Slide 1: Investor Presentation – 2019 full year results
March 2020 Investor Presentation – 2019 full year results Rhona Driggs Chief Executive Officer Tim Anderson Chief Financial Officer
Slide 2: Contents
Global Focus, Local Presence 1 Contents • Appointed as Chief Executive Officer in June 2019 Overview 2 having previously served as Chief Operating Officer • Nearly 30 years' experience working in international Strategy & Delivery 5 staffing companies • Recognised for the past four consecutive years
Slide 3: Overview
Global Focus, Local Presence 2 Overview
Slide 4: Building a strong foundation for future growth
Global Focus, Local Presence 3 Building a strong foundation for future growth • Driving change across the Group • alignment of businesses around core sectors to better leverage synergies and cross- selling potential; • enhancing operating models to scale the businesses more effectively; and • drivin
Slide 5: Diversified business model
Global Focus, Local Presence 4 Diversified business model • 6 sectors with 2,000 employees operating in 20 countries • Diversity of locations and services reduces impact from localised market issues • 70% of net fee income from outside the UK • Growing strength in Offshore Recruitment Services incre
Slide 6: Overview of 2019
Global Focus, Local Presence 5 Overview of 2019 • Growth in net fee income • +3%, +2% in constant currency • 37% growth in Offshore Recruitment Services sector • Decline in profits reflecting a challenging economic environment • Most significant impact in the UK engineering business • Impact of Brex
Slide 7: Financial Review
Global Focus, Local Presence 6 Financial Review
Slide 8: Summary income statement
Global Focus, Local Presence 7 Summary income statement % change £m 2019 2018 % change constant currency Net fee income 74.5 72.3 +3% +2% Adj op profit - Sectors 14.6 16.0 -9% Central costs (4.2) (3.7) -14% Adjusted operating profit 10.4 12.3 -15% -16% Adjusted profit before tax 9.3 11.4 -18% -19% A
Slide 9: Adjusted operating profit against prior year
Global Focus, Local Presence 8 Adjusted operating profit against prior year 1. Impact of decline in UK engineering business 14 2. Reduction in profits in our professional services and new home sales businesses driven by Brexit 12 3. Impact on the downturn in the German automotive -1.4 sector -1.0 4.
Slide 10: Earnings
Global Focus, Local Presence 9 Earnings 2019 2018 % var Adjusted profit before tax £9.3m £11.4m -18% Adjusted, diluted earnings per share 8.5p 12.1p -30% • Adjusted PBT reflects the fall in operating profits Adjusted diluted EPS (p) and an increase of £0.2m to the interest charge - 14 £0.4m from ado
Slide 11: Adjusted net debt
Global Focus, Local Presence 10 Adjusted net debt Adjusted net debt (£m) 2015 2016 2017 2018 2019 0 £m 2019 2018 -5 Adjusted net debt 19.1 17.1 -10 Half year Full year Net finance costs 1.1 0.9 -15 -20 Debt to debtors ratio 42% 36% -25 Adjusted net debt excludes cash held in respect of pilot bonds (
Slide 12: Investment in ConSol
Global Focus, Local Presence 11 Investment in ConSol • £3.5m investment in July 2019 taking our ownership from 65% to 82.5% • Investment at same valuation as initial stake • Business is performing strongly in a high growth sector • Significant opportunity to invest in growing temp in the US and stre
Slide 13: Strategy & Delivery
Global Focus, Local Presence 12 Strategy & Delivery
Slide 14: Strategic objectives – focus on organic growth
Global Focus, Local Presence 13 Strategic objectives – focus on organic growth Build scale in key markets and sectors Materially increase and diversify profits • Focused on developing scale in key markets and sectors • Focused on diversifying our profit base across our to provide clients with servic
Slide 15: Stronger Together initiative
Global Focus, Local Presence 14 Stronger Together initiative • Alignment around core sectors • Sharing best practices and leveraging synergies • Increased support from central team • Helping align and share best in class practice - in particular across marketing, training and technology • Investment
Slide 16: A focused sector approach
Global Focus, Local Presence 15 A focused sector approach • Alignment of business into 6 core sectors – Professional, IT, Property, Construction & Engineering, Commercial and Offshore Recruitment Services • This allows us to: • Communicate more effectively with similar businesses • Improve collabora
Slide 17: Our sectors and brands
Global Focus, Local Presence 16 Our sectors and brands Professional (37%) Healthcare (4%) Property, Construction & Engineering (5%) IT (19%) Commercial (26%) ORS (9%) Percentages shown are each sectors contribution to group net fee income
