Kelly Services, Inc. · NASDAQ:KELYA
Kelly Services — Q3 2024 Earnings Presentation
20 slides from Kelly Services's earnings presentation, Nov 7, 2024
Slide 1: A ro) ro NT = oO te) E o > io) Zz
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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 loss on sale of assets, the 2024 restructuring charges, the 2024 transaction costs, the 2024 integration costs and the 2023 restructuring charges are useful to understand
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: Takeaways
Third-Quarter 2024 Takeaways Staffing demand continued to be impacted by uncertain market and labor trends, consistent with prior quarter * Q3 revenue down 7.1% on a reported basis due primarily to the sale of European staffing operations, down 0.2%" on an organic basis Driving strategic progress on
Slide 7: Financial Summary
Third-Quarter 2024 Financial Summary Change Increase/(Decrease) Actual Results As Reported As Adjusted) Revenue $1.0B (7.1%) (7.1%) Gross Profit Rate 21.4% 100 bps 100 bps Earnings from Operations $2.6M NM (24.5%) Diluted Earnings per Share $0.02 ($0.16) ($0.29) Adjusted EBITDA $26.2M 2.7% Adjusted
Slide 8: Revenue Trends
Third-Quarter 2024 Revenue Trends Reported”) Organic Total (7.1%) (0.2%) Professional & Industrial (2.0%) n/a Science, Engineering & Technology 37.1% (5.1%) Education 10.9% n/a Outsourcing & Consulting 6.0% n/a === Refer to the last slide for footnotes. 2024 Kelly Services, nc Al rights os wrved (1)
Slide 9: Gross Profit Rate
Third-Quarter 2024 Gross Profit Rate 23.0% 110 bps 21.5% 21.0% 20.5% 20.4% 20.0% 19.5% 19.0% 18.5% 18.0% 22.5% 22.0% 130 bps Organic GP (140) bps 10 bps 21.4% (120) bps — —_ bps Q32023GPRate Sale of EMEA MRP staffing operations Business Mix Perm Fees Employee-related Q3 2024 GP Rate Costs * GP rate
Slide 10: SG&A
Third-Quarter 2024 SG&A Sinmilions $250 $240 $230 $228 $220 $34 $219 $210 $200 ($29) $190 56 $180 616) [| S3 | $170 ($7) $160 $150 Q3 2023 Sale of EMEA Prior Year Operations Transaction Integration MRP 3 2024 SGRA staffing Transformation costs costs SG&A ‘operations costs SG&A expenses decreased fol
Slide 11: Revenue and Gross Profit Mix
Third-Quarter 2024 Revenue and Gross Profit Mix Revenue mix by segment Gross Profit mix by segment I Kelly Professional Cw oC, & Industrial me em 30% I Kelly Science, Engineering, we 36% a % Technology & Telecom 1 Kelly Education 39% 45% I KellyOCG (© 2024 Kelly Services nc. llrightsreserved.
Slide 12: EPS Summary
Third-Quarter 2024 EPS Summary Sinmillions except per share data Net earnings (loss) Loss on sale of assets, net of taxes Transaction costs, net of taxes” Restructuring charges, net of taxes Integration costs, net of taxes” Adjusted net earnings === Refer to the last slide for footnotes. (© 2024 Kel
Slide 13: Third-Quarter 2024 Liquidity
(© 2024 Kelly Services nc. llrightsreserved. Third-Quarter 2024 Liquidity $inmillions $500 $418 $427 $400 $117 $126 $300 $200 $100 $0 $49 $49 -$100 -$200 -$300 -$400 Q3 2023 Q4 2023 Q3 2024 mCash — mUnusedBorrowing Capacity mi SBLC Borrowings As of the end of Q3 2024, we have more than $150 million
Slide 14: Sale of European Staffing Operations
(6 2024 Kelly Services nc Alright rse 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 busin
Slide 15: 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 16: Q4 2024 Outlook
Q4 2024 Outlook Revenue - up organically 1.5% to 2.5%, with no significant FX impact; mid-point organic Our Q4 Outlook expectation of $1.045 billion for Q4 2024 assumes a o Reflects continuation of Education double-digit growth and P&l, SET and OCG F P sequential stabilization quarter-over-quarter i
Slide 17: We have redesigned our operating model to drive profitable growth
We have redesigned our operating model to drive profitable growth. Our priorities for each segment are clear. Together, they contribute to a strong, balanced portfolio. Optimize operations ay Accelerate Organic and Inorganic Growth Kelly Kelly Science, nna Professional & Engineering & I Industrial T
Slide 18: Appendix
Slide 19: 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 20: Footnotes
Third-Quarter 2024 Footnotes © 2024 Kelly Services nc. Alleghts reserved Organic excludes the impact of the sale of our EMEA staffing operations in January 2024 and the 2024 results of Motion Recruitment Partners ("MRP"), which was acquired as of May 31, 2024; See reconciliation of Non-GAAP Measures