LONDON PARIS SYDNEY NEW YORK PRELIMINARY RESULTS 2006 February 2007
Agenda LONDON Financial Highlights... 3 Financial Results and Segmental Analysis... 4-11 Geographical Review... 12-18 Our Investment Strategy... 19-30 Current Trading... 31-32 Appendix... 33-52 2
Financial Highlights TORONTO 2006 2005 Change Turnover 649.1m 523.8m 24% Gross profit 348.8m 267.6m 30% Operating profit 97.4m 66.5m 46% Profit before tax 97.0m 66.1m 47% Basic earnings per share (pence) 19.6 14.8 32% Diluted earnings per share (pence) 19.0 14.4 32% Dividends (pence) 6.0 5.0 20% 3
LONDON PARIS SYDNEY NEW YORK FINANCIAL RESULTS AND SEGMENTAL ANALYSIS
Profit and Loss MADRID 2006 m 2005 m Change Turnover 649.1 523.8 23.9% Gross profit 348.8 267.6 30.4% Operating profit 97.4 66.5 46.4% Net interest expense (0.4) (0.4) Profit before tax 97.0 66.1 46.6% Taxation (31.5) (16.5) 90.9% Profit after tax 65.4 49.6 31.9% Effective tax rate on profit 32.5% 25.0% Effective tax rate was lower in 2005 due to utilisation of prior year tax loss. 5
Earnings per share and dividends MILAN Earnings per share 2006 2005 Change Basic (pence) 19.6 14.8 32.4% Diluted (pence) 19.0 14.4 31.9% Weighted average number of shares Basic (000 s) 334,744 336,283 Diluted (000 s) 343,632 345,297 Dividend Interim - pence per share 1.8 1.5 Final - pence per share 4.2* 3.5 Total - pence per share 6.0 5.0 20.0% *Payable on 5 June 2007 6
Share Repurchases and Share Options LONDON Share Repurchases Repurchased and cancelled 23.3m shares (7.0% of total share capital) in the year Total cost of repurchases 83.4m Average repurchase price 355.8p per share Range of prices 307.3p to 404.0p Share Options Options exercised over 23.9m shares (7.2%) in 2006 with proceeds of 38.2m 3.5m options (1.0%) vested but not exercised Further 11.0m options (3.3%) outstanding 7
Cash Flow PARIS 2006 m 2005 m Operating profit 97.4 66.5 Depreciation/share scheme charges 10.6 8.7 Net movement in working capital (28.7) (8.5) Profit on sale of business (0.6) Decrease in provisions (0.4) (0.6) Net cash inflow from operating activities 78.9 65.4 Net interest expense (0.4) (0.4) Taxation paid (21.7) (10.1) Proceeds from sale of business 1.4 Net capital expenditure (8.7) (6.8) 48.1 49.5 Dividends paid (18.1) (14.4) Issue of own shares for share options 38.2 Purchase of own shares (83.4) (34.2) Net cash outflow (15.2) 0.9 8
Balance Sheet SAO PAULO 31 December 2006 m 31 December 2005 m Intangible assets - Goodwill 1.5 1.5 - Computer software 2.1 2.2 Tangible assets 21.6 19.7 25.2 23.4 Trade and other receivables 145.7 106.0 Trade and other payables (84.7) (72.3) 61.0 33.7 Current and deferred taxes (2.0) (0.8) Net (debt)/cash (3.6) 13.1 Provisions (0.2) (0.6) Net assets 80.4 68.8 9
Discipline Analysis of Gross Profit SHANGHAI Gross profit 2006 m 2005 m Change 2006 % share 2005 % share Finance & Accounting 202.5 159.5 27.0% 58.0% 59.6% Marketing, Sales, Retail 67.9 55.1 23.1% 19.5% 20.6% Legal, Technology, HR, Secretarial and Other 46.6 31.8 46.6% 13.4% 11.9% Engineering, Property & Construction, Procurement & Supply Chain 31.8 21.2 50.0% 9.1% 7.9% 348.8 267.6 30.4% 10
Perm/Temp analysis SINGAPORE Turnover 2006 m 2005 m Change 2006 % share 2005 % share Permanent 276.3 205.5 34.5% 42.6% 39.2% Temporary 372.7 318.3 17.1% 57.4% 60.8% 649.1 523.8 23.9% Gross profit Permanent 261.0 195.0 33.9% 74.8% 72.9% Temporary 87.8 72.6 20.9% 25.2% 27.1% 348.8 267.6 30.4% Gross margin Group 53.7% 51.1% Permanent 94.4% 94.9% Temporary 23.6% 22.8% 11
