Q1 2025 Colliers International Group Inc Earnings Call
Welcome to the Colliers International First Quarter Investors Conference call. Today's call is being recorded.
Actual results may be materially different from any future results, performance, or achievements contemplated in the foreign-looking statements.
Speaker Change: Thank you for watching. Please subscribe to my channel. I hope to see you again soon.
Speaker Change: 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 the company's annual report
Speaker Change: on SCORM 40-F as filed with the U.S. Securities and Exchange Commission.
As a reminder, today's call was being recorded.
Speaker Change: Today is Tuesday, May 6, 2025. And at this time, for opening marks and introductions, I would like to turn a call over to the Global Chairman and Chief Executive Officer, Mr. Jay Hennick. Please go ahead, sir.
Speaker Change: Thank you operator, good morning and thanks for joining us for the first quarter conference call. As the operator mentioned, I'm Jay Hennick, Chairman and Chief Executive Officer of Colliers, and with me today is Christian Mayer, our Chief Financial Officer.
Speaker Change: As always, this call is webcast and available in the Investor Relations section of our website, along with a detailed presentation slide deck.
Speaker Change: We're pleased with our operating results for the quarter which met expectations and keep us on track to deliver on our full year targets.
Speaker Change: We took a cautious outlook at the beginning of the year given a macro economic and political uncertainty at the time and we're sure glad we did.
Speaker Change: At Colliers, market volatility has never derailed our focus on creating long-term value.
Speaker Change: Our leadership team has consistently navigated uncertainty with discipline and has taken the opportunity to seize opportunities when they present themselves. This time is no different.
Speaker Change: That said, we're seeing significant growth across business segments and geographies, which we expect will continue particularly in the second half of the year.
Speaker Change: Our newly established engineering segment delivered strong internal growth in the quarter and combined with acquisitions posted meaningful gains over the prior year.
Speaker Change: With more than 9,000 professionals and over 1.5 billion dollars in annualized revenue, we're now one of the top global players in the industry with additional opportunities for growth.
Speaker Change: In investment management, AUM exceeded $100 billion for the first time.
Speaker Change: Fundraising is gaining momentum driven by new ventages and new investment strategies. We're leveraging our scale, our expertise and our proprietary data and relationships to deliver strong performance and innovative opportunities for our investors.
Speaker Change: A real estate services segment is a global leader ranking among the top three worldwide with a balanced, diversified platform supported by strong foundation of recurring revenues.
Speaker Change: With 14,000 professionals globally, this segment has consistently delivered year-over-year growth and strong cash flows despite obvious tailwinds in capital markets.
Speaker Change: Once the market stabilizes, we expect activity levels to rise, which will drive even greater profitability to this division.
Speaker Change: We also advanced our growth strategy with the acquisition of ethos urban, adding best-in-class urban planning capabilities in Australia.
Speaker Change: The pending acquisition of Trio Vest, which strengthens our leadership in high value, recurring real estate services in Canada and the recent acquisition of terror consulting further expanding our infrastructure capabilities in our U.S. engineering platform.
with three powerful growth engines.
Speaker Change: A world-class team, and a 30-year record of performance through all market cycles, Colliers is well positioned to continue delivering exceptional value for shareholders.
Speaker Change: Now, I'll turn things over to Christian for his financial report, and then we'll open up the call to your questions.
Christian Mayer: Thank you, Jay, and good morning, everyone. Please note that the non-GAAP measures discussed here today are asked to find in the materials accompanying this call, and all references to revenue growth are on a local currency basis.
Christian Mayer: Revenees for our first quarter for 1.1 billion, up 16% relative to the prior year period with significant growth coming from our engineering segment.
Christian Mayer: Internal growth was 4% overall and was led by engineering, which had robust increases in activity, particularly with public sector clients in all four of our key end markets.
Property, Infrastructure, Water, and Environmental Control.
Christian Mayer: 1st Porter, Adjusted Even Da was 116 million, up 7% over the prior year with contribution from both internal growth and acquisitions.
Christian Mayer: Overall, real estate services net revenue grew modestly for the first quarter. Capital market activity was up 10% globally.
Christian Mayer: Sales brokerage was up in all geographic regions and all asset classes.
