limits set by the Board. The utilisation of credit limits is regularly monitored.
As at the reporting date, no significant credit risk existed in relation to banking counterparties. No credit limits
were exceeded during the reporting year, and management does not expect any losses from non-performance
by these counterparties. There were no other significant receivables or individual trade receivable balances as at
31 December 2020. Refer to Note 22 for information on the credit quality of trade receivables and the maximum
exposure to credit risk arising on outstanding receivables from clients.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 152
Notes to the financial statements continued
Year ended 31 December 2020
3. Financial risk management continued
3.4 Credit risk continued
The table below shows Group cash balances split by counterparty ratings at the reporting date:
Counterparty rating (provided by S&P)
AA-
A+
A
A-
BBB+
BBB or below
Total
3.5 Liquidity risk
2020
£m
53.8
39.0
174.8
29.7
21.6
19.4
338.3
2019
£m
45.1
23.4
91.3
22.6
13.4
14.1
209.9
The Group maintains appropriate committed facilities to ensure the Group has sufficient funds available for
operations and expansion. The Group prepares an annual funding plan approved by the Board which sets out the
Group’s expected financing requirements for the next 12 months.
Management monitors rolling forecasts of the Group’s liquidity reserve comprising undrawn borrowing facilities
(Note 25) and cash and cash equivalents (Note 23) on the basis of expected cash flow. This is carried out at local
level in the operating companies of the Group in accordance with Group practice as well as on a Group
consolidated basis.
The table below analyses the Group’s financial liabilities and net-settled derivative financial liabilities into relevant
maturity Groupings based on the remaining period from the reporting date to the contractual maturity date. The
amounts disclosed in the table are the contractual undiscounted cash flows.
£m
2020
Borrowings
Lease liabilities
Derivative financial instruments
Trade and other payables
2019
Borrowings
Lease liabilities
Derivative financial instruments
Trade and other payables
Less than a year
Between
1 and 2 years
Between
2 and 5 years
Over 5 years
12.2
45.2
0.3
490.2
547.9
33.4
45.3
0.1
524.0
602.8
–
72.5
0.2
7.3
80.0
–
54.9
–
15.2
70.1
30.0
98.0
0.4
3.5
131.9
–
84.7
–
2.5
87.2
120.0
110.8
–
0.6
231.4
148.0
104.9
–
0.5
253.4
Savills plc | Annual Report and Accounts 2020 153
3.6 Capital risk management
The Group’s objectives when managing capital are:
to safeguard the Group’s ability to provide returns for Shareholders and benefits for other stakeholders; and
to maintain an optimal capital structure to reduce the cost of capital.
The Group’s overall strategy remains unchanged from 2019.
Savills plc is not subject to any externally-imposed capital requirements, with the exception of its regulated entities
within the Savills Investment Management Group and its FCA (Financial Conduct Authority) regulated entity, Savills
Capital Advisors Ltd, in the UK. All regulated entities complied with the relevant capital requirements for the year
ended 31 December 2020. The Savills Investment Management Group has regulated entities in the UK, Jersey,
Luxembourg, Germany, Italy, Japan, Singapore and Australia. For more information on Savills Investment
Management Group’s regulated entities and regulatory requirements, please visit www.savillsim.com.
In order to maintain an optimal capital structure, the Group may adjust the amount of dividends paid to
Shareholders, return capital to Shareholders, issue new shares or sell assets to reduce debt.
The Board has put in place a distribution policy which takes into account the degree of maintainability of the Group’s
different profit streams and the Group’s overall exposure to cyclical Transaction Advisory profits, as well as the
requirement to maintain a certain level of cash resources for working capital and corporate development purposes.
The Board will recommend an ordinary dividend broadly reflecting the profits derived from the Group’s less volatile
businesses. In addition, when profits from the cyclical Transaction Advisory business are strong, the Board will
consider and, if appropriate, recommend the payment of a supplemental dividend alongside the final ordinary
dividend. The value of any such supplemental dividend will vary depending on the performance of the Group’s
Transaction Advisory business and the Group’s anticipated working capital and corporate development requirements
through the cycle. It is intended that, in normal circumstances, the combined value of the ordinary and supplemental
dividends declared in respect of any year are covered at least 1.5 times by statutory retained earnings and/or at least
2.0 times by underlying profits after taxation. The Board has not proposed an interim or supplemental dividend in the
year in order to retain sufficient cash reserves to mitigate the effect of the uncertainty over the impact of COVID-19.
The ordinary dividend that has been proposed by the Board complies with the aforementioned policy.
The Group’s policy is to borrow centrally, if required, to meet anticipated funding requirements. These borrowings,
together with cash generated from operations, are then on-lent or contributed as equity to certain subsidiaries. The
Board of Directors monitors a number of debt measures on a rolling forward 12-month basis including: gross cash by
location; gross debt by location; cash subject to restrictions; total debt servicing cost to operating profit; gross
borrowings as a percentage of EBITDA (earnings before interest, tax, depreciation and amortisation); and forecast
headroom against available facilities. These internal measures indicate the levels of debt that the Group has and are
closely monitored to ensure compliance with banking covenants and to confirm that the Group has sufficient unused
facilities. The Group complied with all banking covenants throughout the year and met all internal counterparty
exposure limits set by the Board.
The capital structure is as follows:
£m
Equity
Cash and cash equivalents
Bank overdrafts
Borrowings (gross of transaction costs)
Net cash
Group
Company
2020
581.6
338.3
(0.1)
(162.1)
176.1
2019
503.2
209.9
(0.1)
(183.3)
26.5
2020
248.6
94.5
–
–
94.5
2019
219.5
83.1
–
–
83.1
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 154
Notes to the financial statements continued
Year ended 31 December 2020
3. Financial risk management continued
3.7 Categories of financial instruments
Financial
assets
at FVPL
2020
£m
Financial
assets at
FVOCI
2020
£m
Financial
assets at
amortised
cost
2020
£m
Total
carrying
amount
2020
£m
Financial
assets at
FVPL
2019
£m
Financial
assets at
FVOCI
2019
£m
Financial
assets at
amortised
cost
2019
£m
Total
carrying
amount
2019
£m
–
–
0.4
–
0.4
27.4
–
27.4
–
–
–
27.4
426.3
426.3
–
338.3
764.6
0.4
338.3
792.4
–
–
0.2
–
0.2
32.6
–
32.6
–
–
–
32.6
505.9
505.9
–
209.9
715.8
0.2
209.9
748.6
Financial
liabilities
at FVPL
2020
£m
Financial
liabilities
at
amortised
cost 2020
£m
Total
carrying
amount
2020
£m
Financial
liabilities
at FVPL
2019
£m
Financial
liabilities
at
amortised
cost 2019
£m
Total
carrying
amount
2019
£m
–
–
–
0.9
0.9
160.6
304.2
500.7
–
160.6
304.2
500.7
0.9
965.5
966.4
–
–
–
0.1
0.1
181.4
267.1
540.9
–
181.4
267.1
540.9
0.1
989.4
989.5
Financial assets:
Financial assets at FVOCI
Trade and other receivables
Derivative financial instruments
Cash and cash equivalents
Total financial assets
Financial liabilities:
Borrowings
Lease liabilities
Trade and other payables
Derivative financial instruments
Total financial liabilities
3.8 Fair value estimation
The following table presents the Group’s assets and liabilities that are measured at fair value at 31 December 2020:
£m
2020
Assets
Financial assets at FVOCI
– Listed
– Unlisted
Derivative financial instruments
Total assets
Liabilities
Derivative financial instruments
Total liabilities
Level 1
Level 2
Level 3
Total
1.5
–
–
1.5
–
–
–
7.2
0.4
7.6
0.3
0.3
–
18.7
–
18.7
0.6
0.6
1.5
25.9
0.4
27.8
0.9
0.9
Savills plc | Annual Report and Accounts 2020 155
The following table presents the Group’s assets and liabilities that are measured at fair value at 31 December 2019:
£m
2019
Assets
Financial assets at FVOCI
– Listed
– Unlisted
Derivative financial instruments
Total assets
Liabilities
Derivative financial instruments
Total liabilities
Level 1
Level 1
Level 2
Level 3
Total
0.8
–
–
0.8
–
–
–
6.9
0.2
7.1
0.1
0.1
–
24.9
–
24.9
–
–
0.8
31.8
0.2
32.8
0.1
0.1
Level 1 instruments are those whose fair values are based on quoted market prices.
Level 2
The fair value of Level 2 unlisted financial assets at FVOCI is determined using valuation techniques using observable
market data where available and rely as little as possible on entity estimates. The fair value of investment funds is
based on underlying asset values determined by the Fund Manager’s audited annual financial statements. These
instruments are included in Level 2.
The fair value of derivative financial instruments relating to forward foreign exchange contracts and interest rate
caps are determined by using valuation techniques using observable market data. The fair value of derivative
financial instruments is based on the market value of similar instruments with similar maturities. These instruments
are included in Level 2.
Level 3
If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
Unlisted equity securities included in Level 3 fall under two categories. The first, where cost has been determined as
the best approximation of fair value. Cost is considered the best approximation of fair value in these instances either
due to insufficient more recent information being available and/or there being a wide range of possible fair value
measurements due to the nature of the investments and cost is considered the best estimate of fair value within the
range. The second, where management have determined the fair value of the unlisted equity security based upon
the latest trading performance of the investments, cash flow forecasts of the investments and applying these to a
discounted cash flow valuation and/or considering evidence from recent fundraising initiatives undertaken.
The derivative financial liability classified as Level 3 relates to a put option, the fair value of which is derived from
management’s best estimate of the average EBITDA forecast of the relevant business.
The following table presents the changes in Level 3 items for the period ended 31 December 2020.
Opening balance 1 January 2020
Additions
Re-measurement
Closing balance 31 December 2020
Derivative financial
instruments
£m
Unlisted equity
securities
£m
–
0.6
–
0.6
24.9
0.7
(6.9)
18.7
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 156
Notes to the financial statements continued
Year ended 31 December 2020
4. Offsetting financial assets and financial liabilities
The table below shows the amounts of financial assets and financial liabilities before and after offsetting. The
amounts offset in the statement of financial position were established in accordance with IAS 32. The assets and
liabilities offset stem from the multi-currency cash pooling implemented within the Group.
£m
As at 31 December 2020
Assets
Cash and cash equivalents
Liabilities
Bank overdrafts
As at 31 December 2019
Assets
Cash and cash equivalents
Liabilities
Bank overdrafts
Gross financial
assets/(liabilities)
Amounts
offset in the
statement of financial
position
Net amount
in the
statement of financial
position
547.4
(209.1)
338.3
(209.2)
209.1
(0.1)
371.4
(161.5)
209.9
(161.6)
161.5
(0.1)
5. Critical accounting estimates and management judgements
5.1 Accounting estimates
Estimates are continually evaluated and are based on historical experience, current market conditions and other
factors including expectations of future events that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates. Changes in accounting estimates may be necessary if there are changes in
circumstances on which the estimate was based, or as a result of new information or more experience. The estimates
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
(a) Pension benefits
Determining the value of the future defined benefit obligation requires estimation in respect of the assumptions
used to calculate present values. These include future mortality, discount rate and inflation. Management determines
these assumptions in consultation with an independent actuary. Details of the estimates made in calculating the
defined benefit obligation are disclosed in Note 12.2.
(b) Goodwill
The Group tests goodwill for impairment on an annual basis by comparing the carrying value of these assets with
the value-in-use calculations of the relevant cash-generating unit (CGU). Within this process, the Group makes a
number of key assumptions including discount rates, terminal growth rates and forecast cash flows. The
assumptions impact the recoverability of goodwill and the requirement for impairment charges in the income
statement. Additional information is disclosed in Note 17, which highlights the critical estimates applied in the
value-in-use calculations for those CGUs that are considered most sensitive to changes in key assumptions and
the sensitivity of these critical estimates.
(c) Professional indemnity provisions
The Group and its subsidiaries are party to various legal claims, the level of professional indemnity provision held in
relation to these claims are based upon advice from both internal legal teams and independent external counsel and
are assessed on a case by case basis. Further details are contained in Note 28.1. Known claims could be inadequately
provided for or additional claims could be made which might not be covered by existing provisions or by insurance
as detailed in Note 32.
(d) Debtor recoverability
As described in Note 22, provisions for impairment of trade receivables have been made. In reviewing the
appropriateness of these provisions, consideration has been given to the ageing of the debt and the potential
likelihood of default, taking into account current and future economic conditions. Impairment analysis is performed
by local management using a provision matrix to measure the expected credit losses, which is based on historical
credit loss experience adjusted for forward-looking factors specific to the debtors and economic environment.
Savills plc | Annual Report and Accounts 2020 157
5.2 Management judgements
The following are critical judgements, apart from those involving estimations (which are dealt with separately
above), that the Directors have made in the process of applying the Group’s accounting policies and that have the
most significant effect on the amounts recognised in the financial statements.
(a) Non-underlying items
The Group presents underlying profit, earnings and taxation as part of its non-GAAP measures explained in Note
2.3. These measures involve the exclusion of items that, in the judgement of the Directors, need to be disclosed
separately in order to obtain a clear and consistent presentation of the Group’s underlying performance as they are
deemed to be material, exceptional and/or non-operational by virtue of their nature. Further details of these items
disclosed by the Directors in the reconciliation to underlying profit are detailed in Note 9.
(b) Critical judgements in determining the lease term
In determining the lease term, management considers all facts and circumstances that create an economic incentive
to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination
options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).
The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this
assessment and that is within the control of the lessee.
6. Revenue from contracts with customers
Revenue of £1,740.5m (2019: £1,913.4m) in the income statement relates solely to revenue arising from contracts
with customers.
The Group derives revenue from the transfer of services over time and at a point in time in the major product lines
and geographical regions as highlighted in the Group’s segment analysis (Note 7).
6.1 Contract related assets and liabilities
The Group recognised the following revenue-related contract assets and liabilities:
Asset recognised for costs incurred to obtain a contract – investment
management contracts
Work in progress – consulting contracts
Accrued income
Total contract related assets
Current
Non-current
Deferred revenue
Total contract liabilities – current
2020
£m
1.4
8.0
48.3
57.7
56.3
1.4
57.7
10.8
10.8
2019
£m
1.6
7.5
42.3
51.4
49.8
1.6
51.4
10.8
10.8
An immaterial impairment loss on contract assets has been recognised in the reporting period (2019: £0.2m
impairment loss).
Amortisation on contract costs recognised in the income statement amounted to £0.2m (2019 £0.2m).
All consulting contracts are for periods of one year or less. As permitted under IFRS 15, the transaction price
allocated to these unsatisfied contracts is not disclosed.
The movement in accrued income and deferred income year-on-year is a result of normal trading fluctuations and
is not materially impacted by subsidiary acquisitions, foreign exchange fluctuations or changes in assumptions.
6.2 Revenue recognised in relation to contract liabilities
Revenue recognised in the year that was included in the contract liability balance at the beginning of the period
totalled £7.0m (2019: £8.6m).
Revenue recognised in the year from performance obligations satisfied in previous years was not material.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 158
Notes to the financial statements continued
Year ended 31 December 2020
7. Segment analysis
Operating segments reflect internal management reporting to the Group’s chief operating decision maker, defined
as the Group Executive Board (GEB). The operating segments are determined based on differences in the nature of
their services. Geographical location also strongly affects the Group and both are therefore disclosed. The
reportable operating segments derive their revenue primarily from property-related services. Refer to the Group
overview on page 3 and the segmental reviews on pages 21 to 25 for further information on revenue sources.
Operations are based in four main geographical areas. The UK is the home of the parent Company with segment
operations throughout the region. Asia Pacific segment operations are based in Hong Kong, Macau, China, South
Korea, Japan, Taiwan, Thailand, Singapore, Vietnam, Australia, New Zealand, Indonesia, Malaysia and Myanmar.
Europe & the Middle East segment operations are based in Germany, France, Spain, Portugal, the Netherlands,
Belgium, Sweden, Italy, Ireland, Poland, Czech Republic, United Arab Emirates, Egypt, Oman, Bahrain and Saudi
Arabia. North America segment operations are based in a number of states throughout the US and in Canada.
The sales location of the client is not materially different from the location where fees are received and where
the segment assets are located.
Within the UK, both commercial and residential services are provided. Other geographical areas, although largely
commercial-based, also provide residential services, in particular Hong Kong, China, Vietnam, Singapore, Australia,
Taiwan and Thailand.
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, acquisition-related costs, amortisation of acquired intangible assets (excluding software) and
other items that are considered exceptional by size or nature (GMP equalisation charge in the current year).
Segmental assets and liabilities are not measured or reported to the GEB, but non-current assets are disclosed
geographically on page 160.
The segment information provided to the GEB for revenue and underlying profit/(loss) for the year ended
31 December 2020 is as follows:
2020
Revenue
United Kingdom – commercial
United Kingdom – residential
Total United Kingdom
Europe & the Middle East
Asia Pacific – commercial
Asia Pacific – residential
Total Asia Pacific
North America
Revenue
Underlying profit/(loss)
before tax
United Kingdom – commercial
United Kingdom – residential
Total United Kingdom
Europe & the Middle East
Asia Pacific – commercial
Asia Pacific – residential
Total Asia Pacific
North America
Underlying profit/(loss)
before tax*
Transaction
Advisory
£m
Consultancy
£m
Property and
Facilities
Management
£m
Investment
Management
£m
Unallocated
£m
Total
£m
79.8
153.2
233.0
98.2
103.9
26.9
130.8
205.2
667.2
9.5
23.0
32.5
(12.3)
3.3
3.4
6.7
164.1
41.7
205.8
37.5
69.1
–
69.1
8.2
204.9
40.1
245.0
68.6
368.3
–
368.3
–
26.9
–
26.9
36.4
7.5
–
7.5
–
320.6
681.9
70.8
17.6
5.9
23.5
2.4
6.5
–
6.5
13.8
3.4
17.2
(0.1)
27.7
–
27.7
–
5.6
–
5.6
7.8
1.4
–
1.4
–
–
–
–
–
–
–
–
–
–
(13.9)
–
(13.9)
–
–
–
–
–
475.7
235.0
710.7
240.7
548.8
26.9
575.7
213.4
1,740.5
32.6
32.3
64.9
(2.2)
38.9
3.4
42.3
(8.4)
(7.5)
(0.9)
19.4
31.5
44.8
14.8
(13.9)
96.6
Savills plc | Annual Report and Accounts 2020 159
The segment information provided to the GEB for revenue and underlying profit/(loss) for the year ended
31 December 2019 is as follows:
2019
Revenue
United Kingdom – commercial
United Kingdom – residential
Total United Kingdom
Europe & the Middle East**
Asia Pacific – commercial
Asia Pacific – residential
Total Asia Pacific
North America
Revenue
Underlying profit/(loss)
before tax
United Kingdom – commercial
United Kingdom – residential
Total United Kingdom
Europe & the Middle East
Asia Pacific – commercial
Asia Pacific – residential
Total Asia Pacific
North America
Underlying profit/(loss)
before tax*
Transaction
Advisory
£m
Consultancy
£m
Property
and Facilities
Management
£m
Investment
Management
£m
Unallocated
£m
Total
£m
94.2
139.1
233.3
127.5
138.6
35.8
174.4
293.0
828.2
12.3
17.8
30.1
5.4
12.4
4.6
17.0
17.3
69.8
180.3
49.6
229.9
38.6
69.6
–
69.6
–
338.1
19.4
7.6
27.0
2.9
4.6
–
4.6
–
34.5
190.1
41.0
231.1
64.3
372.5
–
372.5
–
667.9
12.1
3.7
15.8
0.2
19.2
–
19.2
–
35.2
33.2
–
33.2
35.4
10.6
–
10.6
–
79.2
9.0
–
9.0
7.3
1.8
–
1.8
–
–
–
–
–
–
–
–
–
–
(14.2)
–
(14.2)
–
–
–
–
–
497.8
229.7
727.5
265.8
591.3
35.8
627.1
293.0
1,913.4
38.6
29.1
67.7
15.8
38.0
4.6
42.6
17.3
18.1
(14.2)
143.4
* Transaction Advisory underlying profit before tax includes depreciation of £33.4m (2019: £29.6m), software amortisation of £1.4m (2019: £1.3m)
and share of post-tax loss from joint ventures and associates of £0.1m (2019: £0.9m profit). Consultancy underlying profit before tax includes
depreciation of £7.6m (2019: £7.9m), software amortisation of £0.5m (2019: £0.5m) and share of post-tax loss from joint ventures and associates
of £0.1m (2019: £0.1m profit). Property and Facilities Management underlying profit before tax includes depreciation of £15.2m (2019: £15.8m),
software amortisation of £1.5m (2019: £1.0m) and share of post-tax profit from joint ventures and associates of £8.2m (2019: £9.4m). Investment
Management underlying profit before tax includes depreciation of £1.7m (2019: £1.9m) and software amortisation of £0.1m (2019: £0.1m) and share
of post-tax gain from associates of £2.2m (2019: £1.4m). Included in Other underlying loss is depreciation of £6.4m (2019: £5.6m) and software
amortisation of £1.2m (2019: £0.5m).
