14 January 2020 Steve Ingham Chief Executive Officer Q4 2019 and FY19 Trading Update Kelvin Stagg Chief Financial Officer LSE: PAGE.L Website: https://www.page.com/investors
Headline Numbers Kelvin Stagg, Chief Financial Officer
Headline Numbers Financial Review Regional Review Summary & Outlook Q4 19 Slowdown in growth rate to -0.4% Key financial highlights -0.4% £205.6m Gross Profit Growth in Q4 Constant +5.0% FY 2019 £211.0m Q4 2018 Currency Q4 -2.6% £856.0m Gross Profit Reported FY Rates Q4 +5.0% FY 2019 £814.9m FY 2018 78:22 Michael -0.1% Fee earner to operational Page Q4 +2.1% Q3 2019 6,027:1,671 FTE support staff ratio -1.0% c. £93m Page Net Cash Personnel Q4 +2.0% Q3 2019 c. £98m Q4 2018 3
Financial Review
Headline Numbers Financial Review Regional Review Summary & Outlook Q4 19 Perm and Temp ratio Stronger growth of Temporary in both brands 18% 26% 46% 54% 74% 82% Perm Temp Perm Temp Perm Temp • • • Gross Profit decline in Gross Profit decline in Gross Profit decline in permanent -3.0% to £151.3m permanent -1.9% to £116.3m permanent -6.2% to £35.0m • • • Temporary +7.5% to £54.3m Temporary +9.2% to £24.7m Temporary +6.1% to £29.6m • Perm:Temp ratio 74:26 (Q4 2018: 75:25) 5
Headline Numbers Financial Review Regional Review Summary & Outlook Q4 19 Challenging conditions for all disciplines Marketing, Sales and Retail strongest performing discipline 17% Q4 2019 £m 2018 £m Reported % Constant % 35% Finance Accounting and Financial Gross Profit 72.5 74.5 -2.7% -0.4% Services by Discipline 24% Professional Services Legal, Technology, HR, 50.0 52.1 -4.0% -2.0% Secretarial, Healthcare Technical 24% Engineering, Property & Construction, Procurement & 48.8 50.1 -2.7% -0.6% Supply Chain Finance Marketing, Sales and Retail 34.3 34.3 +0.0% +2.2% Professional Services Group Total 205.6 211.0 -2.6% -0.4% 25% 25% 25% 25% Technical Marketing, Sales and Retail 6
Headline Numbers Financial Review Regional Review Summary & Outlook Q4 19 Fee earner headcount reduced by 54 Ratio of fee earners to operational support staff maintained at 78:22 Total headcount • Decrease in fee earners of 54 (-0.9%) -1.2% 8,000 • Fee earner headcount reduced mainly in Greater China and the UK 7,000 • Flexible business model enables us to react quickly 6,000 to changes in market conditions 5,000 • Operational support headcount reduced by 37, 6,081 6,027 Headcount -54 following the completion of the global roll out of GFS 4,000 3,000 2,000 1,000 -37 1,708 1,671 0 Q3 2019 Q4 2019 Operational Support Staff Fee Earners 7
Fee earner headcount reacts to trading conditions Gross profit growth stalled Gross Profit (£m) as reported Headline Numbers 100 150 200 250 50 0 Q1 49.5 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q2 51.4 Q3 47.8 Q4 43.9 Q1 42.8 Q2 45.0 Q3 45.0 Q4 45.7 Q1 48.1 Q2 52.3 Q3 53.5 Q4 56.7 Q1 59.9 Q2 68.3 Q3 69.2 Q4 70.2 Q1 79.2 Q2 87.4 Q3 89.1 Q4 93.1 Q1 105.5 Financial Review Q2 121.0 Fee Earners Q3 123.4 Q4 128.2 Q1 140.3 Q2 152.4 Q3 141.3 Q4 118.7 Q1 95.0 Q2 83.8 Q3 82.3 Q4 90.6 Q1 97.9 Q2 111.7 Q3 112.8 Q4 119.9 Q1 127.3 Q2 147.8 Q3 142.6 Q4 136.1 Q1 135.9 Q2 138.0 Q3 126.5 Q4 19 Q4 126.5 Q1 126.8 Q2 135.1 Q3 126.9 Regional Review Q4 125.1 Q1 126.6 Q2 137.1 Constant Currency Q3 132.9 Q4 136.2 Q1 135.7 Q2 145.3 Q3 139.1 Q4 135.8 Q1 142.2 Q2 156.9 Q3 158.6 Q4 163.3 Q1 170.2 Q2 181.8 Q3 177.2 Q4 182.4 Q1 187.8 Q2 208.2 Q3 207.9 Q4 211.0 Q1 208.9 Q2 224.7 Q3 216.8 Q4 205.6 Summary & Outlook Q4 210.2 0 1500 3000 4500 6000 Fee Earners Q4 19 8
Regional Review Steve Ingham, Chief Executive Officer
Headline Numbers Financial Review Regional Review Summary & Outlook Q4 19 Group growth rate declined to -0.4% Regions were impacted by macro-economic and political uncertainty in Q4 • Large, High Potential markets* (34% of Group) +4% • Macro-economic and political uncertainty in EMEA • APAC impacted by trade tariffs and social unrest 16% • Americas continued to be our fastest growing region • UK affected by Brexit Gross Profit 16% 50% by Geography Q4 2019 £m 2018 £m Reported % Constant % EMEA 103.6 104.5 -0.8% +2.3% Asia Pacific 37.5 41.1 -8.8% -7.9% 18% Americas 32.6 31.9 +2.2% +5.0% UK 31.9 33.5 -4.8% -4.8% 25% 25% EMEA 25% 25% Asia Pacific Americas UK Group Total 205.6 211.0 -2.6% -0.4% *Germany, Greater China, Latin America, South East Asia and the US 10
