Robert Walters Regulatory News (RWA)

3 March 2014

ROBERT WALTERS PLC

(the 'Company' or the 'Group')

Results for the year ended 31 December 2013

30% INCREASE IN PROFIT

Robert Walters plc (LSE: RWA), the international specialist professional recruitment consultancy, today announces its results for the year ended 31 December 2013.

Financial and Operational Highlights

*Constant currency is calculated by applying prior year exchange rates to local currency results for the current and prior years.

· Strong performance in 2013, increasing profit before taxation by 30% (41%*) against a backdrop of mixed global market conditions.

· Net fee income growth in constant currency across all regions.

· Healthy balance of permanent (69%) and contract (31%) recruitment net fee income (2012: 69%:31%).

· UK

o Regional business and Resource Solutions the standout performers.

o Activity levels in financial services in London were more muted however we continue to successfully develop our offering in disciplines such as IT, legal, supply chain and procurement.

· Asia Pacific

o Record performance in Japan driven by the internationalisation of business and the demand for bilingual professionals, offset by challenging market conditions in Australia.

· Europe

o Robust performance in France and Benelux, with our contract business in particular producing strong net fee income growth. New office opened in Ghent.

· Other International (USA, Brazil, South Africa and the Middle East)

o Strong growth across our South Africa and US businesses. New office opened in Dubai, the Group's first in the Middle East region.

· Group headcount increased to 2,307 as at 31 December 2013 (31 December 2012: 2,233).

· Group is now stronger and more diverse than ever - by geography, discipline and sector.

Robert Walters, Chief Executive, said:

"We delivered a strong performance in 2013, increasing profit by 30% (41% in constant currency), highlighting the strength of our diverse business model and international brand.

 "Trading for the first two months of 2014 has been encouraging. Whilst we are seeing definite signs of recovery in some of our markets, others including major markets such as Australia and France remain challenging. The Group is well positioned to continue to deliver enhanced profitability in line with current market expectations."

The Group will publish an Interim Management Statement for the first quarter ended 31 March 2014 on 7 April 2014.

For further information please contact:

About Robert Walters

Robert Walters is a market-leading international specialist professional recruitment consultancy with 53 offices spanning 24 countries. We specialise in the placement of the highest calibre professionals across the disciplines of accountancy and finance, banking, engineering, HR, IT, legal, sales, marketing, secretarial and support and supply chain and procurement. Our client base ranges from the world's leading blue-chip corporates and financial services organisations through to SMEs and start-ups.

Businesses worldwide rely on us to find the very best specialist professionals to drive their business forward and those same professionals trust us to manage their long-term careers.

www.robertwalters.com 

Robert Walters plc

Results for the year ended 31 December 2013

Chairman's Statement

I am very pleased to report that the Group delivered a strong performance in 2013, increasing profit before taxation by 30% (41%*) against a backdrop of mixed global market conditions.

Revenue was up 5% (7%*) to £597.7m (2012: £567.8m) and gross profit (net fee income) increased by 6% (8%*) to £199.2m (2012: £188.4m). Operating profit was up 28% (39%*) to £10.8m (2012: £8.5m) and earnings per share increased by 24% to 8.4p per share (2012: 6.8p per share). The Group has further strengthened its balance sheet and has a net cash position of £18.6m as at 31 December 2013 (31 December 2012: £11.5m).

Group headcount currently stands at 2,307 (2012: 2,233). Our strategy of maintaining our office network whilst selectively investing in new markets, discipline diversification and Resource Solutions has ensured we are already benefitting from operational gearing as some of the Group's markets have begun to recover.

The Group now has 53 offices in 24 countries, having opened 17 offices over the last four years. During the year we have focused on maximising the return from this investment and as a result, the Group achieved an increase in productivity of 9% which we expect to continue to improve in the current year.

In line with our progressive dividend policy, the Board will be recommending a 5% increase in the final dividend to 3.86p per share which combined with the interim dividend of 1.54p per share will result in a total dividend of 5.4p per share (2012: 5.15p).

I would like to thank Martin Griffiths, who retired from the Board earlier this year for his seven years of service and extend a warm welcome to Brian McArthur-Muscroft who joined the Board in May.

Finally, I would like to thank all our staff across the globe for their efforts this year. Your hard work has once again underpinned the success of the business and also resulted in us being named International Recruitment Firm of the Year by Recruitment International.

Leslie Van de Walle

Chairman

28 February 2014

Chief Executive's Statement

Overall conditions for the period were mixed with some of the Group's markets showing clear signs of recovery, whilst others remained challenging.

