NASDAQ:CIGI Colliers International Group Q2 2024 Earnings Report $47.36 +0.90 (+1.94%) Closing price 04/17/2025 04:00 PM EasternExtended Trading$46.97 -0.39 (-0.82%) As of 04/17/2025 04:05 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast First Business Financial Services EPS ResultsActual EPS$1.36Consensus EPS $1.37Beat/MissMissed by -$0.01One Year Ago EPS$1.21First Business Financial Services Revenue ResultsActual Revenue$1.14 billionExpected Revenue$1.11 billionBeat/MissBeat by +$28.06 millionYoY Revenue Growth+5.70%First Business Financial Services Announcement DetailsQuarterQ2 2024Date8/1/2024TimeBefore Market OpensConference Call DateThursday, August 1, 2024Conference Call Time11:00AM ETUpcoming EarningsColliers International Group's Q1 2025 earnings is scheduled for Tuesday, May 6, 2025, with a conference call scheduled at 11:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckInterim ReportEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Colliers International Group Q2 2024 Earnings Call TranscriptProvided by QuartrAugust 1, 2024 ShareLink copied to clipboard.There are 10 speakers on the call. Operator00:00:00Welcome to the Colliers International Second Quarter Investors Conference Call. Legal counsel requires us to advise that the discussion scheduled to take place today may contain forward looking statements that involve known and unknown risks and uncertainties. Actual results may be materially different from any future results, performance or achievements contemplated in the forward looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward looking statements is contained in the company's annual information form as filed with the Canadian Securities Administrators and in the company's annual report on Form 40F as filed with the U. S. Operator00:00:46Securities and Exchange Commission. As a reminder, today's call is being recorded. Today is Thursday, August 1, 2024. And at this time, for opening remarks and introductions, I would like to turn the call over to the Global Chairman and Chief Executive Officer, Mr. Jay Hennig. Operator00:01:06Please go ahead, sir. Speaker 100:01:09Thank you, operator. Good morning, and thanks for joining us for the Q2 conference call. I'm Jay Hennick, Chairman and Chief Executive Officer of the company. With me today is Chris McLaren, CEO of Real Estate Services and Christian Mayer, our Chief Financial Officer. As always, this call is being webcast and is available in the Investor Relations section of our website along with a presentation slide deck. Speaker 100:01:38During the quarter, Colliers delivered solid results with growth across all service lines and segments. Leasing revenues exceeded expectations, while Capital Markets saw modest growth for the first time in 24 months, albeit from a relatively low bar. With lower interest rates, greater availability of debt, the narrowing of bid ask spreads, we anticipate the deal activity and therefore sales volumes for Colliers should begin to recover from here. As expected, our high value recurring service lines, outsourcing and advisory and investment management continued to deliver solid and predictable growth during the quarter. Assets under management were slightly over $96,000,000,000 Since our business continues to meet expectations, we're maintaining our financial outlook for the year as Christian will elaborate on shortly. Speaker 100:02:40Earlier this week, we completed the previously announced acquisition of EnGlobe, a leading multi disciplined engineering, environmental and inspection services platform. This acquisition establishes Colliers as one of the top players in Canada, complements our rapidly growing engineering operations across the U. S. And Australia and aligns with our strategy of increasing our high value recurring revenue streams, which will now represent 72% of our earnings. Having such a large percentage of recurring earnings further underscores the Colliers' highly differentiated business model and sets us further apart from the others. Speaker 100:03:26Since 20 15, our committed leadership team with substantial ownership has continued to reposition our company to create growth and value for shareholders. One step at a time, we have grown Colliers into the global leader it is in commercial real estate and then expanded our business to include 3 complementary growth engines, real estate services, engineering and investment management. With the acquisition of Englobe, our engineering and project management capabilities have now reached scale with over 8,000 employees generating about $1,300,000,000 in annualized revenues. As a result, beginning in the Q3, we will be realigning our segment reporting to focus on these 3 specific growth engines. This change will enable investors to better appreciate the value, strength and potential of Colliers as a well managed, growth oriented professional services and asset management business with a 30 year track record of delivering 20 percent annualized returns for shareholders. Speaker 100:04:36Now let me ask Chris McLaren to discuss some highlights. Once he's completed, Christian will provide his financial report and then we'll open things up for questions. Chris? Speaker 200:04:47Thank you, Jay. Good morning, everyone. Colliers had a successful second quarter marked by growth across all our service lines and segments, reflecting the strength of our diversified platform. Leasing revenues were up 13% driven by strong activity in the office and industrial asset classes in the Americas and the EMEA regions. As occupiers are becoming more confident in their business plans coupled with the improving return to work trends and the flight to quality offices, we are seeing an increased velocity of leasing transactions. Speaker 200:05:20For example, office leasing was up 18% globally and notably up 32% in the Americas. We also witnessed strong office leasing growth in several other countries including Germany, France, the Netherlands, New Zealand, China, Hong Kong and India. As Jay mentioned, capital markets showed the 1st period of growth since the Q2 of 2022. We outperformed industry benchmarks and continued to gain market share, a direct result of our decision to strategically invest in our business and our people. A great example is our debt finance operations in North America, where we saw substantial improvement in loan origination activity, particularly in the multifamily asset class. Speaker 200:06:07Meanwhile, our high value outsourcing advisory services continued to deliver solid growth this quarter. Revenues were up 5% with solid pipelines and revenue visibility across our service lines through to the end of the year. As Jay mentioned, we are extremely excited to welcome EnGlobe to Colliers. The platform significantly bolsters our engineering and project management capabilities and will deliver exceptional returns over the coming years. Our performance to date is a testament to our strong enterprising culture, a unique culture that we have cultivated over many years that is hard to replicate. Speaker 200:06:46Colliers has become the platform of choice for entrepreneurial professionals who want to leverage their careers for success. Our latest global engagement survey, which had an impressive 88% participation rate and high engagement scores that exceeded external benchmarks shows that our people remain engaged, motivated and passionate about our business and accelerating success of our clients. Now I'll turn things over to Christian, who will provide more details on our financials. Speaker 300:07:17Thank you, Chris, and good morning. Please note that all references to revenue growth made on this call are expressed in local currency and that the non GAAP measures discussed here today are as defined in the materials accompanying this call. Our second quarter revenues were $1,100,000,000 up 6% relative to the prior year period. Each of our service lines and segments reported revenue growth for the quarter. Internal growth was 5% overall and was led by double digit gains in leasing in the Americas and in EMEA. Speaker 300:07:542nd quarter adjusted EBITDA was 156,000,000 dollars up 6% over the prior year period with the margin increasing slightly to 13.7%. We continue to be agile in managing our operating costs to match the expected pace of revenues in our transactional businesses. The benefit of these actions was most evident in the Asia Pacific region where margins were up 120 basis points on essentially flat revenues. In our Investment Management segment, we raised $1,000,000,000 of new capital commitments during the Q2, bringing our year to date fundraising to 1,500,000,000 dollars Our full year fundraising estimate is at the lower end of our previously stated $5,000,000,000 to $8,000,000,000 range with awaiting to the 4th quarter. However, our fundraising pipelines are growing and investor interest in our highly differentiated alternative infrastructure and credit strategies as well as more traditional real estate asset classes continues to gain momentum. Speaker 300:09:092nd quarter assets under management were flat at $96,400,000,000 Growth from fundraising was offset by 1, dispositions of assets in older vintage funds returning capital to investors. 