Korn Ferry · NYSE:KFY
Korn Ferry — Q4 FY2022 Earnings Presentation
25 slides from Korn Ferry's earnings presentation, Jun 22, 2022
Slide 1: FY'22 Q4 Earnings Call
FY’22 Q4 Earnings Call June 22, 2022
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 by investing in initiatives Intention
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 Strong, Durable Relevant Solutions Aligned Poised for Foundation With Macro Trends Sustainable Growth • Recognized industry leader with • Rapid emergence of remote work • Focus on durable, scalable ~11,000 experts strate
Slide 5: Accelerating Global Demand & Strong Execution Driving Revenue & Earnings To Another New High
Accelerating Global Demand & Strong Execution Driving Revenue & Earnings To Another New High $721M 20.0% +$166M +30% YoY (1) Adj. EBITDA Margin % Fee Revenue (Non-GAAP) $144M $1.75 +$31M +28% YoY +$0.54 +45% YoY (2) Adj. EBITDA (1) Adj. Diluted EPS (Non-GAAP) (Non-GAAP) See detailed explanation of f
Slide 6: Business Continues to be Highly Diversified Across Lines of Business, Geography and Industry
Business Continues to be Highly Diversified Across Lines of Business, Geography and Industry For the fourth quarter of FY’22 Fee Revenue by Lines of Business Fee Revenue by Geography Fee Revenue by Industry 3% 5% 14% 14% 18% 30% 34% 19% 56% 27% 18% 12% 24% 26% Executive Search Digital NAM APAC Consu
Slide 7: Diversified Mix of Revenue & Operating Efficiencies Continue to Drive Greater Earnings ($M)
Diversified Mix of Revenue & Operating Efficiencies Continue to Drive Greater Earnings ($M) FY’21 QTR. 4 FY’22 QTR. 3 FY’22 QTR. 4 $555 $135(3) $681 $167(3) $721 $173(3) 100% 100% 100% $81 $90 $90 $28 90% $28 90% $28 90% 80% 80% 80% $120 $189 $213 70% 70% $44 70% $51 $30 60% 60% 60% 50% $154 50% 50%
Slide 8: Sustainable Fee Revenue and Strong Execution Driving Greater Earnings & Profitability from Pre-Pandemic Period
Sustainable Fee Revenue and Strong Execution Driving Greater Earnings & Profitability from Pre-Pandemic Period ($M) Pre-Pandemic Today Fee Revenue Up 36% from Pre- FY’20 Total Yr. FY’22 Total Yr. Pandemic Level to a New High $2,627 Growth Driven by the Co.’s Unique $1,933 Set of Solutions that A
Slide 9: Monthly New Business - YoY Growth (Excluding RPO)
(6) Monthly New Business* - YoY Growth (Excluding RPO) FY’22 February to FY’22 April New Business at New High 26% 26% 18% FY'22 - Feb. FY'22 - Mar. FY'22 - Apr. * Confirmations plus upticks and additional placements See detailed explanation of footnotes on page 16 9
Slide 10: Monthly New Business - YoY Growth By Line of Business
Monthly New Business* - YoY Growth By Line of Business (6) (Excluding RPO) FY’22 February to FY’22 April KF Total* Executive Search* New Business at a New High New Business at a New High 22% 26% 26% 20% 16% 18% FY'22 - Feb. FY'22 - Mar. FY'22 - Apr. FY'22 - Feb. FY'22 - Mar. FY'22 - Apr. Digital and
Slide 11: Consulting
Consulting 24% of Fee Revenue and 18% of Adj. EBITDA(1) in FY’22 QTR. 4 FY’22 Total Yr. Fee Revenue = $650 (+26% YoY) Fee Revenue Adj. EBITDA ($M) & Adj. EBITDA(1) Consultant + Execution 13% YoY Fee Revenue ($M) Margin (%) (Non-GAAP) Staff Productivity Hours Worked Driven by Leadership Development 4
Slide 12: Digital
Digital 12% of Fee Revenue and 16% of Adj. EBITDA(1) in FY’22 QTR. 4 FY’22 Total Yr. Fee Revenue = $349M (+21% YoY) Fee Revenue Adj. EBITDA ($M) & Adj. EBITDA(1) Subscription & License Fee 11% YoY Fee Revenue ($M) Margin (%) (Non-GAAP) Revenue(4)($m) 34.7% 31.2% 31.0% New Business was $107M – the $9
Slide 13: Executive Search
Executive Search 34% of Fee Revenue and 37% of Adj. EBITDA(1) in FY’22 QTR. 4 FY’22 Total Yr. Fee Revenue = $936M (+47% YoY) Global Fee Revenue Adj. EBITDA ($M) & Adj. EBITDA(1) 22% YoY Fee Revenue ($M) Margin (%) (Non-GAAP) Consultant Productivity 27.5% 26.3% NAM +19%, EMEA +20%, $244 24.8% $1.66 $
Slide 14: RPO & Professional Search
