Post on 08-Jun-2020
INTERIM RESULTSSix months ended 31 December 2016
CAUTIONARY STATEMENT
This presentation contains certain statements that are neither reported financial results nor other historical information. The informationcontained in this presentation is not audited, is for personal use and informational purposes only and is not intended for distribution to, or useby, any person or entity in any jurisdiction in any country where such distribution or use would be contrary to law or regulation, or which wouldsubject any member of the Hays Group to any registration requirement. No representation or warranty, express or implied, is or will be madein relation to the accuracy, fairness or completeness of the information or opinions made in this presentation.
Statements in this presentation reflect the knowledge and information available at the time of its preparation. Certain statements included orincorporated by reference within this presentation may constitute “forward-looking statements” in respect of the Group’s operations,performance, prospects and/or financial condition. By their nature, forward-looking statements involve a number of risks, uncertainties andassumptions and actual results or events may differ materially from those expressed or implied by those statements. Accordingly, noassurance can be given that any particular expectation will be met and reliance should not be placed on any forward-looking statement.Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends oractivities will continue in the future. No responsibility or obligation is accepted to update or revise any forward-looking statement resulting fromnew information, future events or otherwise. Nothing in this presentation should be construed as a profit forecast.
This presentation does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares in theCompany, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract orcommitment or investment decision relating thereto, nor does it constitute a recommendation regarding the shares of the Company or anyinvitation or inducement to engage in investment activity under section 21 of the Financial Services and Markets Act 2000. Past performancecannot be relied upon as a guide to future performance. Liability arising from anything in this presentation shall be governed by English Law,and neither the Company nor any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise)for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation.Nothing in this presentation shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.
2
AGENDA
FINANCIAL REVIEW PAUL VENABLES, FINANCE DIRECTOR
OPERATING REVIEW ALISTAIR COX, CHIEF EXECUTIVE
STRATEGY UPDATE ALISTAIR COX, CHIEF EXECUTIVE
CURRENT TRADING ALISTAIR COX, CHIEF EXECUTIVE
APPENDICES
1
2
3
4
5
3
1. FINANCIAL REVIEW
PAUL VENABLESGROUP FINANCE DIRECTOR
GOOD FIRST HALF FINANCIAL PERFORMANCENet fees Operating profit**
£81.5m
£82.6m
£86.3m£396.9m
£383.9m
£380.3m
Basic earnings per share**
3.64p
3.80p
4.49p
4.55p
3.99p
Net fees £465.5m
3% increase*
EPS4.55p
14% increase
Operating profit £100.1m
1% decrease*
* LFL (‘like-for-like’) growth is organic growth at constant currency.** Continuing operations only.
£94.7m
£100.1m£465.5m
£413.4m
5
INTERIM DIVIDEND INCREASED BY 5% TO 0.96p
H2 15
H1 16
H2 16
H1 17
H1 15
H2 15
H1 16
H2 16
H1 17
H1 15
H2 15
H1 16
H2 16
H1 17
H1 15
GOOD FIRST HALF FINANCIAL PERFORMANCE
Income statement**
Six months ended 31 December 2016£m
2015£m
Actual growth
LFL* growth
Turnover 2,484.5 2,043.9 22% 7%
Net fees 465.5 396.9 17% 3%
Operating profit 100.1 86.3 16% (1)%
Net finance cost (3.9) (3.9)
Profit before tax 96.2 82.4 17%
Tax (30.8) (25.5)
Profit after tax 65.4 56.9 15%
* LFL (‘like-for-like’) growth is organic growth at constant currency. ** Continuing operations only.
EXCHANGE RATE MOVEMENTS INCREASED NET FEES AND OPER ATINGPROFIT BY £55.5 MILLION AND £14.8 MILLION RESPECTIV ELY
6
Net Fees £227.5m 10%*
Op Profit £48.6m 6%*
� Strong 10%* net fee growth in Germany to £110.7m
� Rest of division grew 11%*, with 13 countries growing by over 10%*, and delivered a strong 19%* increase in profit
GOOD GROWTH IN INTERNATIONAL BUSINESS OFFSETS DECLI NE IN UK
Asia Pacific
Performance by region
Continental Europe & RoW
24%of netfees
49% of netfees
Net Fees £111.9m 6%*
Op Profit £33.3m 12%*
� 9%* growth in A&NZ led by private sector acceleration, up 10%*; operating profit up 16%*
� Asia, net fees down (5)%* and operating profit (16)%* as banking markets remained tough
United Kingdom & Ireland
27% of netfees
Net Fees £126.1m (10)%*
Op Profit £18.2m (29)%*
� Trading conditions tough but sequentially stable through the half, with net fees down (10)%*
� Operating profit down (29)%*, in line with management guidance
7* LFL (‘like-for-like’) growth is organic growth at constant currency. ** Represents the conversion of net fees into operating profit.
GOOD GROWTH ACROSS TEMP AND PERM
Permanent placement business Temporary placement business
* Growth rates and margin change are for the 6m ended 31 December 2016 versus 6m ended 31 December 2015, on a like-for-like basis which is organic growth at constant currency.
Review of Group Permanent and Temporary Businesses*
** The underlying Temp gross margin is calculated as Temp net fees divided by Temp gross revenue and relates solely to Temp placements in which Hays generates net fees and specifically excludes transactions in which Hays acts as agent on behalf of workers supplied by third party agencies and arrangements where the Company provides major payrolling services.
