Q1 2022 Colliers International Group Inc Earnings Call

May 3, 2022

Yeah.

First quarter investors conference call.

Today's call is being recorded.

Okay.

So the discussion scheduled to take place today may contain forward looking statements, John both known and unknown risks and uncertainties.

Actual results may be materially different from any future results performance or achievements comes data into forward looking statements.

Additional information concerning factors that could cause actual results to materially differ from dosing to forward looking statements is contained in the Companys annual information form as filed with the Canadian Securities administrators and in the company's annual report on form 10 F. As filed with the U S Securities and Exchange Commission.

As a reminder, today's call is being recorded today may three 2022.

And at this time for opening remarks, and introductions I would like to turn the call over to the global Chairman and Chief Executive Officer, Mr. Jay Hennick. Please go ahead Sir.

Thank you.

Good morning, and thanks for joining us for the first quarter Conference call I'm, Jay Hennick, Chairman and Chief Executive Officer of the company and with me today is Christian Mayer, our Chief Financial Officer.

As always this conference call is being webcast live and is available in the Investor Relations section of our website.

A presentation slide deck is also available to accompany this call.

Today Colliers delivered very strong first quarter results across all service lines building on the momentum from last year.

Revenue EBITDA and earnings per share were all up sharply.

And we were pleased to see that assets under management in our investment management segment was also up considerably.

Last week, we announced the promotion of Chris Mclaren into Chief Executive Officer of our real estate services Global business.

Over the past 12 years as the leader of our EMEA business, Chris delivered some very exceptional results.

This new role, Chris will oversee our capital markets leasing and outsourcing and advisory businesses globally reporting to me.

Having him on board will provide us with the bench strength, we need to successfully pursue our ambitious 2025 growth plan.

During the quarter. We were also busy on the acquisition front, we added our affiliate operations in Cincinnati and Cleveland, We completed the previously announced acquisition of our affiliate and <unk>.

Italy, and Colliers engineering and design expanded its operations in the U S southwest and just after quarter end, we completed the acquisition of Antirion, which is currently being integrated into our global investors platform in Europe .

Once we complete the new partnership with the Salt infrastructure partners, our iam business will represent almost 25% of our consolidated EBITDA.

This marks an important milestone in our service line diversification.

Increases our recurring revenue streams and represents another step in the transformation of colliers into a very different kind of company.

And in the future, we expect our IMT segment to represent an even greater proportion of our overall EBITDA.

So far this year, we completed or announced acquisitions totaling more than $400 million and our pipeline remains strong. If we're successful 2022 should be a record year of capital allocation for colliers.

The bottom line of all of this is this.

The leadership team of Colliers has a proven 27 year track record of creating significant value for shareholders.

<unk> business model is balanced highly recurring and diversified and generates a lot of free cash flow that we reinvest in our growth.

All of these characteristics together with our unique enterprising culture growth mindset and significant inside ownership position us very well to continue delivering superior returns for our shareholders.

And let me be clear on one other thing.

At its core Colliers is an extremely well managed service business.

Cause of this we're able to weather the various macro events that might impact others like inflation interest rates.

Regional conflicts and supply chains to name a few.

Our results over the past number of years have demonstrated this in spades.

With that said I'll now turn things over to Christian Christian.

Jay as announced this morning, <unk> reported strong first quarter financial results.

My comments follow the flow of the slides posted on the Investor Relations section of <unk> Dot com to accompany this call.

Please note that the non-GAAP measures referenced on this call are as defined in this morning's press release.

All references to revenue growth are expressed in local currency.

First quarter revenues were $1 billion up 31% relative to the prior year period with revenues up strongly across all service lines.

Growth for the quarter was primarily internally generated.

Compared to 2019 pre pandemic levels capital markets revenues were up 52% and leasing was up 27% with office leasing recovering to within 5% of Q1 19 levels.

Q1, 'twenty two adjusted EBITDA was $121 million.

33% from one year ago with margins at 12, 1% up slightly from 11, 9% in the prior year quarter, driven by the Americas region.

First quarter Americas revenues were $642 million up 35% over the prior year.

