Empresaria Group Plc · LSE:EMR
Empresaria — H1 2018 Earnings Presentation
29 slides from Empresaria's earnings presentation, August 2018
Slide 1: Investor Presentation
August 2018 Investor Presentation Spencer Wreford CEO Tim Anderson Group Finance Director
Slide 2: Cautionary Statement
Global Focus, Local Presence 1 Cautionary Statement The information contained in this presentation is not audited, is past trends or activities should not be taken as a representation for personal use and informational purposes only and is not that such trends or activities will continue in the futu
Slide 3: Empresaria is an international specialist staffing group
Global Focus, Local Presence 2 Empresaria is….. an international specialist staffing Group, following a multi-branded strategy to address global talent shortages
Slide 4: Overview of the half year
Global Focus, Local Presence 3 Overview of the half year • Organic profit growth despite changes to legislation - adjusted profit before tax up 2%, up 3% in constant currency - net fee income up 1% in constant currency • Trading in line with full year market expectations • Investing in the business
Slide 5: Operating review
Global Focus, Local Presence 4 Operating review
Slide 6: Overview of the half year results
Global Focus, Local Presence 5 Overview of the half year results Particularly strong results from: • Offshore Recruitment Services (‘ORS’) business in India • Professional services in UK • Retail in Chile • Recent investments in Rishworth Aviation, ConSol Partners & Pharmaceutical Strategies • Impro
Slide 7: Diversified and balanced
Global Focus, Local Presence 6 Diversified and balanced • Spread of operations reduces impact from localised market issues • 66% of net fee income from outside the UK • Temporary 58%, Permanent 37%, ORS 5% • Professional & specialist levels at 85% UK (34%) Technical & industrial (29%) Germany & Aust
Slide 8: Operations review - UK
Global Focus, Local Presence 7 Operations review - UK £m 2018 2017 34% Revenue 42.1 44.0 of Group net fee income Net fee income 11.6 12.1 Adjusted operating profit 1.0 0.9 • Professional services (LMA) growing NFI following successful merger last year • IT sector (ConSol), profit grew despite lower
Slide 9: Operations review - Continental Europe
Global Focus, Local Presence 8 Operations review - Continental Europe £m 2018 2017 22% Revenue 47.2 46.5 of Group net fee income Net fee income 7.5 7.8 Adjusted operating profit 1.6 1.9 • Constant currency - revenue down 1% (£0.4m), NFI down 6% (£0.5m) • Lower temp margins impact on NFI • Technical
Slide 10: Operations review - Asia Pacific
Global Focus, Local Presence 9 Operations review - Asia Pacific £m 2018 2017 32% Revenue 68.2 64.2 of Group net fee income Net fee income 10.9 11.1 Adjusted operating profit 1.5 1.8 • Constant currency - revenue up 13% (£8.6m), NFI up 4% (£0.5m) • ORS in India grew 30%, opening an office in a second
Slide 11: Operations review - Americas
Global Focus, Local Presence 10 Operations review - Americas £m 2018 2017 12% Revenue 21.0 18.8 of Group net fee income Net fee income 4.2 3.4 Adjusted operating profit 0.9 0.3 • Constant currency - revenue up 15% (£2.9m), NFI up 29% (£1.0m) • Chile (Alternattiva) delivered strong results • Healthca
Slide 12: Investments
Global Focus, Local Presence 11 Investments
Slide 13: Grupo Solimano
Global Focus, Local Presence 12 Grupo Solimano • Investment in 60% of Grupo Solimano in July, an established provider of outsourced and temporary staffing services in Peru • Strategic investment to build presence in growing Latin American market • Total consideration is expected to be approximately
Slide 14: Financial Review
Global Focus, Local Presence 13 Financial Review
Slide 15: Revenue by type: temporary, permanent, ORS
Global Focus, Local Presence 14 Constant • Temp - strong revenue increase in £m 2018 2017 % var currency Rishworth Aviation offset by falls in FastTrack Temp revenue 162.6 157.5 +3% +5% • Perm - strong results in ConSol Perm revenue 12.6 13.6 -8% -5% Partners in US and UK Professional services. £700
