PageGroup PLC · LSE:PAGE
PageGroup — Michael Page International — H1 2006 Earnings Presentation
54 slides from PageGroup's earnings presentation, August 2006
Slide 1: Michael Page International Interim Results 2006
LONDON PARIS SYDNEY NEW YORK MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2006 August 2006 Michael Page International is a world leading recruitment consultancy 123 offices in 20 countries worldwide | www.michaelpage.co.uk
Slide 2: Agenda
Agenda LONDON Financial Results . ........................................................................................................ 3 - 11 FINANCIAL RESULTS Segmental Analysis ................................................................................................... 12 - 13 SEGMENTAL
Slide 3: Financial Results and Segmental Analysis
LONDON PARIS SYDNEY NEW YORK FINANCIAL RESULTS AND SEGMENTAL ANALYSIS Michael Page International is a world leading recruitment consultancy 123 offices in 20 countries worldwide | www.michaelpage.co.uk
Slide 4: Overview Interim Results 2006
Overview Interim Results 2006 HONG KONG FINANCIAL RESULTS • Record gross profits SEGMENTAL • Group gross profit increased by 30.0% to £166.6m (2005: £128.2m) ANALYSIS GEOGRAPHICAL • Operating profit increased by 47.4% to £45.1m (2005: £30.6m) REVIEW MICHAEL PAGE • Significantly increased basic earni
Slide 5: Profit and Loss
Profit and Loss Interim Results 2006 2006 2005 £m £m Change MADRID Turnover 312.0 250.4 24.6% FINANCIAL RESULTS Gross profit 166.6 128.2 30.0% SEGMENTAL ANALYSIS Operating profit 45.1 30.6 47.4% GEOGRAPHICAL Net interest 0.1 (0.1) REVIEW MICHAEL PAGE Profit before tax 45.2 30.5 48.0% INTERNATIONAL O
Slide 6: Taxation
Taxation Interim Results 2006 2006 2005 £m £m MEXICO CITY Profit before tax 45.2 30.5 FINANCIAL RESULTS Taxation on profits SEGMENTAL ANALYSIS Current and deferred tax (14.7) (7.9) GEOGRAPHICAL REVIEW MICHAEL PAGE Effective tax rate on profits 32.5% 26.0% INTERNATIONAL OVERVIEW OUR STRATEGY SCOPE FO
Slide 7: Earnings per share and dividends
Earnings per share and dividends Interim Results 2006 2006 2005 Change MILAN Earnings per share FINANCIAL Basic 9.1p 6.6p 37.9% RESULTS SEGMENTAL Diluted 8.8p 6.5p 35.4% ANALYSIS GEOGRAPHICAL Weighted average number of shares REVIEW MICHAEL PAGE Basic (000’s) 336,276 341,591 INTERNATIONAL OVERVIEW D
Slide 8: Share Based Payment Charges
Share Based Payment Charges Share options charge £3.2m (2005: £0.9m) LISBON • H1 2006 charge higher due to social charges as a consequence of higher share price. FINANCIAL 350.5p at 30 June 2006 (31 December 2005: 270.0p) RESULTS SEGMENTAL ANALYSIS LTIP* and Deferred Bonus Plan* charge £2.0m (2005:
Slide 9: Share Repurchases and Share Options
Share Repurchases and Share Options LONDON Share Repurchases • Repurchased and cancelled 11.35m shares (3.3% of total share capital) in H1 FINANCIAL RESULTS • Total cost of repurchases £39.7m SEGMENTAL ANALYSIS • Average repurchase price 347.0p per share GEOGRAPHICAL REVIEW • Range of prices 310.8p
Slide 10: Cash flow
Cash flow Interim Results 2006 2006 2005 £m £m PARIS Operating profit 45.1 30.6 Depreciation/amortisation/share scheme charges 5.4 3.9 FINANCIAL RESULTS Increase in receivables (28.4) (17.1) SEGMENTAL ANALYSIS Increase in payables 4.7 3.0 GEOGRAPHICAL Decrease in provisions (0.2) (0.3) REVIEW Net ca
Slide 11: Balance Sheet
Balance Sheet 30 June 31 December 2006 2005 SAO PAULO £m £m Intangible assets - Goodwill 1.5 1.5 FINANCIAL RESULTS - Computer software 2.1 2.2 SEGMENTAL Tangible assets 19.6 19.7 ANALYSIS GEOGRAPHICAL 23.2 23.4 REVIEW MICHAEL PAGE INTERNATIONAL Trade and other receivables 133.7 106.0 OVERVIEW Trade
Slide 12: Discipline Analysis
Discipline Analysis Interim Results 2006 2006 2005 2006 2005 Turnover £m £m Change % share % share SHANGHAI Finance & Accounting 197.0 160.6 22.8% 63.1% 64.2% FINANCIAL RESULTS Marketing, Sales, Retail 48.8 40.9 19.2% 15.6% 16.3% SEGMENTAL ANALYSIS Other 66.2 48.9 35.2% 21.2% 19.5% GEOGRAPHICAL 312.
