Good morning, everyone, and thank you for joining us on a busy reporting day for the sector. I'm Kean Marden, Head of Investor Relations, and I'm joined here today by James Hilton, Chief Financial Officer, to present Hays Q3 2026 results.

Before we begin, please be aware that this call is being recorded and the replay is accessible using the number and code provided in the release. Please be aware that our discussions may contain forward-looking statements that are based on current expectations or beliefs, as well as assumptions on future events.

There are risk factors which could cause actual results to differ materially from those expressed in or implied by such statements. Hays disclaims any intention or obligation to revise or update any forward-looking statements that have may been made during this call, regardless of whether these statements are affected by new information, future events, or otherwise.

I'll now hand you over to James.

Thank you, Kean. Good morning, everyone, and thanks for joining us today.

I'll 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.

Group net fees decreased by 8%, with temp and 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 lower net fees.

Although near-term market conditions are likely to remain challenging, and we remain mindful of heightened global macroeconomic uncertainty, we currently expect FY26 pre-exceptional operating profit will be in line with consensus. I would like to highlight the following key items from the results.

Temp and contracting net fees decreased by 6%, as we saw a modestly stronger return to work in the UK and Ireland and ANZ, and the year-on-year decline in volumes and average hours worked in Germany was in line with our expectations during the quarter. Group temp and contracting volumes decreased by 5% year-on-year, including Germany down 9%, UK&I down 8%, ANZ down 6%, and rest of the world up 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.

We continue to manage our consultant capacity on a business line basis, and despite challenging markets, our actions delivered 7% year-on-year growth in average consultant net fee productivity in Q3, including notable increases in the UK&I and our rest of the world businesses. On a seasonally adjusted basis, productivity has now increased for a sector-leading 10 consecutive quarters.

Consultant headcount reduced by 3% in the quarter and by 14% versus prior year. We've continued to make strong progress towards our structural cost-saving program, with a further £15 million per annum savings delivered in Q3.

We've now achieved £30 million annualized savings in FY26, making excellent progress towards our target of £45 million by FY29. In total, we've now delivered £95 million annualized cumulative structural savings since the start of FY24.

Our non-consultant headcount exited the quarter down 7% year-on-year, and the group's net debt position was circa £15 million, which is in line with our expectations and reflects normal seasonal cash flows. I will now comment on the performance by each division in more detail.

Our largest market of Germany saw fees down 11% year-on-year. Temp and contracting fees decreased by 11%, with volumes down 9%, and a further 2% impact from negative hours and mix.

Temp and contracting volumes remained solid overall, with return to work in line with prior year, and the year-on-year 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 remained resilient, but hours worked remained soft during the quarter after federal budget approval was delayed.

Perm was sequentially stable through the quarter, and the year-on-year 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 and finance was down 22%, but construction and 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%, driven by our ongoing focus on resource allocation, and we made strong progress with our structural cost-saving initiatives. In UK and Ireland, fees decreased by 10%, with a modestly stronger return to work in temp and contracting, down 6%, but perm remained subdued and was down 15%.

Fees in the private sector declined by 8%, while the public sector was tougher, down 13%. At the specialism level, technology was flat versus prior year, while construction and property and accountancy and finance decreased by 8% and 6%, respectively.

Enterprise fees declined by 4%, while office support was flat, as our actions to target higher-salary roles offset lower volumes in the junior roles. Consultant headcount decreased by 4% in the quarter and 16% year-on-year.

Consultant net fee productivity increased by 11%, and we made further good progress in improving operational efficiency. Once again, a key driver has been a greater focus from our consultants on higher-skilled roles, consistent with our five-lever strategy.

As a result, year-on-year growth in average candidate salary remained at 8% for perm in Q3, and accelerated to 9% in temp and contracting. As expected, our sustained focus on cost discipline, including ongoing initiatives to optimize our office portfolio and delayer management, has driven a further structural improvement in costs.

We've made good progress towards building a higher quality-focused business, and consequently anticipate improved profitability in the second half. In ANZ, fees decreased by 2% year-on-year, with modestly improved momentum in temp and contracting, but perm was more subdued.

Temp and contracting decreased by 1% year-on-year, with a return to work modestly ahead of previous years. Perm net fees down 6%, slipped back into modest year-on-year 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 and property, our largest specialism at 21% of ANZ net fees, increased by 6%, with office support and accountancy and finance up by 7% and 5%, respectively.

Technology declined by 11%. Australia net fees were down 2%, with New Zealand at -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%.

As with UK and Ireland, a key driver of our profit recovery has been greater focus from our consultants on higher-skilled roles. As a result, year-on-year growth in our average salary for our perm placements was maintained at 5% in Q3.

