Sthree Plc · LSE:STEM
Sthree — Investor Day (2014)
127 slides from Sthree's investor day presentation, 2014
Slide 1: SThree Investor Day 2014
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Slide 2: SThree Strategy: Evolution Not Revolution
STHREE STRATEGY EVOLUTION NOT REVOLUTION GARY ELDEN 2
Slide 3: The Agenda for Today
THE AGENDA FOR TODAY 14.00 – 14.05 Introduction GE 14.05 – 14.30 SThree Strategy – Evolution not Revolution GE Strategic positioning 5 point plan 14.30 – 14.50 Plan To Triple Profits AS Contract 14.50 – 15.15 Energy JH 15.15 – 15.20 Q&A ALL 15.20 – 15.45 Comfort Break & Tech Demo ALL 15.45 – 16.15 U
Slide 4: Timeline
TIMELINE www.sthree.com | SThree plc 4
Slide 5: Our DNA
STHREE STRATEGIC POSITIONING Ø Pure play STEM specialist staffing company OUR Ø Multi-Brand approach DNA Ø Entrepreneurial culture Ø Contract & Permanent Ø Global database for global candidates www.sthree.com | SThree plc 5
Slide 6: Pure Play STEM Specialist Staffing Company
PURE PLAY STEM SPECIALIST STAFFING COMPANY PERM SALARY £55k CONTRACT PRO- RATA £93k OUR SECTORS Banking & Finance Energy Engineering ICT Life Sciences www.sthree.com | SThree plc 6
Slide 7: SThree Strategic Positioning: Multi-Brand Approach
STHREE STRATEGIC POSITIONING Ø Pure play STEM specialist staffing company Ø Multi-Brand approach Ø Entrepreneurial culture Ø Contract & Permanent Ø Global database for global candidates www.sthree.com | SThree plc 7
Slide 8: Multi Brand Approach
MULTI BRAND APPROACH www.sthree.com | SThree plc 8
Slide 9: SThree Strategic Positioning: Entrepreneurial Culture
STHREE STRATEGIC POSITIONING Ø Pure play STEM specialist staffing company Ø Multi-Brand approach Ø Entrepreneurial culture Ø Contract & Permanent Ø Global database for global candidates www.sthree.com | SThree plc 9
Slide 10: Entrepreneurial Culture
ENTREPRENEURIAL CULTURE Tracker Shares - how they work ≤ 22.5% Sold To Investor ≤ 22.5% Sold To Investor 5 YEARS ≥ 77.5% Owned by ≥ 77.5% Owned by SThree SThree Business valued at an early stage Exit Value ½ - ⅔ x PAT x PER • Strong governance via MI Steering Committee • 2013 buy backs £7m, 2012 £10
Slide 11: SThree Strategic Positioning: Contract & Permanent
STHREE STRATEGIC POSITIONING Ø Pure play STEM specialist staffing company Ø Multi-Brand approach Ø Entrepreneurial culture Ø Contract & Permanent Ø Global database www.sthree.com | SThree plc 11
Slide 12: Contract and Permanent
CONTRACT AND PERMANENT 12% CAGR PERM 35% PERM PERM 2008 44% 2013 2018 48% CONTRACT % of GP 52% % of GP CONTRACT % of GP 56% CONTRACT 65% • Headcount on Contract now 50% first time in our history • Perm still has massive growth potential, especially in our core established locations www.sthree.com |
Slide 13: SThree Strategic Positioning: Global Database
STHREE STRATEGIC POSITIONING Ø Pure play STEM specialist staffing company Ø Multi-Brand approach Ø Entrepreneurial culture Ø Contract & Permanent Ø Global database for global candidates and clients www.sthree.com | SThree plc 13
Slide 14: Global Database for Global Candidates and Clients
GLOBAL DATABASE FOR GLOBAL CANDIDATES AND CLIENTS GLOBAL CANDIDATES PROVIDE AN ABILITY TO TAKE LARGER GEOGRAPHICAL STEPS APPROX 50% OF CONSULTANTS ARE WORKING ON GLOBAL CANDIDATE MARKETS 90% OF DEAL GP FROM TOP 50 CLIENTS IN GLOBAL SECTORS www.sthree.com | SThree plc 14
