PRELIMINARY RESULTS. Year ended 30 June 2016

Transcription

1 PRELIMINARY RESULTS Year ended 30 June 2016

2 CAUTIONARY STATEMENT 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 Hays Group 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. Statements in this presentation reflect the knowledge and information available at the time of its preparation. Certain statements included or incorporated 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 and assumptions and actual results or events may differ materially from those expressed or implied by those 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. Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. No responsibility or obligation is accepted to update or revise any forward-looking statement resulting from 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 the Company, 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 the Company or any invitation or inducement to engage in investment activity under section 21 of the Financial Services and Markets Act 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, 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

3 AGENDA FINANCIAL REVIEW OPERATING REVIEW STRATEGY UPDATE CURRENT TRADING APPENDICES PAUL VENABLES, FINANCE DIRECTOR ALISTAIR COX, CHIEF EXECUTIVE ALISTAIR COX, CHIEF EXECUTIVE ALISTAIR COX, CHIEF EXECUTIVE 3

4 1. FINANCIAL REVIEW PAUL VENABLES GROUP FINANCE DIRECTOR

5 STRONG GROUP FINANCIAL PERFORMANCE Net fees Operating profit** Basic earnings per share FY m FY m FY p FY m FY m FY p FY m FY m FY p FY m FY m FY p FY m FY m FY p Net fees 810.3m 7% increase* Operating profit 181.0m 13% increase* EPS 8.48p 14% increase FULL YEAR DIVIDEND INCREASED BY 5% TO 2.90p, WITH COVER OF 2.9X * LFL ( like-for-like ) growth is organic growth at constant currency. ** Continuing operations only. 5

6 STRONG GROUP FINANCIAL PERFORMANCE Income statement** Year ended 30 June 2016 m 2015 m Actual growth LFL* growth Turnover 4, , % 12% Net fees % 7% Operating profit % 13% Net finance cost (8.0) (8.0) Profit before tax % Tax (51.9) (50.7) Profit after tax % EXCHANGE RATE MOVEMENTS DECREASED NET FEES AND OPERATING PROFIT BY 16.4 MILLION AND 4.5 MILLION RESPECTIVELY * LFL ( like-for-like ) growth is organic growth at constant currency. ** Continuing operations only. 6

7 STRONG PROFIT LEVERAGE; INCREASED CONVERSION RATE** TO 22.3% Performance by region 22% of net fees 45% of net fees 33% of net fees Asia Pacific Net Fees 176.1m 4%* Op Profit 50.2m 8%* 4%* growth in Australia & NZ led by excellent public sector up 18%*; operating profit up 8%* Solid performance in Asia despite tough banking markets.net fees up 4%* and operating profit up 10%* Continental Europe & RoW Net Fees 362.5m 15%* Op Profit 78.7m 16%* Strong 13%* net fee growth in Germany to 175.1m Rest of division grew 17%*, with 11 countries growing by over 20%*, and delivered a material increase in profit of 5.7m* United Kingdom & Ireland Net Fees 271.7m 0%* Op Profit 52.1m 14%* Trading conditions became more challengingas the year progressed Excellent operating leverage with profit up 14%* due to further productivity improvements and strong cost control * LFL ( like-for-like ) growth is organic growth at constant currency. ** Represents the conversion of net fees into operating profit. 7

8 GOOD GROWTH IN BOTH PERM AND TEMP NET FEES Split of net fees FY 14 FY 15 FY 16 59% Temp 58% 49% Temp 52% Temp 58% Temp Review of Group Permanent and Temporary Businesses* Permanent placement business Temporary placement business 7% net fee growth 7% net fee growth 6% volume increase 1% average Perm fee increase Volumes increased by 6% driven by improved client and candidate confidence with significant growth in Europe 340.4m (42% of net fees) 469.9m (58% of net fees) 5% volume increase 4% increase in mix/hours (20) bps underlying margin decrease** Increase in volumes of 5% as client demand remained strong, especially in Germany Average Perm fee up 1% primarily as a result of salary inflation Mix/hours worked increased 4% Underlying Temp margin** down by 20bps, primarily in ANZ * Growth rates and margin change are for the year ended 30 June 2016 versus year ended 30 June 2015, on a like-for-like basis which is organic growth at constant currency. ** 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. 8

9 THE AUSTRALIAN DOLLAR AND EURO REMAIN SIGNIFICANT FX TRANSLATION SENSITIVITIES FOR THE GROUP Key FX rates and sensitivities Year ended 30 June 2016 Average Closing Australian $ Euro Impact of a one cent change per annum Net fees Op profit Australian $ +/- 0.8m +/- 0.3m Euro +/- 2.5m +/- 0.8m FX rates at 30 August 2016: 1 / AUD1.7421; 1 / Retranslating the Group s full year operating profit at current exchange rates would increase the actual result by c. 26m from 181.0m to c. 207m 9

