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FULL YEAR RESULS PRESENTATION 2016
RESULTS FOR THE YEAR ENDED 30 NOVEMBER 2016
FULL YEAR RESULTS PRESENTATION 2016RESULTS FOR YEAR ENDED 30 NOVEMBER 2016
2
2016 Overview
• Robust full year performance, in the face of mixed trading conditions
• Adjusted profit before tax flat YoY at £40.8m, above the top end of the consensus range
• GP up 2%* YoY (up 6%* excluding Energy) and up 10% on a reported basis
• Foreign exchange increased reported operating profit by £4.2m
• Contract GP up 8%* YoY and ahead by 11%* excluding Energy
• Contract now accounts for 67% of Group GP (FY 2015: 64%)
• Permanent GP down 8%* YoY (down 1%* excluding Energy) but productivity improved by 3%* YoY
• 75% of GP now generated outside UK&I (FY 2015: 70%)
• Improved balance sheet position with year end net cash of £10m
• Businesses restructured in markets where we are facing adverse trading conditions
• Final dividend maintained
* Growth is at constant currency
3
FINANCIAL RESULTS
4
FINANCIAL HIGHLIGHTS
*Growth is at constant currency, on an adjusted basis
Note 1: Conversion ratio = operating profit expressed as a % of gross profit
Note 2: 2016 figures are adjusted for the impact of £3.5m of costs in relation to the restructuring of certain sales businesses and central support functions
Note 3: 2015 figures were adjusted for the impact of £3.1m of costs in relation to the restructuring of the Energy business and impairment of certain IT assets
Note 4: 2015 figures exclude the impact of exceptional items
Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted
FY 2016 FY 2016 FY 2015 FY 2015 Actual Growth Actual Growth CC Growth*
Revenue £959.9m £959.9m £848.8m £848.8m +13% +13% +6%
Contract gross profit £173.3m £173.3m £151.0m £151.0m +15% +15% +8%
Permanent gross profit £85.4m £85.4m £84.7m £84.7m +1% +1% -8%
Total gross profit £258.7m £258.7m £235.7m £235.7m +10% +10% +2%
Operating profit £41.3m £37.8m £41.5m £38.4m - -2% -6%
Conversion ratio 16.0% 14.6% 17.6% 16.3% -1.6% pts -1.7% pts -1.3% pts
Net finance expense (£0.5m) (£0.5m) (£0.7m) (£0.7m) -29% -29% -29%
Profit before tax £40.8m £37.3m £40.8m £37.7m - -1% -6%
Taxation (£11.0m) (£10.1m) (£11.4m) (£11.3m) -4% -11% -7%
Profit after tax £29.8m £27.2m £29.4m £26.4m +1% +3% -5%
Basic earnings per share 23.2p 21.2p 23.2p 20.8p - +2%
Total ordinary dividend 14.0p 14.0p 14.0p 14.0p - -
Net cash £10.0m £10.0m £6.2m £6.2m +61% +61%
Foreign Exchange (FX)PPE, Deferred Tax Assets and Working Capital increase due to a weakening of GBP increasing the value of balances in our overseas businesses
PPEIncrease due to FX + office moves including London and New York
Net Working Capital Increase due to FX + growth in our Contract runner book YoYDSO improved by 1 day to 37 days
Strong cash position£50m revolving credit facility ('RCF') with RBS and HSBC, which is committed to 2019
5
BALANCE SHEET
A robust balance sheet
30 November 30 November
2016 2015
Intangible assets £11.6m £11.1m
Property, plant & equipment £7.1m £5.6m
Investments £0.7m -
Deferred tax assets £2.5m £1.8m
Net working capital £50.3m £40.1m
Provisions (£5.8m) (£6.7m)
Net current tax (liabilities)/assets (£0.7m) £1.3m
£65.7m £53.2m
Net cash £10.0m £6.2m
Net assets £75.7m £59.4m
6
CASH FLOW BRIDGE
An improvement in cash despite share buy backs of £6.8m
YE 2015 Net
Cash
Adjusted OP Depn and
Amort
Share
Options &
Other
Foreign
Exchange
Share
options
Exercises
Investments Working
Capital
Adjusting
items 2016
& 2015
Treasury
Shares
Purchased
Capex Taxes and
Interest
Dividends YE 2016 Net
Cash
£6.2m
£41.3m
£5.7m
£3.0m £2.7m £0.6m (£0.7m) (£3.1m)(£4.7m)
(£6.8m)
(£7.2m)
(£9.0m)
(£18.0m)
£10.0m
7
EARNINGS PER SHARE AND DIVIDENDS
Note 1: 2015 numbers are before exceptional items
Note 2: 2015 figures were adjusted for the impact of £3.1m of costs in relation to restructuring Energy business and the impairment of IT assets
Note 3: 2016 figures are adjusted for the impact of £3.5m of costs in relation to the restricting of certain sales businesses and central support function
Adjusted EPS and dividends maintained YoY
Adjusted As Reported Adjusted As Reported Adjusted As Reported
FY 2016 FY 2016 FY 2015 FY 2015 Actual Growth Actual Growth
Profit after tax £29.8m £27.2m £29.4m £26.4m +1% +3%
For basic EPS 128.3m 128.3m 127.0m 127.0m +1% +1%
Dilutive impact of share plans 3.8m 3.8m 5.6m 5.6m -32% -32%
Fully diluted EPS 132.1m 132.1m 132.6m 132.6m - -
Basic 23.2p 21.2p 23.2p 20.8p - +2%
Diluted 22.6p 20.6p 22.2p 19.9p +2% +4%
DPS Ordinary 14.0p 14.0p 14.0p 14.0p - -
Weighted
average
number of
shares
EPS
8
FOREIGN EXCHANGE IMPACT
An FX tailwind in 2016. If the exchange rates of the Group’s main operating currencies had remained at FY 2015 average rates throughout the current year, FY 2016 GP and OP would have been lower by circa
£17.6m and £4.2m, respectively.