In our Rest of the World division, comprising 24 countries, like-for-like fees decreased by 6%. Temp moved back into positive year-on-year growth, and fees were up 3%, but perm declined by 12%.

As a reminder, our total actual growth rate includes the impacts of our previously communicated exits from operations in Chile, Colombia, Thailand, and Mexico. In EMEA ex Germany, fees decreased by 8%.

France, our largest Rest of the World country, remained tough and loss-making, with 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. Southern Europe performed strongly, with Spain and Portugal again achieving record quarterly net fees, up 17% and 6%, respectively, and Poland grew by 2%.

In the Americas, fees decreased by 7%. The US and Canada were down 8% and 2%, respectively.

We've 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 final close, with mobilization anticipated over the coming quarters. Brazil, down 12%, was again challenging.

Asia fees increased by 8%, with improved activity overall through the quarter. Japan grew by 33%, driven by strong growth in our temp and contracting business and an easier comparable.

Mainland China grew by 16% and Hong Kong by 9%. For the Rest of the World as a whole, consultant headcount increased by 3% in the quarter and by 14% year-on-year.

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've 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 10 consecutive quarters, driven by careful allocation of consultants to business lines with the most attractive productivity and long-term structural growth opportunities, greater focus from our consultants on higher-skilled roles, and our investments to provide them with the best tools.

Within temp and contracting, net fee growth was positive in three of our eight focus countries in Q3. At the group level, temp and contracting now contributes 65% of net fees.

In Enterprise Solutions, we've recently signed several new contracts, which we expect to contribute to fees over the coming quarters. Our programs to structurally reduce our cost base is performing well, with £95 million 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. Moving on to current trading and guidance.

To date, we have observed minimal impact from developments in the Middle East, but we remain vigilant. Although we have limited forward visibility, given the heightened levels of global macroeconomic uncertainty, we expect near-term perm market conditions to remain challenging, but expect greater resilience in temp and contracting to continue.

We were pleased once again with our net fee productivity through Q3, and believe our 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 high-potential business lines with improving productivity in more challenging areas. 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 program, we have incurred around £20 million of exceptional restructuring costs to date in fiscal 2026. Finally, there are no material working day impacts anticipated in Q4 26.

I'll now hand you back to the administrator, and we're happy to take your questions.

morning all, it's Rory here. Two questions, please.

Firstly, I'm sure you've scrutinized all the forward indicators all the ways that you can, have you seen any signs of client activity changing at all since the start of the Middle East conflict? Then secondly, within enterprise clients, can you say what the net fee trend here was, excluding those two large RPO contracts you lost?

You reference a growing pipeline and improving win rates. Can you just talk more about any sectors or countries that are driving that and what your hopes are for that fee pool going forward?

Thank you.

Thanks, Rory. I'll start off with the first one around the impacts in the Middle East.

Look, standing back from this, the first and immediate priority for us has been the safety and the well-being of our 70 or so colleagues over in the region, specifically in the UAE. As I put in the statement and in the script, we have seen to date little to no impacts at all in either our fees and/or in our forward indicators, but clearly we remain highly vigilant given the level of uncertainty that's building around the world.

As you would expect, we will watch every piece of data like a hawk, and if and when we see any change, we'll react accordingly. As we stand here today, it's business as usual.

We continue to focus on our priorities, which is optimizing our resource allocation for the best long-term opportunities and managing it versus the current level of demand and activity. We're fully focused on our cost programs and we expect to make good progress through the next quarter, and we're continuing to invest in our technology and our people and positioning ourselves for the long term.

Look, as a team, Rory, you know as well, we've been through choppy times in the past, whether that's GFCs, whether it's pandemics, this is the next thing to come along to the world of geopolitics, but we'll manage it accordingly and we'll stay very, very close to it. As and when we see anything, we'll let you know.

Second question was around Enterprise, and really the trends in that business. I think if we just look through the impact of two large losses that we had in Q4 last year, actually excluding those, we were about flat year-on-year in the Enterprise business.

Bearing in mind this time last year was an all-time record performance for our Enterprise business, we were up against a relatively tough comp. We were down 5% in the quarter, but if I adjust for those two contracts, is about flat.

In terms of the pipeline, it's been encouraging, actually. We've been talking a little while now around the efforts we've had to sharpen our focus on the bid pipeline, and what we've had is some really successful conversions of that.

Now getting those deals over the line in the last quarter should be beneficial for us in the coming quarters ahead. In terms of where those are concentrated, we've had several wins in the North America, in the US, in particular in tech sector as well.

That's where a lot of our focus has been, as in terms of investment, and really pleasing to see some of those efforts coming through, and I think that will help that business going forward over the next 6 to 12 months.

Great, thank you. Maybe just one more to follow up on the kind of the business repositioning in these tricky markets.

