8 October 2019 Steve Ingham Chief Executive Officer Q3 2019 Trading Update Kelvin Stagg Chief Financial Officer LSE: PAGE.L Website: https://www.page.com/investors
Headline Numbers Steve Ingham, Chief Executive Officer
Headline Numbers Financial Review Regional Review Summary Q3 19 Slowdown in growth rate to +2.1% Key financial highlights +2.1% £216.7m Gross Profit Growth in Constant +7.4% Q2 2019 £207.9m Q3 2018 Currency +4.2% Reported Rates +7.9% Q2 2019 c. £92m Michael +2.1% Net Cash Page c. £82m Q2 2019 +6.2% Q2 2019 Dividends +2.0% £54.5m Paid Page (October 9 th ) Personnel +10.3% Q2 2019 17.03 pence per share 3
Financial Review Kelvin Stagg, Chief Financial Officer
Headline Numbers Financial Review Regional Review Summary Q3 19 Perm and Temp ratio Business balance reflects brands and geographic mix 17% 25% 44% 56% 75% 83% Perm Temp Perm Temp Perm Temp • • • Gross Profit growth in Gross Profit growth in Gross Profit growth in permanent +0.1% to £162.4m permanent +0.1% to £126.4m permanent flat at £36.0m • • • Temporary +8.5% to £54.3m Temporary +13.1% to £25.7m Temporary +4.7% to £28.6m • Perm:Temp ratio 75:25 (Q3 2018: 76:24) 5
Headline Numbers Financial Review Regional Review Summary Q3 19 Financial disciplines strongest performing Technology now c. 8% of the Group 17% Q3 2019 £m 2018 £m Reported % Constant % 36% Finance Accounting and Financial Gross Profit 78.3 72.5 +7.9% +6.1% Services by Discipline 23% Professional Services Legal, Technology, HR, 53.0 50.2 +5.5% +3.1% Secretarial, Healthcare Technical 24% Engineering, Property & Construction, Procurement & 49.2 49.7 -0.9% -3.3% Supply Chain Finance Marketing, Sales and Retail 36.2 35.5 +2.2% -0.2% Professional Services Group Total 216.7 207.9 +4.2% +2.1% 25% 25% 25% 25% Technical Marketing, Sales and Retail 6
Headline Numbers Financial Review Regional Review Summary Q3 19 Focus on productivity Ratio of fee earners to support staff maintained at 78:22 Total headcount • Increase in fee earners of 46 (+0.8%) +0.3% 8,000 • Fee earners added where we saw greatest growth, mainly into Germany, India and the US 7,000 • Flexible business model enables us to react quickly 6,000 to changes in market conditions 5,000 • Support headcount reduced by 20, following the 6,035 6,081 Headcount +46 completion of the global roll out of GFS 4,000 3,000 2,000 1,000 -20 1,728 1,708 0 Q2 2019 Q3 2019 Support Staff Fee Earners 7
Fee earner headcount reacts to trading conditions Gross profit growth slowed 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 Q3 19 Q4 126.5 Q1 126.8 Q2 135.1 Regional Review 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 207.9 Q4 211.1 Q1 208.9 Q2 224.6 Q3 216.7 Q3 212.2 Summary 0 1500 3000 4500 6000 Fee Earners Q3 19 8
Regional Review Steve Ingham, Chief Executive Officer
Headline Numbers Financial Review Regional Review Summary Q3 19 Group growth rate slowed to 2.1% Slower growth in all regions • Large, High Potential markets* (37% of Group) +4% • Growth in Europe and Americas regions, but slower than Q2 • APAC impacted by trade tariffs and social unrest 16% • UK further affected by Brexit Q3 2019 £m 2018 £m Reported % Constant % 47% Gross Profit 17% by Geography EMEA 101.5 94.9 +7.0% +5.6% Asia Pacific 44.1 46.0 -4.0% -8.1% Americas 37.3 31.8 +17.0% +13.0% 20% UK 33.8 35.2 -4.1% -4.1% Group Total 216.7 207.9 +4.2% +2.1% 25% 25% 25% 25% EMEA Asia Pacific Americas UK *Germany, Greater China, Latin America, South-East Asia and the US 10