10 WE CONTINUE TO DRIVE MATERIAL PROFIT LEVERAGE AND SUPERIOR CONVERSION RATE INCREMENTAL FEE TO PROFIT DROP- THROUGH (LFL) FY14 FY15 51%* FY16 Medium-term guidance 40%* 68%* Long-term industry norm of 30%-40%* in previous growth cycles Drop-through* of 51% in FY14-FY16 We expect a 40%-50%* drop-through over the medium-term assuming a normal growth rate** Current UK market uncertainty makes any guidance difficult for FY17 GROUP CONVERSION RATE Conversion Rate 17.5% FY % FY % 22.3% FY15 FY16 Sector-leading conversion rate of 22.3%, up 480bps in the last three years, driven by: Significant increase in UK profit Strong trading in Europe (ex-germany) leading to strong increase in profit and leverage EXPECT FURTHER INCREASE IN CONVERSION RATE IN THE MEDIUM-TERM TOWARDS 30% * Percentage of incremental like-for-like net fees which drop-through to operating profit. ** Defined as growth in all three major countries and growth of 5% or more like-for-like at Group level. 10

11 DECREASE IN ETR TO 30.0% DRIVEN BY INCREASE IN UK PROFITS AND REDUCTION IN THE NUMBER OF COUNTRIES GENERATING TAX LOSSES Finance charge and taxation Year ended 30 June 2016 m Finance charge 2015 m Net interest charge on debt (2.9) (4.1) Interest unwind of discount on Acquisition Liability (0.9) (0.4) IAS 19 pension charge (non-cash) (3.9) (3.0) PPF levy (0.3) (0.5) Net finance charge (8.0) (8.0) We expect the net finance charge for the year ending 30 June 2017 to be c. 7 million Taxation Underlying effective tax rate 30.0% 32.5% Material improvement in UK and smaller country profits reduces the Group effective tax rate to 30.0% The Group s effective tax rate for the year to June 2017 will be driven by the mix of profits generated during the year. We currently expect the rate to be between 30% and 35% 11

12 14% INCREASE IN EARNINGS PER SHARE Basic EPS FY H p** p 7.72p FY H p** 7.44p FY H p8.48p Basic earnings per share (EPS) Year ended 30 June Change Basic earnings 121.1m 105.4m 15% Weighted average number of shares* 1,428.4m 1,416.4m Basic earnings per share 8.48p 7.44p 14% Memo Shares in issue* at 30 June 2016 and 30 August ,433m * Number of shares used for basic EPS calculation purposes excludes shares held in Treasury. 12

13 GOOD UNDERLYING CASH PERFORMANCE Operating profit to free cash flow conversion Operating cash flow 159.3m (FY15: 189.8m) 181.0m 32.6m (54.3)m 20m FY15 year-end unwind (41.7)m (3.6)m 114.0m Uses of cash flow FX translation gain* 21.2m Cash from operations FY m 175.6m FY m 189.8m H1 FY m 162.2m Capex 14.9m Pensions 14.4m Dividend 39.9m Decreased net debt 67.5m Operating profit Non-cash items Working capital Tax paid Interest paid Free cash flow Other ( 1.5m) Capex guidance for FY17 is c. 15m and depreciation & amortisation guidance is c. 23m * Arose primarily from the significant change in closing FX rates compared to the opening FX rates and the retranslation of cash flow movement in the year which are at average FX rates. 13

14 m STRONGEST BALANCE SHEET FOR MANY YEARS Balance sheet analysis 30 June June 2015 Goodwill & intangibles Property, plant & equipment Net deferred tax Net working capital* Derivative financial instruments Tax liabilities (27.1) (19.5) Retirement benefit obligations (14.3) (58.7) Acquisition Liabilities (11.2) (8.6) Provisions (9.3) (14.9) Net cash/(debt) 36.8 (30.7) Net assets GOODWILL & INTANGIBLES Increase due to FX impact on Goodwill NET WORKING CAPITAL Good underlying working capital management with debtor days at 37 Increase due to expansion of Temp/Contracting business, FX and c. 20m reversal of PY favourable year-end phasing RETIREMENT BENEFITS Decrease primarily due to an increase in asset values, a decrease in the inflation rate, favourable experience changes following the 2015 actuarial revaluation and company contributions, partially offset by a decrease in the discount rate * 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. 14

15 WE HAVE ACHIEVED OUR LONG-STANDING GOAL OF ELIMINATING NET DEBT Free cash flow* FY 52.7m m FY m 141.0m H1 FY m 111.8m Closing net cash/(net debt) m 36.8 NET DEBT ELIMINATED FY16 ended with net cash of 36.8m (30.7) 210M BANK FACILITY IN PLACE expires April 2020 (105.2) (62.7) EBITDA / INTEREST RATIO: 60X** debt covenant: > 4.0 (132.9) Jun 12 Jun 13 Jun 14 Jun 15 Jun 16 NET DEBT / EBITDA RATIO: N/A debt covenant: < 2.5 * Free cash flow is defined as cash flow before dividends, additional pension contributions, capital expenditure, acquisitions and exceptional items. ** Covenant ratios are shown on a pro-forma basis for 12 months ended 30 June

