Business Entities - Review of the PageGroup: Large, High Potential Markets

Transcription

1 Second Quarter 2014 Trading Update 15 July 2014

2 PageGroup Second Quarter 2014 Trading Update 2 Overview Group Q2 Gross Profit +9% in constant currency +2% in reported rates Y-o-Y growth in all regions Impact of FX Q2 Gross Profit lower by c. 10m c. 19m in H1 H1 Headcount FE in Q2 +72 (+2%) +177 Fee Earners in H Support staff in H1 H1 Financial Position Cash Other of 41m investment at 30 June 22m Final dividend paid 25m EBT share hedging

3 PageGroup Second Quarter 2014 Trading Update 3 Trading Performance Group Growth Rates Group Gross Profit m m Reported Constant Q vs Q % +8.9% Q vs Q % +8.9% H vs H % +7.9% H vs H % +12.2% FX Impact YoY Q reported rates: GP 10m lower H reported rates: GP 19m lower

4 PageGroup Second Quarter 2014 Trading Update 4 Permanent:Temporary Group Q Q Growth Rates Perm:Temp Gross Profit m m Reported Constant Permanent % +9.4% Temporary % +7.4% Ratio (Perm:Temp) 77:23 77:23 H H Growth Rates Perm:Temp Gross Profit m m Reported Constant Permanent % +8.4% Temporary % +6.1% Ratio (Perm:Temp) 77:23 77:23 Perm:Temp ratio remains at 77:23 Permanent growth ahead of temporary in constant currency Reflection of geographic mix of business: due to strong GP growth in regions with little / no temp: LatAm, Asia, etc.

5 PageGroup Second Quarter 2014 Trading Update 5 Group headcount and reported gross profit Group Total headcount increased by 4% during H1 to 5,337 (Q4 13: 5,130) Support staff 15% of H1 headcount additions

6 PageGroup Second Quarter 2014 Trading Update 6 H1 Discipline overview Group H H Growth Rates Gross Profit Proportion m m Reported Constant Finance & Accounting 40% % +3.5% Engineering, Property & Construction, Procurement & Supply Chain Legal, Technology, HR, Secretarial, Healthcare 21% % +12.8% 20% % +7.8% Marketing, Sales & Retail 19% % +12.4% GROUP TOTAL 100% % +7.9% Selected disciplines* Oil, Gas & Mining: >25% Procurement & Supply Chain: >20% Human Resources: >15% Retail: > 23% Marketing: >14% *In constant currency

7 PageGroup Second Quarter 2014 Trading Update 7 Q2 Regional overview Group Q Q Growth Rates Gross Profit Proportion m m Reported Constant EMEA 40% % +5.0% UK 25% % +11.1% Asia Pacific 21% % +14.2% Americas 14% % +8.7% Group Total 100% % +8.9% 20 countries (56% of Group) grew >10%* Large, High Potential markets: +15%* Record quarters for 15 countries *In constant currency

8 PageGroup Second Quarter 2014 Trading Update 8 Year-on-Year Gross Profit growth rates Group Q1 Q2 Q3 Q4 Q1 Q2 EMEA -15.0% -8.2% -7.1% -1.4% +5.7% +5.0% UK -1.2% +0.3% +5.0% +5.1% +8.1% +11.1% Asia Pacific -0.3% -8.0% -4.3% -5.7% +1.3% +14.2% - Asia +13.5% +1.6% +7.4% +2.7% +8.0% +25.0% - Australasia -16.1% -21.3% -19.7% -18.3% -9.5% -2.9% Americas +2.1% +9.8% +16.8% +6.7% +16.2% +8.7% - North America +15.8% +29.8% +26.0% +30.0% +30.5% +15.7% - Latin America -2.1% +1.4% +12.6% -4.8% +7.4% +4.4% Group Total -6.7% -3.8% -0.3% +0.3% +6.8% +8.9% Growth rates in constant currency

