PageGroup Regulatory News (PAGE)

15 April 2014

FIRST QUARTER 2014 INTERIM MANAGEMENT STATEMENT

Growth in all regions in constant currencies

Highlights*

· 6.8% Group gross profit growth; all four regions delivered year-on-year growth

· FX headwinds, particularly in Brazil, Japan & Australia, impacted reported results

· Discipline diversification: non-Finance disciplines now over 60% of Group gross profit

· Continued investment in our five high potential markets: China, Germany, Latam, SE Asia, US

· Increase in fee earner headcount of 105 in Q1; launched new business in Peru

*in constant currencies

Q1 GROSS PROFIT ANALYSIS

Commenting, Steve Ingham, Chief Executive Officer said:

"The 7% year-on-year increase in the Group's gross profit in constant currency for the first quarter reflects improved performances across all regions. We are pleased with the continued strong results coming from the UK and the US, together with a return to growth in our large businesses in France and Germany. In reported rates, gross profit was £126.6m in the first quarter, effectively flat year-on-year, reflecting the impact of foreign exchange movements, particularly in Japan, Australia and Brazil.

"EMEA saw a second consecutive quarter of growth in reported rates, with improved performances in the largest five countries, namely France, Germany, Holland, Italy and Spain. The UK saw its quarterly growth rate increase to 8%, following two consecutive quarters of 5% year-on-year growth in the second half of 2013. In constant currency, our business in the US was up 32%, while our performance in Brazil has recovered from a poor Q4, with growth of 2% year-on-year. This resulted in 16% growth for the Americas region as a whole. In Asia Pacific, all of our Asian businesses enjoyed growth including China, which grew by 5%. Continuing the trend of the previous three quarters, Australia's decline slowed, resulting in gross profit decreasing by 10% in the quarter.

"We continue to invest in the Group to capture future growth, increasing fee earner headcount by 105 since the start of the year, particularly in Germany, Asia and the US. Our large, high potential markets all saw increased investment in the first quarter, including the launch of a business in Lima, Peru. Our financial commitment to these markets is coupled with the investment in transferring highly experienced senior managers to markets where their experience will bring greater returns, quicker. 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. We have also further enhanced our key central support functions as part of our focus on driving improvements and global consistency across our operational support teams. Furthermore, following the successful launch in Q1 of our new website across Asia Pacific, we will also accelerate investment from 2015 into this year to roll-out to all major geographies.

"Whilst economic conditions remain variable across our markets, we have the confidence to invest further in headcount and infrastructure, with the steps outlined above resulting in our anticipated investment in the business this year rising by £4 million. At the same time the positive momentum we are seeing in some of the leading indicators in a number of our markets means we would expect to meet current market expectations of full year gross profit*."

* Company compiled consensus of £538.5m

Enquiries:

The Company will host a conference call and presentation for analysts and investors at 9am today. The live presentation can be viewed by following the link:

http://www.axisto-live.com/investis/clients/pagegroup/presentations/533994e330f93ef138376969/first-quarter-2014-ims

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

Please quote "PageGroup" to gain access to the call

A presentation and recording to accompany the call will be posted on the Company's website during the course of the morning of 15 April 2014 at:

http://www.pagegroup.co.uk/investors/reports-and-presentations/presentations-and-webcasts/2014.aspx

The Group will issue its second quarter and half year trading update on 15 July 2014.

Group Trading Update

Michael Page International plc ("PageGroup") delivered first quarter gross profit of £126.6m, flat on the prior year in reported rates, but up 7% in constant currencies, reflecting positive performances in all four regions. The foreign exchange impact on our reported results came principally from movements in the Japanese Yen, Brazilian Real and Australian Dollar. In constant rates, our quarterly gross profit was approximately £9m higher.

Ongoing Investment

Fee earner headcount increased by 105 (+3%) in the quarter, with total headcount rising to over 5,280 at the end of March 2014, as we continued to invest, particularly in our high potential markets. Going forward, we expect to add further fee-earner headcount and infrastructure where we have limited spare capacity. To date in 2014, we have initiated over 25 Director and Managing Director moves around our business to markets such as Japan, China and the US, where their experience will bring greater returns, quicker. We have also launched a business in Lima, Peru, our eighth country in the Americas.

