PageGroup PLC · LSE:PAGE
PageGroup — Michael Page International — FY2007 Earnings Presentation
59 slides from PageGroup's earnings presentation, March 2008
Slide 1: Results 2007
MICHAEL PAGE INTERNATIONAL RESULTS 2007 | Results 2007 March 2008 Michael Page International is a world leading recruitment consultancy 149 offices in 25 countries worldwide | www.michaelpage.co.uk
Slide 2: Agenda
MICHAEL PAGE INTERNATIONAL RESULTS 2007 | Financial Results . ................................... 4 - 10 Segmental Analysis .............................. 11 - 25 Group Strategy ..................................... 26 - 32 Agenda 2008 Initiatives ...................................... 33 - 39 Appen
Slide 3: Overview Results 2007
MICHAEL PAGE INTERNATIONAL RESULTS 2007 | • Record gross profits: +37% to £478m • Operating profit: +54% to £149m Overview Results 2007 • Conversion rate* 31.3% (2006: 27.9%) • Staff numbers: +34% to 5,052 *Operating profit as a proportion of gross profit Michael Page International is a world leadin
Slide 4: Financial Results
MICHAEL PAGE INTERNATIONAL RESULTS 2007 | Financial Results Michael Page International is a world leading recruitment consultancy 149 offices in 25 countries worldwide | www.michaelpage.co.uk
Slide 5: Income Statement
A Financial Results MICHAEL PAGE INTERNATIONAL RESULTS 2007 | Income Statement 2007 2006 £m £m Change Revenue 831.6 649.1 28.1% Gross profit 478.1 348.8 37.1% Operating profit 149.4 97.4 53.5% Net interest expense (2.0) (0.4) Profit before tax 147.4 97.0 52.1% Taxation (45.7) (31.5) 45.0% Profit aft
Slide 6: Taxation and earnings per share
A Financial Results MICHAEL PAGE INTERNATIONAL RESULTS 2007 | Taxation and earnings per share Effective tax rate on profit 2007 2006 Taxation for the year 31.8% 31.2% Adjustment in respect of prior period (0.8)% 1.3% 31.0% 32.5% Expected effective tax rate for 2008 is 30.5% reflecting reduction in U
Slide 7: Dividends and share repurchases
A Financial Results MICHAEL PAGE INTERNATIONAL RESULTS 2007 | Dividends and share repurchases 2007 2006 (pence 2007 (pence 2006 Dividend Dividend per share) £m per share) £m growth Interim 2.4 7.8 1.8 6.0 Final 5.6* 18.0 4.2 14.0 Total 8.0 25.8 6.0 20.0 33.3% *Proposed and payable on 9 June 2008 200
Slide 8: Cash Flow
A Financial Results MICHAEL PAGE INTERNATIONAL RESULTS 2007 | Cash Flow 2007 2006 £m £m Operating profit 149.4 97.4 Depreciation/share scheme charges 14.5 10.6 Net movement in working capital (15.0) (28.7) Decrease in provisions (0.2) (0.4) Net cash inflow from operating activities 148.7 78.9 Net in
Slide 9: Balance Sheet
A Financial Results MICHAEL PAGE INTERNATIONAL RESULTS 2007 | Balance Sheet 2007 2006 £m £m Intangible assets - Goodwill 1.5 1.5 - Computer software 2.8 2.1 Tangible assets 27.1 21.6 31.4 25.2 Trade and other receivables 195.1 145.7 Trade and other payables (116.1) (84.7) 79.0 61.0 Current and defer
Slide 10: Perm/Temp analysis
A Financial Results MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 10 Perm/Temp analysis 2007 2006 2007 2006 Revenue £m £m Change % share % share Permanent 392.6 276.3 42.1% 47% 43% Temporary 439.0 372.7 17.8% 53% 57% 831.6 649.1 28.1% Gross profit Permanent 372.0 261.0 42.5% 78% 75% Temporary 106.1 87.8
Slide 11: Segmental Analysis
MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 11 Segmental Analysis Michael Page International is a world leading recruitment consultancy 149 offices in 25 countries worldwide | www.michaelpage.co.uk
Slide 12: Discipline analysis of gross profit
A SEGMENTAL ANALYSIS MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 12 Discipline analysis of gross profit 2006 2007 Gross Profit: £348.8m Gross Profit: £478.1m 12% 9% 13% 15% 37.1% Growth 58% 54% 20% 19% +28% Growth Finance & Accounting +58% Growth Legal, HR, Technology, Secretarial and Other +32% Growt
Slide 13: Ongoing strategy of diversification: discipline development of gross profit
