PageGroup PLC · LSE:PAGE
PageGroup — Michael Page International — H1 2009 Earnings Presentation
34 slides from PageGroup's earnings presentation, August 2009
Slide 1: Interim Results 2009
Interim Results 2009 August 2009 Specialists in Global Recruitment www.michaelpage.co.uk
Slide 2: Financial Results
Financial Results Specialists in Global Recruitment www.michaelpage.co.uk
Slide 3: Income Statement
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 3 Income Statement H1 H1 Constant 2009 2008 Currency £m £m Change Change Revenue 364.7 500.0 -27.1% -33.1% Gross profit 178.8 292.7 -38.9% -44.5% Operating profit before non recurring items 5.6 84.9 -93.4% -93.5% Non recurring items 26.5 – Operating
Slide 4: Perm/Temp Gross Profit and Gross Margin
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 4 Perm/Temp Gross Profit and Gross Margin H1 H1 Growth Rates 2009 2008 Constant Gross profit £m £m Reported currency Permanent 124.4 229.8 -45.9% -51.2% Temporary 54.4 62.9 -13.3% -19.9% Ratio (Perm:Temp) 70:30 79:21 Permanent 95.5% 94.8% Temporary 2
Slide 5: Dividends and share repurchases
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 5 Dividends and share repurchases H1 2009 H1 H1 2008 H1 (pence 2009 (pence 2008 Dividend per share) £m per share) £m Interim 2.88 9.3 2.88 9.3 *Proposed and payable on 9 October 2009 H1 2009 H1 2008 Shares H1 2009 Shares H1 2008 Share repurchases (m)
Slide 6: Cash Flow
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 6 Cash Flow H1 2009 H1 2008 £m £m Operating profit before non recurring items 5.6 84.9 Non recurring items 26.6 – Operating profit after non recurring items 32.2 84.9 Depreciation and share scheme charges 9.9 10.0 Decrease/(increase) in working capit
Slide 7: Working Capital
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 7 Working Capital H1 H1 2009 2008 £m £m Decrease/(increase) in receivables 51.1 (25.5) (Decrease)/increase in payables (37.9) 1.1 Decrease/(increase) in working capital 13.2 (24.4) • Cash inflow from reduction in trade receivables as activity level s
Slide 8: Net capital expenditure
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 8 Net capital expenditure H1 H1 2009 2008 £m £m Purchases of fixtures, plant and equipment – net 2.6 7.8 Purchases of software 3.3 3.8 Total 5.9 11.6 • Project to replace recruitment system driving software and hardware investment spend • Accelerated
Slide 9: Balance Sheet
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 9 Balance Sheet H1 H1 2009 2008 £m £m Intangible assets - Goodwill 1.5 1.5 - Computer software 14.7 6.2 Tangible assets 34.0 31.9 50.2 39.6 Trade and other receivables 151.9 230.1 Trade and other payables (92.1) (122.5) 59.8 107.6 Current and deferre
Slide 10: Segmental Analysis
Segmental Analysis Specialists in Global Recruitment www.michaelpage.co.uk
Slide 11: Geographical analysis of gross profit
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 11 Geographical analysis of gross profit H1 2009 H1 2008 Gross profit £178.8m -38.9% £292.7m Operating profit before NRI £5.6m -93.4% £84.9m 300 £292.7m 250 £226.5m Gross Profit (£m) 200 £178.8m 150 £114.4m 100 50 £15.7m 0 H1 1990 H1 2000 H1 2007 H1
Slide 12: Change in Headcount
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 12 Meritocratic Headcount – Reacting to market conditions 200 150 100 Change in Headcount Q1 2008 50 Q2 2008 0 Q3 2008 -50 Q4 2008 -100 Q1 2009 Q2 2009 -150 -200 -250 -300 EMEA UK Asia Pacific Americas Group End 2007 2,078 1,799 632 543 5,052 Q1 2008
Slide 13: EMEA Gross profit
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 13 EMEA Gross profit H1 2009 £85.8m H1 2008 -36.6% £135.4m Operating (loss)/profit £(1.5m) – £40.0m 150 £135.4m 120 Gross Profit (£m) £90.4m £85.8m 90 60 £41.0m 30 £6.0m 0 H1 1990 H1 2000 H1 2007 H1 2008 H1 2009 Proportion: Switzerland – – 7% 8% 6% H
Slide 14: United Kingdom Gross profit
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 14 United Kingdom Gross profit H1 2009 £57.0m H1 2008 -40.3% £95.6m Operating profit* £6.1m -78.6% £28.4m 100 £95.6m £92.0m 80 Gross Profit (£m) 60 £57.3m £57.0m 40 20 £8.6m 0 H1 1990 H1 2000 H1 2007 H1 2008 H1 2009 Proportion: Engineering, P&C, P&SC
Slide 15: Asia Pacific Gross profit
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 15 Asia Pacific Gross profit H1 2009 £19.2m H1 2008 -46.7% £36.0m Operating profit £2.0m -84.2% £12.9m 40 £36.0m Gross Profit (£m) 30 £27.0m 20 £19.2m £13.6m 10 £1.1m 0 H1 1990 H1 2000 H1 2007 H1 2008 H1 2009 Proportion: Asia – 28% 43% 39% 41% Austra
Slide 16: The Americas Gross profit
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 16 The Americas Gross profit H1 2009 £16.8m H1 2008 -34.6% £25.7m Operating (loss)/profit £(1.0m) – £3.6m 30 £25.7m Gross Profit (£m) 20 £17.1m £16.8m 10 £2.4m £nil 0 H1 1990 H1 2000 H1 2007 H1 2008 H1 2009 Proportion: Latin America – 43% 42% 51% 55%
Slide 17: Current Trading
