Colliers International Group Inc 6-K, filed Aug 3, 2022
Colliers International Group Inc. (CIGI)
About this 6-K
Colliers International Group Inc filed this 6-K on August 3, 2022.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of: August 2022
Commission File Number: 001-36898
COLLIERS INTERNATIONAL GROUP INC.
(Translation of registrant's name into English)
1140 Bay Street, Suite 4000
Toronto, Ontario, Canada
M5S 2B4
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F [ ] Form 40-F [ X ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes [ ] No [X]
If “Yes” is marked, indicate the file number assigned to the Registrant in connection with Rule 12g3-2(b): N/A
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| COLLIERS INTERNATIONAL GROUP INC. | ||
| Date: August 3, 2022 | /s/ Christian Mayer | |
| Name: Christian Mayer | ||
| Title: Chief Financial Officer | ||
EXHIBIT INDEX
EXHIBIT 99.1
Colliers Reports Strong Second Quarter Results
Investment Management continues to scale, further increasing recurring earnings
Second quarter operating highlights:
| Three months ended | Six months ended | ||||||||||
| June 30 | June 30 | ||||||||||
| (in millions of US$, except EPS) | 2022 | 2021 | 2022 | 2021 | |||||||
| Revenues | $ | 1,127.8 | $ | 946.0 | $ | 2,128.8 | $ | 1,720.9 | |||
| Adjusted EBITDA (note 1) | 161.3 | 136.6 | 282.8 | 228.7 | |||||||
| Adjusted EPS (note 2) | 1.84 | 1.58 | 3.28 | 2.64 | |||||||
| GAAP operating earnings | 103.9 | (385.8)* | 144.7 | (345.8)* | |||||||
| GAAP diluted EPS | 0.67 | (10.53)* | 0.26 | (10.80)* | |||||||
| * Includes $471.9 million settlement of Long-Term Incentive Arrangement with the Company's Chairman & CEO. | |||||||||||
TORONTO, Aug. 03, 2022 (GLOBE NEWSWIRE) -- Colliers International Group Inc. (NASDAQ and TSX: CIGI) (“Colliers” or the “Company”) today announced operating and financial results for the second quarter ended June 30, 2022. All amounts are in US dollars.
For the quarter ended June 30, 2022, revenues were $1.13 billion, up 19% (23% in local currency), adjusted EBITDA (note 1) was $161.3 million, up 18% (21% in local currency) and adjusted EPS (note 2) was $1.84, up 16% versus the prior year period. Second quarter adjusted EPS would have been approximately $0.05 higher excluding foreign exchange impacts. GAAP operating earnings were $103.9 million. Prior year GAAP operating loss of $385.8 million included a $471.9 million settlement of the Long-Term Incentive Arrangement (“LTIA”) with the Company’s Chairman & CEO which was approved by 95% of disinterested shareholders. GAAP diluted net earnings per share were $0.67 versus diluted net loss of $10.53 in the prior year quarter. Second quarter GAAP EPS would have been approximately $0.05 higher excluding changes in foreign exchange rates.
For the six months ended June 30, 2022, revenues were $2.13 billion, up 24% (27% in local currency), adjusted EBITDA (note 1) was $282.8 million, up 24% (26% in local currency) and adjusted EPS (note 2) was $3.28, up 24% versus prior year. Six months ended June 30, 2022 adjusted EPS would have been approximately $0.07 higher excluding foreign exchange impacts. The GAAP operating earnings were $144.7 million and included $27.0 million loss on disposal of the Company’s operations in Russia. Prior year GAAP operating loss of $345.8 million included the settlement of the LTIA. The GAAP earnings per share were $0.26 as compared to diluted loss per share of $10.80. Year to date GAAP EPS would have been approximately $0.08 higher excluding changes in foreign exchange rates.
“Colliers reported strong second quarter results with continued solid revenue growth across all service lines,” said Jay S. Hennick, Global Chairman & CEO of Colliers.
“During the quarter, we also continued to grow our Investment Management segment in both size and scale furthering our goal of becoming a major player in the rapidly growing alternative private capital industry. We completed two acquisitions and a third after quarter end. Then, in late June, we announced the addition of Versus Capital, a highly successful alternative real asset manager in the US with strong private wealth distribution capabilities. Once completed, Colliers will have more than $85 billion in assets under management (“AUM”).“
“Investment Management now comprises about 30% of Colliers’ pro forma annualized adjusted EBITDA and the business compares very favorably with other public peers in the investment management industry. Our revenues are predominately from recurring management fees, about 90% of our investment funds are perpetual or long-dated strategies – defined as 10 years or more, and 70% are in rapidly growing sectors like alternatives and infrastructure. Most importantly, each of our platforms has a long history of delivering top-tier performance for investors through all investment cycles. Over the past 6 years, Colliers has built an impressive Investment Management business and we continue to see great potential in the years to come.”
“Separately, during the quarter, we added a building consultancy and project management leader in the UK, enhancing our service capabilities in Europe and continuing the growth of our Outsourcing & Advisory segment.”
“Overall, Colliers continues to transform into a more resilient, global and diversified services company with 55% of our pro forma earnings coming from recurring revenue streams and the balance from essential advisory services. Based on acquisitions already completed or announced, we expect 2022 to be a record year of capital deployment, with more than $1 billion invested.“
“With our strong global brand and operating platform, proven track record of more than 27 years, balanced and diversified business model, unique enterprising culture and significant inside ownership, we expect to continue delivering excellent returns for shareholders for many years to come,” he concluded.
About Colliers
Colliers (NASDAQ, TSX: CIGI) is a leading diversified professional services and investment management company. With operations in 63 countries, our 17,000 enterprising professionals work collaboratively to provide expert real estate and investment advice to clients. For more than 27 years, our experienced leadership with significant inside ownership has delivered compound annual investment returns of 20% for shareholders. With annual revenues of $4.5 billion and $81 billion of assets under management, Colliers maximizes the potential of property and real assets to accelerate the success of our clients, our investors and our people. Learn more at corporate.colliers.com, Twitter @Colliers or LinkedIn.
Consolidated Revenues by Line of Service
| Three months ended | Six months ended | ||||||||||||||||||||
| (in thousands of US$) | June 30 | Change | Change | June 30 | Change | Change | |||||||||||||||
| (LC = local currency) | 2022 | 2021 | in US$ % | in LC% | 2022 | 2021 | in US$ % | in LC% | |||||||||||||
| Outsourcing & Advisory | $ | 475,865 | $ | 388,661 | 22 | % | 27 | % | $ | 890,410 | $ | 728,777 | 22 | % | 26 | % | |||||
| Investment Management(1) | 75,127 | 50,477 | 49 | % | 50 | % | 161,504 | 95,104 | 70 | % | 71 | % | |||||||||
| Leasing | 277,396 | 241,257 | 15 | % | 18 | % | 514,668 | 420,917 | 22 | % | 25 | % | |||||||||
| Capital Markets | 299,458 | 265,599 | 13 | % | 16 | % | 562,176 | 476,110 | 18 | % | 21 | % | |||||||||
| Total revenues | $ | 1,127,846 | $ | 945,994 | 19 | % | 23 | % | $ | 2,128,758 | $ | 1,720,908 | 24 | % | 27 | % | |||||
| (1) Investment Management local currency revenues, excluding pass-through carried interest, were up 45% and 42% for the three and six months ended June 30, 2022, respectively. | |||||||||||||||||||||
Consolidated revenues for the second quarter increased 23% on a local currency basis with all service lines up, led by Investment Management and Outsourcing & Advisory. Consolidated internal revenues measured in local currencies were up 15% (note 3) versus the prior year quarter.