Average Closing Average Closing Average Closing
EUR € 1.25 1.18 1.36 1.42 7.9% 16.9%
USD $ 1.39 1.25 1.54 1.50 9.7% 16.8%
Gross
Profit
Operating
Profit
Gross
Profit
Operating
Profit
EUR € £1,300k £431k £1,045k £351k
USD $ £506k £79k £453k £108k
Impact of a 1% change per
annum
30 November 2015
30 November 2016
Year Ended Year Ended
30 November 2015
Year Ended Year Ended
30 November 2016
YoY Exchange
Rate Movement
9
OPERATING REVIEW
10
2016 PRIORITY
* Growth is at constant currency
Progress
Strategic investment inContract
• Record Contract Runners at year end
• Contract now 67% of GP (FY 2015: 64%)
• Now represents 63% of sales headcount, our highest ever
Drive recovery in Permanent productivity
• Successful focus on improving productivity, up 3%* YoY
• Restructure of the Permanent business to focus on higher yielding markets
Broaden capabilities in high growth US markets
• GP flat* YoY and ahead by 9%* excluding Energy
• Significant ICT opportunity, GP up 46%* YoY
• Business restructured and reshaped to drive profitable growth in 2017
Accelerate sector diversification in key STEM growth markets
• Strong performances from ICT, Life Sciences and Engineering offsetting weakness in Energy and
Banking & Finance
• Exciting ICT opportunities outside UK and Europe (currently just 10% of ICT)
Build scale and critical mass in global network
• Growth driven by increased returns from existing locations
• New offices opened in Minneapolis and Austin
Focus on costs and efficiencies to improve operational gearing
• Restructure of Energy, Banking & Finance and UK businesses and a further right sizing of central
support functions in 2016
• Tight ongoing control of costs
• Improving consultant productivity, up 1% YoY and up 5% in Q4
DIVISION
DIVERSIFICATION
GEOGRAPHICAL
DIVERSIFICATION
SECTOR
DIVERSIFICATION
67%
33%
Cont
Perm
64%
36%
Cont
Perm
25%
49%
20%
6%
UK&I
C Europe
USA
APAC & ME30%
44%
19%
7%
UK&IC EuropeUSAAPAC & ME
45%
16%
8%
9%
21%
1%
ICT
Banking & Finance
Energy
Engineering41%
18%
11%
9%
19%
2%
ICT
Banking & Finance
Energy
Engineering
Life Sciences
Other
11
BUSINESS PROFILE
FY 2016 FY 2016 FY 2016
FY 2015FY 2015FY 2015
DIVISION GEOGRAPHY SECTOR
67%
33%
Cont
Perm
77%66% 67%
39%
23%34% 33%
61%
UK&I C Europe USA APAC & ME
Cont Perm
73%
52%
92%
65% 60%
27%
48%
8%
35% 40%
ICT Banking &
Finance
Energy Engineering Life Sciences
Cont Perm
64%
36%
Cont
Perm
73%64% 61%
35%
27%36% 39%
65%
UK&I C Europe USA APAC & ME
Cont Perm
71%
49%
74%65% 58%
29%
51%
26%35% 42%
ICT Banking &
Finance
Energy Engineering Life Sciences
Cont Perm
12
CONTRACT / PERMANENT GROSS PROFIT ANALYSIS
FY 2016
FY 2015
Continued focus on growth in Contract across all regions and sectors
CONTRACT
RUNNERS
GROSS
PROFIT PER
DAY RATE
5,745
4,157 4,359 4,6925,122
5,791
7,5738,412
9,078
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
13
KEY PERFORMANCE INDICATORS: CONTRACT
* Growth is at constant currency
Note 1: All numbers are period end
Note 2: Contractors are those on placement with one of the Group’s clients at the end of
the relevant period
Note 3: The average gross profit per day per contractor is calculated by taking the period
end Total Runner Weekly Gross Profit position, divided by the period end number of
