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MarketScreener Homepage  >  Equities  >  Toronto Stock Exchange  >  Colliers International Group Inc.    CIGI   CA1946931070

COLLIERS INTERNATIONAL GROUP INC.

(CIGI)
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Colliers International : Second Quarter 2020 Financial Results

08/06/2020 | 12:59pm EST

Colliers International Group Inc.

Second Quarter 2020 Financial Results

August 6, 2020

Forward-Looking Statements

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, 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 business spending; commercial real estate property values, vacancy rates and general conditions of financial liquidity for real estate transactions; the effects of changes in foreign exchange 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; impact of pandemics on client demand, ability to deliver services and ensure the health and productivity of employees; disruptions or security failures in information technology systems; and political conditions or events, including elections, referenda, changes 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 December 31, 2019 under the heading "Risk Factors" (which factors are adopted herein and a copy of which can be obtained at www.sedar.com) and other periodic 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 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.

Non-GAAP measures

This presentation makes reference to the non-GAAP measures Adjusted EBITDA and Adjusted EPS. Please refer to Appendix for reconciliations to GAAP measures.

Second Quarter 2020 Results

(US$ millions, except per share amounts)

Three months ended

Q2 2020

Q2 2019

%Change

June 30, 2020

USD

LC

(1)

Revenue

550.2

745.5

-26%

-25%

Adjusted EBITDA

60.0

87.3

-31%

-30%

Adjusted EBITDA Margin

10.9%

11.7%

Adjusted EPS

0.70

1.10

-36%

GAAP Operating Earnings

14.5

57.2

-75%

GAAP Operating Earnings Margin

2.6%

7.7%

GAAP EPS

-0.26

0.60

NM

Six months ended

YTD

YTD

% Change

June 30, 2020

2020

2019

USD

LC

(1)

Revenue

1,180.8

1,380.6

-14%

-13%

Adjusted EBITDA

114.4

130.9

-13%

-11%

Adjusted EBITDA Margin

9.7%

9.5%

Adjusted EPS

1.25

1.61

-22%

GAAP Operating Earnings

33.1

70.6

-53%

GAAP Operating Earnings Margin

2.8%

5.1%

GAAP EPS

-0.14

0.63

NM

Highlights

Resilience during pandemic

  • Majority of earnings now come from Investment Management and Outsourcing & Advisory segments - high value-add professional services that are recurring and contractual
  • Pandemic uncertainty in Leasing and Capital Markets impacted quarterly results
  • Diversified business model, strong balance sheet, entrepreneurial culture, and significant insider ownership

Other highlights

  • Completed a $230 million offering of convertible notes
  • Completed acquisition of Dougherty (Colliers Mortgage)
  • Subsequent to quarter end, completed the acquisition of Maser Consulting

3 3

Second Quarter Consolidated Revenues

(US$ millions)

Q2 Revenues

745.5

46.9

550.2

Investment

281.6

41.4

Management

55%

Recurring Outsourcing &

257.0

Advisory

163.6

Capital Markets

115.0

253.4

Leasing

136.8

2020

2019

% Change over Q2 2019

USD

LC

Investment Management

-12%

-12%

Outsourcing & Advisory

-9%

-6%

Capital Markets

-30%

-28%

Leasing

-46%

-45%

Total

-26%

-25%

Revenue Mix

Q2 2020

Q2 2019

Investment Management

8%

6%

Outsourcing & Advisory

47%

38%

Capital Markets

21%

22%

Leasing

24%

34%

Total

100%

100%

4

Second Quarter Geographic Split

(US$ millions)

Q2 2020 Revenues

Investment

Management

41.4

8%

Asia Pacific

100.1

18%

Q2 2020 Adjusted EBITDA1

Investment

Management

17.4

29%

Americas

40%

24.4

56%

Americas

308.9

18%

EMEA 99.6

Asia Pacific

20%

11%

12.3

EMEA 6.3

Q2 2019 Revenues

Q2 2019 Adjusted EBITDA2

Investment

Investment

Management

6%

46.9

Management

Asia Pacific

19.2

22%

Americas

17%

125.1

36.2

41%

57%

Americas

16%

421.4

Asia Pacific

EMEA

20%

14.2

151.6

21%

EMEA 19.0

1

Q2 2020

GAAP Operating Earnings: $3.4M Americas, $(3.3)M EMEA, $5.1M Asia Pacific, $10.6M Investment Management

2

Q2 2019

GAAP Operating Earnings: $25.6M Americas, $10.8M EMEA, $12.5M Asia Pacific, $12.2M Investment Management

