Korn Ferry · NYSE:KFY
Korn Ferry — Q1 FY2022 Earnings Presentation
24 slides from Korn Ferry's earnings presentation, Sep 8, 2021
Slide 1: FY’22 Q1 Earnings Call
FY’22 Q1 Earnings Call September 8, 2021
Slide 2: Safe Harbor Statement
Safe Harbor Statement FORWARD-LOOKING STATEMENTS Statements in this presentation that relate to future results and events are based on Korn Ferry’s current expectations. You are cautioned not to place undue reliance on such statements. Actual results in future periods may differ materially from thos
Slide 3: Advancing our Strategy to Become the Preeminent Global Organizational Consultancy
Advancing our Strategy to Become the Preeminent Global Organizational Consultancy Diversifying offerings into fully Advancing Korn Ferry as a premier integrated, scalable and sustainable career destination: client engagements: Attracting and retaining top talent through continued Intentional shift t
Slide 4: A Compelling Investment Opportunity, At a Critical Moment, in a Critical Sector
A Compelling Investment Opportunity, At a Critical Moment, in a Critical Sector Strengthened Solutions Lining Up to Poised for Foundation Macro Trends Growth • Recognized industry leader in with • Rapid emergence of remote work • Deeper penetration with clients and 7,900 experts strategically positi
Slide 5: FY’22 Q1 Financial Results Show Continued Improvement Both Sequentially & YoY
FY’22 Q1 Financial Results Show Continued Improvement Both Sequentially & YoY With New Record Highs In Revenue & Earnings $585M 20.7% +$241M +70% YoY +1,760 bps YoY Adj. EBITDA Margin % Fee Revenue (Non-GAAP) $121M $1.37 +$111M YoY +$1.56 YoY Adj. EBITDA (3) Adj. Diluted EPS (Non-GAAP) (Non-GAAP) Se
Slide 6: Business Continues to be Highly Diversified Across Lines of Business, Geography and Industry
Business Continues to be Highly Diversified Across Lines of Business, Geography and Industry For the first quarter of FY’22 Fee Revenue by Lines of Business Fee Revenue by Geography Fee Revenue by Industry 3% 7% 14% 24% 17% 16% 37% 18% 52% 14% 20% 28% 25% 25% Executive Search Digital NAM APAC Consum
Slide 7: Diversified Mix of Revenue & Operating Efficiencies Continue to Drive Greater & More Balanced Earnings
Diversified Mix of Revenue & Operating Efficiencies Continue to Drive Greater & More Balanced Earnings ($M) FY’21 QTR. 1 FY’21 QTR. 4 FY’22 QTR. 1 $344 $29(4) $555 $135(4) $585 $148(4) 100% 100% 100% $56 $81 90% $81 $26 90% 90% $28 $8 80% 80% 80% $69 $120 $139 70% 70% 70% $34 $30 60% $6 60% 60% 50%
Slide 8: Quarterly New Business - Improving YoY Growth Trend
Quarterly New Business* - Improving YoY Growth Trend (Excluding RPO) FY’21 QTR. 2 to FY’22 QTR. 1 59% 48% (1%) (7%) QTR. 2 FY'21 QTR. 3 FY'21 QTR. 4 FY'21 QTR. 1 FY'22 * Confirmations plus upticks and additional placements 8
Slide 9: Quarterly New Business - YoY Growth By Lines of Business
Quarterly New Business* - YoY Growth By Lines of Business (Excluding RPO) FY’21 QTR. 2 to FY’22 QTR. 1 KF Total* Executive Search* 74% 59% 48% 45% (1%) (16%) (1%) (7%) QTR. 2 FY'21 QTR. 3 FY'21 QTR. 4 FY'21 QTR. 1 FY'22 QTR. 2 FY'21 QTR. 3 FY'21 QTR. 4 FY'21 QTR. 1 FY'22 Digital and Consulting Profe
Slide 10: Consulting
Consulting 25% of Fee Revenue and 18% of Adjusted EBITDA in FY’22 QTR. 1 Adj. EBITDA ($M) & Adj. EBITDA(2) Consultant + Execution Fee Revenue Fee Revenue ($M) Margin (%) (Non-GAAP) Staff Productivity 50% YoY 428K 426K $359 Hours Worked $349 $154 17.7% 18.1% $148 367K Av g. Bill Rate $27.2 $26.8 $271
Slide 11: Digital
Digital 14% of Fee Revenue and 18% of Adjusted EBITDA in FY’22 QTR. 1 Adj. EBITDA ($M) & Adj. EBITDA(1) Subscription & License Fee Fee Revenue ($M) Fee Revenue Margin (%) (Non-GAAP) Revenue(5) ($M) 34.7% 44% YoY $81 31.8% $81 $24 $24 $27.9 $21 (Flat Sequentially) $25.6 $56 14.2% ▪ New Business - $10
Slide 12: Executive Search
Executive Search 37% of Fee Revenue and 41% of Adjusted EBITDA in FY’22 QTR. 1 Adj. EBITDA ($M) & Adj. EBITDA(2) Global Fee Fee Revenue ($M) Margin (%) (Non-GAAP) Consultant Productivity Revenue $217 28.4% $1.54 $1.59 24.8% $201 $7 $61.6 81% YoY $5 $29 $2.4 $24 $8.3 $49.8 $0.90 565 $43 $0.8 (+8% Seq
