Q3 2005 Results

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Q3 2005 Results
27 October 2005
Presented by Zach Miles Chief
Executive Frits Vervoort CFO
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This presentation includes forward-looking
statements that reflect our intentions, beliefs
or current expectations and projections about our
future results of operations, financial
condition, liquidity, performance, prospects,
growth, strategies, opportunities and the
industry in which we operate. Forward-looking
statements include all matters that are not
historical fact. We have tried to identify these
forward-looking statements by using words
including may, will, should, expect,
intend, estimate, project, believe,
plan, seek, continue, appears and similar
expressions or their negative. These
forward-looking statements are subject to a
number of risks, uncertainties, assumptions and
other factors that could cause our actual results
of operations, financial condition, liquidity,
performance, prospects or opportunities, as well
as those of the markets we serve or intend to
serve, to differ materially from those expressed
in, or suggested by these forward-looking
statements. Important factors that could cause
those differences include, but are not limited to
our financial position and our ability to
implement our business strategy and plans and
objectives of management for future operations,
our ability to develop, balance and expand our
business, our ability to implement our long-term
growth strategy (including through organic growth
and acquisitions), our ability to make
improvements to our capital structure, industry
and market trends and volumes, including the
speed and strength at which the staffing services
industry and the sectors in which we operate,
rebound from economic slowdowns and recessions,
the effects of regulation (including employment
and tax regulations), our ability to improve the
efficiency of our operations and to reduce
expenses in our operating companies and their
network of offices, litigation and our ability to
take advantage of new technologies. In light of
these risks, uncertainties, assumptions and other
factors, the forward-looking events described in
this presentation might not occur. Additional
risks that we may deem immaterial or that are not
presently known to us could also cause the
forward-looking events discussed in this
presentation not to occur. Except as otherwise
required by applicable law, we undertake no
obligation to update publicly or revise publicly
any forward-looking statements, whether as a
result of new information, future events, changed
circumstances or any other reason after the date
of this presentation.
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Presentation Agenda

• Highlights and Operating Summary
• Financial Summary
• Management Outlook

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Q3 2005 Highlights

• Sales of 1,808m (2004 1,728m)
• Up 6 organically
• Professional/executive sales up 8 organically
• Permanent placement fees up 18 organically
• Operating income of 66m (2004 61m)
• Up 7 organically
• Net income increased to 40m (2004 32m)
• Up 25 organically
• EPS of 0.24 (2004 0.19)
• Up 26 organically
• A busy quarter for acquisitions and organic
  developments

Excluding Special Items in Q3 2004
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Geographic Breakdown Q3 2005
Sales
Operating income
Netherlands 5
Netherlands 7
ROE 20
ROE 14
UK 15
France 41
UK 12
France 45
US 8
US 15
ROW 8
ROW 10
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Sector Breakdown Q3 2005
Sales
Operating income
Other Sectors 5
Education 1
Other Sectors 6
Education 1
Engineering
10
Engineering 6
IT 9
IT 15
Traditional 52
Accounting 4
Traditional 68
Healthcare 6
Accounting 6
Healthcare 11
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Organic Growth by Region
Rest of Europe
Rest of World
UK
Netherlands
France
US
30 20 10 0 -10 -20 -30
Q3 2004
Q4 2004
Q1 2005
Q2 2005
Q3 2005
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Q3 2005 Operating Summary

• France organic sales increased by 6
• Gross margin declined but operating income
  improved by 13 organically assisted by good cost
  control
• All segments within VediorBis showed growth
• Permanent placement develops encouragingly
• Engineering and accounting sectors grew by more
  than 10 and the decline in healthcare eased

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Q3 2005 Operating Summary

• UK organic sales were flat
• Good performance from engineering sector offset
  by slowdown in traditional and healthcare sectors
  which both declined by 6 organically
• Operating income decreased organically by 18
• Gross margins increased reflecting higher
  permanent placement

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Q3 2005 Operating Summary

• US organic sales growth remains high at 12
• Very strong increase in organic operating income
  up 36
• Professional/executive recruitment sales up 11
  organically led by accounting recruitment
• Traditional recruitment continued to grow well in
  advance of US market trends with an organic sales
  improvement of 20

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Q3 2005 Operating Summary

• Netherlands organic sales growth accelerates to
  12
• Operating income increased organically by 62 due
  to continuing operational leverage and cost
  control
• Professional/executive sectors showed a strong
  improvement in organic growth of 10
• The Vedior brand, our largest operating company
  in the Dutch market grew by 17 organically

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Q3 2005 Operating Summary

• Other Countries
• Rest of Europe sales improved by 4 organically
• Australian operations continue to perform well
  with increased sales, profitability and
  efficiency
• All operations in Latin America achieved
  excellent growth in sales and profitability
• Indian sales increased by 65 organically

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Organic Growth by Sector
Other Sectors
Education
Healthcare
Engineering
IT
Accounting
Traditional
40 30 20 10 0 -10 -20
Q3 2004
Q4 2004
Q2 2005
Q3 2005
Q1 2005
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Business Development

• Organic initiatives
• Andrew Farr
• Supreme Education
• Ma Foi
• Select Interservices
• Vedior Career
• Vedior Contec

Date Mar 05 Mar 05 Jul 05 Jul 05 Sept 05 Oct 05
Sector Accounting Education HR
BPO Travel/Tourism Perm Plcmnt Engineering
Market UK UK Oman Cyprus Japan Japan
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Business Development

• Acquisitions
• Becker
• Locum Medical
• Mandeville
• Consulteam
• Qualitair
• Compliance

Date Jun 05 Jun 05 Jul 05 Jul 05 Aug 05 Oct 05
Sector Accounting Healthcare Sales/Retail Tra
ditional Engineering Legal
Market US US UK Eastern Europe UK/Netherlan
ds US
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Presentation Agenda

• Highlights and Operating Summary
• Financial Summary
• Management Outlook

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Income Statement
Three months ending 30 September
million 2005 2004 Increase Organic Sales
1,808 1,728 5 6 Gross
profit 315 300 5 6 SGA (249) (239) 5 6 O
perating income 66 61 7 7 Net income 40 32
25 Earnings per
share 0.24 0.19 26
Excluding Special Items in Q3 2004
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Temporary Gross Margin Trend
0.3 0.2 0.1 0 -0.1 -0.2 -0.3 -0.4 -0.5
-0.6 -0.7 -0.8
Pricing
Q3 2004
Q2 2005
Q3 2005
Q1 2005
Q4 2004
Each quarter compared to the equivalent quarter
in the prior year
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Balance Sheet Cash Flow

• DSO unchanged at 65 days
• Net debt reduced 33 million to 559 million
• Redemption of Preference Shares A 51 million
• Cash generated from operations increased 25
  million to 73 million
• Benefit from lower working capital requirements

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Presentation Agenda

• Highlights and Operating Summary
• Financial Summary
• Management Outlook

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GDP Forecasts

• 2005 GDP 2006 GDP
• Belgium 1.3 1.7
• France 1.4 1.6
• Germany 0.9 1.1
• Netherlands 0.6 1.6
• UK 1.9 2.1
• Euro area 1.2
  1.5
• Japan 2.2 2.0
• US 3.5 3.2

Source The Economist Poll, 22 October 2005
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Management Outlook

• Latest developments in the majority of markets
  encouraging
• Look forward to continuation of positive trends
  in Q4 2005 and into 2006
• More difficult operating environment in UK
• Costs being reduced and other measures taken to
  protect profitability
• A healthier operating environment combined with
  continuing structural growth driven by
  demographic changes, deregulation and increasing
  skill shortages

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Any Questions?