Slide 1: Investor Presentation – results for 2018
March 2019 Investor Presentation – results for 2018 Spencer Wreford Chief Executive Officer 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's vision and purpose
Global Focus, Local Presence 2 Empresaria’s vision is to be a leading international specialist staffing Group Our purpose is to help our staff, candidates and clients to realise their potential
Slide 4: Overview
Global Focus, Local Presence 3 Overview
Slide 5: Overview of the year
Global Focus, Local Presence 4 Overview of the year • Fourth consecutive year of record profits, benefits from diversification - Net fee income up 4%, up 6% in constant currency - Three out of four regions grew adjusted operating profit over prior year - Adjusted profit before tax up 4%, up 6% in co
Slide 6: Overview of the year
Global Focus, Local Presence 5 Overview of the year Particularly strong results from: • IMS – (Offshore Recruitment Services) delivered >50% growth in net fee income • LMA – (Professional services) successfully integrated insurance business • Alternattiva – (Retail) increased scale and depth across
Slide 7: Diversified business model
Global Focus, Local Presence 6 Diversified business model • 20 niche brands with local expertise and market knowledge • Diversified spread of operations reduces impact from localised market issues • 67% of net fee income from outside the UK • Focus on strengthening presence in key sectors Permanent
Slide 8: Strategy & delivery
Global Focus, Local Presence Strategy & delivery
Slide 9: Strategy update
Global Focus, Local Presence 8 Strategy update • Unique business model for sector (multi-branded, management equity philosophy, diversified by geography & sector) • Decentralised structure with local management having autonomy to run business on day to day basis - core part of the Group’s DNA • Grea
Slide 10: Focused growth strategy
Global Focus, Local Presence 9 Focused growth strategy Build size and scale in key sectors and geographies Improve productivity through leading brands Delivered through Organic growth & External investments Invest in like-minded people who share our values and passion
Slide 11: Proven strategy in action
Global Focus, Local Presence 10 Proven strategy in action • Simplifying group with focus on developing leading brands • Diversified by geography • Driving growth in net fee income and profit • Improving productivity (conversion ratio) • Platform in place for next phase of growth £m 2008 2018 Brands
Slide 12: Investment in Grupo Solimano
Global Focus, Local Presence 11 Investment in Grupo Solimano • Latin America is a high potential staffing market • Good growth delivered from Alternattiva in Chile in recent years, demonstrating opportunities in the market • Strategy is to build more scale and depth across region (Chile, Peru, Colum
Slide 13: Financial Review
Global Focus, Local Presence 12 Financial Review
Slide 14: Summary income statement
Global Focus, Local Presence 13 Summary income statement % change £m 2018 2017 % change constant currency Net fee income 72.3 69.4 +4% +6% Adj op profit - Regions 16.0 14.2 +13% Central costs (3.7) (2.6) +42% Adjusted operating profit 12.3 11.6 +6% +8% Adjusted profit before tax 11.4 11.0 +4% +6% Ad
Slide 15: Net fee income
Global Focus, Local Presence 14 Net fee income • Net fee income up 4% 74 • Constant currency up 6% 72 +1.8 -0.4 • UK, Asia Pacific and Americas 70 delivered NFI growth +3.3 -1.0 • Negative currency impact of £1.0m: 68 +0.3 -1.1 Continental Europe +£0.2m 66 72.3 Asia Pacific -£1.0m 69.4 64 Americas -
Slide 16: Earnings
Global Focus, Local Presence 15 Earnings 2018 2017 % var Adjusted profit before tax £11.4m £11.0m +4% Diluted earnings per share 9.1p 7.9p +20% Adjusted, diluted earnings per share 12.1p 12.5p -3% • Adjusted PBT reflects the strong increase in Adjusted diluted EPS (p) operating profit offset partly
Slide 17: Strong cash flow
Global Focus, Local Presence 16 Strong cash flow Free cash flow (£m) 12 £m 2018 2017 10 Free cash 8 flow Free cash flow (pre tax) 9.6 9.6 6 Free cash Percent of adjusted PBT 84% 87% 4 flow (pre 2 tax) Free cash flow 6.7 4.1 0 2014 2015 2016 2017 2018 Invested in: Free cash flow is cash from operatin
Slide 18: Strong cash generating business
Global Focus, Local Presence 17 Strong cash flow Strong cash generating business providing the opportunity to: Further reduce Invest in organic Make external Return funds to debt growth investments shareholders • Adjusted net debt • An additional £0.5m • Investment in Grupo • 2018 dividend reduced b
