Sthree Plc · LSE:STEM
Sthree — FY2015 Earnings Presentation
45 slides from Sthree's earnings presentation, January 2016
Slide 1: Full Year Results Presentation 2015
FULL YEAR RESULTS PRESENTATION 2015 RESULTS FOR YEAR ENDED 30 NOVEMBER 2015 FULL YEAR RESULTS PRESENTATION 2015 RESULTS FOR YEAR ENDED 30 NOVEMBER 2015
Slide 2: A Strong Performance in 2015
A STRONG PERFORMANCE IN 2015 • Adjusted operating profit was up 39% year on year (“YoY”) to £41.5m (2014: £29.8m) • Adjusted operating profit conversion ratio up 3.9% points to 17.6% • Group gross profit (“GP”) up 11%* YoY and ahead by 17%* excluding Energy • Continued strong growth across ICT (+19%
Slide 3: Financial Results
FINANCIAL RESULTS 3
Slide 4: FY 2015: Financial Highlights
FY 2015: FINANCIAL HIGHLIGHTS Adjusted As Reported Adjusted As Reported Adjusted FY 2015 FY 2015 FY 2014 Actual Growth Actual Growth CC Growth* Revenue £848.8m £848.8m £746.9m +14% +14% +17% Contract Gross Profit £151.0m £151.0m £132.5m +14% +14% +17% Permanent Gross Profit £84.7m £84.7m £85.7m -1%
Slide 5: Historical Gross Profit & Gross Margin
HISTORICAL GROSS PROFIT & GROSS MARGIN Gross Profit Contract Gross Margin £250m £235.7m 25.0% £213.6m £218.2m 21.5% 22.1% 21.6% 21.4% 21.5% £199.5m £192.8m 20.2% 20.0% 19.8% £200m £189.5m 20.0% £167.8m £162.4m 125.2 113.9 117.4 £150m 102.4 15.0% 102.2 101.2 76.2 89.8 £100m 10.0% £50m 99.7 100.8 110.
Slide 6: Historical Operating Profit & Conversion Ratio
HISTORICAL OPERATING PROFIT & CONVERSION RATIO Adjusted Operating Profit Before Exceptional Items Conversion Ratio Adjusted Operating Profit Before Exceptional Items as a % of Gross Profit £60m £56.8m 30% £50m 25% 25.9% 23.8% £41.5m £40m 32.4 20% £30.0m £29.8m 17.6% £30m 15% £25.1m 27.4 15.3% 13.7%
Slide 7: Balance Sheet
BALANCE SHEET 30 November 30 November A strengthening Balance Sheet 2015 2014 £m £m Intangible Assets 11.1 11.1 • Deferred Tax Property, Plant & Equipment 5.6 4.2 Decrease due to utilisation and write off of deferred tax assets in respect of historical tax losses in Deferred Tax 1.8 3.4 certain terr
Slide 8: Cash Flow
CASH FLOW Adjusted As Reported FY 2015 FY 2015 FY 2014 £m £m £m • Receivables Operating Profit Before Exceptional Items 41.5 38.4 29.8 Decrease due to improved collections from clients YoY Depreciation and Amortisation 5.1 6.6 5.2 Share Awards Charge and Other Non Cash Items 4.2 4.2 2.3 • Payables &
Slide 9: Cash Flow Bridge
CASH FLOW BRIDGE £60m 2.0 5.1 £50m (0.5) 4.2 (3.5) 10.2 £40m (8.6) 41.5 £30m (11.5) £20m £10m (17.7) 6.2 (4.9) £0m £(10m) (9.9) Adjusted Share Exceptional / 2014 Net OP Working Based Depn & ITJB Share adjusted Taxes and Foreign 2015 Net Debt Capital Payments Amort Disposal Transactions Items Capex I
Slide 10: Earnings Per Share and Dividends
EARNINGS PER SHARE AND DIVIDENDS Adjusted As Reported Adjusted As Reported FY 2015 FY 2015 FY 2014 Actual Growth Actual Growth Profit After Tax Before Exceptional Items £29.4m £26.4m £20.2m +46% +31% For Basic EPS 127.0m 127.0m 123.7m +3% +3% Weighted Average Number of Shares Dilutive Impact of Shar
Slide 11: Euro & USD/GBP Exchange Rate
EURO & USD/GBP EXCHANGE RATE Year Ended 30 November 2015 Year Ended 30 November 2015 Average Closing Gross Profit Op Profit Impact of one percent change per annum £'000 EUR € 1.36 1.42 EUR € 1,045 351 USD $ 1.54 1.50 USD $ 453 108 Year Ended 30 November 2014 Year Ended 30 November 2014 Average Closi
Slide 12: Operating Review
OPERATING REVIEW 12
Slide 13: 2015 Highlights