2, redemptions in certain open end funds. And 3, modest mark to market adjustments which totaled less than 25 basis points across the portfolio. As we mentioned previously, disposition activity in our funds is a healthy process resulting in the realization of gains and recycling of capital back to investors, which should position us well for future fundraising. We are maintaining our financial outlook for 2024 except for an increase to reflect the partial year impact of newly acquired EnGlobe. Speaker 300:10:06Our operating expectations remain unchanged. We continue to expect a recovery in capital markets activity in the 3rd and 4th quarters, although there is still a risk that this could be delayed to early 2025. In our recurring service lines, outsourcing and advisory and investment management, we continue to expect mid to high single digit revenue growth for the balance of the year. Regarding our balance sheet, our financial leverage ratio as defined as net debt to pro form a adjusted EBITDA was 2x as of June 30. We expect leverage to rise to the 2.5x range on account of Anglo for Q3, then to decline to approximately 2 times by year end as we generate seasonally strong cash flows and pay down our revolving credit facility. Speaker 300:11:04Looking ahead beyond the current year, I am very excited about the prospects for our business. Our new real estate services segment which will include capital markets and leasing as well as outsourcing is very well positioned for the coming rebound and transactional activity. Our engineering segment will benefit from public and private sector infrastructure tailwinds in the coming decade and beyond. Our investment management business is poised for an increase in capital flows to its highly differentiated investment strategies. These 3 complementary segments collectively are expected to deliver predictable high single digit annual internal growth in the years ahead. Speaker 300:11:52In addition, our time tested track record of balancing strong internal growth with strategic acquisitions done the Colliers way should continue to translate into exceptional long term returns for our shareholders. That concludes my prepared remarks. I would now like to open the call for questions. Operator, can you please open the line? Operator00:12:18Thank you. Ladies and gentlemen, we will now begin the question and answer Speaker 400:13:03Just a couple of questions. When you think about the new reporting structure, which I think is going to be well received, will you be giving sort of pro form a historicals that we can incorporate into our model and investors can use to assess sort of the margin profile for each of these segments? Speaker 300:13:24Yes, Steve. We'll be definitely doing that and look for those with the Q3 reporting. Speaker 400:13:31Okay. Okay. That's great. And then just on the investment management business with respect to just some of the puts and takes on dispositions versus fundraising. Can you talk about kind of that fundraising that's weighted to Q4? Speaker 400:13:48Where that's coming from? Where you're seeing that demand coming from? And then how you expect that to potentially grow or evolve into fiscal 2025? Speaker 100:14:02Yes. So as Christian mentioned, our pipelines, our fundraising pipelines are stronger than they've been for a long time. And I know I've said that a couple of quarters consistently. What is happening is it's not translating. It's translating faster into investments now. Speaker 100:14:25We're seeing it this year. But there's a lot of lookers. There's a lot of re ups. I was just meeting with one of our key guys yesterday and they were talking about their current fund that's closing this year and they had 100% re ups in LPs. The big guys are returning with the same or slightly more investment. Speaker 100:14:53The smaller guys are cutting their investments back a little bit because they're being required to reallocate capital, especially in areas where they can't get money out of some of the funds, some of the closed ended funds where they're committed. So we think there's a little bit better traction so far in the first half of the year. We're cautiously optimistic that we'll have a good finish to the year. But I think as Christian said, a little bit lighter than our forecasts are a little bit lighter than probably we had when we went into the year. I don't think it's going to impact our estimate of fundraising for the balance of the year might be slightly below where we expect. Speaker 400:15:50Okay. That's good color. Thanks, Jay. And then maybe just turning to the Capital Markets side of the business. Obviously, a nice modest positive inflection in the quarter. Speaker 400:16:04Just curious if you can give a little bit of color into what you're hearing on the ground from your broker network And what your pipeline of visibility or what your visibility looks like into the pipeline for activity into the balance of this year as well as into 2025? Speaker 200:16:23Hey, Stephen, it's Chris here. In regards to your question, I'd say sentiment is shifting to more positive outlook for sure. As there's more certainty in the interest rates will be coming down, we've seen reductions in Canada, the ECB and now the UK today. So there's a lot of confidence that the Fed will do the same thing sometime in the fall. So what we're seeing is that there's a huge increase in activity, a lot more meetings, a lot more pipeline. Speaker 200:16:53Our pipeline is growing and but we don't expect a normalized market probably into 2025. We think it's going to be more of a gradual approach to increasing the market activity. The other thing that I could tell you is that the last 18 months have been incredibly slow on the investment volume and it's been smaller tickets of €25,000,000 to €100,000,000 And now we're starting to see a few larger €100,000,000 plus transactions in the different regions. And this will start to set the transparency of pricing and probably spur more transaction activity. Speaker 500:17:34So I Speaker 200:17:34think we're very well positioned to take advantage of the pending improvements and we look forward to leveraging our great teams and platform going forward. Operator00:17:53Thank you. Your next question is from Stephen Sheldon from William Blair. Please ask your question. Speaker 600:18:02Hey, thanks. Nice results here. First, just in outsourcing and advisory, continued good growth there, but a little deceleration year over year. So anything to call out in terms of what's driving that slowdown? Was that driven by any specific business units within that segment? Speaker 600:18:19And how are you thinking about underlying growth there over the rest of the year, excluding obviously the inorganic boost from EnGlobe that will be coming on? Speaker 300:18:28Yes, Stephen. I mean the one thing I'd point out there is just ongoing flatness in our