PageGroup PLC · LSE:PAGE
PageGroup — H1 2013 Earnings Presentation
40 slides from PageGroup's earnings presentation, August 2013
Slide 1: Half Year Results 2013
PageGroup 2013 half year results | 1 Half Year Results 2013 | August 2013
Slide 2: Key Highlights
PageGroup 2013 half year results | 2 Key Highlights Robust First Half Strong Cash Posi<on Global Opera<ng Standards Reduc<on in opera<onal Good performances in a support headcount number of regions Summary Dividend paid in Q2 Appendices
Slide 3: Agenda
PageGroup 2013 half year results | 3 Agenda Financial Review Segmental Analysis Strategy Summary and Outlook Appendices
Slide 4: Financial Review
PageGroup 2013 half year results | 4 Financial Review
Slide 5: HY 2013 Group Financial Highlights
PageGroup 2013 half year results | 5 Financial Review HY 2013 Group Financial Highlights HY 2013 vs HY 2012 • Revenue £503.2m ↑0.1% • Gross Profit £261.9m ↓4.4% • EBIT (pre exceptional) £32.1m ↓10.8% • EBIT (post exceptional) £32.1m ↑14.1% • EPS 7.0p ↑14.8% • Interim Dividend 3.25p ↔level • Net Cash
Slide 6: Profits up 13.4% in challenging conditions
PageGroup 2013 half year results | 6 Financial Review Profits up 13.4% in challenging conditions INCOME STATEMENT Constant 2013 2012 currency £m £m Change change Revenue 503.2 502.6 +0.1% -0.9% Gross Profit 261.9 273.9 -4.4% -5.2% Operating Profit 32.1 36.0 -10.8% -11.9% Exceptional Items - (7.8) Ne
Slide 7: Temporary recruitment more resilient
PageGroup 2013 half year results | 7 Financial Review Temporary recruitment more resilient PERM/TEMP GROSS PROFIT AND GROSS MARGINS Half Year H1 2013 H1 2012 Growth Rates Constant GROSS PROFIT £m £m Reported Currency Permanent 202.6 215.7 -6.1% -6.8% Temporary 59.3 58.2 +2.0% +0.6% Ratio (Perm:Temp)
Slide 8: Strong cashflow
PageGroup 2013 half year results | 8 Financial Review Strong cashflow CASH FLOW H1 2013 H1 2012 £m £m Operating profit before exceptional items 32.1 36.0 Exceptional items - (7.8) Operating profit after exceptional items 32.1 28.2 Depreciation and share scheme charges 12.3 13.3 Increase in underlyin
Slide 9: £21m paid in dividends
PageGroup 2013 half year results | 9 Financial Review £21m paid in dividends CASH FLOW ANALYSIS H1 2013 H1 2012 £m £m Movement in net cash (14.6) (24.2) Cashflow movement 110,000 100,000 27.1 90,000 44.4 80,000 12.4 70,000 6.6 60,000 50,000 20.8 0.8 61.4 7.9 40,000 47.6 30,000 Actual 2012 EBITDA Wor
Slide 10: Strong balance sheet with over £47m in cash at end of June 2013
PageGroup 2013 half year results | 10 Financial Review Strong balance sheet with over £47m in cash at end of June 2013 BALANCE SHEET 30 June 31 Dec 2013 2012 £m £m Intangible assets 44.6 44.1 Tangible assets 27.5 28.9 72.1 73.0 Trade and other receivables 202.8 185.8 Trade, other payables, current a
Slide 11: Interim dividend maintained at 3.25p
PageGroup 2013 half year results | 11 Financial Review Interim dividend maintained at 3.25p DIVIDENDS H1 2013 H1 2012 H1 (pence per H1 2013 (pence per 2012 share) £m share) £m Interim dividend 3.25* 10.0* 3.25 9.9 *Proposed and payable on 4th October 2013 SHARE REPURCHASES H1 2013 H1 2012 H1 Shares
Slide 12: Segmental Analysis
PageGroup 2013 half year results | 12 Segmental Analysis
Slide 13: Regional Results Summary
PageGroup 2013 half year results | 13 Segmental Analysis Regional Results Summary GROSS PROFIT AND OPERATING PROFIT BY REGION Operating Gross Profit Profit H1 2013 H112013 Conversion £m %Group £m %Group Rate EMEA 107.1 41% 10.4 32% 9.7% UK 61.4 23% 9.6 30% 15.6% Asia Pacific 54.3 21% 9.6 30% 17.7% A
Slide 14: Geographic Analysis of Gross Profit
PageGroup 2013 half year results | 14 Segmental Analysis Geographic Analysis of Gross Profit 77% of gross profit generated outside the UK Different growth rates across geographies, rapidly changing shape of the Group Americas, now 15% of the Group, up +6%* on H1 2012 Headcount down by 144, -2.8% fro
Slide 15: Discipline Analysis of Gross Profit
PageGroup 2013 half year results | 15 Segmental Analysis Discipline Analysis of Gross Profit Continued diversification avoids exposure to any one discipline or sector Finance & Accounting now 41% of Group Financial Services 8% of Group Technical disciplines 20% of Group Ongoing launch and roll-out o
Slide 16: Year-on-year quarterly growth rates improving in 79% of the Group
PageGroup 2013 half year results | 16 Segmental Analysis Year-on-year quarterly growth rates improving in 79% of the Group 2012 vs 2011 2013 vs 2012 Q1 Q2 Q3 Q4 Q1 Q2 EMEA +10.1% -2.5% -7.2% -10.9% -15.0% -8.2% UK -3.7% -9.2% -10.9% -2.1% -1.2% +0.3% Asia Pacific +17.8% +11.2% +2.6% +10.1% -0.3% -8.
