Welcome to the Colliers International Second Quarter Investors Conference Call. Today's call is being recorded. Legal counsel requires us to advise that this discussion scheduled to take place today may contain forward-looking statements that involve known and unknown risks and uncertainties. Actual results may be materially different from any future results, performance, or achievements contemplated in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the company's annual information form as filed with the Canadian Securities Administrators and in the company's annual report, Form 40-F, as filed with the U.S. Securities and Exchange Commission. As a reminder, today's call is being recorded. Today is August second, 2023. 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, operator. Good morning, thanks to everyone for joining us for this second quarter conference call. I'm Jay Hennick, Chairman and Chief Executive Officer of the company. With me today is Chris McLernon, Chief Executive Officer of our Real Estate Services business, and Christian Mayer, our Chief Financial Officer. As always, this call is being webcast and is available in the investor relations section of our website, along with the presentation slide deck. During the second quarter, Colliers experienced strong growth in recurring revenues, which contributed 65% of our adjusted EBITDA. Having such a large percentage of recurring revenue highlights our balanced and resilient business model, enables us to withstand market fluctuations, and truly sets us apart from the others. Once again, Investment Management and Outsourcing and A dvisory experienced robust growth during the quarter, while capital markets, and to a lesser extent, leasing, declined versus the prior year, a record quarter. As everyone knows, lower interest rate, lower interest rates have lower investment volumes, sorry, have been caused by rising interest rates, challenging debt availability, and continued price discovery, which we expect will quickly rebound once conditions stabilize. Since the rest of our business has been performing well, we're maintaining our financial outlook for the year, as Christian will elaborate on. Our company is basically comprised of two parts. Colliers, one of the top global leaders in commercial real estate. This segment makes up about 70% of our adjusted EBITDA and is led by CEO, Chris McLernon. Chris will provide some highlights in a few minutes. The second segment is Investment Management, which is our fastest-growin g business. Since 2016, Colliers has built a highly differentiated private investment platform with an impressive $100 million of assets under management. Importantly, 85% of our AUM is comprised of perpetual or other long-duration investment vehicles, giving us predictable revenue streams over the long term. As importantly, 70% of these assets are in defensive strategies, like seniors and student housing, healthcare, and infrastructure, classes that are highly sought after with strong tailwinds for the future. During the second quarter, IM continued to scale with revenues up 58%, including the benefit of acquisitions. We continue to invest in our platform, adding investment professionals and new products, as well as strengthening our distribution capabilities. While fundraising remains a challenge for the entire industry, the interest in our investment vehicles has never been greater. We expect our fundraising will accelerate as we move towards the end of the year. Now, let me ask Chris McLernon to discuss some of the highlights from our real estate services business. Once he's completed, Christian will provide his usual financial report, and then we'll open things up to questions. Chris? Thank you, Jay. Good morning. Our vision at Colliers is to accelerate the success of our clients and our people while creating value for our shareholders. Today, Colliers is stronger than ever. It is our unique, enterprising culture that sets us apart from our competitors as we continue to attract and retain the best talent in the industry, while taking share from our competitors. Although transactional services of capital markets and leasing declined versus prior year due to the challenging market conditions, our outsourcing and advisory services showed strong growth, continuing the momentum from the first quarter. Globally, capital markets investment volumes have hit the lowest levels seen in a decade due to the rapid rise and continued uncertainty around interest rates, combined with the tightening debt markets, which is affecting price discovery between buyers and sellers. We are confident that our transaction business will rebound strongly once market conditions improve. In the meantime, to counter the decline in transactional revenue, we have been very proactive, optimizing our costs throughout the business. We have done this before, and our enterprising culture with leadership at all levels are fully aligned with shareholders, allows us to make hard decisions quickly and in the best interests of our clients, people, and shareholders. Finally, during the quarter, we continued to make progress toward our Enterprise 2025 plan, growing our outsourcing and advisory business internally and strengthening our service offering by completing three strategic investments in the U.S., Australia, and New Zealand. Now, let me pass things over to Christian. Thank you, Chris, and good morning. Now that you've heard from