PageGroup PLC · LSE:PAGE
PageGroup — Michael Page International — H1 2012 Earnings Presentation
38 slides from PageGroup's earnings presentation, August 2012
Slide 1: Half Year Results 2012
Half Year Results 2012 | August 2012
Slide 2: Agenda
Michael Page International Half Year Results 2012 | 2 Financial Review Segmental Analysis Agenda Strategy Summary and Outlook Appendices
Slide 3: Income Statement
FINANCIAL REVIEW Michael Page International Half Year Results 2012 | 3 Resilient Asia “Quote” conditions Pacificgross profit performance in challenging INCOME STATEMENT Change before Before After exceptional exceptional Exceptional exceptional Change items items items before items at H1 2012 H1 2012
Slide 4: Exceptional item
FINANCIAL REVIEW Michael Page International Half Year Results 2012 | 4 Exceptional item relates to the removal of a management layer for Continental Europe and the Americas Legacy management structure removed; will not be replaced Exceptional Severance packages totalled £7.8m, item including £1.5m o
Slide 5: Regional results
FINANCIAL REVIEW Michael Page International Half Year Results 2012 | 5 Regional results Gross profit and operating profit by region Operating profit (before exceptional Gross profit items) H1 2012 H1 2012 £m % Group £m % Group EMEA 117.9 43% 13.4 37% United Kingdom 61.7 22% 8.6 24% Asia Pacific 56.9
Slide 6: Perm/Temp gross profit and gross margins
FINANCIAL REVIEW Michael Page International Half Year Results 2012 | 6 As Pacific Asia “Quote” markets weaken temporary recruitment is more resilient PERM/TEMP GROSS PROFIT AND GROSS MARGINS Growth Rates H1 2012 H1 2011 Constant Gross profit £m £m Reported currency Permanent 215.7 219.4 -1.7% +0.9%
Slide 7: Cash flow
FINANCIAL REVIEW Michael Page International Half Year Results 2012 | 7 Asia Pacific “Quote” £21m paid in dividends CASH FLOW H1 2012 H1 2011 £m £m Operating profit before exceptional items 36.0 45.4 Exceptional items (7.8) - Operating profit after exceptional items 28.2 45.4 Depreciation and share s
Slide 8: Strong balance sheet with £32m cash
FINANCIAL REVIEW Michael Page International Half Year Results 2012 | 8 Strong Asia balance sheet with £32m cash “Quote” Pacific at end of June 2012 BALANCE SHEET 30 June 31 Dec 2012 2011 £m £m Intangible assets 44.1 39.7 Tangible assets 31.7 33.2 75.8 72.9 Trade and other receivables 206.8 199.1 Tra
Slide 9: Half year 2012 dividend maintained at 3.25p
FINANCIAL REVIEW Michael Page International Half Year Results 2012 | 9 Asia Pacific “Quote” Half year 2012 dividend maintained at 3.25p H1 2012 H1 2011 (pence H1 2012 (pence H1 2011 Dividend per share) £m per share) £m Interim dividend 3.25* 9.9* 3.25 9.7 *Proposed and payable on 5 October 2012 H1 2
Slide 10: Geographic analysis of gross profit
SEGMENTAL ANALYSIS Michael Page International Half Year Results 2012 | 10 HEADCOUNT AND GROSS PROFIT AS REPORTED GEOGRAPHIC ANALYSIS 6000 200 OF GROSS PROFIT 150 4500 152.4 147.8 142.6 141.3 140.3 138.0 135.9 136.1 Headcount 128.1 127.3 123.4 121.0 78% of gross profit 119.8 118.7 £m 111.7 112.8 100
Slide 11: Discipline analysis of gross profit
SEGMENTAL ANALYSIS Michael Page International Half Year Results 2012 | 11 HEADCOUNT AND GROSS PROFIT AS REPORTED DISCIPLINE ANALYSIS OF 6000 200 GROSS PROFIT 150 4500 152.4 147.8 142.6 141.3 140.3 138.0 135.9 136.1 Headcount 128.1 127.3 123.4 121.0 119.8 118.7 £m 111.7 112.8 100 3000 105.5 97.9 95.0
Slide 12: EMEA
SEGMENTAL ANALYSIS Michael Page International Half Year Results 2012 | 12 H1 2012 H1 2011 EMEA Gross profit £117.9m -2% £120.3m (43% of Group) Operating profit pre exceptional items £13.4m -21% £17.0m Headcount 2,185 +3% 2,126 HEADCOUNT AND GROSS PROFIT AS REPORTED 80 2400 70.2 60 1800 65.2 64.1 63.