16 DIVIDEND INCREASED BY 5%, AS WE BUILD COVER TO 3x EARNINGS FREE CASH FLOW PRIORITIES CORE DIVIDEND POLICY EXCESS CASH RETURNS POLICY Fund Group investment and development Maintain a strong balance sheet Deliver a sustainable core dividend which is affordable and appropriate Core dividend should be sustainable, progressive and appropriate Target core dividend cover of 2.0x to 3.0x Group EPS Increase of 5% in full year dividend to 2.90p per share Cash cost of proposed FY16 dividend 41.7m, with cover of 2.9x We will build a net cash position of c. 50m Assuming a positive outlook, any free cash flow generated over and above this position will be distributed to shareholders via special dividends, or other appropriate methods, annually The final dividend will be paid, subject to shareholder approval, on 11 November 2016 to shareholders on the register on 14 October

17 FINANCIAL SUMMARY GOOD, BROAD-BASED NET FEE GROWTH OF 7%* Strong 15%* growth in CE&RoW, with Germany net fees up 13%* Good growth in Australia and increasingly challenging market environment in the UK&I STRONG 13%* GROWTH IN OPERATING PROFIT Excellent UK operating leverage, driven by further productivity improvements and strong cost control Strong profit growth in Europe ex-germany Further increase in conversion rate to 22.3% GOOD UNDERLYING CASH PERFORMANCE; NET DEBT ELIMINATED 88% conversion of operating profit to operating cash flow Year-end net cash position of 36.8m Dividend increased by 5% to 2.90p as we build cover towards 3x * LFL ( like-for-like ) growth is organic growth at constant currency

18 2. OPERATING REVIEW ALISTAIR COX CHIEF EXECUTIVE

19 WE CONTINUE TO MAKE SIGNIFICANT OPERATIONAL PROGRESS We remain focussed on 1. Delivering industry-leading financial performance 2. Investing to build a leading business & drive growth 3. Building further scale and diversification across the platform Latest results Sector-leading Conversion Rate up 80bps to 22.3% Elimination of net debt: a significant milestone Excellent UK profit performance, despite flat fees* Average consultant headcount up 6% Further productivity improvement incl +2%* in the UK Invested to grow headcount in 22 countries Further roll-out of contracting model globally Development of our US business continues to proceed well POSITION THE GROUP FOR LONG-TERM STRUCTURAL GROWTH OPPORTUNITIES, WHILST DRIVING OUR PROFITS ALONG THE WAY * LFL ( like-for-like ) growth represents organic growth at constant currency. 19

20 GOOD GROWTH IN AUSTRALIA LED BY THE PUBLIC SECTOR; SOLID PERFORMANCE IN ASIA APAC 22% of net fees Year to 30 June % Temp 48% Perm LFL* growth Net Fees 176.1m +4% Op Profit 50.2m +8% Conversion rate 28.5% 70bp Consultants** 1,210 1% Australia & NZ (net fees: 133.6m; operating profit: 44.0m) Net fees up 4%*, operating profit up 8%* Perm net fees up 5%*, Temp net fees up 4%* Further solid growth in NSW & Victoria. ACT delivered excellent growth of 21%, driven by public sector. Resourcesdriven states tough but sequentially stable in Q4 Consultant headcount up 5% year-on-year to capitalise on continued market improvement Asia (net fees: 42.5m; operating profit: 6.2m) Net fees up 4%*, operating profit up 10%* Headline APAC net fees Record performance in China, Hong Kong & Japan Solid overall performance despite more challenging conditions in banking-focused markets of HK and Singapore Consultant headcount down 6%, with investment in China offset by targeted reductions elsewhere through H2 * 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 30 June 2016 closing number versus 30 June 2015 closing number. FY m 174m FY m 179m FY m 242m 20

21 STRONG GROWTH IN GERMANY, EXCELLENT BROAD- BASED GROWTH IN THE REST OF THE DIVISION Headline CE&RoW net fees FY m 305m 133m FY m 314m 134m FY 16 H m 267m 140m CE&RoW 45% of net fees RoW Year to 30 June % Temp 38% Perm LFL* growth Net Fees 362.5m +15% Op Profit 78.7m +16% Conversion rate 21.7% (20)bp Consultants** 3,034 12% Germany (net fees: 175.1m) Strong net fee growth of 13%*, profits up 4.8m* to 63.2m Strong growth in core IT & Engineering, representing 73% of our German business, with net fees up 12%* Faster growth in newer specialisms, with A&F up 16%*, and Perm up 24%* Significant consultant headcount investment up 11% Back office automation project on track to complete in FY17 Rest of the division (net fees: 187.4m) Excellent net fee growth of 17%* and profit up 5.7m* : - 11 countries grew by 20%* or more, 15 all-time records France net fees up 17%* and profit up 18%* Strong performance in the US Brazil tough but stable; excellent performance in rest of LatAm * 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 30 June 2016 closing number versus 30 June 2015 closing number. 21

