Pagegroup Plc · LSE:PAGE
Pagegroup — FY2019 Earnings Presentation
29 slides from Pagegroup's earnings presentation, Mar 5, 2020
Slide 1: Full Year Results 2019
Steve Ingham Chief Executive Officer 5 March 2020 Kelvin Stagg Chief Financial Officer Full Year Results 2019 “A record year for the Group” LSE: PAGE.L Website: https://www.page.com/investors
Slide 2: Headline Numbers
Headline Numbers Steve Ingham, Chief Executive Officer
Slide 3: Record year for Group Gross Profit
Headline Numbers Financial Review Summary and Outlook Record year for Group Gross Profit Key financial highlights Gross Profit £855.5m Operating £146.7m £814.9m FY 2018 Profit £142.5m FY 2018 Constant Currency +5.0% Conversion 17.1% Growth +15.9% FY 2018 Rate 17.5% FY 2018 Earnings 32.2p Total £83.5
Slide 4: Financial Review
Financial Review Kelvin Stagg, Chief Financial Officer
Slide 5: Record gross profit for the Group
Headline Numbers Financial Review Summary and Outlook Record gross profit for the Group Tough trading conditions in a number of markets decreased conversion rate FY 2019 FY 2018 Operating Conversion Operating Conversion £m Gross Profit Gross Profit Profit Rate* Profit Rate* Group 855.5 146.7 17.1% 8
Slide 6: Record gross profit for the Group (EMEA)
Headline Numbers Financial Review Summary and Outlook Record gross profit for the Group Tough trading conditions in a number of markets decreased conversion rate FY 2019 FY 2018 Operating Conversion Operating Conversion £m Gross Profit Gross Profit Profit Rate Profit Rate Group 855.5 146.7 17.1% 814
Slide 7: Record gross profit for the Group (Asia Pacific)
Headline Numbers Financial Review Summary and Outlook Record gross profit for the Group Tough trading conditions in a number of markets decreased conversion rate FY 2019 FY 2018 Operating Conversion Operating Conversion £m Gross Profit Gross Profit Profit Rate Profit Rate Group 855.5 146.7 17.1% 814
Slide 8: Record gross profit for the Group (Americas)
Headline Numbers Financial Review Summary and Outlook Record gross profit for the Group Tough trading conditions in a number of markets decreased conversion rate FY 2019 FY 2018 Operating Conversion Operating Conversion £m Gross Profit Gross Profit Profit Rate Profit Rate Group 855.5 146.7 17.1% 814
Slide 9: Record gross profit for the Group (UK)
Headline Numbers Financial Review Summary and Outlook Record gross profit for the Group Tough trading conditions in a number of markets decreased conversion rate FY 2019 FY 2018 Operating Conversion Operating Conversion £m Gross Profit Gross Profit Profit Rate Profit Rate Group 855.5 146.7 17.1% 814
Slide 10: Headcount responded to tough market conditions
Headline Numbers Financial Review Summary and Outlook Headcount responded to tough market conditions Fee earner to operational support staff ratio of 78:22 • Reduction in fee earner headcount of 89 (-1.5%); a reaction to 30 tough market conditions Support staff as % of Group headcount 28 • Employee
Slide 11: Increase in Effective Tax Rate to 28.3%
Headline Numbers Financial Review Summary and Outlook Increase in Effective Tax Rate to 28.3% Underlying tax rate broadly flat on prior year £m 2019 2018 Reported % Profit Before Tax 144.2 142.3 +1.4% Tax Charge 40.8 38.6 +5.8% Underlying 28.3% 28.1% One off items - (1.0%) Effective Tax Rate 28.3% 2
Slide 12: A strong and robust balance sheet
Headline Numbers Financial Review Summary and Outlook A strong and robust balance sheet Net cash of c. £98m £m 2019 2018 Intangible assets 39.1 33.4 Tangible assets 31.9 35.6 Right-of-use assets 120.2 - Trade and other receivables 380.6 361.9 Trade, other payables, current and deferred taxes (216.6)
Slide 13: IFRS 16 Leases
Headline Numbers Financial Review Summary and Outlook IFRS 16 Leases Marginal benefit to EBIT of c. £2m 2019 £m Lease charge 38.5 Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) 38.5 Depreciation expense (36.6) Earnings Before Interest & Tax (EBIT) 1.9 Finance costs (2.0) Profi
Slide 14: Cash flow generation remains strong
Headline Numbers Financial Review Summary and Outlook Cash flow generation remains strong Fifth consecutive year of special dividend 320 15.9 280 37.4 240 24.6 7.2 10.0 210.0 38.2 200 £m 160 83.5 120 7.5 80 97.7 97.8 97.8 40 Dec 18 EBITDA Working Tax and net Net capex Share EBT share Lease Dividends
