SThree H1 2025 Earnings Report

SThree EPS Results

• Actual EPS: GBX 5.60
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

SThree Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

SThree Announcement Details

• Quarter: H1 2025
• Date: 7/29/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, July 29, 2025
• Conference Call Time: 2:00AM ET

SThree (LON:STEM) brings skilled people together to build the future. We are the global STEM workforce consultancy, placing highly skilled, STEM specialist workers in the industries where they are needed most. We advise businesses, build expert teams, and deliver project solutions for our clients. With more than 38 years of experience in pure-play STEM and a global team of 2,700+ people each with local expertise across 11 countries, we cover high-demand skills across Engineering, Life Sciences and Technology roles. We provide permanent and flexible contract talent to a diverse base of around 6,000 clients. By combining advanced technology with expertise, we push beyond traditional boundaries to deliver tailored solutions, leveraging data and insight from our world-class operating platform. Outpace tomorrow, together Our leadership is: Timo Lehne, CEO 1/2022 – present Andrew Beach, CFO 7/2021 – present Kate Danson, Chief Legal Officer and Company Secretary 3/2021 – present Nick Folkes, Chief Operating Officer 9/2023 – present Jelte Hacquebord, Chief Commercial Officer 8/2023 – present Sarah Mason, Chief People Officer 4/2023 - present Our Board comprises: James Bilefield, Chair Timo Lehne, CEO (Executive Director) Andrew Beach, CFO (Executive Director) Denise Collis, SINED Imogen Joss, NED Elaine O’Donnell, NED Sanjeevan Bala, INED

SThree H1 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Launched a refined branding as the Global STEM workforce consultancy, highlighting a clear focus on high-value STEM skills and flexible talent to differentiate the company in a competitive staffing market.
• Positive Sentiment: Over 80% of net fees now run through the new end-to-end integrated TIP platform, driving operational efficiencies and unlocking £6.5 million in annualized cost savings while enabling faster innovation and productivity gains.
• Negative Sentiment: First-half net fees fell 14% year-on-year and operating profit dropped 72% to £10 million, reflecting ongoing market softness despite disciplined cost control and modest sequential improvement in Q2.
• Positive Sentiment: Contract business remains resilient at 84% of net fees, with a contractor order book providing around five months of forward visibility, strong extension rates, and average contract lengths up 18%.
• Neutral Sentiment: Interim dividend maintained at 5.1 pence per share and a £20 million share buyback underway, while TIP remains on budget and on track, with management expecting profit and margin recovery in the second half.

Presentation

[Timo Lehne, CEO & Executive Director at SThree]

Good morning, everyone, and welcome. Thank you for joining us today for our half year results briefing. I'm joined by Andy Beech, our CFO.

[Andrew Beach, CFO, Executive Director & Board Member at SThree]

Good morning, everyone.

[Timo Lehne, CEO & Executive Director at SThree]

And as usual, together we will be walking you through the half year numbers, our strategic progress and discussing the outlook.

[Timo Lehne, CEO & Executive Director at SThree]

Let's go. During the period, we marked a really important milestone in our evolution with the launch of our refined branding and value statement, which we believe is a more accurate reflection of who we are, what we offer and what sets us apart. We are the Global STEM workforce consultancy. Let us show you what that looks like. We have long provided more than transactional staffing to our customers.

[Timo Lehne, CEO & Executive Director at SThree]

We are workforce consultancy with a suite of resourcing solutions from compliance services, project solutions and workforce structuring to the management of more than 9,000 contractors from 11 countries on behalf of our clients. We specialize in high value, complex, flexible talent where our consultative approach adds the most value and where human expertise supported by digital tools remains essential to the delivery of quality at pace. There aren't many other staffing firms that can provide the range of solutions that we do alongside our experience and regional know how. As many of you know, the charts on this page show how our well established strategy is positioned at the center of two long term growth trends: STEM and flexible talent. This remains as relevant today as it has ever been and it is here where we see our opportunity, fulfilling the structural demand for STEM skills, which is underpinned by mega trends and is particularly well aligned to the contractor model.