Slide 15: SThree Growth: 5 Point Plan
STHREE GROWTH – 5 POINT PLAN 1. Regional growth opportunities 2. Sectors 3. Contract 4. Organic growth/M&A 5. Infrastructure for growth www.sthree.com | SThree plc 15
Slide 16: Regional Growth Opportunities
REGIONAL GROWTH OPPORTUNITIES www.sthree.com | SThree plc 16
Slide 17: Region
REGION Americas APAC/ME 2% 2% APAC/ME 9% APAC/ME DACH 10% France 10% UK&I 5% Americas UK&I 24% 11% 31% 12% Americas CAGR 22% 2008 2013 2018 % of GP8% % of GP % of GP UK&I CAGR 56% DACH Benelux Benelux 25% 13% 25% Benelux 18% 22% DACH CAGR 28% France 3% France 6% 6% CAGR • UK Still down 50% from its
Slide 18: SThree Growth: 5 Point Plan - Sectors
STHREE GROWTH – 5 POINT PLAN 1. Regional growth opportunities 2. Sectors 3. Contract 4. Organic growth/M&A 5. Infrastructure for growth www.sthree.com | SThree plc 18
Slide 19: Sector
SECTOR Other Other Other 3% 1% Life Sciences 4% 2% ENG 7% Life Sciences 15% Life Sciences ICT 20% 32% Banking & ICT 43% Finance 2008 ENG 2013 2018 16% 12% % of GP % of GP ENG % of GP 10% IT Energy Banking & 71% 12% Finance Energy 12% Banking & Finance 25% 15% • ICT Only 4% of our business is outside
Slide 20: SThree Growth: 5 Point Plan - Contract
STHREE GROWTH – 5 POINT PLAN 1. Regional growth opportunities 2. Sectors 3. Contract 4. Organic growth/M&A 5. Infrastructure for growth www.sthree.com | SThree plc 20
Slide 21: Contract - The Strategic Case
CONTRACT - THE STRATEGIC CASE Seasoned contactors in STEM Markets Resilient in uncertain markets and strong as markets improve Established regions strong on Contract USA specialist staffing market 80-90% Contract Strong sector play staffing Energy Contract dominated UK&I CONTINENTAL AMERICAS APAC &
Slide 22: Contract and Permanent
CONTRACT AND PERMANENT PERM 35% PERM PERM 44% 48% 2008 CONTRACT 2013 2018 % of GP 52% % of GP CONTRACT % of GP 56% CONTRACT 65% • Headcount for the first time in our history on Contract is the same size as Perm • Perm still has massive growth potential, especially in our core established locations w
Slide 23: SThree Growth: 5 Point Plan - Organic Growth/M&A
STHREE GROWTH – 5 POINT PLAN 1. Regional growth opportunities 2. Sectors 3. Contract 4. Organic growth/M&A 5. Infrastructure for growth www.sthree.com | SThree plc 23
Slide 24: Organic Growth
ORGANIC GROWTH DACH AMERICAS 1 Managing Director 1 Regional CEO 1 Director 5 Directors 4 Managers 14 Managers BENELUX SECTOR HEADS 3 Directors 2 Directors MIDDLE EAST 2 Directors APAC 4 Managers 5 Consultants 1 Regional CEO 3 Directors 6 Managers 14 Consultants www.sthree.com | SThree plc 24
Slide 25: M&A
M&A Talent • Acquisition of key personnel: Region: Japan and Russia Sector: Energy • Tracker shares helps attract and retain staff Businesses • Actively engaged in looking at opportunities • Small bolt on to expedite access to: New Geographies New Sectors • Taking a measured approach www.sthree.com
Slide 26: SThree Growth: 5 Point Plan - Infrastructure for Growth
STHREE GROWTH – 5 POINT PLAN 1. Regional growth opportunities 2. Sectors 3. Contract 4. Organic growth/M&A 5. Infrastructure for growth www.sthree.com | SThree plc 26
Slide 27: Infrastructure for Growth
INFRASTRUCTURE FOR GROWTH……. The Group will benefit from operational gearing into recovery www.sthree.com | SThree plc 27
Slide 28: Key Takeaways
