PageGroup PLC · LSE:PAGE
PageGroup — H1 2019 Earnings Presentation
26 slides from PageGroup's earnings presentation, Aug 7, 2019
Slide 1: Half Year Results 2019: Record first half for the Group
7 August 2019 Kelvin Stagg Chief Financial Officer Half Year Results 2019 “Record first half for the Group” LSE: PAGE.L Website: https://www.page.com/investors
Slide 2: Financial Review
Financial Review Kelvin Stagg, Chief Financial Officer
Slide 3: Record first half for the Group
Financial Review Capital Allocation Summary H1 19 Record first half for the Group Key financial highlights Gross Profit £433.5m Operating £75.6m Profit £396.0m H1 2018 £67.2m H1 2018 Constant +9.5% Conversion 17.4% Currency +14.2% H1 2018 Rate Growth 17.0% H1 2018 EPS 16.8p Interim 4.30p Dividend 15
Slide 4: Conversion rate up to 17.4%
Financial Review Capital Allocation Summary H1 19 Conversion rate up to 17.4% Focus on productivity and conversion £m H1 2019 H1 2018 Reported % Constant % Gross Profit 433.5 396.0 +9.5% +9.5% Operating Profit 75.6 67.2 +12.5% +11.4% Conversion Rate* 17.4% 17.0% Fee Earner 70.7 69.2 +2.2% +2.2% Prod
Slide 5: Improvement in productivity in all regions
Financial Review Capital Allocation Summary H1 19 Improvement in productivity in all regions Record Gross Profit in three of our four regions H1 2019 H1 2018 Operating Conversion Productivity Gross Operating Conversion £m Gross Profit Profit Rate increase* Profit Profit Rate EMEA 213.1 45.6 21.4% +3
Slide 6: Costs driven by employee headcount
Financial Review Capital Allocation Summary H1 19 Costs driven by employee headcount Fee earner to support staff ratio currently at 78:22 • Employee costs driven by a +6.6% increase in average 30 headcount and inflationary salary rises Support staff as % of Group headcount • Completed implementation
Slide 7: IFRS 16 - balance sheet impact
Financial Review Capital Allocation Summary H1 19 IFRS 16 - balance sheet impact Grossing up of Assets and Liabilities by c. £130m £m 2019 H1 2019 Opening Balance Assets Right-of-use assets 129.5 129.3 Liabilities Lease Liability (138.5) (131.4) • IFRS 16 adopted using the modified retrospective met
Slide 8: IFRS 16 – income statement impact
Financial Review Capital Allocation Summary H1 19 IFRS 16 – income statement impact Slight benefit to EBIT; marginal negative impact on PBT H1 2019 £m Lease charge 20.4 Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) 20.4 Depreciation expense (19.6) Earnings Before Interest & T
Slide 9: Strong and robust balance sheet
Financial Review Capital Allocation Summary H1 19 Strong and robust balance sheet Net cash of £81.7m £m H1 2019 H1 2018 Intangible assets 36.5 33.4 Tangible assets 35.5 31.9 Right-of-use assets 129.5 - Trade and other receivables 393.2 346.7 Trade, other payables, current and deferred taxes (186.8)
Slide 10: Depreciation increase due to IFRS 16
Financial Review Capital Allocation Summary H1 19 Depreciation increase due to IFRS 16 Depreciation of right-of-use assets of £19.6m H1 2019 H1 2018 £m £m Depreciation 24.9 4.4 Amortisation 5.0 5.1 Total 29.9 9.5 Net Capital Expenditure Tangible assets 5.0 6.8 Intangible assets 8.4 4.0 Total 13.4 10
Slide 11: Strong cash flow generation
Financial Review Capital Allocation Summary H1 19 Strong cash flow generation Special dividend to be paid for a fifth successive year 210 (45.8) 170 109.1 (20.7) (13.4) £m 130 (20.7) 3.5 (29.0) 90 1.1 97.7 81.7 50 Dec 18 EBITDA Working Tax and net Net capex Lease Share options Dividends Exchange Jun