[Timo Lehne, CEO & Executive Director at SThree]

As a result of this focus, our contract business represents 84% of group total. Our bias towards contract provides us with resilience and more profitable revenue stream with better visibility and is a powerful differentiator in the market. We have delivered a steady performance in the first half of the year against the persistently challenging market environment. We have made significant progress in preparing our business for when market conditions improve and to align with structural opportunities. As a result of the TIP rollout, over 80% of our business is now transacting through our future ready end to end integrated technology infrastructure.

[Timo Lehne, CEO & Executive Director at SThree]

This is driving operational efficiencies and significantly enhancing our ability to scale. We are now able to innovate at pace with the foundations to unlock rich data insights and layer in new functionality. We are building an organization fit for purpose, which combined with our industry experience, deep networks and strong commercial footing means we are ready for the future. We are often asked whether current industry trends are structural or cyclical. We believe they're both.

[Timo Lehne, CEO & Executive Director at SThree]

Let's explore further. Regarding our end markets, this is clearly an extended cycle, lasting longer than expected due to persistently low business confidence. However, we do expect this extended cycle to eventually subside and investment to resume. To stay ahead, organizations will need to invest in their future. We anticipate that once pent up demand is released, the demand for flexible stem roads will be especially acute.

[Timo Lehne, CEO & Executive Director at SThree]

Beyond the usual economic cycles, a deeper transformation is underway. Emerging technologies like machine learning and generative AI are reshaping markets and sectors. These trends aren't short term trends. They signal lasting structure change and we are well positioned to respond. From a client perspective, organizations of all sizes are reimagining their business models and workforces.

[Timo Lehne, CEO & Executive Director at SThree]

They are now faced with making smart and strategic decisions to ensure they have the skills and expertise needed to compete in an AI enabled future. Every industry will be significantly impacted by technology investment. We have long recognized that structural megatrends, including technological advances, will shape the workforce of the future, and we have deliberately placed our focus at the heart of this opportunity. We help clients build a workforce infrastructure that supports AI innovation across all roads and across all industries. Our tech focus connects businesses with the core skills needed to prepare their data and processes for effective AI adoption.

[Timo Lehne, CEO & Executive Director at SThree]

From an industry perspective, our ability to offer workforce solutions means that compared to more transactional and blue collar staffing businesses, we are less at risk of dis intimidation from digital platforms. Our clients need experts that can advise them and that is our specialism. Digital transformation, including advancements in AI, is reshaping staffing, creating opportunities to deliver enhanced client and candidate services and drive efficiencies. The world is moving fast and the work we have done in the last three years allows us to capitalize on these trends as we have the right foundations in place with our focus, scale and one of the most modern technology stacks in our industry. Whilst the landscape around us is evolving rapidly, it is clear that there's pent up demand for the skills we are focused on.

[Timo Lehne, CEO & Executive Director at SThree]

And we're extremely well positioned to not only keep pace with this evolving landscape, but lead the future of this industry. I will cover each of these differentiators in more detail later in the presentation. I will now pass over to Andy to talk us through the financials.

[Andrew Beach, CFO, Executive Director & Board Member at SThree]

Thank you very much, Timo. Let's start with a summary of the half year performance. Net fees are down 14% year on year on a constant currency basis. Contract, which represents 84% of net fees, declined 14% as continued softness in new business activity was partially offset by strong contract extensions. Pleasingly, we also saw a modest sequential quarter on quarter improvement in the rate of decline during q two, reflecting an improved US performance where initiatives aimed at strengthening market positioning are beginning to gain traction.

[Andrew Beach, CFO, Executive Director & Board Member at SThree]

Permanent, which is a smaller part of our business, declined 13% and continues to be impacted by challenging market conditions across most of our regions despite a softening in comparatives. Notably, our permanent businesses in The US and Japan recorded growth in the first half of the year. Operating profit for the half was £10,000,000, which is down 72% on a constant currency basis. This primarily reflects the effect of our operational gearing on lower net fees across key markets, partially offset by disciplined management of operating costs and the early realization of further operational efficiencies. This has resulted in a conversion ratio, the ratio of operating profit to net fees, of 6.3%.