Jay about Investment Management and from Chris on Real Estate Services, I will add some comments on our consolidated results, our balance sheet, and our financial outlook for the full year. Please note that all references to revenue growth made on this call are expressed in local currency, and that the non-GAAP measures discussed here today are as defined in the materials accompanying this call. For our second quarter, revenues were $1.1 billion, down 4% relative to the prior year, which was a record second quarter for our business. Our Capital Markets and Leasing service lines reported revenue declines of 38% and 7% respectively, in line with market conditions and our expectations, continuing the challenging trend that started last summer. Our recurring Investment Management and Outsourcing and Advisory service lines each reported strong growth. On an overall basis, internal revenues declined 10%, attributable entirely to lower transaction volumes. Consolidated adjusted EBITDA for the second quarter was $147 million, relative to $161 million in the prior year, with margins at 13.6% versus 14.3% in the prior year quarter. The margin reduction was attributable to the decline in capital markets volume, particularly in our EMEA region, where producer compensation is partially fixed. The overall margin impact was moderated by growth in our higher-margin investment management operations, as well as aggressive cost control actions across the company. We have achieved cost savings of approximately 28% during the second quarter. We expect a similar or greater level of savings in each of the third and fourth quarters. Turning to our balance sheet, our financial leverage ratio, defined as net debt to proforma adjusted EBITDA, was 2.4x at June 30th, reflecting capital deployed on acquisitions during the past 18 months, which are performing in line with our expectations, as well as seasonal working capital usage. Absent any significant further acquisitions, we expect our leverage to decline to under 2.0x by year-end. On June 1st, we completed the early redemption of our 4% convertible notes, issuing 4.1 million new subordinate voting shares. The early redemption eliminates the interest expense related to those notes and increases the amount of permanent capital on our balance sheet. At present, 55% of our indebtedness is at attractive, low fixed interest rates. Our weighted average interest rate for the second quarter was 4.6%, up 130 basis points over the prior year, far less than the 450 basis point jump in floating reference rates during the same period, demonstrating our active management of borrowing costs. With respect to our financial outlook for the full year 2023, we are maintaining our current outlook. We expect lower capital markets and leasing transaction volumes to persist for the remainder of the year, with the impact partly offset by cost control efforts across our company. We also expect continuing strong growth in our recurring service lines, investment management, and outsourcing and advisory. Overall, we expect full-year adjusted EBITDA to be up between 6% and 14% relative to 2022. We expect the majority of our second-half growth to be focused in the fourth quarter due to easier prior year comparatives in our transactional business and expected incremental management fees from fundraising and investment management. Full-year adjusted earnings per share is expected to be down slightly to up slightly on higher interest expense, as well as the impact of a larger proportion of earnings coming from non-wholly owned operations. 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. We will now begin the question-and-answer session. Should you have a question, please press star followed by the one on your touch tone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be pulled in the order they are received. Should you wish to decline from the polling process, please press star followed by two. If you are using a speakerphone, please lift the handset before pressing any keys. Please only press star one one time. If you press more than once, you may be removed from the queue. One moment, please, for your first question. Your first question comes from Stephen MacLeod with BMO Capital Markets. Please go ahead. Great. Thank you. Good morning, morning, everyone. Just a couple of questions. Morning. Morning. Just a couple of questions. One is around the investment management fundraising environment. You suggested that, you know, you expect a very strong back half, for fundraising, and I'm just curious if you can give a little bit of color around what's driving that. As you pointed out, Jay, I think in your prepared remarks, that fundraising is a challenge in the industry, but you're still expecting a strong accelerated back half. Look, it's, it's, it's still unclear. you know, I think that the reason we're seeing or the entire industry is seeing a slowdown is for the same reasons capital markets, in some ways, is seeing a slowdown. Everybody is trying to figure out how that might impact value of assets within funds and so on and so forth. The beauty of our investment management platform and the fact that we curated it over a long period of time, is that we focused on defense strategies, infrastructure, and other highly sought-after investment classes. redemptions for, for us have been modest, if, if, if at all, whereas there's been redemptions in, in many, many funds that, that have