** Property and Facilities Management 2019 revenue has been restated, with revenue decreased by £16.6m in the Europe & Middle East division.
There is no change to underlying profit. Refer to Note 2.29 for further details.
The Unallocated segment includes costs and other expenses at holding company and subsidiary levels, which are
not directly attributable to the operating activities of the Group’s business segments.
A reconciliation of underlying profit before tax to profit before tax is provided in Note 9.
Inter-segmental revenue is not material. No single customer contributed 10% or more to the Group’s revenue for
both 2020 and 2019.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 160
Notes to the financial statements continued
Year ended 31 December 2020
7. Segment analysis continued
Non-current assets by geography are set out below:
Non-current assets
United Kingdom
Europe & the Middle East
Asia Pacific
North America
Total non-current assets
2020
£m
2019
£m
267.9
160.6
134.8
235.4
798.7
283.8
150.3
134.4
196.7
765.2
Non-current assets include goodwill and intangible assets, plant, property and equipment, right-of-use assets and
investments in joint ventures and associates. Financial assets held at FVOCI, non-current other receivables, non-
current contract assets and deferred tax assets are not included.
8. Operating profit
8.1 Operating profit
Operating profit is stated after charging/(crediting):
In depreciation
– Depreciation of right of use assets – leasehold properties
– Depreciation of right of use assets – equipment and motor vehicles
In other operating expenses
– Net foreign exchange (gains)/losses (excluding net (gains)/losses on forward foreign
exchange contracts)
– Net (gains)/losses on forward foreign exchange contracts
– Significant restructuring costs*
– Acquisition-related costs**
– Expense relating to short-term leases
– Expense relating to variable lease payments not included in lease liabilities
In other operating income
– Dividends from equity investments held at FVOCI
Related to investments held at the end of the reporting period
Related to investments disposed of during the reporting period
In other (gains)/losses
– Loss/(profit) on disposal of joint ventures, associates and other investments
– Profit on disposal of subsidiaries
Group
2020
£m
45.6
2.2
(0.3)
(0.1)
1.5
5.0
0.7
1.2
(0.5)
(0.3)
0.1
–
2019
£m
42.4
1.8
1.4
0.1
11.5
13.7
0.9
1.2
(0.5)
–
(1.5)
(0.2)
* Significant restructuring costs include staff related costs of £1.4m (2019: £1.5m), an impairment of right of use assets of £0.1m (2019: £0.5m) and
other related restructuring costs of £nil (2019: £9.5m, relating to costs incurred in rebranding the North American business to and the final
reorganisation within the ex SEB German Investment management business).
** Refer to Note 9 for a further breakdown of acquisition-related costs.
Savills plc | Annual Report and Accounts 2020 8.2 Fees payable to the Company’s auditors, PricewaterhouseCoopers LLP, and its associates
Audit services
Fees payable to the Company’s auditors for the audit of the parent Company
Fees payable to the Company’s auditors and its associates for the audit of the
Company’s subsidiaries
Audit-related assurance services
Total
161
Group
2020
£m
0.4
2.1
2.5
0.1
0.1
2.6
2019
£m
0.4
1.8
2.2
0.2
0.2
2.4
Audit–related assurance services relates primarily to the work performed in connection with the Group’s interim
financial statements.
8.3 Government subsidies
During the year, the Group received £23.4m of wage-related subsidies from governments globally in respect of
employment support schemes due to the COVID-19 pandemic. After repayments (principally of UK Furlough
receipts) and other provisions, the net positive impact of such receipts on the Group’s operating profit in the year
was £11.9m.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 162
Notes to the financial statements continued
Year ended 31 December 2020
9. Underlying profit before tax
Statutory profit before tax
Adjustments:
Amortisation of acquired intangible assets (excluding software)
Share-based payment adjustment
Loss/(profit) on disposal of joint ventures and associates
Restructuring costs
Acquisition-related costs
GMP equalisation charge
Underlying profit before tax
2020
£m
83.2
4.9
1.2
0.1
1.5
5.0
0.7
96.6
2019
£m
115.6
6.9
(2.6)
(1.7)
11.5
13.7
–
143.4
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 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.
Loss on disposal 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. In the prior
year, profit on disposal included profits recognised in relation to the proceeds received in relation to legacy real
estate funds in North America and disposal of a portion of the Group’s holding in a joint venture in China.
Restructuring costs includes costs of integration activities in relation to significant business acquisitions. Charges
in the 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. In the prior year, charges related to costs incurred
in rebranding the North American business to Savills in line with the original integration plan and the final
reorganisation within the German Investment management business associated with the SEB acquisition of 2015.
Acquisition-related costs include a net £4.7m (2019: £12.4m) provision 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. These relate to acquisitions in the UK (£1.8m –
primarily Currell Group), North America (£1.8m) and Europe & the Middle East (£1.1m – primarily Aguirre Newman).
In the prior year, these costs related to acquisitions in the UK (£5.0m – primarily Currell Group), North America
(£2.9m) and Europe & the Middle East (£4.5m – primarily Aguirre Newman). In addition, acquisition-related costs
includes £0.3m of unwinding of interest on deferred consideration payments (2019: £0.5m), £0.7m of transaction
costs (2019: £0.8m) and a £0.7m credit in relation to a working capital adjustment on the Cluttons Middle East
acquisition in 2018.
Guaranteed Minimum Pension (‘GMP’) equalisation charge in the 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. Refer to Note 12.2.
Savills plc | Annual Report and Accounts 2020 163
10. Constant Currency
The Group generates revenues and profits in various territories and currencies because of its international footprint.
Those results are translated on consolidation at the foreign exchange rates prevailing at the time. These exchange
rates vary from year to year, so the Group presents some of its results on a constant currency basis. This means that
the current year results are retranslated using the prior year exchange rates. This eliminates the effect of exchange
from the year-on-year comparison of results.
The constant currency effect on revenue, statutory profit and underlying profit is summarised below:
Revenue
Profit before tax
Underlying profit before tax
2020
Constant
Currency
Effect
£m
2020 at
Constant
Currency
£m
2020
£m
1,740.5
(4.3)
1,744.8
83.2
96.6
0.1
0.1
83.1
96.5
The Group’s segmental results for the current year are presented below in constant currency:
2020 at Constant Currency
Revenue
United Kingdom – commercial
United Kingdom – residential
Total United Kingdom
Europe & the Middle East
Asia Pacific – commercial
Asia Pacific – residential
Total Asia Pacific
North America
Revenue
Underlying profit/(loss)
before tax
United Kingdom – commercial
United Kingdom – residential
Total United Kingdom
Europe & the Middle East
Asia Pacific – commercial
Asia Pacific – residential
Total Asia Pacific
North America
Underlying profit/(loss)
before tax
Transaction
Advisory
£m
Consultancy
£m
Property
and Facilities
Management
£m
Investment
Management
£m
Unallocated
£m
Total
£m
79.8
153.2
233.0
97.3
104.8
27.1
131.9
207.5
669.7
9.5
23.0
32.5
(12.3)
3.2
3.4
6.6
164.1
41.7
205.8
37.2
69.8
–
69.8
8.3
204.9
40.1
245.0
67.9
370.6
–
370.6
–
26.9
–
26.9
36.1
7.5
–
7.5
–
321.1
683.5
70.5
17.6
5.9
23.5
2.4
6.5
–
6.5
13.8
3.4
17.2
(0.1)
28.0
–
28.0
–
5.6
–
5.6
7.7
1.4
–
1.4
–
–
–
–
–
–
–
–
–
–
(13.9)
–
(13.9)
–
–
–
–
–
475.7
235.0
710.7
238.5
552.7
27.1
579.8
215.8
1,744.8
32.6
32.3
64.9
(2.3)
39.1
3.4
42.5
(8.6)
(7.6)
(1.0)
19.2
31.4
45.1
14.7
(13.9)
96.5
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 164
Notes to the financial statements continued
Year ended 31 December 2020
10. Constant Currency continued
The constant currency effect on the Group’s segmental results for the current year is presented below:
2020 – Constant Currency Effect
Revenue
United Kingdom – commercial
United Kingdom – residential
Total United Kingdom
Europe & the Middle East
Asia Pacific – commercial
Asia Pacific – residential
Total Asia Pacific
North America
Revenue
Underlying profit/(loss)
before tax
United Kingdom – commercial
United Kingdom – residential
Total United Kingdom
Europe & the Middle East
Asia Pacific – commercial
Asia Pacific – residential
Total Asia Pacific
North America
Underlying profit/(loss)
before tax
Transaction
Advisory
£m
Consultancy
£m
Property
and Facilities
Management
£m
Investment
Management
£m
Unallocated
£m
Total
£m
–
–
–
0.9
(0.9)
(0.2)
(1.1)
(2.3)
(2.5)
–
–
–
–
0.1
–
0.1
0.1
0.2
–
–
–
0.3
(0.7)
–
(0.7)
(0.1)
(0.5)
–
–
–
–
–
–
–
0.1
0.1
–
–
–
0.7
(2.3)
–
(2.3)
–
(1.6)
–
–
–
–
(0.3)
–
(0.3)
–
–
–
–
0.3
–
–
–
–
0.3
–
–
–
0.1
–
–
–
–
(0.3)
0.1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2.2
(3.9)
(0.2)
(4.1)
(2.4)
(4.3)
–
–
–
0.1
(0.2)
–
(0.2)
0.2
0.1
Savills plc | Annual Report and Accounts 2020 11. Employees
11.1 Employee benefits expense
Basic salaries and wages
Profit share and commissions
Wages and salaries
Social security costs
Other pension costs
Share-based payments
165
Group
Company
2020
£m
635.7
385.2
2019
£m
644.5
466.8
1,020.9
1,111.3
78.3
34.7
19.8
79.9
31.5
17.8
1,153.7
1,240.5
2020
£m
9.6
5.4
15.0
1.9
0.6
1.6
19.1
2019
£m
9.2
5.9
15.1
2.0
0.5
1.0
18.6
During the year, the Group received wage-related subsidies from governments globally in respect of employment
support schemes following the COVID-19 pandemic. The amount received under these schemes are off-set against
the employee benefit expense in the income statement. Refer to Note 8.3 for further details.
11.2 Staff numbers
The monthly average number of employees (including Directors) for the year was:
United Kingdom
Europe & the Middle East
Asia Pacific
North America
Group
Company
2020
6,939
2,135
29,160
833
39,067
2019
6,388
2,032
29,912
825
39,157
2020
151
–
–
–
2019
143
–
–
–
151
143
The average number of UK employees (including Directors) during the year included 112 employed under fixed-term
and temporary contracts (2019: 113).
11.3 Key management compensation
Key management
– Short-term employee benefits
– Post-employment benefits
– Share-based payments
Group
2020
£m
17.3
0.1
2.2
19.6
2019
£m
23.2
0.1
2.6
25.9
The key management of the Group for the year ended 31 December 2020 comprised Executive Directors and the
GEB members. Details of Directors’ remuneration is contained in the Remuneration report on pages 92 to 116.
During the year, eight (2019: seven) GEB members made aggregate gains totalling £1.8m (2019: £2.1m) on the
exercise of options under DSBP and DSP schemes (2019: PSP and DSBP schemes).
Retirement benefits under the defined benefit scheme are accruing for three (2019: three) GEB members and
benefits are accruing under a defined contribution scheme in Hong Kong for two (2019: two) GEB members.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 166
Notes to the financial statements continued
Year ended 31 December 2020
12. Pension schemes
12.1 Defined contribution plans
The Group operates the Savills UK Group Personal Pension Plan, a defined contribution scheme, a number of
defined contribution individual pension plans and a Mandatory Provident Fund Scheme in Hong Kong, to which
it contributes. The total pension charges in respect of these plans were £34.0m (2019: £31.5m). The amount
outstanding as at 31 December 2020 in relation to defined contribution schemes is £2.7m (2019: £1.3m).
12.2 Defined benefit plan
The Group operates two defined benefit plans.
The Pension Plan of Savills (the ‘UK Plan’) is a UK-based plan which provided final salary pension benefits to some
employees, but was closed with regard to future service-based benefit accrual with effect from 31 March 2010.
From 1 April 2010, pension benefits for former employees of the UK Plan are provided through the Group’s defined
contribution Personal Pension Plan.
The UK Plan is administered by a separate Trust that is legally separated from the Company. The Board of the
pension fund is composed of six trustees. The Board of the pension fund is required by law and by its Article of
Association to act in the interest of the fund and of all relevant stakeholders in the scheme. The Board of the pension
fund is responsible for the investment policy with regard to the assets of the fund. The contributions are determined
by an independent qualified actuary on the basis of triennial valuations.
A full actuarial valuation of the UK Plan was carried out as at 31 March 2019 and has been updated to 31 December
2020 by a qualified independent actuary.
The Savills Fund Management GMBH Plan (the ‘SFM Plan’) is a Germany-based plan which provides final salary benefits
to nine active employees and 106 former employees. The plan is closed to future service-based benefit accrual.
The SFM Plan is administered by an external Trust that is legally separated from the Company. The Trust Agreement
requires the trustee to maintain the plan assets in the interest of the beneficiaries of the plan and to fulfil their
pension entitlements in the event of insolvency to the extent of the plan assets held. The Investment Committee of
the fund, advised by expert investment managers, is responsible for the investment policy with regards to the assets
of the fund. The contributions are determined based on the annual valuations of an independent qualified actuary.
A full actuarial valuation of the SFM Plan was carried out as at 31 December 2020 by a qualified independent actuary.
The table below outlines the Group’s and Company’s defined benefit pension amounts in relation to the UK Plan:
Liability in the statement of financial position
Net interest expense/(income) included in finance costs
Past service cost included in employee benefit expense
Actuarial (gain)/loss included in other comprehensive income
Group
Company
2020
£m
2.6
0.2
0.7
(7.7)
2019
£m
9.4
(0.2)
–
21.4
2020
£m
0.1
–
–
(0.4)
2019
£m
0.5
–
–
1.2
The past service cost in 2020 relates to the estimated cost of GMP equalisation of historic individual transfers-out of
the UK Plan; this follows a second High Court hearing on the GMP equalisation case in May and October 2020. The
ruling issued on 20 November 2020 did not revisit any of the issues addressed in the original 2018 ruling.
Rule 23 of the governing Trust Deed and Rules of the UK Plan covers the rights upon termination of the UK Plan,
which is triggered when there are no beneficiaries surviving in accordance with Rule 19. Management interprets
these rules that in the event of the UK Plan winding up with no members, any surplus assets would be returned to
the Company. Based on these rights, any net surplus in the scheme is recognised in full.
Savills plc | Annual Report and Accounts 2020 167
2019
£m
17.1
(16.6)
0.5
Total
£m
0.5
–
–
1.4
0.2
(0.1)
–
0.1
Total
£m
(0.1)
–
The amounts recognised in the statement of financial position in relation to the UK Plan are as follows:
Present value of funded obligations
Fair value of plan assets
Liability recognised in the statement of financial position
Group
Company
2020
£m
333.0
(330.4)
2.6
2019
£m
309.9
(300.5)
9.4
2020
£m
18.4
(18.3)
0.1
The movement in the defined benefit obligation/(asset) for the UK Plan over the year is as follows:
Group
Company
At 1 January 2020
Interest expense/(income)
Past service cost
Remeasurements:
– Gains on plan assets, excluding
amounts included in interest
income
– Loss from change in financial
assumptions
– Loss from change in
demographic assumptions
– Experience gains
Benefit payments
At 31 December 2020
At 1 January 2019
Interest expense/(income)
Remeasurements:
– Gains on plan assets, excluding
amounts included in interest
income
– Loss from change in financial
assumptions
– Gain from change in demographic
assumptions
– Experience losses
Employer contributions
Benefit payments
At 31 December 2019
Present value
of obligation
£m
Fair value of
plan assets
£m
309.9
(300.5)
6.1
0.7
(5.9)
–
Total
£m
9.4
0.2
0.7
–
(34.0)
(34.0)
26.0
2.9
(2.6)
(10.0)
333.0
–
–
–
10.0
(330.4)
Group
Present value
of obligation
£m
Fair value of
plan assets
£m
262.1
7.5
(264.9)
(7.7)
(1.9)
(1.9)
26.0
1.4
Present value
of obligation
£m
Fair value of
plan assets
£m
17.1
0.3
–
–
0.2
(0.1)
(0.5)
18.4
(16.6)
(0.3)
–
–
–
–
0.5
(18.3)
Company
Present value
of obligation
£m
Fair value of
plan assets
£m
14.6
0.4
(14.7)
(0.4)
2.9
(2.6)
–
2.6
Total
£m
(2.8)
(0.2)
–
(25.7)
(25.7)
45.0
(2.2)
4.3
–
(6.8)
309.9
–
–
–
(9.0)
6.8
(300.5)
45.0
(2.2)
4.3
(9.0)
–
9.4
–
2.5
(0.1)
0.1
–
(0.4)
17.1
(1.3)
(1.3)
–
–
–
(0.6)
0.4
(16.6)
2.5
(0.1)
0.1
(0.6)
–
0.5
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 168
Notes to the financial statements continued
Year ended 31 December 2020
12. Pension schemes continued
12.2 Defined benefit plan continued
The table below outlines the Group’s defined benefit pension amounts in relation to the SFM Plan:
Liability in the statement of financial position
Actuarial loss included in other comprehensive income
SFM Plan
2020
£m
1.7
1.3
2019
£m
0.8
1.3
Section 5.2 of the SFM Plan Trust Deed provides the Trustor (Savills Fund Management GmbH, Savills Fund
Management Holding AG, and Savills Investment Management (Germany) GmbH respectively) with an unconditional
right to a refund of surplus assets assuming the full settlement of plan liabilities in the event of a plan wind-up.
Furthermore, in the ordinary course of business neither Trustor nor Trustee have any rights to unilaterally wind up,
or otherwise augment the benefits due to members of the scheme. Based on these rights, any net surplus in the
scheme is recognised in full.
The amounts recognised in the statement of financial position in relation to the SFM Plan are as follows:
Present value of funded obligations
Fair value of plan assets
Liability recognised in the statement of financial position
SFM Plan
2020
£m
16.3
(14.6)
1.7
2019
£m
14.6
(13.8)
0.8
Savills plc | Annual Report and Accounts 2020 169
The movement in the defined benefit obligation/(asset) for the SFM Plan over the year is as follows:
At 1 January 2020
Interest expense/(income)
Remeasurements:
– Loss on plan assets, excluding amounts included in interest income
– Loss from change in demographic assumptions
– Experience losses
Employer contributions
Benefit payments
Exchange movement
At 31 December 2020
At 1 January 2019
Interest expense/(income)
Remeasurements:
– Gains on plan assets, excluding amounts included in interest income
– Loss from change in demographic assumptions
– Experience losses
Employer contributions
Benefit payments
Exchange movement
At 31 December 2019
The significant actuarial assumptions were as follows:
As at 31 December
Expected rate of salary increases
Projection of social security contribution ceiling
Rate of increase to pensions in payment
– pension promise before 1 January 1986
– pension promise after 1 January 1986
– accrued before 6 April 1997
– accrued after 5 April 1997
– accrued after 5 April 2005
Rate of increase to pensions in deferment
– accrued before 6 April 2001
– accrued after 5 April 2001
– accrued after 5 April 2009
Discount rate
Inflation assumption
SFM Plan
Present value
of obligation
£m
Fair value
of plan assets
£m
14.6
0.2
–
0.8
0.2
–
(0.5)
1.0
16.3
(13.8)
(0.2)
0.2
–
–
(0.5)
0.5
(0.8)
(14.6)
SFM Plan
Present value
of obligation
£m
Fair value
of plan assets
£m
14.0
0.3
–
1.6
0.4
–
(0.9)
(0.8)
14.6
(13.7)
(0.3)
(0.7)
–
–
(0.8)
0.9
0.8
(13.8)
Total
£m
0.8
–
0.2
0.8
0.2
(0.5)
–
0.2
1.7
Total
£m
0.3
–
(0.7)
1.6
0.4
(0.8)
–
–
0.8
SFM Plan
UK Plan
2020
2.50%
2.25%
2.25%
1.75%
–
–
–
–
–
–
2019
2.50%
2.25%
2.25%
1.75%
–
–
–
–
–
–
1.07%
1.75%
1.39%
1.75%
2020
3.25%
2019
3.25%
–
–
–
3.00%
2.70%
2.00%
5.00%
2.10%
2.10%
1.40%
2.80%
–
–
–
3.00%
3.10%
2.30%
5.00%
2.20%
2.20%
2.00%
3.20%
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 170
Notes to the financial statements continued
Year ended 31 December 2020
12. Pension schemes continued
12.2 Defined benefit plan continued
Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics
and experience. These assumptions translate into an average life expectancy in years for a pensioner retiring at
age 60:
Retiring at the end of the reporting year
Retiring 20 years after the end of the
reporting year
– Male
– Female
– Male
– Female
SFM Plan
UK Plan
2020
84.9
88.7
87.7
91.0
2019
84.8
88.9
87.6
90.9
2020
88.3
89.9
90.0
91.6
2019
88.2
89.7
89.9
91.4
The sensitivity of the defined benefit obligations to changes in the principal assumptions is:
0.1% increase in discount rates
0.1% increase in inflation rate
0.1% increase in salary increase rate
1 year increase in life expectancy
SFM Plan
UK Plan
Impact on present value of scheme
obligations £m
Impact on present value of scheme
obligations £m
(0.3)
–
0.2
0.8
(6.7)
3.8
0.3
14.5
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit
obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the
assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligations has
been calculated using the projected unit credit method at the end of the reporting period, which is the same as that
applied in calculating the defined benefit obligations liability recognised in the statement of financial position.
