returning to growthfiles.investis.com/hays/docs/irday_slides_1.pdfq4 trading update on 8 july 2010...
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RETURNING TO GROWTH
INVESTOR PRESENTATIONTHURSDAY 29 APRIL 2010
2
CAUTIONARY STATEMENT
The information contained in this presentation is not audited, is for personal use and informational purposes only and is not intended for distribution to, or use by, any person or entity in any jurisdiction in any country where such distribution or use would be contrary to law or regulation, or which would subject any member of the Hays Group to any registration requirement.
Statements in this presentation reflect the knowledge and information available at the time of its preparation. Certain statements included or incorporated by reference within this presentation may constitute “forward-looking statements” in respect of the Group’s operations, performance, prospects and/or financial condition. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions and actual results or events may differ materially from those expressed or implied by those statements. Accordingly, no assurance can be given that any particular expectation will be met and reliance should not be placed on any forward-looking statement. Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. No responsibility or obligation is accepted to update or revise any forward-looking statement resulting from new information, future events or otherwise. Nothing in this presentation should be construed as a profit forecast.
This presentation does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares in the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decision relating thereto, nor does it constitute a recommendation regarding the shares of the Company. Past performance cannot be relied upon as a guide to future performance. Liability arising from anything in this presentation shall be governed by English Law. Nothing in this presentation shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.
3Information as at December 2009
BOB LAWSONChairman
JOHN FARAGUNAMD Hays Healthcare
NICK COXManaging Director CERoW
ALEXEY SHTEINGARDTMD Russia
ALISTAIR COXChief Executive
JAMES HILTONIR & M&A Manager
FREDERIC BEZIERSDirector France
LUIZ VALENTEMD Brazil
PAUL VENABLESFinance Director
CHRIS STAMPERFinancial Controller
KLAUS BREITSCHOPFMD Germany
STEVE WESTONTechnology Director
STEVE WITTSHead of Tax & Treasury
DIRK HAHNCOO Germany
TIM COOKManaging Director UK & I
ALISON YAPPCompany Secretary
TINA LINGMD France
LES DUNCANMD Corporate Accounts
JAMES CULLENSHR Director
NIGEL HEAPManaging Director APAC
MICHAL MLYNARCZYKMD Poland
CHARLES LOGANMD Retail Specialisms
SHOLTO DOUGLAS-HOMEMarketing Director
SEAN NGAssociate Director China
CHRISTOPH NIEWERTHDirector Germany
PAUL MALLINSONDirector Corp Accounts
MARTIN ABELLHead of IR & M&A
SHAILAJA PURANIKHays Operations India
ADAM MARSHDirector Pharma
PETER DINGLEHead of Digital Strategy
TOM SCHOENROCKFinance Director Germany
TIM MCGRATHChief Commercial Officer
GROUP
APAC
OVER 30 OF THE HAYS MANAGEMENT TEAM HERE TODAY
CE & ROW
UK & I
4
OBJECTIVES TODAY
RECAP HOW WE NAVIGATED THROUGH THE RECESSION– market leading performance in the downturn
EXPLAIN INVESTMENTS WE MADE DURING THE RECESSION– others dug in; we started preparing for the upturn
DISCUSS THE OPPORTUNITIES IN OUR SIGHTS– in existing & new markets
DEMONSTRATE WE ARE IN THE BEST POSSIBLE SHAPE– to exploit the next cycle of growth fully
5
AGENDA
STRESS TESTING HAYS
GROUP STRATEGY
FOCUS BY DIVISION
INTRODUCTION LEADING TECHNOLOGY
BUILDING A LEADING GLOBAL BRAND
CONVERTING OPPORTUNITY INTO PERFORMANCE
Page 6
Page 9
Page 22
Page 49
Page 81
Page 95
Page 110
SUMMARY
APAC
CE & RoWUK & I
Q&A SESSIONREFRESHMENT BREAKSPEED EXPO
1.0
2.0
3.0
4.0
Q&A SESSIONREFRESHMENT BREAKSPEED EXPO
Q&A SESSIONWINE TASTING
5.0
6.0
7.0
8.0Page 120
6
1.0INTRODUCTION
7Information as at December 2009
Q3 TRADING UPDATE: 2% SEQUENTIAL GROWTH IN NET FEES DRIVEN BY THE INTERNATIONAL BUSINESS
* LFL is like-for-like growth, which represents organic growth of continuing activities at constant currency. The Q3 growth rates and the outlook comments are as disclosed in the Interim Management Statement issued on 8 April 2010. The disc charts show Group operating profits by division for 6 months ended 31 December 2009.
Actual LFL*
APAC 23% 3%
CE & RoW (2)% (7)%
UK & I (18)% (18)%
Group (5)% (10)%
Q4 trading update on 8 July 2010
Net fee growth for QE 31 March 2010 (‘Q3’) Q3 Highlights
OVERALL IMPROVING TRENDS- perm trends stronger than temp
INTERNATIONAL SEQUENTIAL GROWTH - +7% in APAC, +3% in CE & RoW
CONTINUED STABILITY IN THE UK- private sector offsetting public sector
SELECTIVELY ADDING HEADCOUNT- particularly in APAC
8Information as at December 2009
FORWARD INDICATORS FOR OUR MARKETS POINT TO BROAD BASED RECOVERY IN 2010
0500
1,0001,5002,0002,500
Q108
Q208
Q308
Q408
Q109
Q209
Q309
Q409
Monster Employment Index Europe Generalists net fees (£m)
US temp payroll data (QoQ %) Hays net fees (£m)
ManpowerAdecco Randstad
4% SEQUENTIAL GROWTH IN Q409
100
150
200
Q108
Q208
Q308
Q408
Q109
Q209
Q309
Q409
Q110
SEQUENTIAL GROWTH IN Q409 & Q110
Monster Europe index, Generalist net fee trends and US temp payroll data are all considered good forward indicators for Hays’ business. All quarterly numbers are presented on a calendar year basis. Adecco and Randstad net fees are converted to Sterling at a rate of €1.15/£1. Manpower net fees are converted to Sterling at a rate of $1.50/$1. US temp payroll data as published by the Bureau of Labor Statistics.
£m
£m
-5%
0%
5%
Jan 09
Apr 09
Jul 09
Oct 09
Jan 10
QoQ GROWTH FOR THE LAST 6 CONSECUTIVE MONTHS
Feb 09M
ar 09
May 09
Jun 09
Aug 09
Sep 09
Nov 09
Dec 09
Feb 10
90
100
110
120IMPROVING TRENDS IN ONLINE RECRUITMENT ACTIVITY
Index
Jan 09Feb 09M
ar 09A
pr 09M
ay 09Jun 09Jul 09A
ug 09Sep 09O
ct 09N
ov 09D
ec 09Jan 10Feb 10M
ar 10M
ar 10
9
2.0STRESS TESTING HAYS
10
IN 2008 WE SET 4 OBJECTIVES TO ACHIEVE DURING RECESSION
1. PROFIT MAXIMISATION– rapid re-alignment of the cost base
2. FOCUS ON CASH FLOW– maintain balance sheet strength
3. GAIN SHARE IN RESILIENT MARKETS– re-directing resources
4. INVEST FOR THE LONG TERM– ring-fence key projects & retain core infrastructure
11
GDP growth in our main markets* Group net fees
UK & IAPAC CE & RoW
0
50
100
150
200
250
300
350
400
450H
2 07
H1 08
H2 08
H1 09
H2 09
H1 10
H1 07
£m 36% REDUCTION IN NET FEES FROM PEAK
THE TOUGHEST MARKETS ON RECORD RESULTED IN NET FEES FALLING 36% FROM PEAK
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
Quarter on quarter GDP growth %
Q1 08
Q1 09
Q1 10F
Q3 08
Q3 09
Q3 10F
Australia Germany UK
Q2 08
Q4 08
Q2 09
Q4 09
Q2 10F
Q4 10F
*Sources: UK, Office of National Statistics; Australia, Australian Bureau of Statistics; Germany, Statistisches Bundesamt. 2010 GDP forecasts for each country are based on UBS estimates, as at March 2010.
6.1% CUMULATIVE FALL IN UK GDP IN Q3 2009 VERSUS PEAK IN Q1 2008
12
AS EXPECTED TEMP NET FEES PROVED MORE RESILIENT THAN PERM
0
50
100
150
200
250
H1 09
H2 09
H2 08
H1 08
H2 07
H1 07
H2 06
H1 06
49% REDUCTION FROM PEAK IN H2 08
H1 10
[x]%
£m
0
50
100
150
200
250
H1 09
H2 09
H2 08
H1 08
H2 07
H1 07
H2 06
H1 06
H1 10
£m22% REDUCTION FROM PEAK IN H2 08
Permanent placement net fees
UK & IAPAC CE & RoW
Temporary placement net fees
UK & IAPAC CE & RoW
13
THE PUBLIC SECTOR PROVIDED RESILIENCE DURING THE TOUGHEST PART OF THE DOWNTURN
14% REDUCTION FROM PEAK IN H1 09
Public sector net fees
43% REDUCTION FROM PEAK IN H2 08
UK & IAPAC CE & RoW
Private sector net fees
UK & IAPAC CE & RoW
0
50
100
150
200
250
300
350
H1 09
H2 09
H2 08
H1 08
H2 07
H1 07
H2 06
H1 06
H1 10
[x]%
£m
0
50
100
150
200
250
300
350
H1 09
H2 09
H2 08
H1 08
H2 07
H1 07
H2 06
H1 06
H1 10
£m
14
A BALANCED PORTFOLIO DELIVERED PROFITS THROUGHOUT THE RECESSION
Net fees by type*
*Indicative purposes only based on information for the 6 months ended 31 December 2009.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
SPOT
RECRUITMENT CONTRACTS
PRIVATE SECTOR
TOP 40
30,000 CUSTOMERS
TEMP
PERM
OTHER
ACCOUNTANCY & FINANCE
CONSTRUCTION & PROPERTY
IT
~ 25%
~ 75%75%
~ 15%
~ 85%
59%
41%
30%
20%
19%
31%
PUBLIC SECTOR
25%
15
150
200
250
300
350
400
450
0
1,000
2,000
3,000
4,000
5,000
6,000
7,0009%
4%3%
13%
71%
H1 08
H2 07
H2 08
H1 07
EARLY AND DECISIVE ACTION TAKEN TO CUT THE COST BASEOperating costs & heads (No.)