valuation business. As you know, our clients are on retainers there And the new flow comes from capital markets transactions, which are still at depressed levels. So the valuation revenues as a result were pretty flat in the quarter. On a full year basis, obviously, I noted in my comments, we expect mid to high single digit growth in outsourcing and advisory overall. Speaker 300:18:59And I'd say we're well on track to achieve that. Speaker 600:19:06Got it. Makes a lot of sense. And then, yeah, for Christian, any framework on how we should think about interest expense over the rest of the year as we think about our models, especially with I assume it will likely increase from capital in the acquisition? Speaker 300:19:22Yes, certainly. And Globe, we raised capital earlier this year as you know, that was applied to repay the revolver. That revolver has now been utilized to finance the Enbob acquisition, which is about US480 1,000,000 dollars when we closed on Monday. So you'll have to add that to your thinking as you map out the rest of the year for interest expense. Speaker 600:19:50All right. Thank you. Operator00:19:56Thank you. Your next question is from Jimmy Chaun from RBC Capital Markets. Please ask your question. Speaker 500:20:04Thanks. Obviously, a big quarter for the leasing business. I was wondering Jimmy, Speaker 300:20:11can you speak a little louder? We're having trouble hearing you. Speaker 100:20:13Jimmy, a little louder if you could. Speaker 500:20:17Sure. Can you hear me better now? Speaker 100:20:21Little better. Go. We're good. Operator00:20:33Jimmy disconnected his line. We will proceed with the next one. It's from Himanshu Gupta from Scotiabank. Please ask your question. Speaker 700:20:44Thank you and good morning. So just on the leasing front, I mean, it looks like leasing was better than expectations. And I think you mentioned about the office leasing strength in a number of markets. Can you speak to industrial leasing as well? I mean, is that an area of strength there as well? Speaker 200:21:07Yes. So Colliers has a strong industrial leasing and sales platform and leasing and industrial was up 11% globally for us this year. So we continue to see some good strength there in industrial. Speaker 700:21:25Okay. And was it like Americas or are you beginning to see in Europe as well? Speaker 200:21:33We're seeing it in Europe as well. Speaker 700:21:35Okay. Thank you. And then just turning to the capital markets, again, showing some stabilization and improvement. Would you say that June was better than April May, I mean, given the late moment or was it like across the board? Speaker 200:21:58I would say that, yes, it was slightly better, June. But as I mentioned, this going to be a gradual increase in the activity. I don't think there is a major catalyst moment where there is going to be a rush of transactions. This is really going to grow into Q3 and Q4 and probably hopefully normalizing in 2025. Speaker 100:22:24Got it. Which I mean, I might add, it's all upside if you think about it because Colliers has said great year over year growth across all sectors with capital markets being flat to the prior year. So as capital markets comes back, it impacts us greatly on the positive side, both in transactions itself, but let's not forget the large investment we made a couple of years ago in debt origination, debt placement, etcetera, Colliers Mortgage. And so there's a lot of upside, I would say, that is pent up that will start to come back gradually over time, as Chris said. But the way we look at it is it's just net upside for us and just another catalyst to the future. Speaker 700:23:22Got it. Thank you. And Speaker 200:23:25just to add to the conversation, another sign that the market is turning is that land is being transacted again. And so in Q2, land was 19% of our overall sales. So that's a positive sign. Speaker 700:23:40Got it. Thank you. And then as you mentioned that capital markets could be normalizing, let's say, next year. What's your definition of normal? I mean, is it the elevated COVID period, 2020 1, 2022? Speaker 700:23:59Or are we talking like pre pandemic period? I mean, how do you like where does the final Capital Markets settlement settle at? Speaker 200:24:08I mean, I think what we're hoping is that it gets to the 10 year average in terms of investment volumes. Speaker 700:24:16Okay. Okay. Speaker 300:24:17And then the other thing to think about here is that if you look over the past 3 or 4 years, we've acquired a business in the Nordics, which is a leader in capital markets, which added tremendous skill set in that area. We've also been recruiting folks in capital markets, debt advisors as well as capital market sales professionals. So our capacity I think now is stronger than it ever has been in this space. And certainly that will be additive as well. Speaker 700:24:49Sure. Sure. Thank you for that. Last question is on Investment Management. I think Q2 EBITDA margin came a bit lower. Speaker 700:25:00I mean, it looks like you're doing some investments, some additional expenses. So can you speak to it? And then are they done? Or should we continue to see increased investments for the rest of the year? Speaker 300:25:13Yes, Himanshu, we've been making investments in investment management, resources and infrastructure over the last year or so, adding capability on fundraising, which means staff and the related costs associated with that staff. It also means spending on new strategies. So that is legal fees to set up new funds, advisor fees, other costs to set those funds up and then to execute on those new funds, you also need people to do to run those funds and to execute on that on their asset acquisition plans and so forth. So I think we're going to continue to see some of those costs in the EBITDA results over the next little while. But as the fundraising picks up, the revenue will exceed the incremental costs and we'll see some margin rebound. Operator00:26:18Your next question is from Frederic Bastian from Raymond James. Please ask your question. Speaker 800:26:27Hi, good morning. Good morning, Brett. Well, great to see you gain further scale in engineering and also nice to see your stock being rewarded with an improved valuation here. Now, Jay, as you look to surface additional value and as the Engineering and Investment Management businesses continue to grow in size, does it make sense to start considering another split, basically a repeat of what you did with FirstService in 2015? Speaker 100:27:00Well, Fred, you've known us for a long time. So we consider all kinds of options, I don't know, daily, maybe 3 times a day. So we're always looking at those opportunities. For investment management in particular, we're doing lots of great things. As Christian mentioned, we're investment spending in that business to increase the number of investment strategies we have. Speaker 100:27:32We've invested in technology. We've invested in people and fundraising is a little soft. So we wouldn't do any. There's no rush to do anything until we have good momentum and good strength going forward. And we're building it one step at a time as we always have. Speaker 100:27:54But we're going to have to look at those kinds of things, generating incremental share value because as you know, a company like Colliers, which is as well managed as it is and global in proportion and great growth engines, we believe that we're trading at substantially below the value that we should be trading at on an ordinary in a normal circumstance. So yes, we're considering all options, but there's no rush for us. Speaker 800:28:35Awesome. Thanks, Jay. That's the answer I was looking for. That's all I have. Thank you. Speaker 800:28:42Thanks. Operator00:28:44Thank you. Your next question is from Jamie Shen from RBC Capital Markets. Please ask your question. Speaker 500:28:52Thank you. Sorry about that earlier. My question was about the leasing revenue and how are you thinking about the revenue growth in the back half of the year? Speaker 200:29:06Yes. So I think the