6-K
Colliers International Group Inc. (CIGI)
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 February 2024 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 ]
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: February 8, 2024 | /s/ Christian Mayer |
| Name: Christian Mayer | |
| Title: Chief Financial Officer |
EXHIBIT INDEX
EdgarFiling EXHIBIT 99.1
Colliers Reports Fourth Quarter Results
Robust revenue growth continues in high-value recurring services
Fourth quarter and full year operating highlights:
| Twelve months ended | |||||||
|---|---|---|---|---|---|---|---|
| December 31 | |||||||
| (in millions of US, except EPS) | 2023 | 2022 | 2023 | 2022 | |||
| Revenues | 1,235.2 | $ | 1,222.4 | $ | 4,335.1 | $ | 4,459.5 |
| Adjusted EBITDA (note 1) | 198.4 | 202.7 | 595.0 | 630.5 | |||
| Adjusted EPS (note 2) | 2.00 | 2.31 | 5.35 | 6.99 | |||
| GAAP operating earnings | 132.6 | 103.8 | 300.9 | 332.5 | |||
| GAAP diluted net earnings per share | 1.42 | 0.51 | 1.41 | 1.05 |
All values are in US Dollars.
TORONTO, Feb. 08, 2024 (GLOBE NEWSWIRE) -- Colliers International Group Inc. (NASDAQ and TSX: CIGI) (“Colliers” or the “Company”) today announced operating and financial results for the fourth quarter and year ended December 31, 2023. All amounts are in US dollars.
For the seasonally strong fourth quarter ended December 31, 2023, revenues were $1.24 billion, up 1% (flat in local currency) and adjusted EBITDA (note 1) was $198.4 million, down 2% (down 3% in local currency) versus the prior year quarter. Adjusted EPS (note 2) was $2.00, relative to $2.31 in the prior year quarter. Fourth quarter adjusted EPS would have been approximately $0.02 lower excluding foreign exchange impacts. GAAP operating earnings were $132.6 million as compared to $103.8 million in the prior year quarter. GAAP diluted net earnings per share were $1.42 versus $0.51 in the prior year quarter on a reduction in acquisition-related costs and lower non-controlling interest. The fourth quarter GAAP diluted net earnings per share would have been approximately $0.02 lower excluding changes in foreign exchange rates.
For the full year ended December 31, 2023, revenues were $4.34 billion, down 3% (3% in local currency) and adjusted EBITDA (note 1) was $595.0 million, down 6% (6% in local currency) versus the prior year. Adjusted EPS (note 2) was $5.35, relative to $6.99 in the prior year. Adjusted EPS for the year would have been approximately $0.02 lower excluding foreign exchange impacts. GAAP operating earnings were $300.9 million as compared to $332.5 million in the prior year. GAAP diluted net earnings per share were $1.41 compared to earnings per share of $1.05 in the prior year, with the prior year impacted by a loss on disposal of certain operations including Russia. The 2023 GAAP diluted net earnings per share would have been approximately $0.02 lower excluding changes in foreign exchange rates.
“In the fourth quarter, Colliers experienced robust revenue growth in its high-value recurring service lines. Outsourcing & Advisory and Investment Management delivered increases of 10% and 6%, respectively. Over the course of the year, these services achieved even greater growth, with respective increases of 11% and 28%,” said Jay S. Hennick, Chairman & CEO of Colliers.
“Colliers has strategically transformed into a highly diversified professional services company by expanding its operations to include additional recurring revenue streams such as Investment Management and Engineering and Design. Today, more than 70% of our earnings come from recurring services, which provide our business greater stability and predictability, setting us apart from our competitors.”
“Throughout the year, we observed industry-wide declines in transaction volumes, which had an impact on our Capital Markets and, to a lesser extent, Leasing revenues. However, we anticipate a return to higher transaction velocity in the latter half of 2024 as interest rates and credit conditions stabilize.”
“With our nearly 30-year track record of creating substantial shareholder value, coupled with the expectation of increased transactional revenue later this year and a robust pipeline of new opportunities, we are more excited about the future than ever,” he concluded.
About Colliers Colliers (NASDAQ, TSX: CIGI) is a leading diversified professional services and investment management company. With operations in 66 countries, our 19,000 enterprising professionals work collaboratively to provide expert real estate and investment advice to clients. For more than 29 years, our experienced leadership with significant inside ownership has delivered compound annual investment returns of approximately 20% for shareholders. With annual revenues of $4.3 billion and $98 billion of assets under management, Colliers maximizes the potential of property and real assets to accelerate the success of our clients, our investors and our people. Learn more at corporate.colliers.com, X @Colliers or LinkedIn.
Consolidated Revenues by Line of Service
| Changein US$% | Changein LC% | Twelve months endedDecember 31 | Changein US$% | Changein LC% | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands of US) | |||||||||||
| (LC = local currency) | 2022 | 2023 | 2022 | ||||||||
| Outsourcing & Advisory | 580,375 | $ | 519,084 | 12% | 10% | $ | 2,082,124 | $ | 1,872,328 | 11% | 11% |
| Investment Management (1) | 129,134 | 121,307 | 6% | 6% | 487,457 | 378,881 | 29% | 28% | |||
| Leasing | 318,236 | 335,724 | -5% | -6% | 1,063,088 | 1,124,106 | -5% | -5% | |||
| Capital Markets | 207,423 | 246,290 | -16% | -16% | 702,472 | 1,084,172 | -35% | -35% | |||
| Total revenues | 1,235,168 | $ | 1,222,405 | 1% | 0% | $ | 4,335,141 | $ | 4,459,487 | -3% | -3% |
| (1) Investment Management local currency revenues, excluding pass-through carried interest, were up 4% and 38% for the three and twelve months ended December 31, 2023, respectively. |
All values are in US Dollars.
For the fourth quarter, consolidated revenues were flat on a local currency basis. The market-driven transaction slowdown in Capital Markets and, to a lesser extent, Leasing was offset by solid growth in Outsourcing & Advisory and Investment Management. Consolidated internal revenues measured in local currencies declined 2% (note 3) versus the prior year quarter.