A SEGMENTAL ANALYSIS MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 13 Ongoing strategy of diversification: Discipline development of gross profit Finance & Accounting Legal, HR, Technology, Secretarial and Other Marketing, Sales and Retail ngineering, Property & Construction, E Procurement & Supply Chai
Slide 14: Discipline development by country
A SEGMENTAL ANALYSIS MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 14 Ongoing strategy of diversification: Discipline development by country 15 2001 - 2007 1991 - 2000 12 1976 - 1990 Number of disciplines 9 6 3 0 UK lia e ds ny ina ore ain ly A zil l n nd m en d da a o d ica E rg a ga nc ssi tin pa xic
Slide 15: Geographical analysis of gross profit
A SEGMENTAL ANALYSIS MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 15 Geographical analysis of gross profit 2006 2007 Gross Profit: £348.8m Gross Profit: £478.1m 8% 6% 12% 13% 39% 45% 37.1% Growth 36% 41% +19% Growth United Kingdom +27% Growth Asia Pacific +55% Growth EMEA +79% Growth Americas Michael P
Slide 16: Geographic development of gross profit
A SEGMENTAL ANALYSIS MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 16 Ongoing strategy of diversification: Geographic development of gross profit EMEA Asia Pacific United Kingdom Americas • Geographic spread by number of 500m £478.1m countries increasing and speeding up: 1990: 4, 2000: 12, 2007: 25 • EM
Slide 17: Headcount development by country
A SEGMENTAL ANALYSIS MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 17 Ongoing strategy of diversification: Headcount development by country 2000 2001 - 2007 1991 - 2000 1976 - 1990 1500 Headcount 1000 500 0 UK lia e s y ina re ain ly A zi l l n nd m en d da a o d ica E rg a ga nd an nc ssi tin pa xic la
Slide 18: EMEA
A SEGMENTAL ANALYSIS MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 1 EMEA 2006 2007 Gross Profit: £126.6m Gross Profit: £196.4m Operating Profit: £34.2m +84.4% Operating Profit: £63.0m Conversion Rate: 27.0% Conversion Rate: 32.1% Headcount: 1,438 +44.5% Headcount: 2,078 8% 6% Gross profit 18% 33% 19% 3
Slide 19: EMEA: Geographic development of gross profit
A SEGMENTAL ANALYSIS MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 19 Ongoing strategy of diversification: EMEA: Geographic development of gross profit France Italy Holland Belgium, South Africa, UAE, Spain Switzerland Sweden, Poland, Portugal, Russia, Ireland, Luxembourg Germany • France 2007 growth in
Slide 20: United Kingdom
A SEGMENTAL ANALYSIS MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 20 United Kingdom 2006 2007 Gross Profit: £155.8m Gross Profit: £186.0m Operating Profit: £44.3m +34.2% Operating Profit: £59.4m Conversion Rate: 28.4% Conversion Rate: 31.9% Headcount: 1,537 +17.0% Headcount: 1,799 7% Gross profit 5% 16
Slide 21: United Kingdom: discipline development of gross profit
A SEGMENTAL ANALYSIS MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 21 Ongoing strategy of diversification: United Kingdom: discipline development of gross profit Finance & Accounting Legal, HR, Technology, Secretarial and Other Marketing, Sales & Retail ngineering, Property & Construction, E Procurement
Slide 22: Asia Pacific
A SEGMENTAL ANALYSIS MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 22 Asia Pacific 2006 2007 Gross Profit: £45.0m Gross Profit: £57.2m Operating Profit: £17.1m +22.1% Operating Profit: £20.8m Conversion Rate: 37.9% Conversion Rate: 36.4% Headcount: 441 +43.3% Headcount: 632 Gross profit 42% 43% 27.3% Gr
Slide 23: Asia Pacific: Geographic development of gross profit
A SEGMENTAL ANALYSIS MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 23 Ongoing strategy of diversification: Asia Pacific: Geographic development of gross profit Australia Asia • Reliance on Australia becoming less 60m £57.2m in the region: 2000: 72%, 2007: 57% • Newest disciplines in Australia (HR/ 50m L
Slide 24: The Americas