For the six months ended June 30, 2022, consolidated revenues increased 27% on a local currency basis. Consolidated internal revenues measured in local currencies were up 21% (note 3).
Segmented Second Quarter Results
Revenues in the Americas region totalled $740.7 million for the second quarter, up 27% (28% in local currency) versus $582.8 million in the prior year quarter. Outsourcing & Advisory revenues were up sharply, driven by Engineering & Design (including recent acquisitions). Capital Markets growth was robust, particularly in industrial and land sales, partially offset by a reduction in debt origination activity. Adjusted EBITDA was $101.6 million, up 29% (30% in local currency) over the prior year quarter and included an $11.7 million gain on the termination of a lease, offset by (i) higher discretionary and variable costs as well as (ii) changes in revenue mix with a reduction in higher-margin debt origination. GAAP operating earnings were $81.1 million, relative to $63.2 million in the prior year quarter.
Revenues in the EMEA region totalled $169.3 million for the second quarter, up 7% (20% in local currency) compared to $158.6 million in the prior year quarter. Revenue growth was led by Outsourcing & Advisory (including recent acquisition). Leasing activity was up, however, Capital Markets revenues were impacted by geopolitical uncertainty in the region. Adjusted EBITDA was $14.4 million, down 30% (21% in local currency) relative to the prior year and was impacted by (i) lower Capital Markets revenues and (ii) higher discretionary and variable costs. GAAP operating earnings were $4.2 million, versus operating earnings of $14.4 million in the prior year quarter.
Revenues in the Asia Pacific region totalled $142.6 million for the second quarter compared to $154.0 million in the prior year quarter, down 7% (down 1% in local currency). Revenues were impacted by continued COVID-19 lockdowns in several Asian markets which extended until late in the quarter. Adjusted EBITDA was $19.5 million, down 5% (up 2% in local currency) from $20.7 million in the prior year quarter. GAAP operating earnings was $17.6 million, versus $16.7 million in the prior year quarter.
Investment Management revenues for the second quarter were $75.1 million compared to $50.5 million in the prior year quarter, up 49% (48% in local currency). Passthrough revenue from historical carried interest represented $1.9 million for the quarter versus nil in the prior year quarter. Excluding the impact of carried interest, revenue was up 45% (45% in local currency) driven by (i) management fee growth from increased assets under management and (ii) two acquisitions completed during the quarter. Adjusted EBITDA was $29.2 million, up 37% (36% in local currency) over the prior year quarter. GAAP operating earnings were $19.2 million in the quarter, versus $14.2 million in the prior year quarter. Assets under management were $68.7 billion as of June 30, 2022, up 54% from $44.5 billion on June 30, 2021. Including Rockwood Capital, completed on July 6, 2022, assets under management are now $81 billion, of which $70 billion are either perpetual or long-dated strategies.
Unallocated global corporate costs as reported in Adjusted EBITDA were $3.4 million in the second quarter, relative to $5.0 million in the prior year quarter. The corporate GAAP operating loss for the quarter was $18.2 million relative to a loss of $494.3 million in the second quarter of 2021, with the prior year period impacted by (i) the settlement of the LTIA and (ii) contingent acquisition consideration expense related to acquisitions.
Outlook for 2022
The Company is increasing its outlook for full year 2022 to reflect the impact of recent acquisitions and operating results year to date. The financial outlook is based on the Company’s best available information as of the date of this press release, and remains subject to change based on, but not limited to, numerous macroeconomic, health, social, geopolitical (including escalation of hostilities, outbreak of war, elections, disruption of supply chains) and related factors.
| Measure | Updated | Previous |
| Revenue growth | Low double digit revenue growth:
| Low double digit revenue growth:
|
| AEBITDA Margin | Up 60 bps – 100 bps | Up 40 bps – 80 bps |
| Consolidated income tax rate | 27%-29% | 25%-27% |
| NCI share of earnings | 20%-22% | 18%-20% |
| AEPS growth | Low-twenties | High-teens |
Conference Call
Colliers will be holding a conference call on Wednesday, August 3, 2022 at 11:00 a.m. Eastern Time to discuss the quarter’s results. The call, as well as a supplemental slide presentation, will be simultaneously web cast and can be accessed live or after the call at corporate.colliers.com in the Events section.
Forward-looking Statements
This press release includes or may include forward-looking statements. Forward-looking statements include the Company’s financial performance outlook and statements regarding goals, beliefs, strategies, objectives, plans or current expectations. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Such factors include: economic conditions, especially as they relate to commercial and consumer credit conditions and consumer spending, particularly in regions where our business may be concentrated; commercial real estate and real asset values, vacancy rates and general conditions of financial liquidity for real estate transactions; trends in pricing and risk assumption for commercial real estate services; the effect of significant movements in average capitalization rates across different asset types; a reduction by companies in their reliance on outsourcing for their commercial real estate needs, which would affect revenues and operating performance; competition in the markets served by the Company; the ability to attract new clients and to retain major clients and renew related contracts; the ability to retain and incentivize producers; increases in wage and benefit costs; the effects of changes in interest rates on the cost of borrowing; unexpected increases in operating costs, such as insurance, workers’ compensation and health care; changes in the frequency or severity of insurance incidents relative to historical experience; the effects of changes in foreign exchange rates in relation to the US dollar on the Company’s Canadian dollar, Euro, Australian dollar and UK pound sterling denominated revenues and expenses; the impact of pandemics on client demand for the Company’s services, the ability of the Company to deliver its services and the health and productivity of its employees; the impact of global climate change; the impact of political events including elections, referenda, trade policy changes, immigration policy changes, hostilities and terrorism on the Company’s operations; the ability to identify and make acquisitions at reasonable prices and successfully integrate acquired operations; the ability to execute on, and adapt to, information technology strategies and trends; the ability to comply with laws and regulations related to our global operations, including real estate investment management and mortgage banking licensure, labour and employment laws and regulations, as well as the anti-corruption laws and trade sanctions; and changes in government laws and policies at the federal, state/provincial or local level that may adversely impact the business.
Additional information and risk factors are identified in the Company’s other periodic filings with Canadian and US securities regulators (which factors are adopted herein and a copy of which can be obtained at www.sedar.com). Forward looking statements contained in this press release are made as of the date hereof and are subject to change. All forward-looking statements in this press release are qualified by these cautionary statements. Except as required by applicable law, Colliers undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Summary financial information is provided in this press release. This press release should be read in conjunction with the Company's consolidated financial statements and MD&A to be made available on SEDAR at www.sedar.com.
