A MESSAGE FROM OUR CEO
Our people are the heart and soul of FirstService and our greatest asset
2020 was an extraordinary year that tested the resilience of our people and our business model. We are thankful and proud of what we accomplished in 2020 and continue to be inspired by the dedication and resolve of our teams. Their unwavering commitment to safely deliver on our service promise in the face of adversity has strengthened our market position as we enter 2021.
We have many highlights to be proud of in 2020 including the following:
Employee Health and Safety
Our people are the heart and soul of FirstService and our greatest asset. From Day One of the pandemic, we put the safety of our teams at the forefront. The leadership at our operations were disciplined and meticulous in setting out operational protocols which helped keep our COVID-19 infection rates of front line, sited staff as manageable as possible.
We also recognized the stress and mental health risks of working from home and juggling professional responsibilities, home schooling and caring for at-risk family members. Our leadership across FirstService stayed connected with their teams, delivered health and wellness programming and focused on culture building initiatives throughout the year.
Our top line grew by 15% in 2020 driven largely by acquisitions and supported by solid organic growth of 4%. Our ability to deliver organic growth during the pandemic in spite of lockdowns is perhaps the truest reflection of the strength and resilience of our business model.
We pride ourselves on being an organic growth company "first" and consider it to be the most important measure of brand health across our service lines.
2020 represented our first full year with Global Restoration and it was an important one in terms of establishing the foundation for our aspirational vision. We made great strides in integrating the four tuck-under acquisitions we closed in the back half of 2019. We also closed on Rolyn Restoration in mid-2020, which added nine branches to our footprint in the mid-Atlantic region. Additionally, we completed planning and began implementation of our enterprise-wide operating platform and finalized our preparation for rebranding early this year. We remain confident about our opportunity in Commercial Restoration and expect 2021 to be another critical year in terms of our build-out.
Despite the pandemic and the many challenges it presented, we were able to adapt our acquisition process and complete several important brand enhancing tuck-unders.
As I mentioned above, we built on our commercial restoration platform with the acquisition of Rolyn, a leading commercial and large loss service provider in the mid-Atlantic region. The addition of Rolyn expanded our footprint to better serve national customers and deepened our capability in the healthcare vertical.
At Century Fire, we expanded our geographic footprint in two high priority markets with the acquisition of Aegis Fire Protection in Kansas City and Cornet Fire in Washington, DC. We are excited about the opportunities in these two markets and believe we have the right partners to drive significant growth.
At FirstService Residential, we solidified our leadership position in the New York City market with the acquisition of Midboro Management taking us to over 600 communities under management and almost 100,000 units. Midboro has a strong team that will add to our leadership depth in this important market.
In the aggregate, we closed six tuck-unders and deployed $100 million of capital. We are pleased to have executed on our acquisition strategy almost seamlessly during the pandemic.
Strong Balance Sheet
Free cash flow reached record levels in 2020 on the back of strong operating profitability, efficient working capital management and more measured capital expenditures. This cash flow, together with a $150 million equity private placement, reduced our balance sheet leverage to 1.4 times Net Debt to EBITDA. Our liquidity at year end in terms of cash on hand and available credit line capacity was at an all-time high of $600 million. We have always believed that maintaining a conservative capital structure and maximum financial flexibility is a cornerstone of the FirstService business model.
Our teams continued to demonstrate a commitment to care for each other, responding to the needs of colleagues facing financial hardship and heartache. Through the FirstService Relief Fund we provided monetary support to employees impacted by the pandemic, suffering from serious illnesses and injuries, affected by natural disasters or coping with the passing of family members.
We also continued to give back within our communities. Examples include donations of lifesaving personal protective equipment to front line caregivers, and complimentary disinfecting and sanitation services to first responders.
Pandemic or no pandemic, our Social Purpose and our commitment to #FirstServeOthers will always be a big part of who we are.
Summary and Look Forward
We have consistently stated that our long term goal is to grow revenues at an average annual rate of 10% with incremental earnings growth. Our performance throughout 2020, the strength of our balance sheet and the sheer size of our markets reinforce our confidence in achieving this goal for 2021 and years to come. The pandemic has impacted all of us professionally and personally. It caused us to rethink how we operate and challenged us to develop innovative ways to engage with each other and serve our customers. It hasn't been easy, and we are thankful to our teams for persevering in the face of these challenges.
We also thank our loyal customers for their repeat business and referrals. We value these relationships and will continue to work hard to maintain your trust. Finally, we want to thank our Board of Directors for their ongoing counsel and our long-time shareholders for their continuing support.
D. Scott Patterson
Chief Executive Officer