Slide 13: Perm/Temp analysis
Perm/Temp analysis Interim Results 2006 2006 2005 2006 2005 Turnover £m £m Change % share % share SINGAPORE Permanent 132.4 98.7 34.2% 42.4% 39.4% FINANCIAL Temporary 179.6 151.7 18.4% 57.6% 60.6% RESULTS 312.0 250.4 24.6% SEGMENTAL ANALYSIS GEOGRAPHICAL Gross profit REVIEW Permanent 124.9 93.5 33.6
Slide 14: Geographical Review
LONDON PARIS SYDNEY NEW YORK GEOGRAPHICAL REVIEW Michael Page International is a world leading recruitment consultancy 123 offices in 20 countries worldwide | www.michaelpage.co.uk
Slide 15: Geographical analysis of gross profit
Geographical analysis of gross profit Interim Results 2006 2006 2005 2006 2005 £m £m Change % share % share TOKYO United Kingdom 76.0 63.0 20.8% 45.6% 49.1% FINANCIAL RESULTS SEGMENTAL ANALYSIS Continental Europe 59.3 40.7 45.6% 35.6% 31.7% GEOGRAPHICAL REVIEW MICHAEL PAGE Asia Pacific 21.6 18.8 14.
Slide 16: United Kingdom
United Kingdom Interim Results 2006 2006 2005 £m £m Change MANCHESTER Turnover 153.1 127.9 19.7% FINANCIAL RESULTS SEGMENTAL Gross profit 76.0 62.9 20.8% ANALYSIS GEOGRAPHICAL Operating profit before share based charges 23.5 16.4 43.3% REVIEW MICHAEL PAGE Share based charges (3.9) (0.9) INTERNATIONA
Slide 17: United Kingdom Overview
United Kingdom Overview • No slowing of growth rate throughout first half LONDON • UK job count up 18% since the year end, 16,160 at 30 June 2006 FINANCIAL RESULTS • Finance & Accounting gross profit up 15% with City particularly strong SEGMENTAL ANALYSIS • MP opening 2 new offices in H2, Sheffield
Slide 18: Continental Europe
Continental Europe Interim Results 2006 2006 2005 £m £m Change ROTTERDAM Turnover 104.4 77.2 35.2% FINANCIAL RESULTS SEGMENTAL Gross profit 59.3 40.7 45.6% ANALYSIS GEOGRAPHICAL REVIEW MICHAEL PAGE Operating profit 16.1 7.8 106.8% INTERNATIONAL OVERVIEW OUR STRATEGY SCOPE FOR Operating margin 27.2%
Slide 19: Continental Europe Overview
Continental Europe Overview France MILAN • Now 40% of region (47% H1 2005), grew gross profit by 25% • New ‘Borloo Law’ opens up permanent market at the € lower end. Page Personnel FINANCIAL now temp and perm at the professional ‘clerical’ end of the market RESULTS • Launched 2 new disciplines – Hea
Slide 20: Asia Pacific
Asia Pacific Interim Results 2006 2006 2005 £m £m Change PARRAMATTA Turnover 41.0 37.3 9.9% FINANCIAL RESULTS SEGMENTAL Gross profit 21.6 18.8 14.6% ANALYSIS GEOGRAPHICAL REVIEW MICHAEL PAGE Operating profit 7.8 6.6 18.3% INTERNATIONAL OVERVIEW OUR STRATEGY SCOPE FOR Operating margin 36.1% 35.1% GRO
Slide 21: Asia Pacific Overview
Asia Pacific Overview TOKYO FINANCIAL • Represents 13% of total MPI gross profit RESULTS • Hong Kong/Singapore/Tokyo/Shanghai has seen strong growth in gross profit of 35% SEGMENTAL ANALYSIS • Hong Kong now has 6 disciplines GEOGRAPHICAL REVIEW • New office opening in the New Territories in H2 MICHA
Slide 22: Australia Overview