KEY TAKEAWAYS GROWTH WITHIN EXISTING - Sectors - Regions - Infrastructure CONTRACT PERM - High Growth potential within - Confidence in market creates churn = improving yields and STEM Markets productivity PEOPLE - High barriers to entry - Niche focus will see improving fees in core regions - Robust
Slide 29: Financials Presentation
ALEX SMITH: CFO FINANCIALS PRESENTATION www.sthree.com | SThree plc 29
Slide 30: Agenda: Plan to Triple Profits, Contract
AGENDA 1 PLAN TO TRIPLE PROFITS 2 CONTRACT www.sthree.com | SThree plc 30
Slide 31: Financial 5 Year Plan
FINANCIAL 5 YEAR PLAN www.sthree.com | SThree plc 31
Slide 32: Group Financial 5 Year Plan - Scenarios
GROUP FINANCIAL 5 YEAR PLAN – SCENARIOS 2013 5 year Low Medium* High Gross Profit £193m £290m £325m £390m +9% +12% +16% CAGR CAGR CAGR Operating Profit £21m £54m £73m £107m +20% +28% +38% CAGR CAGR CAGR CR% 11% 19% 23% 28% Headcount 1,458 2,155 2,490 2,770 +7% +10% +14% CAGR CAGR CAGR * Objective as
Slide 33: Infrastructure for Growth
INFRASTRUCTURE FOR GROWTH……. The Group will benefit from operational gearing into recovery www.sthree.com | SThree plc 33
Slide 34: Headcount by Region - 5 Year Plan (Medium Case)
HEADCOUNT BY REGION - 5 YEAR PLAN 800 700 10% CAGR MEDIUM CASE 6% 600 CAGR GROUP 12% HEADCOUNT CAGR 500 CAGR OF +10% 17% 400 CAGR 3% 300 CAGR 5% 200 CAGR 100 0 UK&I GERMANY BENELUX USA APAC May-14 MEDIUM CASE www.sthree.com | SThree plc 34
Slide 35: Headcount by Region - 5 Year Plan (High Case)
HEADCOUNT BY REGION - 5 YEAR PLAN 900 800 12% CAGR 700 8% 10% HIGH CASE CAGR 600 6% CAGR CAGR GROUP HEADCOUNT 12% CAGR 500 22% CAGR OF CAGR +14% 17% 400 CAGR 6% 3% CAGR 300 CAGR 9% CAGR 5% 200 CAGR 100 0 UK&I GERMANY BENELUX USA APAC May-14 MEDIUM CASE HIGH CASE www.sthree.com | SThree plc 35
Slide 36: Region
REGION Americas APAC/ME 2% 12% 2% CAGR APAC/ME 9% APAC/ME 8% 10% DACH France 10% CAGR UK&I 5% Americas UK&I 24% 11% 31% Americas 22% 22% CAGR 2008 2013 2018 % of GP UK&I % of GP % of GP 56% DACH Benelux Benelux 25% 6% 13% 25% CAGR Benelux 18% DACH 28% France 3% France 6% Geographical shift towards A
Slide 37: Sector
SECTOR Other Other Other 3% 1% Life Sciences 4% 12% 2% CAGR ENG 7% Life Sciences Life Sciences 15% IT 20% 32% Banking & IT 43% Finance 2008 ENG 2013 2018 16% 12% % of GP % of GP ENG % of GP 10% Banking & IT Energy Finance 71% 12% Energy 12% Banking & 25% Finance 15% Energy & Life Sciences expected t
Slide 38: Business Shape
BUSINESS SHAPE 12% CAGR PERM 35% PERM 44% PERM 2008 2013 2018 48% CONTRACT % of GP 52% % of GP CONTRACT % of GP 56% CONTRACT 65% Further remix of the business towards contract www.sthree.com | SThree plc 38
Slide 39: Under the Medium Case Scenario of Our 5 Year Plan We Would
UNDER THE MEDIUM CASE SCENARIO OF OUR 5 YEAR PLAN WE WOULD: Significantly increase the quality of earnings ✓ Increased exposure to contract market ✓ Greater geographical diversification ✓ Broader spread of disciplines Significantly increase the profitability of the group ✓ Gross profit increasing by
Slide 40: Contract
CONTRACT www.sthree.com | SThree plc 40
Slide 41: Contract
CONTRACT Fact based insight from system investments Contract life-time values > Permanent equivalent Deploy resources strategically Invest in different Contract models Focus on Contract operational excellence Financial results www.sthree.com | SThree plc 41
Slide 42: Best in Breed Platforms Give Unique Insight