2015 HIGHLIGHTS 2015 Priorities 2015 Progress Strategic investment in Contract • Strong performance • GP +17%* YoY and ahead by 21%* excluding Energy • Contract runners +11% YoY • Contract now 64% of GP (FY 2014: 61%) • Now represents 58% of consultant headcount, our highest ever Drive recovery in P
Slide 14: Business Profile
BUSINESS PROFILE 2% 7% 19% 30% 36% 19% FY 2015 FY 2015 FY 2015 41% % of GP % of GP % of GP Cont / 9% Sector Geographical Perm Diversification Diversification 64% 11% Contract 18% 44% period end headcount +16% YoY ICT UK&I Banking & Finance Energy C Europe Cont Perm Engineering Americas Life Sciences
Slide 15: Headcount
HEADCOUNT Average sales heads up 6% YoY and period end May 12 Nov 12 May 13 Nov 13 May 14 Nov 14 May 15 Nov 15 sales heads up 8% YoY Period End Average sales heads 2,195 2,116 2,220 2,327 2,579 2,578 2,673 2,847 YoY: Total Heads UK&I +6% Period End C Europe +4% 1,685 1,633 1,732 1,862 2,080 2,081 2,
Slide 16: Permanent / Contract Analysis
PERMANENT / CONTRACT ANALYSIS Gross Profit Gross Profit Mix by Sector Gross Profit Mix by Region FY 2015 FY 2015 100% 100% 29% 26% 35% 27% 36% 80% 42% 80% 39% 36% 51% 65% 60% 60% FY 2015 40% 74% 40% % of GP 71% 65% 73% 64% 61% 49% 58% 64% 20% 20% 35% 0% 0% ICT Banking & Energy Engineering Life Scien
Slide 17: Key Performance Indicators: Contract
KEY PERFORMANCE INDICATORS: CONTRACT Contract Runners 8,412 7,573 Period end 5,745 5,791 Contract runners 5,122 excluding Energy 4,692 4,157 4,359 up 15% YoY -28% +5% +8% +9% +13% +31% +11% vs vs vs vs vs vs vs FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 Contract Margin FY08 FY09 FY10 FY11 FY12 FY13 F
Slide 18: Contract Runners – Comparison to Prior Years
CONTRACT RUNNERS – COMPARISON TO PRIOR YEARS 135% 131% 130% 125% 120% 115% 112% 111% 110% 109% ` 108% 105% 105% 100% 95% 90% November December January February March April May June July August September October November 2010 2011 2012 2013 2014 2015 FULL YEAR RESULTS PRESENTATION 2015 | RESULTS FOR
Slide 19: Contract Runners – Comparison to Prior Years (excluding Energy)
CONTRACT RUNNERS – COMPARISON TO PRIOR YEARS (excluding Energy from all years) 125% 123% 120% A strong platform for 2016 115% 115% 110% 107% 107% 105% 105% ` 104% 100% 95% 90% November December January February March April May June July August September October November 2010 2011 2012 2013 2014 2015
Slide 20: Key Performance Indicators: Permanent
KEY PERFORMANCE INDICATORS: PERMANENT Permanent Placement Volumes 10,236 7,434 7,343 6,551 6,429 6,601 6,408 6,060 Placement volumes excluding Energy up -41% -41% +8% +13% -1% -12% +3% -3% 5% YoY vs vs vs vs vs vs vs vs FY 08 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY08 FY09 FY10 FY11 FY12 FY13 FY
Slide 21: Region & Sector Review
REGION & SECTOR REVIEW 21
Slide 22: Geographical Analysis
GEOGRAPHICAL ANALYSIS Gross Profit UK&I 9% 7% Benelux 15% 30% 30% 19% France 9 % FY 2014 2 5% 15 % 3 0% FY 2015 % of GP Germany % of GP 16 % 5 % 25% Americas 16% 23% 16% 5% APAC & ME 5% Growth / (Decline) by Region FY 2014 FY 2015 73% UK&I 26% 14% C Europe 5% 14% Americas 11% 11% APAC & ME (6%) Asia
Slide 23: Performance by Region
PERFORMANCE BY REGION GP Average Consultant Growth YoY FY 2015 Growth YoY Cont Perm Total Cont / Perm Mix Cont Perm Total Perm Cont FY 15 +5% +4% +5% 27% 73% +8% - +5% UK&I Q4 15 (2%) (14%) (6%) +11% (3%) +5% Perm Cont FY 15 +19% +6% +14% 36% 64% +16% (6%) +5% C Europe Q4 15 +15% +9% +13% +18% - +10
Slide 24: GP Business Mix – Sector