Christian Mayer: Debt Finance Activity increased nicely, particularly refinancing volume in our U.S. multi-family franchise.
Christian Mayer: Leasing revenues were down 5%, relative to a strong, prior year first quarter, that had a couple of larger specialty asset class transactions.
Christian Mayer: We expect leasing revenues to return to your veer growth going forward.
Christian Mayer: The segment's net margin declined modestly to 6.6% for the seasonally slow first quarter, primarily due to continued healthy investments in recruiting, as well as revenue mix.
Christian Mayer: Engineering performed strongly in Q1 with net revenue growth of 63% attributable to both recent acquisitions and lower teens percentage internal growth.
Christian Mayer: The Net Margin increased to 8.4% up 110 basis points relative to the prior year period due to improvements in staff utilization and operating leverage.
Christian Mayer: We continue to carefully monitor our clients for potential tariffs or government policy related impacts but to date are not aware of any significant issues.
Christian Mayer: Investment management net revenues, excluding pass-through performance fees, or flat, as expected.
Christian Mayer: The net margin was 46.2% up from 44.2% last year with lower incentive compensation partially offset by higher headcounts.
Christian Mayer: We raised 1.2 billion of new capital commitments during the first quarter which was more than double the amount we raised in the prior year period.
Christian Mayer: Notably, three quarters of the capital commitments raised during the quarter were in traditional real estate strategies, indicating increased investor interest as conditions improve.
Christian Mayer: We expect our fundraising to accelerate in the second quarter with new advantages of existing products as well as new investment strategies entering the market.
Christian Mayer: Assets under management at March 31st were 100.3 billion, up 1.4 billion from year-end.
Christian Mayer: Increases came from fundraising and positive market adjustments, partially offset by portfolio dispositions that returned capital to investors.
Christian Mayer: Our cash flow from operations and free cash flow for the first quarter improved significantly over year over year.
Christian Mayer: On a trailing 12-month basis, our free cash will exceeded 400 million and represented a conversion rate of 136% of adjusted net earnings.
Christian Mayer: Across each of our business segments, our operations are working capital light and have modest cat-backs, resulting in strong free cash flow that can be reinvested in our growth.
Christian Mayer: Over the long term, we are targeting a conversion rate of approximately a hundred percent of adjusted net earnings.
Christian Mayer: Moving to our balance sheet, our leverage ratio defined as net debt to perform on adjusted even though was 2.2 times as in March 31st.
Christian Mayer: As expected, leverage increased modestly in the first quarter given seasonal operating cash outflows. For the second quarter, we expect leverage to remain in the two times range, then decline to approximately 1.5 times by year end.
That assumes no material acquisitions.
Our full-year financial outlook remains unchanged.
Speaker Change: As Jay noted in his comments, we took a cautious posture when we set our outlook back in February knowing that international trade tensions and interest rate volatility could impact our clients and our businesses.
Speaker Change: We currently expect transactional revenue choppiness to continue in the second quarter, but see an improvement in operating conditions in the back half of the year.
Speaker Change: That concludes my prepared remarks. Operator, can you please open the line for questions.
Thank you.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: Should you have a question, please press the star followed by the number one on your touchstone phone.
Speaker Change: You will hear prompt that your hat has been raised.
Speaker Change: Should you wish to decline from the Poland process, please press the star followed by the number two.
Speaker Change: Viewer using a speaker phone. Please lift the headset before pressing any keys.
One moment please, for your first question. [inaudible]
Anthony Paloni: Your first question is from Anthony Paolone from JP Morgan Chase. Please, go ahead.
Anthony Paloni: Yeah, thanks and good morning. I guess first question is can you just talk about what you have seen unfolding more more recently in the market and where you know whether it's by region or property type or business line where where maybe you've seen some impact from the macro environment.
Anthony Paloni: Wow, that's a loaded question. There's things happening all over the place, and so...
Anthony Paloni: You know, I'm trying to zero in on a couple of highlights for you.
We're seeing sort of better results in Asia.
We're seeing some pockets in Europe .
Anthony Paloni: I'm talking specifically about capital markets now. New York seems to be strong in terms of new lease, new leases at record rates.