Australia Overview • 7 offices – Sydney (3), Melbourne (2), Brisbane and Perth WHEELERS HILL • 7 disciplines – Finance, Banking, Sales & Marketing, HR, Legal, Technology and Engineering FINANCIAL RESULTS • 161 fee earners, 8% of MPI’s gross profit SEGMENTAL ANALYSIS • Gross profit performance (AUS$)
Slide 23: Australia Actions
Australia Actions SYDNEY • New Regional Managing Director for Asia Pacific (based in Australia) FINANCIAL RESULTS – from US/UK (22 years experience) – August 2006 SEGMENTAL ANALYSIS • New Australian Managing Director – June 2006 GEOGRAPHICAL REVIEW • New management structure by discipline, as per ot
Slide 24: The Americas
The Americas Interim Results 2006 2006 2005 £m £m Change SAO PAULO Turnover 13.5 8.0 69.0% FINANCIAL RESULTS SEGMENTAL Gross profit 9.7 5.7 70.4% ANALYSIS GEOGRAPHICAL REVIEW MICHAEL PAGE Operating profit 1.6 0.7 117.0% INTERNATIONAL OVERVIEW OUR STRATEGY SCOPE FOR Operating margin 16.4% 12.3% GROWT
Slide 25: The Americas Overview
The Americas Overview North America TORONTO • North America gross profit grew 71% versus 2005 • Significantly increased headcount in H1 2006 by 39% to 157 FINANCIAL RESULTS • Launched Sales & Marketing and HR (previously only focused on Finance & Banking) SEGMENTAL ANALYSIS • Canada – launched Augus
Slide 26: Michael Page International Overview
LONDON PARIS SYDNEY NEW YORK MICHAEL PAGE INTERNATIONAL OVERVIEW Michael Page International is a world leading recruitment consultancy 123 offices in 20 countries worldwide | www.michaelpage.co.uk
Slide 27: Michael Page International Overview
Michael Page International Overview AMSTERDAM • Specialist recruitment company focused on placing ‘white-collar’ professionals into permanent, contract and temporary positions: FINANCIAL - Turnover ratio 42:58 Perm/Temp RESULTS - Gross profit ratio 75:25 Perm/Temp SEGMENTAL ANALYSIS • Specialisms: F
Slide 28: Positioning
Positioning Korn Ferry Executive Search Egon Zehnder Spencer Stuart Whitehead Mann Russell Reynolds BRUSSELS H IG D H FINANCIAL DE ER Harvey Nash AD RESULTS OPD FE UE Qualified Professional N ES SThree O L Recruitment I Robert Walters VA AT SEGMENTAL Mercuri Urval ER ANALYSIS Hudson UN M RE GEOGRAPH
Slide 29: Power of the Brand
Power of the Brand One of the strongest global brands in recruitment • Voted one of Britain’s strongest B2B brands since 2000 - Superbrands FRANKFURT • Sunday Times 100 Best Companies to work for 2005 and 2006 FINANCIAL • Voted one of Britain’s Top Employers 2005 (as published in the book by the RES
Slide 30: Power of the Brand Online
Power of the Brand Online Globally per month: GENEVA FINANCIAL 10 million RESULTS Page Views SEGMENTAL ANALYSIS GEOGRAPHICAL REVIEW 1.2 million MICHAEL PAGE Visitors INTERNATIONAL OVERVIEW OUR STRATEGY 150,000 SCOPE FOR GROWTH Job Apps/General CURRENT CV Submissions TRADING APPENDIX 30 Michael Page
Slide 31: Current Clients
Current Clients LONDON FINANCIAL RESULTS SEGMENTAL ANALYSIS GEOGRAPHICAL REVIEW MICHAEL PAGE INTERNATIONAL OVERVIEW OUR STRATEGY SCOPE FOR GROWTH CURRENT TRADING APPENDIX 31 Michael Page International is a world leading recruitment consultancy 123 offices in 20 countries worldwide | www.michaelpage.
