Empresaria Group Plc · LSE:EMR
Empresaria — Investor Presentation (March 2016)
26 slides from Empresaria's investor presentation, March 2016
Slide 1: Investor Presentation March 2016
Investor Presentation March 2016 Joost Kreulen Chief Executive Officer Spencer Wreford Group Finance Director
Slide 2: Cautionary Statement
Global Focus, Local Presence 1 Cautionary Statement The information contained in this presentation is not activities should not be taken as a representation that audited, is for personal use and informational purposes such trends or activities will continue in the future. No only and is not intended
Slide 3: An international staffing specialist: Multi-branded
Global Focus, Local Presence 2 An international staffing specialist • Strategy to develop leading brands with sector expertise Multi- • Diversified and balanced by geography and sector to lower risk branded • Understand the requirements of candidates and clients • Multi-branded model to address glob
Slide 4: An international staffing specialist: Growth Markets
Global Focus, Local Presence 3 An international staffing specialist • Not reliant on any single market or sector Growth • Brand expansion across geographies Markets • Attack market vertically in markets with talent shortages • Operating in key sectors offering international growth opportunities % ne
Slide 5: An international staffing specialist: Operational Mix
Global Focus, Local Presence 4 An international staffing specialist • Temporary staffing bias reflective of economic cycles Operational • Focus on professional & specialist job levels Mix • Temporary sales have reduced with deliberate move away from low value work • Investment focus to increase temp
Slide 6: Management Equity
Global Focus, Local Presence 5 Attract and retain key management • Management own shares in their brands Management • Attract and retain key staff Equity • Brand management incentivised to grow long term profits • Decentralised structure leaves operational responsibility with local managers • Shares
Slide 7: Group at a glance
Global Focus, Local Presence 6 Group at a glance Technical & IT, Digital Professional 19 specialist brands Industrial & Design services NFI £21.5m (£20.8m) NFI £9.2m (£7.2m) NFI £6.2m (£5.1m) 6 core sectors 18 countries Retail Executive search Healthcare Other NFI £3.3m (£3.2m) NFI £3.1m (£2.6m) NFI
Slide 8: Clear strategy: Buy & build approach
Global Focus, Local Presence 7 Clear strategy Buy & build approach Develop leading brands with sector Build - organic investment in existing expertise brands - Increase headcount in existing brand - Professional & specialist roles - Add a new vertical specialism - Sectors with long term growth prosp
Slide 9: Case study – IMS (India)
Global Focus, Local Presence 8 Case study – IMS (India) • Start up in 2006 • Management own 29% • Provide specialised outsourced services to the recruitment sector • Now operating from 3 centres in Ahmedabad • Servicing clients in US, UK and EMEA • Voice based (headhunting, market research, candidat
Slide 10: Case study – Pharmaceutical Strategies (USA)
Global Focus, Local Presence 9 Case study – Pharmaceutical Strategies (USA) • Acquisition in 2015 • Management own 7.5% (second generation shares) • Provide specialised pharmacists and nurses • Working nationwide with 75% of the PBM market • Rapid growth expected from the US healthcare sector over m
Slide 11: Results for the period
Global Focus, Local Presence 10 Results for the period
Slide 12: Overview
Global Focus, Local Presence 11 Overview Strong profit performance Full year profit was ahead of market forecast Continued delivery against strategy and 5 year plan Significant progress made across all KPIs Growth opportunities into 2016 Organic investment opportunities and impact of acquisition of
Slide 13: Highlights
Global Focus, Local Presence 12 Highlights • Consistency with 10 consecutive quarters of net fee income growth • Investment in USA a strong growth driver for 2016 – already integrated well into the Group • Investments made in 2014 progressing, with improved contributions in the year • Organic invest