46%
H1 09
H2 09
H1 10
£m No.
Group net fees (£m) Consultant heads (No.)
31% REDUCTION IN CONSULTANT HEADCOUNT FROM PEAK IN MARCH 2008
Breakdown of operating costs (%)*
Group operating costs (£m)
PayrollOccupancyAdvertising & PostageMotor, Travel & EntertainmentOther
*Cost breakdown is based on 6 months ended 31 December 2009.
COSTS REDUCED BUT CORE INFRASTRUCTURE MAINTAINED
STOPPED INVESTING EARLY
16
UK & I profit
REDUCTION IN OPERATING PROFIT LIMITED TO c.2X THE DECLINE IN NET FEES
Group operating profit*
0
20
40
60
80
100
120
140
H1 10H2 09H1 09H2 08H1 08H2 07H1 07
73% REDUCTION IN PROFIT FROM PEAK
*Year-on-year movement in net fees and operating profit are presented on a headline basis. Excludes exceptional items.
APAC profit CE & RoW profit
£m
17(1) Excludes operating profit from Protiviti consulting division.
WE DELIVERED BETTER PROFIT PROTECTION THAN OUR MAIN PEERS
Peak to trough change in operating profit*
(73)%
(93)%
>(100)%
EARLY ACTION ON HEADCOUNT - started reducing UK heads in March 2008
*Measures movement between reported peak half yearly operating profit and trough half yearly operating profit, excluding non-trading related exceptional items.
(2) 92% is after including £8.5m of restructuring costs taken in 6 months to 31 May 2009.
PROFITABLE THROUGHOUT- £35m trough operating profit in H110
MINIMAL RESTRUCTURING COSTS - 31% reduction in consultants
CORE FABRIC OF BUSINESS RETAINED - key investment projects ring-fenced(84)%(1)
A BALANCED PORTFOLIO - temp/perm, public/private sector
Reasons for out-performance
>(100)%
(92)%(2)
18
0
50
100
150
200
Working capital as % of turnover* Operating cash flow
*Excludes £30.4m payable in respect of the OFT fine which is under appeal. Information is shown on a monthly basis at constant currency, extracted from Hays plc management information.
30%
40%
50%
60%
70%
80%
90%
100%
Dec 06 Dec 09Dec 08Dec 07
Operating cash flow
EXCELLENT WORKING CAPITAL MANAGEMENT AND OPERATING CASH FLOW PERFORMANCE
H1 08
H2 08
H1 09
H2 09
H1 10
H1 07
H2 07
Operating profit**
£m
**Before exceptional items.
87%
39%
19
NET DEBT REDUCED THROUGH THE DOWNTURN
*Covenant ratios are shown on a pro-forma basis for 12 months ended 31 December 2009.
Net (debt) / net cash
£460M BANK FACILITY IN PLACE- 5 year facility to February 2011
£0.7m
£(38.4)m
£(81.1)m
£(54.6)m
June 08 Dec 08 June 09 Dec 09
NET DEBT/ EBITDA RATIO: 0.4X* - debt covenant: < 3
EBITDA/ INTEREST RATIO: 62X* - debt covenant: > 4
£(114.9)m
Dec 07
£77M REDUCTION
NEW FACILITIES BEING PUT IN PLACE - over-subscribed & well advanced
NET DEBT WILL INCREASE IN 2010 - as business returns to growth
20
DIVIDEND MAINTAINED, UNDERPINNED BY STRONG CASH FLOW PERFORMANCE
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
FY07 FY08 FY09
Dividend per share, earnings per share* and cash flow per share**
STRONG CASH FLOW COVERED DIVIDEND IN FY07, FY08 & FY09
pence
Dividend per shareCash flow per share
*EPS is basic EPS on continuing activities before exceptional items. **CFPS is cash flow per share defined as net cash flow pre: dividend, share buy back, loan repayments & discontinued activities, divided by weighted average number of shares in issue.
Earnings per share
21
STRESS TESTED & PROVEN A BUSINESS BUILT TO WITHSTAND TOUGH TIMES
BALANCED PORTFOLIO28 countries / 17 specialisms / temp & perm
STRONG COST CONTROLflexible cost base / market leading conversion rate
HIGHLY CASH GENERATIVElow capital intensity / cash returned to investors
PROVEN MANAGEMENTunderpinned by Hays DNA
22
3.0GROUP STRATEGY
23
WE AIM TO BE THE PRE-EMINENT GLOBAL BUSINESS IN SPECIALIST RECRUITMENT FOUR COMPONENTS TO OUR STRATEGY
24
GROWTH BY REPLICATING OUR BUSINESS
3.1
BUILD SCALEin existing locations
NEW TERRITORIESin existing & new countries
NEW SPECIALISMSin existing locations
25
A PROVEN TRACK RECORD OF REPLICATING BUSINESS INTO NEW COUNTRIES AND NEW SPECIALISMS
New country & specialism entries
NEW COUNTRIES NEW SPECIALISMSPre 1990
Early 1990s
Late 1990s
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Brazil
China, HK
organic acquisition
A&F C&P
FranceCzech Re.
Netherlands
Portugal
Canada
Belgium
Germany Switzerland
Spain
Austria
Sweden Poland
Australia
N.Zealand
Singapore
Italy UAELuxembourg
UK
key
Legal
Banking Fin. Services
EducationContact Ce.
RPO
HR
Sales & Ma.
Executive
Retail
Healthcare
Purchasing
IT
Japan Pharma
Energy
Hungary Denmark
Ireland
India Russia
Re.& Mining
26
PRE-RECESSION, HAYS’ INTERNATIONAL BUSINESS WAS DELIVERING MARKET LEADING GROWTH…
*International is defined as total Group net fees less the net fees generated in each Group’s domestic business. Robert Half excludes their non-recruitment activities. SThree’s numbers are for 12 months ended 1 June 2008.
Annual net fee growth of International businesses pre-recession*(based on net fees for 12 months ended 30 June 2008)
0%
60%
30%
40%
50%
10%
20%
54%
Growth
27
…REINFORCING OUR INTERNATIONAL PLATFORM AS THE LARGEST IN SPECIALIST RECRUITMENTInternational net fees of the specialist recruitment businesses (12 months ended 31 December 2009)*
0
300
150
50
100
200
250
17% LARGER THAN NEXT COMPETITOR
£292m
Net fees £m
*International is defined as total Group net fees less the net fees generated in each Group’s domestic business. Robert Half is our estimate excluding their non-recruitment activities. SThree’s numbers are for 12 months ended 29 November 2009.
28
Group net fees by division (% split) Group operating profit* by division
H105
H106
H107
H108
H109
H110
76%
71%
67%
60%
50%
46%
13%
16%
17%
22%
23%
24%
11%
13%
16%
18%
27%
30%
100%
H105
H106
H107
H108
H109
H110
79%
72%
66%
57%
43%
18%
16%
21%
24%
30%
37%
63%
5%
7%
10%
13%
20%
19%
100%UK & I APACCE & RoW UK & I APACCE & RoW
28 COUNTRIES IN 2010
*Before exceptional items.
HIGH POTENTIAL INTERNATIONAL BUSINESS NOW OVER HALF OF GROUP NET FEES AND OVER 80% OF PROFITS
16 COUNTRIES IN 2005
29
PIPELINE FOR GROWTH OVER NEXT 10 YEARSHays businesses at different stages of the life cycle
VISION (4-5 yrs out)
INFANCY ESTABLISHED BUSINESSES
IrelandBrazilChinaDenmarkHungaryItalyIndiaLuxembourgRussiaSingaporeUAE
Austria Belgium CanadaCzech RepublicHong KongNetherlands
ArgentinaChileColombiaFinlandMalaysiaMexicoNorway PhilippinesQatarSouth AfricaSouth KoreaUSA
Other AsiaOther C EuropeOther E EuropeOther Middle East
New countries*
Specialist Recruitment
*New countries represent countries Hays is reviewing for potential entry in next cycle of growth.
UNDER REVIEW
New ZealandPortugalPoland
UK
AUSTRALIA
GERMANYFRANCE
5 LARGEST COUNTRIES ARE IN BLUE
KEY
DEVELOPMENT PHASE
JAPAN
SpainSwedenSwitzerland
30
OPPORTUNITY TO MORE THAN DOUBLE OUR INTERNATIONAL SCALE OVER NEXT 5 YEARS Consultant headcount projections in International businesses*
Australia & NZ
1,100
1,650
2009
Last peak
2014P
631
Asia
173
500
2009
Last peak
2014P
122
Americas
214
500
2009
Last peak
2014P
114
Germany**
534
1,100
2009
Last peak
2014P
447
France
348
600
2009
Last peak
2014P
224
Rest of Continental Europe
746
1,200
2009
Last peak
2014P
491
*Projections are indicative only and will be subject to the timing and pace of the next phase of economic growth. ‘Last peak’ headcount is the highest headcount achieved in the respective region. 2009 is at 31 December 2009. 2014 is at 31 December 2014. **Headcount numbers for Germany have been adjusted to show the information on the same basis as the rest of the Group.
base projection stretch
1,250
400
400
850
450
900
31
REPLICATE OUR BUSINESS INTO NEW SPECIALISMS
Specialist Recruitment
Aus &
NZ
China &
HK
Japan
Singapore
Austria
Belgium
Brazil
Canada
Czech
Denm
ark
France
Germ
any
Hungary
India
Italy
Luxembourg
Netherlands
Poland
Portugal
Russia
Spain
Sweden
Switzerland
UA
E
UK
&I
Accountancy & Finance
Construction & Property
Information Technology
Pharma
Sales & Marketing
Banking
Contact Centres
Education
Executive
Financial Services
Healthcare
Human Resources
Legal
Energy
Purchasing
Retail
Resources & Mining
>10% of country activity <10% of country activity Key priorities in embryonic countries
UKAPAC Continental Europe & Rest of WorldAPAC
32
Pharma net fees* (£m) Healthcare net fees (£m)
67%
60%46%
Education net fees** (£m)
H2 07
60%
H207
H2 07
TRACK RECORD OF SUCCESSFULLY REPLICATING INTO NEW SPECIALISMS, EVEN THROUGH RECESSION
*Pharma includes a small amount of Finance Technology fees which are reported together with Pharma.**Seasonal impact of summer school closure affects H1 in each period.