Slide 12: Capital Allocation
Capital Allocation
Slide 13: Clear and established capital allocation strategy
Financial Review Capital Allocation Summary H1 19 Clear and established capital allocation strategy A highly cash generative business model 1st use of cash 2nd use of cash 3rd use of cash To satisfy To maintain the To make operational and ordinary dividend supplementary investment through downturns
Slide 14: Track record of shareholder returns
Financial Review Capital Allocation Summary H1 19 Track record of shareholder returns c. £875m returned via share buybacks and dividends 120 100 80 £m 60 83 50 40 40 60 20 30 40 16 34 15 24 20 14 38 41 35 36 29 31 31 31 27 26 25 22 18 13 12 13 14 1 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Slide 15: A growing dividend through the cycle
Financial Review Capital Allocation Summary H1 19 A growing dividend through the cycle Committed to returning cash to shareholders • 2019 interim dividend proposed of 4.30p per share or £13.9m, increase of 4.9% on 2018 +1.8% 60 • 2019 special dividend proposed of 12.73 pence per share (£41.0m) 50 •
Slide 16: Summary
Summary
Slide 17: Another record half year for the Group
Financial Review Capital Allocation Summary H1 19 Another record half year for the Group Mindful of challenging macro-economic conditions in a number of our regions Gross Profit +9.5% in constant currencies Productivity +2.2% following COO appointment and focus Operating profit +11.4% in constant cu
Slide 18: Appendix
Appendix
Slide 19: Our business model
Financial Review Capital Allocation Summary Our business model H1 19 19
Slide 20: A growing international business
Financial Review Capital Allocation Summary H1 19 A growing international business Delivering on our global diversification strategy Gross Profit 16% 24% 39% 61% 76% 84% FY 2007 FY 2013 H1 2019 UK International 20
Slide 21: Significant variations in recruitment mix
Financial Review Capital Allocation Summary H1 19 Significant variations in recruitment mix Geography Brands 13% 10% 15% 30% 30% 42% 87% 90% 85% 70% 70% 58% EMEA Asia Pacific UK Americas Michael Page Page Personnel Temp Perm 21
Slide 22: Long-term international growth
Financial Review Capital Allocation Summary H1 19 Long-term international growth ASIA 7,000 EMEA UK AMERICAS PACIFIC 6,116 6,035 Fee Earner Headcount 6,000 5,497 5,000 4,711 4,484 4,278 3,837 3,654 3,797 3,624 3,810 4,000 3,273 3,000 2,763 2,515 EMEA 2,075 2,000 1,657 1,657 1,708 1,466 1,444 1,174 A
Slide 23: Fee earner investment and support staff
Financial Review Capital Allocation Summary H1 19 Fee earner investment and support staff 7000 6000 5000 Headcount 4000 3000 2000 1000 0 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 24: Year-on-Year Gross Profit Rates
Financial Review Capital Allocation Summary H1 19 Year-on-Year Gross Profit Rates 2017 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 EMEA +14.8% +13.2% +12.6% +19.3% +18.2% +18.6% +20.9% +13.9% +11.4% +9.0% Asia Pacific +3.9% +6.8% +13.9% +14.9% +13.8% +18.4% +27.7% +22.0% +14.9% +4.7% – Asia +3.6% +10.2%
Slide 25: Contacts and Calendar
Financial Review Capital Allocation Summary H1 19 Contacts and Calendar Contacts Date Event Jeremy Tatham – Group Financial Controller 9 October 2019 Q3 2019 Trading Update Tel: +44 (0) 1932 264 143 Email: investorrelations@michaelpage.com Web: http://www.page.com/investors 25
Slide 26: Disclaimer
Financial Review Capital Allocation Summary H1 19 Disclaimer 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