21 March 2023

SThree plc

FY23 Q1 Trading Update

Net fee growth driven by our Contract business

SThree plc ("SThree" or the "Group"), the only global pure-play specialist staffing business focused on roles in Science, Technology, Engineering and Mathematics (‘STEM’), today issues a trading update covering the period 1 December 2022 to 28 February 2023.

Highlights

• Group net fees for the quarter up 4% YoY(1), in line with expectations. 
• Contract net fees up 8% YoY with growth across all regions, with Contract now representing 81% of Group net fees (Q1 2022: 77%, Q4 2022: 78%).
• Permanent net fees down 12% YoY, reflecting market conditions, performance in USA and Life Sciences, and the planned transition from Permanent to Contract in several markets.
• In our largest three markets, which represent 73% of net fees, Germany and the Netherlands grew 7% and 4% respectively, while USA was down 6%.
• Technology up 8% and Engineering up 19%, while Life Sciences was down 15%.
• Contractor order book (2) up 5% YoY (Q4 2022: up 19% YoY).
• Robust balance sheet, with £64 million net cash as at 28 February 2023 (28 February 2022: £41 million, 30 November 2022: £65 million).

Timo Lehne, Chief Executive, commented:

“The Group has delivered a robust net fee performance in the first quarter of FY23 with fees up 4% YoY, in line with expectations, and supported by the strength of our well-established strategy, focused on STEM and flexible talent. The macro-economic environment remains uncertain, and we continue to see varied effects across our markets impacting new placements, offset by strong Contract extensions.  Our Contractor Order Book underpins our near term visibility and continues to be a source of strength for the business, with Contract now representing 81% of Group net fees. 

We have continued to make progress against our clear strategy which is centred on an analytical and fact-based approach of knowing where to play and playing where we can win. Our targeted investment in talent and digital infrastructure is progressing as planned, positioning the Group to scale with sustainable margins, in line with our 2024 ambitions.

Our long-term opportunity is unchanged, underpinned by structural megatrends which drive the acute need for scarce STEM talent. We are closely monitoring lead indicators across our markets as we navigate challenging macro conditions. Supported by a resilient business model and robust financial position, we remain well positioned to source and place the best STEM talent the world needs.”

Reporting structure change

SThree has changed its reporting structure, as shown in the tables below. Going forward, SThree will apply the new groupings of DACH, Netherlands (including Spain, which is managed from the Netherlands), Rest of Europe, USA and Middle East & Asia, as well as continuing to present the net fees of its five key markets: Germany, Netherlands, USA, UK and Japan.  A table with the historical reporting structure is provided in the appendix.