Slide 19: Adjusted net debt
Global Focus, Local Presence 18 Adjusted net debt Adjusted net debt (£m) 2014 2015 2016 2017 2018 0 £m 2018 2017 -5 Adjusted net debt 17.1 19.5 -10 Half year Full year Net finance costs 0.9 0.6 -15 -20 Debt to debtors ratio 36% 45% -25 Adjusted net debt excludes cash held in respect of pilot bonds (
Slide 20: Outlook
Global Focus, Local Presence 19 Outlook
Slide 21: Outlook
Global Focus, Local Presence 20 Outlook STRONG PLATFORM FOCUSED STRATEGY Able to deliver next phase of Driving organic growth growth Strengthening core brands in Investments made in central key markets team in 2018 to enhance support provided to group companies Economic environment is generally posi
Slide 22: Q&A
Global Focus, Local Presence 21 Q&A
Slide 23: Appendices
Global Focus, Local Presence 22 Appendices
Slide 24: 5 year track record
Global Focus, Local Presence 23 5 year track record Net fee income (£m) Staff productivity Debt to debtors ratio (%) 80 1.90 50 60 1.80 40 30 40 1.70 20 20 1.60 10 0 1.50 0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Adjusted PBT (£m) Conversion ratio (%) Adjusted EPS
Slide 25: UK
Global Focus, Local Presence 24 UK £m 2018 2017 % change Revenue 85.7 86.7 -1% Net fee income 23.7 23.4 +1% Adjusted operating profit 2.9 2.6 +12% • LMA (Professional services), strong year after integration of insurance £23.7m (2018 NFI) brand in Jan 33% of Group NFI • ConSol (IT, digital & design)
Slide 26: Continental Europe
Global Focus, Local Presence 25 Continental Europe £m 2018 2017 % change Revenue 96.1 98.8 -3% Net fee income 15.6 16.5 -5% Adjusted operating profit 4.7 6.1 -23% • Constant currency - revenue down 4% (£3.7m), NFI down 7% (£1.1m) £15.6m (2018 NFI) 22% of Group NFI • Impact of regulatory changes in G
Slide 27: Asia Pacific
Global Focus, Local Presence 26 Asia Pacific £m 2018 2017 % change Revenue 136.8 132.7 +3% Net fee income 24.5 22.2 +10% Adjusted operating profit 6.1 4.5 +36% • Constant currency - revenue up 9% (£11.1m), NFI up 15% (£3.3m) £24.5m (2018 NFI) 34% of Group NFI • IMS (RPO and ORS) NFI up >50%, second
Slide 28: Americas
Global Focus, Local Presence 27 Americas £m 2018 2017 % change Revenue 48.6 38.9 +25% Net fee income 8.9 7.3 +22% Adjusted operating profit 2.3 1.0 +130% • Constant currency - revenue up 28% (£3.1m), NFI up 25% (£1.8m) £4.2m (2018 NFI) 12% of Group NFI • Alternattiva in Chile delivered another year
Slide 29: Income statement – year ended December 2018
Global Focus, Local Presence 28 Income statement – year ended 31 December 2018 Constant £m 2018 2017 Change currency Revenue 366.8 357.1 +3% +5% Net fee Income 72.3 69.4 +4% +6% Administrative costs (60.0) (57.8) Adjusted operating profit* 12.3 11.6 +6% +8% Interest higher due to interest on tax Int
Slide 30: Balance sheet – as at December 2018
Global Focus, Local Presence 29 Balance sheet – as at 31 December 2018 £m 2018 2017 Property, plant & equipment 2.1 1.4 Goodwill and intangibles increased for acquisition of Grupo Goodwill and other intangible assets 54.8 54.1 Solimano and reduced for amortisation Deferred tax asset 1.5 1.0 58.4 56.
Slide 31: Cash flow – year ended December 2018
Global Focus, Local Presence 30 Cash flow – year ended 31 December 2018 £m 2018 2017 Profit for the year 5.8 4.5 Depreciation, amortisation, share-based payments, exceptional items and loss on Cash generated from operations was £8.4m, down on the prior business disposal 3.0 3.4 year reflecting an ou
Slide 32: Shareholder information
Global Focus, Local Presence 31 Shareholder information Shares in issue - 49,019,132 ordinary shares Market capitalisation - £34 million (4 March 2019) Outstanding options 2.9m (5.9% of shares in issue) Significant shareholders (updated on 4 March 2019) Anthony Martin 13,924,595 28.4% Close Brothers
Slide 33: Empresaria at a glance
Global Focus, Local Presence 32 Empresaria at a glance 4 Regions 21 countries 20 brands Permanent 37% Temporary & Contract 58% Offshore Recruitment UK Continental Asia Pacific Americas Services Europe 5% £23.7m (2018 NFI) £15.6m (2018 NFI) £24.5m (2018 NFI) £8.9m (2018 NFI) 33% of Group NFI 22% of G
Slide 34: People focused business model
Global Focus, Local Presence 33 People focused business model Multi-brand with niche sector experts – Management equity philosophy – local expertise and market knowledge operating company management take equity in their respective businesses aligning their interests with shareholders Diversified by