September Colliers International Group Inc. Investor Presentation

Transcription

1 September 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 $20B+ 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 Colliers establishes investment management platform Revenues in the Americas region exceed $1 billion Revenues up 9x EBITDA up 14x 1 TSX & NASDAQ - CIGI 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 70+ acquisitions since 2004 Target 15%+ ROIC $2,603 $ TTM 2018 Trailing twelve months (TTM) ended June 30, 2018 include impact of new revenue recognition guidance ASC 606 6

7 Diversified By Service & Geography Revenue By Service 1 Revenue By Region 1 39% 29% 58% 22% 32% 20% Outsourcing & Advisory Lease Brokerage Sales Brokerage Americas EMEA Asia Pacific 1 Twelve months ended June 30,

8 Transaction Services 61% 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 50% 21% 64% 18% 14% Office Retail & Multi-family 1 Twelve months ended June 30, % Industrial Other 18% Americas EMEA Asia Pacific 8

9 Outsourcing 39% Revenue vs. 15% In 2004 Property Management Valuation & Advisory Project Management Global Brand & Platform 30% Revenue By Service 1 41% Revenue By Region 1 48% 29% 1 Twelve months ended June 30, % Valuation & Advisory Property & Asset Management Project Management & Workplace Solutions 23% Americas EMEA Asia Pacific 9

10 Harrison Street Transformational Investment Demographic & Needs Based Investing Best in Class Returns Establishes New Platform Differentiated Strategies Proven Track Record $15.6B of AUM By Product Type 49% Student Housing Seniors Housing Investable Universe $2+ Trillion 3% 48% Storage Medical Office Closed End Funds Open End Funds Separate Accounts and Other 10

11 Highly Regarded Investor Base Diversified, global and loyal investor base More than 245 investors 70% have invested in multiple Harrison Street funds No one investor represents more than 6% AUM 44.7% Public Plans & Sovereign Entities 14.0% 20.8% Corporate Plans Multi-Managers & Fund of Funds 6.6% Endowments & Foundations 4.0% 6.9% Family Offices Banks & Insurance Companies 3.0% Other 11

12 Investment Management Platform Stable Recurring Revenues $20+ Billion in AUM 15%+ of Colliers EBITDA Positive Industry Dynamics Leverage Platform & Capabilities Harrison Street and existing European investment management business Recurring revenue streams $115 $130 million EBITDA margins of 35 40% ~15% of Colliers annualized EBITDA Strong growth potential Positive industry dynamics Leverage track records, culture and client focus to grow Capitalize on Colliers global brand, platform and relationships 12

13 Future Trends Real estate growth expected to continue Greater outsourcing of real estate services Client demand for comprehensive professional services Limited number of premier firms capable of providing services globally Greater institutional allocations to real estate Allocations have doubled since 2010, expected to continue to grow Attractive yields in real estate and safe harbor for capital Consolidating industry Global platform and comprehensive offerings essential to serve large clients Scale required to invest in technology, training and attract the best talent Professionals require world-class tools, local expertise and global client relationships 13

14 Compelling Growth Prospects Fragmented, consolidating and growing global industry $240B+ Market & Growing Top 5 Firms 1 Less Than 15% Market Share Unlimited growth expand market share, add services Few have global brand, platform and resources Proven track record continues to position Colliers for the future 1 Colliers, CBRE, JLL, C&W and Savills 14

15 Acquisitions Over Last 12 Months Total investments of $570 million AMERICAS Colliers Pittsburgh May 2018 Colliers Winnipeg Apr 2018 Coldwell Banker Commercial Advisors (Utah) Apr 2018 Serten Advisors (D.C.) Oct 2017 EMEA Engel & Volkers (Frankfurt) Aug 2018 Sadolin & Albæk (Denmark) July 2018 IREA (Spain) Feb 2018 Ovenia Group (Finland) Jan 2018 APAC SIP Group (China) Mar 2018 NixAnderson (Australia) Sep 2017 INVESTMENT MANAGEMENT Harrison Street Real Estate Jul

16 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 4 Be Experts 5 Deliver Memorable Service 6 Grow Internally & Acquire 16

17 Financial Overview

18 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% 18

19 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 19

20 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 $ year record of AEPS growth Enhanced operating leverage 5 years of strong operating cash flow Improved cash flow management and operating leverage 20

21 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 21

22 5 Year Plan On Track to Meet Enterprise 2020 Goals Revenue Growth Plan: 5% internal and 10% from acquisitions Revenues EBITDA 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