more traditional real estate asset classes. I think investors generally are being more cautious, but our pipelines have never been stronger. We're having more meetings. There's more conversation with new potential LPs throughout the entire system. We're all excited about that. It's just taking longer for them to make final decisions. But that's been the case, I would say now for two quarters, maybe three quarters. Sooner or later, they're going to have to start to make, make some decisions, and we think that, we'll be at the front end of those decisions, given our asset classes. Okay, that's great. That's good color. Thank you, Jay. Just within capital markets and leasing, you know, obviously, you've talked about just the sort of weaker backdrop persisting for the back half of the year, which which I think is the expectation that everyone has. Can you talk a little bit about just sort of your activity levels? Are you seeing a lot of kicking of the tires and just the transactions are not getting done? I mean, just as it, as it relates to potentially pent-up demand. Hi, Steve. It's Chris here. We're certainly taking more meetings in Q2 and, and going into Q3, pitching more and bringing new mandates to market. Certainly at the, the lesser numbers and, and, and volumes, but we're seeing activity that'll, you know, transact probably towards Q4. You know, the market has stalled, and, you know, as I said in my opening remarks, that we're at a 10-year low. You've got Germany, for example, down 68% year-over-year, U.S. down 65%. But we're, we're seeing some, some, you know, good meetings starting to take place and, you know, investors wanting to test the market. That's great. Thanks, Chris. Appreciate that color. Thanks, guys. Your next question comes from Stephen Sheldon with William Blair. Please go ahead. Hey, good morning, guys. Thanks for taking my questions, and great, great quarter overall in a tough environment. Did want to ask about the slowdown in outsourcing and advisory in the Americas. You know, I think it, it had been growing kind of high single digits the past two quarters, down to 3% year-over-year this quarter. Anything specific driving that, such as tough comps or one-off items? Then how are you thinking about the growth outlook there, over the next few quarters and, and, and to early 2024? Just give me a sec here, Stephen. We're gonna pull up the- We don't know if, we don't know if your facts are right there. Yeah, we're surprised by them. We're surprised by your question, but- Okay. Like it is. Maybe I'll ask another one. O&A is actually, O&A is actually up in the Americas, Stephen Sheldon, by 5, about $10 million on a quarter-over-quarter basis. Not sure. Yeah, I was asking year-over-year slowdown, because it had been growing, I think my number is at least 9% 4 Q, 7%, 1Q, down to 3% this quarter, year-over-year. I don't know if maybe valuation had slowed down, given that there's been some transactional pieces there. Right. I think I understand the question now. You know, part of our outsourcing and advisory business has, is a valuation practice, and that valuation practice is a recurring service offering in that it provides ongoing property valuation on an annual basis to large financial institution clients who contract us to do that work. There is some additional work that gets done on the front end as transactions occur and as new loans are originated. That part of the valuation business has declined, clearly. Maybe that's what you're, what you're seeing there, that that could probably be the... That's probably the single biggest driver of, of a reduction in volume there. Okay. Got it. That's, that's what I figured. Then just, you know, 2025 quickly approaching, you guys have your targets out there. You know, just curious, you know, it seems like you've, you've done multiple of these, these kind of five-year targets. When are you thinking about providing your outlook for 2030? I know there's a lot going on in the near term, just, just curious, you know, where, when, when we would maybe start expecting to see some of those longer-term targets again? I t's, it's funny you, you mentioned 2030. We're doing lots of work on 2030 right now, which is way ahead of where we would have been, several years ago. We generally would start our five-year plan, you know, three and a half years, maybe four years into our current plan. We actually started it early this time. I don't think we would make it public much, much before, you know, we're, we're finished the current five-year plan. There's been a lot of thinking around the 2030 plan. What do we look like in 2030? It's quite exciting, and, and from our perspective, we see some very, very interesting ways for us to continue our, our current, current growth trajectory. Right now, it's quite remote. You know, my commentary is just, is just around, the fact that we think that we can continue to grow at the same kind of clip we have historically for much further than the current five-year plan. Got it. Maybe just one more. You know, Chris, I think, you know, you, you kind of talked about seeing some good activity on, on the capital market side, although, you know, deal, deal volume is still down quite a bit year-over-year. It doesn't seem like it's picked up yet. Some of your peers have reported green shoots in areas like, or subsectors like multifamily, industrial, subsectors like that. Just curious what you're seeing out