Korn Ferry · NYSE:KFY

Korn Ferry — Q1 FY2021 Earnings Presentation

20 slides from Korn Ferry's earnings presentation, Sep 3, 2020

  1. Slide 1: FY'21 Q1 Earnings Call Presentation

    KORN FERRY FY’21 Q1 Earnings Call Presentation September 3, 2020

  2. Slide 2: Safe Harbor Statement

    SAFE HARBOR STATEMENT FORWARD-LOOKING STATEMENTS NON-GAAP FINANCIAL MEASURES Statements in this presentation that relate to This presentation includes financial information future results and events are based on Korn calculated other than in accordance with U.S. Ferry’s current expectations. You are

  3. Slide 3: FY'21 Q1 Fee Revenue Down 29% YoY (27.8% at CC)

    FY’21 Q1 FEE REVENUE DOWN 29% YoY (27.8% AT CC) Fee Revenue Adj. EBITDA Margin % (1) Adj. Diluted EPS ($) (2) (NON-GAAP) (NON-GAAP) $344M 3.1% ($0.19) (29%) (27.8%) at CC See detailed explanation of footnotes on page 13 © 2020 Korn Ferry . All rights reserved 3

  4. Slide 4: Highly Diversified Business Across Segment, Geography and Industry

    HIGHLY DIVERSIFIED BUSINESS ACROSS SEGMENT, GEOGRAPHY AND INDUSTRY FEE REVENUE BY SEGMENT FEE REVENUE BY GEOGRAPHY FEE REVENUE BY INDUSTRY Edu, / LATM RPO & Non- Consumer 4% Profit Prof. 13% Search APAC 7% Tech. 20% Executiv e 18% 14% Search 35% Fin. Sv cs NAM 19% 47% Digital 16% Life Sci. / HC 19%

  5. Slide 5: Balanced Mix of Revenue and Earnings ($M)

    BALANCED MIX OF REVENUE AND EARNINGS ($M) (6) FY’20 QTR. 1 FY’21 QTR. 1 (3) $485 $100 $344 $29 (3) 100% 100% $58 90% $18 90% $56 $8 80% 80% $96 $16 $69 70% 70% 60% 60% $6 $17 $138 50% 50% $99 40% 40% $7 30% 30% $49 20% $193 20% $120 $8 10% 10% 0% 0% (1) (1) Fee Revenue Adj. EBITDA Fee Revenue Adj. E

  6. Slide 6: KF Monthly New Business YoY Growth (Excluding RPO)

    KF MONTHLY NEW BUISNESS* YOY GROWTH (EXCLUDING RPO) MARCH 2020 TO JULY 2020 (5%) (20%) (25%) 61% 35% (31%) 68% (34%) 32% March April May June July *Executive Search & Professional Search Includes Confirmations Plus Upticks & Additional Placements © 2020 Korn Ferry . All rights reserved 6

  7. Slide 7: Monthly New Business YoY Growth by Segment (Excluding RPO)

    MONTHLY NEW BUISNESS* YOY GROWTH BY SEGMENT (EXCLUDING RPO) MARCH 2020 TO JULY 2020 Executive Search* Professional Search* (15%) (26%) (27%) (23%) (34%) (39%) (41%) (38%) (37%) (54%) Mar Apr May Jun July Mar Apr May Jun July Consulting 34% Digital 35% 5% 68% 3% 0% 32% (5%) (18%) (22%) (28%) (13%) (3

  8. Slide 8: Consulting: 29% of Fee Revenue and 24% of Earnings

    CONSULTING 29% OF FEE REVENUE AND 24% OF EARNINGS IN FY’21 QTR. 1 NEW BUSINESS DOWN (5%) YOY IN QTR. 1 (4) FEE REVENUE ($M) ADJ. EBITDA ($M) & ADJ. EBITDA CONSULTANT + EXECUTION MARGIN (%) (NON-GAAP) STAFF PRODUCTIVITY Hours Worked 452K Avg. Bill Rate 12.2% $304 367K $138 1,928 1,928 $271 6.6% $16.7

  9. Slide 9: Digital: 16% of Fee Revenue and 28% of Earnings

    DIGITAL 16% OF FEE REVENUE AND 28% OF EARNINGS IN FY’21 QTR. 1 (1) (5) FEE REVENUE ($M) ADJ. EBITDA ($M) & ADJ. EBITDA SUBSCRIPTION & LICENSE FEE MARGIN (%) (NON-GAAP) REVENUE - ($M) 30.8% $21 $58 $56 14.2% $17.8 $15 $7.9 FY'20 Q1 FY'21 Q1 FY'20 Q1 FY'21 Q1 FY'20 Q1 FY'21 Q1 (1) (1) Adj. EBITDA Adj.