Plan assets are comprised as follows:
SFM Plan
UK Plan
2020
2019
2020
2019
Liability-driven investment (LDI)
Investment funds
Bonds
Cash and cash equivalents
Asset backed securities
£m
–
%
–
£m
–
%
–
14.6
100%
13.8
100%
–
–
–
–
–
–
–
–
–
–
–
–
£m
99.9
29.6
141.1
1.5
58.3
Total
14.6
100%
13.8
100%
330.4
%
30%
9%
43%
–
18%
100%
£m
72.9
31.2
127.6
0.7
68.1
300.5
%
24%
10%
43%
–
23%
100%
No Plan assets are the Group’s own financial instruments or property occupied or used by the Group. The fair values
of the above equity and debt instruments are determined based on quoted market prices in active markets.
Savills plc | Annual Report and Accounts 2020 171
Although the UK Plan does not invest directly in the Group’s financial instruments, it does invest in passive equity
funds, so will have some exposure to FTSE All Share, hence indirectly to the Savills share price.
Through the defined benefit plans, the Group is exposed to a number of risks, the most significant of which are
detailed below:
(a) Asset volatility
The plan liabilities are calculated using a discount rate set with reference to corporate bond yields; if plan assets
underperform this yield, this will create a deficit. The Plan holds a significant proportion of equities and funds, which
are expected to outperform corporate bonds in the long-term while providing volatility and risk in the short term.
(b) Changes in bond yields
A decrease in corporate bond yields will increase the Plan’s liabilities, although this will be partially offset by an
increase in the value of the Plan’s bond holdings.
(c) Inflation risk
Higher inflation will lead to higher liabilities. The majority of the Plan’s assets are either unaffected by or are loosely
correlated with inflation, meaning that an increase in inflation will also increase the deficit.
(d) Life expectancy
The majority of the Plan’s obligations are to provide benefits for the life of the member, so increases in life
expectancy will result in an increase in the Plan’s liabilities.
Expected contributions to post-employment benefit plans for the year ending 31 December 2021 are £4.5m.
The Company expects to contribute £0.2m.
The weighted average duration of the defined benefit obligations is 20 years for the UK Plan and 17 years for
the SFM Plan.
Expected maturity analysis of the undiscounted pension benefits:
At 31 December 2020
Pension benefit payments
– UK Plan
– SFM Plan
Less than
a year
£m
Between
1–2 years
£m
Between
2–5 years
£m
4.7
0.5
5.4
0.5
20.4
1.6
Over
5 years
£m
456.6
17.5
Total
£m
487.1
20.1
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 172
Notes to the financial statements continued
Year ended 31 December 2020
13. Finance income and costs
Bank interest receivable
Fair value gain
Finance income
Bank interest payable
Unwinding of discounts on liabilities
Finance charges on lease liabilities
Net interest on defined benefit pension obligations
Fair value loss
Finance costs
Net finance cost
14. Income tax expense
Analysis of tax expense for the year:
Current tax
United Kingdom:
Corporation tax on profits for the year
Adjustment in respect of prior years
Overseas tax
Adjustment in respect of prior years
Total current tax
Deferred tax
Representing:
United Kingdom
Effect of change in UK tax rate on deferred tax
Overseas tax
Effect of change in overseas tax rate on deferred tax
Adjustment in respect of prior years
Total deferred tax (Note 21)
Income tax expense
Group
2020
£m
3.4
–
3.4
(6.5)
(0.5)
(8.9)
(0.2)
(0.1)
(16.2)
(12.8)
Group
2020
£m
13.0
0.3
13.3
15.0
(1.8)
26.5
(3.7)
(0.3)
(7.6)
0.2
0.1
(11.3)
15.2
2019
£m
6.4
0.1
6.5
(8.4)
(0.8)
(9.3)
0.2
–
(18.3)
(11.8)
2019
£m
13.3
(0.5)
12.8
22.6
0.2
35.6
(2.8)
0.2
(1.3)
0.5
(0.2)
(3.6)
32.0
Savills plc | Annual Report and Accounts 2020 173
The tax on the Group’s profit before income tax differs from the theoretical amount that would arise using the UK
weighted average tax rate of 19% (2019: 19%) applicable to profits of the consolidated entities as follows:
Profit before income tax
Tax on profit at 19% (2019: 19%)
Effects of:
Adjustment in respect of prior years
Difference in overseas tax rates
Utilisation of previously unprovided tax losses
Expenses and other charges not deductible for tax purposes
Non-assessable income (including COVID-19 subsidies)
Tax on joint ventures and associates
Effect of change in tax rates on deferred tax
Income tax expense
Group
2020
£m
83.2
15.8
(1.4)
2.5
–
5.3
(4.7)
(2.0)
(0.3)
15.2
2019
£m
115.6
22.0
(0.5)
4.2
(0.4)
8.7
(0.3)
(2.4)
0.7
32.0
The effective tax rate of the Group for the year ended 31 December 2020 is 18.3% (2019: 27.7%), which is lower
(2019: higher) than the UK weighted average applicable rate.
Deferred tax has been determined using the applicable effective future tax rate that will apply in the expected
period of utilisation of the deferred tax asset or liability.
The tax (charged)/credited to other comprehensive income is as follows:
Group
Company
Tax on items that will not be reclassified to profit or loss
Deferred tax on pension actuarial gains/losses
Tax on items that may subsequently be reclassified
to profit or loss
Current tax credit on employee benefits
Current tax credit on foreign exchange reserves
Current tax credit on retirement benefits
Current tax on IFRS 16 initial lease recognition release
Deferred tax on additional pension contributions
Deferred tax on pension – effect of tax rate change
Deferred tax on employee benefits
Deferred tax on foreign exchange reserves
Deferred tax on IFRS 16 recognition and release
Tax on items relating to components of other
comprehensive income
2020
£m
(1.2)
(1.2)
2.5
(0.1)
–
0.1
–
0.3
(3.2)
0.1
–
(0.3)
(1.5)
2019
£m
4.4
4.4
2.3
0.2
1.7
(0.2)
(1.7)
(0.2)
–
0.1
1.6
3.8
8.2
2020
£m
(0.1)
(0.1)
0.5
–
–
(0.1)
–
–
(0.3)
–
–
0.1
–
2019
£m
0.2
0.2
0.5
–
0.1
(0.1)
(0.1)
–
(0.1)
–
1.1
1.4
1.6
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 174
Notes to the financial statements continued
Year ended 31 December 2020
15. Dividends – Group and Company
Amounts recognised as distribution to equity holders
in the year:
In respect of the previous year
Ordinary final dividend of £nil per share (2018: 10.8p)
Supplemental interim dividend of £nil per share (2018: 15.6p)
In respect of the current year
Interim dividend of £nil per share (2019: 4.95p)
Group
2020
£m
Company
2019
£m
2020
£m
2019
£m
–
–
–
–
14.8
21.3
6.7
42.8
–
–
–
–
14.9
21.5
6.9
43.3
The Group paid £0.4m (2019: £0.5m) of dividends to non-controlling interests.
Under the terms of the Savills plc 1992 Employee Benefit Trust (the ‘EBT’), the Trustees have waived their dividend
entitlement for all shares held by the Trust. The dividends paid to the Rabbi Trust are eliminated upon Group
consolidation, as a result the dividends paid by the Group and the Company are not equal.
On 1 April 2020, the proposed ordinary final dividend and supplemental interim dividend for 2019 were withdrawn
in order to retain sufficient cash reserves to mitigate the effect of the potential impact of COVID-19 on the Group.
The Board recommends a final dividend of 17.0p (net) per ordinary share (amounting to £23.8m) is paid on 18 May
2021 to Shareholders on the register at 9 April 2021. These financial statements do not reflect this dividend payable.
The total paid and recommended ordinary dividend for the 2020 financial year comprises an aggregate distribution
of 17.0p per ordinary share (2019: 4.95p per ordinary share).
16. Earnings per share
16.1 Basic and diluted earnings per share
Basic earnings per share (‘EPS’) are based on the profit attributable to owners of the Company and the weighted
average number of ordinary shares in issue during the year, excluding the shares held by the EBT, 3,524,326 shares
(2019: 4,388,054 shares) and the Rabbi Trust, 1,055,676 shares (2019: 1,602,405).
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume
conversion of dilutive potential ordinary shares, being the share options granted to employees where the exercise
price is less than the average market price of the Company’s ordinary shares during the year and where
performance conditions have been met.
The earnings and the shares used in the calculations are as follows:
Basic earnings per share
Effect of additional shares issuable
under option
Diluted earnings per share
2020
Earnings
£m
67.6
–
67.6
2020
Shares
million
138.0
3.1
141.1
2020
EPS
pence
49.0
(1.1)
47.9
2019
Earnings
£m
82.9
–
82.9
2019
Shares
million
136.7
4.2
140.9
2019
EPS
pence
60.6
(1.8)
58.8
Savills plc | Annual Report and Accounts 2020 175
16.2 Underlying basic and diluted earnings per share
Excludes (loss)/profit on disposals, share-based payment adjustment, amortisation of intangible assets (excluding
software), restructuring costs, acquisition-related costs and other exceptional costs.
Basic earnings per share
Amortisation of acquired intangible assets
(excluding software) after tax
Share-based payment adjustment after tax
Loss/(profit) on disposal of joint ventures
and associates after tax
Restructuring costs after tax
Acquisition-related costs after tax
GMP equalisation charge after tax
2020
Earnings
£m
67.6
2020
Shares
million
138.0
2020
EPS
pence
49.0
2019
Earnings
£m
82.9
2019
Shares
million
136.7
3.3
1.1
0.1
1.5
4.1
0.6
–
–
–
–
–
–
2.4
0.8
0.1
1.1
3.0
0.4
5.1
(2.2)
(1.2)
9.3
12.8
–
–
–
–
–
–
–
2019
EPS
pence
60.6
3.7
(1.6)
(0.9)
6.8
9.4
–
Underlying basic earnings per share
78.3
138.0
56.8
106.7
136.7
78.0
Effect of additional shares issuable
under option
Underlying diluted earnings per share
–
78.3
3.1
141.1
(1.3)
55.5
–
106.7
4.2
140.9
(2.3)
75.7
The Directors regard the adjustments on the previous table necessary to give a fair picture of the underlying results
of the Group for the year. The adjustment for share-based payment 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 charge and the effective value of the annual share award in order to better
match the underlying staff costs in the year with the revenue recognised in the same period.
The gross amounts of the above adjustments (Note 9) are amortisation of acquired intangible assets (excluding
software) £4.9m (2019: £6.9m), share-based payment adjustment £1.2m charge (2019: £2.6m credit), restructuring
costs of £1.5m (2019: £11.5m), net loss on disposals of £0.1m (2019: £1.7m net profit), acquisition-related costs of
£5.0m (2019: £13.7m) and the GMP equalisation charge of £0.7m (2019: £nil).
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 176
Notes to the financial statements continued
Year ended 31 December 2020
17. Goodwill and intangible assets
Group
Company
Customer/
business
relationships
£m
Investment
and property
management
contracts
£m
Goodwill
£m
Order
backlogs
£m
Brands
£m
Computer
software
£m
Total
£m
Total
£m
422.9
21.5
41.4
6.6
1.2
29.1
522.7
9.3
5.1
7.7
–
–
–
1.1
429.1
–
–
–
–
29.2
–
–
–
(0.2)
0.4
41.6
2.2
–
(5.3)
–
0.1
3.6
0.5
–
–
–
–
0.3
0.1
0.1
1.7
1.7
33.8
539.0
0.1
5.3
15.6
5.3
–
0.8
(1.1)
(6.4)
(0.2)
48.7
18.0
18.4
6.4
–
–
1.0
49.7
1.6
–
0.1
19.7
2.8
–
0.4
21.6
0.2
(5.3)
0.2
1.5
1.2
0.3
–
–
1.5
4.7
(0.4)
0.2
15.8
9.6
(5.7)
1.9
109.8
11.3
104.0
2.6
–
–
9.9
1.2
(0.2)
–
3.6
6.3
Cost
At 1 January 2020
Additions through
business combinations
(Note 20.4)
Other additions
Disposals
Reclassifications
Exchange movement
At 31 December 2020
Accumulated
amortisation and
impairment
At 1 January 2020
Amortisation charge
for the year
Disposals
Exchange movement
At 31 December 2020
Net book value
At 31 December 2020
379.4
9.5
20.0
2.1
0.2
18.0
429.2
The carrying amount of intangible assets with indefinite useful lives totals £2.8m as at 31 December 2020 (2019:
£2.9m), which consists of investment management contracts in relation to open-ended funds. No impairment
charge has been recognised in 2020 (2019: no impairment charge recognised).
All intangible amortisation charges in the year are disclosed on the face of the income statement.
The Company’s intangible assets consist of computer software only.
Savills plc | Annual Report and Accounts 2020 177
Group
Company
Customer/
business
relationships
£m
Investment
and property
management
contracts
£m
Goodwill
£m
Order
backlogs
£m
Brands
£m
Computer
software
£m
Total
£m
Total
£m
Cost
At 1 January 2019
434.5
21.9
42.1
6.9
1.3
26.9
533.6
Additions through
business combinations
Other additions
Disposals
Exchange movement
At 31 December 2019
Accumulated amortisation
and impairment
1.5
–
–
(13.1)
422.9
–
–
–
–
–
–
–
–
–
–
–
–
(0.4)
21.5
(0.7)
41.4
(0.3)
6.6
(0.1)
1.2
–
7.3
(4.7)
(0.4)
1.5
7.3
(4.7)
(15.0)
29.1
522.7
7.3
–
2.4
(0.4)
–
9.3
At 1 January 2019
50.7
16.1
15.3
Amortisation charge
for the year
Disposals
Exchange movement
At 31 December 2019
Net book value
–
–
(2.0)
48.7
2.2
–
(0.3)
18.0
3.8
–
(0.7)
18.4
6.3
0.3
–
(0.2)
6.4
0.7
0.6
–
(0.1)
1.2
12.0
101.1
2.5
3.5
(3.9)
(0.3)
10.4
(3.9)
(3.6)
11.3
104.0
0.5
(0.4)
–
2.6
6.7
At 31 December 2019
374.2
3.5
23.0
0.2
–
17.8
418.7
During the year, goodwill and intangible assets were tested for impairment in accordance with IAS 36. Goodwill
and intangible assets are allocated to the Group’s cash-generating units (‘CGUs’) identified according to country
of operation and business segment. In most cases, the CGU is an individual subsidiary or operation and these have
been separately assessed and tested. A segment-level summary of the allocation of goodwill and indefinite useful
life intangible assets is presented below:
2020
United Kingdom
Europe & the Middle East
Asia Pacific
North America
Total goodwill and indefinite life
intangible assets
2019
United Kingdom
Europe & the Middle East
Asia Pacific
North America
Total goodwill and indefinite life
intangible assets
Transaction
Advisory
£m
Consultancy
£m
Property and
Facilities
Management
£m
Investment
Management
£m
28.7
62.2
14.8
145.8
251.5
11.9
19.9
4.6
3.1
39.5
30.9
21.0
30.1
–
82.0
2.0
4.9
2.3
–
9.2
Transaction
Advisory
£m
Consultancy
£m
Property
and Facilities
Management
£m
Investment
Management
£m
28.7
59.6
14.7
150.7
253.7
11.9
19.0
4.7
–
35.6
30.9
18.4
29.5
–
78.8
2.0
4.7
2.3
–
9.0
Total
£m
73.5
108.0
51.8
148.9
382.2
Total
£m
73.5
101.7
51.2
150.7
377.1
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 178
Notes to the financial statements continued
Year ended 31 December 2020
17. Goodwill and intangible assets continued
17.1 Method of impairment testing
Goodwill values have been tested for impairment by comparing them against the ‘value-in-use’ in perpetuity of the
relevant CGU group. The value-in-use calculations were based on projected cash flows, derived from latest financial
budgets and strategic plans covering a three-year period, prepared by management and approved by the Board.
Projected cash flows are extended for a further two-year period based upon forecasted market growth rates.
These projected cash flows were discounted at CGU specific, risk adjusted, discount rates to calculate their net
present value.
17.2 Key assumptions
The calculation of value-in-use is most sensitive to the following assumptions:
(a) CGU specific operating assumptions
CGU specific operating assumptions are applicable to the forecasted cash flows for the years 2021 to 2023 and
relate to revenue forecasts and operating margins in each of the operating CGUs. These assumptions include the
ongoing impact and timing of recovery from the COVID-19 pandemic. The value ascribed to each assumption will
vary between CGUs as the forecasts are built up from the underlying operating segments within each CGU group.
(b) Discount rate
The pre-tax discount rate applied to cash flows of each CGU is based on the Group’s Weighted Average Cost of
Capital (‘WACC’). WACC is the average cost of sources of financing (debt and equity), each of which is weighted by
its respective use.
Key inputs to the WACC calculation are the risk-free rate, the equity market risk premium (the return that Savills
shares provide over the risk-free rate), beta (reflecting the risk of the Group relative to the market as a whole) and
the Group’s borrowing rates.
Group WACC was adjusted for risk relative to the country in which the assets were located. The risk-adjusted
discount range of rates used in each region for impairment testing are as follows:
United Kingdom
Europe
Asia Pacific
North America
Middle East
(c) Long-term growth rate
2020
Discount rate range
2019
Discount rate range
9.1%
8.4%–12.9%
8.5%–14.6%
9.4%–9.9%
15.9%
8.2%–11.1%
8.0%–13.1%
8.1%–9.6%
8.2%–8.3%
8.5%
To forecast beyond the five years covered by detailed forecasts, a terminal value was calculated, using average
long-term growth rates. The rates are based on the long-term growth rate in the countries in which the Group
operates. The long-term growth rates used in each region for impairment testing are as follows:
United Kingdom
Europe
Asia Pacific
North America
Middle East
2020
Long-term growth
rate range
2019
Long-term growth
rate range
1.8%
0.8%–2.8%
0.6%–6.6%
1.7%–1.8%
2.4%
1.8%–2.0%
0.8%–3.0%
0.6%–5.9%
1.6%–1.8%
2.5%
Savills plc | Annual Report and Accounts 2020 179
17.3 Sensitivity to changes in assumptions
Management have determined that there has been no impairment to any CGUs. This assessment is a reflection of
best estimates in arriving at value-in-use, future growth rates and the discount rate applied to cash flow projections.
