PageGroup Regulatory News (PAGE)

5 March 2014

Full Year Results for the Year Ended 31 December 2013

Michael Page International plc ("PageGroup"), the specialist professional recruitment company, announces its full year results for the year ended 31 December 2013.

*Constant Exchange Rates

** Exceptional items: 2013 operating profit charge of £2.5m (2012: £nil) relating to Page Personnel France. 2013 restructuring charge of £nil (2012: £7.8m). These items are described fully in note 4.

Highlights

· Revenue increased by 1.2%; gross profit lower by 2.7% at constant exchange rates

· Operating profit ** increased 4.7%, reflecting a focus on operational efficiencies

· Signs of improvement in many markets as the year progressed, notably in the UK and USA

· 20 out of 34 countries achieved year-on-year gross profit growth in 2013

· Continued investment in high potential markets of China, South East Asia, Germany, LatAm and USA

· 2 new offices opened in the Americas, Los Angeles and Monterrey (Mexico)

· EMEA represented 40% of gross profit; UK 24%; Asia Pacific 21%; Americas 15%

· Operational support headcount reduced by 155 (-10.5%) in 2013 delivering recurring £20m pa savings

· Fee earner headcount increased by 186 (+5.1%)

· Strong balance sheet with net cash at 31 December 2013 of £85.4m

· Total dividend increased by 5% to 10.5p

Commenting, Steve Ingham, Chief Executive Officer of PageGroup, said:

"Although 2013 was a challenging year for the recruitment industry and the global economy in general, PageGroup was able to deliver a robust performance, with our key measure of gross profit (net fee income) just 2.5% lower than 2012, at £514m. However, as a result of our focus on operational efficiencies, we delivered an operating profit before exceptional items of £68.2m, exceeding the prior year by 4.7%.

"We achieved good performances in our significant UK and US markets, and also in Spain, the UAE, Mexico and Japan. There were also some signs of recovery in Continental Europe towards the end of the year. In contrast, Australia remained a difficult market, with the continued downturn in the resources sector, and our largest business in Latin America, Brazil, felt the impact of more challenging conditions. The refocusing of the business in the USA has been highly successful. We now have a fast growing and profitable business in this region which has considerable potential for PageGroup. Overall, year-on-year gross profit growth was experienced in 20 of the 34 countries in which we operate.

"A strategic objective in 2013 was to initiate a stronger focus on the consistency and efficiency of our operational support teams. Operational support headcount has been reduced by 155, while fee earner headcount has increased by 186, a net overall increase in headcount of 31. At the same time, we continue to work on ways to deliver the optimal infrastructure and technology to enable our people to best serve the needs of clients and candidates alike.

"The savings made in operational support had a positive impact on our cost base of approximately £10m in 2013 and hence our performance. In total, approximately £20m of recurring costs were removed from the business, with the full benefit to be felt in 2014. These savings will help mitigate cost base growth elsewhere, such as salary increases representing £14m at c. 3% per head; investments in additional fee earner headcount; and in the supporting infrastructure, including the first full year of amortisation of the Gateway IT project intangible asset of around £8.5m (2013: £5.4m).

"During 2013, we also continued to invest in our large, high potential markets of China, South East Asia, Germany, Latin America and the USA, identified in our long-term growth strategy. We see these markets as sizable long-term opportunities to achieve, or in most cases improve, our significant market share and consolidate our position as the established market leader. We are also mindful that these markets will develop according to local conditions and market character, and along differing timeframes. Our financial commitment to these markets is coupled with the investment in transferring highly experienced PageGroup managers to lead the efforts in country which also ensures that the unique PageGroup culture and best practice is adopted from the outset. This is a significant advantage for us, and is fundamental to our consistent organic growth strategy, both across the economic cycle and as we look to grow in new markets.

"The strength and timing of any recovery in world economic markets is uncertain, our visibility relatively short and we remain exposed to some volatile economies. This is demonstrated by the recent adverse movements in foreign currencies that are impacting our overseas results when translated into Sterling (impact on 2014 operating profit of c. £4m at current exchange rates). However, we have continued to invest in additional fee earner headcount in selected markets since the start of the year. We believe our clear and consistent growth strategy, our geographic and discipline diversity and our strong balance sheet, with £85 million of net cash at year end, ensures that we remain in a strong position to respond to any improvements in market conditions in 2014. This is also reflected in our proposed increase of 5% in the total dividend to 10.5p."