A SEGMENTAL ANALYSIS MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 24 The Americas 2006 2007 Gross Profit: £21.5m Gross Profit: £38.4m Operating Profit: £1.9m +231.3% Operating Profit: £6.2m Conversion Rate: 8.7% Conversion Rate: 16.1% Headcount: 342 +58.8% Headcount: 543 Gross profit 43% 40% 79.0% Grow
Slide 25: The Americas: Geographic development of gross profit
A SEGMENTAL ANALYSIS MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 25 Ongoing strategy of diversification: The Americas: Geographic development of gross profit North America Latin America • Americas headcount up 59% to 543 on the back of significant senior 40m £38.4m management investment (transfers fro
Slide 26: Group Strategy
MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 26 Group Strategy Michael Page International is a world leading recruitment consultancy 149 offices in 25 countries worldwide | www.michaelpage.co.uk
Slide 27: Group Strategy
GROUP STRATEGY MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 27 s Of m fi ce a Te s Culture Michael Page International s Co ine Strategy nt u rie i pl c s Dis To organically grow existing and new teams, offices, disciplines and countries with a consistent team and meritocratic culture Michael Page Inter
Slide 28: Clear on Brand
A GROUP STRATEGY MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 28 Clear on Brand Executive Search 25 Countries 91 Offices Qualified Professional 2,964 Fee Earners 8 Countries 79 Offices 873 Fee Earners Clerical Professional Generalist Staffing Michael Page International is a world leading recruitment co
Slide 29: Flexible with headcount
GROUP STRATEGY MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 29 • 865 teams worldwide, typically a Manager and 3 Consultants • Manager has full P&L responsibility for team • Significant share of profit each quarter allocated to team as bonus • Individual bonuses allocated subjectively, based on contribu
Slide 30: Long term on investment
A GROUP STRATEGY MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 30 Long term on investment 1996 2001 2006 Singapore Switzerland South Africa Japan Russia Ireland 2008 1976 1985 1993 1998 2002 U.A.E. Austria United Kingdom Australia Germany USA Belgium Mexico Turkey Sweden New Zealand 1997 2000 2005 2007
Slide 31: Consistent over time
GROUP STRATEGY MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 31 • No acquisitions, one IT platform, one culture, one remuneration strategy • Consistent recruitment, training, development to ensure consistent quality of fee earners Consistent over time • Consistent brand strategy • Organic growth, home g
Slide 32: Deep in experience
A GROUP STRATEGY MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 32 Deep in experience Senior Operational Management No. Tenure in MP Executive Directors Managing Directors Executive Directors 2 21 years Regional Managing Directors Directors Regional Managing 13 16 years Directors Managing Directors 28 11
Slide 33: 2008 Initiatives
MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 33 2008 Initiatives Michael Page International is a world leading recruitment consultancy 149 offices in 25 countries worldwide | www.michaelpage.co.uk
Slide 34: Globally
2008 INITIATIVES MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 34 • Continued roll-out and launch of new disciplines • Improve methods to meet client demand through global candidate supply • Continued investment and commitment to MP/PP websites, drive online ad sales Globally • Development of Global ‘Di
Slide 35: EMEA
2008 INITIATIVES MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 35 • Continue roll-out and launch of disciplines in newer countries • Expansion of office network in existing countries: – Germany: Stuttgart – France: Massy, Monaco – Sweden: Gothenburg – Switzerland: Basel EMEA – Spain: Seville • Increase
Slide 36: United Kingdom
2008 INITIATIVES MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 36 • Expansion of office network: – MP: Newcastle and Cardiff – PP: Canterbury, Wolverhampton • Continued roll-out of newer Michael Page disciplines • Continued roll-out of new Page Personnel disciplines: HR and Secretarial • Target competit