Management has performed sensitivity analysis on a number of CGUs, and in particular where the headroom in the
impairment reviews was less than 50% of the carrying value of the CGU. The sensitivity analysis highlighted that if
the recovery from the COVID-19 pandemic took longer than anticipated then a number of the CGUs could be at risk
of reduced headroom. The US Transaction Advisory CGU was identified as the only material CGU that is considered
to be sensitive to changes in key assumptions, but for which no impairment charge was considered to be required at
31 December 2020. Key assumptions applied to this CGU were as follows: a discount rate of 9.9%, a long-term
growth rate post the explicit five year forecast period of 1.8%, an average medium-term revenue growth rate of 15.1%
and the market recovering from impact of the COVID-19 pandemic during the course of 2021. The headroom in the
value-in-use model for this CGU of £21.5m (10%) would be reduced to nil if the following adverse changes to those
key assumptions were made in isolation: a 0.9% increase to the discount rate, a 1.4% reduction in the long-term
growth rate and a 2.6% reduction in the average medium-term revenue growth rate (applied evenly across the
explicit forecast periods).
18. Property, plant and equipment
Group
Cost
At 1 January 2020
Additions
Additions through business combinations (Note 20.4)
Disposals
Reclassifications
Exchange movement
At 31 December 2020
Accumulated depreciation and impairment
At 1 January 2020
Charge for the year
Disposals
Reclassifications
Exchange movement
At 31 December 2020
Net book value
At 31 December 2020
Freehold
property
£m
Leasehold
improvements
£m
Equipment
and motor
vehicles
£m
0.1
–
–
–
–
–
0.1
–
–
–
–
–
–
74.5
5.3
–
–
1.5
(0.7)
80.6
32.4
7.3
–
1.1
(0.4)
40.4
65.5
7.5
0.1
(3.5)
(0.8)
0.3
69.1
38.8
9.2
(3.3)
(0.1)
(0.1)
44.5
Total
£m
140.1
12.8
0.1
(3.5)
0.7
(0.4)
149.8
71.2
16.5
(3.3)
1.0
(0.5)
84.9
0.1
40.2
24.6
64.9
The Directors consider that the fair value of property, plant and equipment approximates carrying value.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 180
Notes to the financial statements continued
Year ended 31 December 2020
18. Property, plant and equipment continued
Group
Cost
At 1 January 2019
Additions
Disposals
Exchange movement
At 31 December 2019
Accumulated depreciation and impairment
At 1 January 2019
Charge for the year
Disposals
Exchange movement
At 31 December 2019
Net book value
At 31 December 2019
Company
Cost
At 1 January 2020
Additions
Disposals
At 31 December 2020
Accumulated depreciation and impairment
At 1 January 2020
Charge for the year
Disposals
At 31 December 2020
Net book value
At 31 December 2020
Company
Cost
At 1 January 2019
Additions
Disposals
Transfer from Group Company
At 31 December 2019
Accumulated depreciation and impairment
At 1 January 2019
Charge for the year
Disposals
At 31 December 2019
Net book value
At 31 December 2019
Freehold
property
£m
Leasehold
improvements
£m
Equipment
and motor
vehicles
£m
0.1
–
–
–
0.1
–
–
–
–
–
75.4
4.3
(4.3)
(0.9)
74.5
30.0
7.0
(4.2)
(0.4)
32.4
67.1
11.9
(11.6)
(1.9)
65.5
41.1
9.4
(10.7)
(1.0)
38.8
Total
£m
142.6
16.2
(15.9)
(2.8)
140.1
71.1
16.4
(14.9)
(1.4)
71.2
0.1
42.1
26.7
68.9
Freehold
property
£m
Leasehold
improvements
£m
Equipment
£m
Total
£m
8.0
2.2
(1.7)
8.5
5.3
1.1
(1.7)
4.7
7.2
2.2
(1.7)
7.7
5.3
1.0
(1.7)
4.6
0.1
–
–
0.1
–
–
–
–
0.1
0.7
–
–
0.7
–
0.1
–
0.1
0.6
3.1
3.8
Freehold
property
£m
Leasehold
improvements
£m
Equipment
£m
0.1
–
–
–
0.1
–
–
–
–
–
–
–
0.7
0.7
–
–
–
–
7.9
1.4
(2.1)
–
7.2
6.4
1.0
(2.1)
5.3
Total
£m
8.0
1.4
(2.1)
0.7
8.0
6.4
1.0
(2.1)
5.3
0.1
0.7
1.9
2.7
Savills plc | Annual Report and Accounts 2020 181
19. Right of use assets
The statement of financial position shows the following amounts relating to right of use assets:
Group
Cost
At 1 January 2020
Additions
Additions through business combinations (Note 20.4)
Disposals
Exchange movement
At 31 December 2020
Accumulated depreciation and impairment
At 1 January 2020
Charge for the year
Disposals
Exchange movement
At 31 December 2020
Net book value
At 31 December 2020
Group
Cost
At 1 January 2019
Additions
Disposals
Exchange movement
At 31 December 2019
Accumulated depreciation and impairment
At 1 January 2019
Charge for the year
Impairment
Disposals
Exchange movement
At 31 December 2019
Net book value
At 31 December 2019
Leasehold
properties
£m
Equipment
and motor
vehicles
£m
Total right
of use assets
£m
263.6
72.2
1.7
(11.5)
–
326.0
41.8
45.6
(9.5)
0.4
78.3
247.7
6.2
2.6
0.1
–
0.4
9.3
1.8
2.2
–
0.2
4.2
5.1
269.8
74.8
1.8
(11.5)
0.4
335.3
43.6
47.8
(9.5)
0.6
82.5
252.8
Leasehold
properties
£m
Equipment
and motor
vehicles
£m
Total right
of use assets
£m
253.0
16.6
(0.8)
(5.2)
263.6
–
42.4
0.5
(0.4)
(0.7)
41.8
221.8
4.3
2.3
(0.1)
(0.3)
6.2
–
1.8
–
–
–
1.8
4.4
257.3
18.9
(0.9)
(5.5)
269.8
–
44.2
0.5
(0.4)
(0.7)
43.6
226.2
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 182
Notes to the financial statements continued
Year ended 31 December 2020
19. Right of use assets continued
Company
Cost
At 1 January 2020
Additions
At 31 December 2020
Accumulated depreciation and impairment
At 1 January 2020
Charge for the year
At 31 December 2020
Net book value
At 31 December 2020
Company
Cost
At 1 January 2019
Additions
At 31 December 2019
Accumulated depreciation and impairment
At 1 January 2019
Charge for the year
At 31 December 2019
Net book value
At 31 December 2019
Right of use assets
– Leasehold
properties
£m
63.4
0.5
63.9
4.7
5.3
10.0
53.9
Right of use assets
– Leasehold
properties
£m
60.6
2.8
63.4
–
4.7
4.7
58.7
Savills plc | Annual Report and Accounts 2020 183
20. Investments and transactions
20.1 Group – Investments in joint ventures and associates
Cost or valuation
At 1 January 2020
Additions
Disposals
Loans advanced/(repaid)
Exchange movement
At 31 December 2020
Share of profit
At 1 January 2020
Group’s share of profit from
continuing operations
Dividends received
Exchange movement
At 31 December 2020
Total
At 31 December 2020
Cost or valuation
At 1 January 2019
Additions
Disposals
Loans advanced
Exchange movement
At 31 December 2019
Share of profit
At 1 January 2019
Group’s share of profit from
continuing operations
Dividends received
Exchange movement
At 31 December 2019
Total
Joint ventures
Associates
Investment
£m
Loans
£m
Total
£m
Investment
£m
Loans
£m
Goodwill
£m
Total
£m
11.9
0.3
(0.6)
–
–
11.6
11.2
6.2
(5.7)
(0.1)
11.6
2.8
–
–
1.4
(0.1)
4.1
–
–
–
–
–
14.7
0.3
(0.6)
1.4
(0.1)
15.7
11.2
6.2
(5.7)
(0.1)
11.6
2.5
–
–
–
–
2.5
7.5
4.0
(5.1)
–
6.4
0.6
0.2
–
(0.1)
–
0.7
–
–
–
–
–
14.9
18.0
–
–
–
–
0.2
–
(0.1)
–
14.9
18.1
–
–
–
–
–
7.5
4.0
(5.1)
–
6.4
23.2
4.1
27.3
8.9
0.7
14.9
24.5
Joint ventures
Associates
Investment
£m
Loans
£m
Total
£m
Investment
£m
Loans
£m
Goodwill
£m
Total
£m
10.7
2.0
(0.4)
–
(0.4)
11.9
10.6
7.8
(6.8)
(0.4)
11.2
2.3
–
–
0.5
–
2.8
–
–
–
–
–
13.0
2.0
(0.4)
0.5
(0.4)
14.7
2.5
0.1
–
–
(0.1)
2.5
10.6
7.4
7.8
(6.8)
(0.4)
11.2
4.0
(3.7)
(0.2)
7.5
–
–
–
0.6
–
0.6
–
–
–
–
–
–
14.8
–
–
–
0.1
14.9
–
–
–
–
–
17.3
0.1
–
0.6
–
18.0
7.4
4.0
(3.7)
(0.2)
7.5
At 31 December 2019
23.1
2.8
25.9
10.0
0.6
14.9
25.5
In the opinion of the Directors, the Group does not have any joint ventures or associates that are individually material
to the results of the Group.
The joint ventures and associates have no significant liabilities to which the Group is exposed, nor has the Group any
significant contingent liabilities or capital commitments in relation to its interests in the joint ventures and associates.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 184
Notes to the financial statements continued
Year ended 31 December 2020
20. Investments and transactions continued
20.2 Group – Financial assets at fair value through other comprehensive income (‘FVOCI’)
Financial assets at FVOCI comprise the following individual equity investments:
Non-current assets
Listed securities
OnTheMarket plc
Unlisted securities
YOPA Property Ltd
Vucity Ltd*
Aomi Project TMK
Savills IM Japan Value Fund II
Euro V
Prime London Residential Development Fund II
Cordea Savills UK Property Ventures No. 1 LP
Daishin GK Canal
Daishin GK Kaigan
Prime London Residential Development Fund
Home Click Pte Ltd
Savills Property Services (India) Private Ltd
Other smaller investments
2020
£m
2019
£m
1.5
15.2
1.3
–
4.1
1.6
0.6
0.4
0.7
0.2
0.2
0.2
0.2
1.2
0.8
15.2
8.0
2.1
1.7
1.6
0.7
0.6
0.5
0.2
0.2
0.2
0.2
0.6
27.4
32.6
* The Group holds more than 20% of the equity interest in Vucity Ltd. However, the Group does not have the power to participate in the financial
and operational decisions of the entity, does not have representation on the Board of Directors and does not participate in major policy-making
processes. As a result, the Group does not exert significant influence over this investment.
During the year, the Group made total investments of £5.0m, including an increase to its investment in the Savills
IM Japan Value Fund II (£3.6m). The Group disposed of investments totalling £2.5m, including its investment in the
Aomi Project TMK (£2.0m) and a part disposal in Savills IM Japan Fund II (£0.4m).
During the prior year, the Group increased its investment in YOPA Property Ltd and Vucity Ltd at a total cost of
£4.5m. New investments relating to a number of investments in Japan of £0.9m include Daishin GK Canal (£0.5m),
and additional investments were made in Euro V and Savills IM Japan Value Fund II at a total cost of £0.9m. The
Group made disposals of investments totalling £4.5m including partial disposals of Greater Tokyo Office Fund
(£2.3m), Savills IM Japan Value Fund II (£1.4m), and full disposal of its holding in Serviced Land Fund 2 (£0.4m)
following the funds liquidation.
As a result of COVID-19 related challenges to the planning markets in particular, the Group revalued its investment
in Vucity Ltd, reducing the carrying value by £7.2m. This change in fair value has been recognised through other
comprehensive income.
Equity investments at FVOCI are denominated in the following currencies:
Sterling
Japanese yen
Hong Kong dollar
Euro
Other
Refer to Note 3.8 for information about methods and assumptions used in determining fair value.
2020
£m
19.4
3.5
0.2
3.7
0.6
27.4
2019
£m
25.6
4.6
0.2
1.8
0.4
32.6
Savills plc | Annual Report and Accounts 2020 185
At 31 December 2020 the Group held conditional commitments to co-invest in a number of Savills IM funds including,
£2.0m (2019: £4.4m) in the Japan Value Fund II over the next year, £nil (2019: £2.7m) in Euro V, £1.0m in the Japan
Residential Fund II (2019: £nil) over the next two years, £3.4m in the Asia Pacific Income and Growth Fund (2019: £nil)
over the next three years, £3.4m in the Vestas Blind Pool Fund VESALF (2019: £nil) over the next two years and £0.2m
(2019: £0.2m) in the Cordea Savills UK Property Ventures Fund No. 1 LP, which is in the process of disposing of its
assets and winding up.
20.3 Company – Investments in subsidiaries
Cost
At 1 January 2019
Loans advanced
Loans repaid
Loans capitalised
Loans transferred to amounts owed by subsidiary undertakings
At 31 December 2019
At 31 December 2020
Shares
in Group
undertaking
£m
Loans to Group
undertakings
£m
57.2
–
–
24.3
–
81.5
81.5
71.6
40.0
(35.0)
(24.3)
(52.3)
–
–
Total
£m
128.8
40.0
(35.0)
–
(52.3)
81.5
81.5
Refer to Note 36 for a full list of the Group’s subsidiaries. The Company directly owns Savills Holding Company
Limited, all other subsidiaries in the Group are indirectly owned. The carrying value of the investment in the
Company’s subsidiary is assessed for impairment by comparing the carrying value of the investment to the
underlying net assets of the subsidiary. No impairments were identified during the year.
20.4 Acquisitions 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:
Property, plant and equipment
Right-of-use asset
Intangible assets
Current assets:
Current liabilities:
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Borrowings
Lease liabilities
Income tax liability
Employment benefit provisions
Non-current liabilities:
Lease liabilities
Deferred tax liabilities
Net assets acquired
Goodwill
Purchase consideration
Consideration satisfied by:
Cash paid
Discounted value of deferred consideration
Provisional fair value to the Group
Macro
£m
–
1.3
7.2
–
–
–
–
–
–
–
(1.3)
–
7.2
3.3
10.5
9.3
1.2
10.5
Omega
£m
0.1
0.5
3.3
0.9
2.4
(1.0)
(0.7)
(0.3)
(0.3)
(0.1)
(0.2)
(1.0)
3.6
1.8
5.4
4.3
1.1
5.4
Total
£m
0.1
1.8
10.5
0.9
2.4
(1.0)
(0.7)
(0.3)
(0.3)
(0.1)
(1.5)
(1.0)
10.8
5.1
15.9
13.6
2.3
15.9
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 186
Notes to the financial statements continued
Year ended 31 December 2020
20. Investments and transactions continued
20.4 Acquisitions of subsidiaries continued
Macro Consultants LLC (‘Macro’)
On 1 March 2020 the Group acquired 100% of the equity interest in Macro Consultants LLC, complementing our
existing services whilst accelerating the expansion of Savills advisory and management service platform in the
United States.
Total acquisition consideration is determined at £10.5m, £9.3m of which was settled on completion and the
remainder relating to the discounted value of deferred payments of £1.2m. The deferred payments are payable in
six separate instalments between September 2021 and September 2027.
In addition to the above, an earn-out is payable on an annual basis between 2021 until 2027 and is measured against
revenue and income targets. The maximum earn-out payment under the agreement totals £23.3m and 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.
Acquisition-related costs of £0.2m have been expensed as incurred to the income statement.
Goodwill of £3.3m has been determined. Goodwill is attributable to the experience and expertise of key staff and
strong industry reputation and is expected to be deductible for tax purposes over a period of 15 years. Intangible
assets recognised on acquisition include £6.7m of customer relationships and £0.5m in relation to the brand.
The acquired business contributed revenue of £8.2m and a loss of £0.9m to the Group for the period from 1 March
2020 to 31 December 2020. Had the acquisition been made at the beginning of the financial year, revenue would
have been £10.2m and the loss would have been £1.2m.
OMEGA Immobilien Management GmbH and OMEGA Immobilien Service GmbH (‘Omega’)
On 31 August 2020 the Group acquired 100% of the equity interest in OMEGA Immobilien Management GmbH and
OMEGA Immobilien Service GmbH, property and facilities management businesses offering services for offices,
shopping centres, residential complexes and car parks across Germany.
Total acquisition consideration is provisionally determined at £5.4m, £4.3m of which was settled on completion and
the remainder relating to a deferred payment in 2022 totalling £1.1m.
In addition to the above, an earn-out is payable in 2023 and is based on average future EBITDA targets. The
maximum earn-out payment under the agreement totals £4.5m and 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.
Acquisition-related costs of £0.5m have been expensed as incurred to the income statement.
The fair value exercise is in progress and goodwill of £1.8m has been provisionally determined. Goodwill is
attributable to the experience and expertise of key staff and is not expected to be deductible for tax purposes.
The acquired business contributed revenue of £3.6m and a profit of £0.4m to the Group for the period from
31 August 2020 to 31 December 2020. Had the acquisition been made at the beginning of the financial year, revenue
would have been £9.9m and the profit would have been £0.9m.
2019 acquisition
In the year ended 31 December 2019 the Group acquired the trade and assets of KKS Strategy LLP, a London-based
workplace consultancy and design studio. There are no changes to the provisional fair values in respect of this
acquisition as reported in the Group’s 2019 Annual Report.
Savills plc | Annual Report and Accounts 2020 187
21. Deferred income tax
Deferred income tax assets and liabilities are only offset where there are legally enforceable rights to offset current
tax assets against current tax liabilities and when the deferred income tax relates to the same fiscal authority. The
deferred tax assets and liabilities are offset when realised through current tax. The deferred income tax assets and
liabilities at 31 December are as follows:
The movement on the deferred tax account is shown below:
Deferred tax assets
– Deferred tax asset to be recovered after more than
12 months
– Deferred tax asset to be recovered within 12 months
Deferred tax liabilities
– Deferred tax liability to be recovered after more than
12 months
– Deferred tax liability to be recovered within 12 months
Deferred tax asset – net
At 1 January – net asset
Amount credited to the income statement (Note 14)
Effect of tax rate change within the income statement
(Note 14)
Tax (charged)/credited to other comprehensive income
– Pension asset on actuarial (gain)/loss
– Pension asset on additional contributions
– Pension asset – effect of UK tax rate change within other
comprehensive income
– Employee benefits
– Movement on foreign exchange reserves
– IFRS 16 initial lease recognition released to reserves
Additions through business combinations (Note 20.4)
Exchange movement
At 31 December – net asset
Company
2020
£m
2019
£m
Group
2020
£m
33.0
9.8
42.8
(4.5)
(1.1)
(5.6)
37.2
2019
£m
23.9
8.8
32.7
(1.2)
(0.9)
(2.1)
30.6
2.1
0.4
2.5
–
–
–
2.5
Group
Company
2020
£m
30.6
11.2
0.1
(1.2)
–
0.4
(3.2)
–
–
(1.0)
0.3
37.2
2019
£m
25.3
4.3
(0.7)
4.4
(1.7)
(0.2)
–
0.1
(0.2)
–
(0.7)
30.6
2020
£m
2.7
0.2
–
(0.1)
–
–
(0.3)
–
–
–
–
2.5
2.1
0.6
2.7
–
–
–
2.7
2019
£m
2.5
0.3
–
0.2
(0.1)
–
(0.1)
–
(0.1)
–
–
2.7
Deferred income tax assets have been recognised for tax loss carry-forwards and other temporary differences
to the extent that the realisation of the related tax benefit through future taxable profits is probable.
As at the reporting date the Group did not recognise deferred tax income tax assets of £2.1m (2019: £1.7m) in
respect of losses amounting to £10.9m (2019: £7.3m), of which £0.3m expires within one to two years (2019: £nil),
£1.2m within three to five years (2019: £0.6m) with the remaining £9.4m being carried forward indefinitely against
future taxable income (2019: £6.7m).