Notes
Non-GAAP Measures
1. Reconciliation of net earnings to adjusted EBITDA:
Adjusted EBITDA is defined as net earnings, adjusted to exclude: (i) income tax; (ii) other expense (income); (iii) interest expense; (iv) settlement of LTIA; (v) loss on disposal of operations; (vi) depreciation and amortization, including amortization of mortgage servicing rights (“MSRs”); (vii) gains attributable to MSRs; (viii) acquisition-related items (including contingent acquisition consideration fair value adjustments, contingent acquisition consideration-related compensation expense and transaction costs); (ix) restructuring costs and (x) stock-based compensation expense. We use adjusted EBITDA to evaluate our own operating performance and our ability to service debt, as well as an integral part of our planning and reporting systems. Additionally, we use this measure in conjunction with discounted cash flow models to determine the Company’s overall enterprise valuation and to evaluate acquisition targets. We present adjusted EBITDA as a supplemental measure because we believe such measure is useful to investors as a reasonable indicator of operating performance because of the low capital intensity of the Company’s service operations. We believe this measure is a financial metric used by many investors to compare companies, especially in the services industry. This measure is not a recognized measure of financial performance under GAAP in the United States, and should not be considered as a substitute for operating earnings, net earnings or cash flow from operating activities, as determined in accordance with GAAP. Our method of calculating adjusted EBITDA may differ from other issuers and accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings to adjusted EBITDA appears below.
| Three months ended | Six months ended | ||||||||||||||
| June 30 | June 30 | ||||||||||||||
| (in thousands of US$) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Net earnings (loss) | $ | 66,731 | $ | (412,601 | ) | $ | 88,048 | $ | (387,794 | ) | |||||
| Income tax | 28,610 | 20,872 | 44,937 | 29,719 | |||||||||||
| Other income, including equity earnings from non-consolidated investments | (1,062 | ) | (1,964 | ) | (4,190 | ) | (3,946 | ) | |||||||
| Interest expense, net | 9,571 | 7,916 | 15,889 | 16,200 | |||||||||||
| Operating earnings (loss) | 103,850 | (385,777 | ) | 144,684 | (345,821 | ) | |||||||||
| Settlement of LTIA | - | 471,928 | - | 471,928 | |||||||||||
| Loss on disposal of operations | 950 | - | 27,040 | - | |||||||||||
| Depreciation and amortization | 44,097 | 34,574 | 80,737 | 72,351 | |||||||||||
| Gains attributable to MSRs | (2,526 | ) | (5,841 | ) | (7,823 | ) | (14,916 | ) | |||||||
| Equity earnings from non-consolidated investments | 906 | 1,732 | 4,066 | 3,138 | |||||||||||
| Acquisition-related items | 9,365 | 16,695 | 24,448 | 35,542 | |||||||||||
| Restructuring costs | 181 | 650 | 271 | 943 | |||||||||||
| Stock-based compensation expense | 4,490 | 2,597 | 9,351 | 5,522 | |||||||||||
| Adjusted EBITDA | $ | 161,313 | $ | 136,558 | $ | 282,774 | $ | 228,687 | |||||||
2. Reconciliation of net earnings and diluted net earnings per common share to adjusted net earnings and adjusted EPS:
Adjusted EPS is defined as diluted net earnings per share as calculated under the “if-converted” method, adjusted for the effect, after income tax, of: (i) the non-controlling interest redemption increment; (ii) settlement of LTIA; (iii) loss on disposal of operations; (iv) amortization expense related to intangible assets recognized in connection with acquisitions and MSRs; (v) gains attributable to MSRs; (vi) acquisition-related items; (vii) restructuring costs and (viii) stock-based compensation expense. We believe this measure is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company and enhances the comparability of operating results from period to period. Adjusted EPS is not a recognized measure of financial performance under GAAP, and should not be considered as a substitute for diluted net earnings per share from continuing operations, as determined in accordance with GAAP. Our method of calculating this non-GAAP measure may differ from other issuers and, accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings to adjusted net earnings and of diluted net earnings per share to adjusted EPS appears below.
Adjusted EPS is calculated using the “if-converted” method of calculating earnings per share in relation to the Convertible Notes, which were issued on May 19, 2020. As such, the interest (net of tax) on the Convertible Notes is added to the numerator and the additional shares issuable on conversion of the Convertible Notes are added to the denominator of the earnings per share calculation to determine if an assumed conversion is more dilutive than no assumption of conversion. The “if-converted” method is used if the impact of the assumed conversion is dilutive. The “if-converted” method is dilutive for the adjusted EPS calculation for all periods presented.
| Three months ended | Six months ended | ||||||||||||||
| June 30 | June 30 | ||||||||||||||
| (in thousands of US$) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Net earnings (loss) | $ | 66,731 | $ | (412,601 | ) | $ | 88,048 | $ | (387,794 | ) | |||||
| Non-controlling interest share of earnings | (11,806 | ) | (11,745 | ) | (20,322 | ) | (19,525 | ) | |||||||
| Interest on Convertible Notes | 2,300 | 2,300 | 4,600 | 4,600 | |||||||||||
| Settlement of LTIA | - | 471,928 | - | 471,928 | |||||||||||
| Loss on disposal of operations | 950 | - | 27,040 | - | |||||||||||
| Amortization of intangible assets | 32,279 | 23,533 | 56,870 | 50,871 | |||||||||||
| Gains attributable to MSRs | (2,526 | ) | (5,841 | ) | (7,823 | ) | (14,916 | ) | |||||||
| Acquisition-related items | 9,365 | 16,695 | 24,448 | 35,542 | |||||||||||
| Restructuring costs | 181 | 650 | 271 | 943 | |||||||||||
| Stock-based compensation expense | 4,490 | 2,597 | 9,351 | 5,522 | |||||||||||
| Income tax on adjustments | (9,891 | ) | (8,517 | ) | (16,310 | ) | (18,183 | ) | |||||||
| Non-controlling interest on adjustments | (4,269 | ) | (3,460 | ) | (7,939 | ) | (6,795 | ) | |||||||
| Adjusted net earnings | $ | 87,804 | $ | 75,539 | $ | 158,234 | $ | 122,193 | |||||||
| Three months ended | Six months ended | ||||||||||||||
| June 30 | June 30 | ||||||||||||||
| (in US$) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Diluted net earnings (loss) per common share(1) | $ | 0.64 | $ | (9.53 | ) | $ | 0.24 | $ | (9.75 | ) | |||||
| Interest on Convertible Notes, net of tax | 0.04 | 0.04 | 0.07 | 0.07 | |||||||||||
| Non-controlling interest redemption increment | 0.51 | 0.67 | 1.16 | 0.96 | |||||||||||
| Settlement of LTIA | - | 9.86 | - | 10.19 | |||||||||||
| Loss on disposal of operations | 0.02 | - | 0.56 | - | |||||||||||
| Amortization expense, net of tax | 0.41 | 0.29 | 0.71 | 0.66 | |||||||||||
| Gains attributable to MSRs, net of tax | (0.03 | ) | (0.07 | ) | (0.09 | ) | (0.18 | ) | |||||||
| Acquisition-related items | 0.18 | 0.26 | 0.45 | 0.56 | |||||||||||
| Restructuring costs, net of tax | - | 0.01 | - | 0.01 | |||||||||||
| Stock-based compensation expense, net of tax | 0.07 | 0.05 | 0.18 | 0.12 | |||||||||||
| Adjusted EPS | $ | 1.84 | $ | 1.58 | $ | 3.28 | $ | 2.64 | |||||||
| Diluted weighted average shares for Adjusted EPS (thousands) | 47,804 | 47,846 | 48,302 | 46,303 | |||||||||||
| (1)Amounts shown reflect the "if-converted" method's dilutive impact on the adjusted EPS calculation for the three and six months ended June 30, 2022 and 2021. | |||||||||||||||
3. Reconciliation of net cash flow from operations to free cash flow:
Free cash flow is defined as net cash flow from operating activities plus contingent acquisition consideration paid, plus the cash portion of the LTIA settlement, less purchases of fixed assets, plus cash collections on AR Facility deferred purchase price. We use free cash flow as a measure to evaluate and monitor operating performance as well as our ability to service debt, fund acquisitions and pay of dividends to shareholders and distributions to non-controlling interests. We present free cash flow as a supplemental measure because we believe this measure is a financial metric used by many investors to compare valuation and liquidity measures across companies, especially in the services industry. This measure is not a recognized measure of financial performance under GAAP in the United States, and should not be considered as a substitute for operating earnings, net earnings or cash flow from operating activities, as determined in accordance with GAAP. Our method of calculating free cash flow may differ from other issuers and accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net cash flow from operating activities to free cash flow appears below.
