Welcome to the Colliers International Second Quarter Investors Conference Call. Legal Counsel requires us to advise that the discussion scheduled to take place today may contain forward-looking statements that involve known and unknown risks and uncertainties. Actual results may be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the company's annual information form as filed with the Canadian Securities Administrators and in the company's Annual Report on Form 40-F as filed with the U.S. Securities and Exchange Commission. As a reminder, today's call is being recorded. Today is Thursday, August 1, 2024. And at this time, for opening remarks and introductions, I would like to turn the call over to the Global Chairman and Chief Executive Officer, Mr. Jay Hennick. Please go ahead, sir.

Thank you, operator. Good morning, and thanks for joining us for the second quarter conference call. I'm Jay Hennick, Chairman and Chief Executive Officer of the company. With me today is Chris McLernon, CEO of Real Estate Services, and Christian Mayer, our Chief Financial Officer. As always, this call is being webcast and is available in the Investor Relations section of our website, along with a presentation slide deck. During the quarter, Colliers delivered solid results with growth across all service lines and segments. Leasing revenues exceeded expectations, while capital markets saw modest growth for the first time in 24 months, albeit from a relatively low bar. With lower interest rates, greater availability of debt, and the narrowing of bid-ask spreads, we anticipate that deal activity and therefore sales volumes for Colliers should begin to recover from here. As expected, our high-value recurring service lines, outsourcing and advisory, and investment management continued to deliver solid and predictable growth during the quarter. Assets under management were slightly over $96 billion. Since our business continues to meet expectations, we're maintaining our financial outlook for the year, as Christian will elaborate on shortly. Earlier this week, we completed the previously announced acquisition of Englobe, a leading multidisciplined engineering, environmental and inspection services platform. This acquisition establishes Colliers as one of the top players in Canada, complements our rapidly growing engineering operations across the U.S. and Australia, and aligns with our strategy of increasing our high-value recurring revenue streams, which will now represent 72% of our earnings. Having such a large percentage of recurring earnings further underscores the Colliers highly differentiated business model and sets us further apart from the others. Since 2015, our committed leadership team with substantial ownership has continued to reposition our company to create growth and value for shareholders. One step at a time, we have grown Colliers into the global leader it is in commercial real estate and then expanded our business to include three complementary growth engines; real estate services, engineering, and investment management. With the acquisition of Englobe, our engineering and project management capabilities have now reached scale with over 8,000 employees generating about $1.3 billion in annualized revenues. As a result, beginning in the third quarter, we will be realigning our segment reporting to focus on these three specific growth engines. This change will enable investors to better appreciate the value, strength, and potential of Colliers as a well-managed, growth-oriented professional services and asset management business with a 30-year track record of delivering 20% annualized returns for shareholders. Now let me ask Christopher McLernon to discuss some highlights. Once he's completed, Christian will provide his financial report and then we'll open things up for questions. Chris?

Thank you, Jay. Good morning, everyone. Colliers had a successful second quarter, marked by growth across all our service lines and segments, reflecting the strength of our diversified platform. Leasing revenues were up 13%, driven by strong activity in the office and industrial asset classes in the Americas and the EMEA regions. As occupiers are becoming more confident in their business plans, coupled with the improving return to work trends, and the flight to quality offices, we are seeing an increased velocity of leasing transactions. For example, office leasing was up 18% globally and notably up 32% in the Americas. We also witnessed strong office leasing growth in several other countries, including Germany, France, the Netherlands, New Zealand, China, Hong Kong, and India. As Jay mentioned, Capital Markets showed the first period of growth since the second quarter of 2022. We outperformed industry benchmarks and continued to gain market share, a direct result of our decision to strategically invest in our business and our people. A great example is our debt finance operations in North America, where we saw substantial improvement in loan origination activity, particularly in the multifamily asset class. Meanwhile, our high-value outsourcing advisory services continued to deliver solid growth this quarter. Revenues were up 5% with solid pipelines and revenue visibility across our service lines through to the end of the year. As Jay mentioned, we are extremely excited to welcome Englobe to Colliers. The platform significantly bolsters our engineering and project management capabilities and will deliver exceptional returns over the coming years. Our performance to date is a testament to our strong enterprising culture, a unique culture that we have cultivated over many years that is hard to replicate. Colliers has become the platform of choice for entrepreneurial professionals who want to leverage their careers for success. Our latest global engagement survey, which had an impressive 88% participation rate and high engagement scores that exceeded external benchmarks, shows that our people remain engaged, motivated, and passionate about our business and accelerating the success of our clients. Now I'll turn things over to Christian who will provide more details on our financials.