Split of net fees
H2 16H1 16 58% Temp
59% TempH1 17
� 6% volume increase driven primarily by Germany and Australia
� Mix/hours worked increased 1%
� Underlying Temp margin** down 40bps primarily due to mix and a reduction in Temp margin in our Australia and UK public sector markets
� Strong volume increase in CE&RoWoffset a decrease in the UK&I
� Average Perm fee up 1% primarily as a result of salary inflation
4% net fee growth
6% volume increase
1% increase in mix/hours
40 bps underlying margin decrease**
1% net fee growth
1% volume increase
1% average Perm fee increase
8
58% Temp
£192.0m(41% of net fees)
£273.5m(59% of net fees)
THE AUSTRALIAN DOLLAR AND EURO REMAIN SIGNIFICANT F X TRANSLATION SENSITIVITIES FOR THE GROUP
Six months ended 31 December 2016 Average Closing
Australian $ 1.6963 1.7105
Euro € 1.1651 1.1739
Impact of a one cent change per annum Net fees Op pr ofit
Australian $ +/- £0.9m +/- £0.3m
Euro € +/- £2.6m +/- £0.9m
Key FX rates and sensitivities
� FX rates at 20 February 2017: £1 / AUD1.6244; £1 / €1.1745
� Retranslating the Group’s FY16 full year operating profit at current exchange rates would increase the actual result by c.£29m from £181.0m to c.£210m
9
WE HAVE MAINTAINED OUR SECTOR-LEADING CONVERSION RA TE*
1010
EXPECT IMPROVEMENT IN SECOND HALF CONVERSION RATE
Conversion Rate* 1H16 1H17
APAC 27.5% 29.8%
CE&RoW 21.8% 21.4%
UK&I 18.1% 14.4%
GROUP 21.7% 21.5%
* Represents the conversion of net fees into operating profit.
� OVERALL GROUP CONVERSION RATE DECLINED 20bps TO 21.5%
� INCREASE IN APAC DRIVEN BY ACCELERATING GROWTH AND STRONG LEVERAGE IN AUSTRALIA
� MODEST DECLINE IN CE & RoW DUE TO SIGNIFICANT HEADCOUNT INVESTMENT AND 3 LESS WORKING DAYS IN GERMANY
� REDUCTION IN UK PARTIALLY MITIGATED BY EARLY PROACTIVE ACTION TO REDUCE COST BASE
� We expect the net finance charge for the year ending 30 June 2017 to be c.£7 million
11
Taxation
Underlying effective tax rate 32.0% 31.0%
INCREASE IN ‘ETR’ TO 32.0% DRIVEN BY DECREASE IN UK PROFITS
Finance charge and taxation
Six months ended 31 December 2016£m
2015£m
Finance charge
Net interest charge on debt (1.2) (1.3)
Interest unwind of discount on Acquisition Liability (0.6) (0.5)
IAS 19 pension charge (non-cash) (1.0) (1.9)
PPF levy (0.3) (0.2)
Other interest payable (0.8) -
Net finance charge (3.9) (3.9)
� Decrease in profits in UK increases the Group effective tax rate to 32.0%
� ETR for FY17 will be driven by the mix of profits. We currently expect the rate to be 32%.
14% INCREASE IN EARNINGS PER SHARE
Basic earnings per share (EPS)
* Number of shares used for basic EPS calculation purposes excludes shares held in Treasury.
Six months ended 31 December 2016 2015 Change
Basic earnings £65.4m £56.9m 15%
Weighted average number of shares* 1,439m 1,425m
Basic earnings per share 4.55p 3.99p 14%
Memo
Shares in issue* at 31 December 2016 and 20 February 2017 1,443m
Basic EPS
1110
125.19p**
3.25p**H1 12 7.72pH2 12H1 13
5.19p5.47pH1 17 4.55p
3.99p4.49pH2 16
H1 16
12
GOOD UNDERLYING CASH PERFORMANCE
£100.1m
£18.5m
£(34.8)m
£(30.2)m £(1.3)m
£52.3m
Operating profit to free cash flow conversion Uses of cash flow
Operating profit
Non-cash items
Working capital
Taxpaid
Interestpaid
Free cash flow
Operating cash flow £83.8m (H1 16: £33.9m)
Cash from operations
H1 13 £162.2m
Capex guidance for FY17 is c. £20m and depreciation & amortisation guidance is c. £23m
£78.1m £97.3m£33.9mH1 16
H1 17
H1 15 £78.5m
£83.8m
Increase in Net Cash £11.1m
Capex £10.0m
Pensions £7.4m
13
Dividend £28.7m
Other £(4.9)m
£m31 Dec
201630 Jun
2016
Goodwill & intangibles 243.7 242.0
Property, plant & equipment 20.7 19.8
Net deferred tax 26.2 23.9
Net working capital* 234.6 190.6
Derivative financial instruments (0.2) 6.6
Tax liabilities (29.9) (27.1)
Retirement benefit obligations (20.5) (14.3)
Acquisition Liabilities (12.7) (11.2)
Provisions (9.1) (9.3)
452.8 421.0
Net cash 47.9 36.8
Net assets 500.7 457.8
STRONGEST BALANCE SHEET FOR MANY YEARS
Balance sheet analysis
* Movement in net working capital in the balance sheet is calculated at closing exchange rates. For cash flow purposes, the movement in working capital is calculated at average exchange rates.
� Good underlying working capital management with debtor days at 39
� Increase primarily due to expansion of Temp/Contracting business in Germany and Australia
NET WORKING CAPITAL
� Increase due primarily to a decrease in the discount rate and an increase in the inflation rate partially offset by an increase in asset values and regular Company contributions
RETIREMENT BENEFITS
14
15
FURTHER INCREASE IN NET CASH POSITION
** Covenant ratios are shown on a pro-forma basis for 6 months ended 31 December 2016.
Closing net cash/(net debt) £m
Free cash flow*
H1 13 £111.8m
£52.7m£62.2m
* Free cash flow is defined as cash flow before dividends, additional pension contributions, capital expenditure and acquisitions.