there, you know, if we looked by almost by subsector or different asset classes within commercial real estate. Is, is there more activity happening in certain subsectors than others? Yeah, absolutely. You know, the number one asset class that investors are looking at is that industrial logistics. It's been a five-year boom in, in the marketplace. Vacancy is quite low, so we're seeing rental appreciation, so that, that continues to be a hot sector. Same with multifamily. With many cities around the world, you've got a, you know, an over-demand situation, you know, where rental tenants are looking for properties, so we're seeing rental increases in, in multifamily. I think that's a, a good sector. You know, there's the whole flight to quality in terms of office leasing, so the very best buildings, the trophy assets with the best amenities, best locations, best tenants are still gonna be an attractive investment. Then I would say the, the alternatives, you know, student housing, data centers, et cetera. The problem is it's such a small pool of assets, but it's very much in, in demand. Those are the sectors that we're seeing, that have interest with investors today. You know, I would also add another thing to what Chris says, and that's geographic, our geographic diversification. If you take a look at our APAC numbers, they were surprisingly better than the rest of the world, which is interesting because things may be turning there a little bit. Whereas in the U.S., capital markets and leasing were down, whereas in APAC, they weren't down nearly as much. So we don't know whether those are early signs yet, but, you know, that's, to us, that's a green shoot. Absolutely, Jay. Just to, to follow on up on that, you know, in Asia Pacific, we've got a, a first-class regional, and local, management teams, and we're seeing, real good progress in our Japanese capital markets business going from strength to strength. We've also improved our operations in Korea and Singapore, so we saw a couple of large transactions this quarter in those two markets. Then, a pillar of strength is still our Australian business, and, you know, we're seeing some, again, industrial logistic sales, and then the return to residential project marketing, with the, heavy immigration coming into Australia so definitely some green shoots there. Thank you, guys. Appreciate the call. Good to hear. Ladies and gentlemen, as a reminder, should you have a question, please press star followed by the one. Your next question comes from Frederic Bastien with Raymond James. Please go ahead. Thanks. It's, it's nice to have Chris join us for the call and presumably for future ones. Also, thanks for your comments on the APAC region, because that was one of the questions I had. I guess my biggest concern coming into the print were margins, and, and they held up quite nicely, especially in the Americas. Certainly showed you, you've been quite proactive with your cost structure. Question is around the outlook you provided for, for this, the back half. I think you mentioned in your prepared remarks you expected more savings to be achieved. Wondering if you could provide additional color there. Thanks. Yeah, Frederic, we've been active on managing our costs, and we've been positioning ourselves to deal with this decline in capital markets activity that started, you know, really nine months ago. We, we have been proactive in reducing headcount in producer support and administration roles. Managing that headcount as best we can, despite the fact that there is activity, as Chris says, you know, there's people looking at transactions. Being prudent there on our headcount, managing the discretionary costs in the business, you know, travel, conferences, that, that sort of thing. We've made some very good progress there, as I, as I mentioned in my prepared remarks, $28 million in the second quarter. We're looking for the same or better in the third and fourth quarters, and that will positively impact our margin for the full year. Thanks. How would that differ from the cost savings that you achieved during COVID? How different of an approach did you use? It's the same playbook, Frederic, but a different situation slightly. During the pandemic, it was actually much more black and white. Our people were at home, transactions simply weren't being talked about and weren't being explored, so we made more dramatic cuts to those areas. I think from a overall perspective, you know, the, the pandemic-era cuts were significantly more in dollars, but they, they were focused in the same areas of our transactional business. Just to add some additional color. You know, remember, we've got this decentralized partnership model, and so we've got leadership locally aligned to performance and they're being proactive. It's a basket of businesses, and so, you know, we've got some countries performing well, some service lines performing well. It's not looking at cost containment across the board, it's being selective, and looking at those, you know, service lines and countries that are, you know, challenged, and letting the ones that are going well, you know, continue to run well. Let's not forget the highly variable nature of our, our professionals globally around the world, that compensation adjusts based on their production. We, we feel, as you're hearing from, from Chris and from Christian, that this is a road we've been down several times before. The structure of