Anthony Paloni: But generally speaking, there is still an uncertainty in the marketplace, which is...
which is preventing clients from making longer-term decisions.
Anthony Paloni: on leases in non-key markets, let's say. And we were, I would say at the beginning of the quarter, excited that
that things were stabilizing and then of course all this.
Anthony Paloni: Tariff stuff started and all of a sudden transactions that were close to closing.
Anthony Paloni: had financing light tied up in a variety of other things just we're put on delay. So all of this to say is we're still in a market in my view that's. [inaudible]
Anthony Paloni: You know, uncertain and unclear, and only a select number of transactions are getting completed.
Speaker Change: I'd add to that, Jay, in terms of, you know, we talked about our capital markets business, but when you switch over to looking at our engineering segment, activity levels there continue to be very robust Tony and we have, you know, strong pipelines of work.
Speaker Change: We are seeing the public sector clientele, particularly engaging on new and enhanced projects and assignments.
So feel very good about that segment.
Speaker Change: in terms of investment management, indications to date, given the trade uncertainty and...
Speaker Change: and volatility is that, you know, activity levels and interest levels and fundraising.
Speaker Change: are proceeding and growing. So I think the volatility should not be a major factor impacting our success and fundraising for the year.
Speaker Change: Okay, thanks, and that actually gets to my follow-up, which was going to be an investment management, because you all did, I think you mentioned doubled your fundraising in the quarter there. What do LPs want right now or not want? Can you just give us a little bit more about how that's going and kind of where the success lies there? Yeah.
Speaker Change: I think there's a lot of pent up demand across all the strategies.
I think there's been such a softness and fun raising.
across the board for the past couple of years.
Speaker Change: And this year is going to be the telltale. I mean, we're forecasting fundraising to be more than double what it was last year. And we started off with the first quarter with a nice start.
Speaker Change: So, I think people are feeling better. I think they want to get back to completing transactions. So, I'm cautiously optimistic that we're at the other side of this on the investment management component of our business. Thank you very much.
Okay, thank you.
Thank you. Bye. Bye.
Speaker Change: Your next question comes from Daryl Young, from Stafel, please go ahead.
Speaker Change: Operating Model, and is that in part what's driving some of the strong results this year is you're maybe integrating these businesses and cross selling more than you might have historically and under your decentralized model. Any color there would be great.
Speaker Change: No, I don't think we're going to change the Colliers investment model at all. It's proven the test of time for sure. But what is more centralized is that country for country. So for example, the US business operates as one large partnership.
That's a big differentiator we think for us.
Same thing in Canada.
Speaker Change: and these are larger platforms that operate in a centralized way.
Speaker Change: in partnership with the people that make it happen day-to-day.
Speaker Change: So, yes, there's huge synergies in the business. You can add product specialties. There's strong organic growth opportunities, Christian as alluded to a few, but it continues. The market is massive.
and, you know, the other thing is the Colliers brand.
has gone a long way in enhancing the stature.
Speaker Change: of engineering firms that were otherwise not really well known. They might have been…
Speaker Change: known in the region, but now they have a national presence both in Canada and in the US and in Australia, New Zealand.
And let's not forget that our engineering segment also includes...
Speaker Change: Both our project management and our program management capability, which are also consolidating.
Speaker Change: which also have great cross-cell opportunities to the same client base. So we're very excited about that business and what we can do with that business over the next five to ten years.
Speaker Change: You know we're not active in Europe at all yet, we'd love to be active there as well, but you know this is a segment that could dwarf.
Speaker Change: The rest of our real estate services business as an example. So a lot of focus and a lot of energy are going into this segment for us.
Speaker Change: That's good color, thanks Jay. And one more on the real estate services side that the margins were a little bit lighter than I would have thought talent acquisition obviously short term pain for long term game but I'm just wondering.
Speaker Change: Can you give us some color on how many net hires you have today or what the expectations for growth and hires would be going forward? Or is this a bit of a backfill for maybe some departures you had last year or the last couple of years?
Speaker Change: Yeah, Daryl, we do have internal targets we set for growth in our business.
Speaker Change: We've grown our practice significantly over the last four or five years.
Speaker Change: both through mostly through organic recruiting but also a little bit of acquisition activity that hasn't been.