H1 17 £52.3m
H1 15H1 16 £12.8m
£56.3m
Jun 16Dec 14 Dec 16Jun 15 Dec 15
(79.2)
47.936.8
(30.7)
NET DEBT ELIMINATED IN FY16� H1 17 ended with net cash of £47.9m
£210M BANK FACILITY IN PLACE� expires April 2020
EBITDA / INTEREST RATIO: 52X**� debt covenant: > 4.0
NET DEBT / EBITDA RATIO: N/A� debt covenant: < 2.5
(56.1)
15
DIVIDEND INCREASED BY 5%, IN LINE WITH OUR POLICY
� Core dividend should be sustainable, progressive and appro priate� Target core dividend cover of 2.0x to 3.0x Group EP S� Interim dividend increased by 5% to 0.96p, in line with our
strategy to build cover towards 3.0x earnings
EXCESS CASH RETURNS POLICY
FREE CASH FLOW PRIORITIES
CORE DIVIDEND POLICY
� We will build a year-end net cash position of c.£50 m� Assuming a positive outlook, any free cash flow gen erated over
and above this position will be distributed to shar eholders via special dividends, or other appropriate methods, an nually
� Fund Group investment and development� Maintain a strong balance sheet� Deliver a sustainable core dividend which is afford able and
appropriate
16
The interim dividend will be payable on 07 April 20 17 and the ex-dividend date is 02 March 2017
17* LFL (‘like-for-like’) growth is organic growth at constant currency.
FINANCIAL SUMMARY
OPERATING PROFIT BROADLY FLAT* DESPITE DECLINE IN T HE UK
� Strong 12%* profit growth in Asia Pacific, driven by excellent profit growth in Australia� 6%* increase in CE&RoW profit, as we invested to drive further growth; UK decrease in
profitability partially mitigated with early cost base adjustments� Maintained sector-leading conversion rate of 21.5%
GOOD UNDERLYING CASH PERFORMANCE; DIVIDEND INCREASE� 84% conversion of operating profit to operating cash flow� Increase in net cash position to £47.9m� Dividend increased by 5% to 0.96p as we build cover towards 3.0x
SOLID NET FEE GROWTH OF 3%*, DRIVEN BY INTERNATIONA L BUSINESSES
� Strong 10%* growth in CE&RoW, with Germany net fees up 10%* � Acceleration of growth in Australia; tough but sequentially stable conditions in the UK
17
2. OPERATING REVIEW
ALISTAIR COXCHIEF EXECUTIVE
ANOTHER 6 MONTHS OF OPERATIONAL & FINANCIAL PROGRES S
2. Investing to build a market-leading business & drive growth
1. Maximising financial performance
POSITION THE GROUP FOR LONG-TERM STRUCTURAL GROWTH OPPORTUNITIES, WHILST DRIVING OUR PROFITS ALONG THE WAY
3. Building further diversification across the platform
� £100.1m of Operating Profit, 21.5% conversion rate*� UK headcount adjusted quickly to protect profits� Australia conversion rate 37%, Germany 35%� Ended the half with c.£50m net cash
� Non-UK consultant headcount up 9%� Material headcount increases in core markets:
- Germany up 13%- Australia up 12%
We remain focussed on… Delivering clear results…
* Represents the conversion of net fees into operating profit. ** LFL (‘like-for-like’) growth represents organic growth at constant currency.
� Temp & Contracting now represents 59% of net fees, having grown 4%**
� Contracting business now operating in 27 countries
19
ACCELERATION IN AUSTRALIA; TRADING CONDITIONS IN ASIA TOUGH OVERALL
Australia & NZ (net fees: £87.2m; operating profit: £30.2m)� Australia net fees up 11%*, with acceleration through the half.
Perm up 8%* while Temp increased 12%*� Strong growth in Victoria 15%, NSW 14% and ACT 13%� IT up 22%* to record levels, C&P, our largest specialism, up
12%* and Office Support up 9%*� Invested aggressively to drive growth, ANZ consultant
headcount up 9% year-on-year (including Australia up 12%)
Asia (net fees: £24.7m; operating profit: £3.1m)� Net fees down 5%*; tough trading conditions especially in
Banking markets, Japan & Singapore� By contrast, record net fees in China and Hong Kong� Invested in China, HK & Malaysia, but overall consultant
headcount down 6% year-on-year
Headline APAC net fees
LFL* growth 6m to 31 Dec 2016
* LFL (‘like-for-like’) growth represents organic growth at constant currency. Conversion rate represents percentage movement versus prior year. ** Consultant numbers represent closing numbers, and percentage changes are 31 Dec 2016 closing numbers versus 31 Dec 2015 closing numbers.
APAC
1011
£146m£210m
£242m
Net Fees £111.9m +6%
Op Profit £33.3m +12%
Conversion rate 29.8% +230bp
Consultants** 1,270 +3%
H1 17 £112mH2 16H1 16
£92m£84m
46%Perm
54%Temp
24%of netfees
£
£
%
20
Germany (net fees: £110.7m)� Net fees up 10%* and a record first half profit performance� Good 8%* growth in Contracting and Temp, despite 3 less
working days; excellent growth in Perm, up 25%*� Strong growth across all specialisms, core IT & Engineering
businesses up 10%*, A&F up 11%*� Continued significant investment as we build material further
scale, consultant headcount up 13%
Rest of the division (net fees: £116.8m)
� Strong, broad-based 11%* net fee growth, with 13 countries up 10%* or more, including Belgium, Netherlands, Poland
� Record performance in France, with fees up 18%*
� Significant investment in headcount, up 10%
� Operating profit up 19%*
STRONG, BROAD-BASED GROWTH; ALL-TIME RECORD IN GERMANY
Headline CE&RoW net fees
* LFL (‘like-for-like’) growth represents organic growth at constant currency. Conversion rate represents percentage movement versus prior year. ** Consultant numbers represent closing numbers, and percentage changes are 31 Dec 2016 closing numbers versus 31 Dec 2015 closing numbers.
