Empresaria Group Plc · LSE:EMR
Empresaria — H1 2019 Earnings Presentation
31 slides from Empresaria's earnings presentation, August 2019
Slide 1: Investor Presentation – Interim 2019 results
August 2019 Investor Presentation – Interim 2019 results Rhona Driggs Chief Executive Officer Tim Anderson Chief Financial Officer
Slide 2: Contents
Global Focus, Local Presence 1 Contents • Appointed as Chief Executive Officer in June 2019 Overview 3 having recently served as Empresaria Group's Chief Operating Officer. Strategy & Delivery 6 • Nearly 30 years' experience working in international staffing companies Financial Review 11 • Recognise
Slide 3: Overview
Global Focus, Local Presence 2 Overview
Slide 4: Diversified business model
Global Focus, Local Presence 3 Diversified business model • 5 sectors with over 1,950 employees operating in 21 countries • Spread of operations reduces impact from localised market issues • 67% of net fee income from outside the UK • Growing stength in Offshore Recruitment Services further diversif
Slide 5: Overview of the half year
Global Focus, Local Presence 4 Overview of the half year • Solid growth in net fee income • +7%, +6% in constant currency • 55% growth in Offshore Recruitment Services sector • Fall in profits in the first half as expected • Low starting point for temps in Germany and Japan following regulatory chan
Slide 6: Strategy & Delivery
Global Focus, Local Presence 5 Strategy & Delivery
Slide 7: Focused growth strategy
Global Focus, Local Presence 6 Focused growth strategy Build size and scale in key sectors and geographies Improve productivity through leading brands Delivered through Organic growth & External investments Invest in like-minded people who share our values and passion
Slide 8: A focused sector approach
Global Focus, Local Presence 7 A focused sector approach • Alignment of business into 5 core sectors – Professional, IT, Commercial, Engineering, Offshore Recruitment Services • Improve collaboration and leverage operational synergies • Sector heads to be identified reporting into CEO • Scale sector
Slide 9: Our sectors and brands
Global Focus, Local Presence 8 Our sectors and brands Professional IT Engineering Commercial ORS 43% of Group NFI 19% of Group NFI 6% of Group NFI 25% of Group NFI 8% of Group NFI
Slide 10: Investing in the business
Global Focus, Local Presence 9 Investing in the business • Central team • Investment in marketing and training teams • Brand management and operational structures • Reorganisations undertaken in 3 brands to ensure structure and approach is optimised to deliver and to improve underperforming business
Slide 11: Financial Review
Global Focus, Local Presence 10 Financial Review
Slide 12: Summary income statement
Global Focus, Local Presence 11 Summary income statement % change £m 2019 2018 % change constant currency Net fee income 36.3 34.0 +7% +6% Adj op profit - Sectors 6.2 6.5 -5% Central costs (1.9) (1.5) -27% Adjusted operating profit 4.3 5.0 -14% -14% Adjusted profit before tax 3.7 4.7 -21% -21% Adjus
Slide 13: Adjusted operating profit against prior year
Global Focus, Local Presence 12 Adjusted operating profit against prior year 1. Total contribution from Germany and Japan is down 6 due to the lower starting point for temp numbers following the regulatory changes last year. These businesses are rebuilding well but German progress 5 offset by weaken
Slide 14: Earnings
Global Focus, Local Presence 13 Earnings 2019 2018 % var Adjusted profit before tax £3.7m £4.7m -21% Adjusted, diluted earnings per share 3.3p 5.0p -34% • Adjusted PBT reflects fall in operating profits and Adjusted diluted EPS (p) an increase of £0.3m to the interest charge - 14 £0.2m from adoption
Slide 15: Adjusted net debt
Global Focus, Local Presence 14 Adjusted net debt Adjusted net debt (£m) 2015 2016 2017 2018 2019 0 £m 2019 2018 -5 Adjusted net debt 18.1 17.1 -10 Half year Full year Net finance costs 0.6 0.3 -15 -20 Debt to debtors ratio 38% 36% -25 Adjusted net debt excludes cash held in respect of pilot bonds (
Slide 16: Investment in ConSol