Leasing activity was up 41% led by industrial.

Capital markets activity was up 35% and was led by industrial land and multifamily asset classes.

Ox leasing activity was within 2% of Q1 2019 pre pandemic levels.

Outsourcing and advisory revenues were up 31% driven by engineering and design, including recent acquisitions as well as valuation.

Net loan servicing.

Adjusted EBITDA was $81 million up 43% from last year with the margin up 60 basis points to 12, 6% unfavorable operating leverage from higher revenues in all service lines.

First quarter EMEA revenues were 153 million up 30% from one year ago with robust growth across all service lines led by outsourcing and advisory and capital markets.

Adjusted EBITDA was $5 million up 23% on higher revenues, although margin was impacted by revenue mix from increased project management activity, which runs at lower margins and other services.

First quarter Asia Pacific revenues were $119 million down, 3% driven by COVID-19, Lockdowns in several Asian markets as well as a tough prior year comparison, which benefited from a number of high margin capital markets transactions.

Adjusted EBITDA was $10 million down from $15 million in the prior year quarter.

Investment management revenues were 86 million up 94% versus the prior year period.

After eliminating the impact of pass through carried interest revenues were up 38% driven by management fee growth.

Assets under management were 52 billion at quarter end up 26% from one year ago.

Adjusted EBITDA for the quarter was $27 million up 51% versus the comparative quarter on solid flow through from incremental management fee revenue.

Our financial leverage ratio as defined as net debt to pro forma adjusted EBITDA was 0.9 times as of March 31 2022.

Most of our debt is locked in at attractive fixed interest rates, averaging less than 3%.

During the first quarter, we invested in acquisitions and we utilized our normal course issuer bid the first time as a public company.

We repurchased just under 1 million shares in March and April .

Given our stocks current trading price, our low leverage <unk>.

Our growth prospects and significant financial capacity, we believe it is prudent to make modest share repurchases at this time.

With our strong balance sheet disciplined capital deployment and solid operating cash flow, we continue to be very well capitalized for future growth.

We are increasing our outlook for the full year 2022 to reflect our strong Q1 results as well as recent acquisitions.

The outlook is subject to risks and uncertainties as outlined in the accompanying slides.

We now expect low double digit revenue growth.

<unk> at high single digit internal growth and the balance from previously completed and recently announced acquisitions.

We expect our adjusted EBITDA margin to improve 40 to 80 basis points relative to 2021 from a combination of internal operating leverage and higher margin acquisition.

Finally, our adjusted earnings per share are expected to grow at a high teens percentage rate for 2022.

That concludes my prepared remarks, I would now like to open the call for questions. Operator can you. Please open the line.

Thank you, ladies and gentlemen, if you'd like to ask a question at this time. Please press. The Star then the one key on your Touchtone telephone.

Please standby will be compile the Q&A roster.

No first question coming from the line of Stephen Sheldon with William Blair. Your line is now open.

Hey, good morning, guys and congrats on the strong results.

First thing I wanted to ask about just the APAC Asia Pacific region.

Can you talk about the trends you saw there throughout the quarter.

Weakness related to Covid lockdowns get more more pronounced in the quarter went along or did you start to see any signs of <unk>.

<unk> just would be good to I guess get some more commentary there as you think about the cadence for the rest of the year.

I think youre talking about Asia Pacific as opposed to EMEA.

Correct me, if I'm wrong Sheldon sorry.

Sorry, sorry, Yes, Asia Pacific again.

Yes.

Yes, Steven.

The lockdown situation in Q1 was really the main driver.

Sure.

The revenue.

There certainly.

<unk> been in Lockdowns before.

Lockdowns caused delays in the transactional side of the business.

Of course, the recurring side of the business continues to operate.

Property management, and valuations and that sort of thing.

Revenues were impacted in Q1 from the Lockdowns, we expect that will ease as the year progresses.

And.

We think the revenue growth there will be.

Stronger in the future.

No as you know in China. For example, there are three cases of Covid and they've closed the whole country now so notwithstanding that we still generated a pretty respectable revenues and earnings in that marketplace, but there are other markets in Asia that are going through similar locked down so it is.