LONDON PARIS SYDNEY NEW YORK GEOGRAPHICAL REVIEW
Geographical analysis of gross profit LONDON 2005 2006 GP: 267.6m GP: 348.8m 14.6% 4.8% 12.9% 6.2% 48.4% 30.4% Growth 44.7% 32.2% 36.3% United Kingdom +20.3% EMEA +46.9% Asia Pacific +15.2% Americas +66.8% 13
United Kingdom LONDON 2005 2006 Turnover: 269.6m Turnover: 312.4m Gross Profit: 129.5m Gross Profit: 155.8m Headcount: 1,318 Headcount: 1,537 12% 5% Gross profit 15% 5% 3% 4% 57% 20.3% Growth 54% 22% 21% Finance & Accounting +14% Marketing, Sales & Retail +14% Legal, HR, Technology, Secretarial and Other Engineering, Property & Construction, Procurement & Supply Chain +42% +42% Scotland +62% 14
EMEA MILAN 2005 2006 Turnover: 159.2m Turnover: 223.0m Gross Profit: 86.1m Gross Profit: 126.6m Headcount: 1,041 Headcount: 1,438 16% Gross profit 19% 11% 46% 46.9% Growth 12% 38% 9% 9% 9% France +22% Holland +76% Belgium, Switzerland, South Africa, UAE, Sweden, Poland, Portugal, Russia, Ireland +112% Germany +60% Spain +66% Italy +21% 11% 8% 12% 15
Asia Pacific TOKYO 2005 2006 Turnover: 76.7m Turnover: 83.6m Gross Profit: 39.0m Gross Profit: 45.0m Headcount: 359 Headcount: 441 Gross profit 37% 63% 15.2% Growth 42% 58% Australia +5% Rest of Asia Pacific +32% 16
Australia Overview WHEELERS HILL Gross profit performance AUS$ 2005 2006 Q1 +26% +6% Q2 +22% +2% Q3 +11% +3% Q4-7% +24% New Management team installed in Q3 Restructured by discipline rather than by geography in Q4 Expect benefits to become gradually evident as 2007 progresses Weak Q4 2005 comparator 17
The Americas PHILADELPHIA 2005 2006 Turnover: 18.3m Turnover: 30.1m Gross Profit: 12.9m Gross Profit: 21.5m Headcount: 208 Headcount: 342 Gross profit 66.8% Growth 42% 58% 40% 60% North America +73% Latin America +58% 18
LONDON PARIS SYDNEY NEW YORK OUR INVESTMENT STRATEGY
Michael Page International - Strategy LONDON To organically grow existing and new teams, offices, disciplines and countries with a consistent team and meritocratic culture Teams Countries Culture Offices Disciplines 20
30 years of organic growth GENEVA 1986 1996 2006 Turnover m* 18.8 142.1 649.1 Operating Profit m* 2.3 28.9 97.4 Average number of staff 262 737 3,305 *as reported. 21
30 years of organic growth: Disciplines MANCHESTER 1986 1996 2006 4 6 14 Finance & Accounting Finance & Accounting Finance & Accounting Banking Banking Banking Legal Legal Legal Marketing Marketing Marketing Sales Technology Sales Technology Engineering & Manufacturing Procurement & Supply Chain Property & Construction Human Resources Retail Secretarial Hotel and Catering Healthcare 22
30 years of organic growth: Countries BRUSSELS 1986 1996 2006 3 7 24 UK UK UK Australia Australia Australia France France France Holland Holland Germany Germany China China Singapore *Added January 2007 Singapore Spain USA Italy Brazil Portugal Switzerland Japan Sweden Belgium Poland Canada Mexico Russia Republic of Ireland South Africa United Arab Emirates Luxembourg* 23
Rolling out the global strategy FRANKFURT Increase revenue from existing consultants New consultants into existing teams New teams into existing offices, e.g. MP Finance teams in New York, Boston, New Jersey, Stamford, Amsterdam, Dusseldorf, Frankfurt Rolling out existing disciplines into existing offices, e.g. MP Property & Construction in Toulouse, Rio MP Engineering into Liverpool, Campinas MP HR into Leeds, Edinburgh, Rotterdam MP Technology into Rotterdam, Eindhoven, Amersfoort Launching new disciplines into existing offices e.g. MP HR and MP Technology in Japan MP Sales and Marketing, MP HR & MP Engineering into USA MP Sales and Marketing into Switzerland Opening new offices in an existing country e.g. Sha Tin, Sheffield, Peterborough, Cardiff, Utrecht, Antwerp, Toulouse, Campinas Launching new countries in an existing region e.g. Dubai, Dublin, Moscow, Johannesburg, Mexico City 24