Analyst meeting

The company will be presenting to a meeting of analysts at 9.00am today at

FTI Consulting

Holborn Gate

26 Southampton Buildings

London

WC2A 1PB

United Kingdom.

If you are unable to attend in person, you can also follow the presentation on the following link:

http://www.axisto-live.com/investis/clients/pagegroup/presentations/5303938fde2f8a3c3b27553c/full-year-results

Please use the following dial-in numbers to join the conference:

The presentation and a recording of the meeting will be available on the company's website later today at

http://www.page.com/investors/reports-and-presentations/presentations-and-webcasts/2014.aspx

Enquiries:

MANAGEMENT REPORT

Cautionary Statement

The Management Report has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed.

The Management Report contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward looking information.

GROUP STRATEGY

Our strategy is clear and consistent.

Organic growth

Our strategy is to grow organically, achieved by drawing upon the skills and experiences of proven PageGroup management, ensuring we have the best and most experienced, home-grown talent in each key role. Our team-based structure and profit share business model is highly scalable. The small size of our specialist teams means we can increase headcount rapidly to achieve growth when market conditions are good. Conversely, when market conditions tighten, these entrepreneurial, profit sharing teams reduce in size through natural attrition. Consequently, our cost base contracts during the lean times. Our strategy for organic growth has served the business well over the thirty eight years since its inception and we believe it will continue to do so. We have grown from a small, single discipline management recruitment company operating in one country to a large multidiscipline,

multinational business, operating in 34 countries represented by three key brands.

Diversification by region and discipline

Our strategy is to expand and diversify the Group by industry sectors, professional disciplines, geography and level of focus, be it Page Executive, Michael Page or Page Personnel, with the objective of being the leading specialist recruitment consultancy in each of our chosen markets. As recruitment is a cyclical business, impacted significantly by the strength of economies, diversification is an important element of our strategy in order to reduce our dependency on individual businesses or markets and to increase the resilience of the Group. This strategy is pursued entirely through the organic growth of existing and new teams, offices, disciplines and countries, maintaining a consistent team and meritocratic culture as we grow.

Build for the long term

When we invest in a new business, be it a new country, a new office or a new discipline, we do so for the long-term. Downturns in the general economy of a country or in specific industries will inevitably have a knock-on effect on the recruitment market. However, it has been our practice in the past, and remains our intention, to maintain our presence in our chosen markets through these downturns, while closely controlling our cost base. In this way, we are able to retain our highly capable management teams in whom we have invested and, normally, we find that we gain market share during downturns which positions our business for market-leading rates of growth when the economy improves. Pursuing this approach means that we carry spare capacity during the downturn, which has a negative effect on profitability. A strong balance sheet is, therefore, essential to support the business through these times.

Recruit the best people, develop their talent and promote from within

We recognise that it is our people who are at the heart of everything we do, particularly as an organically grown business. Investing in them is, therefore, a vital element of our strategy. Our strategy is to find the highest calibre staff from a wide range of backgrounds and then do our very best to retain them through a team-based structure, a profit share business model and continuous career development, often internationally. Our strong track record of internal career moves and promotion from within means that people who join us know that one day they can be our future senior managers and main Board directors. Steve Ingham, our Chief Executive Officer, joined PageGroup 27 years ago at recruitment consultant level. Similarly, all of the operational members of our Executive Committee started their PageGroup careers at consultant level and have a total of 125 years of PageGroup experience across the five individuals.

REVIEW OF 2013

Market conditions in 2013 made for another challenging year, but the Group delivered an increase over 2012 in operating profit (before and after exceptional items), despite gross profit (net fee income) being down 2.5%.

We were encouraged by our performance in Q4, which saw our first positive growth in constant currency since Q1 of 2012, and by the improvement in the year-on-year quarterly gross profit growth rate in each of the last three quarters. Year-on-year gross profit growth was experienced in 20 countries and we finished the year with a strong balance sheet and £85m of net cash.