our business is quite unique in this respect. You know, I think leadership has consistently had the fortitude to act when times like these occur, and we're doing that, and the results are showing up. We're, we're pleased with that. Awesome. Thank you. That's all I have. Thanks, Fred. Your next question comes from Jimmy Shan with RBC Capital Markets. Please go ahead. Thanks. Good morning, guys. Just wanted to follow up on the leasing business. Capital markets revenue versus OPs were down about the same level, but, but leasing seems to have done a little bit better. I wondered if, if, you know, whether that's a different asset mix, geographies, and kind of what would account for seemingly better year-over-year performance. Then maybe how do we think about the trajectory of that business over the next few years? I know weak office and industrial strong, but maybe if you could provide some color as to how to think about the growth, beyond, beyond this year. Yeah, this is Chris here. It is a geographic topic, so Asia Pacific leasing was up 24%, year-over-year on the quarter, and this was attributed to a couple of things. One, again, I mentioned the improved performance in some of our Asia Pacific operations, you know, Korea, Singapore, Japan. Then we've also got a, you know, a growing business in India, but predominantly it would be Australia. Again, we are the leader in the A-class landlord leasing business, and there's a whole trend of the flight to quality for office users to go to the best buildings. So we're capturing a lot of that market in Australia, which is helping the overall leasing markets for the company. Okay. In terms of your guidance for the year, I guess two question. One is, what would that assume in terms of AUM growth in the back half? Sort of is your confidence in the guide really sort of predicated on your, the cost-cutting efforts that you've done so far? Is that really what's kind of the main driver to you being able to sustain the guidance? Yeah, I mean, to answer your question, Jimmy, our AUM at June 30th was $99 billion. We certainly expect to be, you know, well north of $100 billion. You know, sort of, no one's happy to know where that's going to be, but, but, definitely a few billion north of $100 billion by the end of the year. That will come from fundraising that we expect will occur before the end of the year. As Jay mentioned, you know, we've had very modest redemption activity, so that's not really a factor. Valuation in our AUM is, is, is, is also a modest negative, but not something that we're concerned about. It's really all about fundraising for us in terms of our AUM trajectory. Just as a reminder, you know, our fee-paying AUM is, is, is the number that generates the revenue. Our AUM is a gross measure that includes leverage. If we raise, just for discussion purposes, $1 billion, our AUM will actually go up potentially by $2 million, given the leverage that's in the portfolio. Just be cognizant of that. In terms of your other questions, cost control certainly will be a continuing focus for the balance of the year, as I've mentioned a couple of times on the call already, and that's part of what is in our outlook. We've also had a couple of tuck-in acquisitions, actually three tuck-in acquisitions this year, to date. Those will continue to annualize into the results over the next two quarters. Of course, our outsourcing business will also continue to grow over the next two quarters, and that will drive some additional EBITDA to help us achieve our outlook. Okay, thanks, guys. Thank you. Your next question comes from Maxim Sytchev with National Bank Financial. Please go ahead. Hi, good morning, gentlemen. Hi. I just wanted to start a little bit with, with EMEA, if it's possible. Do you mind providing a bit more color in terms of the, the operating earnings loss in the quarter? Is it, again, more of a function of the compensation structure than anything else, or is there a sort of any additional data points you can provide on that geography? Thanks. Yeah, Max, it's, it really is that, it's the, the compensation structure, which has a partially fixed component in, in capital markets. As you can see in the materials, the capital markets revenues in EMEA are, are down, you know, quite, quite significantly in the quarter. That's the driver of it. The revenues are offset by growth in outsourcing and advisory. Those margins in outsourcing and advisory, you know, are, are sort of low, low double-digit area. Whereas the capital markets business in EMEA is, is a significantly higher margin operation. As the revenues come down, that, that margin deleveraging is more significant and impacts the amount of EBITDA generated, as well as the operating earnings that are generated. Okay. Thanks a lot for clarifying question. Then, Jay, maybe a bit more sort of a broader question. I mean, if, if you listen to, listen to some of sort of the, the bearish commentary around kind of commercial real estate, in general, is that actually, you know, potentially the, the biggest shoe dropping is kind of like 2025, 2026 sort of timeframe? I, I'm just wondering what, what are your thoughts or maybe counterpoints to, to that view of the world, in terms of, you know, the potential stabilization, when it comes to, you know, the value of the properties and, and how the sausage sort of gets made on, on, on that sort of timeframe? Thank you. You know, I think it's, you know, I, I