Slide 1: Preliminary Results for the Year Ended 30 June 2023
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2023
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT This presentation contains certain statements that are neither reported financial results nor other historical information. The information contained in this presentation is not audited, is for personal use and informational purposes only and is not intended for distribution to,
Slide 3: Agenda
AGENDA 1. OPERATING REVIEW Alistair Cox, Chief Executive 2. FINANCIAL REVIEW James Hilton, Group Finance Director 3. CURRENT TRADING James Hilton, Group Finance Director 4. STRATEGY Alistair Cox, Chief Executive 5. APPENDICES 3
Slide 4: Operating Review
1. OPERATING REVIEW Alistair Cox Chief Executive
Slide 5: Key developments
NET FEES +6% to £1,294.6m OP PROFIT (9)% to £197.0m RECORD FEES. EXCELLENT CASH GENERATION; CORE DIVIDEND EPS (7)% to 8.59p UP +5% AND £35.6m SPECIAL DIVIDEND NET CASH £135.6m Business focus Delivering cash-backed Driving fee growth Operations & Investment profits • Record fees, up 6%, including rec
Slide 6: Germany – Financial overview
RECORD FEES AND STRONG PROFIT GROWTH, INCLUDING H2 CONVERSION RATE OF 28.2% Germany – Financial overview Actual LFL FY23 share Net fees up 19%; operating profit up 29% (36% WDA) Year to 30 June 2023 2022 growth growth of Group • Record performance across all contracting forms £ Net fees £382.0m £313
Slide 7: UK & Ireland – Financial overview
MARKETS SLOWED SHARPLY, PARTICULARLY IN PERM, DRIVING NEGATIVE PROFIT GROWTH. EARLY ACTION TO ALIGN CONSULTANT HEADCOUNT TO MARKET UK & Ireland – Financial overview Actual LFL FY23 share Net fees up 1%; operating profit down 34% Year to 30 June 2023 2022 growth growth of Group £ Net fees £266.1m £26
Slide 8: Australia & New Zealand – Financial overview
TOUGH MARKET CONDITIONS, PARTICULARLY IN THE PUBLIC SECTOR AND BANKING, LED TO REDUCED PRODUCTIVITY AND A DISAPPOINTING PERFORMANCE Australia & New Zealand – Financial overview Actual LFL FY23 share Net fees down 6%; operating profit down 39% Year to 30 June 2023 2022 growth growth of Group • Disapp
Slide 9: Rest of World – Financial overview
RECORD FEES IN 19 COUNTRIES, LED BY A STRONG PERFORMANCE IN EMEA. TOUGH MARKET CONDITIONS IN CHINA AND USA NEGATIVELY IMPACTED PROFIT Rest of World (RoW) – Financial overview Actual LFL FY23 share Net fees up 5%; operating profit down 14% Year to 30 June 2023 2022 growth growth of Group • Temp (34%
Slide 10: Summary: Record group fee performance
SUMMARY: RECORD GROUP FEE PERFORMANCE, WITH SIGNIFICANT OPERATIONAL & SOCIAL PROGRESS IN KEY STRATEGIC AREAS Record fees, including 21 Several tough markets held Strong societal progress On-track strategically, country records, driven by back operating profit, however made, including an 85% deliveri
Slide 11: Financial Review
2. FINANCIAL REVIEW James Hilton Group Finance Director
Slide 12: Record fees despite increasingly tough markets, particularly in Perm
RECORD FEES DESPITE INCREASINGLY TOUGH MARKETS, PARTICULARLY IN PERM. EARLY ACTION TO ALIGN CONSULTANT HEADCOUNT TO FEE GROWTH Net fee growth* ‒ Temp versus Perm Group net fee growth* versus Group consultant headcount change 67% 65% Temp Fees Net fees 61% Perm Fees Consultant headcount 48% 39% 41% 3
Slide 13: Record fees; operating profit down 9%; DPS up 5%