Revenue

Revenue for the year ended 31 December 2013 was £1,005.5m, exceeding our revenue in 2012 of £989.9m by 1.6%. Our revenue from permanent placements decreased by 4.5% to £403.1m (2012: £422.0m), while revenue from temporary recruitment was up by 6.1% at £602.5m (2012: £567.9m). The differences in these performances are in line with what we would normally expect at this point in the cycle, as temporary recruitment tends to pick up earlier in the recovery, but will be overtaken by the subsequent much faster recovery in permanent recruitment.

Gross profit

Our strategy of diversification by region has reduced our exposure to changes in market conditions. The rate of growth is impacted by the strengths of the economies and the maturity/competitiveness of the recruitment markets in each region.

We have continued to invest in the large, high potential markets of the US, Germany, Latin America, Greater China and South East Asia and have seen some of the benefits of this investment with year-on-year growth of 8.7% in the Americas and 6.9% in Asia. We delivered year-on-year gross profit growth in 20 countries and record breaking performances in China, Japan, Turkey, Russia, UAE, Malaysia, Mexico and Chile.

Gross profit from permanent placements decreased by 4.3% and represented 76.3% of Group gross profit (2012: 77.8%) while gross profit from temporary placements increased by 3.8% representing 23.7% (2012: 22.2%) of Group gross profit.

Group gross margin decreased to 51.1% (2012: 53.2%) reflecting the 1.5% growth in the proportion of temporary business and a small reduction in the gross margin achieved on temporary placements to 20.2% (2012: 20.6%), where strong pricing in rapidly growing markets has been offset by competitive pressures elsewhere.

Gross profit by discipline

Diversification by discipline is a core element of our strategy. Our oldest discipline, Finance and Accounting, now represents just 41% of Group gross profit, while 59% is generated from other areas, significantly reducing our exposure to any particular market sector and reducing our overall risk. Our diversification into Engineering, Procurement & Supply Chain and Property & Construction has been particularly successful and this category now represents nearly 20% of our gross profit. Financial Services, once approximately 14% of Group gross profit, now only represents approximately 7% of Group and 4% of UK gross profit, but has remained stable at this level for the past six quarters.

Administration costs and conversion of gross profit to operating profit

During the year we remained focused on the conversion of gross profit to operating profit through improved operational efficiency. During 2013 we undertook an exercise to standardise and streamline many of our operational support functions, which drove significant cost savings; a reduction of approximately £10m in operational support costs in 2013 and run-rate savings of approximately £20m at the end of the year.

With around 75% of our cost base relating to employee costs, a decrease of 155 operational support staff during 2013 drove significant savings. Most of this decrease was in our European operations, which with relatively high employment and social charges meant that associated one-off costs offset some of the savings achieved in 2013. The full benefit of this exercise will be seen in 2014.

The conversion of gross profit to operating profit is also impacted by our investment strategy. In 2013 we continued to pursue our strategy of investing in our high potential markets as well as investing in our existing markets to drive their long-term potential. Overall, we increased our fee-earner headcount by 186 during the year. Naturally it takes some time before these new fee-earners reach full productivity and this, together with the other start-up costs incurred as investments are made to open or expand new offices, adversely impacted the conversion rate.

Administration expenses in the year included share based charges of £6.8m (including social security) (2012: £13.2m) in respect of the Group's deferred annual bonus scheme, long-term incentive plan and share option schemes. The reduction in the charge compared to 2012 was primarily due to some performance elements not being met, causing charges for these plans made in previous years to be credited in 2013.

The net position taking into account savings made from our operational support efficiency initiatives, the cost of investments in fee-earners and our operating platform and share costs was an overall net increase of 31 heads, but a decrease of £16.0m in our administration costs (before exceptional items), a 3.5% reduction on 2012. Our conversion rate of gross profit to operating profit increased to 13.3% during the year (2012: 12.4%).

In normal circumstances, the operational gearing of the business model leads us to expect that a decline in gross profit will lead to a larger proportionate decrease in operating profit. However, in 2013, although there was a 2.5% decrease in gross profit, operating profit before exceptional items increased by 4.7%, as a result of the streamlining of our operational support functions.

REGIONAL REVIEW OF 2013

Continental Europe, Middle East and Africa (EMEA)

EMEA is our largest region, representing 40% of the Group's gross profit for the year (2012: 41%). Revenue in the year was £407m, which was 1% higher than 2012 (constant currency -2.9%). However, gross profit at £208m was 4.9% lower than 2012 (constant currency -8.2%).

