full year results presentation 2017
TRANSCRIPT
2
2017 Overview
• Encouraging full year performance with strong Q4 and exit rate into 2018
• Adjusted profit before tax up 9% to £44.5m
• GP up 4%* YoY (up 11% on an as reported basis) and up 8%* YoY in Q4
• Growth in GP driven by USA (+18%*) and Continental Europe (+9%*), whilst UK&I remains challenging (-14%*)
• 81% of GP now generated outside UK&I (FY 2016: 75%)
• Contract GP up 10%* YoY, with growth across all sectors
• Contract now accounts for 71% of Group GP (FY 2016: 67%)
• Permanent GP down 8%* YoY, but productivity improved by 3%* YoY
• Foreign exchange increased reported operating profit by c£5.0m and GP by c£18.1m
• Move of London based support functions to Glasgow underway**
• Final dividend maintained
*Growth is at constant currency
** Net Cost is expected to be c£14-£16m,less expected regional development grant of c£2m. Exceptional impact in 2017 of £6.7m. Annualised benefit of c£4-5m per annum on completion of move
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: 2017 figures are adjusted for the impact of £6.7m of costs in relation to the strategic restructuring and relocation of UK central support functions
Note 3: 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
Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted
FY 2017 FY 2017 FY 2016 FY 2016 Actual Growth Actual Growth CC Growth*
Revenue £1,114.5m £1,114.5m £959.9m £959.9m +16% +16% +9%
Contract gross profit £203.5m £203.5m £173.3m £173.3m +17% +17% +10%
Permanent gross profit £84.2m £84.2m £85.4m £85.4m -1% -1% -8%
Total gross profit £287.7m £287.7m £258.7m £258.7m +11% +11% +4%
Operating profit £44.9m £38.2m £41.3m £37.8m +9% +1% -3%
Conversion ratio 15.6% 13.3% 16.0% 14.6% -0.4%pts -1.3%pts -1.2%pts
Profit before tax £44.5m £37.7m £40.8m £37.3m +9% +1% -3%
Taxation (£11.4m) (£10.1m) (£11.0m) (£10.1m) -4% - +8%
Profit after tax £33.1m £27.6m £29.8m £27.2m +11% +2% -1%
Basic earnings per share 25.7p 21.5p 23.2p 21.2p +11% +1% -1%
Dividend per share 14.0p 14.0p 14.0p 14.0p
Net cash £5.6m £5.6m £10.0m £10.0m
Strong cash position
£50m revolving credit facility ('RCF') with Citibank and
HSBC, committed to May 2019
5
BALANCE SHEET
Investments
Investments in Innovation start ups and incubator
Deferred tax assets
Primarily due to increased provisions
Provisions
Increased for restructuring costs
Net Working Capital
Increase due to growth in Contract runner book and
DSO increase
A robust balance sheet
30 November 30 November
2017 2016
Intangible assets £11.4m £11.6m
Property, plant & equipment £6.7m £7.1m
Investments £1.8m £0.7m
Deferred tax assets £4.2m £2.5m
Net working capital £67.0m £50.3m
Provisions (£14.5m) (£5.8m)
Net current tax liabilities (£1.5m) (£0.7m)
£75.1m £65.7m
Net cash £5.6m £10.0m
Net assets £80.7m £75.7m
6
CASH FLOW BRIDGE
YE 2016 Net Cash
Operating profit
Depn and amort
Share awards + other non
cash items
Foreign exchange +
other
Restructuring Capex & investments
Treasury shares
purchased
Taxes and interest
Working capital
Dividends YE 2017 Net Cash
£10.0m
£44.9m
£6.1m£3.5m
(£0.6m) (£1.0m)
(£6.9m)
(£7.8m)
(£11.2m)
(£13.4m)
(£18.0m)
£5.6m
Note 1: Cash Flow presented on an adjusted basis
7
LONDON BASED SUPPORT RELOCATION
Cash outflow of c£13m to £14m in 2018
(2017: £1m)
c£4m-£5m annualised benefit
Simple Payback of c3 years
250 Roles* proposed for relocation
Restructuring costs of £6.7m recognised as exceptional items in 2017. Further costs of £8m-£9m expected
in 2018 with a regional development grant of up to c£2m receivable in future years contingent on
investment
Exceptional Charge £m’s
People costs £11m - £12m
Other Costs £3m - £4m
Total £14m - £16m
Less: Regional Development
Grantc.£2m
Total Exceptional Cost £12m - £14m
* Include IT, Finance and HR
8
EARNINGS PER SHARE AND DIVIDENDS
Dividends maintained YoY
Note 1: 2017 figures are adjusted for the impact of £6.7m of costs in relation to the strategic restructuring and relocation of UK central support functions
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
Adjusted As Reported Adjusted As Reported Adjusted As Reported
FY 2017 FY 2017 FY 2016 FY 2016 Actual Growth Actual Growth
Profit after tax £33.1m £27.6m £29.8m £27.2m +11% +2%
For basic EPS 128.6m 128.6m 128.3m 128.3m +0% +0%
Dilutive impact of share plans 4.0m 4.0m 3.8m 3.8m +5% +5%
Fully diluted EPS 132.6m 132.6m 132.1m 132.1m +0% +0%
Basic 25.7p 21.5p 23.2p 21.2p +11% +1%
Diluted 24.9p 20.8p 22.6p 20.6p +10% +1%
DPS Interim Ordinary 14.0p 14.0p 14.0p 14.0p - -
Weighted
average
number of
shares
EPS
9
FOREIGN EXCHANGE IMPACT
An FX tailwind in 2017. If the exchange rates of the Group’s main operating currencies had remained at FY
2016 average rates throughout the current year, FY 2017 GP and OP would have been lower by c£18.1m
and c£5.0m, respectively.