Following us down a bit but as you can see from the results not materially so.

Got it that's helpful.

And then just wanted to ask about the AUM growth and investment management, it's been really impressive and consistently strong so what's working so well on that side in terms of <unk>.

Capital raising and what about Colliers broad based capabilities I guess is there anything to call out that's helping to support that growth.

Well I think I think it all starts with the exceptional platforms that we have already as part of our investment management platform Harrison Street, Colliers global investors and soon to be but salt.

These are all exceptional alternative asset.

Our platforms. They are managed by extremely seasoned professionals that own a direct equity stake in <unk>.

Our business.

And Stephen as you know over many years, that's been a core of the way call Yours operates our role is to help them accelerate their growth. There is various ways for us to have done that you see in the case of Harrison Street, which is.

Four and a half years in history now and.

The company has tripled its size, it's tripled its EBITDA and it's just starting.

So.

Theres a variety of ways in which we help them do that but I would say that by and large starting with exceptional professionals that have a significant equity stake in the business.

Is the is really the backbone of the success of Harrison Street.

And of course the salt.

<unk> has many many of the same characteristics. So we're we're very excited about this aspect of our business we think its substantially.

Hidden within Colliers and we.

Think our strategy in that area is second to none.

Good to hear thanks for taking my questions and congrats again on the results.

Thanks Steven.

And our next question coming from the line of George <unk> with Scotiabank. Your line is open.

Hey, good morning, guys congrats on the results.

Jay I think you made it obvious that.

Thank you May and August that you wanted to.

Grow the investment management segment beyond kind of 23% of total EBITDA.

Want to ask you how much but can you maybe give us a sense of maybe what specific asset classes or areas that.

Do you want to get bigger in.

Yeah.

The percentage, we don't know because its all a function of strategically acquiring the right businesses in the right way. So it's unlikely. We're we're an acquirer of 100% of any exceptional.

Investment management platform.

But I.

I think that.

That there is a.

Growing desire amongst.

Entrepreneurial run businesses to join the strategy that we have and so we're excited about it.

The only number that we have offered.

To the street is that over the course of our five year period.

R R.

Our recurring revenue streams should exceed 65% how much of that will be from our other recurring services or investment management, we don't know.

But youll see a trends.

You'll see it.

Transform as we continue to pursue this growth strategy.

Okay and should we expect more I guess of infrastructure of student housing.

Housing is that kind of believe me once Dan.

Well that's for sure Harrison Street Theyre dominate in that area.

The U S. They have established over the past year. Their first open ended fund in Canada. They have an extremely successful and growing business in.

In Europe .

But it's all it's all focused on infrastructure students seniors other alternative asset classes.

That are.

Where you can generate better returns.

For investors. So that's very much a core of how we see our overall platform in the years to come.

Okay, and you guys have been active on the CIB as referenced for the first time as a public company operating performance has been strong and the shares haven't really reacting.

Accordingly, I'm, just wondering is buying our own stock here, maybe more attractive than M&A would you consider maybe a more meaningful return of capital to shareholders.

Well I mean, it's something that we evaluate every day George our.

Every hour.

And.

First and foremost we are.

Interested in growing our business organically and through acquisition, but when we see the market not appreciating the value of our shares then that caused us to take <unk>.

Consideration of that in <unk> and.

In April and in March we acted and.

And we May continue to act in the future on that we'll decide that on a day by day basis.

Basis.

Okay. Thanks, and just one last one for me on General Occupier services was a big strategy of ours, we spoke about it quite a bit before the pandemic can you maybe just give us an update in terms of where we are now.

Yes, we continue to be active in global Occupier services, and we have our recruiting plan to grow that business meaningfully over the next five years as part of our enterprise 25 <unk>.

<unk>.

I think we're on track with that and you see it.

<unk> and the results.

Okay. Thanks, guys.

Thanks.

And our next question coming from the line of Stephen Macleod with BMO capital. Your line is open.

Great. Thank you good morning, guys.

Hey, Steve.

I just wanted to ask about the outlook and our revised guidance and just get a little bit of a sense as to sort of what what factors you are considering.

