PageGroup PLC · LSE:PAGE
PageGroup — FY2016 Earnings Presentation
33 slides from PageGroup's earnings presentation, March 2017
Slide 1: Full Year Results 2016
Full Year Results 2016 PageGroup BE PASSIONA WINDY AC A j VV ORK Ao A | Vi MAKE IT FUN
Slide 2: Agenda
Agenda Financial Review Regional Review Business Strategy Summary
Slide 3: 2016 Group Financial Highlights
3 2016 Group Financial Highlights 2016 vs 2015 constant Gross Profit £621.0m 11.7% 3.0% Operating Profit £101.0m 12.1% 1.4% Profit Before Tax £100.0m 10.3% Diluted EPS 23.1p 9.5% Net Cash £92.8m £2.2m Total Ordinary Dividend (proposed) 11.98p 4.2% Special Dividend 6.46p
Slide 4: Financial Review
Financial Review
Slide 5: Income Statement
5 Income Statement Constant currency £m 2016 2015 Change change Revenue 1,196.1 1,064.9 +12.3% +3.6% Gross Profit 621.0 556.1 +11.7% +3.0% Operating Profit 101.0 90.1 +12.1% +1.4% Net Interest (Expense)/Income (1.0) 0.6 Profit Before Tax 100.0 90.7 +10.3% Taxation (27.9) (24.5) +13.9% Effective tax
Slide 6: Operating Costs
6 Operating Costs Support staff as % of Group headcount % FY16 77:23 9% Actual cc 30 £m 2015 change 6% change 25 Employee 405.2 357.9 +13% +5% 10% Other 114.9 108.1 +6% -1% 20 costs Total 520.1 75% 466.0 +12% +2% 15 2016 2015 % 10 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Headcount 6,099 5,8
Slide 7: Impact of Foreign Exchange
7 Impact of Foreign Exchange Constant Actual vs Actual Gross Profit (£m) Currency Constant Rates UK 146.3 – 146.3 EMEA 242.0 29.9 271.9 Asia Pacific 106.7 13.0 119.7 Americas 77.7 5.4 83.1 Group 572.7 48.3 621.0 Operating Profit 91.3 9.7 101.0 2016 impact: • Gross profit increased by c. 8% or £48.3m
Slide 8: Group Effective Tax Rate (ETR)
8 Group Effective Tax Rate (ETR) 2016 2015 % Profit Before Tax 100.0 90.7 +10.3 Tax Charge 27.9 24.5 +13.9 Underlying 27.4% 29.4% Losses and deferred tax on share plans 0.5% (2.4%) ETR 27.9% 27.0% • UK corporation tax rate decreased to 20% from 20.25% in 2015 • Underlying rate down by 2% - due to ge
Slide 9: Balance Sheet
9 Balance Sheet £m 2016 2015 Intangible assets 37.9 36.3 Tangible assets 29.5 21.4 67.4 57.7 Trade and other receivables 267.0 217.4 Trade, other payables, current and deferred taxes (180.6) (148.3) 86.4 69.1 Net cash 92.8 95.0 Net assets 246.6 221.8 • Strong balance sheet with £92.8m net cash at 31
Slide 10: Permanent vs Temporary
10 Permanent vs Temporary PageGroup Michael Page Page Personnel £m 2016 2015 Growth rates 2016 2015 Growth rates 2016 2015 Growth rates Constant Constant Constant Reported Reported Reported Gross Profit Currency Currency Currency Permanent 470.0 424.0 +10.8% +2.3% 367.6 339.1 +8.4% +0.4% 102.4 84.9
Slide 11: Cash Flow (£m)
11 Cash Flow (£m) 225 (1.1) 200 (32.8) 175 (23.4) 122.4 150 (14.7) (20.1) 125 100 (36.2) 3.7 75 95.0 92.8 50 Dec 2015 EBITDA Working Tax and net Net Capex Net option Dividends Paid Exchange Dec 2016 Capital interest excercises/EBT purchases Cash Increase Decrease • Decrease of £2.2m in net cash vs D
Slide 12: Dividends
12 Dividends 2016 2015 Pence per Share £m Pence per Share £m Interim 3.75 11.6 3.60 11.3 Final 8.23 25.6 7.90 24.7 Special 6.46 20.1 16.0 50.1 Total 18.44 57.3 27.5 86.1 Number of shares (m) 311.0 313.3 • Final dividend proposed of 8.23p (+4.2%) • Payable on 19 June 2017 • Special dividend paid in O
Slide 13: Regional Review
Regional Review - 7
Slide 14: Regional Results Summary
14 Regional Results Summary UK (24%*) -3.5% gross profit Asia Pacific (19%*) 1,014 FE headcount (-7.7%) -2.2% gross profit 16.5% conversion 933 FE headcount (+2.0%) £24.2m operating profit 17.3% conversion £20.7m operating profit Americas (13%*) -0.9% gross profit 769 FE headcount (+12.1%) EMEA (44%
Slide 15: Europe, Middle East, Africa
15 Europe, Middle East, Africa 27% Reported Constant 31% £m 2016 2015 rates currency Gross Profit by geography Gross Profit 5% 271.9 217.0 +25.3% +11.5% 22% 15% Operating Profit 51.7 31.9 +62.1% +41.8% Conversion 19.0% 14.7% +4.3ppts +4.0ppts France S. Europe Other Germany ME & Africa Headcount 2,55
Slide 16: United Kingdom
16 United Kingdom 17% 36% £m 2016 2015 Change Gross Profit by Gross Profit 146.3 151.6 -3.5% 25% geography Operating Profit 24.2 29.2 -17.4% 22% Conversion 16.5% 19.3% -2.8ppts London North South Midlands Headcount 1,411 1,516 -6.9% • Market sentiment of caution and uncertainty due to Brexit • Londo
Slide 17: Asia Pacific
17 Asia Pacific 18% £m 2016 2015 Reported rates Constant currency 87:1329% Gross Profit by geography Gross Profit 119.7 109.1 +9.7% -2.2% 42% Operating Profit 20.7 22.7 -8.8% -21.5% 11% Conversion 17.3% 20.8% -3.5ppts -4.1ppts SE Asia & India Japan Greater China Australasia Headcount 1,205 1,180 +2.