CE&RoW
1011 £220m
£267mH1 13 £140m£134m£133mH1 16 £173m
H2 16H1 17
£190m£228m
LFL* growth 6m to 31 Dec 2016
Net Fees £227.5m +10%
Op Profit £48.6m +6%
Conversion rate 21.4% (40bp)
Consultants** 3,358 +11%
37%Perm
63%Temp
49%of netfees
£
£
%
21
CONDITIONS TOUGH BUT SEQUENTIALLY STABLE; EARLY SIGNS OF IMPROVEMENT IN PRIVATE SECTOR
* LFL (‘like-for-like’) growth represents organic growth at constant currency. Conversion rate represents percentage movement versus prior year. ** Consultant numbers represent closing numbers, and percentage changes are 31 Dec 2016 closing numbers versus 31 Dec 2015 closing numbers.
UK & IRELAND Net fees declined 10%* in challenging trading condi tions
� Net fees of £126m, operating profit of £18m
� Consultant headcount down 10% year-on-year, 2% down sequentially after cost base action was taken early in FY16
� Both Perm and Temp net fees down 10%*
Private sector net fees down 9%*: 72% of UK&I net f ees
� Post-Referendum step-down in Perm, quickly stabilised andexited the half with early signs of improvement
� A&F -6%*, C&P -8%*, IT -11%*
Public sector net fees down 12%*: 28% of UK&I net f ees
� Challenging conditions throughout the half
� A&F -5%*, C&P -11%*, Education -10%*
LFL* growth 6m to 31 Dec 2016
Net Fees £126.1m (10)%
Op Profit £18.2m (29)%
Conversion rate 14.4% (370bp)
Consultants** 1,978 (10)%
44%Perm
56%Temp
27%of net fees
£
£
%
22
Headline UK&I net fees
H1 17 £126m£133m
£139mH2 16H1 16
2018 ASPIRATIONS: WE REMAIN ON TRACK AFTER 3 ½ YEAR S
Other Countries (£m) Operating Profit*
25 35 45
ASSUMED 5YR NET FEE CAGR: +8% to +12%
* Nothing in this presentation should be construed as a profit forecast. There is no certainty over timing or probability of achieving these objectives and they are dependent on a variety of assumptions and factors both Hays specific and otherwise. The 2018 Operating Profit ranges are after Group central cost allocation but before allocation of CE&RoW & Asia Pac divisional overheads (assumed to be £15m per annum) and assume constant rates of exchange as of 30 September 2013. All reported profit numbers are shown on a headline basis.
FY18 ORIGINAL FX
FY 2016
HY 20171720
Australia & NZ (£m) Operating Profit*
ASSUMED 5YR NET FEE CAGR: +1% to +5%
FY 2016
HY 2017 3044
FY18 ORIGINAL FX 60 70 80
UK & Ireland (£m) Operating Profit*
45 60 75
ASSUMED 5YR NET FEE CAGR: +5% to +9%
FY 2016
FY18 OBJECTIVE
HY 2017
2518
Germany (£m) Operating Profit*
ASSUMED 5YR NET FEE CAGR: +7% to +12%
FY 2016
HY 2017FY18 ORIGINAL FX
3963
85 100 115
52
31 37
20
23
3. STRATEGY UPDATE
ALISTAIR COXCHIEF EXECUTIVE
25
WE HAVE CLEAR, WELL ESTABLISHED STRATEGIC PRIORITIE S TO DELIVER OUR LONG-TERM AIMS
GENERATE, REINVEST & DISTRIBUTE
MEANINGFUL CASH RETURNS
BUILD CRITICAL MASS & DIVERSITY
ACROSS OUR GLOBAL PLATFORM
MATERIALLY INCREASE &
DIVERSIFY GROUP PROFITS
INVEST IN PEOPLE, TECHNOLOGY,
COLLABORATIONS & INNOVATION
A PRIORITISED PIPELINE OF OPPORTUNITIES TO BUILD SCALE
26
GERMANY
AUSTRALIA
UK
CORE PROFIT DRIVERS
FUTURE MATERIAL PROFIT DRIVERS
MEANINGFUL CONTRIBUTORS
NETWORKCRITICAL
FRANCE
JAPAN
USA
CANADA
SWITZERLANDNEW ZEALANDBELGIUMCHINAMEXICO/BRAZIL
20 OTHER HAYSCOUNTRIES
ONGOING
0-5 YEARS
0-10 YEARS
£10m+ TARGET £5m+ TARGET
27
FRANCE: MANY YEARS OF CONSISTENT OUTPERFORMANCE
Drivers of success
NET FEES
OPERATING PROFIT
CONSULTANT HEADCOUNT
17 OFFICES, BROAD NATIONAL COVERAGE
50% NET FEES PARIS, 50% REGIONS
CONTRACTOR ROLLOUT PROGRESS
NOW c.50% OF NON-PERM FEES
INVESTED TO GROW CORE SPECIALISMS:
A&F, C&P, LIFE SCIENCES
TEMP / CONTRACTOR
NUMBERS
DOUBLED
7x HIGHER
UP 65%
UP 74%
EXPERIENCED, LONG-TENURE MANAGEMENT
SIGNIFICANT HEADCOUNT INVESTMENT
Progress (FY11-date)
OUR FOCUS WILL REMAIN UNCHANGED AS WE SEEK TO BUILD ON THIS SUCCESS
RELATIVE RESILIENCE TO THE CYCLE
SIGNIFICANT BARRIERS TO ENTRY
EXISTING HAYS EXPERTISE
28
CONTRACTING ROLLOUT SUPPORTS OUR DIVERSIFICATION ST RATEGY
22%
78%
80%
56%
68%
65%
36%
32%
JAPAN
AUSTRIA
SWITZERLAND
BELGIUM
NETHERLANDS
USA
CANADA
FRANCE
% non-Perm net fees
Perm Temp & Contracting
WE ARE FOCUSED ON BUILDING FURTHER SCALE IN OUR WORLD-CLASS CONTRACTING BUSINESS
Why Contracting is a key focus
CLEAR STRUCTURAL GROWTH
2.
3.
4.
1.
2.
1.
