PageGroup PLC · LSE:PAGE
PageGroup — FY2013 Earnings Presentation
43 slides from PageGroup's earnings presentation, Jun 25, 2014
Slide 1: Full year results 2013
PageGroup Full year results 2013 Worldwide leaders in specialist recruitment page.com
Slide 2: Agenda
PageGroup 2013 full year results | 2 Agenda Financial Review Segmental Analysis Business Review Appendices
Slide 3: Financial Review
FINANCIAL REVIEW
Slide 4: 2013 Group Financial Highlights
PageGroup 2013 full year results | 4 Financial Review 2013 Group Financial Highlights 2013 vs 2012 Revenue £1,005.5m 1.6% Gross Profit £513.9m 2.5% Operating Profit before exceptional items £68.2m 4.7% Operating Profit after exceptional items £65.7m 14.7% Basic EPS before exceptional items 15.1p 11.
Slide 5: Income Statement
PageGroup 2013 full year results | 5 Financial Review Income Statement Constant 2013 2012 currency £m £m Change change Revenue 1,005.5 989.9 +1.6% +1.2% Gross Profit 513.9 526.9 -2.5% -2.7% Operating Profit before exceptional items 68.2 65.1 +4.7% +4.7% Exceptional Items (2.5) (7.8) Net Interest (ex
Slide 6: Exceptional Items
PageGroup 2013 full year results | 6 Financial Review Exceptional Items 2013: Exceptional operating profit charge of £2.5m relating to French Profit Share in Page Personnel France (PPF) Issue originally raised in tax audit in March 2008 Profit increased in France (and lowered in UK) as result of jud
Slide 7: Cost control and efficiencies
PageGroup 2013 full year results | 7 Financial Review Cost control and efficiencies OPERATIONAL COSTS • January 2014 c. 3% increase in salaries (c. £14m) Fee Earner / Support NON-OPERATIONAL COSTS • Programme to drive harmonisation • Support staff fell by 155, with fee earners up 186 • £10m savings
Slide 8: Year-on-year growth in temporary gross profit
PageGroup 2013 full year results | 8 Financial Review Year-on-year growth in temporary gross profit Group MP PP 2013 2012 Growth Rates 2013 2013 PERM/TEMP Constant GROSS PROFIT £m £m Reported Currency £m £m Permanent 392.2 409.7 -4.3% -4.3% 316.4 75.8 Temporary 121.7 117.2 +3.8% +2.7% 61.8 59.9 Rati
Slide 9: Strong balance sheet with £85m in cash at 31 December 2013
PageGroup 2013 full year results | 9 Financial Review Strong balance sheet with £85m in cash at 31 December 2013 2013 2012 BALANCE SHEET £m £m Intangible assets 42.1 44.1 Tangible assets 25.2 28.9 67.3 73.0 Trade and other receivables 189.4 185.8 Trade, other payables, current and deferred taxes (13
Slide 10: Intangible Asset – new operating system and related applications
PageGroup 2013 full year results | 10 Financial Review Intangible Asset – new operating system and related applications • Intangible asset moved from ‘assets under construction’ to ‘in-use assets’ in May 2013 • Amortisation commenced in May 2013: 8 months in 2013, £5.4m charge • Related intangible a
Slide 11: Cash flow: Net cash increased by £24m
PageGroup 2013 full year results | 11 Financial Review Cash flow: Net cash increased by £24m 2013 2012 £m £m Movement in net cash 24.0 4.7 Cash flow movement (£'000)
Slide 12: Final dividend increased to 7.25p, up 7.4%
PageGroup 2013 full year results | 12 Financial Review Final dividend increased to 7.25p, up 7.4% 2013 2013 2012 2012 DIVIDENDS (pence per share) £m (pence per share) £m Interim 3.25 10.1 3.25 9.9 Final * 7.25 22.2 6.75 20.5 Total 10.5 32.3 10.0 30.4 * Proposed and payable on 23 June 2014
Slide 13: Segmental Analysis
PageGroup SEGMENTAL ANALYSIS
Slide 14: Positive trends through year
PageGroup 2013 full year results | 14 Segmental Analysis Positive trends through year Positive trend Regions: still a Group EMEA conversion through 2013 mixed story conversion rate +5.7 pts, both Gross & UK & USA positive improving H2 vs H1 Operating Profit Brazil & Australia H1: 12.3% 20 of 34 coun
Slide 15: Regional Results Summary
