Full Year Results 2015
3 2015 Group Financial Highlights 2015 vs 2014 constant Gross Profit £556.1m 4.4% 9.3% Operating Profit before exceptional items £90.1m 14.8% 20.2% Profit before tax £90.7m 15.6% Diluted EPS before exceptional items 21.3p 15.8% Net cash £95.0m £5.0m Special Dividend 16.0p Total Ordinary Dividend (proposed) 11.5p 4.5%
5 Income Statement Constant currency £m 2015 2014 Change change 1,046.9 Revenue 1,064.9 +1.7% +7.1% 532.8 Gross Profit 556.1 +4.4% +9.3% 90.1 78.5 +14.8% +20.2% Operating Profit before exceptional items - 1.6 Exceptional items 0.6 0.3 Net interest income 90.7 78.4 +15.6% Profit before tax (24.5) (21.1) +16.4% Taxation including exceptional items 27.0% 26.2% Effective tax rate on profit 66.2 59.3 +11.6% Profit after tax Earnings per share before exceptional items Basic (pence) 21.3 18.4 +15.8% 21.1 18.2 +15.9% Diluted (pence) Earnings per share after exceptional items 21.3 19.3 +10.4% Basic (pence) 21.1 19.1 +10.5% Diluted (pence)
6 Operating Costs Support staff as % of Group headcount % FY15 77:23 £m Actual % Constant % 2014 6% 9% Employee 357.9 +5% 375.8 +11% 340.0 10% Other 108.1 -6% 112.6 -2% 114.4 costs Total 466.0 +3% 487.9 +7% 454.4 75% Headcount 2015 2014 % 2007 2008 2009 2010 2011 2012 2013 2014 2015 5,835 5,578 +4.6 • Total operating costs: +3% increase in reported rates (+7%*) Employee costs (77% of total costs) +5% (+11%*) driven by +4.6% headcount, • salary rises of c. 3% and higher share plan charges PRS amortisation: 5 years useful life aligned with timing of benefit • * In constant currencies
7 Impact of Foreign Exchange Constant Actual vs Actual Gross Profit (£m) Currency Constant Rates UK 151.6 – 151.6 EMEA 237.3 (20.3) 217.0 Asia Pacific 110.7 (1.6) 109.1 Americas 82.5 (4.1) 78.4 Group 582.1 (26.0) 556.1 Operating Profit 94.2 (4.1) 90.1 2015 impact: Gross profit reduced by c. 5% or £26m • Operating profit reduced by c. 4% or £4m • A 1% strengthening of our 5 primary foreign currencies (EUR, USD, AUD, CNY & HKD) • would impact gross profit by c. £3m and operating profit by c. £0.3m
8 Group Effective Tax Rate (ETR) 2015 2014 % Profit Before Tax 90.7 78.4 +15.6 Tax Charge 21.0 +16.4 24.5 Underlying * 29.4 31.0 US losses and deferred tax on share plans (2.4) (3.1) ETR before exceptional items 27.9 27.0 Exceptional items - (1.7) ETR after exceptional items 26.2% 27.0% * Including China adjustments in 2014 • UK corporation tax rate reduced by 1.25% Lower profit in higher tax jurisdictions such as Brazil and Australia • Higher profit in lower tax jurisdictions such as the Netherlands • One Offs: • Recognition of US Federal & State taxes reduced rate by 1.2% Share options reduced rate by 1.2% •
9 Permanent vs Temporary PageGroup Michael Page Page Personnel £m 2015 2014 Growth rates 2015 2014 Growth rates 2015 2014 Growth rates Constant Constant Constant Reported Reported Reported Gross Profit Currency Currency Currency Permanent 424.0 406.4 +4.3% +8.9% 339.1 328.1 +3.3% +7.1% 84.9 78.3 +8.5% +16.5% Temporary 132.1 126.4 +4.5% +10.4% 67.0 63.1 +6.1% +9.2% 65.1 63.3 +2.9% +11.5% Ratio 76:24 76:24 84:16 84:16 57:43 55:45 (Perm:Temp) Perm Temp 16% 24% 43% 84% 76%
10 Balance Sheet £m 2015 2014 Intangible assets 36.3 38.5 Tangible assets 21.4 21.8 57.7 60.3 Trade and other receivables 217.4 204.9 Trade, other payables, current and deferred taxes (148.3) (139.0) 69.1 65.9 Net cash 95.0 90.0 Net assets 221.8 216.2 Strong balance sheet with £95.0m net cash at 31 December 2015 • • Movements principally reflect increased trading activity
11 Cash Flow (£m) 225 200 (11.4) (18.3) 175 22.6 (14.8) 150 113.1 (85.1) 125 100 (1.1) 75 95.0 90.0 50 Dec 2014 EBITDA Working Capital Tax and net interest Net Capex Net Option exercises Dividends Paid Exchange Dec 2015 Cash Increase Decrease • Increase in ordinary dividends paid; additional £50m special dividend paid Working capital outflow increase in line with trading activity • Increase of £5.0m in net cash vs Dec 2014 • £22.6m generated from share option exercises •