RECORD FEES. OPERATING PROFIT DOWN 9% AS WE BALANCED STRATEGIC INVESTMENTS WITH MANAGING OUR NEAR-TERM CAPACITY; DPS UP 5% ‡ Net fees Operating profit Net cash* FY19 £1,129.7m FY19 £248.8m FY19 £129.7m FY20 £996.2m FY20 £135.0m FY20 £366.2m FY21 £918.1m FY21 £95.1m FY21 £410.6m FY22 £1,189.4m FY22 £
Slide 14: EPS down 7%
Basic EPS (p) FY21 3.67 EPS DOWN 7%. LOWER PROFIT & HIGHER ETR, PARTIALLY FY22 9.22 OFFSET BY LOWER FINANCE CHARGE & SHARE BUYBACK FY23 8.59 Income Statement Year ended 30 June 2023 2022 Reported LFL* £m £m growth growth Turnover 7,583.3 6,588.9 15% 12% Net fees 1,294.6 1,189.4 9% 6% Operating profi
Slide 15: Fee growth driven by improved pricing and positive mix effects
Drivers of FY23 fee growth (£m) FEE GROWTH DRIVEN BY IMPROVED PRICING & POSITIVE MIX EFFECTS, WITH VOLUMES DOWN, MAINLY IN PERM Review of Group Permanent and Temporary Businesses* Permanent placement business Temporary placement business 3% net fee increase 9% net fee increase 11% average Perm fee i
Slide 16: Balancing strategic investments with managing near-term capacity
BALANCING STRATEGIC INVESTMENTS WITH MANAGING NEAR-TERM CAPACITY. GOOD OVERALL PRODUCTIVITY AND ACTIVE COST MANAGEMENT FY23 operating profit bridge (£m) Actions taken to reduce our cost base Payroll: i) Average consultant headcount up 9% ii) Average base pay increase of 5% from 1 July 2022 iii) Comm
Slide 17: Conversion rate of 15.2%
CONVERSION RATE* OF 15.2% Conversion rate* FY22 H1 23 H2 23 FY23 Comments Germany 24.1% 24.0% 28.2% 26.2% Conversion rate of 27.2% on a working-day adjusted basis UK & Ireland 16.5% 11.1% 10.4% 10.8% We reduced our UK&I cost base per period by c.£1 million through the year Australia & 26.4% 17.8% 16
Slide 18: Effective tax rate of 28.0%
EFFECTIVE TAX RATE (ETR) of 28.0% Finance charge and taxation Year ended 30 June 2023 2022 Finance charge £m £m Net interest charge on debt* (1.7) (0.5) IFRS 16 interest on lease liabilities (non-cash) (4.2) (3.9) IAS 19 pension charge (non-cash) 1.1 (1.4) PPF levy (0.1) (0.1) Net finance charge (4.
Slide 19: Excellent cash performance, with 101% cash conversion
EXCELLENT CASH PERFORMANCE, WITH 101% CASH CONVERSION Operating profit to free cash flow bridge (FY23, £m) Uses of cash flow (FY23) 8 Cash from operations* £199.3m (FY22: £182.9m) 101% cash conversion (FY22: 87%) Pensions £17.7m Capex/ M&A*** £30.1m Share buyback (28.7) programme £75.0m 197.0 80.9 (
Slide 20: Continued excellent credit control, debtor days at record lows
CONTINUED EXCELLENT CREDIT CONTROL, WITH DEBTOR DAYS MAINTAINED AT RECORD LOWS, WELL BELOW PRE-PANDEMIC LEVELS Debtor Days (Days Sales Outstanding) Cash position overview Closing net cash (£m) 39 410.6 NET CASH POSITION 366.2 36 • FY23 ended with net cash of £135.6m 296.2 33 33 33 £210 MILLION BANK
Slide 21: A strong balance sheet despite significant shareholder distributions
A STRONG BALANCE SHEET, DESPITE SIGNIFICANT SHAREHOLDER DISTRIBUTIONS Balance sheet analysis 30 Jun 30 Jun RETIREMENT BENEFITS £m 2023 2022 • Decrease in Defined Benefit surplus driven by a decrease in expected returns on Goodwill & intangibles 254.0 249.4 scheme assets. This was partially offset by
Slide 22: Highly cash generative business model with clear cash flow priorities
HIGHLY CASH GENERATIVE BUSINESS MODEL, WITH CLEAR CASH FLOW PRIORITIES AND DELIVERING SUBSTANTIAL SHAREHOLDER RETURNS Fund Group • Invest in headcount, training, systems Early action taken to manage capacity whilst and brand to support organic growth protecting our strategic investments. Capex in li
