Pagegroup Plc · LSE:PAGE
Pagegroup — Michael Page International — H1 2011 Earnings Presentation
48 slides from Pagegroup's earnings presentation, August 2011
Slide 1: Half Year Results 2011
Half Year Results 2011 | August 2011
Slide 2: Agenda
Michael Page International Half Year Results 2011 | 2 Financial Review Segmental Analysis Agenda Strategy Summary and Outlook Appendices
Slide 3: Financial Review
Michael Page International Half Year Results 2011 | 3 Financial Review
Slide 4: 31% growth in gross profit with growth in every geography
FINANCIAL REVIEW Michael Page International Half Year Results 2011 | 4 31% growth in gross profit with growth in every geography INCOME STATEMENT Constant H1 2011 H1 2010 Currency £m £m Change Change Revenue 502.1 393.5 +27.6% +25.8% Gross profit 275.1 209.6 +31.3% +29.5% Operating profit before non
Slide 5: 35% growth in gross profit from permanent placements
FINANCIAL REVIEW Michael Page International Half Year Results 2011 | 5 35% growth in gross profit from permanent placements PERM/TEMP GROSS PROFIT AND GROSS MARGINS Growth Rates H1 2011 H1 2010 Constant Gross profit £m £m Reported currency Permanent 219.4 163.0 +34.6% +32.7% Temporary 55.7 46.5 +19.
Slide 6: £49m of cash paid in dividends and share repurchases
FINANCIAL REVIEW Michael Page International Half Year Results 2011 | 6 £49m of cash paid in dividends and share repurchases CASH FLOW H1 2011 H1 2010 £m £m Operating profit before non-recurring items 45.4 32.5 Non-recurring items - 17.1 Operating profit after non-recurring items 45.4 49.6 Depreciati
Slide 7: Funding the expansion
FINANCIAL REVIEW Michael Page International Half Year Results 2011 | 7 Funding the expansion WORKING CAPITAL Underlying VAT H1 2011 H1 2010 H1 2010 H1 2010 £m £m £m £m (Increase)/decrease in receivables (51.7) (32.2) 9.0 (23.2) Increase/(decrease) in payables 16.6 16.3 (50.0) (33.7) Increase in work
Slide 8: Strong balance sheet with £24m in cash in H1 2011
FINANCIAL REVIEW Michael Page International Half Year Results 2011 | 8 Strong balance sheet with £24m in cash in H1 2011 BALANCE SHEET 30 June 31 Dec 2011 2010 £m £m Intangible assets 32.3 27.5 Tangible assets 32.0 28.5 64.3 56.0 Trade and other receivables 226.9 169.5 Trade and other payables (147.
Slide 9: Half year 2011 dividend increased by 12.8%
FINANCIAL REVIEW Michael Page International Half Year Results 2011 | 9 Half year 2011 dividend increased by 12.8% H1 2011 H1 2010 (pence H1 2011 (pence H1 2010 Dividend per share) £m per share) £m Interim 3.25* 9.8* 2.88 8.9 *Proposed and payable on 7 October 2011 H1 2011 H1 2011 H1 2010 H1 2010 Sha
Slide 10: Dividend increased as business grows
FINANCIAL REVIEW Michael Page International Half Year Results 2011 | 10 Dividend increased as business grows Excess cash used to repurchase shares Maintain strong balance sheet position DIVIDENDS, SHARE REPURCHASE HISTORY AND YEAR END NET CASH/DEBT POSITION 140 356p 411p 105 496p KEY: Dividends paid
Slide 11: Segmental Analysis
Michael Page International Half Year Results 2011 | 11 Segmental Analysis
Slide 12: Headcount and gross profit: geographic analysis
SEGMENTAL ANALYSIS Michael Page International Half Year Results 2011 | 12 HEADCOUNT AND GROSS PROFIT AS REPORTED GEOGRAPHIC ANALYSIS OF GROSS PROFIT 200 6000 150 4500 152.4 147.8 141.3 140.3 Headcount 128.1 Headcount +623 (+14%) 127.3 123.4 121.0 119.8 118.7 £m 111.7 112.8 100 3000 in H1 105.5 97.9
Slide 13: Headcount and gross profit: discipline analysis
SEGMENTAL ANALYSIS Michael Page International Half Year Results 2011 | 13 HEADCOUNT AND GROSS PROFIT AS REPORTED DISCIPLINE ANALYSIS OF GROSS PROFIT 200 6000 150 4500 152.4 147.8 141.3 140.3 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 90.6 83.8 82.3 All spec
Slide 14: EMEA
SEGMENTAL ANALYSIS Michael Page International Half Year Results 2011 | 14 EMEA 44% of Group Gross profit growth of 32% Operating profit of £17.0m +76% from £9.6m in 2010 Headcount +29% to 2,126
Slide 15: EMEA headcount and gross profit
SEGMENTAL ANALYSIS Michael Page International Half Year Results 2011 | 15 H1 2011 H1 2010 EMEA Gross profit £120.3m +32% £91.3m Operating profit £17.0m +76% £9.6m Headcount 2,126 +29% 1,645 HEADCOUNT AND GROSS PROFIT AS REPORTED Strong growth of 32% 80 2400 across 18 countries 70.2 60 1800 65.2 64.1
Slide 16: United Kingdom
SEGMENTAL ANALYSIS Michael Page International Half Year Results 2011 | 16 United Kingdom 24% of Group Gross profit growth of 8% Operating profit of £10.4m +8% from £9.6m in 2010 Headcount +10% to 1,343
Slide 17: United Kingdom headcount and gross profit