Market conditions remained challenging across the region, particularly in our largest markets of France and Germany, which is a predominantly permanent recruitment business. France and Germany make up 50% of our EMEA region and both countries saw gross profit decrease in the year. However, while these two markets remain challenging, they improved as the year progressed and our optimism has increased with regard to their outlook. In

France we operate under all three of our brands; Page Executive, Michael Page and Page Personnel. Page Personnel alone would be France's market leader in professional recruitment with over 250 consultants and a focus on salaries below 45,000 Euro. It is primarily a temporary recruitment business, but also undertakes permanent recruitment. In the fourth quarter this business grew 9.1%, with permanent recruitment up 1.2% and temp recruitment up 15.2%.

Germany is seen as a strategic high potential growth market for the Group. As discussed in the strategy section, we remain, therefore, committed to continuing our investment in Germany to grow the business despite continued challenging trading conditions.

While our businesses in EMEA experienced a decline of 8.2% in gross profit at constant currency over the year, there were encouraging signs of improvement as the year progressed, with the decline in the fourth quarter only 1.3%. At the end of the year, France and Germany looked close to returning to positive growth. In addition, strong performances were seen in many countries, most notably in the UAE (+15%), Turkey (+46%) and Spain (+9%), as well as in Portugal, Sweden, Poland, Ireland, Russia and Qatar.

Our headcount in the region declined during the year by 154 heads. This was largely a result of our strategy to seek out efficiencies and consistency across the regions, with 130 of the decrease related to operational support roles, representing a 21% decrease in operational support heads. Fee-earner headcount declined by 24 during the year, but was up 47 in the fourth quarter, reflecting our growing optimism in the region.

United Kingdom

The UK is the most established and largest business in the Group, but following our strategy of geographic diversification now represents just 24% of Group gross profits. Growth returned to the UK in the second quarter of 2013 and full year revenue increased by 0.9% on 2012 to £299m. Full year gross profit grew by 2.2% to £124m, with gross profit growth rates increasing throughout 2013.

The UK business is highly diverse, recruiting for many industries and professions and across a broad salary spectrum. Although markets remained challenging in 2013, we continued to capitalise on our discipline diversification and depth of management experience. Strong performances were seen in our Logistics, Procurement & Supply Chain, and Property and Construction businesses. Our newer disciplines such as Digital Marketing and Design also performed very well year-on-year. Public sector, which comprises just over 13% of the UK business, grew 25% year-on-year while growth in the private sector remained flat. The UK region's dependence on financial services has fallen considerably in recent years and now represents a stable 4% of UK gross profit, compared to its peak of approximately 11% in 2007.

Our Page Personnel brand, representing 19% of the UK business, grew by 21% in the fourth quarter of the year, with permanent recruitment up 27% and temporary recruitment up 13%. Page Personnel focuses on roles with a salary below £40,000 and, therefore, in line with the job market at this level, recruits a higher proportion of temporary roles. Typically, as markets recover, lower-level job recruitment tends to improve first, which was reflected in the growth rate for permanent recruitment being higher than in temporary.

We continue to focus on our conversion rate. Operating profit before exceptional items increased by 16.6% to £18.4m and conversion of gross profit to operating profit increased to 14.8% in the year, from 13% in 2012.

Headcount increased by 82 during 2013, the majority of which were fee earners, reflecting stronger market conditions and, with confidence slowly improving, we believe that we are well positioned to take advantage should the economy continue its recovery in 2014.

Asia Pacific

Trading in our Asia Pacific region continued to be impacted by the difficult trading conditions in Australia. The region contributed 21% of Group gross profit in 2013 (2012: 22%). Revenue decreased 1.5% to £189.4m, gross profit decreased by 7.9% and operating profit decreased by 33.6%.

In constant currency gross profit for the region decreased by 4.7%, with combined gross profit for Australia and New Zealand down 19% on the previous year as a result of the continued slow-down in the mining and natural resources sector in Australia and its effect on the wider economy. Consequently, having represented 44% of the region's gross profit in 2012, this fell to 36% in 2013. In 2011 and 2012, we achieved an exceptional performance from our Australian business, largely driven by the expansion of the mining and natural resources sector that drove the Australian economy, despite the effects of the global financial crisis experienced in most major economies around the world. However, as the resources sector slowed impacting the wider economy, our Australian business found trading conditions difficult during 2013 and gross profit declined by 20% in constant currency to approximately £38m. Market conditions in Australia remain difficult but stable.

