Pagegroup Plc

Good morning, everyone, and welcome to the Michael Page 2026 Third Quarter Trading Update. I'm Kelvin Stagg, Chief Financial Officer, and on the call with me is Nick Kirk, Chief Executive Officer. While 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. The group delivered gross profit of £190.5 million in the quarter, representing growth of 1.5% in constant currencies and 1.4% in reported rates against 2025, the first quarter of growth since Q4 2022. Productivity, measured as gross profit per fee earner, grew 6% versus Q3 2025. This is higher Q3 productivity than in our record year of 2022. Overall, around 50% of the group was in growth in Q3. Our fee earner headcount reduced by 63, or 1.3% during the quarter, with a reduced level of new starters over the summer period. Overall, the group ended the quarter with 4,851 fee earners and a total headcount of 6,604. Net cash at the end of September was around £6 million, in line with expectations. This compares the net debt of £7 million at the end of Q2 and is before the recent interim dividend payment of £4.6 million paid on the 9th of October. I will now give a brief financial review. Our Fiona headcount reduced by 63 or 1.3% during Q3, a reduced level of starters over the summer period. Reductions in EMEA and APAC were partially offset by additions in the Americas and the UK. and our non-operations headcount decreased by 12 in the quarter. We remain committed to our strategy and continue to reallocate resources into the areas of the business where we see the most significant long-term structural growth opportunities. Concurrently, we continue to ensure headcount in all our markets is aligned to activity levels. Over the past two years, we have reduced by 24% in France, Germany, and the UK collectively, partially offset by increases in the US, Japan, and India of 18%. Growth profit per fee earner and measure of productivity remained high and increased 6% compared to Q3 2025. This is higher Q3 productivity than in our record year of 2022. In line with our strategy, we continue to move resources and many more. I will now present a regional review. Group gross profit grew 1.5% in constant currencies against Q3 2025. The group delivered its first quarter of growth since Q4 2022. We saw growth continue in Asia Pacific, the Americas and Southern Europe with trading more challenging albeit stable across France, Northern Europe and the UK. In total, around 50% of the group was in growth in Q3. In line with our strategy, Page Executive, which now represents around 10% of the group, delivered its second consecutive quarter of growth of 15%. In our largest region, Europe, Middle East and Africa, which represented 49% of the group, we declined 3.8% with continued mixed results across the region. Germany, the group's largest market in Q3, representing 12% of the group, declined by 7%. We saw strong results from our contracting business, up 15%, with continued strong demand for finance transformation and project-based IT implementation specialists. Page Executive grew 9%. However, trading was more challenging in our predominantly permanent-focused Michael Page business. France, 11% of the group, declined 11%. Temporary recruitment, down 8%. outperformed permanent, down 15, indicative of the ongoing tough market conditions. The trading environment remains challenging, with high levels of uncertainty amongst both candidates and clients. As in recent quarters, clients are highly selective, slower in decision making and cautious on salary offers. As a result, the recruitment process has become more complex and time to hire has increased. Southern Europe delivered another quarter of growth, up 5%, with Spain continuing to deliver the standout results, up 9%. Elsewhere in Europe, we saw challenging market conditions in all countries, albeit Switzerland returned to growth with improved conversion of office to placements. In response to these conditions, we reduced our Fiona headcount by 47, mainly in Northern Europe. In the Americas, which represented 22% of the group, We grew 8.9% against Q3 2025. North America grew 8%, with the US, our second largest market in Q3, up seven, delivering two years of consecutive quarterly growth. Our largest discipline, construction, continued to deliver the standout results, up 12%, due to continued strong client demand and talent shortages. In addition, manufacturing delivered another quarter of growth. However, we are yet to see a broad-based recovery, with tough conditions in most other disciplines. In Latin America, gross profit grew 10%, in line with Q2. Mexico, our largest country in the region, grew 8, slightly ahead of Q2. Brazil grew 5%, a notable improvement on the decline of 6 in Q2. Temporary recruitment continued to outperform permanent, due to the uncertainty in the lead-up to the election. Columbia, which