Slide 17: EMEA (41% of Group)
PageGroup 2013 half year results | 17 Segmental Analysis EMEA (41% of Group) H1 2013 H1 2012 Market conditions Gross profit £107.1m -9% £117.9m remain challenging but Operating profit before £10.4m -22% £13.4m exceptional items signs of improvement Headcount 1,881 -14% 2,185 Profitable in all major
Slide 18: United Kingdom (23% of Group)
PageGroup 2013 half year results | 18 Segmental Analysis United Kingdom (23% of Group) H1 2013 H1 2012 Market conditions tough but stable Gross profit £61.4m 0% £61.7m Operating profit before £9.6m +11% £8.6m exceptional items Conversion rate of Headcount 1,256 +1% 1,243 15.6% Technical disciplines
Slide 19: Asia Pacific (21% of Group)
PageGroup 2013 half year results | 19 Segmental Analysis Asia Pacific (21% of Group) H1 2013 H1 2012 Asia +8%* in gross Gross profit £54.3m -5% £56.9m profits Operating profit £9.6m -30% £13.8m Headcount 1,076 +2% 1,050 Record performances for Japan, Malaysia, India and Taiwan Southern China and Hon
Slide 20: Americas (15% of Group)
PageGroup 2013 half year results | 20 Segmental Analysis Americas (15% of Group) H1 2013 H1 2012 Clear market leader in Gross profit £39.1m +5% £37.4m Latin America with Operating profit £2.5m +1172% £0.2m 5 countries, 18 offices Headcount 742 -12% 843 and 506 headcount Conversion rate vastly improv
Slide 21: Group Matrix (Summary)
PageGroup 2013 half year results | 21 Segmental Analysis Group Matrix (Summary) EMEA (41%) UK (23%) • Gross Profit of £107.1m • Gross Profit of £61.4m, flat vs H2 2012 • Operating Profit of £10.4m • Operating Profit of £9.6m • Headcount 1,881, down 14% vs H1 2012, mostly in • Headcount 1,256, up 1%
Slide 22: Strategy
PageGroup 2013 half year results | 22 Strategy
Slide 23: Clear, Consistent Strategy of Organic Growth
PageGroup 2013 half year results | 23 Strategy Clear, Consistent Strategy of Organic Growth Building the platform for long-term growth by: • Organic growth • Meritocratic culture • Diversification • Financial conservatism • Consistent brand strategy • Focus on operational support consistency and eff
Slide 24: Positioned for growth
PageGroup 2013 half year results | 24 Strategy Positioned for growth Constant investment TRACK RECORD (Gross Profit CAGR) FEE EARNER CHANGE (CAGR) has transformed Years 91- 00 00- 12 Years 91- 00 00- 12 shape of the 44% 23% 38% 21% business 28% 3% 29% 3% 28% 2% 24% 1% 1/2 of the business now positio
Slide 25: Large, High-potential markets: Headcount and Discipline track record
PageGroup 2013 half year results | 25 Strategy Large, High-potential markets : Headcount and Discipline track record Investment in the core strategic markets of USA, China, Germany, Latin America and South East Asia. These are substantial, high-potential markets for recruitment where PageGroup alrea
Slide 26: Large, High-potential Markets: Financial Track Record
PageGroup 2013 half year results | 26 Strategy Large, High-potential Markets : Financial Track Record
Slide 27: Commitment to diversification
PageGroup 2013 half year results | 27 Strategy Commitment to diversification DIVERSIFICATION • By discipline and by management level • Michael Page in 34 countries • Page Personnel in 20 countries • Page Executive across full network • 59% of gross profit from Non-Finance & Accounting • 26% of Group
Slide 28: Summary and Outlook
PageGroup 2013 half year results | 28 Summary and Outlook
Slide 29: Summary and Outlook
PageGroup 2013 half year results | 29 Summary Summary and Outlook Summary: • Robust first half in challenging conditions • 14 countries had a record half including Japan, India, Turkey, Russia, UAE, Mexico and Canada • Continued focus on operational support consistency resulting in cost savings • H1
Slide 30: Appendices
PageGroup 2013 half year results | 30 Appendices
Slide 31: Group quarterly gross profit trend: 2003 to 2013
PageGroup 2013 half year results | 31 Appendices Group quarterly gross profit trend: 2003 to 2013
Slide 32: Clear on brand
PageGroup 2013 half year results | 32 Appendices Clear on brand At 30 June 2013
Slide 33: Long-term approach to investment
PageGroup 2013 half year results | 33 Appendices Long-term approach to investment
Slide 34: Fee earner/support staff headcount trend
PageGroup 2013 half year results | 34 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 H1 2013 72:28
Slide 35: Cost structure
PageGroup 2013 half year results | 35 Appendices Cost structure IT (c.10%) • consolidation Data centre MISCELLANEOUS (c.5%) - reduces support staff • Travel - disaster greater resilience and • Staff welfare recovery - recruitment development of new software Staff Costs (c.75%) PROPERTY (c.10%) • to
Slide 36: Strong conversion rates whilst investing for the future
PageGroup 2013 half year results | 36 Strong conversion rates whilst investing for the future ; strong Appendices improvement in the Americas
Slide 37: Dividends, share repurchase history and year end net cash/debt position
PageGroup 2013 half year results | 37 Appendices Dividends, share repurchase history and year end net cash/debt position Dividend increased or Excess cash used to Maintain strong balance maintained through repurchase shares sheet position economic cycles
Slide 38: Number of shares and options outstanding
PageGroup 2013 half year results | 38 Appendices Number of shares and options outstanding
Slide 39: Cautionary Statement
PageGroup 2013 half year results | 39 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 distrib
Slide 40: PageGroup 2013 half year results | 40
PageGroup 2013 half year results | 40