active contractors, divided by 5 (assuming a 5 day working week)
Contractmargin %
FY 2016 19.9%
FY 2015 19.8%
-28%
vs
FY08
+5%
vs
FY09
+8%
vs
FY10
+9%
vs
FY11
+13%
vs
FY12
+31%
vs
FY13
+11%
vs
FY14
+8%
vs
FY15
+9%*
vs
FY08
-1%*
vs
FY09
+4%*
vs
FY10
-2%*
vs
FY11
-5%*
vs
FY12
0%*
vs
FY13
+3%*
vs
FY14
-1%*
vs
FY15
Contract runners up 77% vs 2012
90%
95%
100%
105%
110%
115%
120%
125%
130%
135%
November December January February March April May June July August September October November
2010 2011 2012 2013 2014 2015 2016
14
CONTRACT RUNNERS – COMPARISON TO PRIOR YEARS
131%
112%
111%
109%
108%
105%
108%
PERMANENT
PLACEMENT
VOLUMES
PERMANENT
AVERAGE FEE
10,236
6,060 6,5517,434 7,343
6,429 6,601 6,4085,731
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
15
KEY PERFORMANCE INDICATORS: PERMANENT
* Growth is at constant currency
Note 1: 2013 data is based on a normalised 52 week period
Note 2: 2014 data is adjusted due to timing of period ends (an additional 45 placements in
Germany)
Note 3: The average permanent placement fee is calculated using the total placement
fees for the relevant period, divided by the number of placements for the period
Note 4: This analysis excludes retained business
-41%
vs
FY08
+8%
vs
FY09
+13%
vs
FY10
-1%
vs
FY11
-12%
vs
FY12
+3%
vs
FY13
-3%
vs
FY14
+16%*
vs
FY08
+1%*
vs
FY09
+6%*
vs
FY10
+4%*
vs
FY11
0%*
vs
FY12
+1%*
vs
FY13
+3%*
vs
FY14
+1%*
vs
FY15
Placement volumes excluding Energy down 5% YoY
Average fee up 2%* YoY
excluding Energy
Permanent is more vulnerable to market sentiment and placement volumes are down YoY. The decrease is broadly in line with the 10% decrease in Permanent headcount.
-11%
vs
FY15
16
REGION & SECTOR REVIEW
GEOGRAPHICAL
DIVERSIFICATION
ASIA PACIFIC &
MIDDLE EAST
GROSS PROFIT
GROWTH /
(DECLINE) BY
REGION*
FY 2016 FY 2015
(8%)
9% 10%
17%
0%
(15%)
UK&I
Benelux
France
Germany
USA
APAC & ME
5%
18%14% 12%
26%
(6%)
25%
17%
5%27%
20%
6%UK&I
Benelux
France
Germany
USA
APAC & ME
30%
16%
5%
23%
19%
7%
32%
48%
20%
Australia
Asia
Middle East
Russia
35%
44%
19%
2%
17
GEOGRAPHICAL GROSS PROFIT ANALYSIS
* Growth is at constant currency
18
GROSS PROFIT PERFORMANCE BY REGION
Note 1: GP Growth is at constant currency
Permanent impacted by tougher Energy comparatives, restructuring in the Global Banking market and uncertainty related to the EU Referendum in the UK
CONT PERM TOTAL CONT PERM TOTAL
Q3 16 -4% -23% -9% +1% -27% -10%
Q4 16 -7% -26% -12% -5% -32% -15%
FY 16 -3% -21% -8% +2% -21% -7%
Q3 16 +16% +4% +12% +10% +1% +6%
Q4 16 +14% -3% +8% +12% -3% +5%
FY 16 +17% +7% +13% +12% +1% +7%
Q3 16 +5% -30% -10% +12% -23% -3%
Q4 16 +6% -7% +1% -3% -30% -13%
FY 16 +10% -15% - +27% -18% +7%
Q3 16 -15% -32% -26% +6% -11% -5%
Q4 16 +4% -9% -4% +3% -15% -10%
FY 16 -2% -23% -15% +3% -17% -11%
Q3 16 +6% -15% -2% +7% -12% -1%
Q4 16 +5% -10% - +3% -16% -5%
FY 16 +8% -8% +2% +11% -10% +1%
UK&I
DIVISION MIX
YoY GROWTH YoY GROWTH
AVERAGE SALES HEADCOUNTGROSS PROFIT
FY 2016
GROUP
C EUROPE
USA
APAC & ME
Cont
77%Perm
23%
Cont
66%
Perm
34%
Cont
67%
Perm
33%
Cont
39%
Perm
61%
Cont
67%
Perm
33%
19
GROSS PROFIT PERFORMANCE BY SECTOR
Note 1: GP Growth is at constant currency
ICT shows strong growth. Banking is impacted by adverse global trading conditions
