Upload
vanngoc
View
216
Download
0
Embed Size (px)
Citation preview
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOU
Work Service FY 2017Management Presentation | April 27th 2018
LET US WORK FOR YOU 1
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOU
`
LET US WORK FOR YOU
Disclaimer
This presentation was prepared by Work Service S.A. (The „Company”) for informative purpose only. It’s presentingselected data of Work Service Capital Group, and by any mean should not be treated as investment advise, offer ofpurchasing or sale of any shares or other financial instruments issued on behalf of Work Service Group, or undertake anycommercial activity with The Company and it’s affiliated subsidiaries.
The presentation was prepared with preservative of due diligence, however The Company does not guarantee accuracyand completeness of contained information. It’s advised that any person intending to decide to invest in any financialinstruments issued by The Company base it’s decision on officially issued reports prepared in accordance with effectivelegal regulations.
Work Service S.A. and it’s subsidiaries is not being liable for any effects of decisions based on information and content ofthis presentation. Presentation may also consists some statements related to the future, especially expected financialresults and/or performance indicators. All statements related to the future are burden with known and unknown risks,uncertainties and other factors which may influence that future results, performance or achievements of Work ServiceS.A. may substantively deviate from presented assumptions.
2
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOULET US WORK FOR YOU
Agenda
1
3
2
2017 Key Events
FY17 Financial Results
2018 Plans and Strategic Perspective
4 Summary | Q&A
3
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOU
53% | 47%revenues split
domestic vs. international
>37.500 FTE employed on average
~2.659mPLN
revenue
+9,7%YoY growth on
continued business 7 countries
flexible employment forms core business
>10.000 cross borded employees
~6%Group revenues
Work Service Group
LET US WORK FOR YOU 5
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOU
2017 Key Events
Acquisition of APT Romania. Expansion on very promising market with #4 temp staffing
agency
Debt and earn-out liabilities decreased by
~50 mPLN
Clear Focus on core business and
development of cross border employment
services
Exiting from investments in IT Kontrakt and Work Service Russia. Strategic
decision to sale Exact Systems Group
ENTERING NEW MARKET
DEBT DELEVERAGING
NEW DEVELOPMENT STRATEGY
DISINVESTMENTS
LET US WORK FOR YOU 6
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOU
Sale of IT Kontrakt
- Execution of Work Service WS2020 Strategy to Focus on core business of flexible employment forms in CEE and to deleverage
the Company
- Transaction closed on July 1st 2017, purchaser Cornerstone/Oaktree
- Purchase price 146,9 mPLN
- Part of the funds raised by the Company from the sale of Shares will be used for the early redemption of the U series bonds
issued by the Company with a nominal value of PLN 80 million
- The operation and early redemption of the U series bonds issued by the Company are part of the reduction of debt and the
implementation of optimization of the Company's financial policy
LET US WORK FOR YOU 7
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOULET US WORK FOR YOU
Scale of Group Operations
23.064
1.4071.074
1.827
1.060
6.3471.688
FTE (full time equivalent) is personnelservices industry standard KPI to measureand benchmark business volumes. It’sbased on total number of working hoursdivided by 168 hours.
FTE number has direct impact on revenuesand margin as it’s fully correlated withtopline metrics.
Data represents average monthly FTE infiscal year 2017.
LET US WORK FOR YOU 8
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOULET US WORK FOR YOU
Crossborder Achievements
9
Ukraine – Poland:From ~2.000 in Jan’17 to
~4.000 employees in Jan’18
NEW! Serbia – Slovakia:
320 employees placed in 2017
NEW! Poland – Czech:
From zero to more than 1.000employees recruited in 2017,currently >800 employed
Hungary – Austria:
~250 employees on-going, newcontracts to take off in 2018
Poland – Germany:
More than 2.000 employeesrecruited in 2017
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOU
Revenue [m PLN]
Record high FY with historic 2.5 bPLNexceeded.
Topline growth of 9,7% (comparabledata, no IT Kontrakt and WS Russiaincluded) is in line with market growth,however Group dynamic is diluted bydecreased sales in WS Germany (95%vs. YA).
Domestic core business of flexibleemployment forms proves strongperformance with 10% growth year-on-year.
Bottom line results diminished inQ4’17 due to non-cash accountingauditor’s corrections in amount of c.a.24.4 mPLN.
