A record Quarter and Year for - Home | Page Group€¦ · “A record Quarter and Year for the...

Steve Ingham

Kelvin Stagg

Chief Executive Officer

Chief Financial Officer

LSE: PAGE.L

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

14 January 2019

Q4 2018 and FY18 Trading Update

“A record Quarter and Year for

the Group”

http://www.page.com/investors

Headline Numbers

Kelvin Stagg, Chief Financial Officer

Q4 18

Headline Numbers Financial Review Regional Review Summary

+15.4%+15.9% FY 2018

+15.8%+14.5% FY 2018

3

Key financial highlights

A record Quarter and Year for the Group

£211.1m£182.4m Q4 2017

£815.0m £711.6m FY 2017

Gross Profit

Q4

Gross Profit

FY

Michael

Page Q4

Page

Personnel Q4

79:216,116:1,656 FTE

c. £96mc. £96m Q4 2017

Fee earner to

operational

support staff

ratio

Net Cash

Growth in

Constant

Currency Q4

Reported

Rates Q4

+14.2%+19.0% Q3 2018

+17.9%+21.4% Q3 2018

Financial Review

Q4 18


76%

24%

Perm Temp

84%

16%

Perm Temp

58%

42%

Perm Temp

5

• Gross Profit growth in

permanent +17.6% to £159.9m

• Temporary +9.0% to £51.2m

• Perm:Temp ratio 76:24, slightly

up on the prior year







Growth across brands in Perm and TempBusiness balance reflects brands and geographic mix

Q4 18


6

Discipline diversification progress

35%

25%

24%

16%

25%25%25%25%

Finance

Professional Services

Technical

Marketing, Sales and Retail

Gross Profit

by Discipline

Q4 2018 £m 2017 £m Reported % Constant %

Finance

Accounting and Financial

Services74.6 66.7 +11.8% +11.7%

Professional Services

Legal, Technology, HR,

Secretarial, Healthcare51.8 41.4 +25.0% +24.5%

Technical

Engineering, Property &

Construction, Procurement &

Supply Chain

50.2 42.4 +18.5% +17.5%

Marketing, Sales and Retail 34.5 31.9 +8.4% +8.4%

Group Total 211.1 182.4 +15.8% +15.4%

Professional Services disciplines delivered strongest growth

Q4 18


1,660 1,656

6,058 6,116

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Q3 2018 Q4 2018

He

ad

co

un

t

Support Staff Fee Earners

+58

• Increase in fee earners of 58 (+1.0%)

• Fee earner headcount added in our Large, High

Potential markets, as well as where we saw

strongest growth, such as India

• Fee earner headcount additions in all regions

• Marginal reduction in support staff of 4

7

Total headcount

+0.7%

A new record headcountRatio of fee earners to support staff at a new record of 79:21

-4

Q4 18


8

49

.5

51

.4

47

.8

43

.9

42

.8

45

.0

45

.0

45

.7

48

.1

52

.3

53

.5

56

.7

59

.9 68

.3

69

.2

70

.2 79

.2 87

.4

89

.1

93

.1 10

5.5 12

1.0

12

3.4

12

8.2

14

0.3

15

2.4

14

1.3

11

8.7

95

.0

83

.8

82

.3 90

.6 97

.9 11

1.7

11

2.8

11

9.9

12

7.3 1

47

.8

14

2.6

13

6.1

13

5.9

13

8.0

12

6.5

12

6.5

12

6.8

13

5.1

12

6.9

12

5.1

12

6.6

13

7.1

13

2.9

13

6.2

13

5.7

14

5.3

13

9.1

13

5.8

14

2.2 15

6.9

15

8.6

16

3.3

17

0.2

18

1.8

17

7.2

18

2.4

18

7.7 2

08

.2

20

7.7

21

1.1

21

0.4

0

1000

2000

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4000

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6000

0

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Fee E

arn

ers

Gro

ss P

rofit

(£m

) as r

eport

ed

Fee Earners

Record Quarter and YearInvestment reflects confidence in growth markets

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2015 2016 20172014 2018

Q4 18 Constant currency

Regional Review

Steve Ingham, Chief Executive Officer

Q4 18


49%

20%

16%

15%

25%25%25%25%EMEA Asia Pacific UK Americas

Q4 growth rate of 15.4%

Gross Profit

by Geography

Q4 2018 £m 2017 £m Reported % Constant %

EMEA 104.4 90.9 +14.9% +13.9%

Asia Pacific 41.2 33.5 +23.1% +22.0%

UK 33.5 32.8 +2.1% +2.1%

Americas 32.0 25.2 +27.0% +29.2%

Group Total 211.1 182.4 +15.8% +15.4%

Large, High Potential markets* +25%

10

• 20 countries achieved YoY growth of over 20%

• Growth in all four regions

• Americas fastest growing region, record quarter in Latin America

*Germany, Greater China, Latin America, South East Asia and the US

Q4 18


France34%

S. Europe20%

Germany16%

Benelux15%

Other15%

• Michael Page (55% of EMEA) +13%, Page Personnel (45%) +15%

• France, now the largest country in the Group, +10%, despite tough

comparator in Q4 2017 of +28%

• Impact of disruption from ‘gilet jaunes’ protests

• Germany +28%; Michael Page Interim +44%

• Benelux +13%; Netherlands +15%

• Southern Europe +16%; Italy +23%; Spain +10%

• Middle East & Africa +19%

11

49% of Group

Gross Profit

by Geography

EMEA delivered a record quarterStrong growth across all brands

£m Period 2018 2017Reported

%

Constant

%

Gross Profit

Q4 104.4 90.9 +14.9% +13.9%

FY 394.2 332.3 +18.6% +17.9%

Headcount 3,299 2,996 +10.1%

Q4 18


Greater China40%

Australasia25%

SE Asia & India21%

Japan14%

• Greater China, our fourth largest market and 8% of the Group, +12%

• Mainland China experienced slowing activity due to uncertainty

around trade tariffs

• South East Asia +30%; strong growth in Singapore +37%

• Japan +28%, both Gaishikei and Nikkei markets strong

• India +79%

• Australia +25%, strong growth in all offices

20% of Group

Gross Profit

by Geography

Asia Pacific continues strong growthGreater China growth impacted by market uncertainty

