Colliers International Group Inc

TSX:CIGI

Earnings Call Transcript 2020-Q4

[Operator]

Welcome to the Colliers International Fourth Quarter Investor 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 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 on Form 40-F as filed with the U.S. Securities and Exchange Commission. As a reminder, today's call is being recorded today, February 11, 2021. 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.

[Jay Stewart Hennick, Founder, Global Chairman & CEO]

Thank you, operator. Good morning, and thanks for joining us for our fourth quarter and year-end conference call. As the operator mentioned, I'm Jay Hennick, Chairman and Chief Executive Officer, and with me today is John Friedrichsen, Chief Operating Officer; and Christian Mayer, Chief Financial Officer. As always, this call is being webcast and is available in our Investor Relations section of our website. A slide deck is also available there to accompany today's call. Earlier today, Colliers reported better-than-anticipated financial results for the fourth quarter and for the full year despite the ongoing impact of the global pandemic. The strong finish is a testament to our unique enterprising culture but also to the bold steps we've taken over the past 4 years to transform Colliers into a more balanced and resilient professional services and investment management company. Currently, the majority of our revenues and more than 60% of our EBITDA comes from high-quality recurring services like investment management, property and project management, engineering and mortgage servicing. All of these continue to grow rapidly and over time, will represent an even greater proportion of our revenue and EBITDA. The balance of our business, less than 40%, comes from transactional services, leasing and capital markets. While market -- while volumes in these areas were down somewhat, they delivered much better than anticipated. Let's all remember transaction services are conventional services. They're not going away, and they may be delayed from time to time like in a pandemic, for example, but they will be back, and they'll be back strongly when things return to normal. Colliers has another tremendous advantage in diversification. Our revenues are not only diversified by service and asset class, they are also diversified by geography. Having a global platform with multiple revenue streams generated around the world, it brings significant balance, stability and more importantly, opportunity to Colliers. We can actually grow everywhere. With all of these characteristics and advantages, not to mention our proven track record of more than 25 years, strong balance sheet and significant inside ownership, we are confident we will emerge from this pandemic stronger than ever. Before I turn things over to Christian and John for comment, I'd like to say a word about the Colliers brand, the acquisitions we completed this year, our continued growth in investment management and our view of the balance of this year and beyond. First, the brand. As you know, we worked -- we have worked very hard to build the Colliers brand into what it is today, an undisputed global leader in professional services and investment management. Our brand is respected everywhere we do business and is supported by our unique enterprising culture and our proven track record. Earlier this month, Colliers, a new visual identity, which was designed for today's evolving global digital era. For us, this move was a natural evolution of the iconic Colliers brand and reaffirms our commitment to accelerating our success as we continue to lead our company and our industry into the future. Please take a look at our website or your favorite social media platform and share our excitement in owning the blue. Second, acquisitions. While others were in a holding pattern during the pandemic, Colliers capitalized by completing 4 acquisitions, including 2 larger ones. As in the past, we took advantage of market dislocation to move forward to complete important strategic steps that would accelerate our long-term success. In total, we invested $240 million in acquisitions this year, up from $109 million last. In June, we partnered with an exceptional leadership team led by David Juran to enter the mortgage banking business in a major way. Our new business, rebranded as Colliers Mortgage, provides real estate lending and finance solutions especially in the areas of multifamily, health care and seniors housing as one of the select few who can issue debt on behalf of U.S. government agencies. Among other things, this allows us to leverage our brokerage channel and offer real estate loans to our clients, while strengthening our global platform even further. And then in July, we added another substantial business in Maser Consulting, a company that is also being rebranded as Colliers Engineering & Design. This addition marked another important step in our strategy to add more highly valued essential services that continue to diversify our business for the future. Led by a talented executive team with a significant equity stake, our focus is on engineered solutions for the built environment, which will also benefit in the future year as there are additional infrastructure investments contemplated everywhere. Furthermore, we see this business as highly complementary to our other professional services and something we believe we can scale globally down the road. Third, Investment Management. Our efforts over the past 4 years to build a global leader in Investment Management has proved to be another great success story and one that has added significant enduring value to Colliers. Today, our Investment Management business represents about 20% of our EBITDA, more than double that of our peers, and it's made up of 2 platforms, Harrison Street, a market leader in alternative asset classes and Colliers Global Investors, a leading European fund manager specializing in more institutional real estate assets. In total, we have more than $39 billion of high-quality fee-generating AUM, which has been up over 20% over the last year. We continue to actively grow our AUM and in turn, our recurring management fee streams. Both bring additional balance, both create more resilience, and most importantly, both create significant opportunities for Colliers to grow in the future. Finally, a look ahead at the remainder of 2021. While the pandemic is expected to gradually subside over the course of the year, the timing and the extent is more difficult to determine. For us, this means business as usual for our recurring revenue streams with a measured rebound when it comes to our transactional services, which we expect later in the year. Christian will have more to say about this in just a minute. Christian?

