December Colliers International Group Inc. Investor Presentation

Transcription

1 December 2018 Colliers International Group Inc. Investor Presentation

2 Basis Of Presentation All amounts in millions of US Dollars unless otherwise noted. Adjusted EBITDA ( AEBITDA ) and Adjusted EPS ( AEPS ) are non-gaap measures. For reconciliations to the most directly comparable GAAP measures see Appendix. Forward-Looking Statements Certain statements included herein constitute forwardlooking statements within the meaning of the U.S. Private Securities Litigation Reform Act of Such forwardlooking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, which will, among other things, impact demand for the Company s services, service industry conditions and capacity; the ability of the Company to implement its business strategy, including the Company s ability to acquire suitable acquisition candidates on acceptable terms and successfully integrate newly acquired businesses with its existing businesses; changes in or the failure to comply with government regulations (especially safety and environmental laws and regulations); and other factors which are described in the Company s filings with the Canadian securities regulators and the U.S. Securities and Exchange Commission. 2

3 About Colliers Top-tier global real estate service firm 13,000+ Professionals 35 Countries 1 $25B+ in AUM $102B Transactions 2B Square feet managed 1 69 countries including affiliates 3

4 Why Invest in Colliers? Entrepreneurial culture & partnership philosophy with +40% insider ownership Experienced team Record of creating value +20% CAGR over 23 years 1 Massive industry Compelling growth prospects Asset-light Strong balance sheet, cash flow & modest CapEx 1 Stock price including pre-spinoff

5 An Overnight Success Story Four Decades In The Making FirstService acquires largest Colliers operations & begins consolidation 2004 Acquires Colliers established in Australia 1976 Expands to Canada, US, Asia, Europe and LATAM Gains control of Colliers brand 2010 Colliers completes spin-off from FirstService 2015 Colliers UK and Germany Colliers France established 2014 Establishes investment management platform 2018 Revenues in the Americas region exceed $1 billion 2016 Revenues up 9x EBITDA up 15x 5

6 14 Year Record of Successful Growth Fastest growing public real estate service company The Colliers Way Internal growth greater than market rates Proven ability to target, acquire and integrate Invested $1B+ in 75+ acquisitions since 2004 Target 15%+ ROIC $2,699 $ TTM 2017 & 2018 trailing twelve month revenue includes impact of new revenue recognition guidance (ASC 606). The 2016 and prior periods have not been restated. 6

7 Diversified By Service & Geography Revenue By Service 1 Revenue By Segment 1 28% 22% 38% 57% 2% 32% 2% 19% Outsourcing & Advisory Lease Brokerage Sales Brokerage Investment Management Americas Asia Pacific EMEA Investment Management 1 Twelve months ended September 30,

8 Brokerage Services 60% Revenue vs. 85% In 2004 Brokerage Sales & Leasing Diversified by Asset Class & Geography 3,900+ Professionals Global Brand & Platform Revenue By Asset Class 1 Revenue By Region 1 49% 21% 64% 18% 14% Office Retail & Multi-family 1 Twelve months ended September 30, % Industrial Other 18% Americas EMEA Asia Pacific 8

9 Outsourcing & Advisory 38% Revenue vs. 15% In 2004 Property Management Valuation & Advisory Project Management Global Brand & Platform 29% Revenue By Service 1 45% Revenue By Region 1 48% 29% 26% Valuation & Advisory Property Management Project Management & Workplace Solutions 1 Twelve months ended September 30, % Americas EMEA Asia Pacific 9

10 Investment Management Stable Recurring Revenues $25+ Billion in AUM 15%+ of Colliers Pro Forma EBITDA Positive Industry Dynamics Leverage Platform & Capabilities Harrison Street and existing European investment management business Differentiated strategies demographic and needs based investing Mix of closed and open end fund products Diversified, global and loyal investor base Strong growth potential Positive industry dynamics Leverage track records, culture and client focus to grow Capitalize on Colliers global brand, platform and relationships 10

11 Future Trends Real estate growth expected to continue Increased investment by sophisticated investors Attractive yields, increased access to debt capital and safe harbor for investment Institutional allocations have doubled since 2010, expected to continue to grow Consolidating industry Global platform and comprehensive offerings essential to larger clients Scale required to invest in market leading technology, training and talent Professionals require local expertise and global relationships Greater outsourcing of real estate services Client demand for services wherever they choose to do business Only five firms capable of providing services globally 11

12 Compelling Growth Prospects Fragmented, consolidating and growing industry $240B+ Market & Growing Unlimited growth expand market share, add services Only five global players Top 5 Firms 1 Less Than 15% Market Share Colliers proven track record continues to position us for the future 1 Colliers, CBRE, JLL, C&W and Savills 12

