Interim Management Statement

9 April 2009

Interim management statement

Third quarter ended 31 March 2009

 
 

Commenting on trading for the quarter ended 31 March 2009, Alistair Cox, Chief
Executive of Hays plc, said:

"Market conditions in each of the countries in which we operate deteriorated
further during the quarter. Against this backdrop, group net fees fell by 27%
(31% on a like-for-like basis) versus the same period last year. We have
continued to reduce our cost base with headcount falling by 11% during the
quarter bringing our total headcount reduction since the start of the financial
year to 19%.

Whilst we continue to cut costs in response to difficult market conditions, we
are also investing in gaining market share and in strengthening the business
for the longer term. We have enhanced our major corporate account offering and
delivery structure which is enabling us to cross sell more effectively into
large blue chip organisations. We are making good progress in developing our
technology systems to increase efficiency across the business and we are
selectively investing in the international network including starting
operations in India during the quarter.

Demand for temporary assignments has been broadly stable following the
re-engagement of temporary workers after the Christmas holidays at around 90%
of the pre-Christmas level. Demand for permanent placements continues to fall
across all our markets.

We expect market conditions will remain tough for some time. However, the
experience of our management teams across the world, our leading market
positions, our public sector presence, our balance of permanent and temporary
placement business, and the strength of our balance sheet, place us in a strong
position to deal with these conditions."

 

Group

Growth in net fees for the quarter ended 31 March 2009         Growth       
(versus the same period last year)                                  
                                                         Actual      LFL*
                                                                     
By region                                                            
      United Kingdom & Ireland                            (37)%     (37)%
      Asia Pacific                                        (32)%     (36)%
      Continental Europe & Rest of World                     7%      (9)%
      Total                                               (27)%     (31)%
                                                                     
By segment                                                           
      Permanent                                           (43)%     (46)%
      Temporary                                           (10)%     (14)%
      Total                                               (27)%     (31)%
                                                                     

* LFL is like-for-like growth, which represents organic growth at constant
currency. No adjustment is made for the one additional trading day in the
quarter ended 31 March 2009 versus the same period last year. No adjustment is
made for the impact of Easter being in Q4 this year (Q3 last year) which is
estimated to have improved the net fee growth rate by around 2% in the quarter.


In the quarter ended 31 March 2009, Hays plc, the leading global specialist
recruitment group, saw a reduction in net fees of 27% (31% on a like-for-like
basis*) versus the same period last year. The difference between the headline
and like-for-like growth rate is due to the more favourable Euro and Australian
dollar exchange rates. During the quarter, headcount was reduced by 11%
primarily through natural attrition and performance management, with reductions
being made across all the regions.

Net fees from the permanent placement business decreased by 46%* as market
conditions continued to deteriorate across all our markets. Net fees from the
temporary placement business decreased by 14%* primarily due to the
re-engagement of temporary assignments after the Christmas holidays being lower
than last year.

The pace of the fall in net fees increased across the quarter, with an exit
rate of around 30%* below the same period last year (35%* after adjusting for
Easter falling in the fourth quarter this year).

 

United Kingdom & Ireland

In the United Kingdom & Ireland, net fees fell by 37%* versus the same period
last year as market conditions deteriorated further across the private sector,
particularly in the permanent placement market. However, our public sector
business, which represented a third of the United Kingdom & Ireland net fees in
the quarter, continued to be resilient, achieving 3% growth in the quarter.

We have continued to take swift action to address the reduction in demand
levels. During the quarter, we reduced the headcount in the United Kingdom &
Ireland business by a further 9% which brings the total reduction to 27% over
the last 12 months. Whilst we will retain our geographical coverage, we have
sought to drive efficiency by consolidating operations in some cities resulting
in the closure of 14 offices. This brings the total number of office closures
to 28 since the start of the financial year.

 

Asia Pacific

In Asia Pacific, net fees decreased by 36%*. Conditions in the permanent
placement market were very weak in nearly all sectors and regions. In line with
trends for the rest of the Group, demand in the temporary placement market was
broadly stable following the re-engagement of temporary workers after the
Christmas holidays at around 90% of the pre-Christmas level. Good growth
continued to be achieved in the public sector.

We reduced the headcount by 17% during the quarter which brings the total
headcount reduction in the region to 27% since the start of the financial year.

 

Continental Europe & Rest of World ('RoW')

In Continental Europe & RoW, net fees decreased by 9%*. Our German business,
which is primarily focused on the IT contracting market, achieved good growth
in the quarter although at a slower pace than previously. In all our other
major countries in the region, net fees decreased following a marked reduction
in demand in the permanent placement markets. Headcount was cut by 11% during
the quarter with reductions across all countries except Germany.

