Kelly Services, Inc. · NASDAQ:KELYA

Kelly Services — Q1 2020 Earnings Presentation

14 slides from Kelly Services's earnings presentation, May 4, 2020

  1. Slide 1: First Quarter 2020

    FIRST QUARTER 2020 MAY 4, 2020

  2. Slide 2: First Quarter Takeaways

    FIRST QUARTER TAKEAWAYS Impact of COVID-19 pandemic begins in the second half of March • Q1 Revenue down 8.8%, down 8.3% in constant currency(1) • Impact from COVID-19 related demand declines of 2.7% year-over-year • Non-cash goodwill impairment charge in the quarter triggered by negative market res

  3. Slide 3: First Quarter 2020 Financial Summary

    FIRST QUARTER 2020 FINANCIAL SUMMARY Constant Currency Actual Results Change Change(1) Revenue $1.3B (8.8%) (8.3%) Gross Profit % 17.7% (50) bps Loss from Operations ($111.8M) NM NM Loss Per Share ($3.91) ($4.47) • Revenue declined in Americas Staffing and International Staffing segments in the face

  4. Slide 4: Financial Summary (Excluding Special Items)

    FIRST QUARTER 2020 FINANCIAL SUMMARY (Excluding Goodwill Impairment Charge, Gain/loss on investment in Persol Holdings, Gain on Sale of Assets and Restructuring) Constant Currency Actual Results Change Change(3) Revenue $1.3B (8.8%) (8.3%) Gross Profit % 17.7% (50) bps Earnings from Operations(1) $1

  5. Slide 5: EPS Summary

    FIRST QUARTER 2020 EPS SUMMARY $ in millions except per share data First Quarter 2020 2019 Amount Per Share Amount Per Share Net earnings (loss) ($153.2) ($3.91) $22.1 $0.56 Goodwill impairment charge, net of taxes(1) 124.7 3.18 - - (Gain) loss on investment in Persol Holdings, (2) 54.0 1.38 (9.1) (

  6. Slide 6: Revenue Growth

    FIRST QUARTER 2020 REVENUE GROWTH REVENUE MIX BY SEGMENT(1) REVENUE GROWTH BY SEGMENT 10% 5% Americas 0.4% 0.6% 0.6% Reported Staffing 0% 40% 42% Constant International Currency Staffing (5%) Organic Global Talent Growth(2) Solutions (10%) (8.8%)(8.3%)(9.4%) (10.7%) (10.7%) 18% (15%) (12.1%) (14.6%)

  7. Slide 7: Gross Profit Growth

    FIRST QUARTER 2020 GROSS PROFIT GROWTH GROSS PROFIT MIX BY SEGMENT(1) GROSS PROFIT GROWTH BY SEGMENT 10% 5% 0.1% 0% (0.2%) 42% Americas (5%) Reported 45% Staffing Constant (10%) Currency International (11.3%) (10.9%) (11.8%) Staffing (15%) (13.4%) Global Talent (20%) 13% Solutions (20.2%)(20.0%) (25

  8. Slide 8: Gross Profit Rate Growth

    FIRST QUARTER 2020 GROSS PROFIT RATE GROWTH 19.0% 18.5% 18.2% 18.0% 17.7% (40) bps (10) bps 17.5% 17.0% 16.5% 16.0% 15.5% 15.0% Q1 2019 GP Rate Americas Perm Fees Q1 2020 GP Rate Staffing • Overall GP rate declined on higher employee-related costs and lower perm fees • Americas Staffing GP rate decl

  9. Slide 9: SG&A

    FIRST QUARTER 2020 SG&A $ in millions $250 $9 $240 $235 $230 ($13) ($6) $220 ($3) $219 ($2) ($1) $210 $200 $190 Q1 2019 SG&A Restructuring Americas Corporate International Global Talent FX Q1 2020 SG&A Staffing Staffing Solutions • Restructuring charges reflect actions taken prior to COVID-19 to ali

  10. Slide 10: Balance Sheet Data

    FIRST QUARTER 2020 BALANCE SHEET DATA $ in millions ACCOUNTS RECEIVABLE SHORT-TERM BORROWINGS $1,500 $80 $74 $1,283 $1,282 $1,300 $1,236 $60 $1,100 $40 $900 $20 $700 $2 $2 $500 $0 Q1 2019 Q4 2019 Q1 2020 Q1 2019 Q4 2019 Q1 2020 Excluding Acquisitions Acquisitions • Accounts Receivable reflects the i

  11. Slide 11: 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 o

  12. Slide 12: Recent Acquisition: Insight

    RECENT ACQUISITION: INSIGHT • Education service staffing company with experience in partnering with school districts in Illinois, Massachusetts, New Jersey and Pennsylvania 12

  13. Slide 13: Non-GAAP Measures

    NON-GAAP MEASURES Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding the 2020 goodwill impairment charge, 2020 and 2019 gains and losses on the investment in Persol Holdings, the 2020 and 2019 restructuring charges, and the 2020 gain on sale of ass

  14. Slide 14: 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

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