In the 2020 outlook with respect to maybe nearer term visibility and potentially longer term visibility as you get into the back half of the year.

Yes, Thanks, Steve.

We.

Increased our guidance for the year in part on the strong result in Q1.

And also our.

Good visibility into Q2, our transaction activity.

We also have.

Very good visibility on the recurring side of our business, which is half the revenue.

And that gives us.

Conference and our outlook now as it relates to the back half of the year and transactions.

We did not simply increase the guidance for that there are obviously some macro.

Factors at play here.

Situation with the conflict in eastern Europe .

Interest rates and all that stuff, but.

By and large we are.

As I mentioned, increasing our outlook for the regions.

Outline.

Great great. Thank you.

And then I just wanted to.

With respect to Harrison Street on the investment management business.

The strong fund raising momentum that you saw.

In Q4, and now coming into Q1.

What kind of visibility do you have in terms of the fund raising momentum through the balance of the year.

Well, we have very strong visibility.

Q. This particular year, we're in the market with Christian for next 666 funds all funds are increasing in size from previous.

Previous funds.

As you probably know 80% to 90% of the investors roll into the subsequent fund.

And so we are quite excited about the prospects of fund raising.

In the current year.

And the Salt is also actively.

Fund raising as is antirion so.

It'll be very interesting to see how we do over the next couple of quarters.

But our internal expectations are.

Significantly better than last year, which itself was a record year for us.

That's that's fantastic and then maybe just finally.

With respect to the macro backdrop and the potential for rising rates.

Are you beginning to see any of those conversations or any of those factors beginning to creep into conversations about transaction activity or is that something that is just kind of on hold for now and people are waiting to see how things unfold.

Well I tried to make the point in my in my prepared remarks.

Macro concepts really don't affect.

Colliers, they never did and anybody who thinks they do is smoking something.

Where we're impacted is in the investment decisions.

Investors that may or may not decide to continue with their investments and it's all over the place.

Some say as interest rates go up we're going to sell assets. Some say we have shopping malls were selling all the shopping malls and getting out of shopping malls, because we don't like it anymore, others say logistics are impacted by supply chain. So they are not going to build as many.

Logistics centers.

Inflation could be beneficial to owners of real estate, but we don't really owned real estate. All we do is buy sell and lease real estate. So all we want is a loss of <unk>.

In our non recurring business and as Christian said more than just over 50% of our business is recurring today. So we're really talking about the nonrecurring portion of our business and Theres more velocity, there's more pipeline there is more activity in capital markets and.

Leasing today than ever before.

And when I listened to the geniuses out there talking about the <unk>.

Macro events in the tail winds and all that stuff, they're talking about owners of real estate potentially they're not talking about those who serve those owners as we do so I wanted to make that point and I. Thank you for bringing it up Steve.

Because as a long term investor and building huge value for shareholders over a long period of time I smile at some of the some of the editorial around this so I think we're in an amazing position to capitalize and really not affected by two.

Much of what goes on look everybody is stuff happens.

But as you could see from our own results over the past.

10 years five years ticket, we just continue to get stronger and grow better and gained share. So I think colliers and frankly some of its peers have tremendous business models that are unappreciated by the marketplace.

Well, great that's very good color Jay. Thank you so much thanks Christian.

Alright, no problem. Thanks.

And as a reminder, ladies and gentlemen to ask a question. Please press star one.

Our next question coming from the line of Scott Thompson with CIBC. Your line is open.

Thank you.

I think that.

You've gone over in pretty good detail.

The drivers of the factors, especially the outlook.

Giving us clear understanding.

Of what.

What what your outlook is and how strong it is.

Just a quick question, though.

Are you.

Are there any particular business lines under markets, where you are seeing market share gains.

Everywhere.

Everywhere market share gains everywhere.

Okay.

Thank you.

Thanks.

Okay.

No.

Okay.

No all I am saying is.

Just look at the actual results.

For the quarter and it's been pretty consistent over the past couple of years.

Up 30% in virtually every area.

Impressive.

Yes.

And exceeding our own expectations frankly.

<unk>.