H1 08
H2 08
H2 09
H1 10
H1 08
H2 08
H1 09
H2 09
H1 10
H2 07
H1 08
H2 08
H1 09
H2 09
H1 10
H1 09
37% CAGR 32% CAGR 11% CAGR
£10m
£5m £2m
£4m
£8m
£11m
33
>> bought in 2007 to enter Japan & Pharma
GREAT TRACK RECORD OF ACQUISITIONS SUPPLEMENTING ORGANIC GROWTH
• Specialist based businesses only• Similar model & culture to Hays• Strong track record• Excellent management with depth &
commitment to stay
• Bolt-on acquisitions providing:– scale in large markets where we
are small; or– early entry in high priority new
countries; or– new specialisms in existing
priority markets
Acquisition criteria
Operating profit since acquisition
£7m
FY03FY04FY05FY06FY07
£1m (4 months)£5m
£13m£16m
£25m£38m
FY08FY09
Acquisition case studiesASCENA>> bought in 2003 to enter Germany*
FY07 £1m (4 months)£3m
£5mFY08FY09
Operating profit since acquisition
• Pharma rolled out from UK into 24 countries• Japan headcount doubled despite recession
JAMES HARVARD
FY10F £10m
*The Ascena acquisition included operations in Austria and Switzerland as well as Germany.
34
WE AIM TO BE TOP 3 IN ALL OUR KEY MARKETS
Australia (#1) BelgiumBrazil France Germany (#1) Ireland (#1)Italy Japan New ZealandPortugal (#1)SpainSwedenSwitzerland UK (#1)
Austria Canada China & HKCzech Republic Denmark Hungary India Luxembourg Netherlands Poland Russia Singapore UAE
2010 market positioning
TOP 3
TOP 5
#1 SPECIALIST RECRUITMENT GROUP WORLDWIDE IN 2007, 2008, 2009 MEASURED BY PROFITS
35
3.2 OPERATIONAL EFFECTIVENESS
FRONT OFFICE TECHNOLOGYincreasing consultant productivity
UK BACK OFFICE TECHNOLOGYincreasing service levels & efficiency
ONLINE CAPABILITYdeveloping route to market
LEVERAGE CORPORATE ACCOUNTSproviding an efficient delivery model
36
0
10
20
30
40
HAYS HAS A MARKET LEADING RECORD OF CONVERTING FEES INTO PROFITPre-recession conversion rates*
Specialist Recruitment
Group with leading conversion rate
*Conversion rate (‘CR%’) is the proportion of net fees converted into operating profit (excluding exceptional items). Conversion rates shown are for the 12 months ended 31 December 2007 which represents the final year prior to the impact of the recession.
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
CONTINUALLY SEEKING TO IMPROVE EFFICIENCY
%
37
COMPLETE AND TAKE ADVANTAGE OF NEW TECHNOLOGY PLATFORMS TO INCREASE EFFICIENCY
THE MARKET LEADING TECHNOLOGY PLATFORM IN RECRUITMENT
COMPLETES 2010COMPLETES 2010 NEXT FOCUS
NEW GLOBAL FRONT OFFICE TECHNOLOGY
NEW UK BACK OFFICE IT SYSTEM
ENHANCED ONLINE CAPABILITY
• fully automated
• highly efficient
• improved customer service
• enhanced real-time Management Information
• increase consultant productivity
• seamless connectivity with back office & internet
• competitive advantage
• drive traffic to hays.com
• enhance online experience
• build online engagement
38
ACCESSING THE CORPORATE ACCOUNT MARKET WITH AN EFFICIENT DELIVERY MODEL
CANDIDATES
LARGE CORPORATES
– control supply chain of agencies
– deepen client relationships at key hiring levels
– leverage multi-specialism, cross border capabilities, temp & perm
– gain share of client recruitment spend
– attract best talent
COMPETITIVE ADVANTAGE
– serving large corporates who want an efficient & holistic approach to recruitment
– want recruitment agency to have choice of all employers: SMEs, large corporates & public sector
OPPORTUNITY TO GAIN MARKET SHARE
Corporate Accounts
39
DEVELOP THE BEST PEOPLE IN THE INDUSTRY
3.3
RECRUIT, ENGAGE & RETAIN THE BESTstrength in depth
INDUSTRY LEADING TRAININGdeep expertise in specialisms
LEADERSHIP DEVELOPMENTmanage bigger & more complex businesses
PERFORMANCE BASED CULTURErewarding results
40
– developing first line management & team leader capability
– online training/business resources developed with Chartered Institute of Management
– assessment centres– globally consistent induction
over 9 months– early and regular appraisal
– classroom & on the job training– expert sector knowledge– client & candidate management
RECRUITMENT & INDUCTION
HAYS ACADEMY
TECHNICAL TRAINING
2009 STAFF ‘TALKback’ SURVEY identified “my manager effectively coaches and builds the strengths of our team” as Hays’ top strength relative to benchmark of corporates
INCREASING EXPERTISE
INDUSTRY LEADING CONSULTANT TRAINING
41
– small number of senior management team– INSEAD and London Business School
– senior & experienced middle managers
– two year development programme fast tracking our leadership group
– commercial & leadership skills– Ashridge and IMD business schools
HAYS ADVANCED MANAGEMENT PROGRAMME
SENIOR LEADERSHIP DEVELOPMENT
STRONG LEADERSHIP TO DRIVE GROWTH
HAYS FAST FORWARD DEVELOPING LEADERSHIP
– modular courses on strategy, finance, technology, change & leadership over 2 years
42
REWARDS GEARED TO RESULTS
– ~ 50% of consultant pay is commission based driven by fees
– meritocratic not patronage based
– some team based reward
– meritocratic– transparent– drives personal accountability– highly variable
– bonuses aligned to business unit profit
– small element based on personal objectives
– Group share-based long term incentive schemes for top 350
– profit focus– alignment with shareholders– long term lock-in
Reward structure
REWARD CHARACTERISTICS ADVANTAGES
CONSULTANTS
MANAGEMENT
43
GLOBALLY CONSISTENT EXPERIENCEfor clients, candidates & employees
BUILD A LEADING GLOBAL BRANDpremium & compelling brand
ONE HAYS AROUND THE WORLD3.4
44
A GLOBALLY CONSISTENT CUSTOMER EXPERIENCEONE HAYS
45
BUILD A LEADING GLOBAL BRANDMARKET LEADERS HAVE MARKET LEADING BRANDS
SEE SECTION 6 >>
46
SUMMARY OF THE GROUP STRATEGY
build scale in existing locationsroll out new officesenter new countries & add bolt-on acquisitionsroll out newer specialisms across our network
1.1 GROWTH BY REPLICATING
1.3 BEST PEOPLE IN THE INDUSTRY1.4 ONE HAYS AROUND THE WORLD
a globally consistent customer experiencea leading global brand
leverage front office technology to increase consultant productivityemploy new UK back office to increase service levels & efficienciesdevelop our online capabilityfurther develop Corporate Accounts capability
recruit, engage and retain the bestindustry leading trainingworld class leadership developmentperformance based culture
1.2 OPERATIONAL EFFECTIVENESS
47
Q&A SESSION
SHORT TERM CYCLESLONG TERM GROWTH
48
SPEED EXPO – PART 1
1. BRICS
2. INTERNET
3. CORPORATE ACCOUNTS
BUILDING THE BUSINESSES OF TOMORROW
ENHANCING OUR ONLINE CAPABILITY
JOINING UP OUR CAPABILITIES
4. GLOBAL BUSINESSESROLLING OUT OUR GLOBAL BUSINESSES
49
4.0FOCUS BY DIVISION
50
CLEAR OBJECTIVES BY REGION
ASIA PACIFIC
CONTINENTAL EUROPE & ROW
UNITED KINGDOM & IRELAND
Continue market beating performance in Australia & New Zealand and build scale in our business in Asia
Aggressively grow our business to establish top 3 market positions in all of our geographies
Maintain SME market leadership, gain share in large corporates market & drive efficiencies
51
4.1ASIA PACIFIC
52
Australia & NZJapanHong KongChinaSingapore
3%
23%
5%8%
25%
36%
Accountancy & FinanceConstruction & PropertyITResources & MiningBankingOther
APAC PROFILE
Net fees by specialism
Temp : Perm
Private : Public sector
56% 44%
77% 23%
Net fees by region
Information is for 6 months ended 31 December 2009
88%
ASIA PACIFIC PROFILE
Net fees: £64.2m
Operating profit: £22.1m
Conversion rate: 34.4%
Countries: 6
Consultants: 753
Offices: 49
7%
Objective: continue market beating performance in Australia & New Zealand and build scale in our business in Asia
53
UNRIVALLED MARKET POSITION IN AUSTRALIA PROVIDES PLATFORM FOR MARKET LEADING PERFORMANCES
Competitor* Net fees
#1 £112m
#2 Hudson ~ £45m
#3 Michael Page £24m
#4 Robert Walters ~ £23m
Rank
Market position in Australia & NZ* Market position by state
Larger than next 3 competitors combined
Unrivalled breadth & depth of expertise
Repeated market leading performance engenders success culture
*Based on Hays’ estimates for year ended 31 December 2009.
