FDM Group (Holdings) plc Results for the six months ended 30 June 2020 Rod Flavell - CEO Mike McLaren - CFO
Summary • Resilient first half performance, COVID-19 has impacted the Group to differing degrees of significance, longevity and economic effect across our global footprint • The Group had a positive Q1 across all territories, but trading levels fell in Q2 as lockdown restrictions were imposed • We remained agile with our consultants and internal staff successfully adopting a virtual working approach • No FDM employee has been furloughed and we have introduced a wage for signed-off trainees in the UK to help them through short term uncertainty • Strong cash generation with closing cash of £58.3m and no debt • Reflecting the strength of the Group’s balance sheet, current encouraging trading levels and our confidence in FDM’s long term prospects, the Board is pleased to declare an interim dividend of 18.5 pence per share Page 1
Highlights for the six months ended 30 June 2020 Revenue (£m) Basic Earnings per Share (p) Closing Cash (£m) +5% -16% +103% 2020 2020 14.8 2020 58.3 140.5 +6% 2019 +2% 2019 17.6 +26% 2019 28.7 134.4 (CAGR) (CAGR) (CAGR) 2018 29.8 2018 2018 16.3 117.8 2017 2017 13.9 29.3 2017 117.1 Adjusted Operating Profit (£m) Adjusted Basic Earnings per Share (p) Cash Conversion (%) -24% -25% +58 ppts. 2020 20.5 2020 14.1 2020 143% -3% 2019 27.0 -3% 2019 2019 18.9 85% (CAGR) (CAGR) 2018 25.2 2018 17.8 2018 84% 2017 22.6 2017 15.3 2017 104% Adjusted Profit Before Tax (£m) Effective Tax Rate (%) Interim Dividend per Share (p) -24% +16% +0.3 ppts. 2020 2020 2020 18.5 20.2 23.5% +7% +16% 2019 2019 23.2% 2019 16.0 26.6 (CAGR) (CAGR) 2018 23.3% 2018 14.5 2018 24.9 2017 26.9% 2017 12.0 2017 16.5 CAGR (Compound Annual Growth Rate) applied over three years ppts. (percentage points) 2018 and 2017 comparative figures have been restated for IFRS 16 Leases Underlying cash conversion is 105% and calculated by dividing cash flow generated from operations by operating profit before settlement cost of the long standing legal claim, associated legal costs and accrued holiday pay Page 2
Highlights for the six months ended 30 June 2020 New Clients Mounties on Client Site Mounties on Client Site +28 -5% 2020 28 3,846 3,656 +7% 3,416 2,947 2019 40 (CAGR) 2018 38 2017 35 2017 2018 2019 2020 Number of Clients Training Completions -18% -4% 831 2020 +10% 396 +4% 381 339 (CAGR) (CAGR) 2019 1,008 285 2018 965 2017 741 2017 2018 2019 2020 Mountie Utilisation (%) Mountie Headcount on Client Site by Region -1.1 ppts. 2020 45% 33% 7% 15% 97.2% 96.7% 96.1% 95.0% 2019 52% 31% 6% 11% 2018 54% 30% 5% 11% 2017 56% 30% 5% 9% 2017 2018 2019 2020 UK & I NA EMEA APAC CAGR (Compound Annual Growth Rate) applied over three years ppts. (percentage points) Page 3
Market Review UK & Ireland 2020 2019 North America 2020 2019 Revenue £64.3m £69.7m -8% Revenue £51.1m £46.7m +9% Mounties on client sites* 1,637 1,985 -18% 1,222 1,205 +1% Mounties on client sites £14.2m £18.8m Adjusted operating profit -24% Adjusted operating profit £4.6m £7.7m -40% Adjusted operating profit margin % 22% 27% -5% Adjusted operating profit margin % 9% 16% -7% 2020 started promisingly following Brexit COVID-19 and its knock-on effects Started the year with modest Government policy has recently allowed clarity; however we felt the impact of have impacted demand in some headcount growth, but the impact of Mounties in some locations to return to COVID-19 in Q2, when the UK was placed sectors more than others with COVID-19 and the associated move to their place of work while others continue into lockdown travel, energy, retail and insurance remote working resulted in increased to work remotely most noticeably affected onboarding times and lower demand The pace and efficiency with which our during the second quarter All our Academies are training and workforce transitioned to working remotely With many Mounties electing to placing Mounties with clients remotely has been very pleasing defer annual leave until later in the Adjusted operating profit decreased year, we have seen an overall after the Board took the pragmatic and All our UK Academies are training and increase in