Interim Results 6 months to 31 st December 2019 Disclaimer The - - PowerPoint PPT Presentation

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Interim Results 6 months to 31 st December 2019 Disclaimer The - - PowerPoint PPT Presentation

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Interim Results 6 months to 31 st December 2019 Disclaimer The presentation contains forward- looking statements, including statements about the Groups intentions, beliefs and expectations. These statements are based on the Groups current

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6 months to 31st December 2019

Interim Results

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Disclaimer

The presentation contains forward-looking statements, including statements about the Group’s intentions, beliefs and expectations. These statements are based on the Group’s current plans, estimates and projections, as well as the Group’s expectations of external conditions and events. Forward-looking statements involve inherent risks and uncertainties and speak only as of the date they are made. The Group undertakes no duty to and will not necessarily update any such statements in light

  • f new information or future events, except to the extent required by any applicable law or regulation.

Recipients of this presentation are therefore cautioned that a range of factors could cause actual results

  • r outcomes to differ materially from those expressed in any forward-looking statements.

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▪ Record gross profit Gross profit: +10% to €51.1m ▪ Reflecting increased operational leverage Adjusted* PBT: +24% to €14.2m ▪ Business model producing strong bottom-line growth EPS: +23% to 42.9c ▪ Progressively increasing dividend DPS: +25% to 10.0c ▪ Strong 12 month cash conversion and working capital management Cash: +€16.9m to €47.1m

Financial Highlights

Record EPS and strong PBT conversion

* Adjusted operating profit and adjusted profit before tax (PBT) exclude non-cash charges relating to the Group’s Long-Term Incentive Plan (LTIP) and currency translation. LTIP charge in first half of 2019 is €0.6 million (2018: €0.5 million)

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6 Months to 31 Dec 2019 2018 Gross margin 17.5% 16.7% Adjusted operating margin 4.93% 4.16% Conversion ratio: gross profit to adj. operating profit 28.2% 25.0% Conversion ratio: gross profit to adj. PBT 27.8% 24.7% Permanent fees: % of gross profit 29.6% 29.8% Flexible Talent fees: % of gross profit 70.4% 70.2% Number of recruiters 583 562

Key Performance Metrics

Focus on productivity and conversion ratios

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Balanced Growth 10% organic growth across Permanent and Flexible Talent NFI Operational Leverage 70bp increase in adjusted operating margin to 4.9% Conversion Ratio 28.2% conversion ratio in adjusted operating profit (+3.2%) Investment Investment to support innovation & operational efficiencies Productivity Increased consultant productivity, strong MyCpl penetration

Operational Highlights

Significant improvement in operational efficiencies

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78% 22%

RoI* International

Geography

30% 70%

Perm Flexible Talent

Business Type

21% 38% 18% 11% 7% 5%

Healthcare Information Technology Pharma and Engineering Light Industrial Finance and Accounting Other

Sector

H1 FY20 Business Profile (NFI)

Focus on higher growth sectors with a majority of NFI under contract

*If RoI NFI adjusted for NFI of non–Irish markets the mix would be approx. 50 : 50 (RoI : International)

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58% 64% 68% 71% 70% 42% 36% 32% 29% 30% 2016 2017 2018 2019 2020 H1

NFI MIX

Fleixible Talent Permanent

Evolution of Net Fee Income

Trend toward Flexible Talent and higher margin contract revenue

7 72% 76% 72% 76% 78% 28% 24% 28% 24% 22% 2016 2017 2018 2019 2020 H1

GEOGRAPHIC MIX

ROI International

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34.0 36.2 40.5 46.4 51.1 36.1 35.6 42.7 49.9

14.5% 15.0% 15.5% 16.0% 16.5% 17.0% 17.5% 18.0%

0.0 20.0 40.0 60.0 80.0 100.0 120.0

2016 2017 2018 2019 2020

NFI (€M) AND NFI MARGIN (%)

H1 H2 NFI % 8.5 9.0 9.7 11.5 14.2 8.9 7.4 10.7 14.0

0.0 5.0 10.0 15.0 20.0 25.0 30.0

2016 2017 2018 2019 2020

ADJUSTED PBT (€M)

H1 H2

Continuing Robust Growth Trend

Growth in managed solutions is a key driver

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40.1 47.1 16.1 3.2 1.1 3 1.8 Cashflow Increase Decrease

Cashflow (€m) H1 FY20

Strong free cashflow & cash generation with excellent working capital management

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Bolt on Acquisitions Existing Business Dividends Return Surplus Cash

Multiple opportunities for continued organic expansion Must be strategic fit

  • r drive innovation

Progressive dividend policy €45m returned to shareholders through tender offers

Capital Allocation

Track record of returning surplus capital

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Expand and enhance partnerships with clients Diversification of product and profit mix, with a focus on higher margin, managed services and solutions Continued investment in technology to future proof our business and drive further innovation Targeted growth in key international markets, building on our existing relationships and international footprint

