PageGroup PLC · LSE:PAGE
PageGroup — Michael Page International — FY2009 Earnings Presentation
40 slides from PageGroup's earnings presentation, March 2010
Slide 1: 2009 Results | March 2010
2009 Results | March 2010 Michael Page INTERNATIONAL
Slide 2: Financial Results
Michael Page International Financial Results
Slide 3: Income statement
Michael Page International Financial Results 2009 | 3 Income statement 2009 2008 Constant £m £m Change exchange Revenue 716.7 972.8 -26.3% -31.5% Gross profit 351.7 552.7 -36.4% -41.2% Operating profit 20.2 140.5 -85.6% -86.4% Net interest income/(expense) 0.9 (0.4) Profit before tax 21.1 140.1 -85.
Slide 4: Perm/temp gross profit and gross margins
Michael Page International Financial Results 2009 | 4 Perm/temp gross profit and gross margins Growth Rates 2009 2008 Constant Gross profit £m £m Reported exchange Permanent 249.4 425.7 -41.4% -46.2% Temporary 102.3 127.0 -19.5% -24.7% Ratio (Perm:Temp) 71:29 77:23 Gross margins Permanent 95.9% 94.9
Slide 5: Dividends, share repurchases and number of shares
Michael Page International Financial Results 2009 | 5 Dividends, share repurchases and number of shares 2009 2008 (pence 2009 (pence 2008 Dividend per share) £m per share) £m Interim 2.88 9.4 2.88 9.3 Final 5.12* 16.5 5.12 16.3 Total 8.0 25.9 8.0 25.6 *Proposed and payable on 7 June 2010 2009 2008 S
Slide 6: Cash flow
Michael Page International Financial Results 2009 | 6 Cash flow 2009 2008 £m £m Operating profit 20.2 140.5 Depreciation and share scheme charges 20.1 17.6 Decrease in working capital 74.5 27.1 Net cash inflow from operating activities 114.8 185.2 Net interest income/(expense) 0.9 (0.9) Taxation pai
Slide 7: Working capital and VAT refund
Michael Page International Financial Results 2009 | 7 Working capital and VAT refund Underlying HMRC Total Total 2009 2009 2009 2008 £m £m £m £m Decrease/(increase) in receivables 70.9 (9.0) 61.9 25.0 (Decrease)/Increase in payables (37.4) 50.0 12.6 2.1 Decrease in working capital 33.5 41.0 74.5 27.
Slide 8: Net capital expenditure
Michael Page International Financial Results 2009 | 8 Net capital expenditure 2009 2008 £m £m Purchases of fixtures, plant and equipment 3.7 16.1 Purchase of software 7.6 10.3 Total 11.3 26.4 • Maintenance levels of capital expenditure • Replacement of recruitment system driving software and hardwar
Slide 9: Balance sheet
Michael Page International Financial Results 2009 | 9 Balance sheet 2009 2008 £m £m Intangible assets - Goodwill 1.5 1.5 - Computer software 18.5 12.3 Tangible assets 31.4 39.1 51.4 52.9 Trade and other receivables 135.4 205.8 Trade and other payables (145.6) (138.4) (10.2) 67.4 Current and deferred
Slide 10: Uses of cash
Michael Page International Financial Results 2009 | 10 Uses of cash Remains the same • Support the growth of the business • Maintain strong balance sheet with net cash position • Maintain/grow annual dividend - current dividend £26m • Share repurchases (cancellation/satisfy share plans) Specialists
Slide 11: Segmental Analysis
Michael Page International Segmental Analysis
Slide 12: Geographical analysis of gross profit
Michael Page International Financial Results 2009 | 12 Geographical analysis of gross profit Diverse by geography 2009 2008 Gross profit £351.7m -36.4% £552.7m 200 Operating profit £20.2m -85.6% £140.5m Gross Profit (£m) as reported Headcount 3,549 -28% 4,943 152.4 141.3 140.3 150 • Reduced dependen
Slide 13: Discipline analysis of gross profit
Michael Page International Financial Results 2009 | 13 Discipline analysis of gross profit Diverse by professional discipline 2009 2008 Gross profit £351.7m -36.4% £552.7m 200 Operating profit £20.2m -85.6% £140.5m Gross Profit (£m) as reported 152.4 Headcount 3,549 -28% 4,943 141.3 140.3 150 • Down
Slide 14: EMEA
Michael Page International Financial Results 2009 | 14 EMEA 2009 2008 Gross profit £163.7m -37% £258.8m Operating profit £1.1m -98% £66.3m 80 Headcount 1,572 -27% 2,155 70.2 Gross Profit (£m) as reported 65.2 63.7 • France benefits from strong market leading 59.7 57.6 60 position 48.5 48.4 47.7 • Sp
Slide 15: United Kingdom
Michael Page International Financial Results 2009 | 15 United Kingdom 2009 2008 Gross profit £110.8m -37% £176.7m Operating profit £11.3m -76% £46.6m 49.0 48.5 47.9 47.1 50 45.0 45.0 44.1 Headcount 1,179 -28% 1,640 • Market conditions tough but stable 36.1 40 Gross Profit (£m) • Financial Services,
Slide 16: Asia Pacific
Michael Page International Financial Results 2009 | 16 Asia Pacific 2009 2008 Gross profit £42.2m -37% £66.8m Operating profit £8.1m -64% £22.4m 19.6 20 18.4 Headcount 403 -37% 638 Gross Profit (£m) as reported 16.4 15.4 14.8 • Downturn impacted later but quicker 14.7 15 • All parts of Asia stabilis
Slide 17: The Americas
Michael Page International Financial Results 2009 | 17 The Americas 2009 2008 Gross profit £35.0m -31% £50.5m Operating profit (£0.2m) -104% £5.3m 14.3 14.1 15 Headcount 395 -22% 510 Gross Profit (£m) as reported • Latin America now nearly two thirds 11.6 12 10.7 of the region 10.6 10.5 9.9 9.6 • Br
Slide 18: Strategy
Michael Page International Strategy Consistent over time
Slide 19: Group quarterly gross profit trend: 2001 to 2009