FACT BASED INSIGHT FROM SYSTEMS INVESTMENTS ENTERPRISE DATA WAREHOUSE BEST IN BREED PLATFORMS GIVE UNIQUE INSIGHT www.sthree.com | SThree plc 42
Slide 43: Contract Lifetime Value
CONTRACT LIFETIME VALUE CONTRACT PLACEMENTS CONTRACT CONSULTANTS MORE PRODUCTIVE • Run on average for 37 weeks • Doing 15% more DPH in H1 2014 • GP of c. £17k • LTV 50% greater than permanent equivalent Contract Consultants produce 60% more LTV per month in H1 2014 Note: Example relates to H1 2014,
Slide 44: Contract Lifetime Value
CONTRACT LIFTIME VALUE GP LTV c. 50% > PERMANENT EQUIVALENT How does this convert to operating profit? ADDITIONAL COSTS COMMISSION OF SUPPORT SAVING t -FHBM5FBN t PG t 5JNFTIFFUT $POUSBDUPST t *OWPJDJOH BSFPSQIBOFE OP LTV c. 50% > PERMANENT EQUIVALENT www.sthree.com | SThree plc 44
Slide 45: Contract Consultant Headcount Investment
CONTRACT CONSULTANT HEADCOUNT INVESTMENT 1000 50% increase in 900 Contract Headcount over 800 2 years 700 600 500 400 300 200 100 0 May-12 Nov-12 May-13 Nov-13 Feb-14 May-14 www.sthree.com | SThree plc 45
Slide 46: Different Contract Models
DIFFERENT CONTRACT MODELS Freelancer Model Employed Contractor Model - Seasoned contractor - Rolled out model in USA, Australia, Hong Kong & - Business to business relationship Singapore - Dominant model in the UK/ - No bench risk Europe - Mirror client and employee notice periods 100% 6% 9% FY 2012
Slide 47: Focus on Contract Operational Excellence
FOCUS ON CONTRACT OPERATIONAL EXCELLENCE • Head of Contract role in UK&I/broadened to Europe • Getting the operational basics right, the 5 point plan - Contractor Monitoring - Meetings - Job Spec - Negotiation - The Immediate Starter • Management reporting tools - Margin discipline Strong Focus on -
Slide 48: The Results
THE RESULTS Indexed Contract Runners - FY 7 Year Analysis (Annual Trend based on P12 Nov Year End Runners) 120% 115% 112% 112% 110% 109% 108% 105% 105% 100% 101% 95% 90% 85% 80% 75% 72% 70% 2008 2009 2010 2011 2012 2013 2014 www.sthree.com | SThree plc 48
Slide 49: The Results
THE RESULTS Indexed Contract Runners - 2014 Q2 by Region (Annual Trend based on P12 Nov Year End Runners) 160% Americas 150% 148% APAC & ME 5% 140% Americas Asia Pac & 13% Mid East 130% 142% France UK&I 5% RUNNERS 43% AS AT P6 120% DACH 2014 DACH 17% 114% SThree 110% 112% Benelux 17% UK&I 107% 100%
Slide 50: Contract GP Growth
CONTRACT GP GROWTH 2014 2013 GROUPS Q1 2014 Q2 2014 H1 2014 AVG HC H1 FY 2013 AVG HC FY 2013 GP YOY GP YOY GP YOY 2014 YoY GP YOY YoY UK&I 6% 12% 10% 17% (4%) 11% BENELUX 5% 15% 10% 18% 3% 13% DACH 33% 47% 40% 38% 10% 29% FRANCE 2% 4% 3% (11%) (17%) (15%) APAC 17% 16% 16% 26% 17% 35% AMERICAS 90% 98
Slide 51: Impact on Cash
IMPACT ON CASH Contract DSO v s. Candidate Pay ment Terms (Group Number) 45 40 35 30 25 DSO Da ys 20 Candidate Terms 15 10 5 0 P12 P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 Period • Average funding of 16 days • Approx W/C investment per runner of £8k • Varies by country, sector and by contract model ty
Slide 52: Contract Summary
CONTRACT SUMMARY • Fact Based Investment > Heads up 22% CAGR since May 2012 > New ECM model • STEM Contractors > Resilient in uncertain markets > Strong as markets improve • Some Forward Visibility • Barriers to Entry > Relative complexity > Financial strength > Systems & processes > Different busin
