Q2 2021 TRADING UPDATE

7 July 2021

PAGEGROUP PLC

Q2 BACK TO 2019 RECORD LEVEL: INCREASING 2021 GUIDANCE

Q2 Highlights

Note: Given the magnitude of the impact of COVID-19 in 2020, we are providing comparisons in constant currencies against 2019, to ensure the most appropriate representation of current trading. Comparisons to 2020 are also given in the tables.

·    Group gross profit of £219.7m, +94.1% vs. 2020 (+2.0% vs. 2019)

·    Improvement in the exit rate, exiting June at +11% vs. 2019

·    Gross profit per fee earner up 15% on Q2 2019

·    17 record quarters including 4 of our 5 Large, High Potential markets

·    Large, High Potential markets (38% of Group) +16% vs. 2019

·    EMEA +0.4%: France -11%; Germany +26% all vs. 2019

·    Asia Pacific +10.5%: Greater China +10%; SE Asia +35%; India +47% all vs. 2019

·    Americas +7.7%: US +8%; Latin America +11% all vs. 2019

·    UK -9.0%: Michael Page -4%; Page Personnel -24% all vs. 2019

·    Increase in fee earner headcount of 176 to 5,443 (Q2 2019: 6,035)

·    Strong cash position, net cash of c. £168m (Q1 2021: c. £136m, Q2 2020: c. £162m)

Outlook

·    Full year operating profit expected to be within the range of £125m - £135m

Q2 Gross Profit Analysis

H1 Gross Profit Analysis

Steve Ingham, Chief Executive Officer, PageGroup, said:

"Throughout the pandemic we have continued to focus on the protection and wellbeing of our employees, candidates and clients, whilst progressing strategic investments in our platform to take advantage of the recovery. The tough and challenging year in 2020 has strengthened our culture, diversity and the values in the business which are now re-affirmed at the forefront of our operations. I am immensely proud of the spirit, resilience, and commitment of all our people. This, I believe, is reflected in our results.

"Given the magnitude of the impact of COVID-19 on 2020, we are continuing to compare our results to 2019, our record gross profit year. I am pleased to report that the improvement in results we saw in Q1 continued into April and May, both of which were down 3% on 2019, broadly in line with the exit rate in March. We then saw a significant improvement in June, which was up 11% on 2019. Overall, this meant the Group was up 2.0% for the quarter compared to 2019. This noticeable improvement in Q2 was seen throughout the Group and was achieved despite the backdrop of continued restrictions or lockdowns in many of our markets. We delivered record quarters in 4 of our 5 Large, High Potential Markets and in 17 countries.

"We remain confident in our strategy of maintaining and investing in our platform by continuing to invest carefully in headcount, demonstrated by the c. 400 experienced hires we added in 2020, which continued in 2021 to now approaching 800, as well as rolling-out new technology and innovation. Our headcount is currently down 8% on the pre-pandemic level at the end of 2019. As a result of the more favourable trading conditions in Q2, as well as this reduction in our fee earner headcount, our gross profit per fee earner is up 15% on Q2 2019 and 86% on Q2 2020. We are the clear leader in many of our markets, with a highly experienced senior management team, which, we believe, positions us well to take advantage of opportunities to grow and improve our business. We have maintained our focus on driving progress towards our long-term strategic goals.

"Given the lower headcount, as well as reduced spending on travel and entertaining due to the pandemic, our underlying pre-bonus cost base is currently c. 5% below 2019 levels. However, bonus levels have been higher given the increase in pre-bonus profit and if visibility continues to improve, we will further invest in our fee earner headcount in H2. As a result, our underlying cost base would increase.

"Looking ahead, there continues to be a high degree of global macro-economic uncertainty as COVID-19 remains a significant issue and restrictions remain in a number of the Group's markets. Additionally, at this stage of the recovery, it is not easy to determine whether the improved performance is still the result of pent-up supply and demand, or a sustainable trend. However, and notwithstanding the early stage in the year, the strength of our performance in H1, and notably in June, has further increased confidence in our outlook for the year. Subject to other unexpected events, we now expect full year operating profit to be within the range of £125m - £135m."