Headline Numbers Financial Review Regional Review Summary & Outlook Q4 19 EMEA growth continued to slow Macro-economic uncertainty continued to impact market confidence • Michael Page (55% of EMEA) +4%, Page Personnel (45%) flat Other • France, representing 17% of the Group, +1% 13% • Germany +16%, with Michael Page Interim +50% France 33% • Benelux +6% Benelux 16% • Southern Europe +2%; Italy +3%, Spain +2% Gross Profit by Geography • Middle East & Africa -3% Reported Constant £m Period 2019 2018 % % S.Europe Q4 103.6 104.5 -0.8% +2.3% 20% Germany 18% Gross Profit FY 418.5 394.3 +6.1% +7.0% No. 2019 Q4 2018 Q4 % 2019 Q3 % 50% of Group Headcount 3,317 3,299 +0.5% 3,344 -0.8% 11
Headline Numbers Financial Review Regional Review Summary & Outlook Q4 19 Asia Pacific impacted by uncertainty Social unrest in Hong Kong throughout quarter • Greater China, -14%, Mainland China -7%, Hong Kong -27% • South East Asia -4% Japan & India • Japan -1% 22% Greater China • India +13%, against a particularly tough comparator of +79% 37% • Australia -7%, against a tough comparator of +25% Gross Profit by Geography SE Asia Reported Constant £m Period 2019 2018 17% % % Q4 37.5 41.1 -8.8% -7.9% Gross Profit Australasia FY 163.3 161.2 +1.4% -0.2% 24% No. 2019 Q4 2018 Q4 % 2019 Q3 % 18% of Group Headcount 1,679 1,709 -1.8% 1,711 -1.9% 12
Headline Numbers Financial Review Regional Review Summary & Outlook Q4 19 Americas again our fastest growing region Despite weaker Financial Services market in New York • US +10%, driven by strong performances from Boston, Chicago Canada and Los Angeles 3% Rest of Latam • Slowdown in New York Financial Services 13% • Latin America +5%; Mexico +9%, Brazil +4% • Collectively our other four countries in Latin America +4% Brazil 12% Gross Profit by Geography USA 57% Reported Constant £m Period 2019 2018 % % Mexico Q4 32.6 31.9 +2.2% +5.0% 15% Gross Profit FY 139.1 121.0 +14.9% +14.0% No. 2019 Q4 2018 Q4 % 2019 Q3 % 16% of Group Headcount 1,376 1,328 +3.6% 1,366 +0.7% 13
Headline Numbers Financial Review Regional Review Summary & Outlook Q4 19 UK impacted by uncertainty Disruption from Brexit increased uncertainty • Page Personnel suffered from low client confidence, -4% Midlands • Michael Page continued to be impacted by lower senior 17% candidate confidence, -5% London 36% Gross Profit Reported by Geography £m Period 2019 2018 % South 25% Q4 31.9 33.5 -4.8% Gross Profit FY 135.1 138.4 -2.4% North 22% No. 2019 Q4 2018 Q4 % 2019 Q3 % Headcount 1,326 1,436 -7.7% 1,368 -3.1% 16% of Group 14
Summary & Outlook
Headline Numbers Financial Review Regional Review Summary & Outlook Q4 19 Summary Slowdown in growth in all regions Increased macro-economic and political uncertainty Decrease in Group Gross Profit growth rate to -0.4% Fee Earners down by 54, Operational Support down by 37 Strong net cash position of c. £93m Expect FY 2019 operating profit to be in line with our previous guidance of £140m to £150m 16
Headline Numbers Financial Review Regional Review Summary & Outlook Q4 19 Outlook Challenging trading conditions and foreign exchange headwinds Tough trading conditions experienced across the majority of our regions are anticipated to continue Likely that foreign exchange headwinds will persist Business model enables us to react quickly to market conditions Well positioned to take advantage of all opportunities during 2020 Continue to progress towards our Vision 17
Appendix
Headline Numbers Financial Review Regional Review Summary & Outlook Our business model Q4 19 19
Headline Numbers Financial Review Regional Review Summary & Outlook A growing international business Q4 19 Delivering on our global diversification strategy Gross Profit 16% 24% 39% 61% 76% 84% FY 2007 FY 2013 Q4 2019 UK International 20
Headline Numbers Financial Review Regional Review Summary & Outlook Q4 19 Significant variations in recruitment mix Geography Brands 13% 14% 18% 33% 33% 46% 87% 86% 82% 67% 67% 54% EMEA Asia Pacific Americas UK Michael Page Page Personnel Temp Perm 21
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