28 July 2022

ROBERT WALTERS PLC

(the "Company" or the "Group")

Half-yearly financial results for the six months ended 30 June 2022

RECORD FIRST HALF

Robert Walters plc (LSE: RWA), the leading international recruitment group, today announces its half-yearly financial results for the six months ended 30 June 2022.

Financial and Operational Highlights

* Constant currency is calculated by applying prior period exchange rates to local currency results for the current and prior periods.

Group highlights

§ Record first half performance with Group net fee income up 27% (27%*) to £210.5m (£211.3m*) (2021: £166.2m) and

   operating profit rising by 15% (17%*) year-on-year to £27.7m (£28.4m*) (2021: £24.1m).

§ Acute talent shortages and wage inflation across all geographies and specialist professional disciplines. Fierce competition

   for talent as demand continues to outstrip supply.

§ Recruitment activity levels were strong across all forms of recruitment - permanent, contract, interim and recruitment

   process outsourcing.

§ Permanent recruitment now represents 71% (2021: 67%) of the Group's net fee income.

§ 82% (2021: 79%) of the Group's net fee income now derived from our international businesses.

§ Opened a first office in Italy (Milan).

§ Group headcount up by 16% during the first half to 4,051 (31 December 2021: 3,484).  

§ Group's hybrid working model has continued to operate successfully across the globe underpinned by our long-term

   investment in technology.

§ The Group purchased 2,024,071 shares at an average price of £6.25 for £12.7m through the Group's Employee Benefit Trust.

§ The Board has authorised a share buyback of up to £10m shares for cancellation.

§ Strong balance sheet with net cash of £81.8m as at 30 June 2022 (30 June 2021: £122.8m).

Regional highlights

§ Asia Pacific net fee income up 27% (27%*) to £93.7m (£93.9m*) (2021: £73.7m) and operating profit up 15% (17%*) to

   £16.2m (£16.5m*) (2021: £14.0m).

§ Europe net fee income up 35% (39%*) to £61.1m (£62.7m*) (2021: £45.2m) and operating profit up 18% (24%*) to £7.3m

   (£7.7m*) (2021: £6.2m).

§ UK net fee income up 8% to £38.0m (2021: £35.2m) with operating profit increasing by 8% to £3.6m (2021: £3.3m).

§ Other International (the Americas, Middle East and South Africa) net fee income up 46% (38%*) to £17.7m (£16.7m*)

   (2021: £12.1m) and operating profit up 3% (11%*) to £0.6m (£0.7m*) (2021: £0.6m).

Robert Walters, Chief Executive, said:

"The Group delivered a record first half performance with all regions growing both net fee income and operating profit. An acute shortage of professionals coupled with growing wage inflation has resulted in a significant increase in job churn and a fierce competition for talent across all of the Group's geographies and specialist disciplines.

"We have continued to invest in additional headcount during the first half to ensure we are able to further capitalise on the current demand for talent that exists across the globe.

"Looking ahead, we are yet to see signs of any slowdown in job market activity despite the volatile macro-economic backdrop and inflationary pressure that is being experienced across global markets. Current trading remains in line with the recently upwardly revised market expectations."

The Company will publish a trading update for the third quarter ending 30 September 2022 on 11 October 2022.

Further information

About Robert Walters Group

The Robert Walters Group is a market-leading international specialist professional recruitment group with over 4,000 staff spanning 31 countries. We specialise in the placement of the highest calibre professionals across the disciplines of accountancy and finance, banking, engineering, healthcare, HR, IT, legal, sales, marketing, secretarial and support and supply chain, logistics and procurement. Our client base ranges from the world's leading blue-chip corporates and financial services organisations through to SMEs and start-ups. The Group's outsourcing division, Resource Solutions is a market leader in recruitment process outsourcing and managed services.

www.robertwaltersgroup.com

Forward looking statements

This announcement contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them at the time of their approval of this announcement 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.

Robert Walters plc

Half-yearly financial results for the six months ended 30 June 2022

Half-yearly Management Report

The Group delivered a record first half performance with profit before taxation increasing by 19% (22%*) year-on-year to £26.4m (2021: £22.1m). Activity levels were strong across all forms of recruitment - permanent, contract, interim and recruitment process outsourcing - and the Group's ability to provide an end-to-end recruitment solution to our clients and candidates remains a key source of competitive advantage. Permanent recruitment currently represents 71% (2021: 67%) of the Group's net fee income.

All of the Group's regions delivered increases in both net fee income and operating profit, with Asia Pacific and Europe delivering the standout performances in terms of operating profit growth. A record high of 82% (2021: 79%) of the Group's net fee income is now derived from our international businesses reflecting the strength of the Group's global brand and geographic footprint. With Covid restrictions also easing across many countries, talent has begun to move more frictionlessly across international borders and our International Candidate Management function is once again proving a valuable asset to the Group.