For the year ended December 31, 2023, consolidated revenues decreased 3% on a local currency basis on lower Capital Markets and, to a lesser extent, Leasing activity partly offset by strong growth in Investment Management and Outsourcing & Advisory. Consolidated internal revenues measured in local currencies were down 8% (note 3).
Segmented Fourth Quarter Results Revenues in the Americas region totalled $677.9 million, flat (down 1% in local currency) versus $678.9 million in the prior year quarter. The decline was driven by lower Capital Markets and Leasing activity partly offset by higher Outsourcing & Advisory revenues as well as the favourable impact of recent acquisitions. Adjusted EBITDA was $78.8 million, down 5% (5% in local currency) relative to the prior year quarter due to declines in higher margin transactional revenues. GAAP operating earnings were $53.3 million, relative to $52.0 million in the prior year quarter.
EMEA region revenues totalled $235.7 million, up 3% (down 2% in local currency) compared to $228.3 million in the prior year quarter, attributable to lower Capital Markets activity, particularly in Germany and the Nordics, partly offset by growth in Outsourcing & Advisory. Adjusted EBITDA was $35.7 million, flat (down 5% in local currency) compared to $35.9 million in the prior year quarter. GAAP operating earnings were $28.9 million compared to $30.4 million in the prior year quarter.
Revenues in the Asia Pacific region totalled $192.4 million compared to $193.6 million in the prior year quarter, down 1% (flat in local currency), due to lower Capital Markets activity offset by recent acquisitions. Adjusted EBITDA was $32.3 million, down 6% (5% in local currency) primarily on changes in service mix. GAAP operating earnings were $26.0 million, versus $29.0 million in the prior year quarter.
Investment Management revenues were $129.1 million relative to $121.3 million in the prior year quarter, up 6% (6% in local currency). Passthrough revenues (from historical carried interest) were $6.2 million versus $3.6 million in the prior year quarter. Excluding the impact of carried interest, revenue was up 5% (4% in local currency) driven by management fee growth from increased assets under management (“AUM”). Adjusted EBITDA was $53.8 million, up 1% (1% in local currency) compared to the prior year quarter. GAAP operating earnings were $41.5 million in the quarter, versus a GAAP operating loss of $18.8 million in the prior year quarter which was impacted by contingent acquisition consideration expense related to recent acquisitions. AUM was $98.2 billion as of December 31, 2023 compared to $97.7 billion as of December 31, 2022.
Unallocated global corporate costs as reported in Adjusted EBITDA were $2.4 million in the fourth quarter, relative to $3.5 million in the prior year quarter. The corporate GAAP operating loss for the quarter was $17.1 million, versus earnings of $11.2 million in the fourth quarter of 2022.
Segmented Full Year Results Revenues in the Americas region totalled $2.51 billion for the year compared to $2.76 billion in the prior year, down 9% (9% in local currency). The revenue decline was largely driven by market conditions in Capital Markets and, to a lesser extent, Leasing. The decline was partly offset by internal growth in Outsourcing & Advisory revenues and the favourable impact of recent acquisitions. Adjusted EBITDA was $270.9 million, down 18% (18% in local currency) from $332.3 million in the prior year, impacted by (i) changes in service mix; and (ii) an $11.4 million gain on the termination of a lease which favourably impacted the prior year. GAAP operating earnings were $174.6 million, versus $254.4 million in 2022.
EMEA region revenues were $726.9 million for the full year compared to $715.1 million in the prior year, up 2% (down 1% in local currency). Local currency revenue mix shifted significantly, with Capital Markets and Leasing lower due to difficult macroeconomic conditions, almost fully offset by growth in Outsourcing & Advisory (including recent acquisitions). Adjusted EBITDA was $38.4 million, down 44% (50% in local currency) versus $68.5 million in the prior year on significantly lower higher-margin Capital Markets revenues. GAAP operating earnings were $5.5 million as compared to $9.9 million in 2022.
The Asia Pacific region generated revenues of $610.3 million for the year, which were flat (up 4% in local currency) compared to $608.5 million in the prior year. Both Leasing and Outsourcing & Advisory revenues (including recent acquisitions) were up, partly offset by a continued decline in Capital Markets activity consistent with the market conditions in the region. Adjusted EBITDA was $79.2 million, down 7% (4% in local currency) versus $85.1 million in the prior year. GAAP operating earnings were $62.7 million, versus $72.3 million in the prior year.
Investment Management revenues were $487.5 million compared to $378.9 million in the prior year, up 29% (28% in local currency). Pass-through revenue from historical carried interest was $6.8 million in the current year, versus $30.3 million in the prior year. Excluding the impact of pass-through revenue, revenues were up 38% (38% in local currency) and were positively impacted by (i) acquisitions and (ii) fundraising across all investment strategies which led to increased management fees. Adjusted EBITDA was $213.9 million, up 47% (46% in local currency), relative to $146.0 million in the prior year. GAAP operating earnings were $103.1 million, versus $37.1 million in 2022.
Unallocated global corporate costs as reported in Adjusted EBITDA were $7.4 million in 2023, relative to $1.4 million in the prior year, with the difference primarily attributable to foreign exchange gains in the prior year. The corporate GAAP operating loss was $45.0 million, relative to $41.1 million in 2022.
Outlook for 2024 For 2024, the Company expects Capital Markets and Leasing conditions to remain challenging in the first half of the year followed by year-over-year growth in the second half, with market sentiment improving and interest rates and credit conditions stabilizing. Outsourcing & Advisory revenue growth is expected to remain resilient. Investment Management revenues are expected to grow in line with fundraising, which is expected to improve relative to 2023.
The outlook for 2024 is as follows:
| Measure | Actual 2023 | Outlook for 2024 |
|---|---|---|
| Revenue growth | -3% | +5% to +10% |
| Adjusted EBITDA growth | -6% | +5% to +15% |
| Adjusted EPS growth | -23% | +10% to +20% |
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 numerous macroeconomic, geopolitical, health, social and related factors. Continued interest rate volatility and/or lack of credit availability for commercial real estate transactions could materially impact the outlook.
