Steve Ingham Chief Executive Officer

Steve Ingham

Kelvin Stagg

Chief Executive Officer

Chief Financial Officer

LSE: PAGE.L

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

6 March 2019

Full Year Results 2018

“A record year for the Group”

http://www.page.com/investors

Financial Review

Kelvin Stagg, Chief Financial Officer

Financial Review Regional Review Strategy Review Summary

3

Key financial highlights

Record year for Group Gross Profit and EPS

£814.9m£711.6m FY 2017

+15.9%+9.8% FY 2017

Gross Profit

Constant

Currency

Growth

£142.5m£118.3m FY 2017

17.5%16.6% FY 2017

Operating

Profit

Conversion

Rate

32.5p26.5p FY 2017

£97.7m£95.6m FY 2017

32.1p26.5p FY 2017

Earnings

Per Share

Net Cash

£40.8m£40.1m FY 2017

25.83p25.23p FY 2017

Special

Dividend

Total

Dividend

Per Share


76%

24%

Perm Temp

84%

16%

Perm Temp

58%

42%

Perm Temp

4

Business balance reflects brands and geographic mix

Strong growth across all brands

• Gross Profit growth in

permanent +17.7% to £621.7m

• Temporary +10.4% to £193.2m

• Perm:Temp ratio 76:24 broadly

in line with prior year








• Employee costs driven by +15.0% average increase in

headcount

• Fee earners added at a ratio of 83:17 to support staff

• Page Vision target fee earner to operational support staff ratio

of 82:18

Fee earner to operational support staff ratio at new record 79:21

Costs driven by headcount increases

14

16

18

20

22

24

26

28

30

2008 2010 2012 2014 2016 2018S

up

po

rt s

taff

as

% o

f G

rou

p h

ea

dc

ou

nt

5

2018 £m Constant %

Employee 520.9 +16.1%

Other costs 151.5 +11.1%

Total 672.4 +14.9%

Employee costs % 77.5%


Adverse impact in Asia Pacific and the Americas

Slight negative impact from FX

Gross Profit (£m) Constant Currency Actual vs Constant Actual Rates

EMEA 391.9 2.4 394.3

Asia Pacific 165.4 (4.2) 161.2

UK 138.4 - 138.4

Americas 128.9 (7.9) 121.0

Group 824.6 (9.7) 814.9

• Slight negative foreign exchange impact of £9.7m or 1.4ppts on gross profit, immaterial impact on operating profit

6


Underlying tax rate broadly flat on prior year

Decrease in Effective Tax Rate to 27.1%

£m 2018 2017 Reported %

Profit Before Tax 142.3 118.2 +20.4

Tax Charge 38.6 35.1 +9.9

Underlying 28.1% 27.5%

One off items (1.0%) 2.2%

Effective Tax Rate 27.1% 29.7%

• 2017 one off items due to US tax reform resulting in a write down of deferred tax assets

• 2018 one off items relate to share based payments and recognition of deferred tax on losses

• 2019 Effective Tax Rate expected to be c. 27%

7


Movements reflect increased trading activity

A strong and robust balance sheet

£m 2018 2017

Intangible assets 33.4 34.2

Tangible assets 35.6 30.2

69.0 64.4

Trade and other receivables 361.9 309.6

Trade, other payables, current and deferred taxes (210.0) (199.5)

151.9 110.1

Net cash 97.7 95.6

Net assets 318.6 270.1

8


Working Capital increases due to increased trading activity

Cash flow generation remains strong

Cash Increase Decrease

95.6 97.7

169.4

37.6

41.2

24.4 26.911.6

81.3

40

80

120

160

200

240

280

Dec 17 EBITDA WorkingCapital

Tax and netinterest

Net capex Share optionsexercised

EBT sharepurchases

DividendsPaid

Exchange Dec 18

£m

1.9

9


Committed to returning cash to shareholders, over £300m in 4 years

A growing ordinary dividend through the cycle

11.3 11.6 12.3 13.1

23.7 24.6 25.9 27.4

50.1

20.1

40.140.8

0

10

20

30

40

50

60

70

80

90

2015 2016* 2017 2018

£m

Dividends Paid

Interim Final Special

25.23p

18.44p

27.50p

• Final 2018 dividend proposed of 9.00p per share (+4.7%)

• Total dividends will be over £300m in past four years

• Return per share of 97p since January 2015, represents a

yield of 23%**

2018 Pence per share

Interim (Paid) 4.10

Special (Paid) 12.73

Final (Proposed) 9.00

Total 25.83

10

25.83p

*2016 special dividend lower due to EBT purchases of £20m** Share price of 418.3p on 2nd January 2015

Regional Review

Steve Ingham, Chief Executive Officer


12

Strong growth in gross profit balanced with sustained investment in fee earners

Record operating profit for the Group

FY 2018 FY 2017

£m Gross ProfitOperating

Profit

Conversion

Rate*Gross Profit

Operating

Profit

Conversion

Rate*

Group 814.9 142.5 17.5% 711.6 118.3 16.6%

EMEA 394.3 85.6 21.7% 332.3 69.7 21.0%

Asia Pacific 161.2 26.8 16.6% 137.2 23.5 17.1%

UK 138.4 13.4 9.7% 140.8 16.0 11.4%

Americas 121.0 16.7 13.8% 101.3 9.2 9.0%

• Increase of £24.2m in operating profit, growth in constant currency +20.7%

• Overall improvement in market conditions and benefits from our operational support transformation programmes led to

