Pagegroup Plc · LSE:PAGE
Pagegroup — FY2012 Earnings Presentation
51 slides from Pagegroup's earnings presentation, March 2013
Slide 1: 2012 Results | March 2013
PageGroup 2012 results | 1 2012 Results | March 2013
Slide 2: Agenda
PageGroup 2012 results | 2 Agenda Financial Review Segmental Analysis Strategy Summary Appendices
Slide 3: Financial Review
PageGroup 2012 results | 3 Financial Review
Slide 4: Resilient gross profit performance in challenging conditions
PageGroup 2012 results | 4 Financial Review Resilient gross profit performance in challenging conditions Constant Before After currency exceptional Exceptional exceptional Change change INCOME STATEMENT items items items before before 2012 2012 2012 2011 exc. exc. £m £m £m £m items items Revenue 989
Slide 5: Exceptional items
PageGroup 2012 results | 5 Financial Review Exceptional items • Exceptional item relates to the removal of a management layer for Continental Europe and the Americas • One Executive Board with Executive Directors responsible for each region reporting directly to CEO • Legacy management structure rem
Slide 6: Full year 2012 dividend maintained at 10.0p
PageGroup 2012 results | 6 Financial Review Full year 2012 dividend maintained at 10.0p DIVIDENDS 2012 2011 (pence per 2012 (pence per 2011 share) £m share) £m Interim 3.25 9.9 3.25 9.8 Final 6.75 20.5 6.75 20.5 Total 10.00 30.4 10.00 30.3 SHARE REPURCHASES 2012 2011 Shares 2012 Shares 2011 m £m m £
Slide 7: Temporary recruitment more resilient in weaker market conditions
PageGroup 2012 results | 7 Financial Review Temporary recruitment more resilient in weaker market conditions Growth Rates 2012 2011 Constant PERM/TEMP GROSS PROFIT £m £m Reported currency Permanent 409.7 438.4 -6.6% -3.2% Temporary 117.2 115.4 +1.6% +5.0% Ratio (Perm:Temp) 78:22 79:21 GROSS MARGINS
Slide 8: £31m paid in dividends, £18m shares acquired
PageGroup 2012 results | 8 Financial Review £31m paid in dividends, £18m shares acquired CASH FLOW 2012 2011 £m £m Operating profit before exceptional items 65.1 86.0 Exceptional items (7.8) - Operating profit after exceptional items 57.3 86.0 Depreciation and share scheme charges 27.0 24.4 Decrease
Slide 9: Strong balance sheet with over £61m in cash at end of 2012
PageGroup 2012 results | 9 Financial Review Strong balance sheet with over £61m in cash at end of 2012 BALANCE SHEET 2012 2011 £m £m Intangible assets 44.1 39.7 Tangible assets 28.9 33.2 73.0 72.9 Trade and other receivables 185.8 199.1 Trade, other payables, current and deferred taxes (138.8) (149.
Slide 10: Segmental Analysis
PageGroup 2012 results | 10 Segmental Analysis
Slide 11: Geographic Analysis of Gross Profit
PageGroup 2012 results | 11 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 Asia, now 12% of the Group, the greatest source of growth Headcount – down by 187, -4% from 5
Slide 12: Discipline Analysis of Gross Profit
PageGroup 2012 results | 12 Segmental Analysis Discipline Analysis of Gross Profit Continued diversification avoids exposure to any one discipline or sector Finance & Accounting now 42% of Group Financial Services only 8% of Group Newer disciplines, 20% of Group growing at 6% Ongoing launch and roll
Slide 13: Year-on-year quarterly growth rates
PageGroup 2012 results | 13 Segmental Analysis “Year-on-year quarterly growth rates” 2012 vs 2011 Q1 Q2 Q3 Q4 EMEA +10.1% -2.5% -7.2% -10.9% UK -3.7% -9.2% -10.9% -2.1% Asia Pacific +17.8% +11.2% +2.6% +10.1% Americas +7.6% -8.6% -10.2% -1.1% Group Total +7.6% -2.5% -6.5% -3.6% Growth rates in local
Slide 14: EMEA
PageGroup 2012 results | 14 Segmental Analysis EMEA 41% of Group Gross profit of £218m Operating profit of £22m Headcount -8% to 2,040
Slide 15: EMEA (41% of Group)
PageGroup 2012 results | 15 Segmental Analysis EMEA (41% of Group) 2012 2011 Market conditions Gross profit £218.4m -9% £239.6m increasingly Operating profit before £22.1m -30% £31.7m exceptional items challenging Headcount 2,040 -8% 2,210 Profitable in all major countries Newer businesses such as A
Slide 16: United Kingdom
