Half Year Results 2017 Agenda Financial Review Capital Strategy - - PowerPoint PPT Presentation

Half Year Results 2017

Agenda

Financial Review Capital Strategy and Returns Summary

Financial Review

H1 2017 Group Financial Highlights

H1 2017 H1 2016 Reported % Constant % Revenue £673.1m £575.9m +16.9% +7.7% Gross Profit £352.0m £299.2m +17.7% +8.3% Operating Profit £56.9m £47.1m +20.9% +9.2% Basic Earnings Per Share 13.1p 10.8p +21.3% Net Cash £88.9m £73.6m +20.8%

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Interim Dividend Per Share 3.90p 3.75p +4.0% Special Dividend Per Share 12.73p 6.46p

Income Statement

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H1 2017 £m H1 2016 £m Reported % Constant % Gross Profit 352.0 299.2 +17.7% +8.3% Administrative Expenses 295.1 252.1 +17.1% +8.1% Operating Profit 56.9 47.1 +20.9% +9.2% Net Interest Expense

• (0.2)

Profit Before Tax 56.9 46.9 Taxation (16.0) (13.1) Profit After Tax 40.9 33.8 Effective Tax Rate (%) 28.2% 28.0% H1 2017 £m H1 2016 £m Closing % Average % Total Headcount 6,448 5,919 +8.9% +6.5%

Impact of Foreign Exchange

H1 2017 H2* 2017 FY 2017 Reported Rates £m Constant Currency £m Foreign Exchange £m Foreign Exchange £m Foreign Exchange £m Gross Profit 352 324 28 2 30

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Operating Profit 57 51 6

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Conversion Rate** 16.2% 15.9%

* H2 estimate at June 2017 exchange rates ** Conversion Rate is the amount of Gross Profit converted into Operating Profit

• Sterling weakened post EU Referendum at end of June 2016
• Little FX benefit expected H2 2017

Conversion* by Region

H1 2017 H1 2016 Gross Profit £m Operating Profit £m Conversion Rate % Gross Profit £m Operating Profit £m Conversion Rate % GROUP 352.0 56.9 16.2 299.2 47.1 15.7

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EMEA 162.1 31.4 19.4 129.1 23.8 18.5 UK 73.0 8.7 11.9 74.8 11.6 15.6 ASIA PACIFIC 66.7 11.3 17.0 56.5 9.4 16.6 AMERICAS 50.2 5.5 11.0 38.8 2.3 5.8

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

• Increase in share and deferred remuneration charges of c. £3m due to 60% increase in share price
• UK Conversion before non-trading items down 1%

Depreciation, Amortisation and Capital Expenditure

H1 2017 £m H1 2016 £m Depreciation 4.2 4.4 Amortisation 4.9 3.8 Total 9.1 8.2 Capital expenditure Tangible assets 4.9 7.3 Intangible assets 4.4 4.6 Total 9.3 11.9

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• Reduced Capex in 2017 due to 3 significant office moves in 2016
• Capital expenditure of c. £4m on new Global Finance System

Balance Sheet

H1 2017 £m H1 2016 £m Intangible assets 37.1 36.5 Tangible assets 29.5 26.8 Trade and other receivables 287.3 262.7 Trade, other payables, current and deferred taxes (173.1) (164.0) Net cash 88.9 73.6 Net assets 269.7 235.6

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• Trade and other receivables increased by c. £20m due to foreign exchange movements

H1 Cash Flow

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H1 2017 H1 2016 Movement in net cash (£m) (3.9) (21.4)

£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 to fund ordinary dividends:
• To grow the ordinary dividend over the course of the economic cycle
• 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 13

Assessment of Surplus Cash

H1 2017 H1 2016 Special Dividend (£m) 40.0 20.0

14 £m

Dividends

H1 2017 (pence per share) H1 2017 £m H1 2016 (pence per share) H1 2016 £m Interim 3.90 12.3 3.75 11.6 Special 12.73 40.0 6.46 20.0 Total 16.63 52.3 10.21 31.6

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• Interim dividend increased by 4.0%
• Special dividend of £40.0m
• Both payable to shareholders on 11th October 2017
• Ordinary dividend yield of 2.5%
• Total dividend yield of 5.2%

Dividend yield calculated using a half year share price of 475.8p

Summary

Summary

Summary

• Ongoing focus on conversion rates and productivity
• Gross Profit of £352.0m, up 8.3% in constant currency (+17.7% in reported rates)
• Conversion rate up slightly to 16.2% (H1 2016: 15.7%)
• 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 3.90p, up 4.0%, total £12.3m
• Special dividend of 12.73p, total £40.0m
• Trading conditions anticipated to remain challenging in some key markets
• Brexit negotiations and political uncertainty in the UK
• Election in Germany
• Brazil’s ongoing macro-economic challenges
• Continue to focus on driving profitable growth, whilst remaining able to

respond quickly to any changes in market conditions

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Summary

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Cautionary Statement

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