Conference Call Colliers will be holding a conference call on Thursday, February 8, 2024 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 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 clients and renew related contracts; the ability to attract new capital commitments to our Investment Management funds and retain existing capital under management; the ability to retain and incentivize employees; 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, war 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.sedarplus.ca.
This press release does not constitute an offer to sell or a solicitation of an offer to purchase an interest in any fund.
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) loss on disposal of operations; (v) depreciation and amortization, including amortization of mortgage servicing rights (“MSRs”); (vi) gains attributable to MSRs; (vii) acquisition-related items (including contingent acquisition consideration fair value adjustments, contingent acquisition consideration-related compensation expense and transaction costs); (viii) restructuring costs and (ix) 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 | Twelve months ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31 | December 31 | |||||||||||
| (in thousands of US) | 2023 | 2022 | 2023 | 2022 | ||||||||
| Net earnings | $ | 81,221 | $ | 61,972 | $ | 144,691 | $ | 194,544 | ||||
| Income tax | 29,974 | 24,976 | 68,086 | 95,010 | ||||||||
| Other income, including equity earnings from | ||||||||||||
| (912 | ) | (2,329 | ) | (5,919 | ) | (5,645 | ) | |||||
| Interest expense, net | 22,347 | 19,163 | 94,077 | 48,587 | ||||||||
| Operating earnings | 132,630 | 103,782 | 300,935 | 332,496 | ||||||||
| Loss on disposal of operations | - | (524 | ) | 2,282 | 26,834 | |||||||
| Depreciation and amortization | 51,087 | 51,542 | 202,536 | 177,421 | ||||||||
| (Gains) losses attributable to MSRs | (5,436 | ) | 6,829 | (17,722 | ) | (17,385 | ) | |||||
| Equity earnings from non-consolidated investments | 707 | 1,856 | 5,078 | 6,677 | ||||||||
| Acquisition-related items | (6,406 | ) | 26,406 | 47,096 | 77,144 | |||||||
| Restructuring costs | 15,435 | 5,023 | 27,701 | 5,485 | ||||||||
| Stock-based compensation expense | 10,361 | 7,772 | 27,087 | 21,853 | ||||||||
| Adjusted EBITDA | $ | 198,378 | $ | 202,686 | $ | 594,993 | $ | 630,525 |
All values are in US Dollars.
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) loss on disposal of operations; (iii) amortization expense related to intangible assets recognized in connection with acquisitions and MSRs; (iv) gains attributable to MSRs; (v) acquisition-related items; (vi) restructuring costs and (vii) 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.
Similar to GAAP diluted EPS, 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 and fully converted or redeemed by June 1, 2023. 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 where the Convertible Notes were outstanding.
| Three months ended | Twelve months ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31 | December 31 | |||||||||||
| (in thousands of US$) | 2023 | 2022 | 2023 | 2022 | ||||||||
| Net earnings | $ | 81,221 | $ | 61,972 | $ | 144,691 | $ | 194,544 | ||||
| Non-controlling interest share of earnings | (17,593 | ) | (16,222 | ) | (56,560 | ) | (53,919 | ) | ||||
| Interest on Convertible Notes | - | 2,300 | 2,861 | 9,200 | ||||||||
| Loss on disposal of operations | - | (524 | ) | 2,282 | 26,834 | |||||||
| Amortization of intangible assets | 36,269 | 39,111 | 147,928 | 128,741 | ||||||||
| (Gains) losses attributable to MSRs | (5,436 | ) | 6,829 | (17,722 | ) | (17,385 | ) | |||||
| Acquisition-related items | (6,406 | ) | 26,406 | 47,096 | 77,144 | |||||||
| Restructuring costs | 15,435 | 5,023 | 27,701 | 5,485 | ||||||||
| Stock-based compensation expense | 10,361 | 7,772 | 27,087 | 21,853 | ||||||||
| Income tax on adjustments | (13,313 | ) | (19,835 | ) | (48,359 | ) | (42,486 | ) | ||||
| Non-controlling interest on adjustments | (5,534 | ) | (3,804 | ) | (22,667 | ) | (15,262 | ) | ||||
| Adjusted net earnings | $ | 95,004 | $ | 109,028 | $ | 254,338 | $ | 334,749 | ||||
| Three months ended | Twelve months ended | |||||||||||
| December 31 | December 31 | |||||||||||
| (in US$) | 2023 | 2022 | 2023 | 2022 | ||||||||
| Diluted net earnings per common share^(^^1)^ | $ | 1.42 | $ | 0.48 | $ | 1.38 | $ | 0.97 | ||||
| Interest on Convertible Notes, net of tax | - | 0.04 | 0.04 | 0.14 | ||||||||
| Non-controlling interest redemption increment | (0.08 | ) | 0.49 | 0.47 | 1.97 | |||||||
| Loss on disposal of operations | - | - | 0.05 | 0.56 | ||||||||
| Amortization expense, net of tax | 0.47 | 0.50 | 1.92 | 1.63 | ||||||||
| (Gains) losses attributable to MSRs, net of tax | (0.07 | ) | 0.08 | (0.21 | ) | (0.20 | ) | |||||
| Acquisition-related items | (0.14 | ) | 0.51 | 0.83 | 1.45 | |||||||
| Restructuring costs, net of tax | 0.24 | 0.08 | 0.43 | 0.08 | ||||||||
| Stock-based compensation expense, net of tax | 0.16 | 0.13 | 0.44 | 0.39 | ||||||||
| Adjusted EPS | $ | 2.00 | $ | 2.31 | $ | 5.35 | $ | 6.99 | ||||
| Diluted weighted average shares for Adjusted EPS (thousands) | 47,582 | 47,215 | 47,504 | 47,897 | ||||||||
| ^(^^1)^ Amounts shown reflect the "if-converted" method's dilutive impact on the adjusted EPS calculation. |
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, less purchases of fixed assets, plus cash collections on AR Facility deferred purchase price less distributions to non-controlling interests. 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. 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 | Twelve months ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31 | December 31 | |||||||||||
| (in thousands of US$) | 2023 | 2022 | 2023 | 2022 | ||||||||
| Net cash provided by operating activities | $ | 157,103 | $ | 238,501 | $ | 165,661 | $ | 67,031 | ||||
| Contingent acquisition consideration paid | 469 | 285 | 39,115 | 69,224 | ||||||||
| Purchase of fixed assets | (24,113 | ) | (25,874 | ) | (84,524 | ) | (67,681 | ) | ||||
| Cash collections on AR Facility deferred purchase price | 33,106 | (57,052 | ) | 124,313 | 288,004 | |||||||
| Distributions paid to non-controlling interests | (9,578 | ) | (8,193 | ) | (77,400 | ) | (62,926 | ) | ||||
| Free cash flow | $ | 156,987 | $ | 147,667 | $ | 167,165 | $ | 293,652 |
4. Local currency revenue and adjusted EBITDA growth rate and internal revenue growth rate measures
Percentage revenue and adjusted EBITDA 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. Adjusted EBITDA for this purpose is calculated in the same manner as for our debt agreement covenant calculation purposes, incorporating the expected full year impact of business acquisitions and dispositions.
