PageGroup PLC · LSE:PAGE
PageGroup — Q3 2017 Earnings Presentation
39 slides from PageGroup's earnings presentation, October 2017
Slide 1: Q3 2017 Trading Update
Q3 2017 Trading Update PageGroup MAKE IT FUN
Slide 2: Agenda
Agenda Financial Review Operational Support Strategy Regional Review Digital and Innovation Summary and Outlook
Slide 3: Financial Review
Financial Review
Slide 4: Q3 Trading Performance – Year-on-Year Gross Profit
Q3 Trading Performance – Year-on-Year Gross Profit Reported (£m) Constant 2017 2016 % % Q3 2017 vs. Q3 2016 177.3 158.6 +11.8% +8.8% • In reported rates Q3 Gross Profit +11.8% a record third quarter for the Group at £177.3m • In constant currencies Q3 Gross Profit +8.8% - Michael Page +7.7% - Page P
Slide 5: Foreign Exchange – 2017 Benefit
Foreign Exchange – 2017 Benefit £m Reported Estimated Q1 Q2 Q3 YTD Q4 FY Gross Profit +15 +13 +5 +33 -3 +30 Operating Profit +3 +3 +1 +7 -1 +6 • YTD benefit of c. £33m of Gross Profit and c. £7m of Operating Profit • Using September rates, foreign exchange would have a negative impact on our Q4 repo
Slide 6: Permanent vs Temporary – Year-on-Year Gross Profit
Permanent vs Temporary – Year-on-Year Gross Profit Reported (£m) Constant Q3 2017 2016 % % Permanent 133.4 119.3 +11.8% +9.1% Temporary 43.9 39.3 +11.9% +7.8% Ratio (Perm : Temp) 75:25 75:25 • Perm : Temp ratio 75:25 (Michael Page 84:16; Page Personnel 55:45) • Performance in permanent recruitment s
Slide 7: Discipline Overview – Year-on-Year Gross Profit
Discipline Overview – Year-on-Year Gross Profit Reported (£m) Constant % of Q3 2017 2016 % % Group Accounting and Financial 37% 65.3 60.7 +7.5% +4.7% Services Legal, Technology, HR, Secretarial 23% 40.6 35.3 +14.9% +12.3% Healthcare Engineering, Property & Construction, Procurement & 22% 39.6 32.6 +
Slide 8: Headcount Investment
Headcount Investment Q3 2017 Q2 2017 Movement % Fee earners 5,277 4,987 290 +5.8% Support staff 1,473 1,461 12 +0.8% Total headcount 6,750 6,448 302 +4.7% Ratio 78:22 77:23 • Fee earner headcount investment in our Large, High Potential and strong growth markets • Record ratio 78:22 of fee earners to
Slide 9: Headcount and Reported Gross Profit
Headcount and Reported Gross Profit Q3 total headcount increased 4.7% vs. Q2 2017 to 6,750 (Q2 2017: 6,448) 9
Slide 10: Operational Support Strategy
Operational Support Strategy
Slide 11: Operational Support Strategy - Principles
Operational Support Strategy - Principles Key Principles Summary Finance Bus. Tech Marketing HR Global processes: Standardise and simplify as far as possible Flexible to demand: Scalable to react, both to peaks and troughs Geographically agnostic: To optimise the cost of standardised services Commer
Slide 12: European Shared Service Centre: Implementation Costs
European Shared Service Centre 4.0 Non Operational Cost per F/E £k Implementation Costs £m 44 3.0 40 2.0 p.a. 36 1.0 0.0 32 2014 2015 2016 2017 Implementation Costs £m Non-Operational Cost per F/E £k p.a. • Marketing, Business Technology and Finance now relocated to the SSC • £6m SSC benefit in 2017
Slide 13: Global Finance System (GFS)
Global Finance System (GFS) Headcount and Tech Savings £m 3 3 Roll-out and Running Costs £m 2 2 1 1 0 0 2017 2018 2019 Roll-out and Running Costs £m Headcount and Tech Savings £m • Global Finance System based on NetSuite Cloud ERP • Live in August in UK SSC covering 25% of Group’s fee earners • Roll