[Andrew Beach, CFO, Executive Director & Board Member at SThree]

Profit before tax is 10,100,000.0, down 72% year on year, reflecting the lower operating profit and lower net interest income on our cash. Now we do expect profits and margins to increase in the second half of the year in part due to the benefits of our first half efficiency actions being weighted to the second half. We continue to index calendar quarter net fee performance since 2019, the last full year before the pandemic, to show more clearly our performance compared to other staffing businesses. As the chart shows, we are less cyclical, which we believe is due to our strategic focus on flexible talent and STEM. We clearly outperformed the market through COVID, and over the last three years, we have sustained that outperformance.

[Andrew Beach, CFO, Executive Director & Board Member at SThree]

This shows that we are less volatile through periods of market disruption, with our contractor order book providing a runway of contract net fees due to be recognized as they are earned on a month by month basis over the life of a contract. As we have seen historically, when markets recover and new placement activity increases, the recovery in net fees tends to be smoother and from a higher overall level, resulting in a more even through the cycle net fee profile compared to permanent dominant businesses where net fees are recognized almost immediately. Overall, this demonstrates that we have the right strategy and that our business is high quality through the cycle. Looking at the regional and skill mix for the period, we have critical mass and a well diversified business across key stem markets and skill verticals. The first ring chart shows the split by region, with DUC remaining the largest region in the group representing 33% of net fees.

[Andrew Beach, CFO, Executive Director & Board Member at SThree]

Looking to the far right, you can see net fees were lower across all regions in the first half. The second ring chart shows our strong and unique position in providing STEM skills. Technology continues to be our largest skill, and it represents 45% of net fees. Engineering, our second largest skill, declined by 9% year on year following last year's record performance. Encouragingly, within this vertical, our clean energy business continues to perform strongly, growing 6% year on year and now accounting for 14% of group net fees.

[Andrew Beach, CFO, Executive Director & Board Member at SThree]

At the same time, we saw continued softness in demand for skills across both technology and life sciences, reflecting the persistently challenging trading environment throughout the first half. We continue to benefit from the ongoing trend towards flexible working. This slide looks at our net fees by service. Our contract business can be split between independent contractors and employed contractors. The most notable shift over the last few years has been the trend towards the employed contractor model or ECM, which has grown from 22% of net fees in '19 to 40% of net fees in the '25.

[Andrew Beach, CFO, Executive Director & Board Member at SThree]

Although acting as the employer of record is not a service unique to s three, it remains out of reach for most subscale recruiters due to the high barriers to entry driven by the complexity of compliance, operational infrastructure, and the balance sheet strength required to support it. Where s three stands apart from larger industry peers is in our comparatively higher net fee exposure to ECM, further reinforced by our focus on STEM disciplines. Additionally, our ECM segment generates net fee margins around 30 to 40% higher than those generated by independent contractors as our clients are willing to pay for the risk and complexity that we assume on their behalf. With the rollout of our new future ready digital infrastructure, there will naturally be fewer manual touch points, eliminating the need to constantly increase headcount to service our contractors, thereby helping us to achieve higher profit margins and scale more efficiently. Looking now at the future visibility of our contract business.

[Andrew Beach, CFO, Executive Director & Board Member at SThree]

The contractor order book represents the value of contracts written up to the contractual end date, assuming that all contracted hours are worked. The book was down 8% year on year as a continued strong extensions performance was only able to partially offset the slowdown in new placements from the prolonged market uncertainty. However, even with the decline, the order book continues to provide us with sector leading forward visibility compared to permanent focused staffing businesses with the equivalent of around five months worth of future net fees already booked. The resilience of the contractor order book demonstrates that whilst new placement activity continues to be soft, all other underlying metrics around our contract business are strong. We've seen excellent extension rates in the half, and this has resulted in average contract lengths increasing by 18% compared to the prior year to sixty four weeks.