PageGroup 2012 results | 16 Segmental Analysis United Kingdom 23% of Group Gross profit of £121m Operating profit of £15.8m Headcount -4% to 1,237
Slide 17: United Kingdom (23% of Group)
PageGroup 2012 results | 17 Segmental Analysis United Kingdom (23% of Group) 2012 2011 Market conditions tough but stable Gross profit £121.4m -7% £130.0m Operating profit before £15.8m -14% £18.3m exceptional items UK remains diversified Headcount 1,237 -4% 1,292 in geography, disciplines and perma
Slide 18: Asia Pacific
PageGroup 2012 results | 18 Segmental Analysis Asia Pacific 22% of Group Gross profit of £115m Operating profit of £29m Headcount +7% to 1,036
Slide 19: Asia Pacific (22% of Group)
PageGroup 2012 results | 19 Segmental Analysis Asia Pacific (22% of Group) 2012 2011 Asia +17%* growth Gross profit £114.9m +11% £103.4m in gross profits Operating profit £29.0m +11% £26.2m Headcount 1,036 +7% 971 Australia and New Zealand +3%* in gross profits New offices opened in Taipei and Suzho
Slide 20: The Americas
PageGroup 2012 results | 20 Segmental Analysis The Americas 14% of Group Gross profit of £72m Operating loss of -£1.7m Headcount -3% to 786
Slide 21: Americas (14% of Group)
PageGroup 2012 results | 21 Segmental Analysis Americas (14% of Group) 2012 2011 Clear market leader in Gross profit £72.2m -11% £80.9m Latin America with Operating (loss)/profit -£1.7m -117% £9.9m 5 countries, 20 offices Headcount 786 -3% 813 and 538 headcount Continuing to invest in platform for f
Slide 22: Strategy
PageGroup 2012 results | 22 Strategy
Slide 23: Clear, consistent strategy of organic growth
PageGroup 2012 results | 23 Strategy CLEAR, CONSISTENT STRATEGY OF ORGANIC GROWTH • Improving market share by diversification in more mature recruitment markets • Investing our resources in the less developed recruitment markets that offer the greatest growth and margin potential
Slide 24: Positioned for growth
PageGroup 2012 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 positioned in
Slide 25: Investment every year to diversify the business
PageGroup 2012 results | 25 Strategy Investment every year to diversify the business Clear, consistent Meritocratic, building strategy of organic trust, clear values growth – continuing and culture – retaining diversification by high flyers and geography and entrepreneurs discipline
Slide 26: Mature recruitment markets
PageGroup 2012 results | 26 Strategy Mature recruitment markets DIVERSIFICATION • By discipline and by management level • Michael Page in 34 countries • Page Personnel in 21 countries • Page Executive across full network • 58% of gross profit from Non-Finance & Accounting • 20% from technical discip
Slide 27: Investment continues – UK
PageGroup 2012 results | 27 Strategy Investment continues – UK Remains Group’s Strong profit Invest in retaining Key exporter of largest and most resilience with long- and growing management talent to established country term potential established and launch and grow in for growth stable management
Slide 28: Less developed, high potential markets
PageGroup 2012 results | 28 Strategy Less developed, high potential markets PROVEN CHINA, GERMANY, ESTABLISHED BUSINESSES LATIN AMERICA “CODE CRACKED” UNPROVEN NORTH AMERICA, ESTABLISHING BUSINESSES INDIA, AFRICA “CRACKING THE CODE”
Slide 29: Proven investment – development of China
PageGroup 2012 results | 29 Strategy Proven investment – development of China New offices opened: Continued investment Suzhou and Taipei in headcount, +15% in 2012
Slide 30: Proven investment – development of China
PageGroup 2012 results | 30 Strategy Proven investment – development of China % of Group gross profit 6.4% • Growth in 2012 (Q1 +17%, Q2 +14%, Q3 -2%, Q4 +15%) 2012 growth rate* +10.3% • Successfully rolling out offices and disciplines No. of offices 10 • Rapidly growing local management • Very expe
Slide 31: Proven investment – development of Latin America
PageGroup 2012 results | 31 Strategy Proven investment – development of Latin America Clear market leader Launched in Bogota, with 5 countries, Colombia and new 20 offices and office in Macaé, 538 headcount Rio de Janeiro