Headcount

In 2020 we reduced our fee earner headcount by 882, primarily those on performance review or those with very limited experience in recruitment. This was net of adding c. 400 experienced fee earners in 2020. We have subsequently added a further c. 400 in the first half of this year. These, plus those who have joined from outside recruitment, net of attrition, mean that we have added 298 fee earners in the first half of 2021. Our operational support headcount rose by 64 in Q2, and, as such, our ratio of fee earners to operational support staff was maintained at 77:23. Overall, the Group had 5,443 fee earners and a total headcount of 7,075, compared to 6,035 and 7,763 in Q2 2019 respectively.

Productivity

As a result of the more favourable trading conditions in Q2, as well as the reduction in our fee earner headcount, our gross profit per fee earner was up 15% on Q2 2019 and 86% on Q2 2020.

Geographical Analysis (unless otherwise stated all growth rates are in constant currency and vs. 2019)

In Europe, Middle East and Africa, the improvement in trading conditions we experienced at the end of Q1 continued into Q2, which was up 0.4% overall against Q2 2019. France declined 11%, an improvement on the decline of 19% in Q1, with June showing further improvement, exiting the quarter down 6%. Germany, the Group's third largest market, delivered another record quarter, up 26%, with June up 43%. Growth was strongest in our Technology focused Interim business, up 50% for the quarter. Benelux was down 9% overall, with a decline in the Netherlands of 14%, partially offset by growth in Belgium of 2%. Italy and Spain both delivered record quarters, up 5% and 7%, respectively. The Middle East and Africa was down 10%. There were also record quarters in Poland, Portugal and Turkey. In line with the improved trading conditions, our fee earner headcount increased by 81.

In Asia Pacific, gross profit for Q2 was up 10.5% to £46.0m, a record quarter. Mainland China was up 29% for the quarter and exited June strongly, up 46%. Hong Kong, where trading conditions remained challenging, was down 16%, though this was an improvement on Q1. Overall, Greater China grew 10% for the quarter. The Large, High Potential market of South East Asia delivered a record quarter, up 35%. Singapore was up 10%, with the other five countries in the region growing 58%, collectively. Japan grew 17%, a record quarter and a significant improvement from growth of 2% in Q1. India, despite being one of the worst affected countries by COVID-19, also delivered a record quarter, growing 47%. Australia declined 13% for the quarter, although we saw an improvement in June, exiting down only 2%. Our fee earner headcount in the region increased by 70 in the quarter, mainly in South East Asia and India.

In the Americas, despite being one of the worst COVID-19 affected regions, gross profit for Q2 was up 7.7%, a record quarter. In the US, where the improvements in trading conditions we saw at the end of Q1 continued, we grew 8%, a record quarter and exited June strongly, up 19%. In Latin America, gross profit grew 11%, a record quarter, up from a decline of 2% in Q1. Mexico, our largest country in the region, was down 4% for the quarter but exited June +3%. Brazil was up 27% for the quarter. Elsewhere in Latin America, the remaining countries grew 15% for the quarter, collectively, with record quarters from Argentina, Colombia and Panama. We increased our fee earner headcount by 31 across the region in the quarter, mainly in the US.

In the UK, gross profit declined 9.0% in the quarter, an improvement from a decline of 25.1% in Q1. Michael Page (-4% in Q2) was more resilient than Page Personnel (-24% in Q2). The UK's performance improved in June, down just 1.7%, with Michael Page growing 7%. Our fee earner headcount declined by 6 in the quarter.

Financial Position

Save for the effects of Q2 trading detailed above, there have been no other significant changes in the financial position of the Group since the publication of the results for the quarter ended 31 March 2021. Net cash at 30 June 2021 was c. £168m (Q1 2021: c. £136m; Q2 2020: c. £162m).

Shares

At 30 June 2021 there were 328,618,774 Ordinary shares in issue, of which 11,863,101 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 10,381,016 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 Second Quarter and First Half 2021 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 interim results for the six months ending 30 June 2021 on 9 August 2021.

This announcement contains inside information for the purposes of article 7 of EU Regulation 596/2014 and Article 7 of Onshore Regulation (EU) 596/2014 as it forms part of domestic law by virtue of the EUWA. The person responsible for making this announcement on behalf of PageGroup is Kelvin Stagg, Chief Financial Officer.

Enquiries:

The Company will host a conference call and presentation for analysts and investors at 9:00am today. The live presentation can be viewed by following the link:

https://www.investis-live.com/pagegroup/60d0aff74f5e110c004dbb5c/q2-2021-trading-update

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

Please quote participant access code 78 56 62 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 7 July 2021 at:

https://www.page.com/presentations/year/2021