29
FORGING MUTUALLY BENEFICIAL GLOBAL RELATIONSHIPS:OUR COLLABORATION WITH SEEK
AUSTRALIA’S LARGEST ONLINE JOBS MARKETPLACE
c.90% OF AUSTRALIA’S WHITE COLLAR POPULATION COVERED BY THE HAYS / SEEK COMBINED DATABASE
ACCESS TO REAL-TIME INFORMATION HELPS UNDERSTAND APPROACHABILITY
INCREASES EFFICIENCIES, REDUCES WASTED EFFORT AND INCREASES OUTPUT
POSITIVE RESULTS IN TERMS OF IMPROVED PRODUCTIVITY, JOB FILL RATES AND CANDIDATE ENGAGEMENT
THERE ARE 5 PILLARS WHICH UNDERPIN THE STRENGTH OF OUR BUSINESS MODELSIGNIFICANT PROGRESS DELIVERED AGAINST ALL KEY PRIO RITIES, AND WELL POSITIONED FOR FURTHER GROWTH AND DEVELOPMENT
30
BUILD CRITICAL MASS AND SCALE ACROSS OUR GLOBAL PLATFORM
ASPIRATION TO MATERIALLY INCREASE AND DIVERSIFY GROUP PROFITS
GENERATE, REINVEST & DISTRIBUTE MEANINGFUL CASH RETURNS
NON-UK CONSULTANT HEADCOUNT UP 9%
NON-PERM NOW 59% OF NET FEES
CONTINUED TO DEVELOP MUTUALLY-BENEFICIAL RELATIONSHIPS
GOOD PROFIT PERFORMANCE DESPITE A SLOWDOWN IN UK MARKET
STRONG CASH PERFORMANCEc.£50m NET CASH5% INTERIM DIVIDEND INCREASE
INVEST IN PEOPLE & TECHNOLOGY, RESPOND TO CHANGE & BUILD RELATIONSHIPS
4. CURRENT TRADING
ALISTAIR COXCHIEF EXECUTIVE
CONTINUATION OF TRENDS WE SAW AT THE END OF H1 ACRO SSTHE GROUP; RETURN TO WORK SOLID OVERALL
Current trading conditions by region
APAC
UK&I
CE & RoW
� Conditions remain tough, especially in the public s ector markets� Return to work was solid and in line with our expec tations � Continuation of signs of modest improvement in priv ate sector markets
� Strong activity levels in Australia across all stat es and most specialisms� Return to work good and in line with prior year lev els� Asia remains mixed but subdued overall
� Strong underlying growth in Germany and rest of Eur ope� Return to work in Germany was good � North America remains good, Latin America more mixe d
32We expect the timing of Easter this year to increase year-on-year net fee growth in Q3 by 2%-3%, with a commensurate decrease expected in Q4.
QUESTIONS & ANSWERS
APPENDIX 1
H1 2017 RESULTS SUPPORTING INFORMATION
Six months ended 31 December 2016£m
2015£m
LFL growth*
Germany 38.6 31.3 3%
Rest of CE&RoW (23 countries) 15.8 12.3 10%
CE&RoW Central Costs (5.8) (5.8) 3%
CE&RoW Operating Profit 48.6 37.8 6%
MATERIAL INCREASE IN CE&RoW (EX-GERMANY) PROFITABILITY
* LFL (‘like-for-like’) growth represents organic growth at constant currency.
Operating profit split in Continental Europe & RoW – HEADLINE
� Germany delivered operating profit LFL growth of 3%* despite significant investment in headcount and maintained an excellent conversion rate of 35%
� A strong performance elsewhere in CE&RoW where market conditions were good and we invested in headcount while controlling our cost base
35
LIKE-FOR-LIKE SUMMARY
* LFL (‘like-for-like’) growth is organic growth at constant currency.
Six months ended 31 December 2015£m
FX impact£m
Organic£m
2016£m
LFL* growth
Net fees
Asia Pacific 84.4 21.5 6.0 111.9 6%
Continental Europe & RoW 173.1 33.3 21.1 227.5 10%
United Kingdom & Ireland 139.4 0.7 (14.0) 126.1 (10)%
396.9 55.5 13.1 465.5 3%
Operating profit
Asia Pacific 23.2 6.5 3.6 33.3 12%
Continental Europe & RoW 37.8 8.0 2.8 48.6 6%
United Kingdom & Ireland 25.3 0.3 (7.4) 18.2 (29)%
86.3 14.8 (1.0) 100.1 (1)%
36
H1 FY17 v H2 FY16: ANALYSIS BY DIVISION
* LFL (‘like-for-like’) growth is organic growth at constant currency.Note: H2 16 is the period from 1 January 2016 to 30 June 2016. H1 17 is the period from 1 July 2016 to 31 December 2016.
Net fee growth (LFL*) versus same period last year
Q3 16 Q4 16 H2 16 Q1 17 Q2 17 H1 17
Asia Pacific 3% 4% 4% 5% 7% 6%
Continental Europe & RoW 11% 21% 16% 13% 8% 10%
United Kingdom & Ireland (3)% (4)% (3)% (10)% (10)% (10)%
Operating profit growth (LFL*)versus same period last year
Asia Pacific 10% 12%
Continental Europe & RoW 14% 6%
United Kingdom & Ireland 9% (29)%
Conversion rate (%)operating profit as % of net fees
Asia Pacific 29.4% 29.8%
Continental Europe & RoW 21.6% 21.4%
United Kingdom & Ireland 20.3% 14.4%
37
Relative size Country / sub region(ranked by net fees)
Net Fees Net fee growth(LFL*)
# of offices # of consultants
Germany £110.7m 10% 17 1,359
France £27.3m 18% 17 372
Benelux £16.7m 11% 11 263
USA £16.2m 8% 12 192
Switzerland £10.4m (3)% 4 116
Canada £8.8m 6% 8 115
Other** (16 countries) £37.4m 13% 32 941
101 3,358
CONTINENTAL EUROPE & ROW PERFORMANCE BY COUNTRY
* Percentages represent LFL (‘like-for-like’) growth which is organic growth at constant currency for 6m ended 31 December 2016 versus 6m ended 31 December 2015. ** Other represents financial results for remaining CE&RoW countries.Note: Pie charts represent net fees by country / sub region. 38
CONSULTANT HEADCOUNT
Change in headcount As at Dec
2016
As at June2016
Changesince
June 2016
As at Dec
2015
Changesince
Dec 2015
Asia Pacific 1,270 1,210 5% 1,232 3%
Continental Europe & RoW 3,358 3,034 11% 3,015 11%
United Kingdom & Ireland 1,978 2,024 (2%) 2,207 (10%)
Group 6,606 6,268 5% 6,454 2%
39
OFFICE NETWORK
* Offices opened is shown net of closed and merged offices.