[Christian Mayer, Chief Financial Officer]

Thank you, Jay. As announced earlier today, Colliers reported better-than-anticipated financial results for the fourth quarter and full year. My comments will follow the flow of the slides posted on the Investor Relations section at colliers.com to accompany this call. Please note that the non-GAAP measures referenced on this call are defined in the press release issued today. All references to revenue growth are calculated based on local currency. On a full year basis, revenues were $2.8 billion, down 9% versus 2019 and 16% internally. Our adjusted EBITDA was $361 million, up slightly from 1 year ago, reflecting 2 things: one, strong growth in high-margin services like Investment Management, and our recently acquired Mortgage and Engineering & Design platforms; and two, prudent cost management through the pandemic. Turning our focus to the fourth quarter. Revenues were $914 million, down 4% relative to the prior year. Internal revenues were down 15%, primarily due to the impact of the pandemic on our transactional leasing and capital markets operations. Fourth quarter consolidated adjusted EBITDA was $155 million, up 7% from $144 million 1 year ago with margins at 17% versus 15.5% in the prior year quarter. During the fourth quarter, we maintained our prudent approach to managing operating costs to match expected pandemic-impacted revenues with margins benefiting as transactional activity strengthened later in the quarter. Margins were also favorably impacted by acquisitions. In the Americas regions -- region, fourth quarter revenues totaled $525 million, up 8% over the prior year period. Outsourcing & Advisory revenues were up 31%, driven primarily by recent acquisitions. Capital markets revenues were up 46%, driven by strong debt origination revenues from a recent acquisition. Leasing revenues were down 34%, impacted by ongoing deferral of decision-making by occupiers, especially in the office sector. Adjusted EBITDA was $70 million, up 40% versus last year with significant contribution from acquisitions as well as ongoing measures to manage operating costs. Our EMEA operations generated Q4 revenues of $183 million down 24% from 1 year ago, with each service line impacted by the ongoing pandemic. Adjusted EBITDA for the region was $36 million compared to $51 million last year. Asia Pacific fourth quarter revenues were $163 million, down 11% relative to the prior year period. Capital Markets revenues were down 33% with the drop-off in large sale transactions, leasing was down 11%, while Outsourcing & Advisory revenues grew 4%. Adjusted EBITDA was $36 million compared to $33 million last year. Investment Management revenues were $44 million, reflecting growth of 4%, excluding the impact of pass-through carried interest. Assets under management were $39.5 billion at year-end, up 9% from September 30, 2020, and reflected strong fundraising activity in both open-end and closed-end fund series, including a new closed-end fund successfully launched late in the fourth quarter. Adjusted EBITDA for the quarter was $18 million versus $17 million in the prior year period. Based on our solid cash flow from operations for the year as well as steps taken to fortify our balance sheet in the second quarter, we continue to maintain a conservative financial profile. Our net debt to adjusted EBITDA leverage ratio was 1.0x at year-end at the lower end of our target range relative to a ratio of 1.4x 1 year ago. With $777 million of available unused credit at year-end, we have ample dry powder for future acquisition opportunities. As we look ahead to 2021, we are expecting the impact of the pandemic to subside, although the extent and timing remain uncertain. In our transactional services, we anticipate a tough first quarter comparison to the prepandemic level of Q1 2020. But we anticipate a rebound in the second half of the year as the economy recovers and market confidence continues to build. Of course, our Outsourcing & Advisory and Investment Management revenue streams are expected to remain resilient through the year. Considering all of these factors, our outlook for 2021 revenues and adjusted EBITDA is to increase between 10% to 25% versus prior year. That concludes my prepared remarks, and I'd now like to turn the call over to John.

