Unlocking our
unique
potential
Annual Report and Accounts 2023
Strategic Report
Introduction
SThree at a glance 2
Our market environment 4
Review of the Year
Chair’s statement 6
Chief Executive Officer’s statement 8
Our business model 12
Strategy overview 18
Key performance indicators 20
Strategic progress 24
Our Performance
Chief Financial Officer’s statement 34
Business review 38
Stakeholder engagement (including
section 172 statement) 46
Our commitment to being a
responsible business (including TCFD) 52
Our Principal Risks
Risk management 76
Compliance information 83
Governance Report
Board of Directors 86
Chair’s governance statement 88
Our Board at a glance 90
Board roles and responsibilities 92
Our Board 93
Employee Engagement 96
Nomination Committee 100
Audit & Risk Committee 104
Directors’ remuneration report 112
Remuneration at a glance 115
Remuneration policy 116
Annual report on remuneration 123
Directors’ report 135
Financial Statements
Independent auditors’ report 139
Consolidated Income Statement 147
Consolidated Statement of
Comprehensive Income 148
Statements of Financial Position 149
Consolidated Statement of Changes in Equity 150
Company Statement of Changes in Equity 151
Consolidated Statement of Cash Flows 152
Notes to the financial statements 153
Five-year financial summary 196
Other Information
Results announcement timetable 197
Shareholder information 198
Company information and corporate advisers 199
More information
SThree’s Annual Report and Accounts 2023 is
our primary report to shareholders. It provides
an overview of the performance of the Group
for the year ended 30 November 2023,
disclosures relating to our nancial, operational,
environmental and social performance,
and detail on our strategy. Supplementary
information and disclosures are provided in
the following documents and referenced
in this report.
ESG Impact Report
sthree-impact-report-2023.pdf
Climate Change Report
sthree-climate-change-2023.pdf
Summary of notices and policies
sthree-ar23-notices-and-policies.pdf
Online quick read
A concise summary of the SThree Annual
Report, highlighting strategy, performance,
sustainability information as well as examples
of how we have engaged with our stakeholders
can be found at:
sthree.com/annual-report-2023
Online investor centre
All SThree corporate reports, including
investor briengs, trading updates, share
price information and analyst coverage
can be found at:
sthree.com/investor-centre
The Strategic Report from page 2 to page 85
was approved by the Board on 29 January
2024 and is signed on its behalf by:
Timo Lehne
Chief Executive Ocer
Andrew Beach
Chief Financial Ocer
01
Strategic Report
Governance
Financial Statements
Annual Report and Accounts 2023
SThree at a glance
Unlocking our purpose by
bringing skilled
people together
to build the future
Our purpose is focused
on making the most
of favourable market
megatrends and investing
in our platform for future
operational excellence,
to allow us to provide a
quality service and deliver
sustainable value to our
stakeholders.
Our purpose is grounded
in our ESG commitments,
which are focused on
encouraging diversity
in STEM (Sciences,
Technology, Engineering
and Mathematics),
reducing our own
environmental impact
and contributing to a net
zero future by facilitating
green careers
1
.
Our vision is to be the
#1 STEM talent provider
in the best STEM markets.
1. Read more about how we apply our purpose
in day-to-day activities and what progress we
are making towards achieving SThree’s ESG
commitments in the case studies that feature
throughout this Annual Report. You can identify
these by looking for this QR code icon.
2. The Group also uses alternative performance
measures (APMs) to help explain its business
performance. Further information on APMs,
including a reconciliation to the nancial
statements (where appropriate), can be found
on pages 193 to 195.
3. Peer group reects top two to four listed peers
in each region.
4. See ‘Alternative performance measures’ note
for details on applied methodology, pages 193
to 195.
We deliver our purpose through four strategic pillars
Our Places Our Platform Our People Our Position
To be a leader in markets we
choose to serve
Create a world-class
operational platform
through data, technology
and infrastructure
Find, develop and retain
great people
Leverage our position in STEM
to deliver sustainable value to
our candidates and clients
We focus our decision making
on disciplined investments into
target regions and STEM skill
verticals. Our global house of
well-respected brands provides
us with deep STEM expertise
and broad networks of clients
and candidates.
We accelerate digital
transformation to drive greater
operational excellence,
productivity and customer
experience. Using innovative
technology and insightful data,
we enable knowledge-fuelled
consultants to perform at
their best.
We create a high-performance,
inclusive culture. We invest
in talent acquisition strategy,
best training and development
initiatives, and oer competitive
reward and incentives to attract
the best talent in the best
markets.
Dene what we want each of
our brands to be famous for
and drive our reputation as the
undeniable rst choice for clients
and candidates within STEM.
Our FY24 goal
To grow Group market share
faster than our peer group
3
(on a
net fee basis compared to FY19).
Our FY24 goal
In the short term, progression of
our conversion ratio
4
is expected
to be aected by current macro-
economic headwinds.
In the mid to long term, we aim
to build a business that can
achieve its conversion ratio at
21% or higher.
Our FY24 goal
Achieve and maintain an upper
quartile eNPS in the professional
services sector/industry.
Our FY24 goal
To positively impact 150,000 lives
since FY19.
We have led our industry for nearly 40 years, specialising in STEM before anyone else – we are proud pioneers.
We accelerate careers, enrich lives and enable people to make a dierence to the world around them – that goes
for our own colleagues as well as our candidates.
Further reading
Strategy overview, pages 18 to 19
Highlights
Group nancial highlights in FY23
2
Group operational highlights in FY23
Net fees
£419m
FY22: £431m
Operating prot
£76m
FY22: £78m
Chief Financial Ocer’s statement
Pages 34-37
Our Position
Pages 32-33
Our commitment to being a responsible
business (including TCFD) Pages 52-75
Basic earnings
per share
42.4p
FY22: 41.0p
eNPS
43
FY22: 51
Taking action on climate
8% reduction in CO
*
(FY22: 44% reduction*)
Science-based GHG reduction targets
approved for scopes 1, 2 & 3, aligned
to a 1.5°C scenario.
Doubled the share of
renewable business*
(FY22: 88% growth*)
Through delivering STEM skills
required in the transition to a
low-carbon economy.
* Since FY19
Lives positively
impacted
25,725
(FY22: 32,970)
Through delivering
recruitment solutions
and community
programmes
in FY23.
NPS
48
FY22: 52
Net cash
£83m
FY22: £65m
A resilient performance against a record prior year and challenging
global macro-economic backdrop.
Engaging,
developing
and empowering
our people.
Delivering high-
quality customer
service supported
by investment
in the right
technology.
Our People
Pages 28-31
02 03
Strategic Report
Governance
Financial Statements
SThree plc Annual Report and Accounts 2023
Our market environment
Global labour market landscape
5
We dierentiate between ve
global megatrends which gained
traction and draw in sought-
after specialists in life sciences,
technology and engineering.
The past few years have completely
altered the shape of the labour
market. From the large volume of job
losses in 2020 to sharp rebounds in
most economies leading to elevated
wage growth, shortages of workers,
high numbers of job openings and
shifted working habits.
Through 2023, in the face of
ongoing macro-economic and
geopolitical uncertainties which
accelerated a series of cascading and
interconnected global crises in food,
fuel and energy, major economies
such as the US narrowly avoided a
recession and mild contractions in
economic activity were recorded
in the UK and some EU economies.
Nevertheless, labour demand
remained robust, mostly driven
by the technological advances,
widening digitalisation and the ‘green
transition’. Also, throughout the year
a series of critical reviews led by
the United Nations took place to
assess international agreements on
sustainable development, climate
change, gender equity, nancing,
natural disasters and universal
health coverage. It helped to build
political momentum, articulate
new commitments and inclusive
coalitions to accelerate progress of
green investments and businesses’
decarbonisation. These developments
contributed to the growth in demand
for highly skilled talent and underpin
our condence in the resilience of
our business model and strategy with
strong focus on STEM jobs and skills.
Today, the global STEM talent market is valued
at circa £112 billion in annual revenue
6
, of
which the key driver is the net job-creation in
roles related to technology, digitalisation and
sustainability. Roles within AI and Machine
Learning Specialists are top of the list,
followed by Sustainability Specialists, Business
Intelligence Analysts, Information Security
Analysts, Renewable Energy Engineers, and
Solar Energy Installation and System Engineers.
These roles are typical for STEM markets, within
which we operate, and provide enormous
opportunity for SThree.
Digitalisation is transforming business models
around the world, helping companies to make
huge leaps forward, enabling them to become
more sustainable and resilient. Businesses
are adopting leaner ways of working, with
software-driven production, allowing more
capacity for innovation and cost eciencies.
Global direct investment in digital transformation
is expected to reach $3.4trillion by 2026 and
this rate of investment is accelerating.
Changing customer demands, increased
technological complexity and innovative digital
technologies, including Articial Intelligence
(AI) and machine learning, are driving an
explosion in demand for specialist technology
skills. It is forecast that 69 million new digital
jobs will be needed by 2027.
The pandemic has led to profound changes
and developments that have signicantly
accelerated the pace at which the life sciences
sector is evolving.
Ensuring that solutions and knowledge,
including AI and reliable data, are developed
in good time to address future healthcare
priorities is the foundation of this megatrend.
Research and development, technology,
regulation, remote care and ecient
manufacturing will be essential for the life
sciences sector to reach its full potential in the
coming years.
Companies at the forefront of these exciting
areas will create ongoing demand for highly
skilled specialists within quality assurance,
clinical operations, regulatory aairs and other
medical specialists.
A large scale global action towards a green
energy transition is ongoing and is expected
to accelerate over the next decade, partially
thanks to the development and widespread
adoption and deployment of innovative
technologies and engineering skills.
According to the International Energy Agency,
by 2030 14 million new jobs will be created in
global energy supply, and a further 16 million
in clean energy end-uses, such as more
ecient appliances, electric and fuel cell
vehicles, building retrots and energy-ecient
construction. In the next ve years, this job
growth will be driven through both public and
private investments, driving an exponential
growth in demand for engineering and ‘green’
tech talent.
The world is facing fast-ageing populations,
lower birth rates and smaller households. By
2030, 1.4 billion, or one in six people, in the
world will be aged 60 years or over and this is
expected to reach more than two billion people
by 2050.
The proportion of people of working age
globally is therefore shrinking, while the relative
number of those retiring is expanding, driving
acute labour shortages across every sector.
Changing demographics, including labour
shortages post-pandemic, are one of the
driving forces behind the research and
development and encourage the adoption of
automation technologies to boost productivity.
This leads to a rise in demand for a highly
skilled workforce, as well as increased rates of
pay, especially in STEM elds.
The pandemic has changed the way the world
thinks about wellbeing, mobility, infrastructure
and therefore work practices.
Driven by recent technological advances, many
people are no longer constrained by traditional
9-5 working models. Furthermore, a shift towards
remote working has seen businesses adapting
existing infrastructure or making ‘smart’ urban
developments, which in turn call for signicant
investment and highly skilled STEM professionals.
Greater work exibility gives candidates the
condence to go from contract to contract,
developing their career within their given
sphere of expertise. This contributes to ongoing
growth in the number of freelancers and
independent contractors, which according to
62% of global executives polled by Ceridian will
substantially replace full-time employees within
the next four years.
Digitalisation Research-led healthcareDecarbonisation Generational shifts New working models
Global investment
in digital
transformation,
by 2026
$3.4tr
Source: Statista
Growth in global
pharma R&D spend,
2019–2026
+24%
Source: Statista
Global investment
in the energy
transition in 2022
>$1tr
Source: HSBC Global
Research, Nine key themes
to guide your outlook
Global shortage
of skilled workers
by 2030, with
the largest gap in
technology and
engineering
85m
Source: German
Economic Institute
Share of global
candidates stating
exible working as
a factor that will
aect their career
63%
Source: SThree research
‘How the STEM world
evolves’ 2023
New digital jobs
required globally
by 2027
69m
Source: WEF Future of
Jobs Report 2023
Growth in SThree
Life Sciences-
related net fees
since FY19
+10%
*
New ‘green’ energy
jobs required
globally by 2030
+14m
Source: IEA Net Zero –
clean energy jobs by 2030
US growth of
STEM occupations
between 2017–2029
8.8%
Source: Id Tech
Ageing and health (who.int)
Share of executives
believe freelancers
likely to replace full-
time employees in
next four years
62%
Source: SIA/Ceridian
2021 survey
Global annual
venture capital
investment in
quantum computing
in 2021
$1bn
Source: HSBC Global
Research, Nine key themes
to guide your outlook
Share of health and
healthcare rms
expect to be using
AI by 2025
89%
Source: HSBC Global
Research, Nine key themes
to guide your outlook
Growth in
SThree net fees
in renewables
since FY19
+142%
*
Growth in SThree
contract net fees
since FY19
+36%
*
Growth in SThree
STEM contractor
order book since
FY19
+51%
*
* In constant currency. 5. Based on https://www3.weforum.org/docs/WEF_Future_of_Jobs_2023.pdf
6. Based on our top ve markets which together represent 74% of global STEM market by revenue.
Source: SThree analysis, SIA data.
7. Source: Ageing and health (who.int/news-room/fact-sheets/detail/ageing-and-health).
Growth in SThree
technology-related
net fees since FY19
+36%
*
04 05
Strategic Report
Governance
Financial Statements
SThree plc Annual Report and Accounts 2023
Chair’s statement
Unlocking our unique potential by
delivering in
line with our
strategy
2023 has been another challenging year for
many people around the globe. Heightened
levels of geopolitical and macro-economic
instability have impacted individuals,
businesses, and governments creating
an increasingly complex commercial
environment. Meanwhile, issues that were
prevalent last year, including high ination
and interest rates, the rising cost of living
and a global energy crisis have continued
to have an impact on our lives.
Our teams, customers and key markets of operation have all
been impacted dierently by these issues, yet I am proud that
SThree has still delivered a resilient performance this year,
thanks to our strategic focus on sourcing and placing the best
STEM talent. Our robust performance in Contract, supported
by our unique Employed Contractor Model (ECM), underpins
our condence in the megatrend that is the demand for exible
workers in STEM. In the year we placed 15,292 skilled people
and maintained a strong order book throughout. I would like to
thank our clients and candidates for the trust they have placed in
the Group this year. I would also like to thank every member of
the SThree team for their eorts to support our customers. It is
thanks to their skill and dedication that SThree nds itself in this
position of strength today, with many exciting opportunities to
be pursued in the near future.
Since Timo’s appointment as Chief Executive Ocer in April
2022 his energy and vision has spread across the business, with
the whole team coming together to execute an exciting growth
strategy. Our Technology Improvement Programme underpins
a large part of this strategy and I am delighted to report that
it continues to roll out at pace, providing a market-leading
platform for future growth and productivity that has been
designed to provide us with the best opportunity to continue
to seize market share in our target markets.
Following the resilient trading performance in the year, coupled
with a healthy balance sheet position, the Board is proposing
a nal dividend at 11.6 pence per share, which taken together
with the interim dividend of 5.0 pence per share, gives the total
dividend for the year of 16.6 pence per share, an increase of
4% over the prior year. This is in line with the Board’s policy to
oer shareholders long-term ordinary dividend growth within a
targeted cover range of 2.5x to 3.0x and forms part of our wider
capital allocation policy.
Maximising shareholder value through a disciplined approach
to investment to deliver growth in net fees and margin, whilst
maintaining a strong balance sheet and sustainable through-
the-cycle dividend, remains a priority for the Board. Following
a periodic review, the Group’s capital allocation policy has
been refreshed to reect investments in business improvement
alongside organic and inorganic growth as a key aspect of
our strategy.
Across the Group, we are clear on our ambitions and delivering
our strategy. With the addition of Margot van Soest (Managing
Director, Netherlands & Spain), Sarah Mason (Chief People
Ocer) and Matt McManus (Managing Director, US) to the
Executive Committee, coupled with the appointment of Imogen
Joss as Non-Executive Director early in the nancial year, we
have an enhanced, experienced executive leadership team
and Board in place to drive the Group forward. I would like to
thank both the executive team and Board for all their hard work
this year, alongside those inside and working together with our
business who have helped us achieve a resilient set of results.
I am especially proud of our promotion to the FTSE 250, after
too many years of absence. This is a clear reection of the
progress we have made, and is another key milestone in
SThree’s ongoing journey.
We remain committed to reducing our impact on the planet,
providing great opportunities for our people and ensuring we
have the governance processes in place to protect each and
every SThree stakeholder. We are proud to support the transition
to a green economy by connecting engineering talent to the
green energy projects where they are most needed, and we
are dedicated to making SThree an employer of choice for
sta. I am delighted that, for the rst time, through targeted
ownership opportunities, over 50% of our employees are
now shareholders in the business, something we see as
the ultimate vote of condence in our direction of travel,
providing strong alignment with our wider shareholder base.
Looking ahead, while we remain conscious of the wider
economic environment, I am condent that the Group will
continue to deliver against our strategy. We have continued
to invest across the business, enhancing and innovating how
we operate so that as customer condence strengthens and
the market returns to growth, we are in the best position
possible to seize the opportunity. With a market-leading
technology suite underpinning our future operations and a
talented and experienced team in place, we are condent in
the Group’s long-term prospect.
James Bileeld
Chair
29 January 2024
SThree nds itself in the position
of strength today, with many
exciting opportunities to be
pursued in the near future.”
James Bileeld
Chair
06 07
Strategic Report
Governance
Financial Statements
SThree plc Annual Report and Accounts 2023
Chief Executive Ocer’s statement
Unlocking our unique potential through
the power
of talent
I am proud of the work we have achieved
over the past year. The Group has
performed well against a challenging
economic backdrop, demonstrating
the resilience of our business model
and strength of our strategy, with the
megatrend of demand for exible STEM
workers persisting across our core markets.
Through this, we have invested in our
people, infrastructure product oering and
made excellent progress in the positioning
of SThree for sustainable long-term growth.
The strength of the Group derives from our clear purpose:
bringing skilled people together to build the future. We rmly
believe that the future is exible STEM talent. Underpinned by
long-term megatrends, the two growth drivers of STEM and
exible talent have proven resilient through cycles, providing
a unique business model that delivers quality of earnings and
good visibility.
Whilst this core purpose remains consistent, we must also
evolve. As a business consciously aligned to megatrends, we
are acutely aware of how these structural forces, such as digital
transformation, changing patterns of work, and the opportunities
presented by articial intelligence are aecting every industry.
We have established a position as a leading specialist talent
partner, built over decades through unrivalled STEM networks,
long-term client relationships and deep expertise, all of which
work together to create signicant competitive dierentiation.
From this, we are progressing to the next stage of our growth
journey as a digital-rst organisation, with an integrated end-to-
end platform that will redene our potential and support us in
unleashing our vision.
At the same time, we continue to be guided by our disciplined
and focused approach to our investment decisions, supported by
a robust business model. For FY23, the Group delivered net fees
of £419 million, 4% down on the record prior year performance.
With ongoing exceptional levels of productivity combined with
tight cost control, whilst also benetting from spend recognition
timing on the Technology Improvement Programme (TIP)
(without impacting delivery) we delivered operating prot of
£76 million. This was delivered alongside a material increase
in net cash balance to £83 million and a contractor order book
of £184 million. This provides us with the nancial strength and
exibility to pursue our market opportunity and to deliver value
to shareholders.
Our approach: a platform of STEM resourcing solutions
supporting our customers’ business ambitions
The Group provides solutions to customers predominately
through the placement of specialist STEM Contract skills,
representing 82% of total net fees, as this model is particularly
well aligned to employee and employer preferences in STEM
roles. Within this, we have also established a specic expertise
in delivering ECM, whereby contractors are directly employed
by SThree and which is increasingly a source of growth for the
business, now comprising nearly 50% of the contractor order
book. We also provide our clients with high-value Permanent
skills in select, strategic markets. The Group’s STEM prociency
across all three employment models, whether it be Contractors,
ECM or Permanent roles, allows us to oer the best solution to
meet our customers’ bespoke requirements.
We wrap this in a customer-centric service delivery approach,
working collaboratively with our clients to source the scarce
skills on which they depend, building enduring relationships
with our contractors who view SThree as a partner in their
career development. We are a people business, and we are
super-charging our teams through the implementation of a
sophisticated and integrated IT infrastructure. This is bringing
our organisation closer together to drive scale, eciencies and
productivity, particularly in our growing ECM business which is
complex and compliance heavy. We believe this will be a game-
changer in the industry.
The market: our model performing in a challenging
environment
Global macro-economic factors through the year, such as high
ination, market uncertainty and high interest rates weighing
on investment decisions, have created a challenging labour
market. Many organisations took stock of their previous
expansive hiring initiatives to reassess their footprint in light
of a weakening outlook.
The priority for organisations shifted to business-critical
requirements, which for many is represented by STEM Contract
skills. Whether it be engineers, cyber security specialists or
medical scientists, organisations across sectors are dependent
to function eectively. We saw these market dynamics play out
during the year with robust extensions as clients sought to retain
critical STEM skills helping to somewhat oset weaker new
placement activity across the market.
Progressing our ESG commitments
As we navigate through periods of transient market conditions,
we do not lose sight of our ESG commitments. We know that
a successful business is a responsible one, seeking to deliver a
positive outcome for all stakeholders. As such, we are pleased
to have not only made continued progress against the clear ESG
targets we have set ourselves, but to have also strengthened
our environmental ambitions during the year with a new science-
based target (SBTi-veried) of net zero before FY50. This
complements the work we do every day promoting jobs that will
build a sustainable future, and we are delighted to have achieved
our target of doubling the share of our global renewables
business ahead of the target date of FY24.
We continue to strive for social mobility and equity in STEM by
encouraging diversity in our talent pipeline. We do this through
our Elevate Careers programme and our partnership with
Women Who Code where we have funded scholarships for
3,700 women. In FY23, we welcomed 47 women to our internal
talent programme, Identify. We can see how the programme is
improving retention and progression of our female employees,
but we recognise we need to do more to make progress towards
our ambition to have 50/50 women in leadership roles and this
will continue to be a priority in FY24.
Our unique model and strategic focus
on STEM and exible talent provide
us with a strong platform both now
and over the long term.”
Timo Lehne
Chief Executive Ocer
08 09
Strategic Report
Governance
Financial Statements
SThree plc Annual Report and Accounts 2023
Chief Executive Ocer’s statement continued
Strategic execution
Our places – knowing where to play, play where we
can win
Our analytical and data-driven approach informs the regional
and vertical mix we choose to operate in. Over the year we
forensically analysed and validated our footprint, reconrming
our condence in our active market coverage of 11 countries
strategically focused in the biggest STEM markets. With an
average share of under 3%, we believe there is substantial scope
to scale, both organically and, given the highly fragmented and
niche landscape, through select acquisitions that align with the
Board’s strict criteria, and in doing so, realise the increasing
benets of economies of scale.
This analysis also brought greater clarity and insight into the
strategic direction for our regions – understanding where
our core opportunities lie to drive margin and higher value,
versus those regions ripe for steady growth or fast scaling
opportunities. Within this context we continue to rene to how
we go to market. Within the US, we reinforced our presence by
moving away from a brand-led management structure, to having
strong fully integrated regional teams serving all of our brands,
and across the organisation we introduced new tools and
dashboards to bring greater performance insight.
Our platform – digital rst
We have bold ambitions to be a digital-rst innovator in a
traditionally analogue industry, and we see huge scope to
drive higher margin growth by leveraging the power of modern
technology. The systematic roll out of our TIP continues to
progress on track and on budget, with our rst deployment
successfully completed in the US. Whilst we continue to work
on data quality testing, it is evident that the end-to-end platform
is working. We have already onboarded over 2,000 contractors,
using it to submit timesheets, while to date we have issued over
15,000 invoices reecting around $70 million of revenue.
We are seeing the early benets from our rst deployment,
including the systemising of best practice and process
eciencies, helping to improve both employee and client
experiences. Our disputed invoice volume has fallen
considerably as a result of improved data collection, and our
Contractor payment process, which previously required a high
proportion of manual intervention due to its complexity, has
been streamlined signicantly, freeing teams up to be more
productive. As we have said before, the wider benets around
eciencies and scaling will become evident with time as the TIP
progresses, and the platform develops richer functionality.
We look ahead to our next regional deployment in Germany,
commencing in the rst half of FY24. We have a great team
in place and are condent in our approach as proven by
deployment in the US.
Our people – best employer, best people
The engine of our business is our brilliant people, and as such,
we are focused on making our business a destination employer,
attracting and retaining the best talent, in order to support our
collective push as one team to achieve our growth ambition.
The key metric we monitor to assess our standing is our
employee net promoter score, and we were pleased to have
comfortably retained our position this year in the top quartile
of professional services companies. We continue to see high
engagement across our employee surveys, there is growing
uptake across the organisation of our DE&I learnings initiative
launched in the previous year, and the soft launch of our newly
redened values in H2 to our sales leadership team is helping
shape our culture as we grow.
With relation to the TIP, whilst a great deal of focus is on IT
migration and data management, key to our programme is our
training and change management initiatives working to ensure
our teams understand our new capabilities and have the skills to
adopt new ways of working. We have also started some bigger
programmatic work, taking the global best practices and looking
to standardise excellence.
Building on this, we will look to embed our new values across
the Group. Other priorities are centred on ensuring we have the
right incentives and infrastructure to allow our people to thrive,
including the continued optimisation of our oce footprint
in line with current working model expectations, new talent
management programmes to retain key talent and drive shorter
time-to-productivity, and ongoing eorts to ensure an inclusive
working environment that promotes best practice and ambition.
Our position – a winning brand with competitive and
dierentiated value propositions
We are committed to providing best-in-class STEM stang
services to our clients and candidates by leveraging our global
network of specialised brands. Our approach ensures that every
client receives tailored solutions, unparalleled expertise, and a
pathway to reach their goals amid an ever-changing landscape
whilst helping candidates realise their career ambitions. During
the year, we reinforced our go-to-market brand position in
specic vertical skills, elevated our thought-leadership through
new research ‘How the STEM world evolves’, and established
a Group Commercial function under a new Chief Commercial
Ocer position to coordinate our commercial strategy.
Outlook
As we look forward, Contract extensions remain strong and
provide an ongoing source of resilience, although as we await
an easing of the macro-economic backdrop, new business
activity continues to be subdued for longer than expected.
Our conversion ratio, whilst anticipated to temper from the
exceptional FY23 levels as our staged investment programme
progresses, is expected to remain sector leading. We have been
consciously positioning the business for the future and whilst
we continue to operate in a challenging market environment,
this does not change our focus. We have a resilient business,
a talented team, great client and candidate partnerships, and
we are building a market-leading technology suite. With our
investments and innovations, we are condent that when the
market returns to growth, we will be in a position of strength to
source the best STEM talent the world needs.
Timo Lehne
Chief Executive Ocer
29 January 2024
Basic earnings per share
42.4p
FY22: 41.0p
Total divided per share
16.6p
FY22: 16.0p
We have a talented team and are
building a market-leading technology
suite, to help us drive future growth
for the Group.”
Timo Lehne
Chief Executive Ocer
10 11
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SThree plc Annual Report and Accounts 2023
1
USA
United States
(focus on Life Sciences and Engineering)
Our business model
giving customers
access to a global
network
A global network
SThree is a multi-brand organisation, giving our customers
access to a global network of dedicated STEM specialists.
SThree employs circa 2,700 people across 33 oces in 11
8
countries, with key operations located in Europe, the USA,
the Middle East and Japan.
Amsterdam
Antwerp
Barcelona
Berlin
Birmingham
Bristol
Brussels
Düsseldorf
Eindhoven
Frankfurt
Glasgow
Hamburg
Hannover
Leeds
London
Madrid
Manchester
München
Nürnberg
Paris
Rotterdam
Stuttgart
Utrecht
Vienna
Zurich
Austin
Boston
Chicago
Houston
New York
San Diego
Dubai
Tokyo
Where we operate
Financial reporting segments
Since FY23, the Group’s reportable segments are as follows:
FY23 FY23
Reportable
segment name Countries included
DACH Austria, Germany, Switzerland
Netherlands
including Spain Netherlands, Spain
Rest of Europe Belgium, France, the UK
USA USA
Middle East & Asia Dubai, Japan
Net fees per
reporting segment
As a proportion of FY23 total
Group net fees
Recruitment consultants
per reporting segment
Based on FY23 average
Europe
Europe oces (Head oce: London) USA oces ME & Asia oces
ME & Asia
USA
DACH 36%
Netherlands incl. Spain
19%
Rest of Europe
17%
USA
23%
Middle East & Asia
5%
DACH 37%
Netherlands incl. Spain
18%
Rest of Europe
20%
USA
17%
Middle East & Asia
8%
8. Excluding Ireland, Luxembourg and Singapore, which
as of 30 November 2023 were no longer a going concern.
Unlocking our unique potential by
13
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Financial Statements
Annual Report and Accounts 2023
12
SThree plc
1
We source and help to
nurture sought-after
STEM talent
2
We connect
STEM specialists
with dynamic
organisations across
the world
3
We earn fees
and grow free
cash ow
4
We reinvest
capital wisely to fund
continued business
growth and fund
dividend
5
We build a sustainable future through STEM
Sustainability
Our commitment to run a responsible and sustainable business remains at the
heart of everything we do. We work with clients who are at the forefront
of tackling climate challenges, whilst investing in our own renewable
energy business and managing our own carbon footprint towards
the net zero economy. We make DE&I development part of
business as usual and launch new incentives
to support the wellbeing and health
of our people.
Our business model continued
Our key value drivers What we do
How we do it
We have long-standing relationships and strong internal
resources which we use to do business and create and
preserve value for our stakeholders and for wider society.
As the global STEM specialist talent partner we connect sought-after specialists in life
sciences, technology, engineering and mathematics with dynamic organisations across
the world.
Our relationships
Our people
with a broad range of skills, experience and values,
are crucial to deliver our purpose and strategy.
Candidates
who depend on us to connect them with the right
opportunities and dynamic organisations in need of
highly specialist STEM talent.
Clients
for whom we adapt our business and strategy by
investing in the right vertical niches, improving and
developing our service proposition so it continues to
be relevant to evolving client needs. And for whom
we have become the go-to partner to nd niche
STEM skills.
Local communities
where we established long-standing partnerships with
local authorities, non-governmental organisations
and other institutions. Together we contribute to
development of a more diverse and innovative
STEM talent pipeline.
Investors
with whom we engage to share our strategic
priorities and performance.
Group resources
SThree’s culture
is open, cooperative and performance focused. It
is underpinned by policies and business practices
and a well-established corporate governance
framework, all of which are designed to guide our
behaviours and ways of working across SThree.
Our culture demonstrates a commitment to
treating all employees, candidates, clients and local
communities with respect as critical partners in our
business.
Financial position
we fund our business through a strong operating
cash ow, supplemented by debt and equity when
needed. An appropriate mix between the three
provides us with strategic exibility to pursue value-
enhancing opportunities when they arise.
Geographic footprint
with a strong leading presence in key STEM markets
where technological change is at full speed and
demand for contract roles outstrips supply.
1
Talent in demand
We build specialist STEM candidate
communities via multi-channel
campaigns: career development fairs,
industry events, networking, thought
leadership, digital marketing and other
targeting techniques.
2
Agility
The way we serve our clients exes
locally, accommodating client
preferences and complex regulatory
landscapes across all regions.
3
Recurring revenue generation
We earn fees mainly on a recurring basis. 82% of
Group net fees are Contract fees, earned on an
ongoing basis for the duration of the contract, with
the Group paying contractors and retaining a portion
of the amount charged to the client as a service fee.
18% are Permanent fees, charged as a percentage of
a candidate’s starting salary when the candidate is
placed with a client.
Investing for growth
We are a highly cash generative
business. We invest free cash into
growing our business and asset base
and use it to fund a regular dividend
stream. In time, we will consider
the appropriateness of inorganic
opportunities.
14 15
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SThree plc Annual Report and Accounts 2023
Our business model continued
What value we create for stakeholders Our key competitive advantages
Our natural ability to bring people together sets us apart. By nurturing closer relationships
with our employees, candidates and clients, we earn loyalty and inspire collaboration.
By combining it with responsible resource management, and close relationships with local
communities, we create value for all our stakeholders.
Our people Shareholders
(our institutional and retail investors)
Environment
7.1%
of operating prot invested in learning and
professional development programmes
41,264
employee training hours
11.6p
recommended nal dividend per share
£27.4m
total dividends distributed to shareholders
in FY23
8%
reduction in CO
2
emissions since FY19 base
year
For our 2,654 people worldwide, we
provide a great place to work and invest
in ongoing learning and development,
wellbeing and DE&I programmes, all in
support of creating an inclusive culture,
winning our employees’ engagement and
empowering them to meet their goals.
We aim to pay a dividend that is
sustainable through the cycle, and which
will be driven by long-term earnings
growth. In FY23, the Board recommended
a nal dividend for the year of 11.6 pence
per share.
We source the talent needed to build a
sustainable future, partnering with clients
to support the transition to a low-carbon
economy. Our ambition is to be a net
zero company by FY50, with a near-term
target of reducing scope 1 and 2 GHG
emissions by 77%, and scope 3 GHG
emissions by 50%, by FY30 versus the
base year FY19.
Candidates and clients Local communities
15,292
candidates placed in FY23
>7,200
clients we worked with around the world in FY23
431
people accessed career support programmes
3,094
hours volunteered in local communities
We use our deep knowledge and global
network to understand the needs and
career aspirations of the best STEM
professionals and match them with the
organisations that need them, in both
permanent and contract roles. Their work
helps our clients make new discoveries,
increase the accuracy and availability of
technologies and to realise the long-term
potential of technology to address the
world’s challenges.
We use our knowledge and experience
to support local communities and
initiatives to help eliminate barriers to
employment and create more pathways
into STEM careers.
Signicant market potential Clear capital allocation
policy
Strong nancial position
SThree operates in the world’s largest
STEM markets: the USA, Germany, the
Netherlands, the UK and Japan. Despite
our strong market positions we have a
relatively small market share (circa 2%
of the potential STEM market in the top
ve markets). This oers us a signicant
opportunity for growth.
Our investment policy reects a
disciplined strategy of value creation.
Funds are allocated across the business
according to strategic value-enhancing
priorities, sustainability-related matters
and principal risks.
Recurring revenue dynamics of our
Contract business drive sustainable
free cash ows. Plus, we maintain a
£50million Revolving Credit Facility
(RCF).
c.2%
Our share of STEM market in our top ve
countries
£30–35m
Current investment plan to increase our
productivity
£83m
Net cash
Global house of STEM
specialist recruitment
brands
Well-considered ESG
strategy
Regular dividend
Each of our brands brings expertise
in specic sought-after skills within
science, technology, engineering and
mathematics. We understand them and
know how to achieve the goals of STEM
professionals and the organisations that
need them across many sectors – for both
permanent and contract work.
Long-term commitments to the
environment and society aim to deliver
positive outcomes for all our stakeholders
and contribute towards the UN
Sustainable Development Goals (SDGs).
We oer shareholders long-term dividend
growth in line with our dividend cover
policy, which is currently within the range
of 2.5x to 3.0x of our annual earnings.
1,833
Recruitment consultants
114,466
Number of lives positively impacted since FY19
16.6p
Total dividend per share
We are where the world comes for scarce STEM talent. This is where we operate.
By successfully focusing on STEM and developing a deep knowledge of our candidate
specialisms and our clients’ needs, we are able to bring clients and candidate talent
together. The ability to achieve a perfect t is highly valued by both parties. That enables
us to maintain our pricing, invest in enhancing our service, continue to take market share
in a growing market and generate sustainable returns.
Focus on STEMExamples of our value creation in FY23 Driving sustainable value Cash generative business
Full details of our transition to net zero
can be found on page 71
See Our commitment to being a responsible
business for more information on page 52
See Chief Financial Ocer’s statement
for more information on page 34
See Strategic progress: Our Places, Our
Platform for more information on page 24
16 17
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Financial Statements
SThree plc Annual Report and Accounts 2023
Strategy overview
Unlocking our strategy
Our Places Our People
To be a leader in markets we choose
to serve
Create a world-class operational platform
through data, technology
and infrastructure
Find, develop and retain great people Leverage our position in STEM to deliver
sustainable value to our candidates
and clients
Key performance indicators we track for these pillars Key performance indicators we track for these pillars Key performance indicators we track for these pillars Key performance indicators we track for these pillars
• Net fees.
• Net fees through renewable business.
• Basic earnings per share.
• Total shareholder return.
• Operating prot conversion ratio.
• Prot before tax.
• Carbon reduction.
• Representation of women in leadership roles.
• Employee net promoter score (eNPS).
• Customer net promoter score (NPS).
• Number of lives positively impacted.
Progress on FY23 priorities Progress on FY23 priorities Progress on FY23 priorities Progress on FY23 priorities
• Built a performance dashboard so managers can
understand the status and client focus of their team.
• Tracked key STEM skill verticals and matched headcount
investment in core growth markets.
• Continued to deliver commercial pricing discipline and
grew average bill rates.
• Began the roll out of our new Customer Relationship
Management (CRM) system and Enterprise Resource
Planning system as part of a unied technology platform.
• Used an agile approach to enhance consultant productivity
through the new tools.
• Creation of new role of Chief Operating Ocer to
represent operations on Executive Committee (ExCo).
• Redenition and internal launch of our new values.
• Conducted employee engagement surveys with 81%
participation.
• Began adaptation of the oce estate to hybrid working.
• Continued to develop our talent pool through a ‘Leading
with Purpose’ programme, rolled out to our leadership
cohorts, for improved succession management, and
introduced a new cohort of future women leaders into
Identify programme.
• Compensation framework review.
• Enhanced our operating model with a clearer matrix
structure for core function support to our markets.
• Promotion of new research, ‘How the STEM world
evolves’, to support thought-leadership positioning.
• Reinforced positioning of our go-to-market brands as
specialists in specic vertical skills.
• Finalised the formal planning for the establishment of a
dedicated Customer Marketing function, to support our
increasing client and candidate-focus, for implementation
in FY24.
• Creation of new role of Chief Commercial Ocer to
represent the customer on ExCo.
• Launched Elevate Careers programmes for diversifying
STEM talent pipeline.
Initiatives and immediate priorities for FY24 Initiatives and immediate priorities for FY24 Initiatives and immediate priorities for FY24 Initiatives and immediate priorities for FY24
• Improve the use of data-driven insights to focus our eorts
on the highest-demand STEM skill verticals, and scale
teams supporting those sectors.
• Enhance customer-orientated behaviours through best
practice training and a more globalised sector approach.
• Implement a more ecient set of processes for placing
candidates into international locations.
• Continue the CRM roll out to other major markets with a
focus on the change management approach to adopt new
ways of working.
• Continue renements to processes to improve the
employee experience, share best practice and shorten the
pathway to productivity for new hires.
• Embed new values across the Group and evolve our
Employee Value Proposition (EVP).
• Build a programme to enhance our People model, focusing
on retaining key talent and driving a shorter time-to-
productivity.
• Embed the Leadership with Purpose behaviours and
extend our leadership development programme.
• Continue DE&I initiatives.
• For internal recruitment purposes, launch a data-driven
competency testing framework.
• Continue to optimise our oce footprint in line with
current working model expectations.
• Extend L&D oering to equip our people with the
enhanced platform skills.
• Further rene specialist positioning of our House of Brands
portfolio.
• Drive more customer-centricity into the organisation
and embed our Sales Excellence programme across the
organisation.
• Expand the remit of our commercial function to improve
marketing eectiveness, pricing approach and client
development approaches.
• Implement/launch a newly created Customer
Marketing function.
Our approach to ESG* Our approach to ESG* Our approach to ESG* Our approach to ESG*
• Positively impacting over 150,000 lives by FY24 through
providing access to decent work and our community
programmes.
• Help the world move to net zero by nding clients the
renewables talent they need to make the transition.
• Deliver eciencies so we can transition to net zero.
• Build the systems that will provide our clients with access
to the very best talent to deliver their low-carbon
transition plans.
• Create a culture where everyone is welcome at SThree so
we empower our people to thrive.
• Improve diversity across our client portfolio and the STEM
sectors in which we operate.
• Build diverse STEM talent communities that enable our
clients to meet their business objectives and make STEM
careers more accessible to everyone.
• Run or partner on events that build diverse STEM talent
career pathways.
Our Platform Our Position
* Integral to our purpose and strategy is a strong emphasis on our ESG commitments.
We bring skilled people together to build a sustainable future for everyone.
18 19
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Financial Statements
SThree plc Annual Report and Accounts 2023
£419mFY23
£431mFY22
£356mFY21
£309mFY20
18%FY23
18%FY22
17%**FY21
10%**FY20
142%FY23
88%FY22
46%FY21
20%FY20
£78mFY23
£77mFY22
£60m**FY21
£30m**FY20
-8% YoYFY23
-44% YoY FY22
-71% YoYFY21
-56% YoYFY20
51.7%FY23
35.4%FY22
85.6%FY21
-15.8%FY20
Result (% growth on base year 2019)
42.4pFY23
41.0pFY22
31.8p**FY21
13.9p**FY20
Key performance indicators
SThree’s Board and
ExCo review the Group
performance across a
wide range of measures
and indicators that are
consistent with our strategic
priorities and investor
proposition.
Our key performance indicators (KPIs)
provide a balanced set of metrics that
give emphasis to both nancial and non-
nancial measures, in line with interests
of various groups of our stakeholders.
Remuneration
To help our Board and Executive
Committee align their focus with the
interests of our stakeholders, all of
the KPIs are reected in the executive
remuneration targets, as per the policy
approved by shareholders at the 2023
Annual General Meeting.
* In constant currency.
** Adjusted.
* In constant currency.
** Adjusted.
Net fees Net fees through global
clean energy business
Basic earnings per share
(EPS)
Total shareholder return
(TSR)
This KPI is calculated as
revenue less cost of sales, and
represents the mark-up we
charge to our clients on top
of candidate salaries. It is one
of our fundamental nancial
measures as it indicates how
our business is performing
over time. Our FY27 medium-
term target is to grow our net
fees faster than our peer group
across the aggregate of our
top ve markets compared
to FY19.
This KPI represents growth in
the Group’s net fees generated
from placements of candidates
in the renewable energy sector
since FY19. A transition to a
low-carbon future will drive
an increase in STEM job
opportunities. Our target is to
double the size of our global
clean energy business by FY24
versus the base year FY19.
EPS helps to assess the
Group’s protability per share.
Internally, it is also used for
the vesting assessment of the
Group Long-Term Incentive
Plans. Our ongoing target is to
achieve earnings growth for
shareholders while balancing
reinvestment to secure future
growth opportunities.
The growth in value of a
shareholding over a three-
year period, assuming that
dividends are reinvested
at the closing price on the
ex-dividend date. This KPI
helps to assess the Group’s
performance in the delivery
and maximisation of long-
term value for shareholders.
Our ongoing target is to
generate good returns on the
investments we make and
create long-term value for
shareholders.
£419m
-4% on FY22
142%
growth on FY19
42.4p
+4% on FY22
51.7%
+16.3% pts on FY22
FY23 performance
Net fees declined 4%* YoY; this
was a resilient performance
underpinned by our strategic
focus on STEM and exible
talent. Contract remained
stable, up 1%* YoY, while
Permanent was down 22%*
amidst challenging market
conditions.
Based on the market data
available to us as at the
end of Q3 FY23, we have
outperformed our peer group
(on a net fee basis versus FY19)
in four out of ve top markets
(Germany, the Netherlands, the
UK and Japan).
SThree’s commitment to
double the size of clean energy
business has already been
achieved. In FY23, net fees
from renewable business
grew by 142%* on FY19.
STEM talent continued to
be in high demand among
businesses with strong plans
to mitigate climate change.
Our internal Global Renewable
Energy Network continued
to promote best practices
and guidance on how to drive
future growth within the
renewable energy sector on a
global scale.
Basic EPS increased by 4%
over the prior year; this was
attributable to the lower
operating prot oset by
net interest earned on cash
balances, lower Group ETR
and a decrease of 0.1 million in
the weighted average number
of shares.
During the assessed three-year
period (FY20 to FY23), SThree
plc’s share price remained
strong, outperforming
the basket of comparator
companies. Despite volatile
geopolitical and macro-
economic conditions
persisting in the post-
pandemic period, the Group
benetted from favourable
STEM-related megatrends
and a resilient business model,
delivering a good trading
performance.
R R R R
FY23 performance
The ratio has remained
stable YoY, reecting the
ongoing exceptional levels
of productivity, that despite
the challenging macro
environment dropped just
2% in the year, combined
with tight cost control, whilst
also benetting from spend
recognition timing on the
Technology Improvement
Programme (TIP) (without
impacting delivery). When
excluding the TIP expense of
£3.8 million incurred in FY23,
the ratio would be 19.2%.
PBT increased by 1% on a
reported basis (down 2% in
constant currency basis) as
compared to FY22, due to
lower trading performance,
investments made in
technology, but with stronger
YoY productivity per head
and favourable currency
movements.
In FY23, we continued to make
improvements to the energy
eciency of our business. We
invested nearly £3.0 million to
fund energy-ecient facilities
and equipment in our new
oce in Glasgow, UK, and
transitioning some of our
technology to the cloud-based
arrangements.
R R
Operating prot
conversion ratio
Prot before tax (PBT) Carbon reduction
This measure represents
operating prot stated as
a percentage of net fees.
It measures the Group’s
eectiveness in controlling
costs and managing its
investments for future growth.
Our aim is to operate our
business eciently and cost
eectively with stable margins
and to deliver a mid-term
sustainable operating prot
conversion ratio in excess
of 21%.
The KPI represents net fees
less administrative expenses,
less interest before adjusting
items. It is a measure of our
underlying protability, our
eciency and how we manage
our cost base. Delivering
a healthy and consistently
protable growth is important
as we aim to create value for
all our stakeholders over the
long term.
In FY23, we announced our
ambitious commitment to
reduce scope 1 and 2 carbon
emissions by 77%, and scope
3 carbon emissions by 50%
by FY30, from a FY19 base.
Our medium-term ambition
is to reduce scope 1, 2 and
3 carbon emissions by 25%
between FY19 and FY24.
Progress against carbon
reduction is also used as a
factor in determining vesting
of Long-Term Incentive Plans
granted to executives.
18%
at in % pts on FY22
£78m
-2%* on FY22
8%
reduction from base
year FY19
Our Places Our Platform
Be a leader in markets we choose to serve Create a world-class operational platform through data,
technology and infrastructure
20 21
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SThree plc Annual Report and Accounts 2023
48 ptsFY23
52 ptsFY22
50 ptsFY21
52 ptsFY20
43 ptsFY23
51 ptsFY22
43 ptsFY21
5 ptsFY20
114,466** FY23
88,741**FY22
55,771**FY21
15,764**FY20
39%FY23
32%FY22
L3: 34% L4: 14%*FY21
L3: 34%FY20 L4: 14%*
Key performance indicators continued
** Number of lives.
Representation of women
in leadership roles
Employee net promoter score
(eNPS)
This KPI is a measure of gender balance
within the Group and an indicator of
our strategic growth plans leading to
a diverse leadership team. In FY23,
we reviewed the denition of women
in leadership to align with the FTSE
Women in Leadership requirements.
This KPI is therefore calculated by
taking the number of women in ExCo
and ExCo -1 (excluding administrative
roles) as a percentage of the total of our
workforce who are ExCo and ExCo -1
(excluding administrative roles).
Our short-term target is to achieve 40%
of women in leadership, with a longer-
term ambition to achieve 50/50.
* The comparators for years prior to FY23 are
using a denition which resulted in a larger
population being included and restating has
not been possible due to a lack of data.
The score is the result of the annual
employee survey that captures regular
feedback from our people about their
experience of working at SThree.
Our success is reliant on having a
motivated and engaged workforce,
so our aim is to never stop listening
to, and acting upon, our people’s
feedback. eNPS helps us identify areas
for ongoing improvement so that we
can ensure SThree is a great place to
work, and we attract and retain the
best people.
39%
of women in leadership
43 pts
-8 pts on FY22
Customer net promoter score
(NPS)
Number of lives positively
impacted
NPS is a metric that measures the
candidate’s and client’s (both referred
to as customer) experience when
working with SThree and is the key
indicator of customer loyalty to the
Group. The score is the percentage of
promoters minus the percentage of
detractors.
NPS helps us measure and improve
the customer experience and draw
meaningful insights into how our
candidates and clients view their
relationships and engagement with
our business.
The metric represents the number of
people whose lives since 2019 have
been positively impacted through
inclusive recruitment solutions and
community programmes that SThree
delivers. We use our skills and unique
position to help communities nd
decent, sustainable work that can
deliver real social change. Our short-
term target is to positively impact
150,000 lives between FY19 and FY24.
48 pts
-4 pts on FY22
114k lives
+29% on FY22
FY23 performance
At the end of FY23, women
represented 39% of all roles within
the leadership cohort. In FY23, we
identied that 53% of our core function
leadership are women compared
to 24% of our sales leadership. We
therefore held two focus groups
with women in sales management to
better understand their experience
in addition to conducting a full
assessment of the employee life cycle
of women in sales. This has informed
an action plan for FY24.
Our average global eNPS declined to
43 points. This is still a strong result
which allows SThree to remain within
the top quartile of professional services.
78% of all sta who completed the
survey believe that SThree builds a
great performance culture through
recognition, clear performance
objectives and constructive feedback,
and supports its people in setting and
pursuing challenging career goals.
Key themes that we need to develop
and invest in include hybrid working
environment and organisational
structure, providing our people with
more autonomy and exibility.
R R
FY23 performance
Our global NPS score remained
strong at 48 points given growing
complexity in the world of work and
higher customer expectations. This
score reects our commitment to
building deeper partnerships with our
customers, innovating our systems (we
successfully launched the rst tranche
of the TIP in our US business), and
optimising our processes to ensure
superior service delivery for all our
clients and candidates.
Since December 2019 we have
positively impacted 114,466 lives.
This year, we remained focused
on addressing the STEM skills gap
for our clients through diversifying
the talent pipeline and contributing
to social mobility and equity in the
STEM industries we partner with.
Our new Elevate Careers programme
provided development, coaching and
mentoring support to 2,754 existing
and aspiring STEM professionals in
FY23. Through our placements in FY23
alone, we helped 15,292 candidates
access decent work in STEM-related
industries.
R R
Our People Our Position
Find, develop and retain great people Leverage our position in STEM to deliver
sustainable value to our candidates and clients
We delivered a
resilient performance
against record prior
year and challenging
macro-economic
environment.”
Andrew Beach
Chief Financial Ocer
22 23
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Financial Statements
SThree plc Annual Report and Accounts 2023
Strategic progress
Our Platform
Strategic progress
Our Places
Unlocking our unique potential through Unlocking our unique potential with
data-driven
decision making
major platform
improvements
We continue to focus on the biggest
STEM markets where we are strongest
and where we can oer the most value for
our clients.
Our presence in ve of our regions alone gives us access
to approximately 73% of the total global STEM market.
We continue to outperform our competitors in most skill
verticals across our markets. Each of our regional operations
enjoys strong autonomy, enabling them to tailor services to
the specic needs of their region, but we also standardise
processes across the Group to leverage our proven sales and
client development practices.
Our geographical footprint
In line with our strategy of choosing to operate where we
see the biggest opportunity to win, we continued to apply a
diligent approach to making investments in technology and
our people across our core markets.
We are happy with our global footprint and can serve the
most important global STEM markets from our current oce
footprint and client coverage.
Where we feel we need to expand our presence, we will do
so in a considered way, evaluating dierent expansion options
for serving other markets, including from our existing points
of strength.
We began the implementation of our
Technology Improvement Programme
(TIP) this year following a successful
pilot in FY22. It will enable sustainable,
scalable growth and capability that
future-proofs the business.
We presented full details of our TIP in an investor brieng
in January. Roll out began this year following a pilot in our
Houston oces in FY22.
The opportunity
We are good at what we do and have a strong business, but
we identied two specic performance improvements that
greater digitisation could bring. First, like all talent businesses,
even though we provide new hires with thorough training
and support, there is usually a period of up to 18 months
before their productivity starts to reach the levels of more
experienced colleagues. The latest digital technology enables
us to prompt best practice at every stage of the sales process,
presenting consultants with reminders of the action most
likely to achieve an optimal outcome. Also, managers can see
real-time visibility of their team members’ activity allowing
them to make supportive interventions earlier, before the
outcome of a sale is decided.
The other opportunity oered by greater digitisation is
simplifying complex, administrative processes such as those
required for compliance. The industry’s fastest growing
employment segment is the Employed Contractor Model
(ECM) where we employ the candidate on behalf of the client.
It has grown as a share of our business and now constitutes
37% of our net fees. Providing ECM requires considerable
administrative support in order to comply with regulations in
dierent territories. Digitisation can reduce the costs and time
involved and improve accuracy.
Deciding where we operate is a dynamic process and we will
move swiftly to open in a new territory, or expand our market
presence, when we see opportunities for growth. Even in
times of economic uncertainty, we continue to invest in the
major markets for STEM talent.
At the beginning of the year, we unveiled a new structure
to simplify our reporting on regional performance and align
our leadership to our geographical operational clusters. Our
regional segments are DACH, Netherlands including Spain,
USA, Rest of Europe and Middle East & Asia.
Utilise opportunities of enhanced platform
Improvements in our technology platform are giving us
greater quality market insights, allowing us to enhance the
service we oer our clients. We have introduced new training
to help our people add value for clients.
Plans for FY24
FY23 was all about ensuring we have the right structures,
operating models, skills verticals, specialisms and global
company network to support our ‘Leader in STEM talent’
positioning. Next year, with the frameworks in place, our aims
will be to:
• apply data driven insights to focus market discipline,
pricing and skills vertical investments; and
• enhance customer-orientated behaviour through best
practice training.
Wherever they are in the
world, we want our clients
and candidates to recognise
that when they work with an
SThree brand, they can rely on
a high level of excellence.”
Jelte Hacquebord
Chief Commercial Ocer
Nicholas Folkes
Chief Operating Ocer (COO)
Nicholas Folkes leads the Technology Improvement Programme.
Before joining us in 2021 as Chief Technology Ocer, Nicholas
had successfully run digital transformation initiatives at major
companies including G4S, Tesco and MSCI. His appointment
as COO this year allows him to represent technology at
C-suite level and demonstrates its centrality to all our
operations planning.
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SThree plc Annual Report and Accounts 2023
Strategic progress
Our Platform continued
Together, the multiple productivity improvements that result
from digital systematisation oer the potential to scale at
speed, without a correlating increase in headcount. So there
is the real prospect of a step change in our operating prot
conversion ratio and prot before tax. At the same time,
we can improve the experience and service we deliver to
both candidates and clients, giving us a strong competitive
advantage.
An improved platform also oers many benets for
employees. Our people’s experience at work will become
more rewarding as they adopt more eective practices
more quickly. They will have access to data-driven insights,
and more-timely, focused, management guidance to direct
their sales tactics. People will be freed of much routine
administration that was holding them back from being
more productive. Put these improvements together and the
positive impact on day-to-day work should be signicant. Job
satisfaction amongst new-hires and experienced hands alike
is likely to benet, enhancing retention rates.
Development and implementation
SThree has a distinct way of working that has proved
successful in the talent marketplace. We captured these
behaviours and processes in a blueprint, ready for digitisation,
then consulted extensively within the business, explaining the
rationale of the platform enhancement and discovering from
managers what they needed the platform to do. As a result,
we identied over 300 steps or ‘enablers’ in the blueprint
that have the potential to enhance real-time interactions with
clients, candidates and colleagues. As our next step, we will
select the enablers with the biggest expected impact and
return on investment, to digitalise within sales processes.