Slide 23: Financial summary
FINANCIAL SUMMARY Record net fees of £1,294.6m, up 6% Operating profit down 9% to £197.0m Strong cash generation; core DPS up 5% • 21 country records, including our largest • Down 6% WDA* to £202.0m, and delivered • Cash conversion of 101% with DSOs market of Germany and records in key an increased
Slide 24: Current Trading
3. CURRENT TRADING James Hilton Group Finance Director
Slide 25: Current trading conditions and outlook by region
OVERALL, TEMP VOLUMES REMAIN STABLE. CONDITIONS REMAIN TOUGH IN PERM GLOBALLY WITH INCREASED TIME-TO-HIRE Current trading conditions and outlook by region Germany UK & Ireland Australia Rest of World Temp and Contracting remain Temp and Contracting remains Temp and Contracting remains EMEA remains s
Slide 26: Strategy
4. STRATEGY Alistair Cox Chief Executive
Slide 27: 2022 Investor Day set out medium-term growth ambitions
OUR 2022 INVESTOR DAY SET OUT OUR MEDIUM-TERM GROWTH AMBITIONS* Our five-year ambitions* Technology Germany UK&I ANZ Outsourced Solutions £500m+ Double profits £350m AUD $500m Double net fees to €200m** net fees net fees net fees to £400m Assuming a supportive economic backdrop, we see significant s
Slide 28: Building a scaled and more resilient EMEA business
BUILDING A SCALED AND MORE RESILIENT EMEA BUSINESS, UNDERPINNED BY NON- PERM GROWTH EMEA Ex-Germany fees (LHS, £m) and Contractor/Temp volumes EMEA Ex-Germany Net fees last 10 years (£m, constant currency) (RHS) 10000 250 250 9000 8000 200 200 7000 150 6000 150 5000 100 4000 100 50 3000 50 2000 0 10
Slide 29: Conclusion: record fees, management actions and strong cash returns
CONCLUSION: RECORD FEES, SIGNIFICANT MANAGEMENT ACTIONS AS MARKETS TIGHTENED AND STRONG CASH RETURNS TO SHAREHOLDERS We have delivered We are market leaders in We have the financial 5% core dividend We have the right record fees and acted some of the most strength to continue increase and further pe
Slide 30: Appendix 1: FY23 Results supporting materials
APPENDIX 1 FY23 Results supporting materials
Slide 31: Like-for-like summary
LIKE-FOR-LIKE SUMMARY 2022 FX impact Organic 2023 LFL* Year ended 30 June £m £m £m £m growth Net fees Germany 313.9 8.3 59.8 382.0 19% United Kingdom & Ireland 263.3 0.3 2.5 266.1 1% Australia & New Zealand 195.7 4.5 (11.8) 188.4 (6)% Rest of World 416.5 19.6 22.0 458.1 5% Group 1,189.4 32.7 72.5 1,
Slide 32: Full-year and half-year growth analysis and conversion rate by division
FULL-YEAR AND HALF-YEAR GROWTH ANALYSIS AND CONVERSION RATE BY DIVISION Net fee growth* Q1 22 Q2 22 H1 22 Q3 22 Q4 22 H2 22 FY22 Q1 23 Q2 23 H1 23 Q3 23 Q4 23 H2 23 FY23 versus same period last year Germany 39% 37% 38% 32% 29% 31% 34% 26% 22% 24% 23% 11% 14% 19% United Kingdom & Ireland 45% 33% 39%
Slide 33: Rest of World performance by country/market
REST OF WORLD PERFORMANCE BY COUNTRY/MARKET Net fees Net fee No. of Consultant Rest of World net fees Country/Region (£m) growth* offices Headcount France 82.2 18% 21 609 USA 61.7 (13)% 12 371 Other** Switzerland 39.4 16% 4 183 France Benelux 36.7 6% 11 260 Canada 28.5 1% 6 193 China 27.8 (21)% 5 19
Slide 34: Excellent progress in our German business
EXCELLENT PROGRESS IN OUR GERMAN BUSINESS, WHICH CONTINUES TO EXTEND ITS MARKET LEADERSHIP Germany fees (£m) Germany strategic highlights • Record fees in each contract forms • Growth in temp and contracting driven by price and mix with volumes up 12% in the year • Technology (35% of fees) up 10%; E