54
REFINING OUR BUSINESS IN AUSTRALIA & NZ
MANAGEMENT & LEADERSHIP DEVELOPMENT- for top 200
DEVELOPMENT OF SMALLER SPECIALISMS - aim to be top 3 in all our markets
INVEST IN GROWING HEADCOUNT - take advantage of early economic recovery
ROLL OUT NEW FRONT OFFICE TECHNOLOGY - complete in 2010 & leverage advantages in 2011
ROLL OUT ENHANCED INDUCTION TRAINING - to strengthen consultant expertise
Profile in Australia & NZ Focus in Australia & NZ
Accountancy & Finance 37%Construction & Property 24%IT 8%Resources & Mining 5%Other 26%
Temp : Perm
Private : Public sector
62% 38%
71% 29%
Net fees: £56.9m
Operating profit: £20.8m
Consultants: 631
Offices: 41
Net fees by specialism
Based on 6m ended 31 Dec 2009
55Source: *SME Business Services; ** PwC Economics report: Convergence, Catch Up and Overtaking (January 2010).
ASIA REPRESENTS A SUBSTANTIAL OPPORTUNITY
BY 2020, ASIAN COUNTRIES WILL COMPRISE 30% OF GLOBAL GDP* BY 2030, CHINA WILL BE THE WORLD’S LARGEST ECONOMY**
RAPIDLY DEVELOPING ECONOMIES
RAPIDLY INCREASING SERVICE SECTORS
RAPIDLY DEVELOPING WORKFORCE SKILLS
RAPIDLY INCREASING SALARIES
56
ASIA 2010: A SMALL MARKET ASIA 2020: A BIG MARKET
Competitor Net fees
#1 Robert Walters ~ £20m
#2 Michael Page £18m
#3 £14m
#4 Hudson ~ £14m
Rank
Net fees in Asia*
Hays net fees
Market opportunities**
SHANGHAI
BEIJING
TOKYO
OSAKA
SINGAPORE
SYDNEY
City population
** Hays view the population as a useful indicator of the long-term potential market size in each city.* Based on Hays estimates for year ended 31 December 2009.
HONG KONG
ASIAN MARKETS AT VERY EARLY STAGES OF DEVELOPMENT
57
Net fees by country
£2.8m
Strategy in Asia Office locations in Asia
BUILDING SCALE IN ASIA
DEVELOPING A SOLID PLATFORM - infrastructure & local management
PRIORITISE CORE SPECIALISMS - in temp & perm
DOUBLE SIZE OF BUSINESS - over 2 years
H1 10
H2 09
H1 09
H2 08
H1 08
Japan Hong Kong Singapore China£2.8m
£5.8m
£7.2m
£8.1m
£6.0m
£7.3m
1 Beijing2 Tokyo3 Osaka4 Shanghai5 Hong Kong6 Singapore
58
GAINING SCALE IN JAPAN
Profile in Japan
MANAGEMENT & LEADERSHIP DEVELOPMENT- targeted at top 15 people
INVEST IN GROWING HEADCOUNT - double headcount over next 2 years
Focus in Japan
DEVELOPMENT OF HAYS CORE SPECIALISMS - Accountancy & Finance, Banking, C&P*
CONTINUED GROWTH OF IT BUSINESS- consolidate market leading position
Information Technology 45%Sales & Marketing 12%Pharma 10%Accountancy & Finance 10%Other 23%
Temp : Perm
Private sector
23% 77%
100%
Net fees: £4.2m
Operating profit: £1.1m
Consultants: 51
Offices: 2
Net fees by specialism
Based on 6m ended 31 Dec 2009
STRENGTHEN BRAND POSITIONING- increase presence in the market
*C&P is Construction & Property.
59
ASIA PACIFICASIA PACIFIC SUMMARY
UNRIVALLED MARKET POSITION IN AUSTRALIA & NZGAINING CRITICAL MASS IN JAPANBUILDING SCALE IN ASIAALL MARKETS ALREADY IN RECOVERY MODE
60
4.2UNITED KINGDOM& IRELAND
61
27%
8%
9%21%
35%
Accountancy & FinanceConstruction & Property
ITEducation
Other
APAC PROFILENet fees by specialism
Temp : Perm
Private : Public sector
63% 37%
61% 39%
Net fees by region
Information is for 6 months ended 31 December 2009
UK & IRELAND PROFILE
Objective: maintain SME market leadership, gain share in large corporates market & drive efficiencies
Net fees: £121.5m
Operating profit: £6.2m
Conversion rate: 5.1%
Consultants: 2,226
Offices: 194
8%3%
15%
19%24%
31%
LondonNorth & ScotlandHome CountiesMidlands & East AngliaSouth West & WalesIreland
62
INCREASING EFFICIENCY
NEXT STAGE OF CYCLE
BUILD MARKET LEADERSHIP
THREE AREAS OF FOCUS
63
8%
35%21%9%
Banking
S&MRetail
LegalTechnology
PharmaPurchasing
Fin Services / InsuranceFinancial Markets
Education
HR
Construction & PropertyAccountancy & Finance
Contact Centres
Healthcare
IT
Corporate Accounts
OPPORTUNITIES FOR GROWTH ACROSS A BROAD RANGE OF SPECIALISMSAnalysis of UK & I net fees
Information in chart is based on net fees for 6 months ended 31 December 2009. Information in the table is based on net fees for 12 months ended 31 December 2009. *Corporate Accounts segment only includes direct net fees and excludes net fees that are accounted for within the specialisms.
market leader
Sales & Marketing £3m £23m
Healthcare £7m £50m
IT £23m £52m
Hays
Growth in Newer Specialisms (pre recession)
Net fees
HR Services
2%2%1%1%1%1%
<1%<1%<1%
3%
3%3%
2%
7%*
CONSTRUCTION & PROPERTY (#1) WILL BE BIG
CYCLICAL REBOUNDACCOUNTANCY & FINANCE (#1)
Underweight specialisms
0
10
20
30
40
50
60
70
H1 05
H2 05
H1 06
H2 06
H1 07
H2 07
H1 08
IT
NEWER SPECIALISMS(35% OF UK & I)
OPPORTUNITY TO GROW RAPIDLY
15% CAGR
Net
fees
(£m
)
BUILD MARKET LEADERSHIP
INCREASING EFFICIENCY
NEXT STAGE OF CYCLE
64
THE UK MARKET IS CHANGING SHAPE BUT HAYS’ #1 MARKET POSITION WILL REMAIN UNCHANGEDUK specialist recruitment market
SMEs(spot transaction)
‘QUASI’ - SMEs
CORPORATE ACCOUNTS
(Hays: #1)
(Hays: #1)
(Hays: #1)
2008
FUTURE
SMEs(spot transaction)
CORPORATE ACCOUNTS
MORE CLIENTS DEMANDING ‘ONE-STOP SHOPS’
(Hays: #1)
(Hay
s po
sitio
n: #
1)PU
BLI
C S
ECTO
R
(Hays: #1)
(Hay
s po
sitio
n: #
1)PU
BLI
C S
ECTO
R
CANDIDATES WANT RECRUITERS TO SERVE THE WHOLE MARKET
• Corporate Accounts becoming a larger proportion of the market
• Structural shift as corporates with fragmented recruitment (‘quasi SMEs’) now join up their recruitment
• Requires tailored delivery model
65
DEEPENING CORPORATE ACCOUNT RELATIONSHIPS TO INCREASE OUR SHARE OF THEIR RECRUITMENT SPEND
CLIENT(with preferred suppliers)
Preferred Supplier list
CLIENT(with RPO model)
account management/ client
direct recruiting
Agency
Agency
Agency
specialisms
HAYS MOVING FROM BEING ONE OF MANY TO MANAGING THE MANYA
gency
Agency
Agency
Agency
Agency
Agency
specialisms
Corporate Account models
INCREASED SHARE OF CLIENT SPEND
recruitment outsource
66
HAYS IS IDEALLY POSITIONED TO TAKE ADVANTAGE OF MOVE TOWARDS JOINED UP RECRUITINGLarge players in UK specialist recruitment
can manage the recruitment process
SPECIALIST RECRUITMENT CAPABILITYdeep expertise in small number of sectors
BROAD SPECIALIST RECRUITMENT CAPABILITY
deep expertise across broad range of sectors
Alexander Mann
Michael Page
SThree
Robert Walters many smaller
players
many smaller players
SpringRPO CAPABILITYRobert Half
HAYS’ DEEP EXPERTISE ACROSS SECTORS & MANAGED SERVICE CAPABILITY IS UNIQUE
67
– Hays’ heartland– proven model for serving this market– more of the same
SHIFT BY CORPORATES TOWARDS JOINED UP RECRUITMENT MEANS A DIFFERENT APPROACH, NOT LOWER PROFITABILITYSME / SPOT TRANSACTION MARKET CORPORATE ACCOUNT MARKET
– increasingly important
– control supply chain of agencies
– deepen client relationships at key hiring levels
– leverage multi-specialism, cross border capabilities, temp & perm
– gain share of client spend
– developing our delivery modelHays P&L PROFILE
AIM FOR P&L NEUTRAL AT £ OPERATING PROFIT LEVEL
– higher gross margin % per placement– lower share of client spend– lower fill rates = lower productivity
– lower gross margin % per placement– higher share of client spend– higher fill rates & more efficient
delivery = higher productivity
68
MAKING THE UK BUSINESS MORE EFFICIENT THAN EVER
80%
project % complete
BACK OFFICE TRANSFORMATION - automated, more efficient & scaleable- improved customer service & Management Information >> see ‘Leading Technology’ section
90%NEW FRONT OFFICE TECHNOLOGY SYSTEMS - now optimising to increase consultant productivity- leverage advantages in FY11 >> see ‘Leading Technology’ section
50%REFINING CORPORATE ACCOUNT MODEL - low cost delivery model leveraging new technology- different but complementary to traditional ‘spot’ model
10%IMPROVING INTERNET CAPABILITY - increase traffic & enhance content- build online engagement >> see ‘Leading Technology’ section
BUILD MARKET LEADERSHIP
INCREASING EFFICIENCY
NEXT STAGE OF CYCLE
69
UK PUBLIC SECTOR IS UNDER PRESSURE BUT IT IS A SMALL PART OF THE OVERALL GROUP
In the next cycle public sector will return to being ~ 20% of our UK & I net fees Opportunity for market share gain in public sector
BUILD MARKET LEADERSHIP
INCREASING EFFICIENCY
NEXT STAGE OF CYCLE
PUBLIC SECTOR IS A LARGE MARKET- 6 million employed in the public sector
WE HAVE A SMALL MARKET SHARE- c.5%
IT IS A VERY FRAGMENTED MARKET - hundreds of players in the market
PRE- RECESSION
H1
10
FUTURE
23%
H1
08
NOW
77%
61%
39%
~ 80%
~ 20%
Private sector Public sector
UK & I public sector net fees as % of Group
Back office (40%) - under pressure
