FirstService Corporation (FSRV)
Annual Shareholders Meeting Conference Call
April 17, 2013, 04:00 pm ET
Jay Hennick - Founder & CEO
Scott Patterson - President & COO
John Friedrichsen - SVP & CFO
Previous Statements by FSRV
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Thank you, [Peter]. Good afternoon everyone. Welcome to this year’s annual meeting of the shareholders. I'm pleased to have with me today our Chairman, Peter Cohen; Scott Patterson, President and Chief Operating Officer; John Friedrichsen, Senior Vice President and Chief Financial Officer and at the far right your left Doug Cooke, Vice President and Corporate Secretary.
In a few minutes Scott will highlight some of our operations. John will follow with some overview of our financial results and then I'll close with some thoughts on where we expect FirstService to be in the years to come. Since 1993 our goal has been focused and consistent. It’s been to create value for shareholders one step at a time. Year after year we have followed the disciplined approach, concentrating on global real estate services, strengthening existing operations, and ceasing on growth opportunities when they presented themselves.
2012 was another excellent year for FirstService. Revenues hit a record $2.3 billion. We generated exceptional return from Colliers International, FirstService Residential, and FirstService brand, even though results from field assets were a bit disappointing. Most of you will recall a few short years ago during the financial crisis Field Asset was generating exceptional cash flow for FirstService. Those earnings were incredibly important to us at the time and they gave us the firepower we needed to invest in Colliers at the absolute perfect time in the economic cycle. Now those investments are paying off handsomely, as you will hear in the next few minutes.
Capitalizing on market conditions at the right time is just one example of how our disciplined approach works, and its one of the key reasons why FirstService has been able to deliver outstanding returns to shareholders over a long period of time. Looking forward, we continue to create value through our three growth engines. Colliers International, one of the top global players in commercial real estate; FirstService Residential, North America’s largest residential property manager; and Property Services, a leading North American provider of essential services delivered through company owned operations, franchise systems and contractor network.
Over the past few years Colliers International has grown to become our largest business, corporate revenues are about $1.3 billion, and system wide sales including revenue generated from our franchises and affiliates are in excess of $2 billion a year. Around the world more than 12,000 Colliers professionals operating from 482 offices in 62 countries are united by a spirit of enterprise. That means taking initiative, thinking creatively, working collaboratively all to accelerate the success of their client. Being enterprising is the essence of the Colliers’ brand and the results are really quite striking.
Last year, Colliers’ revenue and EBITDA grew by 18% and 52% respectively and margins increased a full 150 basis points to almost 7%, well on our way to our stated goal of 10%. Growth in the United States was an impressive 21%. Strong market share gains and continued growth in investment sales and capital market as well as rapid expansion of multi market assignments with clients like McKenzie, NASDAQ, Credit Suisse among many others. Revenues in Canada, Australia and Asia also reached record levels with regional EBITDA margins well in excess of our 10% goal. And while market conditions in Europe remain challenging, FirstService took advantage as we have done so often in the past by completing the acquisition of Colliers UK adding 13 offices, 700 employees and about a $100 million in annualized revenue.
Last month we announced another important acquisition, the addition of Colliers Germany, adding market leading players in Munich, Stuttgart and Berlin and oversight of the important relationship with affiliates in Düsseldorf and Frankfurt. Germany is one of the strongest, most established and best performing markets in Europe and for us it represents an enormous growth opportunity. Having a leadership position in Germany, the anchor of the entire EU is essential to our strategy. It not only accelerates our growth in the region, but it reinforces our ability to serve client in Europe and around the world.
The FirstService partnership model has always been an important competitive advantage for us and Colliers adopted it with great success, partnering with management is often the difference between completing an acquisition or not. It opens doors, it changes the nature of the discussion, and it allows for transactions that are truly win-win, a critical factor especially when you consider we aspiring service businesses that are heavily people intensive. As a rule, FirstService partners are people who have build their businesses over a long period of time and have very deep market knowledge. They also understand that the market is changing increasingly clients are looking for service providers that can deliver seamlessly on a national or global basis.
FirstService partners are also entrepreneurial or as Colliers would call it enterprising. They want the benefits of being part of a larger, more and better capitalized organization, but they also want to retain a meaningful stake in the businesses as they run day-to-day. For FirstService and for Colliers this is always been at the core of our partnership philosophy and is always been part of this secret [sauce] that had made it successful over many years.