CONT PERM TOTAL CONT PERM TOTAL
Q3 16 +12% -4% +8% +8% -3% +4%
Q4 16 +9% -2% +6% +6% -11% -
FY 16 +15% +4% +12% +14% +1% +9%
Q3 16 -9% -22% -16% +15% -8% +2%
Q4 16 -13% -7% -10% +5% -15% -6%
FY 16 -4% -14% -9% +13% -8% +1%
Q3 16 +15% -2% +9% +1% -22% -10%
Q4 16 +16% -10% +6% -6% -19% -12%
FY 16 +10% +7% +9% +3% -13% -5%
Q3 16 +11% -4% +4% +21% -4% +8%
Q4 16 +15% -6% +6% +13% -13% -
FY 16 +12% +4% +8% +26% +2% +14%
Q3 16 +6% -15% -2% +7% -12% -1%
Q4 16 +5% -10% - +3% -16% -5%
FY 16 +8% -8% +2% +11% -10% +1%
GROUP
GROSS PROFIT AVERAGE SALES HEADCOUNT
YoY GROWTH FY 2016 YoY GROWTH
DIVISION MIX
ICT
BANKING &
FINANCE
ENGINEERING
LIFE SCIENCES
Cont
73%
Perm
27%
Cont
52%
Perm
48%
Cont
65%
Perm
35%
Cont
60%
Perm
40%
Cont
67%
Perm
33%
20
ENERGY - GROUP
* Growth is at constant currency
Note 1: Mix by division, region and stream is based on gross profit
Energy has diversified away from Permanent
Cont Perm Total
Q3 16 -13% -87% -32%
Q4 16 -9% -78% -24%
FY 16 -12% -80% -30%
Cont Perm Total
Q3 16 -14% -88% -38%
Q4 16 -12% -79% -29%
FY 16 -11% -86% -39%
Gross Profit YoY Growth
Average Sales Headcount YoY Growth
Contract Runners
Mix by Stream Mix by Division
Outside FY 2016; Inside FY 2015Outside FY 2016; Inside FY 2015 Outside FY 2016; Inside FY 2015
% of Group
Mix by Region
Outside FY 2016; Inside FY 2015
11%
8%
74%
26%
92%
8%
Cont
Perm
17%
32%32%
19%
10%
46%
29%
15% UK&I
C Europe
USA
APAC & ME
33%
15%
40%
12%24%
5%
50%
21%Upstream
Midstream
Downstream
Power &
Renewables
1,0
83
96
6
1,0
78
1,0
34
92
0
96
4
1,0
06
1,0
46
Q1
2015
Q2
2015
Q3
2015
Q4
2015
Q1
2016
Q2
2016
Q3
2016
Q4
2016
21
OUTLOOK
• Heightened level of political & economic uncertainty to remain a feature
• Continued headcount investment in more resilient Contract market
• 67% of Group GP (2012: 50%)
• 63% of sales headcount (2012: 44%)
• Contract runners +77% since 2012
• Continued focus on productivity in Permanent
• Trading outlook remains mixed
• UK to remain challenging
• Continental Europe well set for future growth
• USA rebased and positioned for recovery
• FX a tailwind
• Confident that we can optimise our performance, whatever the prevailing market opportunity
22
FINANCIAL CALENDAR
2017
17 March Q1 Interim Management Statement
20 April Annual General Meeting
09 June Final Dividend Paid
16 June Trading update for the six months ended 31 May 2017
24 July Interim results for the six months ended 31 May 2017
15 September Q3 Interim Management Statement
15 December Trading update for the year ended 30 November 2017
22 January 2018 Annual results for the year ended 30 November 2017
23
SUPPLEMENTARY MATERIAL
Q1 Q2 Q3 Q4 FY
Cont -1% - -4% -7% -3% NOV 16 10
NOV 15 13
Perm +2% -31% -23% -26% -21% YoY -3
Total - -9% -9% -12% -8%
GROSS PROFIT GROWTH YoY
Outside FY 2016; inside FY 2015
SECTOR MIX FY 2016 SECTOR MIX FY 2015DIVISION MIX
OFFICES
73%
27%
77%
23%
Cont
Perm60%
15%
3%
10%
10%
2%ICT
Banking & Finance
Energy
Engineering
Life Sciences
Other
55%
17%
6%
11%
10%
1%
UK
Ireland
24
UK&I TRADING METRICS
Note 1: Growth is at constant currency
Note 2: Office count includes corporate function offices
25% of Group
GP
Cont Perm Total
YoY -8% -30% -16%
YoY +2% -21% -7% - Below +2% Below