The last five years have been extremely tough for the recruitment industry but as demonstrated by this set of results, the Group continues to increase market share and has emerged from this period stronger than ever.

The Group benefits from a diverse geographical, discipline and sector business model and a well-respected international brand. We have built a well-balanced blend of permanent and contract recruitment income streams and have successfully expanded our sector coverage beyond our traditional strength in financial services. In Resource Solutions, we have also created a market-leading and growing recruitment process outsourcing business.

We continue to be at the forefront of technology. Through our digital assets including our multiple market-leading mobile apps and our new multi-lingual mobile website we continue to innovate to deliver value to our clients and candidates. In addition, internally, we have successfully completed the global roll out of a streamlined front office recruitment database.

Review of Operations

Asia Pacific (46% of net fee income)

Revenue was £260.1m (2012: £280.6m) and net fee income decreased 1% (4% increase*) to £92.1m (£97.4m*) (2012: £93.4m) delivering an operating profit increase of 1% (11%*) to £7.2m (£8.0m*) (2012: £7.2m).

Our market-leading business in Japan delivered a record performance with the internationalisation of business driving strong demand for bilingual professionals. Our operation in Malaysia goes from strength to strength and is a market leader in what is a rapidly developing recruitment market where we have a clear first mover advantage. Market conditions in Singapore, Hong Kong and China remain positive. It's also pleasing to report strong net fee income growth in our newer and smaller businesses in Taiwan, Thailand, South Korea, Indonesia and Vietnam.

Market conditions in Australia, the region's largest market, remain challenging with the resources sector affecting confidence levels across the wider economy. Our Brisbane and Perth offices were hardest hit; however, our offices in New South Wales, Victoria and South Australia were impacted to a lesser degree. We have already taken steps to realign the business accordingly reducing headcount by 18%.

Our investment in setting up Resource Solutions in Asia continues to deliver net fee income growth, with a number of new client wins during the period.

UK (29% of net fee income)

Revenue was £235.7m (2012: £193.2m) and net fee income increased by 15% to £57.2m (2012: £49.7m) producing a six-fold increase in operating profit to £2.5m (2012: £0.4m).

In London, financial services hiring activity remained generally muted; however we continue to successfully diversify and develop our offering in areas such as legal, IT and most recently supply chain and procurement. Our regional recruitment businesses - Manchester, Birmingham, Milton Keynes and Guildford - produced a particularly strong performance across all recruitment disciplines.

Resource Solutions in the UK had an excellent year both winning new clients and retaining existing business across both commerce and financial services.

Europe (21% of net fee income)

Revenue was £93.9m (2012: £87.8m) and net fee income increased 6% (2%*) to £42.0m (£40.2m*) (2012: £39.6m) producing an increase in operating profit to £1.3m (£1.2m*) (2012: £1.2m)

France, the region's largest business, produced a robust performance, growing market share in a country where market conditions have arguably been toughest. Net fee income growth rates were strongest across the Group's Benelux operations, with Walters People, our junior clerical recruitment business in particular the stand-out performer. In Germany, we continue to grow net fee income strongly and we are seeing encouraging signs from our business in Spain. 

Other International (4% of net fee income)

Revenue was £8.0m (2012: £6.1m) and net fee income increased by 38% (44%*) to £7.9m (£8.3m*) (2012: £5.7m) producing an operating loss of £0.2m (operating loss of £0.3m*) (2012: operating loss of £0.4m).

Other International comprises South Africa, the US, Brazil and the Middle East. Our business in South Africa had an excellent year growing net fee income strongly. Improving confidence in the US has helped boost activity levels in our New York office and the technology boom in San Francisco shows no signs of abating. In Brazil, market conditions remain difficult but our Sao Paulo and Rio de Janeiro operations have delivered solid net fee income growth. The Group opened a new office in Dubai, our first in the Middle East region.

Current Trading and Outlook

Trading for the first two months of 2014 has been encouraging. Whilst we are seeing definite signs of recovery in some of our markets, others including major markets such as Australia and France remain challenging. The Group is well positioned to continue to deliver enhanced profitability in line with current market expectations.

Robert Walters

Chief Executive

28 February 2014

Consolidated Income Statement

FOR THE YEAR ENDED 31 DECEMBER 2013

The amounts above relate to continuing operations.

