A record year for the Group LSE: PAGE.L Website: - - PowerPoint PPT Presentation

Steve Ingham Kelvin Stagg Chief Executive Officer Chief Financial Officer LSE: PAGE.L Website: https://www.page.com/investors 5 March 2020

Full Year Results 2019

“A record year for the Group”

Headline Numbers

Steve Ingham, Chief Executive Officer

Headline Numbers Financial Review Summary and Outlook

3

Key financial highlights

Record year for Group Gross Profit

£855.5m

£814.9m FY 2018

+5.0%

+15.9% FY 2018

Gross Profit Constant Currency Growth

£146.7m

£142.5m FY 2018

17.1%

17.5% FY 2018

Operating Profit Conversion Rate

32.2p

32.5p FY 2018

£97.8m

£97.7m FY 2018

32.1p

26.5p FY 2017

Earnings Per Share Net Cash

£83.5m

£81.3m FY 2018

26.43p

25.83p FY 2018

Total dividends paid Total Dividend Per Share

Financial Review

Kelvin Stagg, Chief Financial Officer

Headline Numbers Financial Review Summary and Outlook

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Tough trading conditions in a number of markets decreased conversion rate

Record gross profit for the Group

FY 2019 FY 2018 £m Gross Profit Operating Profit Conversion Rate* Gross Profit Operating Profit Conversion Rate* Group 855.5 146.7 17.1% 814.9 142.5 17.5% EMEA 418.3 90.3 21.6% 394.3 85.6 21.7% Asia Pacific 163.3 19.8 12.1% 161.2 26.8 16.6% Americas 138.8 19.3 13.9% 121.0 16.7 13.8% UK 135.1 17.3 12.8% 138.4 13.4 9.7%

• Increase of £4.2m in operating profit, growth in constant currency +2.2%
• Conversion rate decrease of 0.4ppts to 17.1%, due to tough trading conditions in a number of markets

* Operating profit as a percentage of gross profit

Headline Numbers Financial Review Summary and Outlook

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Tough trading conditions in a number of markets decreased conversion rate

Record gross profit for the Group

FY 2019 FY 2018 £m Gross Profit Operating Profit Conversion Rate Gross Profit Operating Profit Conversion Rate Group 855.5 146.7 17.1% 814.9 142.5 17.5% EMEA 418.3 90.3 21.6% 394.3 85.6 21.7% Asia Pacific 163.3 19.8 12.1% 161.2 26.8 16.6% Americas 138.8 19.3 13.9% 121.0 16.7 13.8% UK 135.1 17.3 12.8% 138.4 13.4 9.7%

• Conversion was broadly flat on 2018 at 21.6%
• Uncertain macro-economic and political climate impacting confidence

Headline Numbers Financial Review Summary and Outlook

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Tough trading conditions in a number of markets decreased conversion rate

Record gross profit for the Group

FY 2019 FY 2018 £m Gross Profit Operating Profit Conversion Rate Gross Profit Operating Profit Conversion Rate Group 855.5 146.7 17.1% 814.9 142.5 17.5% EMEA 418.3 90.3 21.6% 394.3 85.6 21.7% Asia Pacific 163.3 19.8 12.1% 161.2 26.8 16.6% Americas 138.8 19.3 13.9% 121.0 16.7 13.8% UK 135.1 17.3 12.8% 138.4 13.4 9.7%

• Continued investment in two Large, High Potential markets in the region
• Investment into new markets such as Nikkei market in Japan, Bangalore and Canberra offices and new disciplines in

Page Personnel Australia

• Trade tariff uncertainty and social unrest in Hong Kong

Headline Numbers Financial Review Summary and Outlook

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Tough trading conditions in a number of markets decreased conversion rate

Record gross profit for the Group

FY 2019 FY 2018 £m Gross Profit Operating Profit Conversion Rate Gross Profit Operating Profit Conversion Rate Group 855.5 146.7 17.1% 814.9 142.5 17.5% EMEA 418.3 90.3 21.6% 394.3 85.6 21.7% Asia Pacific 163.3 19.8 12.1% 161.2 26.8 16.6% Americas 138.8 19.3 13.9% 121.0 16.7 13.8% UK 135.1 17.3 12.8% 138.4 13.4 9.7%

• Conversion rate broadly flat on 2018
• Improvements in productivity offset by continued investment in the US and Latin America
• Conversion also impacted by tougher conditions in New York FS market and social unrest in Chile

Headline Numbers Financial Review Summary and Outlook

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Tough trading conditions in a number of markets decreased conversion rate

Record gross profit for the Group

FY 2019 FY 2018 £m Gross Profit Operating Profit Conversion Rate Gross Profit Operating Profit Conversion Rate Group 855.5 146.7 17.1% 814.9 142.5 17.5% EMEA 418.3 90.3 21.6% 394.3 85.6 21.7% Asia Pacific 163.3 19.8 12.1% 161.2 26.8 16.6% Americas 138.8 19.3 13.9% 121.0 16.7 13.8% UK 135.1 17.3 12.8% 138.4 13.4 9.7%