[John B. Friedrichsen, Chief Operating Officer]

Thank you, Christian. From an operational perspective across our platform, both regionally and globally, I'd like to highlight a few things that contributed significantly to Colliers' business continuity during a very challenging 2020 and helped position Colliers better than ever before as we enter 2021. Our decisive action to initiate and quickly implement cost management measures earlier than pandemic anchored our resilience and the business continuity that supported our operations, kept our employees safe and serviced our clients during a tumultuous period. This was tough on all of our people, those that remained and those on the sidelines. True to the strength of our culture, we saw incredible commitment and adaptability from our 15,000 employees, validating their critical importance to Colliers as our most valuable asset. As the year progressed and business conditions improved, we were pleased to recall hundreds of Colliers employees back to work with only about 3% remaining furloughed at the end of 2020. During the past year, we made great strides evolving technology to become more of a strategic asset. With greater adoption and acceptance, we expect to continue investing in digital solutions that deliver real value to our clients while also helping our people work more productively, including a new transaction and servicing technology platform for Colliers Mortgage, enhanced data intelligence tools at Harrison Street and additional workflow digitization across our operations, accessible in and out of the office. We're excited about the role that technology can play to enhance our services in the future and plan to bring a sharper focus to digital innovation across Colliers in 2021 and beyond as it becomes an essential function within our operations. Undoubtedly, technology will continue to play an important role. But at Colliers, we see it as an enabler of our people-led professional services and investment management that we provide to our clients and that our brand is known for. Some of our peers have decided to put technology first. Perhaps they see it as the future of their firms, more novel and exciting, where they believe investors will value them more highly. Whatever reason, we see it differently, and we'll continue to prioritize and invest heavily in our people, professionals looking to be part of a high-growth, digitally supported global platform with an enterprising and collaborative culture that puts people first. As we continue to see a recovery that builds momentum with greater clarity on the horizon, we expect to reignite some of our investment plans, which were dampened with the uncertainty of 2020, including our global Occupier Services and Corporate Solutions business, global capital markets and the other key service lines, including those we can leverage globally to deliver more value and achieve greater scale. With additional investment in talent that brings additional capabilities and relationships, combined with supporting technology, We are confident in our ability to double the size of this global advisory business over the next 5 years, substantially increasing the most durable of our transaction-related advisory services. We have reinitiated our investments in global capital markets with the recent addition of new capital markets leaders in Canada and in the U.K. as we build out our capabilities in key markets globally. We expect our investments to align with the anticipated recovery in capital markets activity later this year, resulting in more critical advisory roles that add value in acquisitions, dispositions and capital raising for investors, leveraging our global platform, local knowledge and visibility into global capital flows, all within a global ecosystem awash with more institutional capital targeted at real estate assets than ever before. Finally, our updated Colliers branding couldn't have arrived at a better time as we put 2020 behind us and look forward to a period of renewal and a more prosperous future. While our brand retains several familiar elements of our legacy visual identity, it better represents who we are today and provides enhanced support for the sharp increase in digital, mobile-friendly marketing we experienced last year and expect in the future as well as several tools to enhance the productivity of our people globally. Still, our brand messaging remains consistent with our culture and client-first mindset. In a world of increasing complexity, at Colliers, we strive for simplicity with one overarching and boundless goal: to accelerate success. And along with owning the blue, we truly believe the sky is the limit. That concludes our prepared remarks. And I would now like to turn the call back to our operator to facilitate questions.

[Operator]

[Operator Instructions] Our first question is from George Doumet with Scotiabank.

[George Doumet, Analyst]

Congrats on a very strong quarter. Looking at your 2021 revenue and EBITDA goalposts. Can you maybe talk to what the working assumption is? I guess, for what Jay, you called a measured rebound in transaction volumes. Can you maybe talk about what that assumption could be? Percentage maybe year-over-year?

