REG-SThree SThree: Q1 Trading Update
21/03/2022 07:15
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SThree (STEM)
SThree: Q1 Trading Update
21-March-2022 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR), transmitted by
EQS Group.
The issuer is solely responsible for the content of this announcement.
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21 March 2022
SThree plc
Q1 Trading Update
Very strong net fee performance with growth across all geographies and
sectors
SThree plc ("SThree" or the "Group"), the only global pure-play specialist
staffing business focused on roles in Science, Technology, Engineering and
Mathematics ('STEM'), today issues a trading update covering the period 1
December 2021 to 28 February 2022.
Highlights
• Group net fees for the quarter up 29% YoY (1), driven by the continued
execution of our strategy and reflecting ongoing strength in new
placement activity
• Very strong YoY growth in all five core markets: Germany up 24%, USA
up 27%, Netherlands up 45%, UK up 29% and Japan up 78%
• Momentum across all our key sectors: Technology up 30%, Life Sciences
up 23% and Engineering up 31%
• Contract and Permanent YoY net fees up 32% and 18% respectively
• Contract represents 77% of Group net fees (FY 2021: 75%)
• Contractor order book (2) up 42% YoY (Q4 2021: up 43% YoY)
underpinning our confident outlook
• Robust balance sheet, with £41 million net cash as at 28 February 2022
(28 February 2021: £57 million)
Following the record performance delivered in FY 2021, we are no longer
presenting pre-pandemic comparisons.
Timo Lehne, Interim Chief Executive, commented:
"The strong momentum of FY 2021 has continued into the first quarter of FY
2022, in line with the Board's expectations, with robust performances
across all our core markets and sectors. In addition, the previously
guided investment in our people, talent acquisition and infrastructure to
drive long-term sustainable growth is progressing and will gather pace
through 2022.
Our well-established strategy, positioned at the centre of the secular
trends of STEM and flexible working, continues to drive this encouraging
performance. New placement activity, as well as the strength of the
contractor order book, gives us confidence in the outlook as we build on
the positive start to the year. Our rigorous focus on strategic execution
has not wavered and we remain fully committed to driving returns for all
of our stakeholders.
Whilst we are conscious of the broader uncertainties arising from the war
in Ukraine and its potential macro-economic consequences, our direct
exposure is minimal. We are encouraged by current trading and remain
confident about our overall growth prospects as we continue to position
ourselves as the leading STEM talent provider in the best global STEM
markets."
Q1 Q1 Q2 Q1
Net fees Q1 2022 Q4 2021 Q3 2021 2021 2021
2022 2021 YoY (1) YoY (1) YoY (1) YoY YoY
(1) (1)
Contract £72.3m £56.5m +32% +26% +27% +18% -2%
Permanent £21.5m £19.0m +18% +25% +36% +36% -
GROUP £93.8m £75.5m +29% +25% +29% +22% -1%
Management
structure
DACH (3) £32.6m £27.3m +26% +30% +35% +28% +3%
EMEA ex DACH £34.9m £28.1m +29% +24% +21% +10% -14%
(4)
USA £23.5m £18.3m +27% +18% +31% +28% +19%
APAC £2.8m £1.8m +71% +64% +33% +59% -14%
GROUP £93.8m £75.5m +29% +25% +29% +22% -1%
Top five
countries
Germany £29.3m £25.0m +24% +28% +35% +28% +3%
Netherlands £16.3m £11.9m +45% +36% +24% +21% -4%
UK £10.2m £8.1m +29% +27% +24% +3% -17%
USA £23.5m £18.3m +27% +18% +31% +28% +19%
Japan £2.0m £1.2m +78% +39% +23% +77% -21%
ROW (5) £12.5m £11.0m +19% +20% +21% +10% -16%
GROUP £93.8m £75.5m +29% +25% +29% +22% -1%
Q1
Division mix
2022
Contract 77%
Permanent 23%
Q1
Sector mix
2022
Technology 47%
Life Sciences 23%
Engineering 21%
Other 9%
Business performance highlights
The Group delivered a very strong performance in the quarter with net fees
up 29% YoY, with our Contract and Permanent businesses up 32% and 18% YoY
respectively.
Contract
• Momentum from the previous year continued into the first quarter, with
net fee income up 32% YoY.
◦ Regionally, DACH was up 40% YoY, EMEA ex DACH up 31%, USA up 25% and
APAC up 37%.
◦ Strong growth across all key sectors with Technology up 35% YoY, Life
Sciences up 28% and Engineering up 30%.
• The contractor order book(2) was up 42% YoY (Q4 2021: up 43%),
reflecting the ongoing high demand for skilled contractors across our
markets which underpins our positive outlook.
Permanent
• Permanent net fee income for the first quarter was up 18% YoY.
◦ Strong growth in USA up 31% YoY, EMEA ex DACH up 22% and APAC up
80%. DACH delivered more modest net fee growth of 2% YoY due to
timing of net fee recognition.