revenue growth from leasing will continue at this pace. As we see the leasing is usually linked to GDP growth And as there's more confidence in the economy, we'll continue to see leasing strength. Speaker 500:29:26Okay. So that 13%, you don't see that as a bit of an anomaly or that is a reflection of sort of the catch up of prior leasing decisions by tenants being delayed. It's sort of it's more of a function of a recovery of the market as opposed to a catch up. Would that be fair? Speaker 300:29:47Well, I mean, look, Jamie, leasing is up 8% year to date. And I think in that range is a good number for the full year. We can't predict when leasing activity is going to fall exactly or not when it's going to occur exactly. That's a better way to put it. Speaker 100:30:05But certainly, there are strong signs, as Chris mentioned, to continued growth. And the other thing I would mention just from a standpoint of looking at the components of our business and realizing value, leasing has demonstrated over this entire period that it is as resilient as the other pieces of our business. In fact, more so, it's almost recurring in nature. If you take a look at it going back quarter for quarter over the same, let's call it, 24 months that has impacted capital markets. So when you step back and you look at this business and you take a look at the various component parts, the only part that is really cyclical is capital markets. Speaker 100:31:00The rest is very consistent give or take and leasing has surely demonstrated that to me over the course of the last couple of years. Speaker 500:31:14Yes. That makes sense. And then you mentioned the loan origination business seeing big growth. I wanted, what sort of growth did you see in the quarter? And how big of a business is that now relative to the overall capital markets business? Speaker 300:31:32Yes. So it's still quite small on an overall basis. We saw tremendous growth in loan origination during the quarter, up almost double the prior year's quarter. But what we are seeing is the profitability per loan being originated is lower and the mix is a little bit different. The Fannie Mae, GSE originations are more profitable. Speaker 300:31:57Those have not rebounded to levels we saw previously. There's a lot of refinancing happening in multifamily. There are debt funds and other investors coming in with short term capital on these. And we are participating in placing that debt, but at lower margins because it's not the same as doing a Fannie Mae type of origination and it doesn't have the same kind of profit potential. So it's a nice part of our business. Speaker 300:32:24We generate today a little bit north of $100,000,000 of revenue in that segment, but has potential to be significantly more than that as the market rebounds. Speaker 200:32:35And another key factor to the growth in this area is our recruitment. So we've had a number of strong recruitments both in Canada and the U. S. Bolstering this business? Speaker 100:32:47It is not yet really paid yet because of the slowness in capital markets. Again, it's another segment of our business that's there. We have a national platform both in Canada and the U. S. And we haven't realized the benefits yet. Speaker 100:33:04And to us, it's just upside over the next couple of quarters, we hope or longer. Speaker 800:33:14Okay. All right. Thank you. Operator00:33:20Thank you. Your next question is from Daryl Young from Stifel. Please ask your question. Speaker 900:33:26Hey, good morning everyone. I just had one on the Englobe acquisition. Just wondering if there's any cross border element to this in terms of leveraging some of the specialty capabilities Anglop has into the U. S. Team? Speaker 900:33:41And then also how you're thinking about building from here? I know you've tucked under opportunities from here, but are you at a scale now that you can start recruiting professionals organically and this starts to really spool up the organic growth side of things on maybe even a global basis? Speaker 100:34:01So let me unpack a couple of those things. First of all, one of the beauties of NGLO was that it was entirely a Canadian platform that was coast to coast. And we see a great opportunity to continue to consolidate and strengthen that business across Canada. The other thing that people don't really appreciate is that in addition to NGLOBE, Colliers Project Leaders is the largest project management firm in Canada by a country mile. And all of the other engineering firms have project management And EnGlobe has no project management in it. Speaker 100:34:40If you put the 2 of them together, EnGlobe might be one of the top 3 or 4 players in Canada. So we're very excited about that acquisition. We're very excited to be able to marry the relationships between Colliers Project Leaders and NGLOBE, which will be rebranded as Colliers over time. And so that's sort of the first question you asked. The second question is there is a lot of international, primarily right now U. Speaker 100:35:11S, Canada business and more importantly perhaps is expertise in certain areas that can be transferred, Canada, U. S, U. S, Canada and professionals can work on the same types of projects regardless of the border. So we see over time that accelerating. And obviously for Canadian investors, you'll know that the costs, the labor costs in Canada are actually lower than the labor costs on average in the U. Speaker 100:35:47S. And so there's some opportunities I think to gain some additional synergies there. So as Christian said in his comments, we're very excited about that acquisition. We had our eye on that for probably 3 years, 4 years and it had to work its way through the system. But for us, it was the perfect addition and it filled us out in North America. Speaker 100:36:15But we see great growth opportunities for that business in Europe. And obviously, Australia is growing rapidly, New Zealand. And so we think that there'll be lots of growth yet to come over the coming years. Speaker 300:36:33Just to add to that, Jay, I think Daryl was asking specifically about Canadian tuck in opportunities. And I do think there are a significant number of tuck in opportunities for us and we've got a pipeline already that we're actively pursuing. So we hope to be able to execute on a few of those to build scale additional scale for nGlobe and additional practice areas, additional geographic coverage for nGlobe in the years to come. Speaker 900:37:06Got it. That's great color guys. Thanks very much. I'll get back in the queue. Operator00:37:15Thank you. There are no further questions at this time. Please proceed. Speaker 100:37:35Okay. Thank you, operator, and thanks, everyone, for participating. And we look forward to visiting again on our Q3 conference call. Thank you. Operator00:37:47Thank you. Ladies and gentlemen, this concludes the conference call. Thank you for your participation and have a nice day.