Front line services (30%) - expect resilienceConstruction & Property (30%) - resilient to date
the part of UK public sector business that is under pressure represents around 12% of Group net fees
IDEALLY POSITIONED TO TAKE SHARE - much bigger & more experienced than the rest
REST OF HAYS GROUP
UK PUBLIC SECTOR
REST OF HAYS GROUP
70
PRIVATE SECTOR PRESSURES ARE CYCLICAL NOT STRUCTURAL
UK & I net fees in the private sector
H1 10H2 08
PEAK £176m
TROUGH £74m
58% FALL DUE TO RECESSION IMPACT
EXTERN
AL
STRU
CTU
RA
L PR
ESSUR
ES
ECO
NO
MIC
D
OW
NTU
RN
ECO
NO
MIC
G
RO
WTH
C
YCLE
SUBSTANTIAL CYCLICAL REBOUND
(6 months) (6 months)
RETURN TO PRE-RECESSION CONVERSION RATE
– when top line recovers
Influences on conversion rate (‘CR%’)
CONVERSION RATE %
– when UK economy returns to meaningful GDP growth
INTER
NA
L EFFIC
IENC
Y
71
UNITED KINGDOM & IRELAND SUMMARY#1 MARKET POSITION FOCUSED ON GAINING SHARE IN ALL MARKET SEGMENTSUK PUBLIC SECTOR EXPOSURE CONCERNS OVER-PLAYEDHIGH GROWTH OPPORTUNITIES IN NEWER SPECIALISMSWILL BE MORE EFFICIENT THAN EVER IN NEXT CYCLEWELL POSITIONED FOR SUBSTANTIAL CYCLICAL REBOUND
72
4.3CONTINENTAL EUROPE & ROW
73
49%
15%
8%4%4%
20%
GermanyFranceBeneluxCanadaSwitzerlandOther
5%10%
7%
46%
12%
20%
Accountancy & FinanceConstruction & PropertyITPharmaSales & MarketingOther
APAC PROFILENet fees by specialism
Temp : Perm
Private : Public sector
56% 44%
95% 5%
Net fees by region
Information is for 6 months ended 31 December 2009
CONTINENTAL EUROPE & ROW PROFILE
Objective: aggressively grow our business to establish top 3 market positions in all of our geographies
Net fees: £79.1m
Operating profit: £6.8m
Conversion rate: 8.6%
Countries: 20
Consultants: 1,068
Offices: 82
74
EMBRYONIC MARKETS ACROSS THE REGION
Recruitment by HR departments versus specialist recruitment groups
Specialist Recruitment
Pie chart is indicative only. Net fees for Michael Page are their EMEA division. Hays numbers shown on same basis as Michael Page calculated as CE & RoW division excluding Canada, Brazil, India. Information shown on a calendar year basis.
INTERNAL CORPORATE HR DEPARTMENTS
SPECIALIST RECRUITMENT GROUPS
Competitor 2005 2009
#1 HR n/a n/a
#2 Michael Page £86m £164m
#3 £58m £155m
Specialist recruitment markets in Continental Europe
IT’S NOT ABOUT THE COMPETITION IT’S ABOUT GETTING THE MARKET TO USE SPECIALIST RECRUITMENT GROUPS
Rank departments
75
COMPELLING HAYS PROPOSITION ENABLES RAPID PENETRATION INTO NEW MARKETS
Canada
Net fees in first 3 years
2. APPROACH TARGET CLIENTS- “no placement, no fee” approach gets us in the door
3. CLIENTS ENGAGE HAYS- contingent fee means minimal downside for client
5. ORGANISE INTERVIEWS & OFFER PROCESS- & keep in regular contact post placement
6. NEXT TIME CLIENT RECRUITS THEY CALL HAYS- the beginning of a relationship
1. BUILD CANDIDATE DATABASE- through advertising: paper, web, networking
4. MATCH CANDIDATE TO CLIENT REQUIREMENTS- draw from database & further advertising
Opening in new markets
breakeven within 24 months
Italy£1.6m
£3.2m£3.8m
breakeven within 10 months
Brazil
breakeven within 12 months
£3.9m£1.2m£2.1m
£0.7m£3.4m
£5.4m
£0.4m
76
PRIORITY IN GERMANY IS TO STRENGTHEN OUR #1 POSITION IN ‘IT’ AND ROLL OUT OTHER SPECIALISMS
DEVELOP PERM PLACEMENT BUSINESS - roll out across disciplines & offices
DRIVE GROWTH IN NEWER SPECIALISMS - A&F, C&P, S&M, Pharma, Legal**
STRENGTHEN #1 POSITION IN ‘IT’- focus on market share & margins
DEVELOP TEMP PLACEMENT BUSINESS - prioritising Accountancy & Finance
Profile in Germany Focus in Germany
IT & Engineering 81%Accountancy & Finance 10%Construction & property 4%Pharma 3%Other 2%
Temp : Perm
Private : Public sector
87% 13%
97%
Net fees: £38.7m
Operating profit: £12.2m
Consultants: 447*
Offices: 9
Net fees by specialism
Based on 6m ended 31 Dec 2009*Adjusted to show the information on the same basis as the rest of the Group.**‘A&F’ is Accountancy & Finance, ‘C&P’ is Construction & Property, ‘S&M’ is Sales & Marketing.
EXPAND ENGINEERING BUSINESS - focused on contracting
77
PRIORITY IN FRANCE IS TO BUILD SCALE IN EXISTING LOCATIONS
BUILD SIZEABLE TEMP PLACEMENT BUSINESS - roll out across disciplines and offices
FURTHER OFFICE OPENINGS IN THE REGIONS - eg. Orleans & Monaco
INCREASE CRITICAL MASS IN MAJOR CITIES - once market conditions permit
PRIORITISE ACCOUNTANCY & FINANCE- expect rapid market development in upturn
Profile in France Focus in France
Accountancy & Finance 24%Construction & Property 27%Banking 10%Pharma 9%Other 30%
Temp : Perm
Private : Public sector
27% 73%
97%
Net fees: £12.2m
Operating profit: £(0.6)m
Consultants: 224
Offices: 17
Net fees by specialism
Based on 6m ended 31 Dec 2009
78
THE PRIORITY IN OUR SMALLER BUSINESSES IS TO AGGRESSIVELY PURSUE GROWTH WHEN THE MARKETS TURN
FOCUS IN BRAZIL
FOCUS IN CANADA FOCUS IN BENELUX
FOCUS IN SPAIN
• Gain critical mass in Greater Toronto Area
• Expand western region
• Diversify services eg. temp / contracting
• Gain critical mass in major cities
• Develop temp / contract business
• Focus on A&F
• Achieve critical mass in Madrid & Barcelona
• Target Corporates
• Double headcount over 3 years
• Further office rollout
• Springboard for other S American countries
79
Development of the office network
Offices as at December 2006
9Austria, Germany & Switzerland
France
Benelux
Canada
Iberia & Italy
South & Central America
Other
Planned offices in next 3 years*
44
*Planned office openings are based on current business plans for existing and new countries.
CONTINUING TO DEVELOP OUR FOOTPRINT
Offices opened 2007 - 2009
ROLL OUT OFFICES & BUILD CRITICAL MASS IN MAJOR CITIES
12 5
18
6 2 2
7 4 4
1 1 8
10 53
2
BIG OPPORTUNITY TO EXPAND IN SOUTH AMERICA
80
CONT. EUROPE & ROW SUMMARY
EMBRYONIC MARKETSPRIORITISE NEWER SPECIALISMS IN GERMANYPRIORITISE SCALE IN MAJOR CITIES IN FRANCEDEVELOP BALANCED PORTFOLIO: TEMP & PERMENTRENCH TOP 3 MARKET POSITIONS
81
5.0LEADING TECHNOLOGY
82
WORLD CLASS RECRUITMENT NEEDS WORLD CLASS TECHNOLOGY
70,000 LIVE JOBS GLOBALLY
30,000 CLIENTS
40,000 TEMPORARY WORKERS PAID WEEKLY
2.5 MILLION INVOICES ISSUED PER YEAR
2.5 MILLION CANDIDATES IN OUR DATABASE
20,000 DATABASE SEARCHES EVERY DAY
2 MILLION CONTACTS
Statistics about Hays Group*
*Indicative only.
83
ISSUES WITH OUR LEGACY IT SYSTEMS
1. MULTIPLE IT SYSTEMS IN USE2. NOT SCALEABLE3. MANUALLY INTENSIVE4. POOR FUNCTIONALITY & CONNECTIVITY5. LIMITED REPORTING CAPABILITY
IN THE PAST NO ONE HAS EFFECTIVELY USED LEADING TECHNOLOGY IN RECRUITMENT
84
£50 MILLION INVESTED– the biggest investment in IT in
specialist recruitment
EXTENSIVE RESEARCH– assessed every competitor system
HAYS DESIGN– our intellectual property
OTHERS WILL TRY TO COPY– but we will be years ahead
HAYS HAS INVESTED TWO YEARS AND £50 MILLION DEVELOPING THE INDUSTRY LEADING TECHNOLOGY PLATFORM
Bus
ines
s ch
ange
par
tner
DELIVERY LED BY HAYS & SUPPORTED BY EXTERNAL PARTNERS
Delivery teamC
onsu
ltant
s sp
ecia
lisin
g in
sta
ffing
indu
stry
dedicated core Hays team responsible for delivery
Tech
nolo
gy
impl
emen
tatio
n pa
rtner
Offs
hore
dev
elop
men
t ce
ntre
representatives across Hays input to design
Third
par
ties
The investment
85
THREE PARTS TO OUR NEW TECHNOLOGY PLATFORM
COMPLETES 2010COMPLETES 2010 NEXT FOCUS
NEW GLOBAL FRONT OFFICE TECHNOLOGY
NEW UK BACK OFFICE IT SYSTEM
ENHANCED ONLINE CAPABILITY
• fully automated
• highly efficient
• improved customer service
• enhanced real-time Management Information
• increase consultant productivity
• seamless connectivity with back office & internet
• competitive advantage
• drive traffic to hays.com
• enhance online experience
• build online engagement
END TO END MANAGEMENT INFORMATION
86
BACK OFFICE TRANSFORMATION FROM HIGHLY FRAGMENTED AND MANUAL SYSTEM TO COHESIVE AUTOMATED SYSTEM
2. MANUAL INTERFACES
1. MANUALLY INTENSIVE
3. INCOMPLETE VISIBILITY
£21 MILLION COST BASE PAat start of project
2. CLIENT / CANDIDATE INTERFACE
1. AUTOMATED & EFFICIENT
3. COMPLETE VISIBILITY
£8M DIRECT COST SAVINGS PA**+ indirect cost savings
Old UK back office New UK back office
FEW ECONOMIES OF SCALE1 consultant adds 0.7 admin head
ECONOMIES OF SCALE1 consultant adds 0.2 admin head*
*Relates to admin staff in front & back office with improvements in front office system also contributing. **Reduction in cost base (excluding depreciation) due to back office transformation project once completed and reduction in volumes due to recession.
