Empresaria Group Plc · LSE:EMR
Empresaria — H1 2015 Earnings Presentation
28 slides from Empresaria's earnings presentation, September 2015
Slide 1: Investor Presentation – September 2015
Investor Presentation – September 2015 Joost Kreulen Chief Executive Officer Spencer Wreford Group Finance Director
Slide 2: Cautionary Statement
Global Focus, Local Presence 1 Cautionary Statement The information contained in this presentation is statements regarding past trends or activities not audited, is for personal use and informational should not be taken as a representation that such purposes only and is not intended for distribution
Slide 3: Overview of the period
Global Focus, Local Presence 2 Overview of the period Robust performance Full year expectations ahead of market forecast Continued delivery against strategy Focused on multi-brand growth strategy Strong growth opportunities Further investment opportunities in a growth market
Slide 4: An international specialist staffing Group
Global Focus, Local Presence 3 An international specialist staffing Group Multi-branded Management equity Growth Business markets mix 3
Slide 5: Multi-branded business model
Global Focus, Local Presence 4 Multi-branded business model Diversified by geography and sector – lower risk approach • Sector & market experts • Understand the requirements of both candidates and clients • Operating in talent shortage markets • Attack market vertically rather than horizontally • Br
Slide 6: Management equity philosophy
Global Focus, Local Presence 5 Management equity philosophy Attract and retain key management • Key managers own shares in their brand • Align interests of management and shareholders • Incentivised to grow profits into the long-term • Decentralised structure leaves operational responsibility with l
Slide 7: Growth markets
Global Focus, Local Presence 6 Growth markets Technical & industrial Sectors 12% 2% IT, digital & design • Operating in key sectors offering international growth Financial 7% 42% opportunities Retail 7% Executive search Geographies 17% Healthcare • 73% of net fee income from UK, Germany & Japan 13%
Slide 8: Business mix
Global Focus, Local Presence 7 Business mix • Temporary sales have reduced with deliberate move away from low value work • Current split of net fee income is 53% temporary (2014: 60%) • Recovery in market confidence being seen with strong growth in permanent sales • Recent investments in regions wit
Slide 9: Results for the period
Global Focus, Local Presence 8 RESULTS FOR THE PERIOD
Slide 10: Highlights
Global Focus, Local Presence 9 Highlights Continued delivery against strategy with strong profit growth • Net fee income +12% (16% constant currency) • 8 consecutive quarters of growth in net fee income • Profit before tax (adjusted) +33% (44% constant currency) • EPS adjusted +36% • Net debt down 3
Slide 11: Financial summary
Global Focus, Local Presence 10 Financial summary 2015 2014 % var Constant currency % var Revenue £92.4m £94.0m (2%) 3% Permanent revenue £12.7m £9.9m 29% 28% Temporary revenue £79.6m £84.2m (5%) - Net fee income £24.1m £21.6m 12% 16% Adjusted operating profit* £3.0m £2.4m 25% 36% Conversion ratio 1
Slide 12: Revenue analysis
Global Focus, Local Presence 11 Revenue analysis Permanent revenue +29% (28% constant currency) Temporary revenue (-5%) (flat in constant currency) • New office opening and acquisitions made in 2014 • 85% of currency impact from € region +16% • Disposals (Czech/Slovakia/Malaysia) (-1%) • Finance, Ex
Slide 13: Net fee income Conversion ratio
Global Focus, Local Presence 12 Net fee income Conversion ratio Net fee income +12% (+16% constant currency) Focus on increasing conversion ratio • Target of +10% average growth over 5 years • Costs managed • Being driven by increase in Permanent sales and • Still investing in growing business with
Slide 14: Net debt
Global Focus, Local Presence 13 Net debt 2011 2012 Net debt (£m) 2013 2014 2015 0 Net debt down 30% to £9.9m (2014: £14.2m) -2 -4 -6 Average net debt down 39% to £9.2m (2014: £15.1m) -8 -10 -12 Net debt to debtors ratio 32% (2014: 44%) -14 -16 -18 Debtor days stable at 52 at June Half year n