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallColliers International Group Q2 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckInterim report First Business Financial Services Earnings HeadlinesColliers announces acquisition of TriovestApril 15, 2025 | globenewswire.comColliers International Is Reasonably Defensive With A Potential CatalystApril 14, 2025 | seekingalpha.comClaim Your FREE Protection GuideIn the final days of his first term, Trump quietly left open an "off the books" wealth-protection loophole hidden in the 6,871 pages of the IRS Tax Code... And since then, "in the know" patriots have quietly used this same "Trump loophole" to shield their life savings from the economic chaos. But with Trump now forcefully bringing back millions of manufacturing jobs from Mexico, China, and the entire BRICS anti-dollar coalition...April 20, 2025 | American Alternative (Ad)JPMorgan Chase & Co. Cuts Colliers International Group (NASDAQ:CIGI) Price Target to $142.00April 13, 2025 | americanbankingnews.comColliers International price target lowered to $142 from $167 at JPMorganApril 11, 2025 | markets.businessinsider.comFirstService Corporation Elects Directors and Confirms AuditorApril 2, 2025 | tipranks.comSee More Colliers International Group Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like First Business Financial Services? Sign up for Earnings360's daily newsletter to receive timely earnings updates on First Business Financial Services and other key companies, straight to your email. Email Address About First Business Financial ServicesFirst Business Financial Services (NASDAQ:FBIZ) operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals in Wisconsin, Kansas, and Missouri. The company offers real estate lending, commercial and industrial lending, asset-based lending, accounts receivable financing, equipment financing loans and leases, floorplan financing, vendor financing, small business administration lending and servicing, treasury management solutions, and company retirement services. It also provides private wealth management for individuals, including creating and executing asset allocation strategies, trust and estate administration, financial planning, investment management, and access to brokerage and custody-only services. In addition, the company offers bank consulting consisting of investment portfolio administrative and asset liability management services, and commercial deposit accounts. The company was founded in 1909 and is headquartered in Madison, Wisconsin.View First Business Financial Services ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Archer Aviation Unveils NYC Network Ahead of Key Earnings Report3 Reasons to Like the Look of Amazon Ahead of EarningsTesla Stock Eyes Breakout With Earnings on DeckJohnson & Johnson Earnings Were More Good Than Bad—Time to Buy? Why Analysts Boosted United Airlines Stock Ahead of EarningsLamb Weston Stock Rises, Earnings Provide Calm Amidst ChaosIntuitive Machines Gains After Earnings Beat, NASA Missions Ahead Upcoming Earnings Tesla (4/22/2025)Intuitive Surgical (4/22/2025)Verizon Communications (4/22/2025)Canadian National Railway (4/22/2025)Novartis (4/22/2025)RTX (4/22/2025)3M (4/22/2025)Capital One Financial (4/22/2025)General Electric (4/22/2025)Danaher (4/22/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
There are 10 speakers on the call. Operator00:00:00Welcome to the Colliers International Second Quarter Investors Conference Call. Legal counsel requires us to advise that the discussion scheduled to take place today may contain forward looking statements that involve known and unknown risks and uncertainties. Actual results may be materially different from any future results, performance or achievements contemplated in the forward looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward looking statements is contained in the company's annual information form as filed with the Canadian Securities Administrators and in the company's annual report on Form 40F as filed with the U. S. Operator00:00:46Securities and Exchange Commission. As a reminder, today's call is being recorded. Today is Thursday, August 1, 2024. And at this time, for opening remarks and introductions, I would like to turn the call over to the Global Chairman and Chief Executive Officer, Mr. Jay Hennig. Operator00:01:06Please go ahead, sir. Speaker 100:01:09Thank you, operator. Good morning, and thanks for joining us for the Q2 conference call. I'm Jay Hennick, Chairman and Chief Executive Officer of the company. With me today is Chris McLaren, CEO of Real Estate Services and Christian Mayer, our Chief Financial Officer. As always, this call is being webcast and is available in the Investor Relations section of our website along with a presentation slide deck. Speaker 100:01:38During the quarter, Colliers delivered solid results with growth across all service lines and segments. Leasing revenues exceeded expectations, while Capital Markets saw modest growth for the first time in 24 months, albeit from a relatively low bar. With lower interest rates, greater availability of debt, the narrowing of bid ask spreads, we anticipate the deal activity and therefore sales volumes for Colliers should begin to recover from here. As expected, our high value recurring service lines, outsourcing and advisory and investment management continued to deliver solid and predictable growth during the quarter. Assets under management were slightly over $96,000,000,000 Since our business continues to meet expectations, we're maintaining our financial outlook for the year as Christian will elaborate on shortly. Speaker 100:02:40Earlier this week, we completed the previously announced acquisition of EnGlobe, a leading multi disciplined engineering, environmental and inspection services platform. This acquisition establishes Colliers as one of the top players in Canada, complements our rapidly growing engineering operations across the U. S. And Australia and aligns with our strategy of increasing our high value recurring revenue streams, which will now represent 72% of our earnings. Having such a large percentage of recurring earnings further underscores the Colliers' highly differentiated business model and sets us further apart from the others. Speaker 100:03:26Since 20 15, our committed leadership team with substantial ownership has continued to reposition our company to create growth and value for shareholders. One step at a time, we have grown Colliers into the global leader it is in commercial real estate and then expanded our business to include 3 complementary growth engines, real estate services, engineering and investment management. With the acquisition of Englobe, our engineering and project management capabilities have now reached scale with over 8,000 employees generating about $1,300,000,000 in annualized revenues. As a result, beginning in the Q3, we will be realigning our segment reporting to focus on these 3 specific growth engines. This change will enable investors to better appreciate the value, strength and potential of Colliers as a well managed, growth oriented professional services and asset management business with a 30 year track record of delivering 20 percent annualized returns for shareholders. Speaker 100:04:36Now let me ask Chris McLaren to discuss some highlights. Once he's completed, Christian will provide his financial report and then we'll open things up for questions. Chris? Speaker 200:04:47Thank you, Jay. Good morning, everyone. Colliers had a successful second quarter marked by growth across all our service lines and segments, reflecting the strength of our diversified platform. Leasing revenues were up 13% driven by strong activity in the office and industrial asset classes in the Americas and the EMEA regions. As occupiers are becoming more confident in their business plans coupled with the improving return to work trends and the flight to quality offices, we are seeing an increased velocity of leasing transactions. Speaker 200:05:20For example, office leasing was up 18% globally and notably up 32% in the Americas. We also witnessed strong office leasing growth in several other countries including Germany, France, the Netherlands, New Zealand, China, Hong Kong and India. As Jay mentioned, capital markets showed the 1st period of growth since the Q2 of 2022. We outperformed industry benchmarks and continued to gain market share, a direct result of our decision to strategically invest in our business and our people. A great example is our debt finance operations in North America, where we saw substantial improvement in loan origination activity, particularly in the multifamily asset class. Speaker 200:06:07Meanwhile, our high value outsourcing advisory services continued to deliver solid growth this quarter. Revenues were up 5% with solid pipelines and revenue visibility across our service lines through to the end of the year. As Jay mentioned, we are extremely excited to welcome EnGlobe to Colliers. The platform significantly bolsters our engineering and project management capabilities and will deliver exceptional returns over the coming years. Our performance to date is a testament to our strong