Our business model

Strategic Report
Governance
Financial Statements

Unlocking our unique potential by

A global network

giving customers
access to a globalnetwork

Europe offices (Head office: London)

1 USA
United States(focus on Life Sciences and Engineering)

EuropeAmsterdam
Antwerp
Barcelona
BerlinBirmingham
Bristol
Brussels
Düsseldorf
EindhovenFrankfurt
Glasgow
Hamburg
Hannover
Leeds
LondonMadridManchester

MünchenNürnberg
Paris
Rotterdam
Stuttgart
Utrecht
ViennaZurichUSA offices

ME & Asia offices

AustinBostonChicagoHoustonNew York
San Diego

DubaiTokyoUSA

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 offices in 118
countries, with key operations located in Europe, the USA,
the Middle East and Japan.

Where we operate
Financial reporting segments
Since FY23, the Group’s reportable segments are as follows:

Reportablesegment name8.

12Countries included

DACH

Austria, Germany, Switzerland Netherlands
including Spain

Netherlands, Spain

Rest of Europe

Belgium, France, the UKUSA

USAMiddle East & Asia

Dubai, JapanNet fees perreporting segment

Recruitment consultants
per reporting segment

As a proportion of FY23 total
Group net fees

Based on FY23 average

FY23

ME & Asia

FY23DACH36%

DACH

37%

Netherlands incl. Spain

19%

Netherlands incl. Spain

18%

Rest of Europe

17%

Rest of Europe

20%

USA

23%

USA

17%

Middle East & Asia

5%

Middle East & Asia

8%

Excluding Ireland, Luxembourg and Singapore, which
as of 30 November 2023 were no longer a going concern.

SThree plc

Annual Report and Accounts 2023

13Our business model continued

Strategic Report
Governance
Financial Statements

Our key value drivers

What we do

We have long-standing relationships and strong internal
resources which we use to do business and create andpreserve 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 acrossthe world.

Our relationships

Group resources

Our people

SThree’s culture

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 rightopportunities and dynamic organisations in need ofhighly specialist STEM talent.

Clients

for whom we adapt our business and strategy byinvesting in the right vertical niches, improving anddeveloping our service proposition so it continues tobe relevant to evolving client needs. And for whom
we have become the go-to partner to find niche
STEM skills.

Local communities

where we established long-standing partnerships withlocal authorities, non-governmental organisations
and other institutions. Together we contribute todevelopment of a more diverse and innovative
STEM talent pipeline.

is open, cooperative and performance focused. It
is underpinned by policies and business practices
and a well-established corporate governanceframework, all of which are designed to guide ourbehaviours and ways of working across SThree.
Our culture demonstrates a commitment totreating all employees, candidates, clients and local
communities with respect as critical partners in ourbusiness.

How we do it
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 othertargeting techniques.

2Agility

The way we serve our clients flexes
locally, accommodating client
preferences and complex regulatory
landscapes across all regions.

3Recurring revenue generation

We earn fees mainly on a recurring basis. 82% ofGroup net fees are Contract fees, earned on an
ongoing basis for the duration of the contract, with
the Group paying contractors and retaining a portionof the amount charged to the client as a service fee.
18% are Permanent fees, charged as a percentage ofa candidate’s starting salary when the candidate isplaced with a client.

Financial position

we fund our business through a strong operating
cash flow, supplemented by debt and equity whenneeded. An appropriate mix between the threeprovides us with strategic flexibility to pursue valueenhancing opportunities when they arise.

Geographic footprint

with a strong leading presence in key STEM markets
where technological change is at full speed anddemand for contract roles outstrips supply.

21

We connect
STEM specialists
with dynamicorganisations acrossthe world3

We source and help tonurture sought-after
STEM talent

We earn fees
and grow freecash flow

Investors

with whom we engage to share our strategic
priorities and performance.

4We reinvest
capital wisely to fundcontinued businessgrowth and funddividend

Investing for growth

We are a highly cash generative
business. We invest free cash into
growing our business and asset baseand use it to fund a regular dividend
stream. In time, we will consider
the appropriateness of inorganic
opportunities.