Thank you, Chris, and good morning. Please note that all references to revenue growth made on this call are expressed in local currency and that the non-GAAP measures discussed here today are as defined in the materials accompanying this call. Our second quarter revenues were $1.1 billion, up 6% relative to the prior year period. Each of our service lines and segments reported revenue growth for the quarter. Internal growth was 5% overall and was led by double-digit gains in leasing in the Americas and in EMEA. Second quarter adjusted EBITDA was $156 million, up 6% over the prior year period with the margin increasing slightly to 13.7%. We continue to be agile in managing our operating costs to match the expected pace of revenues in our transactional businesses. The benefit of these actions was most evident in the Asia Pacific region, where margins were up 120 basis points on essentially flat revenues. In our Investment Management segment, we raised $1 billion of new capital commitments during the second quarter, bringing our year-to-date fundraising to $1.5 billion. Our full year fundraising estimate is at the lower end of our previously stated $5 billion to $8 billion range, with the weighting to the fourth quarter. However, our fundraising pipelines are growing, and investor interest in our highly differentiated alternative infrastructure and credit strategies, as well as more traditional real estate asset classes, continues to gain momentum. Second quarter assets under management were flat at $96.4 billion. Growth from fundraising was offset by: one, dispositions of assets and older vintage funds, returning capital to investors; two, redemptions in certain open-end funds; and three, modest mark-to-market adjustments, which totaled less than 25 basis points across the portfolio. As we mentioned previously, disposition activity in our funds is a healthy process, resulting in the realization of gains and recycling of capital back to investors, which should position us well for future fundraising. We are maintaining our financial outlook for 2024, except for an increase to reflect the partial year impact of newly acquired Englobe. Our operating expectations remain unchanged. We continue to expect a recovery in capital markets activity in the third and fourth quarters, although there is still a risk that this could be delayed to early 2025. In our recurring service lines, outsourcing advisory and investment management, we continue to expect mid- to high single-digit revenue growth for the balance of the year. Regarding our balance sheet, our financial leverage ratio, as defined as net debt to pro forma adjusted EBITDA, was 2 times as of June 30th. We expect leverage to rise to the 2.5 times range on account of Englobe for Q3 and then to decline to approximately 2 times by year-end as we generate seasonally strong cash flows and pay down our revolving credit facility. Looking ahead beyond the current year, I am very excited about the prospects for our business. Our new Real Estate Services segment, which will include capital markets and leasing as well as outsourcing, is very well positioned for the coming rebound in transactional activity. Our engineering segment will benefit from public and private sector infrastructure tailwinds in the coming decade and beyond. Our investment management business is poised for an increase in capital flows to its highly differentiated investment strategies. These three complementary segments collectively are expected to deliver predictable, high single-digit annual internal growth in the years ahead. In addition, our time-tested track record of balancing strong internal growth with strategic acquisitions, done the Colliers way, should continue to translate into exceptional long-term returns for our shareholders. That concludes my prepared remarks. I would now like to open the call for questions. Operator, can you please open the line?

Thank you. Your first question is from Stephen MacLeod from BMO Capital Markets. Please ask your question.

Okay, great, thanks. Good morning, guys. Just a couple of questions. When you think about the new reporting structure, which I think is going to be well received, will you be giving sort of pro forma historicals that we can incorporate into our model and investors can use to assess sort of the margin profile for each of these segments?

Yes, Steve, we'll be definitely doing that and look for those with the Q3 reporting.

Okay. Okay. That's great. And then just on the investment management business with respect to some of the puts and takes on dispositions versus fundraising. Can you talk about kind of the fundraising that's weighted to Q4, where that's coming from, where are you seeing that demand coming from, and then how you expect that to potentially grow or evolve into fiscal 2025?