Slide 18: Summary and Outlook
Global Focus, Local Presence 17 Summary and Outlook
Slide 19: Coronavirus
Global Focus, Local Presence 18 Coronavirus • No material impact at this stage, too early to predict how it will develop • The situation is very fluid and changes daily. Early indications of exposure include: • Aviation business – Significant slowdown in international travel. Loss of revenue could l
Slide 20: Building a strong platform for future growth
Global Focus, Local Presence 19 Building a strong platform for future growth Focused strategy targeting organic growth • Build scale in key markets and sectors • Materially increase and diversify profits • Invest in techology to drive revenue and productivity • Reduce net debt - investment activity
Slide 21: Q&A
Global Focus, Local Presence 20 Q&A
Slide 22: Appendices
Global Focus, Local Presence 21 Appendices
Slide 23: Professional
Global Focus, Local Presence 22 Professional % change £m 2019 2018 % change (constant currency) Revenue 125.0 139.7 -11% -10% Net fee income 27.3 26.8 +2% +1% Adjusted operating profit 3.5 4.5 -22% % of Group net fee income 37% 37% • Net fee income growth despite challenges from Brexit uncertainty p
Slide 24: IT
Global Focus, Local Presence 23 IT % change £m 2019 2018 % change (constant currency) Revenue 45.2 44.0 +3% 0% Net fee income 14.4 13.6 +6% +3% Adjusted operating profit 3.2 3.2 0% % of Group net fee income 19% 19% • Net fee income growth in the UK and Japan offset by a reduction in the US where we
Slide 25: Healthcare
Global Focus, Local Presence 24 Healthcare % change £m 2019 2018 % change (constant currency) Revenue 11.3 11.3 0% -1% Net fee income 2.8 2.7 +4% +2% Adjusted operating profit 0.5 0.5 0% % of Group net fee income 4% 4% • The first half of 2019 saw a slow start with operational issues in Finland and
Slide 26: Property, Construction & Engineering
Global Focus, Local Presence 25 Property, Construction & Engineering % change £m 2019 2018 % change (constant currency) Revenue 22.4 31.6 -29% -29% Net fee income 3.8 5.3 -28% -28% Adjusted operating (loss)/profit (1.2) 0.5 n/a % of Group net fee income 5% 7% • The results for the year are driven by
Slide 27: Commercial
Global Focus, Local Presence 26 Commercial % change £m 2019 2018 % change (constant currency) Revenue 142.4 132.7 +7% +9% Net fee income 19.7 19.2 +3% +3% Adjusted operating profit 5.4 5.6 -4% % of Group net fee income 26% 27% • In Germany the 2018 legislation changes are now business as usual and w
Slide 28: Offshore Recruitment Services
Global Focus, Local Presence 27 Offshore Recruitment Services % change £m 2019 2018 % change (constant currency) Revenue 12.2 7.9 +54% +54% Net fee income 7.0 5.1 +37% +37% Adjusted operating profit 3.2 1.7 +88% % of Group net fee income 9% 7% • Growth in both its UK and US customer bases, but with
Slide 29: Income statement – year ended 31 December 2019
Global Focus, Local Presence 28 Income statement – year ended 31 December 2019 Constant £m 2019 2018 Change currency Revenue 358.0 366.8 -2% -2% Net fee Income 74.5 72.3 +3% +2% Administrative costs (64.1) (60.0) Interest higher due to adoption of IFRS 16 Adjusted operating profit* 10.4 12.3 -15% -1
Slide 30: Balance sheet – as at 31 December 2019
Global Focus, Local Presence 29 Balance sheet – as at 31 December 2019 £m 2019 2018 Property, plant & equipment 2.3 2.1 Right-of-use assets 10.6 - Right-of-use asset recognised on adoption of IFRS 16 Leases, Goodwill and other intangible assets 49.0 54.8 with matching lease liabilities on implementa
Slide 31: Cash flow – year ended 31 December 2019
Global Focus, Local Presence 30 Cash flow – year ended 31 December 2019 £m 2019 2018 Profit for the year 0.5 5.8 Depreciation, amortisation, share-based Depreciation includes depreciation of right-of-use assets of £6.4m payments and impairment of intangibles following the adoption of IFRS 16 Leases
Slide 32: Shareholder information
Global Focus, Local Presence 31 Shareholder information Shares in issue - 49,019,132 ordinary shares Market capitalisation - £25.5 million (10 March 2020) Outstanding options 4.0m (8.2% of shares in issue) Significant shareholders (updated on 6 March 2020) Anthony Martin 13,924,595 28.4% Close Broth
Slide 33: Cautionary Statement
Global Focus, Local Presence 32 Cautionary Statement The information contained in this presentation is not audited, is past trends or activities should not be taken as a representation for personal use and informational purposes only and is not that such trends or activities will continue in the fut