During the period, we continued to invest in growing the business to capitalise on the acute talent shortages that exist right across both our international footprint and our range of specialist disciplines. We have grown our headcount by 16% since the beginning of the year and also opened our first office in Italy, in Milan, and are excited about the opportunity to develop a thriving business in one of Europe's largest economies.

Wage inflation continued to grow, creating significant churn in the job market right across the globe as candidates capitalised on the salary premiums on offer for job movers. With job churn high and the competition for talent fierce, the Group was able to successfully increase fee margins during the period and also benefited from higher candidate salary levels.

The Group's hybrid working model is operating successfully across the globe underpinned by our long-term investment in technology - it was particularly encouraging to receive excellent feedback on how the Group responded and continues to respond to the needs of our people through our global employee engagement survey that was launched in February. The health and wellbeing of our people remains our number one priority and we will continue to listen to feedback through regular surveys.

ESG

ESG remains a key priority and we continue to strive to ensure the Group is adopting all relevant best practice. Highlights from the first half include:

Technology and Insights

The roll out of Zenith, the Group's new customer relationship management system, progressed well through the first half with successful deployments to our businesses in the US, Canada, Brazil, Mexico and Chile. The next stage of the roll out will cover the South-East Asia region.

The Group continued to provide market insights and analysis to our clients and candidates by harnessing comprehensive internal and external data sources to better inform recruitment searches and decision-making. This has proven to be a source of competitive advantage and a successful revenue-generating tool.

Group Financials

Revenue was up 15% (16%*) to £538.6m (£541.3m*) (2021: £468.2m) and gross profit (net fee income) increased by 27% (27%*) to £210.5m (£211.3m*) (2021: £166.2m). Operating profit increased by 15% (17%*) to £27.7m (£28.4m*) (2021: £24.1m). Profit before taxation increased by 19% (22%*) to £26.4m (£27.1m*) (2021: £22.1m).

The Group has a strong balance sheet with net cash of £81.8m as at 30 June 2022 (30 June 2021: £122.8m). The Group also has a £60.0m committed loan facility due for renewal in 2025. At 30 June 2022, £26.6m (2021: £9.4m) was drawn down under this facility.

Asia Pacific (45% of net fee income)

Revenue was £240.1m (2021: £194.0m) and net fee income increased by 27% (27%*) to £93.7m (£93.9m*) (2021: £73.7m), delivering an operating profit of £16.2m (£16.5m*) (2021: £14.0m).

All markets across the region delivered double-digit growth in net fee income year-on-year. In Japan, the Group's largest and most profitable business, net fee income increased by 25%* year-on-year driven by the ongoing demand for bilingual professionals, digital transformation, and the recovery of Covid-impacted sectors. Elsewhere across Asia, Korea, Malaysia and Thailand all delivered record performances in terms of both net fee income and operating profit. Activity levels in Mainland China were however negatively impacted by the prolonged period of Covid-enforced lockdown with operating profit remaining flat year-on-year.

Skill shortages remain particularly acute across both Australia and New Zealand, a situation exacerbated by the re-opening of international borders and the negative net migration that exists. Whilst permanent recruitment activity remained solid, contract recruitment activity increased during the period as the shortage of permanent talent began to bite. Net fee income in Australia grew by 17%* year-on-year and in New Zealand, where we have a dominant market position, net fee income increased by 36%* year-on-year.  

Resource Solutions, our recruitment process outsourcing business, delivered a strong performance in the first half as a number of recent new client wins came fully on stream. The business has a broad range of clients spanning multiple markets across the region and is well positioned to deliver long-term growth.

Europe (29% of net fee income)

Revenue was £136.6m (2021: £100.8m) and net fee income increased by 35% (39%*) to £61.1m (£62.7m*) (2021: £45.2m), delivering an operating profit of £7.3m (£7.7m*) (2021: £6.2m).

A strong performance right across the region with all markets delivering net fee income growth of more than 25%* year-on-year.

In France, our largest business in the region, net fee income increased by 26%* year-on-year as permanent and interim recruitment continued to bounce-back well.

Our operations in the Netherlands and Belgium delivered record levels of net fee income, further cementing our market-leading position across this region. Spain also produced record net fee income and during the period we opened a new office in Bilbao giving us four offices across this rapidly growing recruitment market. Our business in Germany built upon its strong 2021 performance and delivered a record first half performance in terms of both net fee income and operating profit.

United Kingdom (18% of net fee income)

Revenue in the UK was £141.2m (2021: £159.2m) and net fee income increased by 8% to £38.0m (2021: £35.2m), delivering an operating profit of £3.6m (2021: £3.3m).