Average Closing Average Closing Average Closing
EUR € 1.15 1.14 1.25 1.18 (8.2%) (3.8%)
USD $ 1.28 1.35 1.39 1.25 (7.6%) 8.2%
Gross ProfitOperating
ProfitGross Profit
Operating
Profit
EUR € £1,520k £467k £1,300k £431k
USD $ £643k £169k £506k £79k
Impact of a 1% change per
annum
Year Ended
30 November 2017
Year Ended
30 November 2016
YoY Exchange
Rate Movement
Year Ended
30 November 2017
Year Ended
30 November 2016
11
2017 PROGRESS
Progress
Strategic investment in
Contract• Record Contract Runners at year end
• Contract now 71% of GP (FY 2016: 67%)
• Now represents 65% of sales headcount, our highest ever
• 16th consecutive quarter of growth
Drive recovery in Permanent
productivity• Productivity up 3%* YoY
• Separate management structure for Permanent business to drive accountability and improve focus
Broaden capabilities in high
growth US markets• GP up +18%* YoY with Contract up +21%* and Permanent up +12%*
• Double digit growth achieved across all sectors except Banking & Finance
• Our second largest region, representing 22% of our Group
Accelerate sector
diversification in key STEM
growth markets
• Robust performances in Life Sciences and Engineering offsetting weakness in Banking & Finance
• Continued recovery in Energy and moderate growth in ICT
• Exciting ICT opportunities outside UK and Europe
Build scale and critical mass in
global network• Growth driven by increased returns from existing locations
• Group period end headcount up 10% YoY and up 7% sequentially in Q4
• New offices opened in Lyon, Toulouse, Vienna and Barcelona
Focus on costs and
efficiencies to improve
operational gearing
• Majority of London based support functions to relocate to Glasgow**
• Improving consultant productivity, up 5%* YoY
*Growth is at constant currency
** Net Cost is expected to be c£14-£16m,less expected regional development grant of c£2m. Exceptional impact in 2017 of £6.7m. Annualised benefit of c£4-5m per annum on completion of move
DIVISION
DIVERSIFICATION
GEOGRAPHICAL
DIVERSIFICATION
SECTOR
DIVERSIFICATION
71%
29%
Perm
67%
33%
Cont
Perm
19%
52%
22%
7%
25%
49%
20%
6%
UK&IC EuropeUSAAPAC & ME
43%
15%
9%
9%
22%
2%
45%
16%
8%
9%
21%
1%
ICTBanking & FinanceEnergyEngineeringLife SciencesOther
12
BUSINESS PROFILE
FY 2017 FY 2017 FY 2017
FY 2016FY 2016FY 2016
DIVISION GEOGRAPHY SECTOR
71%
29%
79% 71% 69%51%
21% 29% 31%49%
UK&I C Europe USA APAC & ME
75%55%
93%72% 64%
25%45%
7%28% 36%
ICT Banking &Finance
Energy Engineering Life Sciences
67%
33%
77%66% 67%
39%
23%34% 33%
61%
UK&I C Europe USA APAC & ME
73%52%
92%
65% 60%
27%48%
8%
35% 40%
ICT Banking &Finance
Energy Engineering Life Sciences
13
CONTRACT / PERMANENT GROSS PROFIT ANALYSIS
FY 2017
FY 2016
Continued focus on growth in Contract across all regions and sectors
Contract Permanent
CONTRACT
RUNNERS
GROSS
PROFIT PER
DAY RATE
4,157 4,359 4,692 5,1225,791
7,5738,412
9,07810,197
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
14
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)
Contract
margin %
FY 2017 19.8%
FY 2016 19.9%
+12%
vs
FY16
+5%
vs
FY09
+8%
vs
FY10
+9%
vs
FY11
+13%
vs
FY12
+31%
vs
FY13
+11%
vs
FY14
+8%
vs
FY15
Flat*
vs
FY16
-1%*
vs
FY09
+4%*
vs
FY10
-2%*
vs
FY11
-5%*
vs
FY12
0%*
vs
FY13
+3%*
vs
FY14
-1%*
vs
FY15
Contract runners nearly doubled since 2012
15
CONTRACT RUNNERS – COMPARISON TO PRIOR YEARS
112%
131%
111%
108%
112%
90%
95%
100%
105%
110%
115%
120%
125%
130%
135%
November December January February March April May June July August September October November