Yes, as Christian mentioned, our fundraising pipelines are stronger than they have been in a long time. I've consistently pointed this out over the past few quarters. However, it isn't translating into investments as quickly as we would like. While we see a lot of interest this year, many potential investors are still evaluating their options. I spoke with a key contact recently who mentioned their current fund closing this year, achieving 100% re-ups from limited partners. The larger investors are coming back with the same or slightly increased amounts, while smaller investors are reducing their investments due to the need to reallocate capital, particularly in areas where they are unable to withdraw from some closed-ended funds. We believe there's been some improvement in the first half of the year, and we're cautiously optimistic about a strong finish. Nevertheless, as Christian noted, our forecasts are slightly lower than we initially anticipated at the beginning of the year. This shouldn't affect our profitability estimates, but realistically, we may see fundraising for the remainder of the year fall short of our expectations.

That's good to hear, thanks Jay. Now, regarding the capital markets aspect of the business, there's been a nice, modest improvement this quarter. Could you share some insights about what you're hearing from your broker network and how the visibility into your pipeline looks for the remainder of this year and into 2025?

Hey Stephen, it's Chris here. In regards to your question, I'd say sentiment is shifting to more positive outlook for sure. As there's more certainty in the interest rates that will be coming down, we've seen reductions in Canada, the ECB and now the UK today. So there's a lot of confidence that the Fed will do the same thing sometime in the fall. So what we're seeing is that there's a huge increase in activity, a lot more meetings, and a lot more pipeline. Our pipeline is growing. And we don't expect normalized market probably into 2025. We think it's going to be more of a gradual approach to increasing market activity. The other thing that I could tell you is that the last 18 months have been incredibly slow on the investment volume, and it's been smaller tickets of $25 million to $100 million. And now we're starting to see a few larger $100 million-plus transactions in the different regions. And this will start to set the transparency of pricing and probably spur more transaction activity. So I think we're very well positioned to take advantage of the pending improvements and we look forward to leveraging our great teams and platform going forward.

Okay, that’s great. Thanks Chris, thanks guys, appreciate it.

Your next question is from Stephen Sheldon from William Blair. Please ask your question.

Hey, thanks and nice results here. First, just in Outsourcing & Advisory, continued good growth there, but a little deceleration year-over-year. So anything to call out in terms of what's driving that slowdown? Was that driven by any specific business units within that segment, and how are you thinking about underlying growth there over the rest of the year, excluding, obviously, the inorganic boost from Englobe that will be coming on?

Yes, Stephen, I mean, the one thing I'd point out there is just ongoing flatness in our valuation business. As you know, our clients are on retainers there. And the new flow comes from capital markets transactions, which are still at depressed levels. So the valuation revenues as a result were pretty flat in the quarter. On a full-year basis, obviously, I noted in my comments, we expect mid- to high single-digit growth in Outsourcing & Advisory overall. And I'd say we're well on track to achieve that.

Got it. Makes a lot of sense. And then, yes, for Christian, any framework on how we should think about interest expense over the rest of the year as we think about our models, especially with I assume it will likely increase from capital in the acquisition?

Yes. Certainly, Englobe. We raised capital earlier this year, as you know, that was applied to repay the revolver. That revolver has now been utilized to finance the Englobe acquisition, which is about U.S. $480 million when we closed on Monday. So you have to add that to your thinking as you map out the rest of the year for interest expense.

Okay, thank you.

Thank you. Your next question is from Jimmy Shan from RBC Capital Markets. Please ask your question.

Thanks. Obviously, a big quarter for the leasing business. I was wondering...

Jimmy, can you speak a little louder? We are having trouble hearing you.

Jimmy, a little louder if you could.

Sure. Can you hear me better now?

A little better. Go, you're good. Jimmy?

Jimmy has disconnected his line. We will proceed with the next one. It's from Himanshu Gupta from Scotia Bank. Please ask your question.

Thank you and good morning. So just on the leasing front, I mean it looks like leasing was better than expectations. And I think you mentioned about the office leasing strength in a number of markets. Can you speak to industrial leasing as well? I mean, is that an area of strength there as well?

Yes. So Colliers has a strong industrial Leasing and Sales platform. And Leasing and Industrial was up 11% globally for us this year. So we continue to see some good strength there in industrial.

Okay. And was it like mostly Americas or are you beginning to see in Europe as well?

We're seeing it in Europe as well.

Okay. Okay. Thank you. And then just turning to the capital markets, again, showing some stabilization and improvement. Would you say that June was better than April and May? I mean, given the late movement, or was it like across the board?

