Slide 1: Q4 2015 Earnings Results
February 3, 2016 Q4 2015 Earnings Results
Slide 2: Forward-Looking Statement
Forward-Looking Statement Certain statements made by us in this presentation that are not historical facts or that relate to future plans, events or performances are forward-looking statements that reflect management’s current outlook for future periods, including statements regarding future financi
Slide 3: Q4 2015 Growth Highlights
Q4 2015 Growth Highlights • Organic growth accelerated to 14% vs. 8% in Q3 2015 o Construction – double-digit growth o Small to medium size customers – mid-single digit growth vs. flat Q3 2015 o On-premise – acceleration in double-digit growth trend o National customers –double-digit growth, slower
Slide 4: Q4 2015 Financial Summary
Q4 2015 Financial Summary 4 Amounts in millions, except for earnings per share $811 +17% $46 +6% -60bps $0.66 +6% • Total revenue growth of 17%; 3% from SIMOS acquisition • Decline in Adjusted EBITDA Margin primarily due to: o Higher workers’ compensation benefit in Q4 2014 (40 bps) o Higher SG&A ex
Slide 5: Q4 SG&A Bridge
5 Q4 SG&A Bridge $117 $141 $7 $10 $3 $2 $2 Q4 2014 Investments for Growth Variable Costs Sourcing & Screening SIMOS Acquisition* Other Q4 2015 • Investments for growth mostly related to additional sales and recruiting professionals and technology solutions • Sourcing & screening increases related to
Slide 6: Q4 Gross Margin Bridge
6 Q4 Gross Margin Bridge 22.9% 22.8% 0.10% 0.40% 0.40% Q4 2014 SIMOS Acquisition Workers' Comp Revenue Mix / Other Q4 2015 Q4 2015 Earnings Results | Feb. 3, 2016
Slide 7: Q4 2015 – Staffing Services Segment
Q4 2015 – Staffing Services Segment1 7 Amounts in millions, except for earnings per share $784 +17% $53 +15% -14bps • Year-over-year organic revenue growth of 14% and organic Adj. EBITDA growth of 10% o Continued broad-based revenue growth, strong momentum in small to medium size customers, step-up
Slide 8: Q4 2015 – Managed Services Segment
Q4 2015 – Managed Services Segment1 8 Amounts in millions, except for earnings per share $27 +16% $1 -38% -445bps • Solid top-line growth • Large customer implementation slower than expected: o Full load of recruiting resources on lower than expected revenue base o Customer contract discussion in pr
Slide 9: Highlights
0% 1% 8% 14% Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Highlights 9 Q4 2015 Earnings Results | Feb. 3, 2016 Accelerating Organic Growth Successful Acquisitions Strong Shareholder Returns • Investments in sales and recruiting resources produced strong revenue growth across most industries and regions •
Slide 10: FY 2015 Financial Summary
FY 2015 Financial Summary 10 Amounts in millions, except for earnings per share $2,696 +24% $147 +23% Flat $2.02 +20% • Total organic revenue growth of 7% • Strong organic revenue momentum exiting 2015 • Flat Adjusted EBITDA margin year-over-year primarily driven by SG&A investments to generate reve
Slide 11: Debt and Liquidity Highlights
0% 8% 30% 18% 31% 30% 2012 2013 2014 Q3 2015 Q4 2015 Jan-16* -$130 -$105 $180 $91 $214 $192 No Debt $32 $202 $114 $246 $236 2012 2013 2014 Q3 2015 Q4 2015 Jan-16* Cash Net Debt Total Debt Liquidity Debt to Total Capital Amounts in millions Amounts in millions 11 *Jan-16 includes debt for the acquisi
Slide 12: Acquisitions
Acquisitions
Slide 13: SIMOS Productivity Model Enhances TBI On-premise Capabilities
SIMOS Productivity Model Enhances TBI On-premise Capabilities 13 Q4 2015 Earnings Results | Feb. 3, 2016 • • • About SIMOS SIMOS Illustrative Workflow Client Solutions - Warehouse / Distribution Productivity / Pricing Model • • • • • • W h at d o es SI M O S d o ? Ho w d o es SI M O S d o it ?
Slide 14: SIMOS Acquisition Overview
SIMOS Acquisition Overview 14 Q4 2015 Earnings Results | Feb. 3, 2016 Deal Info Acquisition date 12/1/15 Purchase price1 $67.5m • $67.5m cash up-front plus additional cash “earn-out” of up to $22.5m2 Valuation Multiple 4.2x • Forward 12 months Adj. EBITDA multiple based on $67.5m purchase price, net
Slide 15: Strategic Rationale
Strategic Rationale 15 Q4 2015 Earnings Results | Feb. 3, 2016 Excellent fit with our existing Staff Management business Productivity- based business model provides unique client value proposition Embedded business process service provides high client retention New capabilities help Staff Management
Slide 16: Aon Hewitt RPO Acquisition Advances PeopleScout's Global Strategy
Aon Hewitt RPO Acquisition Advances PeopleScout’s Global Strategy 16 Q4 2015 Earnings Results | Feb. 3, 2016 • business is a leading provider of recruitment process outsourcing (RPO) services • • • • About Aon Hewitt RPO Domestic v. International One Global PeopleScout Aon Hewitt Partnership • • • •
Slide 17: Aon Hewitt RPO Deal Info
Deal Info Acquisition date 1/4/16 • Purchase agreement signed December 2015, but closed January 4, 2016. Purchase price1 $72m • All cash Valuation Multiple 4.8x • Forward 12 months Adj. EBITDA multiple, net of acquired tax asset2 Financing Existing Facility • Amended existing $300m asset-backed faci
Slide 18: Strategic Rationale
Strategic Rationale 18 Q4 2015 Earnings Results | Feb. 3, 2016 Leading provider of recruitment process outsourcing (RPO) Builds market leadership positon in North America RPO under PeopleScout brand Ongoing strategic partnership with Aon Hewitt Low-cost locations provide opportunity for cost savings
Slide 19: 2016 Outlook
2016 Outlook
Slide 20: FY 2016 Highlights: Investing for Growth, Priorities, Outlook
FY 2016 Highlights 20 Q4 2015 Earnings Results | Feb. 3, 2016 Investing for Growth 2016 Priorities 2016 Outlook • Sales and recruiting headcount added in the back half of 2015. Year-over-year SG&A growth rates expected to moderate throughout 2016. • New SG&A investments added in mobile technology fo
Slide 21: Q1 2016 Outlook: Consolidated Commentary
Consolidated Commentary Revenue Mid-point growth $660M to $675M 16% • Staffing Services growth of 14% (includes SIMOS revenue of $40M) • Managed Services growth of 76% (includes Aon Hewitt RPO revenue of $15M) Adjusted EBITDA Mid-point growth $20M to $23M 9% • Staffing Services Adj. EBITDA of $25M (
Slide 22: FY 2016 Outlook: Consolidated Commentary
Consolidated1 Commentary Revenue Growth $3,124M 16% • SIMOS non-organic revenue of $160M2 • Aon Hewitt RPO revenue of $65M • Excludes 53rd week incremental revenue of $45M Adjusted EBITDA $190M 29% • SIMOS non-organic Adjusted EBITDA of $12M2 • Aon Hewitt RPO Adjusted EBITDA of $13M • Excludes 53rd
Slide 23: Appendix
Appendix
Slide 24: EBITDA and Adjusted EBITDA Definitions
EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA excludes interest, taxes, depreciation and amortization from net income. Adjusted EBITDA further excludes from EBITDA non-recurring costs related to acquisition and integration costs, as well as, Work Opportunity Tax Credit third par