Slide 32: Our Strategy
LONDON PARIS SYDNEY NEW YORK OUR STRATEGY Michael Page International is a world leading recruitment consultancy 123 offices in 20 countries worldwide | www.michaelpage.co.uk
Slide 33: Michael Page International Strategy
Michael Page International Strategy LONDON s Of FINANCIAL RESULTS m fi ce a SEGMENTAL Te ANALYSIS To organically grow s GEOGRAPHICAL REVIEW existing and new teams, offices, disciplines Culture MICHAEL PAGE INTERNATIONAL OVERVIEW and countries with a OUR STRATEGY consistent team and s Co ine SCOPE FO
Slide 34: Strategy - Organic
Strategy - Organic PHILADELPHIA Ensures consistency around the World: FINANCIAL • Culture RESULTS • Customer Service SEGMENTAL ANALYSIS • Brand Values GEOGRAPHICAL • Reputation REVIEW • Quality MICHAEL PAGE INTERNATIONAL • Systems and software OVERVIEW OUR STRATEGY Avoids the risks associated with a
Slide 35: Strategy - Existing
Strategy - Existing GENEVA FINANCIAL RESULTS SEGMENTAL ANALYSIS • Existing teams – every team adds one consultant that’s 500 new fee earners GEOGRAPHICAL REVIEW • Existing disciplines – more focus, more knowledge, more value MICHAEL PAGE • Existing offices – increases margin, infrastructure establis
Slide 36: Strategy - New
Strategy - New SHANGHAI • Always with experienced and proven Michael Page management FINANCIAL RESULTS • New teams add value to clients and candidates as we offer more specialist knowledge SEGMENTAL ANALYSIS • New disciplines creates new profit streams adding value to existing clients. GEOGRAPHICAL
Slide 37: Strategy - Culture
Strategy - Culture Entrepreneurial MILAN • Staff motivated by long term careers • Scope for promotion FINANCIAL RESULTS • Scope for international placement SEGMENTAL • Organic growth maintains entrepreneurial culture ANALYSIS GEOGRAPHICAL Meritocratic REVIEW • The ‘fittest’ get rewarded the most MIC
Slide 38: Making the Strategy work faster
Making the Strategy work faster Maximising Communication At The Top Main Board PARIS Steve Ingham Steve Puckett Charles-Henri Dumon CEO (19) Group FD (5) Exec Dir (21) FINANCIAL RESULTS SEGMENTAL UK Asia Pacific Europe Americas ANALYSIS Gary Watson Gary James Fabrice Lacombe Alexis de Bretteville GE
Slide 39: Making the Strategy work faster
Making the Strategy work faster AMSTERDAM FINANCIAL RESULTS SEGMENTAL Improving communication throughout the organisation ANALYSIS GEOGRAPHICAL • Raises awareness of breadth of career opportunities versus competitors REVIEW MICHAEL PAGE • Improves referrals of ‘warm business’ INTERNATIONAL OVERVIEW
Slide 40: Making the Strategy work faster
Making the Strategy work faster WARSAW FINANCIAL RESULTS Investing in Training and People SEGMENTAL ANALYSIS • Increases working efficiencies GEOGRAPHICAL REVIEW • Improves client and candidate retention/loyalty MICHAEL PAGE INTERNATIONAL • Word of mouth cheaper than other forms of communication OVE
Slide 41: Making the Strategy work faster
Making the Strategy work faster SYDNEY FINANCIAL Investing in Technology RESULTS SEGMENTAL • Maximises efficiency of consultants, new software roll-out completed ANALYSIS GEOGRAPHICAL • Improved management information for performance measurement and business REVIEW development MICHAEL PAGE INTERNATI
Slide 42: Scope for Growth
LONDON PARIS SYDNEY NEW YORK SCOPE FOR GROWTH Michael Page International is a world leading recruitment consultancy 123 offices in 20 countries worldwide | www.michaelpage.co.uk
Slide 43: Scope for Growth - Headcount
