Annual Report 2020
Total Page:16
File Type:pdf, Size:1020Kb
Hays plc Annual Report & Financial Statements 2020 NAVIGATING THE NEW WORLD OF WORK ‘Our Hays Story’ in 2020 was unlike any in our 52 years. The severe impact of the global Covid-19 pandemic was harsher than any conditions we have seen. Facing this challenge, I am immensely proud of the innovation and steadfast commitment shown by all our Hays colleagues. We transitioned to remote working almost overnight, while retaining complete operational functionality. Our purpose has never been more relevant. We bring opportunities to people, helping them improve their lives and fulfil their potential. Over many years we have helped literally millions of talented individuals develop their careers. We are determined to continue this help as the world adjusts to, and emerges from, the pandemic. The pandemic has accelerated the digital revolution. We are enabled by technology and data. By harnessing the ‘art’ of recruitment – our expert people – with the ‘science’ of technology and data, we are determined to create the recruitment experience of tomorrow. We are global leaders. We have built the world’s largest and most diversified white-collar recruitment business, with over 10,000 colleagues. Our aim is to become lifelong partners to our clients and candidates, writing new stories and changing lives every day. It is a privilege to be able to bring some of these stories to life in our Annual Report. Alistair Cox Chief Executive OUR HAYS STORY We are proud to be industry The digital revolution is Our speed and agility will help ...allowing us to become trusted leaders, based on our deep accelerating, and we will lead us to create the recruiting lifelong partner to millions knowledge and expertise our industry through change experience of tomorrow... of people and organisations Every day, c.10,400 people in Our strong foundations in We are innovative, lead by The best people, allied to the 33 countries strive to help our technology power deep and example and are open to new best technology, will deliver clients find the talent they need valuable data insights for our ideas. The prize for adding real the best service. to grow and people advance consultants, and ultimately human value in a digital world their careers. our clients. will be great. Our purpose is to benefit society by helping people succeed and enabling organisations to thrive, creating opportunities and improving lives Our business model Experts and lifelong partners We earn fees based on a percentage of a The balance, scale and diversity of our candidate’s salary whom we have placed business provides unrivalled breadth of with a client. Our deep industry expertise expertise. We can respond quickly to our spans white-collar Temp, Contracting clients’ needs, enabling businesses, their & Perm markets. people and the communities in which they operate to flourish. Our aim is to become We focus on net fees rather than turnover, trusted lifelong partners to millions of most of which is simply the ‘pass-through’ people and thousands of organisations. of Temp salary. Our ability to convert net Our expertise is highlighted via a series of fees into operating profit(1) (our ‘conversion ‘Our Hays Stories‘ throughout this report. rate’) is a key profit and efficiency metric. For the Hays Skills Guide We are highly cash-generative, with low visit: hays-index.com capital requirements. Watch our ‘About Us’ video at: hays.com/investors Our values We are: Passionate about people, Ambitious, Our values define how we do business and how we Expert, Insightful, Innovative interact with our colleagues, partners, clients and We continuously strive to do the right thing by all our candidates. As our business grows, and as we recruit stakeholders. This enhances and protects our reputation, new talent or face new challenges, our values guide our and makes us stronger. people in the decisions and actions they take every day. For our business model see page 12 Powered by our people Recruitment insights As the ultimate people business, everything powered by technology we do is focused on finding for our clients We embrace technology and data as the right candidates for the right roles. powerful value creators, and have led To do this we focus on hiring, training our industry in innovation. and developing the best consultants in our industry. Our technology improves our speed to market. This drives client and candidate Read more about our people and culture on pages 20 to 21 service, as well as internal efficiency. Engaged data drives the ‘science’ of recruitment, while the ‘art’ of recruitment is delivered by our expert consultants. The prize for adding real human value in a digitised world is substantial. Discover more on our LinkedIn page at: linkedin.com/company/hays We operate across four divisions, with 266 offices in 33 countries Divisional net fee performance FY20 A global business During FY20 our fees decreased