RPO & Professional Search 30% of Fee Revenue and 29% of Adj. EBITDA(1) in FY’22 QTR. 4 FY’22 Total Yr. Fee Revenue = $692M (+87% YoY) RPO New Business = $213 M ($44M of renewals/extensions and Adj. EBITDA ($M) & Adj. EBITDA(1) New Business ($M) Fee Revenue ($M) Margin (%) (Non-GAAP) $169M of new log
Slide 15: Maintaining a Balanced Approach to Capital Allocation
Maintaining a Balanced Approach to Capital Allocation Deployed $325M of Cash in FY’22 Investing $134M in M&A, $46M in **CAPEX, $19M in Debt Service and Returned $126M to Shareholders in Combined Dividends and Share Repurchases Cash & Marketable Securities ($M) FY’22 Capital Allocation ($M) Strong Li
Slide 16: Footnotes
Footnotes (1) Earnings Before Interest, Taxes, Depreciation & Amortization Adjusted to Exclude, when applicable, Acquisition / Integration Costs, Impairment of Fixed Assets (Leasehold Improvements), the Impairment of Right-of-Use Assets, Restructuring Charges and Separation Costs. (2) Adj. Diluted E
Slide 17: Appendix: Reconciliations of Non-GAAP Financial Measures to U.S. GAAP
Appendix Reconciliations of Non-GAAP Financial Measures to U.S. GAAP Financial Measures Earnings Conferenc e Call June 22, 2022
Slide 18: Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M)
Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’21 Q4; FY’22 Q3; FY’22 Q4 YoY Sequential FY'21 FY'22 FY'22 Incr. / (Decr.) Incr. / (Decr.) Qtr. 4 Qtr. 3 Qtr. 4 $/% % $/% % Net Income Attributable to Korn Ferry $66.2 $84.1 $91.7 $25.5 38% $7.6 9% Net Income Attributable to N
Slide 19: Reconciliation of Net Income & Diluted EPS (GAAP) to Adjusted Net Income & Adjusted Diluted EPS
Reconciliation of Net Income & Diluted EPS (GAAP) to Adjusted Net Income & Adjusted Diluted EPS (Non-GAAP) ($M) FY’21 Q4; FY’22 Q3; FY’22 Q4 YoY Sequential FY'21 FY'22 FY'22 Incr. / (Decr.) Incr. / (Decr.) Qtr. 4 Qtr. 3 Qtr. 4 $ % $ % Net Income Attributable to Korn Ferry $66.2 $84.1 $91.7 $25.5 38%
Slide 20: Reconciliation of Consolidated Net Income & Operating Income to Adjusted EBITDA - FY'21 Q4
Reconciliation of Consolidated Net Income & Consolidated Operating Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($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 $41.3
Slide 21: Reconciliation of Consolidated Net Income & Operating Income to Adjusted EBITDA - FY'22 Q3
Reconciliation of Consolidated Net Income & Consolidated Operating Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’22 Q3 FY'22 Q3 Executive Search North Asia Latin Total Exec. RPO & Consulting Digital America EMEA Pacific America Search Prof. Search Corp. KF Fee Revenue $162.9 $90.2 $152.6 $47.5
Slide 22: Reconciliation of Consolidated Net Income & Operating Income to Adjusted EBITDA - FY'22 Q4
Reconciliation of Consolidated Net Income & Consolidated Operating Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’22 Q4 FY'22 Q4 Executive Search North Asia Latin Total Exec. RPO & Consulting Digital America EMEA Pacific America Search Prof. Search Corp. KF Fee Revenue $173.9 $89.5 $156.2 $49.5
Slide 23: Reconciliation of Cash & Marketable Securities to Investable Cash ($M)
Reconciliation of Cash & Marketable Securities to Investable Cash ($M) FY’21 Q4; FY’22 Q3; FY’22 Q4 YoY Sequential FY'21 FY'22 FY'22 Incr. / (Decr.) Incr. / (Decr.) Qtr. 4 Qtr. 3 Qtr. 4 $ % $ % Cash $850.8 $846.5 $978.1 $127.3 15% $131.6 16% Marketable Securities 246.4 260.7 233.0 (13.4) (5% ) (27.7
Slide 24: Fee Revenue Growth by Segment and Region – Actual Reported vs. Constant Currency
Fee Revenue Growth by Segment and Region – Actual Reported vs. Constant Currency FY'22 Q4 vs. FY'21 Q4 Reported Const. Curr. $M % Grth. % Grth. Executive Search North America $156.2 19.5% 19.5% Europe 49.5 20.0% 27.3% Asia / Pacific 30.2 28.0% 30.8% Latin America 8.3 62.4% 59.6% Total Exec. Search $
Slide 25: Thank You
Thank You «7 KORN FERRY