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8 August 2022

Half Year Results for the Period Ended 30 June 2022

Record Financial and Operational Performance

PageGroup plc ("PageGroup"), the specialist professional recruitment company, announces its unaudited half year results for the period ended 30 June 2022.

Financial summary	2022	2021	Change	Change
(6 months to 30 June 2022)				CC*
Revenue	£977.3m	£766.4m	+27.5%	+28.1%
Gross profit	£538.9m	£404.2m	+33.3%	+33.3%
Operating profit	£115.3m	£64.3m	+79.3%	+79.4%
Profit before tax	£114.5m	£63.7m	+79.8%
Basic earnings per share	25.6p	12.2p	>100%
Diluted earnings per share	25.5p	12.1p	>100%
Interim dividend per share	4.91p	4.70p
Special dividend per share	26.71p	26.71p

H1 Summary

• Group operating profit of £115.3m (H1 2021: £64.3m)
• Conversion rate** increased to 21.4% (H1 2021: 15.9%)
• Gross profit per fee earner up 9.2% on H1 2021 to £82.8k (H1 2021: £75.8k)
• Total headcount increased by 830 (10.6%) to 8,668 at the end of June
• Strong Balance Sheet, with net cash of £136.2m (H1 2021: £163.8m)
• Interim dividend up 4.5% to 4.91 pence per share, totalling £15.6m
• Special dividend of 26.71 pence per share, totalling £84.9m
• Outlook unchanged: Full year operating profit expected to be in line with company compiled consensus of £206m
• • in constant currencies
  • operating profit as a percentage of gross profit

Commenting, Steve Ingham, Chief Executive Officer, said:

"We achieved a strong H1 performance across our geographies, disciplines and brands, and delivered Group operating profit up nearly 80% and an underlying conversion rate*** of 22.1%. This was particularly pleasing given that 2021 had been a record year for gross profit and operating profit.

"This performance was achieved despite the backdrop of macro-economic and geo-political uncertainty as well as continued COVID-19 restrictions in certain markets. We believe that our strategy of maintaining and investing in our platform throughout the pandemic by investing in experienced hires and focusing on technology and innovation, has been key to us achieving these outstanding results.

"Gross profit per fee earner, our measure of productivity, reached a new record level, up 9% on H1 2021. The Group continued to benefit from favourable trading conditions, including wage inflation and increased fee rates resulting from the high demand and short supply of candidates, in addition to a shorter time to hire facilitated by video interviewing and investments in new systems.

• Underlying conversion rate is an alternative performance measure, calculated as conversion rate (as defined above) excluding the one-off expense of certain software licenses previously capitalised of c. £4m.

"We continued to invest in headcount, adding 652 fee earners (10.7%) during the first half of the year. The largest headcount investments were made in the markets where we saw the strongest growth and with the highest growth potential, including Germany, the US and India. This investment has driven record performances in four of our five large, high potential markets and both of our high potential disciplines. Our operational support staff headcount increased by 178 (10.1%) and our fee earner to support staff ratio remained at 78:22. The implementation of our global operating system, Customer Connect, was completed in H1, with the final roll outs in France and Latin America.

"We are announcing today an interim dividend of 4.91 pence per share, an increase of 4.5% over 2021. In addition, in line with our policy of returning surplus capital to shareholders, we are also announcing a special dividend of 26.71 pence per share (2021: 26.71 pence per share) totalling £84.9m. Taking these two dividend payments together, this amounts to a cash return to shareholders of £100.5m. This is in addition to the 2021 final dividend paid in June of £32.7m, meaning a total of £133.2m, or 41.92 pence per share, returned to shareholders in 2022.

"Looking forward, we recognise the heightened degree of global macro-economic and geo-political uncertainty, particularly with regards to increasing inflation around the world. In July, we noted a slight slowing in time to hire in some of our markets, and we continue to closely monitor our forward-looking KPIs. However, at this point, our expectations for 2022 full year operating profit remain in line with the company compiled consensus of £206m."

INTERIM MANAGEMENT REPORT

GROUP RESULTS

GROSS PROFIT			£m	Growth rates
	% of Group	H1 2022		H1 2021	Reported	CC
EMEA	50%	266.7		203.5	+31.0%	+34.9%
Asia Pacific	19%	102.0		81.8	+24.8%	+21.9%
Americas	17%	94.2		61.3	+53.7%	+44.1%
UK	14%	76.0		57.6	+31.9%	+31.9%
Total	100%	538.9		404.2	+33.3%	+33.3%
Permanent	78%	422.1		311.3	+35.6%	+35.0%
Temporary	22%	116.8		92.9	+25.7%	+27.5%

Revenue for the six months ended 30 June 2022 increased 27.5% to £977.3m (2021: £766.4m) and gross profit

increased 33.3% to £538.9m (2021: £404.2m). In constant currencies, the Group's revenue increased 28.1% and gross profit increased 33.3%. The Group's revenue mix between permanent and temporary placements was 44:56 (2021: 41:59) and for gross profit was 78:22 (2021: 77:23). Revenue from temporary placements comprises the salaries of those placed, together with the margin charged.