I'd like to say I'd like to Pat ourselves on the back and say it was all all preplanned.

But these these kinds of results across the board market for market are beating our own internal expectations, which which tells us that there's way more to go.

And our pipelines continued to be very strong everywhere.

So we're excited about the next.

Next.

The next phase.

That's great. Thank you I appreciate the clarity.

And our next question coming from the line of Daryl Young with TD Securities. Your line is open.

Hey, good morning, guys and congrats on a good result.

Thanks Darryl.

Just.

I mean the.

<unk> segment historically been been very very resilient I'm still getting a lot of questions from investors about how they may or may not be tied through to the transaction side and how the transaction side as required in order to keep growing the <unk>.

Would you like to comment on that at all and maybe just clear the air on the ability to continue growing O&M even if.

There was somewhat of a pullback in transaction side.

Well Darryl.

As an example in property management.

2 billion square feet space around the world.

And then most of those.

Contracts, we also provide leasing services for those owners.

Those assets.

Now the property management contract is it recurring monthly contract leasing.

A little bit more opportunistic right. If there is a tenant that needs.

Space and we're there to transact on behalf of.

The landlord to make that to make that happen.

They are tied together very complementary to each other.

But at the end of the day the recurring revenue piece of the recurring revenue piece and the transactions will come when they come and they will come in.

There is a.

Any kind of.

Yes.

<unk> and decision, making by tenants or whatever.

We will get that leasing revenue in a later quarter.

And I would add.

An important element of that is our engineering and project management business, which.

I'm going to get the aggregate number slightly wrong, but its probably together six or $700 million globally is that whether this <unk> $600 million globally.

These are all long duration.

Relationships that continue to recur after the relationship has completed so so if we get retained by.

And owner to help with the construction of a new building for them.

It's typically a three year exercise and that often continues beyond that three year period, we may take over the property management of that contract that particular owner might decide to build a second building or a third building and all that's in the project management component of our.

Business and an engineering virtually every single day and every large complex there is some engineering.

Service required and once you're the engineer of record. It's again, a long term duration to do the job and then it's an ongoing support function for a long period of time, so when we talk about our outsourcing and advisory component.

These are high value add services.

This isn't janitorial, it's high value add services that have long duration strong client relationships that are valued and we have a bit of a boat because we have.

Inside information into how that building operates and where the.

The weaker pieces of that building might.

Might be so as the ongoing service provider or expert in the specialty we're there for a long period of time I don't think many investors appreciate.

That piece of what we're doing in that that part of our business continues to grow very rapidly and I think as the market for commercial real estate continues to mature as we're seeing much more construction of new products new buildings out there even in.

Infrastructure assets out there that are that are investment management firms are participating in all of them need a.

A project management capability to manage and oversee the construction of those projects in a defined professional way and so.

We see that component of our business continuing to grow rapidly and it gives us a level of.

Consistency and resilience that most others don't have.

And just to close that out it also gives us the opportunity then to come in and provide the leasing services at the described or a sale or disposition.

<unk>.

If that owner of that asset size ultimately.

Make that decision so it ties the two parts of the business together.

That's great color. Thanks, So was that it was that was that too much was that too much.

I'll give you too much there.

That's perfect I think I think we are.

Can benefit from it right now given just given some of the.

The concerns that are out there. So it's great color. Thank you and maybe just one last quick one I'm not sure if you'll bite on this but the potential for another vertical as any headway has been made there in terms of framing and what that could look like.

Well we are.

And somebody asked the same question maybe you on the last call. We have our we have a full pipeline of activities in our existing.

Our existing verticals.

We have global growth opportunities in every one of those.

Our verticals.

So there's nothing really on the horizon.

That I can see famous last words of something tremendous came we obviously have the capacity to do it but.

We're very confident that we're building some very very strong.

<unk> unique and differentiated verticals that will.

That will.

Really stand the test of time.

And create incredible value for our shareholders.

Okay great.

That's it for me thanks, very much gentlemen.

Okay.

And our next question coming from the line of Patrick <unk> with Raymond James Your line is open.

Hi, good morning.

Hi, Frederic.

The 1 million shares that you repurchased.