[Andrew Beach, CFO, Executive Director & Board Member at SThree]

To sustain contract margins at around 21 and a half percent, we've maintained tight pricing control, especially on extensions, and the average salary of the contract roles that we've placed is up 1% year on year, now reaching £103,000. Productivity was 10% lower year on year as the rate of net fee decline was faster than the reduction in average headcount. The movement in headcount reflects careful management of natural churn, being highly selective about where we choose to hire, and the realization of operational efficiencies. Near term, we expect productivity to continue to moderate until market conditions improve, but over the midterm, we do expect to deliver sustainable increased levels of productivity as our strategic investments in digital infrastructure deliver the expected benefits. TIP remains on budget, and the overall timeline remains on track to complete by the '25.

[Andrew Beach, CFO, Executive Director & Board Member at SThree]

Out of our 11 markets, eight are now actively using the platform, representing over 80% of group net fees. We expect total OpEx for the year to be in the range of 3 to £4,000,000. This is weighted to the second half of this year based on the phasing of rollout activities with around 1,000,000 incurred in h one. Total CapEx is expected to be around 6 to 7,000,000 with just under 3,000,000 spent in the period. As we approach the final stages of the program, we have further refined our delivery forecast.

[Andrew Beach, CFO, Executive Director & Board Member at SThree]

We are pleased to confirm that projected spend remains comfortably within the original 30 to 35,000,000 budget and is now expected to come in towards the mid to upper end of that range. Turning to the year on year operating profit bridge, you can see the decrease in both contract and permanent net fees is partially offset by people costs being down year on year, and this is primarily due to the 5% average decrease in headcount compared to last year, which is partly reflective of the further operational efficiencies coming through. To date, we have made good progress and remain on track to deliver the 6,000,000 in year net saving target for FY '25. Of this, around 2,000,000 has already been achieved. Since most of the costs to deliver were incurred in the first half of the year, we expect a natural uplift in savings in the second half.

[Andrew Beach, CFO, Executive Director & Board Member at SThree]

You can also see the 300,000.0 year on year increase of OpEx cost for the tip and 2,100,000.0 year on year increase of other operating costs. This includes additional expenditure related to the commencement of tip amortization and license fees as well as property and marketing expenditure, which is partially offset by disciplined management of other operating costs. And this leaves profit for the half at £10,000,000. Looking at our net cash position, excluding the impact of a 20,000,000 share buyback program, we are broadly in line with the f y twenty four year end position. We see our usual outflows, including a share purchase for the employee benefit trust, payment of the final FY '24 dividend, lease principal payments, and CapEx, including around 3,000,000 incurred on the tip.

[Andrew Beach, CFO, Executive Director & Board Member at SThree]

We recorded only a modest net increase in working capital as movements in receivables and payables broadly offset each other. Including the purchase of nearly 8,000,000 shares under the share buyback program, our half year cash balance is around £48,000,000. Before moving on to look at dividends, I wanted to share with you a brief reminder of our capital allocation policy. Our overarching intention is to always maximize value for our shareholders. We look to maintain a strong balance sheet to provide flexibility at all times while also providing shareholders with a sustainable through the cycle dividend with long term earnings growth.

[Andrew Beach, CFO, Executive Director & Board Member at SThree]

We then prioritize our deployment of capital in the order shown. Now turning to dividends. Notwithstanding the reduction in our near term profitability, we continue to have strong confidence in the future of the business, so I'm pleased to confirm that we will be paying an interim dividend of 5.1p per share. The board's decision to maintain the dividend in line with last year reflects a considered assessment of the group's future outlook, underpinned by a robust balance sheet and a strong track record of cash generation. It also underscores the board's commitment to returning surplus capital to shareholders where appropriate.

[Andrew Beach, CFO, Executive Director & Board Member at SThree]

So to sum up, we're reporting a steady trading performance with the rate of decline in net fees improving sequentially through the half, operating profit reflecting the lower net fees partially offset by disciplined cost control, a contract order book that continues to provide good visibility of future net fees, and a robust balance sheet, which positions us well to fund our future ambitions. Thank you. I'll hand back to Timo.