Slide 14: Business Technology: Global Operating Model
Business Technology: Global Operating Model • Transition costs relate to organisation change from regional to global • Cloud costs relate to transition from our data centres to Azure Cloud 14
Slide 15: Operational Support Costs
Operational Support Costs £m 2014 2015 2016 2017 2018 SSC Costs -0.3 -2 -4 - - IT Target Operating Model - - - -2 -3 Applications and Infrastructure - - - -2 -2 transition Global Finance System - - - -2 -1 -0.3 -2 -4 -6 -6 • SSC transition costs finished in 2016 • IT Target Operating Model transitio
Slide 16: Diversity, Inclusion and Equality
Diversity, Inclusion and Equality 16
Slide 17: Regional Review
Regional Review
Slide 18: Regional Overview – Year-on-Year Gross Profit
Regional Overview – Year-on-Year Gross Profit Reported (£m) Constant % of Q3 2017 2016 % % Group EMEA 45% 79.3 66.8 +18.7% +12.6% Asia Pacific 21% 37.0 32.3 +14.6% +13.9% UK 19% 34.9 37.8 -7.6% -7.6% Americas 15% 26.1 21.7 +20.1% +18.4% Group Total 100% 177.3 158.6 +11.8% +8.8% • Record quarters in
Slide 19: EMEA – Year-on-Year Gross Profit
EMEA (45% of the Group) – Year-on-Year Gross Profit Reported (£m) Constant 2017 2016 % % Q3 2017 vs. Q3 2016 79.3 66.8 +18.7% +12.6% Headcount at 30 September 2017: 2,854 (30 June 2017: 2,718) • Michael Page (55% of EMEA) +11%, Page Personnel (45% of EMEA) +14% • France (15% of Group) +21% - Page Pe
Slide 20: Asia Pacific – Year-on-Year Gross Profit
Asia Pacific (21% of the Group) – Year-on-Year Gross Profit Reported (£m) Constant 2017 2016 % % Q3 2017 vs. Q3 2016 37.0 32.3 +14.6% +13.9% Headcount at 30 September 2017: 1,438 (30 June 2017: 1,298) • Asia (15% of Group and 73% of Asia Pacific) +22% • Greater China (9% of Group and 61% of Asia) +2
Slide 21: United Kingdom – Year-on-Year Gross Profit
United Kingdom (19% of the Group) – Year-on-Year Gross Profit Reported (£m) 2017 2016 % Q3 2017 vs. Q3 2016 34.9 37.8 -7.6% Headcount at 30 September 2017: 1,407 (30 June 2017: 1,424) • Michael Page (78% of the UK) -8% • Page Personnel (22% of the UK) -5% • Temporary recruitment (-2%) more robust th
Slide 22: Americas – Year-on-Year Gross Profit
Americas (15% of the Group) – Year-on-Year Gross Profit Reported (£m) Constant 2017 2016 % % Q3 2017 vs. Q3 2016 26.1 21.7 +20.1% +18.4% Headcount at 30 September 2017: 1,051 (30 June 2017: 1,008) • North America (8% of the Group and 57% of Americas) +27% • US +29%, a record quarter • Strong growth
Slide 23: Large, High Potential Markets
Large, High Potential Markets Reported (£m) Constant 2017 2016 % % Q3 2017 vs. Q3 2016 59.1 49.3 +19.6% +17.5% Headcount at 30 September 2017: 2,204 (30 June 2017: 2,052) • Q3 Gross Profit +17.5% at £59.1m, a new record for Large, High Potential markets CATEGORISATION • Record quarter for all our La
Slide 24: Digital and Innovation
Digital and Innovation
Slide 25: Our Digital Platform
Our Digital Platform • Single global platform across 55 sites: OUR WEBSITES • over 175 enhancements YTD Globally deployed to • World’s first responsive site in recruitment: ensure effectiveness • now 33% mobile traffic • Efficient: CONSISTENT • Traffic + 30% YoY CANDIDATE CUSTOMER • 14m applications
Slide 26: Our Digital Platform
Our Digital Platform • +350 media partners worldwide: measured by RAM • Changing pattern of media investment: partnering with aggregators & job boards: Indeed, Seek… OUR WEBSITES • Live on Google for Jobs Globally deployed to ensure effectiveness • Global Strategic Partner: LinkedIn • Regional socia