Capital Group ResultsRevenue and EBIT
EBIT [m PLN]
Source: The Company
188,7 345,9
474,5 591,9 655,1 221,4
390,0
502,6
611,3 686,4
238,8
488,3
548,8
616,0
633,6
269,5
515,6
610,8
666,1
684,1
-
500,0
1 000,0
1 500,0
2 000,0
2 500,0
3 000,0
2013 2014 2015 2016 2017
Q1 Q2 Q3 Q4
9,1 16,2 16,3 16,7
25,2 8,5
16,2 16,6 15,5
11,5
11,2
21,1 25,3
22,9 15,2
19,2
35,6 33,3
8,0
-8,4
-20,0
-
20,0
40,0
60,0
80,0
100,0
2013 2014 2015 2016 2017
Q1 Q2 Q3 Q4
LET US WORK FOR YOU 10
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOULET US WORK FOR YOU
111%
112% Work Service subsidiaries
(flexible employment forms)
110% Antal
(permanent recruitment)
124% Exact Systems Group
(quality control outsourcing)
Topline 2017 vs. 2016
11
Work Service Core Business Subsidiaries
Based on new structure of assets: excluding IT Kontrakt and Work Service Russia
116%
131%102%
105% New market!
95%112% Work Service Group
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOULET US WORK FOR YOU
2017 Revenues and EBIT
12
7,3%
11,5%
13,8%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
14,0%
16,0%
consolidation based excl. IT Kontrakt excl. IT Kontrakt andWS Germany
Work Service Group Topline Dynamic2017 vs. 2016
EBIT 2017:
68.0 mPLN Prognosis
67.9 mPLN Operational EBIT
--------------------------------------------------------------------
24.4 mPLN Auditors corrections
--------------------------------------------------------------------
43.5 mPLN after Auditors corrections
REVENUES 2017:
2.659 mPLN consolidation based
Non of auditor’s corrections is related to 2017 core business operational activity. Corrections relate mainly to capitalized costs from previous years.
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOU
Key Market Trends
Migracje zarobkowe
MINIMUM WAGE CANDIDATE MARKET
LABOR MIGRATIONS Migracje zarobkoweREGULATORY CHANGES
Insight:
Impact:
Minimum wage salary is being regulatory increased every 12 months, having an effect on overall labor costs on the whole market.
One of the industry Key Business Drivers having a positive impact on personnel services market value, operators revenue and margins. Due to regulations any labor costs increases are being fully covered by temp staffing customers (end user).
Insight:
Impact:
With historical low unemployment rates and historical high employment rates in the Region, market is in favor of Candidates/Employees. Labor demand stays strong while there are still fundamental competence and demographic gaps.
Market dynamic is working in favor of specialized and sizable personnel services operators, which broad service is keeping customers operational. It’s also a driver of margin increase.
Insight:
Impact:
Market demand stays strong and there are locations where there is no free workforce avaiblabe. In that case most efficient and quickest solution is to provide employees from abroad.
Share of cross border employment solution is growing, impacting average revenue per employee (due to more working hours and additional costs) as well as increasing average margin (due to more complex services of employment legalization and added value services of employees accommodation and transportation).
Insight:
Impact:
Governments of the countries in the region are undertaking efforts to quicken and simplify employment of foreigners, EU and non-EU citizens. Possitive public debate about cross border employment.
Regulatory changes are improving convenience and overall feasibility of employing foreigners. Strong demand is meeting high level of cross border solutions acceptance by customers as well as public opinion.
LET US WORK FOR YOU 13
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOULET US WORK FOR YOU
2017 Highlights Summary
Dynamic Topline Growth Cross Border Achievements Deleveraging the Company
12%2017 vs. 2016
>10.000Candidates found a job abroad in
2017 thanks to Work Service
~50 net mPLNSpend already in 2017 on
deleveraging the Company
• All CEE core markets growing double digit and above the expected market growth
• Specialized entities growing double digit with tremendous run of Exact Systems Group
• Work Service Germany on declining trend due to decreasing business with key customer and JV Partner –Fiege Logistic
• Dynamic growth of Ukraine to Poland cross-border line, almost doubled #FTE in 12 months
• New cross-border lines established: Poland to Czech and Serbia to Slovakia
• Stable but very prospectus cross-border line from Poland to Germany
• Decreasing Bonds debt financing level by c.a. 68 mPLN
• Decreasing earn-out liabilities toward German and Hungarian Partners by c.a. 38 mPLN
• Increasing Bank Loan financing facility by 55 mPLN
14
ITK, Russia, ExactStrategic Focus on core markets
• Based on disinvestment strategy The Company expects more than 350 mPLN in 2017/2018 proceedings from sale of it’s subsidiaries
• Vast majority of net proceedings is meant to be spend on further optimizing of Group financing by decreasing of debts and earn-out liabilities
Group Structure Changes
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOU
Statement of Comprehensive Income2017 vs. 2016
Source: The CompanyContinued business refers to consolidation based net of disinvestments in ITKontrakt and Work Service Russia. Relates to all following slides.