12


%

Constant

%

Gross Profit

Q4 41.2 33.5 +23.1% +22.0%

FY 161.3 137.2 +17.5% +20.7%

Headcount 1,709 1,532 +11.6%

Q4 18


London36%

North22%

South24%

Midlands18%

• Brexit continued to weigh on market sentiment, particularly

with more senior candidates

• Page Personnel +12%

• Michael Page -1%

16% of Group

Gross Profit

by Geography

UK second consecutive quarter of growthStrongest growth in Page Personnel

13


%

Gross Profit

Q4 33.5 32.8 +2.1%

FY 138.4 140.8 -1.7%

Headcount 1,436 1,407 +2.1%

Q4 18


• US +32%, Canada +20%

• Boston, Houston and Los Angeles standout performances

• Latin America +28%: Brazil +25%; Mexico +30%

• All other countries in Latin America grew in excess of 20%

14

Americas was our fastest growing regionRecord quarter for Latin America


%

Constant

%

Gross Profit

Q4 32.0 25.2 +27.0% +29.2%

FY 121.1 101.3 +19.5% +27.3%

Headcount 1,328 1,094 +21.4%

USA53%

Brazil13%

Mexico13%

Canada6%

Rest of Latam15%

15% of Group

Gross Profit

by Geography

Summary

Q4 18


16

A record Quarter and Year for the GroupAll four regions delivered growth

2019 Outlook

Expect 2018 Operating Profit to be in line with Consensus

Strong net cash position of c. £96m

Record fee earner and total headcount

Continued investment in Large, High Potential markets

20 countries delivered YoY growth of over 20%

Group Gross Profit growth rate of +15.4%

Appendix

Q4 18


18

Our business model

Q4 18


19

Delivering on our global diversification strategy

A growing international business

61%

39%

76%

24%

84%

16%

FY 2007 FY 2013 Q4 2018

Gross Profit

InternationalUK

Q4 18


20

70%

88%

67%

88%

30%

12%

33%

12%

EMEA Asia Pacific UK Americas

Temp Perm

84%

58%

16%

42%

Michael Page Page Personnel

Geography Brands

Significant variations in recruitment mix

Q4 18


1,174

1,657 1,657 1,466 1,444

1,708 2,075

2,763

3,837 3,654

2,515

3,273

3,797 3,624 3,810

4,278 4,484

4,711

5,497

6,116

-

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

Fe

e E

arn

er

He

ad

co

un

t

AMERICAS

ASIA

PACIFIC

EMEA

21

1985-1990 1990-19992000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Portugal

(2000)

Switzerland

(2001)

Belgium

(2002)

Sweden

(2002)

Poland S Africa

Ireland

UAE

Austria

Turkey

Luxembourg

Morocco

ThailandIndonesiaTaiwanIndia

Malaysia

New

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)

EMEA

APAC

UK

Americas

Argentina

UKASIA

PACIFICEMEA AMERICAS

Notable fee earner and international growth

2018

Vietnam

Q4 18


22

0

1000

2000

3000

4000

5000

6000

7000

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

He

ad

cou

nt

Fee Earner Support Staff

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

Fee earner investment and support staff

Q4 18


23

2016 2017 2018

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

EMEA +10.3% +13.6% +10.4% +12.4% +14.8% +13.2% +12.6% +19.3% +18.2% +18.6% +20.9% +13.9%

Asia Pacific -2.0% -3.3% -4.7% +1.7% +3.9% +6.8% +13.9% +14.9% +13.8% +18.4% +27.7% +22.0%

– Asia -1.5% -6.9% -7.9% -0.5% +3.6% +10.2% +21.9% +20.8% +17.8% +21.2% +32.2% +21.2%

– Australasia -3.0% +6.6% +3.9% +8.1% +4.7% -1.5% -4.4% +0.7% +4.3% +10.6% +15.7% +25.0%

UK +0.0% -2.3% -4.7% -6.7% -0.1% -4.5% -7.6% -2.8% -7.1% -1.9% +0.8% +2.1%

Americas -0.6% -1.1% -2.0% +0.9% +15.2% +13.8% +18.4% +18.8% +20.4% +29.2% +30.1% +29.2%

– North America +9.2% -1.9% -10.8% -8.4% +12.5% +14.6% +26.5% +18.7% +16.4% +27.0% +27.2% +30.3%

– Latin America -9.8% -0.1% +9.6% +14.3% +19.2% +12.8% +9.1% +19.0% +25.7% +32.2% +33.9% +27.7%

Group Total +3.6% +3.7% +1.3% +3.8% +9.1% +7.7% +8.8% +13.8% +12.3% +16.0% +19.7% +15.4%

Year-on-Year Gross Profit Rates

Q4 18


24

Contacts

Jeremy Tatham – Group Financial Controller

Tel: +44 (0) 1932 264 143

Email: [email protected]

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

Date Event

6 March 2019 FY 2018 Results

10 April 2019 Q1 2019 Trading Update

Contacts and Calendar

Q4 18


25

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.

Disclaimer

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