You've managed to manage some areas that are up strong double digits right now and other areas that are still down strong double digits. I know you've closed four country operations and there's lots of kind of repositioning in the group, but can you talk about are you still in a process of very active portfolio management?

Could there be other countries or practices you might be closing to redeploy, or how far through the evaluation of all the mix do you think you are right now?

The way we run the business, Rory, is not just at a country level. As we run it at a business line level, whether that's the specialism or the contract form within that specialism.

We may be investing in tech contracting in a country while we're disinvesting in perm because we see the levels of demand and activity and we have to make appropriate decisions. You're absolutely right, if you look at our consultant headcount at a macro level in the last quarter, we were down 3%, but actually several of our countries we were strongly investing in, and I'd highlight Japan, Spain as being two good examples there where we're seeing relatively benign macroeconomic conditions, we see really good long-term opportunities to structurally grow our businesses there, particularly in the temp and the contracting area, and we really made some investments in both of those markets, which are really coming through quite nicely.

The way we run our business, as is really to map our resource allocation to both the long-term opportunities for us to grow, but also we have to manage it within the markets we're in and have to respond to current levels of demand and activity. That's how we do that at an overall group level, Rory.

In terms of the portfolio, clearly we've had four countries we've withdrawn from over the last 12 months or so. There's a couple more that we're looking at.

I expect to think about that more strategically going forward and think about the long-term opportunities and the major markets that we need to focus on. We'll update on that in due course.

As of today, we're business as usual, we're very much focused on making sure we've got the right consultants on the right desks in the right markets.

Got it. Thank you very much.

Hi, good morning. My first question is just in France.

You commented it's loss-making at the moment. Are you able to update us on a potential timeline for turning profitable at this level of activity in the market?

Then my second question is on Australia and New Zealand. It just dipped a little bit in this quarter to mind.

The private sector was down 1%, it was up 2% last quarter. Just interested to know what's happened there.

A similar comment on Germany and technology, which has done the opposite, it's materially improved to flat from down 10%. I just wondered if that was comp-related or anything else to draw out.

Thank you.

Right. Thanks, James.

I'll kick off with France, and clearly it's been a challenging market for us and for the sector overall, to be fair, over the last couple of years. Clearly, we've not been happy with the performance there, and as we were loss-making in the first half of the year.

We're very much focused on turning that business around, both in terms of the markets that we're focused on, increasing our exposure to temp and contracting, away from junior clerical roles, and moving further up the food chain, and at the same time, bringing some of the structural costs down in that business. We're well on with our plan.

Our current plan at the levels of demand that we've got today would see us back into a breakeven position or even slightly profitable in our Q4. We're very much focused on that, but clearly it's as all our markets, it's subject to current levels of demand, but, other things being equal, I'd expect to be back into a positive position there as we exit the financial year, which is important for us, because France is an important market for us.

Not so long ago, we were making £15 million-plus of profit there, let's not forget. It is an important market for us.

It's been through an incredibly challenging time, talk about instability and the broader impacts on business confidence, that's right in the heart of that. The team have had a real battle on their hands, but I think we're coming through that now, and I expect to be in a better position for the exit of the year.

Question on Australia is a fair one, and actually, we talked last quarter about some positive momentum, and you mentioned the private sector was up slightly, we were back in growth in the perm business, and we've seen that slightly inflect, actually, whereas our temp and contracting business has continued to move forward, and I think overall, I look at Australia and we're pretty consistent with where we were 6 months ago. I would say that the temp and contracting business has probably been slightly ahead of where we expected to be and has had good momentum and good trends through the quarter as we've highlighted in the return to work.

On the other hand, perm has been that little bit softer, and it's interesting because the top-of-funnel activity is actually pretty good. I look at the number of job registrations, interview numbers, it's consistent with where we were in September and October, but we just haven't seen that conversion come through at quite the same level as we had 6 months ago, and hence, the perm fees have come in just slightly short, but it's relatively small deltas both ways, but just a subtle shift there.

Overall, it's a pretty stable trend in Australia. Actually, a pretty similar picture in the UK, actually, not dissimilar in the trends that we've seen there.

Germany tech is predominantly underpinned by our contracting business. If you think about the weightings of our businesses, the temp business is heavily weighted to the engineering sector and the automotive sector more broadly, whereas the contracting business, the largest business there is in technology, and that's been pretty stable.

We've had pretty solid performance in terms of the number of starters there over the last 3 months post-Christmas. The hours has been stable, which is helpful.

The team are doing a really good job of pivoting that business and finding growth within our clients. Not everywhere is difficult in Germany.

There are pockets of opportunity, and I think the team are doing a good job of finding that. Technology being flat was a pretty decent result overall for the German business.

Hopefully, that covered everything, I think, James. Just please forgive me if I missed anything.