Slide 37: Asia Pacific
2008 INITIATIVES MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 37 • Continued roll-out of existing and new disciplines • Expansion of office network in China to five offices: – Beijing (team currently based in Asia Pacific Shanghai) – Shenzhen (team currently based in Sha Tin) • Increase headcount to ex
Slide 38: The Americas
2008 INITIATIVES MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 38 • Roll-out and launch of new disciplines (HR/ Sales & Marketing, Procurement & Supply Chain, Legal) throughout US network • Grow existing (negligible) US market share • Roll-out Page Personnel in Brazil (launched 2007) The Americas • Grow
Slide 39: Current Trading
2008 INITIATIVES MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 39 Current Trading • Continue to make strategic decisions for long-term good of the Group “2007 was an outstanding year for • Flexible approach to deployment of Michael Page, with record results in each senior personnel quarter as we continu
Slide 40: Appendix
MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 40 Appendix Michael Page International is a world leading recruitment consultancy 149 offices in 25 countries worldwide | www.michaelpage.co.uk
Slide 41: Group quarterly gross profit trend: Q1 2001 to Q4 2007
A APPENDIX MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 41 Group quarterly gross profit trend: Q1 2001 to Q4 2007 140 128.2 123.4 121.0 120 105.5 100 93.1 89.1 Gross Profit (£m) 87.4 80 79.2 69.6 68.3 69.2 70.2 66.9 60 58.7 59.9 56.7 52.3 53.5 49.9 51.4 49.5 48.1 47.8 45.0 45.0 45.7 43.9 42.8 40 20 Q1
Slide 42: Scope for Growth: Headcount
A APPENDIX MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 42 Scope for Growth: Headcount Fee Earners Non-Fee Earners Ratio Fee earners: Non Fee earners 1999 59:41 4000 2000 58:42 2001 57:43 3500 2002 58:42 2003 60:40 2004 64:36 3000 2005 71:29 2006 74:26 2500 2007 76:24 2000 1500 1000 500 H1 H2 H1 H2 H1
Slide 43: Scope for Growth: Conversion
A APPENDIX MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 43 Scope for Growth: Conversion 40% Operating Profit (excl all share based charges) Operating Profit (incl share based charges) 30% 20% Conversion rates before share based charges 2006 2007 EMEA 28.2 33.1 10% UK 32.2 33.9 Asia Pac 39.8 37.8 Americ
Slide 44: Scope for Growth: Number of UK offices per discipline
A APPENDIX MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 44 Scope for Growth: Number of UK offices per discipline 40 Added during 2007 Added during 2006 35 Offices at 2005 30 Number of offices 25 • Very competitive market but very fragmented (circa ten thousand agencies) • Very few strong national brand
Slide 45: Scope for Growth: Number of offices in each country
A APPENDIX MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 45 Scope for Growth: Number of offices in each country 50 Added during 2007 Added during 2006 40 Offices at 2005 Number of offices • Ratio of offices to GDP when compared to what we have in UK presents huge scope 30 • Many markets under developed
Slide 46: Scope for Growth: Number of disciplines in each country
A APPENDIX MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 46 Scope for Growth: Number of disciplines in each country 15 Added during 2007 • Offices already established Added during 2006 • Brand already known Disciplines at 2005 12 • MP management already in situ Number of disciplines • Clients have simil
Slide 47: EMEA Preliminary Results 2007
A APPENDIX MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 47 EMEA Preliminary Results 2007 2007 2006 £m £m Change Revenue 321.1 223.0 44.0% Gross profit 196.4 126.6 55.2% Operating profit before share based charges 65.0 35.7 82.1% Share based charges (2.0) (1.5) Operating profit 63.0 34.2 84.4% Conversio
Slide 48: United Kingdom Preliminary Results 2007