divide the question into two. First of all, you know, there's various asset classes in real estate. We all know what they are. You know, office is obviously something that's, that's under some pressure. As Chris mentioned, multifamily, and our defense assets, defensive assets, infrastructure, these are all doing extremely nicely. Operator, do you mind clearing your throat at a different time? I'm sorry. These are all assets that are doing extremely well. The only difficulty then is availability of capital. We, you know, I see a normalization happening, but we still need to see some stabilization in interest rates. We need to see a change in mentality among sellers of assets and buyers of assets who are prepared to step up for some of the more quality assets that are that are available. You know, I've, you know, I'm reading all the same things that you're reading. You know, I'm hearing 2025, I'm hearing 2026. I can't believe it would be delayed to that length of time. I think you're gonna start to see activity in 2024, maybe even early 2024. There's funds out there that, that need to acquire. There's funds out there that, that need to dispose. You're seeing Blackstone sell massive pieces of their large REIT to redeploy their capital. I think it's all over the place, frankly, and I think it's gonna be. At the more sought-after real estate assets, you're gonna see movement sooner than you think. Of course, we would like to see it starting tomorrow, but the reality is, it's, it's gonna be sooner than we think, because these assets are gonna have to turn over. It's much more a mature asset, real estate is today than ever before. You know, so we're, we're sort of thinking 2024, we're gonna be, maybe not at record levels, but there's gonna be nice activity happening in 2024. Super helpful, Jay. Thank you so much. Maybe just one last question. Obviously, you continue to build your platform in engineering consulting, and now that you have, you know, quite a bit of size in the business, I'm wondering if you can maybe comment on, give us examples, around some you know cross-selling successes that maybe you would have had across sort of the entirety of Colliers. Yeah, that's my last question. Thank you. Yeah, there's, there's just so many, but, you know, the obvious ones is- the obvious ones are, you know, in engineering, there is a ton of pre-work that has to go into taking a piece of land from raw land to, to the point where it can be developed or sold. Our engineering segment is very busy with home builders everywhere, builders of big distribution CapEx, facilities, and so on, in order to, get, get the actual land, sewage, drainage, transportation all set up so that, properties can be sold and developed, and so on and so forth. There's a natural connection. The same clients that may own a piece of land or may want to acquire a piece of land, need to have some assistance from an engineering firm to entitle that land to do what they wanna do, and that's just, that's just one example. For us, our engineering and design business includes also project management, which together, those businesses are now approaching almost $1 billion in revenue. The project management piece of our business generates huge business from the engineering and from our commercial real estate business, as people are looking to build, renovate, and alter the structure of their real estate assets, including in the office environment, where we're very busy right now, trying to decide what the right component of an office is for a downtown office user with work, work from home, and a variety of other factors that we all know about. That's my answer. I'm happy to go into more detail if you want. No, that's perfect. Thank you. Thank you so much for the color. Your next question comes from Frederic Bastien with Raymond James. Please go ahead. Hi, guys. Fred. Just a quick question on, noticed the investment management margins were down sequentially from 45% to roughly 45% to 42%. I think you're guiding, guiding for somewhere to close, close to 50%, as we close out the year. Can you just speak to the, you know, the pressure you see in the margin, what was behind that, and how we get back to the trend you've been forecasting on a go-forward basis? Yeah, Frederic, 50% margins is our target, down the line, you know, 3-5 years from now, as we continue to scale the business. We, we expect to achieve something in the order of 45%, thereabouts, this year, in terms of a full year margin profile. In the quarter, we, as Jay mentioned in his remarks, we invested in distribution capabilities and, and, and other growth initiatives, you know, new, new staffing to support new fund launches. Those growth investments do have an upfront cost attached to them, and those are gonna bear fruit here over time. And we're convinced of that and, and confident in that, and that's why we're making those ongoing investments in our platform. No, that's great color. I know you've made significant investments over time, and they, they've certainly paid off. Thank you for that. All right, thanks. Thanks, Fred. There are no further questions at this time. Please proceed. Well, thanks, everyone, for joining us on this second quarter conference call, and we look forward to speaking to you again during the third quarter. Thanks for participating. Ladies and gentlemen, this concludes the conference call for today. Thank you for participating, and have a nice day.