13 Acquisitions Over Last 12 Months Total investments of $600 million AMERICAS Continental Real Estate Companies (Florida) Nov 2018 Colliers Virginia Nov 2018 Landmark Properties (Quebec) Sep 2018 Colliers Pittsburgh May 2018 Colliers Winnipeg Apr 2018 Coldwell Banker Commercial Advisors (Utah) Apr 2018 EMEA Engel & Volkers (Frankfurt) Aug 2018 Sadolin & Albæk (Denmark) Jul 2018 IREA (Spain) Feb 2018 Ovenia Group (Finland) Jan 2018 APAC GMP Management (Australia) Oct 2018 SIP Group (China) Mar 2018 INVESTMENT MANAGEMENT Harrison Street Real Estate Capital Jul

14 5-year Plan to Double Size of Company In 3 rd year of plan, continue on track 1 Lead In Major Markets 2 Enhance Productivity 3 Innovate through technology 4 Be Experts 5 Deliver Memorable Service 6 Grow Internally & Acquire 14

15 Leverage digital opportunities Our technology focus Create better solutions allowing for better decisions Enhance productivity for professionals Industry leading tools today Data-driven, decision-enhancing solutions Innovative tools for each industry specialty Colliers Proptech Accelerator Find and invest in technologies to enhance value 10 investments completed in 2019 Colliers and industry mentors dedicate time Unique insight into disruptive technologies 15

16 Financial Overview

17 Long-term Diversification Trend Expansion of recurring services & markets Growing Recurring Revenues Sales & Leasing Outsourcing & Advisory 35% 85% % 65% Greater Geographic Diversification Americas Rest Of World 36% % 64% 58% 17

18 Strong Record of Performance Revenue growth providing operating leverage Revenue Adjusted EBITDA $2,275 $242 $1,307 $1,582 $1,722 $1,897 $147 $181 $203 $ % 9.3% 10.5% 10.7% 10.6% Established track record of growth Internal growth 6% CAGR 260 bps margin improvement since 2013 Operating leverage from scale and acquisitions 18

19 Strong Record of Performance Significant AEPS and operating cash flow growth Adjusted Earnings Per Share Operating Cash Flow $3.11 $213 $2.29 $2.44 $156 $1.10 $1.83 $78 $103 $ Record of AEPS growth Enhanced operating leverage Strong operating cash flow Improved cash flow management and operating leverage 19

20 Strong Record of Performance Modest capex, high return on capital Capital Expenditures Return on Capital Since Spin-off Average 13% of EBITDA 17% Average $23 $25 $39 18% 16% 17% 12.0% 11.0% 16.0% Disciplined approach Focused on major market growth Impacted by timing of office expansions Focused on efficient capital deployment High hurdle rate for acquisitions Peer group leading returns 20

21 5 Year Plan On Track to Meet Enterprise 2020 Goals Revenue Growth Plan: 5% internal and 10% from acquisitions Revenues Adjusted EBITDA Adjusted EPS $3.4B $390M >$5.00 $2.3B 15% $242M 17% CAGR CAGR $3.11 $1.7B 15% $181M 16% $2.29 CAGR CAGR 17% CAGR 17% CAGR

22 Third Quarter Q operating results US$ MILLIONS, EXCEPT AEPS Q Q Adjusted Adjusted Revenue Revenue EBITDA Revenue EBITDA Growth 1 Americas % EMEA % Asia Pacific % Investment Management (0.0) NM Corporate 0.4 (5.3) 0.4 (2.2) NM Consolidated % Adjusted EPS % Commentary Consolidated Strong third quarter results, continued revenue and earnings growth, with significant contribution from new Investment Management platform. Revenue up 16% (17% in LC), with 6% internal growth; Adjusted EBITDA was $72.7 million, up 31% (33% in LC). Adjusted EPS was $0.92, a 39% increase versus the prior year quarter. Americas 13% revenue growth (14% on a local currency basis), driven by internal growth. Revenue growth comprised of 9% from internal growth and 5% from recent acquisitions relative to prior year quarter. Internal growth was split evenly among service lines. Adjusted EBITDA was $33.3 million, up 8% versus the prior year quarter. EMEA Revenues up 14% (15% on a local currency basis). Revenue growth comprised of 13% growth from recent acquisitions and 2% from internal growth relative to the prior year quarter. Internal revenue growth was led by an increase in Lease brokerage largely offset by a decline in Sales Brokerage relative to a strong comparative in the prior year period. Adjusted EBITDA was $17.3 million, up 56% versus the prior year quarter. Asia Pacific 3% revenue growth (8% on a local currency basis). Revenue growth comprised of 5% from internal growth and 3% from recent acquisitions relative to the prior year quarter. Adjusted EBITDA was $17.8 million, up 14% from the year ago period, with margin improvement from operating leverage particularly in Asia. Investment Management Comprised of Harrison Street, acquired in July 2018, and the Company s existing European IM business previously reported in EMEA segment. Assets under management increased to $25.9 billion as of September 30, 2018, up 9% sequentially from $23.7 billion at the beginning of the quarter. 1 Revenue growth shown on a local currency ( LC ) basis. AEPS growth shown on a reporting currency ( RC ) basis 22

