Empresaria Group Plc · LSE:EMR
Empresaria — Investor Presentation (March 2018)
28 slides from Empresaria's investor presentation, March 2018
Slide 1: Investor Presentation March 2018
Global Focus, Local Presence Investor Presentation March 2018 Joost Kreulen Chief Executive Officer Spencer Wreford Group Finance Director & Chief Operating Officer
Slide 2: Cautionary Statement
Global Focus, Local Presence 1 Cautionary Statement The information contained in this presentation is not audited, is past trends or activities should not be taken as a representation for personal use and informational purposes only and is not that such trends or activities will continue in the futu
Slide 3: Empresaria is…
Global Focus, Local Presence 2 Empresaria is….. an international specialist staffing Group, following a multi-branded strategy to address global talent shortages
Slide 4: Overview of the year
Global Focus, Local Presence 3 Overview of the year • Third year of record results with adjusted profit before tax of £11.0m • Six consecutive years of double digit percentage growth in adjusted diluted EPS, to 12.5p • Strength of Group allows an increase in proposed dividend by 15% to 1.32p • Diver
Slide 5: Overview of the year
Global Focus, Local Presence 4 Overview of the year • Global business operating from 20 countries 66% • 18 consecutive quarters of net fee income growth over prior of net fee income outside year the UK • Rishworth Aviation and ConSol Partners integrated into Group after joining in 2016 • New office
Slide 6: Operations review - UK
Global Focus, Local Presence 5 Operations review - UK £’m 2017 2016 34% of Group Revenue 86.7 70.1 net fee income Net fee income 23.4 19.0 Adjusted operating profit 2.2 1.5 • Full year contribution from ConSol Partners, mix moved more to European clients • Insurance brand merged into leading brand,
Slide 7: Operations review – Continental Europe
Global Focus, Local Presence 6 Operations review – Continental Europe £’m 2017 2016 Revenue 98.8 92.0 23% of Group Net fee income 16.5 16.8 net fee income Adjusted operating profit 5.1 4.9 • Strong performance from Austrian business • Margin pressure in Germany following new legislation on minimum w
Slide 8: Operations review – Asia Pacific
Global Focus, Local Presence 7 Operations review – Asia Pacific £’m 2017 2016 33% Revenue 132.7 77.3 of Group net fee income Net fee income 22.2 18.6 Adjusted operating profit 3.5 2.7 • Full year contribution from Rishworth Aviation • Good growth from Japan (IT). Market benefits from positive econom
Slide 9: Operations review – Americas
Global Focus, Local Presence 8 Operations review – Americas £’m 2017 2016 10% of Group Revenue 38.9 31.0 net fee income Net fee income 7.3 4.6 Adjusted operating profit 0.8 0.7 • Full year contribution from ConSol Partners. Investment made in experienced staff with positive impact seen in second hal
Slide 10: Financial review
Global Focus, Local Presence Financial review
Slide 11: Revenue: permanent and temporary
Global Focus, Local Presence 10 £’m 2017 2016 % var LFL currency % var Revenue 357.1 270.4 32% 28% Permanent revenue 30.3 26.5 14% 10% Temporary revenue 326.8 243.9 34% 29% Permanent revenue +14% (+10% constant currency) Temporary revenue +34% (+29% in constant currency) • Strong results from Japan,
Slide 12: Net fee income and operating profit
Global Focus, Local Presence 11 £’m 2017 2016 % var LFL currency % var Net fee income 69.4 59.0 18% 13% Adjusted operating profit 11.6 9.8 18% 13% Conversion ratio 16.7% 16.6% Net fee income +18% (+13% constant currency) Conversion ratio of 16.7% • Growth driven by external investments, with 1% orga
Slide 13: Strong financial platform in place
Global Focus, Local Presence 12 Strong financial platform in place Three consecutive years of record adjusted profit before tax Year end debt level in line with expectations Share buyback concluded in January 2018, buying 260,384 shares for £249,445 Balance between reducing debt, investing i
Slide 14: Reported net debt