| Colliers International Group Inc. | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Condensed Consolidated Statements of Earnings | |||||||||||||
| (in thousands of US, except per share amounts) | |||||||||||||
| Three months ended | Twelve months ended | ||||||||||||
| December 31 | December 31 | ||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||
| Revenues | $ | 1,235,168 | $ | 1,222,405 | $ | 4,335,141 | $ | 4,459,487 | |||||
| Cost of revenues | 731,254 | 732,045 | 2,596,823 | 2,749,485 | |||||||||
| Selling, general and administrative expenses | 326,603 | 309,154 | 1,185,469 | 1,096,107 | |||||||||
| Depreciation | 14,818 | 12,431 | 54,608 | 48,680 | |||||||||
| Amortization of intangible assets | 36,269 | 39,111 | 147,928 | 128,741 | |||||||||
| Acquisition-related items (1) | (6,406 | ) | 26,406 | 47,096 | 77,144 | ||||||||
| Loss on disposal of operations | - | (524 | ) | 2,282 | 26,834 | ||||||||
| Operating earnings | 132,630 | 103,782 | 300,935 | 332,496 | |||||||||
| Interest expense, net | 22,347 | 19,163 | 94,077 | 48,587 | |||||||||
| Equity earnings from unconsolidated investments | (707 | ) | (1,856 | ) | (5,078 | ) | (6,677 | ) | |||||
| Other income | (205 | ) | (473 | ) | (841 | ) | 1,032 | ||||||
| Earnings before income tax | 111,195 | 86,948 | 212,777 | 289,554 | |||||||||
| Income tax | 29,974 | 24,976 | 68,086 | 95,010 | |||||||||
| Net earnings | 81,221 | 61,972 | 144,691 | 194,544 | |||||||||
| Non-controlling interest share of earnings | 17,593 | 16,222 | 56,560 | 53,919 | |||||||||
| Non-controlling interest redemption increment | (3,805 | ) | 23,246 | 22,588 | 94,372 | ||||||||
| Net earnings attributable to Company | $ | 67,433 | $ | 22,504 | $ | 65,543 | $ | 46,253 | |||||
| Net earnings per common share | |||||||||||||
| $ | 1.42 | $ | 0.52 | $ | 1.43 | $ | 1.07 | ||||||
| $ | 1.42 | $ | 0.51 | $ | 1.41 | $ | 1.05 | ||||||
| Adjusted EPS (3) | $ | 2.00 | $ | 2.31 | $ | 5.35 | $ | 6.99 | |||||
| Weighted average common shares (thousands) | |||||||||||||
| Basic | 47,333 | 42,968 | 45,680 | 43,409 | |||||||||
| Diluted | 47,582 | 47,215 | 46,274 | 43,918 |
All values are in US Dollars.
| 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) | 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 and fully converted or redeemed by June 1, 2023. 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 was anti-dilutive for the year ended December 31, 2022. | |||
| (3) | See definition and reconciliation above. | |||
| Colliers International Group Inc. | ||||
| --- | --- | --- | --- | --- |
| Condensed Consolidated Balance Sheets | ||||
| (in thousands of US) | ||||
| December 31, | December 31, | |||
| 2023 | 2022 | |||
| Assets | ||||
| Cash and cash equivalents | $ | 181,134 | $ | 173,661 |
| Restricted cash (1) | 37,941 | 25,381 | ||
| Accounts receivable and contract assets | 726,764 | 669,803 | ||
| Warehouse receivables (2) | 177,104 | 29,623 | ||
| Prepaids and other assets | 306,829 | 269,605 | ||
| Warehouse fund assets | 44,492 | 45,353 | ||
| 1,474,264 | 1,213,426 | |||
| Other non-current assets | 188,745 | 166,726 | ||
| Warehouse fund assets | 47,536 | - | ||
| Fixed assets | 202,837 | 164,493 | ||
| Operating lease right-of-use assets | 390,565 | 341,623 | ||
| Deferred tax assets, net | 59,468 | 63,460 | ||
| Goodwill and intangible assets | 3,118,711 | 3,148,449 | ||
| $ | 5,482,126 | $ | 5,098,177 | |
| Liabilities and shareholders' equity | ||||
| Accounts payable and accrued liabilities | $ | 1,104,935 | $ | 1,128,754 |
| Other current liabilities | 75,764 | 100,840 | ||
| Long-term debt - current | 1,796 | 1,360 | ||
| Warehouse credit facilities (2) | 168,780 | 24,286 | ||
| Operating lease liabilities - current | 89,938 | 84,989 | ||
| Liabilities related to warehouse fund assets | - | 1,353 | ||
| 1,441,213 | 1,341,582 | |||
| Long-term debt - non-current | 1,500,843 | 1,437,739 | ||
| Operating lease liabilities - non-current | 375,454 | 322,496 | ||
| Other liabilities | 151,333 | 139,392 | ||
| Deferred tax liabilities, net | 43,191 | 57,754 | ||
| Liabilities related to warehouse fund assets | 47,536 | - | ||
| Convertible notes | - | 226,534 | ||
| Redeemable non-controlling interests | 1,072,066 | 1,079,306 | ||
| Shareholders' equity | 850,490 | 493,374 | ||
| $ | 5,482,126 | $ | 5,098,177 | |
| Supplemental balance sheet information | ||||
| Total debt (3) | $ | 1,502,639 | $ | 1,439,099 |
| Total debt, net of cash and cash equivalents (3) | 1,321,505 | 1,265,438 | ||
| Net debt / pro forma adjusted EBITDA ratio (4) | 2.2 | 1.8 |
All values are in US Dollars.
