HAYS PLC
INVESTOR CALL SCRIPT – Q3: 16 April 2026
INTRODUCTION
Thank you, Kean. Good morning, everyone, and thanks for joining us today.
I will present the key points and regional details of today’s trading update, before
taking questions. As usual, all net fee growth percentages are on a like-for-like
basis versus prior year unless stated otherwise and consequently exclude our
previously communicated exits from operations in Chile, Colombia, Thailand, and
Mexico.
OVERVIEW
Group net fees decreased by 8%, with Temp & Contracting down 6% and Perm
down 12%.
I’m pleased to confirm that strong consultant net fee productivity growth and cost
discipline continues to offset our lower net fees. Although near term market
conditions are likely to remain challenging, and we remain mindful of heightened
global macro-economic uncertainty, we currently expect FY26 pre-exceptional
operating profit will be in line with consensus.
I would highlight the following key items from the results:
1.
Temp & Contracting net fees decreased by 6% as we saw a modestly
stronger return to work in UK&I and ANZ, and the YoY decline in volumes
and average hours worked in Germany was in line with our expectations
during the quarter. Group Temp & Contracting volumes decreased by 5%
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YoY including Germany down 9%, UK&I down 8%, ANZ down 6%, and
RoW up 2%.
2.
Perm net fees decreased by 12%, driven by a 15% decline in volumes as
conversion of activity in UK&I and ANZ reduced modestly versus Q2. This
was partially offset by a 3% increase in the Group average Perm fee
supported by our actions to target higher salary roles.
3.
We continue to manage our consultant capacity on a business line basis
and, despite challenging markets, our actions delivered 7% YoY growth
in average consultant net fee productivity in Q3 including notable
increases in the UK&I and ROW. On a seasonally adjusted basis,
productivity has increased now for a sector leading ten consecutive
quarters. Consultant headcount reduced by 3% in the quarter and by 14%
versus prior year.
4.
We have continued to make strong progress towards our structural cost
savings programme with a further £15m per annum savings delivered in
Q3. We have now achieved £30m annualised savings in FY26, making
excellent progress towards our target of £45m by FY29. In total, we have
now delivered £95m annualised cumulative structural savings since the
start of FY24. Our non-consultant headcount exited the quarter down 7%
YoY.
5.
The Group’s net debt position was c.£15m which is in line with our
expectations and reflects normal seasonal cashflows.
I will now comment on the performance by each division in more detail.
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Our largest market of GERMANY saw fees down 11% YoY.
Temp & Contracting net fees decreased by 11% with volumes down 9% and a
further 2% impact from negative hours and mix.
Temp & Contracting volumes remained solid overall with Return to Work in line
with prior year and the YoY decline in average hours worked during the quarter,
predominantly in our public sector and Enterprise clients, was in line with our
expectations. These sectors hired in anticipation of fiscal stimulus, hence our
placement volumes have been resilient, but hours worked remained softer in the
quarter after federal budget approval was delayed.
Perm was sequentially stable through the quarter and the YoY decline in net fees
eased to 10%.
At the specialism level, Technology and Engineering, our two largest specialisms,
were flat year on year and down 27% respectively, the latter impacted by ongoing
subdued performance of the Automotive sector. Accounting & Finance was down
22%. Construction & Property performed strongly once again with 37% net fee
growth, driven by our focus on infrastructure and the energy sector, and it now
contributes 9% of our net fees in Germany.
Consultant headcount decreased by 6% in the quarter and by 15% year-on-year.
Net fee productivity increased by 5% YoY, driven by our ongoing focus on
resource allocation, and we made strong progress with our structural cost savings
initiatives.
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In UK & IRELAND, fees decreased by 10% with a modestly stronger return to
work in Temp & Contracting, down 6%, but Perm remained subdued, down 15%.
Fees in the private sector declined by 8% YoY, while the public sector was
tougher down 13%.
At the specialism level, Technology, was flat versus prior year while Construction
& Property and Accountancy & Finance decreased by 8% and 6% respectively.
Enterprise net fees declined by 4%. Office Support was flat as our actions to
target higher salary roles offset lower volumes in junior roles.
Consultant headcount decreased by 4% in the quarter and 16% year-on-year.
Consultant net fee productivity increased by 11% YoY and we made further good
progress in improving operational efficiency. Once again, a key driver has been
greater focus from our consultants on high skilled roles consistent with our Five
Levers strategy. As a result, YoY growth in average candidate salary remained
at 8% for Perm in Q3 and accelerated to 9% in Temp & Contracting.
As expected, our sustained focus on cost discipline, including ongoing initiatives
to optimise our office portfolio and delayer management, has driven a further
structural improvement in costs. We have made good progress towards building
a higher quality, focused business and consequently anticipate improved
profitability in the second half.