Slide 35: Excellent progress in Technology and Enterprise clients
EXCELLENT PROGRESS IN TECHNOLOGY AND ENTERPRISE CLIENTS Hays Technology net fees* (£m) Hays Global Outsourcing fees** (£m) On-track to deliver £500m in Technology fees and to double our outsourced solutions fees to £400m * Net fees and fee growth shown on a constant currency basis. The Veredus acqui
Slide 36: Australian dollar and Euro FX translation sensitivities
THE AUSTRALIAN DOLLAR AND EURO REMAIN SIGNIFICANT FX TRANSLATION SENSITIVITIES FOR THE GROUP Key FX rates and sensitivities Year ended 30 June 2023 Average Closing Euro (€) 1.1503 1.1639 Australian dollar ($) 1.7895 1.9077 Impact of a one cent change per annum Net fees Op profit Euro (€) +/- £5.1m +
Slide 37: Consultant headcount and office network
CONSULTANT HEADCOUNT AND OFFICE NETWORK Number of consultants Offices Half on half Year on year As at 30 As at 31 Change since As at 30 Change since As at 30 As at 30 Change Jun 2023 Dec 2022 Dec 2022 Jun 2022 Jun 2022 June 2023 Jun 2022 since Jun 2022 Germany 2,044 2,072 (1)% 2,016 1% 26 26 - Unite
Slide 38: Trading days in major markets
TRADING DAYS IN MAJOR MARKETS Germany UK Australia Number of trading days H1 H2 Year H1 H2 Year H1 H2 Year Year ending 30 June 2022 131 123 254 129 123 252 129 123 252 Year ending 30 June 2023 128 123 251 129 124 253 129 123 252 Year ending 30 June 2024 126 123 249 127 125 252 128 125 253 38
Slide 39: Balanced business model: Temp/contractor and Perm exposure
BALANCED BUSINESS MODEL: SECTOR-LEADING EXPOSURE TO KEY TEMP/CONTRACTOR MARKETS, PERM-GEARED IN HIGH GROWTH AREAS FY23 net fees by geography and contract type 17% 44% 39% 66% 83% 56% 61% 34% Germany - 30% UK&I - 21% ANZ - 15% RoW - 34% Temp Perm PROPORTION OF GROUP NET FEES 39
Slide 40: Appendix 2: Our strategy, business model and investment case
APPENDIX 2 Our strategy, business model and investment case
Slide 41: Our investment case
OUR INVESTMENT CASE We believe there are at least three simple and compelling reasons to invest in Hays 1 2 3 We are market leaders in We have unrivalled balance, Our growth is increasingly vast markets, which offer scale and diversity. Our deep derived from diverse, relationships with large, medium
Slide 42: Hays at the heart of a dramatically changed work ecosystem
HAYS SITS AT THE HEART OF A DRAMATICALLY CHANGED WORK ECOSYSTEM, CHANGES WHICH PLAY DIRECTLY TO OUR STRENGTHS Skill shortages and Significant new demand in high job churn related Talent Services Enhanced ESG and Rapid new job category creation ED&I requirements Demands for flexible working and Agein
Slide 43: The world of work has significantly changed post-pandemic
THE WORLD OF WORK HAS SIGNIFICANTLY CHANGED POST-PANDEMIC, WITH CLIENTS AND CANDIDATES FACING NEW CHALLENGES AND OPPORTUNITIES Covid has accelerated the megatrends which are shaping the world of work Business Skill Employee Demographic Societal challenges shortages demands challenges demands Greater
Slide 44: Hays benefits by solving clients' talent problems
THE NEW WORLD OF WORK BENEFITS HAYS IN FIVE MAJOR AREAS Skill shortages We have the deepest and broadest talent networks New job creation Greater job churn Particularly in structurally Helped by faster hiring growing sectors HAYS BENEFITS BY decisions SOLVING CLIENTS’ TALENT PROBLEMS Wage inflation
Slide 45: How and why Hays will win in the new world of work
