Empresaria Group Plc · LSE:EMR
Empresaria — H1 2020 Earnings Presentation
29 slides from Empresaria's earnings presentation, August 2020
Slide 1: Investor Presentation Interim 2020 results
Investor Presentation Interim 2020 results August 2020 Rhona Driggs Tim Anderson Chief Executive Officer Chief Financial Officer 1
Slide 2: Contents
Contents Overview 3 Financial review 9 Sector analysis 13 Outlook 20 Appendices 22 2
Slide 3: Overview
Overview 3
Slide 4: A global diversified staffing Group
A global diversified staffing Group 6 sectors operating in 20 countries and placing in many more Permanent (34%) Diversity of locations and services reduces impact from localised market issues Temporary and Contract (57%) 75% of net fee income from outside of UK Growing strength in Offshore
Slide 5: Highlights
Highlights Delivered year on year profit growth in each of the first three months of the year Profitability achieved in Q2 despite significant impact from COVID-19 Well positioned to take advantage when our markets recover 5
Slide 6: COVID-19
COVID-19 Depth and speed of impact on the global economy has been unprecedented – staffing at the forefront of the impact The safety of our employees, candidates and clients has been our priority throughout Despite the adverse impact on the Group’s net fee income there have been positives: G
Slide 7: Profitability and financial strength in face of COVID-19
Profitability and financial strength in face of COVID-19 Year on year profit growth in the first quarter pre-pandemic Benefit of operational initiatives put in place last year Profit growth in each month Profitable in second quarter Significant impact to net fee income – down 39% v 2019
Slide 8: Stronger Together - optimising for future growth
Stronger Together - optimising for future growth Investment in technology including Bullhorn as the Group’s preferred front end technology 3 additional brands went live on Bullhorn in July Technology roadmap in place - preferred partners identified Operating model evolution accelerated in ke
Slide 9: Financial review
Financial review 9
Slide 10: Summary income statement
Summary income statement % change £m 2020 2019 % change (constant currency) Net fee income 28.2 36.3 -22% -21% Administrative costs (25.2) (32.0) -21% Adjusted operating profit – Sectors 4.6 6.2 -26% Central costs (1.6) (1.9) +16% Adjusted operating profit 3.0 4.3 -30% -26% Adjusted profit before ta
Slide 11: Adjusted net debt
Adjusted net debt 30 June 31 Dec Net debt substantially reduced % var 2020 2019 reflecting working capital inflows in Q2 and demonstrating the Adjusted net debt £8.9m £19.1m -53% strength of the Group’s balance sheet in a downturn Headroom (exc invoice financing) £18.1m £11.5m +57% The Group has
Slide 12: Increased investment in ConSol Partners
Increased investment in ConSol Partners Investment in H1 increased ownership to 98.7% (from 82.5%). Consideration of £1.6m, including £0.9m paid in H1, £0.1m due in H2, and £0.6m deferred to 2021, along with an additional £0.1m payable in 2022 based on 2021 performance – the terms were substanti
Slide 13: Sector analysis
Sector analysis 13
Slide 14: Professional
Professional % change NFI split £m 2020 2019 % change (constant 2020 currency) 37% 36% Revenue 35.3 62.0 -43% -41% 2019 Net fee income 8.8 13.7 -36% -35% 64% 63% Adjusted operating profit 0.5 1.7 -71% -69% % of Group net fee income 31% 38% Perm Temp Sector experienced large impact from COVID-19, p
Slide 15: IT
IT % change NFI split £m 2020 2019 % change (constant 2020 currency) 55% Revenue 22.1 21.4 +3% +3% 2019 55% Net fee income 6.7 6.8 -1% -2% 45% 45% Adjusted operating profit 1.2 1.3 -8% -8% % of Group net fee income 24% 19% Perm Temp Sector has been resilient in face of COVID-19. US performed str
Slide 16: Healthcare