Slide 16: Net fee income and adjusted operating profit
Global Focus, Local Presence 15 Constant £m 2018 2017 % var currency Net fee income -1% (+1% constant Net fee income 34.0 34.4 -1% +1% currency) Adjusted • Strong results in Americas, India operating profit 5.0 4.9 +2% +4% and UK professional services • Negative impact as expected Conversion ratio 1
Slide 17: Net fee income bridge
Global Focus, Local Presence 16 Net fee income bridge • Net fee income down 1% 35 • Constant currency up 1% 34 0.7 0.2 • Negative currency impact of £0.7m: 1 0.5 Continental Europe +£0.2m 33 0.5 0.5 APAC -£0.7m Americas -£0.2m 34.4 32 34.0 • Asia Pacific and Americas delivered underlying NFI growth
Slide 18: Adjusted net debt
Global Focus, Local Presence 17 Adjusted net debt (£m) 30 June 30 June 31 Dec £m 2013 2014 2015 2016 2017 2018 2018 2017 2017 0 -5 Adjusted net debt 19.5 22.3 19.5 -10 Net finance costs 0.3 0.3 0.6 -15 -20 Debt to debtors ratio 44% 52% 45% -25 Half year Full year Adjusted net debt excludes cash held
Slide 19: Earnings per share
Global Focus, Local Presence 18 30 June 30 June £m % var 2018 2017 Earnings per share 3.8 4.0 -5% Adjusted earnings per share 5.0 5.7 -12% Adjusted diluted EPS of 5.0p, down from 5.7p due to profit mix between businesses with Adjusted diluted EPS (p) different non-controlling interests 14 12 EPS rem
Slide 20: Looking forward
Global Focus, Local Presence 19 Looking forward
Slide 21: Outlook
Global Focus, Local Presence 20 Outlook • Trading in line with expectations • Continuing to invest in brands to drive growth and productivity improvements and to strengthen commercial operations • Working through the effects of regulation changes in key markets but well positioned to return business
Slide 22: Q&A
Global Focus, Local Presence 21 Q&A
Slide 23: Appendices
Global Focus, Local Presence 22 Appendices
Slide 24: Income statement - 6 months ended 30 June 2018
Global Focus, Local Presence 23 Income statement - 6 months ended 30 June 2018 Constant £m 2018 2017 Change currency Revenue 178.3 173.4 +3% +5% Net fee Income (gross profit) 34.0 34.4 -1% +1% Overheads (29.0) (29.5) Adjusted operating profit* 5.0 4.9 +2% +4% Interest (0.3) (0.3) Adjusted profit bef
Slide 25: Balance sheet - as at 30 June 2018
Global Focus, Local Presence 24 Balance sheet - as at 30 June 2018 £m 2018 2017 Re-presented Property, plant & equipment 1.5 1.4 Goodwill and intangibles reduced for amortisation and currency Goodwill and intangibles 53.1 55.8 movements Deferred tax asset 1.0 1.0 55.6 58.2 Trade and other receivable
Slide 26: Cash flow - 6 months ended 30 June 2018
Global Focus, Local Presence 25 Cash flow - 6 months ended 30 June 2018 £m 2018 2017 Re-presented The cash flow statement has been re-presented in line with the amended treatment of cash and overdrafts as discussed on the Profit for the period 2.5 2.1 balance sheet slide Depreciation, amortisation &
Slide 27: Shareholder information
Global Focus, Local Presence 26 Shareholder information Shares in issue - 49,019,132 ordinary shares Market capitalisation - £46 million (20 August 2018) Outstanding option 3.4m (6.8% of shares in issue) Significant shareholders (updated on 13 August 2018) Anthony Martin 13,924,595 28.4% Close Broth
Slide 28: Empresaria at a glance
Global Focus, Local Presence 27 Empresaria at a glance 4 Regions 21 countries 19 brands Permanent 37% Temporary & Contract 58% Offshore UK Continental Asia Pacific Americas Recruitment Services Europe 5% £11.6m (H1 NFI) £7.5m (H1 NFI) £10.9m (H1 NFI) £4.2m (H1 NFI) 34% of Group NFI 22% of Group NFI
Slide 29: People focused business model
Global Focus, Local Presence 28 People focused business model Multi-brand strategy to address global Management equity philosophy - operating talent shortages – decentralised company management take equity in their structure emphasises local expertise respective businesses aligning their and market