• Tight control of our cost base, partially due to reduction in headcount
• Customer First – increasing productivity and repeat business, reduction in travel and UK management team

Headline Numbers Financial Review Summary and Outlook

• Reduction in fee earner headcount of 89 (-1.5%); a reaction to

tough market conditions

• Employee costs driven by inflationary salary rises
• Page Vision target fee earner to operational support staff ratio
• f 82:18

Fee earner to operational support staff ratio of 78:22

Headcount responded to tough market conditions

14 16 18 20 22 24 26 28 30

Support staff as % of Group headcount 10 2019 £m Constant % Employee 545.9 +5.9% Other costs 162.9 +5.4% Total 708.8 +5.8% Employee costs % 77%

Headline Numbers Financial Review Summary and Outlook

Underlying tax rate broadly flat on prior year

Increase in Effective Tax Rate to 28.3%

£m 2019 2018 Reported % Profit Before Tax 144.2 142.3 +1.4% Tax Charge 40.8 38.6 +5.8% Underlying 28.3% 28.1% One off items

• (1.0%)

Effective Tax Rate 28.3% 27.1%

• 2020 Effective Tax Rate expected to be c. 28%

11

Headline Numbers Financial Review Summary and Outlook

Net cash of c. £98m

A strong and robust balance sheet

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£m 2019 2018 Intangible assets 39.1 33.4 Tangible assets 31.9 35.6 Right-of-use assets 120.2

• Trade and other receivables

380.6 361.9 Trade, other payables, current and deferred taxes (216.6) (210.0) Lease liabilities (128.6)

• Net cash

97.8 97.7 Net assets 324.4 318.6

Headline Numbers Financial Review Summary and Outlook

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Marginal benefit to EBIT of c. £2m

IFRS 16 Leases

• IFRS 16 adopted using the modified retrospective method on 1 January 2019
• Right-of-use assets and lease liabilities recognised, were previously classified as operating leases
• Right-of-use assets of £126.2m and lease liabilities of £134.5m on transition
• Straight line rental expense has been replaced by depreciation of right-of-use assets and interest on lease liabilities

2019 £m Lease charge 38.5 Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) 38.5 Depreciation expense (36.6) Earnings Before Interest & Tax (EBIT) 1.9 Finance costs (2.0) Profit Before Tax (PBT) (0.1)

Headline Numbers Financial Review Summary and Outlook

Fifth consecutive year of special dividend

Cash flow generation remains strong

Cash Increase Decrease

14 97.7 97.8 97.8 210.0 15.9 37.4 24.6 7.2 10.0 38.2 83.5

40 80 120 160 200 240 280 320

Dec 18 EBITDA Working Capital Tax and net interest Net capex Share

• ptions

exercised EBT share purchases Lease Liability repayments Dividends Paid Exchange Dec 19

£m 7.5

Headline Numbers Financial Review Summary and Outlook

Committed to returning cash to shareholders, over £380m in 5 years

A growing ordinary dividend through the cycle

11.3 11.6 12.3 13.1 13.8 23.7 24.6 25.9 27.4 29.0 50.1 20.1 40.1 40.8 40.7

10 20 30 40 50 60 70 80 90 2015 2016* 2017 2018 2019

£m

Dividends Paid

Interim Final Special

25.23p 18.44p 27.50p

• Final 2019 dividend proposed of 9.40p per share (+4.4%)
• Return per share of 26.43p in 2019
• Total dividends over £380m in past five years

2019 Pence per share Interim (Paid) 4.30 Special (Paid) 12.73 Final (Proposed) 9.40 Total 26.43 15 25.83p

*2016 special dividend lower due to EBT purchases of £20m

26.43p

Summary and Outlook

Headline Numbers Financial Review Summary and Outlook

Strategic investments driving capability & growth

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Final dividend of 9.00 pence per share, increase on 2017 of +4.7% 20m marketing emails sent, 3 x industry engagement 14m candidate applications in 2019 55m website visits in 2019: +9% YOY Connected Customer Experience: Acquire, Engage, Nurture Culture & Engagement framework devised and deployed Culture as a competitive advantage Continuous listening strategy

Headline Numbers Financial Review Summary and Outlook

We remain mindful of macro-economic uncertainty

A record year for Group Gross Profit

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Final dividend of 9.00 pence per share, increase on 2017 of +4.7% Final dividend of 9.40 pence per share, increase on 2018 of +4.4% Total dividends paid in 2019 of £83.5m Fee earners reduced by 89, -1.5% Conversion rate of 17.1% Operating Profit of £146.7m Gross Profit in constant currency +5.0% Record year for Group Gross Profit

Headline Numbers Financial Review Summary and Outlook

Reacting quickly to market conditions

Outlook

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Final dividend of 9.00 pence per share, increase on 2017 of +4.7% Continue to progress towards our Vision Business model enables us to react quickly to market conditions Emergence of COVID-19 Growth slowed to -3% in first two months of 2020 Likely that foreign exchange headwinds will persist

Appendix

Headline Numbers Financial Review Summary and Outlook

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Our Business Model

Headline Numbers Financial Review Summary and Outlook

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Delivering on our global diversification strategy

