Information  X 
Enter a valid email address

Vedior NV (0J9M)


Thursday 02 February, 2006

Vedior NV

30% EPS increase for 2005

Vedior NV
02 February 2006

Amsterdam, The Netherlands
                                         & FULL

                          Vedior achieves 30% increase
                         in earnings per share for 2005
                    For release at 7.00am on 2 February 2006

Highlights for the Year 2005

•         Organic sales growth 7%
•         Organic operating income growth 11%
•         Pick up in demand in the Netherlands and other parts of continental
•         Strong growth in the US, Australia and Latin America, and rapid
          expansion in India and Eastern Europe
•         Global network extended to 44 markets (2004: 37)
•         Earnings per share of €0.82*, a 30% increase from the prior year
•         Proposed dividend of €0.25, a 25% increase from 2004

Amounts in € million                      2005           2004           Growth
Sales                                    6,851          6,475    +7% organically
Operating Income*                          232            213    11% organically
Net Income*                                139           109           +27%
Net Income per share (in Euro)*           0.82          0.63           +30%

Highlights for the Fourth Quarter 2005

•         Operating margin improves to 3.8% (Q4 2004: 3.6%)
•         Strong growth in permanent placement fees; up 26%
•         Three acquisitions completed (making eight acquisitions for the year)

Amounts in € million                  Q4 2005      Q4 2004             Growth
Sales                                  1,794         1,642      +7% organically
Operating Income                          68            59     +12% organically
Net Income                                42            33            +31%
Net Income per share (in Euro)          0.25          0.19            +32%

Organic growth is measured by excluding the impact of currency effects,
acquisitions and disposals. For the year ending 31 December 2005, organic growth
is adjusted for the extra week in Q1 2004.

*Excluding special items. Special items include the gain on disposal of TriNet
in Q2 2005 and in, Q3 2004, the disposal of the Group's 51% interest in Niscom
Japan and the disposal of Sapphire France.

CEO's Statement

Zach Miles said, 'I am very pleased with the strong improvement in profits
recorded for the year supported by our strategy of developing a diverse revenue

We remain firmly focused on achieving our financial targets and expanding our
range of services through organic investment and a disciplined acquisition

During the year, we achieved strong increases in profitability in the US and
Netherlands as well as our 'Rest of Europe' and 'Rest of World' regions.'

Annual Operational Review

In 2005, we achieved organic growth across all of Vedior's major geographies
with the strongest performances coming from the Netherlands, US and Rest of
World regions. The French market continued its gradual recovery while the UK
market, after several years of strong growth, weakened during the course of the

Sales and profitability improved in all of Vedior's major sectors of operation
with the exception of healthcare and education. The most notable improvements
came from the accounting, IT and engineering sectors. This pattern represents a
reversal of the situation four years ago, reflecting changes in each of these
sectors. Our diverse business mix across different geographies and different
recruitment sectors continues to prove an asset in a cyclical industry.

Vedior's sales increased organically by 7% to €6,851 million in 2005 from €6,475
million in 2004. Organic growth is calculated by excluding currency fluctuation,
the impact of acquisitions/disposals and adjusting for the number of business

The main drivers of Vedior's growth in 2005 were a pick up in demand in the
Netherlands and other parts of continental Europe including Spain, Portugal and
Switzerland continuing strong growth in the US, Australian and Latin American
markets combined with rapid expansion in newer markets such as India and Eastern
Europe. Sales and operating profit in Australia were robust throughout the year
in both the traditional and professional/executive sectors making it our 5th
largest market in terms of profitability.

Vedior's operating companies in emerging markets had an exceptional year with
organic sales growth of 69% in India, 26% in Latin America and 95% in Central/
Eastern Europe, Our presence in these developing economies provide the Group
with access to fast-growing markets as well as the potential to capitalise on
offshoring opportunities.

Demand for permanent placement continued to grow in most markets resulting in a
19% organic increase in placement fees. Permanent placement now represents 2.4%
of Group sales compared to 2.0% of sales in 2004.