Speaker Change: a lot of acquisition activity lately. But when we look at our organic growth in real-estate services, I'm talking about the cat markets are leasing practice. I'm in particular here right now.
Speaker Change: We're targeting a 4% to 5% annual growth rate in terms of the number of producers net growth rate and we also are very focused on increasing the productivity of those producers.
Speaker Change: and, you know, through training, technology, tools, you know, a lot of little things go into that to enhance their ability to generate revenue and in turn profitability for Colliers.
Speaker Change: Okay, thanks very much. I'll hop back in the queue
Speaker Change: Your next question is from Stephen Sheldon, from William Blair, please go ahead.
Stephen Sheldon: Hey, thanks for taking my questions. I wanted to first you just to follow up on the prior engineering question.
Speaker Change: We love an update on how that business has kind of been performing relative to your expectations, but I think you mentioned low teams internal growth this quarter, so really good growth.
Speaker Change: And are you seeing any benefits from cross-selling, I guess, with other business lines? Is this more about engineering kind of growing? The opportunity on engineering as stand-alone owners, we started to see some benefit about taking engineering and have it be a part of the bigger Colliers platform?
Thank you.
Thank you.
Speaker Change: Well, I mean, there's cross-selling in that business in a couple of ways. One is internal as we've discussed, so...
You know, if one specialty...
Say Water
Speaker Change: has a client that needs a different specialty. There's lots of cross-selling, it's built into the DNA of that organization, and so there's multiple cross-selling opportunities.
Speaker Change: with in the platform, not to mention the opportunity to add specialties and then cross-sell them, and that is a the cross-sell within the platform is something that is international in scope. So, for example,
Speaker Change: In engineering, the US engineering firm has referred some key global clients to Canada and vice versa.
Speaker Change: We haven't seen too much yet in Australia, New Zealand, but we think that that's coming Thank you very much.
Speaker Change: In terms of the real estate cross-selling, that's a whole separate opportunity. I think it is, you know, if I'm being frank.
Speaker Change: It is smaller in materiality, but still quite interesting, so for example...
Speaker Change: Every time a client, first of all, it's the same client base, essentially the same client base across the board. They know the Collier's name, they know the Collier's brand, they may want a secure land before they secure land. They need to do a whole variety of testing. Thank you.
Speaker Change: So it might be environmental testing, it might be road access, it might be a variety of other things like that so we can do preliminary work with them and that is happening and it's happening consistently between the two different platforms.
and the owner of the land chooses...
Speaker Change: to develop whatever that might be, whether it's a civil or whether it is private.
Speaker Change: There's a need for a project manager or a program manager to execute on behalf of the client.
Speaker Change: So, Colliers really has the opportunity to surround these same clients both internally within the platform but also externally in the Colliers traditional real estate platform.
Speaker Change: So there's lots of opportunity, but we're really still at the early stages, but I would say in terms of cross-selling, we've seen more cross-selling between engineering and engineering internally and engineering with the Real Estate Services segment.
Speaker Change: We've seen more of it than in most other cross-selling opportunities across our company over the years. So that's an exciting positive for us.
Speaker Change: Got it, great to hear. And then as a follow up on the leasing side, that was a notable slow down this quarter. I think you talked about some tough comps there so can you just give some more detail on those tough comps and what gives you the confidence in the re acceleration over the rest of the year. And within that, I guess, how different do trends look between office and industrial leasing?
Speaker Change: All right, Stephen. So, Leasing had a tough comp in Q1 relative to Q1 of 2024.
as well as Q1 of 2023, quite frankly.
Speaker Change: Both of those prior quarters had specialty asset transactions, a couple of them and when I say that I mean data center type transactions.
Speaker Change: We unfortunately did not have the same type of transaction activity this quarter, and that was the key factor that led to the leasing relative lower performance year on year and in fact over the relative to the prior as well.
Speaker Change: So, you know, as we look ahead, Jay mentioned office leasing is strong in many markets, you know, some markets more than others.
Speaker Change: Industrial leasing were keeping close eye on, and in fact it's impacted directly by some of the tariff stuff that's happening. Industrial leasing was up nicely for us in Q1, but on a full-year basis.
