10 July 2019 Kelvin Stagg Chief Financial Officer Q2 2019 Trading Update “A record quarter for the Group” LSE: PAGE.L Website: https://www.page.com/investors
Headline Numbers Kelvin Stagg, Chief Financial Officer
Headline Numbers Financial Review Regional Review Summary Q2 19 A record quarter for the Group Key financial highlights +7.4% £224.6m Gross Profit Growth in Q2 Constant +11.7% Q1 2019 £208.2m Q2 2018 Currency Q2 £433.5m +7.9% Gross Profit Reported H1 Rates Q 2 +11.2% Q1 2019 £396.0m H1 2018 c. £81m Michael +6.2% Net Cash Page Q2 +9.9% Q1 2019 c. £87m Q2 2018 Dividend +10.3% c. £29m paid in June Page Personnel Q2 +15.6% Q1 2019 3
Financial Review
Headline Numbers Financial Review Regional Review Summary Q2 19 Strong growth in all brands Perm:Temp ratio down on prior year 15% 24% 42% 58% +7.4% +6.2% +10.3% 76% 85% Perm Temp Perm Temp Perm Temp • • • Gross Profit growth in Gross Profit growth in Gross Profit growth in permanent +5.1% to £171.5m permanent +5.5% to £131.5m permanent +4.1% to £40.0m • • • Temporary +15.4% to £53.1m Temporary +10.3% to £23.8m Temporary +19.9% to £29.3m • Perm:Temp ratio 76:24, down on prior year 5
Headline Numbers Financial Review Regional Review Summary Q2 19 Professional Services strongest performing More challenging conditions in Marketing, Sales and Retail 16% Q2 2019 £m 2018 £m Reported % Constant % 35% Finance Accounting and Financial Gross Profit 78.1 72.1 +8.3% +8.0% Services by Discipline 24% Professional Services Legal, Technology, HR, 55.7 49.7 +12.1% +11.7% Secretarial, Healthcare Technical 25% Engineering, Property & Construction, Procurement & 53.9 49.6 +8.8% +7.8% Supply Chain Finance Marketing, Sales and Retail 36.9 36.8 +0.0% -0.2% Professional Services Group Total 224.6 208.2 +7.9% +7.4% 25% 25% 25% 25% Technical Marketing, Sales and Retail 6
Headline Numbers Financial Review Regional Review Summary Q2 19 Focus on productivity and conversion Ratio of fee earners to support staff 78:22 Total headcount • Decrease in fee earners of 122 (-2.0%) -1.0% 8,000 • Fee earner headcount fell in markets where we saw more challenging conditions 7,000 • Fee earner reduction: -28 EMEA; -37 Asia Pacific; 6,000 -17 Americas; -40 UK 5,000 • Flexible business model enables us to react quickly 6,157 6,035 -122 Headcount to changes in market conditions 4,000 • Support headcount increased by 43, majority 3,000 temporary to support the global roll out of GFS 2,000 1,000 1,685 1,728 +43 0 Q1 2019 Q2 2019 Support Staff Fee Earners 7
Fee earner headcount reacts to trading conditions Continued strong gross profit growth 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 Financial Review Q1 105.5 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 Q2 19 Q3 126.5 Q4 126.5 Q1 126.8 Regional Review Q2 135.1 Q3 126.9 Q4 125.1 Q1 126.6 Constant currency Q2 137.1 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 207.7 Q4 211.1 Q1 208.8 Q2 224.6 Q2 223.7 Summary 0 1500 3000 4500 6000 Fee Earners Q2 19 8
Regional Review
Headline Numbers Financial Review Regional Review Summary Q2 19 Q2 growth rate of 7.4% Large, High Potential markets* +14% • 16 countries achieved YoY growth of over 10% • 14 countries delivered record quarters • Americas continued to be fastest growing region 16% Q2 2019 £m 2018 £m Reported % Constant % Gross Profit 16% 48% by Geography EMEA 108.9 100.2 +8.7% +9.0% Asia Pacific 43.8 41.2 +6.4% +4.7% Americas 36.9 30.9 +19.2% +17.4% 20% UK 35.0 35.9 -2.4% -2.4% Group Total 224.6 208.2 +7.9% +7.4% EMEA Asia Pacific Americas UK *Germany, Greater China, Latin America, South East Asia and the US 10
Headline Numbers Financial Review Regional Review Summary Q2 19 EMEA had another record quarter Standout performance for Germany • Michael Page (55% of EMEA) +8%, Page Personnel (45%) +10% • France, representing 16% of the Group, +6% Other 14% • Germany +24%: Michael Page Interim +47% France 32% • Benelux +13%: Strong growth in Belgium and the Netherlands Benelux 16% • Southern Europe +6%: Italy +7%; Spain +3% Gross Profit by Geography • Middle East & Africa +4% Germany 17% S. Europe 21% Reported Constant £m Period 2019 2018 % % Q2 108.9 100.2 +8.7% +9.0% Gross Profit H1 213.1 194.9 +9.3% +10.2% 48% of Group Headcount 3,316 3,175 +4.4% 11