HOW & WHY HAYS WILL WIN IN THE NEW WORLD OF WORK We recruit for all professional Leading global network serving all Highly scalable model, expertly 1 Delivery capability employment types serving all client sizes skillsets, including the fastest growing talent markets globally Millions of deep, perso
Slide 46: Our strategic priorities
OUR STRATEGIC PRIORITIES FOCUS ON BUSINESS GROWTH, MOVING UP THE VALUE CHAIN, INVESTING IN RELATIONSHIPS AND DELIVERING RETURNS TO SHAREHOLDERS 46
Slide 47: Our five-year aspirations
OUR FIVE-YEAR ASPIRATIONS TO MATERIALLY GROW OUR BUSINESS AND GENERATE SIGNIFICANT SHAREHOLDER VALUE Five-year net fee growth Five-year conversion rate Cash conversion Delivering shareholder value Aspiration CAGR Aspiration range* Aspiration rate Aspiration to: Group: 22-25% 90%+ Double profits 6-10
Slide 48: A balanced portfolio
A BALANCED PORTFOLIO FY23 net fees by type* Public sector Full 16% Technology 26% outsourced 20% Germany 30% Professional 36% Perm 43% A&F 15% PSL 30% UK&I 21% C&P 10% Engineering 10% Private sector ANZ 15% 84% Office Support 5% Multiple Life Sciences 5% Technical 64% placements 30% Temp 57% RoW 34%
Slide 49: Market-leading breadth and depth of platform
MARKET-LEADING BREADTH AND DEPTH OF PLATFORM, WITH A STRONG RECORD OF ORGANIC GROWTH 21 Specialisms 33 Countries New Zealand Luxembourg Netherlands Czech Rep. Switzerland Singapore Colombia Germany Denmark Romania Malaysia Australia Thailand Hungary Portugal Belgium Sweden Canada Mexico Austria Pola
Slide 50: Technical specialisms add to our balance and resilience
TECHNICAL SPECIALISMS ADD TO OUR BALANCE AND RELATIVE RESILIENCE Attributes of Technical* vs Professional** net fees In FY23, Technical specialisms represented c.64% Group net fees Investment-led hires rather than 1. purely candidate-driven 49% 52% 54% 55% 58% 60% 60% 60% 61% 62% 62% 62% 63% 64% 63%
Slide 51: Continued investment in building further scale and diversity
CONTINUED INVESTMENT IN BUILDING FURTHER SCALE AND DIVERSITY ACROSS OUR GLOBAL PLATFORM Temp & Contracting Temp/Contractor business as % of FY23 net fees CANADA Clear structural growth NETHERLANDS 1. opportunities 27% POLAND 60% 32% SWITZERLAND Relative resilience 2. to the cycle 76% 66 FRANCE % BEL
Slide 52: The data dilemma
THE DATA DILEMMA: DRIVING MORE VALUE FROM DATA THAN HR TEAMS AND COMPETITORS Access to more and better data Convert data effectively into insights Drive real actions from insight CLICK LIKE TWEET REVIEW DOWNLOAD MILLIONS VIEW DATA OF NEW DATA POINTS QUALITY & INSIGHTS SHARE EACH DAY COMPLIANCE COMME
Slide 53: Purpose, behaviours and the four UN sustainability goals
PURPOSE, BEHAVIOURS, AND THE FOUR UNITED NATIONS SUSTAINABILITY GOALS (UNSDGs) WHICH HAYS ENDORSES PURPOSE We benefit society by investing in lifelong partnerships that empower people and organisations to succeed BEHAVIOURS Build partnerships Think beyond Do the right thing UNSDG Alignment and actio
Slide 54: Doing the right thing is embedded in our strategic priorities
DOING THE RIGHT THING IS EMBEDDED IN OUR STRATEGIC PRIORITIES Drive productivity to Nurture lifelong client Diversify by growing Grow recruitment fees new revenue streams deliver significant profits and candidate FY23 ACHIEVEMENTS and cash flows partnerships STAKEHOLDERS We are proud both of the cul
Slide 55: Worldwide platform provides pipeline of future growth opportunities