| Three months ended | Six months ended | ||||||||||||||
| June 30 | June 30 | ||||||||||||||
| (in thousands of US$) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Net cash provided by (used in) operating activities | $ | 32,399 | $ | 56,687 | $ | (248,310 | ) | $ | 18,548 | ||||||
| Contingent acquisition consideration paid | 1,257 | 2,997 | 60,810 | 10,472 | |||||||||||
| Settlement of LTIA (cash portion) | - | 96,186 | - | 96,186 | |||||||||||
| Purchase of fixed assets | (13,581 | ) | (10,510 | ) | (23,416 | ) | (32,603 | ) | |||||||
| Cash collections on AR Facility deferred purchase price | 90,101 | 11,824 | 256,429 | 22,732 | |||||||||||
| Free cash flow | $ | 110,176 | $ | 157,184 | $ | 45,513 | $ | 115,335 | |||||||
4. Local currency revenue growth rate and internal revenue growth rate measures
Percentage revenue variances presented on a local currency basis are calculated by translating the current period results of our non-US dollar denominated operations to US dollars using the foreign currency exchange rates from the periods against which the current period results are being compared. Percentage revenue variances presented on an internal growth basis are calculated assuming no impact from acquired entities in the current and prior periods. Revenue from acquired entities, including any foreign exchange impacts, are treated as acquisition growth until the respective anniversaries of the acquisitions. We believe that these revenue growth rate methodologies provide a framework for assessing the Company’s performance and operations excluding the effects of foreign currency exchange rate fluctuations and acquisitions. Since these revenue growth rate measures are not calculated under GAAP, they may not be comparable to similar measures used by other issuers.
5. Assets under management
We use the term assets under management (“AUM”) as a measure of the scale of our Investment Management operations. AUM is defined as the gross market value of operating assets and the projected gross cost of development assets of the funds, partnerships and accounts to which we provide management and advisory services, including capital that such funds, partnerships and accounts have the right to call from investors pursuant to capital commitments. Our definition of AUM may differ from those used by other issuers and as such may not be directly comparable to similar measures used by other issuers.
6. Adjusted EBITDA from recurring revenue percentage
Adjusted EBITDA from recurring revenue percentage is computed on a trailing twelve-month basis and represents the proportion of adjusted EBITDA (note 1) that is derived from Outsourcing & Advisory and Investment Management service lines. Both these service lines represent medium to long-term duration revenue streams that are either contractual or repeatable in nature. We report this metric on a pro forma basis, incorporating the expected full year impact of business acquisitions and dispositions.
| COLLIERS INTERNATIONAL GROUP INC. | ||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) | ||||||||||||||||||
| (in thousands of US$, except per share amounts) | ||||||||||||||||||
| Three months | Six months | |||||||||||||||||
| ended June 30 | ended June 30 | |||||||||||||||||
| (unaudited) | 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Revenues | $ | 1,127,846 | $ | 945,994 | $ | 2,128,758 | $ | 1,720,908 | ||||||||||
| Cost of revenues | 703,302 | 576,652 | 1,334,855 | 1,044,382 | ||||||||||||||
| Selling, general and administrative expenses | 266,282 | 231,922 | 516,994 | 442,526 | ||||||||||||||
| Depreciation | 11,818 | 11,041 | 23,867 | 21,480 | ||||||||||||||
| Amortization of intangible assets | 32,279 | 23,533 | 56,870 | 50,871 | ||||||||||||||
| Acquisition-related items (1) | 9,365 | 16,695 | 24,448 | 35,542 | ||||||||||||||
| Loss on disposal of operations | 950 | - | 27,040 | - | ||||||||||||||
| Settlement of long-term incentive arrangement (2) | - | 471,928 | - | 471,928 | ||||||||||||||
| Operating earnings (loss) | 103,850 | (385,777 | ) | 144,684 | (345,821 | ) | ||||||||||||
| Interest expense, net | 9,571 | 7,916 | 15,889 | 16,200 | ||||||||||||||
| Equity earnings from unconsolidated investments | (906 | ) | (1,732 | ) | (4,066 | ) | (3,138 | ) | ||||||||||
| Other (income) expense | (156 | ) | (232 | ) | (124 | ) | (808 | ) | ||||||||||
| Earnings (loss) before income tax | 95,341 | (391,729 | ) | 132,985 | (358,075 | ) | ||||||||||||
| Income tax | 28,610 | 20,872 | 44,937 | 29,719 | ||||||||||||||
| Net earnings (loss) | 66,731 | (412,601 | ) | 88,048 | (387,794 | ) | ||||||||||||
| Non-controlling interest share of earnings | 11,806 | 11,745 | 20,322 | 19,525 | ||||||||||||||
| Non-controlling interest redemption increment | 24,564 | 31,771 | 56,005 | 44,311 | ||||||||||||||
| Net earnings (loss) attributable to Company | $ | 30,361 | $ | (456,117 | ) | $ | 11,721 | $ | (451,630 | ) | ||||||||
| Net earnings (loss) per common share | ||||||||||||||||||
| Basic | $ | 0.70 | $ | (10.53 | ) | $ | 0.27 | $ | (10.80 | ) | ||||||||
| Diluted (3) | $ | 0.67 | $ | (10.53 | ) | $ | 0.26 | $ | (10.80 | ) | ||||||||
| Adjusted EPS (4) | $ | 1.84 | $ | 1.58 | $ | 3.28 | $ | 2.64 | ||||||||||
| Weighted average common shares (thousands) | ||||||||||||||||||
| Basic | 43,336 | 43,329 | 43,698 | 41,801 | ||||||||||||||
| Diluted | 47,804 | 43,329 | 44,328 | 41,801 | ||||||||||||||
Notes to Condensed Consolidated Statements of Earnings
(1) Acquisition-related items include contingent acquisition consideration fair value adjustments, contingent acquisition consideration-related compensation expense and transaction costs.
(2) Settlement of Long-Term Incentive Arrangement with the Company’s Chairman & CEO as approved by 95% of the Company’s disinterested shareholders. The settlement resulted in a cash payment of $96,186 and the issuance of 3,572,858 Subordinate Voting Shares on April 16, 2021.