| 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 | Twelve months ended | |||||||||||
| December 31 | December 31 | |||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Cash provided by (used in) | ||||||||||||
| Operating activities | ||||||||||||
| Net earnings | $ | 81,221 | $ | 61,972 | $ | 144,691 | $ | 194,544 | ||||
| Items not affecting cash: | ||||||||||||
| 51,087 | 51,542 | 202,536 | 177,421 | |||||||||
| - | (524 | ) | 2,282 | 26,834 | ||||||||
| (5,436 | ) | 6,829 | (17,722 | ) | (17,385 | ) | ||||||
| (5,422 | ) | (1,764 | ) | (16,335 | ) | (16,582 | ) | |||||
| 10,522 | (9,799 | ) | (9,924 | ) | (25,997 | ) | ||||||
| 17,374 | 32,909 | 112,450 | 115,951 | |||||||||
| 149,346 | 141,165 | 417,978 | 454,786 | |||||||||
| Increase in accounts receivable, prepaid | ||||||||||||
| (70,451 | ) | (52,907 | ) | (203,727 | ) | (469,062 | ) | |||||
| Increase in accounts payable, accrued | ||||||||||||
| 15,118 | 47,655 | 9,036 | 39,166 | |||||||||
| Increase (decrease) in accrued compensation | 54,793 | 78,095 | (70,395 | ) | (85,547 | ) | ||||||
| Contingent acquisition consideration paid | (469 | ) | (285 | ) | (39,115 | ) | (69,224 | ) | ||||
| Mortgage origination activities, net | 6,633 | 4,722 | 20,667 | 25,639 | ||||||||
| Sales to AR Facility, net | 2,133 | 20,056 | 31,217 | 171,273 | ||||||||
| Net cash provided by operating activities | 157,103 | 238,501 | 165,661 | 67,031 | ||||||||
| Investing activities | ||||||||||||
| Acquisition of businesses, net of cash acquired | 952 | (413,208 | ) | (60,343 | ) | (1,007,297 | ) | |||||
| Purchases of fixed assets | (24,113 | ) | (25,874 | ) | (84,524 | ) | (67,681 | ) | ||||
| Purchases of warehouse fund assets | (73,039 | ) | (44,000 | ) | (122,604 | ) | (161,042 | ) | ||||
| Proceeds from disposal of warehouse fund assets | 24,258 | 89,073 | 74,627 | 137,578 | ||||||||
| Cash collections on AR Facility deferred purchase price | 33,106 | (57,052 | ) | 124,313 | 288,004 | |||||||
| Other investing activities | (17,656 | ) | (18,337 | ) | (65,452 | ) | (62,406 | ) | ||||
| Net cash used in investing activities | (56,492 | ) | (469,398 | ) | (133,983 | ) | (872,844 | ) | ||||
| Financing activities | ||||||||||||
| Increase (decrease) in long-term debt, net | (117,779 | ) | 254,000 | 92,046 | 929,041 | |||||||
| Purchases of non-controlling interests, net | (8,072 | ) | (189 | ) | (32,661 | ) | (31,622 | ) | ||||
| Dividends paid to common shareholders | - | - | (13,517 | ) | (13,100 | ) | ||||||
| Distributions paid to non-controlling interests | (9,578 | ) | (8,193 | ) | (77,400 | ) | (62,926 | ) | ||||
| Repurchases of Subordinate Voting Shares | - | (39,362 | ) | - | (165,728 | ) | ||||||
| Other financing activities | 15,981 | 3,617 | 23,726 | (42,748 | ) | |||||||
| Net cash provided by (used in) financing activities | (119,448 | ) | 209,873 | (7,806 | ) | 612,917 | ||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (679 | ) | 4,626 | (3,839 | ) | (33,333 | ) | |||||
| Net change in cash and cash | ||||||||||||
| (19,516 | ) | (16,398 | ) | 20,033 | (226,229 | ) | ||||||
| Cash and cash equivalents and | ||||||||||||
| 238,591 | 215,440 | 199,042 | 425,271 | |||||||||
| Cash and cash equivalents and | ||||||||||||
| $ | 219,075 | $ | 199,042 | $ | 219,075 | $ | 199,042 |
All values are in US Dollars.