by 11%. ANZ declined 33 countries and 20 specialisms by 11%, Germany by 13%, UK&I by 14% and RoW by 8%. Temp fees decreased by 9%, with Perm down 15%. Geographical performance Contract type by Group net fees 17% 34% 41% Permanent 59% 26% Temporary 23% Australia & New Zealand Germany Australia & New Zealand Germany UK & Ireland Rest of World 19 out of 20 9 out of 20 specialisms covered specialisms covered Australia & New Zealand UK & Ireland Rest of World Group net fees Consultants Offices 17 out of 20 8* out of 20 specialisms covered specialisms covered 17% (£170.5m) 811 42 *Average specialisms per country Operating profit(1) Permanent Temporary £48.2m 29% 71% Net fees by specialism Germany IT & Digital Group net fees Consultants Offices Accountancy & Finance Construction & Property 26% (£259.8m) 1,560 25 18% Engineering 25% Operating profit(1) Permanent Temporary Office Support Banking £53.2m 17% 83% 5% Life Sciences Sales & Marketing 5% Other 5% UK & Ireland 15% Group net fees Consultants Offices 6% 9% 23% (£225.6m) 1,840 95 12% Recruitment insights Operating profit(1) Permanent Temporary powered by technology £16.6m 39% 61% We embrace technology and data as Net fees by: powerful value creators, and have led our industry in innovation. Rest of World Client type Market exposure Job type Our technology improves our speed to market. This drives client and candidate Group net fees Consultants Offices service, as well as internal efficiency. 17% Public Engaged data drives the ‘science’ of 34% (£340.3m) 2,689 104 sector 37% recruitment, while the ‘art’ of recruitment 44% Professional (1) Mature is delivered by our expert consultants. Operating profit Permanent Temporary 56% Less mature 63% 83% Technical The prize for adding real human value Private in a digitised world is substantial. £17.0m 66% 34% sector Discover more on our LinkedIn page For our Divisional operating review see page 32 at: linkedin.com/company/hays (1) Operating profit is presented before exceptional costs of £39.9 million, comprising £20.3 million relating to the partial impairment of goodwill for the US business, and £19.6 million relating to restructuring charges, primarily in our German business. There were £15.1 million of exceptional costs in the prior year, as stated in note 5 on page 142. StrategicStrategic report Report Xxxx Governance Financial statements Shareholder information 1 Financial overview FY20 Contents Net fee income Pre-exceptional operating profit(1) Strategic report A description of our business £996.2m £135.0m model, markets and strategy. 3 Our investment case FY19: £1,129.7m FY19: £248.8m 4 Chief Executive’s review Profit before tax Pre-exceptional basic EPS(1) 12 G lobal business model, local expertise 14 Creating value for all stakeholders 16 Leaders in the global jobs market 18 Megatrends in the world of work £86.3m 5.28p 20 Our people and culture FY19: £231.2m FY19: 11.92p 22 Empowering clients globally 24 Our people, enabled by technology (2) Basic EPS Cash generated by operations 28 C lear, well-established strategic priorities to deliver our long-term aims 30 Measuring our performance 3.14p £247.4m 32 Divisional operating review FY19: 11.10p FY19: £263.0m 38 Finance Director’s review 42 Integrating sustainability Operating cash conversion(3) Conversion rate into the world of work 49 Principal risks Governance report 183% 13.6% How our Board of Directors FY19: 106% FY19: 22.0% sets strategic direction and provides oversight and control. For our KPIs see pages 30 to 31 58 Chairman’s statement 60 Board of Directors Operational summary FY20 62 Board Leadership and Purpose 67 Board and Stakeholder engagement Employees Consultants 69 Nomination Committee Report 72 Audit Committee Report 76 Remuneration Report 10,438 6,900 120 Directors’ Report FY19: 11,509 FY19: 7,782 122 Directors’ responsibilities Financial statements Permanent jobs filled Temporary and contractor roles filled Financial statements for the Group, including a report from the Independent Auditor. 66,329 235,000 124 I ndependent Auditor’s Report FY19: 81,100 FY19: 254,000 132 Consolidated Group Financial Statements Clients Candidate applications 165 Hays plc Company Financial Statements 40,000+ 11.5m Shareholder information Supporting information Clients trust Hays with their We received c.11.5 million for investors. main asset – their people job applications in FY20 174 Shareholder information 175 Financial calendar Web page views LinkedIn followers 175 Hays online 176 Glossary 123.4m 4.2m 176 Country and specialism list More information online: Note: Unless otherwise stated all growth rates discussed in the Strategic report are LFL (like-for-like) year-on-year net fees and profits, representing organic growth at constant currency. Our award-winning investor site gives you fast, direct access to a (1) 2020 operating profit and basic EPS are presented before exceptional costs of £39.9 million, comprising wide range of company information.