Slide 13: United Kingdom
SEGMENTAL ANALYSIS Michael Page International Half Year Results 2012 | 13 H1 2012 H1 2011 UNITED KINGDOM Gross profit £61.7m -7% £66.0m (22% of Group) Operating profit pre exceptional items £8.6m -17% £10.4m Headcount 1,243 -7% 1,343 HEADCOUNT AND GROSS PROFIT Market conditions 75 2100 remained diff
Slide 14: Asia Pacific
SEGMENTAL ANALYSIS Michael Page International Half Year Results 2012 | 14 H1 2012 H1 2011 ASIA PACIFIC Gross profit £56.9m +17% £48.6m (21% of Group) Operating profit pre exceptional items £13.8m +13% £12.2m Headcount 1,050 +20% 874 HEADCOUNT AND GROSS PROFIT AS REPORTED 40 1200 30 900 30.6 Asia +19
Slide 15: Americas
SEGMENTAL ANALYSIS Michael Page International Half Year Results 2012 | 15 H1 2012 H1 2011 AMERICAS Gross profit £37.4m -7% £40.3m (14% of Group) Operating profit pre exceptional items £0.2m -97% £5.8m Headcount 843 +8% 778 Clear market leader in HEADCOUNT AND GROSS PROFIT AS REPORTED Latin America w
Slide 16: Strategy
STRATEGY Michael Page International Half Year Results 2012 | 16 Building the platform for long-term growth by: • Organic growth • Meritocratic culture Strategy • Diversification • Financial conservatism • onsistent brand strategy and C operating model
Slide 17: One clear, consistent strategy of organic growth
STRATEGY Michael Page International Half Year Results 2012 | 17 ne clear, consistent strategy of organic growth, continuing diversification by geography O and discipline Meritocratic, building trust, clear values and culture, retaining high flyers and entrepreneurs 34 29 28 16 4 216 230 280 1 16 yea
Slide 18: Business has been transformed over last decade
STRATEGY Michael Page International Half Year Results 2012 | 18 POSITIONED FOR GROWTH Business has been transformed over last decade Reported gross profit growth H1 2012 H1 2011 H1 2012 Fee earners: 3,755 TRACK RECORD 11% Rest of EMEA* +42% +2% (Gross Profit CAGR) Asia +79% +23% 13% Years ’91-’00 ’0
Slide 19: Investment: Development of UK
STRATEGY Michael Page International Half Year Results 2012 | 19 Remains Group’s largest and most established country INVESTMENT: Strong profit resilience with long-term potential for growth Established and stable management team key to gaining Development of UK market share 18 12 12 69 73 46 1 1 1 5
Slide 20: UK: Continued investment for growth
STRATEGY Michael Page International Half Year Results 2012 | 20 Investing to retain our best people, Directors now 6% of UK staff – c. 3.5% pre-downturn epth of management experience enabling D UK: us to grow market share profitably Continued rowing talent for newer markets: 66 G investment internat
Slide 21: Investment: Development of Asia
STRATEGY Michael Page International Half Year Results 2012 | 21 INVESTMENT: New offices opened: Suzhou and Taipei Continued investment in headcount, +17% in H1 2012 Development of Asia 5 3 3 42 26 1 9 years 15 6 years 31/2 years 1 Cumulative Cumulative Cumulative 1 gross profit gross profit gross pr
Slide 22: Asia: Continued investment for growth
STRATEGY Michael Page International Half Year Results 2012 | 22 In the last 24 months: • 2 new countries – India and Malaysia • 9 new offices, now 16 in the region Asia: Continued • Investment in larger offices as existing office investment space outgrown for growth • Headcount up c.206% to 605 • 38
Slide 23: Investment: Development of Latin America
STRATEGY Michael Page International Half Year Results 2012 | 23 C lear market leader with 5 countries, 20 offices and INVESTMENT: 580 headcount L aunched in Bogota, Colombia and new office in Macaé, Development of Latin America Rio de Janeiro 5 3 45 1 36 4 1 4 years 6 years 31/2 years 1 Cumulative C
Slide 24: Latin America: Continued investment for growth
STRATEGY Michael Page International Half Year Results 2012 | 24 In the last 24 months: • new countries opened: Chile and 2 Latin America: Colombia (now 57 staff) Continued • 12 new offices, now 20 in the region investment for growth • Headcount up 95% to 580 • oll-out of Page Personnel to Argentina,
Slide 25: Investment: Development of Africa
