PageGroup PLC · LSE:PAGE
PageGroup — Michael Page International — H1 2010 Earnings Presentation
40 slides from PageGroup's earnings presentation, August 2010
Slide 1: Half Year Results 2010
Half Year Results 2010 | August 2010
Slide 2: Positioned for growth
Michael Page International Half Year Results 2010 | 2 Positioned for growth Gross Profit GERMANY Growth Rates in Reported Currency H1 2010 vs H1 2009 Headcount THE NETHERLANDS >40% 1,060 0% to 40% 2,540 IRELAND <0% 260 SWEDEN BELGIUM POLAND RUSSIA UNITED KINGDOM LUXEMBOURG SWITZERLAND FRANCE CANADA
Slide 3: Financial Results
Michael Page International Financial Results
Slide 4: Income statement
Michael Page International Half Year Results 2010 | 4 Income statement H1 H1 Constant 2010 2009 Currency £m £m Change Change Revenue 393.5 364.7 +7.9% +6.3% Gross profit 209.6 178.8 +17.2% +15.1% Operating profit before non-recurring items 32.5 5.6 +478.8% +449.5% Non-recurring items 17.1 26.6 Opera
Slide 5: Perm/temp gross profit and gross margins
Michael Page International Half Year Results 2010 | 5 Perm/temp gross profit and gross margins H1 H1 Growth Rates 2010 2009 Constant Gross profit £m £m Reported currency Permanent 163.0 124.4 +31.1% +28.3% Temporary 46.5 54.4 -14.5% -15.3% Ratio (Perm:Temp) 78:22 70:30 Permanent 96.4% 95.5% Temporar
Slide 6: Cash flow
Michael Page International Half Year Results 2010 | 6 Cash flow H1 2010 H1 2009 £m £m Operating profit before non-recurring items 32.5 5.6 Non-recurring items 17.1 26.6 Operating profit after non-recurring items 49.6 32.2 Depreciation and share scheme charges 10.5 9.8 (Increase)/decrease in underlyi
Slide 7: Working capital
Michael Page International Half Year Results 2010 | 7 Working capital Underlying HMRC H1 2010 H1 2010 H1 2010 H1 2009 £m £m £m £m (Increase)/decrease in receivables (32.2) 9.0 (23.2) 51.1 Increase/(decrease) in payables 16.3 (50.0) (33.7) (37.9) (Increase)/decrease in working capital (15.9) (41.0) (
Slide 8: Balance sheet
Michael Page International Half Year Results 2010 | 8 Balance sheet 30 June 31 Dec 2010 2009 £m £m Intangible assets – Goodwill 1.5 1.5 - Computer software 21.1 18.5 Tangible assets 27.8 31.4 50.4 51.4 Trade and other receivables 155.0 135.4 Trade and other payables (108.6) (145.6) 46.4 (10.2) Curre
Slide 9: Dividends, share repurchases and number of shares
Michael Page International Half Year Results 2010 | 9 Dividends, share repurchases and number of shares H1 2010 H1 2009 (pence H1 2010 (pence H1 2009 Dividend per share) £m per share) £m Interim 2.88* 8.9* 2.88 9.3 *Proposed and payable on 8 October 2010 H1 2010 H1 2010 H1 2009 H1 2009 Share repurch
Slide 10: Cash returned to shareholders
Michael Page International Half Year Results 2010 | 10 Cash returned to shareholders £m 150 Share repurchases Net cash/debt at year end p Dividends (paid) Average price paid for shares purchased Dividends (2010 proposed) 120 In H1 2010, 15m shares repurchased into EBT at a cost of £62m 90 496p 412p
Slide 11: Segmental Analysis
Michael Page International Segmental Analysis
Slide 12: Geographical analysis of gross profit
Michael Page International Half Year Results 2010 | 12 Geographical analysis of gross profit Diverse by geography H1 2010 H1 2009 Gross profit £209.6m +17.2% £178.8m 200 Operating profit Gross Profit (£m) as reported £32.5m +478.8% £5.6m before NRI 152.4 141.3 140.3 Headcount 3,860 +4.3% 3,702 150 1
Slide 13: Positioned for growth: 25% of Group growing at 60%+
Michael Page International Half Year Results 2010 | 13 Positioned for growth: 25% of Group growing at 60%+ (reported rates) EMEA ‘Other’ 10% of Group: Asia 7% of Group: Latin America 8% of Group: 2010 GP growth +38% 2010 GP growth +76% 2010 GP growth +75% KEY: China Percentage of Hong Kong Argentina
Slide 14: Discipline analysis of gross profit
Michael Page International Half Year Results 2010 | 14 Discipline analysis of gross profit Diverse by professional discipline H1 2010 H1 2009 Gross profit £209.6m +17.2% £178.8m 200 Operating profit £32.5m +478.8% £5.6m Gross Profit (£m) as reported before NRI 152.4 141.3 140.3 Headcount 3,860 +4.3%
Slide 15: Foundations for the future
Michael Page International Half Year Results 2010 | 15 Foundations for the future Protecting and expanding platform 28 28 16 4 216 222 1 16 years 12 years 77 6 years 1 14 Cumulative profit before tax Cumulative profit before tax Cumulative profit before tax 1 5 £25m 17 £391m £511m 92 356 165 175 2,2
Slide 16: EMEA (44% of Group)
Michael Page International Half Year Results 2010 | 16 EMEA (44% of Group) H1 2010 H1 2009 Gross profit £91.3m +6% £85.8m 80 70.2 Operating profit £9.6m – £(1.5)m Gross Profit (£m) as reported 65.2 63.7 Headcount 1,645 -2% 1,680 59.7 57.6 60 48.4 • M arket conditions gradually improved 48.5 47.6 46.
