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Vedior NV (0J9M)


Thursday 27 April, 2006

Vedior NV

1st Quarter Results

Vedior NV
27 April 2006


Amsterdam, the Netherlands

                        Strong margin improvement drives
                     growth in operating income in Q1 2006
                     For release at 7.00am on 27 April 2006

Highlights for Q1 2006

Amounts in € million           Q1 2006     Q1 2005    Increase   Organic Growth*
Sales                          1,724.2     1,530.8        +13%               +9%
Operating Income                  51.7        38.5        +34%              +29%
Net Income                        29.8        20.8        +43%                 -
Net Income per share (€)          0.18        0.12        +50%                 -

* Organic growth is measured by excluding the impact of currency effects,
  acquisitions and disposals.

•  Operating income in France increased by 31%
•  Operating income in the Netherlands more than doubled
•  Strong growth in sales and profits in North America and Australia
•  Increase in gross margin to 18.4% (Q1 2005: 17.5%)

CEO's Statement

Zach Miles said, 'I am pleased that we have achieved such strong increases in
operating income in two of our key markets; France and the Netherlands.

The results for the first quarter reaffirm the encouraging trends we identified
towards the end of 2005 and bode well for the remainder of the year.

With double digit sales growth in four out of our six major regions, we see good
leverage benefiting our bottom line as a result of improved business mix and
operating efficiency. At the same time, gross margins have increased providing
added impetus to our profitability.

The start of the year has also seen us make excellent progress with our
acquisition programme with the addition of three leading professional/executive
companies to our portfolio of specialist brands.'

Q1 2006 Operational Review

All growth percentages within this Operational Review have been calculated on an
organic basis which excludes the impact of currency effects, acquisitions and

As in the final quarter of 2005, the main drivers of Vedior's growth this
quarter were the strong recovery in the Netherlands and other parts of
continental Europe, continuing growth in the US, Australian and Latin American
markets combined with rapid expansion in newer markets such as India and Eastern
Europe. The quarterly comparison also benefited from the change in the timing of

In France, sales grew by 6%. Changes in business mix and growing permanent
placement revenue contributed to a 31% improvement in operating income.

In the UK, operating income was unchanged while sales increased by 1%. Most
professional/executive recruitment sectors exhibited good growth particularly
accounting, engineering, legal and interim management sectors. Education sales
increased by 17% due to late Easter school holidays. Traditional recruitment
remains weak with the light industrial market most impacted.

In the US, we achieved further improvement in operating income with 21% growth
this quarter on the back of a sales increase of 13%. Professional/executive
sales grew by 10% with good performances from our accounting, IT and healthcare
businesses. Once again, traditional recruitment developed strongly in niche
sectors with 29% sales growth. Our managed service brand also made good

In the Netherlands, operating income increased by 122%. Overall, sales grew by
22% amidst improving economic sentiment and an improving pricing environment.
Professional/executive recruitment sales grew by 13% with exceptionally strong
demand for finance and accounting personnel, and good performances from our IT,
education and interim management brands. Traditional staffing sales grew by 25%
with the emphasis placed on developing higher margin business.

In Vedior's 'Rest of Europe' region, operating income increased by 84% and sales
were up 12%. Good performances were achieved in most markets, particularly
Belgium, Switzerland and Spain, as well as Germany where profits tripled. We
also saw very satisfactory sales performances within emerging markets in Central
/Eastern Europe.

In our 'Rest of World' region, operating income increased by 20% and sales by
22%. Australia increased operating profit by 34% with sales up by 19%.
Professional/executive recruitment sales in Australia increased by 23% while
traditional staffing increased by 14%. Elsewhere, Latin America, Canada and
Japan performed well while our Indian operations grew by more than 60% and more
than doubled operating income.

Demand for permanent placement grew during the quarter resulting in a 32%
organic increase in placement fees. Permanent placement now represents 2.9% of
Group sales compared to 2.3% in Q1 2005.

Gross profit was €316.8 million compared to €268.1 million in Q1 2005. The
increased gross margin earned from the supply of temporary staffing and an
increase in permanent placement fees led to an improvement in gross margin to
18.4% compared to 17.5% in Q1 2005.

We continue to strive for greater operational efficiencies.  As a result, our
conversion ratio (operating income divided by gross profit) increased from 14.3%
to 16.3%. As a percentage of sales, costs increased slightly to 15.4% compared
to 15.0% in Q1 2005 reflecting increases in personnel costs driven by sales
growth and investment in new organic business development.

Operating income was €51.7 million, an increase of 29%. The operating margin
(operating income as a percentage of sales) was 3.0% an improvement of 50 basis
points over Q1 2005.

Cash flow from operating activities increased to €90 million from €35 million in
Q1 2005 mainly due to higher operating income, lower working capital
requirements and lower tax payments.

Business Development

During Q1 2006, Vedior made two acquisitions and launched a number of new
divisions as part of our active programme of organic expansion. In February, we
acquired Talisman Software, a provider of technology personnel globally from a
network of offices in Switzerland, Germany and the Netherlands. During the same
month, we also acquired Special Agent, a recruiter of educational support
personnel, complementing our established teacher supply business.

In April, we acquired a further 52% interest in The Blomfield Group bringing our
total holding in the company to 70%. Blomfield is a leading recruitment services
provider in the UK and Ireland specialising in the financial sector and has a
particularly strong presence in London's financial recruitment market primarily
under the Joslin Rowe brand.

Vedior actively seeks suitable acquisition opportunities in line with its
objective to further diversify its business mix and increase the proportion of
sales and profit derived from professional and executive recruitment.

As part of our organic development programme, we launched Sapphire Governmental
Technologies in the US providing IT consultants to government system integrators
as well as local, state and federal agencies. Elsewhere, we opened a new
engineering/technical division in Australia, biotechnology staffing services in
Singapore and teleservices recruitment in Mexico.

Management Outlook

Improving labour market conditions and increasing demand for personnel is
clearly evident in the improvement in our margins during the first quarter of
2006. Economic forecasts in the majority of our markets continue to improve.
Whilst making progress with our ongoing investment programme, we expect these
trends to positively impact our performance for the remainder of the year.

For further information on these results, please join today's conference call at
9.00am (CET). Details can be found on our website at

Zach Miles, Chief Executive                  Tel: +31 (0)20 573 5609
Frits Vervoort, CFO
Jelle Miedema, Company Secretary

Investor Information at:

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

28 April 2006           Annual General Meeting
9 May 2006              Dividend made payable
27 July 2006            Publication of second quarter results
26 October 2006         Publication of third quarter results

Conference calls to discuss results are scheduled for 9am (CET) on the day of

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
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