Although each individual enabler is not revolutionary, bringing
them together to serve as a best practice copilot for all
colleagues, seamlessly integrating with their work, is a step
change. The data generated and analytical tools will also give
us greater insight into the customers and markets we serve.
So far this year we have rolled out the enhanced CRM across
the US whilst continuing to invite feedback and identify
further potential improvement at each stage. Next year, as we
continue the implementation across our global network, there
will be further conguration enhancement in response to the
experiences of our people using it day to day. From FY25, we
anticipate our platform will be fully deployed and we will be
unlocking further potential for our business.
Reducing our CO impact and helping clients reduce
theirs
Our main contribution to reducing global warming emissions is
providing the renewable energy engineering specialists needed
by companies wanting to decarbonise their operations. Our
clean energy business increased by 28% this year which resulted
in us achieving our target to double the size of our clean energy
business by FY24 (from a FY19 baseline year). Nevertheless, we
take our own emissions seriously and seek to aim to become a
net zero operation by FY50 – see ‘Our commitment to being a
responsible business (including TCFD)’ section for more details.
Our platform is broader than our technology system – it
embraces all our operations. So we continue to look at our
own carbon emissions on our journey to becoming a net zero
business whilst also focusing on how we can better support
our clients with their transition plans.
We have predominantly moved to the cloud through the
digital enhancement of our platform, reducing the carbon
footprint of running our own servers. Microsoft, our major
platform supplier partner, has similarly ambitious net zero
targets to ours which will help us decarbonise our scope 3
emissions.
One of the trends we have seen this year is clients seeking
support with achieving their scope 3 emissions reduction
targets. We have responded by starting to upskill our
consultants on how to talk to clients about these topics. We
will continue to look at how we can best reduce our energy
consumption in order to meet client expectations faster.
We’re taking the art of
recruitment and turning
it into a science.”
Matt McManus
Managing Director US
Carbon reduction on
FY19
8%
FY22: 44%
Case study
For more information on our approach to
deliver a recruitment service that adapts to
our clients’ evolving needs, please see our
case study on Real Stang on our website:
sthree.com/annual-report-2023
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SThree plc Annual Report and Accounts 2023
Axis X shows the mix of women and men at the four dierent levels of pay, with ‘lower quarter’ being the lowest paid and ‘upper quarter’ being the highest paid.
Axis Y shows the proportion of women and men at the four dierent levels of pay, showing movements in distributions between FY21 and FY22.
Strategic progress
Our People
Unlocking our unique potential by
making SThree a
great place to work
SThree is a talent business. Attracting and
keeping the best talent is critical to our
becoming recognised as the leader in STEM
talent and achieving our growth ambitions.
Before taking action, we listen. Across the year, we ran three
Employee Engagement surveys which achieved an average
participation rate of 79%. They showed us what our people
felt SThree’s strengths are and where we most needed to
improve: see table below. The global actions we subsequently
took were guided by the insights these surveys revealed.
eNPS score and benchmarking
We want to make SThree the employer of choice and so our
employee net promoter score is a key metric in measuring
progress. External factors, such as economic and political
uncertainty, can cause scores to drop across all companies
and sectors, so the measure we study most closely is our
ranking against comparable professional services companies.
There are thousands of other professional services companies
in the Peakon employee voice tool index we use. Our aim is to
retain our position in the top quartile, which we comfortably
did this year.
Diversity, Equity & Inclusion (DE&I) progress
Only by continuing to make progress in building a diverse,
equitable and inclusive organisation will we harness the full
range of skills and experience required to meet the needs of
our candidates and clients. Our DE&I initiatives continued
apace this year with the aim of creating an inclusive, high
performing culture, with a focus on representation of women
in leadership.
Theme Feedback and action taken eNPS score FY23
Performance
culture
being able to see a path to advance
career within SThree
We continue to build on our strengths through recognition, setting clear
performance objectives, and providing feedback enabling career advancement
and progression.
43pts
Hybrid working exibility and autonomy As oce leases end, we redesign spaces to drive collaboration and autonomy,
and to support exible working practices. Through various communication
channels we help everyone understand local policies on hybrid working to ensure
the transition to hybrid working environment is safe, ecient and fast. Having
autonomy to deliver agreed results is important to our people and is an ongoing
focus for us.
Purpose being able to link Group purpose
to organisational strategies and
increase teams’ relevance
Our Group Marketing team has worked hard to collate stories and case studies
from across our business, to showcase our purpose and how we bring it to life.
We have also been updating our values, which will enable our purpose and shape
our future culture.
Gender pay analysis
Since April 2017, we have been reporting our UK gender pay data
on an annual basis. This is the second year reporting our gender
pay gap on a global basis.
Our methodology
All active employees on 30 November 2022 have been included
in the analysis. Employees from Ireland, Singapore and Hong
Kong have been excluded following the closure of these markets.
Metrics we have used to measure our global gender pay gap
are: median (the middle value of a list ordered from highest to
lowest), mean (adding up all the numbers and dividing the result
by the total data points), and the proportion of employees who
identify as women and men in each quarter of the Group from
highest to lowest paid.
This reduction in the median bonus pay gap has been driven by
a combination of more women in more senior roles, therefore
higher bonuses, and the cost-of-living payment we awarded at
the end of FY22. Nearly 60% of employees receiving this award
were women.
The remaining gap is driven by having more men than women in
senior roles (despite improvements), increasing the value of their
bonuses, and by having a higher number of women in junior roles
which decreases the value of their bonuses.
Findings
This year we saw a signicant reduction of the SThree global
gender pay gap. The median gap moved from 16.4% to 7.3% and
the mean from 21.2% to 12.6%. This means women earn £0.93 for
every £1 that men earn when comparing median hourly pay, and
£0.87 for every £1 that men earn when comparing mean hourly
pay.
This reduction in the global gender pay gap has been driven by
a higher number of women holding more-mid-to-senior and
senior roles. In the upper quarter, the representation of women
increased from 37.4% to 44.4% as shown in the graph below.
At a global level, women represent 52% of our workforce, an
increase from 51% last year.
The remaining gap is primarily a result of having more men than
women in more senior and therefore more highly paid leadership
roles, and more women than men in the less senior, lower paid
roles (see the below graph).
We also saw a reduction of the SThree global bonus pay gap.
The median bonus gap moved from 61.0% to 52.9%. The mean
bonus gap has remained the same as last year. This means that
women earn £0.47 for every £1 that men earn when comparing
median bonus pay and £0.54 for every £1 that men earn when
comparing mean bonus pay.
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Men Women
Lower Quarter
Men Women
Lower Middle Quarter
Men Women
Upper Middle Quarter
Men Women
Upper Quarter
44.0%
43.6%
56.0%
56.4%
43.6%
45.1%
56.4%
54.9%
49.3%
48.6%
50.7%
51.4%
62.6%
55.6%
37.4%
44.4%
FY21
FY22
SThree Group gender pay gap
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SThree plc Annual Report and Accounts 2023
Strategic progress
Our People continued
The global proportion of men and women receiving bonuses
increased this year, moving from 79.7% to 90.8%. The cost-of-
living payment we awarded at the end of FY22 increased the
proportion of employees receiving at least one bonus award
within the nancial year.
Leading with Purpose roll out
We launched our new Leadership with Purpose principles
which set out the four essential roles a leader must master.
All our most senior people managers have now completed
a training programme in these principles and should be
applying them in their day-to-day management. This will drive
our business forward and provide a consistent experience for
our people. We will continue to embed the behaviours across
the organisation to support the right culture in FY24 when
we will provide a dedicated programme for the next level of
management.
Next year will also see the launch of our Sales Excellence
programme. The initial focus will be on training new sta
during their onboarding process as part of the Speed to
Competence programme, but the longer-term plan is to
involve all members of the sales team so that best practice is
spread across the Group.
Identify – our women leadership programme
Now in its iteration year, a fresh cohort of 47 women joined our
Identify programme which seeks to nd and develop our future
leaders, giving them all the support they need to full their
potential. Participants come from across our global business
with representation from every market in which we operate.
All the women have access to an external mentor through our
social enterprise partners, Femme Palette, and benet from
a speaker series and plenty of networking opportunities. Our
Women in STEM networks in the UK, the Netherlands and the
US provide additional support for women.
Values and evolving our EVP
The focus in the second half of the year was on a review of
our values with a soft launch of newly rened value denitions
to the sales leadership in October. Alongside leadership
development and a newly dened vision, our values will
be key in shaping our culture as we grow. They set out the
behaviours and way of business that dene SThree’s culture
and its distinctive appeal for both candidates and clients, as
well as being essential to making SThree a great place to
work. Our values drive all our decision making and determine
our culture. They guide everything we do: leadership
behaviour, communications, workspace design, our employee
career pathways and more. It is therefore important they are
clear so that everyone at SThree understands them and the
importance of being true to our values in everything we do.
Our new internal values are:
• We are all in
• We build partnerships
• We do the right thing
• We think big
Renement of compensation framework for
sales roles
Rewards for our sales sta are an important component of
our Employee Value Proposition (EVP), which for internal
purposes we refer to as our People Promise. So we continue
to take measures to ensure compensation and incentives
are competitive. A review of reward schemes to ensure they
are driving the right performance and behaviours is still in
process. It will be followed by a comprehensive review of our
benets oering across all regions.
In addition to continuing to invest in base salaries on a
targeted basis, we improved reward communications,
testing the introduction of total reward statements in
the Netherlands. To give managers clarity and achieve
consistency, we further embedded the global grading
framework by providing a detailed toolkit for HR business
partners and managers to direct their people’s compensation.
Our all-employee share incentive plan continues to be
successful with nearly four in ten employees participating
each month.
Identify women’s talent programme
274
hours of mentoring provided
618
hours of learning completed by Identify
participants
10
development opportunities
Talent management
To further build the appeal of our People Promise we
introduced a new talent management process for all sta
across all core sales and non-sales functions. It will ensure
we have the right career oering for all roles.
Retention and succession planning
Next year we plan to introduce a productivity and retention
programme to identify and address key factors that impact
our productivity and retention. Early features include new
approaches to talent acquisition and evolving our People
Promise. In FY24, we also plan to identify and codify the
success criteria for the top 30 most vital roles within the
business so we can invest in succession planning and the
talent management of those individuals.
Future Oce programme and hybrid working
Our Employee Survey revealed strong demand for hybrid working
across the Group and a desire for access to hybrid working
options to be clearer and more equitable between oces.
We have opted for a exible, regional-rst approach to working
practices that empowers local leaders to reect the needs of
the culture and region. We will keep this approach under review
due to ongoing changing expectations and standards around
working practices. We will continue to benchmark and assess
our hybrid practices against local norms, along with internal
data on engagement and productivity, and respond accordingly.
Our future oce programme provides for hybrid working: as
oce leases end, we are redesigning spaces so they support
collaboration between teams.
Preparing people for platform enhancements
Our TIP is oering multiple opportunities to spread best practice
and to work in new ways that take advantage of data. Where
appropriate, there will be automation of manual processes. We
are working alongside the platform team to understand the new
capabilities and are developing initiatives to support behavioural
change and ensure people have the skills to adopt new ways of
working.
Men Women
Gender diversity prole as of 30 November 2023 Total Number % Number %
Board of Directors including Non-Executive Directors 7 4 57% 3 43%
Executive Committee 11 8 73% 3 27%
Executive Committee less 1 75 46 61% 29 39%
Other employees 2,561 1,266 49% 1,295 51%
Total 2,654 1,324 50% 1,330 50%
For more information on the composition of our Board of Directors, see pages 86 to 87.
New Chief People Ocer appointment
Sarah Mason was appointed to the new role of Chief
People Ocer in April having previously worked for the
Group between 1998 and 2008, in sales and then senior
HR roles.
Case study
For more information on how we support our
people development, please see our case
study on Lawrence Doe on our website:
sthree.com/annual-report-2023
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SThree plc Annual Report and Accounts 2023
Strategic progress
Our Position
SThree’s specialist brands are known
amongst candidates and clients for
talent provision in the key STEM skills
verticals while the SThree Group provides
standardisation across our businesses,
spreading eciencies and best practice,
and coordinating major account
development.
We have been most successful when we have had company
brands known for a particular specialism. So this year we have
been taking steps to sharpen the specialist positioning of all
our brands.
Both candidates and clients value expertise in their specialism
– be it Technology, Life Sciences, Renewable Energy or
Engineering. For candidates, it oers a real partnership, an
organisation who can guide them throughout their career. For
clients, it promises a talent provider who understands their
particular needs and can supply hard-to-nd talent with the
skill set they require.
The overarching SThree Group brand presents signicant
additional benets that complement the specialist recruitment
brands, providing the resources, scale and global reach to
serve major clients who need talent in a variety of STEM
disciplines, often across dierent regions. Although we ex
to a country’s culture and respect local nuances, we also
take best practice and apply it everywhere so all customers
experience a marketing-leading service.
New structure and appointments
To raise customer awareness of the benets of our house
of brands proposition we have been nalising plans for the
establishment of a dedicated Customer Marketing function
for implementation in FY24. This function will support our
increasing client and candidate-focus. It will coordinate sales
and marketing teams, encouraging the sharing of insights and
developing a complete service for major account clients by
bringing our global range of STEM expertise and candidate
relationships to play. The appointment of Jelte Hacquebord as
Chief Commercial Ocer to drive this initiative, and represent
the customer at ExCo level, is evidence of our determination
to fully realise the potential of these major global clients.
Thought leadership
The main thrust of our marketing eort continues to be
establishing true thought leader status in the STEM talent
sector. Last year, the ‘How STEM World Works’ research
we commissioned attracted extensive coverage and this
year we followed it with a new study, ‘How the STEM World
Evolves’. It was similarly well received, with 314 instances of
media coverage across press titles including Business Insider,
Associated Press and Asia One, and other numerous trade,
STEM-centric and regional publications.
Unlocking our unique potential by
making the most of
our powerful brands
Our multi-brand strategy –
our ‘House of brands’ – really
dierentiates us. All of our listed
competitors are single brand.”
Jelte Hacquebord
Chief Commercial Ocer
Encouraging people into STEM
We rationalised several programmes designed to widen
and diversify the STEM talent pipeline for our clients under
the new banner of ‘Elevate Careers’. This outreach plays
a crucial role in positioning SThree as the leader in STEM
talent recruitment. It also meets a client need. Our clients are
increasingly coming to us for advice on how to deal with the
challenge of attracting diverse talent. Unlike other industries,
which often attract diverse candidates but face equity
challenges around promotion and development,
STEM industries have an attraction problem they need to
overcome rst.
Elevate Careers is a range of activities that bring communities
together to help people access and advance along clear STEM
career pathways. We co-create events with partners and bring
our expertise to other events, as well as funding scholarships
for women to access development opportunities.
Volunteering
We continued to encourage all our people to take
volunteering leave and participate in local initiatives. Not
only is volunteering consistent with our values and vision to
make a positive impact and support lives, it is also something
our people are keen to do and is an important part of our
Employee Value Proposition.
Case study
For more information on how we support
our clients in talent sourcing, please see our
case study on Computer Futures, ‘Helping
Optimal maintain their market position
through new hires’ on our website:
sthree.com/annual-report-2023
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SThree plc Annual Report and Accounts 2023
Chief Financial Ocer’s statement
Unlocking our unique potential through
focused investments
across markets and
skill verticals
We delivered a resilient performance
underpinned by our strategic focus on
Contract in STEM markets, while the
wider macro-economic environment
remained challenging.
Income statement
On a reported basis revenue for the year was up 1%
9
and
amounted to £1.7 billion (FY22: £1.6 billion) while net fees
declined by 3% to £418.8 million (FY22: £430.6 million).
The strengthening of our two main trading currencies, the
US Dollar and the Euro, against Sterling during the year,
increased the total net fees by £5.6 million. Therefore,
when presented on a constant currency basis, the net
fees decreased by 4% YoY.
Net fee growth in our Contract business was driven by
robust contract extensions from clients with demand for
candidates with STEM skills across most of regions, with
net fees growth of 1%. This was led by the Netherlands
region, which was up 7%, Rest of Europe, up 3%, and
Middle East & Asia, up 29%, while DACH and USA were
down by 1% and 4% respectively. This performance
was driven by strong growth in Engineering, which was
up 18% YoY, and Technology, up 1%, with Life Sciences
down 14% reecting global sector conditions. Our
ECM proposition also continued to deliver encouraging
performance and was up by 3% YoY. Group Contract net
fees as a percentage of Contract revenue
10
remained
consistent YoY at 21.7% (FY22: 21.7%), and at the end of
the year Contract represented 82% of the Group net fees
in the year (FY22: 78%).
The contractor order book
11
closed at £183.5 million,
down 3% YoY against a record prior year comparative,
and accounts for approximately four months’ worth of net
fees, providing us with sector-leading visibility into FY24.
Permanent net fees were down 22% reecting
challenging market conditions across all regions, and
our planned transition from Permanent to Contract in
several markets, particularly in the USA and UK. Our
largest Permanent market, DACH, reported a decline of
8%. Netherlands region was down 1%, and Japan was up
5%. Permanent average fee increased by 6% YoY in the
year, with average permanent fee margin (net fees as a
percentage of salary) now at 27.1% (FY22: 25.3%).
Operating expenses decreased by 3% YoY on a reported
basis, amounting to £342.4 million (FY22: £353.1 million).
This decline resulted from lower personnel costs as
average headcount declined by 2% compared to FY22.
The reported operating prot was £76.4 million (FY22:
£77.6 million), down 5% YoY in constant currency while
the Group operating prot conversion ratio increased
to 18.2% (FY22: 18.0%). Operating prot conversion ratio
reects the ongoing exceptional levels of productivity,
that despite the challenging macro environment
dropped just 2% in the year, combined with tight cost
control whilst also benetting from spend recognition
timing on the Technology Improvement Programme
(TIP) (without impacting delivery). Excluding the TIP, for
which £3.8 million was expensed in FY23, an operating
prot conversion ratio of 19.2% was achieved. The net
currency movements versus Sterling were favourable
to the operating prot, providing a £2.3 million benet.
Fluctuations in foreign currency exchange rates
are expected to remain a material sensitivity to the
Group’s reported results. By way of illustration, each 1%
movement in annual exchange rates of the Euro and US
Dollar against Sterling impacts the Group’s operating
prot by £0.9 million and £0.3 million respectively per
annum.
Net nance income
The Group received net nance income of £1.6 million
as compared to net nance costs of £0.5 million in the
previous year. This was driven by signicantly higher
interest rates applied to the Group’s bank deposits.
Income tax
The total tax charge for the year on the Group’s prot
before tax was £21.9 million (FY22: £22.8 million),
representing a full-year eective tax rate (ETR) of 28.1%
(FY22: 29.6%). The Group’s ETR also varies depending on
the mix of taxable prots by territory, non-deductibility
of the accounting charge for LTIPs and other one-o tax
items. The FY23 ETR is lower than in the prior year due
to a change in the prot mix and FY22 being impacted
by unrecognised losses arising from the restructure of
Singapore and Ireland, and the closure of Hong Kong.
Overall, the reported prot before tax was £77.9 million,
down 2% YoY in constant currency and up 1% on a
reported basis (FY22: £77.0 million).
The reported prot after tax was £56.1 million, at YoY in
constant currency and up 3% on a reported basis (FY22:
£54.2 million).
Earnings per share (EPS)
The EPS was 42.4 pence (FY22: 41.0 pence). The YoY
movement is attributable to the lower operating prot
oset by net interest earned on cash balances, lower
Group ETR and a decrease of 0.1 million in the weighted
average number of shares.
The diluted EPS was 41.5 pence (FY22: 39.9 pence).
Share dilution mainly results from various share options
in place and expected future settlement of vested tracker
shares. The dilutive eect on EPS from tracker shares will
vary in future periods, depending on the protability of
the underlying tracker businesses and the settlement of
vested arrangements.
Our focus as a specialist stang
partner in STEM and exible talent
means we are uniquely positioned
to service the structural demand
of a changing world.”
Andrew Beach
Chief Financial Ocer
Operating prot
£76m
FY22: £78m
Net fees
£419m
FY22: £431m
9. Unless specically stated, all growth rates in revenue and net fees are
expressed in constant currency.
10. The Group has identied and dened certain alternative performance
measures (APMs). These are the key measures the Directors use to assess
the SThree’s underlying operational and nancial performance. The APMs
are fully explained and reconciled to IFRS line items in note 26 to the
Group Consolidated Financial Statements.
11. The contractor order book represents value of net fees until contractual
end dates, assuming all contractual hours are worked.
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Governance
Financial Statements
SThree plc Annual Report and Accounts 2023
Chief Financial Ocer’s statement continued
Dividends and distributable reserves
The Board monitors the appropriate level of dividend,
considering achieved and expected trading of the Group,
together with its balance sheet position. The Board aims to
oer shareholders long-term ordinary dividend growth within a
targeted dividend cover
10
range of 2.5x to 3.0x through the cycle.
The Board has proposed to pay a nal dividend at 11.6 pence
(FY22: 11.0 pence) per share, which together with the interim
dividend of 5.0 pence (FY22: 5.0 pence) per share, will give the
total dividend of 16.6 pence (FY22: 16.0 pence) per share for
FY23.
The nal dividend, which amounts to approximately £15.3
million, will be subject to shareholder approval at the 2024
Annual General Meeting. It will be paid on 7 June 2024 to
shareholders on the register on 10 May 2024.
Balance sheet
Total Group net assets increased to £222.9 million (FY22:
£200.4 million), driven by the excess of net prot over the
dividend payments, £6.2 million increase in intangible assets
attributable to development costs capitalised under the TIP
and favourable foreign currency movements, partially oset by
cost of shares purchased by the Employee Benet Trust (EBT).
Net working capital, including contract assets, decreased by
£2.1 million on the prior year, driven mainly by the slowdown in
trading, including reduced contractor order book. Our days sales
outstanding remained largely unchanged at 45.7 days (FY22:
45.2 days); a slight YoY increase was mainly due to a change of
‘>60 days’ debt prole which went from 7% to 8% of the book.
To reect the more challenging macro-economic backdrop, we
have increased the provision for impairment of trade receivables
by £4.9 million.
Our business model remains highly cash generative, and we
have no undue concentration of repayment obligations in
respect of trade payables or borrowings.
Investments in subsidiaries
The subsidiary undertakings principally aecting the prots
and net assets of the Group are listed in note 25 to the
Consolidated Financial Statements. The recoverable amounts of
the Company’s key trading subsidiaries remained strong in the
current year. However, due to a continued underperformance in
trading in Luxembourg and Canada, a small impairment charge
of £0.1 million was recorded in the Company’s separate books
for FY23. This impairment charge did not impact the Group
consolidated results.
An impairment loss of £0.9 million recognised by the Company
in the prior year was in relation to three businesses, which were
either restructured or closed down.
Tracker shares
The Group settled certain vested and unvested tracker shares
during the year for a total consideration of £4.5 million which was
determined using a formula set out in the Articles of Association
underpinning the tracker share businesses. The consideration was
settled in SThree plc shares; 320,457 new shares were issued and
928,483 of shares held by the EBT were utilised. The arrangement
is deemed to be an equity-settled share-based payment
arrangement under IFRS 2 Share-based payments. There
was no charge to the income statement as initially the tracker
shareholders subscribed to the tracker shares at their fair value.
All current tracker share businesses remaining in existence will
continue to be reviewed for settlement based on the pre-agreed
criteria each year, until the full closure of the scheme in the next
few years. As at the year end, the valuation of the outstanding
shareholdings was approximately £7.9 million. These settlements
may either dilute the earnings of SThree plc’s existing ordinary
shareholders if funded by a new issue of shares or result in a cash
outow if funded via treasury shares or shares held in the EBT
14
.
Liquidity management
In FY23, cash generated from operations was £93.3 million
(FY22: £64.4 million). The increase was primarily driven by a
release in working capital as the rate of new placement activity
slowed down, partially oset by robust Contract extensions.
Income tax paid increased to £19.5 million (FY22: £18.9 million).
Capital expenditure increased to £8.2 million (FY22: £3.7
million), due to the Group-wide TIP and related IT hardware
costs. The capital expenditure also included costs of leasehold
improvements and tting out certain parts of our oce portfolio.
The Group paid £14.9 million in rent (principal and interest
portion) (FY22: £14.3 million). The Group spent £10.0 million
(FY22: £9.9 million) for the purchase of its own shares to satisfy
employee share incentive schemes. Cash inows of £0.3 million
(FY22: £0.5 million) were generated from Save-As-You-Earn
employee scheme.
Dividend payments were £27.4 million (FY22: £14.7 million,
being the nal dividend paid in June 2022) and there was a small
cash outow of £0.1 million (FY22: £0.1 million) representing
distributions to tracker shareholders.
Foreign exchange had a signicant positive impact of £2.1 million
(FY22: positive impact £4.5 million).
Overall, the underlying cash performance in FY23 was strong,
reecting primarily improved working capital partially oset by
the acquisition cost of own shares purchased by the Employee
Benet Trust. We started the year with net cash of £65.4 million
and closed the year with net cash of £83.2 million.
Capital allocation and accessible funding
SThree remains disciplined in its approach to allocating
capital, with the core objective at all times being to maximise
shareholder value. The Group’s capital allocation policy is
reviewed periodically by the Board and was refreshed at the start
of FY24:
• Balance sheet – our intention is to maintain a strong balance
sheet at all times to provide operational exibility throughout
the business cycle.
• Dividend – we aim to pay a sustainable dividend, with a
commitment to a through the cycle dividend cover range of
2.5x to 3.0x of EPS.
• Deployment of capital prioritised in the order of:
1. Organic growth: investing in our people and ensuring
sucient working capital on hand to fund growth in
the contractor order book while developing new
business opportunities.
2. Business improvement: digitalising our business, putting
in place the technology and tools that are key to driving
both scale and higher margins.
3. Acquisitions: strict inorganic growth discipline, with
a focus on complementary and value enhancing
acquisitions.
4. Capital return to shareholders: after all organic and
inorganic opportunities within an appropriate time
horizon have been assessed, further cash returns to
shareholders may be considered.
The Group’s capital allocation priorities are nanced mainly by
retained earnings, cash generated from operations, and a £50.0
million RCF. This has remained undrawn during the year, but any
funds borrowed under the RCF would bear a minimum annual
interest rate of 1.2% above the benchmark Sterling Overnight
Index Average. The Group also maintains a £30.0 million
accordion facility as well as a substantial working capital position
reecting net cash due to SThree for placements already
undertaken.
At the end of the current nancial year, the Group did not draw
down any of the above credit facilities (FY22: £nil).
On 30 November 2023, the Group had total accessible liquidity
of £138.2 million, made up of £83.2 million in net cash (FY22:
£65.4 million), the £50.0 million RCF and a £5.0 million overdraft
facility (undrawn at the year end).
Andrew Beach
Chief Financial Ocer
29 January 2024
FY23 Group performance highlights:
Variance
Continuing operations FY23 FY22 Reported Like-for-like
12
Revenue (£ million) 1,663.2 1,639.4 +1% at
Net fees (£ million) 418.8 430.6 -3% -4%
Operating prot (£ million) 76.4 7 7.6 -2% -5%
Operating prot conversion ratio 18.2% 18.0% +0.2% pts -0.1% pts
Prot before tax (£ million) 77.9 77.0 +1% -2%
Basic earnings per share (pence) 42.4 41.0 +4% +1%
Proposed nal dividend per share (pence) 11.6 11.0 +5% +5%
Total dividend (interim and nal) per share (pence) 16.6 16.0 +4% +4%
Net cash (£ million)
13
83.2 65.4 +27% +27%
12. Variance compares reported results on a constant currency basis, whereby the prior year foreign exchange rates are applied to current and prior nancial year results to remove
the impact of exchange rate uctuations.
13. Net cash represents cash and cash equivalents less bank borrowings and bank overdrafts and excluding leases.
14. Note 19 to the nancial statements provides further details about all
Group-wide discretionary share plans, including the tracker share
arrangements.
36 37
Strategic Report
Governance
Financial Statements
SThree plc Annual Report and Accounts 2023
1
USA
United States
(focus on Life Sciences and Engineering)
Business review
DACH
Group net fees
36%
Net fees mix
By country By service By skills
FY23 FY22
Germany 88% 89%
Switzerland 7% 6%
Austria 5% 5%
FY23 FY22
Technology 68% 67%
Life Sciences 13% 16%
Engineering 17% 14%
Other
15
2% 3%
FY23 FY22
Independent
contractors
51% 51%
ECM 21% 20%
Permanent 28% 29%
Impact of megatrends
We have seen the ve megatrends continue to drive STEM
demand, with only a slight downturn in our Life Science
business, reecting the global market challenge in this
skills vertical.
There is still a war for talent in the DACH territories as employers
struggle with a shortage of STEM talent. Retirement of the baby
boomer generation and insucient replacements from younger
cohorts is intensifying STEM skill shortages. That, combined
with still high ination rates, is likely to lower GDP growth in
DACH countries.
FY23 performance highlights
DACH region saw net fees decline by 3% YoY, with Contract
down 1% and Permanent down 8%. This was primarily driven
by our greater exposure to small- to medium-sized enterprise
clients, which are more inclined to reduce investment in the
face of greater macro-economic challenges than our enterprise
clients. Germany, our largest country in the region (88% of net
fees), saw Contract down 1% with overall net fees down 4%,
driven by Engineering up 13%, oset by Technology and Life
Sciences, down 4% and 16% respectively. Switzerland saw net
fees grow 2% YoY driven by Engineering and Technology, with
Austria net fees at YoY.
Variance
Performance highlights FY23 FY22 Reported Like-for-like
16
Revenue (£ million) 525 539 -3% -6%
Net fees (£ million) 149 149 – -3%
Average total
headcount (FTE)
877 874 – n/a
Our people
Like most rms, we continually review our Employee Value
Proposition to ensure we attract and retain talent. It includes our
hybrid working policy, developing the oce into an appealing
place where people can connect, collaborate and receive
coaching. We aim to encourage more sta into the oce
environment by enhancing our spaces as leases come up
for renewal.
The Technology Improvement Programme (TIP), due to roll out in
Germany at the beginning of FY24, will enable us to increase the
productivity of our employees by giving them state-of-the-art
tools to be more eective in their day-to-day work.
We invested in the development of our leadership through the
Leading with Purpose programme. We will also be reviewing
training delivery at all sta levels as it has become rather too
online centred in response to the Covid-19 pandemic. Our
aim is to introduce a more balanced mix of online and
classroom training.
Reasons for condence
We remain well positioned in exible working with our strong
ECM oering, whilst our Permanent business has increasingly
moved up the salary/seniority range. Together, that enables us to
be a full solution provider to our customers and grow the value of
each of our clients.
In FY23, we continued to invest in growing our strategic
accounts relationships and public sector business. The fact that
we succeeded in our application for a permanent ECM licence
will allow us to further invest in ECM and truly use ECM as a
growth engine for our business in Germany.
In the short term, we will continue to operate under volatile
market conditions. However, we remain condent that we can
achieve our ambition of doubling our business by FY28, by being
a partner of choice to our customers, employer of choice for our
people and creating a high performance culture in which we all
operate to the highest standards, proud to pursue our purpose.
15. Other includes the results of Banking & Finance sector, which was previously
presented separately, and Procurement & Supply Chain and Sales & Marketing.
16. Variance compares FY23 against FY22 on a constant currency basis, whereby the
prior year foreign exchange rates are applied to current and prior nancial year
results to remove the impact of exchange rate uctuations.
Our successful application for a
permanent ECM licence will allow
us to further invest in ECM and
use ECM as a growth engine for
our business in Germany.”
Christophe Zwaenepoel
Managing Director DACH
Case study
For more information on how we grow
ECM service proposition in DACH, please
see our case study on ‘Providing ECM as
a service combined with the local STEM
knowledge’ on our website:
sthree.com/annual-report-2023
FY22 FY22 FY22FY23 FY23 FY23
39
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Financial Statements
Annual Report and Accounts 2023
38
SThree plc
1
USA
United States
(focus on Life Sciences and Engineering)
Business review continued
USA
By skills
FY23 FY22
Technology 16% 17%
Life Sciences 38% 43%
Engineering 41% 30%
Other
17
5% 10%
FY23 FY22
Independent
contractors
13% 15%
ECM 75% 64%
Permanent 12% 21%
Transformation, collaboration,
putting clients at the heart
of what we do – this is what
underpins our strategy of
knowing where to play and
where we can win. It’s how we
are enabling growth and taking
advantage in the largest STEM
market in the world.”
Matt McManus
Managing Director US
Impact of megatrends
Signicant investment into clean energy projects has been
announced in the USA since federal clean energy incentives
were signed into law. 83 new or expanded clean energy
manufacturing facilities are creating demand for nearly 30,000
new jobs while the total number of renewable energy jobs in the
USA is up 50% on 2019. Pharmaceutical companies have also
been ramping up their AI operations in recent months with multi-
billion dollar investments.
Looking at demographic change, the US has a relatively
favourable prole compared to most large economies, but this is
set to change with the share of the population over the age of 65
more than doubling by the end of this century. The shift will drive
healthcare demand, exacerbating current sta shortages. By
the 2030s, the country could be faced with a shortage of nearly
200,000 nurses and 124,000 physicians.
FY23 performance highlights
Despite the overall US recruitment market declining YoY, we
saw a 10% growth in our top ten clients while the next ten grew
by 26%. STEM is demonstrating its resilience against general
economic headwinds. New job activity has been substantially
impacted by a market-wide drop in hiring demand, underpinned
by inationary and interest rate pressures.
Overall, we saw a net fee decline of 14% YoY due to very strong
prior year comparatives in Life Sciences. Engineering saw
strong growth and we outperformed the market, but we did
see market-driven declines in Life Sciences as job vacancies
declined signicantly due to the macro-economic environment.
Contract, supported by improved nisher rates, showed
stronger resilience than Permanent, with a decline of 4% and
51% respectively. Engineering was up 16%, driven by demand
for roles within Electrical Engineering, Project Management and
Construction. Life Sciences was down 24% YoY, in line with the
market conditions within this sector.
Variance
Performance highlights FY23 FY22 Reported Like-for-like
18
Revenue (£ million) 328 338 -3% -3%
Net fees (£ million) 96 112 -14% -14%
Average total
headcount (FTE)
473 539 -12% n/a
Our people
This year we have introduced a new operating model with the
goal of simplifying and standardising ways of working, increasing
cross selling and collaboration between industries. We also
upgraded our hybrid working policy to provide our people with
more opportunities for coaching, collaboration and community
participation.
Reasons for condence
Worth over $50 billion, the USA has the largest STEM stang
market in the world. It exhibited resilience in FY23 after two
consecutive years of high double-digit growth. It is projected to
grow 5% in FY24.
We see immense opportunity in the US market, as we still only
capture a relatively small share of wallet of our key clients.
The US is the rst region to benet from TIP, equipping our
consultants with best-in-class tools and processes ahead of the
rest of the Group. This builds a solid foundation for scaling our
business protably and winning market share.
The Engineering skills vertical oers particular potential. SThree
is the ninth largest engineering stang agency in the world and
is the eleventh largest in the USA
*
.
Our focus in FY24 will be to capture market share through
growth within our core vertical markets of Technology (Software
Development and Salesforce), Engineering and Life Sciences
(Clinical Research and Quality Assurance).
17. Other includes the results of Banking & Finance sector, which was previously
presented separately, and Procurement & Supply Chain and Sales & Marketing.
18. Variance compares FY23 against FY22 on a constant currency basis, whereby the
prior year foreign exchange rates are applied to current and prior nancial year
results to remove the impact of exchange rate uctuations.
Awards / Rankings
1 SSG ranked #82 – Largest Stang Firms in the US*
2 Real ranked #5
(up from #6 last year) –
Largest Life Sciences Stang rm
in the US**
3 2023 Oncon Icon Award – L&D Team
4 Computer Futures – Industry Partner of the Year***
5 Nine people win WISA (Women in Sales Awards)
Net fees mix
By service
Group net fees
23%
FY22 FY22FY23 FY23
* Source: SIA data.
** SIA.
*** WICT Network.
41
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Financial Statements
Annual Report and Accounts 2023
40
SThree plc
1
USA
United States
(focus on Life Sciences and Engineering)
Business review continued
Netherlands including Spain
The Netherlands is a leading
digital frontrunner in Europe and
digitisation remains a top priority
for many clients.”
Margot van Soest
Managing Director Netherlands & Spain
Impact of megatrends
The region is responding to client demand for digitisation
by investing in AI and cloud infrastructure. It is also seeing
signicant spend on decarbonisation. Although hydrogen is
still in its infancy, we anticipate client demand in this sector to
increase in coming years; therefore, we have been building our
capability to secure a signicant part of this market opportunity.
There is a shifting attitude to work. Remote and hybrid working
expanded dramatically during the pandemic but the legal
framework regulating them lagged behind and employers are
realising they may need to ll the gap with their own policies.
SThree, with its state-of-the-art systems for managing contract
employment, is well placed to provide this support.
FY23 performance highlights
Like-for-like, this region saw net fees grow by 6% YoY, with
strong growth in Contract, up 7%, partially oset by Permanent
which was down 2%. The Netherlands, which represents 94%
of the region, saw a net fees growth of 3%, with Engineering up
8% and Technology up 3% YoY driven by demand for skills within
Enterprise Resource Planning (ERP), data and digitalisation
projects. Spain had an impressive year, with net fee growth of
82% driven primarily by Technology.
Variance
FY23 FY22 Reported Like-for-like
20
Revenue (£ million) 368 324 +14% +11%
Net fees (£ million) 82 76 +8% +6%
Average total
headcount (FTE)
422 389 +8% n/a
Our people
Our focus this year has been on retention programmes. We
built on our partnership with Nyenrode University to provide
leadership training for our business managers and tested
improved reward communications with the introduction of
total reward statements.
Reasons for condence
Two megatrends continue to drive up demand in the
Netherlands STEM labour market: the increasing requirement
for specialist STEM skills linked to future technologies within
Technology and Engineering skill verticals, particularly in relation
to renewable energy, and the reduction in the talent pool that
is resulting from the demographical changes, in particular a
growing proportion of an ageing workforce retiring faster
than ever.
In Spain we see a demand for contingent labour continuing to
grow, particularly within the Retail, Banking and Financial, and
Energy sectors.
Group net fees
19%
Net fees mix
By country By service By skills
FY23 FY22
Netherlands 94% 96%
Spain 6% 4%
FY23 FY22
Technology 50% 50%
Life Sciences 5% 6%
Engineering 36% 35%
Other
19
9% 9%
FY23 FY22
Independent
contractors
55% 55%
ECM 38% 37%
Permanent 7% 8%
Case study
or more information on how we support our
clients within the renewables sector, please
see our case study on ‘Sourcing talent for
oshore wind farm projects’ on our website:
sthree.com/annual-report-2023
19. Other includes the results of Banking & Finance sector, which was previously
presented separately, and Procurement & Supply Chain and Sales & Marketing.
20. Variance compares FY23 against FY22 on a constant currency basis, whereby the
prior year foreign exchange rates are applied to current and prior nancial year
results to remove the impact of exchange rate uctuations.
FY22 FY22 FY22FY23 FY23 FY23
43
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Annual Report and Accounts 2023
42
SThree plc
Rest of Europe
Group net fees
17%
Impact of megatrends
Our Rest of Europe region is made up of businesses in the UK,
Belgium and France. In these markets, as globally, there is a shift
from Permanent hires to Contract, in large part due to project-
specic hiring. With strong extensions and increased contract
lengths, we saw a 3% increase YoY in Contract net fees.
AI is a hot topic amongst customers. Our report, How the STEM
World Evolves, revealed the rise of AI and automation caused
concerns among STEM professionals, with 34% worried about
consequent job losses. However, the impact of these two
technologies on recruitment is yet to be seen and the prevailing
view is that they will become another skill verticals, creating
more job opportunities in STEM with a positive impact on the
number of STEM specialists that companies employ.
The UK market is experiencing a green jobs boom as businesses
seek to decarbonise and reach challenging net zero targets.
Demand for talent in the clean energy sector is expected to grow
YoY; reskilling and upskilling STEM specialists will be essential to
bridge the skills gap in this area.
FY23 performance highlights
Net fees saw a decline of 4% YoY. Contract, which represents
95% of net fees for the region, grew 3%, with Permanent
declining 59%, driven by both market conditions and the
transition towards Contract.
The UK, the largest country market in the region (64% of net
fees), saw net fees decline by 3% YoY, driven by Engineering,
up 10%, as demand increased for roles within Project and
Construction Management, Electrical and Mechanical
Engineering, oset by decline in both Technology, down 5%,
and Life Sciences, down 27%. Belgium saw net fees up 13% and
France was down 3%. Average headcount for the region was
down 9% YoY, with year-end headcount down 24%.
Variance
Performance highlights FY23 FY22 Reported Like-for-like
22
Revenue (£ million) 400 394 +1% –
Net fees (£ million) 71 73 -3% -4%
Average total
headcount (FTE)
23
499 547 -9% n/a
Our people
We built our Employee Value Proposition through several
initiatives this year. All our most senior people managers
completed the Leading with Purpose programme which gave
them training in the four essential roles of leadership. This will
enhance their, and their teams’ performance, as they build
a supportive culture. New compensation frameworks were
adopted for all levels as we invested in base salaries on a
targeted basis and reviewed reward schemes to ensure they are
driving the right performance behaviours.
Reasons for condence
Despite geopolitical and economic uncertainties, we
remain condent about the region’s growth prospects. The
implementation of the TIP alongside our focus on STEM will be
strong dierentiators, and we remain condent this will enable
the business to capture more market share across this region.
By implementing dynamic and responsive strategies, the region
is actively adapting to meet the evolving needs of its customers.
Besides exible working oering, it involves a deep understanding
of STEM market, knowing the right skills that are vital for
clients’ long-term success, and wider shifts in the recruitment
environment. The region’s overarching goal is to maintain
focus and clarity, meticulously track leads and pipelines, and
strategically invest in its people to help them succeed.
21. Other includes the results of Banking & Finance sector, which was previously
presented separately, and Procurement & Supply Chain and Sales & Marketing.
22. Variance compares FY23 against FY22 on a constant currency basis, whereby the
prior year foreign exchange rates are applied to current and prior nancial
year results to remove the impact of exchange rate uctuations.
23. Excludes central headcount located in the UK.
Business review continued
Net fees mix
By country By service By skills
FY23 FY22
UK 64% 64%
France 15% 14%
Belgium 18% 15%
Luxembourg 1% 2%
Ireland 2% 5%
FY23 FY22
Technology 56% 55%
Life Sciences 17% 20%
Engineering 14% 12%
Other
21
13% 13%
FY23 FY22
Independent
contractors
66% 62%
ECM 29% 26%
Permanent 5% 12%
Middle East & Asia
Group net fees
5%
Net fees mix
By country By service By skills
FY23 FY22
Japan 45% 44%
Dubai 50% 36%
Singapore 5% 20%
FY23 FY22
Technology 27% 30%
Life Sciences 14% 19%
Engineering 27% 13%
Other
21
32% 38%
FY23 FY22
Independent
contractors
31% 23%
ECM 5% 7%
Permanent 64% 70%
To keep up with increasing technological
complexity as life sciences and healthcare
make rapid advances, our customers
are constantly looking to appoint talent
from our Digitisation and Research-led
Healthcare segments.”
Hashim Kapadia
Regional Sales Director SThree ME&A
Impact of megatrends
Life Sciences and Research-led Healthcare were the key
drivers behind demand for STEM talent in the region. Clients
continued to appoint talent with skills to keep up with increasing
technological complexity. Digitalisation was also a signicant
demand driver as clients sought to harness the potential it oers
for business transformation.
FY23 performance highlights
The region saw net fees increase by 3% YoY. Excluding the
restructured businesses in Singapore and Hong Kong, net fees
were up 20% YoY. Japan, which represents 45% of the region,
was up 6% YoY, driven by Engineering and Life Sciences. Japan’s
Contract net fees were up 32% and Permanent up 5%. Strong
performance was also reported in UAE with net fees up 41%
driven by Engineering.
Variance
FY23 FY22 Reported Like-for-like
22
Revenue (£ million) 43 44 -3% +1%
Net fees (£ million) 21 21 – +3%
Average total
headcount (FTE)
185 208 -11% n/a
Our people
More than 60% of our regional leadership team have been
with SThree since joining through our graduate programme.
Such strong retention of some of our best talent demonstrates
we have a compelling Employee Value Proposition and
are a preferred employer in the sector. This was conrmed
independently this year when we were recognised as a Great
Place to Work-Certied™ company by the Great Place to Work
®
organisation, a global authority on workplace culture.
One of the attractions for graduates is the opportunities we oer
for both mentors and mentees. Beyond their core job role, all
our people have the opportunity to participate in community
initiatives that promote DE&I and ESG goals.
Reasons for condence
Our specialism in major STEM disciplines, combined with our
global reach, gives us a signicant edge over competitors in
the region. Our oce footprint and consultants immersed in
the prevailing culture, provide the region with insights into
clients’ key challenges. We are well placed to build candidate
relationships and source talent.
In line with our global strategy, we will continue to increase our
investment into the Middle East & Asia region, with a focus on
growing our business in Japan and Dubai.
FY22
FY22
FY22
FY22
FY22
FY22
FY23
FY23
FY23
FY23
FY23
FY23
44 45
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SThree plc Annual Report and Accounts 2023
Stakeholder engagement
Why we engage
Our people’s hard work and commitment to deliver standout
customer experiences are at the heart of SThree’s ongoing
success.
Engaging with our employees and understanding what is
important to them, what challenges and risks they face, are
therefore essential to the Board’s decision making. It helps to
inform Group-wide people strategies, develop better policy
interventions, reward schemes, local training plans and share
best practice in nding, developing and retaining talent.
How we engage
• Regular employee surveys.
• Employee resource groups provide moments of belonging,
awareness and allyship whilst inuencing policy and people
experience.
• Our internal community of ambassadors deliver internal
events, volunteering and moments of connection that align
colleagues to our purpose.
• Employee focus groups led by Denise Collis, the Senior
Independent Non-Executive Director, a dedicated Board
advocate for employee engagement.
• Meetings between the CEO, Chief People Ocer and
members of the ExCo on people strategy and initiatives.
• Other ongoing interactions via Group intranet, leadership
and employee-led forums, CEO Town Halls, webinars, social
media channels and global newsletters on client- and sales-
related matters.
Key interests and concerns in FY23
and our response
As part of Our People pillar we continued to keep investing time
and resources into our people.
In light of the ongoing Group-wide Technology Improvement
Programme (TIP), we were very selective about what initiatives
to focus on, ensuring we spread them over the year and across
the Group so that people can still have the opportunity to get
involved but without any impact on their day job or work-life
balance. We have made several improvements to Group-wide
communication processes, training programmes, remuneration
and infrastructure to support employees.
We have rolled out a ‘Leading with Purpose’ training and
‘Strategic Narrative’ (a six-chapter story), to help our global
workforce gain clarity on SThree’s strategy and values, and
thus gain their commitment towards the accomplishment of the
Group’s 2027 ambitions.
Our Group-wide TIP, an essential enabler to increase eciency
and resilience in the way we work internally and with our
customers, made signicant progress this year. We successfully
delivered the rst cohorts of the programme in our key location,
US, which contributed to step-changes to processes that our
employees follow in their day-to-day jobs.
Within L&D, we developed and rolled out the professional study
policy and worked with the professional bodies to achieve
accreditation for nance team members. We also developed
change management plans and a related training oer to drive
successful adoption of outputs built and delivered under the TIP.
Section 172 statement
In accordance with the requirements of Section 172 of the
Companies Act 2006 (the Act), the Directors conrm that during
the nancial year ended 30 November 2023 they have acted in a
way that they consider, in good faith, would most likely promote
the success of the Company for the benet of its shareholders
as a whole, having regard to the likely consequences of any
decision in the long term and the broader interests of other
stakeholders as required by the Act.
Supported by a well-established corporate governance
framework, the Board’s decisions take the long-term interests
of key stakeholders into account, including its employees,
clients and candidates, shareholders and local communities,
along with the impact of our business upon them and the
likely consequences of any planned actions required to deliver
sustainable growth.
The Board maintains close business relationships and
partnerships with these groups, to keep itself informed of the
material issues relevant to stakeholders. In addition to the regular
feedback that it receives from customers and employees, the
Board maintains an open two-way dialogue with investors
to eectively engage with and communicate our actions to
them. This is integral to the Board’s strategic decision-making
framework focused on those business priorities which will
position SThree to deliver shared and sustainable value for all
stakeholders.
The information set out below, together with the information
on pages 94 to 99 of our Governance Report, explains how
the Board considers and engages with key stakeholder groups
identied as critical to our future success: our people, our
clients and candidates (which we referred to as customers), our
shareholders and our local communities.
The examples of the Board’s principal decisions made over the past year, and how we
created value for our stakeholders, are provided on pages 50 to 51
The employee engagement section on pages 96 to 99 in the Governance Report
provides more detail on Group-wide actions taken in response to employee feedback
Our people
Why we engage
Regular engagement with all our clients and candidates
(customers) helps us to adapt our business and strategy
by investing in the right vertical niches and improving and
developing a service proposition that is more relevant to evolving
customer needs. Ultimately, it helps us remain the STEM talent
provider of choice in our markets and a sustainable value creator.
How we engage
• Key Client Directors appointed among our senior recruiting
consultants to engage with clients at a strategic level.
• Customer satisfaction surveys.
• Net promoter score surveys.
• Digital customer interfaces, videos, webinars, social media
channels and other virtual events.
• Thought Leadership articles.
• Elevate Careers – a community programme delivered in
collaboration with clients, candidates and industry bodies
to help diversify the STEM talent pipeline. The programme
provides an opportunity to collaborate on hosting events and
actions that empower people from diverse backgrounds to
access career paths into STEM roles.
• #STEMSeries virtual events to share industry experts’ advice
and tips on multiple topics relevant to the current work and
market environment.
Key interests and concerns in FY23
and our response
Through the engagement activities undertaken, we identied
that acceleration of digital transformation and increased
stakeholder pressure to reduce business carbon footprint are
our clients’ key areas of focus. This contributed to the ongoing
demand for STEM professionals with expertise in data analytics,
AI, developing cutting-edge technologies and green systems
architecture, creating new digital products and process
optimisation. This in turn resulted in a signicant rise in average
rates for most sought-after IT contractors.
In parallel, our candidates requested to work on innovative
projects and with the latest tech to help maintain their value in
the labour market. Flexible and remote working also continued
to be an ask of our candidates, putting additional pressure on our
clients to meet these needs to attract the best talent.
In response, we continued to innovate our systems and
processes to maximise service delivery for all our clients
and candidates.
After an intense period of testing, we rolled out the rst cohorts
of the new integrated platform in the US, to drive greater
operational excellence, productivity and customer experience.
For clients who experience regional talent shortages we utilised
our global talent hotspots and regional specialisms to identify
suitable candidates.
We formed a global core team to work on a new Global Client
Strategy focused on creating a consistent and standardised
approach of growing our key strategic accounts and the way we
partner with them. We aim to enhance our market reputation for
the best client experience.
Our clients and candidates
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Stakeholder engagement continued
Why we engage
We aim to instil condence in our investors and win their long-
term support of our business by providing them with complete,
accurate and transparent information about our strategy
including sustainability commitments and the key drivers behind
our operational and nancial performance.
How we engage
• Annual General Meetings.
• Quarterly results presentations and trading statements.
• Investor roadshows with one-to-one consultations and group
meetings with large international institutions, sections of the
UK private wealth and retail investor community.
• Virtual investor briengs and capital markets days.
• Shareholder perception studies received via the Company’s
stockbrokers and nancial advisers.
• Investor community engagement with the Chair and Non-
Executive Directors, to address environmental, social and
governance issues and our performance.
Key interests and concerns in FY23
and our response
This year when engaging with our investors we focused
on demonstrating our robust nancial performance while
transforming our ways of working, resilience of our business
model further supported by favourable megatrends driving
ongoing demand for STEM skills, governance and remuneration,
strategy, capital allocation, and progress on our strategic
priorities including our transition plan towards net zero.
In June 2023, we received an extension of our main £50 million
credit facility, that was due to mature in May 2023. The Group’s
new credit maturity prole which now extends to FY26, with one
remaining extension option to FY27, has reinforced our ongoing
strong nancial position.
The Board recommended a nal FY23 dividend of 11.6 pence
per share. This nal dividend, together with the interim dividend
of 5.0 pence per share, amounts to a total dividend for the
year of 16.6 pence per share, an increase of 4% over the FY22
total dividend.
In January 2023, our CEO and CFO held SThree’s Technology
Brieng with the investor community. Our investors were
given an update on the Group-wide TIP, highlighting how this
dierentiated solution unique to SThree will bring operational
eciency and enable SThree’s long-term growth.
Our shareholders
Why we engage
Local communities are the source of the
STEM talent our clients need to solve
complex world challenges and drive
economic growth. We provide decent
work opportunities within our local
communities and access to sustainable
livelihoods.
We also address the increasing risk of
climate change through providing the
STEM talent at the forefront of climate
innovation whilst also actively reducing
our own carbon emissions.
How we engage
Community outreach programmes to
grow and diversify the STEM talent
pipeline:
• Career support initiatives where
we utilise our intellectual capital in
recruitment to provide employability
support to people facing barriers to
employment.
• Elevate Careers in partnerships
with education, non-prot
organisations, candidates and clients
to empower community members
underrepresented in STEM to access
career pathways, helping to diversify
the STEM talent pipeline and provide
access to sustainable income.
• Partnerships with our clients
providing the skills needed to deliver
projects that contribute towards the
United Nations SDGs.
Key interests and concerns
in FY23 and our response
In FY23, we evolved our work in building
diverse STEM talent communities and
launched Elevate Careers, designed to
make STEM industries more diverse
and inclusive.
Elevate Careers replaced all our previous
regional community programmes and
shares one global vision and purpose.
Thanks to a standardised approach and
share of resources, it enables us to work
more eciently, making it easier to scale
and translate across the business to
maximise our impact.
Our local communities
and environment
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SThree plc
Stakeholder engagement continued
Illustration of key decisions made by the Board in FY23
The table below shows some of the key decisions of the Board in FY23. The Directors conrm that the deliberations of
the Board incorporated appropriate consideration of the matters detailed in Section 172 of the Companies Act 2006. As
stewards of the Company, the Board recognises that having regard to the needs and expectations of stakeholders is crucial,
as it ensures that SThree is well positioned to deliver long-term sustainable growth for the benet of all its stakeholders.
Launch of the Leading with Purpose
Launch of the Strategic Narrative (a ‘Six-Chapter’ narrative)
Enhance the employee experience and knowledge of SThree strategy (service proposition) to help them become more successful,
more quickly in their day-to-day jobs.
Background and considerations made by the Board in its
decision making
The likely consequences of the decision in the long term and
stakeholder groups aected
The Board approved the development and launch of a
strategic narrative – ‘A Six-Chapter story’ which articulates
SThree’s strategy internally, including our destination, current
reality, unique opportunity, and the journey we need to take
to reach our goals. The Board recognises that Group-wide
communication of SThree’s purpose, vision and strategic
ambitions is key to our ongoing success. In later months of
FY22, multiple interviews took place with the ExCo and focus
groups with representation from across the business to reect
on who we are and where we want to get; it culminated at
the leadership event in Barcelona in October FY22 when the
strategic ‘Six-Chapter’ narrative was unveiled.
In FY23, a team of SThree’s senior leaders issued the narrative
across all business units, describing key initiatives and strategic
drivers and how they shape the purpose of each and every
function within the SThree Group.