2006 Spread of Investment MILAN Allocation of the new headcount Estimated New consultants, existing teams 50% New teams/disciplines, existing offices 20% New disciplines, existing countries 15% New office, existing countries 10% New countries 5% Including bonuses and share based charges approximately 75% of costs are staff related. 25
Return on investment New Consultant Typically Month 3 Profitable ROTTERDAM New Team, Existing Office Typically 2nd Quarter Profitable New Office, Existing Country Typically Year 1 Profitable New Discipline, Existing Country Typically Year 1 Breakeven Typically Year 2 Profitable New Country Typically Year 1 Loss (0.3m) Typically Year 2 Typically Year 3 Breakeven Profitable 26
Depth of management resource to drive organic growth Senior Management No. Tenure in MP LISBON Executive Directors 3 15 years Regional Managing Directors 9 16 years Managing Directors 30 12 years Directors 98 9 years 140 Average c.10 years Retained by: Culture fit Clear long term career paths International opportunities LTIP (MD and above) Share options (Directors) 27
Investment in management resource To fuel growth in existing region, e.g. The Americas CONNECTICUT Alexi de Bretteville (8/06) RMD (14 years) Americas Ex N. Europe, S. Europe, France Patrick Hollard (7/00) MD (10 years) Latin America USA Mark Sharland (8/05) MD (18 years) Canada Ex UK Christophe Rosset (6/06) MD (10 years) Mexico Ex France Patrick Hollard (7/00) Brazil Ex Spain, France Joost Fortuin (3/07) MD (10 years) Southern USA Ex Holland Richard Vickers (1/07) MD (12 years) Eastern USA Ex UK Phillipe Perret (8/06) Dir. (12 years) Mid West USA Ex France Nigel Milford (8/05) Dir. (20 years) Ex UK, Hong Kong Lawrence Pengally (1/04) Dir. (12 years) Finance Ex UK 138 years of Michael Page experience Simon Lewis (5/03) Dir. (12 years) Banking Ex Japan, Hong Kong, UK Huw Rothwell (4/01) Dir. (8 years) HR Ex UK 28
Investment in new countries Mexico, Russia, South Africa, UAE, Republic of Ireland JOHANNESBURG Managing Director responsible averages 13 years at MP All ahead of plan Typically 5 to 10 people in each country Limited/fragmented competition Serviced offices moving to leased premises Target multi-national clients initially Capitalise on global candidate database Collectively should be c.120 people year end 2007 Huge potential, long term investment 29
Headcount - Operational Gearing LONDON SYDNEY 30
LONDON PARIS SYDNEY NEW YORK CURRENT TRADING
Current trading TORONTO Good activity levels continue in all regions MP job count at end of Feb 2007 c. 39,000 (Feb 2006: c. 27,000) Since year end opened: - New country - Luxembourg - New offices - Hamburg, Hartford (Connecticut), Leicester Continue to invest in our businesses for future growth Headcount increase to around 4,500 expected by year end 2007 pre-bonus cost-base of aprox. 260m Q1 trading update will be issued on 5 April 2007 The successful 30 year strategy continues! 32
LONDON PARIS SYDNEY NEW YORK APPENDIX