Slide 14: Five year plan: targets and actual
Global Focus, Local Presence 13 5 year plan • Targets for period 2014 - 2018 Net debt to Conversion NFI growth Debtors Target ratio 10% ratio 20% 25% Actual 10% 16.3% (16% (4th year of 23% 2015 constant growth) currency)
Slide 15: Financial Summary
Global Focus, Local Presence 14 Financial Summary 2015 2014 % var Constant currency % var Revenue £187.3m £187.9m (2%) 3% Permanent revenue & ORS £24.7m £19.4m 28% 28% Temporary revenue £162.6m £168.6m (3.5%) 2% Net fee income £49.2m £44.6m 10% 16% Adjusted operating profit* £8.0m £6.6m 21% 30% Conv
Slide 16: Summary and outlook
Global Focus, Local Presence 15 Summary and outlook Driving KPIs Full year profit ahead of market forecast Growth in NFI, ahead of 10% average target Conversion ratio improvement continues, target of 20% remains Strong growth in PBT despite currency headwinds Focus on growth in line with s
Slide 17: Appendices
Global Focus, Local Presence 16 Appendices
Slide 18: Revenue analysis
Global Focus, Local Presence 17 Revenue analysis Temporary revenue (-3.5%) (+2% in constant currency) Permanent revenue +28% (28% constant currency) • 78% of currency impact from € (11% Chile, 8% Japan) • Core growth of 15% • Disposals (Czech/Slovakia/Malaysia) (-1%) • 2014 investments contribute 13
Slide 19: Net fee income and Conversion ratio
Global Focus, Local Presence 18 Net fee income Conversion ratio Net fee income +10% (+16% constant currency) Conversion ratio of 16.3% • Target of +10% average growth over 5 years • Costs managed but still investing in business with 16% increase in average staff numbers • Being driven by increase in
Slide 20: Net debt
Global Focus, Local Presence 19 Net debt 2011 2012 Net debt (£m) 2013 2014 2015 0 Net debt down 26% to £7.3m (2014: £9.8m) -2 -4 Average net debt down 33% to £8.9m (2014: £13.2m) -6 -8 Net debt to debtors ratio 23% (2014: 32%) -10 -12 -14 Average debtor days of 51 (2014: 52) -16 Cash gener
Slide 21: Income statement – year to 31 December 2015
Global Focus, Local Presence 20 Income statement – year to 31 December 2015 LFL £m 2015 2014 Change currency Revenue 187.3 187.9 (0%) 3% Revenue broadly flat, with permanent up 28% and temporary revenue down 3.5%. Net fee Income 49.2 44.6 10% 16% Net fee income up 10%, with temporary margin increasi
Slide 22: Balance sheet – 31 December 2015
Global Focus, Local Presence 21 Balance sheet – 31 December 2015 £m 2015 2014 Property, plant & equipment 1.5 1.2 Capital expenditure of £0.9m on fixed assets. Goodwill and intangibles 32.5 26.0 Deferred tax asset 0.9 0.9 Goodwill increased for Pharmaceutical Strategies. 34.9 28.1 Trade and other re
Slide 23: Cash flow – year ended 31 December 2015
Global Focus, Local Presence 22 Cash flow – year ended 31 December 2015 £m 2015 2014 Profit for the period 4.5 3.8 Depreciation, amortisation & share based Cash generated from operations was £7.6m, up on the prior year due to payments 1.3 1.1 higher profit levels. Exceptional provision paid down (£0
Slide 24: Directors
Global Focus, Local Presence 23 Directors Board has extensive knowledge of the staffing industry with a combined experience of 100 years Anthony Martin – Chairman Anthony served as Chairman and CEO of Select Appointments and Vedior NV, building one of the world’s largest recruitment companies, befor
Slide 25: Peer group analysis
Global Focus, Local Presence 24 Peer group analysis EPS % Share Mkt Cap P/E Ratio EV/EBITDA Op Margin Description Growth price (m) 1FY 2FY 1FY 2FY 2015 OFY 1FY Adecco SA 58.7 10,233 11.6x 11.3x 8.6x 8.1x 23% 4.5% 4.0% Randstad Holdings 48.2 8,822 12.5x 11.5x 8.7x 7.9x 26% 3.7% 3.0% Hays 116.4 1,667
Slide 26: Shareholder information
Global Focus, Local Presence 25 Shareholder information Shares in issue: 49,019,132 ordinary shares Market capitalisation: £42 million Outstanding options: 2.8m (5.5% of shares in issue) Significant shareholders (updated on 29 February 2016): Anthony Martin 13,924,595 28% Liontrust Asset Management
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