Mr. Jay Hennick reports

COLLIERS REPORTS THIRD QUARTER RESULTS

Colliers International Group Inc. has released operating and financial results for the third quarter ended Sept. 30, 2023. All amounts are in U.S. dollars.

For the quarter ended Sept. 30, 2023, revenues were $1.06-billion, down 5 per cent (6 per cent in local currency), and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $144.9-million, flat (down 1 per cent in local currency) versus the prior-year quarter. Adjusted EPS (earnings per share) was $1.19, relative to $1.41 in the prior-year quarter, impacted by higher interest expense. Third quarter adjusted EPS would have been approximately two cents lower excluding foreign exchange impacts. The GAAP (generally accepted accounting principles) operating earnings were $70.9-million as compared with $84-million in the prior-year quarter. The GAAP diluted net earnings per share were 53 cents versus 27 cents in the prior year. The third quarter GAAP diluted net earnings per share would have been approximately two cents lower excluding changes in foreign exchange rates.

For the nine months ended Sept. 30, 2023, revenues were $3.10-billion, down 4 per cent (4 per cent in local currency), adjusted EBITDA was $396.6-million, down 7 per cent (7 per cent in local currency), and adjusted EPS was $3.36, relative to $4.69 in the prior-year period. Changes in foreign exchange rates did not impact adjusted EPS for the nine months ended Sept. 30, 2023. The GAAP operating earnings were $168.3-million as compared with $228.7-million in the prior-year period. The GAAP diluted net loss per share was four cents as compared with earnings per share of 54 cents in the prior-year period. The nine months ended Sept. 30, 2023, GAAP diluted net loss per share would have been approximately one cent lower excluding changes in foreign exchange rates.

"During the third quarter, Colliers delivered significant growth in our high-value recurring service lines, with a 12-per-cent increase in outsourcing and advisory and a robust 23-per-cent increase in investment management. Our proven business model, with a diverse array of high-value recurring revenues, has demonstrated its resilience. Approximately 70 per cent of our earnings now come from recurring services, which bolsters our ability to navigate through market fluctuations, including the current disruptions affecting our transactional business," said Jay S. Hennick, chairman and chief executive officer of Colliers.

"Since the release of our second quarter report on Aug. 2, 2023, we've seen further declines in transaction velocity due to market-driven factors such as rising interest rates, stricter credit conditions and continued uncertainty regarding tenants' plans for return-to-office. As a result, we've revised our outlook for the seasonally strongest fourth quarter to take a more conservative stance. Capital markets and leasing are truly essential services for investors, owners and occupiers of real estate assets. They may be temporarily impacted right now but they will rebound once the market stabilizes, potentially as early as the second half of 2024.

"Our nearly 30-year track record of performance demonstrates our success and dedication to delivering shareholder value. We remain committed to creating meaningful value for our shareholders by continuing to grow our core business, expanding into new high-value recurring services and seeking out strategic opportunities, especially during times like these," he concluded.

About Colliers International Group Inc.

Colliers is a leading diversified professional services and investment management company. With operations in 66 countries, its 19,000 enterprising professionals work collaboratively to provide expert real estate and investment advice to clients. For more than 28 years, the company's experienced leadership with significant inside ownership has delivered compound annual investment returns of approximately 20 per cent for shareholders. With annual revenues of $4.5-billion and $98-billion of assets under management, Colliers maximizes the potential of property and real assets to accelerate the success of its clients, its investors and its people.

Outlook for 2023

Since the company's previous report, further declines in transaction velocity have occurred and accordingly the outlook has been revised to adapt to this more challenging environment. For the seasonally strongest fourth quarter, the company now expects capital markets and leasing revenues to be down relative to the prior-year quarter. The company continues to expect robust growth (including the impact of recent acquisitions) in its high-value recurring service lines, investment management and outsourcing and advisory. The investment management fundraising environment is also expected to remain challenging through the remainder of the year but should improve in 2024.

The favourable impact of cost control measures across the company is expected to continue, mitigating lower transaction activity. Adjusted EPS is expected to be impacted by increased interest expense as well as a larger proportion of earnings generated from operations not wholly owned.

The outlook for 2023, including the impact of acquisitions completed to date, is as noted herein

The financial outlook is based on the company's best available information as of the date of this press release, and remains subject to change based on numerous macroeconomic, health, social, geopolitical and related factors.

Conference call

Colliers will be holding a conference call on Thursday, Nov. 2, 2023, at 11 a.m. Eastern Time to discuss the quarter's results. The call, as well as a supplemental slide presentation, will be simultaneously webcast and can be accessed live or after the call on the company's website in the events section.

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