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 17 Current Trading • Gross profit continues to decline • In some regions decline is slowing • In some countries and disciplines – early signs of stabilisation • Seasonally quieter summer months – third quarter will be challenging • Headcount will con
Slide 18: Development of Global Platform
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 18 Development of Global Platform ‘000s £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 Headcount – Fee Earners/Directors Operating Profit
Slide 19: Underlying Trends
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 19 Underlying Trends • Increasing compliance • Increasing candidate demand • Increasing candidate shortages • Increasing mobility • Increasing sophistication • Increasing complexity to access candidates Specialists in Global Recruitment www.michaelpa
Slide 20: Strategic and measured investment in downturns maximises growth in upturns
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 20 “Strategic and measured investment and ongoing commitment to existing businesses in downturns has maximised growth in upturns” 28 16 4 1 1 1 14 77 202 17 92 191 Specialists in Global Recruitment www.michaelpage.co.uk
Slide 21: Michael Page International Strategy
Michael Page International Strategy Specialists in Global Recruitment www.michaelpage.co.uk
Slide 22: Michael Page International strategy
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 22 Michael Page International strategy To increase the diversification Of s fi of Michael Page International by m ce a organically growing existing and Te s new teams, offices, disciplines and Culture countries with a consistent team and s Co ine mer
Slide 23: Clear on Brand
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 23 Clear on Brand Executive Search Qualified Professional Clerical Professional Generalist Staffing Specialists in Global Recruitment www.michaelpage.co.uk
Slide 24: Power of the Brand
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 24 Power of the Brand The brand drives organic growth • Attracts the best clients, candidates and employees • Facilitates organic expansion in existing markets and entry into new markets • Leading advertiser in national newspapers Online awareness Gl
Slide 25: Organically Growing
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 25 Organically Growing DepTH of experience at 31 december 2008 Senior Operational Management No. Tenure in MP 5 Executive Executive Board 5 20 years Board Directors Regional Managing Directors 11 14 years Managing Directors 37 12 years 11 Directors 1
Slide 26: Business Model – Flexible with Headcount
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 26 Team Business Model – Flexible with Headcount • c900 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 a
Slide 27: Managing costs
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 27 Team Managing costs IT (c10%) MISCELLANEOUS (c5%) • Accelerate data centre • Travel consolidation • Staff welfare - reduces support staff - greater resilience and Staff Costs (c75%) disaster recovery • Headcount - reacting to market conditions • R
Slide 28: Consistent over time
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 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 Di
Slide 29: Long term on investment
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 29 Long term on investment 1996 2001 2006 Singapore Switzerland South Africa Japan Russia Ireland 2008 1976 1985 1993 1998 2002 U.A.E. Austria United Kingdom Australia Germany USA Belgium Mexico Turkey Sweden New Zealand 6000 1997 2000 2005 2007 1987
Slide 30: Appendices
Appendices Specialists in Global Recruitment www.michaelpage.co.uk
Slide 31: Group quarterly gross profit trend: 2001 to 2009
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 31 Group quarterly gross profit trend: 2001 to 2009 200 152.4 141.3 140.3 150 128.2 123.4 121.0 118.7 Gross Profit (£m) 105.5 95.0 93.1 100 89.1 87.4 83.8 79.2 70.2 69.2 69.6 68.3 66.9 59.9 58.7 56.7 53.5 52.3 51.4 49.9 49.5 48.1 47.8 45.7 45.0 45.0
Slide 32: Headcount Trend
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 32 Headcount Trend Ratio 5000 Fee Earners : Non Fee Earners 1999 59:41 Fee Earners 2000 58:42 2001 57:43 Non-Fee Earners 4000 2002 58:42 2003 60:40 2004 64:36 2005 71:29 2006 74:26 3000 2007 76:24 Headcount 2008 74:26 H1 2009 71:29 2000 1000 0 H1 H2
Slide 33: Operating Profit/Gross Profit
MICHAEL PAGE INTERNATIONAL INTERIM RESULTS 2009 | 33 Conversion rates through cycles (before NRI) 40% Conversion Rate (excl share based charges) Conversion Rate (incl share based charges) 30% Operating Profit/Gross Profit 20% Conversion rates after share based charges H1 2009% H1 2008% EMEA (1.8) 29
Slide 34: Specialists in Global Recruitment
Specialists in Global Recruitment www.michaelpage.co.uk
Michael Page International — H1 2009 Earnings Presentation on 6ix