PageGroup PLC · LSE:PAGE
PageGroup — FY2014 Earnings Presentation
31 slides from PageGroup's earnings presentation, Mar 13, 2015
Slide 1: Full Year Results 2014
PageGroup Full Year Results 2014
Slide 2: Agenda
Agenda Financial Review Business Review Business Strategy Summary and Outlook
Slide 3: Cautionary Statement
3 Cautionary Statement This presentation contains certain statements that are neither reported financial results nor other historical information. The information contained in this presentation is not audited, is for personal use and informational purposes only and is not intended for distribution t
Slide 4: 2014 Group Financial Highlights
4 2014 Group Financial Highlights 2014 vs 2013 constant Revenue £1,046.9m 4.1% 9.9% Gross Profit £532.8m 3.7% 10.0% Operating Profit before exceptional items £78.5m 15.1% 23.8% Operating Profit after exceptional items £80.1m 21.9% Diluted EPS before exceptional items 18.2p 22.1% Net cash £90.0m £4.6
Slide 5: Financial Review
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Slide 6: Income Statement
6 Income Statement Constant currency £m 2014 2013 Change change Revenue 1,046.9 1,005.5 +4.1% +9.9% Gross Profit 532.8 513.9 +3.7% +10.0% Operating Profit before exceptional items 78.5 68.2 +15.1% +23.8% Exceptional items 1.6 (2.5) Net interest income/(expense) including exceptional items 0.3 (1.7)
Slide 7: Operating Costs
7 Operating Costs % Support staff as % of Group headcount 9% 6% £m Actual % Constant % 2013 10% Employee 340.0 +1% 356.1 +6% 335.9 Other 114.4 +4% 121.6 +11% 109.8 costs 75% Total 454.4 +2% 477.7 +7% 445.7 2007 2008 2009 2010 2011 2012 2013 2014 • Total operating costs: 2% increase in reported rates
Slide 8: Impact of Foreign Exchange
8 Impact of Foreign Exchange Constant Actual vs Actual Actual vs Current Gross Profit (£m) Currency Constant Rates Current rates* UK 138.4 – 138.4 – 138.4 EMEA 225.2 (13.2) 212.0 (18.1) 193.9 Asia Pacific 115.6 (10.1) 105.5 (0.9) 104.6 Americas 86.1 (9.2) 76.9 (2.2) 74.7 Group 565.3 (32.5) 532.8 (21
Slide 9: Exceptional Items
9 Exceptional Items 2013 Exceptional: Exceptional operating profit charge of £2.5m A further £0.6m was Issue originally relating to French Profit included within 2013 raised in tax audit in Share in Page Personnel operating profits from March 2008 France (PPF) trading activities 2014 Exceptional: •
Slide 10: Group Effective Tax Rate (ETR)
10 Group Effective Tax Rate (ETR) % % 2013 ETR post exceptionals 33.5 2013 MAP and DT on share options one-off 1.5 2013 Underlying Tax Rate 35.0 Movement in underlying tax rate in 2014 (1.8) 2014 Underlying Tax Rate 33.2 China: Deductions for prior years’ items paid in 2014 and use of (2.2) unrecogn
Slide 11: Permanent vs Temporary
11 Permanent vs Temporary PageGroup Michael Page Page Personnel £m 2014 2013 Growth rates 2014 2013 Growth rates 2014 2013 Growth rates Constant Constant Constant Reported Reported Reported Gross Profit Currency Currency Currency Permanent 406.1 392.2 +3.5% +10.3% 327.2 318.0 +2.9% +9.8% 78.9 74.2 +
Slide 12: Balance Sheet
12 Balance Sheet £m 2014 2013 Intangible assets 38.5 42.1 Tangible assets 21.8 25.2 60.3 67.3 Trade and other receivables 204.9 189.4 Trade, other payables, current and deferred taxes (139.0) (133.6) 65.9 55.8 Net cash 90.0 85.4 Net assets 216.2 208.5 • Strong balance sheet with £90m cash at 31 Dece
Slide 13: Cash Flow
13 Cash Flow (£m) • Capex broadly stable on 2013 • Working capital outflow increase in line with trading activity • Increase of £4.6m in net cash vs Dec 2013 • Movement in cash vs 2013 due to £25.4m EBT purchases
Slide 14: Dividends
14 Dividends 2014 2013 (Pence per Share) £m (Pence per Share) £m Interim 3.42 10.5 3.25 10.1 Final 7.58 23.2 7.25 22.2 Total 11.0 33.7 10.5 32.3 Number of shares (m) 306.5 306.1 • Final dividend proposed of 7.58p (+4.6%) • Payable on 22 June 2015 • Total dividend for year of 11.0p (+4.8%)
Slide 15: Business Review
Slide 16: Review of Operations
16 Review of Operations • Improving trend, H1 +8%, H2 +12% Gross • 19 countries achieved record gross profit in FY14 profit +10% • 8 quarters of consecutive improvement in Y-on-Y growth rates • 5 Large High Potential Markets (30% of Group) +14% FY14, +17% Q4’14 • Fee-earner headcount up 468, +12%, a
Slide 17: Regional Results Summary
