Empresaria Empresaria Group plc Group plc An international Annual Report & Accounts 2016 specialist staffing group Annual Report & Accounts 2016 Empresaria is an international specialist staffing group, following a multi-branded business model to address global talent and skills shortages. The Group’s strategy is to develop leading brands and to be Strategic Report diversified and balanced across geographies and sectors. At a glance 02 Our spread of operations minimises the dependence on any Chairman’s statement 04 Market drivers 06 single market, so reducing the impact from market Multi-branded business model 08 fluctuations and other external factors. Each brand is a Strategic framework 10 specialist in their niche market, enabling them to understand Strategy in action 12 Chief Executive’s review 16 the needs of clients and candidates alike, allowing them to Finance review 22 attack the market vertically rather than horizontally. Key Performance Indicators 26 Risks and uncertainties 28 Our vision is to be a leading, international, specialist staffing Corporate social responsibility 32 group delivering a quality service to our customers and Governance candidates and creating a sustainable business for the Board of Directors 34 long-term benefit of shareholders. Directors’ report 36 Directors’ responsibilities 38 More information on Strategy on pages 10 and 11 Corporate governance statement 39 Audit Committee report 42 Directors’ remuneration report 43 Nomination Committee report 46 Financial Statements Independent auditor’s report 47 Consolidated income statement 48 Consolidated statement of comprehensive income 49 Consolidated balance sheet 50 Consolidated statement of changes in equity 51 Consolidated cash flow statement 52 Notes to the consolidated financial statements 53 Independent auditor’s report 74 Parent Company balance sheet 75 Parent Company statement of changes in equity 76 Notes to the Parent Company financial statements 77 Information Officers and professional advisers 83 www.empresaria.com Empresaria Group plc Annual Report & Accounts 2016 Strategic Report Governance Financial Statements 01 Annual Report & Accounts 2016 Cautionary statement The Chairman’s statement and Strategic report been have reviews’) (‘the prepared to information additional provide to solely Company’s the assess to shareholders strategies and the potential for those strategies succeed. to The reviews should not be relied on by any party or for any purpose. other The reviews contain certain forward- looking statements. These statements are made by the Directors in good faith based on the information available them to up to the time of their approval of this report and such statements should be treated with caution due the to inherent economic both uncertainties, including any underlying factors, risk business and information. looking forward such 23% 15% Empresaria Group plc Group Empresaria 9.2 1.15 Successful integration of Pharmaceutical Pharmaceutical of integration Successful investment Strategies staff of number average in increase 17% 1.15p to 15% up dividend Proposed Net fee income (£m) in Germanbusiness, growth profit Strong Net fee search Executive and Japan in sector IT income (£m) Asia East South in Rishworth in 2016 July in made Investments Net fee ConSol in 2016 October in and Aviation income (£m) Partners Net help to fee £10.5m to 44% by increased debt Net income (£m) investments fund new Net fee brand search Executive launch to Plans income (£m) 2017 in Vietnam in Net fee income (£m)Net fee income (£m) 1.0 20% 20% 20% 20% 20% 20% 20% £59.0m £59.0m £59.0m £59.0m £59.0m £59.0m£59.0m 7.5 (2015: £49.2m) (2015: £49.2m) (2015: £49.2m) (2015: £49.2m) (2015: £49.2m) (2015: £49.2m) (2015: £49.2m) 2016 59.0 2016 59.0 2016 59.0 2016 59.0 2016 59.0 2016 2016 59.0 59.0 2015 49.2 2015 49.2 2015 49.2 2015 49.2 2015 49.2 2015 2015 49.2 49.2 6.1 2014 44.6 2014 44.6 2014 44.6 2014 44.6 2014 44.6 2014 201444.6 44.6 2013 42.6 2013 42.6 2013 42.6 2013 42.6 2013 42.6 2013 201342.6 42.6 0.7 2012 43.9 2012 43.9 2012 43.9 2012 43.9 2012 43.9 2012 201243.9 43.9 5.4 4.6 0.35 0.35 2016 2015 2014 2013 2012 Adjusted profit before tax (£m) £9.2m (2015: £7.5m) 2016 2015 2014 2013 2012 Dividend (p) Dividend 1.15p (2015: 1.0p) 20% 14% 59.0 11.3 9.9 49.2 44.6 8.0 43.9 42.6 6.2 5.0 Five consecutive years of double-digit % double-digit of years consecutive Five earnings per share adjusted in growth Diluted earnings per share unchanged at 9.3p, 9.3p, at unchanged per earnings share Diluted Adjusted charges. amortisation increased after 11.3p to 14% up