PageGroup 2013 full year results | 15 Segmental Analysis Regional Results Summary Americas (15%*) £76.2m gross profit UK (24%*) £4.6m operating profit 6.1% conversion rate £124.1m gross profit £18.4m operating profit 14.8% conversion rate EMEA (40%*) £207.8m gross profit £25.9m operating profit 12.5
Slide 16: Europe, Middle East, Africa
PageGroup 2013 full year results | 16 Segmental Analysis Europe, Middle East, Africa 2013 2012 YOY 2013 H2 2013 H1 H2 v H1 % 72:28 Gross Profit 207.8 218.4 -4.9% 100.6 107.1 -6.1% Perm vs Temp Operating Profit 25.9 22.1 17.5% 15.5 10.4 49.1% 40% Of Gross Profit Conversion 12.5% 10.1% +2.4pts 15.4% 9
Slide 17: United Kingdom
PageGroup 2013 full year results | 17 Segmental Analysis United Kingdom 2013 2012 YOY 2013 H2 2013 H1 H2 v H1 % 71:29 Gross Profit 124.1 121.4 2.2% 62.6 61.4 2.0% Perm vs Temp Operating Profit 18.4 15.8 16.6% 8.8 9.6 -8.0% 24% Of Gross Profit Conversion 14.8% 13.0% +1.8 pts 14.1% 15.6% -1.5 pts Reco
Slide 18: Asia Pacific
PageGroup 2013 full year results | 18 Segmental Analysis Asia Pacific 2013 2012 YOY 2013 H2 2013 H1 H2 v H1 % 85:15 Gross Profit 105.8 114.9 -7.9% 51.5 54.3 -5.2% Perm vs Temp Operating Profit 19.2 29.0 -33.6% 9.6 9.6 0.1% 21% Of Gross Profit Conversion 18.2% 25.2% -7 pts 18.7% 17.7% +1 pts Strong A
Slide 19: Americas
PageGroup 2013 full year results | 19 Segmental Analysis Americas 2013 2012 YOY 2013 H2 2013 H1 H2 v H1 % 86:14 Gross Profit 76.2 72.2 5.6% 37.2 39.1 -4.9% Perm vs Temp Operating Profit 4.6 -1.7 n/a 2.1 2.5 -16.4 15% Of Gross Profit Conversion 6.1% -2.3% +8.4 pts 5.7% 6.4% -0.8 pts Turnaround in Bra
Slide 20: Business Review
BUSINESS REVIEW
Slide 21: Business Review
PageGroup 2013 full year results | 21 Business Review Business Review 2013 Key Actions IT System progress High potential markets Spotlight: • US: building for growth • UK: motivating the talent pool • Spain: resilience through flexibility Diversity of Disciplines Platform for growth Conclusion Outlo
Slide 22: 2013 Key Actions
PageGroup 2013 full year results | 22 Business Review 2013 Key Actions All on ‘One Page’ • clarity over remits of 3 key Streamlining brands across the support the globe functions Reinforced • ensuring quality, consistency of consistency & business model New operating scalability system separated • £
Slide 23: 2013: A more modern approach to technology
PageGroup 2013 full year results | 23 Business Review 2013: A more modern approach to technology Adopting latest 2013/14 versions of best-in-class systems: • CRM • Search • Automatic CV parsing • Job Posting management • Big Data analytics Completed Building agility • Single global website - all dev
Slide 24: High Potential Markets: Our Approach in 2013
PageGroup 2013 full year results | 24 Business Review High Potential Markets: Our Approach in 2013 Market 2013 action USA Upgrade management team Grow fee-earner headcount/ new office LatAm Broaden geographic diversity Cautious in Brazil/ adventurous in Mexico Commitment to invest China Grow fee-ear
Slide 25: US: High Potential Market
PageGroup 2013 full year results | 25 Business Review US: High Potential Market Senior management transfers-in from around Page Group • enables growth acceleration of headcount & discipline • reduced attrition by over 50% • 26% increase in fee earner headcount: from 167 to 211 Revenue growth driven
Slide 26: UK: Motivating the Talent Pool
PageGroup 2013 full year results | 26 Business Review UK: Motivating the Talent Pool Continued Senior Management opportunities through: • relocations to international markets • movement between disciplines & brands Facilitated ongoing promotion within business of exceptional talent • 220+ people in
Slide 27: Spain: Resilience through flexibility
