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A MESSAGE FROM OUR CEO

The alignment around service excellence defines the culture across FirstService.

Scott Patterson

2019 was an exciting, action- packed year for FirstService Corporation, headlined by company milestones including the largest acquisition in our history, the elimination of our dual class share structure and our first equity offering in over 20 years.

Behind these headlines our operating teams steadily and confidently continued to deliver as we generated 7% organic growth across the organization while maintaining our margins. Our teams recognize and appreciate that our relentless focus on customer experience differentiates us and drives our organic growth.

The alignment around service excellence defines the culture across FirstService and coalesces our teams around a common purpose. As a group we intend to win and we know that winning over the long term is directly related to how we treat our customers day to day. We continue to learn and improve as we listen to our customers and front line associates and act on feedback themes. We are better today than we were last year and we will be better again at this time next year. I take tremendous pride and comfort in knowing that every day 24,000 FirstService associates are focused on making incremental gains that do not necessarily show up in milestone- making press releases.

Acquisition of Global Restoration

In June, we closed the acquisition of Global Restoration, the second largest commercial and large loss property restoration firm in North America. The acquisition is complementary to our Paul Davis franchise system and gives us an entry into the massive commercial restoration market. We have partnered with the best management team in the industry and are very excited about our growth opportunity in the years to come. Between closing and year-end we added four tuck-under acquisitions, enhancing our geographic footprint and further strengthening our leadership team.

Residential Management Market Leadership in Chicago

Early in the year our FirstService Residential division significantly expanded its presence in the competitive Chicago market through the acquisitions of Lieberman Management Services and DK Condo, the condominium division of Draper and Kramer. These acquisitions cemented our position as the clear market leader in Chicago and are strategically important in terms of enhancing our national scale. By year-end these businesses were operating and unified under the FirstService Residential brand, positioning us for strong growth in this major metropolitan market.

Elimination of Dual Class Share Structure

In April, we settled the Long-Term Incentive Arrangement with Jay Hennick, our Founder, Chairman and largest shareholder. As part of the agreement Jay converted his multiple voting shares to subordinate voting shares on a one-for-one basis, thereby eliminating the dual class share structure and aligning all shareholders with one class of voting shares. We are very pleased to have successfully transitioned control with a structure that accomplished Jay's goal of maintaining a significant equity interest in the Company.

Growth Capital

2019 was also a very successful year in terms of capital deployment with $580 million invested in 15 acquisitions at a weighted average EBITDA multiple largely consistent with our history and stated criteria. We enjoy tremendous support from our lenders and were able to successfully upsize our lines of credit and seamlessly invest over three times the amount that we have averaged since our spin-off in 2015. We believe the strategic acquisitions that we completed during the year will help accelerate growth for the next several years.

To maintain a conservative balance sheet we completed a $200 million equity offering which brought our leverage ratio down to 2.4x and within our long-term target range of 2.0x and 2.5x. It represented our first public equity issuance since 1998, which is remarkable given that our top line has grown at an almost 20% compounded annual rate over the 21-year period. This track record is a strong reflection on our powerful cash flow business model.

Social Purpose

Our Social Purpose continued to evolve during 2019 driven by the caring and dedicated individuals who represent FirstService across North America.

When we began our Social Purpose journey in 2018, there was an emphasis on Our Community. That emphasis continues and we've expanded our focus to include two other important pillars - Our People and Our Environment.

I was privileged to attend and participate in a number of events this year. Seeing our teams give their time to enhance the lives of others and to support each other leaves me with a feeling of great pride. I am also reminded about what matters most, and why #FirstServeOthers is such an integral part of our culture and our future. Please see our website for details and stories about how our teams bring our Social Purpose to life.

Summary and Look Forward

We are extremely pleased with our performance and accomplishments during 2019. I have shared just a few of our highlights above and there were many more that are worthy of mention.

In aggregate, the notable achievements of 2019 have put us in a great position as we enter a new decade. We have strong leadership positions in huge service markets yet our share of these markets is still modest. This structural dynamic presents a significant long term growth opportunity driven by our platform "engines." This has been true for many years and we continue to take advantage of the opportunity while occasionally adding "engines" as we did in 2016 with Century Fire, and this past year with Global Restoration. Our long term goal is to grow our revenues at an average rate of at least 10% with incremental growth at the EBITDA and earnings per share lines. We are confident we can continue to deliver on this stated goal for years to come.

I started this letter with a tribute to our associates who live our values and deliver on our brand promises every day. I will finish the letter by thanking them for all they do. I also thank our loyal customers for their business and referrals and our shareholders for their continued support.


D. Scott Patterson
Chief Executive Officer