a conversion rate of 17.5%, an increase of 0.9ppts

* Operating profit as a percentage of gross profit


France33%

S. Europe21%

Germany16%

Benelux15%

Other15%

• France 16% of Group, strong growth +16%

• A record year for Germany +29%, significant growth in Michael

Page Interim (contracting) +42%

• Southern Europe +15%; Italy +23%, Portugal +35% and Spain +8%

• Benelux strong growth +19%

• Middle East and Africa +17%

Gross profit records in France, Germany and 9 other countries

EMEA delivered a record year

13

48% of Group

£m 2018 2017 Reported % Constant %

Gross Profit 394.3 332.3 +18.7% +17.9%

Operating Profit 85.6 69.7 +22.8% +21.9%

Conversion 21.7% 21.0% +0.7ppts

Headcount 3,299 2,996 +10.1%

Gross Profit

by Geography


Greater China43%

SE Asia & India19%

Japan13%

Australasia25%

• Greater China, our third largest market and 8% of the Group,

strong growth +19%, new office in Chengdu

• South-East Asia +23%; Singapore +29%, new country;

Vietnam

• Investment in India and Japan delivered record performances

of +49% and +30% respectively

• Australia +14%, +25% in Q4, new office in Canberra

Record years for Greater China, India, Japan and South East Asia

Strong performance in Asia Pacific

14

20% of Group


Gross Profit 161.2 137.2 +17.5% +20.6%


Conversion 16.6% 17.1% -0.5ppts

Headcount 1,709 1,532 +11.6%

Gross Profit

by Geography


London35%

North22%

South25%

Midlands18%

• Brexit continued to weigh on market sentiment

• Page Personnel +8%, a record gross profit

• Michael Page down -4%

• Financial services, 5% of UK, +13%

• Legal +12%, Secretarial +12% and Technology +17%,

Engineering -11% and Sales -17%

Although pockets of growth in some disciplines

United Kingdom remained challenging

15

17% of Group

£m 2018 2017 Reported %

Gross Profit 138.4 140.8 -1.7%

Operating Profit 13.4 16.0 -16.2%

Conversion 9.7% 11.4% -1.7ppts

Headcount 1,436 1,407 +2.1%

Gross Profit

by Geography


USA52%

Canada6%

Brazil12%

Mexico13%

Rest of Latam17%

• USA +25%, with strong performances from several of our

regional offices; Boston, Chicago, Houston and Los Angeles

• Latin America +30%; Brazil +20%, Mexico +33%

• Argentina, Chile, Colombia and Peru grew +36% collectively

Record year for both North and Latin America

Americas the fastest growing region

16

15% of Group


Gross Profit 121.0 101.3 +19.4% +27.2%


Conversion 13.8% 9.0% +4.8ppts

Headcount 1,328 1,094 +21.4%

Gross Profit

by Geography

Strategy Review


18

Continuing to make progress against our Vision for the Group

Delivering the Page Vision

Gro

ss P

rofi

t

• Time to achieve our Vision will depend on

growth rates driven by macro economic

conditions

• Growth of 14.5% (reported rates) as per

last two years would achieve Vision in 2020

• Modelling at 8.5% (2019 Consensus) would

achieve Vision in 2021

• More conservative modelling of 5% would

achieve Vision in 2023


Number of strategic initiatives underway to drive conversion rate improvements

Driving growth in Operating Profit

19

Transition to SSCs

Transformation of

Business Technology

Global Finance System

Continue to invest in

Large, High Potential

markets

Driven by level of fee

earner headcount

investment

New COO role to

drive improvements

in productivity

Clear Data Strategy

Digital Tools

Automating

Administration

Productivity Data & TechnologyRate of Growth Operational Support

Programmes

£200m £250m


154

270

100

140

180

220

260

300

2013 2018L

arg

e,

Hig

h P

ote

nti

al

ma

rke

t G

ros

s P

rofi

t1(£

m)

20

Sustained investment has transformed the Group

Growth driven by Large, High Potential markets

• All five markets experienced record years and double digit

growth in 2018

• Large, High Potential markets gross profit CAGR 12%1

between 2013 and 2018

• Continued focus on these markets in 2019 and beyond

1 Reported rates

+75%

0

150

300

450

600

750

Germany Greater China Latam South East Asia USA

Fe

e e

arn

er

he

ad

co

un

t

2013 2018


21

Improving productivity Supporting highly productive people


22

Bringing our Purpose to life


23

Each MD will have an element of their bonus linked to gender balance

Market leader in Diversity & Inclusivity

Summary


Continuing to invest towards Page Vision

A record year for Group Gross Profit and EPS

25

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

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

Total dividends paid in 2018 of £81.3m

Fee earner growth of 619, +11.3%

Conversion rate increased 0.9 ppts to 17.5%

Operating Profit of £142.5m, constant currency +20.7%

Gross Profit in constant currency +15.9%

Record year for Group Gross Profit and EPS

Appendix


27

Our Business Model


28

Delivering on our global diversification strategy

A growing international business

61%

39%

76%

24%

83%

17%

FY 2007 FY 2013 FY 2018

Gross Profit

InternationalUK


29

Significant variations in recruitment mix

70%

88%

69%

90%

30%

12%

31%

10%

EMEA Asia Pacific UK Americas

Temp Perm

84%

58%

16%

42%

Michael Page Page Personnel

Geography Brands


113 12 13 14

1822

27 26 2529 31 31 31

35 36 38 4114

24

34

8360

1615

30

50

20

4040

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

Dividend and Share Buybacks

Ordinary Dividend Share Buyback Special Dividend 30

Track record of Shareholder returns

£m


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

31

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


32

Fee earner investment and support staff discipline

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


33

Year-on-Year Gross Profit Rates

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%


34

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

10 April 2019 Q1 2019 Trading Update


35

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.

Documents

Steve Ingham Chief Executive Officer