[Christian Mayer, Chief Financial Officer]

George, it's Christian. Look, like the -- we set some pretty wide goalposts as you mentioned for our 2021 numbers. And broadly, we do expect a rebound in transaction activity in the back half of the year. We also recognize there's a tough comp in Q1. Q1 of 2020 was a strong quarter for us, and we expect the transaction activity for the first quarter of '21 will not be at those levels. So I think there is optimism that conditions will improve, and we were trying to take a measured approach to that. We also, in our forecast, have the annualization of the acquisitions that were made in 2020 and the continued growth of our recurring businesses which will -- we expect will grow at low single-digit, mid-single-digit levels in '21.

[George Doumet, Analyst]

Okay. I think there was some anecdotal survey information that was released that suggested 50% rebound in transaction volumes. I guess that does occur. Our guidance would be pretty conservative, right?

[Christian Mayer, Chief Financial Officer]

Yes, I think that's right, George. I think you're referring to a capital markets piece that was put in a few weeks ago, which was a -- it was a survey of institutional investors and other market participants, but yes I mean that is a -- that was, I think, quite a bullish piece. And certainly, we hope that is the case but we're optimistic.

[George Doumet, Analyst]

Okay. That's helpful. And maybe for John, there was a longer-term strategy of improving the margins in the Americas by 300 basis points over the next 2 or 3 years prior to the pandemic. Maybe obviously, we've taken quite a bit of action. But today, kind of where does that strategy sit? How much more can we remove if any over how long?

[John B. Friedrichsen, Chief Operating Officer]

Look, yes, it is part of a long-term strategy. I'd say we're about halfway through that. A lot of it was around kind of repositioning some of our cost structure as it related to our transaction business and then also, over time, growing more scale and creating additional productivity enhancements to the way we operate. So I think we're well on the way. And I think we've seen some of the benefits, obviously, not the best lens to look at given we had to take some pretty hard cost actions and some of those costs will come back. But I think we're feeling pretty good about where we're positioned with respect to that business. Of course, growing our Occupier Service, Corporate Solutions business which, again, it was a bit of a challenging year, but we still made some decent progress this past year that, again, is going to contribute to margin enhancement, I think, around our U.S. business in the Americas generally. So we're feeling pretty good about that but more work to do.

[George Doumet, Analyst]

That's helpful. And maybe one last one for me, maybe for Jay. The balance sheet is underlevered by all standards. Can you maybe handicap the chances of us doing a larger deal, maybe in the investment management area this year? And how is the appetite there?

[Jay Stewart Hennick, Founder, Global Chairman & CEO]

Well, I could hardly hear you question I need you to tell -- ask me the question again. But just before you do, I want to tack on to John's comment. If you take a look at -- I think we've made great progress in margin enhancement in the U.S. If you take a look at '19 versus '20, we're up 200 basis points out of 3 on EBITDA margin, so we're 2/3 of the way there. And so I think we're well on the way. There is more work to do, but it is moving in the right direction. And I'm happy to answer the question but it's -- for some reason, it's muffled here, so it's hard for me to hear it.

[George Doumet, Analyst]

I can try again, Jay, I was just asking you about the balance sheet. Given that it's pretty underlevered, there's room for a large deal. I'm just hoping where the odds that you can see that this year.

[Jay Stewart Hennick, Founder, Global Chairman & CEO]

Obviously, we don't want to give you any color around that because we do this all the time. And especially the transactions that we work on, it takes many, many years sometimes to build the relationship with the targets that of the great companies like Harrison Street and Dougherty, now Colliers Mortgage. So we have several very interesting opportunities, whether the timing is right, whether the valuation is right will be just a function of a number of things. But we have the capacity currently. And of course, we always have additional capacity if the greatest opportunity presents itself. So it's an area of focus for us. It's an area where we think we can accelerate our growth in the years to come. And there's a lot of opportunity to bring some of the benefits of different platforms together to advantage. So hopefully, that gives you some color.

[Operator]

Our next question is from Stephen MacLeod with BMO Capital.

[Stephen MacLeod, Analyst]

I just wanted to dig in a little bit on the recurring business, the Outsourcing & Advisory and Investment Management, just with 2 questions. First, I was wondering if you could give a little bit of color around how the Outsourcing & Advisory business performed by the subsegments within that, so project management, property management, valuation advisory. And then in the past, you've talked about recurring revenues in aggregate, potentially reaching 65% to 70% of revenues over time. And I'm just wondering if that target still holds and maybe if there's potential to move that even higher.

