11 January 2023

FOURTH QUARTER AND FULL YEAR 2022 TRADING UPDATE

RECORD YEAR DESPITE SOFTENING TOWARDS THE END OF Q4

Q4 Highlights*

·    Group gross profit of £266.4m, +3.5% vs. 2021

·    EMEA +11.8%: France +7%; Germany +14%

·    Americas +6.6%: US +2%; Latin America +13%

·    Asia Pacific -15.8%: Greater China -41%; SE Asia -2%; Japan -5%; India +10%

·    UK -1.9%: Michael Page -12%; Page Personnel +31%

·    Large, High Potential markets (37% of Group) -2%; excluding Greater China +8%

·    Decrease in fee earner headcount of 128 to 6,943 (Q3 2022: 7,071)

·    Strong cash position, net cash of c. £131m (Q3 2022: c. £186m, Q4 2021: c. £154m)

·    Client and candidate confidence deteriorated towards the end of the quarter

·    2022 full year operating profit now expected to be c. £195m

* In constant currencies vs 2021 except where stated otherwise

Q4 Gross Profit Analysis

Full Year Gross Profit Analysis

Nicholas Kirk, Chief Executive Officer, PageGroup, said:

"I am pleased to be announcing my first quarterly trading update as CEO. After 28 years at the Group, it is an incredible honour to be leading this great company and I look forward to working with the Board, the Executive Team and our highly talented colleagues to drive the business forward.

"2022 was a record year for the Group with gross profit growing 20% year-on-year and, in Q4, we delivered gross profit growth of 3.5% against Q4 2021. As the quarter progressed, conditions became increasingly challenging and we saw a reduction in both candidate and client confidence, leading to further delays in decision making, as well as candidates being more reluctant to accept offers. Due to these tougher trading conditions, gross profit per fee earner, our measure of productivity, declined 12% compared to Q4 2021. Given the slowdown in trading towards the end of Q4, we now expect 2022 full year operating profit to be c. £195m.

"Looking forward, there remains a high level of global macro-economic and political uncertainty in the majority of our markets. However, against this backdrop, we continue to see candidate shortages and good levels of vacancies. Given our highly diversified and adaptable business model, with a cost base that can be adjusted rapidly and a strong balance sheet, we believe we are well-positioned to weather the uncertainty and continue to make strong shareholder returns."

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

In Europe, Middle East and Africa, gross profit grew 11.8% to £141.2m. France delivered a record quarter, up 7%, with stronger growth in Page Personnel, which had been slower to recover from the pandemic. However, France exited the quarter slower in December, due to increased caution amongst both clients and candidates. Germany delivered another record quarter, up 14% against a tough comparator in Q4 2021. Our Technology focused Interim business continued to deliver standout results, up 35%. Elsewhere in the region, we delivered robust results, but again saw candidate and client confidence deteriorating towards the end of the quarter. Having added 197 fee earners in Q3, we added at a slower rate in Q4, up 21 for the region overall.

In the Americas, we delivered gross profit of £46.5m, up 6.6% against Q4 2021. In the US, we grew 2%, compared to 14% in Q3. Conditions became more challenging as the quarter progressed, with uncertainty around market conditions affecting both candidate and client confidence. Construction, our largest discipline in the US, saw a slowing in residential builds alongside reduced funding for commercial projects. In Latin America, gross profit grew 13%, despite political and macro-economic uncertainty across the region, particularly in Brazil. Mexico, our largest country in the region, was up 1%, compared to 18% in Q3, with increased delays in decision making. Brazil was up 2% and elsewhere in Latin America the remaining countries grew 33%, collectively, with record quarters delivered by both Argentina and Colombia. In line with the more challenging conditions, overall fee earner headcount decreased by 59, mainly in the US and Brazil.

In Asia Pacific, gross profit for Q4 was down 15.8% against 2021 to £43.0m. Permanent recruitment across the region declined 19%, whilst temporary recruitment grew 5%, reflecting the uncertain market conditions. Greater China declined 41%, with Mainland China down 52%, initially due to the COVID-19 lockdowns. The relaxation of some of these restrictions, and the subsequent high infection rate, has continued to impact activity levels. Hong Kong was also impacted and declined 26% for the quarter. Our other Large, High Potential geographic market in the region, South East Asia, declined 2%, driven largely by declines in Singapore, down 9% and Indonesia, down 23%. India grew 10% against a particularly tough comparator and Japan declined 5%, broadly in line with Q3. Australia was flat for the quarter. Our fee earner headcount in the region decreased by 64, mostly in Greater China.

In the UK, gross profit for Q4 declined 1.9% against 2021 to £35.7m. Growth slowed from +9.5% in Q3 as we saw more clients deferring hiring decisions and candidates becoming increasingly cautious about accepting offers. Reflecting the more challenging trading conditions, our fee earner headcount reduced by 26 in Q4.

Large, High Potential Markets

Our 5 Large, High Potential geographic markets of Germany, Greater China, Latin America, South East Asia and the US represented 37% of the Group collectively, declined 2% in Q4. Excluding Greater China, these markets grew 8%.

Perm/Temp mix

Gross profit from permanent recruitment increased 3.9% in reported rates and declined 0.8% in constant currencies to £197.5m (Q4 2021: £190.0m). Gross profit from temporary recruitment increased 21.2% in reported rates and 18.0% in constant currencies to £68.9m (Q4 2021: £56.9m). This resulted in a ratio of permanent to temporary recruitment of 74:26 (Q4 2021: 77:23).

Headcount

We reduced our fee earner headcount by 128 during Q4, with reductions made across all regions except EMEA. Our non-operations headcount rose by 37 in Q4, as we continued to build out our capabilities in PageOutsourcing. As such, our ratio of fee earners to non-operations staff decreased slightly to 77:23 (Q3 2022: 78:22). Overall, the Group had 6,943 fee earners and a total headcount of 9,020.

Foreign Exchange

The Group benefited from positive foreign exchange movements during Q4, increasing our Q4 reported gross profit by 4.4 percentage points, or £10.8m.

Financial Position

Save for the effects of Q4 trading detailed above and the payments of the 2022 interim and special dividends of £100.5m 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 quarter ended 30 September 2022. Net cash at 31 December 2022 was c. £131m (Q3 2022: c. £186m, Q4 2021: c. £154m).

Shares

At 31 December 2022 there were 328,618,774 Ordinary shares in issue, of which 12,359,110 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 10,712,614 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 Fourth Quarter and Full Year 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 Full Year Results on 9 March 2023.

Enquiries:

The Company will host a conference call and presentation for analysts and investors at 8.30am today. The live presentation can be viewed by following the link:

https://www.investis-live.com/pagegroup/63a5a2f92b52ea0d001347c9/anwr

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

Please quote participant access code 30 60 28 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 11 January 2023 at:

https://www.page.com/presentations/year/2023