Robert Walters PLC · LSE:RWA
Robert Walters — H1 2018 Earnings Presentation
33 slides from Robert Walters's earnings presentation, Jul 26, 2018
Slide 1: Half Year Results
HALF YEAR RESULTS Robert Walters plc 26 July 2018 # AUSTRALIA ・ BELGIUM ・ BRAZIL ・ CANADA ・ CHINA ・ FRANCE ・ GERMANY ・ HONG KONG ・ INDIA ・ INDONESIA IRELAND ・ JAPAN ・ LUXEMBOURG ・ MALAYSIA ・ NETHERLANDS ・ NEW ZEALAND ・ PHILIPPINES ・ PORTUGAL ・ SINGAPORE SOUTH AFRICA ・ SOUTH KOREA ・ SPAIN ・ SWITZERLA
Slide 2: Agenda
GROUP OVERVIEW & HIGHLIGHTS Robert Walters, Chief Executive Officer FINANCIAL REVIEW Alan Bannatyne, Chief Financial Officer AGENDA OPERATIONS REVIEW Giles Daubeney, Deputy Chief Executive Officer OUTLOOK Robert Walters, Chief Executive Officer # © Robert Walters plc
Slide 3: Group Vision, Brands and Services
GROUP VISION, BRANDS AND SERVICES Vision: to be the leading global specialist professional recruitment group ROBERT WALTERS GROUP SPECIALIST CLERICAL RECRUITMENT PROFESSIONAL RECRUITMENT PROCESS RECRUITMENT EUROPE OUTSOURCING 3 © Robert Walters plc
Slide 4: Group Strategy
GROUP STRATEGY PURPOSE Powering people and organisations to fulfil their unique potential PRINCIPLES Innovation, teamwork, integrity and passion – these principles are the ROBERT WALTERS foundation stones of the activity of all staff worldwide GROUP STRATEGY The Group’s strategy for growth is centre
Slide 5: Group Highlights
GROUP HIGHLIGHTS Net fee income up 15% (17%*) to £188.6m (2017: £164.5m) Operating profit up 28% (30%*) to £20.7m (2017: £16.2m) Profit before taxation up 32% (35%*) to £20.6m (2017: £15.6m) Interim dividend up 45% to 4.0p (2017: 2.75p) All of the Group’s regions delivered increases in bot
Slide 6: Financial Review
FINANCIAL REVIEW
Slide 7: Financial Review
FINANCIAL REVIEW £M H1 2018 H1 2017 % CHANGE % CHANGE (CONSTANT CURRENCY*) REVENUE 625.9 562.7 11% 13% GROSS PROFIT (NET FEE INCOME) 188.6 164.5 15% 17% OPERATING PROFIT 20.7 16.2 28% 30% PROFIT BEFORE TAXATION 20.6 15.6 32% 35% Basic earnings per share increased by 30% to 21.2p (2017: 16.3p) In
Slide 8: Consolidated Group Income Statement
CONSOLIDATED GROUP INCOME STATEMENT 6 MONTHS TO 6 MONTHS TO 12 MONTHS TO £M 30 JUNE 2018 30 JUNE 2017 31 DECEMBER 2017 REVENUE 1 625.9 562.7 1,165.8 NET FEE INCOME 2 188.6 164.5 345.2 OPERATING PROFIT 20.7 16.2 41.9 INTEREST AND FOREIGN EXCHANGE (0.1) (0.6) (1.3) PROFIT BEFORE TAXATION 20.6 15.6 40.
Slide 9: Summary of Group Balance Sheet
SUMMARY OF GROUP BALANCE SHEET AS AT AS AT AS AT £M 30 JUNE 2018 30 JUNE 2017 31 DECEMBER 2017 GOODWILL 8.1 8.0 8.1 TANGIBLE ASSETS & COMPUTER SOFTWARE 13.0 13.1 12.9 21.1 21.1 21.0 RECEIVABLES 250.6 251.6 227.6 PAYABLES & PROVISIONS (169.2) (192.7) (164.1) 81.4 58.9 63.5 CURRENT AND DEFERRED TAX 5.