[Timo Lehne, CEO & Executive Director at SThree]

Thank you, Andy. We will now turn to look at what we have achieved strategically throughout the half. As part of our ongoing evolution, we took the decision to reassess the alignment of our growth pillars to our business strategy. We have renamed our position pillar to proposition. And we have introduced a fifth strategic pillar to support our execution.

[Timo Lehne, CEO & Executive Director at SThree]

Our customers are at the heart of everything we do, so it felt appropriate to dedicate a specific pillar towards them given their importance. I will now touch on each pillar in turn. Our market reach remains strategically aligned with 11 of the strongest stem markets globally. We regularly review our position in these regions. And since early twenty twenty three, we have been deliberately rebalancing our portfolio, ensuring all our markets are well positioned to take advantage of significant growth opportunities when they arise.

[Timo Lehne, CEO & Executive Director at SThree]

A great example of this strategy in action is what we have done in The U. S. Over the past three years, we rolled out several internal and go to market initiatives, anticipating that U. S. Market would rebound earlier than others.

[Timo Lehne, CEO & Executive Director at SThree]

These initiatives included targeted investments in our core skills verticals to better balance our portfolio, strengthening our permanent offering and sharpening our overall market approach in the region. And we're already seeing the benefits of our efforts, with Q2 performance in U. S. Rebounding, driven in large part by strong performance from our engineering vertical. Turning to our platform.

[Timo Lehne, CEO & Executive Director at SThree]

Nick is going to explain the progress we have made in detail in a second. But from my perspective, H1 marked another positive chapter in our TIP journey. This has been a journey that has been challenging, but one that was bold and has seen us transform our position for when the markets recover. It is no mean feat to deliver a program of this nature and size on track and on budget. We should be incredibly proud.

[Timo Lehne, CEO & Executive Director at SThree]

We have started to show that the TIP is not just delivering functional improvements, but is also beginning to unlock commercial and operational upside, particularly where maturity, adoption and leadership alignment are strong. Now over to Nick.

[Nick Folkes, COO at SThree]

Good morning, ladies and gentlemen. I'm Nick Folks, chief operating officer at s three, and I oversee the group's technology improvement program or TIP. Three years ago, we set out on an ambitious journey to transform the operational core of s three. At the time, we recognized that our legacy technology, while serviceable, was limiting our scalability and capacity to innovate. What we needed was not a service level upgrade, but a complete reengineering of our digital infrastructure.

[Nick Folkes, COO at SThree]

So we made a bold decision not to optimize around the edges, but to fundamentally reinvent. Rather than settle for tactical fixes or short term gains, we chose to take on the harder, more ambitious challenge to replace every core system and build a fully integrated cloud native platform from the ground up, an end to end integrated platform capable of supporting our ambitions for growth, efficiency, and competitive differentiation. It was a long term investment, one that demanded persistence and deep alignment across the business, but it was the only way to unlock the agility and intelligence we knew we needed to lead in the years ahead. And today, that decision is proving itself in faster innovation and smarter decision making and measurable improvements in performance across the business. That decision wasn't just about technology.

[Nick Folkes, COO at SThree]

It was about reimagining how we operate as a business. We set out to elevate every aspect of the business to deliver step change in service quality, unlock richer real time insights, and dramatically boost productivity at scale. Delivering on that ambition required more than new systems. It meant standardizing our ways of working across the business and fully digitalizing s three's operations from front to back. Fast forward to today, and I'm pleased to report that we're delivering on that vision.

[Nick Folkes, COO at SThree]

As of now, over 80% of group net fees are processed through the new platform. We are live in eight out of our 11 global geographies, having recently completed deployments in The Netherlands, France, Spain, Switzerland, and Austria. We've onboarded over 13,000 internal and external users, all of whom now operate on a single global platform. The feedback from our users has been clear. This isn't just better, it's transformational, and it's enabling outcomes that until recently weren't possible.