Global Focus, Local Presence 13 £’m 2017 2016 % var Reported net debt (12.0) (10.5) (14%) Adjusted net debt (19.5) (15.7) (24%) Reported net debt increases to £12.0m following £5.6m Cash generative business: deferred consideration paid in year Cash generated from operations £12.6m Adjusted net
Slide 15: Looking forward
Global Focus, Local Presence Looking forward
Slide 16: Business model and strategy to deliver growth
Global Focus, Local Presence 15 Business model and strategy to deliver growth Multi-branded approach Leading brands Management equity philosophy Business model Diversified by geography & sector Strategy Focus on growth markets Financial discipline Temporary bias 15
Slide 17: Multi-branded: 18 brands, 20 countries
Global Focus, Local Presence 16 Multi-branded Brands are experts in their niche markets Focus on professional & specialist roles Growth to come from: Investing in developing leading brands, through additional headcount and new office openings Spread best practice through Group Bolt-on inve
Slide 18: Management equity philosophy
Global Focus, Local Presence 17 Management equity philosophy Staffing is a people business – our model helps attract and retain the best people Aligns the interests of all shareholders 51 managers hold equity in the operating companies they are responsible for No legal obligation on Empresar
Slide 19: Growth markets
Global Focus, Local Presence 18 Growth markets Spread of operations in different markets to reduce risk from localised market issues 71% of net fee income from four largest staffing markets (US, Japan, UK & Germany) Good coverage in emerging staffing markets in Asia Pacific and Latin America U
Slide 20: Focus on temporary & contract recruitment
Global Focus, Local Presence 19 Focus on temporary & contract recruitment More stable throughout the economic cycle More predictable earnings Target to get 70% of net fee income from temporary & contract 100% 90% 80% Permanent 70% 60% Offshore Recruitment 50% Services 40% Temporary and contrac
Slide 21: Outlook
Global Focus, Local Presence 20 Outlook MARKET Market conditions are generally positive with synchronised GDP growth forecast for 2018 .... …. but geo-political risks and changes to legislation provide challenges PERIOD AHEAD Further investment in brands to build coverage and capacity Continue
Slide 22: Q&A
Global Focus, Local Presence 21 Q&A
Slide 23: Appendices
Global Focus, Local Presence 22 Appendices
Slide 24: Income statement – year ended December 2017
Global Focus, Local Presence 23 Income statement – year ended 31 December 2017 Constant £m 2017 2016 Change currency Revenue 357.1 270.4 32% 28% Net fee Income (gross profit) 69.4 59.0 18% 13% Overheads (57.8) (49.2) Interest costs same as prior year with higher bank Adjusted operating profit* 11.6
Slide 25: Balance sheet – December 2017
Global Focus, Local Presence 24 Balance sheet – 31 December 2017 £m 2017 2016 Property, plant & equipment 1.4 1.6 Goodwill and intangibles 54.1 56.8 Goodwill and intangibles decrease for amortisation and Deferred tax asset 1.0 1.0 currency movements 56.5 59.4 Trade and other receivables 53.1 50.2 Ne
Slide 26: Cash flow – year ended December 2017
Global Focus, Local Presence 25 Cash flow – year ended 31 December 2017 £m 2017 2016 Profit for the period 4.5 4.4 Depreciation, amortisation & share based payments 2.5 2.2 Tax and interest added back 4.2 4.1 Cash generated from operations was £12.6m, up £1.5m on the Loss on business disposal 0.9 -
Slide 27: Directors
Global Focus, Local Presence 26 Directors Board has extensive knowledge of the staffing industry with a combined experience of 100 years Tony Martin – Chairman Tony served as Chairman and CEO of Select Appointments and Vedior NV, building one of the world’s largest recruitment companies, before it w
Slide 28: Shareholder information
Global Focus, Local Presence 27 Shareholder information Shares in issue: 49,019,132 ordinary shares, including 260,384 held in EBT Market capitalisation: £46 million Outstanding options: 3.4m (6.8% of shares in issue) Significant shareholders (updated on 13 March 2018): Anthony Martin 13,924,595 28.
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