BA
CK
O
FFICE
INCREASING EFFICIENCY
87
NEW BACK OFFICE IS BETTER FOR CANDIDATES, CLIENTS AND HAYS
Benefits of new UK back office
CANDIDATES
BA
CK
O
FFICE
2. CLIENT / CANDIDATE INTERFACE
3. COMPLETE VISIBILITY
– ‘right first time’– focus on exceptions – electronic invoicing– less consultant admin
– accuracy– faster pay-rolling
– less manual intervention– less print, postage
& stationery
– e-invoicing– online timesheets – online account visibility – self billing
– real time information – full account analysis
– single view of account– review spend patterns
– online account visibility– faster query resolution– status visibility
1. AUTOMATED & EFFICIENT
CLIENTS HAYS
BETTER CUSTOMER SERVICE
by customer
88
AUTOMATED AND SEAMLESS PROCESSING OF TEMPORARY WORKER ASSIGNMENTS
STARTER PACK
sent by email
Back office work flow(temporary placement)
PLACEMENTOne Touch
CANDIDATE PORTAL
on-line
STATUS
TIMESHEET
JOBS
ON
LINE A
PPRO
VAL
(client / Hays)
CANDIDATE PAID
CLIENT INVOICED
HAYS P&L
in
SMSconfirmation
automated
candidate self serve & visibility 50%
e-invoiced
70% online
auto
auto
client CREDIT CHECK
auto
BA
CK
O
FFICE
real-timeMANAGEMENT INFORMATION
auto
PAPERLESS PROCESS
auto
89
THE NEW FRONT OFFICE TECHNOLOGY IS EASY TO USE, PROVIDES RICHER DATA AND MORE POWERFUL SEARCH
RICHER DATA- better integrity checking
DE-DUPLICATION - one record per candidate
CV AUTOMATIC UPLOAD- from inbox/adverts/job board
ACCURACY- increases efficiency
FASTER SEARCH RESULTS- competitive advantage
AUTOMATED- powered by
INTUITIVE- & better functionality
GLOBAL CONSISTENCY- set up, training & upgrades
AUTOMATED- ‘One Touch’
SINGLE DATABASE- better visibility
EASIER TO USE- new hires learn quicker
INTELLIGENCE - quality & real time MI
Benefits of new front office system
DATABASE SEARCHSYSTEM
FRO
NT
OFFIC
E
INCREASED CONSULTANT PRODUCTIVITY
One Touch
90
FROM VACANCY TO SHORT LIST IN A FEW TOUCHES
VACANCYmandate
ADVERTISE on multiple job boards
PHONE
E-SHOT
SMS TEXT
NEW CVS automatic
upload
UNSUCCESSFULletter & web
link sent
SHORT LISTfor interview
One Touch
CA
ND
IDA
TE INTER
EST YES / N
O
Front office system work flow
FRO
NT
OFFIC
E
IDENTIFY CANDIDATESfrom database
One Touch
One Touch
No touch
RAPID PROCESSING OF CANDIDATE APPLICATIONS
reduced usage
increased usage
INTERVIEWSscheduled
One Touch
91
POWERFUL INFORMATION AT OUR FINGERTIPS
INFORMATION DRIVING BEHAVIOUR
real time exception reporting identifying under performers
MANAGERSbetter short lists using more powerful search on richer database
CONSULTANTSview activity profile of best performers to inform training
TRAINERS
view which jobs we are consistently failing to fill by client
ACCOUNT MANAGERS
view trends by client, sector, region, & salary bracket to allocate resource
EXECUTIVE
review recruiting activity by job type, region, salary bracket
CLIENTSExamples of real time information available
FRO
NT
OFFIC
E
BA
CK
O
FFICE
92
STATE OF THE ART SYSTEMS WILL PROVIDE COMPETITIVE ADVANTAGE
FRO
NT
OFFIC
E
BA
CK
O
FFICE
Now: % Completion
80%
90%
10%
UK BACK OFFICE
GLOBAL FRONT OFFICE
DEVELOP ONLINE CAPABILITY
FRONT & BACK OFFICE IMPLEMENTATION COMPLETES 2010
Next steps: optimisation
ENHANCEMENTS– usage will identify
improvements
End destination
>> see Internet speed expo
STATE OF THE ART SYSTEMS
– market leading
HIGHLY TRAINED CONSULTANTS
– using system to full capability
TRAINING– familiarity– changing behaviour
COMPETITIVE ADVANTAGE
– customer service– efficiency
DEVELOP BEST PRACTICE
– apply worldwide
93
Q&A SESSION
SHORT TERM CYCLESLONG TERM GROWTH
94
SPEED EXPO – PART 2
1. BRICS
2. INTERNET
3. CORPORATE ACCOUNTS
BUILDING THE BUSINESSES OF TOMORROW
ENHANCING OUR ONLINE CAPABILITY
JOINING UP OUR CAPABILITIES
4. GLOBAL BUSINESSESROLLING OUT OUR GLOBAL BUSINESSES
95
6.0BUILDING A LEADINGGLOBAL BRAND
969696
TRANSFORMING HAYS FROM A GREAT BUSINESS TO A GREAT BUSINESS WITH A POWERFUL GLOBAL BRAND
POWERFUL BRAND
1. PUNCHING BELOW OUR WEIGHT– awareness & reputation lagged reality
2. LACK OF DIFFERENTIATION– competitive advantages not clear
3. SEEN AS LOW END IN THE UK– misperception of our market position
4. LACK OF GLOBAL IMPACT– low profile in many of international markets– lack of consistency & clarity worldwide
Four reasons for upgrading our brand
979797
BUILDING A BRAND THAT REFLECTS THE QUALITYOF OUR PEOPLE & SERVICES
PREMIUM BRAND– reputation as sector experts– operate as trusted advisors2
LEADER BRAND– seen as voice of the industry– grow market share3
The aim
IMPACTFUL BRAND– differentiated positioning– creative impact1 100+ AUDIT INTERVIEWS
– clients, candidates, consultants
STRATEGY WORKSHOPS– 100+ people; 5 countries
STRATEGY VALIDATION– 25+ deep interviews & research
TRANSFORMATION PLANNING– global integration workshops
PHASED GLOBAL ROLL-OUT– commenced October 2009
The process
9898
WHAT IS OUR BRAND VISION?
WHAT MAKES HAYS DIFFERENT?
STRATEGIC POSITIONING
DEPTH & BREADTH OF OUR EXPERTISE
POWERING THE WORLD OF WORK
9999
COMMUNICATING OUR EXPERTISE
100100
ALIGNING BRAND PROMISE WITH CUSTOMER EXPERIENCE
PEOPLE & TRAINING• Expertise & leadership training (>> see Section 3)
• Best practice behaviours
SERVICE EXPERIENCE• Client focused
• Consistent, high quality delivery
• Consultative relationship
COMMUNICATIONS• Distinctive ‘tone of voice’
• Authoritative
• Express a point of view
ENVIRONMENTS• Phased office re-branding
• Upgrading online presence (>> see Internet speed expo)
EXPERIENCE
KEY
TO
SU
CC
ESS
HAYSBRAND
101101
PREVIOUSLY: NO CONSISTENCY OR CLARITY
102
‘H’ SYMBOLS PROVIDING CREATIVE IMPACT
From left to right: Corporate | GenericPharma | Construction & Property | Manufacturing & Engineering | Education Accountancy & Finance | Healthcare & Social Care | IT & Telecoms | Energy
103103
NOW: CONSISTENCY AND CLARITY
104104104
STAND OUT ADVERTISING
PREVIOUSLY NOW
105
A DISTINCT TONE OF VOICE WITH A POINT OF VIEW
106
AN AUTHORITATIVE MEDIA PRESENCE
107107107
A PROFESSIONAL IMAGE
108
MEASURING SUCCESS WHAT WE WANT PEOPLE TO SAY ABOUT HAYS
CANDIDATES
“I always talk to Hays when considering my future”
“They are experts in my sector, and understand what employers are looking for”
“I have confidence in their advice & recommend them”
CLIENTS
”I am very loyal to Hays”
“They’ve built an understanding of my business & culture”
“Their expertise and ‘can-do’ attitude have led to a strong relationship”
109
GLOBAL LEADERS HAVE GLOBAL LEADING BRANDS
110
7.0CONVERTING OPPORTUNITY INTO PERFORMANCE
111
A STRONG TRACK RECORD OF DELIVERING FEE AND PROFIT GROWTH
0
100
200
300
400
500
600
700
800
900
FY92
FY93
FY94
FY95
FY96
FY97
FY98
FY99
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
£146
m£3
66m
*Net fees, profit and conversion rate (CR%) of recruitment business only; CR% is the proportion of net fees converted into profit. Information extracted from financial statements and management accounts information. Excludes exceptional items.