| Colliers International Group Inc. | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Segmented Results | |||||||||||||||
| (in thousands of US dollars) | |||||||||||||||
| Asia | Investment | ||||||||||||||
| Americas | EMEA | Pacific | Management | Corporate | Consolidated | ||||||||||
| Three months ended December 31 | |||||||||||||||
| 2023 | |||||||||||||||
| Revenues | $ | 677,854 | $ | 235,699 | $ | 192,379 | $ | 129,134 | $ | 102 | $ | 1,235,168 | |||
| Adjusted EBITDA | 78,841 | 35,747 | 32,341 | 53,825 | (2,376 | ) | 198,378 | ||||||||
| Operating earnings (loss) | 53,271 | 28,894 | 25,982 | 41,540 | (17,057 | ) | 132,630 | ||||||||
| 2022 | |||||||||||||||
| Revenues | $ | 678,878 | $ | 228,346 | $ | 193,631 | $ | 121,286 | $ | 264 | $ | 1,222,405 | |||
| Adjusted EBITDA | 82,933 | 35,920 | 34,253 | 53,070 | (3,490 | ) | 202,686 | ||||||||
| Operating earnings (loss) | 52,015 | 30,364 | 29,022 | (18,831 | ) | 11,212 | 103,782 | ||||||||
| Asia | Investment | ||||||||||||||
| Americas | EMEA | Pacific | Management | Corporate | Consolidated | ||||||||||
| Twelve months ended December 31 | |||||||||||||||
| 2023 | |||||||||||||||
| Revenues | $ | 2,510,002 | $ | 726,900 | $ | 610,313 | $ | 487,457 | $ | 469 | $ | 4,335,141 | |||
| Adjusted EBITDA | 270,902 | 38,373 | 79,238 | 213,925 | (7,445 | ) | 594,993 | ||||||||
| Operating earnings (loss) | 174,613 | 5,483 | 62,709 | 103,139 | (45,009 | ) | 300,935 | ||||||||
| 2022 | |||||||||||||||
| Revenues | $ | 2,756,345 | $ | 715,140 | $ | 608,460 | $ | 378,881 | $ | 661 | $ | 4,459,487 | |||
| Adjusted EBITDA | 332,347 | 68,501 | 85,092 | 145,955 | (1,370 | ) | 630,525 | ||||||||
| Operating earnings (loss) (1) | 254,375 | 9,891 | 72,256 | 37,055 | (41,081 | ) | 332,496 |
Notes to Segmented Results
(1) Operating earnings (loss) include loss on disposal of certain operations, primarily in EMEA.
COMPANY CONTACTS: Jay S. Hennick Chairman & Chief Executive Officer
Chris McLernon Chief Executive Officer, Real Estate Services
Christian Mayer Chief Financial Officer (416) 960-9500
EdgarFiling
Exhibit 99.2
Fourth Quarter 2023 Financial Results February 8, 2024 1
Forward - Looking Statements 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 statements involve known and unknown risks, unce rta inties 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 stat ements. Such factors include: economic conditions, 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 ability to attract new capital commitments to our Investment Management funds and re tain existing capital under management; the effects of changes in foreign exchange rates in relation to the US dollar on Canadian dollar, Australian dollar, UK pound sterling and E uro 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 exp ected inflation could impact profitability of certain contracts; impact of pandemics on client demand, ability to deliver services and ensure the health and productivity of employ ees ; disruptions or security failures in information technology systems; cybersecurity risks; a change in/loss of our relationship with US government agencies could significantly im pact our ability to originate mortgage loans; default on loans originated under the Fannie Mae Delegated Underwriting and Servicing program could materially affect our profitability; th e effect of increases in interest rates on our cost of borrowing and political conditions or events, including elections, referenda, changes to international trade and immigration pol icies 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, 2022 under the heading “Risk Factors” (which factors are adopted herein, and which can be accessed at www.sedarplus.com) and other periodic filings with Canadian and US s ecu rities 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 statements. Except as required by applicable law, Colliers undertakes no obligation to publicly update or revise any forward - loo king statement, whether as a result of new information, future events or otherwise. This presentation does not constitute an offer to sell or a solicitation of an offer to purchase an interest in any fund. 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”), free cash flow, assets under management (“AUM”), fee paying assets under management (“FPAUM”). Please re fer to Appendix for reconciliations to GAAP measures.
USD LC (1) Revenue 4,335.1 4,459.5 -3% -3% Adjusted EBITDA 595.0 630.5 -6% -6% Adjusted EBITDA Margin 13.7% 14.1% Adjusted EPS 5.35 6.99 -23% GAAP Operating Earnings 300.9 332.5 -9% GAAP Operating Earnings Margin 6.9% 7.5% GAAP diluted EPS 1.41 1.05 34% Twelve months ended December 31 2023 2022 % Change Colliers 3 (US$ millions, except per share amounts) Highlights Robust revenue growth continues in high - value recurring services More than 70% of earnings now come from recurring services Market - driven transaction slowdown in Capital Markets and, to a lesser extent, Leasing USD LC (1) Revenue 1,235.2 1,222.4 1% 0% Adjusted EBITDA 198.4 202.7 -2% -3% Adjusted EBITDA Margin 16.1% 16.6% Adjusted EPS 2.00 2.31 -13% GAAP Operating Earnings 132.6 103.8 28% GAAP Operating Earnings Margin 10.7% 8.5% GAAP diluted EPS 1.42 0.51 178% Three months ended December 31 2023 2022 %Change (1) Local Currency
% Change over 2022 USD LC Investment Management (1) 29% 28% Outsourcing & Advisory 11% 11% Leasing -5% -5% Capital Markets -35% -35% Total -3% -3% Revenue Mix 2023 2022 Investment Management 11% 9% Outsourcing & Advisory 48% 42% Leasing 25% 25% Capital Markets 16% 24% Total 100% 100% Colliers 4 Outsourcing & Advisory Investment Management (1) Capital Markets Leasing Local currency internal growth: - 8% (1) Investment Management LC revenue growth, excluding pass - through carried interest, was 38% Full Year Consolidated Revenues (US$ millions)