STRATEGY Michael Page International Half Year Results 2012 | 25 Countries we have INVESTMENT: Morocco Tunisia placed in Countries with offices Casablanca Development of Africa Offices Algeria Libya Egypt Mauritania Mali Niger Sudan Senegal Chad Burkina-Faso Djibouti Guinea Ghana Benin Ivory Togo Nig
Slide 26: Summary and Outlook
SUMMARY AND OUTLOOK Michael Page International Half Year Results 2012 | 26 Summary: • Resilient gross profit performance in difficult market environment • Continued investment in regional diversification and areas for future growth Summary • Strong balance sheet and financial conservatism and Outloo
Slide 27: www.michaelpageinternational.com
www.michaelpageinternational.com
Slide 28: Appendices
Michael Page International Half Year Results 2012 | 28 Appendices
Slide 29: Group quarterly gross profit trend: 2002 to H1 2012
APPENDICES Michael Page International Half Year Results 2012 | 29 Group quarterly gross profit trend: 2002 to H1 2012 152.4 147.8 142.6 141.3 140.3 Gross Profit (£m) as reported 136.1 150 138.0 135.9 127.3 128.2 123.4 119.9 121.0 118.7 112.8 111.7 105.5 97.9 95.0 93.1 100 89.1 90.6 87.4 83.8 82.3 79
Slide 30: Long-term approach to investment
APPENDICES Michael Page International Half Year Results 2012 | 30 Long-term approach to investment 2006 2010 South Africa Chile 2001 Russia 2011 Switzerland Ireland India 1996 Japan UAE Malaysia Singapore Mexico Qatar 2002 2008 Belgium 2012 Austria 1976 1985 1993 1998 Sweden Colombia Turkey United K
Slide 31: Fee earner/support staff headcount trend
APPENDICES Michael Page International Half Year Results 2012 | 31 Fee earner/support staff headcount trend 5000 Ratio Fee Earners Fee Earners : Support Staff 1999 59:41 Support Staff 2000 58:42 2001 57:43 4000 2002 58:42 2003 60:40 2004 64:36 2005 71:29 2006 74:26 2007 76:24 3000 2008 74:26 Headcoun
Slide 32: Cost structure
APPENDICES Michael Page International Half Year Results 2012 | 32 Cost structure IT (c.10%) MISCELLANEOUS (c.5%) • Data centre consolidation • Travel - reduces support staff • Staff welfare - greater resilience and disaster recovery Staff Costs (c.75%) - development of new • Headcount – reacting to
Slide 33: Number of shares and options outstanding
APPENDICES Michael Page International Half Year Results 2012 | 33 Number of shares and options outstanding 410 175p 161p Number of shares and options outstanding (millions) 177p Options outstanding 161p Shares outstanding Weighted average option price 390 Options granted over 5.0m 163p shares in 201
Slide 34: Dividends, share repurchase history and net cash position
APPENDICES Michael Page International Half Year Results 2012 | 34 Eniamconse Dividend feugaitoradmaintained increased duip ea feuissi. through economic cycles Excess cash coreet Patem nulla used tovent repurchase lor adipit shares nulla consectem quat. Maintain strong Iquat ulputet, balance sheet su
Slide 35: Operating profit/Gross profit (%)
APPENDICES Michael Page International Half Year Results 2012 | 35 Strong conversion rates whilst investing for the future 40 35 30 25 Operating profit*/Gross profit (%) 20 15 10 5 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 H1 2012 -5 -10 KEY: United Kingdom EMEA Asia Pacific Americas Group -15 *
Slide 36: Continued investment in building a consistent business through global organic growth
APPENDICES Michael Page International Half Year Results 2012 | 36 In the last 12 months we continued to invest in building a consistent business through global organic growth ORGANIC GLOBAL EXPANSION Basil Le Roux London - Birmingham - Leeds - Manchester - Tokyo James Mayo London - Toronto - San Fra
Slide 37: www.michaelpageinternational.com
www.michaelpageinternational.com
Slide 38: Cautionary Statement
Cautionary Statement The information contained in this presentation is not audited, is for personal use and informational purposes only and is not intended for distribution to, or use by, any person or entity in any jurisdiction in any country where such distribution or use would be contrary to law
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