PageGroup PLC · LSE:PAGE
PageGroup — Q2 2020 Earnings Presentation
35 slides from PageGroup's earnings presentation, 2020
Slide 1: Q2 2020 Trading Update
Steve Ingham Chief Executive Officer Q2 2020 Trading Update Kelvin Stagg Chief Financial Officer LSE: PAGE.L Website: https://www.page.com/investors
Slide 2: Overview
Overview
Slide 3: Q2 & H1 Overview
Overview Financial & Regional Review Summary Q2 20 Q2 & H1 Overview Group gross profit decline of -47.6% Gross Profit £118.3m Constant Currency Q2 -47.6% Q2 £224.7m Q2 2019 -11.7% Q1 2020 Reported Rates Gross Profit £300.6m Q2 -47.4% H1 -13.0% Q1 2020 £433.5m H1 2019 Michael Page Q2 -46.0% Net Cash
Slide 4: COVID-19 Operating Strategy: Protecting our people and our platform
Overview Financial & Regional Review Summary Q2 20 COVID-19 Operating Strategy Protecting our people and our platform Priority is to protect our employees, candidates and clients Immediate office closures following Government guidelines All of the Group’s employees with full access to the Group’s sy
Slide 5: Proactive Communication Strategy
Overview Financial & Regional Review Summary Proactive Communication Strategy Q2 20 Phase 1: Crisis Response • Delivered a comprehensive internal communications strategy • Frequent and transparent interaction with the management team • 62% participation in remote working survey, over 7,500 comments
Slide 6: Proactive Communication Strategy
Overview Financial & Regional Review Summary Proactive Communication Strategy Q2 20 Phase 1: Crisis Response Phase 2: Living with COVID – Staying Connected STAYING CONNECTED APPROACHABLE AND VISIBLE LEADERSHIP • Encouraged people to stay connected • Video updates from CEO with more than 15,200 views
Slide 7: Proactive Communication Strategy
Overview Financial & Regional Review Summary Proactive Communication Strategy Q2 20 Phase 1: Crisis Response Phase 2: Living with COVID – Staying Connected Phase 3: Looking Forward – Reinforce the Platform • Customer Connect remote roll-out to Poland and Belgium • UK and Europe roll-out in H2 • New
Slide 8: Proactive Communication Strategy
Overview Financial & Regional Review Summary Proactive Communication Strategy Q2 20 ‘this just shows how remarkable we ‘setting us above a lot of other employers are as one, as Page, when times are in these times…’ tough’ ‘I don't know how you've all done it - ‘ready to fight more than ever!’ it's b
Slide 9: COVID-19 Operating Strategy: Managing our cost base
Overview Financial & Regional Review Summary Q2 20 COVID-19 Operating Strategy Managing our cost base Flexible and highly diversified business model Maintaining the business platform Planned reduction in Q2 cost base of 20-25% achieved Staff returning from 4 day weeks and furlough All employees retu
Slide 10: COVID-19 Operating Strategy: Managing our cost base
Overview Financial & Regional Review Summary Q2 20 COVID-19 Operating Strategy Managing our cost base • Initial reduction of c. 20% in April compared to March Cost Savings vs. • In April, immediate impact of 20% voluntary salary March* reductions and 4 day working weeks 0% April May June Q3 • In May
Slide 11: Maintaining the Platform: Headcount
Overview Financial & Regional Review Summary Q2 20 COVID-19 Operating Strategy Maintaining the Platform • Overall strategy is to protect the platform and position the Group for Total headcount future growth when conditions improve -7.7% 8,000 • Overall decrease in fee earners of 531 (-9%), with arou
Slide 12: Best performing and most impacted sectors
Overview Financial & Regional Review Summary Q2 20 COVID-19 Operating Strategy Best performing and most impacted sectors Healthcare and Pharmaceutical Best Performing E-Commerce Media Production New Opportunities Telecoms Candidates sent Consumer Goods and Packaging Technology Most Impacted Travel a
Slide 13: Real time monitoring of forward KPIs
Overview Financial & Regional Review Summary Q2 20 COVID-19 Operating Strategy Real time monitoring of forward KPIs New Opportunities Candidates sent Interviews Offers 13
Slide 14: Gradual reopening of our offices
Overview Financial & Regional Review Summary Q2 20 COVID-19 Operating Strategy Gradual reopening of our offices 14
Slide 15: Looking forward into Q3, what are we doing?