5

Americas

(US$ millions)

  • Revenues down 26% in local currency on reduced Leasing and Capital Markets across the region
  • Outsourcing & Advisory revenues were flat in local currency
  • Adjusted EBITDA margin down on lower revenues

Revenue

Adjusted EBITDA and Margin

421.4

308.9

138.0

Outsourcing &

134.9

95.1

Advisory

Capital Markets

71.6

36.2

24.4

188.2

Leasing

102.4

7.9%

8.6%

Q2 2020

Q2 2019

Q2 2020

Q2 2019

USD

LC

Revenue Growth

-27%

-26%

GAAP Operating Earnings: Q2 2020

$3.4M at 1.1% margin ; Q2 2019

$25.6M at 6.1% margin

6

EMEA

(US$ millions)

  • Revenue declined in local currency on lower activity in each service line
  • Outsourcing & Advisory revenue impacted by delays in executing turnkey project management assignments due to the pandemic

Revenue

Adjusted EBITDA and Margin

151.6

99.6

76.2

Outsourcing &

56.7

19.0

Advisory

39.5

Capital Markets

23.0

36.0

6.3

12.6%

Leasing

19.9

6.3%

Q2 2020

Q2 2019

Q2 2020

Q2 2019

USD

LC

Revenue Growth

-34%

-32%

GAAP Operating Earnings: Q2 2020 ($3.3M) at (3.3%) margin; Q2 2019

$10.8M at 7.2% margin

7

Asia Pacific

(US$ millions)

  • Revenues down 16% in local currency on lower Leasing and Capital Markets
  • Outsourcing & Advisory revenues were up slightly in local currency, including incremental revenues from the recent Synergy acquisition

Revenue

Adjusted EBITDA and Margin

125.1

100.1

67.1

Outsourcing &

65.3

Advisory

12.3

14.2

29.0

Capital Markets

20.3

28.9

12.2%

11.4%

Leasing

14.5

Q2 2020

Q2 2019

Q2 2020

Q2 2019

USD

LC

Revenue Growth

-20%

-16%

GAAP Operating Earnings: Q2 2020

$5.1M at 5.1% margin; Q2 2019

$12.5M at 10.0% margin

8

Investment Management

(US$ millions)

  • Revenue decline attributable to a $4.3 million reduction in passthrough revenue from legacy carried interest
  • Lower adjusted EBITDA attributable to changes in the timing of certain European transaction fees
  • $35.7 billion of AUM (up 2% from $35.1 billion at March 31, 2020; up 18% from $30.3 billion at June 30, 2019)

Revenue

Adjusted EBITDA and Margin

46.9

41.4

17.419.2

41.9%

41.0%

Q2 2020

Q2 2019

Q2 2020

Q2 2019

USD

LC

Revenue Growth

-12%

-12%

GAAP Operating Earnings: Q2 2020

$10.6M at 25.7% margin; Q2 2019

$12.2M at 26.1% margin

9

Balance Sheet & Liquidity

(US$ millions)

Cash

Total Debt

Net Debt

Convertible Notes

Redeemable non-controlling interests

Shareholders' equity

Total capitalization

Net debt / pro forma adjusted

EBITDA

Capital Expenditures

Acquisition Spend (1)

June 30, 2020

December 31, 2019

June 30, 2019

$

147.2

$

115.0

$

102.1

627.2

611.4

692.4

$

480.0

$

496.4

$

590.3

223.5

0.0

0.0

375.1

359.2

338.4

499.0

517.3

428.8

$

1,577.6

$

1,372.9

$

1,357.5

1.5x

1.4x

1.7x

Six months ended

June 30, 2020

June 30, 2019

$

19.0

$

24.1

$

172.1

$

40.2

Highlights

  • Conservative financial profile with net debt / pro forma adjusted EBITDA leverage ratio of 1.5x at June 30, 2020
    • Debt agreements permit maximum leverage ratio of 3.5x
  • $608 million of unused credit under revolving credit facility maturing in April 2024
  • May 2020 issuance of Convertible Notes further strengthens balance sheet (considered equity for leverage ratio)
  • Capital expenditures expected at $40-$50 million for 2020

1 Includes business acquisitions, contingent acquisition consideration and purchase of non-controlling interests in subsidiaries.