22 EXCELLENT PROFIT LEVERAGE DESPITE SLOWING GROWTH & INCREASED UNCERTAINTY IN H2 UK & IRELAND 33% of net fees Year to 30 June % Temp 43% Perm LFL* growth Net Fees 271.7m 0% Op Profit 52.1m +14% Conversion rate 19.2% +240bp Consultants** 2,024 (8%) Material improvement in operating profit Headline UK&I net fees 10 FY m 246m 11 FY m 272m FY m m Net fees flat* at 271.7m, operating profit increased 14%* via 2% productivity improvement and strong cost control Private sector net fees up 2%*: 72% of UK&I net fees Public sector net fees down 4%*: 28% of UK&I net fees Increased concern over economic outlook negatively impacted market confidence, especially in H2 Solid performances in IT, up 3%* and Office Support, up 6%*. Net fees in A&F and C&P were flat* London ex-city grew 11%, with mid-single digit growth in Scotland, the North and the Midlands. Our City business was down 3%, with a tough banking market Consultant headcount down 8%, mainly in H1, and emphasis on increasing consultant productivity * 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 30 June 2016 closing number versus 30 June 2015 closing number. 22

23 2018 ASPIRATIONS: IN LINE WITH EXPECTATIONS AFTER 3 YEARS UK & Ireland ( m) Operating Profit* Australia & NZ ( m) Operating Profit* FY 2013 FY 2016 FY18 OBJECTIVE FY FY FY16 AT SPOT RATE** 53 FY18 OBJECTIVE*** ASSUMED 5YR NET FEE CAGR: +5% to +9% ASSUMED 5YR NET FEE CAGR: +1% to +5% Germany ( m) Operating Profit* Other Countries ( m) Operating Profit* FY FY FY FY FY16 AT SPOT RATE** 73 FY16 AT SPOT RATE** 44 FY18 OBJECTIVE*** FY18 OBJECTIVE*** ASSUMED 5YR NET FEE CAGR: +7% to +12% 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 CERoW & Asia Pac divisional overheads (assumed to be 15m per annum) and assume constant rates of exchange as of 30 September All reported profit numbers are shown on a headline basis. ** Spot rate as at 30 August *** At original FX rates (30 September 2013). 23

24 3. STRATEGY UPDATE ALISTAIR COX CHIEF EXECUTIVE

25 THERE ARE 5 PILLARS WHICH UNDERPIN THE STRENGTH OF REMINDER OF OUR KEY STRATEGIC PRIORITIES OUR BUSINESS MODEL 1. ASPIRATION TO MATERIALLY INCREASE AND DIVERSIFY GROUP PROFITS 2. GENERATE AND DISTRIBUTE MEANINGFUL CASH RETURNS 3. BUILD CRITICAL MASS AND SCALE ACROSS OUR GLOBAL PLATFORM POSITION THE GROUP FOR LONG-TERM STRUCTURAL GROWTH OPPORTUNITIES, WHILE DRIVING MATERIAL PROFITS AND CASH ALONG THE WAY 25

26 A PRIORITISED PIPELINE OF OPPORTUNITIES TO BUILD SCALE CORE PROFIT DRIVERS FUTURE MATERIAL PROFIT DRIVERS MEANINGFUL CONTRIBUTORS NETWORK CRITICAL 10m+ TARGET 5m+ TARGET GERMANY UK AUSTRALIA FRANCE JAPAN USA CANADA SWITZERLAND NEW ZEALAND BELGIUM CHINA MEXICO/BRAZIL 20 OTHER HAYS COUNTRIES 0-5 YEARS 0-10 YEARS ONGOING 26

27 THE VEREDUS ACQUISITION HAS GIVEN US A MATERIAL PRESENCE IN THE U.S., THE WORLD S BIGGEST RECRUITMENT MARKET ACHIEVEMENTS TO DATE FUTURE FOCUS Headcount up 13% including 13 international transfers into the US IT Contracting introduced into legacy Hays offices, including NYC Further investment into C&P business New office opened in Denver Record Temp levels and record Perm net fees in the year Hays OneTouch system implemented Accelerate expansion of IT specialism Extend and invest in C&P business Further investment to grow Perm Explore opportunities for network expansion e.g. West Coast, new specialisms (e.g. A&F) Continue to leverage cross-border account relationships into and out of the US Ramp up recruitment/training resources 27

28 NON-PERM BUSINESSES ARE REACHING CRITICAL MASS OUTSIDE OF OUR CORE MARKETS Group ex-uk/germany/anz* Temp/Contractor business as % of net fees Perm Temp & Contracting Canada 26% Netherlands 65% Switzerland 78% 67% France 81% 66% Belgium 32% 53% Japan USA 17% 22% 33% 64% 2011 Today * Percentage of net fees. 28