Overview Financial & Regional Review Summary Q2 20 COVID-19 Operating Strategy Looking forward into Q3, what are we doing? Increasing active headcount to match activity levels Bringing back staff in the US and the UK Decreasing percentage of time on furlough in Europe Firming up plans for strategic
Slide 16: Financial and Regional Review
Financial and Regional Review
Slide 17: Balance Sheet and Liquidity
Overview Financial & Regional Review Summary Q2 20 Balance Sheet and Liquidity Net cash and facilities of c. £500m Strong Balance Sheet with net cash of c. £156m, up £73m on Q1 Inflow of cash through unwind of Temp debtors DSO in line with pre-COVID position No material bad debt write offs Strong ba
Slide 18: Gross profit sharp downturn
Overview Financial & Regional Review Summary Q2 20 Gross profit sharp downturn Decline in fee earner headcount much less than 2009 6000 250 200 4500 Gross Profit (£m) as reported 150 Fee Earners 3000 100 1500 50 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2
Slide 19: Perm and Temp ratio
Overview Financial & Regional Review Summary Q2 20 Perm and Temp ratio Permanent recruitment more impacted by COVID-19 • Gross Profit decline in • Gross Profit decline in • Gross Profit decline in permanent -54.7% to £78.4m permanent -51.2% to £64.4m permanent -65.8% to £14.0m • Temporary -24.4% to
Slide 20: GP Growth Rates – H1
Overview Financial & Regional Review Summary Q2 20 GP Growth Rates – H1 April and May -49%, June slight improvement to -45% 20% 10% 0% January February March April May June -10% -20% -30% EMEA, -38% -40% Growth Rate Q1 Q2 APAC, -42% -50% EMEA -11.1% -42.9% AMERICAS, -53% -60% APAC -16.6% -41.7% UK ,
Slide 21: EMEA -42.9%
Overview Financial & Regional Review Summary Q2 20 EMEA -42.9% France and Southern Europe most impacted, Germany standout result • France, 14% of the Group, -52% (-46% in June) • Germany, 13% of the Group, -20% (-17% in June) • Benelux -35% (-34% in June); Belgium -23% (-15% in June) • Southern Euro
Slide 22: Asia Pacific -41.7%
Overview Financial & Regional Review Summary Q2 20 Asia Pacific -41.7% Improving conditions in Mainland China through the quarter • Greater China, -41% (-37% in June); Mainland China -27% (-17% in June); Hong Kong -62% (-63% in June) Japan & • South East Asia -35% (-41% in June); Singapore -46% (-50
Slide 23: Americas -55.0%
Overview Financial & Regional Review Summary Q2 20 Americas -55.0% Final region to be impacted • US -49% (-52% in June) Canada 5% • Latin America -63% (-57% in June) • Brazil -60% (-47% in June); Mexico -63% (-61% in June) • Conditions flat throughout the quarter, yet to see activity levels improve
Slide 24: UK -61.5%
Overview Financial & Regional Review Summary Q2 20 UK -61.5% Most impacted region in the quarter • All offices closed for the quarter with staff working remotely Midlands • Permanent recruitment down -74% 17% • Temporary down -32% London 37% • Public sector -39% (20% of UK) Gross Profit Reported Sou
Slide 25: Summary
Summary
Slide 26: Summary
Overview Financial & Regional Review Summary Q2 20 Summary Protecting our people and our platform Priority remains to protect our employees, candidates and clients Balancing tight cost management with positioning the Group for the future Moving from short-term cost savings in Q2, to full employment
Slide 27: Appendix
Appendix
Slide 28: Our business model
Overview Financial & Regional Review Summary Our business model Q2 20 28
Slide 29: A growing international business
Overview Financial & Regional Review Summary A growing international business Q2 20 Delivering on our global diversification strategy Gross Profit FY 2007 FY 2013 Q2 2020 UK International 29
Slide 30: Significant variations in recruitment mix
Overview Financial & Regional Review Summary Q2 20 Significant variations in recruitment mix Geography Brands 30
Slide 31: Long term fee earner and international growth
Overview Financial & Regional Review Summary Q2 20 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 2,469* 2,000 1,171 1,000 959* 793* - 1985-1990 1990-1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Slide 32: Fee earner investment and support staff
Overview Financial & Regional Review Summary Fee earner investment and support staff Q2 20 32
Slide 33: Year-on-Year Gross Profit Rates
Overview Financial & Regional Review Summary Year-on-Year Gross Profit Rates Q2 20 2018 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 EMEA +18.2% +18.6% +20.9% +13.9% +11.4% +9.0% +5.6% +2.3% -11.1% -42.9% Asia Pacific +13.8% +18.4% +27.7% +22.0% +14.9% +4.7% -8.1% -7.9% -16.6% -41.7% – Asia +17.8% +21.2%
Slide 34: Contacts and Calendar
Overview Financial & Regional Review Summary Q2 20 Contacts and Calendar Contacts Date Event Jeremy Tatham – Group Financial Controller 5 August 2020 HY 2020 Trading Update Tel: +44 (0) 1932 264 143 Email: investorrelations@michaelpage.com Web: https://www.page.com/investors 34
Slide 35: Disclaimer
Overview Financial & Regional Review Summary Q2 20 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 only