PageGroup 2013 full year results | 27 Business Review Spain: Resilience through flexibility Reallocation of management talent overseas • 10 people to 7 countries Flexibility within cost base • 240+ FE to 142 FE; Madrid: 5 offices to 2 • But 46 promotions in 2012-13 kept motivation high Reduced geogr
Slide 28: Discipline Analysis
PageGroup 2013 full year results | 28 Business Review Discipline Analysis Discipline diversity 2009-13: significant shift in Within High helps both internally discipline mix Potential Markets, and externally • Finance & Accounting 41% now in excess of • different geographies; (from 50%) 100 country-
Slide 29: Delivering the Platform for Growth
PageGroup 2013 full year results | 29 Business Review Delivering the Platform for Growth • ‘One Page’ platform & culture Enables us to: • Model applied consistently • Identify/assess opportunities on across globe global/regional/country basis • Experienced management • Manage resources across locate
Slide 30: Conclusion
PageGroup 2013 full year results | 30 Business Review Conclusion Focused on delivering on ultimate goals Maximising the outcome • sustainable growth • Quantum of opportunity – • long-term investment magnified by scale of operations • enhanced shareholder returns • Direction of travel – positive indi
Slide 31: Outlook
PageGroup 2013 full year results | 31 Business Review Outlook Economic markets remain volatile Foreign exchange translation headwinds H2 2013 trading trends continued into Q1 2014 March is key month of quarter Clear and consistent growth strategy
Slide 32: Appendices
APPENDICES
Slide 33: Business Model
PageGroup 2013 full year results | 33 Appendices Business Model
Slide 34: 2013 Awards
PageGroup 2013 full year results | 34 Appendices 2013 Awards • Recruitment International’s Best Recruitment Company to work for (£100m+) • 9th year in The Sunday Times ‘100 Best Companies To Work For’ • Silver Award from Opportunity Now; Bronze Award from Race for Opportunity • Gestão & RH Magazine’
Slide 35: Group quarterly gross profit trend: 2003 to 2013
PageGroup 2013 full year results | 35 Appendices Group quarterly gross profit trend: 2003 to 2013
Slide 36: Clear on brand
PageGroup 2013 full year results | 36 Appendices Clear on brand At 31 December 2013
Slide 37: Continued investment in building a consistent business
PageGroup 2013 full year results | 37 In the last 12 months we continued to invest in building Appendices a consistent business through global organic growth Organic global expansion
Slide 38: Long-term approach to investment
PageGroup 2013 full year results | 38 Appendices Long-term approach to investment
Slide 39: Fee earner/support staff headcount trend
PageGroup 2013 full year results | 39 Appendices Fee earner/support staff headcount trend Ratio Fee Earners : Support Staff 1999 59:41 2000 58:42 2001 57:43 2002 58:42 2003 60:40 2004 64:36 2005 71:29 2006 74:26 2007 76:24 2008 74:26 2009 71:29 2010 73:27 2011 72:28 2012 71:29 2013 74:26
Slide 40: Cost structure
PageGroup 2013 full year results | 40 Appendices Cost structure IT (c.10%) • Data centre consolidation MISCELLANEOUS (c.5%) – reduces support staff • Travel – greater resilience and • Staff welfare disaster recovery – development of new recruitment software Staff Costs (c.75%) • Headcount – reacting
Slide 41: Strong conversion rates whilst investing for the future
PageGroup 2013 full year results | 41 Appendices Strong conversion rates whilst investing for the future
Slide 42: Dividends, share repurchase history and year end net cash/debt position
PageGroup 2013 full year results | 42 Dividends, share repurchase history and year end net Appendices cash/debt position Dividend increased or Excess cash used to Maintain strong balance maintained through repurchase shares sheet position economic cycles
Slide 43: Number of shares and options outstanding
PageGroup 2013 full year results | 43 Appendices Number of shares and options outstanding