Recruitment volumes across both London and the regions accelerated through the first half of the year, with live job numbers increasing month-on-month. Wage inflation further fuelled candidate confidence to move roles with activity levels across the disciplines of commerce finance, banking, legal and technology particularly strong. Financial services recruitment bounced-back particularly strongly during the second quarter. To counter the premiums on offer for job movers, many organisations have been forced to implement blanket pay rises in the battle to retain existing staff.

Net fee income in Resource Solutions in the UK declined by 8% year-on-year. Recruitment activity levels improved as the period progressed however placement rates were impacted by candidate shortages and delays in the time taken to onboard new hires. A number of new client wins and extensions were secured during the first half across a range of sectors including mining, healthcare, technology and insurance which will deliver returns in the second half of the year and beyond.

Other International (8% of net fee income)

Other International comprises the Americas, Middle East and South Africa. Revenue was £20.7m (2021: £14.2m) and net fee income was up 46% (38%*) to £17.7m (£16.7m*) (2021: £12.1m), delivering an operating profit of £0.6m (£0.7m*) (2021: £0.6m).

We invested significantly during the period to grow scale in many of our newer businesses across the Americas. Chile and Mexico produced record performances in terms of both net fee income and operating profit. In the US net fee income, whilst up by 4%* year-on-year, was impacted by large-scale lay-offs in the tech start-up space. Our business in the Middle East continued to perform very strongly aided by a post-Covid normalisation of the region's economies, high oil prices and the breadth and strength of the Robert Walters brand.

Cash flow

The Group maintained a strong net cash position of £81.8m as at 30 June 2022 (30 June 2021: £122.8m). Working capital in the period has increased by £39.5m in line with improved trading and a positive increase in contract recruitment activity. Notable cash outflows included a dividend payment of £10.6m, £8.2m of lease liabilities, £11.0m of corporation tax payments and £6.9m of capital expenditure. On behalf of global governments, the Group has collected and paid £142.3m in payroll taxes, £54.0m in net sales and VAT taxes and £11.0m in corporation taxes, totalling £207.3m.

Dividend and Share Buybacks

The interim dividend will be increased by 20% to 6.5p per share (2021: 5.4p) and will be paid on 30 September 2022 to those shareholders on the Company's register as at 2 September 2022.

During the first half of the year, the Group purchased 2,024,071 shares at an average price of £6.25 per share for £12.7m through the Group's Employee Benefit Trust. The Board has authorised a share buyback of up to £10m shares for cancellation.

Treasury management, currency risk and other principal risks and uncertainties affecting the business

The Group does not have material transactional exposures, although it is exposed to translation differences on the profits and cash flows generated in its overseas operations. Overseas currency balances that are surplus to local working capital requirements are converted on a regular basis to Pounds Sterling. The main functional currencies of the Group's operating divisions are Pounds Sterling, the Euro, the Australian Dollar and the Japanese Yen.

The other principal risks and uncertainties affecting the Group's business activities remain those detailed within the Principal Risks and Uncertainties section of the Annual Report and Accounts for the year ended 31 December 2021, namely, political factors, economic, environmental and market uncertainty; talent attraction and retention; competition and emerging technologies; brand, reputation and business strategy; candidate risk; non-compliance with laws, regulations and contractual obligations; regulatory environment, data breach and cyber security; reliance on technology infrastructure; and treasury risk. The Board does not foresee a material change in respect of these factors for the remainder of the year.

Related party transactions

There were no related party transactions in the period to 30 June 2022 (30 June 2021: none), other than employment and share-based remuneration payments to key management personnel and receipt of dividends for key management shareholders. There were no outstanding balances as at 30 June 2022.

Board

Ron Mobed stepped down from his role as Non-Executive Chair on 15 July. On behalf of the Board, we would like to thank Ron for his commitment to best practice, professionalism and contribution to the development of the Group. The Group has commenced a formal search process for a successor to the role. Brian McArthur-Muscroft stepped down from the Board, at the Group's Annual General Meeting in April, after completing his nine-year term. Brian made a significant contribution to the business during his tenure and we wish him well for the future.

Outlook

The jobs market remained active throughout the first half of the year, and we are yet to see signs of any slowdown despite the volatile macro-economic backdrop and inflationary pressure that is being experienced across global markets. Current trading remains in line with the recently upwardly revised market expectations.

*Constant currency is calculated by applying prior period exchange rates to local currency results for the current and prior period.

ROBERT WALTERS PLC

Half-yearly Financial Results 2022

CONDENSED CONSOLIDATED INCOME STATEMENT

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AND EXPENSE

ROBERT WALTERS PLC

Half-yearly Financial Results 2022

CONDENSED CONSOLIDATED BALANCE SHEET

ROBERT WALTERS PLC

Half-yearly Financial Results 2022

CONDENSED CONSOLIDATED CASH FLOW STATEMENT