Analyst presentation Year-end results for 2009 - - PowerPoint PPT Presentation

Analyst presentation

Year-end results for 2009

www.hydrogengroup.com

PAGE 1 | HYDROGEN GROUP YEAR-END RESULTS 2009

Who we are

Introduction

Our heritage Award-winning international recruitment specialist focused on hiring mid- to senior-level professionals Currently 250 employees globally Widely recognised for our track record as a top employer:

• Britain’s Top Employer (The Guardian) Winner 2007 and 2008

94% of the clients we worked with 3+ years ago, still work with us today 4 Key sectors:

• Technology
• Finance
• Professional
• Engineering

Hydrogen Group has been recognised for our exceptional performance with an impressive number of prestigious awards and

• accreditations. Here are some of our more recent achievements:
• Britain's Top Employers 2009 - No. 2
• The Sunday Times ‘Best Companies To Work For’
• Britain's Top Employer 2008 - No. 1
• Sunday Times 'Best Company to Work for' 2008
• Britain's Top Employer 2007 - No. 1
• 'Best Company to Star Status' 2007
• Sunday Times 'Best Company to Work for' 2007
• Investors in People Outstanding Workplace of the Year Award
• Sunday Times 'Best Small Company to Work for' 2006

PAGE 2 | HYDROGEN GROUP YEAR-END RESULTS 2009

History

Introduction

2000

2000

1997

1997

PRO established in 1997 Finance launched Partners Group established in 2000 Technology launched

1999

1999

Professionals launched PRO and Partners Group merge to create Hydrogen Group in 2005

2006

2006

Listed on AIM in 2006

2007

2007

Sydney office launched November 2007

2008

2008

Engineering launched

2010

2010

Singapore office launched January 2010 Further global offices planned for 2010

2005

2005

PAGE 3 | HYDROGEN GROUP YEAR-END RESULTS 2009

What we do

Introduction

Balanced business agile to market conditions Consistent experience for clients, candidates and staff Providing candidates with global

• pportunities and clients access to a

global candidate pool

1 2 3

PAGE 4 | HYDROGEN GROUP YEAR-END RESULTS 2009

Historic performance through the cycles

Introduction

Our ability to scale the business in line with market conditions has been critical to our success NFI returned to growth in the second half of 2009, growing 12% on the first half of 2009

PAGE 5 | HYDROGEN GROUP YEAR-END RESULTS 2009

Proposition

Introduction

We focus on finding and building relationships with the high-quality, sought-after specialist candidates that

• ur clients cannot source themselves

With international research teams directly sourcing candidates spanning over 40 countries, we can offer clients access to the best specialist candidates in both the local and international marketplaces Our candidates are hard to find and in high demand, they work with us because our proposition is to give them access to the best jobs and exceptionally high service and delivery levels We minimise the time clients have to invest in the recruitment process and ultimately save them money through quality of processes that reduce time-to-hire

Financials

PAGE 7 | HYDROGEN GROUP YEAR-END RESULTS 2009

Financial highlights

Financials

Group Revenue of £74.1m (2008:£96.2m) Operating profit before exceptional items of £0.3m (2008:£3.7m) Continued focus on cost reduction and debtor management with trade debtors reduced by 11 days to 29 days (2008:40 days) Net funds at 31 December 2009 of £3.1m (2008:net debt of £0.9m) Total dividend for the year 4.1p per share (2008:4.1p)

PAGE 8 | HYDROGEN GROUP YEAR-END RESULTS 2009 Year ending 31st Dec 2009 Year ending 31st Dec 2008 Change Revenue

£74.1m £96.2m (23%)

Gross Profit (Net Fee Income)

£16.8m £26.7m (37%)

Profit before taxation and exceptional items

£0.3m £3.7m (92%)

(Loss)/ profit for the year

(£5.2m) £1.0m (620%)

Basic (loss)/earnings per share

(22.25p) 4.38p (608%)

Adjusted (loss)/earnings per share

2.42p 11.84p (75%)

Dividend for year

4.1p 4.1p

• Income statement

Financials

% Conversion NFI £m

NFI and conversion of NFI to PBT declined until the second half of 2009 when the business returned to profitable growth The level of dividend is both appropriate and sustainable, given the cash generative characteristics of the group and its strong balance sheet and will seek to review it, as and when profitability improves

PAGE 9 | HYDROGEN GROUP YEAR-END RESULTS 2009

2009

Impairment of goodwill established on creation of Hydrogen Group

£5.6m

Provision for onerous contract re leasehold property at Old Bailey

£0.5m

Release of excess provision for costs re abortive Imprint acquisition

(£0.3m)

TOTAL £5.8m

Exceptional items

Financials

Goodwill impairment has no cash impact Leasehold property at Old Bailey successfully sub-let to the end of the lease All fees settled relating to abortive Imprint acquisition

PAGE 10 | HYDROGEN GROUP YEAR-END RESULTS 2009 Year ending 31st Dec 2009 Year ending 31st Dec 2008