29 THERE ARE 5 PILLARS WHICH UNDERPIN THE STRENGTH OF OUR BUSINESS MODEL THE CONTRACTOR BUSINESS PRESENTS CLEAR STRUCTURAL GROWTH OPPORTUNITIES & BUILDS FURTHER DEFENSIVENESS INTO OUR MODEL Why Contracting is a key focus Clear structural growth Resilience to the cycle Significant barriers to entry Existing Hays expertise Contracting becoming the new perm in many skilled jobs markets More skilled candidates choosing to build careers on a flexible, project basis Legislative changes opening up market Less volatile, greater reliability/visibility of earnings Compliance/regulatory complexities Scalable systems/processes: Payroll, credit control, etc. Local candidate attraction networks/databases World-class businesses in Germany to export best practice to new markets Decades of expertise tough to replicate 29

30 UTILISING THE POWER OF DATA: BUILDING INTERNAL EXPERTISE AND FORGING MUTUALLY BENEFICIAL RELATIONSHIPS GLOBALLY Using data to increase productivity Building mutually beneficial data collaborations Teams established in Data Analytics & Digital Marketing Algorithms built to analyse multiple databases, both internal and external Significant insights available around candidate/client intentions to change jobs/recruit Enables faster delivery of high quality shortlists to clients and more focussed business development Enhanced client and candidate experience SEEK is Australia s largest online jobs marketplace c.90% of Australia s white collar population covered by the Hays / SEEK combined database Hays consultants can access real time info on candidates registered on SEEK (subject to permissions) Positive results in terms of improved productivity, job fill rates & candidate engagement 30

31 A STRONG SET OF RESULTS; DELIVERING ON OUR PROMISES AND STRATEGICALLY ON-TRACK 1. STRONG OPERATING PROFIT PERFORMANCE, ELIMINATION OF GROUP NET DEBT 2. ON TRACK IN TERMS OF OUR 2018 PLAN, BUT WITH UK UNCERTAINTIES AHEAD 3. FURTHER PROGRESS AGAINST OUR STRATEGIC & OPERATIONAL GOALS IDEALLY POSITIONED TO CAPITALISE ON GROWTH OPPORTUNITIES & MANAGE THROUGH UNCERTAINTIES 31

32 4. CURRENT TRADING ALISTAIR COX CHIEF EXECUTIVE

33 SOLID GROWTH OVERALL WITH SUPPORTIVE CONDITIONS IN MOST MARKETS AND TOUGH BUT BROADLY STABLE TRADING CONDITIONS IN THE UK Current trading conditions by region APAC CE & RoW UK&I Continue to see good levels of growth in Australia overall, as market confidence continues to recover gradually Strong growth in public sector and solid growth in private sector In Asia, banking-exposed markets remain subdued Growth remains strong overall, albeit against tough comparators In Germany and France we continue to see strong growth and in the rest of Europe and the Americas, conditions remain strong in most markets To date, we have seen no evidence of contagion into Europe following the outcome of the EU Referendum UK market is tough but broadly sequentially stable We saw a step down in Perm activity immediately after the EU Referendum, but since then activity levels have been broadly stable In Temp, activity levels have remained broadly at pre-referendum levels Too early to determine if these trends will continue beyond the summer period 33

34 5. QUESTIONS & ANSWERS

35 6. APPENDICIES

36 1.0 FY 2016 RESULTS SUPPORTING INFORMATION 36

37 MATERIAL INCREASE IN CE&RoW (EX-GERMANY) PROFITABILITY Operating profit split in Continental Europe & RoW HEADLINE Year ended 30 June 2016 m 2015 m LFL growth* Germany % Rest of CE&RoW (23 countries) % CE&RoW Central Costs (12.8) (12.3) 4% CE&RoW Operating Profit % Germany delivered operating profit LFL growth of 8%* despite significant investment in headcount and maintained an excellent conversion rate of 36% An excellent performance elsewhere in CE&RoW where market conditions were strong and we invested in headcount while controlling our cost base * LFL ( like-for-like ) growth represents organic growth at constant currency. 37

38 LIKE-FOR-LIKE SUMMARY Year ended 30 June 2015 m Acquisition m FX impact m Organic m 2016 m LFL* growth Net fees Asia Pacific (9.4) % Continental Europe & RoW (6.9) % United Kingdom & Ireland (0.1) (0.1) % (16.4) % Operating profit Asia Pacific (3.4) % Continental Europe & RoW (1.1) % United Kingdom & Ireland % (4.5) % * LFL ( like-for-like ) growth is organic growth at constant currency. 38

39 H2 FY16 v H1 FY16: ANALYSIS BY DIVISION Net fee growth (LFL*) versus same period last year Q1 16 Q2 16 H1 16 Q3 16 Q4 16 H2 16 FY 16 Asia Pacific 6% 1% 4% 3% 4% 4% 4% Continental Europe & RoW 11% 16% 14% 11% 21% 16% 15% United Kingdom & Ireland 6% 1% 3% (3)% (4)% (3)% 0% Operating profit growth (LFL*) versus same period last year Asia Pacific 6% 10% 8% Continental Europe & RoW 17% 14% 16% United Kingdom & Ireland 20% 9% 14% Conversion rate (%)* operating profit as % of net fees Asia Pacific 27.5% 29.4% 28.5% Continental Europe & RoW 21.8% 21.6% 21.7% United Kingdom & Ireland 18.1% 20.3% 19.2% * LFL ( like-for-like ) growth is organic growth at constant currency. Note: H1 16 is the period from 1 July 2015 to 31 December H2 16 is the period from 1 January 2016 to 30 June