(3) Diluted EPS is calculated using the “if-converted” method of calculating earnings per share in relation to the Convertible Notes, which were issued on May 19, 2020. As such, the interest (net of tax) on the Convertible Notes is added to the numerator and the additional shares issuable on conversion of the Convertible Notes are added to the denominator of the earnings per share calculation to determine if an assumed conversion is more dilutive than no assumption of conversion. The “if-converted” method is used if the impact of the assumed conversion is dilutive. The “if-converted” method is dilutive for the three months ended June 30, 2022. The “if-converted” method is anti-dilutive for the three-month period ended June 30, 2021 and six-month periods ended June 30, 2022 and 2021.
(4) See definition and reconciliation above.
| COLLIERS INTERNATIONAL GROUP INC. | |||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
| (in thousands of US$) | |||||||||
| June 30, | December 31, | June 30, | |||||||
| (unaudited) | 2022 | 2021 | 2021 | ||||||
| Assets | |||||||||
| Cash and cash equivalents | $ | 171,312 | $ | 396,745 | $ | 147,515 | |||
| Restricted cash (1) | 35,142 | 28,526 | 30,052 | ||||||
| Accounts receivable and contract assets | 609,196 | 573,710 | 456,217 | ||||||
| Warehouse receivables (2) | 33,595 | 174,717 | 62,838 | ||||||
| Prepaids and other assets | 264,690 | 353,220 | 205,294 | ||||||
| Real estate assets held for sale | 199,461 | 44,089 | - | ||||||
| Current assets | 1,313,396 | 1,571,007 | 901,916 | ||||||
| Other non-current assets | 140,677 | 120,071 | 100,526 | ||||||
| Fixed assets | 144,346 | 144,755 | 139,598 | ||||||
| Operating lease right-of-use assets | 316,731 | 316,517 | 319,768 | ||||||
| Deferred tax assets, net | 68,429 | 68,502 | 55,167 | ||||||
| Goodwill and intangible assets | 2,198,567 | 1,652,878 | 1,663,937 | ||||||
| Total assets | $ | 4,182,146 | $ | 3,873,730 | $ | 3,180,912 | |||
| Liabilities and shareholders' equity | |||||||||
| Accounts payable and accrued liabilities | $ | 913,059 | $ | 1,082,774 | $ | 736,393 | |||
| Other current liabilities | 96,272 | 186,089 | 131,336 | ||||||
| Long-term debt - current | 4,808 | 1,458 | 2,142 | ||||||
| Warehouse credit facilities (2) | 27,208 | 162,911 | 55,566 | ||||||
| Operating lease liabilities - current | 78,138 | 80,928 | 81,144 | ||||||
| Liabilities related to real estate assets held for sale | 109,666 | 23,095 | - | ||||||
| Current liabilities | 1,229,151 | 1,537,255 | 1,006,581 | ||||||
| Long-term debt - non-current | 1,035,178 | 529,596 | 537,956 | ||||||
| Operating lease liabilities - non-current | 298,121 | 296,633 | 298,668 | ||||||
| Other liabilities | 129,094 | 120,489 | 103,658 | ||||||
| Deferred tax liabilities, net | 55,093 | 42,371 | 38,729 | ||||||
| Convertible notes | 225,866 | 225,214 | 224,578 | ||||||
| Redeemable non-controlling interests | 720,685 | 536,903 | 448,271 | ||||||
| Shareholders' equity | 488,958 | 585,269 | 522,471 | ||||||
| Total liabilities and equity | $ | 4,182,146 | $ | 3,873,730 | $ | 3,180,912 | |||
| Supplemental balance sheet information | |||||||||
| Total debt (3) | $ | 1,039,986 | $ | 531,054 | $ | 540,098 | |||
| Total debt, net of cash and cash equivalents (3) | 868,674 | 134,309 | 392,583 | ||||||
| Net debt / pro forma adjusted EBITDA ratio (4) | 1.4 | 0.3 | 0.9 | ||||||
Notes to Condensed Consolidated Balance Sheets
(1) Restricted cash consists primarily of cash amounts set aside to satisfy legal or contractual requirements arising in the normal course of business.
(2) Warehouse receivables represent mortgage loans receivable, the majority of which are offset by borrowings under warehouse credit facilities which fund loans that financial institutions have committed to purchase.
(3) Excluding warehouse credit facilities and convertible notes.
(4) Net debt for financial leverage ratio excludes restricted cash, warehouse credit facilities and convertible notes, in accordance with debt agreements.
| COLLIERS INTERNATIONAL GROUP INC. | |||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||
| (in thousands of US$) | |||||||||||||||||
| Three months ended | Six months ended | ||||||||||||||||
| June 30 | June 30 | ||||||||||||||||
| (unaudited) | 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Cash provided by (used in) | |||||||||||||||||
| Operating activities | |||||||||||||||||
| Net earnings (loss) | $ | 66,731 | $ | (412,601 | ) | $ | 88,048 | $ | (387,794 | ) | |||||||
| Items not affecting cash: | |||||||||||||||||
| Depreciation and amortization | 44,097 | 34,574 | 80,737 | 72,351 | |||||||||||||
| Settlement of long-term incentive arrangement | - | 375,742 | - | 375,742 | |||||||||||||
| Loss on disposal of operations | 950 | - | 27,040 | - | |||||||||||||
| Gains attributable to mortgage servicing rights | (2,526 | ) | (5,841 | ) | (7,823 | ) | (14,916 | ) | |||||||||
| Gains attributable to the fair value of loan | |||||||||||||||||
| premiums and origination fees | (4,272 | ) | (10,705 | ) | (11,554 | ) | (22,283 | ) | |||||||||
| Deferred income tax | (16 | ) | (13,073 | ) | (11,193 | ) | (22,504 | ) | |||||||||
| Other | 22,842 | 19,394 | 40,629 | 61,285 | |||||||||||||
| 127,806 | (12,510 | ) | 205,884 | 61,881 | |||||||||||||
| Increase in accounts receivable, prepaid | |||||||||||||||||
| expenses and other assets | (165,922 | ) | (55,446 | ) | (337,927 | ) | (79,233 | ) | |||||||||
| Increase (decrease) in accounts payable, accrued | |||||||||||||||||
| expenses and other liabilities | (19,206 | ) | 14,331 | (9,346 | ) | 1,779 | |||||||||||
| Increase (decrease) in accrued compensation | 60,535 | 82,799 | (208,235 | ) | (1,677 | ) | |||||||||||
| Contingent acquisition consideration paid | (1,257 | ) | (2,997 | ) | (60,810 | ) | (10,472 | ) | |||||||||
| Mortgage origination activities, net | 7,527 | 16,327 | 16,271 | 35,378 | |||||||||||||
| Sales to AR Facility, net | 22,916 | 14,183 | 145,853 | 10,892 | |||||||||||||
| Net cash provided by (used in) operating activities | 32,399 | 56,687 | (248,310 | ) | 18,548 | ||||||||||||
| Investing activities | |||||||||||||||||
| Acquisition of businesses, net of cash acquired | (328,120 | ) | (366 | ) | (380,598 | ) | (4,207 | ) | |||||||||
| Purchases of fixed assets | (13,581 | ) | (10,510 | ) | (23,416 | ) | (32,603 | ) | |||||||||
| Purchase of held for sale real estate assets | (117,042 | ) | - | (117,042 | ) | - | |||||||||||
| Proceeds from sale of held for sale real estate assets | 48,505 | - | 48,505 | - | |||||||||||||
| Cash collections on AR Facility deferred purchase price | 90,101 | 11,824 | 256,429 | 22,732 | |||||||||||||