Besides enhancing our employees’ understanding of the Group
vision, the strategic narrative builds on skills of our leadership
team who, by giving the right strategic direction, helps to
unleash our people’s potential to deliver SThree’s vision of
becoming the number one STEM talent provider. The launch
of the Strategic Narrative was accompanied by the creation
of a new SharePoint site giving access to many resources and
information about SThree’s four strategic pillars.
This initiative is expected to help our employees to better
execute our strategy and, in the longer term, generate more
lifetime value to our business and other stakeholders.
Launch of the Global Client Strategy
Build a reputation in the market for best customer experience.
Background and considerations made by the Board in its
decision making
The likely consequences of the decision in the long term and
stakeholder groups aected
The Board understands that SThree’s clients value consistency
and dependability in their partnerships. Our current processes
and standards of growing key strategic accounts were viewed
as good but not ideal, with large potential for improvement
at both global and regional level. The Board approved the
initiative to develop a global client strategy, a much needed
coordinated approach to target, grow and partner with SThree’s
strategic customers.
Our new client strategy will dene the distinctive value and
experiences that SThree provides to its targeted clients; it will
comprise well-dened processes, tactics and tools to support
the selection and development of our long-term partnerships
with key clients. A standardised approach across all regions
will facilitate more global cooperation on key accounts and will
bring alignment with the new CRM system developed as part of
the TIP. In the long term, the global client strategy is expected
to increase SThree’s credibility, reputation, competitiveness and
lead to signicant repeat high-value business from our clients;
ultimately increasing our market share within STEM sectors.
Committed to net zero target by 2050
Strengthening our environmental ambitions with a new science-based target of net zero.
Background and considerations made by the Board in its
decision making
The likely consequences of the decision in the long term and
stakeholder groups aected
After a number of Board discussions with the Executive
Team that began in December 2022, the Board approved
the strategic update announced externally on 12 April 2023.
We have updated the market about our Science Based
Targets initiative (SBTi)-veried target of reaching net zero
GHG emissions across the value chain by FY50, and how we
expect to achieve our near-term pathway to deliver on this
ambitious commitment. We target a 77% reduction in scope 1
and 2 carbon emissions and a 50% reduction in scope 3 GHG
emissions by FY30 from a FY19 baseline.
See net zero transition plan on page 71
SThree’s Board remains committed to tackling SThree’s
environmental impact, aligned to stakeholder expectations. The
Board also considered that SThree’s roadmap towards net zero
would encompass the Group’s targeted action on behavioural
change, operational adaptions and inuencing its end-to-end
value chain. This will also coincide with our growing investment
in the clean energy business and strengthening supply-chain
management through our TIP.
We want to be an attractive employer for our existing and
potential employees, who want to work for companies which
have clear plans and commitments to help shape the future and
tackle climate change.
Expected outcome for shareholders: we understand the
investment communities need to decarbonise their investment
portfolio and, as such, our net zero target and roadmap will
ensure our investors have the data and eciencies needed to
meet their reporting and targets.
Executive appointments
Changes to SThree’s organisational structure and leadership.
Background and considerations made by the Board in its
decision making
The likely consequences of the decision in the long term and
stakeholder groups aected
In April 2023, following close consultations with the People
Leadership Team, the Board approved the appointment of Sarah
Mason as a new Executive Committee member and Chief
People Ocer. Sarah brings with her highly relevant experience,
having spent time within sales and stang organisations,
including SThree for ten years, between 1998 and 2008.
In addition, in August 2023 we announced the appointment of
Jelte Hacquebord as Chief Commercial Ocer (CCO), who has
been pivotal to the success of one of our biggest sales regions
and brings an enormous amount of experience in building
excellent client relationships and overall sales businesses.
In his role, Jelte will be responsible for all revenue channels,
sales function and marketing across all regions, while steering
the direction of business growth and overseeing the market
investment strategy.
Eective from 1 September 2023, Nicholas Folkes, previously
Chief Technology & Information Ocer, became Chief
Operating Ocer (COO) to ensure consistent leadership
and strategy delivery in technology, transformation and
business operations.
The above leadership changes are expected to put us in the
best possible position to capitalise on the opportunities in front
of us.
The appointment of Sarah Mason, who takes a practical,
outcome focused, collaborative approach to change, will further
support the Board’s eorts to create high-performing, inclusive,
learning culture within SThree. We want our people to be able
to see how we aim at developing their potential, accelerating
their careers and helping them to perform at their best.
With the appointment of Jelte Hacquebord as CCO we aim to
bring all key commercial activities (sales, marketing, blueprint
and other sales projects) under one global function, to improve
our focus on driving and accelerating growth through a clear,
consistent and measurable customer strategy, as well as an
optimal go-to-market and customer delivery approach.
The appointment of Nicholas Folkes as COO will maximise our
opportunities to become more ecient and eective in how we
operate, as we navigate our transformation journey.
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ESG targets
and progress
Since FY20 we have monitored our ESG performance against key targets that align to
the areas most material to our business, reecting our business model and stakeholder
priorities. Our ESG targets contribute to the success of our business, aligned with our
strategic pillars.
In addition, we undertook analysis to understand the UN SDGs that we can impact, and
aligned our strategy to deliver relevant outcomes to the targets and indicators established
within the SDG framework.
To positively impact
150,000 lives by FY24
Doubling the share of our global
renewables business by FY24
Reduce scope 1 & 2 emissions
by 77% and absolute scope 3
emissions by 50% by FY30
We aspire to increase
representation of women in
leadership to 50/50
Progress 114,466 lives positively
impacted by SThree since
1 December 2019.
142% growth in our clean
energy business net fees
since FY19 (baseline year).
31% increase in scope
1 and 2 and 12% reduction in
scope 3 in FY23 from FY19
(baseline year).
39% women in leadership
positions*.
FY23 activities 15,292 accessed decent
work through SThree
placements.
431 accessed our career
support programme.
2,754 existing and aspiring
STEM professionals
accessed Elevate Careers
programme with coaching
and mentoring support
provided by SThree.
3,094 hours of volunteering
supported people in our
local community.
28% growth in our clean
energy business net fees
YoY in FY23.
26% increase in absolute
emissions in FY23 in
comparison to FY22 due to
a return to pre-pandemic
operations.
47 women participated
in our leadership talent
development programme
Identify.
Alignment to
strategic pillars
Our Position
Our People
Our Places Our Platform Our People
Sustainable
Development
Goals
* In FY23, we reviewed our denition of women in leadership and aligned it to the FTSE Women on Boards Leadership index/recommendation which denes leadership as
Executive Committee and Executive Committee minus one (excluding administrative roles). As of FY23, SThree adopts this denition, and our data is reective of this within
this Annual Report.
Our
commitment
to being a
responsible
business
Case study
For more information on our Responsible
Business practice, please see a case study on
our partnership with Earthly on our website:
sthree.com/annual-report-2023
Our commitment to being a responsible business (including TCFD)
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Our commitment to being a responsible business (including TCFD) continued
Building an
inclusive
future for
everyone
Our purpose of bringing skilled
people together to build the
future is focused on empowering
people to reach their full potential
whilst using their skills to drive
innovation and progress across
the world. Our social impact
goes beyond our colleagues
and candidates, delivering
outcomes for all stakeholders and
contributing to the UN Sustainable
Development Goals.”
Gemma Branney
Global Director of Purpose and Inclusion
Elevating our people
In FY23, we continued to build a high performing, inclusive
culture. People remain a fundamental part of our core strategy,
enabling our performance and heightening the impact we
have on all of our stakeholders. In FY23, we continued to make
progress in the following areas:
• We understand that company culture is ever evolving and
we continue to prioritise the development of our own culture
across the global business. Over 150 colleagues delivered
internal networks and activities to enhance our culture.
This includes activities surrounding International Women’s
Day, Black History Month, World Environment Day, as well
as touch points throughout the year. In addition, in the US
and UK we launched a new data capture process to enable
colleagues to share their race and ethnicity data with the
business, improving our insights surrounding diversity,
informing future priorities for the business. In FY24 we
will continue to embed DE&I data collection across our
global business to ensure we can align to the Parker
Review requirements.
• Colleague engagement continues to be a KPI for the
business, a metric which provides important insights in
relation to development, retention and productivity. In FY23,
we conducted regular town halls to inform our people,
delivered eight focus groups with our ExCo members, four
focus groups with Non-Executive Directors, delivered culture
co-creation workshops with 15% of our people and delivered
our Engage survey achieving an eNPS of 43 (FY22: 51 points).
Active listening has been a key part of our People Strategy in
FY23, ensuring colleagues’ voices contribute to the evolution
of our culture.
• Our SThree Academy continues to be a signicant resource
for colleague development alongside in-person training
and regular performance reviews which include personal
development planning. In FY23, our colleagues accessed
41,264 hours of learning.
• Our ambition is to achieve 50/50 representation of women
in leadership. In FY23, we launched the third cohort of our
talent accelerator programme with 47 women participating.
The programme increases engagement, retention and
likelihood of promotion of women.
“ I’ve found my journey with the Identify programme
to be immensely enriching. This initiative has not only
granted me access to a diverse array of specialised
training and webinars hosted by inspiring external
speakers but also facilitated connections with
remarkable women from around the globe who share
similar values and goals. I truly enjoyed the external
mentorship, where I delved into topics that were
important to me on a professional level.”
Esther Wilz
Commercial Manager, SThree Berlin
Elevating careers
In FY23, we brought together the numerous community
programmes we deliver into one high impact upskilling
programme aimed at diversifying the STEM talent pipeline,
Elevate Careers. Working in partnership with 39 partners,
including community organisations, industry bodies and clients,
we delivered activities to elevate the STEM careers of 2,754
people from diverse communities. Our programmes included
CV reviews, job search advice, skills development sessions and
industry panel events.
“ As a neurodivergent person, I always appreciate
people sharing how they advocate for themselves.
It’s something that can be challenging to navigate.”
Elevate Careers UK Workshop participant
June 2023
“ This is the most helpful, transparent webinar for career
transition I’ve heard.”
Elevate Careers USA Workshop participant
October 2023
In FY23, we developed a global partnership with Women Who
Code, a charity whose mission is to empower diverse women to
excel in tech careers. SThree contributed £86,000 to fund 3,700
scholarships for women on their programme and ran workshops
for 1,239 women within the Women Who Code community.
Together we are supporting more women from diverse
backgrounds into tech careers, SThree’s largest STEM market.
Elevating our community
Contributing to our local communities is a long-standing part of
our corporate identity which is demonstrated by the 40 hours of
paid volunteering leave every colleague can utilise each year. In
FY23, 85 ESG Ambassadors arranged activities to support their
local community. This included raising £119,025, contributing
over 980 items as gifts in kind and volunteering 3,094 hours. Full
details of the organisations we support and the impact we have
had can be found on pages 10 to 18 in our ESG Impact Report.
“ Our colleagues have a strong ethos of doing good.
Their passion and energy to give back to their local
communities through fundraising, donating items,
skills sharing and using their 40 hours of paid volunteer
leave transforms communities and creates a better
future for everyone.”
Francesca Greaves
Global Purpose and Inclusion Manager
Case study
For more information on how we support
local communities, please see a case study
on our partnership with Aleto Foundation
on our website:
sthree.com/annual-report-2023
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Our commitment to being a responsible business (including TCFD) continued
STEM skills
fuelling a
low-carbon
future
Through our materiality assessment
it is clear that climate change
is a critical topic to all of our
stakeholders. As a STEM stang
specialist, we are committed to
being led by climate science and
our net zero targets reect this.
We are committed to not only
reducing our impact but to providing
the STEM talent the world needs
to decarbonise.”
Andrew Beach
CFO and Executive Sponsor of climate risk
970
placements in clean energy
28%
YoY growth in our clean energy business
8%
reduction in carbon emissions since FY19
The green skills that will build the future
Through climate-related scenario analysis we have identied the
growing opportunity related to the role STEM skills will play in
the low-carbon transition. This is materialising as we have seen
our clean energy business grow by 142% since FY19, when we
set a target to double the size of our clean energy business to
maximise the opportunity identied.
McKinsey estimates 202 million new jobs may be needed to
deliver net zero by FY50 and the LinkedIn Green Skills Report
2023 estimates the need for green skills is double the pace of
green talent entering the job market. Decarbonisation is one of
the most material megatrends impacting SThree.
For further details, see page 4
We continue to strengthen our position as a talent partner to
net zero, growing our sustainability credentials and through
partnering with clients to address their green skills gap. In FY23,
we placed 970 candidates into clean energy roles.
In FY23, we continued to deliver green skills development
opportunities as part of our Elevate Careers programmes.
Throughout this year, 308 women attended workshops
delivered in partnership with Women in Renewable Industries
and Sustainable Energies (WRISE) and New England Women in
Energy and Environment.
Taking meaningful climate action
For over a decade SThree has shown a commitment to climate
action. In FY23, we strengthened our commitment through
setting SBTi-veried targets.
For further details, see page 71
We demonstrate transparent reporting on our carbon emissions,
progress towards our targets and our net zero roadmap which is
detailed within the following TCFD disclosures.
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Our commitment to being a responsible business (including TCFD) continued
TCFD report
Task Force on Climate-related Financial Disclosures statement
Governance pillar
Board oversight
TCFD recommendation: Describe the Board’s oversight of climate-related risks and opportunities.
The Board engages with stakeholders on matters of business
strategy, performance and environment, social and governance
(ESG), including climate change. Continuing to integrate ESG
impacts into the business and providing clear, transparent
reporting on ESG matters remains a priority for the Board. The
Board’s experience includes a range of skills and knowledge
in relation to risk management and risk-informed strategic and
nancial planning which supports the implementation of the
TCFD recommendations across the Group. Full details of the
Board’s experience can be found on pages 86 to 87. The level
of Board oversight is considered appropriate for the ESG risks
identied by the Group.
The Board appointed the Chief Financial Ocer (CFO) as the
Executive Board member who acts as senior sponsor for all
climate-related matters including climate risk, metrics and
targets. The CFO reports progress to the Board on a regular
basis. With over 15 years’ experience as a listed company
CFO, extensive risk management knowledge, an active
member of the Group ESG Committee and Chair of the
TCFD Steering Committee, the CFO is best placed to ensure
the business assesses and monitors the impact of climate
risks and opportunities, informing business strategy and
growth ambitions.
In addition, the Chief Executive Ocer has appointed
an Executive Committee (ExCo) which includes the senior
leaders within the business. The purpose of the ExCo is to
direct the Group strategy including the achievement of
performance targets and mitigation of risks. The ExCo
conducts regular business reviews related to strategy,
risk management (including climate-related risks) and
performance including progress towards ESG targets.
The ExCo reports to the Board and escalates both risk and ESG
matters as appropriate. The Board reviews strategy at least twice
a year.
In addition, the ESG Committee, which includes members of
the ExCo, with Non-Executive Directors’ attending on a rotation
basis, meets quarterly to discuss and report ESG specic topics.
These topics are then discussed at the Group Risk Committee,
ExCo, Group Remuneration Committee and the Board.
During the reporting period, the Board agenda included:
• an update on ESG priorities and progress towards agreed
KPIs. The Board questioned business engagement and
support, oering sponsorship of key ESG topics as required;
• risk review, including discussing climate risk statements, risk
appetite, tolerance and Key Risk Indicators (KRIs);
• TCFD progress updates were provided by the CFO to give
assurance to the Board that we would meet all compliance
requirements. This provided an opportunity for the Board to
question actions and progress, and inuence the direction of
the TCFD Steering Committee as required;
• discussed and agreed new science-based net zero targets
aligned to SBTi; and
• the Board discussed the role of the ESG Committee and
in order to increase the Board’s oversight of ESG-related
topics, including climate risks and opportunities, the Board
agreed that a Non-Executive Director seat will be held on the
committee in FY24.
Management oversight
TCFD recommendation: Describe management’s role
in assessing and managing climate-related risks and
opportunities.
To oversee the governance of risk management, including
climate-related risks, the ExCo has formed a Group Risk
Committee. In addition, to support the management of climate-
related matters and wider ESG ambitions, the ExCo established
an ESG Committee.
ESG Committee
SThree’s ESG Committee has representatives from the ExCo,
including the Chief Executive Ocer, Chief Financial Ocer,
Chief People Ocer and Chief Legal Ocer, as well as
individuals from key strategic markets and departments.
The ESG Committee meets quarterly to direct the Group ESG
strategy, policies and implementation of key changes across the
business. This includes identifying climate risks and providing
oversight of the assessment and mitigation of these risks.
The review of climate-related risks occurred each quarter
during FY23.
In order to provide the right level of oversight to both climate risk
and opportunities, the ESG Committee has formed two sub-
groups which include:
• TCFD Steering Committee, formed in FY22, which
includes leaders from across the business with expertise
in risk management, nancial planning, strategy, ESG
and reporting. The TCFD Steering Committee provides
recommendations to the ESG Committee on the assessment
and management of climate risk, processes to ensure
climate risk informs nancial and strategic planning, and
the governance of climate risk. During the current year,
the TCFD Steering Committee implemented 12 actions
to improve controls and processes of collating information
on how the climate-related risks and opportunities
impact SThree.
• Global Renewable Energy Network (GREN) includes energy
sector leaders from across the business who come together
to learn, share and collaborate on actions that improve the
performance of our renewable energy business, maximising
the opportunities identied through scenario analysis and
supporting the achievement of performance targets. During
the reporting year, GREN continued to develop its reach
across SThree’s regions, promoting uniformed processes and
best practices in support of future growth of our renewable
energy business. GREN’s key initiatives completed in FY23
include global implementation of the new blueprint to guide
a coordinated approach to grow our strategic clients; roll
out of a job intensity dashboard and monthly newsletters
providing our leadership with critical insights.
24. In considering the consistency of our disclosures with the TCFD Recommendations and Recommended Disclosures we have had regard to, among other things, the documents
referred to in LR 9.8.6B and 6C, as applicable to the nancial year 2023.
SThree has supported the recommendations of the Task Force
on Climate-related Financial Disclosures (TCFD) since FY20.
We conrm that we are reporting consistent with all the TCFD
Recommendations and Recommended Disclosures in the Annual
Report and Accounts 2023.
By this we mean the four TCFD recommendations and the 11
recommended disclosures set out in Figure 4 of Section C of the
report entitled ‘Recommendations of the Task Force on Climate-
related Financial Disclosures’ published in June 2017 by the
TCFD. We have also considered the TCFD additional guidance
(2021 TCFD Annex), specically the ‘All Sectors Guidance’ in
preparing the disclosures. We are therefore compliant with the
requirements of the UK Listing Rule 9.8.6(8)
24
.
This section contains the relevant disclosures or otherwise
provides cross-references where the disclosures are located
elsewhere in the report. In preparing them we have had to make
several assumptions, and while we are satised that they are
consistent with the TCFD recommendations, we will continue
to monitor TCFD guidance as it evolves and will consider
opportunities to enhance our future disclosures.
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Climate change governance framework Risks pillar
Identifying and managing climate-related risks
TCFD recommendation: Describe the organisation’s
processes for identifying, assessing and managing
climate-related risks.
Our existing Group Risk Framework is designed to identify,
assess, score and monitor all risks. In addition, risk mitigation
plans and timelines are determined by the appetite and tolerance
for risks as set by the Board and directed by ExCo.
A responsibility for identifying, assessing, and where appropriate
mitigating climate-related risks and opportunities is delegated
to the ESG Committee. The Committee’s approach to
identifying climate-related risks includes utilising market
research data, external partner insights and internal business
reviews. Our strategic review process asks senior leaders
from across the business to identify any current or emerging
risks within their markets, with key questions around climate-
related market changes and policy. These are then discussed
at local management meetings and escalated to the ESG
Committee, who in turn, ensures the right mitigation measures
and controls are in place. In addition to our strategic review
process in FY23, we also renewed our materiality assessment,
conducting interviews, stakeholder surveys and desk research
to further identify risks and opportunities. Additional risks and
opportunities were then reported to the ESG Committee,
informing risk management and mitigation priorities.
We utilise climate-related scenarios to assess the potential
magnitude and likelihood of specic climate-related risks and
opportunities under the varied parameters and assumptions of
each scenario, quantifying the nancial impact on net fees, the
same nancial metric used across the Group’s Risk Framework.
Once assessed, climate-related risks are assigned a risk owner
who is responsible for building and implementing the mitigation
controls related to that risk. The overarching mitigation control
involves tracking progress against targets using measurement
indicators, horizon scanning to identify changes that could
trigger additional transition risks and implementing procedures
and solutions to overcome them. This is reported on a quarterly
basis to the ESG Committee.
To date climate-related scenario analysis has demonstrated
that there are no immediate risks and therefore, climate change
continues to be an emerging risk to the business. However,
some of the Group principal risks are, to an extent, impacted by
climate change, and therefore since FY22, where applicable,
our principal risks reect elements of the climate-related risks
identied through scenario analysis. These risks are regularly
reviewed by the Group Risk Committee and twice a year by
the Board. Further details of these risks can be found in our
Risks section on pages 76 to 82 and more details around risk
management governance can be found on page 76.
Integration with Group’s Risk Framework
TCFD recommendation: Describe how processes for
identifying, assessing, and managing climate-related
risks are integrated into the organisation’s overall
risk management.
Climate change is an emerging risk to SThree and has the
potential, to varying degrees, to impact our business in the
short, medium and long term. We face potential physical
environmental risks from the eects of climate change, including
extreme weather events, alongside potential regulatory and
transition market risks associated with the shift to a low-carbon
economy. However, these also present opportunities.
The process for assessing and identifying climate-related risks
is the same as for all Group’s principal risks and is described
on pages 76 to 77. The risks are reviewed and assessed on an
ongoing basis, and formally at least twice a year, by the Group
Risk Committee. For each of our principal and emerging risks,
the Group Risk Framework details the controls we have in place,
who is responsible for managing both the overall risk and the
individual controls mitigating it. We monitor risks throughout the
year to identify changes in the risk prole.
In summary, the Group Risk Committee is responsible for:
• evaluating, monitoring and reviewing principal and emerging
risks including climate-related risks;
• ensuring climate risk is integrated into the Group Risk
Framework;
• maintaining oversight of climate risks where they impact
Group principal risks; and
• reviewing and assessing the strength of controls in place for
climate risk. This assessment is reported to the Board on a
bi-annual basis.
Any material changes relating to ESG matters, climate risk and
targets are also included within the Chief Financial Ocer’s
statement (executive sponsor of climate risk) which is delivered
at each Board meeting.
Read about the Group’s Risk Framework on pages 76 to 77
Audit & Risk Committee
Oversight of the eectiveness of the
Group’s Risk Management systems
and processes. Reviews assurance
over mitigating controls.
ESG Committee
Identies, assesses and mitigates climate risks and
opportunities, ensuring integration into strategic and
nancial planning.
Global Director
of Purpose and
Inclusion
Implementation of
climate-related scenario
analysis, and stakeholder
engagement to ensure
delivery of action
plans. Oversees the
development of climate
targets and
data reporting.
TCFD Steering
Committee
Provides
recommendations to
the ESG Committee
on the assessment and
management of climate
risk, informs nancial and
strategic planning.
Group Risk Committee
Responsible for reviewing and assessing strength of
controls related to climate risks and reporting updates on
risks to the Executive Committee, Audit & Risk Committee
and the Board.
Global Renewable
Energy Network
Energy sector leaders
who work on actions
that grow our renewable
energy business.
Climate Risk
Owners
Responsible for the
monitoring of climate
risks, developing and
implementing mitigation,
and escalating changes
within risk environment
to the Group
Risk Committee.
Remuneration Committee
Oversight of the Group’s
remuneration policy and employee
incentive arrangements.
CEO
Executive Committee
Undertakes regional reviews to identify risks and opportunities with regional leadership teams.
Responsible for the management of risks and recommending risk appetite to the Board.
Develops Company strategy in line with Board appetite.
SThree Board
Oversight of business strategy and performance, including material ESG factors.
ESG Ambassadors
100+ ambassadors across the business deliver local climate action,
engage colleagues in climate-related issues and provide local insights to the ESG Committee.
Nomination Committee
Oversight of continuing development
of an adequate pipeline into the
Executive Team for succession and
bench strength purposes.
Our commitment to being a responsible business (including TCFD) continued
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Risk and opportunity identication and assessment
TCFD recommendation: Describe the climate-related risks and opportunities the organisation has identied over
the short, medium, and long term.
Guided by our climate-related scenario analysis, and risk
management articulated on pages 61 to 63, the climate-related
risks and opportunities that could have a potential impact on
SThree Group are detailed below, along with mitigating actions.
To assess the materiality of climate-related risks and
opportunities, we used the following timeframes:
• short term: up to ve years to 2028;
• medium term: ve to 15 years from 2028 to 2038; and
• long term: beyond 15 years from 2038 to 2050.
Our likelihood assessment is an estimated probability of
potential impacts:
• low: very unlikely to unlikely;
• moderate: likely to occur; and
• high: likely to very likely to occur.
These risks and opportunities are global in nature and there are
only modest variations in their relative signicance for each of
our business segments. Where appropriate, we refer to specic
geographies. Based on potential nancial or strategic impact, at
present we identify no risks which will signicantly impact our
long-term strategy or business model, though management will
continue to monitor our regional businesses’ performance and
their response to climate events.
Refer to the subsequent section, Metrics & Targets on pages
72 to 74, for further information on measurement indicators,
including our performance against them.
Strategy pillar
The impact of climate change on SThree
TCFD recommendation: Describe the impact of climate-related risks and opportunities on the organisation’s
business, strategy and nancial planning.
We have the right strategy (see diagram 1), which is informed
by climate risks and opportunities and includes our climate
transition plan to net zero.
Through climate-related scenario analysis we have identied
no immediate climate risks to our business, its strategy,
performance or liquidity. However, we understand the
importance of climate change on our stakeholders and therefore
the Group’s exposure to climate-related risks and opportunities
is regularly considered in our strategic and nancial planning, our
capital allocation decisions and in operational management. It
was also considered when preparing the Consolidated Financial
Statements, in particular as part of assessment of the Group’s
long-term viability and its exibility to adapt operations to
climate-related risks and opportunities. For further details see
note 1 to the nancial statements.
We also understand that climate change and its associated
impacts are causing systemic and exponential disruption to
wider society. One of the global megatrends is decarbonisation
which requires extensive innovation and change. Climate change
will have a unique impact on our clients and the STEM skills they
require to redesign and innovate business models that align with
a net zero future.
Our role in supplying the STEM skills, which are needed to
facilitate this change, is a key opportunity identied through
scenario analysis which has inuenced our strategic priorities.
We are well positioned to respond to the growing demand for
green skills and can quickly respond to growing demand for
highly skilled talent as the global economy recongures towards
decarbonisation.
In addition, the decarbonisation of our own business plays
an important role in ensuring we meet the requirements of
our clients and can access new business opportunities. As a
result, we have set carbon reduction targets and have been on
our journey to net zero since FY18. We have also embedded
sustainability criteria into our technology investments and, as
we implement new procurement processes, select new oce
facilities and reimagine ways of working post the Covid-19
pandemic, we are integrating sustainable methods. This year we
have invested £3.0 million in these initiatives, primarily to fund
energy-ecient facilities and equipment in our new oce in
Glasgow, UK, and transitioning some of our technology to the
cloud-based arrangements.
Diagram 1. Here is how our strategic pillars shape our journey towards low-carbon economy
Further information on risk and materiality assessment can be found in the Risk management section on page 76
Our Places
In order to build our market position, we develop and
nurture a diverse green skills pipeline to maintain
competitive advantage as a talent partner to the transition
towards a low-carbon economy. In addition, within our
markets we select geographies with low physical climate
risks to minimise disruption to our people and contractors.
Our People
Attracting talent to our business and on behalf of our
clients; meeting the growing sustainability expectations of
candidates to provide access to the best talent.
Our Platform
Building operational eciency to decarbonise
our value chain.
Our Position
Strengthening our position as a sustainable stang
partner, meeting client, candidate, colleague and investor
expectations to grow our business.
Table 1. Our key climate-related risks and opportunities
Risk/opportunity
Measurement
indicators Potential impact and SThree’s response
1. Transition Risk
Market
Fossil fuel sector exposure
Less than 4% of net fees globally are derived from oil and gas
clients. Under a low-carbon transition, potential net fees from
these clients could be lost due to divestment and reduction in
client demand. The risk to SThree would be two-fold on revenue
and operating expenses – a potential material loss of revenue, in
addition to still maintaining the consultant expenditure to recruit
into this area of the market when there are limited opportunities
available.
% net fees
generated from oil
and gas sector
In FY22, the ExCo agreed to an Energy Sector
Position Statement for the business which
outlined the key energy sector focus areas of
the business. This enables leaders to grow our
energy business informed by risk.
Analysis by the International Energy Agency
shows that the majority of energy employment
is already driven by investment in clean energy
sectors. With a strong renewable energy
proposition, we believe we have already pivoted
our activities towards nding talent in these skill
sets and therefore see limited risk in the decline
of hydrocarbon-based energy investment.
In FY24, we will continue to build our renewable
energy proposition through developing case
studies and proof points to demonstrate our
expertise and commitment.
Over the coming years we will also continue
to build the sustainability literacy levels of our
client relationship teams to ensure they can fully
understand clients’ sustainability requirements
and can also explain SThree’s net zero
commitments.
Business segments potentially aected:
The US and the Netherlands
Timeframe (term):
Short Medium Long
Likelihood:
Low Moderate High
Our commitment to being a responsible business (including TCFD) continued
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Our key climate-related risks and opportunities continued
Risk/opportunity
Measurement
indicators Potential impact and SThree’s response
2. Transition Risk
Market
Maintaining market share in rapidly expanding markets
Decarbonisation continues to be a key megatrend in our business
(see page 4). Through scenario analysis we have identied
opportunities for signicant growth which could materialise
at pace, particularly under a renewable-led growth future (our
scenario analysis of 1.5˚C). There is a potential risk that we do not
respond quickly enough to maximise these opportunities and as a
result lose market share.
Growing headcount will ensure we can meet the demand for
STEM skills in decarbonisation projects.
% net fees
generated from
clean energy
sector
For details on potential impact and SThree’s
response, see Transition risk 1 (Market/Fossil fuel
sector exposure) on page 63.
Business segments potentially aected:
Group-wide
Timeframe (term):
Short Medium Long
Likelihood:
Low Moderate High
Risk/opportunity
Measurement
indicators Potential impact and SThree’s response
4. Transition Risk
Reputation
Changing candidate and client preferences
Environmental concerns are becoming increasingly front of mind
when candidates consider employers. There is a risk candidates
opt to work with stang providers who can demonstrate strong
green credentials and SThree loses competitive advantage if we do
not align to candidate expectations.
% reduction in
carbon emissions
% energy procured
from clean sources
% clean eet
within the
Company
The role we play in bringing skilled people
together to build a sustainable future is core to
our business and is demonstrated throughout our
market proposition.
In FY23, we launched Elevate Careers which is a
social impact programme designed to diversify
the STEM talent pipeline. Through collaborating
with clients, industry bodies, education and
charitable organisations we deliver programmes
to attract more talent into STEM roles, including
green skills. Through this work we grow our
candidate pipeline but also highlight our
commitment to talent development. In FY24,
we will be continuing to grow our collaboration
network surrounding green skills.
We demonstrate a leadership position in
relation to our climate action which has been
demonstrated since setting our rst carbon
reduction target in FY18. In FY23, we announced
SBTi-veried short-term and long-term net zero
targets. In addition, we maintained our CDP B
score, published our ESG Impact Report and
continued to be listed in the FTSE4Good and in
the Financial Times Climate Leaders listing.
In FY24, mobilising regional carbon reduction
actions will be a key priority with annual
milestones and targets being implemented until
we achieve net zero.
Business segments potentially aected:
Group-wide
Timeframe (term):
Short Medium Long
Likelihood:
Low Moderate High
3. Transition Risk
Market
Addressing the multiple skills requirements of clients
As part of the low-carbon transition, clients require multiple STEM
skills within their business. The risk is that SThree could miss
opportunities to deliver across multiple skills within one client due
to our brand structure and how our delivery teams operate.
For example, demand for IT candidates to solve big data
challenges continues to rise rapidly across all industries,
particularly during the transition to a low-carbon future. Energy
clients require both engineering and tech skills which are two
specialisms separated into two dierent SThree brands rather than
one service supplier.
Number of
placements made
within clean
energy
Following a brand refresh we have improved
the interlink between our house of brands and
continue to evolve our marketing to strengthen
our position as a holistic STEM talent pipeline. In
FY23, we continued to strengthen our position
through launching a tool to capture case studies
which enables our sales teams to highlight our
credentials across sectors and skills.
In addition, we began the introduction of our new
CRM system which will improve our data across
both clients and candidates. We also mobilised
a new client strategy following the appointment
of our new Chief Commercial Ocer. Our
strengthened approach to clients alongside
the new system will ensure opportunities are
identied and maximised, enabling our ability to
service clients across multiple skills and roles.
These projects will be ongoing throughout FY24
and FY25.
Business segments potentially aected:
Group-wide
Timeframe (term):
Short Medium Long
Likelihood:
Low Moderate High
5. Transition Risk
Reputation
Operating within high-carbon industries
High-carbon emitting clients are increasingly facing divestment
and stranded asset risk as a result of changing consumer
preferences and government policies. The risk to SThree is
two-fold, loss of net fees from these clients and the reputational
damage of operating within high-carbon emitting sectors.
% net fees
generated from
oil and gas
placements
The Energy Sector Position Statement approved
by ExCo in FY22 denes how we operate within
high-carbon industries and the monitoring we
have in place to mitigate any potential risks
derived from this work. We monitor our work
within high-emitting industries and report
biannually to the ESG Committee. Any change
which may heighten the impact of risk is
escalated to ExCo.
Business segments potentially aected:
Group-wide
Timeframe (term):
Short Medium Long
Likelihood:
Low Moderate High
Our commitment to being a responsible business (including TCFD) continued
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Our key climate-related risks and opportunities continued
Risk/opportunity
Measurement
indicators Potential impact and SThree’s response
6. Transition Risk
Policy and legal
Exposure to changing government
Some large energy and infrastructure projects are inuenced
by government. To respond successfully to these tenders and
win contracts, SThree requires investment in consultants, and
sometimes additional certications.
The risk, which is outside of SThree’s control, is that the level of
preparation work for large renewables projects is an investment
we must make as a potential vendor, however tender outcomes
may change. Often the timeline and budgets for these projects
are delayed and reduced. These changes are often in response to
changing government policies and priorities. This could result in
SThree having areas of operational costs which face delayed or
reduced revenue opportunities.
% net fees
generated from
clean energy
sector
Large infrastructure projects which are subject to
regional and national government approval, have
very long timeframes, from initial investment
through to nal installation and ongoing
operation.
There are opportunities for SThree throughout
this timeframe, which often last for upwards of
ve years. SThree can evaluate over this time
the internal resources required to assist clients,
without committing to long-term costs which
have a larger payback period.
By understanding the timeline for these projects,
utilising external project data tools and mapping
clients’ requirements at each stage throughout
the timeline, we ensure we resource correctly at
each stage of the project.
Through the GREN we will continue to build
resources and tools opportunities. This will
continue to be a key priority in FY24 and beyond
to support the identication and realisation of
new as we see engineering and green skills
demand grow.
Business segments potentially aected:
Group-wide
Timeframe (term):
Short Medium Long
Likelihood:
Low Moderate High
Risk/opportunity
Measurement
indicators Potential impact and SThree’s response
8. Physical Risk
Increased carbon emissions
As global temperatures rise, our reliance on cooling will increase. It
is predicted that cooling requirements could triple by 2050 (Fossil
fuelled future scenario).
The risks to SThree are:
1. The increased operating costs to cool oce spaces.
2. Access to renewable energy as demand increases across
all markets.
3. The increased carbon osetting costs to purchase carbon
credits whilst we transition to net zero.
4. The reputational damage of increasing our carbon footprint
rather than limiting emissions/achieving carbon reduction
targets.
% reduction in
carbon emissions
% energy procured
from clean energy
sources
In FY23, we announced SBTi-veried net zero
targets which includes transitioning to 100%
clean energy by FY30. In addition, our oce
selection criteria prioritise low-carbon oces
which includes oces with self-generating
energy opportunities.
We continue to invest in carbon osetting;
however, our priority is decarbonisation. We
will continue to work with our partner Earthly
who provides veried osetting solutions. We
currently oset scope 1, 2 and limited scope
3 emissions to ensure we support innovative
osetting solutions whilst we transition to net
zero. The cost of osetting was £47,684 in FY23.
More details on osetting can be found on
page 71.
Business segments potentially aected:
Group-wide
Timeframe (term):
Short Medium Long
Likelihood:
Low Moderate High
7. Physical Risk
Impact of extreme weather on operational
performance
Extreme weather events occasionally impact the markets in
which SThree operates and can, at times, have an impact on
access to oces and technology as well as access to sites for
our contractors. The risk is that this could lead to a reduction in
productivity due to lack of access to oces or colleagues’ inability
to work due to power outages. In addition, our contractors may
have reduced access to sites to deliver their contracted hours.
The current risk is relatively small, and during the reporting period
we experienced no nancial losses due to severe weather events.
Across our 33 locations only six locations have been identied as
at risk. Global warming could cause signicantly more extreme
weather events in the longer term, increasing the number of
business locations aected (Fossil fuelled future scenario).
Number of days’
work lost from
severe weather
events
As part of the Group’s business continuity
planning, the oces identied as at risk have
plans in place to ensure operations can continue
if they are impacted by the weather. The
Covid-19 pandemic and the need to implement
remote working at pace tested the eectiveness
of our business continuity planning. Where gaps
in the plans have been identied these are being
proactively addressed. Each country has incident
management teams to manage any severe
weather events ensuring disruption is minimised
while colleague safety is paramount.
Our oce footprint is in mature markets where
planning and building controls are robust which
supports the mitigation of this risk. In addition,
our oce selection criteria consider physical
climate risk. This will impact our long-term
decision making on future new markets and
business growth opportunities.
Business segments potentially aected:
USA, Rest of Europe (the UK), DACH (Germany), and ME&A
Timeframe (term):
Short Medium Long
Likelihood:
Low Moderate High
9. Transition Opportunity
Market
Responding to the changing demands of the market
We are dynamic and exible in our approach and can adapt to new
market requirements with agility and pace.
Our exible approach alongside oering full stang compliance
expertise and at times additional ‘value-add’ oerings such as
trucks, IT equipment and adjacencies for wind projects. Our
expertise and proven track record in delivering compliant stang
solutions provide competitive advantage to clients and potential
clients who are sourcing STEM talent to deliver their low-carbon
transition plan.
% net fees
generated from
clean energy
sector
We have a strategic review process which is
overseen by our ExCo. This process regularly
reviews our markets and new opportunities to
ensure we are investing in the right way.
We have a proven track record in pivoting our
consultants to respond to changing market
opportunities. Most recently, we demonstrated
this through the changing market needs during
Covid-19.
Continuous market reviews ensure we
understand large tenders coming to market, and
can map out recruitment requirements at each
stage, enabling us to build relationships with
appropriate clients throughout the value chain.
Our Global Renewable Energy Network shares
best practice approaches to project mapping
and planning which helps our teams to maximise
opportunities.
Business segments potentially aected:
Group-wide
Timeframe (term):
Short Medium Long
Likelihood:
Low Moderate High
Our commitment to being a responsible business (including TCFD) continued
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Our key climate-related risks and opportunities continued
Risk/opportunity
Measurement
indicators Potential impact and SThree’s response
10. Transition Opportunity
Market
Growth of clean energy generation and associated
technologies
Materially increased net fees from large infrastructure projects
(e.g. oshore wind) and local changing energy generation mix, will
lead to investment into technologies and available government
grants for clients, which will be invested into talent requirements to
deliver projects.
Additionally, the growth of green innovation will create new STEM
job opportunities. LinkedIn research highlights growing demand
for green skills. In 2023 green skills demand increased by 12%
alone. Predictions from IRENA and other industry bodies highlight
unprecedented growth in green skills in the coming seven years.
SThree is well positioned to meet the growing demand for STEM
talent which will support our growth ambitions.
% net fees
generated from
clean energy
sector
For details on potential impact and SThree’s
response, see Transition opportunity 9 (Market/
Responding to the changing demands of the
market) on page 67.
Business segments potentially aected:
Group-wide
Timeframe (term):
Short Medium Long
Likelihood:
Low Moderate High
Risk/opportunity
Measurement
indicators Potential impact and SThree’s response
12. Transition Opportunity
Reputation
Emergence of the ‘green recruiter’
Increasingly, clients are asking for SThree’s ESG targets and
strategy, as such there is an opportunity to stand out from our
competitors by highlighting SThree’s green credentials and
commitment to delivering both environmental and social impact.
In European markets there is an emergence of small, sustainable
recruitment agencies who solely work with low-carbon clients.
SThree has the potential to also compete in this niche market
and obtain competitive advantage given the climate leadership
position, experience and compliance benets already in place.
Maintain CDP
Score
% reduction in
carbon emissions
For details on potential impact and SThree’s
response, see Transition opportunity 11
(Reputation/Alignment to low-carbon clients) on
page 68.
Business segments potentially aected:
Group’s European markets
Timeframe (term):
Short Medium Long
Likelihood:
Low Moderate High
11. Transition Opportunity
Reputation
Alignment to low-carbon clients
As the market moves towards a low-carbon future, companies
are reviewing their own transition plans. Increasingly they are
questioning the environmental impact of all suppliers. SThree
has been working on carbon footprint management and carbon
osetting for over a decade. Our long-term environmental
strategy, targets and transparent reporting provides a competitive
advantage.
We experience an increased demand to clearly evidence our
climate ambition and carbon reduction plans as a supply partner.
Given minimal dierential economic incentives, candidates often
choose to work for a more socially conscious company – this could
extend to SThree itself as a recruiter who aligns themselves to a
low-carbon solution, providing opportunities to grow net fees.
Maintain our CDP
Score
% reduction in
carbon emissions
We continue to be market leaders in our
environmental action with clear targets and
metrics. In the reporting period we announce
SBTi-veried targets and maintained our
CDP score.
Doubling the share of our clean energy business
by FY24, and intentionally growing our green
business highlights our alignment to a low-
carbon future whilst reducing the reputational
risks of working with high emitting clients.
We continue to build our position as a thought
leader in regard to the green skills gaps
which is demonstrated through us co-hosting
programmes with clients, women in renewable
industries and sustainable energy as well as other
key partners.
Through a strategic, embedded approach to our
role in climate action we are not only positioning
ourselves, but we are driving outcomes aligned
to sustainable development.
Business segments potentially aected:
Group-wide
Timeframe (term):
Short Medium Long
Likelihood:
Low Moderate High
Our commitment to being a responsible business (including TCFD) continued
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Climate-related scenario analysis
TCFD recommendation: Describe the potential impact of dierent scenarios, including a 2°C scenario, on the
organisation’s businesses, strategy and nancial planning.
SThree has been utilising climate-related scenario analysis since
FY20. We assessed the nancial implications of climate change-
related risks and opportunities under three scenarios aligned
with the NGFS climate scenario framework. The rst scenario
(‘Green revolution’) is prepared considering orderly transition led
by growth in renewables where an average global temperature
increases by 1.5°C or less; this scenario is most aligned with our
net zero commitment. The second scenario (‘Disruptive change’)
considered disruptive climate change with an average global
temperature reaching 2°C. The third one (‘Fossil fuelled’) is a
scenario where global temperatures increase by more than 3°C.
We utilise these three scenarios to ensure all potential risks
and opportunities are identied, and that we are testing our
resilience under each scenario as political landscapes shift and
the likelihood of each scenario materialising shifts. Our net zero
commitment is aligned to a renewables-led scenario (global
warming limited to 1.5°C) which aligns to the Paris Agreement,
our commitment to doing the right thing and also to maximise
the opportunities we have identied within this scenario. Each
risk and opportunity are analysed based on an estimated
impact on net fees, aligned to our risk management framework.
Using net fees as a measure of impact allows for a consistent
comparison of risks and opportunities and their impact across
dierent scenarios.
Within all three scenarios we identied no climate change-
related risks that would have a material impact on SThree, our
performance and strategy. This is consistent with the assertion
that risks associated with climate change are not expected to
have a material impact on the longer-term viability of the Group.
However, some growth opportunities may arise from the
role STEM skills play in decarbonisation (see details on this
megatrend on page 4) and our proposition as a green supplier
(see further details on pages 18 to 19 related to our strategic
pillars). It has resulted in SThree setting a target and strategy
to maximise this side of our business. In addition, the scenario
analysis continues to inform wider business strategy, e.g. how
we grow our value proposition as a green recruitment partner
to mitigate reputational risk and realise opportunities with both
clients and candidates as outlined above.
SThree uses the NGFS climate scenario framework to stress test key climate-related risks and opportunities. The key outcomes
from the climate-related scenario analysis inform SThree’s targets and growth opportunities, and wider business strategy, e.g.
how we grow our value proposition as a green recruitment partner to mitigate reputational risk and realise opportunities with
both clients and candidates as outlined above.
Green revolution
(orderly 1.5°C)
This orderly scenario assumes that climate
policies are immediately implemented, with an
increasing carbon price levelled that ensures
the world does not exceed 1.5°C warming.
The economy is strong, driven by new
industries providing green solutions and
technologies such as AI, robotics and battery
technology. The development of circular
economy business models disrupts legacy
industries, removing incumbents. Global
opportunities expand in all markets as
consumer technologies are democratised.
Under this scenario, the energy sector
mix shifts rapidly, as the world transitions
away from fossil fuels and towards low-
carbon power, heat and mobility solutions.
Consumer concern over the environmental
sustainability of products and services is
high, and candidates actively disassociate
with companies not following the renewable
revolution.
Disruptive change
(disorderly 2°C)
This disorderly scenario assumes that
signicant climate policy is not implemented
until 2030. In order to reach the 2°C mitigation
goal, the transition from this point happens at a
far quicker pace than in the orderly transition.
Engineering and nance sectors benet from
the rapid development of a carbon dioxide
removal industry – funding for which comes
in the form of increased energy prices for
businesses and consumers.
Under this scenario, the energy sector mix
does not change noticeably until after 2030,
at which point actions taken are relatively
late and limited by available technologies, to
enable a sharp reduction in emissions. The
pace of change claims many victims within
high-carbon industries who are left with
signicant levels of stranded assets.
Fossil fuelled
(hot house 3°C+)
This scenario incorporates the policies and
measures that governments around the world
have already put in place and assumes that no
further policy action will be taken. The scenario
assumes only cautious implementation of
current commitments and plans. Emissions
grow until 2080 leading to 3°C+ of global
warming and increased physical risks.
New technology solutions are not developed
quickly or cost-eectively enough to disrupt
legacy industries. Energy prices are kept
suppressed by the lack of any meaningful
carbon price and the lack of progress in carbon
removal technologies.
Signicant disruption on sectors with oces,
manufacturing sites located in regions and
areas of high physical risk.
The nancial impact assessments for the above presented scenarios are based on the same method of calculations as those used for principal risks evaluated under the SThree
Group-wide risk framework.
Our commitment to being a responsible business (including TCFD) continued
Our transition to net zero
SThree has had climate science aligned targets since FY18 and this year we announced SBTi-veried near-term and long-term net
zero targets. We are committed to transitioning to a net zero business, aligned to a 1.5°C future in order to mitigate the risks and
maximise the opportunities outlined in this report.
Full details of our net zero targets can be found on page 72
Over 87% of our carbon emissions derive from scope 3, with our supply chain being the most signicant element of our carbon
footprint. Due to the size of SThree and our relatively modest spend with multi-national tech and insurance companies decarbonising
our supply chain is a challenging priority which will take time. As a result, we have developed a transition roadmap which reects
both near-term and long-term actions across our most material carbon emissions.
2024 2030 2050
Scope 1 & 2 targets
100% clean energy
Utilising our new property
criteria to open SThree’s rst
net zero operating oce
in Glasgow.
Agreements in place with all
landlords to procure 100%
clean energy and utilise
self-generating technologies
where possible.
By FY50, the megatrends
accelerating the demand for
STEM talent will be reected in
how we operate. The speed of
change, our STEM placements
facilitate, will build a future
where:
• the energy sector will be
transformed, utilising low-
carbon technology to power
our oces;
• the travel sector will be
decarbonised and clean
vehicles will dominate how we
travel;
• metaverse technology will
inuence how people work,
come together and collaborate,
impacting oces, commuting
and travel; and
• the world is changing and
SThree is providing the STEM
talent that will create a net zero
world for our business.
100% clean car eet
30% car eet hybrid or electric. 100% car eet clean fuelled.
Clean oce portfolio
At least seven oces will be
reviewed utilising our clean
property selection criteria.
All oces will be reviewed
utilising our clean energy
criteria.
Scope 3 targets
Low-carbon travel
Introduce and embed a travel
platform that helps inuence
behaviour change.
Reduce emissions from travel
by 50% through low-carbon
travel options and remote
collaboration technology.
Colleague commuting
and working from home
Commence an audit of green
commuter benets to identify
new opportunities.
Oce portfolio to reect
clean commuting with active
travel facilities and transport
connections. All oces will be
reviewed using our clean oce
selection criteria.
Decarbonise our
supply chain
Engage top 20 high emitting
suppliers in carbon reduction
targets.
Commence the implementation
of supply chain data
management within digital
transformation.
Achieve 50% reduction in
supply chain emissions through
inuencing strategic suppliers
and reducing consumption.
The transition to net zero will take time. Our commitment is to take action today, implementing carbon reduction activities and
osetting our carbon emission. We have developed a multi-year partnership with Earthly, a non-prot focused on empowering
companies to invest in nature. Through our partnership we oset carbon by investing in nature-based solutions that combat climate
change whilst delivering social outcomes. Our approach to osetting is focused on scope 1, 2 and limited scope 3 emissions. It is a
short-term mitigation strategy whilst we reduce our carbon emissions and move to net zero. More information on Earthly and the
project we fund can be found on page 8 of the ESG Impact Report 2023.
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SThree plc
Metrics & Targets pillar
Metrics
TCFD recommendation: Disclose the metrics and targets used by the organisation to assess climate-related risks
and opportunities in line with its strategy and risk management process.
In order to manage risks and opportunities the Group’s ESG
Committee have set metrics and targets which are reviewed
quarterly with any material changes escalated to ExCo for
review and further escalation to the Board.
As indicated in the table 2 below, certain metrics and targets are
disclosed at other most appropriate locations of the Strategic
Report.
Our overall climate commitment is to be net zero across
absolute scope 1, 2 and 3 emissions by FY50. As recommended
by the SBTi, we have set both near-term and long-term targets
which were veried by SBTi and align to a 1.5°C future. Our
targets are:
Long-term targets
SThree commits to reaching net zero GHG emissions across the
value chain by FY50. Aligned to the SBTi net zero standard, this
commitment is a long-term target to reduce absolute scope 1, 2,
and 3 GHG emissions by 90% by FY50 from a FY19 base year.
Near-term targets
• Reduce absolute scope 1 and 2 GHG emissions by 77% by
FY30 from a FY19 base year.
• SThree commits to increasing annual sourcing to 100% of
electricity from renewables by FY30 from 28% in FY19.
• Reduce absolute scope 3 GHG emissions by 50% by FY30
from a FY19 base year.
Metrics Targets
Climate-related opportunities
Description Key initiatives and progress FY23
Net fees generated through
renewable business
28% (FY22: 29%) YoY growth.
142% (FY22: 88%) growth from FY19 baseline.
Expanded the reach of our Global Renewable Energy Network to
ensure wider collaboration and sharing of best practice.
Introduced new client management tools as well as communication
channels to share relevant news and opportunities.
Evolved our tools to accelerate our response to client tenders and
due diligence queries.
For more information see KPI section on page 20
Double the size of our clean
energy business by FY24 (from
FY19 baseline).
For more information see
Strategy overview, Our Places
on page 18
Remuneration
Description Key initiatives and progress FY23
Directors’ remuneration report
metrics – 10% weighting of LTIP
award performance measures
(carbon emission reduction)
In FY23, we made progress towards our scope 3 target and
understand more focus is required to achieve our scope 1 and 2 near-
term target.
ESG targets, including climate
targets, as outlined in the KPI
section of this Annual Report.
In addition to climate reduction targets, in FY19 we set a target to double the size of our clean energy business by FY24 in response
to the opportunities identied through climate-related scenario analysis. In FY23, our clean energy business grew by 28% resulting in
SThree achieving this target.
Table 2. TCFD recommended disclosures – metrics and associated targets
Metrics Targets
Climate-related risks (Transition risks)
Description Key initiatives and progress FY23
% reduction in scope 1 and
scope 2 carbon emissions
In FY23, our scope 1 and 2 emissions increased by 368% YoY, and
31% since our baseline year which was due to an increase in car
eet emissions and in certain premises related emissions. This is
two-fold; business returning to pre-pandemic operating models
and an improvement in carbon data. We have however experienced
our premises emissions overall decrease by 61% since FY19.
Reduce absolute scope 1 and
2 GHG emissions by 77% by
FY30 from a FY19 base year.
% reduction in scope 3 carbon
emissions
In FY23, scope 3 emissions increased by 13% YoY but decreased
by 12% since our baseline year. We have remained committed to
reducing emissions from our supply chain which equates to 69% of
our carbon emissions. Our supply chain emissions have decreased
by 5% since FY19.
Reduce absolute scope 3 GHG
emissions by 50% by FY30
from a FY19 base year.
% energy procured from clean
energy sources
The total energy consumption used to calculate emissions (kWh)
reduced by 2% YoY and 79% since our baseline year.
SThree commits to increasing
annual sourcing to 100% of
electricity from renewables by
FY30 from 28% in FY19.
CDP score We continued to evolve our approach to climate risk management
in FY23, ensuring climate risks and opportunities inform strategy
as outlined in this report. In the prior year, our CDP score was B. At
the time of approval of this Annual Report, management was still
awaiting the release of FY23 score.
To maintain a B score in FY24.
Our commitment to being a responsible business (including TCFD) continued
Carbon reduction
Streamline Energy and Carbon Reporting
(SECR) FY23
SThree is committed to providing transparent carbon reporting
to our stakeholders and to help facilitate this in FY23 we adopted
a new carbon data management platform. This provides us with
stronger oversight and the ability to report more widely across
scope 1, 2 and 3 emissions. We have therefore expanded the
scope of our data and restated FY22 and FY19 (the baseline year
for our targets) to ensure our methodology is consistent.
In FY23, our scope 1 and 2 emissions equated to 3,072 tCO
2
e
(market based) and scope 3 equated to 20,662 tCO
2
e, an
average impact of 8.94 tCO
2
e per FTE. This represents a YoY
increase in carbon emissions of 26% and an intensity increase
of 48%. A contributing factor to the increase in emissions is the
availability of improved data accuracy and reporting, which
accelerated in FY23 with access to a new reporting system and
better supplier data. The enhanced data collection provides a
more precise view of our emissions prole, which has inuenced
our scope 1 and 2 emissions. Another factor has been the
ongoing adjustments to work behaviours and practices in a post
covid environment. Through improved data and insights, we
have an even better understanding of the actions we must take
to achieve our net zero targets and this will be a priority in FY24
and beyond.
Energy eciency initiatives
Although we have seen YoY increases, we have made progress
since our baseline year which is our closest to ‘business-as-usual’
year pre-pandemic. The energy eciency initiatives which have
taken place include:
• Our carbon emissions from premises (natural gas, purchased
electricity, waste and water) reduced by 61% since FY19
(baseline year). This followed the introduction of sustainable
property criteria for new oces.