Number of offices 30 June 2016
Opened/(Closed)*
31 Dec 2016
Asia Pacific 49 1 50
Continental Europe & RoW 103 (2) 101
United Kingdom & Ireland 100 - 100
Total 252 (1) 251
40
TRADING DAYS
Number of trading days (UK only) H1 H2 Year
Year ended 30 June 2016 129 125 254
Year ended 30 June 2017 128 125 253
Year ending 30 June 2018 127 125 252
41
THE SCALE AND SCOPE OF OUR BUSINESS IS UNIQUE
LINKEDIN FOLLOWERS
HITS ON HAYS WEBSITES 1.4 million34 million
CV’S RECEIVEDINTERVIEWS PER MONTH6 million >50,000
PERM PLACEMENTS67,000TEMP ASSIGNMENTS220,000
WORLDWIDE IN FY16 WE FILLED OVER 1,000 JOBS EVERY W ORKING DAY
FY16 STATISTICS
42
APPENDIX 2
THE HAYS BUSINESS MODEL & STRATEGY FOR GROWTH
HAYS IS A LEADING GLOBAL EXPERT IN QUALIFIED, PROFE SSIONAL AND SKILLED RECRUITMENT
GENERALIST RECRUITMENT (mostly blue collar)
EXECUTIVE SEARCH (head hunting)
PROFESSIONAL RECRUITMENT (mostly white collar)
� Contingent fee model� Focus on high-skilled roles� Clear structural growth markets
44
A PROVEN TRACK RECORD OF ORGANIC GROWTH
New country & specialism entries
33 COUNTRIES 20 SPECIALISMS
Pre 1990
Early 1990s
Late 1990s
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Brazil
China, HK
Organic Acquisition
A&F C&P
FranceCzech Re.
Netherlands
Portugal
Canada
Belgium
Germany Switzerland
Spain
Austria
Sweden Poland
Australia
N.Zealand
Singapore
Italy UAELuxembourg
UK
Key:
Legal
Banking Fin Services
EducationContact Ce.
Engineering
HR
Sales & Ma.
Executive
Retail
Healthcare
Purchasing
IT
Japan Pharma
Energy O&G
Hungary Denmark
Ireland
India Russia
Mining
Mexico USA
Colombia
Chile Malaysia
Office Pros
Telecoms
45
Top 3 position Top 5 positionMarket Leader Other
OUR WORLDWIDE PLATFORM PROVIDES A PIPELINE OF FUTUR E GROWTH OPPORTUNITIES & LEADERSHIP IN ALL CORE MARKETS
Australia (#1)BelgiumBrazilChileColombiaFranceGermany (#1)Hong KongHungaryIreland (#1)Italy
Japan (#1)MalaysiaNew Zealand (#1)Poland (#1)Portugal (#1)RussiaSingapore (#1)SpainSwedenSwitzerlandUK (#1)
AustriaChinaCzech RepDenmark
LuxembourgMexicoNetherlandsUAE
Hays market positioning*
TOP 3
TOP 5
* Market position is based on Hays estimates. List of countries only includes those with top 5 market positions and excludes newly opened countries.
The largest international specialist recruitment bu siness in the world
46
OUR STRATEGIC FOCUS IS ON BUILDING SCALE IN KEY MAR KETS
� Market leaders in 9 countries including: UK, Australia, Germany
� Additionally, top 3 market position in 12 countries
� Opened in 5 new countries since 2010: US, Mexico, Colombia, Chile, Malaysia
� Leading market positions across professional and technical areas
� Long established market presence across all key specialist areas
� Balance of specialisms leveraged to different stages of the economic cycle
HAYS COUNTRIES HAYS SPECIALISMS
33
2002
2017
11
20
2002
2017
10
47
MARKET LEADING BREADTH AND DEPTH OF PLATFORMDivisional operating review
UK
Irel
and
Aus
tral
ia
New
Zea
land
Hon
g K
ong
Chi
na
Sin
gapo
re
Japa
n
Mal
aysi
a
Ger
man
y
Fra
nce
Bel
gium
Net
herla
nds
Luxe
mbo
urg
Spa
in
Por
tuga
l
Cze
ch R
ep
Hun
gary
Sw
itzer
land
Aus
tria
Sw
eden
Den
mar
k
Pol
and
UA
E
Italy
Bra
zil
Indi
a
Rus
sia
Mex
ico
Col
ombi
a
Chi
le
Can
ada
US
A
Accountancy & FinanceConstruction & PropertyInformation TechnologyLife SciencesSales & MarketingBanking & Capital MarketsContact CentresEducationEngineering & ManufacturingExecutiveFinancial ServicesHealth & Social CareHuman ResourcesLegalOffice ProfessionalsEnergy, Oil & GasPurchasingRetailResources & MiningTelecoms
TotalOffices* 95 5 34 4 1 4 1 4 2 17 17 7 3 1 5 2 1 1 4 1 1 1 6 1 4 3 1 2 1 1 1 8 12 251
33 COUNTRIES20 SPECIALISMS
* Office numbers as at December 2016. 48
… and leverages the Group to economic improvement
THE STRENGTH OF OUR MODEL IS KEY TO DELIVERING FOR CLIENTS AND DRIVING FINANCIAL PERFORMANCE THROUGH THE CYCLE
… a resilient financial performance in tougher economic times…
…delivers the best solutions for clients & candidates…
… the best people, sector leading technologyand a world class brand…
Unrivalled scale, balance and diversity…
49
� Exposure to structural growth and more mature areas
� Long-established across technical, white-collar spe cialisms
� Unmatched breadth and scale of operations globally
� Global connectedness of operations is key
� 33 countries around the world, up from 11 in 2002
� Rapid start-up phase now largely completed
� 20 specialist areas across professional / technical skills
� Focus on building scale in key specialisms in core markets