[Jay Stewart Hennick, Founder, Global Chairman & CEO]

So I'll just give you a more general response then Christian can dig into the details. Yes, that kind of goal is still there. If we can move our recurring earnings to 65%, hopefully, a little bit better over the next few years, that would be terrific. But that's probably a good balance of our business to be frank. And so you'll see growth in all areas of our business. But if the recurring portion is 65%, maybe even as much as 70% over time, that would be a good result for us. And Christian can give you some color on the individual pieces, but I would remind you that diversification is diversification, that's the beautiful part of our business in particular. So within Outsourcing & Advisory, you have segments that outperformed in different geographic regions and some that underperformed in other geographic regions. And so when you look at project management or engineering or mortgage servicing, what you really get is an amalgam of the results, some good by region. So for example, using a weaker example, India, where we have a tremendous project management business is, obviously, in huge lockdown right now. It's a business that could generate -- just our project management piece could generate $10 million to $15 million of EBITDA on an annualized basis, only delivered approximately $5 million this year because of the difficulties in India. The overall project management piece for our business was up, but that was taking into consideration the negative impact of India. So as you look at each one of the diversified service lines, bear in mind, it's different in different regions up and down. So there's puts and takes all over the place. But directionally, which is important, it's up nicely over the prior year. So Christian, I don't know if you want to add anything to that.

[Christian Mayer, Chief Financial Officer]

Yes, I can add a couple of things to that. You may have noticed, Stephen, that the EMEA Outsourcing & Advisory revenues were down for the year for the quarter. So we had some impact in our -- to our French business, which is primarily a workplace project manage business. They were impacted by the pandemic as well. And really, as Jay mentioned, India and France were the 2 areas around the world where we saw impact on our project management business. The rest was up. In the other parts of the world, I would say property management was up around the world. Our valuations practice had a record year in the Americas and performed strongly elsewhere. Our engineering business that we recently acquired in July had -- also had an exceptional first 6 months and has a great pipeline of work going forward. So I think, as Jay mentioned, it's a bit of a geographic noise but that's part diversification and that's one of our benefits.

[Stephen MacLeod, Analyst]

Okay. Yes. Great. And yes, absolutely understanding and appreciating the diversification. That's very good color. And then maybe just finally, could you talk a little bit about the strength in the capital markets business in the Americas segment? That seemed to be a bit of a nice tailwind to the quarter. And I'm just wondering how you see that evolving into Q1 and potentially through the rest of the year? Like is that really isolated to Q4 at this point in time?

[Christian Mayer, Chief Financial Officer]

The capital market business performed really well in the Americas and part of that is the acquisition of Colliers Mortgage and the debt origination practice that we have, which is a government agency origination practice around multifamily and related properties. So those originations were strong, refinancing activities on the agency business was also very strong given the low interest rate environment. We saw it in the third quarter, and it was pronounced as well in the fourth quarter. That will continue in the first and second quarter but will tone down here as refinancing are completed and less of that work is done as we proceed through 2021. Our internal growth, our internal revenue in capital markets in the Americas were down. They were down about 12% but that is less than what the market stats would show less than some of our competitors as well, we think. So we performed well there.

[Operator]

Our next question comes from Daryl Young with TD Securities.

[Daryl Young, Mining Research Associate]

Just following up on Stephen's question with respect to Colliers Mortgage. Is -- could you maybe just tell us how that's performed relative to your expectations at acquisition? And I think at acquisition, you talked about that being a double-digit growth business. Can you maybe just give us a bit of an update on the outlook for that?