Michael Page International Financial Results 2009 | 19 Group quarterly gross profit trend: 2001 to 2009 10% sequential growth in Quarter 4, 2009 152.4 150 141.3 140.3 128.2 123.4 121.0 118.7 Profitable in every quarter 105.5 Gross Profit (£m) as reported 95.0 100 93.1 90.6 89.1 87.4 83.8 82.3 79.2 7
Slide 20: Variance in quarterly gross profit and headcount 2008 - 2009
Michael Page International Financial Results 2009 | 20 Variance in quarterly gross profit and headcount 2008 - 2009 Quick to react 15 600 9.5% 8.6% 10 7.4% 10.1% 400 5 £12m £12m 374 £8m 200 2.0% Gross Profit (£m) as reported 111 0.1% 0 5 -86 -£2m 0 Headcount -1.8% -158 -1.6% -5 -4.3% -507 -431 -£11m
Slide 21: Foundations for the future
Michael Page International Financial Results 2009 | 21 Foundations for the future The expanding platform 28 16 4 1 16 years 12 years 6 years 1 Cumulative profit before tax 14 Cumulative profit before tax 77 Cumulative profit before tax 216 1 £25m £391m £511m 17 92 165 Specialists in Global Recruitme
Slide 22: Organic global expansion
Michael Page International Financial Results 2009 | 22 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 23: Development of Hong Kong & China
Michael Page International Financial Results 2009 | 23 Development of Hong Kong & China Strength, depth and consistency in high potential markets 5 2 1 9 years 6 years 1 7 Cumulative Gross Profit £28.0m 9 Cumulative Gross Profit £64.4m 14 34 Offices No. of Country Disciplines 89 Headcount 1995 1997
Slide 24: Organic growth: Latin America
Michael Page International Financial Results 2009 | 24 Organic growth: Latin America Strength, depth and consistency in high potential markets 3 1 8 1 1 4 years Cumulative Gross Profit 2 6 years Cumulative Gross Profit 1 5 £5.1m 4 £81.3m 43 39 Countries Offices No. of Country Disciplines 225 Headcou
Slide 25: Development of a global platform
Michael Page International Financial Results 2009 | 25 Development of a global platform Capacity for growth ‘000’s £m 50 250 5 150 40 200 4 120 30 150 3 90 20 100 2 60 10 50 1 30 0 0 0 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Countries Country Disciplines Year end Headcount – Fee Ear
Slide 26: Positioned for growth
Michael Page International Financial Results 2009 | 26 Positioned for growth • 600 Fee Earners • 1000 Fee Earners • 2003-2007 Gross Profit France Australia • 2003-2007 Gross Profit CAGR 21% USA Holland UK CAGR 15% UAE • 1991-2000 Gross Profit • 1991-2000 Gross Profit Turkey CAGR 28% Argentina CAGR 2
Slide 27: Operating profit and share price development
Michael Page International Financial Results 2009 | 27 Operating profit and share price development Track record of recovery 595p 600 553p 180 500 150 Operating Profit (£m) Share Price (pence) 400 120 300 90 200 60 79p 166p 100 30 26p 0 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2
Slide 28: Summary and outlook
Michael Page International Financial Results 2009 | 28 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 29: Appendices
Michael Page International Appendices
Slide 30: Michael Page International strategy
Michael Page International Financial Results 2009 | 30 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 31: Clear on brand
Michael Page International Financial Results 2009 | 31 Clear on brand Executive Search 28 Countries 104 Offices Qualified Professional 1,912 Fee Earners 11 Countries 61 Offices 603 Fee Earners Clerical Professional Generalist Staffing Specialists in Global Recruitment 136 offices in 28 countries | w
Slide 32: Growing organically
Michael Page International Financial Results 2009 | 32 Growing organically DepTH of experience at 31 december 2009 Senior Operational Management No. Tenure in MP 5 Executive Board 5 22 years Executive Board Directors Regional Managing Directors 11 16 years Managing Directors 34 13 years 11 Directors
Slide 33: Business Model – Flexible with Headcount
Michael Page International Financial Results 2009 | 33 Team Business Model – Flexible with Headcount • c600 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 34: Managing costs
Michael Page International Financial Results 2009 | 34 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 35: Consistent over time
Michael Page International Financial Results 2009 | 35 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 36: Long term on investment
Michael Page International Financial Results 2009 | 36 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 37: Underlying trends driving the recruitment market
Michael Page International Financial Results 2009 | 37 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 38: Fee earner/support staff headcount trend
Michael Page International Financial Results 2009 | 38 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 Headcoun
Slide 39: Conversion rates through cycles
Michael Page International Financial Results 2009 | 39 Conversion rates through cycles 40% Conversion Rate 30% Operating Profit/Gross Profit 20% Conversion rates 2009 2008 EMEA 0.6 25.6 UK 10.2 26.4 10% Asia Pacific 19.2 33.5 Americas (0.6) 10.5 Group 5.7 25.4 0% 1991 1992 1993 1994 1995 1996 1997 1
Slide 40: INTERNATIONAL
Michael Page INTERNATIONAL
Michael Page International — FY2009 Earnings Presentation on 6ix