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www.robertwaltersgroup.com Strategic Report Introduction Powering people and organisations to fulfil their unique potential. The Robert Walters Group With a reputation for in-depth is a world-leading specialist sector knowledge and outstanding professional recruitment business. service, we build long-term, high-quality, strategic relationships With over 4,000 staff in 31 countries, with start-ups, SMEs and the we deliver specialist recruitment world’s largest multinational consultancy, staffing, recruitment corporates. process outsourcing and managed services across the globe. Our commitment to teamwork, integrity, passion, innovation and We match highly skilled quality means that we are always professionals to permanent, striving to set the standard for the contract and interim roles across industry. We deliver engaging the disciplines of accountancy candidate experiences and power & finance, banking, engineering, rewarding careers, giving talented HR, IT, legal, sales, marketing, individuals the freedom to choose secretarial & support and supply and the opportunity to grow. chain & procurement. Strategic Report Directors’ Report Financial Statements Contents 2019 Highlights Strategic Report Statutory reporting Adjusted reporting, excluding 1 2019 Highlights the impact of IFRS 16 Leases 2 Robert Walters Group at a Glance 4 Chairman’s Statement 1% 6 Chief Executive’s Statement 9 Market Opportunities and Key Trends 12 Strategy in Action 22 People and Culture £1.22bn 31 Innovation Revenue 34 Corporate Social Responsibility 2018: £1.23bn 42 Financial Review 44 Key Performance Indicators 46 Principal Risks and Uncertainties 3% Directors’ Report 50 Corporate Governance Statement £405.5m 57 Report of the Audit and Risk Net Fee Income (Gross Profit) Committee 2018: £392.0m 60 Directors’ Remuneration Report 84 Directors’ Responsibility Statement 85 Directors’ Report 3% 2% 88 Directors and Advisers Financial Statements ** 90 Independent Auditor’s Report £51.2m £50.5m 98 Consolidated Income Statement Operating Profit Adjusted Operating Profit 98 Consolidated Statement 2018: £49.7m 2018: £49.7m of Comprehensive Income 99 Consolidated Balance Sheet 100 Consolidated Cash Flow Statement 3% 1% 101 Consolidated Statement of Changes in Equity 102 Statement of Accounting Policies ** 109 Notes to the Group Accounts 127 Company Balance Sheet £47.4m £49.5m 128 Company Statement Profit Before Taxation Adjusted Profit Before Taxation of Changes in Equity 2018: £49.1m 2018: £49.1m 129 Notes to the Company Accounts 4% 0% 48.4p 50.6p** Basic Earnings Per Share Adjusted Basic Earnings Per Share 2018: 50.4p 2018: 50.4p ** Adjusted figures have been calculated View our Annual Report online: to eliminate the impact of IFRS 16 Leases robertwaltersgroup.com/investors adjustments. Annual Report and Accounts 2019 Robert Walters Group plc 1 Strategic Report Robert Walters Group at a Glance Market-leading global brand Group 24% NFI UK Group 8% NFI Other International The Americas, South Africa, Group Middle East 27% NFI Europe Employees Permanent/Contract recruitment net fee income 4,027 Countries 31 Net fee income from 69% Permanent international businesses 31% Contract 76 % 2 Robert Walters Group plc Annual Report and Accounts 2019 Strategic Report Directors’ Report Financial Statements Our locations What we do In an increasingly complex global recruitment market, the Group builds strong relationships with clients and candidates and offers an end-to-end recruitment service on a local, regional and global basis. Our mission We’re always striving to be the best. That means being the world’s leading specialist professional recruitment group with a clear differentiation on the quality of Group service delivered to our clients 41% NFI and candidates. Asia Pacific Core principles – Teamwork – Innovation – Integrity – Quality – Passion Our services across the world Specialist Professional Recruitment Robert Walters recruits specialists for permanent, contract and interim roles across our core disciplines of accountancy & finance, banking, engineering, HR, IT, legal, sales, marketing, secretarial & support and supply chain & procurement. Geographic Net Fee Income (NFI) Recruitment Process Outsourcing The Group’s international network of Resource Solutions is a market offices spans 31 countries and enables leader in recruitment process us to meet the demands of clients and outsourcing (RPO) and managed candidates whose needs extend beyond services. Resource Solutions designs and deploys tailored recruitment their own market. Our ability to build outsourcing solutions for clients truly local foundations gives us unique across the world. insights into the diverse cultures and industry practices in every territory. Our clients