38% 27% 35% 48% 25% 16% 11% 59% Recurring 73% Recurring 2023 Revenue by Service 2023 AEBITDA by Service Colliers 5 Please refer to Slide 19 Outsourcing & Advisory Leasing Capital Markets Leasing and Capital Markets Year ended December 31, 2023 Broad Diversification Investment Management
% Change over Q4 2022 USD LC Investment Management (1) 6% 6% Outsourcing & Advisory 12% 10% Leasing -5% -6% Capital Markets -16% -16% Total 1% 0% Revenue Mix Q4 2023 Q4 2022 Investment Management 10% 10% Outsourcing & Advisory 47% 42% Leasing 26% 28% Capital Markets 17% 20% Total 100% 100% Colliers 6 Outsourcing & Advisory Investment Management (1) Capital Markets Leasing Local currency internal growth: - 2% (1) Investment Management LC revenue growth, excluding pass - through carried interest, was 4% 4 4 Fourth Quarter Consolidated Revenues (US$ millions)
Colliers 7 Fourth Quarter Geographic Mix Q4 2023 Revenues Q4 2022 Revenues $PHULFDV (0($ $VLD3DFLȴF ΖQYHVWPHQW 0DQDJHPHQW Q4 2023 AEBITDA Q4 2022 AEBITDA (1) Q4 2023 GAAP Operating Earnings: $53.3M Americas, $28.9M EMEA, $26.0M Asia Pacific, $41.5M Investment Management (2) Q4 2022 GAAP Operating Earnings: $52.0M Americas, $30.4M EMEA, $29.0M Asia Pacific, $(18.8M) Investment Management $PHULFDV (0($ $VLD3DFLȴF ΖQYHVWPHQW 0DQDJHPHQW (US$ millions)
Colliers 8 GAAP Operating Earnings: Q4 2023 $53.3M at 7.9% margin; Q4 2022 $52.0M at 7.7% margin Lower Capital Markets and Leasing activity partly offset by higher Outsourcing & Advisory revenues Adjusted EBITDA impacted by declines in higher margin transactional revenues Fourth Quarter Americas (US$ millions) 4 4 USD LC Revenue Growth 0% -1% Revenues AEBITDA Outsourcing & Advisory Leasing Capital Markets
Colliers 9 GAAP Operating Earnings: Q4 2023 $28.9M at 12.3% margin; Q4 2022 $30.4M at 13.3% margin Lower Capital Markets activity, particularly in Germany and the Nordics, partly offset by higher Outsourcing & Advisory revenues Adjusted EBITDA margin impacted by changes in service mix Fourth Quarter EMEA (US$ millions) 4 4 USD LC Revenue Growth 3% -2% Revenues AEBITDA Outsourcing & Advisory Leasing Capital Markets
Colliers 10 GAAP Operating Earnings: Q4 2023 $26.0M at 13.5% margin; Q4 2022 $29.0M at 15.0% margin Revenue decline attributable to lower Capital Markets activity offset by acquisitions Adjusted EBITDA impacted by changes in service mix Fourth Quarter APAC (US$ millions) 4 4 USD LC Revenue Growth -1% 0% Revenues AEBITDA Outsourcing & Advisory Leasing Capital Markets
Colliers 11 GAAP Operating Earnings: Q4 2023 $41.5M at 32.2% margin; Q4 2022 ($18.8M) at (15.5%) margin Growth driven by higher management fees from increased assets under management year over year $98.2 billion AUM as of December 31, 2023 • Up 1% versus December 31, 2022 • Nearly flat versus September 30, 2023 Fourth Quarter Investment Management (US$ millions) 4 4 USD LC Revenue Growth 6% 6% Revenue Growth* 5% 4% *excluding pass-through carried interest Revenues AEBITDA Pass - through carried interest Investment Management
Colliers 12 51% 21% 24% 4% Alternatives Infrastructure Traditional Real Estate Credit AUM by Asset Class 37% 51% 12% Perpetual Capital Long-dated Funds Managed Accounts AUM by Strategy 78% 22% North America EMEA AUM by Geography AUM: $98.2B | FPAUM: $50.8B Focus on long - duration, highly differentiated AUM Investment Management
(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 13 Cash $ 181.1 $ 173.7 Total Debt 1,502.6 1,439.1 Net Debt $ 1,321.5 $ 1,265.4 Convertible Notes - 226.5 Redeemable non-controlling interests 1,072.1 1,079.3 Shareholders' equity 850.5 493.4 Total capitalization $ 3,244.1 $ 3,064.6 Net debt / pro forma adjusted EBITDA - Leverage Ratio (1) 2.2x 1.8x Capital Expenditures $ 84.5 $ 67.7 Acquisition Spend (2) $ 152.1 $ 1,167.5 Twelve months ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Highlights • Leverage ratio of 2.2x • 66% of debt at fixed rates as of December 31, 2023 • Anticipating capital expenditures of $75 - $80 million in 2024 (US$ millions) Capitalization & Capital Allocation
Colliers 14 (US$ millions) Outlook for 2024 • Capital Markets and Leasing conditions expected to remain challenging in the first half of the year followed by year - over - year growth in the second half • Outsourcing & Advisory revenue growth is expected to remain resilient • Investment Management revenues expected to grow in line with fundraising, which is expected to improve relative to 2023 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 numerous macroeconomic, geopolitical, health, social and related factors. Continued interest rate volatility and/or lack of credit ava ila bility for commercial real estate transactions could materially impact the outlook. Outlook for 2024 Actual 2023 Measure +5% to +10% - 3% Revenue growth +5% to +15% - 6% Adjusted EBITDA growth +10% to +20% - 23% Adjusted EPS growth
Appendix Reconciliation of non - GAAP measures
Colliers 16 Reconciliation of GAAP earnings to adjusted EBITDA (US$ thousands) Net earnings $ 81,221 $ 61,972 $ 144,691 $ 194,544 Income tax 29,974 24,976 68,086 95,010 Other income, including equity earnings from non-consolidated investments (912) (2,329) (5,919) (5,645) Interest expense, net 22,347 19,163 94,077 48,587 Operating earnings 132,630 103,782 300,935 332,496 Loss on disposal of business operations - (524) 2,282 26,834 Depreciation and amortization 51,087 51,542 202,536 177,421 (Gains) losses attributable to MSRs (5,436) 6,829 (17,722) (17,385) Equity earnings from non-consolidated entites 707 1,856 5,078 6,677 Acquisition-related items (6,406) 26,406 47,096 77,144 Restructuring costs 15,435 5,023 27,701 5,485 Stock-based compensation expense 10,361 7,772 27,087 21,853 Adjusted EBITDA $ 198,378 $ 202,686 $ 594,993 $ 630,525 Three months ended Twelve months ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Colliers 