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 188
Notes to the financial statements continued
Year ended 31 December 2020
21. Deferred income tax continued
Deferred tax assets – Group
Balance at 1 January 2019
Amount (charged)/credited to
the income statement (Note 14)
Effect of tax rate change within
the income statement (Note 14)
Amounted credited/(charged)
to other comprehensive income
(Note 14)
Effect of UK rate change within other
comprehensive income (Note 14)
Transfer to deferred tax liabilities
Exchange movement
At 31 December 2019
Amount credited to the income
statement (Note 14)
Effect of tax rate change within the
income statement (Note 14)
Amounted charged to other
comprehensive income (Note 14)
Effect of UK rate change within other
comprehensive income (Note 14)
Exchange movement
At 31 December 2020
Set-off of deferred tax liabilities
pursuant to set-off provisions
Net deferred tax asset
at 31 December 2020
Accelerated
capital
allowances
£m
Provisions
and other
£m
Tax losses
£m
Retirement
benefits
£m
Revaluations
£m
Employee
benefits
£m
2.4
0.2
1.6
19.0
0.6
(0.7)
–
–
–
–
–
2.2
0.2
0.1
–
–
–
(0.6)
(0.1)
–
–
(0.5)
17.1
6.5
0.5
–
–
–
2.5
24.1
3.3
1.0
–
–
–
–
(0.2)
4.1
1.8
–
–
–
0.2
6.1
(0.2)
–
2.7
(0.2)
(0.5)
(0.1)
4.1
–
–
(1.2)
0.4
0.1
3.4
Total
£m
31.3
3.3
(0.6)
2.6
(0.2)
(0.5)
(0.8)
4.8
2.6
–
–
–
–
–
–
–
–
–
–
–
0.2
7.4
35.1
–
–
–
–
–
2.3
10.8
–
0.6
(3.2)
(4.4)
–
–
0.4
0.3
0.2
6.5
42.8
(2.4)
40.4
Savills plc | Annual Report and Accounts 2020 189
Provisions
and other
£m
(1.0)
Retirement
Benefits
£m
Intangible
assets
£m
(0.5)
(4.3)
Total
£m
(6.0)
Accelerated
capital
allowances
£m
(0.2)
0.1
–
–
–
(0.1)
–
–
–
0.1
(0.9)
0.1
(0.3)
–
–
–
(0.1)
–
(1.3)
0.9
1.0
(0.1)
–
–
(3.5)
(0.1)
0.5
0.1
(4.5)
0.6
0.4
(0.4)
(0.5)
(1.0)
(4.3)
(1.0)
(5.6)
2.4
(3.2)
37.2
30.6
Total
£m
2.5
0.3
(0.1)
2.7
–
–
0.5
–
–
–
–
–
–
–
–
0.1
0.1
–
Accelerated
capital
allowances
£m
Provisions
and other
£m
Retirement
benefits
£m
Employee
benefits
£m
0.3
–
–
0.3
(0.1)
–
–
0.2
1.2
–
(0.1)
1.1
–
0.1
(0.1)
1.1
1.0
0.3
(0.1)
1.2
0.3
0.2
(0.1)
(0.3)
(0.3)
–
–
–
1.2
(0.1)
2.5
2.5
2.7
Deferred tax liabilities – Group
At 1 January 2019
Tax (charged)/credited to the income
statement (Note 14)
Effect of tax rate change within
income statement
Transfer from deferred tax assets
Exchange movement
At 31 December 2019
Tax credited/(charged) to the income
statement (Note 14)
Effect of tax rate change within income
statement (Note 14)
Additions through business combinations
(Note 20.4)
At 31 December 2020
Set-off of deferred tax liabilities pursuant
to set-off provisions
Net deferred tax liabilities at
31 December 2020
Net deferred tax asset
At 31 December 2020
At 31 December 2019
Deferred tax assets – Company
Balance at 1 January 2019
Amount (charged)/credited to the
income statement
Tax charged to other comprehensive
income (Note 14)
At 31 December 2019
Amount (charged)/credited to the
income statement
Tax credited/(charged) to other
comprehensive income (Note 14)
Effect of UK tax rate change within other
comprehensive income (Note 14)
At 31 December 2020
Net deferred tax asset
At 31 December 2020
At 31 December 2019
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 190
Notes to the financial statements continued
Year ended 31 December 2020
22. Trade and other receivables
22.1 Trade and other receivables – current
Trade receivables
Less: loss allowance/impairment of receivables provision
Trade receivables – net
Amounts owed by subsidiary undertakings
Other receivables
Prepayments
Accrued income
Group
Company
2020
£m
388.9
(29.9)
359.0
–
50.0
39.3
48.3
2019
£m
463.0
(25.6)
437.4
–
41.2
48.0
42.3
496.6
568.9
2020
£m
0.1
–
0.1
86.4
2.3
3.4
–
92.2
2019
£m
–
–
–
70.9
–
2.5
–
73.4
The carrying value of trade and other receivables is approximate to their fair value.
There is no concentration of credit risk with respect to trade and other receivables as the Group has a large
number of clients internationally dispersed with no individual client owing a significant amount. The credit quality
of receivables is managed at a local subsidiary level on a regular basis.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivables
mentioned above. The Group does not hold any collateral as security.
Amounts owed by subsidiary undertakings are unsecured, interest-free and generally cleared within the month.
Accrued income is expected to be settled within 12 months of the year end date.
The carrying amounts of the Group’s gross trade receivables are denominated in the following currencies:
Sterling
Euro
Hong Kong dollar
US dollar
Australian dollar
Chinese renminbi
Other*
Group
2020
£m
161.8
70.9
44.9
34.9
19.3
30.4
26.7
2019
£m
191.5
93.3
51.0
44.0
24.0
26.5
32.7
388.9
463.0
* Other currencies include United Arab Emirates dirham, South Korean won, Singapore dollar, Japanese yen, New Zealand dollar, Indonesian rupiah,
Philippine peso, Malaysian ringgit, Macau pataca, New Taiwan dollar, Thailand baht, Polish zloty, Swedish krona and Canadian dollar.
Savills plc | Annual Report and Accounts 2020 191
22.2 Group – Loss allowance/impairment of trade receivables provision
The other classes within trade and other receivables do not contain material allowances for impairment.
An allowance for impairment is made based on historical credit loss experience adjusted for forward-looking factors
specific to the debtors and economic environment, as evidence of a likely reduction in the recoverability of the cash
flows. Due to the global financial uncertainty arising from the COVID-19 pandemic, management have increased the
expected loss rates for trade receivables based on judgement as to the impact of the pandemic. In addition, certain
customers have been identified as having a significantly elevated risk and have been provided for on a specific basis.
This has resulted in an increased charge for the impairment provision recognised in the income statement during the
year and the overall provision held.
The loss allowance provision for trade receivables as at 31 December 2020 and 31 December 2019 was determined
as follows:
31 December 2020
Expected loss rate
Gross carrying amount (£m)
Loss allowance provision (£m)
31 December 2019
Expected loss rate
Gross carrying amount (£m)
Loss allowance provision (£m)
More than
30 days
past due
More than
60 days
past due
More than
90 days
past due
More than
180 days
past due
Current
0.8%
275.6
1.9%
36.5
(2.1)
(0.7)
(22.2)
(29.9)
3.1%
19.1
(0.6)
19.2%
22.4
(4.3)
62.9%
35.3
More than
30 days
past due
More than
60 days
past due
More than
90 days
past due
More than
180 days
past due
1.5%
58.1
(0.9)
1.9%
31.7
(0.6)
13.9%
27.3
(3.8)
49.9%
36.0
(18.0)
(25.6)
Current
0.7%
309.9
(2.3)
Total
7.7%
388.9
Total
5.5%
463.0
The loss allowance provision for trade receivables as at 31 December reconciles to the opening loss allowance
provision as follows:
At 1 January
Net increase in loan loss allowance recognised in the income statement during the period
Receivables written off during the year as uncollectible
Foreign exchange
At 31 December
2020
£m
(25.6)
(8.7)
4.4
–
2019
£m
(22.6)
(6.5)
2.4
1.1
(29.9)
(25.6)
A 1% increase in the expected loss rate in each ageing category would increase the loss allowance provision
by £3.9m.
22.3 Trade and other receivables – non-current
Trade receivables
Other receivables
Other assets
Group
2020
£m
5.5
11.8
14.5
31.8
2019
£m
3.3
6.7
17.3
27.3
Other receivables include loans of £10.7m (2019: £5.6m) issued to entities that the Group recognise as equity
investments held at FVOCI.
Other assets are signing-on bonuses that are amortised to the income statement over the relevant contractual
claw-back period.
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 192
Notes to the financial statements continued
Year ended 31 December 2020
23. Cash and cash equivalents
Cash at bank and in hand
Short-term bank deposits
Group
Company
2020
£m
290.8
47.5
338.3
2019
£m
168.2
41.7
209.9
2020
£m
94.5
–
94.5
2019
£m
83.1
–
83.1
The carrying value of cash and cash equivalents approximates their fair value.
The effective interest rate on short-term bank deposits as at 31 December 2020 was 0.74% (2019: 2.49%); these
deposits have an average maturity of 39 days (2019: 30 days).
Cash subject to restrictions in Asia Pacific amounts to £41.1m (2019: £34.8m) which is cash pledged to banks in
relation to property management contracts and cash remittance restrictions in certain countries. These amounts
are consolidated.
Cash and cash equivalents are denominated in the following currencies:
Sterling
Hong Kong dollar
Euro
Chinese renminbi
US dollar
Japanese yen
Australian dollar
South Korean won
Singapore dollar
Other currencies*
Group
Company
2020
£m
61.3
78.9
69.6
47.2
9.8
12.3
17.9
13.0
6.9
21.4
338.3
2019
£m
8.7
55.2
43.7
31.6
20.2
12.9
6.2
8.8
5.0
17.6
209.9
2020
£m
94.3
–
–
–
0.2
–
–
–
–
–
2019
£m
83.1
–
–
–
–
–
–
–
–
–
94.5
83.1
* Other currencies include United Arab Emirates dirham, Canadian dollar, Czech koruna, New Taiwan dollar, Macau pataca, Thai baht, Vietnamese
dong, New Zealand dollar, Philippine peso, Danish krone, Polish zloty and Swedish krona.
Savills plc | Annual Report and Accounts 2020 24. Trade and other payables
24.1 Trade and other payables – current
Deferred consideration (Note 24.3)
Trade payables
Amounts owed to subsidiary undertakings
Other taxation and social security
Other payables
Accruals
Group
Company
2020
£m
11.5
73.8
–
103.9
45.2
370.5
604.9
2019
£m
18.1
103.6
–
55.0
54.3
358.9
589.9
2020
£m
–
1.5
2.7
0.9
–
7.3
12.4
The carrying value of trade and other payables is approximate to their fair value.
Amounts due to subsidiary undertakings are unsecured, interest-free and repayable on demand.
24.2 Other payables – non-current
Deferred consideration (Note 24.4)
Other payables
24.3 Deferred consideration – current
At 1 January
Reclassification from non-current deferred consideration (Note 24.4)
Additions through business combinations (Note 20.4)
Deferred consideration linked to employment accrued during year
Interest unwind
Deferred consideration paid
Reclassification
Exchange movement
At 31 December
24.4 Deferred consideration – non-current
At 1 January
Reclassification to current deferred consideration (Note 24.3)
Additions through business combinations (Note 20.4)
Deferred consideration linked to employment accrued during year
Interest unwind on discounted deferred consideration
Exchange movement
At 31 December
Group
2020
£m
6.5
4.0
10.5
2020
£m
18.1
9.9
0.1
1.1
0.3
(17.6)
(0.5)
0.1
11.5
2020
£m
13.1
(9.9)
2.2
1.0
0.2
(0.1)
6.5
193
2019
£m
–
1.7
3.1
0.3
–
8.8
13.9
2019
£m
13.1
4.6
17.7
2019
£m
15.7
12.2
–
6.5
0.2
(16.5)
–
–
18.1
2019
£m
22.1
(12.2)
–
3.0
0.5
(0.3)
13.1
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 194
Notes to the financial statements continued
Year ended 31 December 2020
25. Borrowings
Current
Bank overdrafts
Unsecured bank loans due within one year or on demand
Non-current
Loan notes
Transaction costs (issuance of loan notes and RCF arrangement fees)
Group
2020
£m
0.1
12.1
12.2
150.0
(1.6)
148.4
160.6
2019
£m
0.1
33.3
33.4
150.0
(2.0)
148.0
181.4
The Company does not have any borrowings as at 31 December 2020 and 31 December 2019.
The Group holds a £360.0m multi-currency revolving credit facility (‘RCF’), which includes a £90.0m accordion
facility, expiring in June 2024. As at 31 December 2020 none (2019: £32.5m) of the RCF was drawn. The unsecured
bank loans reflect a £11.4m utilisation of a revolving credit facility in North America for working capital purposes,
which is repayable within one year and denominated in US dollars (2019: £nil) and a £0.7m working capital loan in
Thailand, which is repayable on demand and denominated in Thailand baht (2019: £0.8m).
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.
Movements in borrowings are analysed as follows:
Opening amount as at 1 January
Additional borrowings
Repayments of borrowings (including overdraft movement)
Addition through business combination (Note 20.4)
Non-cash movement
Foreign exchange
Closing amount as at 31 December
The exposure of the Group’s borrowings to interest rate changes at the reporting date are:
Less than 1 year
Group
2020
£m
181.4
46.1
(67.3)
0.7
0.4
(0.7)
160.6
2019
£m
150.0
158.1
(125.2)
–
(1.5)
–
181.4
Group
2020
£m
11.5
11.5
2019
£m
32.6
32.6
The Group’s remaining borrowings, including the non-current loan, are fixed rate instruments and therefore excluded
from the above analysis.
Savills plc | Annual Report and Accounts 2020 The effective interest rates at the reporting date were as follows:
Bank overdrafts
Bank loans
Loan notes
The carrying amounts of borrowings are approximate to their fair value.
The carrying amounts of the Group’s borrowings are denominated in the following currencies:
Sterling
Other
The Group has the following undrawn borrowing facilities:
Floating rate – expiring within 1 year or on demand
Floating rate – expiring between 1 and 5 years
195
Group
2020
%
7.85
1.51
3.16
2019
%
7.85
1.67
3.16
Group
2020
£m
148.4
12.2
160.6
Group
2020
£m
36.1
361.1
397.2
2019
£m
180.5
0.9
181.4
2019
£m
45.3
328.0
373.3
26. Lease liabilities
The statement of financial position shows the following amount relating to lease liabilities:
At 1 January
Additions – new leases
Additions through business combinations (Note 20.4)
Disposal of leases
Repayments of lease liabilities
Unwinding of discount
Exchange movement
Closing amount as at 31 December
Current
Non-current
2020
2019
Group
£m
267.1
85.8
1.8
(2.0)
(56.6)
8.9
(0.8)
304.2
45.2
259.0
Company
£m
75.3
0.5
–
–
(8.1)
2.3
0.1
70.1
5.6
64.5
Group
£m
297.7
19.7
–
–
(54.3)
9.3
(5.3)
267.1
45.3
221.8
Company
£m
77.6
2.8
–
–
(7.6)
2.5
–
75.3
5.4
69.9
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 196
Notes to the financial statements continued
Year ended 31 December 2020
27. Derivative financial instruments
2020
Forward foreign exchange contracts – at fair value
Other derivative contracts – at fair value
2019
Forward foreign exchange contracts – at fair value
Interest rate cap contract – at fair value
Group
Assets
£m
Liabilities
£m
0.4
–
0.4
0.3
0.6
0.9
Group
Assets
£m
Liabilities
£m
0.2
–
0.2
0.1
–
0.1
The Company does not have any derivative financial instruments as at 31 December 2020 and 31 December 2019.
Forward foreign exchange contracts
The gross notional principal amounts of the outstanding forward foreign exchange contracts at 31 December 2020
were £41.8m (2019: £35.0m). All contracts mature within one year and are classed as current.
Gains and losses on forward foreign exchange contracts are recognised in net foreign exchange gains and losses in
the income statement.
Other derivative contracts
Other derivative contracts relates to a put option on a business, with two separate payments dependent on the
valuation of the business. One payment is currently exercisable up until 2026 and the second payment is exercisable
in 2026, both are classed as non-current.
Gains and losses are recognised in operating profits in the income statement.
Interest rate cap contract
The interest rate cap contract matured on 1 January 2021.
Gains and losses on the interest rate cap have been recognised in net finance costs in the income statement.
28. Provisions
28.1 Provisions
At 1 January 2020
Provided during the year
Utilised during the year
Released during the year
Exchange movement
Closing amount as at 31 December 2020
Current
Non-current
Professional
indemnity
claims
£m
Dilapidation
provisions
£m
Onerous
leases
£m
Restructuring
provision
£m
Group total
£m
Company
£m
11.5
4.2
(0.7)
(0.5)
–
14.5
5.6
8.9
7.8
1.0
(0.2)
–
–
8.6
1.9
6.7
0.2
–
(0.1)
(0.1)
–
–
–
–
3.8
0.6
(1.6)
(2.1)
0.1
0.8
0.8
–
23.3
5.8
(2.6)
(2.7)
0.1
23.9
8.3
15.6
1.2
0.1
–
–
1.3
–
1.3
Savills plc | Annual Report and Accounts 2020 197
2019
Current
Non-current
Total
Professional
indemnity
claims
£m
5.2
6.3
11.5
Dilapidation
provisions
£m
Onerous
leases
£m
Restructuring
provision
£m
Group total
£m
Company
£m
1.5
6.3
7.8
0.2
–
0.2
3.8
–
3.8
10.7
12.6
23.3
–
1.2
1.2
(a) Professional indemnity claims
These arise from various legal actions, proceedings and other claims that are pending against the Group and are
based on reasonable estimates, taking into account the opinions of legal counsel. The nature of the amounts
provided in respect of legal actions, proceedings and other claims is such that the extent and timing of cash flows
can be difficult to estimate and the ultimate liability may vary from the amounts provided. The non-current portion
of these provisions is expected to be utilised within the next two to five years.
(b) Dilapidation provisions
The Group is required to perform dilapidation repairs and in certain instances restore properties to agreed
specifications prior to the properties being vacated at the end of their lease term. These amounts are based on
estimates of repair and restoration costs at a future date and therefore a degree of uncertainty exists over the future
outflows, given that these are subject to repair and restoration cost price fluctuations and the extent of repairs to be
completed. The majority of the non-current portion of these provisions is expected to be utilised within the next two
to 11 years.
(c) Onerous leases
A provision is recognised where the costs of meeting the obligations under a lease contract exceed the economic
benefits expected to be received and is measured as the net least cost of exiting the contract, being the lower of the
cost of fulfilling it and any compensation or penalties arising from the failure to fulfil it.
(d) Restructuring provision
This provision comprises primarily termination payments to employees affected by restructuring.
28.2 Employee benefit obligations
In addition to the defined benefit obligations pension scheme disclosed in Note 12.2, the following are included in
employee benefit obligations:
Group
At 1 January 2020
Provided during the year
Additions through business combinations (Note 20.4)
Utilised during the year
Exchange movement
At 31 December 2020
Total
£m
26.5
7.5
0.1
(4.9)
0.6
29.8
The above provisions relate to holiday pay and long service leave in the UK, Asia Pacific and Europe & the Middle
East. Profit shares are included within accruals (Note 24).
The Company had £0.3m of employee benefit obligations as at 31 December 2020 (2019: £0.1m), relating to holiday
pay and long service leave.
The above employee benefit obligations have been analysed between current and non-current as follows:
Current
Non-current
Group
2020
£m
19.2
10.6
29.8
2019
£m
16.2
10.3
26.5
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 198
Notes to the financial statements continued
Year ended 31 December 2020
29. Share capital – Group and Company
Authorised and allotted
Ordinary shares of 2.5p each:
Authorised
Issued, called up and fully paid
Movement in issued, called up and fully paid share capital:
At 1 January
Issued to direct participants on exercise
of options under the Sharesave Scheme
Issued to direct participants under the
Performance Share Plan
2020
Number of
shares
2019
Number of
shares
202,000,000
202,000,000
143,065,222
143,056,718
2020
£m
5.1
3.6
2020
Number
of shares
143,056,718
8,504
–
2019
Number
of shares
142,923,604
87,938
45,176
£m
3.6
–
–
At 31 December
143,065,222
3.6
143,056,718
2019
£m
5.1
3.6
£m
3.6
–
–
3.6
Each issued, called up and fully paid ordinary share of 2.5p is a voting share in the capital of the Company, is
entitled to participate in the profits of the Company and on winding-up is entitled to participate in the assets of
the Company.
As at 31 December 2020, the EBT held 3,524,326 shares (2019: 4,388,054 shares) and the Rabbi Trust held
1,055,676 shares (2019: 1,602,405). These shares are held as ‘treasury shares’. Any voting or other similar decisions
relating to these shares are taken by the trustees of the EBT and the Rabbi Trust, who may take account of any
recommendation of the Company. The EBT waives all of its dividend entitlement. For further details of the EBT
and the Rabbi Trust refer to Note 2.22.