SEGMENTAL ANALYSIS Michael Page International Half Year Results 2011 | 17 H1 2011 H1 2010 UNITED KINGDOM Gross profit £66.0m +8% £61.2m Operating profit £10.4m +8% £9.6m Headcount 1,343 +10% 1,218 HEADCOUNT AND GROSS PROFIT 75 2100 +8% growth in gross and 50 1400 Headcount 49.0 47.9 48.5 47.1 operat
Slide 18: Asia Pacific
SEGMENTAL ANALYSIS Michael Page International Half Year Results 2011 | 18 Asia Pacific 18% of Group Gross profit growth of 56% Operating profit of £12.2m +28.8% from £9.5m in 2010 Headcount +74% to 874
Slide 19: Asia Pacific headcount and gross profit
SEGMENTAL ANALYSIS Michael Page International Half Year Results 2011 | 19 H1 2011 H1 2010 ASIA PACIFIC Gross profit £48.6m +56% £31.2m Operating profit £12.2m +29% £9.5m Headcount 874 +74% 501 1000 Asia +80%* growth in HEADCOUNT AND GROSS PROFIT AS REPORTED gross profits 30 750 27.2 Australia and 20
Slide 20: The Americas
SEGMENTAL ANALYSIS Michael Page International Half Year Results 2011 | 20 The Americas 14% of Group Gross profit growth of 55% Operating profit of £5.8m +54% from £3.8m in 2010 Headcount +57% to 778
Slide 21: Americas headcount and gross profit
SEGMENTAL ANALYSIS Michael Page International Half Year Results 2011 | 21 2011 2010 AMERICAS Gross profit £40.3m +55% £25.9m Operating profit £5.8m +54% £3.8m Headcount 778 +57% 496 HEADCOUNT AND GROSS PROFIT AS REPORTED 24 750 22.3 Latin America now 18.0 10% of Group and 539 16 500 Headcount 15.6 h
Slide 22: Strategy
Michael Page International Half Year Results 2011 | 22 Strategy Organic growth Diversification Meritocratic culture
Slide 23: Strong conversion rates whilst investing heavily for the future
STRATEGY Michael Page International Half Year Results 2011 | 23 Strong conversion rates whilst investing heavily for the future 40 35 30 25 Operating profit/Gross profit (%) 20 15 10 5 0 2003 2004 2005 2006 2007 2008 2009 2010 H1 2011 -5 -10 KEY: United Kingdom EMEA Asia Pacific Americas Group -15 -
Slide 24: One clear, consistent strategy of organic growth
STRATEGY Michael Page International Half Year Results 2011 | 24 One clear, consistent strategy of organic growth constantly diversifying by geography and discipline Meritocratic, building trust, clear values and culture, retaining high flyers and entrepreneurs 32 29 28 16 230 250 216 4 77 1 16 years
Slide 25: Business has been transformed over last 10 years
STRATEGY Michael Page International Half Year Results 2011 | 25 Business has been transformed over last 10 years POSITIONED FOR GROWTH Half of our business is growing at over 50% year-on-year Reported gross profit growth H1 2011 FY H1 Fee Earners: 3,699 2010 2011 Rest of EMEA* +44% +42% 11% 9% Asia
Slide 26: Investment: Development of Asia
STRATEGY Michael Page International Half Year Results 2011 | 26 5 new offices opened in Kuala Lumpur, Delhi, Pudong and INVESTMENT: two offices in Mumbai in 2011 Development of Asia Office space doubled in Beijing Headcount up by 1/3 in first 6 months of 2011 5 3 3 3 30 36 26 15 1 9 years 6 years 1
Slide 27: Asia: Investing for the future
STRATEGY Michael Page International Half Year Results 2011 | 27 In the last 24 months: • 2 new countries – India and Malaysia • 8 new offices, now 15 (+114%) in the region • Office floorspace doubled, now with capacity for 570 (26% spare capacity) Asia: Investing for • 196 promotions across the regi
Slide 28: India: Investing for the future
STRATEGY Michael Page International Half Year Results 2011 | 28 After 5 months of trading: • 3 offices with headcount capacity for over 100 • Startup management team of international transfers: 1 Managing Director India: 1 Director 3 Managers Investing for 1 Consultant the future • Total headcount o
Slide 29: Investment: Development of Latin America
STRATEGY Michael Page International Half Year Results 2011 | 29 Market leading position through organic growth INVESTMENT: Limited competition across the region Development of Latin America Page Personnel now in Brazil, Mexico and Argentina 4 4 3 40 44 1 36 4 1 4 years 6 years 13 1 Cumulative Cumula
Slide 30: Latin America: Investing for the future
STRATEGY Michael Page International Half Year Results 2011 | 30 In the last 24 months: • 8 new offices, now 16 (+100%) in the region • Office floorspace increased by 95%, now with capacity for 600 (10% spare capacity) Latin America: • 2 new countries opened: Argentina and Chile Investing for (now 68
Slide 31: Investment: Development of Germany
STRATEGY Michael Page International Half Year Results 2011 | 31 Organically grown management team investing heavily INVESTMENT: in headcount growth Development of Germany Page Personnel rolled out nationally Page Contracting launched 19 10 8 3 70 80 121 2 34 0 5 0 50 198 177 2 233 6 Directors: Numbe