[Jay Stewart Hennick, Founder, Global Chairman & CEO]

Yes. I mean, the -- it's been a pleasant surprise for -- in a number of areas. First of all, the leadership team there is just terrific. They were constrained under prior ownership, not in a bad way. It was just a privately held company founded many, many years ago by an iconic business leader, but they were constrained in terms of growth opportunities. And joining with Colliers immediately gave them national scope, immediately gave them the opportunity to mine our brokerage channel to originate multifamily seniors and affordable housing opportunities at a time when interest rates were very attractive. And that those asset classes are also key asset classes for Harrison Street. So there's been sort of a twofer on that because both Colliers help to originate but also Harrison Street, which does this for a living every single day, buying and refinancing assets that comply with the types of asset classes that Colliers Mortgage funds, created a great opportunity, and we really have only scratched the surface. Our collective teams are actively working together to mine the flow of opportunities, both through Harrison Street and both -- and also through the Colliers network. So it's performed much better than we expected. We hoped for this. We anticipated this, but we only modeled it based on same-store sales and modest growth as we always do an acquisition. So we're quite excited about the future of that business and think it could be double or triple over the next 3 to 5 years.

[Daryl Young, Mining Research Associate]

Okay. Great. And then just one more on the office side with respect to your advisory services and some of the outsourcing. Coming out of the financial crisis, we saw a big pickup in the outsourcing activity and attempts to shed costs. Would you say the pandemic had maybe accelerated those trends further? And maybe you could just give us a little bit of color on the pipeline of potential work that's coming through that. And then I guess would that translate into potentially brokerage market share wins as well as you build those relationships?

[John B. Friedrichsen, Chief Operating Officer]

It's John here, Daryl. Look, this has been a real catalyst around companies, again, reevaluating the workplace and the role it plays in their operations. So at least for the time being, our teams are working very closely with many of our clients and prospective clients and new clients around thinking through how best to optimize the workplace from their perspective. And companies have different objectives, some are very cost-focused, some look at the workplace as being an asset and attracting talent, and you have a whole wide spectrum of things. But I think more than ever before, the current crisis, and I think where we're going into the future, is very conducive to professional advisory services that we can provide. We can provide insights, best practices that in isolation, companies are finding it difficult to access. And we're able to mobilize our professionals who are experts in this field and who have the market intelligence from advising so many clients on things that really matter. So we are very bullish on the opportunity. And ultimately, that kind of work does see transactions, whatever that might be. And I think that latter part remains to be played out. There's still lots of activity that is on the sidelines as companies think through what works best for them in terms of their own. And this is primarily around the office footprint, obviously. The whole industrial sector and to a lesser extent, for us, retail have different dynamics across the space but very bullish on the opportunity there and that outsourcing trend, I think, was going to continue.

[Operator]

Our next question comes from Rick Skidmore with Goldman Sachs.

[Richard Wynn Skidmore, Vice]

Just to follow up, maybe a question for Jay on the acquisition side. As you look at your footprint, whether it be by business line or geography, are there places where you see white space or opportunities that you think you should be bigger or opportunities to scale the business?

[Jay Stewart Hennick, Founder, Global Chairman & CEO]

So that's the beauty of our business. We have so much white space virtually everywhere, even in markets where we're the hands-down market leader. This category is so wide and it is having a variety of real estate services, transactions, a small part -- becoming a small part of our platform, and it's becoming a smaller part of the platform of the other peers out there. It's the other services that just offer so many opportunities to grow. And when you're a global platform, you have exceptional management teams that know how to operate the Colliers way, know how to integrate acquisitions once they're completed, gives us a huge, huge advantage to grow our business. So I can't point to any specific area because I would say to you, we have white space in every market. We'd like to grow this business -- this particular portion of our business better, bigger than it is today. We see opportunities to fill gaps in other areas. So that's the beauty of the platform that we have and the leadership teams we have on a global basis.

[Richard Wynn Skidmore, Vice]

Just a second question, separate topic. Just in terms of the leasing pipeline across the portfolio and how you see leasing evolving relative to the transaction market in 2021?

[John B. Friedrichsen, Chief Operating Officer]

As you know and as it's been talked about a lot, there's been lots of deferrals around leasing. I expect or we expect some of that to continue as, again, companies sort through, trying to determine what works best for them. And they are, as a bridge, to making those longer-term decisions, often looking to defer leasing and obligations around space for, say, a year. We expect that to continue. The uncertainty, while diminished, has not gone away in 2021. So we expect that -- some of that to continue. But there are other companies that are looking through the pandemic and looking at other factors that are important for them and making long-term decisions, and we've certainly been involved in many of those transactions. So we think there'll be less deferral of decisions that we saw in 2020, but we don't believe they're going away in 2021. They'll diminish significantly, and it will be a year or 2, I think, before we're back to I guess, patterns of thinking and obligations that companies are prepared to take on down the road.