9 PageGroup Second Quarter 2014 Trading Update 9 EMEA Region Growth Rates Gross Profit m m Reported Constant Q vs Q % +5.0% Q vs Q % +5.0% H vs H % +5.2% Headcount up 34 (+2%) to 2,036 (Q1 14: 2,002) France (14% of Group) +3% on Q2 13 Page Personnel (Temp/Perm < 40,000; 63% of France): +11% on Q2 13 Michael Page (Perm > 40,000; 37% of France): -8% on Q2 13 Germany (6% of Group) +7% on Q2 13 Middle East (2% of Group) +24% on Q countries grew >10% FX impact as Euro: moved from 1.17 to 1.25* All in constant currency * Euro: rates as at 30 June 13 / 30 June 14

10 PageGroup Second Quarter 2014 Trading Update 10 UK Region Gross Profit m m Growth Rates Q vs Q % Q vs Q % H vs H % Headcount up 11 (+1%) to 1,361 (Q1 14: 1,350) Private sector +11% on Q2 13 Public sector +14% on Q2 13 (12% of UK) 5 out of 13 disciplines >10% Financial Services remains flat (3% of UK) Strong performances in HR, Finance & Accounting, Marketing

11 PageGroup Second Quarter 2014 Trading Update 11 Asia Pacific Region Growth Rates Gross Profit m m Reported Constant Q vs Q % +14.2% Q vs Q % +23.5% H vs H % +7.8% Headcount flat at 1,114 (Q1 14: 1,112) Asia (14% of Group and 68% of Asia Pacific) +25% on Q2 13 Greater China +37% on Q2 13 Australia and New Zealand (7% of Group and 32% of Asia Pacific) -3% on Q2 13 (from -10% last quarter) Regional FX impact of nearly 4m in Q2 Records in Japan, China, Malaysia All in constant currency

12 PageGroup Second Quarter 2014 Trading Update 12 Americas Region Growth Rates Gross Profit m m Reported Constant Q vs Q % +8.7% Q vs Q % +5.8% H vs H % +11.8% Headcount up 5 (+1%) to 826 (Q1 14: 821) Latin America (8% of Group) +4% on Q2 13 Brazil (58% of LatAm) -7% on Q2 13 and -4% on Q1 LatAm excluding Brazil +24% Argentina and Colombia grew >40% North America (6% of Group) +16% on Q2 13 US +17% on Q2 13 against increasingly tough comparators All in constant currency

13 PageGroup Second Quarter 2014 Trading Update 13 Strategic Focus: Large, High Potential Markets Large High Potential Markets Strategy implemented in 2013 Response to experience of FE headcount cuts impacted ability to respond as markets quickly recovered Commitment to invest through cycles Set criteria to qualify as Large, High Potential Market 5 markets identified: comprises 30% FY13 Group Gross Profit US Germany China LatAmSE Asia

14 PageGroup Second Quarter 2014 Trading Update 14 Market Criteria: Large, High Potential Markets Large High Potential Markets Macro criteria Leading global economies, positive long-term macro prospects Ideally, under-developed recruitment outsourcing penetration Scalable business opportunity / receptive marketplace Attractive conversion rate potential PageGroup criteria PageGroup recruitment model proven locally Ability to hire / retain / promote local consultants Strength & depth in PageGroup management experience able to move into market Attractive salary levels & potential fee rates

15 PageGroup Second Quarter 2014 Trading Update 15 Gross Profit & Fee Earners: CAGRs to H Large High Potential Markets CAGR %* Since 2005 Since 2009 Since 2013 Large, High Poten=al Markets Gross Profit 18.6% 21.3% 13.1% Fee Earner Headcount 21.5% 21.3% 15.1% PageGroup Gross Profit 7.2% 9.2% 7.9% Fee Earner Headcount 8.7% 8.6% 11.0% * In constant currencies

16 PageGroup Second Quarter 2014 Trading Update 16 Performance: 2005 to 2013 Large High Potential Markets m / no. FEs Germany Gross Profit Fee Earners US Gross Profit Fee Earners LatAm Gross Profit Fee Earners China Gross Profit Fee Earners SE Asia Gross Profit Fee Earners Total Gross Profit Fee Earners ,258 * Figures stated are in single rate sterling, using closing rates H1 2014