| Other investing activities | (10,682 | ) | (9,696 | ) | (31,647 | ) | (20,789 | ) | |||||||||
| Net cash used in investing activities | (330,819 | ) | (8,748 | ) | (247,769 | ) | (34,867 | ) | |||||||||
| Financing activities | |||||||||||||||||
| Increase in long-term debt, net | 345,676 | 16,140 | 537,406 | 69,932 | |||||||||||||
| Purchases of non-controlling interests, net | (7,595 | ) | (13,707 | ) | (33,557 | ) | (21,840 | ) | |||||||||
| Dividends paid to common shareholders | - | - | (6,608 | ) | (2,009 | ) | |||||||||||
| Distributions paid to non-controlling interests | (26,628 | ) | (21,305 | ) | (41,554 | ) | (35,228 | ) | |||||||||
| Repurchases of Subordinate Voting Shares | (53,681 | ) | - | (126,366 | ) | - | |||||||||||
| Other financing activities | (4,329 | ) | 1,496 | (34,053 | ) | 6,464 | |||||||||||
| Net cash provided by (used in) financing activities | 253,443 | (17,376 | ) | 295,268 | 17,319 | ||||||||||||
| Effect of exchange rate changes on cash | (14,167 | ) | 888 | (18,006 | ) | (966 | ) | ||||||||||
| Net change in cash and cash | |||||||||||||||||
| equivalents and restricted cash | (59,144 | ) | 31,451 | (218,817 | ) | 34 | |||||||||||
| Cash and cash equivalents and | |||||||||||||||||
| restricted cash, beginning of period | 265,598 | 146,116 | 425,271 | 177,533 | |||||||||||||
| Cash and cash equivalents and | |||||||||||||||||
| restricted cash, end of period | $ | 206,454 | $ | 177,567 | $ | 206,454 | $ | 177,567 | |||||||||
| COLLIERS INTERNATIONAL GROUP INC. | |||||||||||||||||||||
| SEGMENTED RESULTS | |||||||||||||||||||||
| (in thousands of US dollars) | |||||||||||||||||||||
| Asia | Investment | ||||||||||||||||||||
| (unaudited) | Americas | EMEA | Pacific | Management | Corporate | Consolidated | |||||||||||||||
| Three months ended June 30 | |||||||||||||||||||||
| 2022 | |||||||||||||||||||||
| Revenues | $ | 740,711 | $ | 169,271 | $ | 142,604 | $ | 75,148 | $ | 112 | $ | 1,127,846 | |||||||||
| Adjusted EBITDA | 101,573 | 14,367 | 19,543 | 29,199 | (3,369 | ) | 161,313 | ||||||||||||||
| Operating earnings (loss) | 81,108 | 4,209 | 17,558 | 19,150 | (18,175 | ) | 103,850 | ||||||||||||||
| 2021 | |||||||||||||||||||||
| Revenues | $ | 582,769 | $ | 158,571 | $ | 154,018 | $ | 50,477 | $ | 159 | $ | 945,994 | |||||||||
| Adjusted EBITDA | 78,923 | 20,640 | 20,677 | 21,330 | (5,012 | ) | 136,558 | ||||||||||||||
| Operating earnings (loss) | 63,239 | 14,393 | 16,692 | 14,157 | (494,258 | ) | (385,777 | ) | |||||||||||||
| Asia | Investment | ||||||||||||||||||||
| Americas | EMEA | Pacific | Management | Corporate | Consolidated | ||||||||||||||||
| Six months ended June 30 | |||||||||||||||||||||
| 2022 | |||||||||||||||||||||
| Revenues | $ | 1,382,409 | $ | 322,596 | $ | 261,984 | $ | 161,525 | $ | 244 | $ | 2,128,758 | |||||||||
| Adjusted EBITDA | 182,639 | 19,286 | 29,762 | 56,000 | (4,913 | ) | 282,774 | ||||||||||||||
| Operating earnings (loss) (1) | 142,415 | (26,572 | ) | 25,783 | 36,371 | (33,313 | ) | 144,684 | |||||||||||||
| 2021 | |||||||||||||||||||||
| Revenues | $ | 1,058,546 | $ | 284,684 | $ | 282,269 | $ | 95,104 | $ | 305 | $ | 1,720,908 | |||||||||
| Adjusted EBITDA | 135,849 | 25,144 | 36,195 | 39,075 | (7,576 | ) | 228,687 | ||||||||||||||
| Operating earnings (loss) | 106,092 | 13,304 | 28,400 | 24,088 | (517,705 | ) | (345,821 | ) | |||||||||||||
Notes to Segmented Results
(1) Operating earnings (loss) include $27,040 loss on disposal of certain operations, primarily in EMEA.
COMPANY CONTACTS:
Jay S. Hennick
Global Chairman & Chief Executive Officer
Christian Mayer
Global Chief Financial Officer
(416) 960-9500
Exhibit 99.2
$FFHOHUDWLQJVXFFHVV Second Quarter 2022 Financial Results August 3, 2022
Colliers 2 This presentation includes or may include forward - looking statements. Forward - looking statements include the Company’s financial performance outlook and statements regarding goals, beliefs, strategies, objectives, plans or current expectations. These sta tem ents involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially differen t f rom any future results, performance or achievements contemplated in the forward - looking statements. Such factors include: economic condi tions, especially as they relate to commercial and consumer credit conditions and business spending; commercial real estate property va lues, vacancy rates and general conditions of financial liquidity for real estate transactions; the effects of changes in foreign e xch ange rates in relation to the US dollar on Canadian dollar, Australian dollar, UK pound sterling and Euro denominated revenues and expenses ; competition in markets served by the Company; labor shortages or increases in commission, wage and benefit costs; the impact of higher than expected inflation could impact profitability of certain contracts; impact of pandemics on client demand, ability to del ive r services and ensure the health and productivity of employees; disruptions or security failures in information technology systems; cybersec uri ty risks; a change in/loss of our relationship with US government agencies could significantly impact our ability to originate mortgage l oan s; default on loans originated under the Fannie Mae Delegated Underwriting and Servicing program could materially affect our profitabili ty; the effect of increases in interest rates on our cost of borrowing and political conditions or events, including elections, referenda, c han ges to international trade and immigration policies and any outbreak or escalation of terrorism or hostilities. Additional factors and explanatory information are identified in the Company’s Annual Information Form for the year ended Dec emb er 31, 2021 under the heading “Risk Factors” (which factors are adopted herein, and which can be accessed at www.sedar.com) and othe r p eriodic filings with Canadian and US securities regulators. Forward looking statements contained in this presentation are made as of the date hereof and are subject to change. All forward - looking statements in this press release are qualified by these cautionary stateme nts. Except as required by applicable law, Colliers undertakes no obligation to publicly update or revise any forward - looking statement, whe ther as a result of new information, future events or otherwise. Non - GAAP measures This presentation makes reference to certain non - GAAP measures, including local currency (“LC”) revenue growth rate, internal re venue growth rate, Adjusted EBITDA (“AEBITDA”), Adjusted EPS (“AEPS”) and assets under management (“AUM”). Please refer to Appendi x f or reconciliations to GAAP measures.