Gross profit was €1,227 million in 2005 compared to €1,141 million in 2004.
Throughout 2005, Vedior experienced pricing pressure in a number of markets
though this was more than compensated for by changes in business mix and
increased permanent placement fees. The Group's gross margin was 17.9% compared
to 17.6% in 2004. The gross margin earned from the supply of temporary workers
remained stable at 15.7%.

We continued to strive for greater operational efficiencies.  As a result, our
conversion ratio for the year (operating income excluding special items divided
by gross profit) increased from 18.7% to 18.9%. Development of managed service
offerings during 2005 has afforded greater commercial synergies among our brands
particularly in the US, UK, Netherlands and Australia. These managed service
initiatives take advantage of Vedior's high performance culture to provide more
efficient co-ordination and co-operation for the benefit of clients who wish to
utilise services across more than one brand.

As a percentage of sales, costs increased slightly to 14.5% in 2005 compared to
14.3% in 2004 reflecting increases in personnel costs driven by sales growth and
investment in new business start-ups. Cost increases were offset to some degree
by a number of efficiency initiatives including back-office consolidation and
ongoing procurement initiatives.

Operating income increased to €232 million. On an organic basis, operating
income increased by 11% excluding special items. The operating margin (operating
income excluding special items as a percentage of sales) was 3.4%, up from 3.3%
in 2004.

Vedior has maintained profitability in markets and industry sectors representing
99% of total Group sales for two successive years. In the US, where we
capitalised on healthy economic conditions, our operating margin increased from
4.3% to 6.2%, closer to the local operating margin target of between 7.0% to
8.0%. We also achieved a strong improvement in operating margins in the

Cash flow from operating activities increased to €113 million in 2005 from €111
million in 2004. Higher operating income was offset by additional working
capital required to finance sales growth. Debtor days at the end of the year
were 64 (2004: 63).


Vedior's primary objective is to achieve investment returns which are above
average for the industry by focusing primarily on higher organic profit growth
and improved operating margins. We intend to achieve this by increasing the
proportion of our business in the professional/executive recruitment sectors,
developing a more balanced earnings stream and improving our business mix
through both organic and acquisitive growth.

We will continue to maximise the opportunities afforded by our multibranding
approach utilising our strong local brands to attract the highest quality
candidates, and also take advantage of our decentralised management structure
which enables us to react quickly to local market opportunities.

We have also set financial targets based on increasing our operating margins. We
believe these margins are achievable given favourable economic conditions
without any fundamental adjustments to our business model.

                                    2005                        Target
                              operating margins           operating margins
         France                     3.2%                     4.0 to 4.5%
           UK                       5.9%                     7.0 to 8.0%
          USA                       6.2%                     7.0 to 8.0%
      Netherlands                   2.7%                     5.0 to 6.0%
     Rest of Europe                 2.7%                     3.5 to 4.0%
     Rest of World                  4.5%                     5.0 to 6.0%

The achievement of these targets would result in an overall Group operating
margin (after corporate expenses) in the range of 4.6% to 5.6%. However, it is
important to recognise that our industry is economically sensitive and
favourable conditions in each market do not necessarily occur simultaneously.

Business Development

At the end of 2005, Vedior operated through a worldwide network of 2,276 offices
which, on a net basis, is an increase of 31 compared to the prior year. The
number of countries the Group operates in increased from 37 in 2004 to 44 by the
end of 2005.


During 2005, Vedior made eight acquisitions and continued its active programme
of organic expansion. In line with our stated strategy, we acquired majority
stakes in companies with local management keeping a minority interest.

Four of the acquired companies operate in the US in professional/executive
recruitment including healthcare, accounting and finance, and legal recruitment.
Two companies were acquired in the UK in the sales and retail sector and in
aviation. We also acquired a group of companies providing temporary recruitment
services, permanent placement, training and other

HR related services from offices in Bulgaria, Romania, Croatia and Serbia &
Montenegro which extended our coverage to nearly all Eastern European countries.
Finally, we acquired a provider of outsourced pharmaceutical sales and
telemarketing personnel to complement existing operations in Finland.

In addition to these acquisitions, Vedior also made a number of small
investments, including some where the Group holds a minority interest, during
the course of the year. The combined consideration paid for acquisitions and
investments in 2005 was €49 million.

Vedior continues to actively seek 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. The ideal targets are smaller companies with excellent growth
prospects which can be financed from the Group's internal cash resources.