Consolidated Statement of Comprehensive Income

FOR THE YEAR ENDED 31 DECEMBER 2013

Consolidated Balance Sheet

AS AT 31 DECEMBER 2013

Consolidated Cash Flow Statement

FOR THE YEAR ENDED 31 DECEMBER 2013

Consolidated Statement of Changes in Equity

FOR THE YEAR ENDED 31 DECEMBER 2013

Statement of Accounting Policies

FOR THE YEAR ENDED 31 DECEMBER 2013

Robert Walters plc is a Company incorporated in the United Kingdom under the Companies Act.

The financial report for the year ended 31 December 2013 has been prepared in accordance with the historical cost convention and with International Financial Reporting Standards (IFRSs), including International Accounting Standards and Interpretations as adopted for use by the European Union, though this announcement does not itself contain sufficient information to comply with IFRSs.

The Group had net cash of £18.6m at 31 December 2013. Despite the volatile and uncertain global economic conditions, the Group remains confident of its long-term growth prospects. The Group has a strong balance sheet and considerable financial resources, together with a diverse range of clients and suppliers across different geographic locations and sectors. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully.  After making enquiries, the Directors have formed a judgement, at the time of approving the accounts, that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Directors continue to adopt the going concern basis in preparing the accounts.

The financial information in this announcement, which was approved by the Board of Directors on 28 February 2014, does not constitute the Company's statutory accounts for the year ended 31 December 2013 but is derived from these accounts. Statutory accounts for 2012 have been delivered to the Registrar of Companies and those for 2013 will be delivered following the Company's Annual General Meeting. The auditors have reported on these accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under Section 498(2) or (3) of the Companies Act 2006.

The Annual General Meeting of Robert Walters plc will be held on 23 May 2014 at 11 Slingsby Place, St Martin's Courtyard, London WC2E 9AB.

* For the purposes of segmental information, unallocated corporate assets and liabilities include cash, bank loans, corporation and deferred tax balances.

The analysis of revenue by destination is not materially different to the analysis by origin and the analysis of finance income and costs are not significant.

The Group is divided into geographical areas for management purposes, and it is on this basis that the segmental information has been prepared.

*For the purposes of segmental information, unallocated corporate assets and liabilities include cash, bank loans, corporation and deferred tax balances.

The carrying value of goodwill primarily relates to the acquisition of Talent Spotter in China (£1,081,000) and the historic acquisition of the Dunhill Group in Australia (£6,847,000). The historical acquisition cost of Talent Spotter was £768,000, with the movement to the current carrying value a result of foreign currency translation differences. Goodwill is tested annually for impairment, or more frequently if there are indications that goodwill might be impaired. The recoverable amount of the goodwill is based on value in use in perpetuity. The key assumptions in the value in use are those regarding expected changes to cash flow during the period, growth rates and the discount rates.

Estimated cash flow forecasts are derived from the most recent financial budgets and an assumed average growth rate of 3% for years two to five, which does not exceed the long-term average potential growth rate of the respective operations. The forecast for revenue and costs approved by the Board reflect the latest industry forecasts and management expectations based on the past experience.

The value of the cash flows is then discounted at a post-tax rate of 6.7% (pre-tax rate of 10.9%), based on the Group's estimated weighted average cost of capital and risk adjusted depending on the location of goodwill. The weighted average cost of capital has also been adjusted for a terminal growth rate, between 2-4% depending on location, for year six onwards.

Management has undertaken sensitivity analysis taking into consideration the impact in key assumptions. This included reducing the cash flow growth from Year 2 onwards by 0%, 10% and 20% in absolute terms. The sensitivity analysis shows no impairment would arise under each scenario.

Included within prepayments and accrued income is a provision against the cancellation of placements where a candidate may reverse their acceptance prior to the start date. The value of this provision as of 31 December 2013 is £1,115,000 (31 December 2012: £1,055,000). The movement in the provision during the year is a charge to administrative expenses in the income statement of £60,000 (2012: £31,000).

There is no material difference between the fair value and the carrying value of the Group's trade and other payables.

In January 2014, the Group renewed and extended its three-year committed financing facility to £35.0m which expires in November 2016. At 31 December 2013, £11.0m was drawn down under this facility.

The Group has a short-term facility of Renminbi 10m (£1.0m) of which Renminbi 5m (£0.5m) remains outstanding as at 31 December 2013.The loan is secured against cash deposits in Hong Kong.

The Directors estimate that the fair value of all borrowings is not materially different from the amounts stated in the Consolidated Balance Sheet of £11,496,000 (2012: £14,550,000).

Net cash is defined as cash and cash equivalents less bank loans.