At the Annual General Meeting (‘AGM’) held on 25 June 2020, the Shareholders gave the Company authority,
subject to stated conditions, to purchase for cancellation up to 14,305,727 of its own ordinary shares (AGM held on
8 May 2019: 14,295,352). Such authority remains valid until the conclusion of the next AGM or 24 September 2021,
whichever is the earlier.
30. Share-based payment
The Group operates four equity-settled share-based payment arrangements, namely the Sharesave Scheme, the
Performance Share Plan (‘PSP’), the Deferred Share Plan (‘DSP’) and the Deferred Share Bonus Plan (‘DSBP’). The
Group recognised total expenses relating to equity-settled share-based payment transactions of £19.8m in 2020
(2019: £17.8m). Of the total share-based payments charge, £0.6m (2019: £0.6m) relates to the Sharesave, £8.7m
(2019: £8.2m) relates to DSP schemes and £10.2m (2019: £9.3m) relates to DSBP schemes and £0.3m (2019: £0.3m
credit) relating to PSP schemes.
Refer to the Remuneration Report for details of the various schemes, pages 92 to 116.
30.1 Movements in share schemes
2020 number of awards (‘000)
Outstanding at 1 January
Granted
Exercised/cancelled
Forfeited/lapsed
Outstanding at 31 December
Exercisable at 31 December
Weighted average exercise price for awards outstanding
at end of the year (pence)
Weighted average remaining contractual life (years)
Weighted average share price at the date of exercise for
awards exercised in the year (pence)
Sharesave
awards
1,354
–
(9)
(70)
1,275
640.0
0.8
888.2
PSP awards
DSP awards
DSBP awards
478
153
–
(86)
545
–
1.8
3,821
352
3,999
1,279
(1,001)
(1,250)
(118)
3,054
(70)
3,958
–
1.4
–
2.2
–
885.7
766.6
Savills plc | Annual Report and Accounts 2020 199
2019 number of awards (‘000)
Outstanding at 1 January
Granted
Exercised/cancelled
Forfeited/lapsed
Outstanding at 31 December
Exercisable at 31 December
Weighted average exercise price for awards outstanding
at end of the year (pence)
Weighted average remaining contractual life (years)
Weighted average share price at the date of exercise for
awards exercised in the year (pence)
Sharesave
awards
1,593
–
(88)
(151)
1,354
640.0
1.8
PSP awards
DSP awards
DSBP awards
542
136
(45)
(155)
478
–
3.3
3,589
1,461
4,082
1,134
(1,059)
(1,130)
(170)
3,821
(87)
3,999
–
1.8
–
1.6
855.8
888.5
618.0
885.4
30.2 Fair value of options
For all the DSP and DSBP schemes the fair value of awards is the closing share price before award date. The
Actuarial Binomial model of actuaries Lane Clark & Peacock LLP is used to fair value awards granted under the
PSP scheme.
The key inputs to determine the fair value of the awards granted under the PSP scheme during 2020 are
shown below.
Performance Share Plan: Awards in the year ended 31 December 2020
Share price at grant date
Risk-free rate
Volatility of Savills share price
Employee turnover
30 June 2020
825.0
0%
32% per annum
Zero
The expected volatility is measured over the three years prior to the date of grant to match the vesting period of the
award. The risk-free rate is the yield on a zero coupon UK government bond at each grant date, with term based on
the expected life of the option or award.
The fair values of options granted in the period are shown below.
Grant
DSBP 2020
DSP 2020
PSP 2020 (EPS/ROE)
PSP 2020 (TSR)
DSP 2020
DSP 2020
DSP 2020
DSP 2020
Grant date
Deferred period
Fair value pence
27 April 2020
27 April 2020
30 June 2020
30 June 2020
3 – 4 years
3 years
5 years
5 years
7 September 2020
3 – 5 years
7 October 2020
30 October 2020
14 December 2020
3 years
1 – 3 years
1 – 3 years
884.5
884.5
822.5
421.2
801.0
832.0
824.0
953.5
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 200
Notes to the financial statements continued
Year ended 31 December 2020
31. Retained earnings and other reserves
Share-
based
payments
reserve
£m
Treasury
shares
£m
Profit
and loss
account*
£m
Total
retained
earnings*
£m
Capital
redemption
and capital
reserve
£m
Merger
relief
reserve
£m
Foreign
exchange
reserve
£m
Revaluation
reserve
£m
Total
other
reserves
£m
38.5
(50.0)
317.7
306.2
2.1
34.9
59.1
(0.6)
95.5
67.6
67.6
–
5.0
5.0
0.1
–
–
19.8
–
–
–
–
–
(8.3)
–
(8.3)
–
(0.2)
(0.2)
–
–
–
–
–
–
–
–
–
1.7
(6.9)
(5.1)
–
–
–
–
–
–
–
–
–
(0.2)
(0.2)
(0.4)
–
–
–
–
39.8
(37.9)
388.2
390.1
2.2
34.9
60.6
(7.7)
90.0
Balance at
1 January 2020
Profit attributable to
owners of the Company
Other comprehensive
income/(loss)
Employee share
option scheme:
– Value of services
provided
Purchase of
treasury shares
Disposal of equity
investments at FVOCI
Balance at
31 December 2020
– Exercise of options
(18.5)
20.4
(1.9)
–
–
19.8
*
Included within profit and loss account is tax on items taken directly to equity (Note 14) as disclosed above.
Share-
based
payments
reserve
£m
Treasury
shares
£m
Profit
and loss
account*
£m
Total
retained
earnings*
£m
Capital
redemption
and capital
reserve
£m
Merger
relief
reserve
£m
Foreign
exchange
reserve
£m
Revaluation
reserve
£m
Total other
reserves
£m
37.4
(55.4)
295.2
277.2
2.1
34.9
80.1
0.5
117.6
82.9
82.9
(15.0)
(15.0)
–
–
17.8
–
–
–
–
17.8
–
(14.1)
(42.8)
0.8
0.8
(0.6)
(0.6)
(14.1)
–
(42.8)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(21.0)
(0.3)
(21.3)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(0.8)
(0.8)
–
–
38.5
(50.0)
317.7
306.2
2.1
34.9
59.1
(0.6)
95.5
Balance at
1 January 2019
Profit attributable to
owners of the Company
Other comprehensive loss
Employee share
option scheme:
– Value of services
provided
Purchase of
treasury shares
Dividends
Disposal of equity
investments at FVOCI
Transactions with
non-controlling interests
Balance at
31 December 2019
– Exercise of options
(16.7)
19.5
(2.8)
*
Included within profit and loss account is tax on items taken directly to equity (Note 14) as disclosed above.
Savills plc | Annual Report and Accounts 2020 201
32. Contingent liabilities
In common with comparable professional services businesses, the Group is involved in a number of disputes in the
ordinary course of business. Provision is made in the financial statements for all claims where costs are likely to be
incurred, in the case of claims in relation to the provision of professional services where these will not be met by the
Group’s professional indemnity insurers, and represents the cost of defending and concluding claims.
33. Cash generated from operations
Group
Company
Profit for the year
Adjustments for:
Income tax (Note 14)
Depreciation (Note 18 and 19)
Amortisation of intangible assets (Note 17)
Loss on disposal of property, plant and equipment and
intangible assets
Loss/(profit) on disposal of joint ventures and associates
Net finance cost (Note 13)
Share of post-tax profit from joint ventures and associates
(Note 20.1)
Increase/(decrease) in employee and retirement obligations
Exchange movement and fair value movements on financial
instruments in operating activities
Increase in provisions
Charge for share-based compensation (Note 30)
Exercise of share options
2020
£m
68.0
15.2
64.3
9.6
0.8
0.1
12.8
(10.2)
3.4
2.4
0.5
19.8
–
2019
£m
83.6
32.0
60.6
10.4
1.4
(1.7)
11.8
(11.8)
(9.5)
(0.2)
3.4
17.8
–
Operating cash flows before movements in working capital
186.7
197.8
2020
£m
51.5
2019
£m
55.6
(2.1)
(2.0)
6.4
1.2
–
–
1.4
–
0.2
–
0.1
1.6
(20.4)
39.9
5.6
0.4
–
–
1.3
–
(0.5)
–
1.2
1.0
(16.7)
45.9
Decrease/(increase) in trade and other receivables and
contract assets
Increase/(decrease) in trade and other payables and
contract liabilities
Cash generated from operations
84.5
(50.7)
(26.8)
(0.7)
18.6
289.8
(14.5)
132.6
(1.5)
11.6
(0.7)
44.5
Foreign exchange movements resulted in a £0.3m decrease in current and non-current trade and other receivables
(2019: £13.0m decrease) and a £2.3m decrease in current and non-current trade and other payables (2019:
£15.3m decrease).
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 202
Notes to the financial statements continued
Year ended 31 December 2020
34. Analysis of cash net of debt
The analysis of cash net of debt below has been updated in the current year to include IFRS 16 lease liabilities, refer
to Note 26 for further information on lease liabilities.
2020
Cash and cash
equivalents
Bank overdrafts
Bank loans
Loan notes
Transaction costs
Cash and cash
equivalents net of
borrowings
Lease liabilities
At 1 January
£m
Cash flows
£m
209.9
(0.1)
209.8
(33.3)
(150.0)
2.0
28.5
(267.1)
125.2
–
125.2
21.2
–
–
146.4
56.6
Non cash
movements
recognised
in the income
statement
£m
Other non cash
movements
£m
Movements
through
business
combinations
and disposals
£m
Exchange
movement
£m
At
31 December
£m
–
–
–
–
–
(0.4)
(0.4)
(8.9)
–
–
–
–
–
–
–
(83.8)
2.4
–
2.4
(0.7)
–
–
1.7
(1.8)
0.8
–
0.8
0.7
–
–
1.5
0.8
2.3
338.3
(0.1)
338.2
(12.1)
(150.0)
1.6
177.7
(304.2)
(126.5)
Cash and cash
equivalents net of debt
(238.6)
203.0
(9.3)
(83.8)
(0.1)
2019
Cash and cash equivalents
Bank overdrafts
Bank loans
Loan notes
Transaction costs (issuance of loan notes
and RCF arrangement fees)
Finance leases
Cash and cash equivalents net of debt
(before IFRS 16 lease liabilities)
At 1 January
£m
Cash flows
£m
Exchange
movement
£m
At
31 December
£m
223.9
–
223.9
(0.4)
(150.0)
0.5
(0.1)
(3.6)
(0.1)
(3.7)
(32.9)
–
1.5
0.1
(10.4)
–
(10.4)
–
–
–
–
209.9
(0.1)
209.8
(33.3)
(150.0)
2.0
–
73.9
(35.0)
(10.4)
28.5
35. Related party transactions
Other than disclosed below and the information provided within the Remuneration Report and Note 11.3 Key
management compensation, there were no significant related party transactions during the year.
(a) Loans to related parties
Loans to joint ventures and associates are disclosed in Note 20.1. Loans to entities that the Group recognises as
equity investments held at FVOCI are disclosed in Note 22.3.
(b) Company transactions
The Company provided corporate function services to its subsidiaries at an arm’s length value of £24.8m
(2019: £23.5m).
Dividends of £40.5m were received from subsidiaries during the year (2019: £48.5m). Amounts outstanding to and
from subsidiaries as at 31 December 2020 are disclosed in Notes 22 and 24.
(c) Transactions with associates
There were no transactions with associates in the year (2019: £0.2m income received from an associate).
Savills plc | Annual Report and Accounts 2020 203
36. Group – Investments
In accordance with Section 409 of the Companies Act 2006 a full list of subsidiaries, partnerships, associates and
joint ventures, the registered office and the percentage of equity owned by the Group, as at 31 December 2020, are
disclosed below. Unless otherwise stated, all subsidiary undertakings are consolidated into the Group financial
statements and share capital is wholly comprised of ordinary shares which are indirectly held by the Company.
Fully-owned subsidiary
Incoll Group Pty Ltd
Incoll Management Pty Ltd
Moores Cost Consulting Pty Ltd
Savills (ACT) Pty Ltd
Country of
incorporation
Australia
Australia
Australia
Australia
Registered office
Level 25, 1 Farrer Place, Sydney, NSW 2000
Level 25, 1 Farrer Place, Sydney, NSW 2000
Level 25, 1 Farrer Place, Sydney, NSW 2000
Level 25, 1 Farrer Place, Sydney, NSW 2000
Savills (Aust) Holdings Pty Ltd
(ii) Australia
Level 25, 1 Farrer Place, Sydney, NSW 2000
Savills (Aust) Pty Ltd
Savills (NSW) Pty Ltd
Savills (QLD) Pty Ltd
Savills (SA) Pty Ltd
Savills (TAS) Pty Ltd
Savills (VIC) Pty Ltd
Savills (WA) Pty Ltd
Savills Capital Advisory Pty Ltd
Savills Investment Management (Australia)
Pty Limited
Savills Occupier Services Pty Ltd
Savills Project Management Pty Ltd
Savills Project Services (SA) Pty Ltd
Savills Valuations Pty Ltd
Cluttons Sales SPC
Savills Middle East Co. S.P.C
Savills Canada, Inc.
Savills Inc.
Savills Services Inc.
Savills IM Japan Residential Fund II Feeder
GP Ltd
Guardian Property Services (Shanghai)
Company Ltd
Savills Business Information Technology
(Shenzhen) Limited
Savills Property Services (Beijing)
Company Ltd
Savills Property Services (Chengdu)
Company Ltd
Savills Property Services (Chongqing)
Company Ltd
Savills Property Services (Guangzhou)
Company Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
(iv) Bahrain
Bahrain
Canada
Canada
Canada
Cayman
China
China
China
China
China
China
Savills Property Services (Hainan) Limited
China
Savills Property Services (Hengqin) Limited
China
Level 25, 1 Farrer Place, Sydney, NSW 2000
Level 25, 1 Farrer Place, Sydney, NSW 2000
Level 25, 1 Farrer Place, Sydney, NSW 2000
Level 25, 1 Farrer Place, Sydney, NSW 2000
Level 25, 1 Farrer Place, Sydney, NSW 2000
Level 25, 1 Farrer Place, Sydney, NSW 2000
Level 25, 1 Farrer Place, Sydney, NSW 2000
Level 25, 1 Farrer Place, Sydney, NSW 2000
Level 36, Gateway, 1 Macquarie Place, Sydney
NSW 2000, Australia
Level 25, 1 Farrer Place, Sydney, NSW 2000
Level 25, 1 Farrer Place, Sydney, NSW 2000
Level 25, 1 Farrer Place, Sydney, NSW 2000
Level 25, 1 Farrer Place, Sydney, NSW 2000
Flat/shop: 2802, Building: 2504, Road: 2832,
Block: 428, Area: Al Seef, Manama
Flat/shop: 2804, Building: 2504, Road: 2832,
Block: 428, Area: Al Seef, Manama
181 Bay Street – Suite 200, Toronto, ON M5J 2T3
181 Bay Street – Suite 200, Toronto, ON M5J 2T3
181 Bay Street – Suite 200, Toronto, ON M5J 2T3
c/o Walkers Corporate Limited, Cayman Corporate
Centre, 27 Hospital Road, George Town, Grand
Cayman KY1-9008, Cayman Islands
Room 220, Block 1, No.100 Jinyu Road, Pu Dong,
Shanghai
Unit 201 ,A Tower, No.1 QianWan Yi Road, Qianhai
Shengan Cooperation District,Shenzhen
2101 East Tower, Twin Towers, B-12 Jianguomenwai
Avenue, Chaoyang District, Beijing 100022
Room 2106, Yanlord Landmark, No.1 Section 2,
Renmin South Road, Chengdu 610016
Room 1601, 16th floor, GuoHua Financial Center,
No. 9 JuXianYan Square, JiangBeiZui, Chongqing
Room 1301, R&F Center, No.10 Hua Xia Road,
Zhujiang New Town, Guangzhou 510623
Room 9A, Baifang Building, Baifang Square, No.105
Binhai Avenue, Longhua District, Haikou,China
Room 105-19233, No. 6 Baohua Road, Hengqin
new area, Zhuhai
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 204
Notes to the financial statements continued
Year ended 31 December 2020
Country of
incorporation
Registered office
36. Group – Investments continued
Fully-owned subsidiary
Savills Property Services (Shanghai)
Company Ltd
Savills Property Services (Tianjin)
Company Ltd
Savills Property Services (Wuhan)
Company Ltd
Savills Property Services (Zhuhai)
Company Ltd
Savills Real Estate Valuation (Beijing)
Company Ltd
Savills Real Estate Valuation (Guangzhou)
Company Ltd
Savills Technology Innovation Services
(Shanghai) Company Ltd
Savills Valuation and Professional
Services (BJ) Ltd
Savills Valuation and Professional
Services (GZ) Ltd
Shanghai XinMin Equity Investment
Management Co. Ltd
Shenzhen Guardian Property
Management Ltd
Swan Property Services (Beijing)
Company Ltd
Savills CZ s.r.o.
China
China
China
China
China
China
China
China
China
China
China
China
Shanghai Shan Mei Real Consulting Limited
China
Unit D, Room 62,Block 3, No.227, Ru Shan Road,
Shanghai
Unit 4607, Tianjin World Financial Center, No.2
Dagu North Road, Xiaobailou Street, Heping
District, Tianjin
Unit 08-10, 27th Floor, CITIC PACIFIC Mansion,
No.1627 Zhongshan Avenue, Jiang’an District
Room 2204, 22/F, Tower B, China Overseas
Building, Midtown, No. 2021 Jiuzhou West Avenue,
Zhuhai
Unit 01, 21/F, East Tower, Twin Towers, B-12
Jianguomenwai Avenue, Chaoyang District,
Beijing 100022
Room 2105, R&F Center, No.10 Hua Xia Road,
Zhujiang New Town, Guangzhou 510623
Room 205, floor 2 west, No. 707 zhangyang road,
China (Shanghai) Pilot Free Trade Zone
Unit 07, 21/F, East Tower, Twin Towers, B-12
Jianguomenwai Avenue, Chaoyang District,
Beijing 100022
Room 2105, R&F Centre, No.10 Hua Xia Road,
Zhujiang New Town, Guangzhou
Room 5, 2F, No. 707 Zhangyang Road, Pilot Free
Trade Zone, Shanghai
Unit 602, No. 4, Lane 541, Wenshui East Road,
Hongkou District, Shanghai City
Unit 03, 9/F, China Resources Tower, No.2666,
Keyuan South Road, Nanshan District, Shenzhen,
518000, China
2101 East Tower, Twin Towers, B-12 Jianguomenwai
Avenue, Chaoyang District, Beijing 100022
Czech Republic
Florentinum, Building C, Na Florenci 2116/15,
Prague 1, 110 00
Savills Investment Management ApS
Denmark
Knud Højgaards Vej 9, 2860 Søborg
Cluttons Egypt Consulting JSC
Savills Egypt Consulting JSC
Savills Investment Management SAS
Savills Valuation SAS
Savills Advisory Services GmbH
Savills Fund Management Holding AG
Savills IM Berlin Südkreuz GmbH & Co. KG
Savills IM Beteilugungs GmbH
Savills Immobilien Beratungs GmbH
Savills Immobilien Beteiligungs -GmbH
Savills Immobilien Management GmbH
Savills Investment Management
(Germany) GmbH
Savills Property Management
Deutschland GmbH
Savills Facility Management
Deutschland GmbH
Martel Maides Limited
Egypt
Egypt
France
France
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Building 17, Street 210, Al Maadi, Cairo
Building 17, Street 210, Maadi, Cairo.