Hays’ 17 year track record*
Net fees (£m) Op profit (£m) Conversion rate (%)
£m22% 92-08 NET FEE CAGR28% 92-08 PROFIT CAGR
£254
m£7
87m
%
112-5
0
5
10
15
20
H2 C
Y00
H1 C
Y01
H2 C
Y01
H1 C
Y02
H2 C
Y02
H1 C
Y03
H2 C
Y03
H1 C
Y04
H2 C
Y04
H1 C
Y05
H2 C
Y05
H1 C
Y06
H2 C
Y06
H1 C
Y07
H2 C
Y07
H1 C
Y08
H2 C
Y08
H1 C
Y09
H2 C
Y09
HAYS’ PEAK TO PEAK PROFIT PERFORMANCE OUTPERFORMED PEERS IN THE LAST CYCLEHays operating profit peak to peak (£m)
0
20
40
60
80
100
120
140
160
H2 C
Y00
H1 C
Y01
H2 C
Y01
H1 C
Y02
H2 C
Y02
H1 C
Y03
H2 C
Y03
H1 C
Y04
H2 C
Y04
H1 C
Y05
H2 C
Y05
H1 C
Y06
H2 C
Y06
H1 C
Y07
H2 C
Y07
H1 C
Y08
H2 C
Y08
H1 C
Y09
H2 C
Y09
70% growth peak to peak
£1,199m cumulative profit in 7 yrs since peak (16x H1 CY01 peak)
£76m
£129
m
0
50
100
150
200
250
H2 C
Y00
H1 C
Y01
H2 C
Y01
H1 C
Y02
H2 C
Y02
H1 C
Y03
H2 C
Y03
H1 C
Y04
H2 C
Y04
H1 C
Y05
H2 C
Y05
H1 C
Y06
H2 C
Y06
H1 C
Y07
H2 C
Y07
H1 C
Y08
H2 C
Y08
H1 C
Y09
H2 C
Y09
$150
m
$237
m
58% growth peak to peak
$1,587m cumulative profit in 7 yrs since peak (11x H2 CY00 peak)
Robert Half operating profit peak to peak ($m)
Michael Page operating profit peak to peak (£m)
0
10
2030
40
50
6070
80
90
100
H2 C
Y00
H1 C
Y01
H2 C
Y01
H1 C
Y02
H2 C
Y02
H1 C
Y03
H2 C
Y03
H1 C
Y04
H2 C
Y04
H1 C
Y05
H2 C
Y05
H1 C
Y06
H2 C
Y06
H1 C
Y07
H2 C
Y07
H1 C
Y08
H2 C
Y08
H1 C
Y09
H2 C
Y09
102% growth peak to peak
£515m cumulative profit in 7 yrs since peak (12x H1 CY01 peak)
£42m
£85m
£76m
£129
m
Robert Walters operating profit peak to peak (£m)
52% growth peak to peak
£73m cumulative profit in 7 yrs since peak(8x H2 CY00 peak)
£10m
£15m
Note: SThree is excluded from the analysis as the period covered dates to before its IPO and hence publication of half yearly financial information. Excludes exceptional items.
113
OUR EXCELLENT PERFORMANCE IN THE LAST CYCLE WAS DRIVEN BY THE INTERNATIONAL BUSINESS
0
50
100
150
200
250H
103
H104
H105
H106
H107
H108
0%
10%
20%
30%
40%
0
20
40
60
80
100
120
H103
H104
H105
H106
H107
H108
0%
10%
20%
30%
40%
50%
60%
*Net fees, profit and conversion rate (CR%) of recruitment business only; CR% is the proportion of net fees converted into profit. Excludes exceptional items.
APAC
£67m
£228
m
£49m
**Based on the average number of consultants in each period.
03-08 net fee CAGR: 10%03-08 profit CAGR: 6%
CE & RoW UK & I
Net fees (£m) Op profit (£m) Conversion rate (%)
03-08 net fee CAGR: 39%03-08 profit CAGR: 43%
-10
10
30
50
70
90
110
H103
H104
H105
H106
H107
H108
0%
5%
10%
15%
20%
25%
04-08 net fee CAGR: 39%04-08 profit CAGR: 71%
114
Specialist Recruitment
*Headcount reflects total full time permanent employees.
18 2334
41
88
66
FY04
FY05
FY06
FY07
FY08
FY09
Net fees (£m)
38%CAGR
5 713 15
36
24
FY04
FY05
FY06
FY07
FY08
FY09
Operating profit (£m)
52% CAGR
181 222301
441
633
FY04
FY05
FY06
FY07
FY08
FY09
Headcount* (no)
33% CAGR
WE BUILD SCALE RAPIDLY WHEN ECONOMIC CONDITIONS ARE SUPPORTIVE
Case study: Germany
748
115
STRUCTURAL GROWTH ENABLED SIGNIFICANT MOMENTUM ACROSS THE INTERNATIONAL BUSINESS IN THE LAST CYCLE
0%
20%
40%
60%
80%
100%
UA
E
Italy
Spain
Poland
Sweden
Switzerland
Luxembourg
Netherlands
Portugal
Canada
France
Aus &
NZ
Belgium
Germ
any
Czech R
ep
Austria
>100%
84%
68%
52%42% 41% 38%
28% 25% 21%13% 9%
9 COUNTRIES GREW NET FEES BY OVER 40% IN FY07
38% TOTAL GROWTH BY INTERNATIONAL BUSINESS IN FY07
82%
APAC region CE & RoW region
FY07 net fee growth rates by country (%)
99%
36%
116
WE KNOW HOW TO GROW RAPIDLY ACROSS MULTIPLE COUNTRIES AT THE SAME TIME WHEN ECONOMIES ARE FAVOURABLE
0%
20%
40%
60%
80%
100%
Singapore
Brazil
Japan
Hong K
ong
Italy
Poland
Portugal
UA
E
Luxembourg
Sweden
Austria
Germ
any
Czech R
ep
Switzerland
Spain
Aus &
NZ
France
Canada
Belgium
Netherlands
China
>100%
78%65% 61% 57% 56% 52% 52% 50% 49% 46% 46% 46% 37% 36%
APAC region CE & RoW region
19 COUNTRIES GREW NET FEES BY OVER 40% IN FY08
52% TOTAL GROWTH BY INTERNATIONAL BUSINESS IN FY08
FY08 net fee growth rates by country (%)
117
0102030405060708090
H106
H206
H107
H207
H108
H208
H109
H209
H110
POTENTIAL TO DRIVE CONSULTANT PRODUCTIVITY AND LEVERAGE FIXED COST BASE AS MARKET CONDITIONS IMPROVE
0102030405060708090
H106
H206
H107
H207
H108
H208
H109
H209
H110
Specialist Recruitment
£000
Consultant numbers used in the calculation represent the average of the opening and closing headcount number for the six month period.
PRODUCTIVITY 7% BELOW PEAK LEVELS
Net fees per temp consultant (£000) Net fees per perm consultant (£000)
£000
PRODUCTIVITY 24% BELOW PEAK LEVELS
118
LOW CAPITAL REQUIREMENT DRIVES STRONG CASH GENERATION
Specialist Recruitment
Capital Expenditure (£m)
96%117%
84%
117%131%
233%
103%
Conversion of operating profit* to operating cash flow (%)
*Excludes exceptional items.
£5m
£9m£7m
£14m
£17m
£20m
£17m
H1 07
H2 07
H1 08
H2 08
H1 09
H2 09
H1 10
H1 07
H2 07
H1 08
H2 08
H1 09
H2 09
H1 10
UNDERLYING CAPEX AT £5M-£8M (£10M-£16M PA)
HIGHER CAPEX IN FY08-09 ON ‘IT’ PROJECTS
119
020406080
100120140160180200220240260
FY92
FY93
FY94
FY95
FY96
FY97
FY98
FY99
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
A LEADING TRACK RECORD IN RECRUITMENT AND NOW A WIDER PLATFORM FOR GROWTH THAN EVER BEFORE
Operating profit record of Hays Specialist Recruitment business
Specialist Recruitment
£m
GROWTH IN 14 OUT OF 17 YRS24% CAGR PROFIT GROWTH
>95% OF GROWTH IS ORGANICFROM 3 TO 28 COUNTRIES
SIMPLE ACCOUNTINGMINIMAL ONE OFFS
Recruitment business operating profit shown only; information as disclosed in financial statements. Excludes exceptional items.
FY01 9 COUNTRIES 8 SPECIALISMS
NOW 28 COUNTRIES 17 SPECIALISMS
FY92 3 COUNTRIES 3 SPECIALISMS
120
8.0SUMMARY
121
SHAPE OF ECONOMIC RECOVERY: UNCERTAIN HAYS ABILITY TO TAKE ADVANTAGE: CERTAIN
BALANCED PORTFOLIO28 countries / 17 specialisms / temp & perm
STRONG COST CONTROLmarket leading CR% / flexible cost base
STATE OF THE ART TECHNOLOGYmarket leading IT systems
PROVEN MANAGEMENTunderpinned by Hays DNA
HIGHLY CASH GENERATIVElow capital intensity / surplus cash returned
PURE PLAY SPECIALIST RECRUITMENT£671m net fees / 325 offices
MARKET LEADING POSITIONStop 3 in our core markets / #1 worldwide*
ATTRACTIVE MARKETS WORLDWIDEstrong long term growth drivers
BUSINESS MODEL REPLICATESself-funding growth / low expansion risk
*Measured by operating profit.
122
BRAZIL
LIMITED SHORT TERM VISIBILITY LIMITLESS LONG TERM OPPORTUNITY
Hays net fees Country population
Market opportunities*
UK
GERMANY
SPAIN
FRANCE
JAPAN
CANADA
BENELUX
* Hays view the country population as a useful indicator of the long-term potential market size in each country.
INTERNATIONAL MARKETS AT EARLY STAGES OF DEVELOPMENTSUBSTANTIAL GROWTH AHEAD
123
HIGHLY CASH GENERATIVE WITH LOW CAPITAL INTENSITY
MEANINGFUL DIVIDEND
SIGNIFICANT EXPOSURE TO STRUCTURAL & CYCLICAL GROWTH
THREE REASONS TO INVEST IN THIS BUSINESS
1.