Slide 32: Proven investment – development of Latin America
PageGroup 2012 results | 32 Strategy Proven Investment – development of Latin America • Clear market leader % of Group gross profit 9.3% • 2012 tough but continued investment 2012 growth rate* -4.9% • 13 years of successfully rolling out offices No. of offices 20 • Strong local, experienced manageme
Slide 33: Proven investment – development of Germany
PageGroup 2012 results | 33 Strategy Proven investment – development of Germany High salaries and fee Strong permanent Organically grown Page Personnel rolled rates recruitment bias but management team out nationally investing investing heavily in Michael Page Interim in temp/interim headcount growt
Slide 34: Proven investment – development of Germany
PageGroup 2012 results | 34 Strategy Proven investment – development of Germany 2012 growth rate* 8.4% Opportunities: • Market leader in Perm No. of offices 7 • Big investment in Temp/Interim • H1 growth +25%, H2 growth -6% Headcount 258 • Successfully rolled out offices/ disciplines Peak conversion
Slide 35: Investment – development of North America
PageGroup 2012 results | 35 Strategy Investment – development of North America • Platform of offices established • Recent investment in offices in San Francisco and Houston • Past years of profitability (£4m, 20% conversion rate) • New senior management team • Re-focused management team by disciplin
Slide 36: Investment – development of India
PageGroup 2012 results | 36 Strategy Investment – development of India • Established two years ago • Experienced management team (21 years) • Recently invested in two new internal management transfers • Finished second year trading profit in Q4 • Compared to Brazil at this stage – (12 consultants) e
Slide 37: Investment – development of Africa
PageGroup 2012 results | 37 Strategy Investment – development of Africa • Fees in 38 countries to date • 66 headcount • 4 offices • Peak conversion rates (21%) showing promise • Experienced management team (39 years) • International transfers into region
Slide 38: Summary
PageGroup 2012 results | 38 Summary
Slide 39: Key facts
PageGroup 2012 results | 39 Summary Key facts • Group gross profit reduced by -4.9%, to £527m following record in 2011 • EMEA: Market conditions tough although newer countries such as the Middle East and Russia have performed well • Asia Pacific: Australia resilient but worrying signs from mining &
Slide 40: Appendices
PageGroup 2012 results | 40 Appendices
Slide 41: Group quarterly gross profit trend: 2002 to 2012
PageGroup 2012 results | 41 Appendices Group quarterly gross profit trend: 2002 to 2012
Slide 42: Clear on brand
PageGroup 2012 results | 42 Appendices Clear on brand At 31 December 2012
Slide 43: Continued investment in building a consistent business through global organic growth
PageGroup 2012 results | 43 In the last 12 months we continued to invest in building Appendices a consistent business through global organic growth Organic global expansion
Slide 44: Long-term approach to investment
PageGroup 2012 results | 44 Appendices Long-term approach to investment
Slide 45: Fee earner/support staff headcount trend
PageGroup 2012 results | 45 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
Slide 46: Cost structure
PageGroup 2012 results | 46 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 Headcount
Slide 47: Strong conversion rates whilst investing for the future
PageGroup 2012 results | 47 Appendices Strong conversion rates whilst investing for the future
Slide 48: Dividends, share repurchase history and year end net cash/debt position
PageGroup 2012 results | 48 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 49: Number of shares and options outstanding
PageGroup 2012 results | 49 Appendices Number of shares and options outstanding
Slide 50: Cautionary Statement
PageGroup 2012 results | 50 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 distribution or u
Slide 51: PageGroup 2012 results | 51
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