GP BUSINESS MIX – SECTOR 0% 2% 2% 15% 17% 19% 39% 12% 43% FY 2014 41% FY 2013 9% FY 2015 % of GP 9% % of GP % of GP 12% 15% 11% 18% 18% 18% ICT Banking & Finance Energy Engineering Life Sciences Other ICT Only 8% of our business is outside UK&I and C Europe, so massive growth opportunity Life Scienc
Slide 25: Performance by Sector
PERFORMANCE BY SECTOR GP Average Consultants Growth YoY FY 2015 Growth YoY Cont Perm Total Cont / Perm Mix Cont Perm Total Perm Cont FY 15 +22% +13% +19% 29% 71% +23% +7% +17% ICT Q4 15 +20% +5% +15% +27% +11% +20% Perm Cont 51% FY 15 +18% (2%) +7% 49% +8% (13%) (6%) Banking & Finance Q4 15 +18% (9%
Slide 26: Energy – Group
ENERGY – GROUP GP Growth YoY Energy GP as % of Group GP Energy Sector Mix by Division Cont Perm Total Energy FY 15 (4%) (44%) (19%) 11% 26% Q4 15 (22%) (63%) (37%) 15% 39% Cont Average Consultant Growth YoY 61% Perm Cont Perm Total 74% FY 15 +1% (49%) (25%) Q4 15 (11%) (76%) (43%) Outside FY 15; Ins
Slide 27: Outlook
OUTLOOK • Global macro-economic uncertainties increased further during early 2016 • Expect challenging Oil & Gas market conditions and further FX volatility • Prospects for our US business are exciting and we are continuing to invest for the future • Continue to invest selectively in our high perfor
Slide 28: Financial Calendar
FINANCIAL CALENDAR 11MARCH 21 APRIL 3 JUNE 10 JUNE Q1 Trading Annual General Final Dividend Trading update for the Statement Meeting Paid six months ended 31 May 2016 11 JULY 9 9 23 SEPTEMBER DECEMBER JANUARY Interim results for the Trading update for the Q3 Trading Annual results for the six months
Slide 29: Supplementary Material
SUPPLEMENTARY MATERIAL 29
Slide 30: Headcount
HEADCOUNT Nov 08 May 09 Nov 09 May 10 Nov 10 May 11 Nov 11 May 12 Nov 12 May 13 Nov 13 May 14 Nov 14 May 15 Nov 15 Period End Total Heads 2,217 1,606 1,556 1,733 1,814 1,960 2,204 2,195 2,116 2,220 2,327 2,579 2,578 2,673 2,847 Period End Sales Heads* 1,643 1,176 1,116 1,246 1,269 1,416 1,675 1,685
Slide 31: Consultant Headcount
CONSULTANT HEADCOUNT Nov 08 May 09 Nov 09 May 10 Nov 10 May 11 Nov 11 May 12 Nov 12 May 13 Nov 13 May 14 Nov 14 May 15 Nov 15 Period End Consultants 1,496 1,082 1,011 1,134 1,163 1,287 1,515 1,473 1,409 1,454 1,580 1,759 1,766 1,790 1,862 881 935 980 1,087 644 586 587 786 Contract 614 719 504 462 44
Slide 32: UK&I Trading Metrics
UK&I TRADING METRICS UK Cont GP Perm GP Total GP YoY growth +5% +4% +5% 30% of Group GP Nov 15 Nov 14 YoY Ireland Countries 2 2 - Offices 13 13 - # YoY YoY Cont Perm Total Cont Perm Total Cont Perm Total Period End Consultant Headcount 354 205 559 26 (9) 17 +8% -4% +3% Full Year Average Consultant H
Slide 33: UK&I Trading Metrics
UK&I TRADING METRICS SECTOR SPLITS Period End YoY 1% Runners -3% Gross Profit Per Day Rate Within Region 10% FY 2015 2,881 YoY 2% 11% FY 2014 2,970 FY 2015 Below Group average 6% % of GP 55% 0 2,000 4,000 17% 27% 28% ICT Banking & Finance Energy FY 2015 Cont GP FY 2014 Engineering Life Sciences % of
Slide 34: Benelux Trading Metrics
BENELUX TRADING METRICS Bel Lux Neth Cont GP Perm GP Total GP YoY growth +26% +1% +18% 16% of Group GP Nov 15 Nov 14 YoY Countries 3 3 - Offices 7 7 - # YoY YoY Cont Perm Total Cont Perm Total Cont Perm Total Period End Consultant Headcount 207 114 321 38 1 39 +22% +1% +14% Full Year Average Consult
Slide 35: Benelux Trading Metrics
BENELUX TRADING METRICS SECTOR SPLITS Period End YoY Runners +25% Gross Profit Per Day Rate Within Region 7% FY 2015 1,648 YoY -2% 7% 10% FY 2014 1,314 FY 2015 Above Group average 49% % of GP 0 1,000 2,000 12% 15% 27% ICT 32% Banking & Finance Energy FY 2015 Cont GP FY 2014 Engineering Life Sciences