• Although business travel has increased YoY due to an
increase of in-person meetings post pandemic, we have not
increased emissions to pre-pandemic levels and maintained
a carbon reduction of 10% since FY19, which is the result of
our sustainable travel policy.
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SThree plc
Metrics & Targets pillar continued
Table 3. GHG emissions (tCOe) and associated energy consumption (kWh) for FY23
(Energy and carbon disclosures for nancial year, 1 December 2022–30 November 2023)
FY19
baseline Year FY22 FY23
% change
in total
emissions
(FY23 vs FY22)
% change
in total
emissions
(FY23 vs FY19)Emissions source (tCO
2
e)
25
UK and
oshore
Global
(excluding
UK and
oshore)
UK and
oshore
Global
(excluding
UK and
oshore)
UK and
oshore
Global
(excluding
UK and
oshore)
Scope 1
Natural gas 346 2 15 – 22 86 620% -69%
Leased transport 42 990 11 87 – 2,455 2,405% 138%
Refrigerant – – – – 41 – 100% 100%
Scope 2
Purchased electricity
(market/location based) 157 802 109/61 414/319 94/53 320/215 -21% -57%
Other fuels
(heat and steam, EV) – 9 1 21 – 54 145% 500%
Scope 3
Purchased goods
and services – 17,339 – 14,048 704 15,746 17% -5%
Capital goods – 213 26 13 3 183 377% -13%
T&D and WTT (fuel and
energy-related activities) 14 – 27 138 7 273 70% 1,900%
Upstream transportation
and distribution 56 89 – 211 10 163 -18% 19%
Water (purchased goods
and services) 13 98 – 1 1 2 200% -97%
Paper (purchased goods
and services) – 4 2 – 4 4 400% 100%
Waste generated in
operations 15 33 1 5 1 3 -33% -92%
Business travel 261 1,223 256 848 398 940 21% -10%
Employee commuting
incl. working from home – 3,637 417 1,570 382 1,166 -22% -57%
Upstream leased assets
(market/location based) 2 188 – 319/253 – 661 107% 248%
Downstream
leased assets – 184 – 345 – 11 -97% -94%
Total tonnes of COe
(market based) 906 24,811 865 18,020 1,666 22,068 26% -8%
Total tonnes of COe
(location based)
26
906 24,811 817 17,859 1,626 21,963 27% -8%
Number of employees 860 2,504 756 2,364 655 1,998 – –
Tonnes of COe per employee 1.05 9.91 1.14 7.62 2.54 11.05 48% 17%
Total energy consumption used to
calculate emissions (kWh) 8,910,915 4,373,483 11,789,326 170% 32%
Our commitment to being a responsible business (including TCFD) continued
Methodology
The method used to calculate GHG emissions is the GHG
Protocol Corporate Accounting and Reporting Standard
(revised edition), together with the latest emission factors from
recognised public sources including, but not limited to, BEIS, the
US Energy Information Administration, the US Environmental
Protection Agency and the Intergovernmental panel on
Climate Change.
In FY23, we introduced a new carbon data management
platform to continue to improve our disclosures. Prior to
calculating scope 3 emissions, a materiality assessment was
conducted to assess relevance using the GHG protocol. As a
result, categories 9-12 and 14-15 were considered to have no
contribution to the businesses’ scope 3 emissions and have
therefore been omitted from the SECR table published above.
As a result of changing platforms, we have recalculated historic
carbon data, aligned with emission factors now being used
and improved data awareness, which has resulted in some
changes in relation to previously reported emissions. In addition,
increased emissions across leased transportation in FY23
is the consequence of improved data collection from our car
eet suppliers.
Following an operational control approach to dening our
organisational boundary, our calculated GHG emissions from
business activities fall into the reporting period of 1 December
2022 to 30 November 2023, and using the reporting period
1 December 2021 to 30 November 2022 for comparison.
Governance targets
Integrating ESG impacts into the strategic and nancial planning
of the business continues to be a priority of the Board, including
providing transparent reporting on ESG matters. The Chief
Executive Ocer has appointed the ExCo to direct Group
strategy. To oversee the governance of risk management the
ExCo appointed a Group Risk Committee and to oversee the
governance of ESG matters a Group ESG Committee. Both
committees include members of ExCo alongside subject matter
experts and other senior leaders from across the global business.
For full details on the Group governance structure see page 93
in this Annual Report.
To reect shifting trends and stakeholder priorities, SThree
conducts an ongoing materiality assessment to ensure we
identify where we impact people, planet and society, and in
turn how they impact our business. In FY23, we delivered 15
interviews, analysed engage survey data and conducted external
research across our stakeholder groups and markets to ensure
we continue to identify the most material ESG matters to our
business.
The FY23 materiality assessment rearmed the critical
material matters with no new issues materialising. The most
critical matters arising continue to be: climate change and
decarbonisation; DE&I, employee engagement and productivity;
diversity of our candidates; data and cyber security; HSE.
These alongside all other material topics are detailed in our
ESG Impact Report 2023.
Delivering training to strengthen ethical practices
In order to ensure ethical practices are embedded into our
operations we are building a culture of ‘doing the right thing’
which is being integrated into every element of our employee life
cycle, from how we recruit people, to their onboarding, personal
development and performance management. In FY23, we
continued to deliver mandatory training for all colleagues in our
SThree Academy.
These trainings include:
• Anti-bribery and corruption;
• Data Protection;
• Cyber Security;
• Health and Safety; and
• Modern Slavery.
In addition, our award-winning onboarding programme,
Elements, includes training on conduct, operating principles,
performance management, as well as specic training related
to roles. Within our SThree Academy we also provide training
on fraud, our Speak Up policy, DE&I, wellbeing and our wider
policies which every colleague has access to.
Launching Speak Up
In FY23, we refreshed our Speak Up policy and delivered a
campaign to explain what the policy was and how colleagues,
suppliers, contractors and clients can use the policy to raise
concerns. The policy and process are designed to create a
safe space for concerns and complaints to be addressed in a
trusting and transparent manner. Through communications,
endorsements from ExCo members and testimonials from
colleagues who have spoken up in their career, we are building a
culture of trust, honesty and safety across our value chain.
Ethical stang solutions is the foundation of our operating
model and can be demonstrated throughout our Annual Report.
Summary of our policies, implementation and monitoring details
can be viewed online by scanning the following QR code.
Legal notices and policies | SThree
See the summary of notices and policies on
SThree corporate website.
sthree-ar23-notices-and-policies.pdf
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SThree plc
Board
Overall responsibility assessing the nature and extent
of the principal risks and the Group’s risk appetite and
to facilitate eective, entrepreneurial and prudent
management of the business.
Audit & Risk
Committee
Responsible for reviewing the eectiveness of the
Group’s risk management systems and processes.
Reviews assurance over mitigating controls.
Executive
Committee
Responsible for the review and assessment of the
principal risks and recommending risk appetite and
tolerance to the Board. Develops Company strategy in
line with Board appetite.
Group Risk
Committee
Responsible for monitoring principal and key risks and
ensuring eectiveness of regional and function risk
management.
Regional
management
Responsible for reviewing and oversight of regional
risk and controls and plans to mitigate risks within their
region. These risks will then feed into strategic plans to
be reviewed every six months as part of the strategic
planning process.
Function/
business
leadership
Responsible for identifying, assessing and mitigating
both key and operational risks within their functions/
business areas. Risks should be discussed as part of
country management meetings.
Internal
audit
Provides assurance on key controls in place to mitigate
identied risks and assurance that the risk management
and internal control framework are operating
eectively.
Audit & Risk
Committee
Group Risk Committee
Regional
management
Executive
Committee
Board
Function/
business
leadership
Top-down risk
management
Ongoing risk
mitigation and
control review
Bottom-up risk
management
Regional and
functions business
leadership teams
identify, assess, and
control, monitor
and escalate
Risk management is a key part of our business, values and
culture. Eective risk management enables us as a business to
protect value and proactively manage threats to the delivery
of strategic and operational objectives, while enhancing the
realisation of opportunities.
Our principal risks
1. Macro-economic environment/cyclicality
2. Future growth
3. Commercial relationships and customer risk
4. Contractual liability
5. People, talent acquisition and retention
6. Cyber security
7. Data privacy
8. Regulatory compliance
9. Strategic change management
10. Health and safety
Connecting risk, opportunity and strategy
Risk mitigation helps SThree manage specic areas of
the business. However, when brought into our day-to-day
activities, successful risk management helps us to maximise our
competitive advantage and successfully deliver on our strategy.
Whilst the ultimate responsibility for risk management rests
with the Board, the eective day-to-day management of risk is
delegated to our leaders across the business, seeking at all times
to maintain a prudent balance between mitigating risks and
taking advantage of opportunities.
Risk management approach
Our Enterprise Risk Management (ERM) framework and
processes help us to describe, analyse, report and monitor
risks and controls at all levels in the Group. We believe that the
eective management of risk is based on a ‘top-down’ and
‘bottom-up’ approach, which includes:
• our strategy setting process;
• the quality of our people and culture;
• established internal controls with assurance via self-
verication on the strength of controls;
• processes for reviewing, escalating and controlling risks;
• independent assurance by internal audit and external audit;
• regular oversight by the relevant Committees; and
• reacting quickly to market conditions and the cycle.
Principal and key operational risks are considered and
discussed as part of the strategic planning process. Our principal
risk statements include key risk indicators and risk tolerance
measures, as well as assessments of key controls and
risk appetite.
What we review when assessing our principal and
key risks:
• Risk ownership: each risk has a named owner. In addition,
each principal risk is sponsored by a member of the ExCo,
who drives progress.
• Likelihood and impact: globally applied ve-by-ve
scoring matrix.
• Gross risk: before mitigating controls.
• Net risk: after mitigating controls are applied.
• Risk appetite: dened at principal risk level and categorised
into ve levels.
• Risk tolerance: in data format, showing the amount of
deviation from the risk appetite.
• Key risk indicators: quantitative measures that provide early
signals of a change in the risk.
• Actions: key controls in place and activities required for
further mitigation if required.
• Impact on the Group’s strategic pillars and
interdependencies between principal risks.
• Any relevant emerging risks where the principal risk is
impacted by or could impact the emerging risk.
All principal risks are detailed in a standardised statement.
This ensures eective review, understanding and monitoring
throughout the Group, together with consistency, both in
terminology and the underlying assessment itself. As part of
the top-down process, an updated assessment was completed
for each principal risk by the relevant risk owner, working with
the Executive Committee risk sponsor and the risk function.
The statements are challenged and reviewed in detail by the
Group Risk Committee, ExCo and by the Board twice a year. In
addition, deep dive reviews are conducted by the Group Risk
Committee throughout the year, the output of which is reviewed
by the Audit & Risk Committee.
Emerging risks
As part of our ongoing risk management process, emerging risks
are reviewed yearly. An emerging risk is dened as a risk that
materialises over a period of time, rather than at once, meaning
the likely impact of the risk is dicult to evaluate at the time of
assessment of the risk.
Emerging risks are identied during:
• twice yearly principal risk reviews;
• the strategic review process with each region and function;
• horizon scanning undertaken by the Group Legal Function;
• bi-monthly nancial reviews of country performance and
macro-economic trends.
Climate change risk continues to be an emerging risk for the
Group. Further assessment on the emerging risk is shown on
page 61 as part of the TCFD report.
During FY23, Articial Intelligence (AI) was added as an
emerging risk. The risk will be monitored as part of the strategy
reviews and through a newly formed working group. Where an
emerging risk may impact or be impacted by a principal risk, this
is detailed within the principal risk description.
Principal risks
Risks can develop and evolve over time and their potential
impact or likelihood may vary in response to changes in internal
and external circumstances. Risks and mitigation activities that
are outlined below, whilst not exhaustive nor in any order of
priority, are those which could have a material adverse eect
on the implementation of our strategic priorities, our business,
nancial performance, cash ows, liquidity, shareholder value
or reputation, or could aect other key stakeholders, including
employees, clients and candidates.
Changes during FY23
Following review by the Board, the Board believes that the risks
presented are the correct assessment and the right principal
risks for the Group. As a result, the ten principal risks remain the
same ones identied in FY22, with positive movement in net
risk across many principal risks, other than the People principal
risk which, following the appointment of the new Chief People
Ocer, has undergone a full review and reassessment of
the risk.
Strategic pillars
Our Places To be a leader in markets we choose to serve.
Our Platform Create a world-class operational platform
through data, technology, and infrastructure.
Our People Find, develop and retain great people.
Our Position Leverage our position at the centre of STEM
to deliver sustainable value to our candidates
and clients.
Risk management
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SThree plc
1. Macro-economic environment/cyclicality risk
Risk description
Rapid changes in the macro-economic environment could result in SThree suffering financial exposure and/or loss. SThree operates in
a sector that is highly cyclical and sensitive to the economy and business sentiment. Mixed economic signals can delay identification
of changes in market conditions and business decisions to respond, both on the upside and downside. The growth in the ECM models
globally and fixed central support costs impact on the flexible cost base so may exacerbate any time lag between financial performance
impact and ability to cut costs and therefore impacts the ability to scale when economy recovers quicker than anticipated.
Link to climate change and sustainability: SThree may be affected, primarily through its work with the Energy sector, to changes
in Government policy related to climate change, including in the renewable energy space, which may present positive business
opportunities for the Company and fluctuations in the oil price. Geopolitical events, including energy price shocks and other energy
security risks can have an impact on economies, and in turn SThree markets and profits.
Mitigations
• The annual strategic planning and budgeting process incorporate
reviews of the broader market conditions along with monthly business
performance monitoring and twice-yearly reviews as part of the
strategy cycle to help inform any changes that are required to react to
changes in the economy.
• The Group is a strategically diversified business, geographically, by
sector and by product, with a focus on STEM markets which are less
sensitive to economic cycles.
• Strategic focus on Contract market which is more resilient in less
certain economic conditions than Permanent and provides a counter
cyclical cash hedge working capital release with each contract finisher.
• The Group has a flexible cost base that enables the business to quickly
cut costs to react swiftly to changes in market activity.
• The Group has a strong balance sheet with low levels of net debt
through the year and committed debt facilities to support the business.
Change from FY22
No change in net risk due to effective controls through
the Group’s well diversified business and ability to
respond quickly to changes in the market conditions.
Executive Committee sponsor:
Andrew Beach – Chief Financial Officer
Link to Strategic Pillar:
Our Places, Our Position
Principal risk interdependency:
2
3
5
9
2. Future growth
Risk description
If the Group ineffectively executes its strategic initiatives and investments, this could lead to a failure to deliver planned growth and
value creation.
The Group has clear growth ambitions. To achieve these ambitions, the growth needs to be delivered through effective strategy and
execution of strategic plans. SThree recognises that it is vital for the right strategy to be implemented and for this to be executed
effectively.
Link to climate change and sustainability: our strategy to focus on STEM skills and a Contract business is designed to address the
opportunities presented by a number of global megatrends, in business, society and the way that people work.
Link to AI: AI presents both risks and opportunities to SThree. For example, it could have an impact on the demand for employment and
SThree’s services, with AI replacing certain skillsets. It could also significantly increase the demand for some of the high-quality skills
SThree places across all sectors and present opportunities for use in certain SThree business processes.
Mitigations
• Clear strategy, with regular planning and review meetings as
part of strategy setting cycle.
• Oversight of strategic workstreams and technology
investments through the project governance and ExCo.
• Defined M&A processes in place to review any appropriate
opportunities to complement organic growth opportunities.
• Geographies and sectors are aligned with our core strategy and
any new business model proposed is reviewed to understand
market opportunity and strategic synergies, prior to adoption
and implementation.
• Enterprise client strategy to continue growth of key accounts
focusing on delivery of services globally.
Change from FY22
No change in net risk, strategy remains well articulated with key
strategic projects not yet at a sufficiently advanced stage for the
impact to net risk to be seen.
Executive Committee sponsor:
Jelte Hacquebord – Chief Commercial Officer
Link to Strategic Pillar:
Our Places, Our Platform, Our People, Our Position
Principal risk interdependency:
1
3
4
5
6
7
8
9
3. Commercial relationships and customer risk
Risk description
In circumstances where working capital impairment or bad debt write-off occur, SThree may suffer financial loss, due to customers or
intermediaries being unable to fulfil their contractual payment obligations. The Group’s growing ECM business has increased the need
for sufficient working capital to ensure payments are made to candidates whilst waiting for clients to settle invoices. Bad debt can
impact future cash flow for operations when uncollectable debt is written off.
Link to climate change and sustainability: SThree works with a number of clients who are helping to solve the most significant
challenges of our time for both the environment and society.
Link to AI: technology advances have the potential to provide quicker trend and payment behaviour analysis, leading to earlier debt
collection and thereby reducing uncollectable debt.
Mitigations
• Overall credit risk profile client base
of the Company is a low.
• Regular reviews and credit risk scoring
model for higher-risk clients managed
by credit risk analysts.
• Regional oversight of debt through
credit risk dashboard and monthly key
performance indicator reviews.
• Effective end-to-end process for
review of payment terms out of policy
with Chief Financial Officer approval
required.
• Continued focus on aged debt.
Change from FY22
No change to net risk due to controls remaining effective. The macro-economic
environment continues to be challenging, resulting in an increased bad debt provision,
however, enhanced controls remain effective through continuous monitoring, with a focus
on high-risk clients and key enterprise clients which typically have longer payment terms.
During the year, a detailed review and stress testing exercise was undertaken on the risk
appetite for this risk to ensure there is the optimal balance between supporting our growth
ambitions and managing the risk. The conclusion of this review was that risk appetite had
been correctly assessed but will be re-examined if the macro-economic environment
becomes more challenging or greater commercial opportunities arise.
Executive Committee sponsor:
Andrew Beach – Chief Financial Officer
Link to Strategic Pillar:
Our Places, Our Platform
Principal risk interdependency:
1
2
4
4. Contractual liability risk
Risk description
If SThree enters into unfavourable contractual terms with customers, it risks suffering significant financial loss. SThree operates in a
highly competitive environment in which clients sometimes seek to assign significant contractual responsibilities and high financial
liabilities to SThree. Where SThree acts as the employer of record (as with its ECM model), this expectation is generally heightened.
Link to AI: opportunity for advanced technology to improve efficiency of the contract review process.
Mitigations
• SThree seeks to ensure that its contractual exposure to
claims is effectively controlled through its contracts.
• Contract approval processes are in place with defined
escalation procedures for the proposal of contractual terms
that do not align with standard negotiation parameters.
• Well established in-house legal team, aligned to and
working closely with the regional businesses, ensures
a close understanding of business risks and associated
contractual requirements.
• Risk Committee oversight of any changes in the external
environment that should be incorporated into approach
to contracting.
• The Company seeks to place the responsibility for supervision
and control of contractors directly with the client, including
the acceptance of liability for any acts, defaults or omissions.
• Global insurance coverage in place to cover exposure
where appropriate.
Change from FY22
Decreased. Following full risk assessment of each business model
operated globally, the parameters for acceptable contractual liability
were updated to reflect the assessed risk and exposure. Monitoring
of updated contractual liability through key risk indicators will ensure
risk versus reward remains balanced. A new contractual liability
framework is designed to set appropriate contractual exposure for
both clients and SThree whilst also providing clarity and a positive
contracting experience for both client and consultants.
Executive Committee sponsor:
Kate Danson – Chief Legal Officer
Link to Strategic Pillar:
Our Places, Our Platform, Our People
Principal risk interdependency:
2
3
7
8
10
Risk management continued
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SThree plc
5. People, talent acquisition and retention
Risk description
SThree’s profitability, long-term enterprise value, and ultimately our ability to deliver our strategy will be detrimentally impacted if we
cannot attract and retain the right talent and drive the right levels of productivity to deliver against our growth ambitions.
The Group are reliant on attracting and retaining people that can deliver against its growth strategy. Sales consultants take time to reach
their productivity peak, and this therefore needs to be taken into account when considering timelines. It is vital that SThree attracts and
retains an engaged, productive, diverse workforce to ensure the future success of the Company.
Link to AI: a fear of job losses due to the use of AI could cause issues with engagement and retention along with the potential missed
opportunity to use the technology in a way which encourages and enables people to achieve their potential.
Mitigations
• Improved employee engagement
through survey platform.
• Flexible hybrid working policy offered
to all employees.
• Award-winning training platform
to strengthen development of
consultants throughout their career.
• Continuation of strengthening our
wider focus on diversity and inclusion
across gender, nationality, age
and race.
• Continued focus on mental health
and wellbeing.
Change from FY22
Increased. Following appointment of new Chief People Officer a full review of attraction
and retention risk was undertaken and the risk reassessed.
The external environment, such as cost-of-living crisis and macro-economic environment
creating tougher markets for consultants has negatively impacted the risk.
It is acknowledged that the reason for attrition and low employee engagement is
complicated and multi-faceted, requiring a strategic programme focusing on optimising
a broad range of areas throughout the recruitment and talent management process.
Executive Committee sponsor:
Sarah Mason – Chief People Officer
Link to Strategic Pillar: Our Places, Our People
Principal risk interdependency:
2
9
10
6. Cyber security
Risk description
If SThree suffers a serious system or third-party disruption, this could cause loss of data or security breach that disrupts business-critical
activities and its ability to meet its contractual and regulatory obligations.
The threat landscape continues to evolve, heightened by world events, with an increase in cybercrime and the evolution of ransomware
attacks. Secure data is at the heart of creating a strong culture and trusted brand for our candidates and clients; failing to protect our
data and manage security across our services will directly impact our reputation and our ability to sustain and grow our business.
Link to climate change and sustainability: expansion of services provided under the ECM business model could potentially increase
carbon emissions and therefore requires investment into greener solutions to ensure both SThree and our clients make a positive
impact.
Link to AI: being utilised to develop and evolve threats and attack methods to circumvent security controls, or human responses.
However, AI can also be used, in its various forms, to support security, through machine learning and other techniques to help identify
malicious activities and respond to active threats.
Mitigations
• Global information security framework, designed to ensure that
SThree identifies and meets requirements relating to cyber security.
• Vulnerability scanning to early identify weaknesses across the estate
alongside information security team actively monitoring for security
incidents and remediating where necessary.
• Mandatory cyber security training for all employees to build
awareness and understanding of how individuals can help to protect
the Company.
• Incident management plan with clear escalation in the event of a
serious incident and linked to outsourced security event monitoring
to assist.
• Ongoing improvements to authentication requirements.
• Insurance cover in place that provides access to expert helpline in the
event of an incident.
Change from FY22
Decreased. Whilst cyber risk continues to be seen as a
significant risk globally the improvements in operating
systems and ongoing staff awareness around the increasing
sophistication and number of attempted phishing attacks
has further decreased the net risk to SThree.
Executive Committee sponsor:
Nicholas Folkes – Chief Operating Officer
Link to Strategic Pillar:
Our Places, Our Platform, Our Position
Principal risk interdependency:
2
4
7
9
7. Data privacy
Risk description
Non-compliance with international data protection regulations and/or contractual obligations in relation to data protection could
expose SThree to loss of revenue, reputational damage and regulatory sanctions. Having solid data foundations is required for SThree
to fulfil our business strategy. Great customer experience starts with accurate, complete and timely data, and secure data is at the heart
of creating a strong culture and trusted brand for our candidates and clients.
Link to AI: use of AI technology by sales consultants could result in personal data being added into an uncontrolled environment and
shared with third parties without clear and embedded policy and procedures on AI use within the Group.
Mitigations
• Data privacy landscape continues to be monitored by our cross-
functional privacy team and international Data Protection Champion
network to ensure compliance with GDPR and applicable data
privacy legislation.
• A global data protection framework is in place to ensure that the
Group can identify and meet regulatory requirements relating to
data protection within each jurisdiction.
• Embedded processes to manage and respond to Data Subject
Rights requests, such as Right to be Forgotten.
• Mandatory yearly data privacy training for all current employees and
all new employees as part of the induction process.
• Continued investment in our IT systems and technology controls.
Change from FY22
No change. Process improvements and staff awareness
continue.
Executive Committee sponsor:
Kate Danson – Chief Legal Officer
Link to Strategic Pillar:
Our Places, Our Platform, Our Position
Principal risk interdependency:
4
6
8
8. Regulatory compliance
Risk description
A failure by the organisation to meet its regulatory obligations in respect of its business models could undermine our reputation, might
result in legal exposure and regulatory sanctions and could negatively impact our ability to operate. The staffing and recruitment
industry sits against the backdrop of an increasingly stringent and complex regulatory environment. These regulatory changes bring
commercial opportunities for SThree, as companies seek staffing models which remove both the burden of administration and the
risk of regulatory non-compliance through engaging with companies such as SThree. However, they also present risk to SThree in
circumstances where we fail to manage those opportunities appropriately. Failure to comply leaves SThree open to a range of risks,
including fines, penalties, litigation, personal Director liability and loss of licence to operate. Additionally, the reputational impact and
loss of stakeholder confidence could undermine SThree’s business in its entirety.
Link to AI: AI could improve identifying and tracking compliance processes in the system and highlight patterns of behaviour where
controls may not be effective or escalate a point of non-compliance quicker than manual process to ensure prompt action. Potential
to provide greater flexibility in adapting to changing regulatory compliance requirements. AI-powered tools can potentially be trained
quickly on new regulations and then quickly incorporate updates and changes as they occur.
Mitigations
• Regular horizon scanning by Legal function with reporting to
regional management boards and Executive Committee.
• Regional Legal team involvement in the establishment of new
products/services and entering new jurisdictions to ensure
there is full understanding of regulatory compliance required
and the processes to support the compliance.
• Local internal processes designed to ensure regulatory
compliance for each placement.
• Oversight of regulatory compliance risks and controls at
Group Risk Committee.
• Regional regulatory compliance training rolled out by legal
department.
• Detailed regulatory risk assessments regularly reviewed for
all business models in each country the Company has an
entity incorporated within, to ensure full understanding and
relevant appropriate controls are in place.
Change from FY22
Decreased. Likelihood of risk materialising has reduced as a result
of in-depth risk assessment of business model’s risk and controls,
alongside an ongoing programme of work on controls enhancement
and staff training.
Executive Committee sponsor:
Kate Danson – Chief Legal Officer
Link to Strategic Pillar:
Our Places, Our Platform
Principal risk interdependency:
2
4
7
10
Risk management continued
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SThree plc
Compliance information
9. Strategic change management
Risk description
If the Company does not effectively manage and implement strategic change, this could result in poorly implemented projects, wasted
resource and/or adverse financial impact and ability to execute strategy impacting future growth of the Group. Effective strategic change
management is inherently tied into the achievement of our strategy; change management is required for the effective implementation of
parts of the strategy that require us to operate differently. Attempting too many projects, incorrectly mobilising projects, lack of oversight
causing the rejection by staff of change, would prevent SThree moving to the next level of revenue growth and profitability.
Mitigations
• Prioritisation of investment decisions, approval of business cases and
oversight of the investment portfolio, with strong linkage into the annual
budget cycle.
• Formal governance structure in place for strategic projects, including
independent assurance for key technology-related programmes.
• Full Board visibility of the portfolio status, including timelines, project
spend and issues escalation.
• A formal digital demand process to coordinate requests that place
demands on our technology change resources. The forum ensures
correct resource allocation against the Company priorities.
• Monthly programme steering committees review programme status,
risks and document decisions.
• Recruitment and secondment of skilled expertise to business
transformation programme.
Change from FY22
No change. The volume of transformational change has
increased as part of key strategic project roll outs across
the regions but mitigation strategies have increased to
balance this out.
Executive Committee sponsor:
Nicholas Folkes – Chief Operating Officer
Link to Strategic Pillar:
Our Places, Our Platform, Our People, Our Position
Principal risk interdependency:
2
5
6
10. Health and safety
Risk description
If an employee suffers injury where SThree has failed to meet its regulatory obligations or duty of care, this could lead to an undermining
of trust by our employees, candidates and clients, as well as reputational damage and financial loss. Health and safety (H&S)
management regulations contain a general requirement for organisations to monitor and review preventive and protective measures
to protect the health, safety and wellbeing of our employees. As a responsible employer we strive to ensure all our people are safe in
their working environment. Our increasing volume and proportion of business in ECM means we have heightened regulatory obligations
towards our candidates, many of whom operate in higher risk environments than our internal workforce.
Link to climate risk and sustainability: employees are potentially at risk of exposure to increased climatic natural disasters and to
extremes of temperature, where working outdoors, making working conditions higher risk.
Link to AI: AI could improve identifying trends across accident and incident reporting globally to ensure quicker responses to reduce
likelihood of reoccurrence.
Mitigations
• Monthly H&S administration and communication meetings to discuss risks and any
change in processes.
• Annual review and roll out of global H&S policy.
• Processes and reporting in place for any accidents or incidents involving internal
employees and ECM candidates.
• Regular horizon scanning of H&S regulations by both Group Legal and H&S Manager to
ensure policies and processes are updated accordingly.
• Communication with clients to ensure safety of a candidate on a client site and
obligations are understood by both the client and candidate towards H&S.
• The review of H&S obligations are a key part of the contract review process, to ensure
any required processes are followed and are proportionate to the product being offered
to the client.
• Dashboard to capture leading and lagging indicators to highlight any incident risks and
introduce continual improvement processes.
• Group-wide mandatory H&S training.
• Insurance policies where required covering the Company and ECM contractors in the
event of an accident.
Change from FY22
Decreased in likelihood due to a better
understanding of current processes and
controls in place for ECM business H&S
and continued improvement in controls
for office-based employees.
Executive Committee sponsor:
Kate Danson – Chief Legal Officer
Link to Strategic Pillar:
Our Platform, Our People, Our Position
Principal risk interdependency:
4
5
8
Going concern statement
The Directors have reviewed the Group’s cash ow forecasts,
including the assumptions contained in the budget, and
considered associated principal risks which may impact the
Group’s performance in the 12 months from the date of
approval of this year’s nancial statements and in the period
immediately thereafter.
At 30 November 2023, the Group had no debt except for IFRS
16 lease liabilities of £29.0 million. Credit facilities relevant to
the review period comprise a committed £50.0 million RCF
(with the expiry date of June 2026 and an extension option to
2027) and an uncommitted £30.0 million accordion facility, both
jointly provided by HSBC and Citibank. These facilities remained
undrawn on 30 November 2023. A further uncommitted £5.0
million bank overdraft facility is also held with HSBC.
In addition, the Group has £83.2 million of net cash and cash
equivalents available to fund its short-term needs, as well as a
substantial working capital position, reecting net cash due to
SThree for placements already undertaken.
The RCF is subject to covenants that are measured biannually
in May and November, on a trailing 12-month basis, being (i)
net debt to EBITDA of a maximum of 3.0x and (ii) interest cover
of a minimum of 4.0x. The ratio of net debt to EBITDA at 30
November 2023 was nil, as no debt was drawn at the year end,
and hence the going concern assessment was primarily focused
on liquidity available during the assessment period.
Despite the ongoing volatile markets, the Group’s net fee
performance remained resilient in FY23, supported by our
strategic focus on STEM and Contract/exible working
oerings. In addition, the Group’s targeted investment in talent
and digital infrastructure is progressing as planned, driving
both scale and higher margins over the mid to long term, and
delivering our dierentiated and higher value proposition within
the market. In the assessment of the Group’s prospects in
the short term, the Directors also considered expected cash
outows attributable to investments in people, talent acquisition
and infrastructure in response to identied market opportunities
or emerging risks.
The base case forecasts were sensitised to reect a severe but
plausible downside scenario on Group performance. The key
assumptions subject to the sensitivity analysis were a decline in
net fees (10% decline in FY24 and 5% decline in FY25), with cost
base exed only for variable costs, such as commissions and
bonuses, with no other cost mitigating actions assumed, with the
overall result of reduced margins and operating prot.
In the severe but plausible downside scenario, the Group is
expected to have sucient liquidity headroom through the
whole period covered. This stress test also did not incorporate
potential mitigating actions at the Board’s disposal to improve
the position identied by the analysis, such as deferrals of capital
expenditure, suspension of dividends payment and/or share
buyback programme, cash preservation initiatives, and a number
of further reductions in operating expenditure across the Group
primarily related to workforce cost reductions.
Following this assessment, the Directors have formed a
judgement, at the time of approving the SThree Group
Annual Report and Accounts 2023, that there are no material
uncertainties that cast doubt on the Group’s going concern
status and that it is a reasonable expectation that the Group
has adequate resources to continue in operational existence
for at least the next 12 months from the date of approval of this
Annual Report. For this reason, the Group continues to adopt
the going concern basis in preparing the Consolidated Financial
Statements for the year ended 30 November 2023.
Viability statement
In accordance with provision 31 of the UK Corporate
Governance Code 2018, the Directors have assessed the
prospects of the Group over the ve-year period, based on
management’s reasonable expectations of the nancial position
and performance of the Group, internal budgets, planning
timeframes, medium-term targets and the potential impact
of the principal risks as documented on pages 78 to 82 of the
Annual Report.
Assessment of prospects
The Group’s strategy is to deliver a sustainable and protable
growth by focusing on four strategic pillars and building on the
favourable megatrends that inuence all markets and sectors
we operate in. The Group has a clear framework for investments
in selective strategic initiatives and operational decisions made
to continue strengthening the Group’s market position into
the future. Our performance against our strategic objectives is
discussed in more detail on pages 18 to 19.
The review period covers ve years from FY24 to FY28, which
comprise the next nancial year plan used in the going concern
assessment and projections for the subsequent four nancial
years. The Directors believe that the ve years to November
FY28 is an appropriate period over which a reasonable
evaluation of the potential impact of future risk events on the
Group can be made. In coming to this view, the Directors have
considered sustainability and resilience of the Group’s business
model over the long term (including strategic factors detailed in
our key competitive advantages on page 17, as well as longer-
term market trends in areas such as digitalisation and climate
change). Furthermore, the viability period aligns to:
• the impairment review process, where investments in
subsidiaries are tested based on ve-year forecasts;
• the period over which the capital investment decisions are
appraised; and
• the period over which the Group’s major strategic priorities
and plans have historically been considered (in line with the
long-term ambitions announced at the Capital Markets Day
in 2019).
Given our principal risks, the Directors believe that the ability
to assess the Group’s longer-term viability beyond this period
becomes increasingly reduced.
Risk management continued
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SThree plc
The Directors have reviewed the Group’s current nancial
position, progress against the Group’s strategic targets and
plans for the next ve years, alongside an evaluation of the long-
term opportunities and risks in the market in which the Group
operates. The nancial projections were based on the following
key assumptions:
• Key macro-economic data that could impact recruitment
activity and demand for our services and consequently our
revenues and net fees.
• Expected headcount retention rates and our ability to
dynamically change hiring decisions and other operational
spend in the light of trading conditions.
• Expected increase in productivity of sales teams (placements
per consultant) following a full roll out of outputs delivered
under the Technology Improvement Programme.
• Changes in the Group’s working capital levels.
• Movements in foreign currency rates, tax rates and interest
rates.
• Impact of climate change risk and opportunities.
• Dividend per share.
The viability assessment focused mainly on the expected future
solvency of the Group in the face of the macro-economic
environment cyclicality in which the Group operates, being a
key principal risk. However, also considered were the potential
impact of other key principal risks, especially those related to
customer risk and strategic change management.
Subsequently, the key assumptions in the Group’s ve-year
FY24–FY28 plan were stress-tested against severe but plausible
downside scenarios linked to certain principal risks as well as an
emerging risk of climate change, as summarised in the table below.
Assumptions, level of severity considered Link to risks
Scenario 1
Decline in demand for recruitment services (a 4% decline in net fees)
Reduction in demand impacting both Contract and Permanent businesses,
with cost base exed only for variable costs, such as commissions and
bonuses, with no other cost mitigating actions assumed. Headcount growth
of 3% remained as per the base case.
Macro-economic
environment/cyclicality risk
Future growth
Commercial relationships and
customer risk
Scenario 2
Deteriorating/severe macro-economic conditions (cost ination and
margin compression, with a 10% decline in net fees in FY24, a 5% decline
in net fees in FY25, followed by return to growth in subsequent years)
Key areas considered: reduction in contractor order book compounded by
the lower volume of Permanent opportunities. Flat headcount and higher
labour costs, reducing operating prot conversion ratio. Negative impact
on the Group’s sales volume resulting in reduced net fees and prots. No
mitigating levers activated, except for variable sta costs.
Macro-economic
environment/cyclicality risk
Future growth
Commercial relationships and
customer risk
Strategic change management
Scenario 3
Climate change negatively aecting delivery of our services
Key areas considered: negative impact to the Group net fees due to the
closure of two locations with high physical risk. With no cost mitigating
actions taken, the closure of SThree’s oces would aect our operational
ability to place candidates in roles and service the existing contracts.
Emerging risk – climate
change
Based on the results of these scenarios individually and as a
cluster of events for Scenarios 1 and 2, the Directors are satised
that the Group would be able to respond to such circumstances
through various means which could include a reduction and
deferral of capital expenditure and further rationalisation and/or
restructuring of operations, to ensure that the Group continues
to meet its ongoing obligations. In addition, the Directors have
considered the fact that the Group operates in stable markets
and has the robust nancial position of the Group, including
the ability to sell assets, raise capital and suspend or reduce the
payment of dividends.
Viability statement
Following this assessment, the Board can conrm that it has a
reasonable expectation that the Group will continue in operation
and meet its liabilities, as they fall due, over a viability horizon of
ve years for the period ending 30 November 2028. In making
this statement, it is recognised that not all future events or
conditions can be predicted, and future assessments are subject
to a level of uncertainty that increases with time.
Non-nancial matter
Relevant policies, standards and section
of the Annual Report
25
Annual Report page reference
A. Environmental
matters
• TCFD (governance and risk
management)
• Our road to net zero carbon emissions
• Sustainability policies
• Climate-related nancial disclosures, pages 58-75
• Emerging risks – climate change, page 61 and 77
• ESG Impact Report 2023 (online)
• The role of the Board and its key decisions, pages 92-95
B.
Employees
• Our operating principles
• Global DE&I policy
• Health and safety policy
• Whistleblowing policy
• Data protection policy
• Bullying and sexual harassment policy
• Governance targets, page 75 (plus Summary of notices and
policies available online)
• Strategic overview, Our People, pages 28-31
• Employee engagement (how the Board engaged with SThree
employees), pages 96-99
• Gender Pay Gap Report 2022–2023 (online)
C.
Social matters
• Our community programmes aimed
at building and educating future
generations of diverse STEM talent
• Volunteering guidelines
• Corporate giving and fundraising policy
• Tax strategy for 2023 (online)
• Social targets, pages 54-55
• ESG Impact Report 2023 (online)
• Governance targets, page 75 (plus Summary of notices and
policies available online)
D.
Respect for
human rights
• Our Code of Conduct
• Procurement process
• The Company’s Modern Slavery and
Human Tracking Statement (online)
• Governance targets, page 75
E.
Anti-corruption and
anti-bribery matters
• Anti-bribery and corruption policy
• Gifts, hospitality and charitable
contributions policy
• Governance targets, page 75 (plus Summary of notices and
policies available online)
Description of
principal risks
relating to matters
A-E above
• Risk management approach, pages 76-77
• Emerging risks – climate change, page 77
• TCFD report, climate-related risks and opportunities, pages 58-75
Relevant information
Business model
description
• Our business model, pages 12-17
Description of non-
nancial KPIs
• Key performance indicators, pages 20-23
• Our non-nancial KPIs include:
– Under strategic pillar Our Platform: Carbon reduction
– Under strategic pillar Our People: Representation of women in leadership roles, Employee net promoter
score (eNPS)
– Under strategic pillar Our Position: Customer net promoter score (NPS), Number of lives positively impacted
25. Please note that some of the policies are available on request from Company Secretary.
SThree non-nancial and sustainability information statement
The Group has complied with the requirements of Sections 414CA and 414CB of the Companies Act 2006 by integrating the
required non-nancial and sustainability information disclosures throughout the Strategic and Governance Reports. The table below
is intended to provide our stakeholders with references where the key content on our development, performance, position and the
impact of our activities with regards to specied non-nancial matters can be found.
Compliance information continued
Climate-related nancial disclosures
In accordance with Sections 414CB of the UK Companies Act 2006, the required climate-related nancial information disclosures
can be found integrated throughout the Strategic Report, primarily in the TCFD report on pages 58 to 74.
A summary of key areas of disclosure is set out below:
Reporting requirement Further information
(a) Group’s governance for assessing and managing climate-related risks and opportunities Page 58-60
(b) How climate-related risks and opportunities are identied, assessed and managed Page 61, 77
(c) How processes for identifying, assessing, and managing climate-related risks are integrated into the overall Group
risk management framework
Page 61
(d) Description of climate-related risks and opportunities, and time periods over which they are assessed Page 63-69
(e) Impact of the climate-related risks and opportunities on the Group’s business model and strategy Page 62, 77
(f) Analysis of the resilience of the Group’s business model and strategy (climate-related scenarios) Page 70
(g) Targets used by the Group to manage climate-related risks and to realise climate-related opportunities Page 71-73
(h) Key performance indicators (including basis of calculating) used to assess progress against targets identied under (g) Page 72-73
85
Strategic Report
Governance
Financial Statements
Annual Report and Accounts 2023
84
SThree plc
Board of Directors
James Bileeld
Non-Executive Chair
Timo Lehne
CEO; Executive Director
Andrew Beach
CFO; Executive Director
Denise Collis
Senior Independent
Non-Executive Director and
Employee Engagement NED
Elaine O’Donnell
Independent Non-Executive
Director
Committee membership
Audit & Risk Committee Nomination Committee
ChairRemuneration Committee
A
A N N N
N
N R R R
R
R A A AR
Barrie Brien
Independent Non-Executive
Director
Imogen Joss
Independent Non-Executive
Director
Kate Danson
Chief Legal Ocer and
Company Secretary
Appointed: October 2017 Appointed: January 2022 Appointed: July 2021 Appointed: July 2016 Appointed: October 2022 Appointed: September 2017 Appointed: December 2022 Appointed: May 2021
Experience
James Bileeld was appointed
to the SThree Board as Senior
Independent Director and Chair
Designate in October 2017,
becoming Chair in April 2018.
He is Chair of the Nomination
Committee and a member of the
Remuneration Committee.
James is a Trustee of the
Science Museum Group,
the world’s leading group
of science museums.
He managed the digital
transformation of media
group Condé Nast across 27
countries, scaled Skype’s global
operations as part of its founding
management team and held
senior management roles at
Yahoo! during its major growth
phase. Formerly CEO of global
advertising technology company,
OpenX, he also co-founded the
UK local information business,
UpMyStreet, following an
investment banking career at
JP Morgan Chase. James was
previously a Non-Executive
Director of MoneySupermarket.
com, stepping down in May
2022, and Stagecoach Group
plc., stepping down in June
2022 following its acquisition
and subsequent delisting from
the London Stock Exchange.
Experience
Elaine O’Donnell was appointed
to the SThree Board, the
Remuneration and Nomination
Committees and as Chair of
the Audit & Risk Committee in
October 2022.
Elaine is the Senior Independent
Non-Executive Director and
Chair of the Audit & Risk
Committee of both On The
Beach Group plc and The Gym
Group plc.
Elaine qualied as a Chartered
Accountant at PwC and then
spent the majority of her
executive career specialising
in corporate nance, latterly
serving as a partner in
Transaction Advisory Services
at EY. Throughout her career,
she has worked extensively with
global businesses across a range
of market capitalisations and
industry sectors.
Elaine was previously Chair of
Games Workshop Group plc
and a Non-Executive Director
of Studio Retail Group plc.
Experience
Timo Lehne was appointed CEO
in April 2022 having joined the
Board as interim CEO and an
Executive Director on 1 January
2022. Prior to this Timo was
a Senior Managing Director
with full responsibility for the
day-to-day running of SThree’s
largest region, DACH, which
comprises Germany, Austria
and Switzerland.
Timo studied International
Economics in the Netherlands
before joining our Progressive
Recruitment business in
Germany as a sales consultant
in 2006. He was appointed
Senior Business Manager in
Düsseldorf for SThree in 2009,
quickly turning it into our fastest
growing business and growing
the city’s share of net fees
within the DACH region from
4% in 2009 to 27% in 2012. He
was promoted to Senior Sales
Director in 2013, taking joint
responsibility for the running
of the overall DACH business
and in 2017 became Managing
Director for the region, where he
was responsible for the overall
DACH business of SThree
accounting for over 33% of
the Group’s revenue and
more than 1,000 employees
across 10 locations.
Experience
Barrie Brien was appointed
to the SThree Board, the
Audit & Risk, Nomination and
Remuneration Committees in
September 2017.
He is Group Chief Executive
Ocer of STRAT7, a data
analytics and strategy
consultancy, and was the
former Chief Executive Ocer
of Creston plc, a media and
marketing communications
group, stepping down in 2017
following its sale and delisting.
Barrie was extensively involved
in the growth of Creston plc
from 2004 with its buy-and-
build strategy and had also
been Chief Operating and
Financial Ocer.
In addition to extensive public
company experience, including
M&A fundraisings and Investor
Relations, Barrie has spent 30
years in global media, digital,
and marketing communication
companies, advising a portfolio
of boards and clients across
multiple industries on their
growth strategies.
Due to his other professional
commitments Barrie will be
retiring from the Board in April
2024 and will not be standing
for re-election at the Annual
General Meeting.
Experience
Andrew Beach was appointed
to the SThree Board in July
2021, joining from Hyve
Group plc, a global exhibitions
business. As CFO he holds full
responsibility for the nancial
strategy and nancial activities
across the SThree Group.
He is an accomplished CFO
with considerable experience
in listed companies. He has
global experience of business
transformation, funding and
M&A in fast-paced and high-
growth companies and has
extensive experience of working
alongside boards and senior
leadership on company strategy
and direction.
As CFO of Hyve, Andrew was
instrumental in leading the
company through a period of
signicant transformation and
rapid international growth, which
resulted in its promotion to the
FTSE 250. Previously, he held
a number of roles at Ebiquity
plc, joining as Group Financial
Controller in 2007 and quickly
being appointed as CFO in
2008. In 2014 he was promoted
to Chief Financial and Operating
Ocer. Andrew trained and
qualied as a Chartered
Accountant with PwC, working
with them from 1998 until 2007.
Experience
Imogen Joss was appointed
to the SThree Board, the Audit
& Risk, Remuneration and
Nomination Committees in
December 2022.
Imogen is Non-Executive
Director and Senior Independent
Director of Fintel plc and Chair
of its Remuneration Committee,
and a Non-Executive Director
of XPS Pensions Group PLC.
Imogen is also Chair of Grant
Thornton UK LLP, the accounting
and consulting rm, and a Non-
Executive Director of IPSX UK
Ltd and Envetec Sustainable
Technologies.
Imogen spent her executive
career working in senior
general management, sales and
marketing roles for a range of
information services and other
companies, including the London
Stock Exchange Group plc and
S&P Global Inc.
Imogen was previously a Non-
Executive Director and Chair of
the Remuneration Committee of
Euromoney Institutional Investor
plc, stepping down in November
2022 on completion of the
acquisition of Euromoney and
its delisting from the London
Stock Exchange.
Experience
Denise Collis was appointed to
the SThree Board, Nomination
Committee and Remuneration
Committee in July 2016. Denise
was appointed as Chair of the
Remuneration Committee in
September 2016, and became
a member of the Audit & Risk
Committee in April 2018. In
October 2018 Denise was
appointed Senior Independent
Director and, with eect from
1 December 2018, was appointed
as Employee Engagement NED.
Denise is also a Non-Executive
Director and Chair of the
Remuneration Committee at
Smiths News plc, the specialist
distribution company. She was
previously a Non-Executive
Director of Emis Group plc,
stepping down in October 2023
following its acquisition and
subsequent delisting from the
London Stock Exchange. Denise
is a Chair of the Remuneration
& People Committee and a
member of the Nominations
Committee at the British Heart
Foundation. Prior to this, she
was Group HR Director for 3i
Group plc, and most recently
Chief People Ocer for Bupa.
She has extensive international
Human Resources and executive
committee experience, and
has also held senior roles at EY,
Standard Chartered plc and
HSBC. Denise is a Fellow of the
Chartered Institute of Personnel
and Development. Denise was
previously a Non-Executive
Director of Emis Group plc,
stepping down in October 2023
following its acquisition and
subsequent delisting from the
London Stock Exchange.
Experience
Kate Danson joined SThree
in 2021. She is responsible for
leading the provision of legal
services, as well as holding
responsibility for enterprise risk,
health and safety and insurance
across the SThree Group and
is the PLC Company Secretary.
Prior to joining, she was General
Counsel, Group at Johnson
Matthey plc, responsible for
leading the provision of legal
services across the global
group functions. She had
previously worked in a variety
of senior global roles within
Johnson Matthey.
Kate brings a wealth of
knowledge and experience in
complex global legal, ethics and
compliance, business and risk
management issues. She is a
qualied solicitor and started her
career in private practice at the
international law rm Ince & Co.
Kate completed a degree at
King’s College London before
studying at the College of Law
between 2002 and 2004.
N
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Governance
Financial Statements
SThree plc Annual Report and Accounts 2023
Key governance and oversight activities
during the year:
• Continued focus on strategic prioritisation, including
monitoring the progress and roll out of our Technology
Improvement Programme (TIP) including reports from
independent third-party assurance company, and associated
change management.
• Considering performance of dierent sales cohorts and
plans to decrease time to productivity.
• Development of a global client strategy.
• Receiving updates from management of key markets,
including DACH, the Netherlands, the US, the UK and Japan.
• Approving the appointment of new auditors.
• Review of Board’s oversight of ESG, including enhancement
of Non-Executive Director involvement.
• Review of the Investor Relations function and appointment
of new joint Brokers.
• Receiving updates on the work to nalise and roll out new
values and updates on culture.
• Continued monitoring of our talent acquisition strategy and
DE&I metrics and activities.
• Direct engagement through investor calls and meetings and
feedback following investor meetings.
• Considering and approving a new contractual risk policy,
reecting across our core business models and markets.
• Considering the Group’s property portfolio, and approving
new leases in several key cities.
• The adoption of a new Subsidiary Governance Framework.
• Progressing the actions from the 2022 Board eectiveness
review and conducting an internal Board eectiveness
review.
• Holding a number of Board engagement sessions with
employees from across our business and providing the
opportunity for certain of those employees to attend part
of a Board meeting and give their feedback.
• Receiving refresher training on governance topics including
the Market Abuse Regulations.
• Receiving reports from the designated Employee
Engagement NED on employee engagement activity
and outcomes.
• Reviewing our Health and Safety strategy and activities
across the Group.
• Reviewing and approving the Group’s Impact Report.
Read my introduction to strategy on page 6
I am pleased to introduce SThree plc’s Corporate Governance
Report for the nancial year ended 30 November 2023.
Dear Shareholder
This report sets out our Governance Framework and outlines key
activities undertaken during the year. The SThree Board aspires
to adopt governance best practice wherever possible and our
statement of compliance with the UK Corporate Governance
Code published by the Financial Reporting Council (FRC) in
July 2018 (the Code) can be found on page 88.
It is my responsibility as Chair to ensure that the Group has
sound corporate governance and that the Board continues to be
eective. This is managed by ensuring that the Group and the
Board are acting in the best interests of our various stakeholders
and making sure that the Board discharges its responsibilities
appropriately. This includes creating the right Board
dynamic and ensuring that all important matters, in particular
strategic decisions, receive adequate time and attention at
Board meetings.
There have not been any changes to the Board composition
since my last report. However, as detailed in the Nomination
Committee report, Barrie Brien will be retiring at our AGM in
April 2024 to focus on his other professional commitments.
Barrie has served on the SThree Board for more than six years
and has provided good counsel to the Board and business as we
have navigated the Covid-19 pandemic, TIP and entry into the
FTSE 250 index. We thank him for his contribution and wish him
every success for the future.
SThree has always been driven by core business principles,
led by a desire to add value as a recruitment partner and play a
positive role in society. Our purpose and culture demonstrate
a commitment to driving performance for the Group’s long-
term success and to treating all clients, candidates, employees,
suppliers and communities with respect as key stakeholders
and partners in our business. Our approach to stakeholder
engagement during the year is set out in this report.
During the year we gave further consideration on how the
Board shapes and monitors our eorts in ESG. While the ESG
Committee will continue to be a management committee,
chaired by the Chief Executive, Non-Executive Directors will
now attend meetings on a rolling basis. The enhanced focus on
ESG matters includes a dedicated quarterly Board agenda slot.
As Chair I have had the pleasure of visiting a number of our
oces this year. In March, the Board, together with our
Executive Committee, visited our Glasgow oce and held an
all-employee townhall meeting as well as spending time with the
local management team and senior leaders. In October of this
year I, together with Imogen Joss, had the pleasure of attending
our global sales leadership conference in Vienna where around
60 attendees focused on our client strategy as well as the
areas the Company is seeking to optimise internally, in order to
achieve its strategic ambitions. In November, I visited our New
York, Houston and Chicago oces, spending time with our
employees discussing our transformation programme, where
our new systems have been deployed this year. I was keen to
understand their experiences and perspectives on the changes
they have seen as we continue to roll out the programme across
our global footprint. This visit to the US also allowed me to attend
part of the Company’s global incentive trip in Miami, where
top performers across our business came together to celebrate
successes achieved and receive an update on SThree’s strategy.
In addition, I visited our Düsseldorf oce, which is the largest of
our German oces, spending time with both local management
and the broader employee population.
The Board continues to shape and develop our culture with
a focus on diversity and inclusion and we have maintained
oversight of the Group’s initiatives in this important area. Further
information on diversity and gender pay can be found in the
Strategic progress section.
Finally, I would like to take this opportunity to thank all of our
stakeholders for their support during this year. I, along with the
Board, am available to respond to any questions on this report
or any of our activities both now and at the 2024 Annual
General Meeting.
James Bileeld
Chair
29 January 2024
Chair’s governance statement
Compliance with the UK Corporate
Governance Code 2018
The Board considers that the Company has applied the
principles and complied with the provisions of the Code
throughout the year ended 30 November 2023.
Our purpose and culture demonstrate a
commitment to driving performance for
the Group’s long-term success and to
treating all clients, candidates, employees,
suppliers and communities with respect
as key stakeholders and partners in
our business.”
James Bileeld
Chair
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Governance
Financial Statements
SThree plc Annual Report and Accounts 2023
An eective Board,
positioned for growth
Our Board at a glance
Board and Committee structure Skills Matrix
SThree plc Board of Directors
Chaired by James Bileeld
Board Committee
Other Committee
Executive Committee
Established under the authority of the Chief Executive Ocer
Chaired by Timo Lehne
Audit & Risk
Committee
Chaired by
Elaine O’Donnell
Remuneration
Committee
Chaired by
Denise Collis
Nomination
Committee
Chaired by
James Bileeld
Disclosure
Committee
Chaired by the
Chief Legal Ocer
and Company
Secretary
Group Risk
Committee
Chaired by the
Chief Legal Ocer
and Company
Secretary
ESG
Committee
Chaired by the
Chief Executive
Ocer
Finance and
Administration
Committee
Chaired by the
Chief Financial
Ocer
James Bilefield Timo Lehne Andrew Beach Denise Collis Elaine O’Donnell Barrie Brien Imogen Joss
Skill Areas
Strategy and
Transformation
Finance
Risk Management
People and Culture
Marketing
Tech & Cyber Security
Data
ESG/Responsible
Business
Commercial
Experience
Sector
Technology,
Publishing,
Financial
Services
Stang Events
Services,
Marketing
Services,
Accountancy
Healthcare,
Professional
Services,
Financial
Services
Retail and
leisure, nancial
services,
e-commerce,
manufacturing
Media and
Marketing
Services
Business
Information,
Professional
Services
International
UK, US,
Europe
UK, US,
Europe, Asia
UK, US,
Europe, Middle
East, Asia
UK, Americas,
Europe, Middle
East, Asia,
Australasia
UK, Europe,
North America,
Australasia
UK, Europe UK, Europe,
Middle East,
North America,
APAC
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SThree plc Annual Report and Accounts 2023
Board roles and responsibilities
Chair
The Chair is responsible for ensuring an eective
Board. This requires a culture of mutual respect,
openness, debate and constructive challenge.