54–56 Avenue Hoche, 75008 Paris
21 Boulevard Haussmann 75009, Paris, France
Taunusanlage 18, 60325 Frankfurt am Main
Rotfeder-Ring 7, D-60327 Frankfurt-am-Main
Rotfeder-Ring 7, 60327 Frankfurt am Main
Rotfeder-Ring 7, 60327 Frankfurt am Main
Taunusanlage 18, 60325 Frankfurt am Main
Taunusanlage 18, 60325 Frankfurt am Main
Taunusanlage 18, 60325 Frankfurt am Main
Sonnenstrasse 19, Munich
Germany
Bonner Straße 209, 50968 Köln, Germany
Germany
Bonner Straße 209, 50968 Köln, Germany
Guernsey
1 Le Truchot St Peter Port GUERNSEY GY1 1WD
Savills plc | Annual Report and Accounts 2020 205
Fully-owned subsidiary
Parkes & Associates Limited
Country of
incorporation
Guernsey
Registered office
First Floor, Harbour Court, Les Amballes, St Peter
Port, Guernsey, GY1 1WU
Savills Channel Islands Limited
Guernsey
22 Smith Street, St Peter Port, Guernsey, GY1 2JQ
Bridgewater Management Ltd
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
BTHK Property Management Ltd
Hong Kong
Rooms 805-813, 8/F, Cityplaza One, 1111 King’s
Road, Taikoo Shing
Champion Insurance and Computer
Services Ltd
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Dominion Office Centre Ltd
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
East Full Company Ltd
Express Engineering Ltd
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Express Maintenance Services Ltd
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Gateway Contractors Ltd
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Greenscape Ltd
GRVM Ltd
Guard Able Ltd
Guardian Care Ltd
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Guardian Management Services Ltd
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Guardian Mandarin Management Ltd
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Guardian Partners Ltd
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Guardian Property Agencies Ltd
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Guardian Property Management Ltd
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Hip Kwan Property Management Ltd
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Kenda Services Ltd
Kwik Park Ltd
Mount Link Services Ltd
Quartey Properties Ltd
Savills (China) Ltd
Savills (Hong Kong) Ltd
Savills Asia Pacific Ltd
Savills Building Services Ltd
Hong Kong
Savills Design Ltd
Savills Engineering Ltd
Hong Kong
Hong Kong
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Hong Kong
Hong Kong
Hong Kong
23/F, Two Exchange Square, 8 Connaught Place,
Central
23/F, Two Exchange Square, 8 Connaught Place,
Central
23/F, Two Exchange Square, 8 Connaught Place,
Central
Rooms 805-813, 8/F, Cityplaza One, 1111 King’s
Road, Taikoo Shing
Rooms 805-813, 8/F, Cityplaza One, 1111 King’s
Road, Taikoo Shing
Rooms 805-813, 8/F, Cityplaza One, 1111 King’s
Road, Taikoo Shing
Savills Guardian (Holdings) Ltd
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Savills India Holding Ltd
Hong Kong
Savills Indonesia Holding Ltd
Hong Kong
Savills Investment Management
(Hong Kong) Limited
Savills Investment Management Asia
Limited
Hong Kong
Hong Kong
Savills Management Services Ltd
Hong Kong
23/F, Two Exchange Square, 8 Connaught Place,
Central
23/F, Two Exchange Square, 8 Connaught Place,
Central
Level 54, Hopewell Centre, 183 Queen’s Road East,
Hong Kong
Level 54, Hopewell Centre, 183 Queen’s Road East,
Hong Kong
23/F, Two Exchange Square, 8 Connaught Place,
Central
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 206
Notes to the financial statements continued
Year ended 31 December 2020
36. Group – Investments continued
Fully-owned subsidiary
Savills Philippines Holding Ltd
Country of
incorporation
Hong Kong
Savills Project Consultancy Ltd
Hong Kong
Savills Property Management Holdings Ltd
Hong Kong
Savills Property Management Ltd
Hong Kong
Registered office
23/F, Two Exchange Square, 8 Connaught Place,
Central
Rooms 805-813, 8/F, Cityplaza One, 1111 King’s
Road, Taikoo Shing
Rooms 805-813, 8/F, Cityplaza One, 1111 King’s
Road, Taikoo Shing
Rooms 805-813, 8/F, Cityplaza One, 1111 King’s
Road, Taikoo Shing
Savills Realty Ltd
Hong Kong
23/F, Two Exchange Square, 8 Connaught Place,
Central
Savills Regional Services Ltd
Hong Kong
Savills Residence Ltd
Savills Valuation and Professional
Services Ltd
Security and Safety Ltd
Swan Hygiene Services Ltd
Hong Kong
Hong Kong
23/F, Two Exchange Square, 8 Connaught Place,
Central
Rooms 805-813, 8/F, Cityplaza One, 1111 King’s
Road, Taikoo Shing
Room 1208, Cityplaza One, 1111 King’s Road, Taikoo
Shing, Hong Kong
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Swan Pest Control Services Ltd
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Tarrayon Ltd
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
The Peninsular Centre Retailers Association Ltd
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Cluttons (India) Private Limited
Actium
Anateo Ltd
HOK Financial services
Liffey Valley Management Ltd
Mahon Point Management Ltd
Savills Advisory Services (Ireland) Limited
India
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
(ii)
(ii)
(v)
(v)
Flat no. 333, 3rd Floor, Devika Tower, 6 Nehru
Place, New Delhi 110019
33 Molesworth Street, Dublin 2, Ireland
33 Molesworth Street, Dublin 2, Ireland
33 Molesworth Street, Dublin 2, Ireland
33 Molesworth Street, Dublin 2, Ireland
33 Molesworth Street, Dublin 2, Ireland
33 Molesworth Street, Dublin 2, Ireland
Savills Commercial (Ireland) Limited
(ii)
Ireland
33 Molesworth Street, Dublin 2, Ireland
Savills Management Resource Ireland Ltd
Savills Residential (Ireland) Ltd
White Water (Newbridge) Limited
White Water Management Limited
White Water Residential DAC (Designated
Activity Company)
Savills Investment Management SGR S.p.A
(v)
(v)
(v)
Savills Italia S.r.l.
Savills Italy SRL (EUR)
Savills Asset Advisory Company Ltd
Ireland
Ireland
Ireland
Ireland
Ireland
Italy
Italy
Italy
Japan
Savills Investment Architecture Design GK
Japan
Savills Japan Company Ltd
SIM Real Estate GK
Prime London Residential Development
Jersey GP Limited
Japan
Japan
Jersey
33 Molesworth Street, Dublin 2, Ireland
33 Molesworth Street, Dublin 2, Ireland
33 Molesworth Street, Dublin 2, Ireland
33 Molesworth Street, Dublin 2, Ireland
33 Molesworth Street, Dublin 2, Ireland
Via San Paolo 7, 20121 Milan, Italy
Via Manzoni, 37 – 20121 Milano
Via Manzoni, 37 – 20121 Milano
Yurakucho ITOCIA 15/F, 2-7-1 Yurakucho,
Chiyoda-ku, Tokyo 100-0006
3F BPR Place Kamiyacho, 1-11-9 Azabudai, 1
Chome-11 Azabudai, Minato-ku, Tokyo 106-0041
Yurakucho ITOCIA 15/F, 2-7-1 Yurakucho, Chiyoda-
ku, Tokyo 100-0006
3F BPR Place Kamiyacho, 1-11-9 Azabudai, 1
Chome-11 Azabudai, Minato-ku, Tokyo 106-0041
3rd Floor Walker House, 28-34 Hill Street, St Helier,
Jersey, JE4 8PN
Savills plc | Annual Report and Accounts 2020 207
Fully-owned subsidiary
Prime London Residential Development
Jersey II GP Limited
Savills (Jersey) Ltd
Savills IM Single Asset Vehicle Fund ICC
Savills Investment Management
(Jersey) Limited
Country of
incorporation
Jersey
Jersey
Jersey
Jersey
Registered office
3rd Floor Walker House, 28-34 Hill Street, St Helier,
Jersey, JE4 8PN
19 Halkett Place, St Helier, JE2 4WG
3rd Floor, Liberation House, Castle Street, St
Helier, Jersey, Channel Islands JE1 2LH
3rd Floor, Walker House, 28-34 Hill St, St Helier,
Jersey, JE4 8PN
Savills IM European Fund V GP S.a.r.l
Luxembourg
10, rue C.M. Spoo
Savills (Macau) Ltd
Macau
Savills Project Consultancy (Macau) Ltd
Macau
Savills Property Management (Macau) Ltd
Macau
Savills (Myanmar) Ltd
Myanmar
Savills Asset and Property Management BV
Netherlands
Savills Agency B.V.
Savills B.V.
Netherlands
Netherlands
Savills Building & Project Consultancy B.V.
Netherlands
Savills Consultancy B.V.
Savills Holdings B.V.
Netherlands
Netherlands
Suite 1309-1310, 13/F Macau Landmark,
555 Avenida da Amizade
Suite 1309-1310, 13/F Macau Landmark,
555 Avenida da Amizade
Suite 1309-1310, 13/F Macau Landmark,
555 Avenida da Amizade
No. 8, Unit 8-A, Centerpoint Towers, No. 65,
Corner of Sule Pagoda Road & Merchant Street,
Kyauktada Township, Yangon
Viñoly Building, Claude Debussylaan 48,
Amsterdam 1082 MD, Netherlands
Viñoly Building, Claude Debussylaan 48,
Amsterdam 1082 MD, Netherlands
Viñoly Building, Claude Debussylaan 48,
Amsterdam 1082 MD, Netherlands
Viñoly Building, Claude Debussylaan 48,
Amsterdam 1082 MD, Netherlands
Viñoly Building, Claude Debussylaan 48,
Amsterdam 1082 MD, Netherlands
Viñoly Building, Claude Debussylaan 48,
Amsterdam 1082 MD, Netherlands
Savills Investment Management B.V
Netherlands
Vida Building, Kabelweg 57, 1014 BA Amsterdam
Savills Investments B.V.
Netherlands
Savills Nederland Holdings BV
Netherlands
Viñoly Building, Claude Debussylaan 48,
Amsterdam 1082 MD, Netherlands
Viñoly Building, Claude Debussylaan 48,
Amsterdam 1082 MD, Netherlands
Viñoly Building, Claude Debussylaan 48,
Amsterdam 1082 MD, Netherlands
Level 6, 41 Shortland Street, Auckland Central,
Auckland, 1010
Netherlands
New Zealand
Northern Ireland 2nd Floor, Longbridge House, 16-24 Waring Street,
Belfast, BT1 2DX, Northern Ireland
Savills Retail B.V.
Savills (NZ) Ltd
Savills (NI) Limited
FPD Management Services Philippines Inc.
Philippines
Savills Investment Management SP Z o.o.
Poland
Savills Property Management Sp Z o.o.
Savills Sp Z o.o.
Savills Portugal – Consultoria, Lda.
Savills Portugal – Mediaçao Imobiliaria Lda
iProcurePro Pte Ltd
Savills (SEA) Pte Ltd
Savills (Singapore) Pte Ltd
Poland
Poland
Portugal
Portugal
Singapore
Singapore
Singapore
12/F., Times Plaza Building, United Nations Avenue
corner Taft Avenue, Ermita, Manila 1000 Phlippines
Gdanski Business Center – building B (3rd floor),
Inflancka 4 st., 00-189 Warsaw, Poland
Al. Jana Pawła II 22, Warszawa
Al. Jana Pawła II 22, Warszawa
Praça Marquês de Pombal, 16 – 7º, 1250163 Lisbon
Praça Marquês de Pombal, 16 – 7º, 1250163 Lisbon
30 Cecil Street #20-03 Prudential Tower, 049712
30 Cecil Street #20-03 Prudential Tower, 049712
30 Cecil Street #20-03 Prudential Tower, 049712
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 208
Notes to the financial statements continued
Year ended 31 December 2020
36. Group – Investments continued
Fully-owned subsidiary
Country of
incorporation
Registered office
Savills Investment Management Pte. Limited
Singapore
83 Amoy Street, 01-01 Singapore 069960
Savills Property Management Pte Ltd
Singapore
20 Martin Road #03-01/02 Seng Kee Building,
239070
Savills Residential Pte Ltd
Savills Valuation & Professional Services
(S) Pte Ltd
Singapore
Singapore
30 Cecil Street #20-03 Prudential Tower, 049712
30 Cecil Street #20-03 Prudential Tower, 049712
Savills IM Japan Value Fund II GP Pte Ltd
Singapore
61 Robinson Road #16-02, Robinson Centre
Singapore 068893
Savills IM Japan Residential Fund II GP Pte
Ltd
Singapore
61 Robinson Road #16-02, Robinson Centre
Singapore 068893
Savills Korea Advisors Realty Company Ltd
South Korea
Savills Korea Company Ltd
South Korea
Savills Aguirre Newman Arquitectura
Barcelona SAU
Savills Aguirre Newman Arquitectura SA
Savills Aguirre Newman Barcelona SA
Savills Aguirre Newman Consultores, S.A.U
Savills Aguirre Newman Corporate Finance, S.A.U.
Savills Aguirre Newman S.A.U.
Savills Aguirre Newman Valoraciones y
Tasaciones SA
Savills Consultores Inmobiliarios SA
Savills Investment Management SLU
Loudden Bygg-och Fastighetsservice AB
Savills Förvaltning AB
Savills Investment Management AB
Savills Sweden AB
Savills (Taiwan) Ltd
Spain
Spain
Spain
Spain
Spain
Spain
Spain
Spain
Spain
Sweden
Sweden
Sweden
Sweden
Taipei
Savills Residential Services (Taiwan) Ltd
Taipei
Savills Valuation & Professional Services
(Taiwan)
(iii) Taipei
Savills (Thailand) Ltd
Thailand
Savills Services (Thailand) Limited
Thailand
13/F Seoul Finance Center, 136 Sejong-daero
Jung-gu, Seoul
13/F Seoul Finance Center, 136 Sejong-daero
Jung-gu, Seoul
Avda. Diagonal 609-615, Barcelona
Paseo de la Castellana, 81 28046 Madrid
Avda. Diagonal 609-615, Barcelona
Paseo de la Castellana, 81 28046 Madrid
Paseo de la Castellana, 81 28046 Madrid
Paseo de la Castellana, 81 28046 Madrid
Paseo de la Castellana, 81 28046 Madrid
Paseo de la Castellana, 81 28046 Madrid
Paseo de la Castellana, 81 28046 Madrid
Box 6317, 102 35 Stockholm
Sergels Torg 12 111 57 Stockholm
Regeringsgatan 48, 5th Floor, 111 56 Stockholm
Sergels Torg 12 111 57 Stockholm
21/F, No. 68, Sec. 5, Zhong-Xiao East Road,
Taipei 110
21/F, No. 68, Sec. 5, Zhong-Xiao East Road,
Taipei 110
21/F, No. 68, Sec. 5, Zhong-Xiao East Road,
Taipei 110
990 Abdulrahim Place Building, 26/F, Rama
IV Road, Silom Subdistrict, Bang Rak District,
Bangkok
990 Abdulrahim Place Building, 26/F, Rama
IV Road, Silom Subdistrict, Bang Rak District,
Bangkok
Savills Real Estate LLC (Dubai)
Savills Real Estate LLC (Sharjah)
(iv) United Arab
Emirates
(iv) United Arab
Emirates
22nd Floor, Arenco Tower, Sheikh Zayed Road,
PO Box 3087 Dubai
2702C, Al Marzouqi Towers, King Faisal Street,
UAE
B Bids Limited
United Kingdom 33 Margaret Street, London, W1G 0JD
Buckleys Estate Agents Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Chesterfield & Co (Rentals) Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Cordea Savills SLP GP Limited
United Kingdom Wemyss House, 8 Wemyss Place, Edinburgh,
EH3 6DH
Savills plc | Annual Report and Accounts 2020 209
Fully-owned subsidiary
Cordea Savills SLP II LP
Country of
incorporation
Registered office
United Kingdom 50 Lothian Road, Festival Square, Edinburgh,
EH3 9WJ
Cordea Savills SLP LP
United Kingdom Wemyss House, 3 Wemyss Place, Edinburgh,
EH3 6DH
Cordea Savills Investments Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Currell Commercial Limited
United Kingdom 9 Bonhill Street, London, EC2A 4DJ
Currell Management LLP
Currell Residential Limited
United Kingdom 9 Bonhill Street, London, EC2A 4DJ
United Kingdom 9 Bonhill Street, London, EC2A 4DJ
Grosvenor Hill Ventures Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
GTOF Co-Investment GP LLP
United Kingdom Citypoint, 65 Haymarket Terrace, Edinburgh,
Scotland, EH12 5HD
GTOF Co-Investment LP
United Kingdom Citypoint, 65 Haymarket Terrace, Edinburgh,
EH12 5HD
Hepher Dixon Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Holden Matthews Estate Agents Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Humphriss & Ryde Ltd
Jago Dean PR ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
United Kingdom 33 Margaret Street, London, W1G 0JD
JP Case & Co Property Services Limited
United Kingdom 33 Margaret Street, London, W1G 0JD
LIBRA Housing Advisory Services Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Liverpool ONE Management Services Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Mansfield Elstob Main Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Moor House Management Services Limited
United Kingdom 33 Margaret Street, London, W1G 0JD
PCA Holdings Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
PCA Management Consultants Limited
United Kingdom 33 Margaret Street, London, W1G 0JD
Portnalls Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Prime London Residential Development
Co-Investment GP LLP
Prime London Residential Development
Co-Investment II GP LLP
Prime London Residential Development
Co-Investment II LP
Prime London Residential Development
Co-Investment LP
Prime London Residential Development GP
LLP
Prime London Residential Development II
GP LLP
United Kingdom 50 Lothian Road, Festival Square, Edinburgh,
EH3 9WJ
United Kingdom 50 Lothian Road, Festival Square, Edinburgh,
EH3 9WJ
United Kingdom 50 Lothian Road, Festival Square, Edinburgh,
EH3 9WJ
United Kingdom 50 Lothian Road, Festival Square, Edinburgh,
EH3 9WJ
United Kingdom 33 Margaret Street, London, UK, W1G 0JD
United Kingdom 33 Margaret Street, London, UK, W1G 0JD
Prime Purchase Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Rickitt Grant & Company Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
S F Securities Ltd
Savills IM SLP II GP LLP
United Kingdom 33 Margaret Street, London, W1G 0JD
United Kingdom 50 Lothian Road, Festival Square, Edinburgh,
Savills IM UK Income and Growth General
Partner LLP
EH3 9WJ
United Kingdom 33 Margaret Street, London, UK, W1G 0JD
Savills (Europe) Ltd
Savills (L&P) Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
United Kingdom 33 Margaret Street, London, W1G 0JD
Savills (Overseas Holdings) Limited
United Kingdom 33 Margaret Street, London, W1G 0JD
Savills (UK) Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Savills Advisory Services (L&P) Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 210
Notes to the financial statements continued
Year ended 31 December 2020
36. Group – Investments continued
Fully-owned subsidiary
Country of
incorporation
Registered office
Savills Advisory Services Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Savills Asset Warehouse 1 Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Savills Asset Warehouse 2 Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Savills Capital Advisors Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Savills Commercial (Leeds) Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Savills Commercial Ltd
Savills Finance Holdings plc
Savills Financial Services Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
United Kingdom 33 Margaret Street, London, W1G 0JD
United Kingdom 33 Margaret Street, London, W1G 0JD
Savills Holding Company Ltd
(i) United Kingdom 33 Margaret Street, London, W1G 0JD
Savills IM Dawn GP Limited
United Kingdom 33 Margaret Street, London, UK, W1G 0JD
Savills IM Euro V Co-Investment GP LLP
United Kingdom 50 Lothian Road, Festival Square, Edinburgh,
Scotland, EH3 9WJ
Savills IM Euro V Co-Investment LP
United Kingdom 50 Lothian Road, Festival Square, Edinburgh,
Scotland, EH3 9WJ
Savills IM Holdings Limited
Savills IM Investco Limited
United Kingdom 33 Margaret Street, London, UK, W1G 0JD
United Kingdom 33 Margaret Street, London, UK, W1G 0JD
Savills IM Investments Limited
United Kingdom 33 Margaret Street, London, UK, W1G 0JD
Savills IM JVF II Co-Investment GP LLP
United Kingdom 50 Lothian Road, Festival Square, Edinburgh,
Scotland, EH3 9WJ
Savills IM JVF II Co-Investment LP
United Kingdom 50 Lothian Road, Festival Square, Edinburgh,
Scotland, EH3 9WJ
Savills IM SLP General Partner LLP
United Kingdom Wemyss House, 8 Wemyss Place, Edinburgh,
United Kingdom, EH3 6DH
Savills IM SLP III GP LLP
United Kingdom Citypoint, 65 Haymarket Terrace, Edinburgh,
Scotland, EH12 5HD
Savills IM SLP III LP
United Kingdom Citypoint, 65 Haymarket Terrace, Edinburgh,
EH12 5HD
Savills IM UK One Limited
United Kingdom 33 Margaret Street, London, UK, W1G 0JD
Savills IM UK Property Ventures No.1 GP
Limited
Savills IM UK Two Limited
Savills India Limited
Savills Investment Management (UK)
Limited
United Kingdom 33 Margaret Street, London, UK, W1G 0JD
United Kingdom 33 Margaret Street, London, UK, W1G 0JD
United Kingdom 33 Margaret Street, London, W1G 0JD
United Kingdom 33 Margaret Street, London, UK, W1G 0JD
Savills Investment Management LLP
United Kingdom 33 Margaret Street, London, UK, W1G 0JD
Savills Investment Management Overseas
Holdings Limited
United Kingdom 33 Margaret Street, London, UK, W1G 0JD
Savills Italy Holding Limited
United Kingdom 33 Margaret St, London W1G 0JD
Savills KSA Limited
United Kingdom 33 Margaret Street, London, W1G 0JD
Savills Lending Solutions Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Savills Management Resources Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Savills Management Resource Northern
Ireland Ltd
United Kingdom Longbridge House 2nd Floor, 16-24 Waring Street,
Belfast, Northern Ireland, BT1 2DX
Savills ME Limited
United Kingdom 33 Margaret Street, London, W1G 0JD
Savills Middle East Holdings Limited
United Kingdom 33 Margaret Street, London, W1G 0JD
Savills Place-Shaping & Marketing Limited
United Kingdom 33 Margaret Street, London, W1G 0JD
Savills Telecom Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Savills Trust Company Limited
United Kingdom 33 Margaret Street, London, W1G 0JD
Savills plc | Annual Report and Accounts 2020 211
Fully-owned subsidiary
Country of
incorporation
Registered office
Serviced Land No.1 GP Limited
United Kingdom 33 Margaret Street, London, UK, W1G 0JD
Serviced Land No.2 GP Limited
United Kingdom 33 Margaret Street, London, UK, W1G 0JD
Serviced Land No.2 JV GP Limited
United Kingdom 33 Margaret Street, London, UK, W1G 0JD
Smith Woolley Ltd
Smiths Gore Limited
United Kingdom 33 Margaret Street, London, W1G 0JD
United Kingdom 33 Margaret Street, London, W1G 0JD
Stratland Management Limited
United Kingdom 33 Margaret Street, London, UK, W1G 0JD
The Currell Group Limited
United Kingdom 9 Bonhill Street, London, EC2A 4DJ
The London planning Practice Ltd
United Kingdom 33 Margaret Street, London, W1G 0JD
Wellington Holdings Ltd
BTR Capital Advisors I, LLC
BTR Capital Advisors II, Inc.