23 Year to Date YTD Q operating results US$ MILLIONS, EXCEPT AEPS Q YTD Q YTD Adjusted Adjusted Revenue Revenue EBITDA Revenue EBITDA Growth 1 Americas 1, % EMEA % Asia Pacific % Investment Management NM Corporate 1.2 (10.0) 1.4 (6.8) NM Consolidated 1, , % Adjusted EPS % Commentary Consolidated Strong year to date results. Revenue up 16% (14% in LC), with 6% internal growth and 8% growth form recent acquisitions; Adjusted EBITDA was $178. million, up 21% (17% in LC). Adjusted EPS was $2.32, a 30% increase versus the prior year. Americas 13% revenue growth (13% on a local currency basis), with 7% internal growth and 6% growth from recent acquisitions. Internal growth was driven by Lease Brokerage, with strong performance in Canada and the United States. Adjusted EBITDA was $95.9 million, up 11% versus the prior year. EMEA Revenues up 22% (14% on a local currency basis). Revenue growth comprised of 13% growth from recent acquisitions and 1% growth from internal revenues relative to the prior year. Internal revenues were impacted by a decline in Outsourcing & Advisory services, particularly project management activity. Adjusted EBITDA was $39.5 million, up from $31.6 million in the prior year period. Asia Pacific 9% revenue growth (9% on a local currency basis), with 6% from internal growth and 3% growth from recent acquisitions. Internal revenue growth was driven by Lease Brokerage and Outsourcing & Advisory services. Adjusted EBITDA was $44.4 million, up from $35.2 million in the year ago period. Investment Management Revenues totalled $37.1 million, compared to $8.4 million in the prior year period, driven by the Harrison Street July 2018 acquisition. Adjusted EBITDA was $8.4 million. 1 Revenue growth shown on a local currency ( LC ) basis. AEPS growth shown on a reporting currency ( RC ) basis 23

24 Capitalization & Capital Allocation (US$ millions) Cash $ $ $ Total Debt Net Debt $ $ $ Redeemable noncontrolling interests Shareholders' equity Total capitalization $ 1,384.3 $ $ Net debt / pro forma adjusted EBITDA September 30, 2018 December 31, 2017 September 30, Months Ended September 30, 2018 September 30, 2017 Capital Expenditures $ 7.6 $ 8.4 Highlights Net debt / pro forma adjusted EBITDA leverage of 2.2x at September 30, 2018, down from pro forma leverage of 2.4x at the start of the quarter Closed on Harrison Street and three other acquisitions in the quarter Anticipated capital expenditures of approximately $35-$37 million in 2018 driven by investments in office space and IT systems/software Acquisition Spend (1) $ $ Months Ended September 30, 2018 September 30, 2017 Capital Expenditures $ 21.6 $ 28.9 Acquisition Spend (1) $ $ Includes business acquisitions, contingent acquisition consideration and purchase of non-controlling interests in subsidiaries. 24

25 Investment Highlights Entrepreneurial culture & partnership philosophy with +40% insider ownership Experienced team Record of creating value +20% CAGR over 23 years 1 Massive industry Compelling growth prospects Asset-light Strong balance sheet, cash flow & modest CapEx 1 Including pre-spinoff 2015

26 Appendix Reconciliation of net earnings to adjusted EBITDA Three months ended Nine months ended (US$ thousands) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Net earnings $ 25,384 $ 20,362 $ 62,727 $ 53,119 Income tax 10,257 10,941 27,832 28,068 Other income, net (581) (332) (1,041) (2,368) Interest expense, net 6,896 3,487 13,753 9,708 Operating earnings 41,956 34, ,271 88,527 Depreciation and amortization 23,161 12,976 55,303 39,384 Acquisition-related items 6,271 6,149 14,265 13,666 Restructuring costs ,803 Stock-based compensation expense 1, ,978 3,411 Adjusted EBITDA $ 72,665 $ 55,282 $ 178,233 $ 146,791 26

27 Appendix Reconciliation of net earnings and diluted net earnings per common share to adjusted net earnings and adjusted EPS Three months ended Nine months ended (US$ thousands) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Net earnings $ 25,384 $ 20,362 $ 62,727 $ 53,119 Non-controlling interest share of earnings (4,073) (5,462) (8,290) (12,755) Amortization of intangible assets 15,255 6,183 32,624 20,148 Acquisition-related items 6,271 6,149 14,265 13,666 Restructuring costs ,803 Stock-based compensation expense 1, ,978 3,411 Income tax on adjustments (5,440) (2,057) (10,413) (6,523) Non-controlling interest on adjustments (1,929) (1,048) (3,979) (2,777) Adjusted net earnings $ 36,745 $ 25,826 $ 92,328 $ 70, Three months ended Nine months ended (US$) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Diluted net earnings per common share $ 0.41 $ 0.16 $ 1.13 $ 0.48 Non-controlling interest redemption increment Amortization of intangible assets, net of tax Acquisition-related items Restructuring costs, net of tax Stock-based compensation expense, net of tax Adjusted EPS $ 0.92 $ 0.66 $ 2.32 $