Good morning and welcome everyone. Thank you for joining us today for our full year results briefing. I'm joined by Andy Beach, our CFO.
Good morning everyone.
Yeah. Once again, together we will be walking you through the full year numbers, our strategic progress, and our progress against our 2024 ambitions. This will cover our Technology Improvement Program and the benefits we expect to realize. As a result, we will focus this morning session on the FY 2022 results. You will have seen this slide before. It's important to reiterate who we are and our unique position in the market. At SThree, we are the global STEM specialist talent partner. We are purely focused on placing skilled STEM talent by offering flexible solutions to our clients through a network of highly specialized brands. We do this in chosen niche markets where there's high demand and acute supply shortage. Through our analytical approach, we know where to play. We play where we know we can win.
It is this focus that we live and breathe every day here at SThree. In 2022, we placed over 20,000 STEM specialists into highly skilled positions, helping to deliver vital talent that will tackle many of the complex issues facing our world. During my first year as a CEO, the executive team and I spent a lot of time with our regional teams assessing and clarifying our unique position and the strategy. We worked with the wider senior leadership team to articulate this clear strategy across the group. I can say, or we can say, the reception of our employees was fantastic. The alignment of our global teams under one focused approach is, we believe, stronger than ever. It is clear to me that there is excitement and a huge amount of momentum internally at the moment to push forward together as one united SThree.
As many of you know, our well-established strategy is positioned at the center of two long-term trends: STEM and flexible talent. The chart on this slide show how the business is shaped around these two trends. You can see on the left side the distribution of our focus across STEM disciplines. As a reminder, by STEM, we are referring to specialist skills in science, technology, engineering, and mathematics. The focus on these much-needed skills is where we see our long-term opportunity. On the right-hand chart, we see the conscious focus on flexible talent, by which we mean short to medium term contracts that are particularly well-suited to be filled by highly skilled STEM specialists. This focus is demonstrated by the growth of our contract business, which now represents 78% of group total and is up from 75% a year ago.
This bias towards contract provides us with a predictable and visible revenue stream and is a powerful differentiator in the market. We have chosen to become experts in these two areas, specifically because they are underpinned by global long-term megatrends which are driving demand. I won't go into detail this time on each of them because you will have heard us discussing these things in depth previously. Every day when you read the newspaper, you watch TV, you will see examples and statistics of why these megatrends remain so super powerful and are growth drivers for our business. SThree's purpose, the strategy, and the position mean we are at the forefront of the changing world of work. We are uniquely equipped to deliver core talent and skills desperately needed to confront these kind of challenges.
Our consistent focus has delivered another year of significant double-digit quality growth, materially ahead of initial expectations. Andy will go into the detail, but we're reporting today an exceptional 19% like-for-like growth in net fees in 2022, along with record profits with a 23% increase in operating profit. Our contractor order book, which is very important to us, is up 90% and we maintain a very healthy cash position at GBP 65 million. This reflects an excellent performance across the group with growth driven in all regions and all sectors. It is a result, of course, of the work of all of our people. I would like to thank everyone for the hard work and commitment. We now turn to look at what we have actually achieved strategically this year.
Our four pillars, which you might remember, support delivery of our strategy and mean we can consistently comment on our progress relative to our places, the platform, the people, and the position. The first strategic pillar is all about places, our internal credo is, "We know where to play and play where we can win," helping to ensure we are a leader in the markets we choose to serve. I can tell you, everyone in the group acts according to that. This disciplined and focused approach has helped us to grow our market share. In order to further leverage our scale and international footprint, we have launched a global best practice for better collaboration on large global accounts.
It's just one of many initiatives we have launched, but this is enabling us to service clients better through improved information access. The second pillar is all about our platform. Over the past year, we have been focused on creating a world-class operational platform for our colleagues across the group. The technology investments we're making in our platform will enable us to operate more effectively at greater scale by most importantly giving our consultants the best tools to become more productive and that quicker. The third pillar is all about our people. As you know, we're a people business. We want to find, develop, and retain great people by creating a high-performance, inclusive culture that is focused on driving effectiveness, engagement, and expertise in our offices around the world. This year, which we are really proud of, we have seen the highest eNPS ever.