United Kingdom 33 Margaret Street, London, W1G 0JD
United States
399 Park Avenue – 11th FL, New York, NY 10022
United States
399 Park Avenue – 11th FL, New York, NY 10022
BTR Capital Advisors III, Inc.
United States
399 Park Avenue – 11th FL, New York, NY 10022
Gravitas Lease Audit Services LLC
United States
399 Park Avenue – 11th FL, New York, NY 10022
Gravitas Real Estate Solutions LLC
United States
399 Park Avenue – 11th FL, New York, NY 10022
Kelly, Legan & Gerard Inc.
Macro Consultants LLC
Savills (L&P) Inc
Savills (ME) LLC
Savills America Ltd
United States
398 Park Avenue – 11th FL, New York, NY 10022
United States
1040 Avenue of the Americas, New York, NY 10018
United States
Unex House, 132–134 Hills Road, Cambridge
CB2 8PA
United States
399 Park Avenue – 11th FL, New York, NY 10022
United States
399 Park Avenue – 11/F, New York, NY 10022
Savills Capital Markets LLC
United States
399 Park Avenue – 11th FL, New York, NY 10022
Savills Gravitas Real Estate Solutions LLC
United States
399 Park Avenue – 11th FL, New York, NY 10022
Savills Inc.
United States
399 Park Avenue – 11th FL, New York, NY 10022
Savills Investment Management Inc.
United States
251 Little Falls Drive, Wilmington, DE 19808
Savills Occupier Services Inc.
United States
399 Park Avenue – 11th FL, New York, NY 10022
SSOC, LLC
Studley International, Inc
Studley Advisors, Inc
SVS (GA) Inc.
SVS Stone LLC
United States
399 Park Avenue – 11th FL, New York, NY 10022
United States
399 Park Avenue – 11th FL, New York, NY 10022
United States
399 Park Avenue – 11th FL, New York, NY 10022
United States
399 Park Avenue – 11th FL, New York, NY 10022
United States
399 Park Avenue – 11th FL, New York, NY 10022
The Great Studley Stamp Company
United States
399 Park Avenue – 11th FL, New York, NY 10022
Savills Vietnam Company Ltd
SVVN Price Valuation Limited
Liability Company
Vietnam
Vietnam
6/F, Sentinel Place building, 41A Ly Thai To, Hoan
Kiem District, Hanoi City
17 Fl., Vincom Centre Building, 72 Le Thanh Ton
Str., Ben Nghe Ward, Dist 1, Ho Chi Minh City
Subsidiaries of which the Group
owns less than 100%
% owned
Country of
incorporation
Registered office
Savills Belux Group SA
99.9
Belgium
Avenue Louise 81, 1050 Brussels, Belgium
Savills Property Services (Shenzhen)
Company Ltd
85
China
Unit 02, 9/F, China Resources Tower, No.2666,
Keyuan South Road, Nanshan District, Shenzhen,
518000, China
Savills SA
99.97
France
21 Boulevard Haussmann 75009, Paris, France
Savills Fund Management GmbH
94
Germany
Rotfeder-Ring 7, D-60327 Frankfurt-am-Main
Savills Investment Management
(KVG) GmbH
94.9
Germany
Rotfeder-Ring 7, D-60327 Frankfurt-am-Main
Savills Sweden Investment AB
51
Sweden
Segels Torg 12, 111 57 Stockholm
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 212
Notes to the financial statements continued
Year ended 31 December 2020
36. Group – Investments continued
Subsidiaries of which the Group
owns less than 100%
Absolute Result Ltd
% owned
Country of
incorporation
80.2
Hong Kong
Savills Billion Property Management Ltd 80
Hong Kong
The Aurora Management Services Ltd
80
Hong Kong
Registered office
23/F, Two Exchange Square, 8 Connaught Place,
Central
Rooms 805-813, 8/F, Cityplaza One, 1111 King’s
Road, Taikoo Shing
Rooms 805-813, 8/F, Cityplaza One, 1111 King’s
Road, Taikoo Shing
Savills Vignature Property Management
Limited
70
Hong Kong
Rooms 805-813, 8/F, Cityplaza One, 1111 King’s
Road, Taikoo Shing
PT Savills Consultants Indonesia
80.4
Indonesia
Panin Tower – Senayan City, 16/F, Jl.Asia Afrika
Lot.19, Jakarta 10270, Indonesia
Savills Investment Management
(Luxembourg) S.à r.l.
94.9
Luxembourg
10, rue C.M. Spoo
Savills & Partners LLC
65
Oman
Hatat Complex Suite 30-36, Ground Floor,
P O Box 1475, Ruwi, Sultanate of Oman,
Location – Wadi Adai – Romellah
Liverpool ONE Management
Company Ltd
50
United Kingdom 33 Margaret Street, London, W1G 0JD
SGDN Ltd
51
United Kingdom Stuart House, City Road, Peterborough, PE1 1QF
Joint Ventures
% owned
Country of
incorporation
Registered office
Shanghai No.1 and FPDSavills Property
Management Company Ltd
Zhuhai Hengqin Savills Assets Operation
Management Company Ltd
51
51
China
China
Beijing China Railway Savills Property
Management Services Company Ltd
49
China
Beijing Tianrun Savills Property
Management Company Ltd
Gohigh Savills (Shanghai) Property
Management Company Ltd
Guangzhou Nansi & Savills Property
Management Co Ltd
Shanghai Qihui Savills Property Services
Company Ltd
Everbright Savills Property Management
(Shanghai) Company Ltd
Fuzhou Hengli & Savills Property
Management Company Ltd
Beijing Haizhi Savills Property
Management Company Ltd
Beijing Hongyuan Savills Property
Management Company Ltd
Savills BM Property Services
Company Ltd
Shenzhen Qianhai Savills Property
Services Company Ltd
Daisy Savills Property Management
(Beijing) Company Ltd
49
49
49
49
45
45
40
40
40
40
35
China
China
China
China
China
China
China
China
China
China
China
Building No1, 3rd Floor, No.400, Fangchun Rd,
Pudong District, Shanghai
Room 105-1460, No. 6 Baohua road,
Hengqin new area, Zhuhai
Room 202 Tower D, Beijing China Railway Plaza,
No.3 South Road Auto Museum, Fengtai District,
Beijing
Unit 3501A, 35/F, No. 8 Jianguomenwai Dajie,
Chaoyang District, Beijing, PRC
Room 203D, 2/F, No. 21, Lane 596,
Middle Yanan Road, Jingan District, Shanghai
Room 1304, Feng Ze Dong Road No.106,
Nan Sha Area, Guang Zhou PRC
Rm 548, 9F, No. 583 Lingmu Rd., Xuhui District,
Shanghai
Room E-266, 3/F, Ru Shan Road No.227,
Pilot Free Trade Zone, Shanghai
8/F, No.128 Wusi Road, Gudong Street,
Gulou District, Fuzhou
Zone B, 6/F, Tower B, No.18 Zhong Guan Cun
Avenue, Haidian District, Beijing
Unit 104, F1,Building 4, No.2 Jinsui Avenue,
Shunyi District, Beijing
Room 115, No.53, Lane 749, Middle Tianmu Road,
Zhabei District, Shanghai
Unit 201,A Tower, No.1, QianWan Road,Qianhai
Shengan Cooperation District,Shenzhen
Unit 702, Tower 2, Office Building, 7/F, No. 18
Jianguomennei Avenue, Chaoyang District, Beijing
Savills plc | Annual Report and Accounts 2020 Joint Ventures
Suzhou Industrial Park Hengtai Savills
Property Management Company Ltd
% owned
Country of
incorporation
35
China
30
30
30
30
30
30
30
30
China
China
China
China
China
China
China
China
25.5
China
China
China
China
China
Beijing BHG Savills Retail & Property
Management Company Ltd
Beijing Oriental Savills Asset
Management Company Ltd
Beijing Zhaotai Savills Property Services
Company Ltd
Chongqing Shenghua Savills Property
Services Group Company Ltd
Nanjing Smart Science Technology
Park & Savills Property Management
Company Ltd
Savills Raycom Property Management
(Beijing) Company Ltd
Shanghai Poly Savills Property
Management Company Ltd
Shanxi Zhidi Savills Property Services
Company Ltd
Anlian Savills Property Management
(Shenzhen) Ltd
COSCO Savills Property Development
Company Ltd
Beijing Financial Street Savills Property
Management Company Ltd
Beijing Zhong Bao Savills Property
Management Company Ltd
Tianjin TEDA Savills Property Services
Company Ltd
SERE Egypt Consulting JSC
Jiayi Savills Property Services Ltd
Greenmile Ventures Ltd
Greenwalls Gateway Ltd
Skywise Technology & Innovation
Company Limited
G.E.S. Holdings Ltd
G.E.S. Ltd
Savills (Johor) Sdn Bhd
25
20
10
10
54
51
50
50
50
50
50
49
Macau
Macau
Malaysia
Savills (KL) Sdn Bhd
49
Malaysia
Savills (Malaysia) Sdn Bhd
49
Malaysia
213
Registered office
Unit 303-304, Moon Bay International Business
Center, 9 Cuiwei Avenue, Suzhou Industrial Park,
Suzhou
Room 107, Block 1, No 208, Lane 4,
North Xiangyun Road, Daxing District, Beijing
Unit 303, 3/F No, 9 West Street Wangfujing,
Dongcheng District, Beijing
B1/F, 11 Fenghui Yuan, Tai Ping Avenue,
Xicheng District, Beijing, P.R.C
Room 102, 1st Floor, GuoHua Financial Center,
No. 9 JuXianYan Square, JiangBeiZui, Chongqing
Room 468, Floor 4, building 9, Xingzhihui
Business Garden, No. 19, Xinghuo Road,
Jiangbei New District, Nanjing, 210008, China
Unit B1-08, No.2 South Road Ke Xue Yan,
Haidian District, Beijing
Unit 01, 20/F, South Tower, No.528 South Pu
Dong Road, Pu Dong, Shanghai
4/F, Block 3, No.42 Xing Shan Temple, Xian City
Unit B02(b), 19/F, Anlian Plaza, No.4018,
Jintian Road, Futian District, Shenzhen
Unit M, 7th Floor, No.720 Pudong Ave,
Pudong District, Shanghai
B1/F, Tong Tai Building, 33 Financial Street,
West District, Beijing.
603 China Life Tower, 16 Chao Wai Street,
Chaoyang District, Beijing
B2/F, Zone A1, Teda MSD, No.56 Second Avenue,
Economy & Technology Development Zone,
Tianjin
Egypt
Building 17, Street 210, Maadi, Cairo.
Hong Kong
Hong Kong
23/F, Two Exchange Square, 8 Connaught Place,
Central
Vistra Corporate Services Centre,
Wickhams Cay II, Road Town, Tortola, VG1110,
British Virgin Islands
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Alameda Dr. Carlos D’Assumpcao, No. 181 – 187,
Edf. Kong Fai Com. 7/F, K – P
Alameda Dr. Carlos D’Assumpcao, No. 181 – 187,
Edf. Kong Fai Com. 7/F, K – P
Upper Penthouse, Wisma RKT,
No. 2 Jalan Raja Abdullah, Off Jalan Sultan Ismail,
50300 Kuala Lumpur
Upper Penthouse, Wisma RKT,
No. 2 Jalan Raja Abdullah, Off Jalan Sultan Ismail,
50300 Kuala Lumpur
Upper Penthouse, Wisma RKT,
No. 2 Jalan Raja Abdullah, Off Jalan Sultan Ismail,
50300 Kuala Lumpur
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 214
Notes to the financial statements continued
Year ended 31 December 2020
36. Group – Investments continued
Joint Ventures
Savills (Penang) Sdn Bhd
% owned
Country of
incorporation
49
Malaysia
Savills (Project Management) Sdn Bhd
49
Malaysia
Registered office
Upper Penthouse, Wisma RKT,
No. 2 Jalan Raja Abdullah, Off Jalan Sultan Ismail,
50300 Kuala Lumpur
Upper Penthouse, Wisma RKT,
No. 2 Jalan Raja Abdullah, Off Jalan Sultan Ismail,
50300 Kuala Lumpur
Cluttons Saudi Arabia Company Limited 49
Saudi Arabia
Dammam, Malek Saud Street, 31411
Savills Science Limited
50
United Kingdom 33 Margaret Street, London, W1G 0JD
Associates
% owned
Country of
incorporation
Registered office
SAS – Riviera Estates
51
France
11 Avenue Jean Medecin, 06000, Nice
KSH Guardian Property Management Ltd 50
Hong Kong
7/F, Cityplaza One, 1111 King’s Road, Taikoo Shing
Lippo-Savills Property Management Ltd 50
Hong Kong
Yuen Sang Property Management
Company Ltd
50
Hong Kong
Savills Taiping Property Management Ltd 45
Hong Kong
Guardian Home Ltd
40
Hong Kong
Room 2301, 23/F, Tower One, Lippo Centre,
89 Queensway
Room 2501, 25/F, Alexandra House,
18 Chater Road, Central, Hong Kong
Rooms 805-813, 8/F, Cityplaza One,
1111 King’s Road, Taikoo Shing
Unit No, B(6), 6/F., Kam Man Fung Factory
Building, No. 6 Hong Man Street, Chai Wan,
Hong Kong
Hengli Savills Property Management
Limited
Cordea Nichani India Advisers Private
Limited
Rootcorp Ranganatha Limited
Monaco Real estates SARL
Really Pte Ltd
Huttons Asia Pte Ltd
Huttons Capital Pte Ltd
DRC Capital LLP
49
25
25
51
45
48
48
25
Hong Kong
Unit 1806-08, Tower Two, Lippo Centre,
89 Queensway, Hong Kong
India
Mauritius
Monaco
Singapore
Singapore
Singapore
Ground Floor Front, 19 Kumarakrupa Road,
Bangalore 560001, India
4th Floor, Raffles Tower, 19 Cybercity, Ebene,
Mauritius
10 Ter Boulevard Princesse Charlotte
70 Shenton Way #09-12 EON Shenton S 079118
3 Bishan Place #05-01 CPF Bishan Building S
579838
3 Bishan Place #05-01 CPF Bishan Building S
579838
United Kingdom 4th Floor, 6 Duke Street St James’s, London,
United Kingdom, SW1Y 6BN
Other significant holdings
% owned
Country of
incorporation
Registered office
Vucity Ltd
(ii)
20.80 United Kingdom George Hay, Brigham House, Biggleswade,
England, SG18 0LD
(i) Directly owned by Savills plc.
(ii) Both ordinary and redeemable shares owned by the Group.
(iii) Partnership interest.
(iv) Economic interest/part economic interest.
(v) The Group does not control these entities (as defined by IFRS 10) and are not consolidated in to the Group’s financial statements.
The total non-controlling interest at the end of the year is £0.7m (2019: £0.7m). The non-controlling interests in respect of
the above subsidiaries that the Group does not own a holding of 100% are not considered to be individually material.
There were no material transactions with non-controlling interests during the year. Refer to Note 23 for details on
restrictions on the Group’s ability to access cash in the Group’s Asia Pacific operating subsidiaries.
Savills plc | Annual Report and Accounts 2020 215
Shareholder information
Key dates for 2020
Annual General Meeting
Financial half year end
Announcement of half year results
12 May 2021
30 June 2021
5 August 2021
Website
Visit our investor relations website www.savills.com for full up-to-date investor relations information, including the
latest share price, recent Annual and Half Year Reports, results presentations and financial news.
Shareholder enquiries
For Shareholder enquiries please contact our Registrars, Equiniti (see below). For general enquiries please call our
Shareholder Services helpline on: 0371 384 2018 (overseas holders need to call +44 (0)121 415 7047. Lines are open
from 8.30am to 5.30pm, Monday to Friday, excluding bank holidays). For further administrative queries in respect of
your shareholding, please access our Registrars’ website at www.shareview.co.uk.
Electronic communications
If you would prefer to receive Shareholder communications electronically in future, including your Annual and Half
Year Reports and notices of meetings, please visit our Registrars’ website, www.shareview.co.uk and follow the link
to ‘Register for e-communications’ under the Shareholder Services section.
Half Year Report
Like many other listed public companies, we no longer circulate printed Half Year Reports to Shareholders. Rather,
Half Year results’ statements are published on the Company’s website. We believe that this is of benefit to those
Shareholders who do not wish to be burdened with such paper documents, and to the Company, as it is consistent
with our target of saving printing and distribution costs.
Professional advisers and service providers
Solicitors
Joint Stockbrokers
CMS Cameron McKenna Nabarro Olswang LLP
UBS Investment Bank
Cannon Place
78 Cannon Street
London EC4N 6AF
Registrars
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Statutory auditor
PricewaterhouseCoopers LLP
1 Embankment Place
London WC2N 6RH
5 Broadgate
London EC2M 2QS
Numis Securities Ltd
The London Stock
Exchange Building
10 Paternoster Square
London EC4M 7LT
Principal Bankers
Barclays Bank PLC
1 Churchill Place
London E14 5HP
GOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTSOVERVIEW 216
Shareholder information continued
Cautionary note regarding forward-looking statements
Certain statements included in this Annual Report are forward-looking 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. Forward-looking statements can be identified by the use of relevant
terminology including the words: ‘believes’, ‘estimates’, ‘anticipates’, ‘expects’, ‘intends’, ‘forecasts’, ‘plans’, ‘goal’,
‘target’, ‘aim’, ‘may’, ‘will’, ‘would’, ‘could’ or ‘should’ or, in each case, their negative or other variations or comparable
terminology and include all matters that are not historical facts. They appear in a number of places throughout this
Annual Report and include statements regarding our intentions, beliefs or current expectations and those of our
Officers, Directors and employees concerning, amongst other things, our results of operations, financial condition,
liquidity, prospects, growth, strategies and the businesses we operate.
Other factors that could cause actual results to differ materially from those estimated by the forward-looking
statements include, but are not limited to:
Global economic business conditions;
Monetary and interest rate policies;
Foreign currency exchange rates;
Equity and property prices;
The impact of competition, inflation;
Changes to regulations, taxes;
Changes to consumer saving and spending habits; and
Our success in managing the above factors.
Consequently, our actual future financial condition, performance and results could differ materially from the plans,
goals and expectations set out in our forward-looking statements. Accordingly, no assurance can be given that any
particular expectation will be met and readers are cautioned not to place undue reliance on forward-looking
statements which speak only at their respective dates.
The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of
new information, future events or otherwise.
Savills plc | Annual Report and Accounts 2020 Savills plc
33 Margaret Street
London W1G 0JD
T: +44 (0)20 7499 8644
www.savills.com
Registered in England
No. 2122174
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