earnings per share Operating profit up 12% to £8.5m to 12% up profit Operating £7.9m to 11% tax up before Profit Conversion ratio increases to 16.6% 16.6% to increases ratio Conversion from 16.3% Fourteen consecutive quarters of net fee fee net quarters of consecutive Fourteen income growth Net fee income of £59.0m up 20% on on 20% up £59.0m of income fee Net prior year Net fee income (£m)Net fee income (£m) year prior on 44% up £270.4m of Revenue Net fee income (£m) Net fee income (£m) Net fee income (£m)Net fee income (£m)Net fee income (£m) Net fee income (£m) 20% 20% 20% 20% 20% 20% 20% 20% 2014 2013 2012 2016 2015 (2015: £49.2m) Net fee income (£m) £59.0m Financial highlights Financial Operational highlights Operational HIGHLIGHTS 2014 2013 2012 2016 2015 (2015: 9.9p) Adjusted diluted EPS (p) £59.0m£59.0m £59.0m £59.0m £59.0m£59.0m£59.0m £59.0m 11.3p (2015: £49.2m) (2015: £49.2m) (2015: £49.2m) (2015: £49.2m) (2015: £49.2m) (2015: £49.2m) (2015: £49.2m) (2015: £49.2m) 2016 2016 59.0 59.0 2016 59.0 2016 59.0 2016 2016 59.0 2016 59.0 59.0 2016 59.0 2015 2015 49.2 49.2 2015 49.2 2015 49.2 2015 2015 49.2 2015 49.2 49.2 2015 49.2 2014 201444.6 44.6 2014 44.6 2014 44.6 2014 201444.6 201444.6 44.6 2014 44.6 2013 201342.6 42.6 2013 42.6 2013 42.6 2013 201342.6 201342.6 42.6 2013 42.6 2012 201243.9 43.9 2012 43.9 2012 43.9 2012 201243.9 201243.9 43.9 2012 43.9 AT A GLANCE The Group operates in 19 countries across four What we do geographic regions and across seven key sectors, with each brand an expert in their niche market. We focus on growth markets, whether this is country or sector based. Key sectors Service lines The Group has three main service lines, temporary and contract recruitment, permanent recruitment and offshore recruitment services. Overall we aim for a bias in temporary recruitment, which is generally Technical IT, Digital more stable throughout the economic cycle, & Industrial & Design but this also depends on the maturity of the staffing sector in each country, with less mature Net fee income: Net fee income: markets focused purely on permanent sales. We target professional and specialist job levels where our brands can offer a higher value £22.9m £11.9 m added service to clients. (2015: £21.5m) (2015: £9.2m) 5% Professional Retail Services 35% Net fee income: Net fee income: £5.8m £3.9m 60% (2015: £6.2m) (2015: £3.3m) Permanent Temporary and contract Offshore recruitment services Executive Healthcare Search Net fee income: Net fee income: 14% £3.9m £3.4m (2015: £3.1m) (2015: £1.7m) 86% Aviation Other Professional & Specialist Services General Net fee income: Net fee income: £2.5m £4.7m (2015: n/a) (2015: £4.2m) 02 Empresaria Group plc Annual Report & Accounts 2016 Strategic Report Governance Financial Statements Regions United Continental Asia Pacific Americas Kingdom Europe Net fee income: Net fee income: Net fee income: Net fee income: £19.0m £16.8m £18.6m £4.6m (2015: £18.4m) (2015: £14.5m) (2015: £14.2m) (2015: £2.1m) Brands Brands Brands Brands LMA, Mansion House, FastTrack, Headway, Mediradix Skillhouse, FINES, Become, Alternattiva, Monroe Consulting, McCall, Greycoat, Become, Ball Monroe Consulting, Learning Pharmaceutical Strategies, and Hoolahan, Teamsales, Countries Resources, IMS, BW&P, McCall, ConSol Partners ConSol Partners Germany LMA, Greycoat, Rishworth Aviation Austria Countries Finland Countries USA Japan Singapore Chile Indonesia China Mexico India Hong Kong Australia Philippines UAE Malaysia Thailand New Zealand See See See See page 18 page 19 page 20 page 21 How our net fee income is split between our four regions 8% 32% 32% 28% Empresaria Group plc Annual Report & Accounts 2016 03 CHAIRMAN’S STATEMENT Further year of progress The Group has delivered another year of strong growth in profit and adjusted earnings per share. We have again demonstrated the strength of our multi-branded business model, with a strategy to be diversified by geography and sector and to develop leading brands with sector expertise. As we enter 2017, the Group continues to strengthen its position, as our focus on delivering against our strategy is reflected in our trading performance and resilience to uncertain market conditions. Revenue grew by 44%, primarily in the Technical & Industrial sector and from the investments made in 2016. Additionally, our business mix has changed following our decision in the last few years to reduce our exposure to low margin, high volume business in the UK Technical & The Group has Industrial sector Net fee income grew by 20% with profit before tax up 11% (23% on an adjusted basis).