Kelly Services, Inc. · NASDAQ:KELYA
Kelly Services — Q4 2024 Earnings Presentation
23 slides from Kelly Services's earnings presentation, Feb 13, 2025
Slide 1: wn N oO N ~m — > c O > = oO LL
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Slide 2: Presentation
Presentation
Slide 3: Non-GAAP Measures
Non-GAAP Measures Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding the 2024 goodwill impairment charge, the 2024 asset impairment charges, the 2024 integration costs, the 2024 executive transition costs, the 2024 gain on equity securities, the 20
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
Slide 5: a je rT) c G = ic
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Slide 6: Fourth-Quarter 2024 Takeaways
Fourth-Quarter 2024 Takeaways Organic revenue demonstrated positive performance and solid execution despite continued pressure with staffing demand + Q4 revenue down 3.3% on a reported basis reflecting the sale of European staffing operations, up 4.4%) on an organic basis, notably improved versus pr
Slide 7: Fourth-Quarter 2024 Financial Summary
Fourth-Quarter 2024 Financial Summary Change Increase/(Decrease) Actual Results As Reported As Adjusted) Revenue $1.2B (3.3%) (3.3%) Gross Profit Rate 20.3% 100 bps 100 bps Loss from Operations ($56.7M) NM 32.4% Loss per Share ($0.90) ($1.21) ($0.11) Adjusted EBITDA $43.5M 33.9% Adjusted EBITDA Marg
Slide 8: Fourth-Quarter 2024 Revenue Trends
Fourth-Quarter 2024 Revenue Trends Reported) Organic” Total (3.3%) 4.4% Professional & Industrial 4.4% n/a Science, Engineering & Technology 37.9% (4.3%) Education 12.1% 12.0% Outsourcing & Consulting 8.8% n/a === Refer to slides 22 and 23 for footnotes. 2024 Kelly Services, Inc. llrightsreserved
Slide 9: Full Year 2024 Financial Summary
Full Year 2024 Financial Summary Change Increase/(Decrease) Actual Results As Reported As Adjusted) Revenue $4.3B (10.4%) (10.4%) Gross Profit Rate 20.4% 50 bps 50 bps Loss from Operations ($15.1M) NM 33.1% Loss per Share ($0.02) ($1.00) $0.14 Adjusted EBITDA $143.5M 31.2% Adjusted EBITDA Margin 3.3
Slide 10: Fourth-Quarter 2024 Gross Profit Rate
© 2024 Kelly Services nc. Alleghts reserved Fourth-Quarter 2024 Gross Profit Rate 22.0% 21.5% Organic GP (80) bps 80 bps r os [| 20.5% 100 bps — 20.3% (70) bps (10) bps 20.0% 19.5% 19.3% 19.0% 18.5% 18.0% : , : : Q4 2023 GP Rate Sale of EMEA MRP Business Mix Perm Fees Q4 2024 GP Rate staffing operat
Slide 11: Fourth-Quarter 2024 SG&A
Fourth-Quarter 2024 SG&A $inmillions $250 $240 $231 $230 $220 $33 $217 $210 $200 ($31) $190 $4 $2 5180 (S16) |__| —_ — ($6) $170 $160 $150 Q42023SG&A Saleof EMEA Restructuring Operations Integration Executive MRP 4 2024 SG&A staffing & Transaction costs transition operations costs"? costs + SGB&A ex
Slide 12: Fourth-Quarter 2024 Revenue and Gross Profit Mix
© 2024 Kelly Senices, Fourth-Quarter 2024 Revenue and Gross Profit Mix I Kelly Professional & Industrial I Kelly Science, Engineering, Technology & Telecom 1 Kelly Education I KellyOCG Inc. lrights reserved Revenue mix by segment : 10% 24% 33% 33% Gross Profit mix by segment 17% 39% 12
Slide 13: Fourth-Quarter 2024 EPS Summary
Fourth-Quarter 2024 EPS Summary Sinmillions except per share data 2024 2023 int Per Share Amount Per Share Net earnings (loss) ($31.8) ($0.90) $11.4 $0.31 Goodwill impairment charge, net of taxes‘ 54.4 1.53 - - Asset impairment charge, net of taxes‘) 6.0 0.17 - - Integration costs, net of taxes” 2.9
Slide 14: Full Year 2024 EPS Summary
Full Year 2024 EPS Summary Sinmillions except per share data 2024 2023 Amount Per Share Amount Per Share Net earnings (loss) ($0.6) ($0.02) $36.4 $0.98 Goodwill impairment charge, net of taxes 54.4 1.53 - - Transaction costs, net of taxes”) 14.2 0.40 64 0.17 Asset impairment charge, net of taxes 10.
Slide 15: Fourth-Quarter 2024 Liquidity
Fourth-Quarter 2024 Liquidity $inmillions $500 $427 $400 $126 $300 $200 $154 $39 $100 $0 -$100 -$200 -$300 -$400 Q4 2023 Q4 2024 mCash gj Unused BorrowingCapacity mg SBLC Borrowings As of the end of Q4 2024, we have more than $150 million of available liquidity, including $39 million of cash on hand
Slide 16: 2025 Outlook
(© 2024 Kelly Services nc. llrightsreserved. 2025 Outlook Our 2025 Outlook assumes relatively consistent staffing market conditions to start the year, with modest improvement as the year progresses. For the full year, expect to capture additional market share and to deliver incremental organic reven
Slide 17: Appendix
Slide 18: We have a focused operating model to drive profitable growth
We have a focused 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, Professional & Engineerin
Slide 19: 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 20: This acquisition is a transformational step forward on Kelly's journey
i This acquisition is a transformational step forward on Kelly's journey. + MRPis 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, financi
Slide 21: MRP Net Earnings to Adjusted EBITDA Non-GAAP Reconciliation
MRP Net Earnings to Adjusted EBITDA Non-GAAP Reconciliation (© 2024 Kelly Servcesne. llrightsreserved $in millions 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 $36
Slide 22: Fourth-Quarter 2024 Footnotes
Fourth-Quarter 2024 Footnotes © 2024 Kelly Services nc. Alleghts reserved 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) Organic excludes the impact of the sale of our EMEA staffing operations in January 2024, the 2024 results of Motion Recruitment Partners ("MRP"), which was acquired as of May 31, 2024 and the 202
Slide 23: Fourth-Quarter 2024 Footnotes (continued)
Fourth-Quarter 2024 Footnotes (continued) 1) 12) 13) 14) 15) 16) 17) 18) 19) © 2024 Kelly Services nc. Alleghts reserved Restructuring of $0.3 million, $0.2 million net of tax or $0.01 per share in Q4 2024 related to a restructuring adjustment and $6.1 million, $4.6 million net of tax or $0.13 per s