12 Dividends 2015 2014 (Pence per Share) £m (Pence per Share) £m Interim 3.60 11.3 3.42 10.5 Final 7.90 24.7 7.58 23.7 Special 16.0 50.1 - - Total 27.5 86.1 11.0 34.2 Number of shares (m) 313.3 306.5 • Final dividend proposed of 7.90p (+4.2%) • Payable on 20 June 2016 Special dividend paid in October 2015 of £50.1m • Total dividend for year of 27.5p •
14 Review of Operations • Gross profit records for the Group, North America, South East Asia and Gross 17 of our 35 countries profit Challenging conditions in Brazil, Australia and the Middle East • +9% Slowdown in Greater China, and the UK in the fourth quarter • Fee-earner to support staff ratio at a record 77:23 • Headcount • Fee-earner headcount up 206, +5% to 4,484, a Group record 5,835 • Support staff up 51, partly due to Shared Service Centre transition PRS rolled out to c. 85% of fee earners, ahead of 80% target • Key Continued transition to European Shared Service Centre • initiatives • Shared Service Centre headcount now 120
15 Regional Results Summary UK (27%*) Asia Pacific (20%*) +9.6% gross profit 1,099 FE headcount (+6.8%) +4.9% gross profit 19.3% conversion 915 FE headcount (+5.5%) £29.2m operating profit 20.8% conversion £22.7m operating profit Americas (14%*) +7.4% gross profit EMEA (39%*) 686 FE headcount (-5.1%) +11.9% gross profit 7.9% conversion 1,784 FE headcount (+7.5%) £6.2m operating profit 14.7% conversion £31.9m operating profit * Percentage of Group gross profit. Growth rates are 2015 vs 2014 in constant currencies
16 Europe, Middle East, Africa 26% 32% £m Reported Constant 2015 2014 Gross rates currency Profit by geography 6% Gross Profit 217.0 212.0 +2.3% +11.9% 15% 21% Operating Profit 31.9 30.1 +5.9% +18.5% Conversion 14.7% 14.2% +0.5pts +0.8pts France S. Europe Other Germany ME & Africa Headcount 2,295 2,113 +8.6% Gross profit records in 4 countries and Southern Europe overall • • Negative FX impact on operating profit of £4m 71:29 39% France: +7%, Page Personnel +5% • Perm vs of Gross Temp Profit Germany: +14%, Page Personnel +32% • Southern Europe: +28%, improved momentum through year • 70 14 • Benelux: +17% Offices Disciplines • Middle East: -8% (4% of region)
17 United Kingdom 16% 38% £m 2015 2014 Change Gross Profit by Gross Profit 151.6 138.4 +9.6% geography 24% Operating Profit 29.2 24.1 +21.5% 22% Conversion 19.3% 17.4% +1.9pts London North South Midlands Headcount 1,516 1,441 +5.2% • Strong regional performance from London +12% Key discipline performances: • 70:30 27% Property & Construction +42%; Legal +20% • Perm vs of Gross Temp Profit Page Personnel: +19%; Michael Page +7% • • Public sector: +9% (13% of UK business) 28 13 Conversion rate up 1.9pts to 19.3% • Offices Disciplines
18 Asia Pacific 18% 87:13 £m 2015 2014 Reported Constant 27% Gross rates currency Profit by geography Gross Profit 109.1 105.5 +3.4% +4.9% 44% 11% Operating Profit 22.7 20.0 +13.7% +15.1% Conversion 20.8% 18.9% +1.9pts -0.1pts Japan SE Asia & India Greater China Australasia Headcount 1,180 1,141 +3.4% • In Asia Pacific 6 of 8 countries had record years including Greater 87:13 20% China and Japan Perm vs of Gross Temp Profit Greater China: +11%, now around 450 people • Japan, Malaysia, Indonesia and India had record gross profit • 24 14 Australia: -2%, Page Personnel +15% • Offices Disciplines
19 Americas £m 2015 2014 Reported Constant 19% 48% Gross rates currency Profit by Gross Profit 78.4 76.9 +2.0% +7.4% geography 7% Operating Profit 6.2 4.3 +44.9% +46.6% 26% Conversion 7.9% 5.6% +2.3pts -0.3pts Brazil Canada Rest of LatAm Headcount 844 883 -4.4% USA LatAm region ex-Brazil (58%): +29% • 85:15 14% Greater geographic diversity across LatAm • Perm vs of Gross • All countries had record years except Brazil Temp Profit • Brazil: -23%, Mexico: +32%, clear #1 in market 30 14 US: +19%, record gross profit performance driven by New York • Offices Disciplines Canada: +15% despite tough macro-economic conditions •
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