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Financial summary

Growth in net fees for the quarter ended 31 March 2012 (Q3)  Growth (versus the same period last year)                                   

                                                                              Actual                     LFL*

By region                                                             

     Asia Pacific                                                     17%                       9%

     Continental Europe & Rest of World          27%                       26%

     United Kingdom & Ireland                          (5)%                        (5)%

     Total                                                                12%                       10%

By segment                                                            

     Temporary                                                     16%                       14%

     Permanent                                                     8%                          5%

     Total                                                                12%                       10%                                            

* LFL (like-for-like) growth represents organic growth at constant currency.


• Good Group net fee growth of 10%* versus prior year

• International business delivered strong growth of 18%* and represented 70% of net fees in the quarter

• Strong growth of 26%* in Continental Europe & Rest of World, driven by continued excellent performance in Germany which grew by 36%*

• Good growth of 9%* in Asia Pacific, with 9%* growth in Australia & New Zealand, and 5%* growth in the rest of Asia

• Net fees decreased 5% in the UK & Ireland, with private sector declining 6%. Public sector net fees declined 2%

• Based on the Group's year-to-date performance and our current view on   outlook, we expect full year operating profit to be towards the top of the current range of market estimates

Commenting on the Group's performance in the third quarter, Alistair Cox, Chief Executive, said:

"We have made an encouraging start to the second half with good performances in many parts of the Group.  In our International business, which now accounts for 70% of total net fees, growth accelerated to 18%*. 13 countries around the world grew by over 20%* and our market-leading German business was amongst 7 countries that delivered record performances. In the UK, markets remain difficult, especially in Banking and the public sector.

Looking ahead, many parts of the Group continue to grow, but ongoing uncertainty about the global economic outlook means that our markets around the world remain complex and far from uniform. Against this backdrop, we will continue to invest selectively in growth areas whilst at the same time reacting to changing conditions in each of our countries and specialisms to maximise fees and profitability. Our unrivalled global footprint, sectoral diversification and market leadership in so many countries positions us well to capitalise on today's complex markets as well as the long-term opportunities for growth which remain undiminished."


In the quarter ended 31 March 2012, Hays, the leading global professional recruitment group, increased net fees by 12% (10% on a like-for-like basis*) against prior year. Net fees in the temporary placement business, which accounts for 56% of Group net fees, saw strong growth of 14%*. Net fee growth in the permanent placement business was solid at 5%* despite continued uncertainty about the global macro-economic environment impacting confidence amongst the Group's candidates and clients, notably in our Banking related specialisms around the world.

The exit rate for the quarter was circa 7%* up on the same period last year, as comparatives strengthened as the quarter progressed. The Group's underlying temporary placement margin** remained broadly stable and in line with the previous quarter. The Group's consultant headcount, which is 7% up year on year, decreased by 3% during the quarter. This follows the actions taken in October and November 2011 when we became more selective about areas for investment, and reduced consultant numbers in certain countries. Based on the Group's year-to-date performance and our current view on outlook, we expect full year operating profit to be towards the top of the current range of market estimates.


In Asia Pacific, our second largest region by net fees, we recorded good net fee growth of 9%*. In our market-leading Australia & New Zealand business, we recorded good overall net fee growth of 9%*, within which our temporary placement business performed strongly, increasing by 17%*, and our permanent placement business was broadly flat*. We continued to see excellent growth in Western Australiaand Queensland driven by Resources & Mining and associated support specialisms, which was partially offset by tough market conditions in New South Wales and Victoria.

In Asia, which accounts for 12% of the division, net fees grew by 5%*. In Japan, we continued to see strong growth as net fees increased by 31%*. Elsewhere in the division, market conditions remained subdued through the quarter. This was particularly the case in Hong Kong and Singapore, which have a significant weighting towards Banking and Financial Services.

Consultant headcount in the Asia Pacific division was broadly stable in the quarter.

Continental Europe & Rest of World ('RoW')

In Continental Europe & RoW, our largest division, which represents circa 40% of Group net fees, we recorded strong net fee growth of 26%*. Growth continued to be excellent in Germany which had another record performance and grew by 36%*. Growth in Germany was broadly based across all sectors and each of our permanent, contracting and temporary placement businesses. Growth in the rest of the division, which is primarily a permanent placement business, was 15%*. France continued to perform well, and grew by 13%*.

Elsewhere, 9 countries across the division increased net fees by 20%* or more, including Belgium, Brazil, Canada, India and Russia. Conditions in our Southern European businesses were more challenging as activity continued to be significantly impacted by the Eurozone crisis and associated macro-economic uncertainty.

Consultant headcount in the Continental Europe & RoW division decreased by 2% during the quarter and we opened Chile, our fourth Latin American country of operation, in March.

United Kingdom & Ireland

In the United Kingdom & Ireland, net fees decreased by 5%. In our private sector business, net fees were down 6% in large part due to slowing activity in our Banking and City-related specialisms. Elsewhere in our private sector business, our IT, Legal and Energy businesses continued to deliver good growth.

In our public sector business, net fees were down 2% year on year, but have now been stable on a sequential basis since April 2011.

We continued to make good progress on our cost reduction plans through the quarter to protect the profitability of the business.

Consultant headcount in the United Kingdom & Ireland division decreased 5% in the quarter.

Cash flow and balance sheet

As a result of good working capital management, net debt decreased to around &pound160 million (31 December 2011: &pound178 million).

* LFL (like-for-like) growth represents organic growth at constant currency.

** the underlying temporary placement gross margin is calculated as temporary placement net fees divided by temporary placement gross revenue and relates solely to temporary placements in which Hays generates net fees and specifically excludes transactions in which Hays acts as agent on behalf of workers supplied by third party agencies.


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