Vedior NV
25 October 2007
Amsterdam, The Netherlands Q3 2007
Strong growth of permanent placement
benefits third quarter performance
For release at 7.00am on 25 October 2007
Highlights for Q3 2007
Amounts in € million Q3 2007 Q3 2007 excl Q3 2006 Increase Organic
non recurring (2) (1,2) Growth
items (1) (1,2,3)
Sales 2,202.4 2,202.4 2,013.4 +9% +9%
Gross Profit 438.5 421.2 365.9 +15% +12%
Gross Margin 19.9% 19.1% 18.2%
Operating Income 106.5 99.4 82.3 +21% +16%
Operating Margin 4.8% 4.5% 4.1%
Net Income 64.0 60.6 50.1 +21%
Net Income per share (in Euro) 0.37 0.35 0.29 +21%
(1) Excluding non recurring items, mainly relating to French social security
benefits (see page 5 and media release of 27 July 2007 for further details).
(2) Excluding profit from the sale of ISU in Q3 2006.
(3) All growth percentages quoted in this media release have been calculated on
an organic basis which excludes the impact of currency effects,
acquisitions and disposals.
• 33% increase in permanent placement fees
• Increase in gross margin to 19.1%
• Organic improvement in operating income of 16% with growth achieved in
all industry sectors
- Engineering +47%
- Accounting/Finance +45%
- Healthcare +27%
• Improving UK market
• Strong contribution from Belgium, Spain, Switzerland, Germany and
other European markets as well as Asia Pacific and Latin America
• Acquisition of two US staffing specialists
CEO's Statement
Tex Gunning said, 'Vedior benefited from increased permanent placement income,
resulting in improved third quarter profitability. Strong growth was achieved in
new markets for these services, such as France, as well as in more established
markets like the UK, Australia and the US.
Although the strong market conditions we saw for the first half of 2007 have
eased somewhat, our business mix and professional/executive focus contributed to
good results overall this quarter.
We have embarked on a strategic review through which we will establish how
Vedior can best capitalise on its strengths and on future market trends. This
wide-ranging review includes analysis of our business portfolio, organisational
alignment and corporate roles. We have mobilised the top 100 people from across
the business to work together in order to establish a clear vision for the
future. I look forward to working with my colleagues on this review and taking
Vedior to its next stage of development. An update on progress will be provided
when we announce our annual results in February 2008.'
Q3 2007 Review
Sales increased 9% this quarter, with increases reported in all of our markets.
Gross profit was up 12% and operating income increased by 16%.
Demand for permanent placement continued to increase this quarter resulting in a
33% organic improvement in placement fees. Permanent placement now represents
22% of Group gross profit compared to 17% in Q3 2006.
On a recurring basis, our gross margin improved to 19.1% from 18.2% and our
operating margin (operating income as a percentage of sales) was 4.5% (Q3 2006:
4.1%). Temporary gross margins were stable compared to the prior year.
Our conversion ratio (operating income divided by gross profit) increased to
23.6% from 22.5%.
Country/ Gross Profit Operating Income % of Group
Region Organic Increase Organic Increase Operating Income
France (See note) +8% +6% 33%
UK +15% +18% 17%
Netherlands +10% +12% 6%
Belgium +17% +44% 6%
Spain +14% +42% 4%
Other Europe +16% +55% 9%
US +8% -2% 12%
Australia & New Zealand +18% +23% 7%
Canada +18% +8% 4%
Latin America, Asia, Middle +26% +42% 2%
East, and Africa
Note: Figures for France in the above table exclude the non recurring effect of
recalculating social security
Our income tax rate increased from 31% to 32% on a year to date basis mainly as
a result of a higher weighted average statutory income tax rate in 2007.
Fees for permanent placement in France more than doubled this quarter. Although
French market growth slowed, we experienced strong increases in operating income
from our professional/executive staffing brands, which all performed well.
In the UK, we have seen improving performances across our business sectors
resulting in an 18% increase in operating income. Our UK permanent placement
activities also yielded good growth this quarter, with a 27% increase in fees.
In particular, engineering/technical and education sectors continued to perform
well as did our accounting/finance specialists despite recent turmoil within the
financial markets. We also saw an improved performance from our healthcare
staffing brands.
In the Netherlands, we saw positive developments in sales and operating income
within our Vedior operating brand as well as strong performances from our
professional/executive staffing activities.
Results across other parts of Europe were also strong, with Belgium, Spain,
Italy, Portugal, Switzerland and Germany achieving excellent performances in
terms of sales and operating income.
In the US, sales increased by 5% while operating income declined by 2% mainly
due to weakness within the traditional staffing sector. Our professional/
executive staffing activities performed well with 4% growth in operating income.
Growth in Australia and New Zealand remains robust with operating margins at
record levels and our traditional, accounting/finance, legal and education
brands performing particularly well.
In Canada, we continued to experience strong growth in the engineering/technical
staffing and IT sectors.
Emerging markets in Latin America, Asia, Middle East, and Africa once again
provide a valuable contribution to our Group results.
Business Development
In Q3 2007, we announced two acquisitions in the US; B2B Workforce, a provider
of eBusiness enterprise applications personnel and consulting services
and Think Engineering, a provider of engineering and technical professionals.
We also continued our active organic growth programme in a number of markets,
including the Middle East and the national expansion of our UK hospitality
staffing brand. Compared to the same quarter last year, the Group's network has
been extended by 138 offices to a total of 2,534 offices worldwide.
Management Outlook
We plan for Q4 to be broadly in line with Q3 trends.
The French social security benefit ceased on 30 September 2007.
For further information on these results, please join today's conference call
starting at 9.00am (CET). Details can be found on our website at www.vedior.com.
Tex Gunning, Chief Executive Officer +31 20 573 5600
Frits Vervoort, Chief Financial Officer
Jelle Miedema, Company Secretary
Investor Information at:
www.vedior.com/investor-relations/investor-relations.asp
Company Profile
Vedior is one of the world's largest recruitment companies and is a full-service
recruitment provider with a diversified portfolio of brands targeting a broad
range of industry sectors.
From its global network of offices spanning Europe, North America, Australasia,
Asia, South America and Africa, Vedior offers temporary and permanent
recruitment as well as a number of complementary employment-related services
such as outplacement, HR outsourcing, payrolling and training.
Vedior has a leading market position in the provision of professional/executive
recruitment in sectors such as information technology, healthcare, accounting,
engineering and education. We also have a significant global network providing
administrative/secretarial and light industrial recruitment.
Financial Agenda
7 February 2008 Publication of annual results 2007
25 April 2008 Publication of first quarter results and AGM
24 July 2008 Publication of second quarter results
23 October 2008 Publication of third quarter results
5 February 2009 Publication of annual results 2008
Safe Harbour
This media release 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 media release 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 media release
not to occur. Except as otherwise required by applicable law, we undertake no
obligations 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 media release.
This information is provided by RNS
The company news service from the London Stock Exchange 