I would say that, yes, it was slightly better in June. But as I mentioned, this is going to be a gradual increase in the activity. I don't think there's a major catalyst moment where there's going to be a rush of transactions. This is really going to grow into Q3 and Q4 and probably hopefully normalizing in 2025.

Which I might add, it's all upside if you think about it because Colliers has set great year-over-year growth across all sectors with capital markets being flat to the prior year. So as capital markets come back, it impacts us greatly on the positive side, both in transactions itself, but let's not forget the large investment we made a couple of years ago in debt origination, debt placement, etcetera Colliers mortgage. And so there's a lot of upside, I would say, that is pent up that will start to come back gradually over time, as Chris said. But the way we look at it is it's just net upside for us and just another catalyst to the future.

Got it.

And just to add to the conversation, another sign that the market is turning is that land is being transacted again. And so in Q2, land was 19% of our overall sales. So that's a positive sign.

Thank you. As you mentioned, if capital markets are expected to normalize next year, how do you define normal? Are you referring to the elevated levels seen during the COVID period in 2021 and 2022, or are you considering the pre-pandemic period? Where do you think the final capital market share may settle?

I think what we're hoping is that it gets to the 10-year average in terms of investment volumes.

So the other thing to think about here is that if you look over the past three or four years, we've acquired a business in the Nordics, which is a leader in capital markets, which added a tremendous skill set in that area. We've also been recruiting folks in capital markets, debt advisers as well as capital market sales professionals. So our capacity, I think, now is stronger than it ever has been in this space. And certainly, that will be additive as well.

Sure, thank you for that. Last question is on Investment Management. I think Q2 EBITDA margin came a bit lower. I mean, it looks like you're doing some investments, some additional expenses. So can you speak to it? And then are they done or should we continue to see increased investments for the rest of the year?

We have been investing in Investment Management resources and infrastructure over the past year, which includes adding fundraising capabilities, staff, and related costs. This also involves expenditures for new strategies, such as legal fees for setting up new funds, adviser fees, and other associated costs. To execute these new funds, we need personnel to run them and carry out asset acquisition plans. As a result, we will continue to see some of these costs reflected in our EBITDA for the near future. However, as fundraising activities increase, the revenue will surpass these incremental costs, leading to a margin recovery.

Good, fair enough. Thank you so much. I will turn it back.

Thank you. Your next question is from Frederic Bastien from Raymond James. Please ask your question.

Hi, good morning. Great to see you gain further scale in engineering, and also nice to see your stock being rewarded with an improved valuation here. Now Jay, as you look to surface additional value and as the engineering and investment management businesses continue to grow in size, does it make sense to start considering another split, basically a repeat of what you did with FirstService in 2015?

Well, Fred, you've known us for a long time. We consider various options several times a day, always on the lookout for opportunities. In Investment Management, in particular, we are undertaking many positive initiatives. As Christian mentioned, we are investing in that business to expand our range of investment strategies. We have put money into technology and people, although fundraising has been a bit weak. Thus, we are not in a hurry to make any moves until we see strong momentum and progress. We are building it one step at a time, as we always have. We need to evaluate ways to generate incremental shareholder value because, as you know, a company like Colliers, which is well-managed, globally positioned, and has strong growth drivers, is undervalued compared to where it should be in normal circumstances. We are considering all options, but we are not in a rush.

Awesome, thanks Jay. That’s the answer I was looking for. That’s all I have. Thank you.

Thank you. Your next question is from Jimmy Shan from RBC Capital Markets. Please ask your question.

Thank you. Sorry about that earlier. My question was about the leasing revenue and how are you thinking about the revenue growth in the back half of the year?

Yes. So I think the revenue growth from leasing will continue at this pace. As we see the leasing is usually linked to GDP growth. And if there's more confidence in the economy, we'll continue to see leasing strength.

Do you see that 13% as an anomaly, or do you believe it reflects prior leasing decisions by tenants that were delayed? Is it more indicative of market recovery rather than just a catch-up? Would that be accurate?

Leasing is up 8% year-to-date, and I believe that number is reasonable for the full year. While we can't predict precisely when leasing activity may decline, there are clear indicators, as Chris pointed out, of sustained growth.