Speaker Change: We think industrial leasing will be up more moderately than that perhaps.
Speaker Change: Ludamon, single-digit growth in industrial leasing for the four-year.
Speaker Change: So all that to say, you know, we expect on a full year base our leasing business to be up mid single digits top line revenue. I think that still holds.
Speaker Change: despite the tough comp in Q1, which was frankly something we were aware of in our, when we [inaudible]
Speaker Change: You know, this is just the reality. If you pulled out the transactions, there were massive transactions in two consecutive years.
Speaker Change: and so if you pull them out, our leasing is up actually six and a half percent a year over a year.
Christian Mayer: You know, it's just another data point, but Christian is right, we expect it to return to normal levels in subsequent quarters.
Very helpful. Thank you Thank you.
Frederick Bastion: The next question is from Frederic Bastien from Raymond James, please go ahead.
Frederick Bastion: Hi guys, I just wanted to thank you for offering the breakdown of pass-through costs for the segment. I found it quite useful.
Frederick Bastion: The big acquisition is the last year, but if you were to highlight which disciplines your US engineering business is best at, which ones would they be?
Frederick Bastion: Well, that's a good question. We'll come back to you on that.
Frederick Bastion: It is a highly diversified business which is one of the great benefits of it.
Frederick Bastion: and I think that if I comment about some of the specialties that I think stand out, I might offend my partners in that business. So, we'll get back to you on that friend and give you a two or three then.
Frederick Bastion: We all believe are significant, although Christian's got some input for you. Yeah, I mean, Frederic, you know, the Canadian business you talked about, you know, Anglo.
You know, a well-known Canadian player, obviously, strength and...
Frederick Bastion: in infrastructure, transportation, power, water, the U.S. business, different business. It was acquired five years ago.
Frederick Bastion: Corps, traditional strength areas there, you know, infrastructure, transportation, the departments of transportation of several large states are key clients there in that business, and then we also have a number of commercial infrastructure type clients.
Frederick Bastion: and programmatic tech clients in our project management and program management business that are both public sector and private sector so it's a very widely dispersed client base with a lot of different activities happening.
And, uh, yeah.
Speaker Change: Thanks. And with respect to regional strength, I mean, you're obviously building a platform. There's a recall you started out on the US East Coast.
Speaker Change: Where would there be opportunities for growth, either through M&A or ORGAD growth?
Yeah, there's multiple opportunities as you would expect, Fred.
and how big is your platform now in the U.S.?
It's approaching 600,000,000 in revenue with headcount is...
2,500.
That's okay, yeah, the engineer is done.
Yep, in the US.
Okay, that's great. That's the girl, I guess. Thank you so much.
Thanks, that's all I have for now.
Thank you.
Thanks for everything.
Your next question is from Julien Blouin from Goldman Sachs.
Please go ahead. Yeah, thank you for taking my question.
Speaker Change: For the engineering segment, that low teens internal growth feels quite a bit stronger than I think the organic growth rates we had previously talked about for the business of mid-high single digits.
Speaker Change: Do you feel like that's sustainable, and can you help us sort of break that apart? How much of that low teens growth was top-line driven versus margin improvement?
Speaker Change: Julien, the low teens growth rate was the top line growth for the quarter on a net revenue basis.
Speaker Change: And what you said is exactly right, you know, mid-high single-digit or organic growth in the expectation for the full year.
Speaker Change: We had a few things accelerated in Q-1 and Q-1 is actually a...
Speaker Change: a seasonal slow-portored engineering as well so that road streets get a bit exacerbated there. But no, for a foyer, it's going to be a bit of single digits. That's the expectation and we're very comfortable with that.
Speaker Change: There was really an issue of difficult comms, but I guess sort of when you zoom out, do you feel like...
Speaker Change: You're sort of holding or potentially losing share in leasing versus some of your peers who have reported generally better than that in terms of leasing results and is that an okay outcome if instead you would rather...
Allocate Capital to Engineering, Out sourcing, Investment Management Ben.
Well,
Speaker Change: In terms of allocation to capital, we're quite balanced and have lots of capital available to deploy, so capital allocation hasn't yet been a problem for us.