Scope for Growth - Headcount LONDON SYDNEY FINANCIAL RESULTS SEGMENTAL ANALYSIS GEOGRAPHICAL REVIEW MICHAEL PAGE INTERNATIONAL OVERVIEW OUR STRATEGY SCOPE FOR GROWTH CURRENT TRADING APPENDIX 43 Michael Page International is a world leading recruitment consultancy 123 offices in 20 countries worldwid
Slide 44: Scope for Growth - Conversion
Scope for Growth - Conversion LONDON STOCKHOLM FINANCIAL RESULTS SEGMENTAL ANALYSIS GEOGRAPHICAL REVIEW MICHAEL PAGE INTERNATIONAL OVERVIEW OUR STRATEGY SCOPE FOR GROWTH CURRENT TRADING APPENDIX 44 Michael Page International is a world leading recruitment consultancy 123 offices in 20 countries worl
Slide 45: Number of UK offices per discipline
Scope for Growth Number of UK offices per discipline 40 NEW YORK 33 FINANCIAL RESULTS 30 SEGMENTAL ANALYSIS Number of offices GEOGRAPHICAL REVIEW 20 20 MICHAEL PAGE INTERNATIONAL OVERVIEW OUR STRATEGY SCOPE FOR 10 GROWTH 8 8 8 7 7 7 CURRENT 6 TRADING 2 APPENDIX 1 1 1 l l il cy ce ga ia Ci ty in g le
Slide 46: Number of offices in each country
Scope for Growth Number of offices in each country 50 STOCKHOLM Relative size of economies Vs. UK by GDP 45 France 1.0x Brazil 0.9x FINANCIAL Spain 0.6x China 4.8x RESULTS 40 Australia 0.3x Sweden 0.1x SEGMENTAL Netherlands 0.3x Portugal 0.1x ANALYSIS United States 6.8x Poland 0.3x Germany 1.4x Mexi
Slide 47: Number of disciplines in each country
Scope for Growth Number of disciplines in each country 20 FRANKFURT Relative size of economies Vs. UK by GDP France 1.0x Brazil 0.9x FINANCIAL Spain 0.6x China 4.8x RESULTS Australia 0.3x Sweden 0.1x 15 SEGMENTAL Netherlands 0.3x Portugal 0.1x 14 ANALYSIS United States 6.8x Poland 0.3x Number of dis
Slide 48: Group quarterly gross profit trend
Group quarterly gross profit trend Q1 2001 to Q2 2006 LONDON SINGAPORE 100 FINANCIAL RESULTS 87.4 SEGMENTAL ANALYSIS 80 79.2 GEOGRAPHICAL REVIEW 69.6 69.2 70.2 Gross Profit (£m) 68.3 66.9 MICHAEL PAGE INTERNATIONAL 60 59.9 OVERVIEW 58.7 56.7 OUR STRATEGY 53.5 52.3 49.9 51.4 49.5 48.1 SCOPE FOR 47.8
Slide 49: Global MP Job Count: Website
Global MP Job Count: Website • Only MP jobs, not total Group LONDON MANCHESTER • Mix of Perm and Temp FINANCIAL RESULTS SEGMENTAL ANALYSIS GEOGRAPHICAL REVIEW MICHAEL PAGE INTERNATIONAL OVERVIEW OUR STRATEGY SCOPE FOR GROWTH CURRENT TRADING APPENDIX 49 Michael Page International is a world leading r
Slide 50: Current Trading
LONDON PARIS SYDNEY NEW YORK CURRENT TRADING Michael Page International is a world leading recruitment consultancy 123 offices in 20 countries worldwide | www.michaelpage.co.uk
Slide 51: Current trading
Current trading TORONTO • Good activity levels in all regions FINANCIAL • Management and operational changes implemented in Australia in Q3 RESULTS SEGMENTAL • Continue to invest in our businesses for future growth ANALYSIS GEOGRAPHICAL • Plan to open Ireland, UAE, South Africa* and Russia in H2 200
Slide 52: Appendix
LONDON PARIS SYDNEY NEW YORK APPENDIX Michael Page International is a world leading recruitment consultancy 123 offices in 20 countries worldwide | www.michaelpage.co.uk
Slide 53: Appendix: Share Options
Appendix: Share Options Summary of Exercised and Outstandings LONDON FINANCIAL RESULTS SEGMENTAL ANALYSIS GEOGRAPHICAL REVIEW Shares millions MICHAEL PAGE Earliest exercise dates for non-vested INTERNATIONAL OVERVIEW share options OUR STRATEGY SCOPE FOR GROWTH CURRENT TRADING APPENDIX 53 Michael Pag
Slide 54: LONDON PARIS SYDNEY
LONDON PARIS SYDNEY NEW YORK Michael Page International is a world leading recruitment consultancy 123 offices in 20 countries worldwide | www.michaelpage.co.uk
Michael Page International — H1 2006 Earnings Presentation on 6ix