[Nick Folkes, COO at SThree]

In just the last six months, we've delivered 60 new product enhancements and continue to develop five key features powered by AI, a testament to the maturity of our platform and the pace at which we can now innovate. We're no longer constrained by fragmented systems or manual workflows. Let me share a few examples. In the front office, our AI driven shortlist generator is already speeding up placement cycles and enhancing candidate matching precision. It provides consultants with richer, more relevant profiles, and helps clients make faster, more confident hiring decisions.

[Nick Folkes, COO at SThree]

In the back office, we've automated time consuming, repetitive tasks such as time seat validation and document checks through AI models that significantly reduce human intervention. And we're just getting started. Next, we're deploying tools to help consultants identify and nurture warm leads, expand active networks, and surface opportunities that once required hours of manual effort. And these capabilities are already delivering real measurable returns. We've now achieved a total of 6,500,000.0 in annualized cost savings from our automation in our middle and back office operations and sales management layers.

[Nick Folkes, COO at SThree]

Thanks to enhanced data and reporting capabilities that drive faster, more impactful decision making. This comfortably exceeds our original expectations. Across The US and Germany, we've seen a 34% reduction in time to first interview, enabling our consultants to move faster and more efficiently for both clients and candidates. But perhaps the most compelling proof point is the performance of our most junior consultants, those with naught to twenty four months of experience who have historically shown consistent productivity regardless of trading conditions. In The US and Germany, those cohorts have delivered a year on year productivity improvements of thirty two percent and five percent respectively, outperforming the overall market cohorts in those countries by significant margins.

[Nick Folkes, COO at SThree]

That level of uplift speaks to the system's ability to reduce ramp time and empower early career talent faster than ever before. This success has only been possible thanks to the commitment of our global teams and the agile iterative delivery model we've adopted. I want to take this opportunity to extend my personal thanks to everyone involved in our transformation. We're now entering the final phase of the program with ECM delivery for Germany and three remaining markets scheduled for rollout. As we close the formal program at the end of this financial year, I want to highlight that we are delivering our technology improvement program to an enhanced scope on time and on budget.

[Nick Folkes, COO at SThree]

But while TIP formally concludes, our momentum does not. We currently have over 20 additional enhancements in development, and we'll continue investing in this platform in line with our capital allocation priorities. However, the most powerful impact of TIP may not lie in what it delivers today, but in what it makes possible tomorrow. With a clean, standardized, and fully integrated data and systems landscape now in place, we've built more than a technology platform. We've established the foundation for a fundamentally more adaptive and insight led business, one capable of evolving rapidly and scaling confidently in a changing world.

[Nick Folkes, COO at SThree]

This positions us uniquely within the sector. We can now drive recruitment technology innovation at a pace once out of reach, unlocking next generation AI capabilities that point towards entirely new ways of working. We're actively exploring opportunities extend far beyond the limits of traditional platforms, possibilities enabled by real time data, intelligent workflows, and a unified architecture driving every decision and interaction. These are the kinds of capabilities that will shape the next era of recruitment, and we're well positioned to lead it. We're confident that this foundation will continue to deliver superior performance and sustained value over the long term.

[Nick Folkes, COO at SThree]

Thank you for your continued support and interest. I look forward to sharing more in the months ahead.

[Timo Lehne, CEO & Executive Director at SThree]

Aligned with our refreshed go to market branding, we have taken another important step forward by introducing a new strategic pillar, one that sharpens our focus on driving revenue through deeper client engagement and stronger candidate relationships. Backed by our TIP program, our evolved brand positioning and continued investment in team development, we're now more joined up as an organization than ever before. That unity is helping us enhance our service proposition and cement our place as a true strategic partner in the STEM workforce space. We are working to rebalance our client mix by pushing further into the enterprise space, which we see as a real opportunity for us. Our global client strategy is a key part of this, creating a more consistent, standardized approach to growing and partnering with our most strategic accounts.