Slide 17: United Kingdom (29% of Group)
Michael Page International Half Year Results 2010 | 17 United Kingdom (29% of Group) H1 2010 H1 2009 Gross profit £61.2m +7% £57.0m 49.0 48.5 47.9 47.1 50 45.0 45.0 44.1 Operating profit £9.6m +58% £6.1m Headcount 1,218 -0% 1,220 40 36.1 32.3 Gross Profit (£m) • Market conditions gradually recoverin
Slide 18: Asia Pacific (15% of Group)
Michael Page International Half Year Results 2010 | 18 Asia Pacific (15% of Group) H1 2010 H1 2009 19.6 Gross profit £31.2m +62% £19.2m 20 18.4 18.0 Operating profit £9.5m +367% £2.0m Gross Profit (£m) as reported 16.4 15.4 14.8 Headcount 501 +18% 426 14.7 15 13.2 12.3 12.2 12.4 • 5 consecutive quar
Slide 19: Development of Hong Kong & China
Michael Page International Half Year Results 2010 | 19 Development of Hong Kong & China Strength, depth and consistency in high potential markets 5 5 2 1 9 years 6 years 1 7 Cumulative Gross Profit £28.0m 9 Cumulative Gross Profit £64.4m 14 15 34 Offices No. of Country Disciplines 89 116 Headcount 1
Slide 20: The Americas (12% of Group)
Michael Page International Half Year Results 2010 | 20 The Americas (12% of Group) H1 2010 H1 2009 14.7 Gross profit £25.9m +54% £16.8m 14.3 14.1 15 Operating profit £3.8m – £(1.0)m Gross Profit (£m) as reported 11.6 Headcount 496 +32% 376 11.2 12 10.7 10.6 10.5 9.9 9.6 • L atin America now nearly t
Slide 21: Organic growth: Latin America
Michael Page International Half Year Results 2010 | 21 Organic growth: Latin America Strength, depth and consistency in high potential markets 3 3 1 8 8 1 1 4 years Cumulative Gross Profit 2 6 years Cumulative Gross Profit 1 5 £5.1m 4 £81.3m 43 36 38 Countries Offices No. of Country Disciplines 225
Slide 22: Group quarterly gross profit trend: 2001 to H1 2010
Michael Page International Half Year Results 2010 | 22 Group quarterly gross profit trend: 2001 to H1 2010 152.4 150 141.3 140.3 128.1 123.4 121.0 118.7 “Profitable every quarter” 111.7 105.5 Gross Profit (£m) as reported 97.9 95.0 100 93.1 90.6 89.1 87.4 83.8 82.3 79.2 70.2 69.2 69.6 68.3 66.9 59.9
Slide 23: Variance in quarterly gross profit and headcount 2008-2010
Michael Page International Half Year Results 2010 | 23 Variance in quarterly gross profit and headcount 2008-2010 15 14.0% 600 9.5% 8.6% 10 7.4% 400 10.1% 7.9% 5 £12m £12m £14m 5.5% 200 374 2.0% £8m £7m 3.1% Gross Profit (£m) as reported 201 111 0.1% 110 0 5 0 -86 -£2m Headcount -158 -1.8% -1.6% -5
Slide 24: Summary and outlook
Michael Page International Half Year Results 2010 | 24 Summary and outlook • Economic downturn was deep, tough and global • Reaction was swift, precise and calculated • Maintained long-term perspective • Track record of strong recovery from previous downturns • Opportunities for growth are numerous
Slide 25: Strategy
Michael Page International Strategy Consistent over time
Slide 26: Michael Page International strategy
Michael Page International Half Year Results 2010 | 26 Michael Page International strategy To increase the diversification s Of m fi of Michael Page International by ce a Te s organically growing existing and new teams, offices, disciplines and Culture s countries with a consistent team and Co ine m
Slide 27: Clear on brand
Michael Page International Half Year Results 2010 | 27 Clear on brand At 30 June 2010 Executive Search 28 Countries 106 Offices Qualified Professional 2,024 Fee Earners 17 Countries 64 Offices 726 Fee Earners Clerical Professional Generalist Staffing Specialists in Global Recruitment www.michaelpage
Slide 28: Consistent over time
Michael Page International Half Year Results 2010 | 28 Consistent over time • No acquisitions, one IT platform, one culture, one remuneration strategy • Consistent recruitment, training, development to ensure consistent quality of fee earners • Consistent brand strategy • Organic growth, home-grown