Organic expansion

Within established markets, Vedior continues to launch new sectors to broaden
our service offering in local markets and also provide an excellent engine for
long-term organic growth.

In the UK, two organic start-up operations commenced trading in 2005; Andrew
Farr Associates operating in the accounting and finance sector while Supreme
Education is a new and innovative initiative for the education recruitment

Two important organic initiatives were launched in the Japanese market in
co-operation with local partners. Vedior Career provides permanent recruitment
services while Vedior Contec provides senior engineering personnel on a contract
basis for construction projects.

During the year, we also opened new offices in Cyprus, Oman and Uruguay via
established brands in neighbouring countries.


We sold our minority holding in TriNet Group, Inc., a Californian-based provider
of business process outsourcing services for payroll, benefits and human
resources. Vedior's gross proceeds from the sale of TriNet shares amount to
approximately $43 million (€35 million) of which approximately $37 million (€30
million) was received at closing and the balance will be paid in instalments
over the next two years. TriNet's annual sales for 2004 were $44 million (€36
million) which, as a minority investment, were not consolidated within Vedior's
reported sales. TriNet's contribution to Vedior's 2004 net result was $3.1
million (€2.4 million). The net profit arising from this disposal was €15

Recent Events

In January 2006, Vedior and TNT ended their joint venture in the Benelux with
Vedior taking 100% ownership of the facilities management recruitment business,
Mailprofs Uitzendburo operating in the Netherlands and Belgium, and TNT assuming
100% ownership of the outsourcing business, Mailprofs Postkamerbeheer. The joint
venture operated on a 50/50 basis with each party reporting its share of
revenues and profits in its consolidated results. For the full year 2005,
Mailprofs Uitzendburo achieved sales of €14 million and Mailprofs
Postkamerbeheer achieved sales of €10 million.

Yesterday, it was announced that Vedior had agreed to acquire a 66% interest in
Talisman Software Holding SA, which services the information technology and
business consulting sectors from a network of offices in Switzerland, Germany,
Netherlands, and the UK.

Management Outlook

Vedior is experiencing growth in both the professional/executive and traditional
parts of its business. We are convinced of the merits of our strategy and have
confidence in the strength of our market position.

We will continue to seek improved operating efficiency while investing in new
and profitable niche markets both organically and through acquisition.

We will benefit from the continuing strong recovery in the Dutch market as well
as growth in other parts of continental Europe, including Spain and Germany. The
established US and Australian markets continue to be buoyant while newer markets
such as India, Latin America, Japan, Eastern Europe and the Middle East are also
expanding rapidly and will increasingly contribute to the Group's results.

In France, we expect the gradual recovery to continue supported by government
initiatives to improve labour market flexibility.

In the UK, economic forecasts indicate an improving environment. Our companies
have been positioned to capitalise on market opportunities.

Pricing pressure will remain a feature of some markets during 2006 driven by
procurement initiatives in larger accounts and excess supply in certain sectors.
However, this is partly cyclical in nature and improved business sentiment
leading to increased demand should improve the situation in the higher skilled
segments. Vedior will continue its policy of exiting low margin business.

Consensus GDP forecasts for 2006 are at a higher level than for 2005 in most of
Vedior's major markets or, as is the case in the US, still at a relatively
positive level. A healthier economic environment combined with continuing
structural growth driven by demographic changes, deregulation and increasing
skill shortages will enable Vedior to take advantage of its leading market
position in professional/executive recruitment and its diverse global network.

Given market trends, our firm priority in 2006 will be to build on the progress
already made towards reaching the Group's margin targets. As markets improve,
Vedior will invest for future growth and establish a stronger platform for
improved long-term profitability. Investment will be targeted primarily in the
following areas:-

•       Acquisition of fast-growing professional/executive recruitment companies
in line-with our stated strategy focusing on North America, Germany, Japan and
emerging markets in Asia and Latin America.

•       New start-up initiatives and development of existing brands worldwide
including further expansion into the Middle East.

•       Continued roll-out of permanent placement activities in France and other

•       Upgrade and expansion of infrastructure (technology, personnel and
offices) particularly in continental Europe.

