Message to shareholders
In 2015, we established an ambitious five-year growth plan to double the size of our company by 2020. I am pleased to announce we are on track to achieving our goals. In the first two years of our plan, Revenues, Adjusted EBITDA and Adjusted EPS are up 32%, 34% and 36%, respectively. Equally important, we continue to be presented with more opportunities today than at any other time in our history.
Colliers is the world’s fastest growing global real estate services company. We are global players in an industry with enormous growth potential. The market for our services exceeds $200 billion annually. Meanwhile, the top five players together – including Colliers – have less than a 20% market share, leaving lots of room to grow. If we continue to follow our proven business model – the Colliers Way – grow faster than our peers, invest smartly in people and technology, while reinforcing our unique entrepreneurial culture, Colliers will continue to generate superior returns for shareholders.
Over the past 23 years, our leadership team has delivered more than 20% compound annual returns for shareholders. This record of performance is unique in our industry and speaks volumes about both the size of the opportunity and our ability to create value over the long-term. With two significant acquisitions in Finland and Spain to launch the year, a strong balance sheet, providing ample capacity to fund continued growth, and a stable business outlook, we are optimistic that 2018 will deliver another year of solid performance – and another step forward in our growth plan.
Here are some highlights from 2017:
- Internal growth was strong at 7% for the year.
- We continue to make excellent progress growing and diversifying. Revenues from Outsourcing and Advisory grew 11%, Lease Brokerage was up 25% and Sales Brokerage was up 26%. More than two-thirds of our total revenues are now generated from services that are mostly contractual or recurring. By region, 48% of our Adjusted EBITDA comes from the Americas, 27% from the EMEA and 25% from Asia Pacific Having a business that is diversified both by service line and by market underpins our foundation, provides balance when market conditions change and, as our history demonstrates, gives us the strength to take advantage when others are retrenching.
- Acquisitions have always been a key component of our strategy. During 2017, we completed a total of ten: seven in the Americas, two in EMEA and one in Asia. Just after year-end, we added two significant businesses in Finland and Spain to increase our footprint in those markets.
Our most valuable asset and greatest competitive advantage are our people. Colliers is the place where entrepreneurial people choose to make a difference. An enterprising culture flows throughout our organization, reinforced by the fact that the people operating our business own almost 25% of the equity. Having our own money on the table means we are always aligned with our shareholders and provides a significant incentive for outstanding client service.
Our unique culture has been recognized with numerous accolades as being a great place to work. Our employee engagement journey began in 2011, and after years of increasing success, this year we received coveted “best employer” status in North America, Asia Pacific and in parts of the EMEA from Aon Hewitt. We continue to build upon this everywhere we do business, because being a best employer as measured by our people, is proof that Colliers highly values being a great place to work.
Technology is another important part of the way we operate. Our investments have been focused on solutions that either add value to our clients or better enable our professionals to execute. Colliers360 for corporate users, Colliers Office Expert for occupiers and tenants and Colliers Indsite for industrial users are just some of the tech investments that have paid off handsomely for Colliers.
Prudent innovation in technology has accelerated our success. To increase our innovation of leading-edge technologies, we recently launched a groundbreaking commercial real estate technology accelerator in partnership with Techstars, a leading technology investor and experienced accelerator host. The new Colliers Proptech Accelerator will enable us to source, shape and invest in new technology solutions that meet our criteria across the entire real estate value chain. The Accelerator will provide us with early insight into the best technologies for delivering value-enhancing strategies to our clients and enabling our professionals to execute more effectively.
Today, Colliers International is a leading global brand and our platform is recognized among the best in the industry. We have come a long way since assuming control of this business in 2004. With the support of our shareholders and employees we are stronger today than ever before.
Cultivating our unique entrepreneurial culture, growing faster than our peers and sourcing and integrating prudent acquisitions that strengthen our business will continue to be a core strategy for increasing client service and creating value for our shareholders.
Before I conclude I would like to acknowledge and thank one of our directors, David Beatty. David will be retiring this year after almost 17 years of service on our Board. We thank him for his many contributions and wish him well in the future.
Finally, I would also like to thank our business leaders, professionals and employees for their enterprising work over the past year. Together we take pride in continuing to build upon our strong foundation as we continue to write the story of Colliers International.
Jay S. Hennick
Chairman and Chief Executive Officer