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Vedior NV (0J9M)

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Thursday 08 February, 2007

Vedior NV

Final Results

Vedior NV
08 February 2007

Amsterdam, The Netherlands
                                                 
                               Q4 & FULL YEAR  2006


                         Strong operational performance
                        across all major regions in 2006
                    For release at 7.00am on 8 February 2007



Highlights for the Year 2006

Amounts in € million          2006      2005      Increase   Organic Growth (1)

Sales                      7,659.7      6,851.3      +12%             +8%
Gross Profit               1,429.1      1,227.3      +16%             +11%
Operating Income(2)         289.6        232.5      +25%             +17%
Net Income (2)(3)           181.7        143.1       +27%
Net Income per share         1.06        0.84        +26%
(in Euro) (2)(3)             



•         Operating margin(2) increased by 40 basis points to 3.8%
•         Global network extended to 49 markets (2005: 44)
•         Proposed dividend of €0.30, a 20% increase from 2005


Highlights for the Fourth Quarter 2006

Amounts in € million          2006      2005    Increase     Organic Growth (1)

Sales                        1,997.1    1,794.7     +11%            +8%
Gross Profit                  390.7       338.4     +15%            +12%
Operating Income               83.4       68.5      +22%            +18%
Net Income (3)                 56.0       43.0      +30%
Net Income per share           0.33       0.25      +32%
(in Euro) (3)                 




•         Conversion ratio improves to 21.3% (Q4 2005: 20.2%)
•         Strong growth in permanent placement fees; up 30%
•         Four acquisitions completed (making twelve acquisitions for the year)


(1)  Unless otherwise stated, 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.

(2)  Excluding profit from the disposal of investments.

(3)  We have changed our policy for accounting for minority interests.  Prior
year results have been restated accordingly. Please refer to page 13 for further
details..



CEO's Statement

Zach Miles said, 'In 2006, Vedior continued to expand its geographic coverage
and made important acquisitions in professional/executive recruitment sectors.
During the year, we completed, on average, one acquisition per month.

Our focus on improving our business mix and profitability has led to an
excellent improvement in operating income for the year and put us on track to
achieve our operating margin targets. This has been achieved during a period
when we have made major investments in our business for future growth.'



Annual Results

Vedior's strategic focus is on profit rather than sales as evidenced by the
significant improvements we have achieved in operating income in 2006.

Operating income increased by 17% to €289.6 million. The operating margin
(operating income as a percentage of sales) was 3.8%, up from 3.4% in 2005. All
increases exclude profits from the disposal of investments.

For the second consecutive year, we achieved organic sales growth across all
major geographies. The strongest growth came from the US, Netherlands, Rest of
World and Rest of Europe regions. In Belgium, Spain, Australia, Portugal,
Germany and Switzerland, we achieved double digit sales growth. One of the
aspects of Vedior's growth in 2006 was the outstanding performance of our
operating companies in emerging markets. The relative immaturity of these
markets combined with a positive economic environment has led to sales growth of
59% in India and 27% in Latin America. In addition to organic growth, sales of
€234 million were added as a result of companies acquired in 2006, principally
CNC Global, Blomfield and Talisman.

Currency effects decreased operating income by 1% but had no significant impact
on 2006 annual sales.

Looking at our business by industry sector, the strongest improvements in
operating income came from the accounting/finance, traditional, engineering/
technical and education sectors. In terms of operating leverage, the best
performance came from traditional staffing in continental Europe.

In line with our longer term objective, we saw continued growth in permanent
placement across all our regions. With a 30% increase in fees to €238.2 million,
permanent placement now represents 16.7% of Group gross profit compared to 13.3%
of gross profit in 2005. In France, permanent placement fees more than tripled
to €14.1 million.

In France, operating income increased by 19%. Gross profit increased by 9%
reflecting an improved business mix and our focus on permanent placement.

In the Netherlands, also as a result of our improved business mix, operating
income increased by 49% and gross profit by 16%. This significant improvement in
performance has been achieved while at the same time making substantial
investments to improve future performance.