Slide 53: Justin Hughes, CEO APAC & MENA
JUSTIN HUGHES CEO APAC & MENA www.sthree.com | SThree plc 53
Slide 54: SThree's Game Changer: Progressive Global Energy & Natural Resources
PROGRESSIVE GLOBAL ENERGY & NATURAL RESOURCES STHREE’S GAME CHANGER www.sthree.com | SThree plc 54
Slide 55: Agenda
AGENDA 1 THE STORY SO FAR 2 MARKET OPPORTUNITY 3 OUR AMBITION & STRATEGY 4 WHERE COULD WE GO? www.sthree.com | SThree plc 55
Slide 56: The Story So Far
THE STORY SO FAR • Set up in 2007 • Today Global Energy accounts for 12% of group GP www.sthree.com | SThree plc 56
Slide 57: Energy
ENERGY Other Other Other 3% 1% Life Sciences 4% 2% ENG 7% Life Sciences 15% Life Sciences IT 20% 32% IT Banking & 43% Finance ENG 16% 2008 12% 2013 2018 % of GP % of GP ENG % of GP 10% Energy Banking & IT Finance 71% 12% Energy 12% Banking & 25% Finance 15% www.sthree.com | SThree plc 57
Slide 58: Energy
ENERGY 2013 CONTRACT 10% CONTRACT 47% PERM 25% 2008 2013 2018 % of GP % of GP % of GP CONTRACT PERM 75% PERM 53% 90% Perm is the door opener – unique to us in sector www.sthree.com | SThree plc 58
Slide 59: Energy
ENERGY 2013 UK&I 100% UK&I 20% APAC + MENA 38% 2008 2013 % of GP % of GP Europe 19% Americas 24% www.sthree.com | SThree plc 59
Slide 60: The Story So Far
THE STORY SO FAR • Set up in 2007 • Today Global Energy accounts for 12% of group GP • SThree’s fastest growing sector www.sthree.com | SThree plc 60
Slide 61: Energy GP
Energy GP 2008 2010 2013 2014 2018 (GBP millions) GP - H1 0.4 0.4 9.7 14.0 ? GP - FY 1.0 1.6 22.7 ? ? 5.0 CONTRACT ENERGY 4.5 – ACCOUNTING GP 4.0 CAGR 3.5 +75% SINCE Q2 3.0 2012 GBP millions 2.5 Q2 2014 109% YOY 2.0 1.5 1.0 0.5 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 62: The Story So Far
THE STORY SO FAR • Set up in 2007 • Today Global Energy accounts for 12% of group GP • SThree’s fastest growing sector • Global foundations in place www.sthree.com | SThree plc 62
Slide 63: Global Hub Model
GLOBAL HUB MODEL www.sthree.com | SThree plc 63
Slide 64: Hub: Glasgow
HUB: GLASGOW www.sthree.com | SThree plc 64
Slide 65: Hub: The Hague
HUB: THE HAGUE www.sthree.com | SThree plc 65
Slide 66: Hub: Houston
HUB: HOUSTON www.sthree.com | SThree plc 66
Slide 67: Hub: Dubai
HUB: DUBAI www.sthree.com | SThree plc 67
Slide 68: Hub: Singapore
HUB: SINGAPORE www.sthree.com | SThree plc 68
Slide 69: Hub: London
HUB: LONDON www.sthree.com | SThree plc 69
Slide 70: Hub: Perth
HUB: PERTH www.sthree.com | SThree plc 70
Slide 71: Hub: Moscow
HUB: MOSCOW www.sthree.com | SThree plc 71
Slide 72: Global Hub Model
GLOBAL HUB MODEL www.sthree.com | SThree plc 72
Slide 73: Global Hub Model
GLOBAL HUB MODEL Sarah Gaudry Head of O&G Payroll UK Mike Walker Steven Winship Sector Head Operations UK Compliance & Logistics UK Joris Verbeek Global Account Manager Houston Abid Hamid Global Business Dev Director Dubai Justin Hughes Hong Kong Alistair Macfadyen Global Operations Manager Global w
Slide 74: The Story So Far
THE STORY SO FAR • Set up in 2007 • Today Global Energy accounts for 12% of group GP • SThree’s fastest growing sector • Global foundations in place • Significant investment in our business model to overcome the barriers to entry on contract - ECM - Local entities - Insurances www.sthree.com | SThre
Slide 75: ECM Locations