Slide 36: Germany Trading Metrics
GERMANY TRADING METRICS Germany Cont GP Perm GP Total GP YoY growth +14% +10% +12% 23% of Switz Group GP Nov 15 Nov 14 YoY Countries 2 2 - Offices 8 9 -1 # YoY YoY Cont Perm Total Cont Perm Total Cont Perm Total Period End Consultant Headcount 266 234 500 42 13 55 +19% +6% +12% Full Year Average Con
Slide 37: Germany Trading Metrics
GERMANY TRADING METRICS SECTOR SPLITS Period End YoY Runners +21% Gross Profit Per Day Rate Within Region FY 2015 1,657 YoY -3% 24% FY 2014 1,367 FY 2015 Above Group average 50% % of GP 0 1,000 2,000 13% 6% 7% ICT Banking & Finance Energy 43% FY 2015 Cont GP 44% FY 2014 Engineering Life Sciences % o
Slide 38: France Trading Metrics
FRANCE TRADING METRICS Cont GP Perm GP Total GP YoY growth +23% -1% +14% 5% of Group GP Nov 15 Nov 14 YoY Countries 1 1 - Offices 1 1 - # YoY YoY Cont Perm Total Cont Perm Total Cont Perm Total Period End Consultant Headcount 54 35 89 6 (7) (1) +13% -17% -1% Full Year Average Consultant Headcount 46
Slide 39: France Trading Metrics
FRANCE TRADING METRICS SECTOR SPLITS Period End YoY Runners +31% Gross Profit Per Day Rate Within Region 14% FY 2015 518 YoY flat 9% FY 2014 395 FY 2015 Below Group average 6% 51% % of GP 0 200 400 600 20% ICT 32% Banking & Finance 36% Energy FY 2015 Cont GP FY 2014 Engineering Life Sciences % of GP
Slide 40: Americas Trading Metrics
AMERICAS TRADING METRICS Cont GP Perm GP Total GP YoY growth +44% +6% +26% 19% of Group GP Nov 15 Nov 14 YoY Countries 1 1 - Offices 6 6 - # YoY YoY Cont Perm Total Cont Perm Total Cont Perm Total Period End Consultant Headcount 165 104 269 53 0 53 +47% +0% +25% Full Year Average Consultant Headcoun
Slide 41: Americas Trading Metrics
AMERICAS TRADING METRICS SECTOR SPLITS Period End YoY 1% Runners +21% Gross Profit Per Day Rate Within Region 10% FY 2015 1,297 YoY 11% FY 2014 1,073 43% FY 2015 27% Above Group average % of GP 0 500 1,000 1,500 19% ICT Banking & Finance 39% Energy FY 2015 Cont GP 46% FY 2014 Engineering Perm GP % o
Slide 42: Asia Pacific & Middle East Trading Metrics
ASIA PACIFIC & MIDDLE EAST TRADING METRICS Cont GP Perm GP Total GP YoY growth +10% -13% -6% 7% of Group GP Nov 15 Nov 14 YoY Countries 6 9 -3 Offices 6 9 -3 # YoY YoY Cont Perm Total Cont Perm Total Cont Perm Total Period End Consultant Headcount 41 83 124 (13) (54) (67) -24% -39% -35% Full Year Av
Slide 43: Asia Pacific & Middle East Trading Metrics
ASIA PACIFIC & MIDDLE EAST TRADING METRICS SECTOR SPLITS Period End YoY Runners -9% Gross Profit Per Day Rate Within Region 2% 13% 19% FY 2015 411 YoY 8% FY 2014 454 FY 2015 Below Group average 28% % of GP 0 200 400 600 38% ICT 30% 35% Banking & Finance Energy FY 2015 Cont GP FY 2014 Engineering Lif
Slide 44: Cost Base Analysis
COST BASE ANALYSIS The Group has a flexible cost base 8% 2% 16% 6% 6% Cost Base Payroll Costs 78% 84% Payroll Property Advertising IT & Professional Other Support Services Sales Note 1: Based on costs for FY 2015 FULL YEAR RESULTS PRESENTATION 2015 | RESULTS FOR YEAR ENDED 30 NOVEMBER 2015 www.sthre
Slide 45: 41 Offices in 15 Countries
41 OFFICES IN 15 COUNTRIES BELGIUM LUXEMBOURG NETHERLANDS GERMANY UK SWITZERLAND IRELAND FRANCE JAPAN USA SINGAPORE DUBAI HONG KONG MALAYSIA AUSTRALIA FULL YEAR RESULTS PRESENTATION 2015 | RESULTS FOR YEAR ENDED 30 NOVEMBER 2015 www.sthree.com | SThree plc 45