OUR WORLDWIDE PLATFORM PROVIDES A PIPELINE OF FUTURE GROWTH OPPORTUNITIES & LEADERSHIP IN ALL CORE MARKETS Hays’ market positioning* TOP 3 Market Leader Top 3 position Top 5 position Other Australia Malaysia Belgium New Zealand Brazil Poland France Portugal Germany Singapore Greater China Spain Hung
Slide 56: Appendix 3: Divisional profiles and historical data
APPENDIX 3 Divisional profiles and historical data
Slide 57: Financial archive – net fees, operating profit and consultant headcount
FINANCIAL ARCHIVE – NET FEES, OPERATING PROFIT AND CONSULTANT HEADCOUNT £ Net fees by division (£m) £ Operating profit‡ by division (£m) 1,295 1,189 243 249 1,130 1,073 212 210 955 996 458 41 42 197 918 417 164 181 27 810 339 368 135 40 764 15 22 66 36 291 340 69 312 63 17 52 32 230 188 44 44 95 196
Slide 58: Germany profile
Snapshot - #1 market position* GERMANY PROFILE – 30% OF GROUP NET FEES AND - Structurally developing market 51% OF GROUP PROFIT - Sectoral diversification Net fees by specialism (FY23) £ Historical headline net fees (£m) £ Historical headline operating profit‡ (£m) 382 8% 4% 314 100 5% 300 91 276 86
Slide 59: UK & Ireland profile
Snapshot - #1 market position* UK & IRELAND PROFILE – 21% OF GROUP NET FEES AND - Diverse sector exposure 15% OF GROUP PROFIT - Nationwide coverage Net fees by specialism (FY23) £ Historical headline net fees (£m) £ Historical headline operating profit‡ (£m) 331 64 272 272 264 263 266 52 19% 246 253
Slide 60: Australia & New Zealand profile
Snapshot - #1 market position* AUSTRALIA & NEW ZEALAND PROFILE – 15% OF GROUP NET FEES, - Diverse sector experience WITH AUSTRALIA REPRESENTING 91% OF DIVISIONAL NET FEES - Geographical diversification Net fees by specialism (FY23) £ Historical headline net fees (£m) £ Historical headline operating
Slide 61: Rest of World profile
Snapshot - Structural growth opportunities REST OF WORLD PROFILE – REPRESENTS 34% OF GROUP - Diverse sector exposure NET FEES, WITH FRANCE OUR LARGEST RoW MARKET - Geographical diversification Net fees by specialism (FY23) £ Historical headline net fees (£m) £ Historical headline operating profit‡ (
Slide 62: Financial archive – net fees and operating profit (local currency)
FINANCIAL ARCHIVE – NET FEES AND OPERATING PROFIT (LOCAL CURRENCY) $ Australia & New Zealand - Historical net fees (AUDm) $ Australia & New Zealand - Historical operating profit‡ (AUDm) 347 359 359 337 130 134 323 321 293 293 305 120 120 288 116 274 263 273 106 232 245 98 95 88 90 91 80 83 72 58 FY0
Slide 63: Financial archive – quarterly net fee growth
FINANCIAL ARCHIVE – QUARTERLY NET FEE GROWTH % Germany % UK & Ireland 38% 39% 37% 32% 29% 48% 26% 45% 19% 22% 23% 16% 13% 15% 33% 11% 29% 6% 22% 15% 16% 2% 0% 11% 5% 3% 3% 3% 4% (9%) 1% 1% (2%) (7%) (5%) (2%) (4%) (4%) (2%) (10%) (7%) (14%) (20%) (20%) (33%) (31%) (34%) (42%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 64: Financial archive – quarterly net fee and consultant growth
FINANCIAL ARCHIVE – QUARTERLY NET FEE AND CONSULTANT GROWTH % Temp Fees % Perm Fees 67% 65% 61% 48% 24% 26% 22% 21% 20% 16% 14% 13%15% 11% 31% 16% 8% 11% 9% 11% 8% 9% 5% 9% 11% 11% 9% 7% 7% 4% 0% 0% 0% 0% (2%) (6%) (9%) (10%) (3%) (7%) (5%) (26%) (13%) (13%) (35%) (26%) (25%) (44%) Q1 Q2 Q3 Q4 Q1 Q2
Slide 65: Working for your tomorrow – further information
WORKING FOR YOUR TOMORROW FURTHER INFORMATION David Phillips Head Of Investor Relations & ESG Rob Maguire Investor Relations & ESG Manager ir@hays.com +44 (0)333 010 7122 For more information about the Group: haysplc.com/investors