The Chair encourages open communication
and constructive working relations between the
Executive and Non-Executive Directors. He also
seeks to ensure that the Executive Directors are
responsive to constructive challenge on their
proposals by the Non-Executive Directors.
The Chair ensures that SThree maintains
eective communications with our shareholders,
communicating the views of shareholders to the
Board so that all Directors develop an understanding
of the views of the major investors in the Group.
In addition, he also ensures the Board listens
to the views of the workforce, customers and
other stakeholders, especially in the context of
principal decisions.
With the assistance of the Company Secretary, the
Chair sets the Board’s agenda, ensuring adequate
time is available to discuss all agenda items. To
facilitate constructive Board discussion, the Chair
ensures there is a timely ow of high-quality,
accurate, clear information.
Chief Executive
Our Chief Executive has day-to-day management
responsibility for running the Group’s operations,
for implementing the Group’s strategy as approved
by the Board, for applying Group policies and for
promoting the Company’s culture and standards,
including those on governance. He has the broad
authority from the Board to run the Company and
he is accountable for, and reports to the Board on,
how it is performing. Our Chief Executive also has a
key role in the process for the setting and review of
strategy. In addition, he ensures that the Executive
Directors’ views on business issues and views from
the workforce on relevant issues are shared with the
Board in a balanced way.
There is a clear division between the Chair’s
responsibilities for running the Board and the Chief
Executive’s role for the running of the business.
This division of responsibilities is established in a
written statement.
Chief Financial Ocer
The CFO is responsible for the management of
the Finance function. He leads the Group’s nance
activities, nance risks and controls, Group funding
arrangements and the Investor Relations function.
As a Director, the CFO’s responsibilities extend
beyond the Finance function to include the whole of
the Group’s operations and activities, supporting the
CEO in the delivery of the corporate strategy.
Senior Independent Director
The Senior Independent Director’s role is to provide
a sounding board for the Chair, to act, if necessary,
as a focal point and intermediary for the other
Non-Executive Directors and to ensure that any key
issues that are not being addressed by the Chair or
the executive management are taken up. The Senior
Independent Director and the Chair maintain a
regular dialogue regarding current issues. The Board
recognises that, should any signicant issues arise
which threaten the stability of SThree or its Board,
the Senior Independent Director may be required
to work with the Chair or others or to intervene to
resolve them.
The Senior Independent Director is available to
shareholders should they have concerns which have
not been resolved from contact through the normal
channels of the Chair, Chief Executive or other
Executive Directors or if the normal channels may
be inappropriate. The Senior Independent Director
is also available to attend meetings with major
shareholders to listen to their views in order to help
develop a balanced understanding of their issues
and concerns.
The Senior Independent Director is responsible
for leading the annual appraisal of the Chair’s
performance and plays an important role by
ensuring there is an orderly process for succession
to the role of Chair of SThree.
Non-Executive Directors
The role of our Non-Executive Directors is to
scrutinise management’s performance in meeting
agreed goals and objectives and to monitor how
that performance is reported. They must also be
satised with the integrity of the Group’s nancial
information on the eectiveness of nancial controls
and risk management systems. As members of
the Board, the Non-Executive Directors bring
independent judgement and a range of experience
to the Board and therefore have a key role in
constructively challenging in all areas. This is
vital to the independence and objectivity of the
Board’s deliberations and decision making and is
particularly important in helping develop proposals
on strategy. The Chief Executive and the other
Executive Directors welcome, and are responsive
to, constructive challenge by the Non-Executive
Directors on their proposals. The Non-Executive
Directors’ role is to support the decisions that have
been taken and to support the executive team in
their delivery. Non-Executive Directors also play
an important part in supporting the Chair and the
Executive Directors in embracing and representing
the Company’s culture, values and standards within
the Board and throughout SThree. The Non-
Executive Directors are responsible for determining
appropriate levels of remuneration for the Executive
Directors and have a prime role in appointing and,
where necessary, removing Executive Directors, and
in succession planning.
Company Secretary
The Company Secretary reports to our Chair on
Board governance matters and together they keep
the ecacy of the Company’s and the Board’s
governance processes under review. The Company
Secretary is responsible for advising and keeping
the Board up to date on all legislative, regulatory
and governance matters and developments.
The Company Secretary ’s responsibilities also
include ensuring good information ows within
the Board and its committees and between senior
management and Non-Executive Directors. The
Company Secretary facilitates Board inductions and
assists with professional development as required.
The Company Secretary’s advice, services and
support are available to each Director.
Our Board
Board and Committee attendance
The Board has established various Committees, each with clearly
dened Terms of Reference, procedures and powers. The Terms
of Reference for the Audit & Risk, Remuneration and Nomination
Committees are reviewed regularly and are aligned closely
with the UK Corporate Governance Code. They are available at
www.sthree.com
In addition to the scheduled Board meetings held during the
year, the Board met for a dedicated strategy session. The
number of scheduled Board meetings held, and attendance at
each, is set out in the table below. All Directors attended the
Annual General Meeting. Attendance at each of the Committee
meetings can be found in the Audit & Risk, Remuneration and
Nomination Committee reports.
Should Directors be unable to attend meetings due to
unavoidable commitments, full Board packs are distributed and
separate dialogue held with the Chair on all matters of relevance.
Further details of each Committee are contained in the
Remuneration, Audit & Risk and Nomination Committee sections
of this Annual Report.
Director
Scheduled Board
meetings attended
James Bileeld 8/8
Timo Lehne 8/8
Andrew Beach 8/8
Denise Collis 8/8
Barrie Brien* 7/8
Imogen Joss 8/8
Elaine O’Donnell 8/8
* Barrie Brien did not attend a Board meeting due to a prior commitment.
Composition of the Board
The Board comprises a balance of Executive and Non-Executive
Directors who bring a wide range of skills, experience and
knowledge to its deliberations. The Non-Executive Directors
full a vital role in corporate accountability and have a
particular responsibility to ensure that the strategies proposed
by the Executive Directors are fully discussed, constructively
challenged and critically examined, not only in the best long-
term interests of shareholders, but to also take account of the
interests of customers, employees and other stakeholders. The
Non-Executive Directors are all experienced and inuential
individuals and through their mix of skills and business
experience, they contribute signicantly to the eective
functioning of the Board and its Committees. This ensures that
matters are fully debated and that no one individual or small
group dominates the decision-making process.
Directors have a wide range of experience of various industry
sectors relevant to the Group’s business and each member
brings independent judgement to bear in the interests of the
Company on issues of strategy, performance, resources and
standards of conduct. The Board is of sucient size to match
business needs and members have an appropriate and varied
range of skills, vital to the success of the Group.
The composition and performance of the Board and each
Committee is evaluated at least annually to ensure the
appropriate balance of skills, expected time commitment,
knowledge and experience, and the Directors can therefore
ensure that the balance reects the changing needs of the
Group’s business and is refreshed if necessary. Board members
feel a strong cultural anity with the Group, engaging fully as
a committed team and in a wide variety of activities with our
employees around the globe, whether it be an oce visit, or
presentation by management. The Nomination Committee
report gives further information on activity in this regard,
including changes in Board composition, succession planning
and diversity and inclusion activity.
Excluding the Chair, the other Non-Executive Directors have
been determined by the Board throughout the year as being
independent in character and judgement with no relationships
or circumstances which are likely to aect, or could appear to
aect, each Director’s judgement.
The Board has a Non-Executive Chair, who is not classed
as independent because of his position but who met the
independence criteria set out in the Code on appointment. At least
half the Board is comprised of Non-Executive Directors determined
by the Board to be independent, as required by the Code.
The role of the Board
Our Board’s role is to provide leadership of the Company and
direction for management. It is collectively responsible and
accountable to our shareholders for the long-term sustainable
success of the Group, for generating value for shareholders,
contributing to wider society and for ensuring the Group is
appropriately managed and operates responsibly, with eective
controls, as it pursues its objectives.
The Board reviews the performance of management and
the operating and nancial performance of the Group as a
whole. In particular, the Board is responsible for establishing
the Company’s purpose and values and setting strategy,
determining risk appetite, ensuring appropriate risk management
and internal controls are in place, ensuring good governance,
decision making and promoting the desired culture. The Board
also ensures that plans are in place for orderly succession for
appointments to the Board and to senior management, so as to
maintain an appropriate balance of skills and experience within
the Company and on the Board.
In order to carry out its work, the Board, which usually meets
formally eight times a year, agrees an annual agenda plan to
ensure all necessary matters are covered and to allow sucient
time for debate and challenge. In particular, the Board has
sought to ensure there is sucient time to discuss strategy so
that the Non-Executive Directors have a good opportunity to
challenge and help develop strategy proposals. The Board also
takes time to review past decisions where necessary.
At Board meetings, the Board receives and considers papers and
presentations from management on relevant topics. Eective
review and decision making are supported by providing the
Board with high-quality, accurate, clear and timely information,
including input from experts and independent advisers where
necessary. The Board seeks to work in the best interest of SThree
plc and its stakeholders.
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SThree plc
Our Board continued
Certain powers are delegated to the Remuneration Committee,
Audit & Risk Committee and Nomination Committee, with
details of the roles and responsibilities of these Committees
being set out under the relevant sections.
Division of responsibilities
In order to facilitate more ecient working practices there are
agreed Terms of Reference for the Board’s main Committees and
for the Group’s management committees, including an Executive
Committee, a Disclosure Committee, a Group Risk Committee,
an ESG Committee, and a Finance and Administration
Committee, all of which provide a clear framework of
delegated authorities.
The Board is responsible to shareholders for the proper
management of the Group and has identied key nancial and
operational areas that require regular reporting and which enable
the performance of senior management to be reviewed and
monitored. These are set out in a schedule of matters reserved
for the Board, which is reviewed on a regular basis.
The schedule outlines all matters requiring specic consent
of the Board, which include the approval of Group strategy,
operating plans, annual budget, the Annual Report, the Interim
Report, trading updates, major divestments and capital
expenditure, meaningful acquisitions and disposals, the
recommendation of dividends and the approval of treasury, tax
and risk management policies.
The schedule therefore facilitates structured delegation, subject
to certain nancial limits, and provides a practical framework for
executive management and reporting, which seeks to achieve
the objectives of maintaining eective nancial and operational
controls, whilst allowing appropriate exibility to manage the
business. The current schedule of matters reserved for the
Board, which has been incorporated into a new Corporate
Governance Framework, is available on the Company’s website
at www.sthree.com.
Information and support
Board and Committee meeting papers are circulated well in
advance of the relevant meeting and where a Director is unable
to attend he/she is provided with a copy of the papers and has
the opportunity to comment on the matters under discussion.
The Company Secretary helps to ensure information ows
between the Board and Committees, as well as senior
individuals across the Group and Non-Executive Directors, and
appropriately advises the Board on governance matters.
Directors have access to the advice and services of the
Company Secretary, who is responsible to the Board for ensuring
that its procedures are complied with and to assist in arranging
any additional information as required. The appointment and
removal of the Company Secretary is a matter reserved for the
Board as a whole.
Directors are entitled to obtain independent professional advice
at the Company’s expense, on the performance of their duties
as Directors. All Committees are serviced by the Company
Secretary’s team and are appropriately resourced.
Section 172 duties, including link to
purpose, values and culture
Directors must act in the way they consider, in good faith, would
be most likely to promote the success of the Company for the
benet of its members as a whole, and in doing so have regard
(amongst other matters) to the:
• likely consequences of any decision in the long term;
• interests of employees;
• need to foster business relationships with suppliers,
customers and others;
• impact of operations on the community and the
environment;
• desirability of maintaining a reputation for high standards of
business conduct; and
• need to act fairly as between members.
As a purpose-driven organisation, this also drives our approach
to values and culture to help deliver on our strategy. Board and
Committee meeting attendees are reminded of these duties
at the start of each meeting, including considering the long-
term impact of decisions, whilst aiming to uphold the highest
standards of governance.
The issues, factors and stakeholders that the Board considers
relevant to complying with Section 172 are set out in the Section
172 statement.
Engagement with shareholders and
constructive use of our AGM
As a listed plc, engagement with shareholders is given a
high priority as part of a comprehensive Investor Relations
programme. The Company produces Annual and Interim Reports
for shareholders and the Company’s website contains up-to-
date information on the Group’s activities, investor presentations
and published nancial results.
Shareholders can also subscribe for email alerts of important
announcements made. There are regular meetings with institutional
shareholders and analysts following key trading updates and
throughout the year on an ad hoc basis, whilst ensuring that price
sensitive information is released consistently and at the same time
to all, in accordance with best practice market rules.
There is also dialogue on specic issues, which this year included
audit tendering, the application of the remuneration policy and
general governance matters. In between trading updates, there
is continued dialogue with the investor community by meeting
key investor representatives, holding investor roadshows and
participating in conferences. Investor sentiment is regularly
relayed to the Board, whilst meetings between management and
debt providers, principally the Company’s banks, also take place
periodically.
The Chair, Senior Independent Director and other Non-Executive
Directors are available to discuss governance, strategy or other
issues, or should there be matters of concern that have not been,
or cannot be, addressed through the Executive Directors. During
the year, both the Chair and Senior Independent Director were
available to shareholders, with the Chair and Company Secretary
holding separate investor meetings, the results of which were
fed back to the Board.
Views of analysts, brokers and institutional investors are sought
on a non-attributed basis via periodic sentiment surveys and
these, as well as regular analyst and broker publications, are
circulated to all Directors to ensure that they develop a full
understanding of the views of shareholders.
Any issues or concerns are raised and discussed by the Board,
and Directors routinely receive regular reports on share price,
trading activity and sector updates.
The Board views the AGM as an opportunity to communicate
with private and institutional investors alike and welcomes active
participation. The Company proposes a separate resolution on
each substantially separate issue and the proxy appointment
forms for each resolution provide shareholders with the option to
direct their proxy to vote either for or against any resolution or to
withhold their vote.
The Company’s registrars ensure that all valid proxy
appointments received for the AGM are properly recorded and
counted and a schedule of proxy votes cast is made available to
shareholders attending the meeting. There is also full disclosure
of the voting outcome via the London Stock Exchange and on
the Company’s website as soon as practicable after the AGM.
All Board members attended the AGM and the Chairs of the
Audit & Risk, Nomination and Remuneration Committees are
available to answer questions. The Notice of AGM is posted at
least 20 working days prior to the date of the meeting and the
Company’s website contains copies of all Notices issued.
Engagement with employees and
stakeholder inuence in decision making
The Board is committed to engaging with employees to better
understand the Company’s culture, challenges and issues. On a
rolling cycle, the Board engages with employees from one region
ahead of a Board meeting, without Executive Directors present.
These meetings are designed to coordinate with Board reviews
for the relevant region, to enable a holistic understanding of the
experience of our people in the workplace, in addition to the
strategic and operational perspective of regional management.
Across the year, the Board has therefore met collectively with
employee groups from a number of our key markets, including
Japan, Germany, the Netherlands, Spain and the US.
Denise Collis was appointed in December 2018 as the
designated NED responsible for employee engagement, to
gather views from employees and ensure that these are brought
into the boardroom. In carrying out this role, Denise has met
with a diverse range of employees, at all levels of seniority,
whilst also engaging with Group and local HR teams. See the
separate ‘Employee engagement’ section for details on Denise’s
engagement with employees across the SThree Group during
the course of 2023.
To ensure the continuing success of the Group in setting
strategy, making decisions and addressing principal risks, key
stakeholders are considered as part of the business model and
value chain. The Board’s annual programme, reviewed each
year, is designed to ensure the voice of each stakeholder group
is heard, either directly, (e.g. by inviting customers to meet
Board Directors) or indirectly, (e.g. through independent surveys
or management reports). The Board oversees and challenges
the executive on stakeholder engagement and its inuence
on strategy by including appropriate direct or independent
assessments, (e.g. investor or client/customer survey feedback),
it also ensures appropriate stakeholder management processes
are in place (e.g. by facilitating escalation procedures and
complaints/grievance mechanisms (such as whistleblowing)
which are also appropriately reviewed or audited, as needed.
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Employee engagement
Once again, I would like to emphasise the overwhelmingly
positive tone of the exchanges I have had with our people,
characterised by a spirit of openness, honesty and constructive
participation. The refreshing manner in which they have
embraced these forums is indicative of their appreciation
that their voice is being heard by the Board and subsequently
acted upon. A key measure of success is the large number of
employees each year who are keen to participate.
Following the pattern of previous years, we sought to achieve a
mixture of sessions, ranging from those that were more general
in content to those that looked to hone in on a particular area of
importance. Last year, I was keen to meet with those at the early
stages of their career to try and develop a better understanding
of what had attracted them to SThree, what the experience had
been like and what action we could take to encourage them to
build a longer-term career with us. This year, given the strategic
importance of our Technology Improvement Programme (TIP),
I was keen to hear from those who had been at the vanguard of
the roll out of the enhanced Customer Relationship System.
One focus group involved US Houston team representatives,
with the other group being drawn from the central technology
team responsible for the roll out across the whole of SThree. The
insights from these two sessions proved to be very insightful,
bringing rich learning from the pilot and already shaping the next
phase of the programme.
This year we have again dedicated two Board sessions in
July and November to discuss my ndings, considering
recommendations and determining next steps. At the same time
we have reviewed either the Pulse or Annual Survey results,
which has allowed for deeper analysis and more targeted
actions. As in previous years, there has been a strong correlation
between the two sources of input, which reinforces our view that
our people feel free to express themselves, whether providing
direct or anonymous feedback.
A new feature this year has been the decision to invite two
focus group participants to observe the employee engagement
session at the November Board meeting. The purpose has been
to bring further openness and transparency as well as allowing
them to see for themselves the seriousness with which the Board
received the key messages. At the same time, it has provided a
somewhat unique developmental experience.
Whilst I full the role of designated Non-Executive Director,
responsibility for employee engagement is not delegated.
Indeed, I would describe each of my Board colleagues as
demonstrating strong personal ownership. As an example, this
year we introduced a new videoconference session before each
main Board meeting, where the Non-Executive Directors were
able to engage directly with representatives from the geographic
location due to be discussed in depth at the meeting itself. It
is a truism that the more lenses you look through, the better
the understanding. In addition, two of my colleagues, Elaine
O’Donnell and Imogen Joss, each joined one of my focus groups
and made an excellent contribution.
The Action Plan set out in pages 98 and 99 demonstrates that
good progress is being made in responding to employees’
feedback, whether this feedback is expressed as aspiration,
encouragement, endorsement, observation, critique or concern.
I have seen the Board carefully consider this Action Plan and put
resources behind its implementation. The year-on-year progress
has been highly encouraging, but there is so much more that we
want to achieve. This ongoing commitment makes me condent
progress will continue through next year and I am enthusiastic
about the prospect.
I felt listened to in our focus group session
with Denise, but also ‘heard’. The roll
out of the new Customer Relationship
Management system was specically
designed to be agile, with ongoing learning
and issue resolution built into the process.
This ‘resolve as we go’ approach was
expected but we were also moving at a
speed which felt intense and resulted
in some pressure points. Following the
focus group, additional resource from the
central technology team was allocated in
support, with senior leadership in both the
US and UK being highly visible and owning
what needed to be done. In a short space
of time, we had accelerated ticking the
issues o our list. Against this backdrop,
I enjoyed the experience of being asked
to contribute as well as observe the Board
session. I was made to feel very welcome
and was struck by the openness, honesty
and balance of the discussion, which
acknowledged the dierent perspectives
that exist in a major programme. I love to
be part of the voice of the sales people,
and would be absolutely willing to be
involved in future focus groups.”
Taan
Houston oce
I personally feel it is important that the Board hear a rst-hand account of how the roll out
is going. We are moving at pace which can create some resourcing peaks and it is good to
know that the Board wants to be kept up to speed and provide active support. For example,
as a result of the feedback from the focus groups we have bolstered our resources around
communications and change. I felt free to express my views, in my own way, in the Board
meeting and it was very much a two-way conversation. I sensed that the Board seemed to
have a very good relationship with one another and they were very respectful to myself and
Taan. No one was talking over another, and they were really listening. It struck me just how
engaged they are as a Board. I also appreciated the words of encouragement and positivity
around the current and planned programmes and how excited the Board are about what is
happening and how it is the right thing for the business.”
Lindsay
Central Transformation team
Four meetings were held over the
course of the year, one in person in
Amsterdam in April, and three by
videoconference in June, October
and November. A broad spectrum of
participants took part, drawn from
dierent levels of seniority across our
Sales and Core Functions areas in the
US, Continental Europe, the UK
and Dubai.”
Denise Collis
Senior Independent Non-Executive Director
What value we create for stakeholders
Our natural ability to bring people together sets us apart. By nurturing closer relationships
with our employees, candidates and clients, we earn loyalty and inspire collaboration.
By combining it with responsible resource management, and close relationships with local
communities, we create value for all our stakeholders.
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Employee engagement continued
2022/2023 feedback Action taken during 2023 or planned for 2024
Further develop internal
communications, with particular
emphasis on audience segmentation,
to ensure appropriate and timely
connections across dierent parts of
the organisation.
Support Leaders with tools
and materials to cascade
communications in a timely,
structured and consistent way.
An established cadence of communication focuses attention on performance and
strategy and shares the experiences of our people, our clients and our candidates,
as we bring skilled people together to build the future. There has been a focus on
closer working between the Global and Regional Internal Communication teams to
ensure consistency of messaging, tailored for regional relevance, and the sharing
of examples of exceptional performance across the business. Work is under way to
establish a communication rhythm for the new C-suite roles of Chief Commercial
Ocer and Chief Operating Ocer, that complements the one already in place for
our CEO and CFO. Investigation is also under way into a new digital communications
platform which will enhance the way we communicate with colleagues.
Leaders have received improved tools and materials to improve the cascade of major
communications, for example following the October 2023 Sales Conference.
Enable a better understanding
throughout the organisation of the
digital enhancement programme
and the impact of change on roles
and behaviours.
The strategic investment in systems and processes through the TIP, that began in
2022, is delivering at pace. A key priority in 2023 has been to ensure that we engage
across the whole organisation to ensure consistent awareness and understanding.
We have then built eectively on this with specic training for individual teams as
they are directly impacted.
To ensure the success and eectiveness of the programme we established a
dedicated Global Change Leadership Group which has invested signicant time
immersing our leaders in the solution through events such as the Transformation
design week and a global Change Leadership Event. We are also providing regular
updates at Top100 calls and All Colleague Townhalls. We set up a dedicated
Transformation Hub accessible to all colleagues, via the intranet with all key updates
and communications.
The pilot of the new Customer Relationship Management System in Houston was the
rst opportunity to experience the programme ‘live’ as it impacted our employees,
contractors and clients. Unltered feedback was actively sought and valuable key
learnings have been gathered, acknowledged and acted upon.
Continue to invest in L&D,
particularly onboarding, manager
eectiveness and leadership
development.
Support the development and
understanding of the role of the
sales manager to enable productivity
and retention.
All leaders at Global Grade 15 and above are now upskilled in the four essential
roles of leadership and undertake an associated leadership assessment. The results
from the assessment are used to support individual development plans and will
help inform 2024 benchmarks for the role of a leader. There is also a plan to create
a leadership index to ensure biannual leadership benchmarks. This will enable us
to establish regional, country and brand comparisons of how we are leading and
developing our people. Phase 2 of the programme, ‘Multiplier leadership’, is fully
under way and will carry on into 2024 with all senior leaders expected to complete
by the end of 2024.
The onboarding journey is being reviewed and the introduction of sales accreditation
and graduation will be introduced in 2024 with a mix of online and face to face
training. Ten live accreditations will be designed and aligned to our blueprint sales
tactics. This will drive speed to competence and ultimately speed to productivity.
Launch is scheduled for December 2023 with a full roll out in H1 2024.
The Sales Excellence and Sales Best Practice teams are undertaking a Sales Manager
role review. A blueprint role prole and embedding plan will then be introduced
during the end of 2023 and into 2024 to enable achievement of the required
standards to maximise sales performance and team retention.
Core Operations Functions career
paths to be developed with
opportunities for progression.
Following initial roll out, we have further embedded the Global Grade framework
by providing a detailed toolkit for the HR team and managers. A similar approach
for enhancing reward communications is planned with the aim of achieving greater
consistency and transparency.
The Core Operations Function has also benetted from a new skills and competency
based framework along with targeted learning. This was run as a pilot in 2023 with a
view to extending across all core functions in 2024.
2022/2023 feedback Action taken during 2023 or planned for 2024
Provide greater clarity around the
employee proposition.
The People Promise – our name for the Employee Value Proposition – that
was developed in 2022 has been embedded into the talent attraction and
acquisition processes.
Our Marketing team has been working to collate stories and case studies from
across our business to showcase our purpose and how we bring it to life. We are also
co-creating updated values. These will be aligned to our purpose and embedded
across the organisation in 2024.
Continue to enhance support for
mental health and address any signs
of burnout due to the weight of the
organisational change agenda.
H1 2023 was a busy period for Mental Wellbeing training with the focus on the
following, relatively high touch, targeted initiatives:
• At Ease with Mental Wellbeing: aimed at equipping people managers with the
skills, techniques and tools to spot and support struggling team members.
• Virtual Workshops: 18 workshops delivered by an external consultancy to over
120 people managers. The workshops provide scenario-based exercises further
supported by 75 minutes of online learning. A 90-minute follow-up session is
scheduled for each group three months after the workshop. Additional workshops
were held in H2 for our 22/23 Identify+ cohorts.
• Mind Strength: aimed at building personal resilience for all colleagues. A pilot
for 16 colleagues commenced in June and ran for 14 weeks. Participants were
provided with access to 60 minutes of online learning and a 45-minute group
discussion session every two weeks.
The focus of the second half of the year has been on consolidation and dening
an approach which will give more colleagues access to on-demand support in this
important area throughout 2024 and beyond.
Continue to focus on Diversity,
Equity & Inclusion, with visible
declarations of intent.
Our approach continued to include both global and local actions, focused on
building an inclusive culture underpinned by allyship and undertaking outcome led
activities to improve representation in leadership.
In 2023 we have:
• launched a new process to start to collect diverse background data from our
colleagues in order to better understand the impact of our DEI strategy and
identify key priorities moving forward;
• our women in leadership programme, Identify, has over 40 women actively
participating in mentoring, learning and upskilling in 2023, to support their career
path into leadership; and
• throughout the year our Employee Resource Groups delivered actions and events
in celebration of Black History Month, Pride and International Women’s Day
alongside conducting training and allyship awareness moment.
Our DEI Strategy continues to evolve, utilising data and active listening to inform our
priorities. We have achieved this in 2023 through our Engage survey, running focus
groups with women in the business and with our Employee Resource Groups and
through improving our data.
Improve the oce environment,
enabling better collaboration
and provide greater clarity on
hybrid working.
Local leadership are empowered to set local hybrid working policies and patterns
to meet local needs. Focus during 2023 has been on communicating these policies
clearly and applying them consistently. Hybrid working will be supported through
our future oce property redesign programme for 2024 and beyond.
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SThree plc Annual Report and Accounts 2023
Nomination Committee
Dear Shareholder
I am pleased to present to you the Nomination Committee
report. The report provides underlying detail on the
Committee and its activities during the year, in compliance
with the UK Corporate Governance Code (the Code).
SThree’s purpose is to bring skilled people together to build the
future. That future-focus and long-term thinking also applies to
how our Nomination Committee keeps our Board’s composition
under review and ensures we have robust succession plans in
place, to safeguard the delivery of our strategy and ensure the
long-term success of the Company.
Following the appointment of Elaine O’Donnell and Imogen Joss,
who joined the Board in October 2022 and December 2022
respectively, the focus has been on their successful induction
and Board stability. While it was not considered appropriate to
add to the Board immediately following these appointments, the
Committee has continued to consider succession plans for Non-
Executive Directors.
As previously announced, Barrie Brien, who has served on the
Board since September 2017, will stand down at the 2024 AGM,
allowing him to focus on his other professional commitments. I
would like to thank Barrie for his years of service and thoughtful
contribution to the Board. As noted in my last report, the Board
understands and fully supports the recommendations of the
Parker Review, and I can conrm we have commenced the
search for a new Non-Executive Director, preferably from a non-
white minority ethnic background, in order to meet the Parker
Review target by December 2024.
Summary of Terms of Reference
The Committee’s Terms of Reference are, broadly, to regularly
review the structure, size and composition (including the skills,
knowledge, experience and diversity) of the Board, make
recommendations with regard to any changes and to review
and prepare relevant job descriptions for new appointees, as
well as ensuring the continuing development of, and adequate
pipeline into, the Executive Committee for succession and bench
strength purposes.
Summary of core Committee activities
carried out during the year:
• Oversaw the Board and senior management succession
plans, and considered the refreshed approach to Executive
Committee talent management.
• Oversaw the composition and eectiveness of the Board and
Committees, with diversity a key criteria.
Succession planning and diversity
As noted earlier in this report, our focus for the year under
review was the induction of our new Non-Executive Directors
and Board stability.
The Committee also periodically reviews Board composition
to ensure that the Code provisions regarding diversity, over-
boarding, Chair tenure and Remuneration Committee Chair
experience are all complied with. In November 2023 the
Committee considered Board membership and the need to
continually refresh the composition of the Board on a gradual
basis, taking into account the length of service of current
Board members.
In our 2021 Report, we conrmed that the Committee had
agreed plans to achieve a Board, by 2024, with a minimum of
40% women representation and at least one individual from a
non-white minority ethnic background.
While we meet the new Listing Rule targets for gender
diversity on the Board, and have a minimum of 40% women
representation, including Denise Collis, who is our Senior
Independent Director, and is considered to hold a senior Board
position, we do not currently meet the target of having at least
one individual on our Board who is from a minority ethnic
background (as dened by the Listing Rules). As described
above, it remains the Committee’s intention to add a new Non-
Executive Director, preferably from a non-white minority ethnic
background, before December 2024. The Board acknowledges
the importance of diversity in its broadest sense in the
boardroom. The Board’s policy, which it applies to its Audit &
Risk, Remuneration and Nomination Committees, is to promote
a diverse and inclusive membership on the Board and in lling
any vacancy, consideration will be given to the combination of
demographics, experience, skills, race, age, gender, education
and professional background and other personal objectives
needed to support good decision making. The Board continues
to monitor management’s eorts to achieve its short-term target
of 40% of women in leadership, with a longer-term ambition
to achieve 50/50. The Group has a global Diversity, Equity and
Inclusion policy which applies to everyone who works at SThree,
whether on a permanent or temporary basis, in any of our
businesses worldwide. During 2024 the Board intends to develop
and set out a tailored Diversity Policy applicable to the Board and
Senior Management.
SThree’s purpose is to bring skilled people
together to build the future. That future-
focus and long-term thinking also applies
to how our Nomination Committee keeps
our Board’s composition under review
and ensures we have robust succession
plans in place.”
James Bileeld
Nomination Committee Chair
Committee meetings held
2
James Bileeld (Chair) 2/2
Barrie Brien 2/2
Denise Collis 2/2
Elaine O’Donnell 2/2
Imogen Joss 2/2
The Committee complies with the requirement to have a majority of
independent Non-Executive Directors.
Full biographies are available on pages 86-87
Induction of Imogen Joss
Upon appointment to the Board, each Director engages in
a comprehensive induction programme which is tailored to
their individual needs. Imogen Joss was recruited in 2022,
joining the Board on 1 December 2022.
Imogen’s programme included:
• initial meetings with fellow Directors for discussion of
key matters;
• meetings with Executive Committee members with
responsibilities for key regions and countries;
• meetings with the Chief Legal Ocer and Company
Secretary covering an overview of legal framework
applicable to directors of UK-listed companies, and an
overview of Risks and processes around identication
and reporting;
• attending a day on the sales oor, experiencing the work
of our sales consultants; and
• attending our Vienna senior leadership conference.
In addition, key strategic, nancial and governance
documents were provided to Imogen in an electronic
reading room.
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Nomination Committee continued
All Directors are subject to annual re-election, although Non-Executive Directors are typically expected to serve for an initial term
of three years, which, in normal circumstances and subject to satisfactory performance/re-election at each AGM, is automatically
extended annually. Non-Executive Directors will normally serve no longer than nine years, subject to review as part of the AGM
re-election process and their agreement. The Company’s Articles of Association also contain provisions regarding the removal,
appointment and election/re-election of Directors.
Board and executive management gender and ethnicity metrics
The following metrics set out the range of gender and ethnicity as they relate to our Board and executive management as at 30
November 2023. Executive Management is considered to be our Executive Committee, which includes our Chief Executive and
Chief Financial Ocer. The process by which diversity data was collected was, where permitted by relevant laws, to contact relevant
individuals and ask them how they identied using the categorisations set out in the Listing Rules. Where we already held gender or
ethnicity data for executives, with consents in place to use it for reporting on an anonymous basis, we used that data.
The data is used for statistical reporting purposes and is provided with consent. The data in the tables below is as at 30 November
2023 and there have been no changes in the period between then and the date of this report.
Further information on gender balance of those in senior management and their direct reports can be found on page 31.
Board and executive management gender
Number
of Board
members
Percentage of
the Board
Number of
senior positions
on the Board
(CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage
of executive
management
Men 4 57% 3 8 73%
Women 3 43% 1 3 27%
Not specied/prefer not to say – – – – –
Board and executive management ethnic background
Number
of Board
members
Percentage of
the Board
Number of
senior positions
on the Board
(CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage
of executive
management
White British or other White (including minority-white groups) 7 100% 4 11 100%
Mixed/Multiple Ethnic Groups – – – – –
Asian/Asian British – – – – –
Black/African/Caribbean/Black British – – – – –
Other ethnic groups, including Arab – – – – –
Not specied/prefer not to say – – – – –
Commitment
For Board vacancies, the Nomination Committee approves a detailed job specication, which sets out the indicative time
commitment expected. Potential Director candidates are required to disclose any signicant outside commitments prior to
appointment and must undertake that they have sucient time to meet these, in addition to Company business.
Upon joining, each Director receives a formal appointment letter which identies their responsibilities and expected minimum time
commitment, which is typically two to three days a month. These letters are available for inspection at the Company’s registered
oce, or by contacting cosec@sthree.com.
Development
At scheduled Board and Committee meetings, Directors receive
detailed reports from management on the performance of
the Group or specic areas of focus and responsibility. Non-
Executive Directors may visit the Group’s sales oces or other
locations in order to join sta members and other stakeholders
from dierent geographic areas to discuss current initiatives.
Directors are aware of their responsibilities and are briefed on
relevant regulatory, legal, governance or accounting matters
periodically, as required. Directors also attend external seminars
on areas of relevance to their role in order to facilitate their
professional development, whilst Non-Executive Directors also
use external insights from their own development networks
to support the management team. These measures help to
ensure that the Board continues to develop its knowledge of the
Group’s business and get to know senior management, as well as
promoting awareness of responsibilities. Executive Directors are
encouraged to accept external appointments in order to broaden
their experience, although currently no such positions are held.
Induction arrangements are tailored for new appointments to
ensure that these are appropriate to each role, dependent on
previous experience. Details of the induction of Imogen Joss are
set out below.
Directors and other Senior Executives are invited to
attend analyst briengs and our Investor Brieng Series of
presentations, and major shareholders are invited to meet any
relevant new Non-Executive Directors.
As part of the annual Board evaluation process, the Chair
assesses any training and development needs in respect of
individual Directors.
James Bileeld
Chair
29 January 2024
Board evaluation
Each year, the Board reviews performance and
eectiveness, including that of its committees and individual
Directors, to identify areas for improvement and ensure it is
well placed to provide constructive challenge.
In 2021 the review was externally facilitated by Manchester
Square Partners. In 2022 and 2023 the review was
undertaken by the Chair and Company Secretary, and
in relation to the Chair’s performance, by the Senior
Independent Director. It is the intention of the Board to carry
out an externally facilitated review in 2024.
The 2023 review was a formal and rigorous evaluation of
the performance and eectiveness of the Board and its
principal committees, with Committee Chairs overseeing
the review of their respective committees. The evaluation
process involved each Director considering a tailored
questionnaire which included specic consideration of
Board structure, meetings, key responsibilities of the Board
and/or committee, its relationship with management, its
priorities and changes which the Directors believed would
improve eectiveness. The review concluded that the
Board operated eectively and that the Board Committees
discharged eectively their duties under their respective
terms of reference.
The key focus areas identied are set out below:
Action 2021/2022 2022/2023 progress and insight
Ongoing monitoring
of the Company’s
Technology
Improvement
Programme (TIP) to
ensure its success.
Progress of the programme, including
its roll out, is monitored closely, with an
update presented at each Board meeting.
Additionally, and independent third-party
assurance provider monitors progress
and periodically reports to the Board.
Successful induction
of the newly appointed
Non-Executive Directors
and continued focus
on the Non-Executive
Director succession
plan.
Comprehensive induction programmes
for both new appointees who
demonstrate a thorough understanding
of the business and contribute eectively.
Non-Executive Director succession plan
in place to ensure progressive renewal of
the Board.
Post-implementation
reviews of past project
decisions.
Formal post-project reviews conducted
and included for Board review where
appropriate.
Consideration to
be given to the
mechanisms used
to monitor culture
throughout the Group.
New values have now been developed
and launched. A plan has been created
to communicate and embed these values
within the Company.
Actions arising from 2022/2023 review
Continued monitoring of the Company’s TIP as it is
rolled out.
Enhanced focus on productivity and performance
management to help deliver growth.
Reviewing and monitoring the approach to talent and
succession planning.
102 103
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Audit & Risk Committee
In fullling its duties, the Committee
has reviewed the resilient nancial
performance of the Group in the year,
challenging management and the
auditors on the underlying signicant
accounting estimates and judgements.
In addition to the normal meeting cycle
and schedule of work, the Committee
has led a robust audit tender process
and has recommended the appointment
of EY as our new external auditors.”
Elaine O’Donnell
Audit & Risk Committee Chair
Dear Shareholder
As Chair of the Audit & Risk Committee, I am pleased to
present, on behalf of the Board, its Audit & Risk Committee
report, prepared in accordance with the UK Corporate
Governance Code (the Code). This Report explains the
Committee’s responsibilities and how it has delivered
on these.
The Audit & Risk Committee assists the Board in carrying out
its oversight responsibilities regarding the Company’s nancial
and corporate reporting, risk management and internal controls
and in overseeing the relationship with the external independent
auditor. This report sets out how the Committee has discharged
its responsibilities during the year and, in relation to the nancial
statements, the signicant issues it considered and how they
were addressed.
During the course of the year, an important area of focus for
the Committee was leading the external audit tender process
for new auditors. This was a formal, rigorous and competitive
tender for audit services for the 2024 year end onwards and led
to the Committee making a recommendation to the Board to
appoint EY as our new auditors. As detailed later in this report,
all members of the Committee were involved in the selection
process, which was carried out in accordance with
FRC guidance.
PwC have now completed their nal audit as the Group’s
external independent auditor and I would like to thank them for
their rigour and robust challenge throughout the year and their
time as auditors to SThree.
Internal Audit (IA) continues to play an important role in
the Group’s governance, providing regular updates to the
Committee, with tracking of remedial action in the case of
any control failures. In accordance with our succession plans,
the previous Head of Internal Audit stepped down at the start
of the year and the Committee considered and approved the
recommendation to appoint the new Head of Internal Audit.
At the start of each year, an annual IA plan is presented for the
Committee to agree, after appropriate review and challenge.
Signicant focus is placed on key accounting judgements and
estimates, which underpin the nancial statements, namely:
1. Revenue recognition.
2. Provision for impairment for trade accounts receivable and
contract assets.
3. Impairment of investment in subsidiaries.
All of these were fully considered by the Committee in light of
the latest FRC guidance.
Having reviewed the content of the Annual Report, the
Committee considers that, taken as a whole, it is fair, balanced
and understandable and provides the information necessary
for shareholders to assess the Company’s and the Group’s
performance, business model and strategy. In reaching this
conclusion the Committee considered the processes and
controls in place, including liaising as necessary with external
advisors and Committee Chairs.
Committee composition and experience
The Committee consists of Elaine O’Donnell (Chair), Barrie
Brien, Denise Collis and Imogen Joss. James Bileeld continues
to attend meetings by invitation, as does the Chief Executive
Ocer, Chief Financial Ocer, Chief Legal Ocer & Company
Secretary, the external auditors, Director of Group Risk,
Insurance and Health & Safety, Head of Internal Audit and
certain Finance function heads.
Elaine O’Donnell is a Chartered Accountant and has held senior
roles, including as a Partner in Transaction Advisory Services
at EY. Barrie Brien brings extensive nancial experience,
having held the role of Chief Operating and Financial Ocer at
Creston PLC between 2004 and 2014. Denise Collis is degree
educated and has held senior management positions, which
include nancial responsibility. Imogen Joss has relevant sector
experience given her position as Chair of Grant Thornton UK
LLP, an accounting and consulting rm. The Committee, taken
as a whole, is considered to have appropriate sector knowledge
in addition to their broad Board experience.
The Committee’s principal responsibilities
• To monitor the integrity of the Consolidated Financial
Statements of the Group and any announcements relating to
nancial performance.
• To review signicant nancial reporting issues and
judgements.
• As requested by the Board, to advise whether, taken
as a whole, the Annual Report is fair, balanced and
understandable and provides the information necessary for
stakeholders to assess the Group’s performance, business
model and strategy.
• To review the Group’s internal nancial controls, internal
control and risk management systems and reporting,
including supporting the Board in overseeing risk
management activity, advising on risk appetite and assessing
material breaches of risk controls.
• To monitor and review the eectiveness of the Group’s
IA function.
• To agree the external auditors’ engagement terms, scope,
fees and non-audit services, to monitor and review
the external auditors’ eectiveness and associated
independence and recommend re-appointment to the
Board and shareholders.
• To review arrangements by which the Group’s employees
may raise concerns about possible improprieties in nancial
reporting or other such matters and ensuring appropriate
follow-up.
• To monitor and review the activities and priorities of the
Group’s Risk function and the Risk Committee.
• To assess procedures for detecting fraud and
preventing bribery.
• Where requested by the Board, to advise on proposed
strategic transactions, including conducting due diligence
appraisals and focusing on risk aspects.
Summary of core Committee activities
carried out during the year:
• Approved annual Committee programme/cycle of work.
• Reviewed and recommended to the Board the full and half-
year nancial results for publication.
• Approved the external audit plan and reviewed the
audit results.
• Reviewed the performance, independence and
eectiveness of the external auditors.
• Reviewed any non-audit services provided by the external
auditors.
• Led the audit tender process and recommended the
appointment of EY as external auditors.
• Reviewed the risk management and controls framework
and its eectiveness through oversight and reporting from
the Group Risk Committee and Director of Risk, including
on control eectiveness of operational risks across global
operations teams.
• Considered the Code requirements concerning fair,
balanced and understandable reporting.
• Reviewed the Company’s going concern and long-term
viability statements, including the impact of climate change
on the business.
• Reviewed and discussed the Group’s position in relation to
cyber-risk.
• Considered the risks of generative AI technologies.
• Reviewed the output of Group Risk Committee meetings.
• Conducted an annual review of progress against the
business integrity areas forming part of SThree’s compliance
programme and reporting on investigations conducted in the
course of the year.
• Considered new legislation and governance developments
relevant to the role of the Committee.
• Recommended the Audit & Risk Committee report for
approval by the Board.
• Held discussions with the external auditors and Head of IA
without management present.
• Approved the IA plan and reviewed all reports/ndings.
• Reviewed the eectiveness of the IA function.
Committee meetings held
4
Elaine O’Donnell (Chair) 4/4
Barrie Brien 4/4
Denise Collis 4/4
Imogen Joss 4/4
All Committee members attended an additional afternoon of
presentations from parties tendering for the provision of auditing
services to SThree.
Full biographies are available on pages 86-87
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Areas of key signicance in the preparation
of the nancial statements
The Committee considered each of the following items of key
signicance in the preparation of the Consolidated Financial
Statements in 2023 and based on discussions with management
found the accounting treatment and presentation thereof
complete and accurate. These items were also discussed
with the external auditors during the planning stage and on
completion of the audit.
The key considerations were:
1. Revenue recognition – signicant estimation is required
in determining a portion of the Group revenue recognised
in exchange for provided service for which no timesheets
have been received on or before the reporting date. The key
estimation uncertainty arises from determining the historical
shrinkage rate which is used to constrain the variable part
of revenue. The Committee evaluated the key assumptions
applied in the calculation methodology and the use of the
shrinkage rate by comparing them with prior years and
considering business performance, in particular the Group’s
growing strategic focus on Contract business, in FY23; and
satised itself that the assumptions and the changes to those
assumptions were appropriate.
2. Provision for impairment for trade accounts receivable and
contract assets – the Group assesses impairment of accounts
receivable individually and collectively. The general provision
is calculated based on specic percentages applied to debtor
ageing, consistent with the approach in prior years. The
dierence between this method and IFRS 9 ECL calculation
is immaterial. This year the specic provision has been
calculated using management’s knowledge and assessment of
customer risk of credit losses. In FY23, additional data sources
were used to enhance this assessment. The Dunn & Bradstreet
credit tool was used to identify clients with a ‘severe’ or ‘high-
risk’ rating, and this was used in conjunction with our Credit
team’s knowledge of payment behaviours and operational
challenges in collecting cash to determine a provision.
Specic provisions of either 100%, 50% or 25% were applied
to specic clients (c.20 in total) to provide for credit losses
based on management’s assessment of risk. The Committee
has considered the judgements applied by management and
the output of the subsequent audit work. In their evaluation,
after robust discussions with management and the auditors,
the Committee satised itself that the nal assumptions and
resulting level of year-end bad debt provisions are appropriate.
The conclusion of this exercise was an overall increase in the
ECL provision of £4.9 million.
3. The impairment of investment in subsidiaries – the Group has
operations in several countries across the globe. These operations
are subsidiaries of the parent company, SThree plc. As set out
in the accounting policies, every year management performs an
assessment of whether there are any indicators of impairment
of SThree plc’s investments in its subsidiaries. The Committee
considered key areas of judgement applied by management in
this assessment and compared them with the Group’s budget,
medium-term forecasts, and the current trends in the wider
macro-economic environment in which subsidiaries operate.
The Committee agreed with the management’s conclusion
that overall, there have been no impairment triggers for most
investments and for which no further detailed impairment review
was required in FY23. Only two investments, held in Canada and
Luxembourg, were viewed to have low prospects of recovery and
were therefore written o in the SThree plc’s books generating a
small charge of less than £0.1 million.
4. Adopting the going concern basis of preparation of the
nancial statements – the Committee reviewed and, where
relevant, challenged the assumptions applied by management
in the forecast models which underpin the going concern and
viability statements. In particular, the Committee reviewed
the appropriateness and relevance of the severe but plausible
stress tests to ensure that the Group has adequate liquidity
and is compliant with the bank covenants throughout the
relevant periods.
The Committee also reviewed the management’s work
in conducting a robust assessment of the risks facing the
Group, their potential impact, how they were being managed,
together with a discussion as to the appropriate period for the
assessment. The Committee deemed appropriate that the Group
continues to apply the going concern basis for the preparation
of the nancial statements and recommended to the Board to
approve the viability statement.
The above key accounting judgements and estimates are also
set out in the note Basis of preparation and consolidation on
pages 153 to 156.
The Committee also considered and addressed key judgements
applied by management in accounting for certain other
transactions which occurred during the year. In the year under
review this included:
• Provisions – SThree’s most signicant provisions relate
to various ongoing legal and compliance-related disputes.
Accounting for provisions involves making estimates about
the timing and amounts of future uncertain cash outows.
The Committee received regular updates from management
in relation to a number of open enquiries, and reviewed the
key assumptions and controls put in place to determine the
cost estimates and provisions in the nancial statements.
The Committee satised itself that management correctly
applied the recognition criteria for the provision under the
accounting standard IAS 37 Provisions, Contingent Liabilities
and Contingent Assets.
• Capitalisation of internally generated assets – under the
ongoing Technology Improvement Programme, management
continued to reassess categories of programme costs
against the capitalisation principles under IAS 38 Intangible
Assets, and further IFRS guidance issued on accounting for
cloud computing arrangements. The Committee reviewed
and agreed with the management’s interpretation of the
accounting standards in relation to capitalisation and
recognition criteria for internally generated assets. The
Committee also reviewed the accounting guidance and
assumptions made by management behind how and when
to bring the programme outputs into business-as-usual
processes. The Committee agreed with management’s
overarching conclusion to commence amortisation of
programme outputs on a day when the implementation of
a minimum viable product in two key regions, the US and
Germany, is successfully completed and sucient routine
quality approvals are received.
Audit & Risk Committee continued
External auditors
Responsibilities in relation to external
auditors
During the year, the Committee carried out each of
the following:
• Recommended the re-appointment of PwC as external
auditors for the nancial year ending 30 November 2023, for
subsequent ratication of their remuneration and terms of
engagement by shareholders.
• Reviewed and monitored the external auditors’
independence and objectivity and the eectiveness of
the audit process, taking into consideration relevant UK
professional and regulatory requirements.
• Reviewed the policy on the engagement of the external
auditors and supply of non-audit services. This policy sets out
a ‘whitelist’ of permitted non-audit services, lists examples
of prohibited services, sets out typical audit-related services,
their award and approval, explains the cap on non-audit
services which can be billed, and sets out reporting and
independence provisions.
• Considered and noted the requirements of the FRC
publication ‘Audit Committees and the External Audit:
Minimum Standard’.
• Led the audit tendering process and recommended to
the Board that EY be appointed as external auditors for
subsequent ratication by shareholders.
Appointment, objectivity and Independence
The Committee and the external auditors have safeguards
in place to ensure that objectivity and independence are
maintained. The Committee also considers independence taking
into consideration relevant UK professional and regulatory
requirements. Non-audit services during the year under review
relate to the half-year agreed upon procedures and PwC
Viewpoint (regulatory updates) subscription, whilst net fees
generated to the Group through recruitment services provided
to PwC as a client are not material. The external auditors are
required to rotate audit partners responsible for the Group audit
every ve years and the current lead audit partner, Kenneth
Wilson, was appointed in 2019, following appropriate transition.
This also reected the focus of the audit team’s activities moving
to Glasgow.
Performance and tendering
During the year, the Committee reviewed performance
and fees and met with the external auditors, PwC without
management present.
As detailed in our 2022 Annual Report, PwC were originally
appointed as auditors of SThree in 1999 and became auditors
of the public company in 2005. They were subsequently
reappointed following a tender process in 2017. In light of PwC’s
tenure and following engagement with certain signicant
shareholders, we began an audit tender process during the 2023
nancial year with a view to having new auditors in place for our
2024 interim results. Details of that process can be found on
pages 108-109.
The Committee considers that the Company has complied
with the Competition and Markets Authority’s Statutory Audit
Services for Large Companies Market Investigation (Mandatory
Use of Competitive Tender Processes and Audit Committee
Responsibilities) Order 2014 for the nancial year under review.
Framework used by the Committee to
assess eectiveness of the external audit
process
The Committee has adopted a broad framework to review
the eectiveness of the Group’s external audit process and
audit quality which includes: assessment of the audit partner
and team with particular focus on the lead audit engagement
partner; planning and scope of the audit, including a dedicated
audit planning afternoon, with identication of particular areas
of audit risk; the planned approach and execution of the audit;
management of an eective audit process; communications by
the auditors with the Committee; how the auditors support the
work of the Committee; how the audit contributes insights and
adds value; a review of independence and objectivity of the audit
rm; and the quality of the formal audit report to shareholders.
Feedback is provided to both the external auditors and
management by the Committee and its attendees, based on the
above, with any actions reviewed by the Committee.
The eectiveness of management in the external audit process
is assessed principally in relation to the timely identication and
resolution of areas of accounting judgement, the quality and
timeliness of papers, analysing those judgements, management’s
approach to the support of independent audit and the booking
of any audit adjustments arising, as well as the timely provision of
documents for review by the auditors and the Committee.
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Audit & Risk Committee continued
Policy on non-audit work
The Committee sets clear guidelines on non-audit work, which
is only permitted where it does not impair independence or
objectivity and where the Committee believes that it is in the
Group’s best interests to make use of built-up knowledge or
experience. Such work has included services required due to
legislation and assurance work or other specialist services. The
Committee continuously monitors the quality and volume of
this work, fees incurred, as well as independent safeguards
established, in order to consider whether to use other rms and
continues to use such rms to provide general tax advice or for
other projects.
The policy aligns with regulations to prohibit a number of non-
audit services, whilst also meeting FRC Ethical Standards and
FRC guidance, to clearly set out:
• which types of non-audit work are allowed/prohibited;
• the types of work for which external auditors can be
engaged without Audit & Risk Committee referral, provided
such services fall below £25,000 and are not specically
prohibited; and
• for which types of work Committee Chair referral is needed,
i.e. which are above £25,000.
Under the policy the external auditors are required to seek
approval in advance of staring work on any assignment within
the Group.
Fees paid to external auditors for non-audit
work
Audit fees for the year were £1,128,000 (FY22: £925,000). The
YoY increase in audit fees reects the 5% ination rate applied
to the cost of audit services and one additional subsidiary falling
under the audit scope due to growth in trading.
The Committee reviews all non-audit work against policy to
ensure it is appropriate and the fees are justied. Non-audit fees
increased in line with the 5% ination rate to £14,000 in FY23
(FY22: £13,000).
External audit: Tender
As noted earlier, in light of PwC’s tenure and following
engagement with certain signicant shareholders, we began an
audit tender process during the 2023 nancial year with a view
to having new auditors in place for our 2024 interim results.
A cross functional working group, comprising Finance,
Procurement and Company Secretarial, determined the process,
with due regard to the FRC’s guidance, with the Audit & Risk
Committee Chair and CFO giving approval to proceed on
that basis.
Having reviewed the existing auditor relationship, current
market regulations, best practice guidelines and completed fee
benchmarking potential tender candidates were identied and a
Request for Proposal (RFP) document developed.
The initial longlist of seven candidates, which excluded PwC in
consequence of their tenure to date, included three challenger
rms. Following agreement with the Chair of the Committee and
CFO this was reduced to a shortlist of four candidates, including
two challenger rms. The full Committee was kept apprised
of the rationale for shortlisting the candidates. All shortlisted
candidates were issued with an RFP, however the two challenger
rms declined to tender during the RFP process having carefully
considered their capacity to deliver on the requirements. The
responses of the remaining candidates were evaluated and
consideration was given to the most recent FRC inspection
results of each rm. Both candidates then presented to the full
Committee and cross functional working group, with Committee
members scoring candidates against criteria set out in the
section below, on a price-blind basis. The proposals from both
remaining candidates were submitted to the Board. Following
consideration, the Committee made a recommendation to the
Board that EY be appointed as SThree’s statutory auditors for
the nancial year commencing 1 December 2023, subject to
shareholder approval. In light of her position as Chair of Grant
Thornton UK LLP, Imogen Joss attended the presentations but
recused herself from voting on the decision to recommend any
auditing rm.