Highlights Colliers 3 USD LC (1) Revenue 1,127.8 946.0 19% 23% Adjusted EBITDA 161.3 136.6 18% 21% Adjusted EBITDA Margin 14.3% 14.4% Adjusted EPS 1.84 1.58 16% GAAP Operating Earnings (2) 103.9 -385.8 NM GAAP Operating Earnings Margin 9.2% -40.8% GAAP diluted EPS (2) 0.67 -10.53 NM Three months ended June 30 2022 2021 %Change Strong second quarter results with solid revenue growth across all service lines Investment Management represents 30% of consolidated Adjusted EBITDA (including acquisitions) • Completed two acquisitions and a third after quarter end • In June, announced investment in Versus Capital, a highly successful alternative asset manager in the US with strong private wea lth distribution capabilities • Once acquisitions completed, will have $87 billion in AUM, of which $75 billion will be either perpetual or long - dated strategie s Expect record year for capital deployment with more than $1 billion invested (US$ millions, except per share amounts) (1) Local Currency (2) For the three months and six months ended June 30, 2021, GAAP operating earnings and GAAP diluted EPS include a $471.9 millio n settlement of Long - Term Incentive Arrangement (“LTIA”) with the Company's Chairman & CEO USD LC (1) Revenue 2,128.8 1,720.9 24% 27% Adjusted EBITDA 282.8 228.7 24% 26% Adjusted EBITDA Margin 13.3% 13.3% Adjusted EPS 3.28 2.64 24% GAAP Operating Earnings (2) 144.7 -345.8 NM GAAP Operating Earnings Margin 6.8% -20.1% GAAP diluted EPS (2) 0.26 -10.80 NM Six months ended June 30 2022 2021 % Change
Trailing Twelve Months Ended June 30, 2022 Service Diversification Colliers 4 Shown on a proforma basis including announced acquisitions 25% 45% 30% 39% 23% 27% 11% Leasing Outsourcing & Advisory Capital Markets Investment Management Leasing & Capital Markets 55% Recurring TTM Q2 2022 Revenue By Service TTM Q2 2022 AEBITDA By Service 50% Recurring
299.5 265.6 277.4 241.3 475.9 388.7 75.1 50.5 1,127.8 946.0 Q2 2022 Q2 2021 Second Quarter Consolidated Revenues Colliers 5 Outsourcing & Advisory Investment Management (1) Capital Markets Leasing (US$ millions) % Change over Q2 2021 USD LC Investment Management (1) 49% 50% Outsourcing & Advisory 22% 27% Leasing 15% 18% Capital Markets 13% 16% Total 19% 23% Revenue Mix Q2 2022 Q2 2021 Investment Management 7% 5% Outsourcing & Advisory 42% 41% Leasing 25% 26% Capital Markets 26% 28% Total 100% 100% Local currency internal growth: 15% (1) Investment Management LC revenue growth, excluding pass - through carried interest, was 15%
Americas 740.7 EMEA 169.3 Asia Pacific 142.6 Investment Management 75.1 66% 15% 12% 7% Americas 582.8 EMEA 158.6 Asia Pacific 154.0 Investment Management 50.5 62% 17% 16% 5% Americas 78.9 EMEA 20.6 Asia Pacific 20.7 Investment Management 21.3 56% 14% 15% 15% 14% Americas 101.6 EMEA 14.4 Asia Pacific 19.5 Investment Management 29.2 61% 9% 12% 18% Second Quarter Geographic Mix (1) Q2 2022 GAAP Operating Earnings: $81.1M Americas, $4.2M EMEA, $17.6M Asia Pacific, $19.2M Investment Management (2) Q2 2021 GAAP Operating Earnings: $63.2M Americas, $14.4M EMEA, $16.7M Asia Pacific, $14.2M Investment Management Colliers 6 Q2 2022 Revenues Q2 2021 Revenues Q2 2022 AEBITDA Q2 2021 AEBITDA (US$ millions)
Solid growth in Outsourcing & Advisory led by Engineering & Design Robust Capital Markets activity, particularly in industrial and land sales AEBITDA increase driven by higher revenues and an $11.7 million gain on a lease termination partly offset by higher variable costs and service mix changes Americas Colliers 7 GAAP Operating Earnings: Q2 2022 $81.1M at 11.0% margin; Q2 2021 $63.2M at 10.9% margin 224.2 176.2 214.5 180.0 302.0 226.6 740.7 582.8 Q2 2022 Q2 2021 Revenue AEBITDA and Margin (US$ millions) (US$ millions) USD LC Revenue Growth 27% 28% Outsourcing & Advisory Leasing Capital Markets
Significant foreign exchange headwinds impacted revenues 13% Revenue growth led by Outsourcing & Advisory (including recent acquisition) AEBITDA impacted by lower Capital Markets revenues and higher discretionary and variable costs EMEA Colliers 8 GAAP Operating Earnings: Q2 2022 $4.2M at 2.5% margin; Q2 2021 $14.4M at 9.1% margin 38.2 46.9 35.6 33.9 95.5 77.7 169.3 158.6 Q2 2022 Q2 2021 Revenue AEBITDA and Margin (US$ millions) (US$ millions) USD LC Revenue Growth 7% 20% Outsourcing & Advisory Leasing Capital Markets
Foreign exchange headwinds impacted revenues 6% Revenue impacted by COVID - 19 lockdowns in several Asian markets APAC Colliers 9 GAAP Operating Earnings: Q2 2022 $17.6M at 12.3% margin; Q2 2021 $16.7M at 10.8% margin 37.1 42.4 27.3 27.4 78.2 84.2 142.6 154.0 Q2 2022 Q2 2021 Revenue AEBITDA and Margin (US$ millions) (US$ millions) USD LC Revenue Growth -7% -1% Outsourcing & Advisory Leasing Capital Markets
Revenue growth driven by recurring management fees and acquisitions AUM of $68.7 billion as of June 30, 2022, up significantly from $44.5 billion on June 30, 2021 Including Rockwood and Versus, AUM now $87 billion Investment Management Colliers 10 GAAP Operating Earnings: Q2 2022 $19.2M at 25.5% margin; Q2 2021 $14.2M at 28.0% margin 73.2 50.5 1.9 0.0 75.1 50.5 Q2 2022 Q2 2021 Revenue AEBITDA and Margin (US$ millions) (US$ millions) Investment Management USD LC Revenue Growth 49% 48% Revenue Growth 45% 45% (excluding pass - through carried interest) Pass - through carried interest
(US$ millions) Capitalization & Capital Allocation (1) Net debt for financial leverage ratio excludes restricted cash, warehouse credit facilities and convertible notes, in acc ord ance with debt agreements (2) Includes business acquisitions, contingent acquisition consideration and purchases of non - controlling interests in subsidiar ies Colliers 11 Cash $ 171.3 $ 396.7 $ 147.5 Total Debt 1,040.0 531.1 540.1 Net Debt $ 868.7 $ 134.3 $ 392.6 Convertible Notes 225.9 225.2 224.6 Redeemable non-controlling interests 720.7 536.9 448.3 Shareholders' equity 489.0 585.3 522.5 Total capitalization $ 2,304.3 $ 1,481.7 $ 1,588.0 Net debt / pro forma adjusted EBITDA - Leverage Ratio (1) 1.4x 0.3x 0.9x Capital Expenditures $ 23.4 $ 32.6 Acquisition Spend (2) $ 517.9 $ 40.7 Six months ended June 30, 2022 June 30, 2021 June 30, 2022 December 31, 2021 June 30, 2021 Highlights • Leverage ratio of 1.4x • Pro forma leverage ratio, including all announced acquisitions, of 2.0x • Extended and increased credit facility to US$1.5 billion during Q2 • Ample liquidity to fund acquisition and internal growth • Repurchased 1 million CIGI shares in March and April 2022 at cost of $126 million • Anticipating capital expenditures of $75 - $80 million in 2022