17 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 and fully converted or redeemed by June 1, 2023 Reconciliation of GAAP earnings to adjusted net earnings and adjusted earnings per share (US$ thousands) Net earnings $ 81,221 $ 61,972 $ 144,691 $ 194,544 Non-controlling interest share of earnings (17,593) (16,222) (56,560) (53,919) Interest on Convertible Notes - 2,300 2,861 9,200 Loss on disposal of operations - (524) 2,282 26,834 Amortization of intangible assets 36,269 39,111 147,928 128,741 (Gains) losses attributable to MSRs (5,436) 6,829 (17,722) (17,385) Acquisition-related items (6,406) 26,406 47,096 77,144 Restructuring costs 15,435 5,023 27,701 5,485 Stock-based compensation expense 10,361 7,772 27,087 21,853 Income tax on adjustments (13,313) (19,835) (48,359) (42,486) Non-controlling interest on adjustments (5,534) (3,804) (22,667) (15,262) Adjusted net earnings $ 95,004 $ 109,028 $ 254,338 $ 334,749 (US$) Diluted net earnings per common share $ 1.42 $ 0.48 $ 1.38 $ 0.97 Interest on Convertible Notes, net of tax - 0.04 0.04 0.14 Non-controlling interest redemption increment (0.08) 0.49 0.47 1.97 Loss on disposal of operations - - 0.05 0.56 Amortization expense, net of tax 0.47 0.50 1.92 1.63 (Gains) losses attributable to MSRs, net of tax (0.07) 0.08 (0.21) (0.20) Acquisition-related items (0.14) 0.51 0.83 1.45 Restructuring costs, net of tax 0.24 0.08 0.43 0.08 Stock-based compensation expense, net of tax 0.16 0.13 0.44 0.39 Adjusted EPS $ 2.00 $ 2.31 $ 5.35 $ 6.99 Diluted weighted average shares for Adjusted EPS (thousands) 47,582 47,215 47,504 47,897 Three months ended Twelve months ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Three months ended Twelve months ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Colliers 18 (US$ thousands) Net cash provided by operating activities $ 157,103 $ 238,501 $ 165,661 $ 67,031 Contingent acquisition consideration paid 469 285 39,115 69,224 Purchase of fixed assets (24,113) (25,874) (84,524) (67,681) Cash collections on AR Facility deferred purchase price 33,106 (57,052) 124,313 288,004 Distributions paid to non-controlling interests (9,578) (8,193) (77,400) (62,926) Free cash flow $ 156,987 $ 147,667 $ 167,165 $ 293,652 Three months ended Twelve months ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Reconciliation of net cash flow from operations to free cash flow
Local currency revenue and adjusted EBITDA growth rate and internal revenue growth rate measures Percentage revenue and adjusted EBITDA 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. Fee paying assets under management We use the term fee paying assets under management (“FPAUM”) to represent only the AUM on which the Company is entitled to receive management fees. We believe this measure is useful in providing additional insight into the capital base upon which the Company earns management fees. Our definition of FPAUM may differ from those used by other issuers and as such may not be directly comparable to similar measures used by other issuers. Recurring revenue percentage Recurring revenue percentage is computed on a trailing twelve - month basis and represents the proportion 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. Revenue for this purpose incorporates the expected full year impact of acquisitions and dispositions. 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 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. Adjusted EBITDA for this purpose is calculated in the same manner as calculated for our debt agreement covenant calculation purposes, incorporating the expected full year impact of business acquisitions and dispositions. Colliers 19 Other Non - GAAP Measures
Appendix Full Year Regional Details
Colliers 21 Full Year Geographic Mix 2023 Revenues 2022 Revenues $PHULFDV (0($ $VLD3DFLȴF ΖQYHVWPHQW 0DQDJHPHQW 2023 AEBITDA 2022 AEBITDA (1) 2023 GAAP Operating Earnings: $174.6M Americas, $5.5M EMEA, $62.7M Asia Pacific, $103.1M Investment Management (2) 2022 GAAP Operating Earnings: $254.4M Americas, $9.9M EMEA, $72.3M Asia Pacific, $37.1M Investment Management $PHULFDV (0($ $VLD3DFLȴF ΖQYHVWPHQW 0DQDJHPHQW (US$ millions)
Colliers 22 GAAP Operating Earnings: 2023 $174.6M at 7.0% margin; 2022 $254.4M at 9.2% margin Market - driven decline in Capital Markets and, to a lesser extent, Leasing Internal growth in Outsourcing & Advisory as well as acquisitions Adjusted EBITDA impacted by changes in service mix and an $11.4 million gain on the termination of a lease which favourably impacted the prior year Full Year Americas (US$ millions) USD LC Revenue Growth -9% -9% Revenues AEBITDA Outsourcing & Advisory Leasing Capital Markets
Colliers 23 GAAP Operating Earnings: 2023 $5.5M at 0.8% margin; 2022 $9.9M at 1.4% margin Lower Capital Markets and Leasing revenues almost fully offset by growth in Outsourcing & Advisory revenues Adjusted EBITDA impacted by changes in service mix Full Year EMEA (US$ millions) USD LC Revenue Growth 2% -1% Revenues AEBITDA Outsourcing & Advisory Leasing Capital Markets
Colliers 24 GAAP Operating Earnings: 2023 $62.7M at 10.3% margin; 2022 $72.3M at 11.9% margin Growth driven by Leasing and Outsourcing & Advisory revenues partly offset by lower Capital Markets activity Adjusted EBITDA impacted by changes in service mix Full Year APAC (US$ millions) USD LC Revenue Growth 0% 4% Revenues AEBITDA Outsourcing & Advisory Leasing Capital Markets
Colliers 25 GAAP Operating Earnings: 2023 $103.1M at 21.2% margin; 2022 $37.1M at 9.8% margin Growth driven by acquisitions and higher management fees from increased assets under management year over year Full Year Investment Management (US$ millions) USD LC Revenue Growth 29% 28% Revenue Growth* 38% 38% *excluding pass-through carried interest Revenues AEBITDA Pass - through carried interest Investment Management