Colliers International Group Inc. (CIGI) Earnings Call Transcript & Summary

Welcome to the Colliers International Annual Meeting of Shareholders Conference Call. Today's call is being recorded. 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 containing 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 40-F as filed with the U.S. Securities and Exchange Commission. As a reminder, today's call is being recorded. Today is Tuesday, April 7, 2020, 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.

Good afternoon, ladies and gentlemen. As the operator has already introduced me, I am the Chairman, Chief Executive Officer of Colliers International Group. I'll be acting as the Chairman of the meeting today. Before we begin the official part of the meeting, allow me to introduce the people who are here with me in person today: Christian Mayer, our Chief Financial Officer; Matt Hawkins, the Chief -- the Corporate Secretary; and Lynda Cralli, Assistant Corporate Secretary. In light of the unprecedented circumstances we are now facing, I've asked all directors of the corporation other than myself to refrain from attending the meeting in person. Before we begin the formal part of the meeting, I'd like to take this opportunity to thank everyone for joining us online today. As previously announced by press release, this meeting is being webcast live through the Colliers website located at www.colliers.com, where it will be archived and accessible for 1 year. Due to the ongoing COVID-19 situation, we have unfortunately been required to tightly restrict physical attendance at today's meeting, and I'm looking forward to hopefully getting to see many of you at next year's AGM. Following the conduct of the formal business of today's meeting, I will provide an update on our business and the steps we are taking to address the ongoing economic situation. Please note that we will not be opening up the call to questions after the meeting. It's now just after 4 O'clock, and I'd like to ask that the annual meeting of shareholders of Colliers come to order. With the consent of the meeting, I'll act as Chair and in accordance with Colliers' bylaws, Matt Hawkins will act as secretary and scrutineer. The minutes of the last annual meeting and special meeting of the shareholders held on April 9, 2019, are here; and with the consent of the meeting, we will dispense with the reading of these minutes and the minutes shall be taken as read. I'm also tabling a copy of the audited and consolidated financial statements for Colliers for the year ended December 31, 2019, and the auditor's report thereon. You will have received them with the meeting materials. With the consent of the meeting, the reading of the auditor's report will be dispensed with and the financial statements will be taken as received. Will the secretary please report whether there is a quorum present?

According to the bylaws of Colliers, a quorum for any meeting of shareholders is any 2 shareholders entitled to vote at the meeting, whether present in person or represented by proxy. Based on all available attendance, it is clear that we have a quorum of shareholders. A copy of the final scrutineers' report will be an annex to the meeting -- the minutes of this meeting.

I'm advised that there's a quorum present. As there's a quorum present, I declare that this meeting be regularly called and properly constituted for the transaction of business. I note that we have received duly completed proxies that have been -- that have appointed Matt Hawkins as the policyholder in respect -- a proxy holder in respect of approximately 86% of the total votes associated with Colliers shares. In connection with each matter of the formal business to be voted on at the meeting today, we will take them by a show of hands. Matt Hawkins will vote in accordance with the instructions set out in each proxy. A summary of voting results on each matter of formal business will be included in a press release to be issued following the meeting. The first item of business is to consider a resolution appointing PricewaterhouseCoopers LLP as independent auditors of Colliers at a remuneration to be fixed by the directors. In order to be approved, the resolution must be passed by a majority of the votes cast. May I have a motion for the approval of this resolution?

Christian Mayer, shareholder. Mr. Chairman, I move that PricewaterhouseCoopers LLP be appointed as independent auditors of Colliers to hold office until the close of the next annual meeting of shareholders at a remuneration to be fixed by the Board of Directors of Colliers.

Lynda Cralli, shareholder. Mr. Chairman, I second the motion.

The meeting will now be voted on. I propose to take the vote by way of a show of hands. Will those in favor of the motion please signify by raising your hand? [Voting]

Matt Hawkins has raised his hand. Those opposed if any? [Voting]

Nobody put up their hand. I declare the motion carried. The next item of business is the election of 9 directors. These directors will hold office until the next annual meeting of shareholders or until their successors are elected or appointed or otherwise cease to hold office. The management information circular states that there will be 9 proposed candidates. The secretary will please read their names.

The names of the director nominees are Peter Cohen, John Jack Curtin, Christopher Galvin, Jane Gavan, Stephen Harper, Jay Hennick, Katherine Lee, Benjamin Stein, L. Frederick Sutherland.

Thank you. Prior to completing the formal vote on the nominees, I'd like to take this opportunity to extend… [Technical Difficulty]

Ladies and gentlemen, please continue to hold. Your call will resume momentarily. Thank you, ladies and gentlemen, for standing by. You may proceed, sir.