17 Regional Results Summary UK (26%*) +12% gross profit Asia Pacific (20%*) 1,029 FE headcount (+12%) +9% gross profit 17.4% conversion 867 FE headcount (+3%) £24.1m operating profit 18.9% conversion £20.0m operating profit Americas (14%*) +13% gross profit 723 FE headcount (+13%) EMEA (40%*) +9% gr
Slide 18: Europe, Middle East, Africa
18 Europe, Middle East, Africa 26% £m 2014 2013 Reported Constant Gross 34% rates currency Profit by geography 212.0 207.8 +2.1% +8.6% 6% Gross Profit 19% 15% Operating Profit 30.1 25.9 +16.2% +26.1% Conversion 14.2% 12.5% +1.7pts 14.5% France S. Europe Other Germany ME & Africa Europe Headcount 2,1
Slide 19: United Kingdom
19 United Kingdom 16% £m 2014 2013 Change Gross 36% 25% Profit by Gross Profit 138.4 124.1 +11.5% geography Operating Profit 24.1 18.4 +30.9% 23% Conversion 17.4% 14.8% +2.6pts London North South Midlands Headcount 1,441 1,319 +9% • Strong regional performances from London +18%; North +14% • Key dis
Slide 20: Asia Pacific
20 Asia Pacific 18% £m 2014 2013 Reported rates Constant currency 87:1333% Gross Profit by geography Gross Profit 105.5 105.8 -0.3% +9.4% 38% 11% Operating Profit 20.0 19.2 +3.8% +16.1% Conversion 18.9% 18.2% +0.7pts 19.3% SE Asia & India Japan Greater China Australasia Headcount 1,141 1,111 +3% • 6
Slide 21: Americas
21 Americas Reported Constant 38% £m 2014 2013 Gross 33% rates currency Profit by Gross Profit 76.9 76.2 +0.8% +13.2% geography 6% 23% Operating Profit 4.3 4.6 -7.0% +16.5% Conversion 5.6% 6.1% -0.5pts 6.2% Brazil Canada Rest of LatAm Headcount 883 814 +8% USA • Greater geographic diversity across L
Slide 22: Business Strategy
Slide 23: 2014 Key Achievements
23 2014 Key Achievements • Significant growth in Page Personnel • New countries & disciplines • PRS & technology roll-out • Investment in fee-earners ahead of support staff • EVP programme & talent retention
Slide 24: Market Categories
24 Market Categories Large, High Medium & Small, Large, Proven Category Potential High Margin Germany, Greater China, Australia, France, Canada, India, Countries/regions Latin America, Holland, Italy, Japan, New Zealand, SE Asia, US Spain, UK smaller EMEA countries % Group gross profit 30.3% 55.3% 1
Slide 25: Large, High Potential Markets
25 Large, High Potential Markets • Consolidation of position in Greater China and LatAm • SE Asia: gaining market share in Malaysia, launched in Indonesia Achieved • Investment in Page Personnel Germany 2014 • US: progress in LA office, expansion of new disciplines • Grew fee-earner headcount by 163
Slide 26: Large, Proven Markets
26 Large, Proven Markets UK & France • Very strong performance from PP, together up 16% Achieved • Ongoing roll-out of technical disciplines; achieving market share gains 2014 • 50% drop through in FY14 Spain/ Italy/ Netherlands • Gross profit +18% • Added 58 fee-earners (+15%), maintained productiv
Slide 27: Medium & Small, High Margin Markets
27 Medium & Small, High Margin Markets • Gross profit records in 10 countries • Canada: +40%, fee-earners +16% Achieved • Poland: +52%, fee-earners +53% 2014 • Portugal: +63%, fee-earners nearly doubled • Turkey: +17%, fee-earners +20% • Middle East: UAE +23%, with margins remaining above 30% • Japa
Slide 28: Technology Enablers
28 Technology % Headcount Covered WEBSITE 60% 80% CRM 30% 80% PRS COLLABORATION TOOLS 100% DATA 100% BI 30% 80% ENABLERS SMARTPHONES 100% WAN 30% 80% 2014 2015 2015 Delivers broad range of benefits to front office • Flexible and modular system allows for efficient scaling & maintenance • Enhanced CR
Slide 29: 2015 Focus
29 2015 Focus Focus Action Benefit Productivity Headcount additions Maximise potential below rate of growth in for conversion rate gross profit improvements Focus on measured headcount additions in existing countries and offices Talent Full roll-out of Employee Improved productivity Value Propositio
Slide 30: Summary and Outlook
30 Summary and Outlook • Good performance across all 4 regions in 2014 • Record fee-earner headcount & support staff ratio Summary • EVP & technology roll-out progressed • Conversion rate increased • Dividend increase of 4.6%; strong cash balance • Negative FX impact in 2014 continuing into 2015 Out
Slide 31: Page
Page Michael Page Page Personnel Part of PageGroup