Sthree Plc · LSE:STEM
Sthree — FY2020 Earnings Presentation
44 slides from Sthree's earnings presentation, January 2021
Slide 1: Bringing Skilled People Together to Build the Future
BRINGING SKILLED PEOPLE TOGETHER TO BUILD THE FUTURE FULL YEAR RESULTS PRESENTATION 2020 RESULTS FOR YEAR ENDED 30 NOVEMBER 2020
Slide 2: We Bring Skilled People Together to Build the Future
WE BRING SKILLED PEOPLE TOGETHER TO BUILD THE FUTURE STEM FLEXIBLE WORKING The short-to-mid term project work often required or desired from STEM specialist workers Technology Life Sciences Employed Freelance Permanent contractor contractor Engineering Banking & Other Finance GLOBAL FOOTPRINT UNIQUE
Slide 3: Recurring Revenue Nature of Flexible Working Focus Has Highly Attractive Economics
RECURRING REVENUE NATURE OF OUR FLEXIBLE WORKING FOCUS HAS HIGHLY ATTRACTIVE ECONOMICS Resilient in Particularly More uncertain Higher lifetime Growth in Counter suited to STEM predictable High barriers markets and value and margin at cyclical cash staffing and visible to entry strong as profitabili
Slide 4: We Are the Only Global Pure-Play STEM Specialist
WE ARE THE ONLY GLOBAL PURE-PLAY STEM SPECIALIST WE ARE UNIQUE 4 4
Slide 5: Resilient Performance Driven by Unique Focus on STEM and Flexible Working
RESILIENT PERFORMANCE DRIVEN BY OUR UNIQUE FOCUS ON STEM AND FLEXIBLE WORKING Strong balance sheet Revenue Net fees £50m Net cash position as £1,203m down 9% YoY £308.6m down 8% YoY 30 November 2019: £11m at 30 November 2020 Increase in Contract business mix Operating profit Free cash flow conversio
Slide 6: COVID-19
COVID-19 6
Slide 7: Our Focus on Operational Execution Delivered
OUR FOCUS ON OPERATIONAL EXECUTION DELIVERED Progress in KPIs Sequential improvement across H2 Market share gains USA, Germany, Sales activity Contractor retention Netherlands and UK increased rates up Net promoter score 52 Contractor order Productivity per book stabilised head up YoY 2019: 44 7
Slide 8: Focused Execution Guided by Our Purpose
FOCUSED EXECUTION GUIDED BY OUR PURPOSE Three phases of Initial response Ongoing management Recovery phase response to the COVID-19 pandemic by SThree KEEPING OUR PEOPLE, ENSURING ECONOMIC VIABILITY AND ENSURING BUSINESS CONTINUITY AND CANDIDATES AND CLIENTS SAFE A VIBRANT BUSINESS ONGOING EFFECTIVE
Slide 9: Our Purpose in Action
OUR PURPOSE IN ACTION Our purpose has never been more relevant; ‘Bringing skilled people together to build the future’ and help tackle the global health crisis MAINZ, Germany, December 31, 2020 – BioNTech SE (Nasdaq: BNTX) today wants to express its thanks and gratitude not only to its employees but
Slide 10: Performance
s|three® PERFORMANCE .| i a, . \
Slide 11: Resilient Performance Despite Impact of COVID-19
RESILIENT PERFORMANCE DESPITE IMPACT OF COVID-19 FY 2020 FY 2019 Actual movement LFL movement* Revenue £1,202.6m £1,324.7m -9% -9% Contract net fees £233.4m £251.4m -7% -7% Permanent net fees £75.2m £86.6m -13% -13% Total net fees £308.6m £338.0m -9% -8% Operating profit £31.3m £60.0m -48% -48% Conv
Slide 12: Operating Profit After Cost Savings and One-Off Items