2013 2014 2015 2016 2017
PERMANENT
PLACEMENT
VOLUMES
PERMANENT
AVERAGE FEE
6,0606,551
7,434 7,3436,429 6,601 6,408
5,7314,972
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
16
KEY PERFORMANCE INDICATORS: PERMANENT
Note 3: 2014 data is adjusted due to timing of period ends (an additional 45 placements in Germany)
Note 4: 2013 data is based on a normalised 52 week period
* Growth in constant currency
Note 1: 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 2: This analysis excludes retained business
-13%
vs
FY16
+8%
vs
FY09
+13%
vs
FY10
-1%
vs
FY11
-12%
vs
FY12
+3%
vs
FY13
-3%
vs
FY14
+3%*
vs
FY16
+1%*
vs
FY09
+6%*
vs
FY10
+4%*
vs
FY11
0%*
vs
FY12
+1%*
vs
FY13
+3%*
vs
FY14
+1%*
vs
FY15
Placement
volumes down
13% YoY
Average fee
up 3%* YoY
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
22
INNOVATION
Helps to future-proof
the companyGenerate new
revenue streams
Minimise risk through
governance and
support structure
Invested $2m in three third
party start-up’s
Expect to spend £3m on Innovation in operating expenses in 2018 (2017: £2m)
Talent Acquisition Platform
focused on cultural fit and
automated matching. Initial
stages of growth.
Has attracted blue-chip
technology brands.
Create and manage
asynchronous video
interviews.
Being trialled internally with
one of our core brands.
Hybrid tech recruitment
platform. Pilot planned for
H1 2018 before wider
adoption.
Innovative approach
to meet our
customers evolving
demands
BUY BUILD
23
2018 PRIORITIES
Progress
Grow and extend regions,
sectors and services• Invest and grow in key markets, particularly in USA and Germany
• Maximise opportunities in ICT, Life Sciences, Engineering & Energy
• Further leverage our Employee Contractor Model to create new opportunities
Develop and sustain great
customer relationships• Continue to use NPS to drive improvements in our processes and behaviours
• Embed our operating principles throughout the organisation to create great customer experience
Focus on Contract, drive
Permanent profitability• Focus on growing Contract headcount faster than Permanent, in line with our plan
• Continue to maintain a strong permanent offering in key markets such as Germany & USA
• Complete separate management structures for Permanent & Contract business to drive profitability
and improve focus
Generate incremental revenues
through Innovation and M&A• Leverage our existing innovation investments and launch additional ventures incubated within SThree
• Trial additional services and test products developed by our third party investments
Build infrastructure for
leveraged growth• Invest in new offices in key markets and drive increased returns from existing locations
• Deploy salesforce marketing cloud
• Relocate UK central support roles to Glasgow with minimal impact on customer service
Find, retain and develop great
people• Develop our future female leaders
• Understand what matters most to our employees through employee NPS surveys and act on feedback
24
OUTLOOK
• Encouraged by the improvement in momentum in Q4
• Continued headcount investment in more resilient Contract market
• Contract runners nearly doubled since 2012
• Continued focus on productivity in Permanent with selective headcount investment
• Sectorally and geographically diverse and agile
• Trading outlook remains encouraging with Continental Europe and USA well positioned for growth
• Enter 2018 in good shape