A growing international business

61% 39% 76% 24% 84% 16% FY 2007 FY 2013 FY 2019 Gross Profit

International UK

Headline Numbers Financial Review Summary and Outlook

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68% 87% 88% 69% 32% 13% 12% 31% EMEA Asia Pacific Americas UK Temp Perm 84% 57% 16% 43% Michael Page Page Personnel Geography Brands

Significant variations in recruitment mix

FY 2019 FY 2019

Headline Numbers Financial Review Summary and Outlook

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Track record of Shareholder returns

£m

13 12 13 14 18 22 27 26 25 29 31 31 31 35 36 38 41 41 14 24 34 83 60 16 15 30 50 20 40 40 42 20 40 60 80 100 120 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Dividend and Share Buybacks

Ordinary Dividend Share Buybacks Special Dividend

1

Headline Numbers Financial Review Summary and Outlook EMEA

918 2,610 1,352 1,147

• 1,000

2,000 3,000 4,000 5,000 6,000 7,000

1990-99 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Fee Earner Headcount

AMERICAS ASIA PACIFIC

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1985-1990 1990-1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2017 2018

Portugal (2000) Switzerland (2001) Belgium (2002) Sweden (2002) Poland S Africa Ireland UAE Austria Turkey Luxembourg Morocco Thailand Indonesia Taiwan India Malaysia New Zealand Japan (2001) China (2003) Australia (1985) USA (1998) Brazil (2000) Canada Mexico Chile Colombia Peru

INTERNATIONAL GROWTH

France (1986) Netherlands (1987) Germany (1993) Spain (1997) Italy (1997) Hong Kong (1995) Singapore (1996) Argentina

UK ASIA PACIFIC EMEA AMERICAS

Long term fee earner and international growth

2019

Vietnam

2016

Headline Numbers Financial Review Summary and Outlook

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1000 2000 3000 4000 5000 6000 7000 H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2 Headcount Fee Earner Support Staff 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Fee earner investment and support staff

Headline Numbers Financial Review Summary and Outlook

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Year-on-Year Gross Profit Rates

2017 2018 2019

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

EMEA +14.8% +13.2% +12.6% +19.3% +18.2% +18.6% +20.9% +13.9% +11.4% +9.0% +5.6% +2.3% Asia Pacific +3.9% +6.8% +13.9% +14.9% +13.8% +18.4% +27.7% +22.0% +14.9% +4.7%

• 8.1%
• 7.9%

– Asia +3.6% +10.2% +21.9% +20.8% +17.8% +21.2% +32.2% +21.2% +15.6% +5.8%

• 10.6%
• 7.6%

– Australasia +4.7%

• 1.5%
• 4.4%

+0.7% +4.3% +10.6% +15.7% +25.0% +13.0% +0.9% +1.1%

• 9.6%

Americas +15.2% +13.8% +18.4% +18.8% +20.4% +29.2% +30.1% +29.2% +21.4% +17.4% +13.0% +5.0% – North America +12.5% +14.6% +26.5% +18.7% +16.4% +27.0% +27.2% +30.3% +20.9% +18.9% +10.3% +4.6% – Latin America +19.2% +12.8% +9.1% +19.0% +25.7% +32.2% +33.9% +27.7% +21.6% +15.3% +16.9% +5.5% UK

• 0.1%
• 4.5%
• 7.6%
• 2.8%
• 7.1%
• 1.9%

+0.8% +2.1% +1.7%

• 2.4%
• 4.1%
• 4.8%

Group Total +9.1% +7.7% +8.8% +13.8% +12.3% +16.0% +19.7% +15.4% +11.7% +7.4% +2.1%

• 0.4%

Headline Numbers Financial Review Summary and Outlook

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Contacts and Calendar

Contacts Jeremy Tatham – Group Financial Controller Tel: +44 (0) 1932 264 143 Email: investorrelations@michaelpage.com Web: http://www.page.com/investors Date Event 15 April 2020 Q1 2020 Trading Update

Headline Numbers Financial Review Summary and Outlook

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Disclaimer

This presentation contains certain statements that are neither reported financial results nor other historical information. 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 use would be contrary to law or regulation, or which would subject any member of the PageGroup plc group of companies to any registration requirement. No representation or warranty, express or implied, is or will be made in relation to the accuracy, fairness or completeness of the information or opinions made in this presentation. Certain statements included or incorporated by reference within this presentation may constitute “forward-looking statements” that are based on current expectations or beliefs, as well as assumptions about future events. There are risk factors that can cause actual results to differ materially from those expressed in or implied by such statements. Accordingly, no assurance can be given that any particular expectation will be met and reliance should not be placed on any forward-looking statement. PageGroup plc disclaims any intention or obligation to revise or update any forward-looking statements that may be made in this presentation, regardless of whether those statements are affected as a result of new information, future events or

• therwise. Nothing in this presentation should be construed as a profit forecast.

This presentation does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares in PageGroup plc, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decision relating thereto, nor does it constitute a recommendation regarding the shares of PageGroup plc. Past performance cannot be relied upon as a guide to future

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presentation shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.