ECM LOCATIONS 10% of our energy contractors have been “gifted” – we have taken over the management of contractors that we have not sourced because we are compliant www.sthree.com | SThree plc 75
Slide 76: The Story So Far
THE STORY SO FAR • Set up in 2007 • Today Global Energy accounts for 12% of group GP • SThree’s fastest growing sector • Global foundations in place • Significant investment in our business model to overcome the barriers to entry on contract - ECM - Local entities - Insurances • Evolution of our fro
Slide 77: Evolution: £12 Million New Business with Top 10 Clients
EVOLUTION £12 MILLION 153% GLOBAL ENERGY NEW BUSINESS WRITTEN UP WITH TOP 10 CLIENTS STHREE NEW BUSINESS WRITTEN UP AT TOP 20 CLIENTS: INDUSTRY ANALYSIS Energy 16% Energy FY 2011 Other 46% H1 2014 54% Other 84% "* Represents 12 months rolling deal GP" www.sthree.com | SThree plc 77
Slide 78: Title Evolution
TITLE EVOLUTION SThree average number of deals per client in 2013 was 2.3 Progressive Global Energy average number of deals per client in 2013 was 4.7 Oil and Gas sector average number of deals per client …? www.sthree.com | SThree plc 78
Slide 79: Market Opportunity
MARKET OPPORTUNITY • Global Energy Recruitment industry is a multi billion pound industry - Global energy demand expected to increase 50% over next 3 decades - Industry is facing large skill shortages, with a significant percentage of the U.S industry workforce eligible for retirement in 5 to 10 yea
Slide 80: Our Ambition & Strategy
OUR AMBITION & STRATEGY “To provide a complete end to end service offering to our energy clients and combine that with our recruitment expertise” www.sthree.com | SThree plc 80
Slide 81: Our Ambition & Strategy
OUR AMBITION & STRATEGY Provide end to end services that are competitive with best in class PRE MOBILISATION PROPOSED SHORT TERM EXPECTED DELIVERY DATE CENTRAL/REGIONAL/LOCAL Health screening Outsourced Live Local Project location safely and security induction Outsourced Inoculations Advisory only M
Slide 82: Our Ambition & Strategy
OUR AMBITION & STRATEGY Provide end to end services that are competitive with best in class Provide project recruitment Transactional recruitment AND - Global client strategy - 360° consultants (job - Global services centric) - Client specialist - Technical niche resourcers specialists - Global data
Slide 83: Project Driven Model (Farming)
1 PROJECT DRIVEN MODEL (FARMING) www.sthree.com | SThree plc 83
Slide 84: Job Driven Model (Hunting)
2 JOB DRIVEN MODEL (HUNTING) www.sthree.com | SThree plc 84
Slide 85: Where Could We Go?
WHERE COULD WE GO? www.sthree.com | SThree plc 85
Slide 86: SThree's Game Changer Summary
SUMMARY • Unique sector opportunity • Another SThree in 5 years? • Is this the sign of things to come? STHREE’S GAME CHANGER www.sthree.com | SThree plc 86
Slide 87: SThree USA: Our Land of Opportunity
STHREE USA STEVE QUINN OUR LAND OF OPPORTUNITY www.sthree.com | SThree plc 87
Slide 88: SThree USA: Our Land of Opportunity
STHREE USA OUR LAND OF OPPORTUNITY • American Ambition • Why the USA? • American History • Strategic Choices • Infrastructure For Growth • The Future • Conclusion www.sthree.com | SThree plc 88
Slide 89: American Ambition
AMERICAN AMBITION To be the most To become a major profitable region player in the US in the SThree specialist staffing world sector www.sthree.com | SThree plc 89
Slide 90: Why the USA?