To be the #1 STEM talent provider in the best STEM markets
25
FINANCIAL CALENDAR
201829 January Annual results for the year ended 30 November 2017
16 March Q1 Trading Statement
26 April Annual General Meeting
15 June Trading update for the six months ended 31 May 2018
23 July Interim results for the six months ended 31 May 2018
14 September Q3 Trading Statement
14 December Trading update for the year ended 30 November 2018
201928 January Annual results for the year ended 30 November 2018
GEOGRAPHICAL
DIVERSIFICATION
ASIA PACIFIC &
MIDDLE EAST
GROSS PROFIT
GROWTH /
(DECLINE) BY
REGION*
FY 2017 FY 2016
(14%)
13%9%
6%
18%
(4%)(8%)
9% 10%
17%
-
(15%)
19%
19%
5%28%
22%
7%
25%
17%
5%27%
20%
6%
34%
45%
21%32%
48%
20%
28
GEOGRAPHICAL GROSS PROFIT ANALYSIS
* Growth is at constant currency
UK&I
Benelux
France
Germany
USA
APAC & ME
Australia
Asia
Middle East
29
SECTOR GROSS PROFIT ANALYSIS
* Growth is at constant currency
SECTORAL
DIVERSIFICATION
GROSS PROFIT
GROWTH /
(DECLINE) BY
SECTOR*
FY 2017 FY 2016
1%
(2%)
25%
5%
7%
15% 12%
(9%)
(30%)
9% 8%
1%
43%
15%
9%
9%
22%
2%
45%
16%
8%
9%
21%
1%
30
GROSS PROFIT PERFORMANCE BY REGION
Note 1: GP Growth is at constant currency
GP Growth YoY FY 17 Average Sales Headcount YoY
Cont Perm Total Cont / Perm Mix Cont Perm Total
Q3 17 -10% -12% -10% Q3 17 -9% -9% -9%
Q4 17 -9% -25% -13% Q4 17 -4% -6% -4%
FY 17 -11% -22% -14% FY 17 -10% -17% -12%
Q3 17 +12% -9% +6% Q3 17 +24% -4% +13%
Q4 17 +24% -1% +16% Q4 17 +23% +2% +15%
FY 17 +17% -7% +9% FY 17 +21% -5% +10%
Q3 17 +24% +12% +20% Q3 17 -2% -5% -3%
Q4 17 +23% +6% +17% Q4 17 +9% +20% +12%
FY 17 +21% +12% +18% FY 17 -8% -9% -8%
Q3 17 +32% -20% +1% Q3 17 -11% -17% -15%
Q4 17 +4% -14% -7% Q4 17 +3% -9% -5%
FY 17 +24% -22% -4% FY 17 -6% -17% -14%
Q3 17 +9% -6% +5% Q3 17 +8% -7% +2%
Q4 17 +14% -5% +8% Q4 17 +12% +1% +8%
FY 17 +10% -8% +4% FY 17 +5% -10% -1%
Cont79%
Perm21%
Cont69%
Perm31%
Cont51%
Perm49%
UK&I
USA
APAC & MENA
19% of Group
22% of Group
7% of group
Cont71%
Perm29%
GROUP
Cont71%
Perm29%
C Europe52% of group
31
GROSS PROFIT PERFORMANCE BY REGION
Note 1: GP Growth is at constant currency
GP Growth YoY HY 17 Average Sales Headcount YoY
Cont Perm Total Cont / Perm Mix Cont Perm Total
Q1 17 -13% -37% -19% Q1 17 -12% -27% -18%
Q2 17 -14% -11% -14% Q2 17 -15% -22% -17%
HY 17 -14% -25% -16% HY 17 -14% -24% -17%
Q1 17 +17% -11% +7% Q1 17 +15% -9% +5%
Q2 17 +15% -8% +7% Q2 17 +20% -9% +8%
HY 17 +16% -9% +7% HY 17 +17% -9% +6%
Q1 17 +11% +16% +12% Q1 17 -17% -28% -21%
Q2 17 +23% +13% +20% Q2 17 -19% -17% -18%
HY 17 +17% +14% +16% HY 17 -18% -23% -20%
Q1 17 +11% -30% -14% Q1 17 -4% -22% -17%
Q2 17 +54% -22% +5% Q2 17 -12% -19% -17%
HY 17 +31% -26% -4% HY 17 -8% -21% -17%
Q1 17 +7% -14% - Q1 17 -1% -18% -8%
Q2 17 +9% -6% +4% Q2 17 - -15% -6%
HY 17 +8% -10% +2% HY 17 - -17% -7%
Cont79%
Perm21%
Cont68%
Perm32%
Cont53%
Perm47%
UK&I
USA
APAC & MENA
20% of Group
22% of Group
7% of group
Cont70%
Perm30%
GROUP
Cont70%
Perm30%
C Europe51% of group
32
GROSS PROFIT PERFORMANCE BY SECTOR
Note 1: GP Growth is at constant currency
GP Growth YoY FY 17 Average Sales Headcount YoY
Cont Perm Total Cont / Perm Mix Cont Perm Total
Q3 17 +2% -3% +1% Q3 17 +6% -7% +2%
Q4 17 +4% -6% +1% Q4 17 +8% -3% +5%
FY 17 +4% -6% +1% FY 17 +4% -10% -1%
Q3 17 +8% -6% +1% Q3 17 -11% -16% -14%
Q4 17 +17% -17% -1% Q4 17 -6% -7% -7%
FY 17 +6% -10% -2% FY 17 -7% -15% -11%
Q3 17 +37% +12% +35% Q3 17 +17% +5% +16%
Q4 17 +46% +113% +50% Q4 17 +20% +2% +19%
FY 17 +26% +15% +25% FY 17 +4% -19% +2%