Slide 29: Growing organically
Michael Page International Half Year Results 2010 | 29 Growing organically DepTH of experience at 30 june 2010 Senior Operational Management No. Tenure in MP 4 Executive Board 4 23 years Executive Board Directors Regional Managing Directors 11 16 years Managing Directors 32 13 years 11 Directors 128
Slide 30: Organic global expansion
Michael Page International Half Year Results 2010 | 30 Organic global expansion Strength, depth and consistency by growing organically Andy Bentote London - Shanghai Richard Vickers Leeds - London - New York - Leeds Scott Mewing Sydney - London - Sydney - Singapore - Alexis de Bretteville Sydney - T
Slide 31: Long-term on investment
Michael Page International Half Year Results 2010 | 31 Long-term on investment 1996 2001 2006 Singapore Switzerland South Africa Japan Russia Ireland 2008 1976 1985 1993 1998 2002 UAE Austria United Kingdom Australia Germany USA Belgium Mexico Turkey Sweden New Zealand 6000 1997 2000 2005 2007 1987
Slide 32: Business Model – Flexible with Headcount
Michael Page International Half Year Results 2010 | 32 Team Business Model – Flexible with Headcount • c700 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
Slide 33: Managing costs
Michael Page International Half Year Results 2010 | 33 Team Managing costs IT (c10%) MISCELLANEOUS (c5%) • Data centre consolidation • Travel - reduces support staff • Staff welfare - greater resilience and disaster recovery Staff Costs (c75%) • Headcount – reacting to market conditions • Reductions
Slide 34: Fee earner/support staff headcount trend
Michael Page International Half Year Results 2010 | 34 Fee earner/support staff headcount trend Ratio Fee Earners Fee Earners : Support Staff 1999 59:41 Support Staff 5000 2000 58:42 2001 57:43 2002 58:42 2003 60:40 2004 64:36 4000 2005 71:29 2006 74:26 2007 76:24 2008 74:26 2009 71:29 3000 H1 2010
Slide 35: Conversion rates through cycles
Michael Page International Half Year Results 2010 | 35 Conversion rates through cycles 40% Conversion Rate (excl all share based charges) Conversion Rate (incl all share based charges) 30% Operating Profit/Gross Profit 20% Conversion rates H1 2010 H1 2009 EMEA 10.5 -1.8 UK 15.7 10.6 10% Asia Pacific
Slide 36: Development of a global platform
Michael Page International Half Year Results 2010 | 36 Development of a global platform Capacity for growth No. No. ‘000 £m 50 250 5 150 40 200 4 120 30 150 3 90 Full Year consensus at 12 August 2010 £64m 20 100 2 60 Half Year 10 50 1 30 0 0 0 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Slide 37: Number of shares and options outstanding
Michael Page International Half Year Results 2010 | 37 Number of shares and options outstanding 175p 410 161p Number of Shares and Options Outstanding (millions) 177p Options outstanding 161p Shares outstanding p Weighted average option price 390 Options granted over 11.5m shares in 2010 163p 370 18
Slide 38: Operating profit and share price development
Michael Page International Half Year Results 2010 | 38 Operating profit and share price development Track record of recovery 595p 600 553p 180 500 150 Operating Profit (£m) Share Price (pence) 400 120 377p 300 90 200 60 79p 166p 100 30 26p 0 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2
Slide 39: Underlying trends driving the recruitment market
Michael Page International Half Year Results 2010 | 39 Underlying trends driving the recruitment market • Increasing compliance • Increasing candidate demands • Increasing candidate shortages • Increasing mobility • Increasing sophistication • Increasing complexity to access candidates Specialists i
Slide 40: INTERNATIONAL
Michael Page INTERNATIONAL
Michael Page International — H1 2010 Earnings Presentation on 6ix