LET US WORK FOR YOU 16
CONSOLIDATION BASED [t PLN] FY16 FY17Dynamic
2017/2016
Revenues 2 485 233 2 659 165 7,0%
Net revenues from sales of products 2 479 725 2 665 150 7,5%
Variation in stocks of products 5 487 -5 985
Net income on sale of goods and materials 21
Operating costs 2 420 971 2 606 365 7,7%
Depreciation 16 145 17 484 8,3%
Consumption of materials and energy 10 957 17 728 61,8%
Outside services 363 847 393 129 8,0%
Taxes and charges 5 298 4 330 -18,3%
Remuneration 1 598 361 1 727 150 8,1%
Social insurance and other benefits 384 592 403 607 4,9%
Other generic expenses 41 770 42 936 2,8%
Value of goods and materials sold
Profit (loss) on sales 64 261 52 800 -17,8%
Other operating incomes 22 195 27 113 22,2%
Other operating costs 23 407 36 429 55,6%
Profit (loss) on operating activities 63 049 43 485 -31,0%
Profit from sale of ITK Kontrakt 78 589 n/a
Net loss from revaluation of the ProService Group to fair value -158 924 n/a
Net loss from sale of other assets -1 867 n/a
Financial incomes 2 923 4 040 38,2%
Financial costs 35 072 40 344 15,0%
Gross profit (loss) 30 900 -75 021
Income tax 15 398 11 712 -23,9%
Net profit (loss) 15 501 -86 732
CONTINUED BUSINESS [t PLN] FY16 FY17Dynamic
2017/2016
Revenues 1 944 243 2 132 798 9,7%
Net revenues from sales of products 1 941 595 2 137 864 10,1%
Variation in stocks of products 2 648 -5 066 -291,3%
Net income on sale of goods and materials
Operating costs 1 933 532 2 126 685 10,0%
Depreciation 10 031 10 823 7,9%
Consumption of materials and energy 5 769 5 906 2,4%
Outside services 156 040 238 488 52,8%
Taxes and charges 4 049 2 909 -28,2%
Remuneration 1 383 991 1 487 730 7,5%
Social insurance and other benefits 341 871 356 353 4,2%
Other generic expenses 31 781 24 478 -23,0%
Value of goods and materials sold
Profit (loss) on sales 10 711 6 112 -42,9%
Other operating incomes 18 359 24 353 32,7%
Other operating costs 19 712 26 188 32,9%
Profit (loss) on operating activities 9 358 4 277 -54,3%
Financial incomes 1 979 3 734 88,7%
Financial costs 30 428 34 813 14,4%
Gross profit (loss) -19 091 -26 802 40,4%
Income tax 6 404 6 427 0,4%
Net profit (loss) -25 495 -33 229 30,3%
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOU
Statement of Cash Flow2017 vs. 2016
Comments
• Cash flows from operating activities decreaseddue to lower level of factoring utilization.
• Outflows from investing activities are mainlyrelated to Fiege JV (Work Service Germany) 2ndearn out tranche payment in Q1’17 andHungarian acquisitions earn outs payments inQ2’17.
• Inflow from investing activities is purely closingITKontrakt disposal transaction in June 2017.
• Negative cash flow from financing activities ismainly result of +55m PLN new debt facility fromPKO BP and 100m PLN redemption of bonds.