[Operator]

Our next question comes from Matt Logan with RBC Capital.

[Matt Logan, Analyst]

Jay, earlier in some of your commentary, you mentioned that Colliers has several very large interesting opportunities, and that the business has additional capacity if the greatest opportunity presents itself. Can you tell us what Colliers' greatest opportunity is at the moment?

[Jay Stewart Hennick, Founder, Global Chairman & CEO]

Good question. We don't have any greatest opportunities. We're open-minded to anything. As long as -- what I would say is that if you look at the engines for growth that we have today, we're very comfortable with those engines. We are actively looking to grow them globally. I don't see in our pipeline anything new because we just see so much opportunity in those existing areas. So we happen to be in a fortunate position to have extremely low leverage, lots of capacity to capital. So there really isn't anything within reason we couldn't buy as long as it enhances our platform, which is something that we think about all the time. I don't think people think about this as much. The integration of the business and the impact it might have on the culture of the organization is always a key consideration for us, and that's a market-by-market, business-by-business kind of decision, so that would be a limiting factor. But capital, no, in the -- in our existing areas for growth, no. So we're open-minded and if anybody in your investment banking area has a great opportunity for us to consider, I'll give you my home phone number, my wife's phone number, and even my kid's phone number, they'll get to you quickly.

[Matt Logan, Analyst]

Great color. And maybe just in terms of those growth engines, would those be Harrison Street, Colliers Mortgage and the Colliers Engineering platforms really as the main growth engines?

[Jay Stewart Hennick, Founder, Global Chairman & CEO]

Right. But also traditional transaction services. There's lots of markets. One of the other people on the call mentioned this, there's a lot of markets where we're undersized and there's opportunity there to significantly enhance our presence. We're doing, I hope to be, a very successful job in France. We entered that market 5, 7 years ago. It's been a rough go, to be frank. But the last couple of years, we've really gained momentum. You haven't seen it yet in the results. And there's other markets like Spain where you are seeing it in the results despite a very difficult pandemic in Spain, and we're excited about India. And if you take a look at our results in China, we're doing extremely well in China, and the team there is exceptional and very bullish about the opportunities there as we open some new doors that previously weren't open to us. So there's excitement internally. I think there's also a desire to get beyond the pandemic for everybody but also our leaders who feel like it's our time at Colliers. And it's our time to really enhance our market position and accelerate our success. So they're anxious to do that.

[Matt Logan, Analyst]

I appreciate all the commentary. And maybe just one last one for me before I turn the call back. When I think about your goalpost for 2021, we have revenue and EBITDA growing at the same clip. Would it be fair to say that there's no margin expansion potential for 2021 and maybe some of those cost-saving initiatives that we talked about last quarter are more of a longer-term story or is it simply too early to quantify any potential margin expansion at the current juncture?

[Christian Mayer, Chief Financial Officer]

Well, look, Matt, I mean, I can take you through it kind of service line by service line, if you want. Obviously, brokerage, we're going to have some operating leverage from higher revenues, we hope, in the back half of the year. But we also have some cost that we're going to reinstate from the significant cost management initiatives we took in 2020 and also investment in people that John talked about in terms of capital markets and occupier. Yes. And we can -- Investment Management is going to be similar to prior year. Corporate costs are going to go up. Obviously, we've had some significant costs and actions on the corporate side. You can see that in the numbers. Happy to take you through more detail offline on that. But there's a number of moving parts in our outlook in terms of the margin. But on a net effect, it remains relatively flat.

[Operator]

Our next question is from Stephen Sheldon with William Blair.

[Joshua Kapler Lamers, Associate]

This is actually Josh Lamers on for Stephen. First, I wanted to ask about headcount. You noted some appointments in key markets and that for the most part, there's very few professionals that are still furloughed, which is good to see. But to start the year, where does headcount stand in the leasing and capital markets businesses relative to the start of 2020?