40 CONTINENTAL EUROPE & ROW PERFORMANCE BY COUNTRY Relative size Country / sub region (ranked by net fees) Net Fees Net fee growth (LFL*) # of offices # of consultants Germany 175.1m 13% 17 1,213 France 41.7m 17% Benelux 27.9m 24% USA 25.8m 15% Switzerland 18.3m 19% Canada 14.0m 0% Other** (16 countries) 59.7m 19% ,034 * Percentages represent LFL ( like-for-like ) growth which is organic growth at constant currency for 12m ended 30 June 2016 versus 12m ended 30 June ** Other represents financial results for remaining CE&RoW countries. Note: Pie charts represent net fees by country / sub region. 40

41 CONSULTANT HEADCOUNT Change in headcount As at June 2016 As at Dec 2015 Change since Dec 2015 As at June 2015 Change since June 2015 Asia Pacific 1,210 1,232 (2%) 1,195 1% Continental Europe & RoW* 3,034 3,015 1% 2,715 12% United Kingdom & Ireland 2,024 2,207 (8%) 2,203 (8%) Group 6,268 6,454 (3%) 6,113 3% * Consultant headcount at June 2015 has been restated to include 144 resourcers previously not reported as consultants in Germany and Switzerland. 41

42 OFFICE NETWORK Number of offices 30 June 2015 Opened/ (Closed)* 30 Jun 2016 Asia Pacific Continental Europe & RoW United Kingdom & Ireland Total * Offices opened is shown net of closed and merged offices. 42

43 TRADING DAYS Number of trading days* H1 H2 Year Year ended 30 June Year ended 30 June Year ending 30 June * UK only. 43

44 THE SCALE AND SCOPE OF OUR BUSINESS IS UNIQUE FY16 STATISTICS 67, ,000 PERM PLACEMENTS TEMP ASSIGNMENTS 6 million CV S RECEIVED >50,000 INTERVIEWS PER MONTH 34 million HITS ON HAYS WEBSITES 1.4 million LINKEDIN FOLLOWERS WORLDWIDE IN FY16 WE FILLED OVER 1,000 JOBS EVERY WORKING DAY 44

45 2.0 THE HAYS BUSINESS MODEL & STRATEGY FOR GROWTH 45

46 HAYS IS A LEADING GLOBAL EXPERT IN QUALIFIED, PROFESSIONAL AND SKILLED RECRUITMENT EXECUTIVE SEARCH (head hunting) PROFESSIONAL RECRUITMENT (mostly white collar) Contingent fee model Focus on high-skilled roles Clear structural growth markets GENERALIST RECRUITMENT (mostly blue collar) 46

47 A PROVEN TRACK RECORD OF ORGANIC GROWTH New country & specialism entries Key: Organic Acquisition 33 COUNTRIES 20 SPECIALISMS Pre 1990 UK Australia Ireland A&F C&P IT Early 1990s Banking Fin Services Office Pros Late 1990s Czech Re. France N.Zealand Contact Ce. Education 2000 Belgium Portugal Legal Canada Spain Netherlands HR 2003 Germany Switzerland Austria Engineering Energy O&G Mining 2004 Sweden Poland Sales & Ma. Purchasing Telecoms 2005 Executive Healthcare 2006 Italy Luxembourg UAE China, HK Retail 2007 Brazil Singapore Japan Pharma 2008 Hungary Denmark 2009 India Russia 2010 Mexico USA 2011 Colombia 2012 Chile Malaysia 47

48 OUR WORLDWIDE PLATFORM PROVIDES A PIPELINE OF FUTURE GROWTH OPPORTUNITIES & LEADERSHIP IN ALL CORE MARKETS Hays market positioning* Market Leader Top 3 position Top 5 position Other TOP 3 Australia (#1) Belgium Brazil Chile France Germany (#1) Hong Kong Hungary Ireland (#1) Italy Japan (#1) Malaysia New Zealand (#1) Poland (#1) Portugal (#1) Russia Singapore (#1) Spain Sweden Switzerland UK (#1) TOP 5 Austria China Colombia Czech Rep Denmark Luxembourg Mexico Netherlands UAE The largest international specialist recruitment business in the world * Market position is based on Hays estimates. List of countries only includes those with top 5 market positions and excludes newly opened countries. 48

49 OUR STRATEGIC FOCUS IS ON BUILDING SCALE IN KEY MARKETS HAYS COUNTRIES HAYS SPECIALISMS 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 49