It started towards the end of the first quarter and then it's up until yesterday or today, just wondering if it was evenly split between the two quarters.

I think we.

We purchased around 600000 shares during during March and 400000 roughly in April Frederic.

Okay. That's good color.

I'm just curious about how much liquidity you estimate you have going forward against.

Against the <unk> transaction is as yet to close.

And then you've got this.

The extra amount that you've spent on the share purchase so.

How comfortable are you that you can deploy capital.

Say in the second half is some great opportunities present themselves.

I think we're very well positioned Frederic we are a $1 billion.

Oliver which has a.

No draw on it I think around $200 million at the moment.

First we have the basalt transaction to close.

So lots of liquidity.

In the system and our leverage is very low so.

We're well positioned.

As your business has become more and more recurring in nature.

Comfortable kind of leveraging more too as well.

Can you remind me of what your comfort range is right now with respect to net debt to EBITDA.

Hello.

Our comfort zone is one to two times and we're comfortable at that two times.

Level for the reason that you that you described.

With the higher amount of recurring revenue and certainly at the businesses transforming this year with the basalt transaction, we're going to have 23% of our EBITDA from investment management extremely high visibility and the highly durable and high margin.

EBITDA coming from those services low capex as well so strong cash flow.

And when if we get to a point where were our leverages above two times based on an acquisition or something we know we can quickly delever and then get back into that.

So you know sort of one to two times range quickly so we feel pretty comfortable with our.

With all of that okay.

Alright.

Got one for you can you comment on the.

The latest acquisition that caused the colors A&D did in the U S southwest how does that kind of fits.

And the whole strategy, how well diversified you are now in the U S and where you might take that business going forward.

Just briefly.

Fred.

It was it was an excellent acquisition from our perspective, it fit very nicely into.

Into our business or our current business.

<unk>.

The acquisition business.

Had a very small and growing platform in Texas. So we needed we needed to augment that that that business, which we did.

And we're very excited about the new partners that joined the overall the overall business and.

But I would say, we have lots and lots of room in engineering in the U S and globally.

And as you know because you cover many engineering firms, we have a global brand we have extensive client relationships.

And both of those things come in very handy, especially when you pursue a partnership philosophy as we do which creates that much more alignment between the people that make it happen day to day and some of the other firms that are 100% owned.

Engineering firm so.

This is Ben.

Standard fare for our business over 27 years, we understand how to build platforms through great partnerships with great people and we see that this segment is.

For the same.

Growth trajectory and we can do it on a global basis. So.

Lots and lots to do there, but it's still very small percentage very small, but still a small percentage of our global business.

Great.

Specifically on a regional basis, so in the U S.

I recall you are in the northeast.

<unk> now kind of Texas is California, a white space for you.

Is California.

Everything sorry.

Right.

Go ahead.

California was an opportunity here.

Yes, and if you have it.

You have an idea in mind.

I'll give you my phone number which I know you already have.

I do alright. Thanks.

Thanks.

Thanks Roger.

Our next question comes from the line of John <unk> with Goldman Sachs. Your line is open.

Hi, good morning, congratulations on a strong quarter.

Could you perhaps.

Hi could you perhaps talk about the driver of higher margin guidance I mean, I know you.

Alluded to.

Getting some.

Operating leverage, but then there is some acquisition related impact as well, which is obviously working favorably for you.

Is that a way to think about it.

Kind of.

What piece and how much is coming from just general leverage in the business.

Yes for sure Chandni.

The operating.

<unk> <unk>.

Increase is half from.

Organic sources, so you saw in the quarter.

<unk> business had strong revenues, but also a strong.

Margin growth, we expect that to continue.

Through the through the year cross.

All of our regional businesses.

From from operating leverage from higher revenue is also from.

And some of that continuing.

Cost management activities that were undertaking around.

Around the company.

The other half.

The margin increase is from acquisitions and as you know investment management businesses operate at higher margins.

So the impact of the <unk> deal, which we just closed on April one.

And the basalt transaction closing in the second half.

We'll drive that additional margin expansion on a consolidated basis.