As we believe it is a true reflection of the hard work and the investment being made, but also the momentum we have created in the organization towards this medium-term, long-term ambition. It's a testament to the culture and environment I think we've created here at SThree. Yeah, we're coming to the fourth and final pillar, which is focused on our position as a house of brands at the heart of STEM, with niche brands that have deep market value within target local markets. Major achievement this year, including growing our active contractors to over 12,500. We also launched our new brand identity to closer tie our house of brands together and unify the business really as one global STEM specialist. We believe this represents a clear expression of our intent to seize the market as an energized and innovative business.
It is this progress and focus that positions us well for the future. These initiatives are important steps to build our highly exciting and successful future. I will now hand over to Andy, who will talk you and take you through the financials and the breakdown of how the group performed.
Great. Thank you very much, Timo. Let me first start by taking you through a quick look back over the last few years. FY 2019 was, at the time, our record ever performance. Whilst FY 2020 was hit by the pandemic, the impact on the top-line performance was relatively shallow. We bounced back quickly in FY 2021, helped by the market recovery and returned to year-on-year growth from Q 2 in that year. Since then, we have delivered seven consecutive quarters of growth, delivering a 19% year-on-year increase in net fees on a constant currency basis for both FY 2021 and FY 2022. As expected, in Q 4, we saw a return towards more normalized growth rates and market consensus forecasts slower growth rates into FY 2023.
We remain confident that our positioning and strategy provide resilience to the business and will continue to deliver strong growth over the medium to long term. Looking in more detail at the full year 2022 performance, we have delivered record performance for both net fees and operating profit, with constant currency growth of 19% and 23%, respectively. Our conversion ratio, the ratio of operating profit to net fees, is 18%. As expected, our second half margins were lower than those delivered in the first half as we incurred more costs towards the end of the year related to our investments in technology, people, and talent acquisition, together with some restructuring costs in APAC and Ireland. Despite these costs, we have delivered incremental improvement year- on- year and are moving closer towards our 2024 ambition of 21% or more.
At the start of FY 2022, we forecast to deliver flat margins year-on-year. The 1 percentage point overachievement you see here is largely due to the lower than expected costs for the Technology Improvement Program. However, the program remains on track, and we do not expect that future years costs will go over budget. Profit before tax is GBP 77 million, up 24% year-on-year. Our effective tax rate has remained broadly flat at just under 30%, and this gives a profit after tax of GBP 54.2 million, which is up 24% year-on-year. I'll now go on to talk about some of the key drivers behind this performance. Our strategic focus on contract has been the key driver of net fee growth. It now represents 78% of net fees and saw growth of 23% year-on-year.
Permanent, which now represents 22% of net fees, grew by 6% year-over-year. This more modest level of growth reflects a conscious choice to target our headcount investment towards contract in line with our strategy. Our disciplined and focused approach to investments is also enabling us to continue delivering gains in our net fee margins. Contract net fees as a percentage of contract revenues are now 21.7%, whilst the average permanent net fee as a percentage of candidate's starting salary is 25.3%. We've also benefited from higher placement salaries. The average salary of contract placements increased by 3%, and on the permanent side, by nearly 2%. We continue to benefit from the growing demand from our clients for flexible talent solutions.
Our focus on contract business delivers a more sustainable revenue stream and a higher value across the length of the engagement. This slide looks at the analysis of net fees by product type. As I mentioned before, 78% of our business comes from contract, and this can be further 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 23% of net fees in 2019 to 35% of net fees in 2022. That's an increase of 28% year-on-year and 81% since 2019. ECM is the predominant model in the U.S., but it's also fast-growing across Europe. Turning now to the regional and sector split for the year. We have a well-balanced business, both geographically and by sector.