Source: The Company
LET US WORK FOR YOU 17
As at Dec 31st [t PLN] 2016 2017
Net profit (loss) 2 418 -96 290
Total adjustments 81 369 76 550
Cash flows from operating activities 83 786 -19 741
Inflows 2 302 129 772
Outflows 30 453 125 978
Cash flows from investing activities -28 151 3 794
Inflows 110 000 92 580
Outflows 118 925 120 133
Cash flows from financing activities -8 925 -27 553
Increase (decrese) of cash and its net
equivalents 46 711 -43 500
Cash balance at the begining of the period 57 904 104 615
Cash balance at the end of the period 104 615 61 115
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOU
Balance Sheet2017 vs. 2016
Source: The Company
LET US WORK FOR YOU 18
As at [t PLN] Dec 31st 2016 Dec 31st 2017
FIXED ASSETS 669 786 440 695
Intangible assets 61 126 44 887
Goodwill 549 644 354 334
Tangible fixed assets 31 207 16 997
Real property investments 1 615 2 690
Other financial assets 25 30
Other long-term assets 4 309 1 051
Other long-term financial assets 2 893 204
Deferred tax assets 18 157 20 348
Prepayments 811 154
CURRENT ASSETS 631 101 493 204
Inventory 28 342 16 702
Trade and other receivables 432 903 385 753
Other financial assets 29 236 30 812
Other short-term assets 9 351 1 238
Cash and other pecuniary assets 104 615 50 824
Prepayments 26 653 7 873
ASSETS CLASSIFIED FOR SALE 177 269
TOTAL ASSETS 1 300 887 1 111 167
As at [t PLN] Dec 31st 2016 Dec 31st 2017
EQUITY 357 297 144 974
Share capital 6 509 6 509
Supplementary capital 330 652 232 874
Capital from the valuation of options -53 774 -53 774
Net profit (loss) 2 418 -96 290
Exchange rates balance -5 277 -15 785
Minority Interest 76 769 71 440
LIABILITIES AND PROVISIONS FOR LIABILITIES 943 590 878 782
Long-term liabilities 342 551 84 037
Long-term credits and loans 125 543 931
Deferred income tax liabilities 3 033 2 266
Other provisions 1 762 1 786
Other liabilities 212 212 79 055
Short-term liabilities 601 039 794 745
Trade and other liabilities 472 498 495 235
Short-term credits and loans 96 183 271 966
Other provisions 32 358 27 543
LIABILITIES CLASSIFIED FOR SALE 87 411
TOTAL LIABILITIES 1 300 887 1 111 167
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOULET US WORK FOR YOU
2018 Plans and Strategic Perspective
19
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOULET US WORK FOR YOU
The past
2012 2013 2014 2015 2016 2017
14.310 18.828 30.575 37.262 39.213 37.500
39,1 48,0 89,1 91,5 63,1 43,5
-53,1 -44,9 -127,0 -176,7 -28,2 +54,0*
MERGE & INTETGRATION
727m918m
1.739m
2.136m
2.479m
2.700m
FTE
EBIT
INVEST. CF
NET DEBT
REVENUE
100,2 76,0 94,6 294,9 255,0 212,0*
CAPITAL INCREASE
ACQUISITIONS
INVESTMENTS EXITS
IPO PineBridge Investment SPO
CAGR 2012-2017 = 133%
Antal (PL)Fiege JV (DE)
ProHuman (HU)
Naton (SLO)WorkExpress (PL)
CRS (PL, BE)
Leverage the scale and focus on topline
IT Kontrakt, WS Russia, Exact Systems
* H1’17
20
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOU
demography `
LET US WORK FOR YOU
Strengths Opportunities
1. Positive brand recognition and strong market equity
2. Strong network of customers, client’s intimacy
3. Dense coverage of offices and branches, excellent operational capabilities
4. Proven cross-border and foreign recruitment competences
5. Operational capabilities and organizational know-how on magnificent staffing
projects
6. End-to-end solution in cross-border employees exchange, one stop shop for
candidates and employees
7. Flexibility and entrepreneur spirit combined with decisional agility
Undergoing a employment mobility paradigm shift and accelerating change of employment habits:
1. Demography driven workforce demand higher than employees
supply
2. Dynamical growth of employment and flexible employment
forms in particular
3. Unique geographical situation, being natural bridge between East
and West
4. Increasing candidates mobility due to attractive salary arbitrage
and political/social situation in Central and Eastern Europe
5. Growing importance of foreign workforce for the regional
economies (gainful immigration)
6. Overall positive climate for employees mobility and secondment
solutions
21
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOULET US WORK FOR YOU
The past
Value Created
What is Needed to
Succeed
Addressable Market
Business Issues
Pre 2000 - 2005 2005 - 2009 2009 - 2016 Emerging/ongoing
Speed and Business Capability
Flexibility and Business Continuity / Security
Cost Optimization and Efficiency
Resources Availability
<800m EUR <1.400m EUR >5.000m EUR
Cycle 1 „Make life easier” Cycle 2 „On Demand” Cycle 3 „Painkillers” Cycle 4 „Employee Market”
EntrepreneurshipOperational networkLocal candidates touch
Resources managementReliability and responsivenessMarket Equity
Know-howFlexibility and creativity
ScaleSkillsCost efficiency
Customers relationsEffective candidates sourcing
Extreme cost focus
Readiness for new business model with external HR
partner
Keep my business running! Demographic, competence and
infrastructural GAP on labor market. Transformation pressure
Shift from fix to flexible costs, capital intensive growth
2.500m+ EUR
22
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOU
Work Service wants to be a Regional Champion, holding undisputable
market share leader position in Central Europe personnel services market,
hence #1-#3 market player on each geographical market the Company operates on.