OPERATING PROFIT AFTER COST SAVINGS AND ONE-OFF ITEMS £60.0m (£11.4m) One off items (£18.0m) £7.5m (£3.6m) £1.2m (£1.1m) £31.3m (£3.3m) Operating profit Permanent Contract People costs IT/ other Impairments Business right Government Operating profit FY 2019 net fees net fees operational sizing costs
Slide 13: Improving Underlying Sequential Performance in H2
IMPROVING UNDERLYING SEQUENTIAL PERFORMANCE IN H2 Productivity YoY Net fee growth YoY +12% 0% -7% -6% -4% -12% -14% -10% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 • Productivity up 4% in H2 DACH USA • Sequential improvement in net fee growth from Q3 to Q4 across EMEA excl DACH GROUP all our major geographies 13 Note
Slide 14: Benefit of Flexible Working & STEM; ECM Net Fees Grew 11% YoY
BENEFIT OF FLEXIBLE WORKING & STEM ECM NET FEES GREW 11% YOY 2015 2019 2020 7% 26% 23% 24% 28% 36% 64% 74% 76% Contract Contract Contract 57% 51% 48% • Employed contractor model ‘ECM’ has attractive margins, c40% higher than freelance Employed Contractor ‘ECM’ Freelance Contractor • Contractor LTV i
Slide 15: Robust Balance Sheet with Debt Facilities Undrawn
ROBUST BALANCE SHEET WITH DEBT FACILITIES UNDRAWN 30 Nov 2020 30 Nov 2019 Net working capital Intangible assets £4.4m £8.0m Permanent £3.2m Property, plant & equipment £7.9m £6.8m Contract £76.3m Net working capital £79.5m £98.0m £79.5m Net lease liabilities (£2.6m) £0.0m Provisions (£12.5m) (£9.7m)
Slide 16: Strong Cash Management Drives Improved Free Cash Flow Conversion
STRONG CASH MANAGEMENT AND WORKING CAPITAL UNWIND DRIVES IMPROVED FREE CASH FLOW CONVERSION FY 2020 Uses of free cash £16.6m £76.9m (£10.5m) £5.3m CAPEX (£14.0m) £9.2m £1.1m £52.4m LTIPs/tracker shares/ other £21.6m £6.7m Dividends £29.5m £39.3m Net increase in cash balance Operating profit Non-cash
Slide 17: Resilient Performance Leading to Reinstatement of Final Dividend
RESILIENT PERFORMANCE LEADING TO REINSTATEMENT OF FINAL DIVIDEND Adjusted As Reported Adjusted As Reported Adjusted As Reported FY 2020 FY 2020 FY 2019 FY 2019 Actual Growth Actual Growth Profit after tax £18.4m £18.8m £43.2m £41.3m -57% -55% For basic EPS 132.1m 132.1m 129.9m 129.9m +2% +2% Weighte
Slide 18: Business Overview
BUSINESS OVERVIEW 18
Slide 19: Global Business Operating in the Best STEM Markets
GLOBAL BUSINESS OPERATING IN THE BEST STEM MARKETS Net fees 3% 3% 25% 23% 34% 32% 42% 38% DACH USA EMEA excl DACH APAC 19 Note 1: Business mix is based on % of net fees Note 2: All pie charts: Outside FY 2020; Inside FY 2019 Note 3: Size of bubble denotes the size of the staffing markets based on re
Slide 20: Group KPIs
GROUP KPIS Revenue Net fees Average sales headcount NPS Net fees (£m) £1,203 £308.6 2,193 52 FY20 £308.6 FY19 £338.0 FY18 £316.5 million million FTE Contractor Order Book -10% Division Sector YoY 2% 23% 3% 24% £92.4m £98.1m 76% 20% £88.8m 26% 74% £76.6m 45% 45% 21% 22% FY 2017 FY 2018 FY 2019 FY 202
Slide 21: DACH
DACH (34% OF GROUP NET FEES) Revenue Net fees Average sales headcount NPS Net fees (£m) £371.9 £105.8 786 55 FY20 £105.8 FY19 £109.3 FY18 £99.4 million million FTE Division Sector 18% 65% 16% 35% 35% 65% Technology 16% 18% 58% Banking & 60% Finance 7% Engineering 6% Contract Life Sciences Permanent
Slide 22: DACH
