Half Year Results 2016 Agenda Financial Review Capital Strategy - - PowerPoint PPT Presentation

Half Year Results 2016

Agenda

Financial Review Capital Strategy and Returns Summary and Outlook

Financial Review

H1 2016 Group Financial Highlights

H1 2016 H1 2015 Reported % Constant % Revenue £575.9m £530.4m +8.6% +5.5% Gross Profit £299.2m £280.9m +6.5% +3.6% Operating Profit £47.1m £40.0m +17.6% +12.1% Basic Earnings Per Share 10.8p 9.1p +18.7% Net Cash £73.6m £100.5m

• 26.7%

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Interim Dividend Per Share 3.75p 3.60p +4.2% Supplementary Dividend Per Share 6.46p 16.0p

Income Statement

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H1 2016 £m H1 2015 £m Reported % Constant % Revenue 575.9 530.4 +8.6% +5.5% Gross Profit 299.2 280.9 +6.5% +3.6% Operating Profit 47.1 40.0 +17.6% +12.1% Net Interest (expense)/income (0.2) 0.4 Profit Before Tax 46.9 40.4 Taxation (13.1) (12.1) Profit After Tax 33.8 28.3 Effective Tax Rate 28.0% 30.0% Earnings Per Share Basic (pence) 10.8 9.1 +18.7% Diluted (pence) 10.8 9.0 +20.0%

Conversion by Region

H1 2016 H1 2015 Gross Profit £m Operating Profit £m Conversion Rate % Gross Profit £m Operating Profit £m Conversion Rate % GROUP 299.2 47.1 15.7 280.9 40.0 14.3

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EMEA 129.1 23.8 18.5 109.1 15.6 14.3 UK 74.8 11.6 15.6 75.7 12.5 16.5 ASIA PACIFIC 56.5 9.4 16.6 56.0 9.9 17.6 AMERICAS 38.8 2.3 5.8 40.1 2.0 5.0

Conversion Rate is the amount of Gross Profit converted into Operating Profit

Depreciation, Amortisation and Capital Expenditure

H1 2016 £m H1 2015 £m Depreciation 4.4 3.7 Amortisation 3.8 3.9 Total 8.2 7.6 Capital expenditure 11.9 5.7

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• Increased capital expenditure due to the fit out of new European SSC and for office moves in locations such as

New York, Paris and Tokyo

• New office in Neuilly, Paris is the Group’s largest by headcount
• Moved offices in Tokyo and out of the Chrysler building in New York to a more suitable open-plan office
• Additional floors at our new European Shared Service Centre as the transition continues

Balance Sheet

H1 2016 £m H1 2015 £m Intangible assets 36.5 36.5 Tangible assets 26.8 20.3 Trade and other receivables 262.7 218.4 Trade, other payables, current and deferred taxes (164.0) (134.6) Net cash 73.6 100.5 Net assets 235.6 241.1

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• Trade and other receivables increased by c. £24m due to foreign exchange movements
• Following payment of special dividend of £50m in H2 2015, net cash was £26.9m lower than H1 2015

H1 Cash flow: Shares purchased to hedge share plan exposures

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H1 2016 H1 2015 Movement in net cash (£m) (21.4) 10.5

£m

Capital Strategy and Returns

Capital Strategy

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• To finance the activities and development of the Group from retained earnings while maintaining

a strong balance sheet position

• First use of cash is to satisfy operational and investment requirements, as well as hedging the

Group’s liabilities under its share plans

• Second use of cash is an ordinary dividend:
• To grow the ordinary dividend in line with our long term growth rate
• Sustain the level of ordinary dividend payment during downturns
• Increase the ordinary dividend during more prosperous times
• Cash generated in excess of these first two priorities will be returned to shareholders through

supplementary returns using:

• Special dividend and /or
• Share buybacks

Track Record of Shareholder Returns

£m

Assessment of Surplus Cash

H1 2016 H1 2015 Special Dividend (£m) 20.0 50.0

£m

Dividends

H1 2016 (pence per share) H1 2016 £m H1 2015 (pence per share) H1 2015 £m Interim 3.75 11.6 3.6 11.3 Supplementary 6.46 20.0 16.0 50.0 Total 10.21 31.6 19.6 61.3

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• Interim Dividend increased by 4.2%
• Supplementary return of £20m
• Both payable to shareholders on 12th October
• Ordinary dividend yield of 3.4%
• Total dividend yield of 5.3%

Dividend yield calculated using a share price of 340p

Summary and Outlook

Summary & Outlook

Summary

• Trading conditions anticipated to remain challenging in several key markets
• No contagion from referendum result seen so far outside of UK and the Financial

Services markets

• Some slowing in candidate and client activity in the UK
• Ongoing focus on conversion rates and productivity
• Conversion rate up to 15.7% (H1 2015: 14.3%)
• Fee earner movements to react to market conditions both up and down
• Continued focus on standardisation and efficiency
• Returning cash to shareholders
• Interim dividend of 3.75p, up 4.2%, total £11.6m
• Supplementary dividend of 6.46p, total £20.0m
• Continue to focus on driving profitable growth, whilst remaining able to

respond quickly to any changes in market conditions

Outlook

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Cautionary Statement

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