Healthcare % change NFI split £m 2020 2019 % change (constant 10% currency) 17% Revenue 5.9 5.1 +16% +18% 2019 Net fee income 1.2 1.4 -14% -14% 83% 2020 Adjusted operating profit 0.1 0.2 -50% -50% 90% % of Group net fee income 4% 4% Perm Temp Sector impacted by COVID-19 with patients unable or unw
Slide 17: Property, Construction & Engineering
Property, Construction & Engineering % change NFI split £m 2020 2019 % change (constant 23% currency) 34% Revenue 1.8 13.0 -86% -86% 2019 Net fee income 0.4 2.3 -83% -83% 66% 2020 Adjusted operating loss (0.1) (0.2) n/a n/a 77% % of Group net fee income 1% 6% Perm Temp Year on year fall in revenue
Slide 18: Commercial
Commercial % change NFI split £m 2020 2019 % change (constant 4% currency) 6% Revenue 65.5 68.4 -4% -1% 2019 Net fee income 8.0 9.1 -12% -10% 94% 2020 Adjusted operating profit 1.5 1.9 -21% -17% 96% % of Group net fee income 28% 25% Perm Temp Commercial sector performances have varied by industry
Slide 19: Offshore Recruitment Services
Offshore Recruitment Services % change NFI split £m 2020 2019 % change (constant 13% currency) 13% Revenue 5.8 5.8 - +2% 2019 Net fee income 3.4 3.2 +6% +8% 87% 87% 2020 Adjusted operating profit 1.4 1.3 +8% +11% % of Group net fee income 12% 9% Perm ORS The only sector to show year on year profit
Slide 20: Outlook
Outlook 20
Slide 21: Outlook
Outlook Cautious on the speed of recovery as the COVID-19 pandemic continues to impact the global economy. Some signs of economic activity increasing where cases are falling and restrictions lifting – too early to assess the quality and pace of any improvement or its impact on the staffing secto
Slide 22: Appendices
Appendices 22
Slide 23: Strategic objectives
Strategic objectives Build scale in key markets and sectors Materially increase and diversify profits • Focused on developing scale in key markets and • Focused on diversifying our profit base across our sectors to provide clients with services across sectors, business and growing our high potential
Slide 24: Our sectors and markets
Our sectors and markets Continental UK Asia Pacific Americas Europe Professional IT (Key sales market) Healthcare Property, Construction & Engineering Commercial Offshore Recruitment Services (Key sales market) (Key sales market) 24
Slide 25: Income statement
Income statement Six months ended 30 June 2020 % Change £m 2020 2019 % Change (constant currency) Revenue 136.1 175.5 -22% -20% Net fee Income 28.2 36.3 -22% -21% Administrative costs (25.2) (32.0) Adjusted operating profit* 3.0 4.3 -30% -26% Interest (0.6) (0.6) Adjusted profit before tax* 2.4 3.7
Slide 26: Balance Sheet
Balance Sheet As at 30 June 2020 £m 2020 2019 Property, plant and equipment and right-of use assets 10.9 16.0 Goodwill and other intangibles 47.2 54.0 Significant fall in trade receivables reflecting reduction in Trade and other receivables 44.6 58.5 trading Cash and cash equivalents 25.0 21.2 Defer
Slide 27: Cash flow statement
Cash flow statement Six months ended 30 June 2020 £m 2020 2019 (Loss)/profit for the period (1.4) 1.3 Depreciation, amortisation, share-based payments and impairment of goodwill and other intangible assets 7.5 4.8 Tax and interest 0.8 1.6 Working capital 10.4 (3.9) Cash generated from operations 17.
Slide 28: Shareholder information
Shareholder information Shares in issue – 49.0m ordinary shares Market capitalisation - £19.8m (10 August 2020) Outstanding options (after deducting shares held in EBT) 4.8m (9.8% of shares in issue) Significant shareholders set out below (updated August 2020) Number of Shareholder % held sh
Slide 29: Cautionary statement
Cautionary statement The information contained in this presentation is not audited, is for personal use and informational purposes only and is not intended for distribution to, or use by, any person or entity in any jurisdiction in any country where such distribution or use would be contrary to law