◦ Growth driven by Engineering up 39% YoY and Technology up 16%
YoY, with Life Sciences up 7% YoY.
Headcount and productivity
• Group average headcount in the quarter was up 8% YoY, with period-end
headcount up 9% YoY.
• Sequentially, Group period-end headcount was up 2% vs Q4 2021.
• We continue to invest in line with our previously stated strategy of
focusing on specific niches within sectors and markets where we can
gain valuable market share; investment in talent acquisition remains a
priority for the business.
• As expected, we have seen some normalisation of productivity as new
hires come on board although it remains well above historic levels,
with Q1 productivity up 19% YoY (FY 2021: up 31%).
Regional highlights
DACH saw net fees grow 26% YoY
• Germany, our largest country in the region, delivered strong net fee
growth of 24% driven by:
◦ Technology up 30% due to demand for open-source software
development and infrastructure roles.
◦ Engineering up 32%, with higher demand for automation and
construction management roles.
• Contract performance was outstanding, up 40% YoY.
EMEA ex DACH saw net fees grow 29% YoY
• The Netherlands, our largest country in the region, saw a very strong
performance with net fees up 45%, driven by:
◦ Technology, up 41%, driven in particular by demand for ERP
consultants, front end developers, project managers and business
analysts.
◦ Engineering up 55% with increased demand for project managers,
process engineers and health and safety advisors.
• UK continued its trend of strengthening performance with net fees up
29% YoY, driven by Technology up 31%, as demand increased for software
development and project management roles.
USA saw net fees grow 27% YoY
• Life Sciences, our largest sector in the USA, continued its momentum
into the new financial year as net fees grew 29%, driven by demand for
roles within clinical operations, medical writing and quality
assurance.
• Engineering was up 26%, driven by increased demand for project and
construction management roles.
• Technology was up 19% with a particular focus on roles within software
development and mobile applications.
APAC saw net fees grow 71% YoY
• This performance was driven by Japan, our largest country in the
region, where net fees grew by 78%.
• Growth was driven by Technology, up 81%, with demand increased for
cyber security, IT consulting and technology sales roles.
Balance sheet
SThree remains in a robust financial position, with net cash at 28
February 2022 of £41 million (28 February 2021: £57 million). The YoY
decrease in cash is driven by growth in the number of contractors,
together with timing of performance bonuses relating to the record
performance and productivity levels achieved in FY 2021. As at 28 February
2022, the Group had total accessible liquidity of £96 million, comprising
£41 million net cash, a £50 million revolving credit facility ('RCF') and
a £5 million overdraft facility (RCF and overdraft both undrawn). In
addition, SThree has a £20 million accordion facility, alongside its
substantial working capital position, reflecting net cash due to the Group
for placements already undertaken.
Analyst conference call
SThree is hosting a conference call for analysts and investors today at
8.30am to discuss the Q1 2022 trading update. If you would like to
register for the conference call, please contact SThree@almapr.co.uk.
The Group will issue its trading update for the six months ending 31 May
2022 on 20 June 2022.
(1) All growth rates in this announcement are expressed at constant
currency.
(2) The contractor order book represents value of net fees until
contractual end dates, assuming all contractual hours are worked.
(3) DACH - Germany, Austria and Switzerland.
(4) EMEA ex DACH - UK, Ireland, Belgium, Netherlands, Luxembourg, France,
Spain and Dubai.
(5) ROW - All other countries we operate in excluding Germany,
Netherlands, UK, USA and Japan.
- Ends -
Enquiries:
SThree plc
Andrew Beach, CFO
via Alma
+44 20 3405 0205
Alma PR
Rebecca Sanders-Hewett
SThree@almapr.co.uk
Susie Hudson
Notes to editors
SThree plc brings skilled people together to build the future. We are the
only global pure-play specialist staffing business focused on roles in
Science, Technology, Engineering and Mathematics ('STEM'), providing
permanent and flexible contract talent to a diverse base of over 8,000
clients across 14 countries. Our Group's c.2,700 staff cover the
Technology, Life Sciences, Engineering and Banking & Finance sectors.
SThree is part of the Industrial Services sector. We are listed on the
Premium Segment of the London Stock Exchange's Main Market, trading with
ticker code STEM.
Important notice
Certain statements in this announcement are forward looking statements. By
their nature, forward looking statements involve a number of risks,
uncertainties or assumptions that could cause actual results or events to
differ materially from those expressed or implied by those statements.
Forward looking statements regarding past trends or activities should not
be taken as representation that such trends or activities will continue in
the future. Certain data from the announcement is sourced from unaudited
internal management information and is before any exceptional items.
Accordingly, undue reliance should not be placed on forward looking
statements.
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ISIN: GB00B0KM9T71
Category Code: QRF
TIDM: STEM
LEI Code: 2138003NEBX5VRP3EX50
OAM Categories: 2.2. Inside information
Sequence No.: 150205
EQS News ID: 1306999
End of Announcement EQS News Service
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