Slide 13: RPO & Professional Search
RPO & Professional Search 24% of Fee Revenue and 23% of Adjusted EBITDA in FY’22 QTR. 1 Adj. EBITDA ($M) & Adj. EBITDA(2) Fee Revenue New Business ($M) Fee Revenue ($M) Margin (%) (Non-GAAP) $165 $139 103% YoY $161 24.9% 24.4% $120 $34.0 (+16% Sequentially) $46 $52 $52 $30.0 $42 ▪ RPO New Business -
Slide 14: Cash & Marketable Securities
Cash & Marketable Securities Strong Liquidity with $614M of Investable Cash(6) Investable Cash(6) Cash & Marketable Securities ($M) $103M $1,097 20% YoY $904 $455 $733 Repurchased $290 $222 41.1K shares ($2.7M) FY’22 YTD $642 $614 Dividend Payments $511 $6.9M FY’22 Q1 FY'21 Q1 FY'21 Q4 FY'22 Q1 Inve
Slide 15: Footnotes
Footnotes (1) Earnings Before Interest, Taxes, Depreciation & Amortization Adjusted to Exclude Acquisition/Integration Costs and Restructuring Charges. (2) Earnings Before Interest, Taxes, Depreciation & Amortization Adjusted to Exclude Restructuring Charges. (3) Diluted Earnings per Share Adjusted
Slide 16: Appendix: Reconciliations of Non-GAAP Financial Measures to U.S. GAAP
Appendix Reconciliations of Non-GAAP Financial Measures to U.S. GAAP Financial Measures Earnings Conferenc e Call September 8, 2021
Slide 17: Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA (Non-GAAP)
Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’21 Q1; FY’21 Q4; FY’22 Q1 YoY Sequential FY'21 FY'21 FY'22 Incr. / (Decr.) Incr. / (Decr.) Qtr. 1 Qtr. 4 Qtr. 1 $/% % $/% % Net Income (Loss) Attributable to Korn / Ferry ($30.8) $66.2 $74.8 $105.7 - $8.6 13% Net Income
Slide 18: Reconciliation of Net Income & Diluted EPS to Adjusted Net Income & Adjusted Diluted EPS
Reconciliation of Net Income (Loss) & Diluted EPS (GAAP) to Adjusted Net Income (Loss) & Adjusted Diluted EPS (Non-GAAP) ($M) FY’21 Q1; FY’21 Q4; FY’22 Q1 YoY Sequential FY'21 FY'21 FY'22 Incr. / (Decr.) Incr. / (Decr.) Qtr. 1 Qtr. 4 Qtr. 1 $ % $ % Net Income (Loss) Attributable to Korn / Ferry ($30
Slide 19: Reconciliation to Adjusted EBITDA - FY’22 Q1
Reconciliation of Consolidated Net Income & Consolidated Operating Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’22 Q1 FY'22 Q1 Executive Search North Asia Latin Total Exec. RPO & Consulting Digital America EMEA Pacific America Search Prof. Search Corp. KF Fee Revenue $148.5 $80.7 $138.7 $42.7
Slide 20: Reconciliation to Adjusted EBITDA - FY’21 Q4
Reconciliation of Consolidated Net Income & Consolidated Operating Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’21 Q4 FY'21 Q4 Executive Search North Asia Latin Total Exec. RPO & Consulting Digital America EMEA Pacific America Search Prof. Search Corp. KF Fee Revenue $153.6 $80.5 $130.8 $41.2
Slide 21: Reconciliation to Adjusted EBITDA - FY’21 Q1
Reconciliation of Consolidated Net Income (Loss) & Consolidated Operating Income (Loss) (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’21 Q1 FY'21 Q1 Executive Search North Asia Latin Total Exec. RPO & Consulting Digital America EMEA Pacific America Search Prof. Search Corp. KF Fee Revenue $99.3 $56.0
Slide 22: Reconciliation of Cash & Marketable Securities to Investable Cash
Reconciliation of Cash & Marketable Securities to Investable Cash ($M) FY’21 Q1; FY’21 Q4; FY’22 Q1 YoY Sequential FY'21 FY'21 FY'22 Incr. / (Decr.) Incr. / (Decr.) Qtr. 1 Qtr. 4 Qtr. 1 $ % $ % Cash $542.8 $850.8 $649.3 $106.5 20% ($201.5) (24%) Marketable Securities 190.2 246.4 255.0 64.8 34% 8.6 3
Slide 23: Fee Revenue Growth by Segment and Region – Reported vs. Constant Currency
Fee Revenue Growth by Segment and Region – Actual Reported vs. Constant Currency FY'22 Q1 vs. FY'21 Q1 Reported Const. Curr. $M % Grth. % Grth. Executive Search North America $138.7 100.1% 97.9% Europe 42.7 42.1% 31.0% Asia / Pacific 28.7 66.4% 55.9% Latin America 6.8 93.9% 81.3% Total Exec. Search
Slide 24: Thank You
Thank You «7 KORN FERRY