Fee earner productivity increased by 9.2% vs H1 2021 due to video interviewing reducing time to hire, wage inflation and improvements in fee rates from candidate shortages, alongside the strategic decisions and investments made by the Group in recent years. This contributed to the strong business performance, with gross profit increasing 33.3%, whilst fee earner headcount has increased 23.7% from 5,443 in H1 2021 to 6,734 in H1 2022.

The Group's organic growth model and profit-based team bonus ensures costs remain tightly controlled. 78% of first half costs were employee related, including salaries, bonuses, share-basedlong-term incentives, and training and relocation costs.

In total, administrative expenses in the first half increased 24.6% in reported rates compared to 2021, to £423.6m (2021: £339.9m), driven largely by the increase in headcount. In constant currencies, administrative expenses were up 24.5% and operating profit increased by 79.4% to £115.3m (2021: £64.3m), an increase of 79.3% at reported rates.

In the first half, the Group incurred costs of c. £4m relating to the one-off expense of software licenses previously capitalised. We currently expect an additional one-off cost of c. £3m in H2 relating to the consolidation of our London offices.

The Group's conversion rate, which represents the ratio of operating profit to gross profit, was 21.4% (2021: 15.9%) driven by the strong business performance across all regions, as well as Q1 of the prior year still being impacted by COVID-19 as well as the repayment of £3.4m of furlough monies to HMRC. Excluding the one-off expense of software licenses previously capitalised, as mentioned above, the Group's underlying H1 2022 conversion rate was 22.1%.

OTHER ITEMS

Net interest expense of £0.8m was broadly consistent with H1 2021. The effective tax rate for the first half was 28.8% (H1 2021: 39.4%), which is in line with the 2021 full year effective tax rate of 29.0%.

For the six months ended 30 June 2022, basic earnings per share and diluted earnings per share were 25.6p and 25.5p, respectively, representing growth of more than 100% on 2021 (2021: basic earnings per share 12.2p; diluted earnings per share 12.1p).

CASH FLOW

The Group started the year with net cash of £154.0m. In H1, £92.5m was generated from operations due to strong trading conditions, offset by an increase in debtors across both permanent and temporary recruitment. Tax paid was £30.0m and net capital expenditure was £18.9m. During the first half, £0.3m was received from exercises of share options (2021: £6.9m), £14.8m was spent on the purchase of shares into the Employee Benefit Trust (2021: £10.4m) and dividends of £32.7m were paid to shareholders. As a result, the Group had net cash of £136.2m at 30 June 2022, compared with the prior year of £163.8m.

CAPITAL ALLOCATION POLICY

It is the Directors' intention to continue to finance the activities and development of the Group from retained earnings and to maintain a strong balance sheet position.

The Group's first use of cash is to satisfy operational and investment requirements, as well as to hedge its liabilities under the Group's share plans. The level of cash required for this purpose will vary depending upon the revenue mix of geographies, permanent and temporary recruitment, and point in the economic cycle.

Our second use of cash is to make returns to shareholders by way of an ordinary dividend. Our policy is to grow the ordinary dividend over the course of the economic cycle in a way that we believe we can sustain the level of ordinary dividend payment during downturns, as well as increasing it during more prosperous times.

Cash generated in excess of these first two priorities will be returned to shareholders through supplementary returns, using special dividends and/or share buybacks.

The Board has announced an interim dividend of 4.91 pence per share, an increase of 4.5% over last year. In addition, in line with our policy of returning surplus capital to shareholders, the Group is pleased to announce today a special dividend of 26.71 pence per share (2021: 26.71 pence per share) totalling £84.9m. Taking these two dividend payments together, this amounts to a cash return to shareholders of £100.5m. This is in addition to the 2021 final dividend paid in June of £32.7m, meaning a total of £133.2m, or 41.92 pence per share, returned to shareholders in 2022.

The special dividend will be paid, as in previous years, at the same time as the interim dividend on 14 October 2022 to shareholders on the register as at 2 September 2022.

During the first half, the Group made purchases of £14.8m of shares into the Employee Benefit Trust to hedge its exposure under the Group's share plans (2021: £10.4m).

GEOGRAPHICAL ANALYSIS (All growth rates given below are in constant currency vs. H1 2021 unless otherwise stated)

EUROPE, MIDDLE EAST AND AFRICA (EMEA)

EMEA	£m		Growth rates
(50% of Group in H1 2022)	H1 2022		H1 2021	Reported	CC
Gross Profit	266.7		203.5	+31.0%	+34.9%
Operating Profit	65.3		35.9	+82.0%	+87.8%
Conversion Rate (%)	24.5%		17.6%

EMEA is the Group's largest region, contributing 50% of Group first half gross profit. Against 2021, in reported rates, revenue in the region increased 27.9% to £523.0m (2021: £408.9m) and gross profit increased 31.0% to £266.7m (2021: £203.5m). In constant currencies, revenue increased 31.6% on the first half of 2021 and gross profit increased by 34.9%.