Headline Numbers Financial Review Regional Review Summary Q3 19 EMEA Growth slowed from Q2 • Michael Page (56% of EMEA) +9%, Page Personnel (44%) +2% • France, representing 15% of the Group, slowed to +2% Other 15% • Germany +16%, stand out performance, with Michael Page Interim France +28% 31% • Benelux +7% Benelux 16% Gross Profit • Southern Europe +7%; Italy +11%, Spain +3%; Portugal +25% by Geography • Middle East & Africa -10% Reported Constant £m 2019 2018 S.Europe Germany % % 19% 19% Gross Profit 101.5 94.9 +7.0% +5.6% Headcount 3,344 3,290 +1.6% 47% of Group 11
Headline Numbers Financial Review Regional Review Summary Q3 19 Asia Pacific Impacted by trade tariffs and social unrest in Hong Kong • Greater China, 8% of the Group, -24%, against a particularly tough comparator of +31% Japan & • South-East Asia +11% India 21% • Japan +5% Greater China 38% • India +23%, with over 150 fee earners Gross Profit • Australia +2% by Geography SE Asia 17% Reported Constant £m 2019 2018 % % Australasia 24% Gross Profit 44.1 46.0 -4.0% -8.1% Headcount 1,711 1,719 -0.5% 20% of Group 12
Headline Numbers Financial Review Regional Review Summary Q3 19 Americas Our fastest growing region • US +14%, driven by strong performances from offices outside New Canada 4% York Rest of Latam • Slowdown in New York Financial Services 15% • Latin America +17%; Mexico +13%, Brazil +25% • Collectively other four countries in Latin America +15% Brazil Gross Profit 12% by Geography USA 55% Mexico Reported Constant £m 2019 2018 14% % % Gross Profit 37.3 31.8 +17.0% +13.0% Headcount 1,366 1,291 +5.8% 17% of Group 13
Headline Numbers Financial Review Regional Review Summary Q3 19 UK Heightened Brexit related uncertainty • Michael Page and Page Personnel both -4% Midlands • Increased reluctance by candidates to accept new jobs 16% • Clients taking longer to make decisions; some jobs cancelled London or put on hold 37% Gross Profit by Geography South 24% Reported £m 2019 2018 % North 23% Gross Profit 33.8 35.2 -4.1% Headcount 1,368 1,418 -3.5% 16% of Group 14
Summary & Outlook
Headline Numbers Financial Review Regional Review Summary Q3 19 Summary & Outlook Slowdown in growth in all regions Decrease in Group Gross Profit growth rate to +2.1% Increased macro-economic and political uncertainty Fee Earners up by 46, Operational Support down by 20 Business model enables us to react quickly to market conditions Strong net cash position of c. £92m, pre dividend payment of £54.5m Currently expect 2019 Operating Profit to be in the range of £140m - £150m 16
Appendix
Headline Numbers Financial Review Regional Review Summary Our business model Q3 19 18
Headline Numbers Financial Review Regional Review Summary A growing international business Q3 19 Delivering on our global diversification strategy Gross Profit 16% 24% 39% 61% 76% 84% FY 2007 FY 2013 Q3 2019 UK International 19
Headline Numbers Financial Review Regional Review Summary Q3 19 Significant variations in recruitment mix Geography Brands 12% 13% 17% 31% 33% 44% 88% 87% 83% 69% 67% 56% EMEA Asia Pacific UK Americas Michael Page Page Personnel Temp Perm 20
Headline Numbers Financial Review Regional Review Summary Q3 19 Long term fee earner and international growth ASIA 7,000 EMEA AMERICAS UK PACIFIC 6,081 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 Q3 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
Headline Numbers Financial Review Regional Review Summary Fee earner investment and support staff Q3 19 7000 6000 5000 Headcount 4000 3000 2000 1000 0 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Fee Earner Support Staff 22
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