AVERAGE CONTRACT PERMANENT
-24%
YoY
-8%
SALES HEADCOUNT
CONTRACT
RUNNERS
PERMANENT
PLACEMENTS*
YoY
PLACEMENT FEE*
Cont
vs
GroupYoY
SALES HEADCOUNT GROSS PROFIT PER DAY RATE
YoY
vs
GroupTotalPerm
PERIOD END
530
166
364
FY 16
Cont Perm Total
580
192
388
FY 16
Cont Perm Total
2,881
2,663
FY 15
FY 16
1,918
1,455
FY 15
FY 16
FY 15
FY 16
FY 15
FY 16
25
UK&I TRADING METRICS
* Excluding retained business
Note 1: Growth is at constant currency
Q1 Q2 Q3 Q4 FY
Cont +17% +14% +5% +10% +11% NOV 16 6
NOV 15 7
Perm +15% +16% -5% -12% +2% YoY -1
Total +16% +14% +3% +3% +9%
Outside FY 2016; inside FY 2015
OFFICES
DIVISION MIX SECTOR MIX FY 2016 SECTOR MIX FY 2015
GROSS PROFIT GROWTH YoY
73%
27%
74%
26%
Cont
Perm 50%
13%
11%
12%
6%8%
ICT
Banking & Finance
Energy
Engineering
Life Sciences
Other
49%
15%
12%
10%
7%7%
Bel Lux
Neth
26
BENELUX TRADING METRICS
Note 1: Growth is at constant currency
Note 2: Office count includes corporate function offices
17% of Group
GP
5% 1%
11%
27
BENELUX TRADING METRICS
* Excluding retained business
Note 1: Growth is at constant currency
Cont Perm Total
YoY +8% -11% +1%
YoY +10% - +7% -2% Below +2% Below
vs
Group
SALES HEADCOUNT GROSS PROFIT PER DAY RATE PLACEMENT FEE*
Cont Perm Total YoY
vs
Group YoY
-2%
AVERAGE CONTRACT PERMANENT
PERIOD END CONTRACT PERMANENT
+20%
SALES HEADCOUNT RUNNERS PLACEMENTS*
YoYYoY
374
116
258
FY 16
Cont Perm Total
365
123
242
FY 16
Cont Perm Total
1,648
1,970
FY
15
FY
16
1,009
993
FY 15
FY 16
FY
15
FY
16
FY 15
FY 16
Q1 Q2 Q3 Q4 FY
Cont +20% +28% +24% +16% +22% NOV 16 8
NOV 15 8
Perm +31% +9% +7% +1% +11% YoY -
Total +25% +20% +17% +10% +17%
Outside FY 2016; inside FY 2015
DIVISION MIX SECTOR MIX FY 2016 SECTOR MIX FY 2015
OFFICES
GROSS PROFIT GROWTH YoY
57%
43%
60%
40% Cont
Perm 52%
7%
4%
14%
23%
ICT
Banking & Finance
Energy
Engineering
Life Sciences
Other
50%
7%6%
13%
24%
Germany
Switz
28
GERMANY TRADING METRICS
Note 1: Growth is at constant currency
Note 2: Office count includes corporate function offices
27% of Group
GP
Cont Perm Total
YoY +9% +1% +5%
YoY +11% +5% +8% -4% Above -3% Below
vs
Group
SALES HEADCOUNT GROSS PROFIT PER DAY RATE PLACEMENT FEE*
Cont Perm Total YoY
vs
Group YoY
+14%
AVERAGE CONTRACT PERMANENT
+19%
SALES HEADCOUNT RUNNERS PLACEMENTS*
YoYYoY
PERIOD END CONTRACT PERMANENT
558
247
311
FY 16
Cont Perm Total
534
245
289
FY 16
Cont Perm Total
1,657
1,971
FY 15
FY 16
1,535
1,746
FY 15
FY 16
FY 15
FY 16
FY 15
FY 16
29
GERMANY TRADING METRICS
* Excluding retained business
Note 1: Growth is at constant currency
Q1 Q2 Q3 Q4 FY
Cont +8% +14% +16% +24% +16% NOV 16 1
NOV 15 1
Perm +23% -23% +3% -9% -3% YoY -
Total +12% +1% +12% +13% +10%
OFFICES
DIVISION MIX SECTOR MIX FY 2016 SECTOR MIX FY 2015
GROSS PROFIT GROWTH YoY
Outside FY 2016; inside FY 2015
68%
32%
72%
28%
Cont
Perm 50%
19%
8%
7%
16%
ICT
Banking & Finance
Energy
Engineering
Life Sciences
Other
51%
20%
6%
9%
14%
France
30
FRANCE TRADING METRICS
Note 1: Growth is at constant currency
Note 2: Office count includes corporate function offices
5% of Group
GP
Cont Perm Total
YoY +29% -10% +14%
YoY +26% -19% +6% -1% Below +2% Below
PERIOD END CONTRACT PERMANENT
SALES HEADCOUNT RUNNERS PLACEMENTS*
YoYYoY
+7%
AVERAGE CONTRACT PERMANENT
+22%