50 MARKET LEADING BREADTH AND DEPTH OF PLATFORM Divisional operating review 20 SPECIALISMS 33 COUNTRIES UK Ireland Australia New Zealand Hong Kong China Singapore Japan Malaysia Germany France Belgium Netherlands Luxembourg Spain Portugal Czech Rep Hungary Switzerland Austria Sweden Denmark Poland UAE Italy Brazil India Russia Mexico Colombia Chile Canada USA Accountancy & Finance Construction & Property Information Technology Life Sciences Sales & Marketing Banking & Capital Markets Contact Centres Education Engineering & Manufacturing Executive Financial Services Health & Social Care Human Resources Legal Office Professionals Energy, Oil & Gas Purchasing Retail Resources & Mining Telecoms Total Offices* * Office numbers as at June

51 THE STRENGTH OF OUR MODEL IS KEY TO DELIVERING FOR CLIENTS AND DRIVING FINANCIAL PERFORMANCE THROUGH THE CYCLE Unrivalled scale, balance and diversity the best people, sector leading technology and a world class brand delivers the best solutions for clients & candidates a resilient financial performance in tougher economic times and leverages the Group to economic improvement 51

52 THERE ARE 5 PILLARS WHICH UNDERPIN THE STRENGTH OF OUR BUSINESS MODEL BALANCE, SCALE AND DIVERSIFICATION ARE WHAT SETS THE HAYS BUSINESS MODEL APART AND DRIVES OUTPERFORMANCE 1. BALANCE 2. SCALE 3. GEOGRAPHIC DIVERSIFICATION 4. SECTORAL DIVERSIFICATION 5. CONTRACT FORM DIVERSIFICATION Exposure to structural growth and more mature areas Long-established across technical, white-collar specialisms 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 52

53 LEVERAGING OUR BEST-IN-CLASS TECHNOLOGY PLATFORM AND BRAND Global Database Internally integrated & externally connected Delivering outcomes to drive growth GLOBAL DIGITAL PLATFORM OPERATIONAL INTELLIGENCE 1 OPERATIONAL EFFECTIVENESS MANAGEMENT INFORMATION DIGITAL CV PARSING CROSS SYSTEM AWARENESS OPERATIONAL EFFECTIVENESS SEARCH CAPABILITIES AUTOMATED ATS VMS INTERFACES AUTOMATIC JOB BOARD POSTINGS 2 3 BEST CUSTOMER SERVICE DIGITALLY-ENABLED CONSULTANTS THE BEST CANDIDATES TO CLIENTS, FASTER THAN ANYONE ELSE 53

54 A BALANCED PORTFOLIO Net Fees by type* Recruitment contracts ~25% Public sector 17% Top 40 ~15% UK&I 33% Other** 34% Perm 42% Office Sup. 8% Spot ~75% 30,000 Private sector customers 83% ~85% CE&RoW 45% Engineering 8% Construction & Property 15% Accountancy & Finance 15% Temp 58% APAC IT 22% 20% * Indicative purposes only based on information for the 12 months ended June ** Major specialisms within Other include: Banking Related (7%), Life Sciences (5%), Sales & Marketing (4%) and Education (3%). 54

55 BALANCED BUSINESS MODEL: WELL DIVERSIFIED IN STRUCTURAL AND CYCLICAL MARKETS Net fees by market maturity* (percentages in table show % of Group net fees in FY16) ESTABLISHED: >70% penetration 36% of Group net fees +1% LFL net fee growth UK & Ireland (33%) USA (3%) Australia & NZ (16%) France, Netherlands, Canada (8%) DEVELOPING: >30-70% penetration 24% of Group net fees +7% LFL net fee growth EMBRYONIC: <10% penetration 5% of Group net fees +10% LFL net fee growth Japan, China, Malaysia (3%) Latin America, Russia, India (2%) Germany (22%) Other CE&RoW (11%) HK, Singapore (2%) EMERGING: 10-30% penetration 35% of Group net fees +14% LFL net fee growth * Market penetration represents the percentage of skilled and professional recruitment that is outsourced, based on Hays management estimates. 55

56 BALANCED BUSINESS MODEL: SECTOR DIVERSITY EXPOSES US TO GROWTH OPPORTUNITIES AND PROTECTS OUR BUSINESS TOUGH: DECLINE <0%* Banking Resources & Mining Short term challenges Long term opportunity Defend market position Reduce costs 54% 8% Net fees FY m 38% STRONG: GROWTH >10%* Information Technology Life Sciences Sales & Marketing Candidate shortages Clients investing Continued investment Drive growth SOLID / GOOD: GROWTH 0-10%* Accountancy & Finance Construction & Property Engineering Mixed conditions but opportunities available Selective investment Maintain position * Represents LFL ( like-for-like ) growth rates in the 12 months to 30 June Listed specialisms are examples only and are not exhaustive. 56

57 BALANCED BUSINESS MODEL: SECTOR-LEADING EXPOSURE TO KEY TEMP/CONTRACTOR MARKETS, PERM-GEARED IN HIGH GROWTH AREAS Hays FY16 Net Fees by geography Temp Perm 12% 43% 35% 89% 62% 88% 57% 65% 11% 38% Asia Rest of CE&RoW UK & Ireland Australia & New Zealand Germany 0% 100% Group net fees 57