Global Focus, Local Presence 15 Investment in ConSol • £3.5m investment in July 2019 taking our ownership from 65% to 82.5% • Acquisition on same valuation as initial stake • Business is performing strongly in a key sector for the Group • Significant growth potential – recent launch of sub-branch 4w
Slide 17: Summary
Global Focus, Local Presence 16 Summary
Slide 18: Confident in future
Global Focus, Local Presence 17 Confident in future Strong, diversified foundation able to deliver next phase of growth • Investments made in central team enhancing support to Group companies • Stronger Together initiative launch in May • Aligned businesses around core sectors A focused strategy bas
Slide 19: Q&A
Global Focus, Local Presence 18 Q&A
Slide 20: Appendices
Global Focus, Local Presence 19 Appendices
Slide 21: Professional
Global Focus, Local Presence 20 Professional % change £m 2019 2018 % change (constant currency) Revenue 68.4 77.0 -11% -11% Net fee income 15.6 14.4 +8% +7% Adjusted operating profit 2.0 2.0 - -1% % of Group net fee income 43% 42% • Net fee income growth despite challenges from Brexit uncertainty pa
Slide 22: IT
Global Focus, Local Presence 21 IT % change £m 2019 2018 % change (constant currency) Revenue 21.4 21.6 -1% -3% Net fee income 6.8 6.5 +5% +2% Adjusted operating profit 1.3 1.5 -13% -16% % of Group net fee income 19% 19% • Lower temp revenues in Japan – started the year from a lower base following t
Slide 23: Engineering
Global Focus, Local Presence 22 Engineering % change £m 2019 2018 % change (constant currency) Revenue 12.2 14.9 -18% -19% Net fee income 2.2 2.6 -15% -15% Adjusted operating profit (0.4) 0.1 n/a n/a % of Group net fee income 6% 8% • Difficult H1, particularly in the UK, with challenging market cond
Slide 24: Commercial
Global Focus, Local Presence 23 Commercial % change £m 2019 2018 % change (constant currency) Revenue 68.4 61.9 +11% +12% Net fee income 9.1 8.9 +2% +3% Adjusted operating profit 1.9 2.2 -14% -13% % of Group net fee income 25% 26% • First time contribution from investment in Peru made in July 2018 –
Slide 25: Offshore Recruitment Services
Global Focus, Local Presence 24 Offshore Recruitment Services % change £m 2019 2018 % change (constant currency) Revenue 5.4 3.1 +74% +74% Net fee income 2.8 1.8 +55% +55% Adjusted operating profit 1.4 0.7 +100% +100% % of Group net fee income 8% 5% • Significant growth off the back of a strong 2018
Slide 26: Income statement – 6 months ended 30 June 2019
Global Focus, Local Presence 25 Income statement – 6 months ended 30 June 2019 Constant £m 2019 2018 Change currency Revenue 175.5 178.3 -2% -2% Net fee Income 36.3 34.0 +7% +6% Administrative costs (32.0) (29.0) Adjusted operating profit* 4.3 5.0 -14% -14% Interest higher due to adoption of IFRS 16
Slide 27: Balance sheet – as at 30 June 2019
Global Focus, Local Presence 26 Balance sheet – as at 30 June 2019 £m 2019 2018 Property, plant & equipment 2.5 1.5 Right-of-use assets 13.5 - Right-of-use asset recognised on adoption of IFRS 16 Leases, Goodwill and other intangible assets 54.0 53.1 with matching lease liabilities on implementation
Slide 28: Cash flow – 6 months ended 30 June 2019
Global Focus, Local Presence 27 Cash flow – 6 months ended 30 June 2019 £m 2019 2018 Profit for the year 1.3 2.5 Depreciation, amortisation, share-based Depreciation includes depreciation of right-of-use assets following payments and impairment of intangibles the adoption of IFRS 16 Leases from 1 Ja
Slide 29: Shareholder information
Global Focus, Local Presence 28 Shareholder information Shares in issue - 49,019,132 ordinary shares Market capitalisation - £33 million (12 August 2019) Outstanding options 4.0m (8.2% of shares in issue) Significant shareholders (updated on 12 August 2019) Anthony Martin 13,924,595 28.4% Close Brot
Slide 30: P/E ratio comparison
Global Focus, Local Presence 29 P/E ratio comparison Market cap (£m) P/E ratio Yield (%) Hays 2,120 12.7 2.6% Page Group 1,450 13.6 3.0% Robert Walters 420 10.9 2.7% Sthree 346 8.5 5.5% Impellam 197 6.7 - Staffline 103 1.5 7.0% Gattaca 40 5.5 - Empresaria 33 5.2 3.1% Hydrogen 16 6.9 3.1% Prime Peopl
Slide 31: Cautionary Statement
Global Focus, Local Presence 30 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 fut