Headline Numbers Financial Review Regional Review Summary Q2 19 Asia Pacific impacted by trade tariffs India and Japan standout performances • Greater China, 8% of the Group, -1% • South East Asia +8%; Singapore -3% Japan 15% • Continuing impact of trade tariff uncertainty, particularly amongst our larger international clients, now also impacting Singapore Greater China • Japan +13%; India +52%; both record quarters 40% SE Asia Gross Profit • Australia +4% & India by Geography 21% Australasia Reported Constant £m Period 2019 2018 24% % % Q2 43.8 41.2 +6.4% +4.7% Gross Profit H1 81.9 74.1 +10.5% +9.1% 20% of Group Headcount 1,737 1,660 +4.6% 12
Headline Numbers Financial Review Regional Review Summary Q2 19 Americas continues to be fastest growing region Record quarters for the US and Latin America • US +22%, driven by strong performance in regional offices of Boston, Chicago, Houston and Los Angeles Rest of Latam 14% • Latin America +15% against tough comparators Canada 4% • Mexico +30%; Brazil +9% • The other four countries in Latin America grew 9% collectively Brazil Gross Profit 11% by Geography USA 56% Mexico 15% Reported Constant £m Period 2019 2018 % % Q2 36.9 30.9 +19.2% +17.4% Gross Profit H1 69.1 57.3 +20.6% +19.4% 16% of Group Headcount 1,342 1,227 +9.4% 13
Headline Numbers Financial Review Regional Review Summary Q2 19 UK remained challenging Good growth in Page Personnel • Brexit continued to weigh on market sentiment, particularly with senior candidates Midlands 16% • Page Personnel +8% • Michael Page -6% London 37% Gross Profit by Geography South 24% North Reported £m Period 2019 2018 23% % Q2 35.0 35.9 -2.4% Gross Profit H1 69.4 69.7 -0.3% 16% of Group Headcount 1,368 1,395 -1.9% 14
Summary
Headline Numbers Financial Review Regional Review Summary Q2 19 A record quarter for the Group Weaker macro-economic conditions in a number of our markets Group Gross Profit growth rate of +7.4% 16 countries delivered YoY growth of over 10% Fee Earner headcount reduced by 122 Business model enables us to react quickly to market conditions Strong net cash position of c. £81m Currently expect 2019 Operating Profit to be towards the lower end of the range of current market forecasts* *Company compiled consensus for 2019 operating profit of £161.1m with a range of £156.5m - £168.0m 16
Appendix
Headline Numbers Financial Review Regional Review Summary Our business model Q2 19 18
Headline Numbers Financial Review Regional Review Summary A growing international business Q2 19 Delivering on our global diversification strategy Gross Profit 16% 24% 39% 61% 76% 84% FY 2007 FY 2013 Q2 2019 UK International 19
Headline Numbers Financial Review Regional Review Summary Significant variations in recruitment mix Q2 19 Geography Brands 11% 13% 15% 30% 30% 42% 89% 87% 85% 70% 70% 58% EMEA Asia Pacific UK Americas Michael Page Page Personnel Temp Perm 20
Headline Numbers Financial Review Regional Review Summary Q2 19 Long term fee earner and international growth ASIA 7,000 EMEA AMERICAS UK PACIFIC 6,035 Fee Earner Headcount 6,000 5,000 4,000 3,000 EMEA 2,000 APAC Americas 1,000 UK - 1985-1990 1990-1999 2000 2001 2002 2003 2004 2005 2006 2008 2009 2010 2013 2014 2015 2007 2011 2012 2016 2017 2018 Q2 19 1990-99 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 France Germany Portugal Poland S Africa Austria Morocco (1993) (2000) (1986) Ireland Turkey INTERNATIONAL GROWTH Spain Switzerland Netherlands UAE (1997) (2001) EMEA (1987) Italy Belgium (1997) (2002) Luxembourg Sweden (2002) Hong Kong Japan India Vietnam New Indonesia (2001) (1995) ASIA Australia Malaysia Zealand (1985) China Thailand Singapore PACIFIC (2003) (1996) Taiwan Brazil (2000) Canada Mexico Colombia Peru AMERICAS USA (1998) Argentina Chile 21
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