vs
Group
SALES HEADCOUNT GROSS PROFIT PER DAY RATE PLACEMENT FEE*
Cont Perm Total YoY
vs
Group YoY
114
35
79
FY 16
Cont Perm Total
103
36
67
FY 16
Cont Perm Total
518
631
FY 15
FY 16
239
256
FY 15
FY 16
FY 15
FY 16
FY 15
FY 16
31
FRANCE TRADING METRICS
* Excluding retained business
Note 1: Growth is at constant currency
Q1 Q2 Q3 Q4 FY
Cont +20% +10% +5% +6% +10% NOV 16 8
NOV 15 6
Perm +2% -15% -30% -7% -15% YoY 2
Total +14% - -10% +1% -
Outside FY 2016; inside FY 2015
OFFICES
DIVISION MIX SECTOR MIX FY 2016 SECTOR MIX FY 2015
GROSS PROFIT GROWTH YoY
61%
39%
67%
33%
Cont
Perm
15%
25%
11%
49%
ICT
Banking & Finance
Energy
Engineering
Life Sciences
Other
10%
27%
19%
44%
USA
32
USA TRADING METRICS
Note 1: Growth is at constant currency
Note 2: Office count includes corporate function offices
20% of Group
GP
33
USA TRADING METRICS
* Excluding retained business
Note 1: Growth is at constant currency
Cont Perm Total
YoY -9% -30% -17%
YoY +27% -18% +7% -1% Above - Above
PERIOD END CONTRACT PERMANENT
SALES HEADCOUNT RUNNERS PLACEMENTS*
YoYYoY
-15%
AVERAGE CONTRACT PERMANENT
+5%
vs
Group
SALES HEADCOUNT GROSS PROFIT PER DAY RATE PLACEMENT FEE*
Cont Perm Total YoY
vs
Group YoY
307
97
210
FY 16
Cont Perm Total
349
115
234
FY 16
Cont Perm Total
1,297
1,363
FY
15
FY
16
803
680
FY 15
FY 16
FY
15
FY
16
FY 15
FY 16
Q1 Q2 Q3 Q4 FY
Cont +3% +3% -15% +4% -2% NOV 16 6
NOV 15 6
Perm -21% -27% -32% -9% -23% YoY -
Total -13% -18% -26% -4% -15%
Outside FY 2016; inside FY 2015
OFFICES
DIVISION MIX SECTOR MIX FY 2016 SECTOR MIX FY 2015
GROSS PROFIT GROWTH YoY
35%
65%
39%
61%
Cont
Perm
29%
36%
17%
2% 16%
ICT
Banking & Finance
Energy
Engineering
Life Sciences
Other
19%
38%
28%
2%13%
APAC &
ME
34
ASIA PACIFIC & MIDDLE EAST TRADING METRICS
Note 1: Growth is at constant currency
Note 2: Office count includes corporate function offices
6% of Group
GP
Cont Perm Total
YoY +5% -16% -9%
YoY +3% -17% -11% -10% Below +14% Above
vs
Group
SALES HEADCOUNT GROSS PROFIT PER DAY RATE PLACEMENT FEE*
Cont Perm Total YoY
vs
Group YoY
-34%
AVERAGE CONTRACT PERMANENT
+17%
SALES HEADCOUNT RUNNERS PLACEMENTS*
YoYYoY
PERIOD END CONTRACT PERMANENT
163
104
59
FY 16
Cont Perm Total
182
119
63
FY 16
Cont Perm Total
411
480
FY 15
FY 16
904
601
FY 15
FY 16
FY 15
FY 16
FY 15
FY 16
35
ASIA PACIFIC & MIDDLE EAST TRADING METRICS
* Excluding retained business
Note 1: Growth is at constant currency
ALL CHARTS: Outside FY 2016; Inside FY 2015
ICT BY REGION BANKING & FINANCE BY REGION
GROUP BY SECTOR
ENGINEERING BY REGION LIFE SCIENCES BY REGION
41%
18%
11%
9%
19%2%
45%
16%
8%
9%
21%
1%
ICT
Banking & Finance
Energy
Engineering
Life Sciences
Other
40%
18%6%
28%
5%3%
33%
19%6%
32%
6%
4%
29%
12%
5%9%
29%
16%
23%
14%
6%11%
31%
15%
15%
5%
3%
27%
45%
5%
12%
5%4%
29%
45%
5%
39%
19%5%
36% 1%
27%
23%
4%
44%
2%
UK&I Benelux France DACH USA APAC & ME
36
SECTOR GROSS PROFIT ANALYSIS
37
CASH FLOW
Note 1: Cash conversion ratio is calculated as net cash generated from operations less capital expenditure, stated as a % of operating profit before exceptional items / adjustments, and is a
measure of the Group’s ability to convert profit into cash
Note 2: 2015 figures were adjusted for the impact of £3.1m of costs in relation to restructuring Energy business and the impairment of IT assets