WHY THE USA? • Scale and Shale - Everything’s bigger in America • Largest STEM markets • Largest Tech marketplace • Largest Life Sciences marketplace • Largest Financial Services marketplace • Largest Natural Gas producer in the world • Soon to be the Largest Oil producer in the world www.sthree.com
Slide 91: Goldman Sachs Agree
GOLDMAN SACHS AGREE 1. SCALE The U.S. is home to a $15.7 trillion economy, the world’s largest and wealthiest. That’s double the size of China’s annual economic output, 2.5 times that of Japan’s and 4.5 times that of Germany’s. 2. LAND, WATER & ENERGY: The U.S. outstrips the rest of the world (save
Slide 92: American History
AMERICAN HISTORY 2006 2010 2010 2010 2013 www.sthree.com | SThree plc 92
Slide 93: American History
AMERICAN HISTORY USA TOTAL GP £19.6 m 3 2% R AG £14.6 m C £9.9 m £5.6 m £4.9 m £3.4 m 2008 2009 2010 2011 2012 2013 * USA Only reported at constant currency rates www.sthree.com | SThree plc 93
Slide 94: SThree USA Growth - 5 Point Plan
STHREE USA GROWTH – 5 POINT PLAN • Regional Growth • A • Sectors • Contract • Organic Growth/M&A • Infrastructure for growth www.sthree.com | SThree plc 94
Slide 95: Growth Opportunities
GROWTH OPPORTUNITIES www.sthree.com | SThree plc 95
Slide 96: SThree USA Growth - 5 Point Plan: Sectors
STHREE USA GROWTH – 5 POINT PLAN • Regional Growth • Sectors • Contract • Organic Growth/M&A • Infrastructure for growth www.sthree.com | SThree plc 96
Slide 97: Sectors
SECTORS Banking & Life Finance Life Banking & Sciences 20% Sciences Finance 30% 37% 36% 2008 GP 2013 GP 2018 GP Mix % Mix % MIX % IT Energy Banking & 15% 35% Finance Energy 100% IT 26% 1% www.sthree.com | SThree plc 97
Slide 98: SThree USA Growth - 5 Point Plan: Contract
STHREE USA GROWTH – 5 POINT PLAN • Regional Growth • Sectors • Contract • Organic Growth/M&A • Infrastructure for growth www.sthree.com | SThree plc 98
Slide 99: Contract
CONTRACT PERM 25% 2008 GP PERM 2013 GP CONTRACT 48% 2018 GP Mix % 52% Mix % Mix % CONTRACT 75% PERM 100% Contract grows as a share of the business www.sthree.com | SThree plc 99
Slide 100: Contract
CONTRACT Weekly Gross Profit 135% CAGR since 2009 Launch Of ECM Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2009 2010 2011 2012 2013 2014 www.sthree.com | SThree plc 100
Slide 101: SThree USA Growth - 5 Point Plan: Organic Growth/M&A
STHREE USA GROWTH – 5 POINT PLAN • Regional Growth • Sectors • Contract • Organic Growth/M&A • Infrastructure for growth www.sthree.com | SThree plc 101
Slide 102: Organic Growth
ORGANIC GROWTH San Francisco opens in 2010 Local talent acquired and developed within the HUB Talent matures and opens up opportunity for organic growth www.sthree.com | SThree plc 102
Slide 103: SThree USA Growth - 5 Point Plan: Infrastructure for Growth
STHREE USA GROWTH – 5 POINT PLAN • Regional Growth • Sectors • Contract • Organic Growth/M&A • Infrastructure for growth www.sthree.com | SThree plc 103
Slide 104: Infrastructure for Growth - Support Services
INFASTRUCTURE FOR GROWTH- SUPPORT SERVICES www.sthree.com | SThree plc 104
Slide 105: Infrastructure for Growth
INFRASTRUCTURE FOR GROWTH PEOPLE – Headcount up 50% YOY PROPERTY – Doubled the office footprint in San Francisco and Houston PRODUCTIVITY – Best in class productivity PROFIT – All USA locations profit making www.sthree.com | SThree plc 105
Slide 106: The Future
THE FUTURE Largest Tech staffing Firms in the US Ranked by estimated 2012 US temporary staffing revenue RANK COMPANY 2012 US STAFFING REVENUE ($ MILLION) MARKET SHARE 1 TEKsystems (Allegis Group $2,823 12% 2 On Assignment* $1,083 5% 3 Ranstad Technologies $1,062 5% 4 Experis (ManpowerGroup) $875 4%
Slide 107: Conclusion
CONCLUSION • We are at the end of the beginning • Regional growth opportunity is huge • Sector expansion opportunity is vast • Scale of contract opportunity is unprecedented • Infrastructure for growth is in place • We believe we will be a major player in the US specialist staffing sector THE USA IS
Slide 108: Life Sciences Sector Overview: A Market Leading Opportunity