That's everything. Thank you.

Brilliant. Thank you.

Thank you very much. Good morning to both of you.

Just a quick question to see if you've got anything incrementally you can say around permanent CEO appointment in terms of how the process is unfolding there. Secondly, just technically, an update on what you'd expect exceptional restructuring charges to look like in the second half.

You've said that you expect to incur increased charges in H2, just want to check how that compares to previous comments, please.

I think I got it, Karl. You were a little bit faint, if I miss anything in your questions, just please shout.

I think the first question was around the permanent CEO appointment. Although clearly Mark stepped into the role in February on an interim basis, and it's very much BAU, as you can imagine.

We're focused on driving performance, on making sure we've got the right business line allocation. As you're aware, we've cracked on hard with the structural cost program and better positioning ourselves from that perspective, and we expect to make good progress through Q4 as well.

Very much making sure that we deliver and best position the business as strongly as possible while the board are clearly running their process evaluating both external and internal candidates. That's their process to run, and we'll update in due course.

Working with Mark, it's very much business as usual, and we're very clear on what we're doing, and we're cracking on with that. The second question was around the restructuring work that we're doing and any update on restructuring costs in the second half.

We had about £10 million or so of restructuring charges in H1, and I expect a similar level in Q3, and bearing in mind we've accelerated the delivery of the cost program, but I expect similar levels in this quarter. Clearly, we've got another quarter to go, and as I mentioned, we expect to make good progress, there's highly likely to be some further costs coming through in Q4, but clearly, we'll update, Karl, in due course when we're closer to the time and we know what the actual numbers are.

Thanks very much. Apologies for the poor line quality at my end.

No problem. Thanks, Karl.

Morning, all. Just one from me on the Enterprise Solutions business.

Down overall, mentioning the contracts you've previously flagged on North America and Switzerland, also down in the UK, just wondering whether there was any sort of knock-on, those contracts were global contracts that were lost, or whether this was anything specific to the UK. Thanks.

Thanks, Steve. No, it is a fair question, and what we've seen in the last quarter is a little bit of a drop in some of the perm contracts that we have in the Enterprise Solutions business in the UK, notably in the construction sector.

We've seen a little bit less demand coming through, which has been the driver of that being slightly down year-on-year. As I said before, I'd highlight that this time last year was an all-time record quarter for that business, pretty tough comps to go up against.

The temp and contracting side so the MSP has been pretty solid overall, but we have seen a little bit of a drop in demand in some of the perm RPO parts of the business.

Perfect. That's great.

Thanks, James.

Thanks.

Hi, yeah, morning, guys. Thanks for taking my questions.

Sorry, my line did cut out, apologies if any of these have been covered, but two for me. First one is on Asia, which was particularly strong, and I guess especially Japan.

Just wondering if you could dig a bit more into exactly what the drivers of that were. Then second one is on headcount plans for Q4.

I know you touched on the Middle East and the limited impact there, but you did mention sort of heightened vigilance. I'm just curious if any of that heightened sort of awareness of what's going on there is feeding into headcount decisions as we think about Q4.

Thank you.

Thanks, Tom. I'll kick off with Asia.

So 8% growth in the region was pleasing, and as we highlighted, Japan was the standout performance in that region. Underpinning that has been really quite rewarding is the return on investment that we've made over the last couple of years in our contracting business.

That's now a good about 25% of our business, actually probably closer to 30% of our business is in the contracting space in Japan. The investments we've made both in engineering and in technology contracting have really started to come through, and that business was growing at north of 40% year-on-year, which is really pleasing.

The team are cracking on then, doing a really good job. I'm really pleased with that.

We see it as a priority business for us. We think we can grow a big business there, and we're making good headway.

Congratulations to the team over in Japan. It's been a really, really good quarter, and I expect to see another one in Q4.

Moving on to the headcount question, and again looking out to next quarter, we put the guidance in the statement as we expect it to be pretty flat overall. I think there was an earlier question that talked around resource allocation and how we manage that.

It doesn't mean that we won't be investing in some parts of the business and maybe scaling back in other parts, but I think net-net, we expect it to be broadly flat over the next quarter based on where we are today. Look, that's as I said at the outset, we haven't seen any significant impact on our forward KPIs and trading in the business, but we remain vigilant and we'll react to that if we see it.

As we stand here today, we look forward to the next quarter. We think it'll be pretty stable overall, but as I said before, there'll be lots and lots of moving parts under the covers where we're scaling back and or we're doubling down.

Very clear. Thank you.

Thanks.

Thank you. That's all for questions.

Thanks again for joining the call today. I look forward to speaking to you at our next Q4 results on the 10th of July, and should anyone have any follow-up questions, Kean, Prasch, and myself will be available to take calls for the rest of the day.

Thank you.