Kelly Services, Inc. · NASDAQ:KELYA
Kelly Services — Q2 2024 Earnings Presentation
21 slides from Kelly Services's earnings presentation, Aug 8, 2024
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Slide 2: Presentation
Presentation © 2024 Kelly Serveas, Ine Alright reserved
Slide 3: Non-GAAP Measures
Non-GAAP Measures Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding the 2024 loss on the sale of our EMEA staffing operations, the 2024 gain on sale of assets, the 2024 restructuring charges, the 2024 transaction costs, the 2024 asset impairment c
Slide 4: Safe Harbor Statement
Safe Harbor Statement This presentation contains statements that are forward looking in nature and, accordingly, are subject to risks and uncertainties. These statements are made under the “safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not
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Slide 6: Takeaways
Second-Quarter 2024 Takeaways Staffing demand continued to be impacted by market and labor trends, but sequential trends are stabilizing * Q2 revenue down 13.1% on a reported basis due primarily to the sale of European staffing operations, up 0.6%" on an organic basis Significant progress on in-flig
Slide 7: Financial Summary
Second-Quarter 2024 Financial Summary Change Increase/(Decrease) Actual Results As Reported As Adjusted”) Revenue $1.1B (13.1%) (13.1%) Gross Profit Rate 20.2% 40 bps 40 bps Earnings from Operations $12.2M 95.9% 95.2% Diluted Earnings per Share $0.12 ($0.08) $0.35 Adjusted EBITDA $40.5M 64.3% Adjust
Slide 8: Revenue Trends
Second-Quarter 2024 Revenue Trends Reported) Organic Total (13.1%) 0.6% Professional & Industrial (8.5%) n/a Science, Engineering & Technology 10.2% (3.1%) Education 21.7% n/a Outsourcing & Consulting 2.9% n/a s===== Refer to the last slide for footnotes. 2024 Kelly Sences, nc. llrightsreserved (1)
Slide 9: Gross Profit Rate
Second-Quarter 2024 Gross Profit Rate 21.5% 40 bps 21.2% 21.0% 100 bps || 20.5% 30 bps z= - 20.0% 19.8% (110) bps (20) bps 19.5% 19.0% 18.5% 18.0% 17.5% Q2 2023 Sale of EMEA MRP Organic Business Employee-related Perm Q2 2024 GP Rate staffing GP Rate Mix Costs Fees GP Rate operations * GP rate favora
Slide 10: SG&A
Second-Quarter 2024 SG&A Sinmilions * SG&A expenses decreased following the sale of our EMEA staffing operations on January 2, 2024, partially offset by an increase in expense related to the acquisition of MRP completed on May 31, 2024 * Expenses in Operations decreased as a result of workforce redu
Slide 11: Second-Quarter 2024 Revenue and Gross Profit Mix
© 2024 kelly Serves, Second-Quarter 2024 Revenue and Gross Profit Mix I Kelly Professional & Industrial I Kelly Science, Engineering, Technology & Telecom 1 Kelly Education 1 KellyOCG Inc, Alright reserved Revenue mix by segment o 1% 24% 34% Gross Profit mix by segment ee y 18% 29% 17% 36% n
Slide 12: EPS Summary
Second-Quarter 2024 EPS Summary Sinmillions except per share data 2024 Amount Net earnings (loss) $4.6 Loss on sale of EMEA staffing operations, net 100 of taxes) . Gain on sale of assets, net of taxes (4.1) Transaction costs, net of taxes!”) 8.3 Asset impairment charge, net of taxes” 41 Restructuri
Slide 13: Liquidity
Second-Quarter 2024 Liquidity Sinmilions $500 $426 $427 $400 $125 $126 $300 $200 $182 $38 $100 $0 $49 $49 -$100 -$200 $46 -$300 Q2 2023 Q4 2023 Q2 2024 mCash — mUnused Borrowing Capacity mi SBLC—m Borrowings + As of the end of Q2 2024, we have more than $180 million of available liquidity, including
Slide 14: Business Transformation Overview
Business Transformation Overview Comprehensive initiative to build on our strategic progress. In 2023, we successfully delivered on structural cost optimization, and we will continue to execute on opportunities to accelerate profitable top- and bottom-line growth. ~ ___44 Delivering on three key out
Slide 15: Sale of European Staffing Operations
Sale of European Staffing Operations With the closing of the European staffing transaction in January 2024, we have unlocked more than $100 million of capital to reinvest in organic and inorganic growth in our North American staffing and global MSP and RPO businesses. European staffing operations 20
Slide 16: H2 2024 Outlook
(6 2024 Kelly Services nc. llrightsreserved, H2 2024 Outlook Our H2 Outlook assumes a continuation of staffing market conditions relatively consistent with what we have experienced in the first half of 2024, including sequential stabilization of top- line trends. The results of the European staffing
Slide 17: This acquisition is a transformational step forward on Kelly's journey.
i This acquisition is a transformational step forward on Kelly's journey. ° MRP is a leading specialty talent solutions provider, which has strengthened both the scale and capabilities of Kelly's staffing, consulting and RPO solutions in attractive customer end markets — including technology, financ
Slide 18: We have redesigned our operating model to drive profitable growth.
We have redesigned our operating model to drive profitable growth. Our priorities for each segment are clear. Together, they contribute to a strong, balanced portfolio. Optimize Operations and Drive Efficiencies = Accelerate Organic and Inorganic Growth Kelly Kelly Science, I \ Professional & Engine
Slide 19: Appendix
© 2024 Kelly Serveas, Ine Alright reserved
Slide 20: MRP Net Earnings to Adjusted EBITDA Non-GAAP Reconciliation
MRP Net Earnings to Adjusted EBITDA Non-GAAP Reconciliation (© 2024 Kelly Services ne. llrightsreserved. $inmilions 2023 Net earnings (loss) ($6.6) Other (income) expense, net 28.6 Income tax expense (benefit) 9.0 Depreciation & amortization 4.0 EBITDA $35.0 Non-recurring costs 16 Adjusted EBITDA $3
Slide 21: Footnotes
Second-Quarter 2024 Footnotes © 2024 Kelly Services, Inc. Allright reserved Organic excludes the impact of the sale of our EMEA staffing operations in January 2024 and the 2024 results of Motion Recruitment Partners ("MRP"), which was acquired as of May 31, 2024; See reconciliation of Non-GAAP Measu