[John B. Friedrichsen, Chief Operating Officer]

We'd be at a similar number at this point. I mean there have been some puts and takes. We may be up marginally, obviously, some people, as I indicated, we are about 3% furloughed, and that's predominantly servicing the transaction market, which we expect to come back. But at this point, we certainly are ambitious of adding to that headcount in the right way, and we've already started early this year in doing so and expect to do more of that as the year progresses.

[Joshua Kapler Lamers, Associate]

And I appreciate also the guideposts on revenue and EBITDA guidance. Are you able to provide any expected cadence of EBITDA contribution throughout the year? I'm guessing it's going to be heavily second half weighted. But to what extent would you expect it to be second half weighted would be helpful?

[Christian Mayer, Chief Financial Officer]

Well, look, Josh. I mean, I think we provided a little bit of color around our expectations for the transaction in the first quarter. Obviously, we have a tough comp on the transactional side. And we expect the transactional business to really -- to rebound in the second half of the year. And the recurring businesses, the Outsourcing & Advisory business do remain steady through the year. So that's what the most commentary we can give on that and the outlook -- about the outlook. And the guideposts are wide because we have still a lot of uncertainty out there, and that's kind of where we're at.

[Joshua Kapler Lamers, Associate]

Yes. Yes, that makes sense. And then John touched on it a bit in his prepared remarks. But with the hire of Tony Clark, wondering if you could give us maybe another sense or a little bit more insight into his initial agenda and what are some of the major tech focuses early on in his appointment?

[John B. Friedrichsen, Chief Operating Officer]

He's been a great addition to our U.S. team, and he'll work very closely within our North American shared services. We kind of try and pool some of our resources around technology across the North American business because there's so many leverage points that we can share costs and have some scale benefits in doing that. But I think his focus is going to be largely on a number of our proprietary tools and some of the technology we access from third parties and ensure that we're using that on an effective basis, certainly from a cost perspective. But more from an adoption, utilization, ensuring that the people in our business that can best benefit from technology have access to it and that we are very focused on using technology and the delivery of our service to our clients. Our Colliers 360 is a really good portfolio management industry-leading tool for occupiers, and we're going to continue to evolve that product, and there's lots of things that we can do with that, including augmenting additional services that are relevant to occupiers that can be channeled through that Colliers 360. So that will certainly be an area, some other tools that we're currently using. And he'll have to put his mark on the future of those as it relates to really market intelligence and activity-based tools that more of our sales brokerage team uses in the U.S. The infrastructure is very, very sound and solid. And I think most of that will be dealt with by a separate group, but Tony, well, he's certainly been a welcome addition, a real veteran around technology, having also been with other public companies, so that's an added bonus. So we're excited to have him on board.

[Operator]

Our next question is from Frederic Bastien with Raymond James.

[Frederic Bastien, MD & Equity Research Analyst]

Jay, you gave some great color on the potential for Colliers Mortgage. I'd like to now maybe switch to Maser. And in your opinion, how big can the engineering services platform you just gained get in the next 5 years?

[Jay Stewart Hennick, Founder, Global Chairman & CEO]

Well, the goal here -- and it's probably -- I'm probably ahead of myself here. The goal is probably to have about $1 billion in revenue from that service line over the next 5 years. I think it's achievable and it's probably on a global basis. So we see it as a support and complementary to some of the other services that we offer. It's just a natural extension for us.

[Frederic Bastien, MD & Equity Research Analyst]

Okay. Cool. And then within the U.S., just curious if Maser is well positioned to capitalize on the Biden administration's plan to invest in green infrastructure. We know it's quite a hot topic right now, but just curious if they have any opportunities.

[Jay Stewart Hennick, Founder, Global Chairman & CEO]

Yes. They are very focused on that. The one thing that you know is that Maser is concentrated in the northeast, very concentrated in the northeast. So that both creates opportunity for us to augment the platform across the U.S. But yes, they're set up for that because that is probably 30% or 40% of their business today.

[Operator]

And I will turn the call back to Jay Hennick for his final remarks.

[Jay Stewart Hennick, Founder, Global Chairman & CEO]

Okay. Thank you, everyone, for attending this conference call. We look forward to the next one. And thank you, operator, for coordinating the call on behalf of everyone. Thank you.

[Operator]

Thank you. And thank you, ladies and gentlemen. This concludes the conference call. Thank you for your participation. Have a great day.