DACH (34% OF GROUP NET FEES) Contractor Order Book +5% • Resilient performance with FY YoY net fees down 3% YoY Austria (Contract down 3% and Switzerland Permanent down 3%) 3% 5% • Life Sciences up 4% driven by £29.1m exceptional Q1 and increased £27.8m demand in H2 in Clinical £23.6m Research & Dev
Slide 23: EMEA excl DACH
EMEA EXCL DACH (38% OF GROUP NET FEES) Revenue Net fees Average sales headcount NPS Net fees (£m) £588.8 £117.6 934 53 FY20 £117.6 FY19 £141.2 FY18 £141.8 million million FTE Division Sector 3% 14% 12% 86% 4% 16% 11% 84% Technology 51% 50% 22% 25% Banking & Finance Engineering 12% Contract Life Scie
Slide 24: EMEA excl DACH
EMEA EXCL DACH (38% OF GROUP NET FEES) Contractor Order Book -26% YoY • Net fees down 16% with Other Contract down 15% and Dubai Netherlands Permanent down 26% 5% 4% £43.9m £41.9m Belgium • Challenging performance in 10% the UK with net fees down 19% £37.5m £30.9m 40% • The Netherlands, our largest
Slide 25: USA
USA (25% OF GROUP NET FEES) Revenue Net fees Average sales headcount NPS Net fees (£m) £227.5 £77.3 389 51 FY20 £77.3 FY19 £76.7 FY18 £66.7 million million FTE Division Sector 1% 15% 20% 80% 3% 14% 22% 78% 8% 13% Technology 47% 41% Banking & Finance Engineering 29% 29% Contract Life Sciences Permane
Slide 26: USA
USA (25% OF GROUP NET FEES) Contractor Order Book +1% YoY • USA demonstrated its strength with net fees up 2% in the year • Life Sciences up 16% driven by increased activity in H2 in Clinical £27.8m £28.1m Operations, Product Development and Quality Assurance £24.1m • Technology up 9% with increased
Slide 27: APAC
APAC (3% OF GROUP NET FEES) Revenue Net fees Average sales headcount NPS Net fees (£m) £14.4 £7.9 86 27 FY20 £7.9 FY19 £10.8 FY18 £8.6 million million FTE Division Sector 20% 26% 16% 30% 43% Technology 1% 54% Banking & 2% Finance Engineering 84% 19% 25% Contract Life Sciences 80% Permanent Other Not
Slide 28: APAC
APAC (3% OF GROUP NET FEES) Contractor Order Book -8% YoY • Net fees down 26% in the year Singapore driven by transactional nature of our Japan business which is 94% Permanent £0.7m £0.7m £0.7m 26% • Japan, our largest country in £0.6m the region, was down 25% with Technology down 9%, Life Sciences
Slide 29: Strategy & Outlook
s|three® STRATEGY & OUTLOOK
Slide 30: Progress Against Our Strategic Pillars
PROGRESS AGAINST OUR STRATEGIC PILLARS Leveraging our position at Create a world class To be a leader in Find, develop, retain the centre of STEM to deliver operational platform markets we choose great people sustainable value to our through data, technology to serve candidates and customers and inf
Slide 31: ESG: Empowering a Sustainable Future Through STEM
ESG: EMPOWERING A SUSTAINABLE FUTURE THROUGH STEM We have defined three clear areas where we can have the biggest impact Building a Building an Building on our green future inclusive workforce business ethics for the future • We will reduce our carbon footprint • Positively impact 150,000 lives by 2
Slide 32: Market Outlook - Key Themes Are Gaining Traction
MARKET OUTLOOK - KEY THEMES ARE GAINING TRACTION Management of a more Re-building supply chains Digital transformation flexible and resilient workforce with a focus on resilience and acceleration of the future sustainability (just in time to just in case) • Importance and difficulty of • Focus on pl