The improvement in trading conditions seen through 2021 continued in H1 2022, and the region delivered a record first half. Against 2021, Michael Page grew 39%, whilst our more temporary focused Page Personnel business was up 28%. France, 13% of the Group and around a quarter of the region, delivered record gross profit, up 25% on 2021. Germany, the Group's third largest market, also delivered a record first half, up 43%. This was driven by a standout performance from our Technology focused Interim business, which grew 51%. Southern Europe grew 40%, with Italy up 32% and Spain up 40%. Benelux was up 42% for the first half, with the Netherlands up 45% and Belgium up 36%. The Middle East and Africa grew 21%.

Productivity for the first half was up 11.5% on 2021, to a new record level. H1 operating profit was £65.3m (2021: £35.9m) with a conversion rate of 24.5% (2021: 17.6%). Profitability improved significantly on 2021 due to the improvement in trading conditions, with Q1 2021 still being impacted by COVID-19 restrictions. Headcount across the region increased by 368 (10.7%) in the first half, to 3,815 at the end of June 2022 (3,447 at 31 December 2021).

ASIA PACIFIC

Asia Pacific	£m		Growth rates
(19% of Group in H1 2022)	H1 2022		H1 2021	Reported	CC
Gross Profit	102.0		81.8	+24.8%	+21.9%
Operating Profit	20.9		15.3	+36.5%	+33.6%
Conversion Rate (%)	20.5%		18.8%

In Asia Pacific, representing 19% of Group first half gross profit, revenue increased 23.3% in reported rates to £159.3m (2021: £129.2m) and gross profit increased 24.8% to £102.0m (2021: £81.8m), against 2021. In constant currencies, revenue increased 21.1% in the first half and gross profit increased by 21.9%.

Greater China overall grew 4%. In Mainland China, gross profit was flat on 2021, with the country being heavily impacted in H1 2022 by COVID-19 lockdowns and restrictions, particularly in Q2. Hong Kong, which was also impacted by COVID restrictions, grew 11% in H1. South East Asia, one of our Large High Potential markets, delivered a record performance, up 42%. Singapore was up 24%, whilst the other five countries in the region

grew 54%, collectively. India delivered a record first half, up 61%, with strong growth across all offices. Japan also delivered a record, growing 29%, with particularly strong performances from both our contracting business and the Technology discipline. Overall, for the first half, Australia grew 23%.

First half productivity was down slightly, by 1.1% on 2021, due to the tougher trading conditions in Greater China. Operating profit increased to £20.9m (2021: £15.3m) and our conversion rate increased to 20.5% (2021: 18.8%). Despite the impact of COVID-19 lockdowns on Greater China in H1 2022, the business performance remained strong and the conversion rate was only marginally behind full year 2021 of 21.8%. Headcount across the region increased by 133 in the first half (7.8%) to 1,842 at the end of June 2022 (1,709 at 31 December 2021).

THE AMERICAS

Americas	£m		Growth rates
(17% of Group in H1 2022)	H1 2022		H1 2021	Reported	CC
Gross Profit	94.2		61.3	+53.7%	+44.1%
Operating Profit	13.8		8.8	+57.2%	+39.9%
Conversion Rate (%)	14.7%		14.3%

In the Americas, representing 17% of Group first half gross profit, revenue increased 33.8% in reported rates against 2021, to £137.3m (2021: £102.6m), while gross profit increased 53.7% to £94.2m (2021: £61.3m). In constant currencies against 2021, revenue increased by 26.3% and gross profit increased by 44.1%.

North America delivered a record first half, with the US up 43%. Property and Construction, our largest discipline in the US, delivered growth of 53%, albeit against a weak comparator as H1 2021 was still recovering from pre- pandemic levels. The US also saw strong growth in Technology and Healthcare & Life Sciences.

For the first half, Latin America delivered a record performance, up 45%. Mexico, our largest country in the region, grew 47% and Brazil grew 38%. Elsewhere in Latin America, our other five countries in the region together grew 49%.

Productivity in H1 increased 10.6% compared with H1 2021, with increases across both North America and Latin America. Operating profit was £13.8m (2021: £8.8m), with a conversion rate of 14.7% (2021: 14.3%). Trading conditions were strong in the first half throughout the region, due primarily to the increase in productivity. Our conversion rate was up marginally on H1 2021, with the productivity improvements largely offset by a significant investment in headcount, up 252 (18.3%) in H1, to 1,633 at the end of June 2022 (1,381 at 31 December 2021).

UNITED KINGDOM

UK	£m		Growth rate
(14% of Group in H1 2022)	H1 2022		H1 2021
Gross Profit	76.0		57.6	+31.9%
Operating Profit	15.3		4.3	>100%
Conversion Rate (%)	20.1%		7.5%

In the UK, representing 14% of Group first half gross profit, revenue increased 25.4% vs. 2021 to £157.7m (2021: £125.7m) and gross profit increased 31.9% to £76.0m (2021: £57.6m).

Our Michael Page business was up 24% in the first half. Page Personnel, which operates at lower salary levels and had been slower to recover from the pandemic, was up 62% and delivered a record month in June.