That is great color. Thank you for that and then for my follow up So you guys talked about thinking.

Thinking about buyback at this point given how shares of just general reacted.

Is there.

Something embedded in guidance that we should think about.

As you kind of model our numbers.

You have given that high teens earnings growth today.

And how much of buyback.

Buyback is embedded.

And there are you, giving any guidance around that.

The outlook that you see for you today does not have any additional buybacks factored in.

Understood.

And our next question coming from the line of Maxim <unk> with National Bank Financial Your line is open.

Hi, good morning, gentlemen.

IMAX.

Jim maybe first question for you if it's possible.

Given the fact that we've seen obviously some multiple compression of the public markets.

Wondering if you're seeing any.

Changing bundled language potential sellers.

As you communicate right now with where the targets. Thanks.

No I don't think so I think the sellers the expectation.

The expectation of the sellers continues to be.

The higher than they were a year or two ago for obvious reasons.

Assets in the private market are trading materially higher than.

Many public companies, including Colliers.

So I'm not seeing any I'm not seeing any changes.

In pricing expectations from sellers.

Okay. That's super helpful. Thank you very much and then a question I just had a question for you in terms of noncash working capital.

Pretty significant.

Quarter versus last year, I'm, just trying to see how we should be thinking about it as the year progresses in terms of some of that unwinding.

On E Commerce Super helpful. Thanks.

Yes, that's a great question Max.

There were a couple of things in our working capital this quarter.

One was a.

Contingent consideration payment that we made.

Which is on the Harrison Street earn out and $58 9 million of that showed up as a.

Yeah.

Negative against cash from operations. So that's a non operating item in my view under GAAP. It first it's shown as an operating item.

And then secondly.

<unk>.

Accounts receivable facility that we have sorry, the accounts receivable facility that we have.

We drew on it during the quarter and there are some ins and outs on the cash flow statement.

Which resulted in the noncash.

The change in accounts receivable being highly negative in the quarter.

And.

That's something that.

As a non recurring item.

Results in that that working capital change that you saw.

Sure and then in terms of kind of the rest of the year isn't going to look closer to what we've seen in <unk>.

100, <unk>, how should we think about it if we were to exclude two one.

Yeah on a full year basis, we expect to be highly cash flow generative.

As we are each year.

Yes.

The business generates strong operating cash flows and of course, there is some seasonality to that with the transactional business is being very strong in the third and fourth quarters for cash flow and we expect that to be the case again this year.

Okay, absolutely, yes, I think so much first of all understood and then just just one.

Last clarification, Jay I'm not sure did you say that in terms of office leasing we're still 5% below the 2019 peaks I'm just trying to get the number right. Then maybe any color in terms of when you think we're going to be.

Eclipsing those levels and potentially going higher.

Happened previously that thanks.

Max that was.

This past quarter, we were on a global basis, 5% below Q1 2019.

For us leasing.

Look, we're 5% is not a meaningful or material number.

We hope to eclipse 2019 levels.

Not next quarter then the following quarter I think it's.

There is positive momentum and positive.

Trajectory for office leasing and Thats something that.

We're certainly.

Watch them closely.

And are you seeing any change on the industrial side of things I mean, obviously what had tremendous the last couple of years just curious about your.

What's your what are you hearing from our clients right now.

Industrial continues to be very hot.

And I think Thats the case globally Youre also seeing some.

Some publicly traded Reits being acquired in that space.

That's a segment that is very hot right now and continues and I would add to that that we're seeing land sales at record levels, which is going to become industrial.

Property in the future, which will not only drive our leasing revenues and our capital markets revenues in the future.

Because of that additional product on the market.

Okay.

Thank you so much from them.

Thanks.

And I'm showing no further questions at this time I would now like to turn the call back over to Mr. Hanley for any closing remarks.

Okay. Thank you very much operator, and thanks, everyone for participating in this quarter's call and we look forward to doing it again next quarter.

Thanks for joining us.

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

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[music].

Welcome to the caller International first quarter investors conference call.

Today's call is being recorded.

Legal counsel requires us to advise that the discussion is scheduled to take place today may contain forward looking statements.