Thank you, ladies and gentlemen, for standing by as the operator said. We have completed the formal part of the annual meeting, and I was just going to begin my prepared comments. So I'm going to begin today by saying that no one could have predicted the COVID-19 pandemic and the economic stress that it has created. In mid-February, I published my annual letter to shareholders, which was included in our annual report. As I prepared my comments for today's meeting, I was shocked by how many things have changed in just 6 short weeks. Despite all of this, our leadership teams at all levels have moved quickly and are working diligently to navigate through the uncertainties. For Colliers, this means remaining true to our values that have stood the test of time, prioritizing the protection of our people and our business while continuing to provide the best possible advice to our clients. In doing so, over the years, we have built highly respected global real estate services, an investment management leader with more than 15,000 professionals operating in 68 countries around the world. I would like to take a moment to recognize all the enterprising and collaborative people at Colliers for the way they've responded, adapted and remained connected to their teams and to their clients. I also want to thank them personally for going above and beyond for our stakeholders. Let me say that one more time just to emphasize it. Thank you to the Colliers team. Our shareholders know that creating value or, in times like these, preserving value has always been critically important to us. Over the past 25 years, this leadership team has earned an enviable record of performance and speaks volumes about the way we operate and thrive through different business cycles. This decline is no exception. We're confident that our proven track record, diversified business model, enterprising culture and experienced leadership will enable Colliers to withstand this crisis better than most and come out the other side ahead of our field. In entering the pandemic -- we entered the pandemic in a position of great strength. In 2019, we delivered record operating results with revenues that surpassed the $3 billion mark for the first time. We also completed several acquisitions that strengthened and diversified our business even further. The fact is, however, what happened last year or in the first few months of this year no longer matters. All that matters now is what we do from here. Businesses across most industries have been hit hard, and our industry is no exception. Revenues for many companies are drying up quickly as customers are rightfully staying home and distancing themselves. Thankfully, 45% of our revenues and as much as 50% of our EBITDA come from outsourcing, advisory and investment management, services that are more essential, recurring and contractual. We have worked diligently over the years to increase the revenues from this segment of our business so that we could weather the storm in a downturn. So far, these revenues have remained stable with some variability depending upon local market dynamics. I hope this stability holds. The balance of our business comes from Sales and Lease Brokerage. This segment has been significantly impacted, although our variable cost structure does help to automatically adjust our costs versus expected revenue streams. Regardless, we are making tough but necessary decisions to adapt to the current environment while ensuring we continue to deliver expert advice to our clients, which is needed now more than ever. Our professionals are busy helping clients make important decisions about their property, about their leases and are also assisting those hoping to capitalize on the crisis. In commercial real estate, as decisions are made and transactions materialize, revenues invariably follow. Colliers also benefits from our globally diverse revenue streams. About 55% of our revenues comes from the Americas, but the balance is split almost equally between EMEA and Asia Pacific. As markets return, those that recover first will share lessons with the others. So far, we're seeing some new business activity in China and in other parts of Asia, which could represent an early sign of improvement, although it's still too early to tell. Overall, it's hard to predict what the coming months and weeks have in store for us as this crisis continues to affect our global economy. What I do know is that Colliers is always ready to act responsibly and swiftly when it comes to ensuring our operations remain strong, enabling us to capitalize on opportunities as we have done in the past. Let me conclude with 4 reasons why Colliers will emerge from this crisis stronger than most. First, our leadership. As I said, I'm proud of our management teams in each of our regions and business units across the globe. As a group, they are making important decisions with pace while being clear, concise and caring. Our operators are experienced and committed, so I'm confident they'll serve us well. Second, our liquidity. One of our major priorities is to preserve our liquidity and maintain our strong balance sheet. We continue to run sensitivities to ensure we're well fortified. This, combined with taking the right actions now, will allow us to withstand the financial and operational impacts of this crisis. Third, our people. Everyone knows that Colliers experts are the most enterprising and collaborative in the business, whether it's our Knowledge Leader platform launched by our U.S. team or the microsites developed by our Asia Pacific, Canadian and EMEA teams to help clients understand the impact of COVID-19, we have seen countless examples of our enterprising spirit in action. Finally and perhaps most importantly, our entrepreneurial culture and significant ownership. Our leadership team owns about 40% of the equity in our company, substantially more than any of our competitors, and this gives us a huge advantage. Not only are we perfectly aligned with our shareholders, but each of our people have skin in the game, giving them the ultimate motivation to make the right decisions expeditiously. Without question, we will continue to be tested in the coming months in ways we can't anticipate. However, I'm confident we're up to the challenge. I believe in our brand and our business model. I believe in our leadership teams, our decentralized structure and our enterprise and culture. And I'm convinced our economy and Colliers International will come out of this crisis better and more united than ever. Let's all keep calm and carry on. That concludes my comments today, and I'm hoping everyone on this call remains safe during this unfortunate and unprecedented crisis. Thanks for joining us for this year's unusual Annual Meeting of Shareholders. Thanks again.

Ladies and gentlemen, this concludes the Annual Meeting of Shareholders Conference Call. Thank you for your participation, and have a nice day.