Work Service Group ambition is to keep double digit and above the market revenues
growth , yet exceeding the industry average profitability by the end of
FY2020.
LET US WORK FOR YOU
Our vision
LET US WORK FOR YOU 23
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOULET US WORK FOR YOU
Key value proposition
To be successful in key value proposition of
employees availability it requires four complementary components:
Scale & Skills
Customer Relations
Agility &Cost Efficiency
Effective Candidates
Sourcing
Trusted transformation partner to lead through market paradigm shift
Capability and competence to manage large scale personnel services projects
Work Service is leading customers through accelerating change, helping them harness candidates market conditions counter balanced with effective candidates sourcing.
Lean organization to stay price competitive yet being profitable
Reliable solutions to meet customers quality expectations and volume demand
24
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOULET US WORK FOR YOU
Where to play?
1 = 8 = 4Mass of margin
Due to significant value creation and salary arbitrage, margin on Ukraine cross-border employee to Poland is up to two times higher than domestic one.
For the same reasons, employee seconded to Germany generates margin up to eight times higher than domestic employment.
25
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOULET US WORK FOR YOU
How to win?
Capture the market opportunity window by being transformation agent from domestic to domestic/cross-border business model.
Leverage customers network and relations with clear Focus on international key accounts.
x 1.500x 10.000
3.000Customers
26
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOULET US WORK FOR YOU
Our strategic priorities
1
3
2
Scale across large customers base, focusing on international blue chips development where energized go to market strategy is already showing momentum
Invest in unique end-2-end solutions of cross border employee exchange and foreign recruitment. Capabilities on scale with own candidates sourcing channels
Drive the levers of value creation: stable revenue growth, sustainable margin expansion, sound financing, streamlined organization and disciplined overhead
27
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOULET US WORK FOR YOU
Drive levers of value creation
Stable revenue growth Sustainable margin expansion Sound financingStreamlined organization and
disciplined overhead
10% to 12%on a yearly basis
20 – 30 bpsIncrease in EBIT margin
<2.5Net Debt / EBITDA
<10%Indirect Costs Ratioby the end of 2020
• Focus on Key Value Proposition in industries with high growth potential
• Focus on large accounts leveraging network of international KAM across the Group
• Scale cross-border and foreign recruitment offering to international blue chip customers segment
• Enter new market segments (BPO/SSC) and higher skill levels of external employees
• Shift business mix toward cross-border offerings for better 1st margin
• Capitalize operational leverage based on scale effect, indirect to grow slower than margin
• Tailored bank financing with right fit to business model and decreased financing costs
• Earn out liabilities decreased to zero, no minorities*
• Optimize tax rate
* Potentially except Germany JV
• Optimize internal headcount vs. external employees as a key cost driver
• Further process optimization via digitalization
• Reduce complexity by simplifying structure of entities and business units
28
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOU
2017 2020
DOMESTIC BUSINESS CROSS BORDER BUSINESS
Dynamic and accelerating topline
growth to double its share in
portfolio mix, stable margin
Dynamic growth but decreasing margin due to
growing importance of blue collar recruitment
Stable revenues growth in line with
market growth, progressive
increase of our gross margin
2020 2020 2020
FLEXIBLE EMPLOYMENT
domestic
CROSS BORDERsecondement & sourcing
PERMANENT RECRUITMENT
domestic
~15%
~30%
>3 Billion PLN revenue by 2020
To triple cross border solutions revenue till 2020,
domestic business still 70%
Gross Margin %
GROUP REVENUES (on continued business)
LET US WORK FOR YOU 29
~50%
PRACUJEMY DLA CIEBIE / LET US WORK FOR YOULET US WORK FOR YOU
Key messages Work Service have undergone successful transformational journey
Labor market is undergoing a employment mobility paradigm shift that has strategic implications for employers (customers) and service providers
Work Service will be regional leading HR services company with best employees availability
Our vision is to produce greater value for clients, candidates and shareholders, leading the labor market through accelerating change of employment habits
Our strategic priorities:1. Scale across large customers base, focusing on international blue chips development where energized go to market
strategy is already showing momentum2. Invest in unique end-2-end solutions of cross border employee exchange and foreign recruitment, capabilities on
scale with own candidates sourcing channels3. Drive the levers of value creation: stable revenue growth, sustainable margin expansion, sound financing, streamlined
organization and disciplined overhead
30