full year results full year resuls presentation 2016

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


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


13

KEY PERFORMANCE INDICATORS: CONTRACT


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



15

KEY PERFORMANCE INDICATORS: PERMANENT


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


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


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


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%


OFFICES

DIVISION MIX SECTOR MIX FY 2016 SECTOR MIX FY 2015


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



17% of Group

GP

5% 1%

11%

27

BENELUX TRADING METRICS



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%


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%



OFFICES


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



27% of Group

GP

Cont Perm Total

YoY +9% +1% +5%

YoY +11% +5% +8% -4% Above -3% Below

vs

Group


Cont Perm Total YoY

vs

Group YoY

+14%


+19%


YoYYoY


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



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




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



5% of Group

GP

Cont Perm Total

YoY +29% -10% +14%

YoY +26% -19% +6% -1% Below +2% Below



YoYYoY

+7%


+22%

vs

Group


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



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% -


OFFICES



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



20% of Group

GP

33

USA TRADING METRICS



Cont Perm Total

YoY -9% -30% -17%

YoY +27% -18% +7% -1% Above - Above



YoYYoY

-15%


+5%

vs

Group


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%


OFFICES



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



6% of Group

GP

Cont Perm Total

YoY +5% -16% -9%

YoY +3% -17% -11% -10% Below +14% Above

vs

Group


Cont Perm Total YoY

vs

Group YoY

-34%


+17%


YoYYoY


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



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



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


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 3: 2013, 2014 and 2015 are before exceptional items



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


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


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


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

full year results full year resuls presentation 2016

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