Slide 15: Looking Forward
Global Focus, Local Presence 14 LOOKING FORWARD
Slide 16: Clear strategy Focused on growth
Global Focus, Local Presence 15 Clear strategy Focused on growth Develop leading brands with sector expertise 5 year financial targets Maintain diversification and balance by Average growth in NFI of +10% geography and sector Retain operational mix: Professional & Organic growth supplemented by sele
Slide 17: The growth opportunity
Global Focus, Local Presence 16 The growth opportunity Positive economic conditions, despite currency headwinds Structural growth in the German staffing market over medium term Investing in staff to drive sales growth Investing in new offices (organic development in Continental Europe & Asia
Slide 18: Summary and outlook
Global Focus, Local Presence 17 Summary and outlook Delivering on strategy Continuing to deliver on multi-brand growth strategy Driving KPIs Growth in NFI, ahead of 10% average target Conversion ratio improvement continues, target of 20% remains Strong growth in PBT despite currency headwind
Slide 19: Q&A
Global Focus, Local Presence 18 Q&A
Slide 20: Appendices
Global Focus, Local Presence 19 Appendices
Slide 21: Income statement – Half year 2015
Global Focus, Local Presence 20 Income statement – Half year 2015 Constant £m 2015 2014 Change currency Revenue 92.4 94.0 (2%) 3% Net fee Income (gross profit) 24.1 21.6 12% 16% Overheads (21.1) (19.2) Adjusted operating profit* 3.0 2.4 25% 35% Interest (0.2) (0.3) Finance costs down on lower debt l
Slide 22: Balance sheet – 30 June 2015
Global Focus, Local Presence 21 Balance sheet – 30 June 2015 £m 2015 2014 Property, plant & equipment 1.1 1.0 Capital expenditure of £0.3m on fixed assets. Goodwill and intangibles 24.6 26.0 Deferred tax asset 0.7 0.7 26.4 27.7 Trade and other receivables 36.5 37.0 Debtor days at 30 June of 52 (2014
Slide 23: Cash flow – Half year 2015
Global Focus, Local Presence 22 Cash flow – Half year 2015 £m 2015 2014 Profit for the period 1.8 1.3 Depreciation and amortisation 0.5 0.5 Tax and interest added back Cash generated from operations was £0.2m, following a £2.8m 1.1 1.0 Cash paid for exceptional items investment in working capital an
Slide 24: Directors
Global Focus, Local Presence 23 Directors Board has extensive knowledge of the staffing industry with a combined experience of 100 years Anthony Martin – Chairman Anthony served as Chairman and CEO of Select Appointments and Vedior NV, building one of the world’s largest recruitment companies, befor
Slide 25: Shareholder information
Global Focus, Local Presence 24 Shareholder information Shares in issue: 44,562,847 ordinary shares Market capitalisation: £31.6 million Outstanding options: 2.8m (6.4% of shares in issue) Significant shareholders (updated on 1 September): Anthony Martin 12,924,595 29% Liontrust Asset Management 4,3
Slide 26: Case study: IMS (Offshore recruitment services)
Global Focus, Local Presence 25 Case study: IMS (Offshore recruitment services) Based in Ahmedabad, India. Joined the Group in 2006 as a start-up Providing outsourced recruitment services to clients in US (primarily IT sector) and UK (primarily Healthcare sector) Offers both voice and non-voice
Slide 27: Case study: Monroe Consulting (Executive search)
Global Focus, Local Presence 26 Case study: Monroe Consulting (Executive search) Offices in Indonesia, Thailand, Philippines, Malaysia, Mexico & Chile. Joined the Group in 2005 Providing mid to senior level placements across Consumer goods, Healthcare, Industrial, Professional & Technology sectors
Slide 28: Case study: Become Group (Digital & design)
Global Focus, Local Presence 27 Case study: Become Group (Digital & design) Offices in London, Manchester, Sydney, Melbourne, Hong Kong. Joined the Group in 2005 Providing permanent and temporary recruitment services to the Creative sector Track record of organic growth into Australia (2007) and