Q3 17 +10% -5% +5% Q3 17 +27% -2% +15%
Q4 17 +23% -13% +11% Q4 17 +36% +9% +25%
FY 17 +17% -18% +5% FY 17 +21% -11% +7%
Q3 17 +13% -12% +3% Q3 17 +11% +2% +7%
Q4 17 +16% +6% +12% Q4 17 +21% +15% +18%
FY 17 +15% -4% +7% FY 17 +9% -3% +3%
Cont75%
Perm25%
Cont72%
Perm28%
Cont64%
Perm36%
ICT
ENGINEERING
LIFE SCIENCES
43% of Group
9% of Group
22% of group
Cont93%
Perm7%
Cont55%
Perm45%
BANKING & FINANCE
15% of group
9% of GroupENERGY
33
GROSS PROFIT PERFORMANCE BY SECTOR
Note 1: GP Growth is at constant currency
GP Growth YoY HY 17 Average Sales Headcount YoY
Cont Perm Total Cont / Perm Mix Cont Perm Total
Q1 17 +7% -10% +2% Q1 17 - -14% -5%
Q2 17 +3% -6% +1% Q2 17 - -14% -5%
HY 17 +5% -8% +1% HY 17 +0% -14% -5%
Q1 17 -5% -12% -8% Q1 17 -1% -20% -11%
Q2 17 +3% -6% -1% Q2 17 -9% -18% -14%
HY 17 -1% -9% -5% HY 17 -5% -19% -13%
Q1 17 -10% +1% -8% Q1 17 -13% -48% -17%
Q2 17 +30% -35% +24% Q2 17 -6% +2% -6%
HY 17 +10% -15% +7% HY 17 -9% -32% -12%
Q1 17 +22% -34% -1% Q1 17 +6% -28% -10%
Q2 17 +14% -17% +3% Q2 17 +15% -17% +1%
HY 17 +17% -26% +1% HY 17 +10% -23% -5%
Q1 17 +17% -13% +4% Q1 17 +3% -17% -7%
Q2 17 +12% - +7% Q2 17 +2% -9% -3%
HY 17 +15% -7% +6% HY 17 +3% -13% -5%
Cont74%
Perm26%
Cont72%
Perm28%
Cont64%
Perm36%
44% of Group
9% of Group
21% of group
Cont92%
Perm8%
Cont55%
Perm45%
15% of group
9% of group
ICT
ENGINEERING
LIFE SCIENCES
BANKING & FINANCE
ENERGY
34
UK&I TRADING METRICS
Note 1: Growth is at constant currency
Note 2: Office count includes corporate function offices
19% of
Group
GP
FY GROSS PROFIT GROWTH YoY
Q1 Q2 Q3 Q4 FY NOV 17 8
Contract -13% -14% -10% -9% -11% NOV 16 10
YoY -2
Permanent -37% -11% -12% -25% -22%
Total -19% -14% -10% -13% -14%
SECTOR MIX FY 2017
OFFICES
DIVISION MIX SECTOR MIX FY 2016
Outside FY 2017; inside FY 2016
77%
23%
79%
21%
Cont
Perm58%
14%
3%
12%
12%
1%ICT
Banking & Finance
Energy
Engineering
Life Sciences
Other
60%15%
3%
10%
10%
2%
UK
Ireland
35
UK&I TRADING METRICS
* Excluding retained business
Note 1: Growth is at constant currency
Cont Perm Total YoY
YoY -1% -9% -3% -2%
YoY -10% -17% -12% -1% Below +4% Below
-26%
PERIOD END CONTRACT PERMANENT
SALES HEADCOUNT RUNNERS PLACEMENTS*
YoY
AVERAGE
YoY
vs
Group
PERMANENT
SALES HEADCOUNT PROFIT PER DAY RATE1 PLACEMENT FEE*1
Cont Perm Total YoY
vs
Group
CONTRACT GROSS
511
151
360
FY 17
Cont Perm Total
508
159
349
FY 17
Cont Perm Total
2,663
2,616
FY 16
FY 17
1,455
1,075
FY 16
FY 17
FY 16
FY 17
FY 16
FY 17
36
BENELUX TRADING METRICS
Note 1: Growth is at constant currency
Note 2: Office count includes corporate function offices
19% of
Group
GP
5% 1%
13% FY GROSS PROFIT GROWTH YoY
Q1 Q2 Q3 Q4 FY NOV 17 7
Contract +16% +19% +21% +38% +24% NOV 16 6
YoY 1
Permanent -18% -18% -33% -3% -17%
Total +6% +10% +8% +28% +13%
SECTOR MIX FY 2017
OFFICES
DIVISION MIX SECTOR MIX FY 2016
Outside FY 2017; inside FY 2016
74%
26%
81%
19%
Cont
Perm 49%
13%
12%
12%
8%6%
ICT
Banking & Finance
Energy
Engineering
Life Sciences
Other
50%
13%
11%
12%
6%8%
Bel Lux
Neth
37
BENELUX TRADING METRICS
* Excluding retained business
Note 1: Growth is at constant currency
Cont Perm Total YoY
YoY +22% -9% +12% +29%
YoY +21% -19% +7% -0% Below +2% Below
YoY
vs
Group
PERMANENT
SALES HEADCOUNT PROFIT PER DAY RATE1 PLACEMENT FEE*1
Cont Perm Total YoY
vs
Group
CONTRACT GROSSAVERAGE
-20%
PERIOD END CONTRACT PERMANENT
SALES HEADCOUNT RUNNERS PLACEMENTS*
YoY
421
106
315
FY 17
Cont Perm Total
392
99
293
FY 17
Cont Perm Total
1,970
2,537
FY 16
FY 17
993
794
FY 16
FY 17