� Temporary / Contracting / Permanent
� Rolling out IT Contractor model to selected markets
THERE ARE 5 PILLARS WHICH UNDERPIN THE STRENGTH OF OUR BUSINESS MODEL
1. BALANCE
2. SCALE
3. GEOGRAPHIC DIVERSIFICATION
4. SECTORAL DIVERSIFICATION
5. CONTRACT FORM DIVERSIFICATION
BALANCE, SCALE AND DIVERSIFICATION ARE WHAT SETS TH E HAYS BUSINESS MODEL APART AND DRIVES OUTPERFORMANCE
50
LEVERAGING OUR BEST-IN-CLASS TECHNOLOGY PLATFORM AN D BRAND
OPERATIONAL EFFECTIVENESS
BEST CUSTOMER SERVICE
DIGITALLY-ENABLED CONSULTANTS
1
2
3
OP
ER
ATIO
NA
L E
FF
EC
TIV
EN
ES
S
THE BEST CANDIDATES TO CLIENTS, FASTER THAN ANYONE ELSE
CROSS SYSTEM AWARENESS
SEARCH CAPABILITIES
GLOBAL DIGITAL PLATFORM
OPERATIONAL INTELLIGENCE
MANAGEMENT INFORMATION
AUTOMATED ATS VMS INTERFACES
DIGITAL CV PARSING
AUTOMATIC JOB BOARD
POSTINGS
Global Database
Internally integrated & externally connected
Delivering outcomes to drive growth
51
~75%84% ~85%
24% 21%
59%
~25%16% ~15%
49%
15%
41%
27%
15%
9%
8%
32%
A BALANCED PORTFOLIO
Net Fees by type*
* Indicative purposes only based on information for the 6 months ended December 2016.
** Major specialisms within Other include: Banking Related (7%), Life Sciences (4%), Sales & Marketing (4%) and Education (3%).
Spot
Recruitment contracts
Public sector
Private sector
Top 40
30,000 customers
Other**
Accountancy & Finance
Construction & Property
IT
Temp
Perm
APAC
CE&RoW
UK&I
Office Sup.
Engineering
52
HK, Singapore (2%)
* Market penetration represents the percentage of skilled and professional recruitment that is outsourced, based on Hays’ management estimates.
Net fees by market maturity* (percentages in table show % of Group net fees in H117)
ESTABLISHED:>70% penetration30% of Group net fees-8% LFL net fee growth
DEVELOPING:>30-70% penetration
28% of Group net fees+11% LFL net fee growth
EMBRYONIC: <10% penetration6% of Group net fees+9% LFL net fee growth
EMERGING:10-30% penetration36% of Group net fees
+7% LFL net fee growth
UK & Ireland (27%)
Australia & NZ (19%) France, Netherlands,
Canada (9%)
Japan, China, Malaysia (4%)
Latin America, Russia, India (2%)
Germany (24%)
Other CE&RoW (10%)
BALANCED BUSINESS MODEL: WELL DIVERSIFIED IN STRUCTURAL AND CYCLICAL MARKETS
USA (3%)
53
38%
42%
20%
Net fees HY17
£465.5m
Information TechnologyEngineering
Sales & Marketing
Candidate shortagesClients investing
Continued investmentDrive growth
STRONG: GROWTH >10%* TOUGH: DECLINE <0%*
BankingEnergy, Oil & Gas
Education
Short term challengesLong term opportunity
Defend market position Reduce costs
SOLID / GOOD:GROWTH 0-10%*
Accountancy& FinanceConstruction
& PropertyOffice Support
Mixed conditions but opportunities
available
Selective investmentMaintain position
* Represents LFL (‘like-for-like’) growth rates in the 6 months to 31 December 2016. Listed specialisms are examples only and are not exhaustive.
BALANCED BUSINESS MODEL: SECTOR DIVERSITY EXPOSES U S TO GROWTH OPPORTUNITIES AND PROTECTS OUR BUSINESS
54
Asia
Hays HY17 Net Fees by geography
0% 100%Group net fees
Temp Perm
Rest of CE&RoW UK & Ireland Australia & New Zealand Germany
89%
60%44% 34%
13%
87%
66%56%
40%
11%
BALANCED BUSINESS MODEL: SECTOR-LEADING EXPOSURE TO KEY TEMP/CONTRACTOR MARKETS, PERM-GEARED IN HIGH GROWTH AREAS
55
APPENDIX 3
DIVISIONAL PROFILES
#1 market position*
Net fees by specialism
Temp : Perm
Private : Public sector
Net fees by countryNet fees: £111.9m
Operating profit: £33.3m
Conversion rate: 29.8%
Countries: 7
Consultants: 1,270
Offices: 50
Note: Private:Public sector and Temp:Perm split is based on net fees for 6 months ended 31 December 2016.* Market position is based on Hays estimates.
Diverse sector exposure Asia structural opportunity
Net fees by specialism Net fees by country
ASIA PACIFIC REPRESENTS 24% OF GROUP NET FEES WITH AUSTRALIA REPRESENTING 71% OF DIVISIONAL NET FEES
54% 46%
73% 27%
22%
13%
13%11%10%
6%
4%
21%
Const. & Property Account. & Finance IT
Office Support Banking Sales &Marketing
HR Other
71%
9%
7%6%
Austral ia Japan New Zealand
China Singapore (3%) Hong Kong (3%)
Malaysia (1%)
57
6 months ended 31 December 2016
PROFILE OF HAYS AUSTRALIA & NEW ZEALAND
TEMP 66% PERM 34%
19% GROUP NET FEES
844 CONSULTANTS
38 OFFICES
Net fees by specialism Net fees by region
Construction & Property
Acc. & Finance
Office Support IT Other
28% 14% 13% 11% 7% 23%
£87.2m £30.2m 35%
NSW Victoria ACT
Q’la
nd Other
30% 23% 11% 9% 9% 18%
NZ
Note: All data is presented as of 31 December 2016. * Includes Oil & Gas and Energy.