In contrast, our Asia businesses continued to grow year-on-year delivering a record gross profit performance in 2013 with growth of 7% on the prior year. Asia now represents 62% of the region's gross profit, compared to 55% in 2012 and only 39% in 2008. Greater China grew by 1% in terms of gross profit year-on-year, India by 23%, Malaysia by 80% and Japan grew by 25% and finished the year with a record quarterly performance in quarter four.

Headcount across the region as a whole increased by 75 (7%), with Australasia headcount down by 8% and Asia up by 18%. We expect that headcount will continue to increase in Asia in 2014 in line with our strategy of investing in our strategic high-potential growth markets, which include Greater China and South East Asia.

The Americas

The Americas region represented 15% of the Group's gross profit during 2013 (2012: 14%). Revenue increased by 12.1% to £111m (2012: £99m) and gross profit increased by 5.6% to £76m (2012: £72m). In constant currency, gross profit grew by 8.7%.

Operating profit increased significantly to £4.6m from a loss of £1.7m in 2012, with the conversion rate increasing to 6.1% from -2.3% in 2012.

In North America, the USA performed particularly well with gross profit growing 31% to £25.8m. Market sentiment continued to improve in the USA and this, along with the management changes in 2012 and subsequent investments made in 2013 to strengthen the teams across the region, has driven improvements in gross profit and the conversion rate. The USA business now operates from nine offices, having opened an office in Los Angeles during the year.

In Latin America, our largest business, Brazil, felt the impact of tougher economic conditions and consequently gross profit fell by 8%. However, overall gross profit in Latin America increased by 1% due to our other Latin American countries, representing 37% of our Latin American region, performing extremely well, with Mexico increasing gross profit by 22% to £8.2m, Chile increasing its gross profit by 20% to £5.0m, and our newer business in Colombia growing gross profit in excess of 100%; all three recorded record gross profit years.

Overall headcount in the Americas region increased by 28. Headcount in the USA was up by 20% and is now approaching 250, and we have over 500 heads in Latin America.

FINANCIAL REVIEW OF 2013

Exceptional items

French Profit Share:

In October 2013, Page Personnel France (PPF) received notice from the Competent Authorities of the UK and France of their decision regarding a transfer pricing case that had arisen as a result of a French tax audit in March 2008. The decision, which was unexpected, increased the profit generated by PPF, which, as per the mandatory profit share or "participation aux resultants de l'entreprise" that is particular to France, drove a requirement to pay increased employee profit share, both to employees of PPF and also to the temporary workers placed by that company. As a result, the Group has taken in 2013, an exceptional operating profit charge of £2.5m, interest expense on late payment of corporation tax and profit share of £0.6m and additional tax charge on the exceptional item of £0.7m relating to prior periods.

A further £0.6m relating to 2013 is included within operating profits from underlying activities, together with a tax credit of £0.1m, which have not been treated as exceptional items. A proportion of these charges were determined by the tax ruling, with the remainder for other years based on assumptions.

Restructuring charge:

In 2012 there was an exceptional restructuring charge of £7.8m, relating to the removal of a layer of management in Continental Europe and the Americas.

Amortisation of intangible assets

In May, we commenced use of our new operating system and related applications in Boston, USA, and accordingly, began the amortisation of these intangible assets over a five year period. The 2013 charge for these intangible assets was £5.4m, reflecting the eight months of amortisation in 2013.

Taxation

Tax on profit was £21.5m (2012: £20.8m). This represented an effective tax rate of 33.5% after exceptional items (2012: 36.5%). Before exceptional items the Group's effective tax rate was 30.9% (2012: 36.0%). The rate is higher than the effective UK Corporation Tax rate for the year of 23.25% due to disallowable items of expenditure and profits being generated in countries where corporation tax rates are higher than in the UK. The effective tax rate is lower than in 2012 due to the benefit of additional net future and current deductions for share based reward plans in the UK and overseas territories of approximately 4.1%, partially offset by taxes on the current year exceptional item of approximately 1.1%.

