PageGroup : Pdf (209.1

12 October 2022

THIRD QUARTER 2022 TRADING UPDATE

CONTINUED STRONG PERFORMANCE

Q3 Highlights

• Group gross profit of £270.5m, +14.0% vs. 2021
• Strong exit in September, third month with gross profit in excess of £100m
• EMEA +22.1%: Germany +29%; France +12%
• Americas +18.3%: US +14%; Latin America +24%
• Asia Pacific -3.9%: Greater China -26%; SE Asia +17%; Japan -4%; India +35%
• UK +9.5%: Michael Page -4%; Page Personnel +56%
• Large, High Potential markets (41% of Group) +11%
• Increase in fee earner headcount of 337 to 7,071 (Q2 2022: 6,734)
• Strong cash position, net cash of c. £186m (Q2 2022: c. £136m, Q3 2021: c. £195m)
• Interim and special dividends of £100.5m to be paid on 14 October 2022

Outlook

• Full year operating profit expected to be in line with company compiled consensus of £204m

Q3 Gross Profit Analysis

			Reported (£m)		Constant
Year-on-year	% of	Q3 2022	Q3 2021		%	%
Group
EMEA	48%	130.0	106.0		+22.6%	+22.1%
Americas	19%	52.7	39.1		+34.9%	+18.3%
Asia Pacific	19%	50.4	48.8		+3.3%	-3.9%
UK	14%	37.4	34.2		+9.5%	+9.5%
Total	100%	270.5	228.1		+18.6%	+14.0%
Permanent	76%	206.5	176.2		+17.2%	+12.0%
Temporary	24%	64.0	51.9		+23.4%	+20.9%

Steve Ingham, Chief Executive Officer, PageGroup, said:

"We continued to see strong growth in Q3 with Group gross profit up 14.0% against Q3 2021, which was a significantly tougher comparator than Q2. We delivered a good broad-based performance across the majority of our geographies, disciplines and brands, with record performances in nine countries despite the typically slower summer months. We exited the quarter strongly, delivering our third month of gross profit in excess of £100m, albeit aided by the strengthening of the Dollar.

"However, Greater China, 6% of the Group, continued to be impacted by lockdowns and restrictions, down 26% for the quarter. We also saw a slight softening in client confidence across the majority of our regions. This led to a small number of jobs being withdrawn and a slowdown in time to hire in a number of our markets towards the end of the quarter. Temporary recruitment outperformed permanent, as clients looked for more flexibility in their resourcing and cost base, reflecting the

current economic uncertainty. We continued to make targeted investments in headcount in markets where we saw the strongest growth, as well as the highest potential for the future, which includes PageOutsourcing. Overall, we added 337 fee earners in Q3, the majority of which were non- experienced hires. Combined, these factors reduced gross profit per fee earner, our measure of productivity, by 8% compared to Q3 2021.

"Looking forward, there remains a high level of global macro-economic and political uncertainty, particularly regarding increasing inflation in the majority of our markets. However, given our highly diversified and adaptable business model, with a cost base that can be adjusted rapidly, we believe we are well-placed to progress towards our vision for the Group to be the leading specialist recruiter in each of the markets in which we operate.

"We are pleased with the Group's performance in Q3, and currently expect 2022 full year operating profit to be in line with company compiled consensus of £204m."

Geographical Analysis (unless stated otherwise all growth rates are vs. 2021 and in constant currency)

Large, High Potential Markets

Our 5 Large, High Potential geographic markets of Germany, Greater China, Latin America, South East Asia and the US represented 41% of the Group collectively, and grew 11% in Q3. Excluding Greater China, which was impacted by COVID-19 lockdowns and restrictions, growth was 21%.

EMEA			Gross Profit (£m)	Growth Rates
(48% of Group)		2022	2021	Reported	Constant
Q3				130.0	106.0	+22.6%	+22.1%
• Germany (12% of Group) +29%
• France (12% of Group) +12%
	o	Page Personnel +12%
	o	Michael Page +12%
•	Benelux +27%
	o	Belgium +33%
	o	Netherlands +25%
•	Southern Europe +25%
	o	Italy +13%
	o	Spain +21%

• Middle East and Africa +23%

Headcount at 30 September 2022: 4,048 (30 June 2022: 3,815)

In Europe, Middle East and Africa, strong trading conditions continued into Q3. We delivered gross profit of £130.0m, up 22.1% against Q3 2021. Germany, which was the Group's second largest market in Q3, delivered another record quarter, up 29%, with strong growth across all brands, with our Technology focused Michael Page Interim business delivering a standout result, growing 46%. France delivered growth of 12% in both Page Personnel and Michael Page, with stronger growth in permanent recruitment. Benelux was up 27%, with Belgium up 33% and the Netherlands delivering a record quarter, up 25%. Southern Europe delivered another strong quarter, up 25%, with Italy up 13% and Spain up 21%. The Middle East and Africa was up 23%. In line with the strong trading conditions in markets such as Germany, our fee earner headcount increased by 197 in the quarter.

