First Quarter 2017 Trading Update
Agenda Financial Review Regional Review Summary and Outlook
Financial Review
Trading Performance Reported (£m) Constant 2017 2016 % % Q1 2017 vs Q1 2016 170.3 142.2 +19.7% +9.1% Gross Profit +9.1% vs Q1 2016 in constant currencies • • In reported rates, Gross Profit +19.7%, a record for the Group at £170.3m (£15.2m currency benefit) In constant currencies, Gross Profit was £155.1m • Michael Page +7.1% • • Page Personnel +14.0% Financial position: c. £86m net cash • 4
Permanent vs Temporary – Year-on-Year Gross Profit Reported (£m) Constant Q1 2017 2016 % % Permanent 128.0 107.2 +19.3% +8.5% Temporary 42.3 35.0 +20.8% +10.7% Ratio (Perm : Temp) 75:25 75:25 • Perm : Temp ratio maintained at 75:25 • Strong performances from both permanent and temporary recruitment 14 countries achieved growth greater than 20% for permanent recruitment • Michael Page Perm : Temp of 83:17 • Page Personnel Perm : Temp of 58:42 • 5
Discipline Overview – Year-on-Year Gross Profit Reported (£m) Constant % of Q1 2017 2016 % % Group Accounting and Financial 38% 65.2 55.2 +17.9% +7.8% Services Legal, Technology, HR, Secretarial 22% 37.5 32.0 +17.2% +6.2% and Healthcare Engineering, Property & Construction, Procurement & 21% 35.8 27.7 +29.5% +17.8% Supply Chain Marketing, Sales and Retail 19% 31.8 27.3 +16.4% +6.0% Group Total 100% 170.3 142.2 +19.7% +9.1% • Outstanding performance from our technical disciplines; Property & Construction +28% and Engineering +25% Financial Services represents only 6% of the Group • 6
Headcount and Investment Q1 2017 Q4 2016 Movement % Fee earners 4,809 4,711 +98 +2.1% Support staff 1,405 1,388 +17 +1.3% Total headcount 6,214 6,099 +115 +1.9% Ratio 77:23 77:23 Fee earner headcount responds to trading conditions, +62 in EMEA, -9 in the UK • • Fee earner headcount was added in our large, high potential markets, as well as where we saw strongest growth Ratio of fee earner to support staff additions 85:15, making progress towards 80:20 target • • European Shared Service Centre benefits (savings c. £6m) Global Finance System project progressing well (costs c. £2m) • • IT transition to Cloud and European SSC on track (costs c. £2m) 7
Headcount and Reported Gross Profit Total headcount increased 1.9% vs. Q4 2016 to 6,214 (Q4 2016: 6,099) 8
Regional Review
Q1 Regional Overview - Year-on-Year Gross Profit Reported (£m) Constant % of Q1 2017 2016 % % Group EMEA 46% 78.6 61.6 +27.6% +14.8% UK 22% 36.4 36.4 -0.1% -0.1% Asia Pacific 18% 30.8 25.9 +18.8% +3.9% Americas 14% 24.5 18.3 +33.8% +15.2% Group Total 100% 170.3 142.2 +19.7% +9.1% • 11 countries delivered record quarters including France, Germany, Spain and the US • 20 countries achieved year-on-year growth of over 10% 10
EMEA (46% of the Group) - Year-on-Year Gross Profit Reported (£m) Constant 2017 2016 % % Q1 2017 vs Q1 2016 78.6 61.6 +27.6% +14.8% Headcount at 31 March 2017: 2,628 (31 December 2016: 2,553) Michael Page (55% of EMEA) +12%, Page Personnel (45% of EMEA) +18% • • France (15% of Group) +26% - Michael Page (36% of France) +19% - Page Personnel (64% of France) +29% Germany (7% of Group) +11% • - Michael Page (66% of Germany) +10% - Page Personnel (34% of Germany) +12% A record quarter for Southern Europe +11% and strong growth in Benelux +12% • • Record performances from six countries; Austria, Belgium, France, Germany, Poland and Spain • Middle East and Africa combined, grew 10%, Middle East +7%, Africa +14% 11
United Kingdom (22% of the Group) - Year-on-Year Gross Profit Reported (£m) 2017 2016 % Q1 2017 vs Q1 2016 36.4 36.4 -0.1% Headcount at 31 March 2017: 1,405 (31 December 2016: 1,411) Michael Page (78% of the UK) flat • • Page Personnel (22% of the UK) -1% Strong performances from our technical disciplines; Engineering +28%, Property & Construction +12% • • Financial Services (4% of the UK), Legal, Marketing and Retail were the most challenging London -4%, elsewhere +2% • Private sector (88% of the UK) flat • • Public sector (12% of the UK) -2% 12
Asia Pacific (18% of the Group) - Year-on-Year Gross Profit Reported (£m) Constant 2017 2016 % % Q1 2017 vs Q1 2016 30.8 25.9 +18.8% +3.9% Headcount at 31 March 2017: 1,238 (31 December 2016: 1,205) Asia (13% of Group and 70% of Asia Pacific) +3.6% • • Greater China (57% of Asia) +6% Good growth in Mainland China +11% partially offset by Hong Kong -1% • • Investment in Nikkei business in Japan • Strong performances from India +24% and Indonesia +50% • Australasia (5% of Group and 30% of Asia Pacific) +4.7% Australia +4%, Page Personnel +8% • • New Zealand +28% 13
Americas (14% of the Group) - Year-on-Year Gross Profit Reported (£m) Constant 2017 2016 % % Q1 2017 vs Q1 2016 24.5 18.3 +33.8% +15.2% Headcount at 31 March 2017: 943 (31 December 2016: 930) North America (8% of the Group and 57% of Americas) +13% • • US +16%, a record quarter US Fee Earner headcount increase year-on-year of 26% • • US ex. New York FS +31%, New York FS -11% Record quarters in Boston, Chicago and Los Angeles • Property & Construction achieved growth >100% • Latin America (6% of the Group and 43% of Americas) +19% • • Brazil (34% of Latin America) -3%, continues to be impacted by adverse macroeconomic factors • Latin America ex-Brazil (66% of Latin America) +31% Mexico +30% • • Record quarters for Argentina, Colombia and Peru 14
Summary and Outlook
Summary Q1 Gross Profit: +9.1% in constant currencies and +19.7% in reported rates • • Impact of FX Summary Q1 reported Gross Profit increased by 10.6 percentage points or c. £15m Majority of markets performing well • Continental Europe, Latin America (excluding Brazil), South East Asia (excluding Singapore) and the US • Challenging conditions in some markets Brazil, Singapore, the UK and the New York Financial Services market • Record Group Headcount Headcount 6,214, +115 in Q1, of which 98 were fee earners Ratio of fee earner to support staff additions 85:15, making progress towards 80:20 target • Strong Financial position c. £86m net cash 16
Outlook Large, High-Potential Markets • US continues to diversify Outlook Investment in LatAm excluding Brazil Summary Investment in South East Asia excluding Singapore Germany focus on Page Interim and Page Personnel Greater China focus on Mainland China Strong growth businesses • Continental Europe and Page Personnel Challenging trading conditions in some markets • Brexit uncertainty in the UK Financial Services market in New York Brazil expected to remain challenging but profitable Strategic operational support investments • • Continue to focus on driving profitable growth, whilst remaining able to respond quickly to any changes in market conditions 17
Cautionary Statement 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 otherwise. 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 performance. Liability arising from anything in this presentation shall be governed by English Law. Nothing in this presentation shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.
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