10

Impact of COVID-19 Pandemic

Working assumption for full year 2020 (relative to 2019)

• Working assumption previously provided updated to reflect: (i) better than anticipated results for the second quarter across all service lines and regions; and (ii) the recently completed acquisitions of Colliers Mortgage and Maser Consulting

Updated with

Previous

Updated

Add acquisitions

acquisitions

Revenue

-15% to -25%

-15% to -25%

+5%

-10% to -20%

Adjusted EBITDA

-25% to -35%

-20% to -30%

+5%

-15% to -25%

• Transactional Leasing and Capital Markets revenues are expected to remain below 2019 levels, although the scale of decline should moderate in the third and fourth quarters.

• Outsourcing & Advisory and Investment Management are expected to remain relatively stable for the balance of the year with some variability depending on market conditions.

• Significant steps taken to adjust costs to expected revenues across all service lines, including reductions to support, administrative and leadership and related costs; May take further cost reduction measures in future quarters.

11

Appendix

Reconciliation of non-GAAP measures

Appendix

1

3

Reconciliation of net earnings to adjusted EBITDA

Three months ended

Six months ended

(US$ thousands)

June 30, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Net earnings

$

6,483

$

35,575

$

12,942

$

41,039

Income tax

2,127

13,187

7,326

14,402

Other income, net

(266)

179

(970)

(322)

Interest expense, net

6,179

8,257

13,763

15,476

Operating earnings

14,523

57,198

33,061

70,595

Depreciation and amortization

25,940

23,778

50,830

46,447

Gains attributable to MSRs

(509)

-

(509)

-

Equity income from non-consolidated entites

414

-

969

-

Acquisition-related items

3,784

5,263

6,534

9,898

Restructuring costs

13,839

275

19,307

314

Stock-based compensation expense

1,971

809

4,224

3,640

Adjusted EBITDA

$

59,962

$

87,323

$

114,416

$

130,894

13

Appendix

1

4

Reconciliation of net earnings and diluted net earnings per common share to adjusted net earnings and adjusted EPS

Three months ended

Six months ended

(US$ thousands)

June 30, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Net earnings

$

6,483

$

35,575

$

12,942

$

41,039

Non-controlling interest share of earnings

(4,265)

(6,586)

(7,642)

(7,831)

Interest on Convertible Notes

1,059

-

1,059

-

Amortization of intangible assets

17,089

15,238

33,101

29,958

Gains attributable to MSRs

(509)

-

(509)

-

Acquisition-related items

3,784

5,263

6,534

9,898

Restructuring costs

13,839

275

19,307

314

Stock-based compensation expense

1,971

809

4,224

3,640

Income tax on adjustments

(7,442)

(4,212)

(13,247)

(8,216)

Non-controlling interest on adjustments

(2,447)

(2,346)

(4,597)

(4,592)

Adjusted net earnings

$

29,562

$

44,016

$

51,172

$

64,210

Three months ended

Six months ended

(US$)

June 30, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Diluted net (loss) earnings per common share

$

(0.25)

$

0.60

$

(0.14)

$

0.63

Interest on Convertible Notes, net of tax

0.02

-

0.02

-

Non-controlling interest redemption increment

0.30

0.13

0.27

0.20

Amortization expense, net of tax

0.25

0.23

0.49

0.46

Gains attributable to MSRs, net of tax

(0.01)

-

(0.01)

-

Acquisition-related items

0.10

0.12

0.17

0.22

Restructuring costs, net of tax

0.24

-

0.35

0.01

Stock-based compensation expense, net of tax

0.05

0.02

0.10

0.09

Adjusted EPS

$

0.70

$

1.10

$

1.25

$

1.61

Diluted weighted average shares for Adjusted EPS

41,901

39,954

41,021

39,887

(thousands)

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.

14

Disclaimer

Colliers International Group Inc. published this content on 06 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 August 2020 16:58:04 UTC


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Sales 2020 2 711 M - -
Net income 2020 49,9 M - -
Net Debt 2020 658 M - -
P/E ratio 2020 83,0x
Yield 2020 0,11%
Capitalization 3 671 M 3 669 M -
EV / Sales 2020 1,60x
EV / Sales 2021 1,27x
Nbr of Employees 15 250
Free-Float 89,0%
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Number of Analysts 8
Average target price 95,00 $
Last Close Price 91,67 $
Spread / Highest target 14,5%
Spread / Average Target 3,63%
Spread / Lowest Target -7,28%
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NameTitle
Jay S. Hennick Global Chairman & Chief Executive Officer
John B. Friedrichsen Chief Operating Officer
Christian Mayer Chief Financial Officer
Mihai Strusievici Vice President-Information Technology
Peter F. Cohen Independent Vice Chairman
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