On the two charts you see here, the outer ring represents 2022, the inner ring represents 2021. We see no material change year- on- year in either regional or sector mix. The first chart shows that 97% of our net fees come from our top three regions, with DACH representing 35% of the group, EMEA excluding DACH representing 36%, and the U.S. representing 26%. The second chart shows our strong and unique position in providing STEM skills. Technology is our largest sector, and it represents 47% of net fees. Life sciences and engineering each represent 22% of net fees. Turning to the right-hand side of the chart, you can see that we've delivered double-digit growth in net fees across all regions.
You can also see that most of this growth is driven by the technology and engineering sectors with year-on-year growth of 23% and 27% respectively. Life sciences grew by a more modest 6% due to very strong comparatives in 2021, driven by the response to the pandemic in that year. The group's net fee growth has continued to outpace our disciplined growth in headcount, which remains marginally below the pre-pandemic peak. This has resulted in exceptional levels of productivity being net fees per head, which increased by 7% compared to 2021. You may remember, 2021 was also considered an exceptional year for productivity. We therefore maintain that these levels of productivity are not sustainable, and we expect them to revert to some extent.
We do expect to maintain some of the productivity gains achieved over the last couple of years and are investing in tools to sustain more of these gains in the long term, which you'll hear more about later today. Turning now to the year-on-year operating profit bridge. You can see the strong increase in contract and permanent fees, just under GBP 75 million in total. As expected, people costs are up year-on-year. This is largely driven by increased bonus and commissions to reflect the significant improvement in performance together with investments in people and talent acquisition during the year. During the year, we spent GBP 4.1 million on the Technology Improvement Program, and we incurred more costs to support the newly launched corporate brand and a return to more normalized levels of travels and conferences as COVID restrictions were lifted.
We also incurred some restructuring costs during the year. These investments have resulted in a drop-through of around 22%, but are critical to the delivery of our strategy and long-term success of the group. We are very pleased to have still delivered 23% year-on-year growth in operating profit on a constant currency basis. Looking at our net cash position, we've delivered a year-on-year increase of 14% despite the additional working capital required to fund new contractors. The underlying profits of the group, together with very strong management of other working capital, including debtor collection and supplier payments has more than compensated for the required funding. We had tax payments during the year of nearly GBP 19 million, with a further GBP 18 million for lease payments, bank interest, and capital expenditure.
Total impact on cash from purchases of shares and payment of dividends was just over GBP 24 million, offset by an FX benefit of about GBP 4 . 5 million, providing a net impact of GBP 19.6 million. Our cash position fluctuates over the course of the year due to the nature of our business, and we will utilize our cash reserves to increase capital investments in the Technology Improvement Program over the next couple of years. Moving on to look at EPS and dividends. As mentioned earlier, profit after tax is up 24%. The number of shares is slightly down year- on- year as we have increased our share purchases, driving an earnings per share increase of 29% to GBP 0.41 .
Now I'm very pleased to announce our final dividend of GBP 0.11 per share, which in addition to the interim dividend of GBP 0.05, brings our full year dividend to GBP 0.16. This is an increase of 45% over 2021 and in line with our dividend policy. Looking now at the future visibility of our contract business. As many of you know, our contract order book represents the value of contracts written up to the contractual end date and assumes that all our contracted hours are worked. We have seen further growth in the order book, up 19% versus the same time last year, reflecting the high demand for skilled contractors that we've seen across our markets. Despite tougher market conditions, our focus on contract and the strength of the contract order book provides greater visibility and resilience than perm-focused businesses.
The current value of the contract order book at the end of the year represents over 1/3 of our total net fee consensus for FY 2023. To sum up, we're reporting a second consecutive year of record trading performance. We delivered strong growth in net fees across all regions. We've delivered record profits despite investments in our technology and people. The contract order book has continued to grow, giving us good visibility of future net fees, and we have a healthy balance sheet position. With that, I'll hand back to Timo.