We have continued to invest in our corporate infrastructure, such as the updating of our technology and in particular, the successful roll-out of our new website in Asia Pacific, which has driven a strong increase in candidate applications. As a result, we have accelerated our plans for the website roll-out into other regions, bringing forward investment from 2015 into 2014. We have also further enhanced our key central support functions as part of our focus on driving improvements and global consistency across our operational support teams.

Perm/Temp mix

Both Group gross profit from permanent recruitment of £97.7m, (£97.9m: Q1 2013) and temporary recruitment of £28.9m (£28.9m: Q1 2013) were flat on the prior year. In constant currencies, permanent recruitment grew 7% which increased our ratio of permanent to temporary from 75:25 to 77:23 sequentially.

Discipline analysis

The first quarter saw an improvement in the non-Finance and Accounting disciplines, which now account for over 60% of the business.

Geographical analysis

Country highlights*:

· France & Germany return to growth

· UK up 8% driven by Finance & Accounting, excluding Financial Services, and technical disciplines

· US saw fourth consecutive quarter of growth above 30%

· China up 5%: strong performances from Hong Kong & Southern China

· Australia decline slowed to -10% from -18% in Q4

· All Latam countries had positive growth, with Brazil up 2%

* in constant currencies

EMEA saw market conditions improve in the first quarter, with positive performances in both reported and constant currencies. France, our largest market in the region, returned to growth, up 4% in reported and 7% in constant currency, with Page Personnel France growing 17%. Germany saw gross profit up 3% in reported and 6% in constant rates. UAE, Poland and Turkey all achieved a record quarter. These improvements across the region were reflected in fee earner headcount growth of 92 during the quarter, notably in Germany.

The UK increased its gross profit growth rate to 8%, following two consecutive quarters of 5% growth in H2 2013, against increasingly tough comparators. Both Finance & Accounting, excluding Financial Services (+11%), and technical disciplines such as Property & Construction (+24%) performed particularly well. Our Page Personnel business, which focuses on salaries of less than £40,000, grew by 11% year-on-year. Fee earner headcount rose by 20 in the quarter as we balanced utilising spare capacity with adding headcount in selected disciplines.

Asia grew by 9% in constant currency, with growth in all countries, including China which was up 5%. Market conditions in Australia remained tough, but the pace of decline slowed. The continued adverse foreign exchange movements impacted the overall performance of the Asia Pacific region, with both Japan and Australia particularly affected. Fee earner headcount in the region reduced marginally during the quarter, with growth in Asia offset by a reduction in Australia.

Across the Americas, gross profit was up 16% in constant currencies with all countries recording growth and Canada, Argentina and Colombia posting record quarters. Our business in the US again performed strongly, growing at 32%. In Latin America, Brazil recovered after a poor fourth quarter, with year-on-year growth of 2%. We launched a business in Peru making this our eighth country in the Americas. Fee earner headcount in the region remained broadly stable.

Financial Position

Other than the effects of trading in the first quarter as described above, there have been no significant changes in the financial position of the Group since the publication of the results for the year ended 31 December 2013.

Net cash at 31 March 2014 was approximately £75m (31 Dec 2013: £85m). Subject to shareholder approval at the AGM set for 5 June 2014, the proposed final dividend for 2013 of 7.25p per share is due to be paid on 23 June 2014 to shareholders on the Register as at 23 May 2014.

The Group will issue its second quarter and half year trading update on 15 July 2014.

Shares

At 31 March 2014 there were 321,435,690 Ordinary shares in issue, of which 12,058,448 were held by the Employee Benefit Trust ("EBT"). The right to receive dividends and to exercise voting rights has been waived by the EBT over 10,293,277 shares and consequently these shares should be excluded when calculating earnings per share. The total number of voting rights in the company is 321,435,690.

Cautionary statement

This Q1 2014 Interim Management Statement ("IMS") 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 IMS should not be relied on by any other party or for any other purpose. This IMS 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.

This IMS has been prepared for the Group as a whole and therefore gives greater emphasis to those matters that are significant to PageGroup and its subsidiary undertakings when viewed as a whole.