Hays plc Annual Report & Financial Statements 2019 7,800 consultants 30,000+ clients 335,000 jobs filled 3M+ LinkedIn followers 11M job applications 72M web page views Every day, across our business, Our values Our values define how we do business and how we interact with we benefit society by helping our colleagues, partners, clients and candidates. As our business grows, and as we recruit new talent or face new challenges, people succeed and enabling our values guide our people in the decisions and actions organisations to thrive – they take every day. We are: creating opportunities 1) Passionate about people 2) Ambitious and improving lives 3) Expert 4) Insightful 5) Innovative Find out more at We continuously strive to do the right thing by all our stakeholders. This enhances and protects our reputation, and makes us stronger. haysplc.com/about-us For integrating sustainability into the world of work see page 45 Our business model Recruitment insights powered by technology Our revenue model is relatively simple: we earn fees based on a We have long-embraced technology and data as powerful value percentage of a candidate’s salary, usually on a contingent basis, creators, and we have led our industry in terms of innovation when we successfully place a candidate in a role with a client. and data protection. Our delivery model is based on deep industry expertise across Our technology strategy improves both our speed to market Temp, Contracting and Perm recruitment markets. Our consultants and our data quality. This drives our client and candidate service, are long-term, trusted partners to both clients and candidates. as well as our internal efficiency. They are equipped with the best technology, tools and data Engaged data helps drive the ‘science’ of recruitment, but we analytics in the industry. firmly believe in the ‘art’ of recruitment that is delivered by We focus on net fees rather than turnover, most of which is simply our expert consultants, day in and day out. the ‘pass-through’ of Temp salary. Our ability to convert net fees We believe the prize for adding real human value in an increasingly into operating profit(1) (our ‘conversion rate’) is a key profit metric. automated world remains substantial. At 22.0%, we have one of the highest conversion rates in the industry. Group net fees drive our operational leverage, given high levels For driving the digital revolution see page 14 of incremental profit ‘drop-through’. Our business is also highly cash-generative, with relatively low capital requirements. For our business model see page 8 Powered by our people Experts and lifelong partners As the ultimate people business, everything we do is focused The balance, scale and diversity of our platform provides unrivalled on finding for our clients the right candidates for the right roles. breadth of expertise. We can respond quickly to our clients’ needs, To do this we focus on hiring, training and developing the best enabling businesses, their people and the communities in which consultants in our industry. they operate to flourish. Our aim is to become trusted lifelong partners to millions of people and thousands of organisations. For our experts see page 28 Our expertise is highlighted via a series of ‘Our Hays Stories‘ throughout this report. We operate across four divisions, with 265 offices in 33 countries Divisional performance FY19 “Despite weakening global During FY19 our net fees increased by 6%, led by macroeconomic conditions, Germany up 9%, then RoW 8%, ANZ 4% and UK&I 2%. we delivered a solid financial Perm net fees increased by 7%, with Temp 6%. performance in FY19, backed Geographical performance Contract type by group net fees up by strong cash generation. Our strong financial position gives us an excellent platform 18% to balance more challenging 32% 43% 57% current markets with our Permanent Temporary long-term strategic goals.” 27% Alistair Cox 23% Chief Executive Officer For the Chief Executive’s Review see page 20 Australia & New Zealand Germany UK & Ireland Rest of World A global platform 33 countries and 20 specialisms Australia & New Zealand Group net fees Consultants Offices 18% (£198.5m) 1,008 41 Operating profit(1) Permanent Temporary £66.4m 32% 68% Germany Group net fees Consultants Offices 27% (£299.8m) 1,801 24 Operating profit(1) Permanent Temporary Australia & New Zealand Germany £91.3m 16% 84% 19 out of 20 9 out of 20 specialisms covered specialisms covered UK & Ireland UK & Ireland Rest of World Group net fees Consultants Offices 17 out of 20 8* out of 20 23% (£263.8m) 1,960 96 specialisms covered specialisms covered *Average specialisms per country Operating profit(1) Permanent Temporary £48.9m 43% 57% Breadth and depth of expertise: our specialisms • Accountancy & Finance • Executive • Construction & Property • Financial Services Rest of World • Information Technology • Health & Social Care Group net fees Consultants Offices • Life Sciences • Human Resources 