Thank you, Andy. As you've heard, this has been a very busy year for SThree. We have not been standing still. I would like to expand further on some of the operational progress we have made this year.
Myself and the board and our leadership team are fully aligned on our strategic direction. This will enable us to deliver long-term value to all of our stakeholders. We recently reaffirmed our medium-term ambitions for 2024, which you can see here. We will achieve our ambitions through seizing the opportunity, through discipline and focus, and through our Technology Improvement Program. In regard to growing our market share faster than our peers in each of our regions, we have made really good progress. As at September 2022, the most recent data available, we have achieved an average growth quarterly rate of 33% in our core regions versus 2019. Our peer group has achieved on average a growth rate of 17%. Our second stated ambition was to deliver an operating profit conversion ratio of 21% or more by FY 2024.
We believe we are well-placed to deliver on this ambition with good progress to date, combined with our Technology Improvement Program, which we will be briefing on this afternoon. Our third ambition is to be an employer of choice in the professional service sector with eNPS in the upper quartile of our industry. As mentioned already, I was very pleased to see that our eNPS score improved to the highest level we've ever achieved. Our focus for us was to bring everyone in the business on the bus toward one strategic vision. This score reflects that we are progressing very well on that journey. Finally, our fourth ambition was to reduce our carbon footprint on our path to net zero with a target of reducing Scope 1, 2, and 3 emissions by 25% compared to FY 2019.
In 2022, we achieved a 44% reduction against the base year. Well on track, I will touch more on this on the following slide. Our commitment to run responsible, sustainable business remains at the heart of everything we do. We have set ourselves ESG targets centered around promoting green jobs, encouraging diversity in STEM, and contributing to a renewable future. I think we can say we made good progress in the year. Particularly pleasing is having positively impacted nearly 89,000 lives since December 2019. Meaning we are roughly, yeah, well over halfway to our goal of 150,000 impacted lives by 2024. We have advanced our ambition to tackle climate change.
While it's a small but growing proportion of the overall group, we have seen an 88% growth in net fees from our renewable business since 2019, in line with our ambition to double our share by 2024. One good example is our contribution to Dutch customer, where we have just recently placed 20 contractors in the offshore division, building wind platforms and supporting the efforts in the global energy transition. As I mentioned on the previous slide, we have reduced our carbon emissions by 44% in 2022 as compared to 2019 and have been closely monitoring our emissions as the world reopened following the pandemic. There is a clear shift within the organization to embrace digital ways of working, reducing travel where possible, which has positively impacted this target.
We have established net zero working groups for each of our high-emission sources with the sole objective of developing carbon reduction plans and ensuring these are embedded within our operating plans. We will have further details on our net zero plans later this year. Finally, we're increasing our focus on improving gender representation in the business. We've made progress at the senior level with 32% of all leadership position occupied by women. However, we need to recognize that we need to do more at that level and support that succession. Our commitment is clearly there. To conclude, we have had an exceptional record-breaking year combined with major advances in our strategic objectives. Looking ahead, we are pretty well-placed to build on our position as a leader in STEM. We have the discipline and focused approach to strategic execution. I think that's really clear.
This means we proceed with a significant amount of experience and understanding of where our best opportunities lie. Our opportunity is large. It's underpinned by structural mega trends driving the acute need for STEM talent across industries and regions. We've done a lot this year identifying, targeting, and advancing our Technology Improvement Program, ensuring we're positioned for long-term sustainable success. More immediately, trading early in the new financial year is tracking in line with expectations, and we continue to monitor how the markets are evolving in the short term. However, overall, we continue to drive the business forward. As pioneers in our field, we continue to be well-positioned to source and place the best STEM talent the world needs, and as such, our belief in the group's potential remains stronger than ever. Thank you all for being here today, and see you soon. Thank you.