Tender scorecard criteria
The objective was to appoint the audit rm that would provide the highest quality, most eective and ecient audit for the
Company. To support this, the participating rms were scored utilising the following criteria. Presentations were scored on a
price blind basis.
• Strength, experience, attitude and commitment of team: including team structure.
• Industry and business understanding: experience in the recruitment sector and working with listed clients with global
footprints based in Scotland.
• Proactivity and innovation: including commitment to using technology to create a more ecient audit.
• Service approach.
• Transition plan: having a clear transition plan to set up a successful half-year agreed upon procedures and full-year audit.
• International and cross line of service team co-ordination: the strength in breadth of service and international network.
• Quality assurance; ndings from most FRC Audit Quality Reviews.
• Understanding of listed company reporting requirements.
• Understanding of analysts and investor requirements and focus.
• Insights into business practices and recommendations for improvement.
Overview of the tender process
February
2023
• Cross functional working team established to assist Committee with the tender process, FRC Minimum
standards reviewed and process determined adhering to guidelines, longlist of potential auditors drawn up
March
through to
April 2023
• Reviewed existing relationships with audit rms, potential conicts identied, initial engagement sessions
held and forms shortlisted
April
through
to July
2023
• RFP prepared, issued and management meetings held
August and
September
2023
• RFP submissions and evaluations, supplier presentations held
October and
November
2023
• Recommendation by working group to the Committee and from the Committee to the Board Supplier
award and contract negotiations
November
onwards
2023
• Auditor onboarding, planning and transition
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Audit & Risk Committee continued
Group Risk Committee
The Group Risk Committee was created in 2018, with agreed
Terms of Reference, and a regular reporting slot at each Audit &
Risk Committee meeting. The Terms of Reference were updated
in 2023. Under the new Governance Framework, Management
incorporates discussions on risk in Country and Regional
meetings and the half-yearly strategic reviews conducted for
each country, so as to ensure that risks are fully incorporated
into business activities and decisions and strategic planning.
The output of these discussions is reported back to the Group
Risk Committee. The Group Risk Committee meetings consider
a range of risks identied, their materiality and the progress
of mitigating actions/projects in terms of their successful
implementation and their likely eectiveness in reducing risk in
line with Group appetite, on a regular basis, and reports in to
both the Executive Committee and the Audit & Risk Committee
on these. The Chair of the Committee meets regularly with the
Head of Risk without management present.
Fraud and cyber risks
The Committee reviews the procedures for the prevention
and detection of fraud in the Group and has also closely
monitored improvements to cyber security protection in the
light of increasing risks in this area, having particular regard to
data breaches that the Group may face and the processes and
controls in place to tackle any security threats. This information
is owed through to the Board so that it can consider this as part
of its detailed review of the data protection programme and the
activities in place to mitigate personal data risks.
Suspected cases of fraud must be reported to senior
management and are investigated by IA, with the outcome of
any investigation reported to the Committee.
Anti-bribery and corruption, and business
ethics
The Group maintains a zero-tolerance approach against
corruption. A new anti-bribery and corruption policy and a gifts,
hospitality and charitable contributions policy were introduced,
following review and approval by the Committee in November
2021. Minor updates to this policy were made at the start of 2023
and bespoke mandatory training was rolled out for all employees
in 2023, with a 96% completion rate. A gifts and hospitality
register is maintained to ensure transparency and new reporting
tools were introduced during 2023.
The Group also has a Code of Conduct which sets out the
standards of behaviour by which all employees are bound. This is
based on the Group’s commitment to acting professionally, fairly
and with integrity.
Speak Up hotline
In 2023, the Group introduced a refreshed Speak Up policy, and
ran an associated awareness campaign across the Company.
The Group has in place a dedicated independent Speak Up
(whistleblowing) hotline, which is well publicised across the
Group, including via the intranet, with any notication initially
reported to the Chief Legal Ocer & Company Secretary and
the Head of Business Integrity, before being reviewed by the
Committee. Under this arrangement, employees are able to
report any matters of concern, where this does not conict with
local laws or customs (see ‘Company information and corporate
advisers’ section for details). This policy aligns with best
practice. The Board reviewed the introduction of the new Policy
and reporting process. The Audit & Risk Committee reviews
complaints made under the Speak Up policy and escalate any
matters requiring Board oversight.
Committee evaluation
Following an external evaluation in 2021 the Committee
conducted an internal evaluation process this year which
included feedback from management attendees. The
Committee concluded that it continues to operate eectively.
One area that was identied for further consideration was the
attribution of risk topics between the Board and the Committee.
As a result, the Chair of the Committee and Director of Risk
are developing the forward planner to ensure matters are
appropriately captured in the correct forum.
Elaine O’Donnell
Audit & Risk Committee Chair
29 January 2024
Risk management, internal controls, key
focus areas and viability
The Committee supports the Board in its overall responsibility for
risk management activities and implementing policies to ensure
that all risks are evaluated, measured and kept under review by
way of appropriate KPIs, as part of the Group’s ERM framework.
Information on both risk management activities and associated
controls assessments are reported to the Committee through
the Group Risk Committee and escalated to the Board where
appropriate.
Presentations from both functional and regional senior
management across the business are provided to the Board to
further develop information, understanding and debate on risks
and the relevant controls in place. Specic consideration is also
given by both the Committee and the Board to areas such as
the Group’s cyber-risk prole and the mitigations in place and
the Group’s data protection risk prole and the data protection
programme activities and plans. Activities include monitoring of
the eectiveness of the Group’s risk management and internal
control systems in order to safeguard shareholders’ investments
and the Group’s assets and, at least annually, carrying out a
robust assessment of risks and the eectiveness of associated
controls. No signicant failings or weaknesses were identied
from this review.
Signicant progress was made towards reaching a fully
integrated system of SThree internal controls, risk management
and policies. Areas were identied that could be strengthened
to drive a future-proofed, appropriately resourced and fully
compliant system of internal control and corporate governance
policies. Management established a process for regular self-
assessment style attestation by risk, relating to internal controls
over nancial reporting and their owners. The Committee works
closely with the Chief Financial Ocer, Chief Legal Ocer
& Company Secretary, Director of Risk, IA team and external
auditors to ensure that any potential material misstatement
of risks are identied and targeted in terms of the overall
audit strategy and that audit resources and the eorts of the
engagement team are correctly allocated. This helps to ensure
the eective planning and performance of the external and
IA teams, focused on risk, and has resulted in a continued
improvement in processes and controls over recent years.
Internal Audit (IA)
IA plays an integral role in the Group’s governance and risk
management processes and provides independent assurance to
the Committee on compliance with its policies and procedures.
The function carries out a wide variety of audits including
operational as well as ad hoc and project-based reviews and
fraud investigation.
The Committee oversees and monitors the work of IA, which
carries out risk-based reviews of key controls and processes
throughout the Group on a rolling cycle, including resources,
scope and alignment with principal risks and eectiveness of the
function. The Head of IA has direct access to the Committee and
meets regularly with both the Committee and its Chair without
management present to consider the IA work programme, which
is approved in advance by the Committee.
For 2023, the programme was again focused on addressing
both nancial and overall risk management objectives across
the Group, with reviews carried out, ndings reported
to the Committee, recommendations tracked and their
closure monitored.
No signicant weaknesses were identied from the risk
management or internal control reviews undertaken by IA during
the reporting period and throughout the nancial year. The IA
team, working with the Group’s risk and compliance function,
has continued to enhance the risk management framework and
work with managers across the globe to further develop and
embed the risk framework and methodology at a local level,
whilst also ensuring that the IA plan is closely aligned to risk.
Senior management are invited to present to the Committee,
from time to time, to report back on progress against agreed
IA actions and other risks in their area of responsibility.
The Committee ensures that the Group’s IA function remains
at an appropriate size and skill mix for the business, and rmly
believes that this function remains eective and continues to add
signicant value. The IA activity conforms with the International
Standards for the Professional Practice of Internal Auditing as
supported by the results of both an external evaluation of
the IA function which was conducted during 2019 and that
concluded the IA function was highly eective, and yearly
internal assessments of the quality assurance and
improvement programme.
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SThree plc Annual Report and Accounts 2023
Directors’ remuneration report
Dear Shareholder
On behalf of the Board, I am pleased to present this
Directors’ remuneration report for the period ended
30 November 2023. At the 2023 AGM shareholders approved
the revised remuneration policy with strong support, which
reinforces our view that it reects our business strategy,
with remuneration payments that are strongly linked
to performance.
The Annual report on remuneration describes how this policy
was implemented in 2023 and how we intend to operate
in 2024.
Overall, xed elements of the remuneration packages are set so
that they reect the calibre and experience of our people and
the complexity of their roles. The annual bonus measures are
based on specic areas that require immediate focus, whereas
our Long-Term Incentive Plan (LTIP), looks to drive sustainable
improvements at a more macro level over the longer term.
Culturally, the setting of both nancial and broader non-nancial
measures serves to focus scheme participants on a holistic view
of business success and hence serves to drive performance on a
broad, sustainable basis.
An important highlight of 2023 was continuing to invest in the
reward, wellbeing and broader employer proposition of the
wider workforce, ensuring that our reward systems are aligned
with attracting, motivating, and retaining talent.
Remuneration payable for performance in 2023
The Group delivered a resilient performance, both overall and in
comparison, with sector peers, in challenging macro-economic
conditions.
Against a backdrop of stretching and ambitious targets set
on the back of two years of strong growth the outcomes of
the annual bonus plan this year are lower. Half of the bonus
is determined by adjusted operating prot achievement and
the outcome was below the threshold of the target range
resulting in a 0% pay-out of this part of the award. Similarly,
the performance against the target for net fees was below the
threshold resulting in no pay-out. On the measure of days sales
outstanding the team performed well and achieved just below
half of the maximum award.
Our performance in the area of employee net promoter scores
was just above the threshold of upper quartile against external
comparators resulting in a partial pay-out. We did not reach
the threshold of our customer net promoter score resulting in
no pay-out for this element of the plan. We have made good
progress in some parts of the business in relation to gender
representation, however, we did not reach the threshold for
the specic DE&I bonus target (promotion of women in sales
leadership) and therefore there is no pay-out for this element
of the plan.
Committee meetings held
4
Denise Collis (Chair) 4/4
James Bileeld 4/4
Barrie Brien 4/4
Elaine O’Donnell 4/4
Imogen Joss 4/4
Overall, this results in 3.45% of the 85% bonus opportunity linked
to nancial and short-term strategic targets being payable.
The personal objectives assessment, represents a further
opportunity of up to 15.0% for each Executive Director. The past
year has been characterised by a highly challenging business
environment with a dual focus on short-term performance
whilst investing in and positioning the business for future
growth. The latter has been reected in the personal objectives
of the Executive Directors and the Committee has determined
that the payout for the CEO and CFO should be 15% and 10%
respectively, out of 15%, leading to an overall bonus of 18.45%
and 13.45% of maximum.
The 2021 LTIP award, based on our performance over the three
nancial years to the end of FY2023, was subject to a mix of
Earnings Per Share (EPS), Total Shareholder Return (TSR) and
long-term operating prot conversion ratio, a key strategic
performance measure.
For the 50% of the award based on the EPS performance
condition, this required adjusted EPS for 2023 to be between
24.9p and 38.9p representing signicant growth over the period.
Actual adjusted EPS performance for 2023 was 42.4p, resulting
in 100% vesting of the EPS part of the award.
For the 30% of the award based on our TSR performance, our
TSR was required to be between median and upper quartile
performance against a peer group. Actual TSR was +45% placing
SThree at the 72nd percentile and resulting in 91.6% pay-out of
this part of the award.
For the nal 20% of the award subject to operating prot
conversion ratio, we improved our performance materially over
the period and reached 18.2% putting us between threshold and
maximum and resulting in vesting of 69.1% of maximum of this
element of the award.
The overall level of LTIP payout, across the three measures, was
91.3% of maximum. The Committee has considered whether
the formula-driven pay-outs under the incentive plans and
resultant total remuneration for Directors is appropriate, looking
at the broader context within which the performance has been
delivered. The Committee is comfortable that there has been
a robust link between remuneration and performance, and the
policy has operated as intended. We have not adjusted the
performance measures for any of the plans and there has not
been a need to use discretion to adjust the level of remuneration
payable. The outcomes also reect broader reward outcomes
across other incentive plans within the Group.
Full details of the LTIP measures, performance against them
and resultant payments are set out in the Annual report on
remuneration.
Policy implementation for 2024
The Committee increased the salary of both the CEO and CFO
by 2.0%, which is in line with the budgeted 2.0% increase for UK
employees more broadly.
The annual bonus will remain unchanged with a 70%-30% overall
mix of nancial and non-nancial measures, half of the total
being dependent upon adjusted operating prot achievement.
The LTIP will continue to be based on performance over three
years and subject to a two-year holding period post-vesting.
The Committee has given very careful consideration to the LTIP
opportunity for the Executive Directors for 2024, as set out
within the existing Remuneration Policy. The next three years
represent a pivotal period for the business as the Technology
Improvement Programme accelerates and its benets are
realised. The importance of this programme to the future
success of the business cannot be overstated. It is critical that
management incentives are aligned with a dual focus on both
this fundamentally major and ambitious change programme and
stretching business performance targets. For 2024, the intention
is that the grant level will be 175% of base salary, an increase
from 150% of salary last year, and in line with the maximum
permissible under the Remuneration Policy. The Committee
consider the next three years as falling under the heading of
‘exceptional circumstances’ which allows for this increase.
The weighting of LTIP performance measures will remain
unchanged at 50% EPS, 20% TSR, 20% operating prot
conversion ratio and 10% ESG.
The Committee has again set stretching targets, recognising
the need to build forward momentum towards our long-term
ambitions.
The Committee retains discretion to ensure that annual bonus
payments and vested awards under the LTIP can be adjusted if
the formula-driven outturn does not reect the broader overall
performance of the business.
Full details of the annual bonus measures and the measures and
targets for the 2024-2026 LTIP awards are set out in the Annual
report on remuneration.
Below Board we have benchmarked reward across the business
as part of a global grading exercise and reviewed the mix of
share-based incentives. We have introduced a new long-term
incentive plan targeting strong growth for executives in certain
jurisdictions, alongside our Restricted Share plan which operates
more widely.
The Committee has sought to make
appropriate remuneration decisions in
a year that delivered resilient business
performance, and good progress on our
strategic objectives, in challenging macro-
economic conditions. Looking forward,
the Committee has set appropriate
incentive plans to focus management
on delivering strong performance, to
enhance shareholder value.”
Denise Collis
Chair of the Remuneration Committee
112 113
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Remuneration at a glance
Chair and Non-Executive Directors (NEDs) fees
Fees for the Chair and NEDs were last increased on 1 December
2022, in line with that awarded to the Executive Directors of
3.5%. The fees and approach were further reviewed this year
and, again in line with the award to the Executive Directors, a 2%
increase has been made.
Shareholder and employee engagement, and specic
focus on Executive remuneration in broader context
During 2023 we have not needed to consult on remuneration-
related matters, but we have responded to enquiries from our
major shareholders and other key stakeholders and remain
available to discuss relevant matters as they arise.
We have built upon the rolling programme of engagement
with employees around reward, utilising a combination of
in-person and virtual meetings. I have personally engaged
with many employees across several of our oces around the
world, as part of my role as designated NED responsible for
employee engagement, during which reward continues to be
an area of discussion. In addition, I recently held an interactive
and productive session with a diverse group, drawn from
across the business, to answer questions about our corporate
governance and remuneration processes and how our reward
policy cascades throughout the Company, accompanied by the
Director of Reward.
Directors’ remuneration report continued
How have we performed?
Bonus-maximum potential 120% of base salary Weighting Threshold Target Max Actual
Achievement
%
Outcome
(as % of
maximum)
Group adjusted operating prot £m 50% 69.0 75.4 78.0 66.5 0.0% 0.0%
Group net fees £m 15% 402.7 429.8 442.7 387.1 0.0% 0.0%
Days Sales Outstanding (DSO)
1
5% 47.0 46.0 45.0 46.2 44.0% 2.20%
Group Financial objectives 70% 2.20%
Employee engagement Peakon-based relative
outcome (against external comparators) requiring
upper quartile to upper decile performance
5% 42.0 48.0 54.0 43.0 25% 1.25%
Customer engagement 5% 52.0 54.0 56.0 48.0 0.0% 0.0%
DE&I: Promotion of women in sales leadership
(number of promotions)
2
5% 10.0 12.0 14.0 5.0 0.0% 0.0%
Strategic objectives 15% 1.25%
Total pay-out (% of maximum) 3.45%
1. DSO actual is based on the FY23 average.
2. The measure was based on the absolute number of women in senior sales roles by the year end, with targets set in relation to growth plans. From an overall total of senior
promotions made in FY23, 38% were women.
Personal Objectives are individually determined and worth a up to a further 15%. Details are set out below.
2021-2023 LTIP award – grant 150% of base salary Threshold Max Actual Achievement %
EPS (adjusted) (for 50% of the award) 24.9p 38.9p 42.4p 100.0%
TSR (for 30% of the award) 50th percentile 75th percentile 72nd percentile 91.6%
OP conversion between 14.2% and 21.0% (for 20% of the award) 14.2% 21.0% 18.2% 69.1%
Total vesting (% of maximum) 91.3%
Summary of total reward
Reward component CEO
1
CFO
2023 Base pay £’000 £500.8 £365.2
Total remuneration £’000 £907.6 £673.2
2022 Base pay £’000 £416.7 £352.9
Total remuneration £’000 £954.8 £735.7
1. 2022 CEO gure relates to Timo Lehne who was appointed Interim CEO on 1 January 2022.
How we will apply the remuneration policy in 2024
Key Reward Component Key Features
Base salary and core benets CEO salary increased by 2.0% to £510,854. CFO salary increased by 2.0% to £372,528.
Pension contribution: 5% of salary for CEO and CFO in line with the wider UK workforce.
Annual bonus
70% Group nancial targets
15% Shared objectives
15% Personal objectives
Maximum of 120% of salary, with one third of any bonus award paid in shares and held for
two years.
LTIP award
50% EPS
20% TSR
20% Strategic targets (operating prot
conversion ratio %)
10% ESG (carbon emission reduction)
Maximum award of shares worth 175% of annual salary, performance tested, vesting after
three years with a further two-year holding period.
Shareholding requirements Requirement to build up and hold shares equivalent to 200% of salary whilst employed.
Post-service requirement to hold the lower of 200% of salary or actual shareholding for two
years after cessation of employment.
At the July Committee meeting we continued to focus on the
‘fair pay’ agenda discussing progress on specic initiatives.
I am pleased to conrm that during 2024 we will begin paying
all UK colleagues at or above the Real Living Wage Foundation’s
recommended level, and we will for the rst time be analysing
our ethnicity pay data in the UK and USA to examine whether
there are any pay ‘gaps’ and if so set out action plans to address
these. More generally we are embracing the importance
of ‘pay transparency’ across the business and implementing
the necessary systems before this is required for our
European businesses.
We intend to maintain the momentum in this area and will
continue to discuss the ‘fair pay’ agenda.
Conclusion
The Committee appreciates the support received from
shareholders to date on its executive remuneration and
governance approach and looks forward to this continued
support at the AGM in April 2024.
Denise Collis
Chair of the Remuneration Committee
29 January 2024
114 115
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SThree plc Annual Report and Accounts 2023
Remuneration policy
This section of the Directors’ remuneration report sets out the Group’s full remuneration policy for Directors. This was approved by
shareholders at the AGM held on 19 April 2023 and will apply for a period of three years from this date.
The remuneration policy is designed to support the strategic business objectives of the Group so as to attract, motivate and retain
high-calibre Directors and senior managers, in order to deliver sustainable long-term increases in shareholder value.
Remuneration payments and payments for loss of oce to Directors can only be made if they are consistent with the approved
Remuneration Policy or if an amendment to the Policy, authorising the Company to make the payment, has been approved
by shareholders.
The full policy can be viewed on our website in the Investor Centre section included in our 2022 Annual Report.
Decision-making process for determination, review and implementation of policy
The Committee reviews the Policy and its operation taking into account the UK Corporate Governance Code, institutional investor
and proxy agency views and market practice and regulatory developments. The Committee also takes into account views from
Management and advisers who provide the Committee with updates on corporate governance developments, market practice and
technical assistance. In addition, the Committee also carefully considers the remuneration arrangements, policies and practices
of the workforce and the cascade of remuneration throughout the business to ensure that Executive Director pay is considered in
the round.
Where changes are being made to the remuneration policy or signicant changes are proposed in the way we operate our policy,
major shareholders will be consulted, and their views taken into account.
To manage any potential conicts of interest, no individual is involved in discussions regarding their own remuneration arrangements
and the Committee designs the Policy such that remuneration is fully aligned to, and supports, the strategy.
Implementation of the Policy is considered annually for the year ahead in light of the strategy and market outlook and incentive
targets are appropriately stretching.
Factors considered in reviewing and operating the policy
The table below describes how the factors of Provision 40 listed in the UK Corporate Governance Code are addressed in the
Remuneration Policy and its application.
Clarity The policy and its implementation is straightforward, in line with market norms and clearly disclosed in the Directors’
remuneration report. The Remuneration Committee Chair consults with shareholders to explain any changes that are
being made to the remuneration policy or where there is a signicant change in operation of policy.
Simplicity The policy is simple and clear and in line with market practice. The performance conditions chosen are aligned to
the business strategy and the operation of our policy shows a strong and clear link to performance.
Risk The design of our remuneration policy ensures that excessive risk taking will not be rewarded by the balance of
incentive plans in favour of long-term performance and equity, signicant shareholding requirements, discretion to
override formula-driven incentive payments, and malus and clawback provisions.
To avoid conict of interest no individual is present when their remuneration is being reviewed.
Predictability The incentive plans are subject to maximum caps, and the scenario charts illustrate the potential rewards receivable,
taking into consideration performance and share price growth, for the Executive Directors.
Proportionality Overall, there is an appropriate balance between xed and performance-based pay (weighted in favour of the
latter) and short and long-term incentives (also weighted in favour of the latter). Performance targets are stretching,
delivering incrementally higher performance pay at higher performance levels. This delivers a market competitive
remuneration package which is strongly linked to both short and long-term performance.
Alignment to culture The Remuneration Committee designs and operates the policy to support and drive behaviours in line with the
Company culture. The Committee actively considers the pay reward structures across the Group in this process to
ensure that a consistent approach to reward is adopted that is in line with our values.
The Remuneration Policy is set out in the table below, followed by supporting notes which, together, form the Policy.
Executive Directors
Element Purpose and link to strategy Operation Maximum Performance metrics
Base salary Sucient to attract, retain
and motivate high-calibre
individuals.
Reviewed annually with any
increases normally taking
eect from 1 December.
Increases will normally
be equivalent to the
average salary increase for
employees, other than in
exceptional circumstances.
Not applicable
Benets Market competitive
benets package.
Including benets
allowance, private medical
insurance, permanent
health insurance, life
assurance and housing
allowance (if relocated).
Other benets may
be introduced to
ensure benets overall
are competitive and
appropriate for the
circumstances.
Cost of insured benets
will vary in line with
premiums. Other benets
will be at a level considered
appropriate in the
circumstances.
Not applicable
Pension To provide a competitive
pension provision.
Individuals may either
participate in a pension
plan into which the Group
contributes or receive a
salary supplement in lieu of
pension.
Executive Directors
are entitled to a Group
contribution to a pension
scheme or cash in lieu, of
5% of salary, aligned with
the current UK workforce
contribution.
Not applicable
Annual bonus Incentivises high levels
of personal and team
performance, focused on
the key business strategies
and nancial/operational
measures which will
promote the long-term
success of the business.
Deferral into shares for one
third of any bonus earned,
which must be held for two
years.
Dividends or dividend
equivalent payments accrue
on deferred shares, payable
normally in shares.
Bonus may be subject to
clawback or malus being
applied, if appropriate,
in the event of nancial
misstatement, error,
misconduct, reputational
damage or corporate
failure, which has led to an
over-payment.
Maximum bonus
opportunity is 120% of
annual salary.
Achievement of agreed
strategic and nancial/
operational annual business
targets, weighted in line
with business priorities. A
majority of the performance
conditions will be based
on nancial metrics.
Sliding scales are used
for each metric wherever
practicable with up to
20% payable for achieving
threshold performance.
Normally 50% of the
maximum bonus is payable
for target performance for
any nancial metric.
Within the maximum limit,
the Committee may adjust
bonus outcomes, based
on the application of the
bonus formula set at the
start of the relevant year, if
for instance it considers the
quantum to be inconsistent
with the Group’s overall
performance during
the year.
116 117
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SThree plc Annual Report and Accounts 2023
Remuneration policy continued
Element Purpose and link to strategy Operation Maximum Performance metrics
Long-Term
Incentive Plan
(LTIP)
Incentivises and rewards
Executives for the delivery
of longer-term strategic
objectives and to reward
substantial relative and
absolute increases in
shareholder value.
LTIP awards may be
granted each year in the
form of a conditional
award of shares or a nil-
cost option. LTIP awards
normally vest after
three years.
Dividend equivalent
payments accrue on vested
LTIP awards, payable
normally in shares. Vested
LTIP awards must be held
for a further two years
before the shares may be
sold (other than to pay tax).
LTIP awards may be subject
to clawback or malus being
applied, if appropriate,
in the event of nancial
misstatement, error,
misconduct, reputational
damage or corporate
failure, which has led to an
over-payment.
The maximum award is
150% of annual salary in
normal circumstances
but may be increased to
175% of annual salary in
exceptional circumstances.
Targets are reviewed
annually ahead of each
grant to ensure they are
aligned to the business
strategy and performance
outlook. A majority of the
performance conditions
are based on Group
nancial performance and
shareholder value-based
outcomes. No more than
25% of an award may vest
for the threshold level of
performance.
Within the maximum
limit, the Committee may
adjust vesting outcomes,
if it considers the quantum
to be inconsistent with
the Group’s overall
performance during the
performance period or
for other factors, at its
discretion.
All-employee
share plans
Support and encourage
share ownership by
employees at all levels.
Individuals may participate
in share plans oered on
an ‘all-employee’ basis
on the same terms as
other colleagues. HMRC
approved SAYE and SIP
participation is available to
all UK employees, including
Executive Directors, on
similar terms.
A global SIP is available to
all employees, including
Executive Directors, on
similar terms. For UK
participants this is an
HMRC tax-advantaged SIP.
Other plans may be
introduced from time
to time to ensure the
all-employee share
plans oering remains
appropriate.
In line with statutory limits
or lower limits specied
by the Group from time
to time.
Not applicable
Element Purpose and link to strategy Operation Maximum Performance metrics
Share ownership
requirements
Alignment of Executive
Directors’ interests with
those of investors.
Executive Directors are
expected to build and
maintain a shareholding
equivalent in value to no
less than 200% of base
salary. Until this threshold
is achieved Executive
Directors are normally
required to retain no less
than 50% of the net of tax
value from vested LTIP,
deferred bonus or other
share awards (after the
expiry of any relevant
holding period).
After ceasing employment
Executive Directors must
normally retain a level of
shareholding for two years
equivalent to the lower
of 200% of salary or the
level of shareholding on
ceasing employment with
the Group. Self-purchased
shares are excluded from
this requirement.
Not applicable Not applicable
Provisions under previous remuneration policies
For the avoidance of doubt, the Committee has authority to honour any payments due under the terms of the previous policy or
which have been disclosed to shareholders in previous remuneration reports. As part of this policy, awards or other arrangements
which were made in compliance with the policy in force at the relevant time, may be settled in accordance with their terms.
Operation of incentive plans
The Committee’s policy is to review performance measures for the incentive schemes annually, so that they continually align with
strategic objectives. The Committee considers that linking annual bonus and the vesting of LTIP awards to a combination of dierent
measures, capturing share price, nancial results and non-nancial performance, will ensure that incentive plans provide a reward
for rounded performance, while maintaining the alignment of Executive and shareholder interests. Targets for the incentive schemes
are reviewed annually and consideration is given as to whether these remain appropriate or need to be recalibrated. The specic
performance targets are set with the aim of setting stretching targets which incentivise and reward improved performance.
In designing incentive structures and approving incentive payments, the Committee pays due consideration to risk management and
environmental, social and governance (ESG) issues.
The Committee may exercise discretion in assessing achievement against each stated target where it considers that it would be
fair and reasonable to do so. The Committee may also exercise broader discretion in relation to the terms of all incentive plans, for
instance (but not limited to) adjustments required for corporate restructuring and change of control.
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SThree plc Annual Report and Accounts 2023
Remuneration policy continued
Illustration of potential 2024 Executive Directors’ remuneration
The charts below show the remuneration potentially payable to Executive Directors under dierent performance scenarios.
100% 27%
43%
42%
24%
30%
23%
34%
30%
43%
43%
34%
£2,509k
£3,000k
£2,500k
£2,000k
£1,500k
£1,000k
£500k
£-
£1,308k
£554k
£410k
£960k
£1,835k
£1,509k
£2,062k
100% 27%
Below threshold Target Maximum Below threshold Target Maximum
Chief Executive Ocer Chief Financial Ocer
Fixed Pay
Annual Bonus
LTIP
LTIP with 50% share price growth
Assumptions for the charts above:
Fixed pay comprises base salary as at 1 December 2023, pension contribution of 5% salary and the value of benets received in
2023. The on-target level of bonus is 50% of the maximum opportunity. The on-target level of the LTIP is taken to be 50% of the value
of a single year’s award.
The maximum level of bonus and LTIP is the maximum bonus and full vesting of the LTIP award at the 175% of base salary award
level. No share price appreciation has been assumed for deferred bonus awards and the value of all-employee share plans has been
excluded. The ‘maximum’ column includes an additional 50% value of the LTIP to illustrate 50% share price growth.
The CEO’s benets have been converted from EUR to GBP.
Role of the Committee in overseeing broader employee pay and dierences in remuneration policy for Executive
Directors compared to other employees
The Committee actively considers the pay structures across the wider Group when setting policy for Executive Directors to ensure
that a consistent approach to reward is adopted that is in line with our values. There is a particular focus in relation to any base salary
review.
Overall, compared to most employees, the remuneration policy for Executive Directors is weighted more to long-term share-based
incentives and stringent deferral and shareholding requirements. This is to ensure that the relatively higher pay levels are justiable
internally and externally to shareholders as a clear link between the long-term value created for shareholders and the remuneration
received by Executives.
Consideration of employment conditions elsewhere in the Group
When setting the Executive Directors’ remuneration policy, the Committee takes into account the pay and conditions of employees
more generally and, at least once a year, is given full details of the remuneration policy across the Group, with any changes
highlighted. As mentioned earlier, the Committee Chair also has responsibility to engage on employee pay.
We have built upon the rolling programme of engagement with employees around reward, utilising a combination of in-person
and virtual meetings. Denise Collis, Committee Chair, personally engaged with many employees across several of our oces
around the world during which reward continues to be an area of discussion. In addition, Denise recently held an interactive and
productive session with a diverse group, drawn from across the business, to answer questions about our corporate governance and
remuneration processes and how our reward policy cascades throughout the Company, accompanied by the Director of Reward.
The focus on the ‘fair pay’ agenda continued this year, discussing progress on specic initiatives. From 2024 we will be paying all
UK colleagues at or above the Real Living Wage Foundation’s recommended level, and we will for the rst time be analysing our
ethnicity pay data in the UK and USA to examine whether there are any pay ‘gaps’ and if so set out action plans to address these.
More generally we are embracing the importance of ‘pay transparency’ across the business and implementing the necessary systems
before this is required for our European businesses.
Consideration of shareholders’ views in determining the remuneration policy
The Committee actively consults with shareholders on executive remuneration policy changes. Feedback is taken on board and
any proposals are adjusted, as appropriate, given the objective of ensuring that shareholders are supportive of the policy and its
implementation. In addition, the Group follows shareholder sentiment on executive pay and takes it into account in considering the
application of policy in the years between the development of a new policy.
Remuneration policy for recruitment and promotion
The remuneration package for a new Executive Director would take into account the skills and experience of the individual, the
market rate for a candidate of that experience and the individual’s remuneration package in their previous role if considered
appropriate. The Committee will not pay more than necessary to facilitate the recruitment of an individual.
Base salary levels will be set in line with the policy taking account of their skills and experience and market data at comparable
companies. Benets and pension will be in line with the policy. Additionally, there is exibility to make payments to cover relocation
and other related expenses.
Annual bonus opportunity will be in line with the policy and there is exibility to set dierent performance conditions measurable
over a part-year for Executives in the rst year of appointment.
LTIP award levels will be in line with the policy.
For internal promotions, outstanding incentive payments may continue and vest on their original terms. For external recruits there
may be a need to buy out unvested incentive awards at a previous employer. The Committee conrms that any such buy-out
arrangements would only be used if necessary, would take a similar form to that surrendered (e.g. cash or shares and timeframe),
would take account of performance conditions, vesting periods and quantum, and would be no greater than that which the individual
has forfeited on appointment.
Policy on Directors’ service contracts and payments for loss of oce
The Executive Directors have rolling service contracts subject to a maximum of 12 months’ notice by the Group or Executive. For
the avoidance of doubt, an individual’s notice period will start on the date of the announcement of their departure. At the Group’s
discretion, on termination a payment may be made in lieu of notice equivalent to 12 months’ salary, which may be paid in monthly
instalments and oset against future earnings. For new hires the policy is to provide a 12-month notice period.
Service contracts are available for inspection by appointment at 75 King William Street, London EC4N 7BE.
Depending on the circumstances the Committee may consider payments in respect of statutory entitlements, outplacement support
and legal fees. Mitigation would be applied to reduce any payments associated with loss of oce.
‘Good leavers’ (e.g. redundancy or retirement) as determined by the Committee may generally retain any earned bonus (pro-rata if
active employment ceases part way through the year and normally paid at the usual time) or share-based awards, with LTIP awards
scaled back on a pro-rata basis for the portion of the vesting period elapsed on cessation of active employment, subject to still
achieving any relevant performance criteria.
Awards would vest at the normal time and any deferral or holding periods would continue to apply for the normal duration. Only in
exceptional circumstances would awards vest or shares be released early, such as serious ill-health.
‘Bad leavers’, such as a resignation, will lose any entitlement to participate in the current bonus scheme and any LTIP awards will
normally lapse on cessation of employment.
Deferred bonus shares are benecially owned, but must be held for a minimum of two years.
External appointments
Executive Directors are encouraged to undertake one external appointment, where they are able to combine this with their existing
role. This helps to broaden experience and capability, which can benet the Group. Currently, no external appointments are held by
any Executive Directors.
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SThree plc Annual Report and Accounts 2023
Remuneration policy continued Annual report on remuneration
Terms of appointment and remuneration policy for Non-Executive Directors (NEDs)
NEDs are appointed by letters of appointment providing for an initial three-year term, subject to satisfactory performance and re-
election at each AGM, with an expectation that they would serve for at least six years, to provide a mix of independence, balance
and continuity of experience. In practice NEDs may be requested to serve up to nine years, subject to rigorous review. The dates of
appointment and current terms of the NEDs who served during the year are set out in the below table.
Non-Executive Director Date of appointment Expiry date of current term
James Bileeld October 2017 30 September 2026
Denise Collis July 2016 30 June 2025
Barrie Brien* September 2017 10 September 2026
Elaine O’Donnell October 2022 1 October 2025
Imogen Joss December 2022 1 December 2025
* Barrie Brien will stand down from the Board at the AGM in April 2024.
The appointment may be terminated by either the Group or the NED giving three months’ notice. Upon termination or resignation,
NEDs are not entitled to compensation and, except for the three-months’ notice, no fee is payable in respect of any unexpired
portion of the three-year term of appointment.
Service contracts are available for inspection by appointment at 75 King William Street, London EC4N 7BE.
The policy for the remuneration of NEDs is summarised below:
Element Purpose and link to strategy Operation Maximum Performance metrics
Fees Attracts, retains and
motivates high-calibre
NEDs to provide
experience, capability and
governance in the interest
of shareholders.
Fees are determined by the
Board as a whole and set
by reference to those fees
paid in similar companies,
related to allocated
responsibilities and subject
to the aggregate Directors’
fee limits contained in
the Group’s Articles of
Association. Fees may
be payable in cash or in
shares. Out of pocket
expenses including travel
may be reimbursed by
the Group in accordance
with the Group’s expenses
policy (and may settle any
tax incurred in relation
to these). NEDs are not
entitled to compensation
and no fee is payable in
respect of the unexpired
portion of the term of
appointment.
There is no maximum
individual fee limit. The
overall fee comprises a
basic fee plus payment for
additional responsibilities
such as chairing
Committees and for interim
additional duties. NEDs
do not participate in the
Group’s incentive schemes.
Non-Executive Directors
are not eligible for any
performance-related
remuneration.
Obligation to perform
satisfactorily and attend
and contribute to meetings,
assessed via Board
eectiveness reviews.
Sourcing shares for share plans and minority interests
Shares used to settle vested share awards may include new issue shares, treasury, Employee Benet Trust (EBT) shares or market-
purchased shares. The use of new issue or treasury shares is constrained by dilution limits which are reviewed by the Board annually.
In order to comply with investor guidelines, the Board has agreed that certain LTIP awards will be satised using market-purchased
shares via the EBT, if appropriate.
Annual Report on Remuneration
Section 1 – Total reward for 2023
1.1 Directors’ total remuneration for 2023
1.2 Annual bonus for 2023
1.3 LTIP awards vested by reference to performance over the three years to 2023
1.4 LTIP awards granted during the year
1.5 Performance conditions for the 2023-2025 LTIP award
1.6 Payments for loss of oce
1.7 Payments to past Directors
1.1 Directors’ total remuneration for 2023 (audited)
Director
Salary and
fees £’000
Benets
£’000
Pension
£’000
Total
xed pay
£’000
Annual
bonus
£’000
Long Term
Incentive
Plan
£’000
Total
variable pay
£’000
Total Annual
Compensation
£’000
Timo Lehne 2023 500.8 18.1 25.0 543.9 110.9 252.8 363.7 907.6
2022 416.7 13.2 20.8 450.7 411.3 92.8 504.1 954.8
Andrew Beach 2023 365.2 19.1 18.3 402.6 58.9 211.7 270.6 673.2
2022 352.9 16.7 17.6 387.2 348.5 – 348.5 735.7
Elaine O’Donnell 2023 66.9 – – 66.9 – 66.9
2022 10.8 – – 10.8 – – – 10.8
Denise Collis 2023 81.9 – – 81.9 – 81.9
2022 80.0 – – 80.0 – – – 80.0
James Bileeld 2023 176.0 – – 176.0 – 176.0
2022 170.0 – – 170.0 – – – 170.0
Barrie Brien 2023 56.9 – – 56.9 – 56.9
2022 59.4 – – 59.4 – – – 59.4
Imogen Joss 2023 56.9 – – 56.9 – 56.9
1. Benets comprise: benets allowance, medical cover and life/income protection insurance.
2. Timo Lehne’s pension is paid into a pension scheme. Andy Beach’s pension is paid as cash in lieu.
3. 2023 LTIP awards relate to those granted in early 2021 and due to vest in February 2024 for Timo Lehne and July 2024 for Andrew Beach, based on performance assessed over
2021 to 2023 and including dividend equivalents. The value has been calculated using a share price of 368p, being the average closing price over Q4 of the nancial year. 2022
LTIP awards relate to those granted in early 2020 and vested in February 2023 for Timo Lehne, based on performance assessed over 2020 to 2022, also including the value of any
related dividends accrued during the vesting period on vested awards. The benet included in the table last year as calculated using an average share price over the closing three
months of the FY22 nancial year of 372p. The actual share price on the date of vesting was 427p. The updated share price has been used for the LTIP values in the table above.
4. Timo Lehne was appointed Interim CEO on 1 January 2022; base pay, benets, pension and bonus are shown from this date. The total value of the 2020-2022 LTIP vesting is
included in the table.
5. Elaine O’Donnell was appointed as a Non-Executive Director and Chair of the Audit and Risk Committee on 1 October 2022.
6. Barrie Brien was appointed to the Board in 2017 and acted as interim Chair of the Audit Committee from April to October 2022.
7. Imogen Joss was appointed as a Non-Executive Director on 1 December 2022.
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SThree plc Annual Report and Accounts 2023
Annual report on remuneration continued
1.2 Annual bonus for 2023 (audited)
Bonus-maximum potential 120% of base salary Weighting
Threshold
(20% payable)
Target (50%
payable)
Maximum
(100% payable)
Actual
Performance
Achievement
%
Outcome
(as a % of
maximum)
Group adjusted operating prot £m 50% 69.0 75.4 78.0 66.5 0.0% 0.0%
Group net fees £m 15% 402.7 429.8 442.7 387.1 0.0% 0.0%
Days Sales Outstanding (DSO) 5% 47 46 45 46.2 44.0% 2.20%
Group Financial objectives 70% 2.20%
Employee engagement: Peakon-based
relative outcome (against external
comparators) requiring upper quartile to
upper decile performance 5% 42.0 48.0 54.0 43.0 25.0% 1.25%
Customer engagement 5% 52.0 54.0 56.0 48.0 0.0% 0.0%
DE&I: Promotion of women in sales
leadership (number of promotions) 5% 10.0 12.0 14.0 5.0 0.0% 0.0%
Strategic objectives 15% 1.25%
Sub-total (% of maximum) 3.45%
Personal objectives 15% Individually determined, details are set out below
Total (% of maximum) 100%
1. DSO actual is based on the FY23 average.
2. The measure was based on the absolute number of women in senior sales roles by the year end, with targets set in relation to growth plans. From an overall total of senior promotions made in
FY23, 38% were women.
Performance of the CEO and CFO against their personal objectives for 2023 is detailed below:
Director Personal objective Assessment of performance by Committee
Overall achievement
(out of maximum 100%)
Timo Lehne Market development
Ensuring the right operating model and
productivity for the DACH and USA Sales
organisations.
Dene and implement coherent operational
global sales methodologies incl. Performance
Mgt., Enterprise customers etc.
Sales organisational structures agreed
and implemented in DACH and USA with
appropriate operating models in place to drive
productivity.
Key Accounts strategy was dened, supported
by a Blueprint module.
A Global business performance process was
launched based on the DACH region.
100%
Business Transformation
Delivering the agreed roadmap for Sales
Eectiveness deployment and ERP (US and
most of DACH).
Change Management readiness plan activated
across SThree, driving positive sentiment
around the deployed/coming transformation.
Agreed o path for the appropriate CLM and
Marketing technology build on top of our
transformation.
Milestones were delivered as per the roadmap
agreed at Transformation Steering Committee.
A Change Management plan was signed o by
the Executive Committee and Regional Change
Champions trained on technology to gather
employee sentiment through quarterly surveys.
Plan was built, agreed and included in the
FY24 budget.
People
Further build and shape a truly high performing
and collaborating ExCo and ExCo+1 Team.
Evolve the People Function to become a
cohesive, top performing and locally well-
integrated team.
Successful denition and implementation of a
t for purpose SThree culture.
Leadership employee NPS score established
and quantied, with Leadership NPS on an
upwards trajectory.
Goals, organisational design, operating model,
roles and responsibilities and priorities have
been agreed.
Operating values were re-dened and
refreshed.
Culture denition and values integrated
into communication plan, which included
transformation rollout, business performance
approach, year-end review process and
ongoing property refresh plans.
Strategy & structure
Bedding in new SThree narrative amongst the
organisation.
Bedding in operational structure within the four
new regional clusters successfully.
TOM Phase II – successful denition and
agreement of the new operations operating
model (incl. shift in roles and responsibilities).
Over 90% of employees are aware and
recognise SThree’s strategy and ambitions.
Helix reporting line model implemented and
fully utilised for activities such as Objectives
setting and End of Year reviews.
Functional Directors aligned to their regional
clusters.
TOM Phase II dened and signed-o. Core
function roles and responsibilities dened in
line with our Global Grading framework.
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Annual report on remuneration continued
Director Personal objective Assessment of performance by Committee
Overall achievement
(out of maximum 100%)
Andrew Beach Deliver the nance transformation
Deploy Microsoft Dynamics 365 solution
for Finance in USA and Germany (integrated
platform, not full deployment) to be signed o
and received by Head of Finance Operations.
Integrated platforms signed o and received
by Head of Finance Operations in the USA.
Germany platform signed o and to be
deployed in early 2024.
66.7%
Step change investor relations capabilities
Recommend appropriate investor relations
team structure plan (internal resourcing and
external support).
Complete all FY23 steps in the approved
investor relations team structure plan.
Ongoing investor relationship engagement and
strategy plan for FY24 onwards.
Investor relations team established with
engagement plans in place for rollout in 2024.
Plans approved by the Board.
Conduct professional audit tender process
Complete audit tender approach plan.
Complete all FY23 steps in the approved
tender approach plan.
Audit tender completed as per the agreed plan
and was approved by Audit Committee Chair.
Redene Key Strategic Finance roles
Complete Finance Business Partners (FBP)
to RFD gap analysis on all FBPs including
assessment vs job description and forward-
looking capability framework, in collaboration
with all regional FBPs and Managing Director’s.
Gap analysis completed with all appropriate
stakeholders and approved by the Audit
Committee Chair.
The table below sets out the annual bonus outcome for the Executive Directors. In determining the nal outcome, the Committee did
not exercise any discretion. One third of the bonus payable will be paid in shares, which must be held for a period of two years.
Financial element Strategic element* Personal element
% achievement
(out of 70%)
Payment under
nancial element
£
% achievement
(out of 15%)
Payment
under Shared
strategic element
£
% achievement
(out of 15%)
Payment under
Personal element
£
Total bonus
payable
£
Timo Lehne 2.20% 13,222 1.25% 7,513 15.0% 90,151 110,885
Andrew Beach 2.20% 9,642 1.25% 5,478 10.0% 43,827 58,947
* Strategic element relates to Employee engagement, Customer engagement and DE&I measures.
1.3 2021-2023 LTIP award vested by reference to performance over the three years to 2023 (audited)
Earnings Per Share (EPS) for 50% of the award:
EPS Pay-out range
Pay-out range
(threshold to
maximum)
Actual
performance Vesting level
Vesting % of total
LTIP award
Between 24.9p and 38.9 per share 25%–100% 42.4p 100% 50%
Total Shareholder Return (TSR) for 30% of the award:
TSR – Rank of the Company compared to the peer group Pay-out range
Pay-out range
(threshold to
maximum)
Actual
performance Vesting level
Vesting % of total
LTIP award
TSR performance between the median (50th percentile and upper
quartile 75th percentile)
25%–100% 72nd percentile 91.6% 27.5%
Strategic objectives for 20% of the award
Measure Target
Actual
performance Vesting level
Vesting % of total
LTIP award
Operating prot conversion ratio Financial operating prot conversion ratio of
between 14.2% and 21.0% in 2023
18.2% 69.1% 13.8%
Total 91.3%
Number of shares granted vs vested vs lapsed based on assessment versus targets for 2021-2023 LTIP award granted
in 2021 (audited)
Executive Director
Number of
shares granted
Number of
shares vested
Number of
shares lapsed
Dividend
equivalent
additional
shares
Value of
vested shares
based on grant
price £
Value of
vested shares
attributable
to share price
growth
£
Dividend
equivalent
additional
shares
£
Total
£
Timo Lehne, CEO 68,508 62,547 5,961 6,135 226,420 3,753 22,577 252,750
Andrew Beach, CFO 57,377 52,385 4,992 5,139 247,519 n/a 18,912 211,689
1. Based on share price of 362p for Timo Lehne and 472.5p for Andrew Beach.
2. Based on Q4 average share price for 2023 of 368p.
1.4 LTIP awards granted during 2023 (audited)
2021-2023 LTIP award –
grant 150% of base salary Type Date of grant
Number of
shares
Face value of
award
1
% of award
receivable at
threshold Performance period
Timo Lehne
Conditional
share awards 09 Mar 23 159,164 £751,254 25% 1 December 2022 to 30 November 2025
Andrew Beach
Conditional
share awards 09 Mar 23 116,066 £547,832 25% 1 December 2022 to 30 November 2025
1. Based on the closing share price on day before grant date of 472p.
1.5 Performance conditions for the 2023-2025 LTIP award (audited)
Awards vest on the third anniversary of grant, with a further two-year holding period on vested shares. Performance conditions are
based on EPS, TSR, operating prot conversion ratio, and an ESG metric, each applied independently, and there will be a straight-
line sliding scale between threshold and maximum.
LTIP Weighting EPS TSR Strategic ESG
2023-2025 50% 20% 20% 10% (5% for each measure)
2023-2025 Between 55.8p (25%
vesting) and 69.0p (100%
vesting)
Between median (25%
vesting) and UQ (100%
vesting)
Adjusted operating prot
conversion ratio between
20.0% (25% vesting) and
23.5% (100% vesting)
Measuring carbon
reduction across scope 1, 2
and 3 emissions.
Incremental progress
against 2030 milestones.
1) Scope 1 and 2 reduction:
Between threshold 35%
(25% vesting) and 45%
(100% vesting).
2) Scope 3 reduction:
Between threshold 20%
(25% vesting) and 25%
(100% vesting).
Weighted equally as 5% of
overall total.
Notes:
For the 2023-25 LTIP grant the TSR peer group comprises of the following 15 companies - Robert Half International, Randstad, Adecco Group, Asgn, Manpower Group, Korn Ferry,
Hays, Page Group, Kforce, Amadeus Fire, Groupe Crit, Kelly Services ‘A’, Robert Walters, Brunel Intl., and Impellam Group. Previously the Group also included Staine Group,
Empersaria Group and Gattaca, however, they all had a 12-month average market cap below £100m and are no longer considered a relevant peer for TSR comparison purposes.
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Annual report on remuneration continued
1.6 Payments for Loss of Oce (audited)
Mark Dorman, former CEO
Mark stepped down from the Board on 31 December 2021, and remained actively employed to 31 March 2022, during which
time he assisted in a handover and smooth transition. He was then placed on garden leave for the remainder of his notice period.
The following arrangements apply to Mark’s remuneration from the date he stepped down from the Board until the end of his
employment period.
He continued to receive his salary, pension allowance, and other contractual benets until 12 December 2022, subject to him not
taking up alternative employment (excluding a single NED role). From 1 December 2022 to 12 December 2022 this amounted to
£14,667 in relation to base salary, £733 in relation to pension and £403 in relation to benets.
1.7 Payments to Past Directors
No payments were made to past Directors in the year.
Section 2 – How we will apply our remuneration policy in 2024
2.1 Base salary
2.2 Benets and pension
2.3 2024 annual bonus including nancial, shared and personal measures
2.4 2024 Long-Term Incentive Plan awards
2.5 Non-Executive Directors (NEDs)
2.1 Base salary
The table below illustrates the most recent base salary review (eective for 2024). The average budgeted salary increase for
employees is 2.0%.
Executive Director
Base salary
2023
£’000
Increase
(from 1 Dec 2023)
Base salary
2024
£’000
Timo Lehne, CEO 500.8 2.0% 510.9
Andrew Beach, CFO 365.2 2.0% 372.5
2.2 Benets and pension
There are no changes to benets. The CEO and CFO receive a pension contribution of 5% of salary in line with the rate applying to
the majority of the UK workforce.
2.3 2024 annual bonus including nancial, shared and personal measures
The maximum annual bonus remains capped at 120% of base salary. One third of bonus is deferred in shares for two years. The bonus
metrics and weightings for the 2024 annual bonus scheme are summarised in the table below. As the target ranges for each metric
are considered to be commercially sensitive, they will be disclosed retrospectively in next year’s Directors’ remuneration report.
Metric Weighting Measure
Sub-
weighting Link to strategy/notes
Group nancial targets
These are considered
by the Committee to be
the three most relevant
nancial KPIs for bonus
purposes.
70% Adjusted operating prot 50% Operating prot is the key underlying measure of
protability used within the business.
Group net fees 15% Revenue less cost of sales. A broad indicator of
trading.
Days Sales Outstanding
(DSO)
5% The number of days it takes us to receive payment
following issuance of an invoice and supports
eective working capital management.
Shared objectives 15.0% Employee engagement:
Peakon-based relative
outcome (against external
comparators) requiring
median to upper decile
performance
5% To build on our Employee Engagement score
from 2023 and to maintain our excellent relative
performance.
Client penetration 5% To evolve the prole of our client base towards a
greater proportion of higher value clients.
DE&I: Improved
representation of women
5% Building towards our ambition of 50%
representation of women in leadership roles.
Metric Weighting Measure
Sub-
weighting Link to strategy/notes
Personal objectives 15.0% Personal objectives 15% Delivery versus agreed objectives to produce value
or eciency gains.
Total 100% 100%
2.4 Long-Term Incentive Plan awards
LTIP awards to be granted in early 2024 will be granted over shares worth 175% of salary. Awards will vest on the third anniversary of
grant, with a further two-year holding period on vested shares. Performance conditions will be based on EPS, TSR, operating prot
conversion ratio, and an ESG metric, each applied independently, and there will be a straight-line sliding scale between threshold
and maximum.
These measures are considered to provide an eective link to the business KPIs and provide a strong long-term alignment of interest
between executives and shareholders. The introduction of the ESG measure focused on long-term scope 1, 2 and 3 carbon emissions
is linked to the science-based targets within our Board ESG strategy.
For comparison, LTIP targets are summarised in the following table, for awards made in 2022 and 2023:
LTIP Weighting EPS TSR Strategic ESG
2022-2024 50% 20% 20% 10% (3.3% for each
measure)
2023-2025 50% 20% 20% 10% (5% for each measure)
2024-2026 50% 20% 20% 10% (5% for each measure)
2022-2024 Between 51.9p (25%
vesting) and 63.0p (100%
vesting)
Between median (25%
vesting) and UQ (100%
vesting)
Adjusted operating prot
conversion ratio between
19.0% (25% vesting) and
23.0% (100% vesting)
1.
Positively impacting
lives between 135,000
(25% vesting) and
165,000 (100% vesting)
2.
Increasing our
renewables business
between 8.5% (25%
vesting) and 9.5% (100%
vesting)
3.
Carbon reduction
(absolute reduction of
between threshold 20%
(25% vesting) and 25%
(100% vesting) from 2019
baseline)
2023-2025 Between 55.8p (25%
vesting) and 69.0p (100%
vesting)
Between median (25%
vesting) and UQ (100%
vesting)
Adjusted operating prot
conversion ratio between
20.0% (25% vesting) and
23.5% (100% vesting)
Measuring carbon
reduction across scope 1, 2
and 3 emissions.
Incremental progress
against 2030 milestones.
1.
Scope 1 and 2 reduction:
Between threshold 35%
(25% vesting) and 45%
(100% vesting).
2.
Scope 3 reduction:
Between threshold 20%
(25% vesting) and 25%
(100% vesting).
Weighted equally as 5% of
overall total.
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Annual report on remuneration continued
LTIP Weighting EPS TSR Strategic ESG
2024-2026 Between 50.0p (25%
vesting) and 61.0p (100%
vesting)
Between median (25%
vesting) and UQ (100%
vesting)
Adjusted operating prot
conversion ratio between
18.5% (25% vesting) and
22.0% (100% vesting)
Measuring carbon
reduction across scope 1, 2
and 3 emissions.
Incremental progress
against 2030 milestones.
1.
Scope 1 and 2 reduction:
Between threshold 40%
(25% vesting) and 50%
(100% vesting).
2.
Scope 3 reduction:
Between threshold 20%
(25% vesting) and 25%
(100% vesting).
Weighted equally as 5% of
overall total.