Known and unknown risks and uncertainties.

<unk> results may be materially different from any future results performance or achievements comes data and no forward looking statements.

Information concerning factors that could cause actual results to materially differ from dolphin are 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 10 F. As filed with the U S Securities and Exchange Commission.

As a reminder, today's call is being recorded today may <unk> 2022.

And at this time for opening remarks, and introductions I would like to turn the call over to the Goldman Chairman and Chief Executive Officer, Mr. Jay Hennick. Please go ahead Sir.

Thank you operator, good morning, and thanks for joining us for the first quarter Conference call I'm, Jay Hennick, Chairman and Chief Executive Officer of the company and with me today is Christian Mayer, our Chief Financial Officer.

As always this conference call is being webcast live and is available in the Investor Relations section of our website.

<unk> slide deck is also available to accompany this call.

Today Colliers delivered very strong first quarter results across all service lines building on the momentum from last year.

Revenue EBITDA and earnings per share were all up sharply.

And we were pleased to see that assets under management in our investment management segment was also up considerably.

Last week, we announced the promotion of Chris Mclaren into Chief Executive Officer of our real estate services global business over the past 12 years as the leader of our EMEA business.

<unk> delivered some very exceptional results.

In his new role, Chris will oversee our capital markets leasing and outsourcing and advisory businesses globally reporting to me.

Having him on board will provide us with the bench strength, we need to successfully pursue our ambitious 2025 growth plan.

During the quarter. We were also busy on the acquisition front, we added our affiliate operations in Cincinnati and Cleveland, We completed the previously announced acquisition of our affiliate in.

Italy, and Colliers engineering and design expanded its operations in the U S southwest and just after quarter end, we completed the acquisition of Untary on which is currently being integrated into our global investors platform in Europe .

Once we complete the new partnership with the Salt infrastructure partners, our iam business will represent almost 25% of our consolidated EBITDA.

This marks an important milestone in our service line diversification.

Increases our recurring revenue streams and represents another step in the transformation of colliers into a very different kind of company.

In the in the future, we expect our IMT segment to represent an even greater proportion of our overall EBITDA.

So far this year, we've completed or announced acquisitions totaling more than $400 million and our pipeline remains strong.

Successful 2022 should be a record year of capital allocation for colliers.

The bottom line of all of this is this the leadership team of Colliers has a proven 27 year track record of creating significant value for shareholders.

The Colliers business model is balanced highly recurring and diversified and generates a lot of free cash flow that we reinvest in our growth.

And let me be clear on one other thing.

At its core Colliers is an extremely well managed service business because of this we're able to weather the various macro events that might impact others like inflation interest rates pandemic regional conflicts and supply chains to name a few.

Our results over the past number of years have demonstrated this in spades.

With that said I'll now turn things over to Christian Christian.

Thank you Jake as announced this morning, <unk> reported strong first quarter financial results.

My comments follow the flow of the slides posted on the Investor Relations section of Colliers Dot com to accompany this call.

Please note that the non-GAAP measures.

On this call are as defined in this morning's press release.

All references to revenue growth are expressed in local currency.

First quarter revenues were $1 billion up 31% relative to the prior year period with revenues up strongly across all service lines.

Growth for the quarter was primarily internally generated.

Compared to 2019 pre pandemic levels capital markets revenues were up 52% and leasing was up 27% with office leasing recovering to within 5% of Q1 19 levels.

Q1, 'twenty two adjusted EBITDA was $121 million.

33% from one year ago with margins at 12, 1% up slightly from 11, 9% in the prior year quarter, driven by the Americas region.

First quarter Americas revenues were $642 million up 35% over the prior year.

Leasing activity was up 41% led by industrial.

Capital markets activity was up 35% and was led by industrial land and multifamily asset classes.

Ox leasing activity was within 2% of Q1 2019 pre pandemic levels.

Outsourcing and advisory revenues were up 31% driven by engineering and design, including recent acquisitions as well as valuation.

<unk> loan servicing.

Adjusted EBITDA was $81 million up 43% from last year with the margin up 60 basis points to 12, 6% on favorable operating leverage from higher revenues in all service lines.