NET FEES EBIT CONV. RATE
Half Year ended 31 December 2016
58
Ban
king
Res
&
Min
ing*
4%
HISTORIC PROFILE OF HAYS AUSTRALIA & NEW ZEALAND
44444564
8772
49
81134139138
179210
182
129135
812773704722843815706
1,090
FY09 FY16FY15FY14FY13FY12FY11FY10
3332333641403844
FY consultant headcount Historic Conversion Rates
Historic headline net fees (£M) Historic headline operating profit (£M)
Note: Historic net fees and historic operating profit shown on a headline basis. For local currency data, please see slide 65. 59
FY08
163
FY09 FY16FY15FY14FY13FY12FY11FY10FY08
FY09 FY16FY15FY14FY13FY12FY11FY10FY08 FY09 FY16FY15FY14FY13FY12FY11FY10FY08
60
658
50
33%
19%13%
9%
7%
5%
14%
IT EngineeringAccount. & Finance Const. & PropertyLife Sciences Sales & MarketingOther
49%
12%
7%
7%
5%4%
16%
Germany France
Benelux USA
Switzerland Canada
Other
Net fees: £227.5m
Operating profit: £48.6m
Conversion rate: 21.4%
Countries: 24
Consultants: 3,358
Offices: 101
Note: Private:Public sector and Temp:Perm split is based on net fees for 6 months ended 31 December 2016.
Structurally developing markets Focused on core specialisms Broad coverage
CONTINENTAL EUROPE & RoW REPRESENTS 49% OF GROUP NET FEES AND 49% OF GROUP PROFITS
Temp : Perm
Private : Public sector
63% 37%
Net fees by specialism Net fees by countryNet fees by specialism Net fees by country
97% 3%
60
6 months ended 31 December 2016
PROFILE OF HAYS GERMANY
TEMP 87% PERM 13%
24% GROUP NET FEES
1,359 CONSULTANTS
17 OFFICES
Net fees by specialism Net fees by contract type
Note: All data is presented as of 31 December 2016.
IT Engineering
43% 30% 11%
Contracting Temp Perm
63% 24% 13%
£111m £39m 35%NET FEES EBIT CONV. RATE
Half Year ended 31 December 2016
61
Other Acc. & Finance
16%
HISTORIC PROFILE OF HAYS GERMANY
FY consultant headcount* Historic Conversion Rates
Historic headline net fees (£M) Historic headline operating profit (£M)
175158164150136106
8088
636062585238
2636
1,2131,088944940
786670479463
3638383838363341
Note: Historic net fees and historic operating profit shown on a headline basis. For local currency data, please see slide 65.* Consultant headcount has been restated to include resourcers previously not reported as consultants.
62
FY09 FY16FY15FY14FY13FY12FY11FY10FY08 FY09 FY16FY15FY14FY13FY12FY11FY10FY08
FY09 FY16FY15FY14FY13FY12FY11FY10FY08 FY09 FY16FY15FY14FY13FY12FY11FY10FY08
63
452
24
38
33%
27%
16%
11%
9%4%
London North & Scotland
Midlands & E.Anglia Home Counties
South West & Wales Ireland
Net fees by specialism Net fees by regionNet fees: £126.1m
Operating profit: £18.2m
Conversion rate: 14.4%
Consultants: 1,978
Offices: 100
Note: Private:Public sector and Temp:Perm split is based on net fees for 6 months ended 31 December 2016.* Market position is based on Hays estimates.
#1 market position* Diverse sector exposure Nationwide coverage
UK & IRELAND REPRESENTS 27% OF GROUP NET FEES
Temp : Perm
Private : Public sector
56% 44%
72% 28%
21%
20%
11%10%
9%
8%
21%
Account. & Finance Const. & Property
Office Support Education
IT Banking & Fin. Serv.
Other
63
6 months ended 31 December 2016
HISTORIC PROFILE OF HAYS UK & IRELAND
524626
6(7)411
64246222225242244331
272
2,0242,2032,1571,9291,9342,1582,2722,315 191711
3(3)15
19
FY consultant headcount Historic Conversion Rates
Historic headline net fees (£M) Historic headline operating profit (£M)££
272
Note: Historic net fees and historic operating profit shown on a headline basis. 64
FY09 FY16FY15FY14FY13FY12FY11FY10FY08 FY09 FY16FY15FY14FY13FY12FY11FY10FY08
FY09 FY16FY15FY14FY13FY12FY11FY10FY08 FY09 FY16FY15FY14FY13FY12FY11FY10FY08
453
3,128
137
30
LOCAL CURRENCY – HAYS NET FEES AND OPERATING PROFIT
90838098134116
88130273263245274
323293232
293
234208197182161124
91103
857974706244
3042
Australia & New ZealandHistoric net fees (AUDm)
Australia & New ZealandHistoric operating profit (AUDm)
GermanyHistoric net fees (EURm)
GermanyHistoric operating profit (EURm)
65
FY09 FY16FY15FY14FY13FY12FY11FY10FY08 FY09 FY16FY15FY14FY13FY12FY11FY10FY08
FY09 FY16FY15FY14FY13FY12FY11FY10FY08 FY09 FY16FY15FY14FY13FY12FY11FY10FY08
365
86
182
33
FURTHER INFORMATION
HEAD OF INVESTOR RELATIONS DAVID WALKERdavid.walker@hays.com+44 207 391 6613
For more information about the Group: haysplc.com/investors or @haysplcIR