Slide 32: Germany: Investing for the future
STRATEGY Michael Page International Half Year Results 2011 | 32 • Large, underdeveloped market – limited competition particularly in perm recruitment • During the last 18 months, management team strengthened with 11 new Directors and Germany: 88 promotions Investing for the future • Headcount increa
Slide 33: Investment: Development of UK
STRATEGY Michael Page International Half Year Results 2011 | 33 Remains Group’s largest and most established country INVESTMENT: Long-term still offers potential for growth Development of UK Very established management team key to gaining market share 18 12 12 69 80 46 1 1 1 5 100/100 612 741 890 1,
Slide 34: UK: Investing for the future
STRATEGY Michael Page International Half Year Results 2011 | 34 • Investing to retain our best people, with Directors up to 6% as a percentage of UK staff – c. 3.5% pre-downturn • Depth of management experience enabling us to grow gross profit and market share • 81 promotions in last 12 months UK: •
Slide 35: Continued investment in building a consistent business through global organic growth
STRATEGY Michael Page International Half Year Results 2011 | 35 In the last 12 months we continued to invest in building a consistent business through global organic growth ORGANIC GLOBAL EXPANSION Thibault Ades Brussels - Mexico City - Brussels - Stockholm Stockholm Moscow Jason Grundy London - Abu
Slide 36: Summary and Outlook
SUMMARY AND OUTLOOK Michael Page International Half Year Results 2011 | 36 • Strong first half for gross profit and operating profit • Half of our business growing by over 50% in geographies with strongest economies and least competition • Largest-ever business platform – management team, countries,
Slide 37: www.michaelpageinternational.com
www.michaelpageinternational.com
Slide 38: Appendices
Michael Page International Half Year Results 2011 | 38 Appendices
Slide 39: Growing organically
APPENDICES Michael Page International Half Year Results 2011 | 39 Depth of experience at 30 June 2011 Average Senior Operational Management No. Tenure in MP PLC & Executive Board 7 20 years Regional Managing Directors 8 17 years Managing Directors 49 13 years Directors 162 8 years 226 Ave c.10 years
Slide 40: Underlying trends driving the recruitment market
APPENDICES Michael Page International Half Year Results 2011 | 40 Increasing compliance Increasing candidate demands Underlying Increasing candidate shortages trends driving the recruitment Increasing job mobility market Increasing international mobility Increasing complexity to access candidates
Slide 41: Clear on brand
APPENDICES Michael Page International Half Year Results 2011 | 41 Clear on brand Executive Search 32 Countries 121 Offices 2,662 Fee Earners Qualified Professional 20 Countries 68 Offices 1,037 Fee Earners Clerical Professional Generalist Staffing At 31 December 2010
Slide 42: Cost Structure
APPENDICES Michael Page International Half Year Results 2011 | 42 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 43: Long-term on investment
APPENDICES Michael Page International Half Year Results 2011 | 43 Long-term on investment 2001 2006 Switzerland South Africa Japan Russia 1996 Ireland 2008 Singapore UAE Austria Mexico Turkey New Zealand 1976 1985 1993 1998 2002 2010 United Kingdom Australia Germany USA Belgium Chile Sweden 2011 600
Slide 44: Group quarterly gross profit trend: 2001 to H1 2011
APPENDICES Michael Page International Half Year Results 2011 | 44 Group quarterly gross profit trend: 2001 to H1 2011 152.4 147.8 150 141.3 140.3 128.1 127.3 123.4 121.0 119.8 118.7 112.8 111.7 105.5 Gross Profit (£m) as reported 97.9 95.0 100 93.1 90.6 89.1 87.4 83.8 82.3 79.2 70.2 69.2 69.6 68.3 6
Slide 45: Fee earner/support staff headcount trend
APPENDICES Michael Page International Half Year Results 2011 | 45 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 46: Number of shares and options outstanding since IPO
APPENDICES Michael Page International Half Year Results 2011 | 46 Number of shares and options outstanding since IPO 410 175p 161p Number of shares and options outstanding (millions) 177p Options outstanding 161p Shares outstanding Weighted average option price 390 163p 370 Options granted over 4.1m
Slide 47: www.michaelpageinternational.com
www.michaelpageinternational.com
Slide 48: 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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