Appendix Agenda JOHANNESBURG Michael Page International Overview... 35-39 Geographical Review...40-44 Global MP Job Count and Quarterly Gross Profit Trend...45-46 Scope for Growth: UK Offices; Global Disiplines; Global Offices; Conversion...47-50 Share Based Payments and Share Options...51-52 34
Michael Page International Overview AMSTERDAM Specialist recruitment company focused on placing white-collar professionals into permanent, contract and temporary positions: - Gross profit ratio 75:25 Perm/Temp Specialisms: Finance & Accounting, Banking, Legal, Marketing, Sales, Technology, Engineering & Manufacturing, Procurement & Supply Chain, Property & Construction, Human Resources, Retail, Secretarial, Hotel and Catering and Healthcare Year end 2006-133 offices in 23 countries More than 3,700 employees: 41% UK, 38% EMEA, 12% Asia Pacific, 9% Americas Strong and diversified client base >90% of FTSE 100 and FTSE Eurotop 300 Extensive global database of more than a million potentially placeable candidates Market leading global specialist white-collar website currently carrying more than 39,000 jobs 35
Positioning BRUSSELS Executive Search Korn Ferry Egon Zehnder Spencer Stuart Whitehead Mann Russell Reynolds VALUE ADDED SALARY AND REMUNERATION Qualified Professional Recruitment Clerical Staffing (Professional) Harvey Nash OPD SThree Robert Walters Mercuri Urval Hudson Hays Reed Robert Half HIGHER FEES Generalist Staffing (Other) Adecco Manpower Randstad Kelly Vedior 36
Power of the Brand FRANKFURT One of the strongest global brands in recruitment Leading advertiser in the Financial Times (UK), South China Morning Post, Straits Times (Singapore), The Melbourne Age, The Sydney Morning Herald, The Australian Financial Review, FT (Deutschland), Süddeutsche Zeitung, FAZ (Deutschland), Les Echos, Le Figaro and Intermediare Voted one of Britain s strongest B2B brands since 2000 - Superbrands Sunday Times 100 Best Companies to work for 2005 and 2006 Voted one of Britain s Top Employers 2005 (as published in the book by the Guardian) The brand drives organic growth Attracts the best clients, candidates and employees Facilitates organic expansion in existing markets and entry into new markets 37
Power of the Brand Online Globally per month: GENEVA 10 million Page Views 2.2 million Visitors 167,000 Job Apps/General CV Submissions website as at 23 Feb 07 38
Current Clients advertising on the MP website LONDON 39
Geographical analysis of gross profit TOKYO 2006 m 2005 m Change 2006 % share 2005 % share United Kingdom 155.8 129.5 20.3% 44.7% 48.4% EMEA 126.6 86.1 46.9% 36.3% 32.2% Asia Pacific 45.0 39.0 15.2% 12.9% 14.6% Americas 21.4 12.9 66.8% 6.2% 4.8% 348.8 267.6 30.4% 40
United Kingdom Preliminary Results 2006 MANCHESTER 2006 m 2005 m Change Turnover 312.4 269.6 15.9% Gross profit 155.8 129.5 20.3% Operating profit before share based charges 48.7 34.6 41.3% Share based charges (4.4) (2.7) Operating profit 44.3 31.9 38.6% Operating margin before share based charges 31.3% 26.7% Operating margin 28.4% 24.7% Headcount at year end 1,537 1,318 16.6% 41
EMEA Preliminary Results 2006 ROTTERDAM 2006 m 2005 m Change Turnover 223.0 159.2 40.1% Gross profit 126.6 86.1 46.9% Operating profit 34.2 19.4 75.8% Operating margin 27.0% 22.6% Headcount at year end 1,438 1,041 38.1% 42
Asia Pacific Preliminary Results 2006 PARRAMATTA 2006 m 2005 m Change Turnover 83.6 76.7 8.9% Gross profit 45.0 39.0 15.2% Operating profit 17.1 14.1 20.9% Operating margin 37.9% 36.1% Headcount at year end 441 359 22.8% 43