FY 16
FY 17
FY 16
FY 17
38
GERMANY TRADING METRICS
Note 1: Growth is at constant currency
Note 2: Office count includes corporate function offices
28% of
Group
GP
FY GROSS PROFIT GROWTH YoY
Q1 Q2 Q3 Q4 FY NOV 17 8
Contract +16% +10% +7% +15% +12% NOV 16 8
YoY 0
Permanent -7% -5% +4% -1% -2%
Total +6% +4% +5% +8% +6%
SECTOR MIX FY 2017DIVISION MIX SECTOR MIX FY 2016
OFFICES
Outside FY 2017; inside FY 2016
60%
40%
63%
37%Cont
Perm56%
6%4%
14%
20%
ICT
Banking & Finance
Energy
Engineering
Life Sciences
Other
52%
7%
4%
14%
23%
Germany
Switz
39
GERMANY TRADING METRICS
* Excluding retained business
Note 1: Growth is at constant currency
Cont Perm Total YoY
YoY +29% +14% +22% +18%
YoY +17% +3% +11% +1% Above +1% Below
PERIOD END CONTRACT PERMANENT
SALES HEADCOUNT RUNNERS PLACEMENTS*
vs
Group
YoY
-7%
vs
Group
AVERAGE CONTRACT GROSS PERMANENT
SALES HEADCOUNT PROFIT PER DAY RATE1 PLACEMENT FEE*1
Cont Perm Total YoY YoY
681
280
401
FY 17
Cont Perm Total
590
253
337
FY 17
Cont Perm Total
1,971
2,316
FY 16
FY 17
1,746
1,619
FY 16
FY 17
FY 16
FY 17
FY 16
FY 17
40
FRANCE TRADING METRICS
Note 1: Growth is at constant currency
Note 2: Office count includes corporate function offices
5% of
Group
GP
FY GROSS PROFIT GROWTH YoY
Q1 Q2 Q3 Q4 FY NOV 17 3
Contract +21% +20% +9% +15% +16% NOV 16 1
YoY 2
Permanent -16% +5% -32% +14% -8%
Total +9% +16% -1% +14% +9%
SECTOR MIX FY 2017DIVISION MIX SECTOR MIX FY 2016
OFFICES
Outside FY 2017; inside FY 2016
72%
28%
76%
24%
Cont
Perm48%
20%
10%
4%
18%
ICT
Banking & Finance
Energy
Engineering
Life Sciences
Other
50%
19%
8%
7%
16%
France
41
FRANCE TRADING METRICS
* Excluding retained business
Note 1: Growth is at constant currency
Cont Perm Total YoY
YoY +24% -7% +15% +8%
YoY +35% -13% +18% +6% Below +2% Below
PERIOD END CONTRACT PERMANENT
SALES HEADCOUNT RUNNERS PLACEMENTS*
vs
Group
YoY
-23%
vs
Group
AVERAGE CONTRACT GROSS PERMANENT
SALES HEADCOUNT PROFIT PER DAY RATE1 PLACEMENT FEE*1
Cont Perm Total YoY YoY
130
33
97
FY 17
Cont Perm Total
122
31
91
FY 17
Cont Perm Total
631
682
FY 16
FY 17
256
196
FY16
FY17
FY 16
FY 17
FY 16
FY 17
42
USA TRADING METRICS
Note 1: Growth is at constant currency
Note 2: Office count includes corporate function offices
22% of
Group
GP
FY GROSS PROFIT GROWTH YoY
Q1 Q2 Q3 Q4 FY NOV 17 8
Contract +11% +23% +24% +23% +21% NOV 16 8
YoY 0
Permanent +16% +13% +12% +6% +12%
Total +12% +20% +20% +17% +18%
SECTOR MIX FY 2017DIVISION MIX SECTOR MIX FY 2016
OFFICES
Outside FY 2017; inside FY 2016
67%
33%
69%
31%
Cont
Perm
14%
22%
17%
46%
ICT
Banking & Finance
Energy
Engineering
Life Sciences
Other
15%
25%
11%
49%
USA
43
USA TRADING METRICS
* Excluding retained business
Note 1: Growth is at constant currency
Cont Perm Total YoY
YoY +11% +23% +15% +14%
YoY -8% -9% -8% -3% Above -7% Above
PERIOD END CONTRACT PERMANENT
SALES HEADCOUNT RUNNERS PLACEMENTS*
vs
Group
YoY
+18%
vs
Group
AVERAGE CONTRACT GROSS PERMANENT
SALES HEADCOUNT PROFIT PER DAY RATE1 PLACEMENT FEE*1
Cont Perm Total YoY YoY
353
120
233
FY 17
Cont Perm Total
319
104
215
FY 17
Cont Perm Total
1,363
1,552
FY 16
FY 17
680
803
FY 16
FY 17
FY 16
FY 17
FY 16
FY 17
44
ASIA PACIFIC & MIDDLE EAST TRADING METRICS
Note 1: Growth is at constant currency
Note 2: Office count includes corporate function offices
7% of
Group
GP
FY GROSS PROFIT GROWTH YoY
Q1 Q2 Q3 Q4 FY NOV 17 6
Contract +11% +54% +32% +4% +24% NOV 16 6
YoY 0
Permanent -30% -22% -20% -14% -22%
Total -14% +5% +1% -7% -4%
SECTOR MIX FY 2017DIVISION MIX SECTOR MIX FY 2016