Note 3: 2016 figures are adjusted for the impact of £3.5m of costs in relation to the restricting of certain sales businesses and central support function
Receivables & PayablesIncreased due to growth in
our runner book
Treasury shares purchasePurchased to settle share-
based payments
FX movementFX benefit resulting from
weakening GBP
Cash conversion ratioContinued strong cash
conversion. Reduced YoY
due to the one-off benefit of
a DSO reduction in 2015
Adjusted As Reported Adjusted As Reported
FY 2016 FY 2016 FY 2015 FY 2015
Operating profit before exceptional items £41.3m £37.8m £41.5m £38.4m
Depreciation, amortisation and impairments £5.7m £5.7m £5.1m £6.6m
Share awards charge and other non cash items £3.0m £3.0m £4.2m £4.2m
(Increase) / decrease in receivables (£9.4m) (£9.4m) £3.6m £3.6m
Increase in payables and provisions £6.3m £6.0m £6.4m £7.5m
Net cash generated from operations £46.9m £43.1m £60.8m £60.3m
Taxation paid - net (£8.5m) (£8.5m) (£10.8m) (£10.8m)
Capital expenditure (£7.2m) (£7.2m) (£8.6m) (£8.6m)
Proceeds from disposal of subsidiaries - - £2.0m £2.0m
Investment (£0.7m) (£0.7m) - -
Net finance expense (£0.5m) (£0.5m) (£0.7m) (£0.7m)
Dividends paid (£18.0m) (£18.0m) (£17.7m) (£17.7m)
Treasury shares purchased (£6.8m) (£6.8m) (£1.1m) (£1.1m)
Tracker shares and share option related transactions £0.6m £0.6m £0.6m £0.6m
FX movement £2.7m £2.7m (£4.9m) (£4.9m)
Movement in net cash £8.5m £4.7m £19.6m £19.1m
Cash outflow from previously recognised exceptional items (£0.9m) (£0.9m) (£3.0m) (£3.0m)
Cash outflow from 2015 and 2016 restructuring (£3.8m) - (£0.5m) -
Movement in net cash after adjustments £3.8m £3.8m £16.1m £16.1m
Opening net cash/(debt) £6.2m £6.2m (£9.9m) (£9.9m)
Closing net cash £10.0m £10.0m £6.2m £6.2m
Cash conversion ratio 96% 95% 126% 134%
FY GP £213.6m £167.8m £162.4m £189.5m £199.5m £192.8m £218.2m £235.7m £258.7m
GROSS
PROFIT
CONTRACT
GROSS
MARGIN
£99.7m £91.6m £72.5m £87.3m £97.1m £91.6m £100.8m £110.5m £119.8m
£113.9m£76.2m £89.8m
£102.2m £102.4m £101.2m£117.4m
£125.2m£138.9m
£0m
£50m
£100m
£150m
£200m
£250m
£300m
2008 2009 2010 2011 2012 2013 2014 2015 2016
H1 H2
21.5% 22.1% 21.6% 21.4% 21.5%20.2% 20.0% 19.8% 19.9%
2008 2009 2010 2011 2012 2013 2014 2015 2016
38
HISTORICAL GROSS PROFIT & GROSS MARGIN
Note 1: 2013 data is based on a normalised 52 week period
Our strongest performance for GP
Contract gross margin % increased despite difficult trading conditions in Banking and Energy
FY OP £56.8m £18.0m £21.2m £30.0m £25.1m £21.0m £29.8m £41.5m £41.3m
ADJUSTED
OPERATING
PROFIT
before
exceptional
items
CONVERSION
RATIO
adjusted
operating
profit before
exceptional
items as a %
of gross profit
£24.4m
£11.0m £7.1m £11.0m £9.1m £6.7m £8.4m£14.1m £15.3m
£32.4m
£7.0m £14.1m
£19.0m£16.0m
£14.3m£21.4m
£27.4m £26.0m
£0m
£10m
£20m
£30m
£40m
£50m
£60m
2008 2009 2010 2011 2012 2013 2014 2015 2016
H1 H2
23
.8%
11
.8%
9.6
%
12
.2%
9.2
%
7.1
%
8.3
%
12
.8%
12
.8%
25
.9%
10
.5%
12
.8%
15
.3%
12
.2%
10
.9%
13
.7%
17
.6%
16
.0%
2008 2009 2010 2011 2012 2013 2014 2015 2016
HY FY
39
HISTORICAL OPERATING PROFIT & CONVERSION RATIO
Note 1: Includes data for IT Job Board up to 2011