Slide 15: A growing ordinary dividend through the cycle
Headline Numbers Financial Review Summary and Outlook A growing ordinary dividend through the cycle Committed to returning cash to shareholders, over £380m in 5 years • Final 2019 dividend proposed of 9.40p per share (+4.4%) 90 26.43p 27.50p • Return per share of 26.43p in 2019 25.83p 25.23p 80 • To
Slide 16: Summary and Outlook
Summary and Outlook
Slide 17: Strategic investments driving capability & growth
Headline Numbers Financial Review Summary and Outlook Strategic investments driving capability & growth Culture as a competitive advantage Culture & Engagement framework devised and deployed Continuous listening strategy Connected Customer Experience: Acquire, Engage, Nurture 55m website visits in 2
Slide 18: A record year for Group Gross Profit
Headline Numbers Financial Review Summary and Outlook A record year for Group Gross Profit We remain mindful of macro-economic uncertainty Record year for Group Gross Profit Gross Profit in constant currency +5.0% Operating Profit of £146.7m Conversion rate of 17.1% Fee earners reduced by 89, -1.5%
Slide 19: Outlook
Headline Numbers Financial Review Summary and Outlook Outlook Reacting quickly to market conditions Growth slowed to -3% in first two months of 2020 Emergence of COVID-19 Likely that foreign exchange headwinds will persist Business model enables us to react quickly to market conditions Final dividen
Slide 20: Appendix
Appendix
Slide 21: Our Business Model
Headline Numbers Financial Review Summary and Outlook Our Business Model 21
Slide 22: A growing international business
Headline Numbers Financial Review Summary and Outlook A growing international business Delivering on our global diversification strategy Gross Profit 16% 24% 39% 61% 76% 84% FY 2007 FY 2013 FY 2019 UK International 22
Slide 23: Significant variations in recruitment mix
Headline Numbers Financial Review Summary and Outlook Significant variations in recruitment mix Geography Brands FY 2019 FY 2019 13% 12% 16% 32% 31% 43% 87% 88% 84% 68% 69% 57% EMEA Asia Pacific Americas UK Michael Page Page Personnel Temp Perm 23
Slide 24: Track record of Shareholder returns
Headline Numbers Financial Review Summary and Outlook Track record of Shareholder returns Dividend and Share Buybacks 120 100 80 £m 60 40 42 83 50 40 60 20 30 40 16 34 15 24 20 14 38 41 41 35 36 29 31 31 31 27 26 25 22 18 13 12 13 14 1 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20
Slide 25: Long term fee earner and international growth
Headline Numbers Financial Review Summary and Outlook Long term fee earner and international growth 7,000 ASIA EMEA AMERICAS UK PACIFIC Fee Earner Headcount 6,000 5,000 4,000 3,000 2,610 2,000 1,352 1,000 1,147 918 - 1990-99 2000 1985-1990 1990-1999 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005
Slide 26: Fee earner investment and support staff
Headline Numbers Financial Review Summary and Outlook Fee earner investment and support staff 7000 6000 5000 Headcount 4000 3000 2000 1000 0 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20
Slide 27: Year-on-Year Gross Profit Rates
Headline Numbers Financial Review Summary and Outlook Year-on-Year Gross Profit Rates 2017 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 EMEA +14.8% +13.2% +12.6% +19.3% +18.2% +18.6% +20.9% +13.9% +11.4% +9.0% +5.6% +2.3% Asia Pacific +3.9% +6.8% +13.9% +14.9% +13.8% +18.4% +27.7% +22.0% +14.9% +4.
Slide 28: Contacts and Calendar
Headline Numbers Financial Review Summary and Outlook Contacts and Calendar Contacts Date Event Jeremy Tatham – Group Financial Controller 15 April 2020 Q1 2020 Trading Update Tel: +44 (0) 1932 264 143 Email: investorrelations@michaelpage.com Web: http://www.page.com/investors 28
Slide 29: Disclaimer
Headline Numbers Financial Review Summary and Outlook Disclaimer This presentation contains certain statements that are neither reported financial results nor other historical information. The information contained in this presentation is not audited, is for personal use and informational purposes o