A APPENDIX MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 48 United Kingdom Preliminary Results 2007 2007 2006 £m £m Change Revenue 360.4 312.4 15.4% Gross profit 186.0 155.8 19.4% Operating profit before share based charges 63.1 50.1 26.0% Share based charges (3.7) (5.8) Operating profit 59.4 44.3 34.2%
Slide 49: Asia Pacific Preliminary Results 2007
A APPENDIX MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 49 Asia Pacific Preliminary Results 2007 2007 2006 £m £m Change Revenue 97.8 83.6 17.0% Gross profit 57.2 45.0 27.3% Operating profit before share based charges 21.6 17.9 21.1% Share based charges (0.8) (0.8) Operating profit 20.8 17.1 22.1% Conve
Slide 50: The Americas Preliminary Results 2007
A APPENDIX MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 50 The Americas Preliminary Results 2007 2007 2006 £m £m Change Revenue 52.4 30.1 74.1% Gross profit 38.4 21.5 79.0% Operating profit before share based charges 6.9 2.2 217.8% Share based charges (0.7) (0.3) Operating profit 6.2 1.9 231.3% Convers
Slide 51: Share based charge
A APPENDIX MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 51 Share based charge 2007 2006 £m £m Share option charges 2.4 4.6 LTIP* and Deferred Bonus Plan* charges 4.8 3.7 Total share based charges 7.2 8.3 *Approved by shareholders in December 2003 Michael Page International is a world leading recruitmen
Slide 52: Share Based Charges
APPENDIX MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 52 Share options charge £2.4m (2006: £4.6m) • 2007 charge lower due largely to decreased social charges as a consequence of lower share price. 288.0p at 31 December 2007 (31 December 2006: 452.25p) LTIP* and Deferred Bonus Plan* charge £4.8m Share B
Slide 53: Share options
A APPENDIX MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 5 Share options Summary of Exercised and Outstandings Earliest exercise dates for non-vested share options Michael Page International is a world leading recruitment consultancy 149 offices in 25 countries worldwide | www.michaelpage.co.uk
Slide 54: Overview
MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 54 Overview Michael Page International is a world leading recruitment consultancy 149 offices in 25 countries worldwide | www.michaelpage.co.uk
Slide 55: Michael Page International Overview
Michael Page International Overview MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 55 • Specialist recruitment company focused on placing ‘white-collar’ professionals into permanent, contract and temporary positions: - Gross profit ratio: 78:22 Perm/Temp • Specialisms: Finance & Accounting, Banking, Lega
Slide 56: Power of the Brand
Michael Page International Overview MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 56 The brand drives organic growth • Attracts the best clients, candidates and employees • Facilitates organic expansion in existing markets and entry into new markets Power of the Brand • Leading advertiser in the Financi
Slide 57: Power of the Brand - Awards and achievements
MICHAEL PAGE INTERNATIONAL OVERVIEw MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 57 • Superbrands - Voted one of Britain’s strongest B2B brands for the last 7 consecutive years in the UK and the last 3 years in France • Listed as one of The Sunday Times 100 Best Companies to Work For since 2005 • Voted
Slide 58: Power of the Brand Online
Michael Page International Overview MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 58 Power of the Brand Online Globally per month: • 13 million Page Views • 1.6 million Visitors • 300,000 Job Apps/General CV Submissions Michael Page International is a world leading recruitment consultancy 149 offices in
Slide 59: MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 59
MICHAEL PAGE INTERNATIONAL RESULTS 2007 | 59 Michael Page International is a world leading recruitment consultancy 149 offices in 25 countries worldwide | www.michaelpage.co.uk
Michael Page International — FY2007 Earnings Presentation on 6ix