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Recruitment - Embracing the Upturn

Joe Carroll

Client Manager

HSBC Invoice Finance (UK) Ltd

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Contents

The market context

The growth opportunity

The financing options

The resources available

Some real life examples

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The market context

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The growth opportunity (UK)

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The growth opportunity (International)

GDP growth % forecast: selected major economies

2014 2015 UK 2.9 2.5

USA 2.5 2.5 Eurozone 0.9 1.1 Germany 1.7 1.7

France 0.6 1.0 Italy 0.4 0.6

Spain 0.7 1.1 Japan 1.0 1.0

Source: HSBC Economics (March 2014)

Global trade by sector for the UK (2014-30) Growth (% year)

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Exports

Imports

High-tech goods Total

Total imports and exports are the sum of imports and exports from the modelled countries

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Source: Deloitte /APSCo Recruitment Index 2013

The growth opportunity (International)

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The financing need…… and the risks

Staff Supplied

Salary Paid

Payment due

Payment received?

Day 7 Day 30 Day …..Day 1

Increased pressure on Credit Terms

Increased pressure on Margins

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The financing need……. and the risks

Increased company insolvency – Q1 2014

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The financing options

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Structured Unstructured

Grows with business Requires renegotiation

Less security required Capital assets as security

More flexible Less flexible

Self liquidating Higher collateral demands

More favourable cost

Receivables (Invoice) Finance

Used by 43,500 UK businesses* in UK

£250bn of client turnover*

Disclosed (Factoring) or Undisclosed (Invoice Discounting)

UK and Export

Professional Credit Management

Credit Protection

Recruitment is a key sector for our business We fund, collect, protect Over 50 years experience Unrivalled global reach Funding available in every internationally traded currency QiCM accredited SME Fund 2014

*Asset Based Finance Association, 2013 statistics

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Who can help?

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Some recruitment sector businesses HSBC is proud to support

• International specialist staffing group with operations across the globe• Relationship with HSBC Invoice Finance for over 10 years• £13m Receivables Finance funding line• Funding against invoices for temporary and permanent placements• Provides Empresaria Group with the additional working capital to support

continuing sales growth

• One of the North East of England's leading privately-owned multi-disciplinary agencies.

• Over 15 years with HSBC • £3m funding facility supporting UK and Export sales • Credit Protection provided to guard against bad debt • Flexible working capital facility

• £30 million turnover recruitment business focused on the Automotive Industry

• 15 year HSBC relationship• GBP £3m RF facility with $2m RF facility for their US operations.• Facility helps support continued sales growth into new markets, particularly

China.

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Summary

· The UK recruitment industry is poised to take advantage of the upturn in economic conditions

· Opportunities exist in both UK and international markets

· Growth brings with it a need for working capital

· However, embracing the upturn is not without its risks

· Structured funding solutions such as receivables finance offer significant advantages and risk mitigation

· Help and expertise is available through a range of trusted advisors

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Thank you