billable time commercial decision to settle for £3.3m placing Mounties with clients remotely a long-standing legal claim which the Board considered to be unmeritorious EMEA 2020 2019 APAC 2020 2019 Revenue £10.8m £7.6m +42% Revenue £14.3m £10.4m +38% Mounties on client sites* 236 220 +7% 561 436 +29% Mounties on client sites £1.4m £1.0m +40% Adjusted operating profit Adjusted operating profit/ (loss) £0.3m -£0.5m +160% Adjusted operating profit margin % 13% 13% 0% Adjusted operating profit/ (loss) margin % 2% -5% +7% Buoyed by our Sydney Academy, Across the region we commenced work Continued to see good demand in German Academy was temporarily APAC delivered strong headcount with 10 new clients Luxembourg and benefited from a full closed during lockdown, reopening in period of trading in the Netherlands June, and we have developed the growth under the challenging backdrop infrastructure to train remotely of COVID-19 and ongoing protests in Training completions in the region have Hong Kong increased 82% from prior year *Reflecting a change in management reporting, 30 Mounties included within UK & Ireland Mounties deployed as at 30 June 2019 have been re-allocated to EMEA Page 4
Regional Distribution In NA we moved from a permanent premises in Reston to a pop-up in Arlington. During the period we flexed our pop- up academies to match demand Pop-up Training Regional Academy Capacity Completions Revenue Distribution 110 1,023 £140.5m £134.4m 961 5% 10% 10% 907 8% 11% £117.8m £117.1m 8% 6% 9% 14% 6% 7% 83 776 34% 8% 6% 17% 6% 1% 5% 10% 9% 5% 34% 6% 5% 36% 63 32% 33% 33% 35% 16% 33% 27% 28% 71% 40% 52% 56% 54% 46% 51% 43% 38% 40% 33% 9 44% 19% 100% Jun-17 Jun-18 Jun-19 Jun-20 Jun-17 Jun-18 Jun-19 Jun-20 Jun-17 Jun-18 Jun-19 Jun-20 UK&I NA EMEA APAC UK&I NA EMEA APAC Pop-up UK&I NA EMEA APAC Page 5
Mountie Headcount Banks and Diversified Financials headcount has remained resilient 3% 3% Industries 2020 2019 5% Banks 51% 48% 7% Diversified Financials 17% 17% 7% 7% Insurance 7% 8% Government 6% 7% Software & IT Services 4% 4% Energy 92% 90% 3% 3% Jun -20 Jun 20 Media & Entertainment 1% 2% Commercial & Professional Services 1% 1% Utilities 1% 1% Consumer Services 2% 2% Other 2020 2020 2019 2019 Other includes • Food & Staples Retailing • Retailing Getting Back to Business • Automobiles & Components • Telecommunication Services • Health Care Equipment & Services • Pharmaceuticals, Biotechnology & Ex-Forces Life Sciences Graduates Industry classification as per Standard & Poor’s ‘Global Industry Classification Standard’ (GICS) with the addition of a “Government” sector Getting Back Ex-Forces to Business 2020 2019 2020 2019 201 276 102 95 Page 6
Regional Headcount 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 - Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 UK & I NA EMEA APAC Page 7
Top Clients by Headcount 3,000 2,500 2,000 1,500 1,000 500 - Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 HSBC TD RBC Other Government Deutsche Bank Fannie Mae Lloyds Shell JPMorgan Morgan Stanley DWP Manulife Sky BAML BMO Macquarie DBS Bank Metafinanz Standard Life SCB Barclays UBS Credit Suisse Home Office British Airways Page 8
CSR & Inclusivity At FDM, diversity and inclusion starts at the top. It is ingrained into the FDM culture and championed by the leadership team Nationalities Gender Ethnicity Disability Median Pay Gap 81 4% -2.1% ~55% 53%* 85+ -1.7% ~50% 38% 3% 80+ of FDM UK graduate consultants UK business reported a -1.7% are from a BAME** nationalities working of the FDM Management background consider themselves to have a median gender pay gap together as a team at FDM Team are female disability for 2019 Social Mobility Ex-Forces Returners to Work 40%* 88%* 735+ 200+ 630+ 140+ 44% 89% were the first in their attended a former service men and women have been careers restarted through family to go to university state school placed through the programme since its the FDM Getting Back to Business inception programme since inception 30 June 2019 comparatives highlighted in grey * of our UK graduate consultant respondents 2019 ** Black, Asian or Minority Ethnic Page 9
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