As part of our strategy of selectively investing, we started operations in
India where we see excellent long term opportunities for Hays.

 

Cash flow and balance sheet

We achieved good cash flow from operations in the quarter benefiting from our
continued focus on cash management. The balance sheet remains strong, with net
debt broadly in line with Interim levels.

 

Current Trading

Demand for temporary assignments has been broadly stable following the
re-engagement of temporary workers after the Christmas holidays at around 90%
of the pre-Christmas level. Demand for permanent placements continues to fall
across all our markets.

We expect market conditions will remain tough for some time. However, the
experience of our management teams across the world, our leading market
positions, our public sector presence, our balance of permanent and temporary
placement business, and the strength of our balance sheet, place us in a strong
position to deal with these conditions.

* LFL is like-for-like growth, which represents organic growth at constant
currency. No adjustment is made for the one additional trading day in the
quarter ended 31 March 2009 versus the same period last year. No adjustment is
made for the impact of Easter being in Q4 this year (Q3 last year) which is
estimated to have improved the net fee growth rate by around 2% in the quarter.

 

Enquiries

Hays plc                                                                        
Paul Venables           Finance Director                   + 44 (0) 20 7383 2266
Martin Abell            Investor Relations                 + 44 (0) 20 7383 2266
                                                                                
Brunswick                                                                       
Gill Ackers                                                + 44 (0) 20 7404 5959
James Rossiter                                                                  
                                                                                
                                                                               
                                                                                
Conference call

Paul Venables and Martin Abell of Hays plc will conduct a conference call for
analysts and investors at 9:00am United Kingdom time on Thursday 9 April 2009.
The dial in details are as follows:

Dial-in number                                             [phone] 
Password                                                   Hays                 
                                                                                

The call will be recorded and available for playback for seven days as follows: 
                                                                                
Replay dial-in number                                      [phone] 
Access code                                                92331278#            
                                                                                

 
Reporting calendar

Trading statement for quarter ending 30 June 2009                   9 July 2009     
Preliminary results for 12 months ending 30 June 2009               3 September 2009
Interim management statement for quarter ending 30 September 2009   8 October 2009  
Trading statement for quarter ending 31 December 2009               7 January 2010  
Half year report for 6 months ending 31 December 2009               25 February 2010
                                                                            

 
Note to editors

Hays plc is the leading global specialist recruitment group. It is market
leader in the UK and Australia, and one of the market leaders in Continental
Europe. As at 31 December 2008, the Group employed 8,294 staff operating from
380 offices in 27 countries across 17 specialisms. For the year ended 30 June
2008:

-  the Group had revenues of £2.5 billion, net fees of £786.8
   million and operating profit before exceptional items of £253.8 million;

-  the Group placed around 80,000 candidates into permanent jobs
   and around 300,000 people into temporary assignments;

-  the temporary placement business represented 49% of net fees
   and the permanent placement business represented 51% of net fees.

 

Cautionary statement

This Interim Management Statement has been prepared solely in compliance with
the Disclosure Rules and Transparency Rules of the UK Financial Services
Authority and is not audited. Statements in this Report reflect the knowledge
and information available at the time of its preparation. Certain statements
included or incorporated by reference within this Report may constitute
"forward-looking statements" in respect of the Group's operations, performance,
prospects and/or financial condition. By their nature, forward looking
statements involve a number of risks, uncertainties and assumptions and actual
results or events may differ materially from those expressed or implied by
those statements.  Accordingly, no assurance can be given that any particular
expectation will be met and reliance should not be placed on any
forward-looking statement.  Additionally, forward-looking statements regarding
past trends or activities should not be taken as a representation that such
trends or activities will continue in the future. No responsibility or
obligation is accepted to update or revise any forward-looking statement
resulting from new information, future events or otherwise. Nothing in this
Report should be construed as a profit forecast. This Report does not
constitute or form part of any offer or invitation to sell, or any solicitation
of any offer to purchase any shares in the Company, nor shall it or any part of
it or the fact of its distribution form the basis of, or be relied on in
connection with, any contract or commitment or investment decisions relating
thereto, nor does it constitute a recommendation regarding the shares of the
Company. Past performance cannot be relied upon as a guide to future
performance. Liability arising from anything in this Report shall be governed
by English Law. Nothing in this Report shall exclude any liability under
applicable laws that cannot be excluded in accordance with such laws.