Speaker Change: One of the things that, if you look at our business relative to, I'm now talking about the real estate services business relative to our peers, we are extremely well balanced on a global basis.
Thank you. Bye. Bye. Bye.
You know, market for market we have...
Wine Diversification. We have full services.
We can service clients wherever they operate.
and I think.
Most important leaked. [inaudible]
We have track record of consistent profitability.
Speaker Change: and strong tenure amongst our leadership teams. So, we're very comfortable, more so, and we see it as more so than most of the other peers, this balanced global approach.
Speaker Change: We're taking share, we believe, across the board, it's very difficult, it's very difficult in some markets.
Speaker Change: and some markets to take share. For example, New York is a very mature market, difficult to take share. We're doing our best.
Speaker Change: There's other markets in which there's huge opportunity for us to grow.
Speaker Change: You know, things like markets like Japan has been very good for us in recent years. India has been very good for us in recent years and things like that so
You know, I believe we're taking...
Speaker Change: We're taking share, and we're taking share mostly from the secondary players in the industry that are having trouble with their global operations.
Okay, great. Thank you, Jay.
Speaker Change: Your next question is from Jimmy Shan from RBC Capital of Markets. Please go ahead.
Jimmy Shan: I guess first can you maybe elaborate on that or square that for us a little bit? And then the second question is and could be related to that is the you talked about integration last quarter, the back office and the fundraising and I wonder if you could update us on the progress being made there.
Yeah, so Jimmy, the Investor Management
Jimmy Shan: Margin in the first quarter on a net service revenue basis.
Jimmy Shan: was up a little bit, and that is just a factor of lower incentive compensation, and we did have some higher head count setting that and that is, you know, up.
Jimmy Shan: Continuing the themes of prior calls we've had where we talked about the additional resources that we've been adding into our investment management practice.
Jimmy Shan: We expect over the course of the year for margins to be flat, possibly down, slightly an investment management.
Jimmy Shan: and we will continue to be investing there and we're going to continue to work on.
Integration Activities, you know, and using...
Jimmy Shan: are scaled to become more efficient with some back office processes and become and reduce redundancies in the business. And we'll have more to talk about on that as this exercise progresses.
Jimmy Shan: Yeah, and I'd add like, this is a segment that obviously we're very excited about.
Jimmy Shan: You know, we have so many opportunities to leverage a scale that we have, the talent.
for Priatory Data that we have across the platforms.
The talent that we have are all experienced investors.
in specialized areas, and they're actually partners in the business, so they have a vested interest.
Jimmy Shan: in what they do day to day. So the opportunity for us is to bring all of that together.
Jimmy Shan: and to really focus on delivering performance and new investment ideas to our LPs.
by using some of that.
Jimmy Shan: A unique talent that we have across the platform. So, more to say about this over the course of the next year.
Jimmy Shan: But, you know, it's a one step at a time approach, and it's nice to see fundraising up, and it's nice to see, you know, our fee and even a margin numbers pretty good relative to previous quarters.
Thank you.
Speaker Change: Your next question comes from Nevin Yochum, from BMO Capital Market. Please go ahead.
Speaker Change: Thanks, guys. You just may be high level. You know, you touched on some of the terrifying certainty impacting your clients. In the discussions you've had, what have your clients cited only to see or to resume some of the decision making in a more meaningful way?
You know, tariffs are obviously the subject to sure.
Speaker Change: I would have said up until yesterday tariffs were essentially on hard products.
Speaker Change: Colliers Operations are decentralized. They're country specific. We deliver the services that we deliver within country. So as an organization, we're not impacted directly by tariffs.
But
Speaker Change: You know, indirectly tariffs could drive up the cost of construction.
Speaker Change: in that component of our business and that therefore slow down new developments, that could happen.
Speaker Change: Engineering, sort of the same thing, you know, depending upon supply chains and other things.
Speaker Change: and the, therefore, the need of engineering services, obviously, we're not seeing it at this point, in fact.
Speaker Change: We're seeing a lot of positive news there because there's lots of talk about infrastructure
Virtually across the board.
Speaker Change: So we're looking forward to increased activity around those kinds of things. So we're monitoring it very closely.
Speaker Change: but have really no certainty now other than we really don't see it impacting us in any material way at this point.