Our focus on operational efficiencies resulted in an increase in our conversion
ratio for the year (operating income divided by gross profit), from 18.9% to
20.3%.

Operating costs increased by 10% including increased investment in the business
to benefit long-term growth. Investments were made in new start-up initiatives
and the development of existing brands worldwide including further expansion
into the Middle East, new office openings, continued roll-out of permanent
placement activities in France and other markets including Japan, upgrade of our
infrastructure (particularly in continental Europe), enhanced eBusiness
functionality, and improved managed service capability.

Excluding the profit from the disposal of investments, the tax rate decreased to
29.3% in 2006 from 31.0% in 2005. The decrease in tax rate is mainly due to the
inclusion of a deferred tax asset of €5.5 million in 2006 relating to operating
loss carry forwards in the Netherlands.

Cash flow from operating activities increased to €206 million in 2006 from €113
million in 2005 following higher operating income and lower additional working
capital requirements to finance sales growth. Debtor days at the end of the year
were one day lower at 63 (2005: 64).


Strategy and Financial Targets

We believe Vedior has the right infrastructure, strategy, products and services
to identify and recruit the best people on behalf of our clients.

We aim to offer a full range of specialist recruitment services to both local
and multinational employers in markets worldwide. Our strategy is to develop
strong brands dedicated to specific employment sectors in order to concentrate
our expertise and attract the best candidates. Our global network provides an
ideal platform to develop our business and expand the range of recruitment
services that we offer in each country.

We have established ambitious 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              2006           Target
                         operating         operating         operating  
                           margins           margins           margins
       France                3.2%             3.5%          4.0 to 4.5%
         UK                  5.9%             5.9%          7.0 to 8.0%
        USA                  6.2%             6.3%          7.0 to 8.0%
    Netherlands              2.7%             3.5%          5.0 to 6.0%
   Rest of Europe            2.7%             3.3%          3.5 to 4.0%
   Rest of World             4.5%             4.9%          5.0 to 6.0%
    Vedior Group             3.4%             3.8%          4.6% to 5.6*


                               *After corporate expenses

2006 saw progress being made towards the achievement of these targets in all
regions apart from the UK, which remained stable despite a challenging operating
environment in certain sectors. Investments made during the year meant that we
did not seek to maximise profitability in the short term, however, we believe
such investments have strengthened our business and will improve our ability to
achieve our margin targets in future years.

Business Development

At the end of 2006, Vedior operated through a worldwide network of 2,433
offices. On a net basis, this is an increase of 157 compared to the prior year
of which 30 offices were added by acquisition. The most significant increases
reported in our network are in France, Asia, the UK and Australia.

Acquisitions

During 2006, Vedior made twelve acquisitions, the largest of which were CNC, the
market leader in IT recruitment in Canada and the Blomfield Group, a well
established accounting/finance specialist based in the UK and Ireland. In line
with our stated strategy, we acquired majority stakes in companies with local
management keeping a minority interest.

Through two acquisitions to complement our existing presence, Vedior became the
largest interim management provider in the UK.  We also acquired UK companies in
the accounting, HR and education sectors as well as a modelling agency.

We extended our IT staffing network with acquisitions in both the North American
and European markets, where we expanded our coverage in Scandinavia to include
Norway, a new country of operation for the Group. In the Netherlands, we
acquired a legal staffing specialist and in Latin America we made an acquisition
in the engineering sector.

In addition to these acquisitions, Vedior also made a number of smaller
investments, including some where the Group already held a minority interest,
during the course of the year. The combined consideration paid for acquisitions
and investments in 2006 was €157 million.



Organic expansion

We continued with our investment in new and promising niches during 2006. The
most significant was the development of our permanent placement activities in
France. Elsewhere, new niche services were launched in the UK, US, Australia,
Singapore and Mexico.

Taking advantage of positive economic growth, we strengthened our presence in
the Middle East through a number of brands, most notably in the ICT and
engineering/technical sectors in the United Arab Emirates and also Bahrain, a
new market for the Group. Vedior's global network has increased to 49 countries.