I mean, the other thing I would mention just from a standpoint of looking at the components of our business, and realizing value, Leasing has demonstrated over this entire period that it is as resilient as the other pieces of our business. In fact, more so. It's almost recurring in nature. If you take a look at it going back quarter-for-quarter, over the same, let's call it 24 months that has impacted capital markets. So when you step back and you look at this business and you take a look at the various component parts, the only part that is really cyclical is capital markets. The rest is very consistent, give or take, and leasing has surely demonstrated that to me over the course of the last couple of years.

Yes. No, that makes sense. And then you mentioned the loan origination business seeing big growth. I wondered what sort of growth did you see in the quarter and how big of a business is that now sort of relative to the overall capital markets business?

Yes, so it's still quite small on an overall basis. We saw tremendous growth in loan origination during the quarter, up almost double the prior year's quarter. But we are seeing is the profitability per loan being originated is lower and the mix is a little bit different. The Fannie Mae GSE originations are more profitable. Those have not rebounded to levels we saw previously. There's a lot of refinancing happening in multifamily. There are debt funds and other investors coming in with short-term capital on these, and we are participating in placing that debt but at lower margins because it's not the same as doing a Fannie Mae type of origination, and it doesn't have the same kind of profit potential. So it's a nice part of our business. We generate today a little bit north of $100 million of revenue in that segment but has potential to be significantly more than that as the market rebounds.

And another key factor to the growth in this area is our recruitment. So we've had a number of strong recruitments both in Canada and the U.S., bolstering this business.

But it's not yet really paid yet because of the slowness in capital markets. Again, it's another segment of our business that's there. We have a national platform, both in Canada and the U.S., and we haven't realized the benefits yet. And to us, it's just upside over the next couple of quarters, we hope, or longer.

Okay. Alright, thank you.

Thank you. Your next question is from Daryl Young from Stifel. Please ask your question.

Hey, good morning everyone. I just had one on the Englobe acquisition. Just wondering if there's any cross-border element to this in terms of leveraging some of the specialty capabilities Englobe has under the U.S. team? And then also how you're thinking about building from here, I know you've mentioned there's tucked under opportunities from here, but are you at a scale now that you can start recruiting professionals organically and this starts to really spool up the organic growth side of things on maybe even a global basis?

So let me unpack a couple of those things. First of all, one of the beauties of Englobe was that it was entirely a Canadian platform that was coast to coast. And we see a great opportunity to continue to consolidate and strengthen that business across Canada. The other thing that people don't really appreciate is that in addition to Englobe, Colliers project leaders is the largest project management firm in Canada by a country mile. And all of the other engineering firms have project management, and Englobe has no project management in it. If you put the two of them together, Englobe might be one of the top three or four players in Canada. So we're very excited about that acquisition. We're very excited to be able to marry the relationships between Colliers project leaders and Englobe, which will be rebranded as Colliers over time. And so that's sort of the first question you asked. The second question is there is a lot of international, primarily right now, U.S., Canada business, and more importantly, perhaps is expertise in certain areas that can be transferred Canada-U.S. and U.S.-Canada, and professionals can work on the same types of projects regardless of the border. So we see over time that accelerating. And obviously, for Canadian investors, you'll know that the costs, the labor costs in Canada are actually lower than the labor cost on average in the U.S. And so there's some opportunities, I think, to gain some additional synergies there. So, as Christian said in his comments, we're very excited about that acquisition. We had our eye on that for probably three years, four years, and it had to work its way through the system. But for us, it was the perfect addition, and it filled us out in North America. But we see great growth opportunities for that business in Europe. And obviously, Australia is growing rapidly, New Zealand. And so we think that there'll be lots of growth yet to come over the coming years.

Just to add to that, Jay, I believe Daryl was specifically inquiring about Canadian tuck-in opportunities. There are definitely a significant number of such opportunities for us, and we already have a pipeline that we are actively pursuing. We hope to execute on a few of these to enhance scale and expand both practice areas and geographic coverage for Englobe in the coming years.

Got it, that’s great color guys. Thanks very much. I will get back in the queue.

Thank you. There are no further questions at this time. Please proceed.

Okay. Thank you, operator, and thanks everyone for participating, and we look forward to visiting again on our third quarter conference call. Thank you.

Thank you. Ladies and gentlemen, this concludes the conference call. Thank you for your participation, and have a nice day.