OFFICES
Outside FY 2017; inside FY 2016
39%
61%51%49%
Cont
Perm
28%
38%
20%
14%
ICT
Banking & Finance
Energy
Engineering
Life Sciences
Other
29%
36%
17%
2% 16%
APAC & MENA
45
ASIA PACIFIC & MIDDLE EAST TRADING METRICS
* Excluding retained business
Note 1: Growth is at constant currency
Cont Perm Total YoY
YoY +12% -8% -1% +3%
YoY -6% -17% -14% -11% Below -2% Above
PERIOD END CONTRACT PERMANENT
SALES HEADCOUNT RUNNERS PLACEMENTS*
vs
Group
YoY
-19%
vs
Group
AVERAGE CONTRACT GROSS PERMANENT
SALES HEADCOUNT PROFIT PER DAY RATE1 PLACEMENT FEE*1
Cont Perm Total YoY YoY
161
95
66
FY 17
Cont Perm Total
157
98
59
FY 17
Cont Perm Total
480
494
FY 16
FY 17
601
485
FY 16
FY 17
FY 16
FY 17
FY 16
FY 17
ICT BY REGION BANKING & FINANCE BY REGION
ENGINEERING BY REGION LIFE SCIENCES BY REGION
GROUP BY SECTOR
ENERGY BY REGION
ALL CHARTS: Outside FY 2017; Inside FY 2016
45%
16%
8%
9%
21%
43%
15%
9%
9%
22%
2%
33%
19%6%
32%
6%26%
21%
6%
36%
7%
4%
23%
14%
6%11%
31%
15%
18%
16%
7%
12%
32%
15%
12%5%
29%
45%
5%
11%
7%
4%
26%
48%
4%
27%
23%
44%
27%
25%
2%
44%
2%
UK&I Benelux France DACH USA APAC & ME
10%
26%
5%15%
29%
15%
6%
24%
5%
11%
41%
13%
46
SECTOR GROSS PROFIT ANALYSIS
47
CASH FLOW
Note 1: 2017 figures are adjusted for the impact of £6.7m of costs in relation to restructuring and relocation of UK central support functions
Note 2: 2016 figures are adjusted for the impact of £3.5m of costs in relation to the restricting of certain sales businesses and central support functions
Note 3: 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 & Payables
Increased due to growth in
our runner book and increase
in DSO’s
Treasury shares purchase
Purchased to settle share-
based payments
Cash conversion ratio
Reduced due to increase in
working capital
Commentary on Adjusted cash flow
Adjusted As Reported Adjusted As Reported
FY 2017 FY 2017 FY 2016 FY 2016
Operating profit before exceptional items £44.9m £38.2m £41.3m £37.8m
Depreciation, amortisation and impairments £6.1m £6.1m £5.7m £5.7m
Share awards charge and other non cash items £3.5m £3.5m £3.0m £3.0m
Increase in receivables (£35.7m) (£35.7m) (£9.4m) (£9.4m)
Increase in payables and provisions £22.3m £28.0m £6.3m £6.0m
Net cash generated from operations £41.1m £40.1m £46.9m £43.1m
Taxation paid (£10.9m) (£10.9m) (£8.5m) (£8.5m)
Capital expenditure (£5.8m) (£5.8m) (£7.2m) (£7.2m)
Investments (£1.1m) (£1.1m) (£0.7m) (£0.7m)
Net finance expense (£0.3m) (£0.3m) (£0.5m) (£0.5m)
Dividends paid (£18.0m) (£18.0m) (£18.0m) (£18.0m)
Treasury shares purchased (£7.8m) (£7.8m) (£6.8m) (£6.8m)
Tracker shares and share option related transactions £0.1m £0.1m £0.6m £0.6m
FX movement (£0.7m) (£0.7m) £2.7m £2.7m
Movement in net (debt) / cash (£3.4m) (£4.4m) £8.5m £4.7m
Cash outflow from FY17 restructuring (£0.9m)
Cash outflow from FY16 and FY15 restructuring (£0.1m) (£4.7m) (£4.7m)
Movement in net (debt) / cash after adjustments (£4.4m) (£4.4m) £3.8m £4.7m
Opening net cash £10.0m £10.0m £6.2m £6.2m
Closing net cash £5.6m £5.6m £10.0m £10.9m
Cash conversion ratio 79% 90% 96% 95%
CONTRACT
GROSS
MARGIN
GROSS
PROFIT
£99.7m £91.6m £72.5m £87.3m £97.1m £91.6m £100.8m £110.5m £119.8m £134.4m
£113.9m£76.2m £89.8m
£102.2m £102.4m £101.2m £117.4m £125.2m £138.9m£153.3m
£0m
£100m
£200m
£300m
£400m
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
H1 H2
21.5% 22.1% 21.6% 21.4% 21.5%20.2% 20.0% 19.8% 19.9% 19.8%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
48
