Kelly Services, Inc. · NASDAQ:KELYA
Kelly Services — Q2 2020 Earnings Presentation
15 slides from Kelly Services's earnings presentation, Aug 6, 2020
Slide 1: Second Quarter 2020
SECOND QUARTER 2020 AUGUST 6, 2020
Slide 2: Second Quarter Takeaways
SECOND QUARTER TAKEWAYS COVID-19 pandemic impacts global economy and demand for our services • Q2 revenue down 28.7%, down 27.7% in constant currency(1) • June exit rate of 22.5% in constant currency reflects improvement, but uneven improvement in demand trends • Education and light industrial staff
Slide 3: Second Quarter 2020 Financial Summary
SECOND QUARTER 2020 FINANCIAL SUMMARY Constant Currency Actual Results Change Change(1) Revenue $1.0B (28.7%) (27.7%) Gross Profit % 19.4% 160 bps Earnings from Operations $11.1M (68.2%) (67.5%) Earnings Per Share $1.04 ($1.08) • Revenue declined in all segments from decrease in demand related to th
Slide 4: Financial Summary (Excluding Gain/Loss on Investment, Sale of Assets, Restructuring)
SECOND QUARTER 2020 FINANCIAL SUMMARY (Excluding Gain/Loss on Investment in Persol Holdings, Gain on Sale of Assets and Restructuring) Constant Currency Actual Results Change Change(3) Revenue $1.0B (28.7%) (27.7%) Gross Profit % 19.4% 160 bps Earnings from Operations(1) $10.9M (50.4%) (49.3%) Earni
Slide 5: EPS Summary
SECOND QUARTER 2020 EPS SUMMARY $ in millions except per share data Second Quarter 2020 2019 Amount Per Share Amount Per Share Net earnings (loss) $41.1 $1.04 $83.8 $2.12 (Gain) loss on investment in Persol Holdings, net of taxes(1) (20.6) (0.52) (42.5) (1.07) Gain on sale of assets, net of taxes(2)
Slide 6: Revenue Growth
SECOND QUARTER 2020 REVENUE GROWTH REVENUE GROWTH BY SEGMENT REVENUE MIX BY SEGMENT(1) 0% Reported Americas Staffing (10%) (7.5%) (7.5%) Constant (7.7%) Currency International Staffing 33% Organic (20%) Growth(2) Global Talent Solutions 48% (30%) (27.7%) (28.1%) (29.3%) (28.7%) (31.1%) (29.3%) 19% (
Slide 7: Revenue Trends
Revenue Trends Percent in Constant Currency(1) June 2020 Q2 2020 (Exit Rates) Total (27.7%) (22.5%) Americas Staffing (44.1%) (33.6%) Global Talent Solutions (7.5%) (8.1%) International Staffing (29.3%) (28.9%) (1)Constant Currency represents year-over-year changes resulting from translating 2020 fi
Slide 8: Gross Profit Growth
SECOND QUARTER 2020 GROSS PROFIT GROWTH GROSS POFIT BY SEGMENT(1) GROSS PROFIT GROWTH BY SEGMENT Americas Staffing Reported International 10% 3.3% 3.8% Constant Staffing 0% Currency Global Talent Solutions 34% (10%) 54% (20%) (22.5%) (21.7%) (30%) 12% (40%) (36.0%) (34.3%) (41.7%)(40.9%) (50%) Total
Slide 9: Gross Profit Rate Growth
SECOND QUARTER 2020 GROSS PROFIT RATE GROWTH 20.0% 50 bps 10 bps 19.4% 19.5% (10) bps 19.0% 110 bps 18.5% 18.0% 17.8% 17.5% 17.0% 16.5% 16.0% 15.5% 15.0% Q2 2019 GP Rate Global Talent Americas FX International Q2 2020 GP Rate Solutions Staffing Staffing • Overall GP rate improved due to the benefit
Slide 10: SG&A
SECOND QUARTER 2020 SG&A $ in millions $230 $222 $220 $210 $200 ($23) $190 ($10) $180 $178 ($7) ($2) ($2) $170 $160 $150 Q2 2019 SG&A Americas Global Talent International Corporate FX Q2 2020 SG&A Staffing Solutions Staffing • Americas Staffing expenses were down due to temporary expense reduction e
Slide 11: Balance Sheet Data
SECOND QUARTER 2020 BALANCE SHEET DATA $ in millions ACCOUNTS RECEIVABLE SHORT-TERM BORROWINGS $1,500 $40 $1,274 $1,282 $1,300 $1,085 $1,100 $19 $20 $900 $700 $2 $0 $500 $0 Q2 2019 Q4 2019 Q2 2020 Q2 2019 Q4 2019 Q2 2020 Excluding Acquisitions Acquisitions • Accounts Receivable reflects the impact o
Slide 12: Portfolio Progress
PORTFOLIO PROGRESS We are using M&A activity to increase our focus on specialization Kelly and Kelly sells Kelly sells Kelly acquires Kelly acquires Persol form a Kelly Healthcare Kelly Legal Global Insight JV combining Resources to Managed Technology the staffing InGenesis Services to Associates op
Slide 13: Recent Acquisition: Insight
RECENT ACQUISITION: INSIGHT • Education service staffing company with experience in partnering with school districts in Illinois, Massachusetts, New Jersey and Pennsylvania | 13
Slide 14: Non-GAAP Measures
NON-GAAP MEASURES Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding the 2020 and 2019 gains on the investment in Persol Holdings, the 2020 and 2019 restructuring accrual adjustments, and the 2019 gain on sale of assets are useful to understand the
Slide 15: Safe Harbor Statement
SAFE HARBOR STATEMENT This release contains statements that are forward-looking in nature and, accordingly, are subject to risks and uncertainties. These factors include, but are not limited to, the recent novel coronavirus (COVID-19) outbreak, competitive market pressures including pricing and tech