Specialist Staffing We build long-term, high-quality Walters People specialises in temporary/contract and junior relationships with start-ups, SMEs and the permanent recruitment with a world’s largest multinational corporates. focus on financial and business support positions. Annual Report and Accounts 2019 Robert Walters Group plc 3 Strategic Report Chairman’s Statement Operating profit increased by ** 2% Profit before taxation increased by ** 1% 4 Robert Walters Group plc Annual Report and Accounts 2019 Strategic Report Directors’ Report Financial Statements “76% of the Group’s net fee income is now derived from our international businesses with the Group’s footprint now spanning 31 countries.” The Group delivered a resilient During the year, headcount I would like to extend the Board’s performance in 2019, increasing net fee decreased by 3% to 4,027 (2018: 4,132) thanks to all our employees across income to record levels and maintaining with reductions focused in Resource the globe for their steadfastness and profitability despite the political and Solutions, our recruitment process resilience in delivering a pleasing economic turbulence that marked outsourcing business, in line with performance against what has been much of the year. clients’ reduced hiring requirements. a challenging macroeconomic environment for the Group. Against this backdrop, Asia Pacific, The Board will be recommending a 3% Europe and Other International delivered increase in the final dividend to 11.0p per growth whilst the UK was negatively share which, combined with the interim impacted by a decline in candidate and dividend of 4.5p per share, would result client confidence. 76% (2018: 73%) of the in a 5% increase in the total dividend to Group’s net fee income is now derived 15.5p per share (2018: 14.7p). from our international businesses with In 2019, the Group purchased 2,486,300 Carol Hui the Group’s footprint now spanning shares at an average price of £6.03 for Chairman 31 countries. £15.0m through the Group’s Employee 2 March 2020 Revenue was down 1% (down 2%*) Benefit Trust. The Board is authorised to £1.22bn (2018: £1.23bn) and net fee to re-purchase up to 10% of the Group’s income increased by 3% (2%*) to £405.5m issued share capital and will be seeking (2018: £392.0m). Operating profit was up approval for the renewal of this authority 2%** (0%*) to £50.5m** (2018: £49.7m) at the Annual General Meeting on and earnings per share increased by 13 May 2020. 0.4%** to 50.6p** per share (2018: 50.4p In May, Giles Daubeney stepped down per share). The statutory reported from the Board and his role as Deputy operating profit was up 3% (1%*) to CEO. On behalf of the Board, I would £51.2m and earnings per share was like to thank Giles for his significant down 4% to 49.4p. The Group further contribution to the Group over the strengthened its balance sheet with last 30 years and wish him well for net cash of £85.8m as at 31 December the future. 2019 (31 December 2018: £74.3m). Both permanent and contract recruitment grew during the year, with the Group’s ratio of permanent and contract recruitment net fee income currently 69% permanent to 31% contract (2018: 69%:31%). * Constant currency is calculated by applying ** Adjusted figures have been calculated prior year exchange rates to local currency to eliminate the impact of IFRS 16 Leases results for the current and prior years. adjustments. Annual Report and Accounts 2019 Robert Walters Group plc 5 Strategic Report Chief Executive’s Statement Asia Pacific operating profit increased by ** 7% Europe operating profit increased by ** 1% UK operating profit decreased by ** 7% Other International operating profit increased by ** 7% 6 Robert Walters Group plc Annual Report and Accounts 2019 Strategic Report Directors’ Report Financial Statements “Whilst the macro picture was generally challenging, we did see good growth across a number of markets and disciplines, and we continued to invest to take advantage of these opportunities.” Review of Operations We continued to invest in technology Elsewhere across the region, Malaysia to ensure our consultants can spend as and Vietnam performed strongly, 2019 was a year of unprecedented much time as possible building personal increasing operating profit by 100%* political and economic turbulence relationships with our candidates and and 64%* respectively, whereas the fuelled by the US-China trade war, clients. Our consultants are fully mobile ripple effect of trade tariff uncertainty Brexit, protests in Hong Kong and with the global roll out of Microsoft unsettled confidence in a number Gilets-Jaunes disruption in France. Surfaces now complete, we have begun of other South East Asia markets, It’s a testament to the strength of the a global project to replace our existing including