Steve Ingham Chief Executive Officer · Record year for Group Gross Profit £855.5m £814.9m FY...

Steve Ingham

Kelvin Stagg

Chief Executive Officer

Chief Financial Officer

LSE: PAGE.L

Website: https://www.page.com/investors

5 March 2020

Full Year Results 2019

“A record year for the Group”

http://www.page.com/investors

Headline Numbers

Steve Ingham, Chief Executive Officer

Headline Numbers Financial Review Summary and Outlook

3

Key financial highlights

Record year for Group Gross Profit

£855.5m£814.9m FY 2018

+5.0%+15.9% FY 2018

Gross Profit

Constant

Currency

Growth

£146.7m£142.5m FY 2018

17.1%17.5% FY 2018

Operating

Profit

Conversion

Rate

32.2p32.5p FY 2018

£97.8m£97.7m FY 2018

32.1p26.5p FY 2017

Earnings

Per Share

Net Cash

£83.5m£81.3m FY 2018

26.43p25.83p FY 2018

Total

dividends

paid

Total Dividend

Per Share

Financial Review

Kelvin Stagg, Chief Financial Officer


5

Tough trading conditions in a number of markets decreased conversion rate

Record gross profit for the Group

FY 2019 FY 2018

£m Gross ProfitOperating

Profit

Conversion

Rate*Gross Profit

Operating

Profit

Conversion

Rate*

Group 855.5 146.7 17.1% 814.9 142.5 17.5%

EMEA 418.3 90.3 21.6% 394.3 85.6 21.7%

Asia Pacific 163.3 19.8 12.1% 161.2 26.8 16.6%

Americas 138.8 19.3 13.9% 121.0 16.7 13.8%

UK 135.1 17.3 12.8% 138.4 13.4 9.7%

• Increase of £4.2m in operating profit, growth in constant currency +2.2%

• Conversion rate decrease of 0.4ppts to 17.1%, due to tough trading conditions in a number of markets

* Operating profit as a percentage of gross profit


6



FY 2019 FY 2018


Profit

Conversion

RateGross Profit

Operating

Profit

Conversion

Rate

Group 855.5 146.7 17.1% 814.9 142.5 17.5%

EMEA 418.3 90.3 21.6% 394.3 85.6 21.7%

Asia Pacific 163.3 19.8 12.1% 161.2 26.8 16.6%

Americas 138.8 19.3 13.9% 121.0 16.7 13.8%

UK 135.1 17.3 12.8% 138.4 13.4 9.7%

• Conversion was broadly flat on 2018 at 21.6%

• Uncertain macro-economic and political climate impacting confidence


7



FY 2019 FY 2018


Profit

Conversion

RateGross Profit

Operating

Profit

Conversion

Rate

Group 855.5 146.7 17.1% 814.9 142.5 17.5%

EMEA 418.3 90.3 21.6% 394.3 85.6 21.7%

Asia Pacific 163.3 19.8 12.1% 161.2 26.8 16.6%

Americas 138.8 19.3 13.9% 121.0 16.7 13.8%

UK 135.1 17.3 12.8% 138.4 13.4 9.7%

• Continued investment in two Large, High Potential markets in the region

• Investment into new markets such as Nikkei market in Japan, Bangalore and Canberra offices and new disciplines in

Page Personnel Australia

• Trade tariff uncertainty and social unrest in Hong Kong


8



FY 2019 FY 2018


Profit

Conversion

RateGross Profit

Operating

Profit

Conversion

Rate

Group 855.5 146.7 17.1% 814.9 142.5 17.5%

EMEA 418.3 90.3 21.6% 394.3 85.6 21.7%

Asia Pacific 163.3 19.8 12.1% 161.2 26.8 16.6%

Americas 138.8 19.3 13.9% 121.0 16.7 13.8%

UK 135.1 17.3 12.8% 138.4 13.4 9.7%

• Conversion rate broadly flat on 2018

• Improvements in productivity offset by continued investment in the US and Latin America

• Conversion also impacted by tougher conditions in New York FS market and social unrest in Chile


9



FY 2019 FY 2018


Profit

Conversion

RateGross Profit

Operating

Profit

Conversion

Rate

Group 855.5 146.7 17.1% 814.9 142.5 17.5%

EMEA 418.3 90.3 21.6% 394.3 85.6 21.7%

Asia Pacific 163.3 19.8 12.1% 161.2 26.8 16.6%

Americas 138.8 19.3 13.9% 121.0 16.7 13.8%

UK 135.1 17.3 12.8% 138.4 13.4 9.7%

• Tight control of our cost base, partially due to reduction in headcount

• Customer First – increasing productivity and repeat business, reduction in travel and UK management team