Slide 33: The Focus, Across All Themes
THE FOCUS, ACROSS ALL THEMES INVESTING: AGILITY: DEMAND: Businesses are investing to Organisational Demand for the right STEM ensure ongoing resilience agility is key talent still exceeds supply post-pandemic • 40% of employers expect • People at the forefront • Finding the right talent is as that e
Slide 34: Outlook - Our Focus Going Forward
OUTLOOK - OUR FOCUS GOING FORWARD Continue to drive the Group Secular trends of STEM and flexible forward towards our long term working will become more 2024 ambitions powerful over the next year, as shown in our sentiment surveys Build on 2020 success in driving In line with our strategic pillars,
Slide 35: Making Progress Against Group Ambitions 2024
MAKING PROGRESS AGAINST GROUP AMBITIONS 2024 Market share of STEM 2020 Progress Conversion ratio (CR%1) 2020 Progress 50% 21-24% To grow Group market share by To 3% by 2024 2020: 10.1% (2020: 2%) Free cash flow (FCF) CR%2 2020 Progress People and society 2020 Progress 75% • To maintain Learning & De
Slide 36: Q&A
es s|three® Q&A
Slide 37: Financial Calendar
FINANCIAL CALENDAR 2021 2022 15 March Q1 Trading Statement 31 January Annual results for the year ended 30 November 2021 22 April Annual General Meeting 14 June Trading update for the six months ended 31 May 2021 19 July Interim results for the six months ended 31 May 2021 13 September Q3 Trading St
Slide 38: Appendix
APPENDIX 38
Slide 39: Historical Net Fees and Contract Margin
HISTORICAL NET FEES AND CONTRACT MARGIN Full Year £218.2m £235.7m £258.7m £287.7m £321.1m £338.0m £308.6m £172.7m £177.1m £158.7m £153.3m £125.2m £138.9m £117.4m £134.4m £148.4m £160.9m £149.9m Net fees £100.8m £110.5m £119.8m H1 H2 20.7% 20.3% 20.0% 20.0% 19.9% 19.9% 19.8% 19.8% 19.9% 19.8% 19.8% 1
Slide 40: Historical Operating Profit and Conversion Ratio
HISTORICAL OPERATING PROFIT AND CONVERSION RATIO Full Year £29.8m £41.5m £41.3m £44.9m £53.9m £60.0m £31.3m £35.2m £33.5m £35.2m £25.6m £33.5m £27.4m £26.0m £25.6m £27.4m £26m £17.4m Adjusted £21.4m £17.1m Operating £24.1m £24.8m £15.3m £19.3m £20.4m profit £8.4m £14.1m £19.3m £20.4m £24.8m £13.9m £
Slide 41: Total Group Performance
TOTAL GROUP PERFORMANCE FY 2020 FY 2019 Actual movement LFL movement* Revenue £1,214.1m £1,345.0m -10% -10% Contract net fees £235.2m £254.6m -8% -7% Permanent net fees £75.6m £87.8m -14% -14% Total net fees £310.8m £342.4m -9% -9% Operating profit £29.5m £60.0m -51% -51% Conversion ratio 9.5% 17.5%
Slide 42: Foreign Exchange Impact Small in 2020
FOREIGN EXCHANGE IMPACT SMALL IN 2020 Year ended Year ended YoY exchange The Group’s net fees and operating 30 November 2020 30 November 2019 rate movement profit decreased by £1.0m and £0.2m respectively, due to a Average Closing Average Closing Average Closing modest FX headwind EUR € 1.14 1.12 1.
Slide 43: Cost Base Analysis
COST BASE ANALYSIS Cost base Payroll costs Payroll Property Support Services Sales Advertising IT & Professional Other 43
Slide 44: IFRS16 Impact on the Income Statement and Balance Sheet
IFRS16 IMPACT ON THE INCOME STATEMENT AND BALANCE SHEET Adjusted Marginal impact to operating profit of £0.5m and profit before tax of (£0.2m) 44