Speaker Change: Great. Thanks, Jay. And then just one more on M&A. You've completed several transactions in engineering as well as real estate services recently. Just wondering what the areas are where you're seeing the greatest opportunities in the market today.
Speaker Change: Well, we continue to see lots of opportunity, as I said, in engineering and project management and related specialties.
Speaker Change: Our pipelines are full, and the challenge slash opportunity for us is to curate the right ones and then integrate them effectively.
The other thing that we're seeing is a widening of...
Speaker Change: of the lens around what is real estate services. So for example, there is, you know, a whole world out there around...
Fundraising Capital for Infrastructure [inaudible]
Projects, Data Center Projects, things like that.
Speaker Change: which is something that I don't think traditional real estate firms had thought about.
Speaker Change: 3 years ago. But those are the kinds of areas that are really expanding what we could be doing.
within that real estate component of our business, so...
In addition to the usual.
Opportunities, which are-
Speaker Change: More capital markets, more leasing, more property management, more valuation, things like that, all of which are fast.
Speaker Change: Categories, they've got lots of growth opportunities both in taking share and making acquisitions so.
Speaker Change: We feel like we're in a two, you know, aside from I am, we're in two very, very large segments of the overall economy and on a global scale and the thing I haven't mentioned or emphasized
Speaker Change: is we have a strong management team with a long tenure with us that have done acquisitions globally for 30 years.
Speaker Change: So we can take advantage of opportunities virtually anywhere in the world.
Speaker Change: that makes sense, Ethos Urban was a great example this past quarter.
and there's others.
Speaker Change: For us it's just a natural next step to augmenting our internal growth strategies wherever we're doing business.
Maxim Sychev: Your next question comes from Maxim Sychev from National Bank Financial. Please go ahead.
I have been one gentleman.
Maxim Sychev: Jay, you made an interesting comment around engineering potential dewarfing real estate services and when I look at the sort of the nature of fragmentation engineering versus like for example, leasing, I mean there's dramatically more fragmentation in engineering space.
How do you...
Maxim Sychev: I don't know like in five or ten years, depending on sort of how things evolve on that side. Can you maybe comment on that, how you guys are thinking about this internally, just what is sort of the right balance and the right opportunity in terms of kind of going into the most fragmented market possible from an in perspective. Thanks.
Maxim Sychev: Yes, so Max, I mean, you've followed our progress for a long time. You know, we have these five-year plans and you know, as I think about your question and try and respond, you know, I immediately defer to, you know, what do we think are engineering? [inaudible]
Maxim Sychev: Segment looks like five years from now so first I would say it's not called engineering it's probably called engineering and other I don't know what other is. [inaudible]
Maxim Sychev: But that whole segment is not just engineering, it's project management, program management, and a variety of other related services. So that's the first thing. So the category just can continue to widen and widen.
Christian Mayer: Secondly, if we can continue to grow that business globally, as Christian said, and I'm
Christian Mayer: and High Single Digits, Internal Growth. That's pretty damn good for a company of our size. And if we can add, if we can add at least 10 or 12% of the prior years EBITDA in that segment.
Christian Mayer: to our engineering group and roll that number out five years, it'll blow you away.
Christian Mayer: And that is sort of consistent with our five-year thinking and we haven't yet refined our next five-year plan but that's kind of the way we see it. The segment is so damn big.
and for us it is it's all about curating the right [inaudible]
Pieces,
Christian Mayer: and management teams that want to be partners in our business which is our key differentiator from some of the others those that you know as they merge their operations in with us.
They take a significant equity stake in that platform.
Christian Mayer: And that has proven for us to be, you know, a great competitive advantage.
Christian Mayer: which I'm sure others will copy tomorrow after I've just said it.
Appreciate the call, Jay. Thank you so much.
Speaker Change: There are no further questions at this time. I will turn it over to Jay Hennick with closing remarks.
Speaker Change: Okay, I want to thank everybody for joining us this morning and we look forward to our second quarter conference call and probably can't be singing many of the same questions we've covered today. So thanks for participating.
Speaker Change: Ladies and gentlemen, this concludes the conference call. Thank you for your participation and have a nice day.