5We build a sustainable future through STEM
Sustainability
Our commitment to run a responsible and sustainable business remains at theheart of everything we do. We work with clients who are at the forefrontof tackling climate challenges, whilst investing in our own renewableenergy business and managing our own carbon footprint towards
the net zero economy. We make DE&I development part ofbusiness as usual and launch new incentives
to support the wellbeing and healthof our people.

14SThree plc

Annual Report and Accounts 2023

15

Our business model continued

Strategic Report
Governance
Financial Statements

What value we create for stakeholders

Our key competitive advantagesOur 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 localcommunities, we create value for all our stakeholders.

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 fit is highly valued by both parties. That enables
us to maintain our pricing, invest in enhancing our service, continue to take market sharein a growing market and generate sustainable returns.

Examples of our value creation in FY23

Focus on STEM

Driving sustainable value

Cash generative business

Significant market potential

Clear capital allocation
policyStrong financial position

SThree operates in the world’s largest
STEM markets: the USA, Germany, theNetherlands, the UK and Japan. Despite
our strong market positions we have arelatively small market share (circa 2%of the potential STEM market in the top
five markets). This offers us a significant
opportunity for growth.

Our investment policy reflects a
disciplined strategy of value creation.
Funds are allocated across the businessaccording to strategic value-enhancing
priorities, sustainability-related mattersand principal risks.

Recurring revenue dynamics of ourContract business drive sustainable
free cash flows. Plus, we maintain a£50 million Revolving Credit Facility(RCF).

c.2%£30–35m£83m

Global house of STEM
specialist recruitment
brandsWell-considered ESG
strategy

Regular dividend

Each of our brands brings expertisein specific sought-after skills withinscience, technology, engineering andmathematics. We understand them andknow how to achieve the goals of STEM
professionals and the organisations thatneed them across many sectors – for both
permanent and contract work.

Long-term commitments to theenvironment and society aim to deliver
positive outcomes for all our stakeholders
and contribute towards the UN
Sustainable Development Goals (SDGs).

We offer shareholders long-term dividendgrowth in line with our dividend coverpolicy, which is currently within the rangeof 2.5x to 3.0x of our annual earnings.

1,833

114,466

16.6p

Our people

Shareholders

Environment

7.1%

11.6p

8%

41,264£27.4mFor 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 insupport of creating an inclusive culture,
winning our employees’ engagement andempowering them to meet their goals.

We aim to pay a dividend that issustainable through the cycle, and which
will be driven by long-term earnings
growth. In FY23, the Board recommended
a final dividend for the year of 11.6 pence
per share.

of operating profit invested in learning andprofessional development programmes

employee training hours

recommended final dividend per share

Local communities

15,292431>7,2003,094

clients we worked with around the world in FY23

We use our deep knowledge and global
network to understand the needs andcareer aspirations of the best STEM
professionals and match them with theorganisations that need them, in both
permanent and contract roles. Their work
helps our clients make new discoveries,
increase the accuracy and availability oftechnologies and to realise the long-term
potential of technology to address theworld’s challenges.
SThree plc

reduction in CO2 emissions since FY19 baseyear

total dividends distributed to shareholders
in FY23

Candidates and clients

candidates placed in FY2316(our institutional and retail investors)

people accessed career support programmes

hours volunteered in local communities

We use our knowledge and experience
to support local communities andinitiatives to help eliminate barriers toemployment and create more pathways
into STEM careers.

We source the talent needed to build asustainable future, partnering with clientsto support the transition to a low-carbon
economy. Our ambition is to be a net
zero company by FY50, with a near-termtarget of reducing scope 1 and 2 GHG
emissions by 77%, and scope 3 GHG
emissions by 50%, by FY30 versus thebase year FY19.

Full details of our transition to net zerocan be found on page 71

Our share of STEM market in our top fivecountries

Recruitment consultants

See Strategic progress: Our Places, OurPlatform for more information on page 24

Current investment plan to increase ourproductivity

Number of lives positively impacted since FY19

See Our commitment to being a responsible
business for more information on page 52

Net cash

Total dividend per share

See Chief Financial Officer’s statement
for more information on page 34

Annual Report and Accounts 2023

17