HISTORICAL GROSS PROFIT & GROSS MARGIN
Note 1: 2013 data is based on a normalised 52 week period
Robust Contract margin despite strong growth in Energy
FY GP £213.6m £167.8m £162.4m £189.5m £199.5m £192.8m £218.2m £235.7m £258.7m £287.7m
FY OP
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 £19.3m
£32.4m
£7.0m £14.1m£19.0m
£16.0m£14.3m
£21.4m
£27.4m £26.0m£25.6m
£0m
£10m
£20m
£30m
£40m
£50m
£60m
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
H1 H2
23.8
%
11.8
%
9.6%
12.2
%
9.2%
7.1%
8.3%
12.8
%
12.8
%
14.4
%
25.9
%
10.5
%
12.8
%
15.3
%
12.2
%
10.9
%
13.7
%
17.6
%
16.0
%
15.6
%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
HY FY
49
HISTORICAL OPERATING PROFIT & CONVERSION RATIO
Note 1: 2017 figures are adjusted for the impact of £6.7m of costs in relation to restructuring and relocation of UK central support functions
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 restructuring Energy business and the impairment of IT assets
Note 4: 2013, 2014 and 2015 are before exceptional items
Note 5: Includes data for IT Job Board up to 2011 Note 6: 2013 data is based on a normalised 52 week period
£56.8m £18.0m £21.2m £30.0m £25.1m £21.0m £29.8m £41.5m £41.3m £44.9m
50
HEADCOUNT
Note 1: Headcount is now based on full time equivalent heads.
Note 2: Sales heads include consultants and sales management
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 May 17 Nov 17
Period End
Total Heads1,461 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 2,642 2,866
Period End
Sales Heads1,051 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 2,064 2,257
459 474 484 519 564 507 459 477 497 538 541 553 579 550 490 457 470
592707 720
832
1,046 1,1131,109
1,1901,300
1,477 1,475 1,4981,606 1,592
1,554 1,6071,787
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 May 17 Nov 17
UK Sales Heads Int'l Sales Heads
51
SALES HEADCOUNT
Note 1: Headcount is now based on full time equivalent heads
Note 2: Sales heads include consultants and sales management
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 May 17 Nov 17
Period End
Sales Heads1,051 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 2,064 2,257
436 481 458 529623 646 683
824 8941,009 1,067 1,124
1,270 1,299 1,280 1,3241,472615
700 746822
987 974 885
843903
1,006 949 927
915 843764 740
785
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 May 17 Nov 17
Contract Sales Heads Permanent Sales Heads
79%
6%
2%5%
8%
Payroll Property Advertising IT & Professional Other
16%
84%
Support Services Sales
52
COST BASE ANALYSIS
Note 1: Based on costs for FY 2017
The Group has maintained its flexible cost base
Cost
Base
Payroll
Costs
53
TRACKER SHARE 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
• 2017 settlements £3.3m
(2016: £4.6m: 2015:
£8.5m, 2014: £8.3m)
• 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 Profit After Tax. PER is the Group Price/Earnings Ratio calculated as the Share Price/Adjusted Earnings Per Share.
54
40 OFFICES IN 16 COUNTRIES
USA
Austin
Boston
Chicago
Houston
Minneapolis
New York
San Diego
San Francisco
USA
BELGIUM
Antwerp
Brussels
NETHERLANDS
Amsterdam
Rotterdam
LUXEMBOURG
Luxembourg
FRANCE
Paris
Lyon
Toulouse
SPAIN
Barcelona
GERMANY
Berlin
Düsseldorf
Frankfurt
Hamburg
Munich
Stuttgart
SWITZERLAND
Zurich
AUSTRIA
Vienna
CONTINENTAL EUROPE
UK
Birmingham
Bristol
Glasgow
London
Leeds
Manchester
IRELAND
Dublin
UK & IRELAND
AUSTRALIA
Sydney
HONG KONG
Hong Kong
SINGAPORE
Singapore
JAPAN
Tokyo
Asia Pac & Middle East
UAE
Dubai