Share Options and Share repurchases

At the beginning of 2013, the Group had 22.8m share options outstanding, of which 3.5m had vested, but had not been exercised. During the year, options were granted over 4.6m shares under the Group's Share Option Plans, options were exercised over 4.5m shares, generating £14.4m in cash, and options lapsed over 1.1m shares. At the end of 2013, options remained outstanding over 21.8m shares, of which 7.9m had vested but had not been exercised. During 2013, the Group's Employee Benefit Trust did not purchase any shares to satisfy employee share plan awards (2012: £18m) and no shares were repurchased by the Company and cancelled during the year (2012: nil).

Earnings per share and dividends

In 2013, basic earnings per share before exceptional items increased by 11% to 15.1p (2012: 13.6p), reflecting our focus on improving efficiency, and a lower effective tax rate. Diluted earnings per share, before exceptional items, which takes into account the dilution effect of share plans, were 14.9p (2012: 13.5p). After exceptional items, basic earnings per share were 13.8p, an increase of 16.0% on 11.9p in 2012 and diluted earnings per share were 13.7p (2012: 11.7p).

The Group's strategy is to pay dividends to shareholders at a level that the Board believes is sustainable through economic cycles, while maintaining a strong balance sheet to support the required investment in the growth and development of the Group. In line with increase in operating profits, the improved gross profit growth rates experienced as the year progressed and the improved outlook in a number of the Group's markets, a final dividend of 7.25p (2012: 6.75p) per ordinary share is proposed, which, together with the interim dividend of 3.25p (2012: 3.25p) per ordinary share, increases the total dividend for the year by 5% over 2012 to 10.5p per ordinary share.

The proposed final dividend, which amounts to £22.2m, will be paid on 23 June 2014 to shareholders on the register as at 23 May 2014, subject to shareholder approval at the Annual General Meeting.

Cash Flow and Balance Sheet

Cash flow in the year was strong with £24.0m of net cash being generated to bring the closing net cash balance to £85.4m at 31 December 2013. The Group has a £50m invoice financing arrangement and a £10m committed overdraft facility in place to ease cash flow across its operations and ensure access to funds should they be required, but neither of these were in use at the year end.

The movements in the Group's cash flow in 2013 reflected improvements in many of the Group's markets as the year progressed. The increase of 1.6% in the Group's revenue drove a £10.3m increase in working capital, an outflow of £12.7m compared to 2012. This comprised an increase of £8.5m in receivables, compared to a decrease of £7.5m in 2012, as well as a decrease in payables of £1.8m, compared to last year's decrease of £5.1m.

Capital expenditure was £3.6m lower in 2013 at £13.3m (2012: £16.9m). Our capital expenditure is driven primarily by headcount, in terms of expenditure on office accommodation and infrastructure, and by the development and maintenance of our IT systems. The lower level of capital expenditure reflects the reduced spending on software development.

Dividend payments were in line with the prior year at £30.8m (2012: £30.6m). However, there were sizeable differences in cashflow as a result of the purchase and issue of shares related to share options. In 2013, £14.4m was received by the Group from the exercise of options compared to only £7.8m received in 2012. In addition, in 2013, no cash was used to purchase shares for the employee benefit trust to satisfy future employee share awards, whereas in 2012 £18.0m was used for this purpose.

The most significant item in our balance sheet is trade receivables which amounted to £146.7m at 31 December 2013 (2012: £141.7m). Days sales in debtors at 31 December 2013 was 47 days (2012: 47 days).

KEY PERFORMANCE INDICATORS ("KPIs")

We measure our progress against our strategic objectives using the following key performance indicators:

The movements in KPIs are consistent with the business performance as discussed in the Management Report. The source of data and calculation methods year-on-year are on a consistent basis.

GOING CONCERN

In adopting the going concern basis for preparing the financial statements, the Directors have considered the business activities of the Group as well as the principle risks and uncertainties. Based on the Group's level of cash, the level of borrowing facilities available, the geographical and discipline diversification, the limited concentration risk, as well as the ability to manage the cost base, the Board is satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future, being a period of at least twelve months from the date of approval of these accounts. As a result, the going concern basis continues to be appropriate in preparing the financial statements.