•       Enhancement of eBusiness functionality.

•       Improvement of managed service capability.

For further information on these results, please join today's live audio webcast
at starting at 9.00am (CET) or contact one of the
following on +31 (0)20 573 5609 after the event:

Zach Miles, Chief Executive
Frits Vervoort, CFO
Jelle Miedema, Company Secretary
Investor Information at:


Dividend Payments

It will be proposed to the Annual General Meeting of shareholders that a
dividend of €0.25 is paid on each (certificate of an) ordinary share,
representing 30% of profits per share for the year (before special items). At
the same meeting, it will also be proposed that a dividend of €6.00 (including
interim payments) will be paid on each of the issued (depositary receipts of)
preference B shares. The total dividend payment will be €42 million and will be
distributed in cash (€) on 9 May 2006.

Redemption of Preference Shares

Vedior's Annual General Meeting on 29 April 2005 approved the proposal to redeem
the preference A shares effective 5 July 2005 and the preference B shares
effective 1 July 2007. Subsequently, the preference A shares have been redeemed.
One preference shareholder has recently started litigation against the Company
opposing the decision to redeem the preference shares and claiming a reversal of
the redemption on the grounds that the legal process was invalid. Vedior
disputes this claim and is confident that the litigation will be decided in its

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

27 April 2006               Publication of first quarter results
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.


Q4 2005 Review

All growth percentages within this Review have been calculated on an organic
basis excluding the impact of currency effects, acquisitions and disposals.

Sales increased by 7% to €1,794 million compared to the same quarter in 2004.
Revenues from permanent placement increased 26% to 2.4% of sales compared to
1.9% of sales in Q4 2004. Professional/executive recruitment sales increased by
9% with a notable performance from the accounting sector which grew by 15%.
Traditional recruitment sales grew by 6%.

Gross margin was 18.9% compared to 17.8% in Q4 2004. Excluding one-off gains,
the Group's temporary gross margin was stable with pricing trends improving in
several markets.

Operating costs were 11% higher at €270 million mainly reflecting increases in
personnel costs and investment in new business start-ups. Excluding one-off
charges, sales grew faster than costs in all geographic markets apart from the

Operating income (before interest and tax) was €68 million, a 12% increase over
Q4 2004. One-off gains were offset by one-off charges in other parts of the
Group. Operating income as a percentage of sales increased to 3.8% from 3.6% in
Q4 2004. Net income increased 31% to €42 million from €33 million in the fourth
quarter of last year.

In France sales grew by 4% (or 6% adjusted for one business day), operating
income improved by 12% partially helped by a €4 million one-off gain (Q4 2004:
one-off gain of €2 million). Professional/executive sales increased by 4% with
strong growth in the engineering and accounting sectors. Healthcare sales
increased by 2% following four consecutive quarters of decline.

In the UK, operating income declined by 13% with profitability impacted by
continuing investment in new professional/executive businesses. Sales declined
by 3% primarily due to a continuing slowdown in the light industrial and care
sectors. Professional/executive recruitment sales increased with good growth in
the accounting, engineering, legal and interim management sectors.

In the US, we achieved a strong increase in operating income; up 38%.
Traditional recruitment continues to develop strongly with 37% sales growth.
Accounting staffing sales increased by 19% while IT staffing sales grew by 6%.

In the Netherlands, operating income increased by 43%. Professional/ executive
recruitment sales grew by 20%. Our largest traditional staffing brand, Vedior,
grew sales by 25%.

In Vedior's 'Rest of Europe' region, operating income increased by 20% and sales
by 7%. Good performances were achieved in most markets, notably Belgium,
Germany, Switzerland, Spain, Luxembourg and Central/Eastern Europe.

In our 'Rest of World' region, operating income increased by 31% and sales by
23%. Australia increased operating profit by 47% with sales up 19%. Professional
/executive recruitment sales in Australia increased by 26% while traditional
staffing increased by 13%. Elsewhere, Latin America continues to flourish
recording a sales increase of 20% while our Indian operations maintain a high
rate of development with 69% sales growth.

                      This information is provided by RNS
            The company news service from the London Stock Exchange                                                                                                                                                                                                                                  

a d v e r t i s e m e n t