Notes:
For the 2023-25 LTIP grant the TSR peer group comprises of the following 15 companies - Robert Half International, Randstad, Adecco Group, Asgn, Manpower Group, Korn Ferry,
Hays, Page Group, Kforce, Amadeus Fire, Groupe Crit, Kelly Services ‘A’, Robert Walters, Brunel Intl., and Impellam Group. Previously the Group also included Staine Group,
Empersaria Group and Gattaca, however, they all had a 12-month average market cap below £100m and are no longer considered a relevant peer for TSR comparison purposes.
For the 2024-26 LTIP grant, due to their impending sale, we have elected to remove Impellam Group from the TSR peer group.
2.5 Non-Executive Directors (NEDs)
The Committee and Board reviewed the fee levels during the year taking into consideration market benchmarks, the responsibilities
and time commitment required for the Chair and NED’s to full their role.
This year it was agreed to increase the Chair and NED base fee in line with any increase to the Executive Director’s base salary. As
such the Chair and NED base fees were increased by 2.0% eective 1 December 2023.
The fees for the Chairman and NEDs are as follows:
Role
2023 annual fee
£’000
2024 annual fee
£’000
Chair 176 179
NED base fee (x 4 in 2023 and 2024)
1
57 58
Committee Chair (Audit and Remuneration) 10 10
SID 10 10
Employee engagement NED 5 5
Total (Articles of Association limit is £500k per annum) 439 447
1. Imogen Joss joined as a Non-Executive Director on 1 December 2022.
Section 3 – Directors’ interests in shares and broader context for Directors’ pay
3.1 Outstanding share awards held by Directors under LTIP, and SAYE
3.2 Statement of Directors’ shareholdings
3.3 Total Shareholder Return (TSR) performance of SThree over the last ten-year period
3.4 Historical levels of CEO remuneration and incentive plan pay-outs
3.5 Year-on-year percentage change in CEO remuneration compared to employees
3.6 CEO pay ratio
3.7 Relative importance of spend on all employees’ pay compared to dividend payments
3.1 Outstanding share awards held by Directors under LTIP, and SAYE (audited)
Awards outstanding (including those granted in the year), comprising LTIP, and SAYE (audited)
Executive Directors’ awards outstanding under the LTIP are set out in the table below. Awards are currently structured as conditional
awards of shares.
Executive Director
Type of
award
Dates of LTIP
grant/award
Market price
at grant/
award
Shares
originally
awarded
Face value
£ Vesting date
Remaining
unvested at
30/11/2023
Timo Lehne LTIP 16/03/2021 362 68,508 £247,998.96 16/03/2024 68,682
LTIP 23/02/2022 449 133,630 £599,998.70 23/02/2025 133,630
LTIP 26/07/2022 395 18,945 £74,832.75 26/07/2025 18,945
LTIP 09/03/2023 472 159,164 £751,254.00 09/03/2026 159,164
Andrew Beach LTIP 19/07/2021 458 57,377 £262,786.66 19/07/2024 57,524
LTIP 23/02/2022 449 117,886 £529,308.14 23/02/2025 117,886
LTIP 09/03/2023 472 116,066 £547,832.00 09/03/2026 116,066
SAYE
2
09/03/2022 380 4,740 £18,012.00 01/05/2025 4,740
1. Rolled-up dividend shares are included in 2021 LTIP and they are adjusted for expected vesting based on performance.
2. SAYE exercise price was 379.72p which was at a 20% discount to the market value at grant.
3.2 Statement of Directors’ shareholdings (audited)
Under the remuneration policy Executive Directors must build and maintain a level of shares equivalent to at least 200% of base
salary. Directors’ interests in the ordinary share capital of the Company as at the year end, are shown in the table below, including the
interests of connected persons and any changes since the start of the year. There have been no changes since the year end and no
Director had any other interest in the share capital of the Company or its subsidiaries, or exercised any option during the year, other
than as disclosed.
Director
Ordinary
shares held at
1 December
2022
Ordinary
shares
acquired
Ordinary
shares
disposed
Ordinary
shares held at
30 November
2023
Indirect
interest w/
perf con (i.e.
LTIP)
Indirect
interest w/o
perf con
(i.e. SIP)
Share Options
(SAYE)
Shareholding
requirement
(% of salary)
Shareholding
(% of 2023
salary)
Timo Lehne 121,706 65,417 – 187,123 380,247 55 – 200% 151.0%
Andrew Beach 33,956 14,616 – 48,572 291,329 709 4,740 200% 53.8%
James Bileeld 15,000 – – 15,000 – – – – –
Elaine O’Donnell – – – – – – – – –
Imogen Joss – – – – – – – – –
Denise Collis 5,000 – – 5,000 – – – – –
Barrie Brien 1,594 – – 1,594 – – – – –
1. The value has been calculated using a share price of 404p, being the share price on the last day of the nancial year.
2. Includes deferred bonus shares.
3. By reference to original award numbers.
There have been no changes to the share interests of Directors between the end of FY23 and 29 January 2024, when this report was
signed o.
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Financial Statements
SThree plc Annual Report and Accounts 2023
Annual report on remuneration continued
3.3 Total Shareholder Return (TSR) performance of SThree over the last ten-year period
The following graph shows the TSR of the Company, compared to the FTSE 350 Support Services and FTSE Small Cap indices.
These are considered the most illustrative comparators for investors as the Company is or has been a constituent in the past of
these indices.
250.00
200.00
150.00
100.00
50.00
0.00
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
SThree FTSE 350 Support Services FTSE Small Cap
3.4 Historical levels of CEO remuneration and incentive plan pay-outs
The table below shows historical levels of CEO total remuneration over a ten-year period, as well as annual bonus and LTIP
vesting percentages over the same period.
Year CEO
CEO total
remuneration
£’000
Annual bonus
(% of maximum)
LTIP awards
vesting
(% of maximum)
2023 Timo Lehne 907.6 18.5% 91.3%
2022 Timo Lehne 942.8 82.7% 50.8%
2022 Mark Dorman 364.2 79.3% 50.8%
2021 Mark Dorman 1,533.1 83.3% 34.4%
2020 Mark Dorman 500.2 00.0% n⁄a
2019 Mark Dorman (appointed 18 March 2019) 629.1 55.7% n ⁄a
2019 Gary Elden (stepped down 18 March 2019) 832.1 53.2% 63.5%
2018 Gary Elden 1,064.0 73.4% 18.8%
2017 Gary Elden 1,228.9 76.2% 41.0%
2016 Gary Elden 1,058.5 56.4% 50.0%
2015 Gary Elden 1,284.9 92.8% 50.0%
2014 Gary Elden 852.2 54.6% 18.5%
1. Timo Lehne was appointed as interim CEO on 1 January 2022 and permanent CEO from 28 April 2022.
2. Mark Dorman stepped down from the CEO role on 31 December 2021.
3. Mark Dorman was not eligible to receive the 2018-2020 LTIP award for which the performance period ended in 2020; the LTIP vested at 19.3% of maximum for participants.
4. Mark Dorman was not eligible to receive the 2017-2019 LTIP award for which the performance period ended in 2019; the LTIP vested at 71.8% of maximum for participants.
3.5 Year-on-year percentage change in Directors’ remuneration compared to employees
The table below shows the percentage change for each element of remuneration between FY23 and FY20 for Directors who served
during each year, compared with all Group employees.
FY23 vs FY22 FY22 vs FY21 FY21 vs FY20 FY20 vs FY19
Salary/
fees Benets
Annual
bonus
Salary/
fees Benets
Annual
bonus
Salary/
fees Benets
Annual
bonus
Salary/
fees Benets
Annual
bonus
Timo Lehne 10.2% 16.2% (75.3%) n/a n/a n/a – – – – – –
Andrew Beach 3.5% 9.0% (76.8%) n/a n/a n/a n/a n/a n/a – – –
James Bileeld 3.5% – – 13.3% – – 7.1% – – (6.7%) – –
Elaine O’Donnell 3.2% – – n/a – – – – – – – –
Denise Collis 2.4% – – 13.5% – – 7.1% – – (6.7%) – –
Barrie Brien (4.2%) – – 23.8% – 7.1% – – (6.7%) – –
Imogen Joss n/a – – – – – – – – – – –
Average for all employees (1.2%) (0.3%) (22.1%) 13.8% 20.4% (15.5%) 8.8% (5.0%) 77.3% (1.5%) (5.7%) (3.0%)
Notes:
n/a: comparisons for the following executives cannot be provided if they joined or left in the year or were not on the Board in the prior year.
No employees other than Directors are in the listed parent company therefore we have chosen to use group employees.
2023 vs 2022: Timo Lehne’s 2022 remuneration has been annualised for the basis of the year-on-year comparison.
Elaine O’Donnell’s 2022 remuneration has been annualised for the basis of the year-on-year comparison.
Imogen Joss joined as a Non-Executive Director on 1 December 2022. Barrie Brien received an additional fee for his role as interim Chair of the Audit Committee from April to
October 2022.
2022 vs 2021: Timo Lehne was appointed CEO in January 2022. Andrew Beach joined the Board on 15 July 2021. Alex Smith stepped down from the Board on 15 July 2021. Elaine
O’Donnell joined as Non-Executive Director and Chair of the Audit and Risk Committee on 1 October 2022.
3.6 CEO pay ratio
The Committee has decided to use Option B in the relevant regulations to calculate the Chief Executive Ocer pay ratio, using
2023 gender pay gap information to identify the three UK employees as the best equivalents of P25, P50 and P75. The Total Pay
and Benets for P25, P50 and P75 has been calculated based on full-time equivalent at 30 November 2023. This methodology was
selected as the Committee believes this provides a more accurate and consistent calculation based on the information available at
this time.
The following table sets out the CEO pay ratio at the median, 25th and 75th percentile.
Financial year Method
25th percentile
pay ratio Median
75th percentile
pay ratio
2023 Option B 32:1 20:1 12:1
2022 Option B 40:1 22:1 14:1
2021 Option B 59.1 35.1 23.1
2020 Option B 22.1 19.1 10.1
2019 Option B 34.1 26.1 16.1
2018 Option B 39.1 24.1 20.1
The three employees used for the 2023 ratio are shown below:
Employees’ salary
(£)
Employees’ total
remuneration
(£)
Q 25 pay 24,405 28,346
Q 50 pay 38,764 45,255
Q 75 pay 66,113 75,873
Ratios have varied each year primarily driven by varying CEO bonus awards and long-term incentive plan vesting.
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SThree plc Annual Report and Accounts 2023
Annual report on remuneration continued
The Committee is satised the median pay ratio is consistent with the pay, reward and progression policies for the company’s
employees. Workforce pay and reward policies across the Group are actively considered by the Committee when determining the
Executive Director Remuneration Policy and its implementation each year to ensure that our approach to reward across the Group is
aligned with our values.
3.7 Relative importance of spend on all employees’ pay compared to dividend payments
The table below sets out the change to the total employee remuneration costs compared with the change in dividends for 2023
compared to 2022. All gures are taken from the relevant sections of the Annual Report.
Item 2023 2022 Change
Dividends £27.4m £14.7m 87.0%
Remuneration paid to employees (incl. Directors) £255.0m £266.0m -4.1%
Section 4 – Governance
4.1 The Committee and its advisors
4.2 Statements of voting at most recent AGMs
4.3 Approval
4.1 The Committee and its advisors
The Committee’s Terms of Reference (available at www.sthree.com) are reviewed periodically to align as closely as possible with
the UK Corporate Governance Code (the Code) and CGI best practice guidelines. During the year, the Committee comprised only
independent NEDs, being Denise Collis (Chair), James Bileeld, Barrie Brien, Imogen Joss and Elaine O’Donnell. The Committee
therefore meets Code requirements to comprise at least three independent NEDs.
The Chief Executive Ocer, Chief Financial Ocer and the most senior HR representative attend meetings by invitation, excluding
matters related to their own remuneration. The Committee met four times during the year for routine business, in addition to
unscheduled meetings for specic items and no member of the Committee has any personal nancial interest (other than as a
shareholder) in the matters decided.
The Committee appointed Korn Ferry as its independent remuneration adviser in 2016, following a comprehensive review.
Fees paid to Korn Ferry for advice in relation to remuneration matters during the year were £44,591 (2022: £68,594.89) on a time
spent basis, both excluding VAT. A representative from Korn Ferry attends each Remuneration Committee meeting and provides
input into the papers. Korn Ferry are members of the Remuneration Consultants Group (RCG) and comply with the RCG Code
of Conduct. Korn Ferry has no other relationship with the Company and the Committee is satised that their advice was and is
objective and independent.
4.2 Statements of voting at most recent AGMs
At the AGM held in April 2023, the following votes were cast in relation to the binding vote on the remuneration policy and the
advisory vote on the Directors’ Remuneration Report.
Resolution For % Against % Withheld
Directors’ remuneration policy
*
91,519,780 96.35 3,469,671 3.65 20,939
Directors’ remuneration report
*
92,029,557 96.88 2,960,719 3.12 4,646
* Votes withheld are not counted in the % shown above.
4.3 Approval
This report was approved by the Board of Directors on the date shown below and signed on its behalf by:
Denise Collis
Chair of the Remuneration Committee
29 January 2024
Directors’ report
The Directors present their Annual Report on the activities
of the Company and the Group, together with the audited
Consolidated Financial Statements for the year ended
30November 2023.
The Board conrms that these, taken as a whole, are fair,
balanced and understandable and that the narrative sections
of the report are consistent with the nancial statements and
accurately reect the Group’s strategy, performance and
nancial position. Where reference is made to other sections
of the Annual Report, these sections are incorporated into this
report by reference. An overview of the principal risks and
uncertainties faced by the Group is also provided in the
Strategic Report on pages 2 to 85, along with the Company’s
Section 172 statement.
These sections, together with the Governance (pages 86-95),
Employee engagement (pages 96-99), Nomination Committee
(pages 100-103), Audit & Risk Committee (pages 104-111)
and Directors’ remuneration reports (pages 112-134), provide
an overview of the Group, including on environmental and
employee matters, and give an indication of future developments
in the Group’s business, providing a balanced assessment of the
Group’s position and prospects in accordance with the latest
reporting requirements. The Group’s subsidiary undertakings,
including branches outside the UK, are disclosed in note 25 to
the nancial statements, found on page 191.
The forward-looking statements reect knowledge and
information available at the date of preparation of this Annual
Report and nothing in this Annual Report should be construed as
a prot forecast.
The Directors conrm that they have carried out a robust
assessment of the principal and emerging risks facing the
Company and the Group, including those that would threaten
the business model, future performance, solvency and liquidity,
and explained how they are being managed or mitigated (see
analysis of key risks, mitigation and impact on strategy within the
Strategic Report). Information on the Company, including legal
form, domicile and registered oce address is included in note 1
to the nancial statements, on page 153.
Business operations and performance
Business model
The Strategic Report provides information relating to the Group’s
activities, its business model, governance, strategy, future
developments and the principal risks and uncertainties faced by
the business, including analysis using both nancial and non-
nancial KPIs where necessary.
Results and dividends
Results and other key nancial information for the year ended
30 November 2023 are set out in the Financial Statements,
beginning on page 147.
The Group paid an interim dividend of 5.0 pence per share in
December 2023 (FY22: 5.0 pence). The Directors have also
recommended a nal dividend of 11.6 pence per share to be paid
in June 2024 (FY22: 11.0 pence) to shareholders on the register at
the close of business on 10 May 2024.
Financial instruments
Information and policy in respect of nancial instruments and
nancial risk management is set out in note 23 to the nancial
statements, together with information on price, credit and
liquidity risks, on pages 185-190.
Research and development
The only expenditure incurred in the area of research and
development relates to software and system development,
which is shown in the notes to the nancial statements.
Events occurring after the reporting period
There have been no signicant events aecting the Group since
the end of the reporting period until the approval of this report.
Essential contractors and implications following a
change of control or takeover
The Group has business relationships with a number of clients
and contractors but is not reliant on any single one. There are
no signicant agreements which the Company is party to that
take eect, alter or terminate upon a change of control of the
Company following a takeover oer, with the exception of
the Citibank and HSBC Revolving Credit Facility agreements.
The Company does not have agreements with any Director or
employee that would provide compensation for loss of oce or
employment resulting from a takeover, except that in the event
of a takeover, provisions of the Group’s share plans and tracker
share arrangements may cause options, awards or tracker
shares to vest.
Directors and their interests
The Directors of the Company, including their biographies and
Board Committee composition, are shown within the Board of
Directors section of this Annual Report on pages 86-87.
All Directors served throughout the nancial year.
In accordance with the UK Corporate Governance Code, all
serving Directors will retire at the 2024 Annual General Meeting
and submit themselves for re-election, except for Barrie Brien
who will retire from the Board. Rules on the appointment
and replacement of Directors are governed primarily by the
Company’s Articles, the UK Corporate Governance Code and
the Companies Act 2006.
Other than employment contracts, none of the Directors had
a material interest in any contract with the Company or its
subsidiary undertakings. Key terms of the Directors’ service
contracts and interests in shares and options are disclosed in
the Directors’ remuneration report on pages 112-134. Details of
the gender and ethnic diversity of the Board of Directors can be
found on page 102.
134 135
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Governance
Financial Statements
SThree plc Annual Report and Accounts 2023
In addition, the Companies Act 2006, s992 (13c) requires
disclosure of persons with signicant direct or indirect holdings
of securities as at the year end. At the year end we were aware of
the following signicant shareholdings.
Name of holder
Number of
shares
Percentage
shareholding
Nature of
holding
Kempen Capital
Management 15,424,047 11.44% Indirect
JP Morgan Asset
Management 8,377,662 6.21% Indirect
JO Hambro Capital
Management 8,164,164 6.05% Indirect
Littlejohn & Co 6,855,180 5.08% Indirect
BlackRock 6,594,071 4.89% Indirect
Allianz Global Investors 6,57 7,726 4.88% Indirect
Montanaro Asset
Management 4,730,000 3.51% Indirect
Harris Associates 4,556,028 3.38% Indirect
GLG Partners 4,371,885 3.24% Indirect
Annual General Meeting (AGM)
The AGM of the Company will be held on 25 April 2024, at 75
King William Street, London, EC4N 7BE. A separate Notice
details all business to be transacted.
Governance, policies and stakeholders Information to be
disclosed under LR 9.8.4R
Details of the disclosures to be made under Listing Rule 9.8.4R
are listed below.
9.8.4R (4): Details of any long-term incentive schemes can be
found in the Directors’ remuneration report, on pages 112-134.
Aside from the above, the other required disclosures are
not applicable.
Related party transactions
Details of any related party transactions undertaken during the
year are shown in the notes to the nancial statements.
Corporate and social responsibility, including diversity,
human rights and environmental matters
The Board pays due regard to environmental, health and safety,
and employment responsibilities and devotes appropriate
resources to monitoring compliance with, and improving,
standards. The Chief Executive Ocer has responsibility for
these areas at Board level, ensuring that the Group’s policies are
upheld and providing the necessary resources.
Further information on the Group’s diversity, human rights and
anti-bribery and corruption policies, plus detail on environmental
matters, including carbon emissions data, is contained in the
‘Strategic progress’ and ‘Responsible business’ sections of this
Annual Report, whilst information on employee share plans and
share ownership is contained in the Directors’ remuneration
report and the notes to the nancial statements.
Section 172 and stakeholder engagement
Information about our stakeholders, including employees,
suppliers and customers, and how the Board has engaged
and considered their views in regard to principal decisions
Directors’ report continued
can be found in the Corporate Governance Report and within
the Stakeholder engagement section on pages 46 to 51 and
Employee engagement section on pages 96-99.
Health and safety
The Group is committed to providing for the health, safety and
welfare of all current and potential employees. Every eort is
made to ensure that all health and safety legislation, regulations
or similar codes of practice, are complied with.
Equal opportunities
The Group is also committed to providing equal opportunities
and employees are encouraged to train and develop their
careers. Group policy is to oer the opportunity to benet from
fair employment, without regard to gender, sexual orientation,
marital status, race, religion or belief, age or disability, and full
and fair consideration is given to the employment of disabled
persons for all suitable jobs.
In the event of any employee becoming disabled, every eort is
made to ensure that employment continues within the existing
or a similar role, and it is the Group’s policy to support disabled
employees in all aspects of their training, development and
promotion where it benets both the employee and the Group.
Greenhouse gas emissions
The Board is conscious of the role that the business plays in
building a greener future and its impact on the environment
and is committed to our ambitious environmental goals. Details
of the business’s carbon emissions can be found in the ‘Our
commitment to being a responsible business’ section on
pages 52 to 75.
Political donations
No donations for political purposes of any kind were made
during the year (FY22: £nil).
Modern Slavery Act 2015: slavery and human tracking
statement
The Board of Directors has approved and published on its
website its Modern Slavery Statement. This statement is made
pursuant to Section 54(1) of the Modern Slavery Act 2015 and
constitutes our slavery and human tracking statement for
2023. The Company’s Modern Slavery Act statement can be
found on our website, www.sthree.com.
Championing human rights
Our Equal Opportunities Policy sets out clear expectations of
how to conduct business in an ethical and transparent way,
without compromising integrity and professionalism, and
respecting the rights and dignity of all people.
Our focus is on ethical recruitment and working conditions at our
sites, security, and community health and livelihoods.
Given that we also expect our business partners to respect these
workplace values, our Code of Conduct promotes:
• ethical handling of actual or apparent conicts of interest;
• compliance with applicable governmental laws, rules and
regulations;
• complete, accurate, fair and balanced disclosure in reporting;
and
• prompt internal reporting of violations.
Directors’ indemnities, and Directors’ and
Ocers’ insurance
The Directors have the benet of the indemnity provisions
contained in the Company’s Articles, and the Company has
maintained throughout the year Directors’ and Ocers’ liability
insurance for the benet of the Company, the Directors and its
ocers. The Company has entered into qualifying third-party
indemnity arrangements for the benet of all its Directors in
a form and scope which comply with the requirements of the
Companies Act 2006 and which were in force throughout the
year and remain in force.
Conicts of interest
The Board also conrms that there are appropriate procedures
in place to ensure that its powers to authorise the Directors’
conicts of interest are operated eectively. The Board
maintains a register of all potential conicts, which include
external appointments, close family members and companies of
which a Director maintains a signicant shareholding.
Shareholders and share capital
Share capital and share rights
SThree plc has a premium listing on the London Stock Exchange,
and trades under the STEM ticker. As at 30 November 2023, the
issued share capital of the Company was 134,908,207 ordinary
shares of 1 pence each, which includes 35,767 shares held in
treasury. Details of the share capital of the Company, together
with movements during the year are shown in the notes to the
nancial statements. The rights and obligations attached to the
Company’s ordinary shares are contained in the Articles. Shares
acquired by employees under a Company share scheme rank
equally with all other shares in issue.
Ordinary shares allow holders to receive dividends and to vote at
general meetings of the Company. They also have the right to a
return of capital on a winding-up.
There are no restrictions on the size of holding or the transfer of
shares, which are both governed by the general provisions of the
Company’s Articles and relevant legislation. Under the Articles,
the Directors have the power to suspend voting rights and the
right to receive dividends in respect of ordinary shares, as well
as to refuse to register a transfer in circumstances where the
holder of those shares fails to comply with a notice issued under
Section 793 of the Companies Act 2006. The Directors also have
the power to refuse to register any transfer of certicated shares
that does not satisfy the conditions set out in the Articles.
The Company is not aware of any agreements between
shareholders that might result in the restriction of transfer of
voting rights in relation to the shares held by such shareholders.
Authority to issue or make purchases of own shares
including as treasury shares and dilution
The Company is, until the date of the forthcoming AGM,
generally and unconditionally authorised to issue and buy back
a proportion of its own ordinary shares.
The Company’s policy is to comply with investor guidelines on
dilution limits for its share plans by using a mixture of market-
purchased and new-issue shares.
Some 2,198,735 shares were purchased in the market during
the year at a cost of £10 million. Purchases may be made for
cancellation, to be held as treasury shares, or for the Employee
Benet Trust (EBT). The Company’s EBT has waived its right
to dividends on shares held in the Trust account. The Directors
will seek to renew the authority to purchase up to 10% of the
Company’s issued share capital at the next AGM.
Substantial shareholdings
As at the date of this report, the Group has been notied,
under the Financial Conduct Authority’s (FCA) Disclosure and
Transparency Rules (DTR 5), of the signicant interests in the
ordinary share capital of the Company, shown below.
Name of holder
Number of
shares
Percentage
shareholding Date of notication
Kempen 13,454,803 9.98% 10 November 2023
JO Hambro Capital
Management 13,265,368 9.98% 1 July 2020
JP Morgan Asset
Management 9,725,746 7.23% 11 December 2022
Littlejohn & Co 6,739,588 5.01% 6 July 2023
Montanaro Asset
Management 4,141,001 3.08% 14 August 2023
Allianz Global
Investors 6,709,372 4.99% 21 November 2022
GLG Partners 6,463,097
Less
than 5% 16 Feb 2023
The information provided above was correct at the date of
notication. However, since notication of any change is not
required until the next notiable threshold is crossed, these
holdings are likely to have changed. Between 30 November
2023 and the date of this report, the Company has not been
notied of any changes. No Director held over 3% of the
Company’s share capital.
136 137
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Governance
Financial Statements
SThree plc Annual Report and Accounts 2023
Furthermore, ensuring candidates are placed within a fair and
ethical workplace is a fundamental pillar in the recruitment
process. We have a responsibility to all candidates we place
to ensure that they are not subjected to bribery, corruption,
exploitation, forced labour or modern slavery at the companies
they join. Implementation of this is ensured through extensive
training and the continuous education of our people. Employees,
contractors or other third parties are required to immediately
report any instances of unethical behaviour or suspicion of
malpractice to a line manager or a member of the Group HR
Team. Any breaches in human rights are reported to our Chief
People Ocer and where required to relevant authorities.
Independent auditors
As described in the Audit & Risk Committee report, during the
year under review we undertook a competitive tender for our
external audit. PwC did not tender due to the length of their
tenure. A resolution to elect Ernst & Young LLP as the Company’s
auditors will be put to the forthcoming AGM.
Audit fees and non-audit services in respect of PwC’s 2023
audit are disclosed in the Audit & Risk Committee report,
on pages 104-111.
Statement of Directors’ responsibilities in respect of
nancial statements
The Directors are responsible for preparing the Annual Report
and Accounts 2023 and the nancial statements in accordance
with applicable law and regulation.
Company law requires the Directors to prepare nancial
statements for each nancial year. Under that law the Directors
have prepared the Group nancial statements in accordance
with UK-adopted international accounting standards and the
company nancial statements in accordance with United
Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising FRS 101 Reduced
Disclosure Framework (FRS 101), and applicable law).
Under company law, Directors must not approve the nancial
statements unless they are satised that they give a true and fair
view of the state of aairs of the Group and Company and of
the prot or loss of the Group for that period. In preparing the
nancial statements, the Directors are required to:
• select suitable accounting policies and then apply
them consistently;
• state whether applicable UK-adopted international
accounting standards have been followed for the Group
nancial statements and United Kingdom Accounting
Standards, comprising FRS 101 have been followed
for the Company nancial statements, subject to any
material departures disclosed and explained in the
nancial statements;
• make judgements and accounting estimates that are
reasonable and prudent; and
• prepare the nancial statements on the going concern
basis unless it is inappropriate to presume that the Group
and Company will continue in business.
The Directors are responsible for safeguarding the assets of
the Group and Company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities. The Directors are also responsible for keeping
adequate accounting records that are sucient to show and
explain the Group’s and Company’s transactions and disclose
with reasonable accuracy at any time the nancial position of
the Group and Company and enable them to ensure that the
nancial statements and the Directors’ remuneration report
comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity
of the Company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of nancial
statements may dier from legislation in other jurisdictions.
Directors’ conrmations
The Directors consider that the Annual Report and Accounts
2023, taken as a whole, is fair, balanced and understandable and
provides the information necessary for shareholders to assess
the Group’s and Company’s position and performance, business
model and strategy.
Each of the Directors, whose names and functions are listed in
the ‘Our Board’ section of this Annual Report, conrm that, to the
best of their knowledge:
• the Group nancial statements, which have been prepared
in accordance with UK-adopted international accounting
standards, give a true and fair view of the assets, liabilities
and nancial position and prot of the Group;
• the Company nancial statements, which have been
prepared in accordance with United Kingdom Accounting
Standards, comprising FRS 101, give a true and fair view of
the assets, liabilities and nancial position of the Company;
and
• the Directors’ report, together with the Strategic Report,
Chair and other Ocers’ sections of this Annual Report,
includes a fair review of the development and performance
of the business and the position of the Group and Company,
together with a description of the principal risks and
uncertainties that it faces.
In the case of each Director in oce at the date the Directors’
report is approved:
• so far as the Director is aware, there is no relevant audit
information of which the Group’s and Company’s auditors
are unaware; and
• they have taken all the steps that they ought to have taken as
a Director in order to make themselves aware of any relevant
audit information and to establish that the Group’s and
Company’s auditors are aware of that information.
Kate Danson
Company Secretary
For and on behalf of SThree plc
29 January 2024
Directors’ report continued Independent auditors’ report
to the members of SThree plc
Report on the audit of the nancial statements
Opinion
In our opinion:
• SThree plc’s group nancial statements and company nancial statements (the “nancial statements”) give a true and fair view of
the state of the group’s and of the company’s aairs as at 30November2023 and of the group’s prot and the group’s cash ows
for the year then ended;
• the group nancial statements have been properly prepared in accordance with UK-adopted international accounting standards
as applied in accordance with the provisions of the Companies Act 2006;
• the company nancial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework”, and applicable
law); and
• the nancial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the nancial statements, included within the Annual Report and Accounts 2023 (the “Annual Report”), which
comprise: the Consolidated and Company Statements of Financial Position as at 30November2023; the Consolidated Income
Statement and Consolidated Statement of Comprehensive Income, the Consolidated Statement of Cash Flows, and the
Consolidated and Company Statement of Changes in Equity for the year then ended; and the notes to the nancial statements,
which include a description of the signicant accounting policies.
Our opinion is consistent with our reporting to the Audit and Risk Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the nancial statements section
of our report. We believe that the audit evidence we have obtained is sucient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the nancial
statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fullled
our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were
notprovided.
Other than those disclosed in note 3 to the nancial statements, we have provided no non-audit services to the company or its
controlled undertakings in the period under audit.
139
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Financial Statements
Annual Report and Accounts 2023
138
SThree plc
Independent auditors’ report
to the members of SThree plc continued
Provision for impairment of trade accounts receivable and contract assets is a new key audit matter this year. Otherwise, the key
audit matters below are consistent with last year.
Key audit matter How our audit addressed the key audit matter
Contract assets shrinkage (group)
The Group’s accounting process means that there is a material
amount of accrued rather than billed contractor revenue at each
period end within Contract assets. The Group had £94.1million of
Contract assets (2022: £91.7 million).
We focused on this area due to the material quantum of Contract
assets, the estimation uncertainty and the potential for variances
arising from applying the historic ‘shrinkage’ percentage to the full
potential value of unsubmitted timesheets.
Refer to Trade and other receivables (note 12 of the nancial
statements), Operating Segments (note 2 of the nancial statements)
and ‘Audit Committee report’.
Our procedures in respect of accrued contract income comprised the
following:
Tested the business process controls supporting the accuracy of
rates and hours input into the system and recalculated a sample of
accrued revenue transactions with inputs validated to underlying
documentation including timesheets and contracts.
We performed detailed testing over the 12 month rolling average
historical shrinkage rate calculation and performed detailed testing
over the inputs into the calculation. In addition, we have recalculated
the 2023 shrinkage adjustment posted by management and
performed sensitivities and look back procedures.
We veried that Contract assets was not older than 3 months in
age in accordance with Group policy and examined the ageing
prole of the balance, concluding that management were following
their accounting policies in this area. Based on our audit work, we
found estimates related to Contract assets to be acceptable. We
also consider the disclosures made in the nancial statements to be
appropriate.
Provision for impairment of trade accounts receivable
and contract assets (group)
The Group had Accounts Receivable assets of £245.5 million (2022:
£254.4 million) and Contract assets of £94.1m (2022: £91.7m) with an
expected credit loss provision of £8.6 million (2022: £3.7 million).
Impairment losses represent management’s best estimate of
expected credit losses on accounts receivable assets and contract
assets at the reporting date. We have focused on this area because
the measurement of impairment losses requires judgement and
estimates, and due to the signicant increase in the level of provision
compared to previous years.
The Group assesses impairment of accounts receivables both
individually and collectively at each reporting date.
In estimating the amount of impairment losses, which is equal
to the expected credit losses, management takes into account,
among other things, the payment history of the receivables and the
historical experience of credit losses, adjusted for factors specic to
the customer, and an assessment of both the current and expected
general economic conditions at the year end.
The key areas of measurement uncertainty and judgement related to
the recognition of impairment of accounts receivables and contract
assets are as follows:
• the assumption used to estimate the credit risk of the related
exposure and the customer’s expected future cash ows;
• identication of exposures with signicant credit risk or default.
Refer to Trade and other receivables (note 12 of the nancial
statements).
We have challenged management’s assessment and carried out the
following procedures in this area:
Assessed the appropriateness of the impairment methodology against
the requirements of relevant nancial reporting standards;
Tested the accuracy and completeness of the expected credit loss
provision as at 30 November 2023, including:
• individually assessed accounts receivables that have been selected
as having a higher risk of default;
• reviewed the customers’ historical payment data and external
market information in order to understand any uncertainties related
to payments, signicant increases in credit risk or defaults;
• checked the supporting documentation for cash receipts from
customers after the end of the reporting period; and
• tested the mathematical accuracy of management’s impairment
calculation and the correct application of ageing.
Retrospectively assessed the accuracy of previous years provisions,
including loss rates, compared to actual results.
Based on our audit work, we found estimates related to the expected
credit losses to be acceptable. We also consider the disclosures made
in the nancial statements to be appropriate.
Our audit approach
Overview
Audit scope
• We conducted audit work on 9 components. 4 of these components were full scope components and the remaining 5
components were subject to specied scope. The remaining components of the group were subject to analytical review.
Duetothe centralised nature of the SThree support function teams, all audit work was performed by the group engagement
team in theUK.
• We also performed a full scope audit of the parent company.
Key audit matters
• Contract assets shrinkage (group)
• Provision for impairment of trade accounts receivable and contract assets (group)
• Impairment of investments in subsidiaries (parent)
Materiality
• Overall group materiality: £3.89 million (2022: £3.85 million) based on 5% of prot before income tax.
• Overall company materiality: £1.52 million (2022: £1.90 million) based on 1% of net assets.
• Performance materiality: £2.91 million (2022: £2.89 million) (group) and £1.14 million (2022: £1.42 million) (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the nancial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most signicance in the audit of the
nancial statements of the current period and include the most signicant assessed risks of material misstatement (whether or not
due to fraud) identied by the auditors, including those which had the greatest eect on: the overall audit strategy; the allocation of
resources in the audit; and directing the eorts of the engagement team. These matters, and any comments we make on the results
of our procedures thereon, were addressed in the context of our audit of the nancial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identied by our audit.
140 141
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SThree plc Annual Report and Accounts 2023
Materiality
The scope of our audit was inuenced by our application of materiality. We set certain quantitative thresholds for materiality. These,
together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our
audit procedures on the individual nancial statement line items and disclosures and in evaluating the eect of misstatements, both
individually and in aggregate on the nancial statements as a whole.
Based on our professional judgement, we determined materiality for the nancial statements as a whole as follows:
Financial statements - group Financial statements - company
Overall materiality
£3.89 million (2022: £3.85 million). £1.52 million (2022: £1.90 million).
How we determined it
5% of prot before income tax 1% of net assets
Rationale for benchmark
applied
We believe that prot before tax provides us with
a consistent year-on-year basis for determining
materiality and is a generally accepted auditing
benchmark.
We believe that net assets is the primary measure
used by shareholders in assessing the position of the
non-trading holding company, and is an accepted
auditing benchmark.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The
range of materiality allocated across components was £0.7 million to £3.24 million. Certain components were audited to a local
statutory audit materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specically, we use performance materiality in determining the scope
of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in
determining sample sizes. Our performance materiality was 75% (2022: 75%) of overall materiality, amounting to £2.91 million (2022:
£2.89 million) for the group nancial statements and £1.14 million (2022: £1.42 million) for the company nancial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and
aggregation risk and the eectiveness of controls - and concluded that an amount in the middle of our normal range was appropriate.
We agreed with the Audit and Risk Committee that we would report to them misstatements identied during our audit above £0.38
million (group audit) (2022: £0.38 million) and £0.15 million (company audit) (2022: £0.19 million) as well as misstatements below
those amounts that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to adopt the going concern basis of
accounting included:
• Reviewing management’s going concern assessment (which includes a Base Case, a Downside Scenario and a Severe but
Plausible Scenario) for reasonableness and consistency with our audit work;
• Obtaining an understanding and challenging the forecasted cash ows for the twelve month period from the date of authorisation
of these nancial statements and agreeing these to supporting documentation;
• Testing of management’s cashow forecast model which includes challenging the key assumptions within the model as well as
the mathematical accuracy and its integrity;
• Assessing historic growth and management forecasting accuracy;
• Reviewing available banking facilities, including consideration of covenant requirements; and
• Reviewing management’s going concern disclosures.
Based on the work we have performed, we have not identied any material uncertainties relating to events or conditions that,
individually or collectively, may cast signicant doubt on the group’s and the company’s ability to continue as a going concern for a
period of at least twelve months from when the nancial statements are authorised for issue.
In auditing the nancial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the nancial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group’s and the
company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the directors’ statement in the nancial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of
this report.
Independent auditors’ report
to the members of SThree plc continued
Key audit matter How our audit addressed the key audit matter
Impairment of investments in subsidiaries (parent)
The Company holds investments in a number of UK and overseas
subsidiaries with a total carrying amount of £223.63 million at 30
November 2023 (2022: £215.22 million).
An assessment for impairment indicators is performed by
management annually. Impairment triggers were identied due
to under performance of trading in Luxembourg and Canada, and
an impairment charge of £0.1 million recognised to fully impair
the investment balances in respect of these operations. No other
impairment indicators were identied.
We focused on this area due to the material quantum of investments
held by the Company, and the level of judgement required in
determining whether impairment indicators exist which would then
require an impairment test to be performed.
Refer to ‘Investments’ (note 11 of the nancial statements) and ‘Chief
Financial Ocer’s statement’.
We obtained management’s assessment of impairment trigger
indicators for all subsidiaries in the Group, including a summary of
year on year performance and business outlook
We considered the view of management and the performance of the
group as a whole by reference to prior year and budgets (including
individual subsidiaries) and concluded that management’s trigger
assessment was reasonable with no indication of impairment triggers
other than in Canada and Luxembourg.
We reviewed the market capitalisation of the group against the
carrying value of investments.
We consider the disclosure in the nancial statements to be
appropriate.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the nancial
statements as a whole, taking into account the structure of the group and the company, the accounting processes and controls, and
the industry in which they operate.
The Group’s components vary signicantly in size and we identied four nancially signicant components that, in our view, required
an audit of their complete nancial information due to their relative size or risk characteristics. In addition, we performed an audit
over the full nancial information of the company and testing over specic material balances across a further ve components.
Together these full and specic scope component audits gave appropriate coverage of all material balances at a group level. We
also audited consolidation adjustments to get sucient coverage over nal balances. The remaining components were subject to
analytical review.
Although the Group has an international presence, all audit procedures have been performed by the group engagement team in the
UK as this reects the centralised shared service structure of the nance function across the group.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the process management adopted to assess the extent of
potential climate risk on the Group’s nancial statements and support the disclosures made within the Annual Report.
We challenged the completeness of management’s climate risk assessment by:
• Reading external reporting made by management including the Carbon Disclosure Project submissions; and
• Reading the Group’s website and external communications for details of climate related impacts.
We also considered the consistency of the disclosures in relation to climate change (including the disclosures in the Task Force on
Climate-related Financial Disclosures (TCFD) section) within the Annual Report with the nancial statements and our knowledge
obtained from the audit.
Our procedures did not identify any material impact in the context of our audit of the nancial statements as a whole, or our key audit
matters for the year ended 30 November 2023.
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Financial Statements
SThree plc Annual Report and Accounts 2023
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
corporate governance statement is materially consistent with the nancial statements and our knowledge obtained during the audit:
• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess the group’s and company’s position, performance, business model
and strategy;
• The section of the Annual Report that describes the review of eectiveness of risk management and internal control systems; and
• The section of the Annual Report describing the work of the Audit and Risk Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the company’s
compliance with the Code does not properly disclose a departure from a relevant provision of the Code specied under the Listing
Rules for review by the auditors.
Responsibilities for the nancial statements and the audit
Responsibilities of the directors for the nancial statements
As explained more fully in the Statement of Directors’ responsibilities in respect of nancial statements, the directors are responsible
for the preparation of the nancial statements in accordance with the applicable framework and for being satised that they
give a true and fair view. The directors are also responsible for such internal control as they determine is necessary to enable the
preparation of nancial statements that are free from material misstatement, whether due to fraud or error.
In preparing the nancial statements, the directors are responsible for assessing the group’s and the company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the group or the company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the nancial statements
Our objectives are to obtain reasonable assurance about whether the nancial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to inuence the economic decisions of users taken on the basis of these
nancialstatements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identied that the principal risks of non-compliance with laws
and regulations related to the Companies Act 2006, Listing Rules, UK and overseas tax legislation and UK adopted IFRS, and
we considered the extent to which non-compliance might have a material eect on the nancial statements. We evaluated
management’s incentives and opportunities for fraudulent manipulation of the nancial statements (including the risk of override of
controls), and determined that the principal risks were related to posting inappropriate journal entries to achieve desired nancial
results. Audit procedures performed by the engagement team included:
• enquiries with management, internal audit, the Audit and Risk committee and the Group’s internal legal counsel, including
consideration of known or suspected instances of fraud and non-compliance with laws and regulations;
• understanding and evaluating the design and implementation of management’s controls designed to prevent and detect
irregularities;
• identifying and testing journal entries, in particular journal entries posted with an unusual account combination impacting
revenue; and
• challenging assumptions and judgements made by management in their signicant accounting estimates, in particular in relation
to Contract assets, accounts receivable provisioning and the assessment of impairment triggers for investments insubsidiaries.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to events and transactions reected in the nancial statements.
Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations.
We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit
sampling to enable us to draw a conclusion about the population from which the sample is selected.
Independent auditors’ report
to the members of SThree plc continued
Reporting on other information
The other information comprises all of the information in the Annual Report other than the nancial statements and our auditors’
report thereon. The directors are responsible for the other information. Our opinion on the nancial statements does not cover the
other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this
report, any form of assurance thereon.
In connection with our audit of the nancial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the nancial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are
required to perform procedures to conclude whether there is a material misstatement of the nancial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ Report, we also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and
matters as described below.
Strategic report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors’
Report for the year ended 30November2023 is consistent with the nancial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the group and company and their environment obtained in the course of the audit, we
did not identify any material misstatements in the Strategic report and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the
corporate governance statement relating to the company’s compliance with the provisions of the UK Corporate Governance Code
specied for our review. Our additional responsibilities with respect to the corporate governance statement as other information are
described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement, included within the Governance Report is materially consistent with the nancial statements and our
knowledge obtained during the audit, and we have nothing material to add or draw attention to in relation to:
• The directors’ conrmation that they have carried out a robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks
and an explanation of how these are being managed or mitigated;
• The directors’ statement in the nancial statements about whether they considered it appropriate to adopt the going concern
basis of accounting in preparing them, and their identication of any material uncertainties to the group’s and company’s ability to
continue to do so over a period of at least twelve months from the date of approval of the nancial statements;
• The directors’ explanation as to their assessment of the group’s and company’s prospects, the period this assessment covers and
why the period is appropriate; and
• The directors’ statement as to whether they have a reasonable expectation that the company will be able to continue in operation
and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any
necessary qualications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the group and company was substantially less in scope
than an audit and only consisted of making inquiries and considering the directors’ process supporting their statement; checking
that the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the
statement is consistent with the nancial statements and our knowledge and understanding of the group and company and their
environment obtained in the course of the audit.
144 145
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Financial Statements
SThree plc Annual Report and Accounts 2023
Independent auditors’ report
to the members of SThree plc continued
A further description of our responsibilities for the audit of the nancial statements is located on the FRC’s website at: www.frc.org.
uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from
branches not visited by us; or
• certain disclosures of directors’ remuneration specied by law are not made; or
• the company nancial statements and the part of the Directors’ remuneration report to be audited are not in agreement with the
accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit and Risk Committee, we were appointed by the members in 1999 to audit the nancial
statements for the year ended 30November1999 and subsequent nancial periods. The period of total uninterrupted engagement is
25 years, covering the years ended 30November1999 to 30November2023.
Other matter
In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these nancial
statements will form part of the ESEF-prepared annual nancial report led on the National Storage Mechanism of the Financial
Conduct Authority in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report provides no
assurance over whether the annual nancial report will be prepared using the single electronic format specied in the ESEF RTS.
Kenneth Wilson (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Glasgow
29January2024
£’000 Note 2023 | 2022 | ||
| Continuing operations | |||
Revenue | 2 | ||
Cost of sales | ( | ( | |
Net fees | 2 | ||
Administrative expenses | 3 | ( | ( |
Impairment losses on nancial assets | 12 | ( | ( |
Operating prot | |||
Finance income | 5 | ||
Finance costs | 5 | ( | ( |
Prot before income tax | |||
Income tax expense | 6 | ( | ( |
Prot for the year attributable to the owners of the Company | |||
| Earnings per share attributable to shareholders | |||
| pence | |||
| Total Group | |||
Basic | 7 | ||
Diluted | 7 |
The accompanying notes form an integral part of this Consolidated Income Statement.
Consolidated Income Statement
for the year ended 30 November 2023
146 147
Strategic Report
Governance
Financial Statements
SThree plc Annual Report and Accounts 2023
Statements of Financial Position
as at 30 November 2023
Consolidated | Company | ||||
| 30 November | 30 November | 30 November | 30 November | ||
£’000 | Note | 2023 | 2022 | 2023 | 2022 |
| ASSETS | |||||
| Non-current assets | |||||
Property, plant and equipment | 9 | – | – | ||
Intangible assets | 10 | – | – | ||
Investments | 11 | 223,625 | 215,218 | ||
Deferred tax assets | 18 | 136 | 225 | ||
Total non-current assets | 223,761 | 215,443 | |||
| Current assets | |||||
Trade and other receivables | 12 | 819 | 15,446 | ||
Current tax assets | 15,542 | 12,394 | |||
Cash and cash equivalents | 13 | 12 | 121 | ||
Total current assets | 16,373 | 27,961 | |||
Total assets | 240,134 | 243,404 | |||
| EQUITY AND LIABILITIES | |||||
| Equity attributable to owners of the Company | |||||
Share capital | 19 | 1,349 | 1,345 | ||
Share premium | 39,700 | 38,239 | |||
Other reserves | ( | ( | (6,889) | (5,531) | |
Retained earnings | 118,401 | 155,553 | |||
Total equity | 152,561 | 189,606 | |||
| Current liabilities | |||||
Bank overdraft | 13 | – | – | ||
Trade and other payables | 14 | 87,573 | 53,772 | ||
Lease liabilities | 15 | – | – | ||
Provisions | 17 | – | 26 | ||
Current tax liabilities | – | – | |||
Total current liabilities | 87,573 | 53,798 | |||
| Non-current liabilities | |||||
Lease liabilities | 15 | – | – | ||
Provisions | 17 | – | – | ||
Total non-current liabilities | – | – | |||
Total liabilities | 87,573 | 53,798 | |||
Total equity and liabilities | 240,134 | 243,404 |
The accompanying notes form an integral part of these Statements of Financial Position.
The Company’s loss after tax for the year was £9.3 million (FY22: prot after tax of £91.3 million).
£’000 Note 2023 | 2022 | ||
Prot for the year | |||
| Other comprehensive (loss)/income: | |||
| Items that may be subsequently reclassied to prot or loss: | |||
Exchange dierences on retranslation of foreign continuing operations | ( | ||
| Items that will not be subsequently reclassied to prot or loss: | |||
Net loss on equity instruments at FVOCI | 11 | ( | |
Other comprehensive (loss)/income for the year (net of tax) | ( | ||
Total comprehensive income for the year attributable to owners of the Company |
The accompanying notes form an integral part of this Consolidated Statement of Comprehensive Income.
SThree plc (the Company) has elected to take the exemption under Section 408 of the Companies Act 2006 not to present an
income statement and statement of comprehensive income for the parent Company.
Consolidated Statement of Comprehensive Income
for the year ended 30 November 2023
148 149
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Financial Statements
SThree plc Annual Report and Accounts 2023
Company Statement of Changes in Equity
for the year ended 30 November 2023
£’000 Note
Share
capital
Share
premium
Capital
redemption
reserve
Capital
reserve
Treasury
reserve
Retained
earnings
Total equity
attributable to
owners of the
Company
Balance at 1 December 2021 1,337 35,466 172 878 (3,367) 77,119 111,605
Total comprehensive income for the year – – – – – 91,257 91,257
Dividends paid to equity holders 8 – – – – – (14,650) (14,650)
Settlement of vested tracker shares 19(a) 6 2,265 – – 3,835 (224) 5,882
Settlement of share-based payments 19(a) 2 508 – – 2,851 (2,851) 510
Purchase of shares by Employee Benet Trust 19(a) – – – – (9,900) – (9,900)
Credit to equity for equity-settled share-
based payments – – – – – 4,999 4,999
Current and deferred tax on share-based
payment transactions 18 – – – – – (97) (97)
Total movements in equity 8 2,773 – – (3,214) 78,434 78,001
Balance at 30 November 2022 and at
1December 2022 1,345 38,239 172 878 (6,581) 155,553 189,606
Total comprehensive loss for the year – – – – – (9,264) (9,264)
Dividends paid to equity holders 8 – – – – – (27,373) (27,373)
Settlement of vested tracker shares 19(a) 3 1,198 – – 3,987 (511) 4,677
Settlement of share-based payments 19(a) 1 263 – – 4,655 (4,870) 49
Purchase of shares by Employee Benet Trust 19(a) – – – – (10,000) – (10,000)
Credit to equity for equity-settled share-
based payments – – – – – 4,871 4,871
Current and deferred tax on share-based
payment transactions 18 – – – – – (5) (5)
Total movements in equity 4 1,461 – – (1,358) (37,152) (37,045)
Balance at 30 November 2023 1,349 39,700 172 878 (7,939) 118,401 152,561
The accompanying notes form an integral part of this Company Statement of Changes in Equity.
Consolidated Statement of Changes in Equity
for the year ended 30 November 2023
| Total equity | ||||||||||
| Fair value | attributable | |||||||||
| Capital | Currency | reserve of | to owners | |||||||
| Share | Share | redemption | Capital | Treasury | translation | equity | Retained | of the | ||
£’000 | Note | capital | premium | reserve | reserve | reserve | reserve | investments | earnings | Company |
Balance at 1 December 2021 | ( | ( | ( | |||||||
Prot for the year | ||||||||||
Other comprehensive income for the year | ( | |||||||||
Total comprehensive income/(loss) for the year | ( | |||||||||
Dividends paid to equity holders | 8 | ( | ( | |||||||
Distributions to tracker shareholders | ( | ( | ||||||||
| Settlement of vested and unvested tracker | ||||||||||
shares | 19(a) | ( | ||||||||
Settlement of share-based payments | 19(a) | ( | ||||||||
Purchase of shares by Employee BenetTrust | 19(a) | ( | ( | |||||||
Credit to equity for equity-settled share- based payments | 19(b) | |||||||||
| Current and deferred tax on share-based | ||||||||||
payment transactions | 6,18 | ( | ( | |||||||
Total movements in equity | ( | ( | ||||||||
Balance at 30 November 2022 and at 1December 2022 | ( | ( | ||||||||
Prot for the year | ||||||||||
Other comprehensive loss for the year | ( | ( | ||||||||
Total comprehensive (loss)/income for theyear | ( | |||||||||
Dividends paid to equity holders | 8 | ( | ( | |||||||
Distributions to tracker shareholders | ( | ( | ||||||||
| Settlement of vested and unvested tracker | ||||||||||
shares | 19(a) | ( | ||||||||
Settlement of share-based payments | 19(a) | ( | ||||||||
Purchase of shares by Employee Benet Trust | 19(a) | ( | ( | |||||||
Credit to equity for equity-settled share- based payments | 19(b) | |||||||||
| Current and deferred tax on share-based | ||||||||||
payment transactions | 6,18 | |||||||||
Total movements in equity | ( | ( | ||||||||
Balance at 30 November 2023 | ( | ( |
The accompanying notes form an integral part of this Consolidated Statement of Changes in Equity.
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Notes to the nancial statements
for the year ended 30 November 2023
1 Basis of preparation and consolidation
Basis of preparation
The Group’s key accounting policies are set out across the following notes to the accounts and were applied consistently throughout
the year and preceding year. The notes to the nancial statements hav financial statements have been prepared on a continuing basis unless otherwise stated.
The Consolidated Financial Statements have been prepared under the historical cost basis of accounting, as modied b accounting, as modified by nancial financial
assets held at fair value through prot or loss or fit or loss or held at fair value through other comprehensive income.
The Company-only Financial Statements have been prepared under the historical cost convention, in accordance with Financial
Reporting Standard 101 (FRS 101) Reduced Disclosure Framework as issued by the Financial Reporting Council. As permitted by
Section 408 of the Companies Act 2006, the Company’s income statement and statement of comprehensive income have not been
presented. The Company, as permitted by FRS 101, has taken advantage of the disclosure exemptions available under that standard
in relation to share-based payments, nancial instruments, certain disclosures r ts, financial instruments, certain disclosures regarding the Company’s capital, capital management,
presentation of comparative information in respect of certain assets, presentation of a cash o a cash flow statement, certain related party
the Consolidated Financial Statements of SThree plc.
The signicant accounting policies and signicant judgments and k he significant accounting policies and significant judgments and key estimates, including those applied in the individual going
concern assessment relevant to the Company, are the same as those set out in this note 1 to the SThree Group consolidated nancial ted financial
statements.
Consolidated Statement of Cash Flows
for the year ended 30 November 2023
£’000 Note
| 30 November | 30 November | ||
| 2023 | 2022 | ||
| Cash ows from operating activities | |||
Prot before tax | |||
| Adjustments for: | |||
Depreciation and amortisation charge | 9,10,15 | ||
Loss on disposal of property, plant and equipment other than right-of-use assets | 9 | ||
Gain on lease modication | 9 | ( | |
Impairment of intangible assets | 10 | ||
Loss on disposal of intangible assets | 10 | ||
Finance income | 5 | ( | ( |
Finance costs | 5 | ||
Non-cash charge for equity-settled share-based payments | 19(b) | ||
Operating cash ows before changes in working capital and provisions | |||
Decrease/(increase) in receivables | ( | ||
(Decrease)/increase in payables | ( | ||
(Decrease)/increase in provisions | ( | ||
Cash generated from operations | |||
Interest received | 5 | ||
Income tax paid | ( | ( | |
Net cash generated from operating activities | |||
| Cash ows from investing activities | |||
Purchase of property, plant and equipment | 9 | ( | ( |
Purchase of intangible assets | 10 | ( | ( |
Net cash used in investing activities | ( | ( | |
| Cash ows from nancing activities | |||
Interest paid | 15,16 | ( | ( |
Lease principal payments | 15,16 | ( | ( |
Proceeds from exercise of share options | |||
Purchase of shares by Employee Benet Trust | 19(a) | ( | ( |
Dividends paid to equity holders | 8 | ( | ( |
Distributions to tracker shareholders | ( | ( | |
Net cash used in nancing activities | ( | ( | |
Net increase in cash and cash equivalents | |||
Cash and cash equivalents at beginning of the year | |||
Exchange gains relating to cash and cash equivalents | |||
Net cash and cash equivalents at end of the year | 13 |
The accompanying notes form an integral part of this Consolidated Statement of Cash Flows.