TREASURY MANAGEMENT AND CURRENCY RISK

It is the Directors' intention to continue to finance the activities and development of the Group from retained earnings and to operate the Group's business while maintaining a strong balance sheet position.

Cash surpluses are invested in short-term deposits, with any working capital requirements being provided from Group cash resources, Group facilities, or by local overdraft facilities. The Group has a multi-currency notional cash pool between the Eurozone subsidiaries and the UK-based Group Treasury subsidiary which facilitates interest and balance compensation of cash and bank overdrafts.

Foreign Exchange Translation risk

In 2013 the Group operated in 34 countries around the world and carried out transactions recorded in twenty five local currencies. In line with normal accounting policies, the Group's Income Statement and Cash Flow Statement are reported in Pounds Sterling using the average exchange rate for each month to translate the local currency into Sterling and the balance sheet is translated at the closing rate of exchange at the balance sheet date. The Group is therefore exposed to foreign currency translation differences in accounting for its overseas operations. Our policy is not to hedge this exposure.

Foreign Exchange Transaction risk

As a service company, most of the Group's transactions are within the respective territories in which the local businesses operate and therefore there are few cross-border transactions between Group companies. This means that the Group does not have a material exposure to transactional currency risk nor a material exposure to foreign denominated monetary assets and liabilities.

Royalties are charged for the use of the Group's trademarks and management fees are charged for Group and regional functions that provide services to other Group subsidiary companies. Foreign exchange gains and losses are recognised in accordance with IFRS on the settlement of these transactions where the cash received, when converted into Sterling, differs from the amounts previously recorded in the Income Statement. These exchange gains and losses are included within operating profit.

In certain cases, where the Group gives or receives short-term loans to and from other Group companies with different reporting currencies, it may use foreign exchange swap derivative financial instruments to manage the currency and interest rate exposure that arises on these loans. It is the Group's policy not to seek to designate these derivatives as hedges.

The table below shows the relative movements of the Group's main trading currencies against Sterling during 2013, when compared to those prevalent during 2012. Negative percentages indicate that Sterling has weakened against the foreign currency during the period.

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the execution of the Group's strategy are subject to a number of risks. The following section comprises a summary of the main risks PageGroup believes could potentially impact the Group's operating and financial performance.

BOARD CHANGES

The changes we made to your Board in 2012 have borne fruit. In the last Annual Report we explained that we had appointed a new Remuneration Committee Chairman, David Lowden, and were about to appoint a new Audit Committee Chairman, Simon Boddie. Both have performed with distinction during 2013, adding to the effectiveness of our Board and our governance. We have also put in place a new remuneration plan for Executive Directors, better aligning their interests and objectives with those of our shareholders.

The appointment of Kelvin Stagg as Acting Chief Financial Officer immediately following the resignation of Andrew Bracey in October reflects the focus we have given to succession planning. Kelvin had already been identified as the leading internal succession candidate given his considerable experience of the business as Group Financial Controller and Company Secretary for over seven years. Development and succession planning remains one of your Board's most important priorities.

In last year's Chairman's Statement we mentioned that a higher proportion of women on our Board would not only bring different skills and perspectives, but also support our gender diversity objectives across the Group. So we are delighted that Danuta Gray joined our Board in December, adding considerable international line leadership and non-executive experience as well as a strong technology background. Together with Ruby McGregor-Smith, our Senior Independent Director, women now make up 40% of our independent non-executive directors and 29% of our Board. Over 80% of our Board members also have considerable international business experience. This is critical given the global nature of PageGroup.

OUTLOOK

The strength and timing of any recovery in world economic markets is uncertain, our visibility relatively short and we remain exposed to some volatile economies. This is demonstrated by the recent adverse movements in foreign currencies that are impacting our overseas results when translated into Sterling (impact on 2014 operating profit of c. £4m at current exchange rates). However, we have continued to invest in additional fee earner headcount in selected markets since the start of the year. We believe our clear and consistent growth strategy, our geographic and discipline diversity and our strong balance sheet, with £85 million of net cash at year end, ensures that we remain in a strong position to respond to any improvements in market conditions in 2014. This is also reflected in our proposed increase of 5% in the total dividend to 10.5p.

We will next update the market on our first quarter trading for 2014 in an announcement on 15 April 2014.