58 3.0 DIVISIONAL PROFILES 58

59 ASIA PACIFIC REPRESENTS 22% OF GROUP NET FEES WITH AUSTRALIA REPRESENTING 69% OF DIVISIONAL NET FEES Net fees: 176.1m Operating profit: 50.2m Conversion rate: 28.5% Countries: 7 Consultants: 1,210 Offices: 49 Temp : Perm 52% 48% Private : Public sector 74% 26% Net fees by specialism 22% 21% 4% 6% 14% 11% 11% 11% Const. & Property Account. & Finance Office Support IT Banking Sales & Marketing HR Other Net fees by country 6% 7% 9% Australia New Zealand Japan China 69% Singapore (4%) Hong Kong (4%) Malaysia (1%) #1 market position* Diverse sector exposure Asia structural opportunity Note: Private:Public sector and Temp:Perm split is based on net fees for 12 months ended 30 June * Market position is based on Hays estimates. 59

60 CONTINENTAL EUROPE & RoW REPRESENTS 45% OF GROUP NET FEES AND 43% OF GROUP PROFITS Net fees: 362.5m Net fees by specialism Net fees by country Operating profit: 78.7m Conversion rate: 21.7% Countries: 24 Consultants: 3,034 Offices: 103 Temp : Perm 62% 38% 18% 4% 7% 9% 12% 32% 18% 4% 5% 7% 17% 8% 11% 48% Private : Public sector 97% 3% IT Account. & Finance Life Sciences Other Engineering Const. & Property Sales & Marketing Germany Benelux Switzerland Other France USA Canada Structurally developing markets Focused on core specialisms Broad coverage Note: Private:Public sector and Temp:Perm split is based on net fees for 12 months ended 30 June

61 UK & IRELAND REPRESENTS 33% OF GROUP NET FEES Net fees: 271.7m Net fees by specialism Net fees by region Operating profit: 52.1m Conversion rate: 19.2% Consultants: 2,024 Offices: 100 Temp : Perm 57% 43% 21% 9% 9% 10% 21% 19% 11% 9% 3% 11% 17% 25% 35% Private : Public sector 72% 28% Account. & Finance Office Support IT Other Const. & Property Education Banking & Fin. Serv. London Midlands & E.Anglia South West & Wales North & Scotland Home Counties Ireland #1 market position* Diverse sector exposure Nationwide coverage Note: Private:Public sector and Temp:Perm split is based on net fees for 12 months ended 30 June * Market position is based on Hays estimates. 61

62 PROFILE OF HAYS AUSTRALIA & NEW ZEALAND Year ended 30 June 2016 TEMP 65% PERM 35% 134m 44m 33% NET FEES EBIT CONV. RATE 16% GROUP NET FEES 812 CONSULTANTS 37 OFFICES Net fees by specialism Net fees by region Construction & Property Acc. & Finance Office Support IT Banking Res & Mining* Other Q land NSW Victoria NZ ACT Other 28% 14% 13% 10% 6% 4% 25% 29% 22% 11% 10% 9% 19% Note: All data is presented as of 30 June * Includes Oil & Gas and Energy. 62

63 HISTORIC PROFILE OF HAYS AUSTRALIA & NEW ZEALAND Historic headline net fees ( M) Historic headline operating profit ( M) FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY consultant headcount Historic Conversion Rates FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Note: Historic net fees and historic operating profit shown on a headline basis. For local currency data, please see slide

64 PROFILE OF HAYS GERMANY Year ended 30 June 2016 TEMP 88% PERM 12% 175m 63m 36% NET FEES EBIT CONV. RATE 22% GROUP NET FEES 1,213 CONSULTANTS 17 OFFICES Net fees by specialism Net fees by contract type IT Engineering Acc. & Finance Other Contracting Temp Perm 42% 31% 11% 16% 64% 24% 12% Note: All data is presented as of 30 June

65 HISTORIC PROFILE OF HAYS GERMANY Historic headline net fees ( M) Historic headline operating profit ( M) FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY consultant headcount* Historic Conversion Rates , FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Note: Historic net fees and historic operating profit shown on a headline basis. For local currency data, please see slide 67. * Consultant headcount has been restated to include resourcers previously not reported as consultants. 65

66 HISTORIC PROFILE OF HAYS UK & IRELAND Historic headline net fees ( M) Historic headline operating profit ( M) (7) FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY consultant headcount Historic Conversion Rates 2,315 2,272 2,158 1,934 2,157 2,203 1,929 2, (3) FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Note: Historic net fees and historic operating profit shown on a headline basis. 66

67 LOCAL CURRENCY HAYS NET FEES AND OPERATING PROFIT Australia & New Zealand Historic net fees (AUDm) Australia & New Zealand Historic operating profit (AUDm) FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Germany Historic net fees (EURm) Germany Historic operating profit (EURm) FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 67

68 FURTHER INFORMATION HEAD OF INVESTOR RELATIONS DAVID WALKER For more information about the Group: haysplc.com/investors