Note 2: 2013 data is based on a normalised 52 week period
Note 3: 2013, 2014 and 2015 are before exceptional items
Note 4: 2015 figures were adjusted for the impact of £3.1m of costs in relation to restructuring Energy business and the impairment of IT assets
Note 5: 2016 figures are adjusted for the impact of £3.5m of costs in relation to the restricting of certain sales businesses and central support function
Nov 08 May 09 Nov 09 May 10 Nov 10 May 11 Nov 11 May 12 Nov 12 May 13 Nov 13 May 14 Nov 14 May 15 Nov 15 May 16 Nov 16
Period End
Total Heads2,122 1,511 1,461 1,638 1,719 1,865 2,109 2,100 2,021 2,125 2,232 2,484 2,483 2,571 2,752 2,712 2,590
Period End
Sales Heads1,578 1,111 1,051 1,181 1,204 1,351 1,610 1,620 1,568 1,667 1,797 2,015 2,016 2,051 2,185 2,142 2,044
926
524 459 474 484 519 564 507 459 477 497 538 541 553 579 550 490
652
587592
707 720832
1,046 1,1131,109
1,1901,300
1,477 1,475 1,4981,606 1,592
1,554
Nov 08 May 09 Nov 09 May 10 Nov 10 May 11 Nov 11 May 12 Nov 12 May 13 Nov 13 May 14 Nov 14 May 15 Nov 15 May 16 Nov 16
UK Sales Heads Int'l Sales Heads
40
HEADCOUNT
Note 1: Headcount is now based on full time equivalent heads. This is a change from prior years.
Note 2: Sales heads include consultants and sales management
41
SALES HEADCOUNT
Note 1: Headcount is now based on full time equivalent heads
Note 2: Sales heads include consultants and sales management
Nov 08 May 09 Nov 09 May 10 Nov 10 May 11 Nov 11 May 12 Nov 12 May 13 Nov 13 May 14 Nov 14 May 15 Nov 15 May 16 Nov 16
Period End
Sales Heads1,578 1,111 1,051 1,181 1,204 1,351 1,610 1,620 1,568 1,667 1,797 2,015 2,016 2,051 2,185 2,142 2,044
679
461 436 481 458 529623 646 683
824 8941,009 1,067 1,124
1,270 1,299 1,280
899
650615
700 746
822
987 974 885
843903
1,006 949927
915 843764
Nov 08 May 09 Nov 09 May 10 Nov 10 May 11 Nov 11 May 12 Nov 12 May 13 Nov 13 May 14 Nov 14 May 15 Nov 15 May 16 Nov 16
Contract Sales Heads Permanent Sales Heads
79%
7%
1%6%
7%
Payroll Property Advertising IT & Professional Other
17%
83%
Support Services Sales
42
COST BASE ANALYSIS
Note 1: Based on costs for FY 2016
The Group has maintained its flexible cost base
Cost Base
Payroll Costs
43
TRACKER SHARE (MINORITY INTEREST) ARRANGEMENTS
Low barriers to entry make it
a challenge to retain senior
staff – tracker shares
mitigate this.
The Tracker Share model
allows selected individuals
to invest in the business for
which they are responsible.
This is unique in the sector
and helps drive strong
retention and ownership
behaviours.
Tracker shares – how they work
> 77.5%
Owned by
SThree
< 22.5% Sold to
entrepreneurial
staff at fair value
< 22.5%
Sold to
SThree
> 77.5%
Owned by
SThree
5 YEARS
• Strong governance via Tracker Shares Steering Committee
• 2016 settlements £4.6m (2015: £8.5m, 2014: £11.5m, 2013: £7m)
• Expect future settlements to be £5-£15m in shares
• Settlements entirely at SThree’s discretion –no put option
DRIVES STRONG RETENTION AND
OWNERSHIP BEHAVIOURS
Exit Value 1/2 - 2/3 x PAT x PERBusiness valued at fair sale value at an early stage
Note 1:PAT is Group Profits After Tax. PER is the Group Price/Earnings Ratio calculated as the Share Price/Adjusted Earnings Per Share.
44
39 OFFICES IN 15 COUNTRIES