Slide 1: FY23 results presentation
FY23 results presentation Thursday 7 March 2024
Slide 2: Key messages
Key messages 1. 2023 performance was resilient against challenging backdrop, underpinned by international diversification 2. Strong business with a good track record of growth – confident in platform and key growth levers o Fee growth consistently ahead of average annual global GDP (2013-2022) o Inc
Slide 3: Asia-Pacific – consistent double-digit margins, exciting opportunities
Asia-Pacific – consistent double-digit margins, exciting opportunities 25% Robert Walters historical conversion rate FY13-FY23 • NFI down 9%* YoY, with resilient performance in North East 20% 15% Asia offset by Australia and Greater China 10% • Demographic forecasts estimate Japan faces a shortage o
Slide 4: Europe – resilient performance with good mix of income streams
Europe – resilient performance with good mix of income streams Robert Walters net fee income mix 2014 - 2023 50% • Belgium stand out performer (NFI +21%* YoY) 43% 40% • Nicely balanced fee income mix between Perm and 30% 33% Temp (Perm: 54%, Temp: 46%), with interim 20% notably strong 16% 10% • Larg
Slide 5: UK – new management to sharpen focus on performance and costs
UK – new management to sharpen focus on performance and costs Change in UK hiring levels Dec 2023 v. Dec 2019 30% Source: Linked In • London recruitment (down 29%) impacted by tech 15% and financial services sectors 0% • Regions (down 7%) more resilient, underpinned by -15% -30% accounting -45% • Ne
Slide 6: Rest of World – focused on driving penetration
Rest of World – focused on driving penetration • Good positions in attractive, emerging hiring markets • Efficient operating model in South Africa, servicing other African markets remotely from Number of US companies with physical facilities in foreign destination Dec 2023 Source: MSCI Johannesburg
Slide 7: Resource Solutions – work underway to drive better returns
Resource Solutions – work underway to drive better returns • Plays in sizeable global RPO & MSP market • Nice hedging characteristics in portfolio • Exciting product development opportunities – Workforce Consultancy (2023: 10x growth in fee 15% income) • Focused on curating the product offering and
Slide 8: Current trading and outlook
Current trading and outlook US job postings on ‘Indeed’ platform Dec 1st = 100, 2019 - 2024 Source: Indeed • Similarly to end of 2023, early 2024 trading continues to be muted, some isolated pockets of growth • Lead indicators not currently pointing to imminent UK job postings on ‘Indeed’ platform D
Slide 9: Group financial summary
Group financial summary • Decline in NFI second half-weighted (H2 NFI: -12%* % Chg. £m unless otherwise stated 2023 2022 % Chg. (cFX) YoY, H1: -5%* YoY) Net fee income 386.8 428.2 (10%) (8%) Operating costs (360.5) (370.0) (3%) (2%) • c.70% of operating costs driven by spend on people Operating prof
Slide 10: Fee income – Temp resilient, Perm more impacted
Fee income – Temp resilient, Perm more impacted Robert Walters net fee income (“NFI”) bridge (£m) 2023 At constant currency unless otherwise stated • £41m decline in reported terms includes £5m FX impact • More Perm-weighted Asia-Pacific driven by Australia and Greater China • More even mix of fees
Slide 11: Operating costs – c.£10m lower YoY, reflecting action on headcount
Operating costs – c.£10m lower YoY, reflecting action on headcount Robert Walters operating cost bridge (£m) 2023 • Operating costs up by 5% in H1, down by 10% in H2 • Period-end headcount down 9% YoY o H1 net attrition: 76, H2 net attrition: 300 • Lower variable remuneration driven by trading perfo
Slide 12: Cash generative model underpins balance sheet strength
Cash generative model underpins balance sheet strength Robert Walters cash flow bridge (£m) 2023 Free cash flow: £14.0m (2022:£2.3m) • Increased free cash flow • c.£26m delivered to shareholders during the year across ordinary dividend and share buybacks • Strong balance sheet aids management of cou
Slide 13: Capital allocation – clarity and consistency through the cycle
Capital allocation – clarity and consistency through the cycle • Investment to drive growth o Geographic penetration - e.g. new Italy business o New CRM • Look to maintain ordinary dividend in the range whereby 1.75-2.25x covered by earnings o Confident to be outside lower end of range if downturn i
Slide 14: Guidance
Guidance • International diversification enables agile response to continued uncertain macro conditions • Conversion rate improvement, with 2024 anticipated to be at least in-line with 2H23 (8.2%) • Effective tax rate expected to trend down slightly over the medium term • Working capital – any fee i
Slide 15: Sustainability at Robert Walters – driven by our purpose
Sustainability at Robert Walters – driven by our purpose Key sustainability targets and metrics Environment Social Governance 8% of exec annual bonus Net zero across Scope 1 Positively impact 400k opportunity linked to ESG and 2 emissions by 2040 lives by 2030 targets Raise £0.5m through 30% reducti
Slide 16: People – pursuing a balanced approach
People – pursuing a balanced approach Robert Walters – quarterly fee growth and headcount movement 2021 – 2023 NFI at 2023 FX rates 20% 400 300 • Response to late 2022 cooling in labour 15% 267 300 216 200 demand delayed on expectation of Mainland 10% 146 108 89 74 47 100 China bounce back 5% 9 0 •
Slide 17: People – pursuing a data-driven approach
People – pursuing a data-driven approach Period end headcount • Asia-Pacific: reduced headcount in Mainland Segment1 movement (2023 v. 2022) China, broadly held in Japan Asia-Pacific -5% • Europe: held in Belgium and grew in Germany, Europe -7% non-fee earner to fee earner ratios right-sized UK -19%
Slide 18: Technology – enabling our consultants to deliver a better experience for clients and candidates
Technology – enabling our consultants to deliver a better experience for clients and candidates o Comprehensive view of all interactions o Key application of AI: taking burden of o Supports much quicker completion of everyday admin tasks core CRM activities o Over 1,000 ‘AI trailblazers’ at Robert o
Slide 19: Current strategic priorities – focused on driving improvement in performance over the medium-term
Current strategic priorities – focused on driving improvement in performance over the medium-term • Brand o Opportunity to leverage further across recruitment, outsourcing and advisory • Seizing tailwind of ‘ever-changing world of work’ o Advantages specialist talent partners like Robert Walters • I
Slide 20: Conclusion
Conclusion • Differentiated by quality of our people and quality of service • Great platform in strength of brand and international diversification • Big enough to make an impact…nimble enough to move quickly 20