• Reduction in fee earner headcount of 89 (-1.5%); a reaction to

tough market conditions

• Employee costs driven by inflationary salary rises

• Page Vision target fee earner to operational support staff ratio

of 82:18

Fee earner to operational support staff ratio of 78:22

Headcount responded to tough market conditions

14

16

18

20

22

24

26

28

30

Su

pp

ort

sta

ff a

s %

of

Gro

up

he

ad

co

un

t

10

2019 £m Constant %

Employee 545.9 +5.9%

Other costs 162.9 +5.4%

Total 708.8 +5.8%

Employee costs % 77%


Underlying tax rate broadly flat on prior year

Increase in Effective Tax Rate to 28.3%

£m 2019 2018 Reported %

Profit Before Tax 144.2 142.3 +1.4%

Tax Charge 40.8 38.6 +5.8%

Underlying 28.3% 28.1%

One off items - (1.0%)

Effective Tax Rate 28.3% 27.1%

• 2020 Effective Tax Rate expected to be c. 28%

11


Net cash of c. £98m

A strong and robust balance sheet

12

£m 2019 2018

Intangible assets 39.1 33.4

Tangible assets 31.9 35.6

Right-of-use assets 120.2 -

Trade and other receivables 380.6 361.9

Trade, other payables, current and deferred taxes (216.6) (210.0)

Lease liabilities (128.6) -

Net cash 97.8 97.7

Net assets 324.4 318.6


13

Marginal benefit to EBIT of c. £2m

IFRS 16 Leases

• IFRS 16 adopted using the modified retrospective method on 1 January 2019

• Right-of-use assets and lease liabilities recognised, were previously classified as operating leases

• Right-of-use assets of £126.2m and lease liabilities of £134.5m on transition

• Straight line rental expense has been replaced by depreciation of right-of-use assets and interest on lease liabilities

2019 £m

Lease charge 38.5

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) 38.5

Depreciation expense (36.6)

Earnings Before Interest & Tax (EBIT) 1.9

Finance costs (2.0)

Profit Before Tax (PBT) (0.1)


Fifth consecutive year of special dividend

Cash flow generation remains strong

Cash Increase Decrease

14

97.7 97.8 97.8

210.0

15.9

37.4

24.6 7.2

10.0

38.2

83.5

40

80

120

160

200

240

280

320

Dec 18 EBITDA WorkingCapital

Tax and netinterest

Net capex Shareoptions

exercised

EBT sharepurchases

LeaseLiability

repayments

DividendsPaid

Exchange Dec 19

£m

7.5


Committed to returning cash to shareholders, over £380m in 5 years

A growing ordinary dividend through the cycle

11.3 11.6 12.3 13.1 13.8

23.7 24.6 25.9 27.4 29.0

50.1

20.1

40.140.8

40.7

0

10

20

30

40

50

60

70

80

90

2015 2016* 2017 2018 2019

£m

Dividends Paid

Interim Final Special

25.23p

18.44p

27.50p

• Final 2019 dividend proposed of 9.40p per share (+4.4%)

• Return per share of 26.43p in 2019

• Total dividends over £380m in past five years

2019 Pence per share

Interim (Paid) 4.30

Special (Paid) 12.73

Final (Proposed) 9.40

Total 26.43

15

25.83p

*2016 special dividend lower due to EBT purchases of £20m

26.43p

Summary and Outlook


Strategic investments driving capability & growth

17

Final dividend of 9.00 pence per share, increase on 2017 of +4.7%

20m marketing emails sent, 3 x industry engagement

14m candidate applications in 2019

55m website visits in 2019: +9% YOY

Connected Customer Experience: Acquire, Engage, Nurture

Culture & Engagement framework devised and deployed

Culture as a competitive advantage

Continuous listening strategy


We remain mindful of macro-economic uncertainty

A record year for Group Gross Profit

18



Total dividends paid in 2019 of £83.5m

Fee earners reduced by 89, -1.5%

Conversion rate of 17.1%

Operating Profit of £146.7m

Gross Profit in constant currency +5.0%

Record year for Group Gross Profit


Reacting quickly to market conditions

Outlook

19

Final dividend of 9.00 pence per share, increase on 2017 of +4.7%Continue to progress towards our Vision