(US$ millions) 2022 Outlook Colliers 12 Measure Updated Previous Revenue growth Low double digit revenue growth: High - single digit internal growth Balance from acquisitions (including Rockwood, Versus and PEAKURBAN) Low double digit revenue growth: Mid - high single digit internal growth Balance from acquisitions AEBITDA Margin Up 60 bps – 100 bps Up 40 bps – 80 bps Consolidated income tax rate 27% - 29% 25% - 27% NCI share of earnings 20% - 22% 18% - 20% AEPS growth Low - twenties High - teens The financial outlook is based on the Company’s best available information as of the date of this presentation, and remains s ubj ect to change based on, but not limited to, numerous macroeconomic, health, social, geopolitical (including escalation of hostilities, outbreak of war, elections, disruption of supply chains) a nd related factors. Increased 2022 outlook to reflect the impact of recent acquisitions and operating results year to date
Appendix 13 Reconciliation of non - GAAP measures
Reconciliation of GAAP earnings to adjusted EBITDA Colliers 14 (US$ thousands) Net earnings (loss) $ 66,731 $ (412,601) $ 88,048 $ (387,794) Income tax 28,610 20,872 44,937 29,719 Other income, including equity earnings from non-consolidated investments (1,062) (1,964) (4,190) (3,946) Interest expense, net 9,571 7,916 15,889 16,200 Operating earnings (loss) 103,850 (385,777) 144,684 (345,821) Settlement of long-term incentive arrangement ("LTIA") - 471,928 - 471,928 Loss on disposal of business operations 950 - 27,040 - Depreciation and amortization 44,097 34,574 80,737 72,351 Gains attributable to MSRs (2,526) (5,841) (7,823) (14,916) Equity income from non-consolidated entites 906 1,732 4,066 3,138 Acquisition-related items 9,365 16,695 24,448 35,542 Restructuring costs 181 650 271 943 Stock-based compensation expense 4,490 2,597 9,351 5,522 Adjusted EBITDA $ 161,313 $ 136,558 $ 282,774 $ 228,687 Three months ended Six months ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Reconciliation of GAAP earnings to adjusted net earnings and adjusted earnings per share Adjusted EPS is calculated using the “if - converted” method of calculating earnings per share in relation to the Convertible Note s, which were issued on May 19, 2020 Colliers 15 (US$ thousands) Net earnings (loss) $ 66,731 $ (412,601) $ 88,048 $ (387,794) Non-controlling interest share of earnings (11,806) (11,745) (20,322) (19,525) Interest on Convertible Notes 2,300 2,300 4,600 4,600 Settlement of LTIA - 471,928 - 471,928 Loss on disposal of Russian operations 950 - 27,040 - Amortization of intangible assets 32,279 23,533 56,870 50,871 Gains attributable to MSRs (2,526) (5,841) (7,823) (14,916) Acquisition-related items 9,365 16,695 24,448 35,542 Restructuring costs 181 650 271 943 Stock-based compensation expense 4,490 2,597 9,351 5,522 Income tax on adjustments (9,891) (8,517) (16,310) (18,183) Non-controlling interest on adjustments (4,269) (3,460) (7,939) (6,795) Adjusted net earnings $ 87,804 $ 75,539 $ 158,234 $ 122,193 (US$) Diluted net (loss) earnings per common share $ 0.64 $ (9.53) $ 0.24 $ (9.75) Interest on Convertible Notes, net of tax 0.04 0.04 0.07 0.07 Non-controlling interest redemption increment 0.51 0.67 1.16 0.96 Settlement of LTIA - 9.86 - 10.19 Loss on disposal of operations 0.02 - 0.56 - Amortization expense, net of tax 0.41 0.29 0.71 0.66 Gains attributable to MSRs, net of tax (0.03) (0.07) (0.09) (0.18) Acquisition-related items 0.18 0.26 0.45 0.56 Restructuring costs, net of tax - 0.01 - 0.01 Stock-based compensation expense, net of tax 0.07 0.05 0.18 0.12 Adjusted EPS $ 1.84 $ 1.58 $ 3.28 $ 2.64 Diluted weighted average shares for Adjusted EPS (thousands) 47,804 47,846 48,302 46,303 Three months ended Six months ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Three months ended Six months ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Reconciliation of net cash flow from operations to free cash flow Colliers 16 (US$ thousands) Net cash provided by (used in) operating activities $ 32,399 $ 56,687 $ (248,310) $ 18,548 Contingent acquisition consideration paid 1,257 2,997 60,810 10,472 Settlement of LTIA (cash portion) - 96,186 - 96,186 Purchase of fixed assets (13,581) (10,510) (23,416) (32,603) Cash collections on AR Facility deferred purchase price 90,101 11,824 256,429 22,732 Free cash flow $ 110,176 $ 157,184 $ 45,513 $ 115,335 Three months ended Six months ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Other Non - GAAP Measures Colliers 17 Local currency revenue growth rate and internal revenue growth rate measures Percentage revenue variances presented on a local currency basis are calculated by translating the current period results of our non - US dollar denominated operations to US dollars using the foreign currency exchange rates from the periods against which the current period results are being compared . Percentage revenue variances presented on an internal growth basis are calculated assuming no impact from acquired entities in the current and prior periods . Revenue from acquired entities, including any foreign exchange impacts, are treated as acquisition growth until the respective anniversaries of the acquisitions . We believe that these revenue growth rate methodologies provide a framework for assessing the Company’s performance and operations excluding the effects of foreign currency exchange rate fluctuations and acquisitions . Since these revenue growth rate measures are not calculated under GAAP, they may not be comparable to similar measures used by other issuers . Assets under management We use the term assets under management (“AUM”) as a measure of the scale of our Investment Management operations . AUM is defined as the gross market value of operating assets and the projected gross cost of development assets of the funds, partnerships and accounts to which we provide management and advisory services, including capital that such funds, partnerships and accounts have the right to call from investors pursuant to capital commitments . Our definition of AUM may differ from those used by other issuers and as such may not be directly comparable to similar measures used by other issuers . Adjusted EBITDA from recurring revenue percentage Adjusted EBITDA from recurring revenue percentage is computed on a trailing twelve - month basis and represents the proportion of adjusted EBITDA (slide 14) that is derived from Outsourcing & Advisory and Investment Management service lines. Both these service lines represent medium to lon g - t erm duration revenue streams that are either contractual or repeatable in nature. We report this metric on a pro forma basis, incorporating the expected f ull year impact of business acquisitions and dispositions.