Slide 18: Americas
18 Americas 13% 16% £m 2016 2015 Reported Constant rates currency Gross Profit by 15% Gross Profit 83.1 78.4 +6.0% -0.9% geography 50% 6% Operating Profit 4.4 6.2 -29.6% -33.4% Conversion 5.3% 7.9% -2.6ppts 0ppts Brazil Canada Rest of LatAm USA Headcount 930 844 +10.2% Mexico • LatAm ex-Brazil (65%
Slide 19: Business Strategy
_ Business Strategy
Slide 20: Diversification Strategy
20 Diversification Strategy
Slide 21: Market Penetration
21 e Fee Earners I Market Penetration a991 m600 924 Fee Earners Fee Earners Fee Famers % | a@i,244 e Group Fee Earners @ 1,044 Germany, Fee Earners China, SE Asia, LatAm, other Europe 26% Australia & UK Of, rcnsmen | Ha Medium How Total Fee 0 penetration >70% 30-70% <30% papers
Slide 22: Market Categories
Market Categories Category Countries/regions Investment approach Medium/ long-term objectives Large, High Potential Germany, Greater China, Latin America, SE Asia, US Invest through cycle Create a market leading network of offices, management and headcount. c.40% of Group gross profit/ fee-earners;
Slide 23: Brands
Brands EXECUTIVE SEARCH QUALIFIED PROFESSIONAL GENERALIST STAFFING Offices Fee Earners & Directors 23
Slide 24: Discipline Gross Profit Split / Perm/Temp Gross Profit Split
24 Discipline Gross Profit Split Perm/Temp Gross Profit Split 29% 50% 50% 71% 2009 2009 24% 38% 76% 2016 62% 2016 Non Financial services and Accounting Accounting and Financial services Perm Temp
Slide 25: Diversification Strategy
25 Diversification Strategy
Slide 26: Investment Strategy
26 Investment Strategy • Temp and contracting in Germany • Japanese Nikkei market • US outside of New York Financial Services • Chinese domestic market • Latin America outside of Brazil • South East Asia: launched in Bangkok, Thailand • Temporary, interim and contracting • Page Personnel
Slide 27: Page Personnel
27 Page Personnel GP growth in constant currency % Group Gross Profit £200.0 £183.5m 1,600 35.0% 1,414 30.0% 28.8% £150.0 1,200 25.0% No. of FE & Dir Gross Profit £m £66.0m 20.0% 16.7% £100.0 800 651 15.0% 10.0% £50.0 400 5.0% 0.0% £0.0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2006 2
Slide 28: Technology – Strategy
28 Technology – Strategy Completed Innovation roll-out of pipeline Page Recruitment embedded System (PRS) Digital Learning Platform developed and launched
Slide 29: Operational Support Investments
29 Operational Support Investments European Shared Service Centre • Transition of European finance functions completed • Marketing also complete • IT transition two thirds complete - will continue in line with Cloud Strategy New Global Finance System • Global system and processes • UK Shared Service
Slide 30: Summary
Summary
Slide 31: Summary
31 Summary • Record gross profit performance, with EMEA +11.5% • Conversion rate increased slightly to 16.3% Summary • Total Dividends paid of £56.3m; year end cash balance £92.8m • Completed roll-out of PRS our new operating system • Completed European finance transition to new European Shared Serv
Slide 32: Cautionary Statement
32 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
Slide 33: Page
Page Michael Page Page Personnel Part of PageGroup