enterprising culture, a unique culture that we have cultivated over many years that is hard to replicate. Speaker 200:06:46Colliers has become the platform of choice for entrepreneurial professionals who want to leverage their careers for success. Our latest global engagement survey, which had an impressive 88% participation rate and high engagement scores that exceeded external benchmarks shows that our people remain engaged, motivated and passionate about our business and accelerating success of our clients. Now I'll turn things over to Christian, who will provide more details on our financials. Speaker 300:07:17Thank you, Chris, and good morning. Please note that all references to revenue growth made on this call are expressed in local currency and that the non GAAP measures discussed here today are as defined in the materials accompanying this call. Our second quarter revenues were $1,100,000,000 up 6% relative to the prior year period. Each of our service lines and segments reported revenue growth for the quarter. Internal growth was 5% overall and was led by double digit gains in leasing in the Americas and in EMEA. Speaker 300:07:542nd quarter adjusted EBITDA was 156,000,000 dollars up 6% over the prior year period with the margin increasing slightly to 13.7%. We continue to be agile in managing our operating costs to match the expected pace of revenues in our transactional businesses. The benefit of these actions was most evident in the Asia Pacific region where margins were up 120 basis points on essentially flat revenues. In our Investment Management segment, we raised $1,000,000,000 of new capital commitments during the Q2, bringing our year to date fundraising to 1,500,000,000 dollars Our full year fundraising estimate is at the lower end of our previously stated $5,000,000,000 to $8,000,000,000 range with awaiting to the 4th quarter. However, our fundraising pipelines are growing and investor interest in our highly differentiated alternative infrastructure and credit strategies as well as more traditional real estate asset classes continues to gain momentum. Speaker 300:09:092nd quarter assets under management were flat at $96,400,000,000 Growth from fundraising was offset by 1, dispositions of assets in older vintage funds returning capital to investors. 2, redemptions in certain open end funds. And 3, modest mark to market adjustments which totaled less than 25 basis points across the portfolio. As we mentioned previously, disposition activity in our funds is a healthy process resulting in the realization of gains and recycling of capital back to investors, which should position us well for future fundraising. We are maintaining our financial outlook for 2024 except for an increase to reflect the partial year impact of newly acquired EnGlobe. Speaker 300:10:06Our operating expectations remain unchanged. We continue to expect a recovery in capital markets activity in the 3rd and 4th quarters, although there is still a risk that this could be delayed to early 2025. In our recurring service lines, outsourcing and advisory and investment management, we continue to expect mid to high single digit revenue growth for the balance of the year. Regarding our balance sheet, our financial leverage ratio as defined as net debt to pro form a adjusted EBITDA was 2x as of June 30. We expect leverage to rise to the 2.5x range on account of Anglo for Q3, then to decline to approximately 2 times by year end as we generate seasonally strong cash flows and pay down our revolving credit facility. Speaker 300:11:04Looking ahead beyond the current year, I am very excited about the prospects for our business. Our new real estate services segment which will include capital markets and leasing as well as outsourcing is very well positioned for the coming rebound and transactional activity. Our engineering segment will benefit from public and private sector infrastructure tailwinds in the coming decade and beyond. Our investment management business is poised for an increase in capital flows to its highly differentiated investment strategies. These 3 complementary segments collectively are expected to deliver predictable high single digit annual internal growth in the years ahead. Speaker 300:11:52In addition, our time tested track record of balancing strong internal growth with strategic acquisitions done the Colliers way should continue to translate into exceptional long term returns for our shareholders. That concludes my prepared remarks. I would now like to open the call for questions. Operator, can you please open the line? Operator00:12:18Thank you. Ladies and gentlemen, we will now begin the question and answer Speaker 400:13:03Just a couple of questions. When you think about the new reporting structure, which I think is going to be well received, will you be giving sort of pro form a historicals that we can incorporate into our model and investors can use to assess sort of the margin profile for each of these segments? Speaker 300:13:24Yes, Steve. We'll be definitely doing that and look for those with the Q3 reporting. Speaker 400:13:31Okay. Okay. That's great. And then just on the investment management business with respect to just some of the puts and takes on dispositions versus fundraising. Can you talk about kind of that fundraising that's weighted to Q4? Speaker 400:13:48Where that's coming from? Where you're seeing that demand coming from? And then how you expect that to potentially grow or evolve into fiscal 2025? Speaker 100:14:02Yes. So as Christian mentioned, our pipelines, our fundraising pipelines are stronger than they've been for a long time. And I know I've said that a couple of quarters consistently. What is happening is it's not translating. It's translating faster into investments now. Speaker 100:14:25We're seeing it this year. But there's a lot of lookers. There's a lot of re ups. I was just meeting with one of our key guys yesterday and they were talking about their current fund that's closing this year and they had 100% re ups in LPs. The big guys are returning with the same or slightly more investment. Speaker 100:14:53The smaller guys are cutting their investments back a little bit because they're being required to reallocate capital, especially in areas where they can't get money out of some of the funds, some of the closed ended funds where they're committed. So we think there's a little bit better traction so far in the first half of the year. We're cautiously optimistic that we'll have a good finish to the year. But I think as Christian said, a little bit lighter than our forecasts are a little bit lighter than probably we had when we went into the year. I don't think it's going to impact our estimate of fundraising for the balance of the year might be slightly below where we expect. Speaker 400:15:50Okay. That's good color. Thanks, Jay. And then maybe just turning to the Capital Markets side of the business. Obviously, a nice modest positive inflection in the quarter. Speaker 400:16:04Just curious if you can give a little bit of color into what you're hearing on the ground from your broker network And what your pipeline of visibility or what your visibility looks like into the pipeline for activity into the balance of this year as well as into 2025? Speaker 200:16:23Hey, Stephen, it's Chris here. In regards to your question, I'd say sentiment is shifting to more positive outlook for sure. As there's more certainty in the interest rates will be coming down, we've seen reductions in Canada, the ECB and now the UK today. So there's a lot of confidence that the Fed will do the same thing sometime in the fall. So what we're seeing is that there's a huge increase in activity, a lot more meetings, a lot more pipeline. Speaker 200:16:53Our pipeline is growing and but we don't expect a normalized market probably into 2025. We think it's going to be more of a gradual approach to increasing the market activity. The other thing that I could tell you is that the last 18 months have been incredibly slow on the investment volume and it's been smaller tickets