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In ANZ, fees decreased by 2% YoY with modestly improved momentum in Temp
& Contracting but Perm was more subdued.
Temp & Contracting decreased by 1% YoY with a return to work modestly ahead
of previous years. Perm net fees, down 6%, slipped back into modest YoY decline
as conversion of activity to placement became more challenging.
The Private sector decreased slightly by 1%, with the Public sector down 6%.
At the specialism level, Construction & Property (our largest at 21% of ANZ net
fees) increased by 6% with Office Support and Accountancy & Finance up by 7%
and 5% respectively. Technology declined by 11%.
Australia net fees were down 2% YoY with New Zealand at minus 11%
ANZ consultant headcount was up 2% through the quarter but decreased by 4%
year-on-year. Driven by our focus on resource allocation, consultant net fee
productivity grew by 7% YoY. As with the UK & Ireland, a key driver of our profit
recovery has been greater focus from our consultants on high skilled roles. As a
result, YoY growth in the average salary of our Perm placements was maintained
at 5% in Q3.
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In our REST OF WORLD division, comprising 24 countries, LFL fees
decreased by 6%. Temp moved back into positive YoY growth and fees were up
3% but Perm declined by 12%. As a reminder, our total actual growth rate
includes the impact from our previously communicated exits from operations in
Chile, Colombia, Thailand, and Mexico.
In EMEA ex-Germany, net fees decreased by 8%. France, our largest RoW
country, remained tough and loss-making with net fees down 17% but our actions
to address productivity and costs are being delivered on plan and we continue to
expect an improved performance in H2 26. Southern Europe performed strongly
with Spain and Portugal again achieving record quarterly net fees, up 17% and
6% respectively. Poland grew by 2%.
In Americas, net fees decreased by 7%. The US and Canada were down 8% and
2% respectively. We have previously highlighted a “substantial” bid pipeline with
large Enterprise clients in North America and I’m pleased to share that several
contracts have now reached financial close with mobilisation anticipated over the
coming quarters. Brazil, down 12%, was again challenging.
Asia net fees increased by 8% with improved activity overall through the quarter.
Japan grew by 33% driven by strong growth in our Temp & Contracting business
and an easy comparable. Mainland China grew by 16% and Hong Kong by 9%.
For RoW as a whole, consultant headcount decreased by 3% in the quarter and
by 14% year-on-year.
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Before moving to current trading, I wanted to take a few moments to update you
on our strong strategic progress during the quarter. As we have previously
shared with you, our initiatives to improve consultant net fee productivity in real
terms through our Five Levers and structurally improve our cost-base will be key
drivers of profit recovery.
Amidst challenging markets, we are executing well and continue to make
significant operational progress. We continue to invest in high potential and high
performing business lines and scale back or exit those with low performance and
potential. As previously communicated, we have exited four countries over the
last year and will continue to review our country portfolio in the medium term.
Consultant fee productivity, up 7% in the quarter, has increased for a sector
leading ten consecutive quarters driven by careful allocation of consultants to
business lines with the most attractive productivity and long-term structural
growth opportunity, greater focus from our consultants on high skilled roles, and
our investments to provide them with the best tools.
Within Temp & Contracting, net fee growth was positive in three of our eight
Focus countries in Q3. At the group level, Temp & Contracting contributed 65%
of net fees in the quarter.
In Enterprise Solutions, we have recently signed several new contracts which we
expect to contribute to net fees over the coming quarters
And our programmes to structurally reduce our cost base are performing well with
£95m per annum aggregate structural savings now secured since the start of
FY24. We continue to make strong progress with our initiatives and expect the
full financial benefits to build over time.
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Moving on to current trading and guidance.
1.
To date, we have observed minimal impact from developments in the
Middle East, but we remain vigilant. Although we have limited forward
visibility, given heightened levels of global macro-economic uncertainty, we
expect near term Perm market conditions to remain challenging but expect
greater resilience in Temp & Contracting to continue.
2.
We were pleased once again with our net fee productivity through Q3 and
believe our Group consultant headcount capacity is appropriate for current
market conditions and therefore expect it to remain broadly stable in Q4 as
we balance focused investment in high performing and potential business
lines with improving productivity in more challenging areas.
3.
We will continue to structurally reduce our cost base, to position Hays
strongly for when end markets recover, and expect to make further
substantial progress in Q4. As a result of the acceleration of our cost
programme, we have incurred around £20m of exceptional restructuring
costs to date in fiscal 2026.
4.
There are no material working-day impacts anticipated in Q4 26.
I will now hand you back to the administrator, and we are happy to take your
questions.
Q&A
If that is all the questions, thank you again for joining the call.
I look forward to speaking to you next at our Q4 results on 10th July. Should
anyone have any follow up questions, Kean, Prash and I will be available to take
calls for the rest of the day.
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