Pagegroup Plc

Good morning everyone and welcome to the Page Group 2026 second quarter trading update. I'm Kelvin Stagg, Chief Financial Officer. On the call with me is Nick Kirk, Chief Executive Officer. Although I will not read it through, I'd just like to make reference to the legal formalities that are covered in the cautionary statement in the appendix to this presentation and which will also be available on our website following the call. Despite ongoing challenging market conditions, The group produced a good performance in Q2. Q2 gross profit was 197.6 million pounds, a decline of 0.2% in constant currencies. For the first half, we delivered gross profit of 385.2 million pounds, a decline of 2.4% in constant currencies. We reduced our Fiona headcount by 80, or 1.6% during Q2, mainly in France and Northern Europe. Overall, the group ended the quarter with 4,914 fee earners and a total headcount of 6,679. Despite the challenging conditions, gross profit per fee earner and measure of productivity remained high and grew 5% versus Q2 2025. In line with expectations and having paid out the 2025 final dividend of around £10 million in June, net debt at the end of June was around £7 million in line with Q1. In the first week of July the cash balance improved to be broadly net flat and we expect to close the year with around 30 to 40 million pounds of net cash. I will now give a brief financial review. We reduced the earner headcount by 80 or 1.6% during Q2, mainly in France and Northern Europe. We remain committed to our strategy and continue to reallocate resources into the areas of the business Offering the most significant long-term structural opportunities, such as in Asia. Overall, our focus remains on aligning headcounts in all of our markets to activity levels and balancing near-term productivity with ensuring we are well placed to take market share as conditions improve. We reduced our non-operations headcount by 42 in Q2, or 2.3%. Despite the challenging macroeconomic conditions, productivity remained high and grew 5% versus Q2 2025. We continue to target higher salary level roles and delivered our highest quarterly productivity since 2022. In the markets where we have experienced improved trading, such as in Asia Pacific, and our U.S. construction business. This was driven by normalization of conversion of offers to placements as both candidates and clients became more willing to negotiate and compromise to deliver a successful outcome. Our business model focuses on white-collar, qualified candidates working in specialist management and leadership roles. The supply of this talent remains a key challenge for our clients and as a result, our permanent fee rates remain at record levels. I will now present a regional review Group gross profit declined 0.2% in constant currencies against Q2 2025. Market conditions remain mixed across the group. We delivered a seventh consecutive quarter of growth in the US and a fifth consecutive quarter of growth in Asia. Page Executive delivered a record quarter with growth of 15% against Q2 2025, demonstrating the success of our strategy, and we returned to growth in Southern Europe in Q2. We also saw challenging but stable conditions in Northern Europe, France and the UK. Overall, around 50% of the group was in growth in Q2. In our largest region, Europe, Middle East and Africa, which represented 51% of the group, we declined 4.8% on Q2 2025, with mixed results across the region. Temporary recruitment down 2%, continued to be more resilient than permanent, down 6%. Germany, the group's largest market, which represented 12% of the group, declined by 4% in Q2, albeit against a soft comparator. We saw strong results from our contracting business and paid executive, but trading was more challenging in our Michael Page permanent recruitment business due to a combination of renewed energy price shocks, ongoing geopolitical tensions, and weak market sentiment. France, our second largest market, declined 12%, Thank you very much. Southern Europe, which represented 14% of the group, returned to growth in Q2. Spain continued to deliver the standout performance, up 9%. Italy grew 7%, driven by a particularly strong performance in Page Executive. Trading in Northern and Central Europe remained more challenging in all markets. The Middle East declined 24%, as both client and candidate confidence remained subdued amid the regional conflict. In line with the tougher trading conditions in Q2, we reduced our fee on a headcount by 62, mainly in France and the Netherlands. The Americas, which represented 21% of the group, grew 7.2%. North America was up 5%, with the US up 5%, a seventh consecutive quarter of growth and an improvement on the growth of 1% in Q1. Construction, our largest discipline. continued to deliver the standout result, up 12%. In addition, we saw a return to growth in our second largest discipline, engineering and manufacturing, up 22% with improving client confidence and high demand for talent, particularly in the aerospace, defence and electronic sectors. However, we have yet to see a broad-based recovery with tough conditions in most other disciplines. In Latin America, gross profit was up 10%. Mexico, our largest country in the region, grew 7%, an improvement on the 8% decline in Q1, albeit against the softer comparator. We continue to see ongoing tariff-related uncertainty in this market. Brazil was down 6%. Temporary recruitment up 12%, continued to outperform permanent, down 14%. Ahead of the general election in H2, clients are taking a more cautious approach, postponing both hiring and investment decisions. Columbia, which now