of €25,000,000 to €100,000,000 And now we're starting to see a few larger €100,000,000 plus transactions in the different regions. And this will start to set the transparency of pricing and probably spur more transaction activity. Speaker 500:17:34So I Speaker 200:17:34think we're very well positioned to take advantage of the pending improvements and we look forward to leveraging our great teams and platform going forward. Operator00:17:53Thank you. Your next question is from Stephen Sheldon from William Blair. Please ask your question. Speaker 600:18:02Hey, thanks. Nice results here. First, just in outsourcing and advisory, continued good growth there, but a little deceleration year over year. So anything to call out in terms of what's driving that slowdown? Was that driven by any specific business units within that segment? Speaker 600:18:19And how are you thinking about underlying growth there over the rest of the year, excluding obviously the inorganic boost from EnGlobe that will be coming on? Speaker 300:18:28Yes, Stephen. I mean the one thing I'd point out there is just ongoing flatness in our valuation business. As you know, our clients are on retainers there And the new flow comes from capital markets transactions, which are still at depressed levels. So the valuation revenues as a result were pretty flat in the quarter. On a full year basis, obviously, I noted in my comments, we expect mid to high single digit growth in outsourcing and advisory overall. Speaker 300:18:59And I'd say we're well on track to achieve that. Speaker 600:19:06Got it. Makes a lot of sense. And then, yeah, for Christian, any framework on how we should think about interest expense over the rest of the year as we think about our models, especially with I assume it will likely increase from capital in the acquisition? Speaker 300:19:22Yes, certainly. And Globe, we raised capital earlier this year as you know, that was applied to repay the revolver. That revolver has now been utilized to finance the Enbob acquisition, which is about US480 1,000,000 dollars when we closed on Monday. So you'll have to add that to your thinking as you map out the rest of the year for interest expense. Speaker 600:19:50All right. Thank you. Operator00:19:56Thank you. Your next question is from Jimmy Chaun from RBC Capital Markets. Please ask your question. Speaker 500:20:04Thanks. Obviously, a big quarter for the leasing business. I was wondering Jimmy, Speaker 300:20:11can you speak a little louder? We're having trouble hearing you. Speaker 100:20:13Jimmy, a little louder if you could. Speaker 500:20:17Sure. Can you hear me better now? Speaker 100:20:21Little better. Go. We're good. Operator00:20:33Jimmy disconnected his line. We will proceed with the next one. It's from Himanshu Gupta from Scotiabank. Please ask your question. Speaker 700:20:44Thank you and good morning. So just on the leasing front, I mean, it looks like leasing was better than expectations. And I think you mentioned about the office leasing strength in a number of markets. Can you speak to industrial leasing as well? I mean, is that an area of strength there as well? Speaker 200:21:07Yes. So Colliers has a strong industrial leasing and sales platform and leasing and industrial was up 11% globally for us this year. So we continue to see some good strength there in industrial. Speaker 700:21:25Okay. And was it like Americas or are you beginning to see in Europe as well? Speaker 200:21:33We're seeing it in Europe as well. Speaker 700:21:35Okay. Thank you. And then just turning to the capital markets, again, showing some stabilization and improvement. Would you say that June was better than April May, I mean, given the late moment or was it like across the board? Speaker 200:21:58I would say that, yes, it was slightly better, June. But as I mentioned, this going to be a gradual increase in the activity. I don't think there is a major catalyst moment where there is going to be a rush of transactions. This is really going to grow into Q3 and Q4 and probably hopefully normalizing in 2025. Speaker 100:22:24Got it. Which I mean, I might add, it's all upside if you think about it because Colliers has said great year over year growth across all sectors with capital markets being flat to the prior year. So as capital markets comes back, it impacts us greatly on the positive side, both in transactions itself, but let's not forget the large investment we made a couple of years ago in debt origination, debt placement, etcetera, Colliers Mortgage. And so there's a lot of upside, I would say, that is pent up that will start to come back gradually over time, as Chris said. But the way we look at it is it's just net upside for us and just another catalyst to the future. Speaker 700:23:22Got it. Thank you. And Speaker 200:23:25just to add to the conversation, another sign that the market is turning is that land is being transacted again. And so in Q2, land was 19% of our overall sales. So that's a positive sign. Speaker 700:23:40Got it. Thank you. And then as you mentioned that capital markets could be normalizing, let's say, next year. What's your definition of normal? I mean, is it the elevated COVID period, 2020 1, 2022? Speaker 700:23:59Or are we talking like pre pandemic period? I mean, how do you like where does the final Capital Markets settlement settle at? Speaker 200:24:08I mean, I think what we're hoping is that it gets to the 10 year average in terms of investment volumes. Speaker 700:24:16Okay. Okay. Speaker 300:24:17And then the other thing to think about here is that if you look over the past 3 or 4 years, we've acquired a business in the Nordics, which is a leader in capital markets, which added tremendous skill set in that area. We've also been recruiting folks in capital markets, debt advisors as well as capital market sales professionals. So our capacity I think now is stronger than it ever has been in this space. And certainly that will be additive as well. Speaker 700:24:49Sure. Sure. Thank you for that. Last question is on Investment Management. I think Q2 EBITDA margin came a bit lower. Speaker 700:25:00I mean, it looks like you're doing some investments, some additional expenses. So can you speak to it? And then are they done? Or should we continue to see increased investments for the rest of the year? Speaker 300:25:13Yes, Himanshu, we've been making investments in investment management, resources and infrastructure over the last year or so, adding capability on fundraising, which means staff and the related costs associated with that staff. It also means spending on new strategies. So that is legal fees to set up new funds, advisor fees, other costs to set those funds up and then to execute on those new funds, you also need people to do to run those funds and to execute on that on their asset acquisition plans and so forth. So I think we're going to continue to see some of those costs in the EBITDA results over the next little while. But as the fundraising picks up, the revenue will exceed the incremental costs and we'll see some margin rebound. Operator00:26:18Your next question is from Frederic Bastian from Raymond James. Please ask your question. Speaker 800:26:27Hi, good morning. Good morning, Brett. Well, great to see you gain further scale in engineering and also nice to see your stock being rewarded with an improved valuation here. Now, Jay, as you look to surface additional value and as the Engineering and Investment Management businesses continue to grow in size, does it make sense to start considering another split, basically a repeat of what you did with FirstService in 2015? Speaker 100:27:00Well, Fred, you've known us for a long time. So we consider all kinds of options, I don't know, daily, maybe 3 times a day. So we're always looking at those opportunities. For investment management in particular, we're doing lots of great things. As Christian mentioned, we're investment spending in that business to increase the number of investment strategies we have. Speaker 100:27:32We've invested in technology. We've invested