Management Outlook

We believe that the combination of skill shortages and opportunities to expand
our services into new markets and sectors will sustain good growth for our
business in 2007 at a similar rate to that achieved in 2006.

European staffing markets have made a good start to the year. As we continue to
refine our business mix, we expect growth in gross profit to outperform the
market in France and the Netherlands. We also look forward to further growth in
the US where our business mix is concentrated in professional/executive sectors.
Ongoing growth in emerging markets will play an increasing role in our business
development.

We expect interest expenses in 2007 to be in the range of €35 million to €36
million and our tax rate to be 31%.

The realisation of benefits from prior investments and improvements in operating
efficiency will provide operating leverage and enable the Group to make further
progress towards its operating margin targets.

In the longer term, demographic changes and the increased focus on the
deployment and management of human resources will continue to benefit the growth
of our business.





For further information on these results, please join today's live audio webcast
at www.vedior.com/webcast 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: www.vedior.com/investor-relations/investor-relations.asp



ADDITIONAL INFORMATION

Dividend Payments

It will be proposed to the Annual General Meeting of shareholders that a
dividend of €0.30 is paid on each (certificate of an) ordinary share,
representing 28% of the net income per share for the year (excluding profit on
disposal of investments). 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 €52 million and will be distributed in cash on 9 May 2007.



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 2007           Publication of first quarter results
27 April 2007           Annual General Meeting
9 May 2007              Dividend made payable
26 July 2007            Publication of second quarter results
25 October 2007         Publication of third quarter results

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



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.






APPENDIX



Q4 2006 Review

Operating income (before interest and tax) was €83.4 million, an 18% increase
over Q4 2005. Our conversion ratio increased from 20.2% to 21.3%. Operating
income as a percentage of sales increased to 4.2% from 3.8%. Net income
increased 30% to €56.0 million from €43.0 million in the fourth quarter of last
year.

Sales increased by 8% to €1,997.1 million compared to the same quarter in 2005.
Revenues from permanent placement increased 30% to 3.1% of sales compared to
2.4% of sales in Q4 2005. Professional/executive recruitment sales increased by
10%.  Accounting remained strong in most markets with 11% growth and engineering
showed an impressive gain of 15%. Education grew by 21%. Traditional recruitment
sales grew by 8% compared to 6% in Q4 2005.

In Q4 2006, currency effects decreased operating income by 2% and sales by 1%.

Gross margin was 19.6% compared to 18.9% in Q4 2005. Excluding the release of
provisions, gross margin increased from 18.4% in Q4 2005 to 19.1% in Q4 2006
(Please refer to page 13 for further information).

Operating costs were 10% higher at €307.3 million, mainly reflecting increases
in personnel costs and investment in new businesses.

In France, operating income increased by 24%, excluding a net one-off gain of €4
million in Q4 2005.

In the UK, operating income declined by 5%. Profit improvements in the
accounting, engineering and interim management sectors were offset by declines
in the IT and traditional sectors. Newly acquired companies in the UK which
operate in the accounting, HR and interim management sectors, performed very
well so that our total UK operating income increased by 13%.

In the US, we achieved a 16% growth in operating income. IT, our largest sector
in the US, benefited from higher placement fees and an improved pricing
environment. Traditional and legal staffing sales also grew strongly as did our
managed services business.

In the Netherlands, operating income increased by 32%. In our Dutch traditional
business, our policy of focusing on margin improvement, rather than sales
growth, has resulted in a gross profit increase of 14% and a growth in operating
income of 43%, with operating margins improving 90 basis points. Accounting,
education, engineering and healthcare staffing saw very strong increases this
quarter.

In Vedior's 'Rest of Europe' region, operating income increased by 55%. Good
performances were achieved in most markets, notably Belgium, Germany,
Switzerland, Spain, Italy and Central/Eastern Europe.

In our 'Rest of World' region, operating income increased by 29%. Australia
increased operating profit by 41%. Elsewhere, Latin America and India maintained
a high rate of development.




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

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