Slide 27: Our Digital Platform
Our Digital Platform • Deployed Salesforce Marketing Cloud globally • Structured lifecycle contact & campaigns OUR WEBSITES • Globally recognised content programme: Globally deployed to • Targeted & relevant content published 40k times ensure effectiveness • 63m+ views of PageGroup content CONSISTEN
Slide 28: Our Digital Platform
Our Digital Platform OUR WEBSITES Globally deployed to ensure effectiveness CONSISTENT CANDIDATE CUSTOMER ACQUISITION CONTACT Strategic partnerships optimised through close Building customer measurement relationships of trust and credibility 28
Slide 29: Our Innovation platform
Our Innovation platform • Innovation infrastructure in place • Executive Board group governance on investment IMPROVING THE CUSTOMER • Regional Innovation Groups embedded globally EXPERIENCE Giving people a premium • 387 ideas submitted service that reflects our market positioning • 134 evaluated •
Slide 30: Innovation highlight: Digital Learning
Innovation highlight: Digital Learning DELIVERING EFFICIENCY • Initially launched in the UK in February • Now rolled out in countries in Europe, LATAM and APAC • Strong levels of participation across countries that have launched • First blended learning programme developed and completed in the UK •
Slide 31: Innovation highlight: Revenue Attribution Model (RAM)
Innovation highlight: Revenue Attribution Model (RAM) THE SCIENCE DRIVING OUR MEDIA OPTIMISATION ENSURING EFFECTIVENESS • Built using Google Analytics & AI: Google Big Query • From “Last Click” attribution model to a Data Driven Attribution model: attributes revenue across every step in the applicat
Slide 32: Our Innovation platform
Our Innovation platform What’s next? IMPROVING THE • Candidate search & match: CUSTOMER • Semantic Search EXPERIENCE Giving people a premium service that reflects our • Machine learning & AI market positioning • Customer personalisation • Data Management Platform ENSURING DELIVERING EFFECTIVENESS EF
Slide 33: Summary and Outlook
Summary and Outlook
Slide 34: Summary
Summary • Q3 Gross Profit: +8.8% in constant currency and +11.8% in reported rates Summary • Impact of FX Q3 reported Gross Profit increased by 3.0 percentage points or c. £5m • Majority of markets performing well Asia, Continental Europe, the US • Some markets experiencing challenging condition
Slide 35: Outlook
Outlook • Large, High Potential Markets US continues to diversify – offices and disciplines Summary Investment in Latin America, particularly in Mexico and Argentina Outlook Investment in South East Asia, particularly in Indonesia, Malaysia and Thailand Germany investing in Page Interim, Pag
Slide 36: Diversity, Inclusivity and Equality – Strategy and Results
Diversity, Inclusivity and Equality – Strategy and Results
Slide 37: Year-on-Year Gross Profit Growth Rates
Year-on-Year Gross Profit Growth Rates 2015 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 EMEA +12.1% +11.4% +13.0% +10.6% +10.3% +13.6% +10.4% +12.4% +14.8% +13.2% +12.6% Asia Pacific +10.8% +5.6% +5.3% -1.3% -2.0% -3.3% -4.7% +1.7% +3.9% +6.8% +13.9% -Asia +14.1% +8.8% +9.2% +2.4% -1.5% -6.9% -7.9% -
Slide 38: Cautionary Statement
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 to,
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