Steve Ingham

Chief Executive Officer

4 March 2014

Consolidated Income Statement

For the year ended 31 December 2013

The above results all relate to continuing operations.

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2013

Consolidated Balance Sheet

As at 31 December 2013

Condensed Consolidated Statement of Changes in Equity

For the year ended 31 December 2013

Consolidated Statement of Cash Flows

For the year ended 31 December 2013

Notes to the consolidated preliminary results

For the year ended 31 December 2013

1. Corporate information

Michael Page International plc (the "Company") is a limited liability company incorporated in Great Britain and domiciled within the United Kingdom whose shares are publicly traded. The consolidated preliminary results of the Company as at and for the year ended 31 December 2013 comprise the Company and its subsidiaries (together referred to as the "Group").

The consolidated preliminary results of the Group for the year ended 31 December 2013 were approved by the directors on 4 March 2014. The Annual General Meeting of Michael Page International plc will be held at the registered office, Page House, The Bourne Business Park, 1 Dashwood Lang Road, Addlestone, Surrey, KT15 2QW on 5 June 2014 at 12.00 noon.

2. Basis of preparation and accounting policies

Basis of preparation

Whilst the information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRSs") as adopted for use in the European Union and as issued by the International Accounting Standards Board, this announcement does not itself contain sufficient information to comply with IFRSs.

The consolidated financial statements comprise the financial statements of the Group as at 31 December 2013 and are presented in UK sterling and all values are rounded to the nearest thousand (UK £'000), except when otherwise indicated.

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Management Report. The Management Report also includes a summary of the Group's financial position, its cash flows and its borrowing facilities.

The Directors believe the Group is well placed to manage its business risks successfully, despite the current uncertain economic outlook. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its current committed facilities.

After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Annual Report and Accounts.

Nature of financial information

The financial information contained within this preliminary announcement for the 12 months to 31 December 2013 and 12 months to 31 December 2012 do not comprise statutory financial statements for the purpose of the Companies Act 2006, but are derived from those statements. The statutory accounts for Michael Page International plc for the 12 months to 31 December 2012 have been filed with the Registrar of Companies and those for the 12 months to 31 December 2013 will be filed following the Company's Annual General Meeting.

The auditors' reports on the accounts for both the 12 months to 31 December 2013 and 12 months to 31 December 2012 were unqualified and did not include a statement under Section 498 (2) or (3) of the Companies Act 2006.

The Annual Report and Accounts will be available for shareholders in April 2014.

Significant accounting policies

The accounting policies applied by the Group in these consolidated preliminary results are the same as those followed in the preparation of the Group's annual consolidated financial statements for the year ending 31 December 2012, except for the adoption of new standards and interpretations effective as of 1 January 2013.

None of the new standards and interpretations adopted had a material impact on the consolidated financial statements of the Group other than as described below:

IAS 1 Presentation of Items of Other Comprehensive Income - Amendments to IAS 1

The amendments to IAS 1 introduce a grouping of items presented in other comprehensive income (OCI). Items that could be reclassified (or recycled) to profit or loss at a future point in time (e.g., net gain on hedge of net investment, exchange differences on translation of foreign operations, net movement on cash flow hedges and net loss or gain on available-for-sale financial assets) now have to be presented separately from items that will never be reclassified (e.g., actuarial gains and losses on defined benefit plans and revaluation of land and buildings).

The amendment affected presentation only and had no impact on the Group's financial position or performance.

The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

3. Segment reporting

All revenues disclosed are derived from external customers.

The accounting policies of the reportable segments are the same as the Group's accounting policies. Segment operating profit represents the profit earned by each segment including allocation of central administration costs. This is the measure reported to the Group's Chief Executive Officer, the chief operating decision maker, for the purpose of resource allocation and assessment of segment performance.

(a) Revenue, gross profit and operating profit by reportable segment

The above analysis by destination is not materially different to analysis by origin.

The analysis below is of the carrying amount of reportable segment assets, liabilities and non-current assets. Segment assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. The individual reportable segments exclude income tax assets and liabilities. Non-current assets include property, plant and equipment, computer software, goodwill and other intangible.

(b) Segment assets, liabilities and non-current assets by reportable segment

(c) Revenue and gross profit by discipline