Slide 10: Summary of Group Cash Flow
SUMMARY OF GROUP CASH FLOW 6 MONTHS TO 6 MONTHS TO 12 MONTHS TO £M 30 JUNE 2018 30 JUNE 2017 31 DECEMBER 2017 OPERATING PROFIT 20.7 16.2 41.9 DEPRECIATION & AMORTISATION 2.5 2.2 4.7 SHARE-BASED PAYMENTS & OTHER NON-CASH ITEMS 2.9 2.8 6.0 WORKING CAPITAL MOVEMENTS (17.8) (3.7) (9.6) CASH GENERATED BY
Slide 11: Regional Analysis Net Fee Income
REGIONAL ANALYSIS NET FEE INCOME 6 months to 30 June 2018 6 months to 30 June 2017 28% UK 29% (£52.6m) 39% UK 41% Asia Pacific (£48.3m) Asia Pacific (£73.1m) (£67.4m) 26% Europe 23% (£48.9m) 7% Europe Other (£38.0m) 7% International Other (£14.0m) International (£10.9m) 11 © Robert Walters plc
Slide 12: Track Record of Growth
TRACK RECORD OF GROWTH Net Fee Income H1 2014 - 2018 Profit Before Taxation H1 2014 - 2018 200,000 25,000 180,000 160,000 20,000 140,000 120,000 15,000 £000's £000's 100,000 80,000 10,000 60,000 40,000 5,000 20,000 0 0 H1 2014 H1 2015 H1 2016 H1 2017 H1 2018 H1 2014 H1 2015 H1 2016 H1 2017 H1 2018 O
Slide 13: Operations Review
OPERATIONS REVIEW
Slide 14: Management Team
MANAGEMENT TEAM Established and experienced senior management team On-going commitment to grow management from within Well-established approach to succession planning International career opportunities Giles Daubeney Deputy Chief Executive Officer (30)* David Swan Toby James Matthew Chris Hi
Slide 15: Asia Pacific
ASIA PACIFIC
Slide 16: Asia Pacific (39% of net fee income)
ASIA PACIFIC (39% of net fee income) Net fee income: £73.1m (2017: £67.4m) Permanent/contract recruitment split Operating profit: £9.2m (2017: £7.7m) 23% Contract Locations: (2017: 24%) Australia Philippines China Singapore Hong Kong South Korea India Taiwan 77% Indonesia Thailand Permanent Japa
Slide 17: Asia Pacific: Japan & Korea
ASIA PACIFIC Japan & Korea Japan Record first half performance Pace of internationalisation of Japanese businesses and globalisation of the Japan market shows no sign of slowing Ongoing professional and bilingual skill shortage across all sectors and disciplines Technology (fintech, AI, IoT,
Slide 18: Asia Pacific: South East Asia & Greater China
ASIA PACIFIC South East Asia & Greater China Strong performance across both emerging recruitment markets, where we have first mover advantage and well-established markets with opportunity for further growth Hong Kong, Korea, Indonesia, Thailand, the Philippines and Vietnam delivered record first
Slide 19: Asia Pacific: Australia & New Zealand
ASIA PACIFIC Australia & New Zealand Australia First half growth strongest in Victoria, Queensland and South Australia Spike in hiring activity in risk and compliance within banking – across permanent and contract recruitment Technology (fintech, cyber-security, data analytics) professionals c
Slide 20: UK
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Slide 21: UK (28% of net fee income)
UK (28% of net fee income) Net fee income: £52.6m (2017: £48.3m) Permanent/contract recruitment split Operating profit: £4.2m (2017: £4.0m) 36% Contract Locations: (2017: 39%) Birmingham Bracknell Leeds London 64% Manchester Permanent Milton Keynes (2017: 61%) St Albans Average tenure Recruitmen
Slide 22: UK: Two speed job market
UK Two speed job market – areas exposed to financial services versus non-financial services Financial Services relatively subdued after more buoyant 2017 Pockets of growth do remain – risk, compliance, audit, fintech Growth stronger in areas not aligned to financial services and UK regions
Slide 23: Europe
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Slide 24: Europe (26% of net fee income)
EUROPE (26% of net fee income) Net fee income: £48.9m (2017: £38.0m) Permanent/contract/interim recruitment split Operating profit: £7.1m (2017: £4.4m) 20% Interim (2017:19%) Locations: Benelux France Germany 55% Ireland Permanent Portugal (2017: 55%) 25% Contract Spain (2017: 26%) Switzerland A
Slide 25: Europe
EUROPE Strong blend of revenue streams covering permanent, contract and interim recruitment All growing well but notable acceleration in permanent recruitment activity as market confidence has increased Seven out of eight markets delivered record performances with France, the region’s largest
Slide 26: Other International
OTHER INTERNATIONAL
Slide 27: Other International (7% of net fee income)
OTHER INTERNATIONAL (7% of net fee income) Net fee income: £14.0m (2017: £10.9m) Permanent/contract recruitment split Operating profit: £0.2m (2017: £0.1m) 100% Permanent Locations: (2017: 100%) Brazil Canada Middle East South Africa USA Average tenure Recruitment net fee income by discipline 4%
Slide 28: Other International
OTHER INTERNATIONAL North & South America Ongoing investment in headcount to take advantage of growth opportunities New York (legal, compliance, sales & marketing) performed well and newer business in Canada continues to grow strongly West coast market remains active with demand highest in s
Slide 29: Resource Solutions
RESOURCE SOLUTIONS
Slide 30: Resource Solutions – The Model
RESOURCE SOLUTIONS – THE MODEL *The Recruitment Process Outsourcing (RPO) market is projected to grow by 15.4% per annum until 2019 (Source: Nelson Hall) 30 © Robert Walters plc
Slide 31: Resource Solutions
RESOURCE SOLUTIONS Net fee income continued to grow well across UK, US and Asia Multi-country RPO and Total Talent Acquisition services in high demand Clients across over 60 countries Five client service centres – Hyderabad, Jacksonville, Johannesburg, Manchester and Manilla Additional ser
Slide 32: Outlook
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Slide 33: Outlook
OUTLOOK “We enter the second half of the year with confidence that the Group’s platform for growth continues to be strong, across both emerging and well-established markets and disciplines, and that we are well positioned to further capitalise on market opportunities as they arise.” 33 © Robert Walt