FIRSTSERVICE INVESTOR PRESENTATION. October 14, 2004

Transcription

1 FIRSTSERVICE INVESTOR PRESENTATION October 14, 2004

2 Forward-Looking Statements Some of the information contained herein is forward-looking or time sensitive. FirstService Corporation undertakes no obligation to update any of this information. Factors that could cause actual results to vary should be reviewed in reports filed with the Securities and Exchange Commission and the Canadian regulatory authorities.

3 FIRSTSERVICE TO ACQUIRE CMN INTERNATIONAL With revenues of $280 million, CMN establishes commercial real estate platform for FirstService under the Colliers International brand CMN gains strategic partner to support growth and broaden offerings PARTICIPANTS Jay S. Hennick President & CEO, FirstService Corporation Douglas P. Frye President & CEO, CMN International Inc. John B. Friedrichsen Senior Vice President & CFO, FirstService Corporation

4 Agenda CMN Snapshot & Transaction Overview Jay Hennick CMN Business Doug Frye Impact on FirstService John Friedrichsen Q & A

5 CMN Snapshot Leading global player No 3 player in industry CMN is largest affiliate 20 countries, 80 offices, 67 cities North America Asia Pacific Central Europe & Latin America Commercial real estate services Leasing & sales brokerage Property and facility management Valuation and advisory LTM revenue $280M, EBITDA $18M

6 Transaction Overview Transaction structure: Plan of Arrangement, approved by boards of both companies, but subject to regulatory, shareholder and other approvals. Closing ownership: FirstService will own about 70% with active senior management, employees and brokers, holding the balance of 30% (240 in total). Valuation: $88M (including assumed debt), to be funded from existing credit facilities. Expected closing date: November 30, 2004

7 Transaction Overview Investment Rationale FirstService Investment Criteria Growth Opportunities Quality Management Market Leader Strong Cash Flow CMN Attributes New platform for growth Internal growth and acquisitions in existing markets Add complimentary services New geography Experienced management team Excellent broker network Strong historical track record Significant equity stake (total of 30%) Quality global brand Top 3 in most markets CMN is the driver firm in the network with largest share Low capital intensity Variable cost structure Recurring customer relationships

8 CMN Business Douglas P. Frye, President & CEO Age years of real estate industry experience Joined CMN in 2001 as President & COO Named President & CEO in 2002 Chairman of the International Governing Council for Colliers International worldwide

9 CMN Business Key Measures 1 LTM CMN Colliers CMN % Revenue 1 $280M $1,000M 28% Employees 4,100 8,800 47% Brokers 1,200 3,500 34% Countries % Offices 80 Transaction value 1 $11B 247 $27B 32% 41%

10 CMN Yellow Colliers International Red CMN Business

11 CMN Business Revenue by Service Line (2004 TTM Revenue $280M) Property & Facility Management 12% Valuation & Advisory 10% Brokerage 78% Source: CMN data

12 CMN Business Revenue by Region (2004 TTM Revenue $280M) USA 35% Australia & New Zealand 25% Canada 28% Asia, Europe & Latin America 12% Source: CMN data

13 CMN Business Global Competitive Landscape (2003) Colliers $1.0B 1% JLL $0.95B 1% C&W $0.80B 1% Remaining Global Market $78B 95% Global Leaders 5% CBRE $1.63B 2% Source: CMN management estimates, public competitor data CBRE C&W Colliers JLL CB Richard Ellis Cushman & Wakefield Colliers International incl. CMN Jones Lang LaSalle

14 CMN Business Industry Trends Increased outsourcing Sophisticated clients Global needs Continuing consolidation by leaders Large, global full-service firms thrive Regional & niche firms remain second tier Global economic recovery Started in 2004 Key metrics improving

15 CMN Business Growth Strategy Enhance Brand & Capabilities Expand Services Customer Focus Expand Geography Brand penetration Broker training & productivity Market tools & resources Build complementary suite of services Market segment specialization Organic and acquisition Leverage key customer relationships Repeat business Multiple services Outsourcing Consolidation opportunities

16 Expected Incremental Financial Results Fiscal Year Ending 3/31/05 (US$ millions except per share amounts) Impact on FirstService 12/01/04 1 to 03/31/05 Revenue $85.0 $95.0 EBITDA 2 $4.0 $5.0 Diluted EPS $0.01 $ Expected closing date. 2 EBITDA is defined as net earnings from continuing operations before minority interest share of earnings, income taxes, interest, depreciation and amortization. FirstService s method of calculating EBITDA may differ from other issuers and accordingly, EBITDA may not be comparable to measures used by other issuers.

17 Impact on FirstService Seasonality of CMN Revenue and Earnings 45% 40% % of Average Annual Total 35% 30% 25% 20% 15% 10% 5% Revenue EBITDA 0% Q1 Q2 Q3 Q4 FirstService Quarters

18 Pro-forma Annual Operating Results Impact on FirstService (US$ millions) (US GAAP) FSV 1 CMN 1 Adjustments 2 FSV + CMN Revenue $632.0 $280.0 $912.0 EBITDA ($0.5) 74.4 EBITDA % 9.0% 6.4% 8.2% D&A Interest Taxes (1.4) 13.0 Minority Interest Net Earnings $20.7 $8.9 ($5.6) $ Pro-forma annualized operating results: FirstService trailing twelve months ended 6/30/04, CMN trailing twelve months ended 8/31/04. 2 Assumes preliminary estimates of tax rates, interest rates and intangibles amortization.

19 Pro-forma Annual Net Earnings and EPS (US$ millions, except per share amounts) (US GAAP) Impact on FirstService FSV + CMN 1 $24.0 FSV only 1 (20.7) CMN incremental net earnings $3.3 Incremental diluted EPS to FSV 2 $ Net earnings: FirstService trailing twelve months ended 6/30/04, CMN trailing twelve months ended 8/31/04. 2 Based on diluted share count of 15.1 million shares as at 9/30/04.

20 Impact on FirstService Financial Leverage Leverage Current Post closing Net debt / EBITDA: Net debt / total capitalization: 46% 53% Capital availability $40.0M (cash + undrawn credit)

21 Q & A Q & A