Non-current assets £14.7m £20.3m

Intangible assets

£13.6m £19.4m

Tangible assets

£0.4m £0.5m

Other assets

£0.7m £0.4m

Current assets £18.1m £20.2m

Debtors

£15.0m £19.6m

Cash and cash equvalents

£3.1m £0.6m

TOTAL ASSETS £32.8m £40.5m

Current liabilities

£9.7m £11.7m

Non-current liabilities

£0.6m £0.8m

TOTAL LIABILITIES £10.3m £12.5m

Net assets £22.5m £28.0m Debtor days 29 40

Summary financial position

Financials

Focus on working capital

• Debtor days at 29 vs 40 in previous year
• Debtor ageing improved
• All debt repaid/cash surplus

PAGE 11 | HYDROGEN GROUP YEAR-END RESULTS 2009 Year ending 31st Dec 2009 Year ending 31st Dec 2008

Cash from operations

£0.76m £4.86m

Working capital movement

£4.46m £3.77m

Exceptional costs

(£0.35m) (£0.86m)

Finance costs

(£0.04m) (£0.30m)

Tax paid

(£0.03m) (£1.97m)

Proceeds from share issue

£0.02m £0.24m

Net cash invested

(£0.13m) (£0.48m)

Repayment of borrowings

(£1.48m) (£3.09m)

Contribution to EBT

(£0.17m) (£0.61m)

Equity dividends paid

(£0.56m) (£1.39m)

Other

• £0.05m

INCREASE IN CASH £2.48m £0.22m

Summary cash flow

Financials

PAGE 12 | HYDROGEN GROUP YEAR-END RESULTS 2009

• 8
• 6
• 4
• 2

2 4 6 8

1H 06 2H 06 1H 07 2H 07 1H 08 2H 08 1H 09 2H 09

20 25 30 35 40 45 50 55 60 65 70

Cash from operations DSO's

£m Days

Cash generated trend

Financials

£19.7m cash from operations generated over the last 3 years The focus on debtor reduction and decline in working capital has allowed the Group to continue to generate cash and repay all borrowings

Operational review

PAGE 14 | HYDROGEN GROUP YEAR-END RESULTS 2009

2008 NFI 2007 NFI

International UK

UK and International trend analysis

Operational review

2009 NFI

Having built successful UK businesses in the four key markets using a low risk incubator model, the Group is using the same approach for international expansion. The aim is to have 50% of NFI from international in the next 5 years

PAGE 15 | HYDROGEN GROUP YEAR-END RESULTS 2009

2009 NFI 2008 NFI

Permanent and contract trend analysis

Operational review

Contract placements proved more resilient than permanent during economic slowdown

% NFI Our objective is to maintain a 50% contract mix to give the right balance of cash generation, profitability and resilience

PAGE 16 | HYDROGEN GROUP YEAR-END RESULTS 2009

2009 NFI

Financial services and Industry and Commerce trend analysis

Operational review

% NFI 2008 NFI Our objective is to maintain a balance between Industry and Commerce and Financial services to ensure the business is resilient and well placed to take advantage of growth sectors. Financial services was hit more severely from the slowdown than Industry and Commerce

PAGE 17 | HYDROGEN GROUP YEAR-END RESULTS 2009

Analysis by sector

Operational review

2009 NFI 2008 NFI

Engineering is the newest sector and was started after analysing the market and identifying it as a growth market with an imbalance of demand and supply of high quality candidates

PAGE 18 | HYDROGEN GROUP YEAR-END RESULTS 2009

Headcount trend analysis

Operational review

Productivity per head Sales headcount has grown by 10% since low point at 30 June 2009

Total employees Billing to

• perations

ratio

PAGE 19 | HYDROGEN GROUP YEAR-END RESULTS 2009

Operational highlights

Operational review

Good performance delivered despite challenging trading environment Continued selective investment into more robust market sectors and geographies Strong performance from Engineering business with NFI up by 50% to £1.5m (2008: £1.0m) International operations grew 20% and contributed 22% of total Group NFI (2008: 12%) Strong performance from Australia with NFI up 183% for the period First office in Far East Asia opened in Singapore, since the year end

PAGE 20 | HYDROGEN GROUP YEAR-END RESULTS 2009 PAGE 20 | HYDROGEN GROUP YEAR-END RESULTS 2009

Current trading summary

Operational review

Increase in overall activity levels since the beginning of 2010 Increase in contractor numbers in UK businesses Australia has shown strong growth Singapore office has opened and is performing well Investment in working capital if growth continues Dividend sustainable at current level and will be reviewed should profitabity increase We continue to invest in robust markets using our proven incubator model Cautiously optimistic

www.hydrogengroup.com

Hydrogen Group plc 6 Laurence Pountney Hill, London EC4R 0BL United Kingdom Tel +44 (0)20 7240 2500 Fax +44 (0)20 7929 1200 info@hydrogengroup.com www.hydrogengroup.com