  10. Slide 10: Executive Search: 35% of Fee Revenue and 28% of Earnings

    EXECUTIVE SEARCH 35% OF FEE REVENUE AND 28% OF EARNINGS IN FY’21 QTR. 1 (4) ADJ. EBITDA ($M) & ADJ. EBITDA CONSULTANT PRODUCTIVITY FEE REVENUE ($M) MARGIN (%) (NON-GAAP) $1.36 $193 25.3% $8 $27 $48.9 $0.90 569 $47 $120 510 $3 $17 $30 6.7% $112 $69 $8.1 FY'20 Q1 FY'21 Q1 FY'20 Q1 FY'21 Q1 FY'20 Q1 FY

  11. Slide 11: RPO & Professional Search: 20% of Fee Revenue and 21% of Earnings

    RPO & PROFESSIONAL SEARCH 20% OF FEE REVENUE AND 21% OF EARNINGS IN FY’21 QTR. 1 (4) NEW BUSINESS ($M) ADJ. EBITDA ($M) & ADJ. EBITDA FEE REVENUE ($M) MARGIN (%) (NON-GAAP) $98 $96 16.8% $80 $32 $38 $69 $16.1 $24 $24 8.8% $6.0 $66 $58 $56 $45 FY'20 Q1 FY'21 Q1 FY'20 Q1 FY'21 Q1 FY'20 Q1 FY'21 Q1 (4)

  12. Slide 12: Cash & Marketable Securities: Strong Liquidity with $511M of Investable Cash

    CASH & MARKETABLE SECURITIES (7) STRONG LIQUIDITY WITH $511M OF INVESTABLE CASH Cash & Marketable Securities ($M) $733 $567 $222 $205 $511 $362 FY'20 Q1 FY'21 Q1 Bonuses & Deferred Compensation (7) Investable Cash _________ See detailed explanation of footnotes on page 13 © 2020 Korn Ferry . All rig

  13. Slide 13: Footnotes

    FOOTNOTES (1) Earnings Before Interest, Taxes, Depreciation & Amortization Adjusted to Exclude Acquisition/Integration Costs and Restructuring Charges. (2) Diluted Earnings per Share Adjusted to Exclude Acquisition/Integration Costs and Restructuring Charges Net of Tax. (3) Excludes Corporate Adj. E

  14. Slide 14: Appendix: Reconciliations of Non-GAAP Financial Measures to U.S. GAAP

    APPENDIX: Reconciliations of Non-GAAP Financial Measures to U.S. GAAP Financial Measures Earnings Conference Call September 3, 2020

  15. Slide 15: Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP)

    KORN FERRY Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’20 Q1; FY’21 Q1 FY'20 FY'21 Incr. / (Decr.) Qtr. 1 Qtr. 1 $/% % Net (Loss) Income Attributable to Korn / Ferry $43.0 ($30.8) ($73.8) (171.8% ) Net (Loss) Incm. Attrib. to Non-Controlling Int. 0.7 - (0.7) (100.0% ) N

  16. Slide 16: Reconciliation of Net Income & EPS to Adjusted Net Income & Adjusted EPS

    KORN FERRY Reconciliation of Net Income & EPS (GAAP) to Adjusted Net Income & Adjusted EPS (Non-GAAP) ($M) FY’20 Q1; FY’21 Q1 FY'20 FY'21 Incr. / (Decr.) Qtr. 1 Qtr. 1 $ % Net (Loss) Income Attributable to Korn / Ferry $43.0 ($30.8) ($73.8) (171.8% ) (1) Restructuring Chgs. / (Recoveries) - Net - 27

  17. Slide 17: Reconciliation of Net Income & Operating Income to EBITDA & Adjusted EBITDA

    KORN FERRY Reconciliation of Net Income & Operating Income (GAAP) to EBITDA & Adjusted EBITDA (Non-GAAP) ($M) FY’20 Q1; FY’21 Q1 FY'20 Q1 FY'21 Q1 Exec. RPO & Exec. RPO & Consulting Digital Search Prof. Search Corp. KF Consulting Digital Search Prof. Search Corp. KF Fee Revenue $137.5 $58.0 $193.2 $

  18. Slide 18: Reconciliation of Cash & Marketable Securities to Investable Cash

    KORN FERRY Reconciliation of Cash & Marketable Securities to Investable Cash ($M) FY’20 Q1; FY’21 Q1 FY'20 FY'21 Qtr. 1 Qtr. 1 Cash $424.6 $542.8 Marketable Securities 142.7 190.2 Cash & Marketable Securities $567.3 $733.0 ECAP & Bonus Liability (204.7) (222.2) Investable Cash $362.5 $510.8 © 2020 K

  19. Slide 19: Fee Revenue Growth by Segment and Region – Reported vs. Constant Currency

    KORN FERRY Fee Revenue Growth by Segment and Region – Actual Reported vs. Constant Currency FY'21 Q1 vs. FY'20 Q1 Reported Const. Curr. $M % Grth. % Grth. Executive Search North America $69.3 (38.0%) (37.8%) Europe 30.1 (35.4%) (35.0%) Asia / Pacific 17.3 (36.9%) (35.4%) Latin America 3.5 (53.9%) (4

  20. Slide 20: Thank you

    Thank you «? KORN FERRY:

Korn Ferry — Q1 FY2021 Earnings Presentation on 6ix