Americas	Gross Profit (£m)		Growth Rates
(19% of Group)	2022	2021	Reported		Constant

Q3		52.7	39.1	+34.9%	+18.3%
• North America (12% of Group) +15%
o	US +14%
• Latin America (7% of Group) +24%
o	Mexico +18%
o	Brazil -1%

Headcount at 30 September 2022: 1,731 (30 June 2022: 1,633)

In the Americas, now the Group's second largest region, we delivered gross profit of £52.7m, up 18.3% against Q3 2021. In the US, despite the far tougher comparator in Q3 2021, we grew 14%, with continued strong growth in Boston, Chicago and Houston. In Latin America, gross profit grew 24%. Mexico, our largest country in the region, was up 18%, however Brazil was down 1% due to heightened political uncertainty from the recent elections. Elsewhere in Latin America, the remaining countries grew 50%, collectively. We increased our fee earner headcount by 75 across the region in Q3, mainly in the US and Mexico.

Asia Pacific		Gross Profit (£m)	Growth Rates
(19% of Group)		2022	2021	Reported	Constant
Q3				50.4	48.8	+3.3%	-3.9%
• Asia (15% of Group) -6%
• Greater China (6% of Group and 40% of Asia) -26%
	o	Mainland China -32%
	o	Hong Kong -20%
• South East Asia +17%
•	India +35%
•	Japan -4%
•	Australia +7%

Headcount at 30 September 2022: 1,905 (30 June 2022: 1,842)

In Asia Pacific, gross profit for Q3 was down 3.9% against 2021 to £50.4m. Greater China declined 26%, with Mainland China down 32%, driven by the continued COVID-19 lockdowns and restrictions. Hong Kong was also impacted and declined 20% for the quarter. However, our other Large, High Potential geographic market in the region, South East Asia, delivered growth of 17% with all markets delivering growth against Q3 2021. India, where we now have around 230 fee earners, delivered another record quarter, up 35%. Japan declined 4%, whilst Australia grew 7% for the quarter. Our fee earner headcount in the region increased by 45, mostly in South East Asia and Australia.

UK	Gross Profit (£m)		Growth Rate
(14% of Group)	2022		2021
Q3		37.4		34.2	+9.5%
•	Michael Page -4%
•	Page Personnel +56%

Headcount at 30 September 2022: 1,427 (30 June 2022: 1,378)

In the UK, gross profit grew 9.5% in the quarter, with the comparator in Q3 tougher than Q2. Activity levels in September were impacted by the national period of mourning after the death of Her Majesty the Queen and economic uncertainty. Page Personnel, which operates at lower salary levels and had been slower to recover from the pandemic, was up 56%. Michael Page declined 4%. Our fee earner headcount increased by 20 in Q3.

Perm/Temp mix

Gross profit from permanent recruitment increased 17.2% in reported rates and 12.0% in constant currencies to £206.5m (Q3 2021: £176.2m). Gross profit from temporary recruitment increased 23.4% in reported rates and 20.9% in constant currencies to £64.0m (Q3 2021: £51.9m). This resulted in a ratio of permanent to temporary recruitment of 76:24 (Q3 2021: 77:23).

Headcount

We added 337 fee earners in Q3, into markets with particularly strong trading conditions such as Germany, or where we saw the highest potential for future growth, which includes PageOutsourcing. The majority of these were non-experienced hires, as the availability of experienced hires has become increasingly limited. Our non-operations headcount rose by 106 in Q3, and, as such, our ratio of fee earners to non-operations staff was maintained at 78:22. Overall, the Group had 7,071 fee earners and a total headcount of 9,111.

Productivity

Productivity, measured as gross profit per fee earner, decreased 8% in constant currencies compared to Q3 2021. This was due to a combination of a softening in client confidence resulting in a slowdown in time to hire, as well as the aforementioned targeted investment in fee earners, the majority of which were non-experienced.

Foreign Exchange

The Group benefited from positive foreign exchange movements during Q3, increasing our Q3 reported gross profit by 4.6 percentage points, or £10.5m.

Financial Position

Save for the effects of Q3 trading detailed above and the forthcoming payments of the 2022 interim and special dividends of £100.5m to be paid on 14 October 2022, there have been no other significant changes in the financial position of the Group since the publication of the results for the half year ended 30 June 2022. Net cash at 30 September 2022 was c. £186m (Q2 2022: c. £136m, Q3 2021: c. £195m).

Shares

At 30 September 2022 there were 328,618,774 Ordinary shares in issue, of which 12,405,613 were held by the Employee Benefit Trust (EBT). The rights to receive dividends and to exercise voting rights have been waived by the EBT over 10,759,117 shares and consequently these shares should be excluded when calculating earnings per share. The total number of voting rights in the Company is 328,618,774.

Cautionary Statement

This Third Quarter 2022 Trading Update has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The Trading Update should not be relied on by any other party or for any other purpose. This Trading Update contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this Trading Update and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information. This Trading Update has been prepared for the Group as a whole and therefore gives greater emphasis to those matters that are significant to PageGroup and its subsidiary undertakings when viewed as a whole.

The Group will issue its Fourth Quarter Trading Update on 11 January 2023.

Enquiries:

PageGroup	[phone]
Steve Ingham, Chief Executive Officer
Kelvin Stagg, Chief Financial Officer
FTI Consulting	[phone]
Richard Mountain / Susanne Yule

The Company will host a conference call and presentation for analysts and investors at 9:00am today. The live presentation can be viewed by following the link: https://www.investis-live.com/pagegroup/6329db1eedad2c0c00105ad9/sfgh

Please use the following dial-in numbers to join the conference:

United Kingdom (Local)	020 3936 2999
All other locations	[phone]

Please quote participant access code 85 05 24 to gain access to the call.

A presentation and recording to accompany the call will be posted on the Company's website during the course of the morning of 12 October 2022 at:

https://www.page.com/presentations/year/2022