[Timo Lehne, CEO & Executive Director at SThree]

And we're seeing encouraging results. Despite the macro environment we have been experiencing, we have seen year on year growth across our top 20 clients. For our candidates, our focus is on long term relationships. We are committed to connecting skilled STEM professionals with the right opportunities, dynamic organizations that align with their ambitions. This is made possible by network we've built over decades, nurtured through a mix of digital marketing, thought leadership, industry events and other multichannel engagement.

[Timo Lehne, CEO & Executive Director at SThree]

Now turning to our people pillar. The full potential of the exciting changes we're making lies in the hands of our people. From the outset of the tip, we have paired our technology implementation with investment in people, fostering a culture of inclusion and continuous learning. We continue to roll out global training across our systems and new ways of working. And we're pleased to see continuous increase in engagement and adoption.

[Timo Lehne, CEO & Executive Director at SThree]

As part of our commitment to thinking big, we brought our sales efforts more to the forefront of what we do with a strategic shift towards driving a high performance culture. A natural next evolution in this journey was the launch of two new performance frameworks across our sales function. These frameworks, which are integrated with our technology and systems, are designed to build more processes that are scalable and will guide our employees to increase success rates. As highlighted earlier, it's been a busy and productive first half of the year as we focus on strengthening our brand positioning, reinforcing our position as a trusted strategic partner for workforce solutions. As part of this, we brought all seven of our go to market brands closer together under the S3 umbrella.

[Timo Lehne, CEO & Executive Director at SThree]

We believe this will unlock real value, allowing us to harness the collective strengths of our global STEM expertise while still maintaining the specialist focus that makes each brand unique, which customers are looking for. The early response from our customers and partners has been really encouraging, and we are confident this will continue to support our ambition to become the authority in the STEM world of work. We also launched our very first STEM Skills Index, a data driven ranking of countries based on their ability to develop, retain and apply STEM talent. It's already become a cornerstone of our thought leadership and it's proving to be a powerful tool for our consultants, helping them advise and lead more meaningful data led conversations with clients about workforce capability, STEM talent strategy and long term planning. So to bring everything I've discussed together and highlighting what makes S3 unique and well placed to deliver.

[Timo Lehne, CEO & Executive Director at SThree]

Our focus on contract provides resilience and sector leading visibility. Our STEM focus sets us apart. Our conviction continues to be that STEM skills will build the future across all industries, and these skills remain particularly well aligned to our contractor model. We are at the forefront of our industry with our technology investments. Not only will we be a digitally enabled scalable business with high barriers to entry, but we will also be able to drive significant efficiencies and innovate at pace.

[Timo Lehne, CEO & Executive Director at SThree]

As Nick said, the most powerful impact of TIP may not be what it enables today, but what it makes possible tomorrow. We're in a unique position in the sector to drive further innovation, leveraging the very latest technologies, including agentik.ai, to maintain our first mover advantage in the market. And finally, in line with our repositioning, as we have highlighted it, we are not just a traditional recruiter. We are a workforce consultancy. This enables us to become a strategic partner for our clients.

[Timo Lehne, CEO & Executive Director at SThree]

We service businesses around workforce compliance globally, build expert teams and deliver project solutions to outpace tomorrow together. These services help us increase account penetration through deeper engagements with our clients. So to sum up, we delivered a steady performance in the first half of the year against a persistently challenging market environment and we enter the second half of the year in line with guidance. The TIP rollout is entering the final stages. We are maintaining strong momentum with over 20 new platform enhancements already in the development, including next generation AI tools designed to support consultants in opening new opportunities and maximizing their networks, another key step in embedding intelligence in the workflow.

[Timo Lehne, CEO & Executive Director at SThree]

As we continue to scale globally, we remain confident that the TIP will be a key driver of high margin growth, structural efficiency and sustained competitive advantage. And finally, we're building an organization fit for purpose, which combined with our industry experience, deep networks and strong commercial footing means we are structurally positioned to benefit as markets recover and evolve.

Participants

Executives

• Timo Lehne, CEO & Executive Director
• Andrew Beach, CFO, Executive Director & Board Member
• Nick Folkes, COO