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Notes to the nancial statements continued
for the year ended 30 November 2023
1 Basis of preparation and consolidation continued
154 155
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Revenue | Net fees | |||
| 2022 | 2022 | |||
£’000 | 2023 | (restated) | 2023 | (restated) |
DACH | 524,732 | 539,014 | 148,925 | 148,922 |
Rest of Europe | 399,862 | 394,351 | 70,439 | 73,093 |
Netherlands including Spain | 367,643 | 323,963 | 82,149 | 75,661 |
USA | 328,293 | 338,221 | 96,410 | 111,545 |
Middle East & Asia | 42,637 | 43,897 | 20,852 | 21,395 |
1,663,167 | 1,639,446 | 418,775 | 430,616 |
Notes to the nancial statements continued
for the year ended 30 November 2023
1 Basis of preparation and consolidation continued
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Revenue | Net fees | |||
2023 | 2022 | 2023 | 2022 | |
| Brands | ||||
Progressive | 565,938 | 475,142 | 143,666 | 124,877 |
Computer Futures | 538,710 | 564,844 | 137,591 | 143,932 |
Real S | 316,062 | 365,708 | 83,740 | 104,901 |
Huxley Associates | 242,457 | 233,752 | 53,778 | 56,906 |
1,663,167 | 1,639,446 | 418,775 | 430,616 |
Revenue | Net fees | |||
2023 | 2022 | 2023 | 2022 | |
| Service mix | ||||
Contract | 1,584,215 | 1,540,323 | 343,502 | 334,215 |
Permanent | 78,952 | 99,123 | 75,273 | 96,401 |
1,663,167 | 1,639,446 | 418,775 | 430,616 |
Revenue | Net fees | |||
2023 | 2022 | 2023 | 2022 | |
| Skills mix | ||||
Technology | 842,634 | 838,649 | 202,510 | 203,184 |
Engineering Life | 415,357 | 341,850 | 108,820 | 92,083 |
Sciences | 270,235 | 319,734 | 75,516 | 95,172 |
Other | 134,941 | 139,213 | 31,929 | 40,177 |
1,663,167 | 1,639,446 | 418,775 | 430,616 |
Notes to the nancial statements continued
for the year ended 30 November 2023
£’000 2023 | 2022 | |
255,007 | 266,010 | |
Depreciation (note 9) | 15,898 | 18,682 |
Amortisation (note 10) | 16 | 220 |
Loss on disposal of property, plant and equipment (note 9) | 160 | 122 |
– | (266) | |
Impairment of intangible assets (note 10) | – | 499 |
Loss on disposal of intangible assets (note 10) | – | 1,176 |
Service lease charges – Buildings | 2,176 | 2,426 |
Service lease charges – Cars | 1,890 | 1,391 |
Foreign exchange losses | 1,882 | 1,164 |
2 Operating segments continued
| Netherlands | Middle | |||||
| 2023 | including | East & | ||||
£’000 | DACH | Rest of Europe | Spain | USA | Asia | Total |
| Timing of revenue recognition | ||||||
Over time | 483,491 | 396,354 | 358,122 | 316,866 | 29,382 | 1,584,215 |
At a point in time | 41,241 | 3,508 | 9,521 | 11,427 | 13,255 | 78,952 |
524,732 | 399,862 | 367,643 | 328,293 | 42,637 | 1,663,167 |
| Netherlands | Middle | |||||
| 2022 (restated) | including | East & | ||||
£’000 | DACH | Rest of Europe | Spain | USA | Asia | Total |
| Timing of revenue recognition | ||||||
Over time | 495,268 | 385,772 | 315,371 | 315,134 | 28,778 | 1,540,323 |
At a point in time | 43,746 | 8,579 | 8,592 | 23,087 | 15,119 | 99,123 |
539,014 | 394,351 | 323,963 | 338,221 | 43,897 | 1,639,446 |
Revenue | Net fees | |||
2023 | 2022 | 2023 | 2022 | |
Germany | 453,537 | 468,352 | 130,875 | 131,880 |
Netherlands | 350,295 | 314,156 | 77,073 | 72,931 |
USA | 328,293 | 338,221 | 96,410 | 111,545 |
UK | 263,461 | 262,999 | 44,953 | 46,689 |
Japan | 10,813 | 10,793 | 9,317 | 9,410 |
| RoW | 256,768 | 244,925 | 60,147 | 58,161 |
1,663,167 | 1,639,446 | 418,775 | 430,616 |
| 30 November | 30 November | |
| 2023 | 2022 | |
| Non-current assets | ||
Germany | 11,891 | 16,313 |
UK | 11,458 | 5,374 |
Netherlands | 5,678 | 2,149 |
Japan | 2,730 | 4,144 |
USA | 2,687 | 3,962 |
| RoW | 3,738 | 4,153 |
38,182 | 36,095 |
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Group | Company | |||
£’000 | 2023 | 2022 | 2023 | 2022 |
Wages and salaries (including bonuses) | 216,354 | 229,460 | 1,637 | 2,457 |
Social security costs | 28,917 | 26,822 | 172 | 153 |
Other pension costs | 3,090 | 3,161 | 37 | 13 |
Temporary | 1,761 | 1,513 | – | – |
Share-based payments (see note 19(b)) | 4,885 | 5,054 | 226 | 525 |
255,007 | 266,010 | 2,072 | 3,148 |
| Netherlands | |||||||
| Rest | including | Middle East | Group | Company | |||
of Europe | DACH | USA | Spain | & Asia | total | total | |
Sales | 431 | 818 | 367 | 356 | 166 | 2,138 | – |
Non-sales | 635 | 173 | 131 | 94 | 29 | 1,062 | 8 |
1,066 | 991 | 498 | 450 | 195 | 3,200 | 8 |
| Netherlands | |||||||
| Rest | including | Middle East | Group | Company | |||
of Europe | DACH | USA | Spain | & Asia | total | total | |
Sales | 487 | 827 | 444 | 334 | 190 | 2,282 | – |
Non-sales | 620 | 138 | 130 | 81 | 32 | 1,001 | 7 |
1,107 | 965 | 574 | 415 | 222 | 3,283 | 7 |
Notes to the nancial statements continued
for the year ended 30 November 2023
3 Administrative expenses continued
£’000 2023 | 2022 | |
| Fees payable to the Company’s auditors for the audit of the Company’ | ||
– recurring and non-recurring audit fees | 699 | 523 |
| Fees payable to the Company’s auditors and their associates for other services to the Group: | ||
– audit of the Company’s subsidiaries pursuant to legislation | 429 | 402 |
– audit-related assurance services | 13 | 12 |
– all other non-audit services including Viewpoint subscription | 1 | 1 |
Fees charged to operating pr | 1,142 | 938 |
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(a) Analysis of tax charge for the year
£’000 2023 | 2022 | |
| Current income tax | ||
Corporation tax charged on pr | 23,679 | 23,409 |
Adjustments in respect of prior periods | (447) | (133) |
Total current tax charge | 23,232 | 23,276 |
| Deferred income tax | ||
Origination and reversal of temporary | (1,117) | (395) |
Adjustments in respect of prior periods (note 18) | (251) | (57) |
Total deferred tax credit | (1,368) | (452) |
Total income tax charge in the Consolidated Income Statement | 21,864 | 22,824 |
(b) Reconciliation of the eec he effective tax rate
The Group’s tax charge for the year exceeds (FY22: exceeds) the UK statutory rate and can be reconciled as follows:
£’000 2023 | 2022 | |
77,915 | 7 7,026 | |
17,920 | 14,635 | |
Disallowable items | 1,720 | 1,905 |
2,524 | 5,590 | |
Adjustments in respect of prior periods | (697) | (190) |
Adjustments due to tax rate changes | (1) | (294) |
Tax losses for which deferred tax asset was not recognised or derecognised | 398 | 1,178 |
Total tax charge for the year | 21,864 | 22,824 |
28.1% | 29.6% |
(c) Current and deferred tax movement recognised directly in equity
£’000 2023 | 2022 | |
| Equity-settled share-based payments: | ||
Current tax credit | 69 | 196 |
Deferred tax charge | (37) | (574) |
32 | (378) |
The Group expects to receive additional tax deductions in respect of share options currently unexercised. Under IFRS, the Group is
required to provide for deferred tax on all unexercised share options. Where the amount of the tax deduction (or estimated future tax
deduction) exceeds the amount of the related cumulative remuneration expense, this indicates that the tax deduction relates not only
to remuneration expense but also to an equity item. In this situation, the excess of the current or deferred tax should be recognised
in equity. At 30 November 2023, a deferred tax asset of £1.4 million (FY22: £1.1 million) was recognised in respect of these options
(note18). te 18).
On 20 June 2023, Finance (No.2) Act 2023 was substantively enacted in the UK; the Act introduced a multinational top-up tax
and domestic top-up tax as part of the UK’s adoption of the OECD’s Pillar Two Global Anti-Base Erosion rules. This will apply for
accounting periods beginning on or after 31 December 2023. The Group has applied the exception under the Amendments to IAS 12
Income Taxes to not disclose information about deferred tax assets and liabilities related to the OECD Pillar Two Income Taxes.
Notes to the nancial statements continued
for the year ended 30 November 2023
£’000 2023 | 2022 | |
| Finance income | ||
Bank interest receivable | 2,237 | 139 |
Other interest | 20 | 2 |
2,257 | 141 | |
| Finance costs | ||
Interest on lease liability | (605) | (530) |
Bank loans and overdrafts | (93) | (137) |
(698) | (667) | |
1,559 | (526) |
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£’000 2023 | 2022 | |
| Amounts recognised as distributions to equity holders in the year | ||
| Interim dividend of 5.0 pence for FY22 (FY21: 3.0 pence) per share | 6,605 | 3,965 |
| Final dividend of | 14,385 | 10,685 |
| Interim dividend of 5.0 pence for FY23 per share | 6,383 | – |
27,373 | 14,650 |
2
3
4
£’000 2023 | 2022 | |
| Amounts arising in respect of | ||
| Interim dividend of 5.0 pence for FY23 (FY22: 5.0 pence) per share | 6,383 | 6,632 |
| Proposed | 15,327 | 14,547 |
21,710 | 21,179 |
4
5
2. The FY22 interim dividend of 5.0 pence (FY21: 3.0 pence) per share was paid on 2 December 2022 to those shareholders on the register of SThree plc on 4 November 2022.
3. The FY22 Y22 final dividend of 11.0 pence (FY21: 8.0 pence) per share was paid on 9 June 2023 to shareholders on record on 12 May 2023.
4. The FY23 interim dividend of 5.0 pence (FY22: 5.0 pence) per share was paid on 8 December 2023 to shareholders on record at 10 November 2023. The £6.4 million in funds,
required for settlement of the interim dividend, were r e first transferred to the share administrator before 30 November 2023.
5. The Board has proposed the FY23 n Y23 final dividend of 11.6 pence (FY22: 11.0 pence) per share, to be paid on 7 June 2024 to shareholders on record at 10 May 2024. This proposed n d final
dividend is subject to approval by shareholders at the Company’s next Annual General Meeting on 25 April 2024, and therefore has not been included as a liability in these n se financial
statements.
Notes to the nancial statements continued
for the year ended 30 November 2023
£’000 2023 | 2022 | |
| Earnings | ||
56,051 | 54,202 |
million 2023 | 2022 | |
| Number of shares | ||
Weighted average number of shares used for basic EPS | 132.1 | 132.2 |
2.9 | 3.7 | |
Diluted weighted average number of shares used for diluted EPS | 135.0 | 135.9 |
pence 2023 | 2022 | |
Basic EPS | 42.4 | 41.0 |
Diluted EPS | 41.5 | 39.9 |
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SThree plc Annual Report and Accounts 2023
Notes to the nancial statements continued
for the year ended 30 November 2023
9 Property, plant and equipment continued
The movements of property, plant and equipment by class of assets are as follows:
£’000
| Right-of-use | Computer | Leasehold | Fixtures and | ||
| assets | equipment | improvements | Total | ||
| Cost | |||||
At 1 December 2021 | 51,184 | 16,626 | 10,154 | 4,940 | 82,904 |
Additions | 14,432 | 1,311 | 1,196 | 900 | 17,839 |
Disposals | (12,278) | (709) | (1,768) | (718) | (15,473) |
Forex revaluation | 729 | 312 | 340 | 107 | 1,488 |
At 30 November 2022 | 54,067 | 17,540 | 9,922 | 5,229 | 86,758 |
Additions | 12,199 | 1,114 | 353 | 508 | 14,174 |
Disposals | (10,305) | (3,358) | (805) | (382) | (14,850) |
Forex revaluation | (973) | (184) | (235) | (67) | (1,459) |
At 30 November 2023 | 54,988 | 15,112 | 9,235 | 5,288 | 84,623 |
| Accumulated depreciation | |||||
At 1 December 2021 | 18,837 | 13,300 | 8,531 | 4,163 | 44,831 |
Depreciation charge for the year | 15,075 | 2,288 | 936 | 383 | 18,682 |
Disposals | (10,250) | (648) | (1,733) | (692) | (13,323) |
Forex revaluation | 611 | 255 | 325 | 128 | 1,319 |
At 30 November 2022 | 24,273 | 15,195 | 8,059 | 3,982 | 51,509 |
Depreciation charge for the year | 13,174 | 1,596 | 759 | 369 | 15,898 |
Disposals | (8,747) | (3,242) | (768) | (375) | (13,132) |
Forex revaluation | (418) | (156) | (147) | (47) | (768) |
At 30 November 2023 | 28,282 | 13,393 | 7,903 | 3,929 | 53,507 |
| Net book value | |||||
At 30 November 2023 | 26,706 | 1,719 | 1,332 | 1,359 | 31,116 |
At 30 November 2022 | 29,794 | 2,345 | 1,863 | 1,247 | 35,249 |
A depreciation charge of £15.9 million (FY22: £18.7 million) was recognised in administrative expenses.
During the year, certain assets such as server hardware, which became obsolete due to data centre exit, and other oce equipment ffice equipment
were found to be no longer operational. These assets with a total net book value of £0.2 million (FY22: £0.1 million) were disposed of,
incurring a loss on disposal of less than £0.2 million (FY22: a loss on disposal of £0.1 million).
For the carrying amount of right-of-use assets per class of underlying asset refer to note 15. During the year, the Group early-
terminated certain lease contracts (including the write-o the write-off of the corresponding lease liabilities) resulting in no gain or loss on lease
The Company has no property, plant and equipment.
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Notes to the nancial statements continued
for the year ended 30 November 2023
10 Intangible assets continued
| Internally generated | ||||||
| Software and | ||||||
| system | ||||||
| Computer | Assets under | development | ||||
£’000 | Goodwill | software | construction | costs | Trademarks | Total |
| Cost | ||||||
At 1 December 2021 | 206,317 | 9,077 | 695 | 39,343 | 71 | 255,503 |
Additions | – | 8 | 257 | – | – | 265 |
Disposals | – | (2) | (765) | (433) | – | (1,200) |
– | – | (202) | 202 | – | – | |
Forex revaluation | – | 1 | 15 | – | – | 16 |
At 30 November 2022 | 206,317 | 9,084 | – | 39,112 | 71 | 254,584 |
Additions | – | 64 | 6,173 | – | – | 6,237 |
Disposals | – | (3,760) | – | – | – | (3,760) |
Forex revaluation | – | (1) | – | – | – | (1) |
At 30 November 2023 | 206,317 | 5,387 | 6,173 | 39,112 | 71 | 257,060 |
| Accumulated amortisation and impairment | ||||||
At 1 December 2021 | 205,479 | 9,074 | – | 38,420 | 71 | 253,044 |
Amortisation charge for the year | – | 4 | – | 216 | – | 220 |
Accelerated amortisation and impairment charge | – | – | – | 499 | – | 499 |
Disposals | – | (2) | – | (22) | – | (24) |
– | – | – | (1) | – | (1) | |
At 30 November 2022 | 205,479 | 9,076 | – | 39,112 | 71 | 253,738 |
Amortisation charge for the year | – | 16 | – | – | – | 16 |
Disposals | – | (3,760) | – | – | – | (3,760) |
At 30 November 2023 | 205,479 | 5,332 | – | 39,112 | 71 | 249,994 |
| Net book value | ||||||
At 30 November 2023 | 838 | 55 | 6,173 | – | – | 7,066 |
At 30 November 2022 | 838 | 8 | – | – | – | 846 |
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| Cost £’000 | |
At 1 December 2021 | 362,117 |
| Additions | |
– Settlement of vested tracker shares | 3,862 |
– Settlement of unvested tracker shares | 2,122 |
– Capital contribution relating to share-based payments | 4,127 |
At 30 November 2022 | 372,228 |
| Additions | |
– Settlement of vested tracker shares | 4,075 |
– Settlement of unvested tracker shares | 461 |
– Capital contribution relating to share-based payments | 3,919 |
At 30 November 2023 | 380,683 |
| Provision for impairment | |
At 1 December 2021 | 156,070 |
Provision made during the year | 940 |
At 30 November 2022 | 157,010 |
Provision made during the year | 48 |
At 30 November 2023 | 157,058 |
| Net carrying value | |
At 30 November 2023 | 223,625 |
At 30 November 2022 | 215,218 |
Notes to the nancial statements continued
for the year ended 30 November 2023
11 Investments continued
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SThree plc Annual Report and Accounts 2023
| 30 November | 30 November | |
| 2023 | 2022 | |
| Provision for impairment of trade receivables | ||
At the beginning of the year | 3,704 | 4,308 |
Charge for the year | 8,306 | 3,697 |
Bad debts | (1,617) | (4,323) |
Reversed as amounts recovered | (1,728) | (67) |
(26) | 89 | |
At the end of the year | 8,639 | 3,704 |
Group | Company | |||
| 30 November | 30 November | 30 November | 30 November | |
| 2023 | 2022 | 2023 | 2022 | |
Cash at bank | 83,202 | 65,809 | 12 | 12 |
Bank overdraft | – | (423) | – | – |
Net cash and cash equivalents | 83,202 | 65,386 | 12 | 12 |
Notes to the nancial statements continued
for the year ended 30 November 2023
Group | Company | |||
| 30 November | 30 November | 30 November | 30 November | |
| 2023 | 2022 | 2023 | 2022 | |
Trade receivables | 245,525 | 254,413 | – | – |
Contract assets | 94,091 | 91,680 | – | – |
Other receivables | 5,873 | 5,967 | 66 | 8 |
Less allowance for ECLs | (8,639) | (3,704) | – | – |
Trade receivables, contract assets and other receivables – ne | 336,850 | 348,356 | 66 | 8 |
Prepayments | 8,270 | 15,528 | – | 6,488 |
Other taxes and social security | – | – | 753 | 8,950 |
345,120 | 363,884 | 819 | 15,446 |
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SThree plc Annual Report and Accounts 2023
| 30 November | 30 November | |
| 2023 | 2022 | |
Buildings | 24,772 | 27,862 |
Cars | 1,934 | 1,932 |
Total right-of-use assets (refer to note 9) | 26,706 | 29,794 |
Current lease liabilities | 11,297 | 11,102 |
Non-current lease liabilities | 17,720 | 22,600 |
Total lease liabilities (refer to note 23) | 29,017 | 33,702 |
| 30 November | 30 November | |
| 2023 | 2022 | |
Buildings | 11,955 | 13,849 |
Cars | 1,219 | 1,152 |
IT equipment | – | 74 |
Total depreciation charge of right-of-use assets | 13,174 | 15,075 |
Notes to the nancial statements continued
for the year ended 30 November 2023
Group | Company | |||
| 30 November | 30 November | 30 November | 30 November | |
| 2023 | 2022 | 2023 | 2022 | |
Trade payables | 33,821 | 38,093 | – | – |
Accruals | 133,775 | 141,178 | 627 | 1,611 |
Other taxes and social security | 19,617 | 22,323 | 73 | 170 |
Other payables | 12,919 | 15,248 | 1,112 | 1,210 |
Amounts due to subsidiaries (note 22) | – | – | 85,761 | 50,781 |
200,132 | 216,842 | 87,573 | 53,772 |
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SThree plc Annual Report and Accounts 2023
| Restructuring | ||||||
| and | ||||||
| termination | Tracker share | Onerous | ||||
| £’000 Dilapidations | payments | liability | Legal | contracts | Total | |
At 1 December 2021 | 2,655 | 1,508 | 2,559 | 1,540 | – | 8,262 |
Additions | 294 | 2,998 | – | 1,565 | – | 4,857 |
(Released)/charged to the income statement | (36) | (58) | (134) | (238) | 984 | 518 |
Utilised during the year | (127) | (1,407) | (525) | (74) | – | (2,133) |
Forex revaluation | 33 | – | – | 117 | – | 150 |
At 30 November 2022 | 2,819 | 3,041 | 1,900 | 2,910 | 984 | 11,654 |
Additions | 772 | 414 | – | 1,485 | – | 2,671 |
(Released)/charged to the income statement | (56) | (287) | (225) | – | – | (568) |
Utilised during the year | (370) | (2,753) | (483) | (137) | (459) | (4,202) |
Forex revaluation | 24 | – | – | (55) | – | (31) |
At 30 November 2023 | 3,189 | 415 | 1,192 | 4,203 | 525 | 9,524 |
| 30 November | 30 November | |
| 2023 | 2022 | |
| Expected timing of provision utilisation | ||
Current | 7,373 | 7,871 |
Non-current | 2,151 | 3,783 |
9,524 | 11,654 |
Notes to the nancial statements continued
for the year ended 30 November 2023
Balance at 1 December 2021 | 35,068 |
Interest paid to bank | (137) |
Payments of principal and interest element of lease liabilities | (14,251) |
T | (14,388) |
Lease increases | 14,773 |
Lease termination | (2,294) |
| Other movements | 543 |
Balance at 30 November 2022 and 1 December 2022 | 33,702 |
Interest paid to bank | (93) |
Payments of principal and interest element of lease liabilities | (14,855) |
T | (14,948) |
Lease increases | 11,479 |
Lease termination | (1,558) |
| Other movements | 342 |
Balance at 30 November 2023 | 29,017 |
176 177
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| 30 November | 30 November | |
| 2023 | 2022 | |
| Deferred tax assets: | ||
Recovered within one year | 2,553 | 2,016 |
Recovered after one year | 3,259 | 2,638 |
| Deferred tax liabilities | ||
Settled within one year | (3) | (8) |
Settled after one year | (10) | (30) |
Net deferred tax assets | 5,799 | 4,616 |
| 30 November | 30 November | |
| 2023 | 2022 | |
| Operating tax losses not recognised | ||
Europe | 13,854 | 15,532 |
12,637 | 13,977 | |
Rest of World | 764 | 809 |
27,255 | 30,318 |
Notes to the nancial statements continued
for the year ended 30 November 2023
17 Provisions continued
| 30 November | 30 November | |
| 2023 | 2022 | |
Within one year | 1,942 | 4,037 |
1,498 | 1,555 | |
After | 164 | 268 |
3,604 | 5,860 |
| Accelerated | ||||
| tax | Share-based | |||
| depreciation | payments | Provisions | Total | |
At 1 December 2021 | 225 | 1,519 | 2,747 | 4,491 |
Credit/(charge) to income statement for the year | 83 | 80 | (62) | 101 |
Prior year credit to income statement for the year | 13 | – | 44 | 57 |
Adjustment due to tax rate changes | 44 | 84 | 166 | 294 |
Charge directly to equity | – | (574) | – | (574) |
Forex revaluation | (4) | 32 | 219 | 247 |
At 30 November 2022 | 361 | 1,141 | 3,114 | 4,616 |
Credit to income statement for the year | 37 | 83 | 997 | 1,117 |
Prior year credit to income statement for the year | 1 | 218 | 32 | 251 |
Charge directly to equity | – | (37) | – | (37) |
Forex revaluation | (1) | (16) | (131) | (148) |
At 30 November 2023 | 398 | 1,389 | 4,012 | 5,799 |
178 179
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| Capital | ||||
| Number | Share | redemption | Treasury | |
| of ordinary | capital | reserve | reserve | |
| shares | £’000 | £’000 | £’000 | |
| Issued and fully paid | ||||
At 1 December 2021 | 133,630,777 | 1,337 | 172 | (3,367) |
Issue of new shares | 831,845 | 8 | – | – |
Purchase of shares by EBT | – | – | – | (9,900) |
Utilisation of shares held by EBT | – | – | – | 6,686 |
At 30 November 2022 | 134,462,622 | 1,345 | 172 | (6,581) |
Issue of new shares | 409,818 | 4 | – | – |
Purchase of shares by EBT | – | – | – | (10,000) |
Utilisation of shares held by EBT | – | – | – | 8,642 |
At 30 November 2023 | 134,872,440 | 1,349 | 172 | (7,939) |
Notes to the nancial statements continued
for the year ended 30 November 2023
18 Deferred tax continued
| £’000 | |
At 1 December 2021 | 346 |
Credit to income statement for the year | 41 |
Charge directly to equity | (162) |
At 30 November 2022 | 225 |
Charge to income statement for the year | (77) |
Charge directly to equity | (12) |
At 30 November 2023 | 136 |
180 181
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2023 | 2022 | |
Weighted average fair value (£) | 4.52 | 4.08 |
| Key assumptions used: | ||
Share price at grant date (£) | 4.73 | 4.08 |
| Expected volatility | 38.4% | 36.8% |
Annual risk-free interest rate | 3.73% | 1.27% |
Expected life (years) | 3 | 3 |
Notes to the nancial statements continued
for the year ended 30 November 2023
19 Equity continued
30 November 2023 | 30 November 2022 | |||||||
| Number of | ||||||||
| share | ||||||||
| options/ | Number | |||||||
| Charge | matching | Charge | of share | Vesting | Expiry | Performance | ||
| (£’000) | shares | (£’000) | options | period | date | Valuation method | metrics | |
LTIP | 4,179 | 3,501,313 | 4,221 | 3,562,691 | 3 years | Immediate | Monte Carlo | Incremental EPS |
| after vesting | and Binomial | growth/TSR | ||||||
| period | model | ranking against | ||||||
| comparator | ||||||||
| Employee Share | 251 | 116,886 | – | n/a | 1 year | n/a | n/a | None |
| Purchase Plan | ||||||||
| (ShareMatch) | ||||||||
SAYE | 250 | 545,804 | 148 | 538,070 | 3 years | 6 months | Binomial | None |
| after 3-year | ||||||||
| vesting | ||||||||
| period | ||||||||
| Deferred Shares | 140 | n/a | 430 | n/a | 1 year | n/a | n/a | |
| (executive short- | targets, shared | |||||||
| term incentive scheme) | objectives, | |||||||
| personal | ||||||||
| objectives | ||||||||
Growth Incentive Plan | 51 | 161,515 | – | n/a | 3 years | Immediate | n/a | Regional |
| after vesting | ||||||||
| period | targets | |||||||
Free shares | – | n/a | 200 | n/a | None | n/a | n/a | None |
SIP | 14 | n/a | 55 | n/a | 1 year | n/a | n/a | None |
Total | 4,885 | 4,325,518 | 5,054 | 4,100,761 |
| Number of | |
| options | |
At 1 December 2021 | 3,918,656 |
Granted | 1,633,560 |
Exercised | (586,063) |
Lapsed | – |
Forfeited | (1,403,462) |
At 30 November 2022 | 3,562,691 |
Granted | 1,736,137 |
Exercised | (1,002,678) |
Lapsed | (17,192) |
Forfeited | (777,645) |
At 30 November 2023 | 3,501,313 |
182 183
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| 30 November | 30 November | |
| 2023 | 2022 | |
| Year-end balances arising from transactions with related parties | ||
Investments in subsidiaries | 223,625 | 215,218 |
Amounts due to subsidiaries | (85,761) | (50,781) |
| Elected to be | ||||
| Measured at | measured at | Total | ||
| amortised | FV through | carrying | ||
| cost | OCI | amount | ||
| At 30 November 2023 | ||||
| Financial assets | ||||
Trade receivables and contract assets | 12 | 330,977 | – | 330,977 |
Other receivables | 12 | 5,011 | – | 5,011 |
Cash and cash equivalents | 13 | 83,202 | – | 83,202 |
| Financial liabilities | ||||
Bank overdraft | 13 | – | – | – |
Trade payables and accruals | 14 | (167,596) | – | (167,596) |
Other payables | 14 | (9,155) | – | (9,155) |
Lease liabilities | 15,16 | (29,017) | – | (29,017) |
Notes to the nancial statements continued
for the year ended 30 November 2023
21 Commitments continued
£’000 2023 | 2022 | |
Short-term emplo | 5,795 | 6,452 |
Share-based payments | 681 | 1,491 |
P | 136 | 204 |
T | 170 | 87 |
6,782 | 8,234 |
£’000 2023 | 2022 | |
| Transactions with the related parties during the year | ||
Dividend income received from subsidiaries | – | 101,400 |
Investments in subsidiaries (note 11) | (8,455) | (10,111) |
Impairment of investments in subsidiaries (note 11) | (48) | (940) |
Settlement of tracker shares with KMP | (590) | (1,143) |
Loans and advances received from/(repaid to) subsidiaries | 34,980 | (51,779) |
Interest income received from subsidiaries | 4 | 4 |
Interest paid by subsidiaries | (4,512) | (3,103) |
184 185
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Notes to the nancial statements continued
for the year ended 30 November 2023
23 Financial instruments and nancial risk management continued
| Elected to be | ||||
| Measured | measured at | Total | ||
| at amortised | FV through | carrying | ||
| cost | OCI | amount | ||
| At 30 November 2022 | ||||
| Financial assets | ||||
Trade receivables and contract assets | 12 | 342,389 | – | 342,389 |
| Other receivables | 12 | 5,380 | – | 5,380 |
Cash and cash equivalents | 13 | 65,809 | – | 65,809 |
| Financial liabilities | ||||
Bank overdraft | 13 | (423) | – | (423) |
Trade payables and accruals | 14 | (179,271) | – | (179,271) |
| Other payables | 14 | (11,899) | – | (11,899) |
Lease liabilities | 15,16 | (33,702) | – | (33,702) |
| 2023 | 2023 | 2022 | 2022 | |
| LCCY’000 | £’000 | LCCY’000 | £’000 | |
United Arab Emirates Dirham (AED) | 22,031 | 4,752 | 2,218 | 501 |
Canadian Dollar (CAD) | (151) | (88) | (486) | (300) |
Swiss Franc (CHF) | 339 | 307 | (759) | (666) |
Euro (EUR) | 9,263 | 7,990 | (15,106) | (13,041) |
Hong Kong Dollar (HKD) | 6,958 | 706 | 5,559 | 590 |
Japanese Yen (JPY) | (982,198) | (5,245) | (606,417) | (3,645) |
Singapore Dollar (SGD) | (7,029) | (4,163) | (8,142) | (4,961) |
US Dollar (USD) | (34,538) | (27,359) | (30,569) | (25,355) |
(23,100) | (46,877) |
186 187
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| More than | ||||||
| 1-30 days | 31-60 days | 61-120 days | 120 days | |||
| £’000 Current | past due | past due | past due | past due | Total | |
| 30 November 2023 | ||||||
Expected loss rates | 0.58% | 2.47% | 6.70% | 8.72% | 53.80% | |
Gross trade receivables | 187,718 | 27,279 | 13,215 | 8,650 | 8,663 | 245,525 |
Contract assets | 94,091 | – | – | – | – | 94,091 |
Other assets | 5,011 | – | – | – | – | 5,011 |
Loss allowances | 1,664 | 674 | 886 | 754 | 4,661 | 8,639 |
| More than | ||||||
| 1-30 days | 31-60 days | 61-120 days | 120 days | |||
| £’000 Current | past due | past due | past due | past due | Total | |
| 30 November 2022 | ||||||
Expected loss rates | 0.03% | 0.45% | 1.08% | 1.62% | 47.40% | |
Gross trade receivables | 196,628 | 29,960 | 11,741 | 9,323 | 6,761 | 254,413 |
Contract assets | 91,680 | – | – | – | – | 91,680 |
Other assets (restated) | 5,380 | – | – | – | – | 5,380 |
Loss allowances | 87 | 135 | 127 | 151 | 3,204 | 3,704 |
Notes to the nancial statements continued
for the year ended 30 November 2023
23 Financial instruments and nancial risk management continued
| Lease | Trade and other payables, | ||
| including bank overdrafts | |||
| liabilities | |||
| Group | Group | Company | |
| At 30 November 2023 | |||
Within one year | 13,430 | 176,751 | 87,500 |
More than one year | 18,037 | – | – |
31,467 | 176,751 | 87,500 | |
| At 30 November 2022 | |||
Within one year (restated – see note 23(a) above) | 11,023 | 191,593 | 53,602 |
More than one year | 23,254 | – | – |
34,277 | 191,593 | 53,602 |
Category of internal credit rating | Basis of recognition of ECLs | |
Performing | Clients have a low risk of default and a strong capacity to meet contractual | 12-month ECLs |
Underperforming/non-performing | Clients negotiating for new credit terms, default in repayment and other | Lifetime ECLs |
| relevant indicators that showed customers | ||
Non-performing | Interest and/or principal payment are 90 days past due | Lifetime ECLs |
W | Clients with no reasonable expectation of recovery | Asset is written o |
188 189
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| Country of | |||||
Name of undertaking | % | incorporation | Principal activities | Registered o | |
SThree Australia Pty* | 100 | Australia | Dormant | C/O DLA Piper Australia, 80 Collins Street, Melbourne | |
VIC 3000, | PO Box 4301, Australia | ||||
SThree Austria GmbH | 100 | Austria | Recruitment | Wiedner Gurtel 13, Turm 24, 10 OG. 1100 Vienna, Austria | |
SThree Temp Experts Austria GmbH | 100 | Austria | Recruitment | Wiedner Gurtel 13, Turm 24, 10 OG. 1100 Vienna, Austria | |
Computer Futures Solutions NV | 100 | Belgium | Recruitment | Kreupelenstraat 9, 5de en 6de verdieping, B-1000 | |
| Brussels, Belgium | |||||
Huxley Associates Belgium NV | 100 | Belgium | Recruitment | Kreupelenstraat 9, 5de en 6de verdieping, B-1000 | |
| Brussels, Belgium | |||||
SThree Services NV | 100 | Belgium | Recruitment | Kreupelenstraat 9, 5de en 6de verdieping, B-1000 | |
| Brussels, Belgium | |||||
SThree Belgium NV | 100 | Belgium | Recruitment | Kreupelenstraat 9, 5de en 6de verdieping, B-1000 | |
| Brussels, Belgium | |||||
SThree Canada Limited | 100 | Canada | Recruitment | Sun Life Plaza West Tower, 144-4 Avenue SW, Suite 1600, | |
| Calgary AB T2P 3N4, Canada | |||||
SThree SAS | 100 | France | Recruitment | 170 | Boulevard de la Villette, 75019, Paris, France |
SThree Holdings GmbH | 100 | Germany | Holding company | Querstrasse 7, 60322, Frankfurt am Main, Germany | |
SThree GmbH | 100 | Germany | Recruitment | Querstrasse 7, 60322, Frankfurt am Main, Germany | |
SThree Temp Experts GmbH | 100 | Germany | Recruitment | Querstrasse 7, 60322, Frankfurt am Main, Germany | |
SThree Services GmbH | 100 | Germany | Recruitment | Querstrasse 7, 60322, Frankfurt am Main, Germany | |
SThree Limited | 100 | Hong Kong | Non-trading | 10th Floor, YF Life Tower, 33 Lockhart Road, Wan Chai, | |
| Hong Kong | |||||
SThree India Private Limited | 100 | India | In voluntary | 511 | The Corporate Centre, Nirmal Lifestyle Mall, LBS |
| liquidation | Road, Mulund (West), Mumbai, Maharashtra-MH. | ||||
400080, | India | ||||
ST | 100 | Ireland | Recruitment | Pembroke Hall, 38/39 Fitzwilliam Square West, Dublin 2, | |
| D02 NX53, Ireland | |||||
SThree K.K. | 100 | Japan | Recruitment | Kabukiza Tower, 12-15, Ginza 4-chome, Chuo-ku, Tokyo, | |
| Japan | |||||
SThree S.à r.l. | 100 | Luxembourg | Recruitment | 55, rue de Luxembourg, L-8077 Bertrange, Grand Duchy | |
| of Luxembourg | |||||
Progressive Global Energy Sdn. Bhd. | 49 | Malaysia | Recruitment | 10th Floor, Menara Hap Seng, No 1&3 Jalan P Ramlee, | |
50250 | Kuala Lumpur, Malaysia | ||||
SThree Holdings BV | 100 | Netherlands | Recruitment | Gustav Mahlerlaan 38, Gebouw Som 1, 1082MC, | |
| Amsterdam, Netherlands | |||||
Huxley BV | 100 | Netherlands | Recruitment | Keizersgracht 281, 5e verdieping, 1016ED, Amsterdam, | |
| Netherlands | |||||
SThree Interim Services BV | 100 | Netherlands | Recruitment | Gustav Mahlerlaan 38, Gebouw Som 1, 1082MC, | |
| Amsterdam, Netherlands | |||||
| SThree Middle East for Business Services | 100 | Saudi Arabia | HR Services | Astrolabs Riyadhi, 3141 Anas Ibn Malik Rod, Al Malqa, | |
| Limited Liability | Riyadh 13521, | Saudi Arabia | |||
SThree Pte. Ltd. | 100 | Singapore | Recruitment | ||
| Singapore | |||||
SThree Business Services Ibérica, S.L. | 100 | Spain | Recruitment | WeWork, Glories, Carrer Tànger 86, 08018 Barcelona, | |
| Spain | |||||
SThree Switzerland GmbH | 100 | Switzerland | Recruitment | 3rd Floor, Claridenstrasse 34, 8002 Zürich, Switzerland | |
Cavendish Directors Limited** | 100 | UK | Dormant | 1st Floor, 75 King William Street, London, EC4N 7BE, | |
| United Kingdom | |||||
Notes to the nancial statements continued
for the year ended 30 November 2023
23 Financial instruments and nancial risk management continued
| Net cash and cash equivalents | |||||
| Other | |||||
Sterling | Euro | US Dollar | currencies | Total | |
| At 30 November 2023 | |||||
| Functional currency of Group operations | |||||
Sterling | 29,372 | 34,573 | 4,209 | 465 | 68,619 |
Euro | – | 7,388 | – | 182 | 7,570 |
US Dollar | – | – | – | – | – |
Other | – | – | 399 | 6,614 | 7,013 |
29,372 | 41,961 | 4,608 | 7,261 | 83,202 |
| Other | |||||
£’000 Sterling | Euro | US Dollar | currencies | Total | |
| At 30 November 2022 | |||||
| Functional currency of Group operations | |||||
Sterling | 17,610 | 14,396 | 9,437 | 195 | 41,638 |
Euro | 70 | 14,712 | – | 190 | 14,972 |
US Dollar | – | – | 167 | – | 167 |
Other | 11 | – | 1,608 | 6,990 | 8,609 |
17,691 | 29,108 | 11,212 | 7,375 | 65,386 |
| Summary of fair value methods and assumptions | |
Receivables and payables | Due to the short-term nature of the current receivables and payables, their carrying amount is |
| considered to be the same as their fair value. | |
| Cash and cash equivalents, including | Approximates the carrying amount because of the short maturity of these instruments. |
| short-term deposits | |
Investments | Market valuation at the end of the reporting year. |
Borrowings | The carrying amount of the Group’s borrowings, primarily the RCF, approximates their fair value. The |
| fair value of the RCF is estimated using discounted cash | |
| incremental borrowing rates for similar types and maturities of borrowing and is consequently | |
| categorised in level 2 of the fair value hierarchy. |
24 Subsequent events
There were no subsequent events following 30 November 2023.
190 191
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SThree plc Annual Report and Accounts 2023
26 Alternative performance measures (APMs): denitions and reconciliations ): definitions and reconciliations
In discussing the performance of the Group, comparable measures are used.
The Group discloses comparable performance measures to enable users to focus on the underlying performance of the business on
a basis which is common to both periods for which these measures are presented. The reconciliation of comparable measures to the
directly related measures calculated in accordance with IFRS is as follows.
APMs in constant currency
As the Group operates in 11 countries, and with many dieren different currencies, it is aected b t currencies, it is affected by foreign exchange movements, and the
between years and within them, for otherwise foreign currency movements would undermine the management ability to drive the
business forward and control it. Within this Annual Report, comparable results have been highlighted on a constant currency basis as
well as the results on a reported basis which reect which reflect the actual foreign currency e y effects experienced.
The Group evaluates its operating and nancial performance on a constant curr financial performance on a constant currency basis (i.e. without giving eect to ffect to the impact of
variation of foreign currency exchange rates from year to year). Constant currency APMs are calculated by applying the prior year
foreign exchange rates to the current and prior nancial financial year results to remove the impact of exchange rate.
Measures on a constant currency basis enable users to focus on the performance of the business on a basis which is not a which is not affected by
changes in foreign currency exchange rates applicable to the Group’s operating activities from period to period.
The calculations of the APMs on a constant currency basis and the reconciliation to the most directly related measures calculated in
accordance with IFRS are as follows:
£'000, unless otherwise stated
| 2023 | ||||||
| Operating | ||||||
| Operating | conversion | | Basic EPS | |||
Revenue | Net fees | ratio* | before tax | (pence) | ||
Reported | 1,663,167 | 418,775 | 76,356 | 18.2% | 77,915 | 42.4 |
Currency impact | (24,489) | (5,602) | (2,280) | (0.3%) | (2,237) | (1.2) |
In constant currency | 1,638,678 | 413,173 | 74,076 | 17.9% | 75,678 | 41.2 |
£'000, unless otherwise stated
| 2022 | ||||||
| Operating | ||||||
| Operating | conversion | | Basic EPS | |||
Revenue | Net fees | ratio* | before tax | (pence) | ||
Reported | 1,639,446 | 430,616 | 7 7,552 | 18.0% | 77,026 | 41.0 |
* Operating pro rofit conversion ratio represents operating pro ofit over net fees.
To calculate the YoY variances in constant currency, management compared the FY23 results in constant currency versus the FY22
reported results.
Notes to the nancial statements continued
for the year ended 30 November 2023
| Country of | ||||
Name of undertaking | % | incorporation | Principal activities | Registered o |
SThree UK Holdings Limited** | 100 | UK | Holding company | 1st Floor, 75 King William Street, London, EC4N 7BE, |
| United Kingdom | ||||
SThree Overseas Holdings Limited** | 100 | UK | Holding company | 1st Floor, 75 King William Street, London, EC4N 7BE, |
| United Kingdom | ||||
SThree UK Management Limited** | 100 | UK | Holding company | 1st Floor, 75 King William Street, London, EC4N 7BE, |
| United Kingdom | ||||
SThree Overseas Management Limited** | 100 | UK | Holding company | 1st Floor, 75 King William Street, London, EC4N 7BE, |
| United Kingdom | ||||
SThree UK Operations Limited** | 100 | UK | Holding company | 1st Floor, 75 King William Street, London, EC4N 7BE, |
| United Kingdom | ||||
SThree Euro UK Limited | 100 | UK | Support services | 1st Floor, 75 King William Street, London, EC4N 7BE, |
| United Kingdom | ||||
SThree IP Limited** | 100 | UK | Support services | 1st Floor, 75 King William Street, London, EC4N 7BE, |
| United Kingdom | ||||
SThree Management Services Limited** | 100 | UK | Management | 1st Floor, 75 King William Street, London, EC4N 7BE, |
| services | United Kingdom | |||
SThree Partnership LLP | 100 | UK | Recruitment | 1st Floor, 75 King William Street, London, EC4N 7BE, |
| United Kingdom | ||||
Huxley Associates Global Limited | 100 | UK | Recruitment | 1st Floor, 75 King William Street, London, EC4N 7BE, |
| United Kingdom | ||||
Progressive Global Energy Limited | 100 | UK | Recruitment | 1st Floor, 75 King William Street, London, EC4N 7BE, |
| United Kingdom | ||||
| Progressive Global Energy Kurdistan | 100 | UK | Dormant | 1st Floor, 75 King William Street, London, EC4N 7BE, |
| Limited | United Kingdom | |||
Elevize Limited | 100 | UK | Support services | 1st Floor, 75 King William Street, London, EC4N 7BE, |
| United Kingdom | ||||
HireFirst Limited | 100 | UK | Recruitment | 1st Floor, 75 King William Street, London, EC4N 7BE, |
| Technology | United Kingdom | |||
Talent Deck Limited* | 100 | UK | Dormant | 1st Floor, 75 King William Street, London, EC4N 7BE, |
| United Kingdom | ||||
Showcaser Limited* | 100 | UK | Dormant | 1st Floor, 75 King William Street, London, EC4N 7BE, |
| United Kingdom | ||||
SThree Ventures Limited | 100 | UK | Holding company | 1st Floor, 75 King William Street, London, EC4N 7BE, |
| United Kingdom | ||||
SThree Dollar UK Limited | 100 | UK | Support services | 1st Floor, 75 King William Street, London, EC4N 7BE, |
| United Kingdom | ||||
100 | USA | Holding company | Corporation Service Company, 251 Little Falls Drive, | |
| Wilmington DE 19808, United States | ||||
100 | USA | Recruitment | Corporation Service Company, 251 Little Falls Drive, | |
| Wilmington DE 19808, United States | ||||
100 | USA | Recruitment | Corporation Service Company, 251 Little Falls Drive, | |
| Wilmington DE 19808, United States | ||||
Newington International Inc | 100 | USA | Recruitment | Corporation Service Company, 251 Little Falls Drive, |
| Wilmington DE 19808, United States |
25 List of subsidiaries continued
192 193
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Financial Statements
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Total shareholder return (TSR)
The Group uses TSR as an APM to measure the growth in value of a shareholding over a specied period, assuming that dividends a specified period, assuming that dividends
are reinvested to purchase additional shares at the closing price applicable on the ex-dividend date. The TSR is calculated by the
external independent data-stream party.
pence, unless otherwise stated 2023 | 2022 | |
SThree plc TSR return index value: three-month average to 30 Nov 2020 (FY22: 30 Nov 2019) | 240.74 | 262.41 |
SThree plc TSR return index value: three-month average to 30 Nov 2023 (FY22: 30 Nov 2022) | 365.25 | 355.43 |
Total shareholder return | 51.7% | 35.4% |
Notes to the nancial statements continued
for the year ended 30 November 2023
26 Alternative performance measures (APMs): denitions and reconciliations continued
Other APMs
Net cash excluding lease liabilities
Net cash is an APM used by the Directors to evaluate the Group’s capital structure and leverage. Net cash is dened as cash and et cash is defined as cash and
cash equivalents less current and non-current borrowings excluding lease liabilities, as illustrated below:
£’000
| 30 November | 30 November | |
| 2023 | 2022 | |
Cash and cash equivalents | 83,202 | 65,809 |
Bank overdraft | – | (423) |
Net cash | 83,202 | 65,386 |
EBITDA
In addition to measuring nancial performance of financial performance of the Group based on operating prot, roup based on operating profit, the Directors also measure performance
based on EBITDA. It is calculated by adding back to the reported operating prot non-cash items such as ting profit non-cash items such as the depreciation of
property, plant and equipment (PPE), the amortisation and impairment of intangible assets, loss on disposal of PPE and intangible
the level of nancial lev financial leverage of the Group by comparing EBITDA to net debt.
A reconciliation of reported operating prot for ofit for the year, the most directly comparable IFRS measure, to EBITDA is set out below.
£’000 2023 | 2022 | |
Reported operating pr | 76,356 | 77,552 |
Depreciation of property, plant and equipment | 15,898 | 18,682 |
Amortisation and impairment of intangible assets | 16 | 719 |
Loss on disposal of PPE and intangible assets | 160 | 1,298 |
– | (266) | |
Employee share options charge | 4,871 | 4,999 |
EBITDA | 97,301 | 102,984 |
Dividend cover
The Group uses dividend cover as an APM to ensure that its dividend policy is sustainable and in line with the overall strategy for the
use of cash. Dividend cover is dened as er is defined as the number of times the Company is capable of paying dividends to shareholders from the
over the total dividend paid to ordinary shareholders.
£’000 2023 | 2022 | ||
A | 56,051 | 54,202 | |
Dividend proposed to be paid to shareholders (note 8) | B | 21,710 | 21,179 |
Dividend cover | (A ÷ B) | 2.6 | 2.6 |
Contract margin
The Group uses contract margin as an APM to evaluate contract business quality and the service oered ffered to customers. Contract
£’000, unless otherwise stated 2023 | 2022 | ||
Contract net fees | A | 343,502 | 334,215 |
Contract revenue | B | 1,584,215 | 1,540,323 |
Contract margin | (A ÷ B) | 21.7% | 21.7% |
194 195
Strategic Report
Governance
Financial Statements
SThree plc Annual Report and Accounts 2023
Results announcement timetable
SThree plc conrms the following forthcoming dates in the Group nancial calendar:
2024
19 March 2024 FY24 Q1 Trading Update
25 April 2024 Annual General Meeting
18 June 2024 FY24 Half Year Trading Update
23 July 2024 FY24 Half Year Results
24 September 2024 FY24 Q3 Trading Update
17 December 2024 FY24 Trading Update
2025
28 January 2025 FY24 Final Results
Other InformationFive-year nancial summary
30 November
2023
30 November
2022
30 November
2021
30 November
2020
30 November
2019
Financial metrics
9
Revenue (£’m) 1,663.2 1,639.4 1,330.7 1,202.6 1,324.7
Net fees (£’m) 418.8 430.6 355.7 308.6 338.0
Operating prot (£’m)
10
76.4 7 7.6 60.8 31.3 60.0
Operating prot conversion ratio
10
18.2% 18.0% 17.1% 10.1% 17.8%
Basic EPS (pence)
10
42.4 41.0 31.8 13.9 33.2
Other Group ratios
Total assets (£’m) 472.3 470.4 400.6 334.5 305.1
Total equity (£’m) 222.9 200.4 158.2 128.5 116.8
Net cash (£’m) 83.2 65.4 57.5 49.9 10.6
Cash from operations (£’m) 93.3 64.4 54.5 76.9 54.8
Dividends per share (pence) 16.6 16.0 11.0 5.0 15.3
Group operational statistics
Average total headcount
11
2,819 2,890 2,588 2,894 3,109
Average sales headcount
11
1,981 2,114 1,911 2,219 2,423
Active contractors at year end 11,606 12,533 11,809 9,523 11,110
9. Financial metrics are presented for continuing operations only.
10. The results for the nancial years 2019 to 2021 are presented on an adjusted basis, i.e. excluding the impact of exceptional items.
11. Based on full-time equivalents.
197
Annual Report and Accounts 2023
196
SThree plc
Other Information continued
Shareholder information
Shareholders with enquiries relating to their shareholding should contact Computershare Investor Services.
Alternatively, you may access your account via www.investorcentre.co.uk, but will need to have your Shareholder Reference
Number (SRN) available when you rst log in. This can be found on your Welcome letter or other correspondence received from
Computershare relating to your shareholding. The online facility also allows shareholders to view their holding details, update their
address and dividend mandate instructions.
Shareholders who would prefer to view documentation electronically can also elect to receive automatic notication by email each
time the Company distributes documents, instead of receiving a paper version of such documents. You can again choose your
preferred communication method by using the shareholder portal at www.investorcentre.co.uk. Alternatively, you can register your
request via the registrar by calling +44 (0)370 707 1412. Calls are charged at the standard geographic rate and will vary by provider.
Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 08.30–17.30, Monday
to Friday excluding public holidays in England and Wales. Should you wish to change your mind or request a paper version of any
document in the future, you may do so by contacting the registrar.
Potential targeting of shareholders
Companies have become aware that their shareholders have received unsolicited phone calls or correspondence concerning
investment matters. These are typically from overseas-based brokers who target UK shareholders oering to sell them what often
turn out to be worthless or high-risk shares in US or UK investments. They can be very persistent and extremely persuasive. It is not
just the novice investor that has been duped in this way; many of the victims had been successfully investing for several years.
Shareholders are advised to be very wary of any unsolicited advice, oers to buy shares at a discount or oers of free company
reports. If you receive any unsolicited investment advice:
Reject unexpected oers
Scammers usually cold call, but contact can also come by email, post, word of mouth or at a seminar. If you have been oered an
investment out of the blue, chances are it is a high-risk investment or a scam.
Check the Financial Conduct Authority (FCA) Warning List
Use the FCA Warning List to check the risks of a potential investment – you can also search to see if the rm is known to be
operating without FCA authorisation.
Get impartial advice
Get impartial advice before investing – do not use an adviser from the rm that contacted you.
You can report a rm or scam to the FCA on 0800 111 6768 or through www.fca.org.uk/scamsmart.
If you have lost money in a scam, contact Action Fraud on 0300 123 2040 or www.actionfraud.police.uk.
Share price information
Information on the Company’s share price can be found via: www.sthree.com.
ShareGift
ShareGift (reg charity no. 1052686) operates a charity share donation scheme for shareholders with small parcels of shares whose
value may make it uneconomic to sell. Details of the scheme are available from www.sharegift.org or by calling 0207 930 3737.
Printed by a carbon neutral company to the EMAS standard and Environmental
Management System certied to ISO 14001. This product is made using recycled
materials limiting the impact on our precious forest resources, helping reduce the
need to harvest more trees.
This publication has been manufactured using 100% oshore wind electricity
sourced from UK wind.
100% of the inks used are vegetable oil based, 95% of press chemicals are recycled
for further use and, on average 99% of any waste associated with this production
will be recycled and the remaining 1% used to generate energy.
The paper is Carbon Balanced with World Land Trust, an international conservation
charity, who oset carbon emissions through the purchase and preservation of
high conservation value land. Through protecting standing forests, under threat of
clearance, carbon is locked-in, that would otherwise be released.
Executive Directors
Timo Lehne
Chief Executive Ocer
Andrew Beach
Chief Financial Ocer
Whistleblowing hotline
Tel: (UK) 0800 915 1571
Website: www.safecall.co.uk/report
Financial advisers and stockbrokers
Berenberg
60 Threadneedle Street
London
EC2R 8HP
Investec Bank plc
30 Gresham Street
London
EC2V 7QP
Financial PR
Alma Strategic Communications
71-73 Carter Lane
London
EC4V 5EQ
Auditors
PricewaterhouseCoopers LLP
141 Bothwell Street
Glasgow
G2 7EQ
Company information and corporate advisers
Registrars (ordinary shares)
Computershare
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
Tel: (UK) +44 (0)370 707 1412*
Shareholder Portal: www.investorcentre.co.uk
* Calls are charged at the standard geographic rate and will vary by provider. Calls
outside the United Kingdom will be charged at the applicable international rate.
Lines are open between 08.30–17.30, Monday to Friday excluding public holidays in
England and Wales.
Group Company Secretary and registered oce
Kate Danson
Group Company Secretary
1st Floor, 75 King William Street
London
EC4N 7BE
Email: cosec@sthree.com
Company number
03805979
Contact details
Email: enquiries@sthree.com
Web: www.sthree.com
198
SThree plc
SThree plc
75 King William St
London
EC4N 7BE
sthree.com