32% (£367.6m) 3,013 104 • Sales & Marketing • Legal • Banking & Capital Markets • Office Support Operating profit(1) Permanent Temporary • Contact Centres • Purchasing £42.2m 70% 30% • Education • Retail • Energy, Oil & Gas • Resources & Mining For our Divisional operating review see page 30 • Engineering & Manufacturing • Telecoms (1) Operating profit is presented before exceptional costs of £15.1 million, comprising £8.3 million relating to the Lloyds Banking Group legal ruling regarding equalisation of guaranteed minimum pensions for men and women in UK defined pension plans, and £6.8 million relating to restructuring charges, primarily in our European businesses. For 51 years, we have been writing ‘Our Hays Story’ as leaders in our industry. Over that time, we have built the largest, most diversified, specialist recruitment business in the world, responding quickly to the needs of our clients and enabling organisations, their employees and the communities in which they operate to flourish. Our purpose is to 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. The advent of new technologies gives us an unprecedented opportunity to build scale to serve even more people worldwide. Combining the power of technology and data with the deep human expertise and insights of our consultants enables us to broaden our reach at a pace and scale that was previously impossible. This combination – the ‘Art & Science’ of modern recruitment – enables us to reach millions of people and organisations every day. With over 11,500 colleagues around the world, we are writing new stories and changing more lives everyday. Our aim is to be a lifelong partner to our clients and candidates. 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 leaders, Our speed and agility will help us to create based on our deep knowledge and expertise the recruiting experience of tomorrow... Every day, c.11,500 people in 33 countries strive We are innovative, lead by example and are to help our clients find the talent they need to open to new ideas. The prize for adding real grow and people advance their careers. human value in a digital world will be huge. For more information see pages 2 to 5 For more information see pages 10 to 11 The digital revolution is accelerating, ... allowing us to become trusted lifelong and we will lead our industry through change partner to millions of people and organisations Our strong foundations in technology power The best people, allied to the best technology, deep and valuable data insights for our will deliver the best service. consultants, and ultimately our clients. For more information see pages 28 to 29 For more information see pages 14 to 17 StrategicStrategic report Report Xxxx Governance Financial statements Shareholder information 1 Financial highlights FY19 Contents Net fee income Pre-exceptional operating profit(1) Strategic report A description of our business model, markets and strategy. £1,129.7m £248.8m 3 Our investment case FY18: £1,072.8m FY18: £243.4m 4 Leaders in the global jobs market 6 Megatrends in the world of work Profit before tax Basic EPS(1) 8 Global business model, local expertise 10 Creating value for all stakeholders 12 Empowering clients globally £231.2m 11.92p 14 Driving the digital revolution FY18: £238.5m FY18: 11.44p 18 Clear, well-established strategic priorities to deliver Special dividend per share Core dividend per share our long-term aims 20 Chief Executive’s Review 26 Measuring our performance 28 Our people and culture 5.43p 3.97p 30 Divisional operating review FY18: 5.00p FY18: 3.81p 36 Finance Director’s Review 40 Principal risks Conversion rate For our KPIs see pages 26 to 27 45 Integrating sustainability into the world of work Governance report 22.0% How our Board of Directors sets FY18: 22.7% strategic direction and provides oversight and control. 52 Chairman’s statement 54 Board of Directors 56 Leadership Operational highlights FY19 61 Relations with shareholders 62 Effectiveness 66 Accountability Employees Consultants 70 Remuneration Report 97 Directors’ Report 100 Directors’ responsibilities 11,509 7,782 Financial statements Financial statements for the FY18: 10,978 FY18: 7,464 Group, including a report from the Independent Auditor. Clients Candidates 102 Independent Auditor’s Report 109 Consolidated Group Financial Statements 30,000+ 11m 137 Hays plc Company Financial Statements FY18: 30,000+ FY18: c.10.6 million job applications Clients trust Hays with their We received c.11 million job applications Shareholder information main asset – their people in FY19 and our website had 72 million Supporting information for investors. page views 146 Shareholder Information 147 Financial calendar Permanent jobs Temporary and contractor 147 Hays online filled last year roles filled last year 148 Glossary More information online: 81,100 254,000 Our award-winning investor site FY18: 77,000 FY18: 244,000 gives you fast, direct access to a wide range of company information.