in people and fundraising is a little soft. So we wouldn't do any. There's no rush to do anything until we have good momentum and good strength going forward. And we're building it one step at a time as we always have. Speaker 100:27:54But we're going to have to look at those kinds of things, generating incremental share value because as you know, a company like Colliers, which is as well managed as it is and global in proportion and great growth engines, we believe that we're trading at substantially below the value that we should be trading at on an ordinary in a normal circumstance. So yes, we're considering all options, but there's no rush for us. Speaker 800:28:35Awesome. Thanks, Jay. That's the answer I was looking for. That's all I have. Thank you. Speaker 800:28:42Thanks. Operator00:28:44Thank you. Your next question is from Jamie Shen from RBC Capital Markets. Please ask your question. Speaker 500:28:52Thank you. Sorry about that earlier. My question was about the leasing revenue and how are you thinking about the revenue growth in the back half of the year? Speaker 200:29:06Yes. So I think the revenue growth from leasing will continue at this pace. As we see the leasing is usually linked to GDP growth And as there's more confidence in the economy, we'll continue to see leasing strength. Speaker 500:29:26Okay. So that 13%, you don't see that as a bit of an anomaly or that is a reflection of sort of the catch up of prior leasing decisions by tenants being delayed. It's sort of it's more of a function of a recovery of the market as opposed to a catch up. Would that be fair? Speaker 300:29:47Well, I mean, look, Jamie, leasing is up 8% year to date. And I think in that range is a good number for the full year. We can't predict when leasing activity is going to fall exactly or not when it's going to occur exactly. That's a better way to put it. Speaker 100:30:05But certainly, there are strong signs, as Chris mentioned, to continued growth. And the other thing I would mention just from a standpoint of looking at the components of our business and realizing value, leasing has demonstrated over this entire period that it is as resilient as the other pieces of our business. In fact, more so, it's almost recurring in nature. If you take a look at it going back quarter for quarter over the same, let's call it, 24 months that has impacted capital markets. So when you step back and you look at this business and you take a look at the various component parts, the only part that is really cyclical is capital markets. Speaker 100:31:00The rest is very consistent give or take and leasing has surely demonstrated that to me over the course of the last couple of years. Speaker 500:31:14Yes. That makes sense. And then you mentioned the loan origination business seeing big growth. I wanted, what sort of growth did you see in the quarter? And how big of a business is that now relative to the overall capital markets business? Speaker 300:31:32Yes. So it's still quite small on an overall basis. We saw tremendous growth in loan origination during the quarter, up almost double the prior year's quarter. But what we are seeing is the profitability per loan being originated is lower and the mix is a little bit different. The Fannie Mae, GSE originations are more profitable. Speaker 300:31:57Those have not rebounded to levels we saw previously. There's a lot of refinancing happening in multifamily. There are debt funds and other investors coming in with short term capital on these. And we are participating in placing that debt, but at lower margins because it's not the same as doing a Fannie Mae type of origination and it doesn't have the same kind of profit potential. So it's a nice part of our business. Speaker 300:32:24We generate today a little bit north of $100,000,000 of revenue in that segment, but has potential to be significantly more than that as the market rebounds. Speaker 200:32:35And another key factor to the growth in this area is our recruitment. So we've had a number of strong recruitments both in Canada and the U. S. Bolstering this business? Speaker 100:32:47It is not yet really paid yet because of the slowness in capital markets. Again, it's another segment of our business that's there. We have a national platform both in Canada and the U. S. And we haven't realized the benefits yet. Speaker 100:33:04And to us, it's just upside over the next couple of quarters, we hope or longer. Speaker 800:33:14Okay. All right. Thank you. Operator00:33:20Thank you. Your next question is from Daryl Young from Stifel. Please ask your question. Speaker 900:33:26Hey, good morning everyone. I just had one on the Englobe acquisition. Just wondering if there's any cross border element to this in terms of leveraging some of the specialty capabilities Anglop has into the U. S. Team? Speaker 900:33:41And then also how you're thinking about building from here? I know you've tucked under opportunities from here, but are you at a scale now that you can start recruiting professionals organically and this starts to really spool up the organic growth side of things on maybe even a global basis? Speaker 100:34:01So let me unpack a couple of those things. First of all, one of the beauties of NGLO was that it was entirely a Canadian platform that was coast to coast. And we see a great opportunity to continue to consolidate and strengthen that business across Canada. The other thing that people don't really appreciate is that in addition to NGLOBE, Colliers Project Leaders is the largest project management firm in Canada by a country mile. And all of the other engineering firms have project management And EnGlobe has no project management in it. Speaker 100:34:40If you put the 2 of them together, EnGlobe might be one of the top 3 or 4 players in Canada. So we're very excited about that acquisition. We're very excited to be able to marry the relationships between Colliers Project Leaders and NGLOBE, which will be rebranded as Colliers over time. And so that's sort of the first question you asked. The second question is there is a lot of international, primarily right now U. Speaker 100:35:11S, Canada business and more importantly perhaps is expertise in certain areas that can be transferred, Canada, U. S, U. S, Canada and professionals can work on the same types of projects regardless of the border. So we see over time that accelerating. And obviously for Canadian investors, you'll know that the costs, the labor costs in Canada are actually lower than the labor costs on average in the U. Speaker 100:35:47S. And so there's some opportunities I think to gain some additional synergies there. So as Christian said in his comments, we're very excited about that acquisition. We had our eye on that for probably 3 years, 4 years and it had to work its way through the system. But for us, it was the perfect addition and it filled us out in North America. Speaker 100:36:15But we see great growth opportunities for that business in Europe. And obviously, Australia is growing rapidly, New Zealand. And so we think that there'll be lots of growth yet to come over the coming years. Speaker 300:36:33Just to add to that, Jay, I think Daryl was asking specifically about Canadian tuck in opportunities. And I do think there are a significant number of tuck in opportunities for us and we've got a pipeline already that we're actively pursuing. So we hope to be able to execute on a few of those to build scale additional scale for nGlobe and additional practice areas, additional geographic coverage for nGlobe in the years to come. Speaker 900:37:06Got it. That's great color guys. Thanks very much. I'll get back in the queue. Operator00:37:15Thank you. There are no further questions at this time. Please proceed. Speaker 100:37:35Okay. Thank you, operator, and thanks, everyone, for participating. And we look forward to visiting again on our Q3 conference call. Thank you. Operator00:37:47Thank you. Ladies and gentlemen, this concludes the conference call. Thank you for your participation and have a nice day.Read morePowered by