The Americas Preliminary Results 2006 SAO PAULO 2006 m 2005 m Change Turnover 30.1 18.3 64.3% Gross profit 21.5 12.9 66.8% Operating profit 1.9 1.0 81.4% Operating margin 8.7% 8.0% Headcount at year end 342 208 64.4% 44
Global MP Job Count: Website LONDON MANCHESTER Only MP jobs, not total Group Mix of Perm and Temp 45
Group quarterly gross profit trend Q1 2001 to Q4 2006 LONDON SINGAPORE 100 93.1 87.4 89.0 80 79.2 Gross Profit ( m) 60 40 69.6 66.9 58.7 49.9 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 20 Q1 Q2 Q3 2001 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2002 2003 2004 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2005 2006 Q4 46
Scope for Growth NEW YORK Number of UK offices per discipline 40 35 Added during 2006 30 31 Number of offices 20 22 21 10 8 6 8 8 8 8 6 6 7 5 5 4 1 1 1 Accountancy Additions Finance Legal Secretarial City Marketing Sales Retail Human Resources Engineering & Manufacturing Procurement & Supply Chain Property & Construction Technology 47
Scope for Growth Number of disciplines in each country Relative size of economies Vs. UK by GDP France 1.0x Sweden 0.2x FRANKFURT Spain 0.5x Portugal 0.1x 20 Netherlands 0.3x Poland 0.1x Australia 0.3x Canada 0.5x United States 5.6x Japan 2.0x Germany 1.3x Singapore 0.1x 15 14 Italy 0.8x Switzerland 0.2x Mexico 0.3x Russia 0.3x Number of disciplines 10 13 12 13 11 9 10 8 8 8 7 8 China 4.8x Ireland 0.1x Brazil 0.4x South Africa 0.1x Belgium 0.2x UAE 0.1x Added during 2006 5 5 6 5 5 4 6 6 6 5 5 2 3 3 3 3 2 3 2 3 3 4 4 2 2 2 2 2 1 1 UK France Spain Netherlands Australia USA Germany Italy Switzerland China Brazil Belgium Sweden Portugal Poland Canada Japan Singapore Mexico Russia Ireland South Africa UAE 48
Scope for Growth Number of offices in each country STOCKHOLM Number of offices 50 40 30 20 2006 46 47 28 23 Relative size of economies Vs. UK by GDP France 1.0x Sweden 0.2x Spain 0.5x Portugal 0.1x Netherlands 0.3x Poland 0.1x Australia 0.3x Canada 0.5x United States 5.6x Japan 2.0x Germany 1.3x Singapore 0.1x Italy 0.8x Mexico 0.3x Switzerland 0.2x Russia 0.3x China 4.8x Ireland 0.1x Brazil 0.4x South Africa 0.1x Belgium 0.2x UAE 0.1x 10 UK France 8 8 7 7 6 Spain Netherlands Australia 6 4 4 USA Germany Italy 3 2 Switzerland 3 2 China 3 2 Brazil 2 1 Belgium Sweden 1 1 1 Portugal Poland Canada Added during 2006 1 1 1 Japan Singapore Mexico 1 1 Russia 1 1 Ireland South Africa 1 UAE 49
Scope for Growth - Conversion LONDON STOCKHOLM Operating Profit (excl all share based costs) Operating Profit (after all share based costs) Operating Profit (after Share Option costs) 50
Share Based Payment Charges LISBON Share options charge 4.6m (2005: 2.9m) 2006 charge higher due largely to increased social charges as a consequence of higher share price. 452.25p at 31 December 2006 (31 December 2005: 270.0p) LTIP* and Deferred Bonus Plan* charge 3.7m (2005: 1.5m) 2006 charge higher due to greater profits increasing the awards and increased social charges as a consequence of higher share price * Approved by shareholders in December 2003. 51
Share options Summary of Exercised and Outstanding Share Options at 31 December 2006 LONDON 2001 IPO Options Shares (m) Shares (m) Earliest exercise dates for non-vested share options % of total share capital Vested 15.9 4.7 of which exercised 14.2 4.2 Unvested 4.0 1.2 Total 19.8 5.9 Original grants 33.8 52
LONDON PARIS SYDNEY NEW YORK