2.
3.
124
2015
TWO TRULY GLOBAL SPECIALIST RECRUITMENT GROUPSSTILL SIGNIFICANT STRUCTURAL GROWTH AHEADSKILLED CANDIDATE SHORTAGES CONTINUINGHAYS LARGER THAN EVER OPERATING IN 35 COUNTRIES INTERNATIONAL WILL REPRESENT >75% OF GROUPHAYS WILL BE THE SECTOR LEADING GLOBAL BRAND
125
QUADRUPLED THE BUSINESS OVER 10 YEARS
1998 – 2008
MORE OPPORTUNITIES THAN EVER BEFOREIN THE NEXT CYCLE OF GROWTH
126
APPENDICESSPEED EXPOS
127
SPEED EXPO 1
128
SPEED EXPO 2
129
SPEED EXPO 3
130
SPEED EXPO 4
131
APPENDICESSPEAKER BIOGRAPHIES
132132
SPEAKER BIOGRAPHIES
Appointed to the Board on 1 September 2007 and became Chief Executive on 15 November 2007. His career began at British Aerospace before moving to Schlumberger in 1982. He is a Chartered Engineer and has an MBA from the Stanford Business School in California. He previously worked for McKinsey & Company before joining Blue Circle Industries (latterly called Lafarge Group) in 1994, where he was Group Strategy Director before being appointed as Regional Director for Asia. He was previously Chief Executive at Xansa plc. He joined the board of 3i Group plc as a non-executive Director on 1 October 2009.
Appointed Group Finance Director on 2 May 2006. A Chartered Accountant, he joined the Company from DHL Logistics, a division of Deutsche Post World Net. Prior to the acquisition of Exel plc by Deutsche Post in December 2005, he was Deputy Group Finance Director, a member of the executive board of Exel plc and Chairman of their Acquisitions and Projects Review Board. During 13 years with Exel he held a number of senior finance and operational roles, including Finance Director of Exel’s European and Global operations. He joined the board of Wincanton plc as a non-executive Director on 2 September 2009.
ALISTAIR COX, CHIEF EXECUTIVE
PAUL VENABLES, GROUP FINANCE DIRECTOR
133133
Appointed Managing Director, APAC in 1997. Previously he worked in Hays’ UK & I Accountancy & Finance business as a Regional Director (1991-1997, Yorkshire & East Midlands), Regional Manager (1991-1993, Yorkshire), Senior Manager (1989-1991, Leeds), Branch Manager (1989, Hull) and Consultant (1988-1989, Altrincham).
SPEAKER BIOGRAPHIES
NIGEL HEAP, MANAGING DIRECTOR, APAC
Appointed Managing Director, UK & I in 2008. During Tim’s 21-year career at Hays, he has progressed from Consultant to a number of senior roles for the Company’s Construction & Property business, including time spent living and working in Scotland, the North of England and Ireland. In 2006, he was appointed as Managing Director of the Construction & Property business.
TIM COOK, MANAGING DIRECTOR, UK & I
134134
Appointed Group Technology Director in September 2008. Prior to this he was Managing Director of UK Operations at Xansa plc, having previously served as Managing Director of Xansa’s outsourcing and systems integration business and Director of Technology since joining in 1998. He was previously at Barclays for 12 years with responsibility for design development and implementation of technical architectures and infrastructures.
SPEAKER BIOGRAPHIES
STEVE WESTON, GROUP TECHNOLOGY DIRECTOR
Appointed Managing Director, CE & RoW in 2006. Previously he worked in Hays’ UK & I business as Managing Director of ‘Other Specialisms’ (2000-2006) and as Managing Director, UK & Europe IT(1997-1999). Between 1983 and 1997, he held a number of roles in the UK & I Accountancy & Finance and Banking businesses as he progressed from being a Consultant in 1983 to a Regional Director in 1997.
NICK COX, MANAGING DIRECTOR, CE & ROW
135135
Appointed Group Marketing Director in June 2008. Prior to this he was Global Head of Marketing Communications at Reuters, where he was responsible for corporate marketing, brand development and marketing communications from 2001-2008. He was previously with BT (from 1993) and in 1998 he was seconded to the New Millennium Experience Company as Sales & Marketing Director. He is a past Chairman of the Marketing Group of Great Britain.
SHOLTO DOUGLAS-HOME, GROUP MARKETING DIRECTOR
SPEAKER BIOGRAPHIES
136
APPENDICESOTHER INFORMATION
137
GROUP STRUCTURE (financial information for 6 months ended 31 December 2009)
• #1 position in Australia & NZ• 88% of business is Aus & NZ• developing markets in Asia
• top 3 position in major markets• 20 countries• 64% of business is Germany
(principally IT) & France
• #1 market position• wide geographical coverage• 39% public sector
Consultants & offices are as at 31 December 2009. Conversion rate is operating profit / net fees.
APAC
HAYS GROUP
CE & RoW UK & INet fees: £64.2mOperating profit: £22.1mConversion rate: 34.4%Consultants 753Offices: 49
Net fees: £264.8mOperating profit: £35.1mConversion rate: 13.3%Consultants: 4,047Offices: 325
Net fees: £79.1mOperating profit: £6.8mConversion rate: 8.6%Consultants 1,068Offices: 82
Net fees: £121.5mOperating profit: £6.2mConversion rate: 5.1%Consultants 2,226Offices: 194
138
STRATEGIC IMPERATIVES BY REGION
Continued internationalisation to complete footprint
Finalise & optimise new technology platforms to increase efficiency
Build a global leading brand
Strengthen and deepen expertise & widen our leadership capability
GROUP
UNITED KINGDOM & IRELANDASIA PACIFIC
Continue market beating performance in Australia & NZ
Gain critical mass in Japan
Aggressively build business across Asia
Seize early advantage in recovering markets
Retain focus on core SME market
Roll out our corporate account capability entrenching client relationships & market share
Capture high growth opportunities in newer specialisms when market recovers
Increase efficiency of the business
Consolidate #1 position in ‘IT’ market in Germany, and roll out newer specialisms
Build scale in major cities in France, prioritising Accountancy & Finance
Aggressively expand in embryonic markets as markets recover
Pursue top 3 positioning in all geographies
CONTINENTAL EUROPE & RoW
139
FOCUSED 100% ON THE SPECIALIST RECRUITMENT MARKET
THE GLOBAL RECRUITMENT MARKET
GENERALIST RECRUITMENT (mostly blue collar)
SPECIALIST RECRUITMENT (mostly white collar)
EXECUTIVE SEARCH (head hunting)
Note: within the 3 segments, the Groups have been positioned in descending order according to size.
140
STRONG MARKET DRIVERS
CULTURAL CHANGESIncreasing awareness and willingness to use specialist recruitment services in sectors & countries that, historically, have not been familiar with specialist recruitment services.
THE MULTIPLIER EFFECT AND CYCLICAL GROWTHAs positions are filled, new vacancies are automatically created generating a multiplier effect on demand. Hence economic growth has a leveraged impact on our business.
INCREASING FLEXIBILITY DEMANDSIncreasing demand by employers and employees for flexible employment is driving longer- term growth in the temporary placement market.
INCREASING DEREGULATIONDeregulation, particularly in Continental Europe, is opening up new markets for our services, making it easier for us to operate and grow.
STRUCTURAL SKILLS SHORTAGESkill shortages means businesses are using our services to help fill highly-skilled roles.
INCREASING JOB VELOCITYPeople are changing jobs more frequently, which creates greater demand for our services.
141
UNRIVALLED BREADTH AND DEPTH OF EXPERTISE
Jobs we place*
*The above represents a sample of the jobs we place.
ACCOUNTANCY & FINANCE
CONSTRUCTION & PROPERTY
INFORMATION TECHNOLOGY
14 OTHER SECTORS
Architects
Building Control Officers
Carpenters
Civil Engineers
Facilities Managers
Interior Designers
Maintenance Engineers
Project Managers
Quantity Surveyors
Site Managers
Structural Engineers
Java Developers
Electronic Engineers
IT Architects
IT Consultants
Programme Managers
Project Managers
SAP Consultants
Software Developers
Solution Designers
System Administrators
Actuaries
Claims Managers
Clinical Trial Analysts
Compliance Directors
Customs Officers
Doctors
Financial Planners
Financial Traders
Geologists
Graphic Designers
HR Managers
Lawyers
Logistics Managers
Metallurgists
Nurses
Media & PR Officers
Brand Managers
Purchasing Directors
Product Development Managers
Retail Directors
Sales Managers
Store Managers
Teachers
Auditors
Bookkeepers
Corporate Tax Advisers
Credit Controllers
Finance Clerks
Finance Directors
Finance Managers
Financial Analysts
Financial Controllers
Management Accountants
Office Support
Treasurers
142
10
20
30
40
50
60
70
80
90
100
POSITIONED IN THE SWEET SPOT OF RECRUITMENT MARKETS
Specialist Recruitment
Hays market positioning by candidate salary bracket*C
andi
date
sal
ary
(£’0
00)
UK
& Ir
elan
d
Con
tinen
tal E
urop
e &
Res
t of W
orld
pred
omin
antly
£15k
-£5
0k
pred
omin
antly
£2
0k -
£100
k*Information is indicative only. For illustrative purposes, APAC and CE & RoW are based on UK equivalent salaries.
APA
Cpr
edom
inan
tly
£20k
-£7
5k
143
FOUR WAYS FOR LARGE CORPORATES TO RECRUIT
• fewer agencies used
• still fragmented
• competitive spot transactions under agreed pricing framework
• high cost delivery model
• decentralised approach
• corporate divisions acting independently like quasi SMEs
PREFERRED SUPPLIER LISTS
MANAGED SERVICE MODEL
FRAGMENTED RECRUITMENT
• one lead agency manages all perm recruitment & sometimes temp recruitment
• encompasses other value-add services
• high quality & high volume with lower cost delivery model
FULL OUTSOURCE MODEL (‘RPO’)
• one lead agency manages all temp recruitment
• fulfilment via own network & third party agencies