represents around 20% of Latin America, grew 14% due primarily to our technology-focused consulting business. Our remaining countries in Latin America grew 18% collectively. Overall, Fiona headcount increased by 16 in the quarter, mainly in the US. In Asia Pacific, which represented 18% of the group, Q3 gross profit grew 14.7%. Asia was up 19%, a further improvement from the growth of 11 in Q2. This is our sixth consecutive quarter of growth, with 10 of our 11 markets delivering growth. Greater China was up 28% in Q3, an improvement on the growth of 17 in Q2. Mainland China grew 36%, due partly to a soft comparator, but also driven by improved trading across both Michael Page and Page Executives. We continue to see improvement in sentiment from both clients and candidates, which is helping to secure placements, particularly for senior hires across both domestic and multinational clients. Hong Kong was up 9% compared to the growth of two in Q2, with a particularly strong result in Page Executive. Southeast Asia grew 8% in Q3 25, with stable market conditions across most of the region. In Japan, where we've invested over the past two years in Fionas due to the size of the market and its strategic importance, we delivered a standout performance up 23%, a record quarter and a further improvement on the growth of 18 in Q2. India grew 18%, delivering another record quarter. The market sentiment remained positive with continued good levels of business confidence. Australia declined seven. with a slight deterioration in market conditions due to economic uncertainty. Our Fiona headcount in the region decreased by 41 in the quarter due to the timing of levers. In the UK, which represented 11% of the group, gross profit declined 5.5% in line with Q2. Market remains tough but stable with some positive sentiment, albeit this has not yet translated into job acquisition. Temporary recruitment, up 2%, continue to outperform permanent, down 9%. Fiona headcount increased by 9% in Q3. I will now provide a summary of our results. The group delivered our first quarter of growth since Q4 2022. We saw continued growth in Asia Pacific, the Americas and Southern Europe, with trading continuing to be more challenging, albeit stable, across France, Northern Europe, and the UK. We continue to execute our strategy, harnessing the power of PAGE and our position as the global leader for specialist management and leadership permanent recruitment, placing more senior talent at higher salary levels and at higher fee rates. As a result, Q3 productivity was up 6% on 2025 and was also higher than Q3 2022, our record year. Page Executive, representing around 10% of the group, delivered its second consecutive quarter of 15% growth. The progress we are making in productivity, technological innovation, operational efficiency and strategic execution demonstrates that our strategy continues to work and positions us well for future growth. Collectively, since the launch of our strategy, our cost saving programmes have delivered annualised savings of around £40 million. This cost-based control has continued in 2026, incurring 2.5 million of one-off costs in relation to senior exits in H1, with a similar figure expected for H2. As we continue to see improvement and normalisation in trading in a number of our markets, there remains a significant degree of uncertainty. We have a highly diversified and adaptable business model, a strong balance sheet and a cost base that is under continuous review. We currently expect 2026 operating profit to be in line with company compiled consensus of around £29 million. Nick and I will now be happy to take any questions you may have.

Thank you. With that, we can start today's Q&A session. If you would like to ask a question, please press star followed by one on your telephone keypad now. And to withdraw your question, please star followed by two. Our first question today comes from Carl Green from RBC. Your line's now open. Please go ahead with your question.

Thank you very much. Good morning. I've got three questions unrelated. Firstly, just on that 6% increase in productivity, could you just decompose that in terms of what the bigger building blocks were in terms of salary increases, mix, headcount management, etc. That's the first question. The second question, just thinking about page executives and the very strong momentum there going into fiscal 27, how much of a Conversion Ratio, Tailwind, do you think that page executive could be as we look forward into the next year? And then the last question, just specifically on Australia, just maybe a little bit more colour if you can in terms of some of the specialisms which have dipped in the last few months, just to get a sense as to whether that's going to be temporary or maybe something a little bit more structural coming through in Oz. Thank you.