LIFE SCIENCES SECTOR OVERVIEW A MARKET LEADING OPPORTUNITY www.sthree.com | SThree plc 108
Slide 109: Our Ambition & Strategy
OUR AMBITION & STRATEGY “TO BECOME THE WORLD’S MOST PROFITABLE SPECIALIST STAFFING BRAND IN THE LIFE SCIENCES SECTOR” www.sthree.com | SThree plc 109
Slide 110: Agenda
AGENDA 1 THE STORY SO FAR 2 MARKET OPPORTUNITY 3 OUR AMBITION & STRATEGY 4 WHERE COULD WE GO? www.sthree.com | SThree plc 110
Slide 111: The Story So Far
THE STORY SO FAR • Set up in 2006 • Now SThree’s second largest sector www.sthree.com | SThree plc 111
Slide 112: Life Sciences
LIFE SCIENCES Other Other Other 4% 3% Life Sciences 2% 1% ENG Life 7% Sciences 15% Life Sciences IT 20% 32% IT Banking & 43% Finance 2008 ENG 12% 2013 2018 16% % of GP % of GP % of GP ENG 10% IT Energy Banking & 71% 12% Finance Energy 12% Banking & Finance 25% 15% www.sthree.com | SThree plc 112
Slide 113: The Story So Far
THE STORY SO FAR • Set up in 2006 • Now SThree’s second largest sector • Business mix with contract growing faster than perm www.sthree.com | SThree plc 113
Slide 114: Life Sciences
LIFE SCIENCES CONTRACT 60% CONTRACT 30% CONTRACT 51% 2008 % 2013 % PERM 49% 2018 % PERM 40% of GP of GP of GP PERM 70% www.sthree.com | SThree plc 114
Slide 115: The Story So Far
THE STORY SO FAR • Set up in 2006 • Now SThree’s second largest sector • Global footprint established www.sthree.com | SThree plc 115
Slide 116: Life Sciences
LIFE SCIENCES EUROPE AMERICAS 32% 27% 2008% EUROPE 2013% of GP 53% of GP UK&I UK&I 68% 16% APAC & ME 4% www.sthree.com | SThree plc 116
Slide 117: The Story So Far
THE STORY SO FAR • Set up in 2006 • Now SThree’s second largest sector • Global footprint established Offices in every continent www.sthree.com | SThree plc 117
Slide 118: Global Footprint
GLOBAL FOOTPRINT www.sthree.com | SThree plc 118
Slide 119: The Story So Far
THE STORY SO FAR • Set up in 2006 • Now SThree’s second largest sector • Global footprint established - Success in worlds largest marketplace • Penetration of global client base www.sthree.com | SThree plc 119
Slide 120: Penetration of Global Client Base
PENETRATION OF GLOBAL CLIENT BASE 70% £11m GLOBAL LIFE SCIENCES NEW BUSINESS WRITTEN WITH TOP 10 CLIENTS* *Rolling 12 months to May www.sthree.com | SThree plc 120
Slide 121: The Story So Far
THE STORY SO FAR • Set up in 2009 • Now SThree’s fastest growing sector • Global footprint established - Success in worlds largest marketplace • Penetration key client base • This has resulted in 45% CAGR from 2008 to 2013 www.sthree.com | SThree plc 121
Slide 122: Life Sciences GP
45% CAGR Life Sciences GP 2008 2013 2014 2018 (GBP millions) GP – H1 0.4 12.4 17.2 ? GP – FY 1.0 28.9 ? ? 9 5 % R 4 G GBP MILLION CA www.sthree.com | SThree plc 122
Slide 123: Market Opportunity
MARKET OPPORTUNITY • Compliance driven growth • Huge scope for expansion into complementary markets • Gap in the Competitor Landscape - On Assignment in the USA - Hays in Europe and Asia but not dominant • No global leader • Real opportunity for Real Staffing brand to be the World No 1 www.sthree.co
Slide 124: Market Opportunity
MARKET OPPORTUNITY • The FDA regulates all these areas • We only cover Drugs, Vaccines and Med Devices • Huge potential to cross into complementary compliance driven markets www.sthree.com | SThree plc 124
Slide 125: Our Ambition & Strategy
OUR AMBITION & STRATEGY • Deliver productive and profitable growth by: • Dominating in core regions USA, DACH, JAPAN, UK • Delivering full range of staffing services • Expanding offering into the complete Life Sciences www.sthree.com | SThree plc 125
Slide 126: Where Could We Go?
WHERE COULD WE GO? www.sthree.com | SThree plc 126
Slide 127: Conclusion
CONCLUSION • Real can become the Market Leader in Life Sciences specialist staffing • Life Sciences offers scale, profitable growth and a less competitive path • Track record of success with infrastructure in place for growth BUY INTO TOMORROW’S MARKET LEADER TODAY www.sthree.com | SThree plc 127