17 PageGroup Second Quarter 2014 Trading Update Business Environment Large High Potential Markets Macro environment Professional recruitment Job Count Candidates Fee rates/ salaries Germany GDP: +2.5% Posi>ve, improving, but not yet robust Confidence slowly improving; Perm candidates s>ll cau>ous Slight increase vs 2013; limited momentum Candidate- short in technical disciplines & temp market Fee rates above Group average; salaries above European average US GDP: +3.2% Remains posi>ve, some long- term macro concerns Confidence high amongst clients/ candidates Remaining steady vs 2013 Candidate- short market in most areas Fee rates above Group average, high salaries LatAm GDP: +2.9% Brazil/Argen>na challenging; elsewhere posi>ve Buoyant market where macro strength Ex- Brazil, improving trends Candidate- short, par>cularly in technical areas Posi>ve fee rates, wage infla>on China GDP: +7.3% Long- term GDP slowing, but s>ll strong Limited compe>>on in largest of ci>es, elsewhere in infancy Steady, healthy job flow Limited, but growing talent pool; strong bilingual demand Good fee rates, wage infla>on SE Asia GDP: +6.3% Stable in key markets; overall posi>ve commercial environment Singapore is mature; Malaysia etc. have significant poten>al Stable in Singapore, posi>ve trends elsewhere Candidate- short in many areas Fee rates v. strong; salaries high in Singapore, acceptable elsewhere GDP estimates: av F. Source: Citi

18 PageGroup Second Quarter 2014 Trading Update 18 Strategy in 2014 Large High Potential Markets Germany Expanding FE headcount Building temp business scale & capability; leveraging leading perm posi>on US LatAm China SE Asia Transfers- in of experienced Page management (2 MDs YTD) Broadening of disciplines; opening of L.A. Office; growth of FE headcount Cost base flexed by management transfers both within / outside region Brazil - niche markets; FE growth in Mexico, Colombia & Chile; launch in Peru Ongoing hiring of FEs; discipline roll- out through office network Development of experienced local Chinese management base (80% of mgmt) Growing FE headcount in Singapore & Malaysia Expanding disciplines & territories; teams dedicated to Indonesia & Thailand

19 PageGroup Second Quarter 2014 Trading Update 19 Conclusion Solid performance, improving trends High Potential Markets in positive growth Infrastructure roll-out: Website & PRS (Page Recruiting System) rolled out in more US offices (rest of US & UK starts in Q3) Remains in strong cash position following dividend & EBT cash outflows Leading KPI indicators positive for start of H2

20 PageGroup Second Quarter 2014 Trading Update 20 Cautionary Statement The information contained in this presentation is not audited, is for personal use and informational purposes only and is not intended for distribution to, or use by, any person or entity in any jurisdiction in any country where such distribution or use would be contrary to law or regulation, or which would subject any member of PageGroup to any registration requirement. Certain statements included or incorporated by reference within this presentation may constitute forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. There are risk factors that can cause actual results to differ materially from those expressed in or implied by such statements. Accordingly, no assurance can be given that any particular expectation will be met and reliance should not be placed on any forward-looking statement. PageGroup disclaims any intention or obligation to revise or update any forward-looking statements that may be made in this presentation, regardless of whether those statements are affected as a result of new information, future events or otherwise. Nothing in this presentation should be construed as a profit forecast. This presentation does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares in the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decision relating thereto, nor does it constitute a recommendation regarding the shares of the Company. Past performance cannot be relied upon as a guide to future performance. Liability arising from anything in this presentation shall be governed by English Law. Nothing in this presentation shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.

21 PageGroup 2013 half year results 21

22 PageGroup Second Quarter 2014 Trading Update 22 Regional overview Appendix H H Growth Rates Gross Profit Proportion m m Reported Constant EMEA 41% % +5.2% UK 26% % +10.1% Asia Pacific 19% % +7.8% Americas 14% % +11.8% Group Total 100% % +7.9%