represents around 20% of Latin America, was the standout market in the region, delivering a record quarter, up 15%, with another particularly strong performance in our technology-focused consulting business. Elsewhere in Latin America, our remaining countries grew 29% collectively. Journal headcounts in the region decreased by 33%, with the timing of the next intake cohort of fee earners in the US starting in early July. In Asia Pacific, which represented 17% of the group, Q2 gross profit grew 9.4% on 2025. In Asia, which represented 14% of the group, we grew 11%, our fifth consecutive quarter of growth, with 9 out of 11 markets growing. We continue to see improvements in both candidate and client confidence, which is helping to secure placements, particularly for more senior roles. Greater China was up 17%, an improvement on the growth of 11% in Q1. Mainland China grew 28%, due partly to a soft comparator, but with improved trading across both brands. Customer sentiment remained stable, with increased willingness to make decisions, resulting in improved offer-to-placement conversion rates. Hong Kong was up 2%. Southeast Asia grew 4% with strong trading conditions across most of our markets in this region. In Japan, where we have invested in peonies due to the size of the market and its strategic importance, we delivered another standout performance, up 18%. India grew 7%, another record quarter. Australia was flat with stable market conditions. We increased our peony headcount by 26% in the quarter, mainly in Japan and India. In the UK, which represented 11% of the group, gross profit declined 5.3%. The market remains tough but stable, with pockets of optimism beginning to appear in paid executive, entry and technology. Reflective of market uncertainty, temporary recruitment, up 1%, outperform permanent, down 8%, where we continue to see lower job acquisition levels per Fianna. We reduced our Fianna headcount by 11.25%. I will now provide a summary of our results. Despite ongoing challenging market conditions, the group produced a good performance in Q2. We saw continued growth in Asia Pacific and the Americas, as well as a return to growth in Southern Europe. In total, around 50% of the group was in growth. However, trading remained more challenging across France, Northern Europe and the UK. In the markets where we experienced improved trading, this was driven by a normalisation of conversion of offers to placements, as both candidates and clients became more willing to negotiate and compromise to deliver a successful outcome. In the markets where trading remained challenging, we have yet to see any improvement in this metric. We remain committed to our strategy and continue to reallocate resources into markets where we see an improvement in business confidence and activity levels, such as in Asia. The progress we are making in productivity, technological innovation, operational efficiency and strategic execution demonstrates that our strategy is working in positions as well for future growth. We continue to harness the power of age and our position as the global leader for specialist management and leadership recruitment, placing more senior talent at higher salary levels and at higher fee rates, which has driven our highest level of productivity since our record year in 2022 and a record quarter for Page Executive. We have a flexible cost base throughout the owner headcount which adjusts naturally to market conditions. Alongside this we continue to control the cost base tightly and have undertaken various programs since the launch of our new strategy to manage it in light of the tougher market conditions. These programs included managing our support headcount, moving our SSCs to more cost effective locations, Closing offices and reducing management layers. Collectively excluding savings due to the reduction in fair headcount, these initiatives have delivered annualised savings of around £40 million. This cost-based control has continued in 2026, incurring some one-off costs, which we will cover in more detail at the entrance. Whilst we have seen an improvement and signs of a normalisation in trading in a number of our markets, There still remains a high degree of uncertainty in the outlook for the rest of the year. We have a highly diversified and adaptable business model, a strong balance sheet and a cost base that is under continuous review. The Board currently expects 2026 operating profit to be in line with company compiled consensus of around £28 million. Nick and I will now be happy to take any questions you may have.

Thank you. If you would like to ask a question, please press star followed by 1 on your telephone keypad. To remove your question, press star 2. Again, to ask a question, press star 1. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question. We will pause here briefly as questions are registered. Thank you. We will now take our first question from Andy Groble from BNP Paribas. Please go ahead.

Hi, good morning. Just a couple from me, if I may. Firstly, on the conversion of offers to placements which you talked to, which areas are seeing improvement? Are there any areas that are still going backwards on that metric? And kind of broadly across the group, Where does that stand versus, I guess, both the trough and where you would expect it to get to in a normalised market? Thank you. And then secondly, just on the UK, some of the market data was better in June, and on a two-year stack, you've made big strides in that region. Are you seeing that improvement through the course of the quarter, and how do you see this pan out through Q3, given Thank you very much.