Business model enables us to react quickly to market conditions

Emergence of COVID-19

Growth slowed to -3% in first two months of 2020

Likely that foreign exchange headwinds will persist

Appendix


21

Our Business Model


22

Delivering on our global diversification strategy

A growing international business

61%

39%

76%

24%

84%

16%

FY 2007 FY 2013 FY 2019

Gross Profit

InternationalUK


23

68%

87% 88%

69%

32%

13% 12%

31%

EMEA Asia Pacific Americas UK

Temp Perm

84%

57%

16%

43%

Michael Page Page Personnel

Geography Brands

Significant variations in recruitment mix

FY 2019 FY 2019


24

Track record of Shareholder returns

£m

13 12 13 1418

2227 26 25

29 31 31 3135 36 38 41 4114

24

34

83

60

1615

30

50

20

4040 42

0

20

40

60

80

100

120

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Dividend and Share Buybacks

Ordinary Dividend Share Buybacks Special Dividend

1


EMEA

918

2,610

1,352

1,147

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1990-99 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Fe

e E

arn

er

He

ad

co

un

t

AMERICAS

ASIA

PACIFIC

25

1985-1990 1990-1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2017 2018

Portugal

(2000)

Switzerland

(2001)

Belgium

(2002)

Sweden

(2002)

Poland S Africa

Ireland

UAE

Austria

Turkey

Luxembourg

Morocco

Thailand

Indonesia

Taiwan

India

MalaysiaNew

Zealand

Japan

(2001)

China

(2003)

Australia

(1985)

USA (1998) Brazil (2000) Canada Mexico Chile Colombia Peru

INT

ER

NA

TIO

NA

L G

RO

WT

H

France

(1986)

Netherlands

(1987)

Germany

(1993)

Spain

(1997)

Italy

(1997)

Hong Kong

(1995)

Singapore

(1996)

Argentina

UKASIA

PACIFICEMEA AMERICAS

Long term fee earner and international growth

2019

Vietnam

2016


26

0

1000

2000

3000

4000

5000

6000

7000

H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2H1H2

He

ad

cou

nt

Fee Earner Support Staff

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Fee earner investment and support staff


27

Year-on-Year Gross Profit Rates

2017 2018 2019

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

EMEA +14.8% +13.2% +12.6% +19.3% +18.2% +18.6% +20.9% +13.9% +11.4% +9.0% +5.6% +2.3%

Asia Pacific +3.9% +6.8% +13.9% +14.9% +13.8% +18.4% +27.7% +22.0% +14.9% +4.7% -8.1% -7.9%

– Asia +3.6% +10.2% +21.9% +20.8% +17.8% +21.2% +32.2% +21.2% +15.6% +5.8% -10.6% -7.6%

– Australasia +4.7% -1.5% -4.4% +0.7% +4.3% +10.6% +15.7% +25.0% +13.0% +0.9% +1.1% -9.6%

Americas +15.2% +13.8% +18.4% +18.8% +20.4% +29.2% +30.1% +29.2% +21.4% +17.4% +13.0% +5.0%

– North America +12.5% +14.6% +26.5% +18.7% +16.4% +27.0% +27.2% +30.3% +20.9% +18.9% +10.3% +4.6%

– Latin America +19.2% +12.8% +9.1% +19.0% +25.7% +32.2% +33.9% +27.7% +21.6% +15.3% +16.9% +5.5%

UK -0.1% -4.5% -7.6% -2.8% -7.1% -1.9% +0.8% +2.1% +1.7% -2.4% -4.1% -4.8%

Group Total +9.1% +7.7% +8.8% +13.8% +12.3% +16.0% +19.7% +15.4% +11.7% +7.4% +2.1% -0.4%


28

Contacts and Calendar

Contacts

Jeremy Tatham – Group Financial Controller

Tel: +44 (0) 1932 264 143

Email: [email protected]

Web: http://www.page.com/investors

Date Event

15 April 2020 Q1 2020 Trading Update


29

Disclaimer

This presentation contains certain statements that are neither reported financial results nor other historical information.

The information contained in this presentation is not audited, is for personal use and informational purposes only and is

not intended for distribution to, or use by, any person or entity in any jurisdiction in any country where such distribution or

use would be contrary to law or regulation, or which would subject any member of the PageGroup plc group of companies

to any registration requirement. No representation or warranty, express or implied, is or will be made in relation to the

accuracy, fairness or completeness of the information or opinions made in this presentation.

Certain statements included or incorporated by reference within this presentation may constitute “forward-looking

statements” that are based on current expectations or beliefs, as well as assumptions about future events. There are risk

factors that can cause actual results to differ materially from those expressed in or implied by such statements.

Accordingly, no assurance can be given that any particular expectation will be met and reliance should not be placed on

any forward-looking statement.

PageGroup plc disclaims any intention or obligation to revise or update any forward-looking statements that may be made

in this presentation, regardless of whether those statements are affected as a result of new 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 PageGroup plc, 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 or commitment or investment decision relating thereto, nor does it constitute a

recommendation regarding the shares of PageGroup plc. Past performance cannot be relied upon as a guide to future

performance. Liability arising from anything in this presentation shall be governed by English Law. Nothing in this

presentation shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.

Steve Ingham Chief Executive Officer · Record year for Group Gross Profit £855.5m £814.9m FY...

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