Client Focus Solutions Technology Internationalise

Growth Strategy

To be the world’s best at transforming our clients through total talent solutions & experiences

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Attractive market positions & deep relationships

  • Strong market

positions in higher growth markets

  • 23 brands and over

13,000 employees

  • Attractive sector

exposure

  • Blue chip client base

International expansion

  • 47 offices across 9

countries with 3,400 clients

  • Targeted global

expansion

  • Potential to expand

internationally with customers Experienced management with strong track record

  • Over 30 years

industry experience

  • Continuously

profitable since foundation

  • Proven resilience in

market downturns Evolution to increased managed services

  • Continued global shift

in workforce preferences

  • Launch of managed

solutions brand, Covalen

  • Growing recurring

revenue base with

  • ver 50% contracted

Strong balance sheet & cash generation

  • Strongly cash-

generative

  • Effective working

capital management

  • Net Cash (€47m)
  • Track record of

returning surplus capital

Investment Case

Excellent foundation for continued growth and expansion

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12.2 19.2 25.6 35.0 40.7 40.2 43.9 43.7 56.6 77.3 42.9

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 H1

EPS GROWTH

4.0 5.0 6.5 8.5 9.8 9.8 11.0 11.5 13.5 19.0 10.0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 H1

DPS GROWTH

Track Record of Consistent Growth

Excellent 10 year CAGR in earnings and dividends

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Share price and Total Shareholder Return since IPO

14% Total Shareholder Return CAGR since IPO

Source: Bloomberg Data

2 4 6 8 10 12 14 Jun 99 Jan 01 Aug 02 Mar 04 Oct 05 May 07 Dec 08 Jul 10 Feb 12 Sep 13 Apr 15 Nov 16 Jun 18 Jan 20 share price € Share Price Total Return 14

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  • Favourable market conditions exist – with high

demand for talent and low unemployment rates in key markets

  • Positive trends of employers and employees

seeking flexible talent solutions

  • Continued FDI into key sectors in Ireland including

technology, pharma and financial services

  • Full impact of Brexit remains unclear – closely

monitoring uncertainty and implications for our business

Outlook

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Appendix

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6 months to 31 Dec 2019 €m 2018 €m % Change Revenue 291.4 278.6 5% Gross profit 51.1 46.4 10% Gross profit % 17.5% 16.7% 1% Adjusted operating profit 14.4 11.6 24% LTIP & FX charge (0.6) (0.5) (20%) Net financial expense (0.2) (0.1) (100%) Profit before tax 13.6 11.0 24% Earnings per share 42.9 cent 34.9 cent 23% Dividend per share 10.0 cent 8.0 cent 25%

Condensed Group Income Statement

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IFRS 16: The net impact on the Income Statement from the adoption of IFRS 16 in H1 FY20 is less than €8k in the period

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6 months to 31 Dec 2019 €m 2018 €m Tangible assets 7.7 2.2 Intangible assets 26.3 25.8 Net cash 47.1 30.2 Trade & other receivables 125.2 106.2 Deferred tax asset 1.0 1.0 Provisions (1.0) (1.1) Trade & other payables (86.4) (64.0) Net assets before equity & reserves 119.9 100.3

Condensed Group Balance Sheet

IFRS 16: As a result of the adoption of IFRS 16 in H1 FY20, the Group has recognised a right of use asset and a corresponding lease liability of €5.1m and €5.3m, respectively

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6 months to 31 Dec 2019 €m 2018 €m Operating cashflow 16.1 12.2 Movement in working capital (3.2) (3.8) Cash generated from operations 12.9 8.4 Net interest paid (0.1) (0.1) Income tax (paid)/received (1.0) 0.2 Dividends paid (3.0) (1.9) Purchase of tangible and intangible assets (1.0) (0.6) Acquisition of non – controlling interests (0.8) 0.0 Net increase in cash and cash equivalents 7.0 6.0 Net cash at beginning of period 40.1 24.2 Net cash at period end 47.1 30.2

Condensed Group Cashflow Statement

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Real GDP % 2016A 2017A 2018A 2019F 2020F 2021F Ireland 3.7% 8.1% 8.4% 5.4% 2.7% 2.6% UK 1.9% 1.9% 1.3% 1.3% 1.1% 1.5% Eurozone 1.9% 2.5% 1.9% 1.2% 1.0% 1.3% U.S. 1.6% 2.4% 2.9% 2.3% 1.8% 1.9%

Macro Economic Data

Unemployment % 2016A 2017A 2018A 2019F 2020F 2021F Ireland 7.9% 6.4% 5.6% 5.0% 5.0% 4.9% UK 4.9% 4.4% 4.1% 3.9% 4.0% 4.0% Eurozone 10.0% 9.1% 8.2% 7.6% 7.5% 7.5% U.S. 4.9% 4.3% 3.9% 3.7% 3.6% 3.7%

Source: Bloomberg Data

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Thank you

Investor Relations Contact

David Marshall, Head of Corporate Development David.Marshall@cpl.ie +353 1 614 6000