23 Second Quarter Q operating results US$ MILLIONS, EXCEPT AEPS Q Q Adjusted Adjusted Revenue Revenue EBITDA Revenue EBITDA Growth 1 Americas % EMEA % Asia Pacific % Corporate 0.4 (3.6) 0.5 (2.8) NM Consolidated % Adjusted EPS % Commentary Consolidated Strong second quarter results. Revenue up 14% (11% in LC), with 5% internal growth; Adjusted EBITDA was $69.4 million, up 15% (10% in LC). Adjusted EPS was $0.95, a 23% increase versus the prior year quarter. Americas 12% revenue growth (11% on a local currency basis), driven by internal growth. Internal revenue growth was 7% relative to prior year quarter. Internal growth was driven by Lease Brokerage volumes. Adjusted EBITDA was $36.2 million, up 10% versus the prior year quarter. EMEA Revenues up 24% (15% on a local currency basis). Revenue growth comprised of 14% growth from recent acquisitions and 1% from internal growth relative to the prior year quarter. Internal revenues was impacted by a decline in Outsourcing & Advisory services, particularly project management activity, which more than offset increases in Sales and Lease Brokerage. Adjusted EBITDA was $21.5 million, up 23% versus the prior year quarter. Asia Pacific 9% revenue growth (6% on a local currency basis). Revenue growth comprised of 4% from recent acquisitions and 2% from internal growth relative to the prior year quarter. Adjusted EBITDA was $15.4 million, up 21% from the year ago period, with margin improvement from operating leverage particularly in Asia. 1 Revenue growth shown on a local currency ( LC ) basis. AEPS growth shown on a reporting currency ( RC ) basis 23

24 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 % EMEA % Asia Pacific % Corporate 0.8 (4.7) 1.0 (4.6) NM Consolidated 1, , % Adjusted EPS % Commentary Consolidated Strong year to date results. Revenue up 16% (12% in LC), with 5% internal growth; Adjusted EBITDA was $105.6 million, up 15% (12% in LC). Adjusted EPS was $1.39, a 23% increase versus the prior year. Americas 14% revenue growth (13% on a local currency basis), with 7% internal growth. Internal growth was driven by Lease Brokerage, with strong contributions from Canadian operations. Adjusted EBITDA was $62.6 million, up 13% versus the prior year. EMEA Revenues up 26% (13% on a local currency basis). Revenue growth comprised of 13% growth from recent acquisitions and flat 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 $21.0 million due to planned investment in incremental revenue producers in major markets, as well as revenue mix. Asia Pacific 13% revenue growth (10% on a local currency basis), with 6% from internal growth, driven by Lease Brokerage and Outsourcing & Advisory services. Adjusted EBITDA was $26.6 million, up from $19.6 million in the year ago period. 1 Revenue growth shown on a local currency ( LC ) basis. AEPS growth shown on a reporting currency ( RC ) basis 24

25 Capitalization & Capital Allocation Strong balance sheet Cash $ $ Total Debt Net Debt $ $ Redeemable noncontrolling interests Shareholders' equity Total capitalization $ $ Net debt / pro forma adjusted EBITDA June 30, 2018 December 31, Months Ended June 30, 2018 June 30, 2017 Capital Expenditures $ 7.8 $ 13.8 Acquisition Spend (1) $ 18.7 $ Months Ended June 30, 2018 June 30, 2017 Capital Expenditures $ 14.0 $ 20.5 Highlights Expanded ($1 billion capacity) and extended (April 2023) credit facility provides ample capacity for future growth 210 million 10 year senior notes at 2.23% completed May 30, 2018 Net debt / pro forma adjusted EBITDA leverage of 1.2x at June 30, 2018 Acquisition momentum continued subsequent to quarter-end with Denmark and Harrison Street acquisitions Anticipated capital expenditures of $40-42 million in 2018 driven by investments in office space and IT systems / software Acquisition Spend (1) $ $ Includes business acquisitions, contingent acquisition consideration and purchase of non-controlling interests in subsidiaries. 25

26 Technology enabled advisory services Leveraging digital opportunities Implementing Technology Create better client data and experience Provide best in class business support tools Enhance the productivity of our people Better Strategies and Solutions Provide unique, data-driven insights Increase connectivity across our global platform Visibility into the Future Colliers Proptech Accelerator Targeted innovation to create solutions, shape technologies and further accelerate success Unique insight into disruptive technologies 26

27 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

28 Appendix Reconciliation of net earnings to adjusted EBITDA Three months ended Six months ended (US$ thousands) June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Net earnings $ 28,804 $ 25,957 $ 37,343 $ 32,757 Income tax 12,859 12,799 17,575 17,126 Other income, net (33) (807) (460) (2,036) Interest expense, net 3,939 3,279 6,856 6,221 Operating earnings 45,569 41,228 61,314 54,068 Depreciation and amortization 16,283 14,381 32,141 26,408 Acquisition-related items 5,741 3,310 7,995 7,519 Restructuring costs ,041 Stock-based compensation expense 1,487 1,030 3,701 2,473 Adjusted EBITDA $ 69,427 $ 60,258 $ 105,567 $ 91,509 28

29 Appendix Reconciliation of net earnings and diluted net earnings per common share to adjusted net earnings and adjusted EPS (US$ thousands) Three months ended Six months ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Net earnings $ 28,804 $ 25,957 $ 37,343 $ 32,757 Non-controlling interest share of earnings (3,547) (5,091) (4,216) (7,293) Amortization of intangible assets 8,779 7,915 17,368 13,965 Acquisition-related items 5,741 3,310 7,995 7,519 Restructuring costs ,041 Stock-based compensation expense 1,487 1,030 3,701 2,473 Income tax on adjustments (2,550) (2,456) (4,973) (4,466) Non-controlling interest on adjustments (1,206) (885) (2,050) (1,729) Adjusted net earnings $ 37,855 $ 30,089 $ 55,585 $ 44,267 Three months ended Six months ended (US$) June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Diluted net earnings per common share $ 0.60 $ 0.29 $ 0.72 $ 0.32 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 $ 0.95 $ 0.77 $ 1.39 $