Slide 1: Kelly Services, Inc. Second Quarter 2016
Kelly Services, Inc. Second Quarter 2016 August 10, 2016 Exhibit 99.2
Slide 2: 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, competitive market pressures including pricing and technology introductions, changing market and economic
Slide 3: Second Quarter 2016 Highlights (YOY Comparisons)
3 Second Quarter 2016 Highlights (YOY Comparisons) • Total revenue declined 0.7%, or up 0.6% in constant currency • Gross profit up 3.7%, or up 4.8% in constant currency – GP rate up 70 basis points • OCG gross profit up 20% • Earnings from operations of $9.9 million, down 14% YOY – Earnings from op
Slide 4: Financial Summary
Second Quarter 2016 Financial Summary 4 • Second quarter results reflect softening revenue growth • Continued strong GP rate improvement • Earnings from operations negatively impacted by $3.4 million of restructuring costs • EPS growth due to improvements in both operational performance and effectiv
Slide 5: Financial Summary (Excluding Restructuring)
Second Quarter 2016 Financial Summary (Excluding Restructuring) 5 ----- (1) Excludes $3.4 million of restructuring costs, $2.5 million net of income tax expense or $0.07 per share, in 2016. (2) Constant Currency represent year-over-year changes resulting from translating 2016 financial data into USD
Slide 6: Revenue Growth
Second Quarter 2016 Revenue Growth 6 • Overall reported revenue decline of 0.7% as positive trends in OCG and EMEA were offset by softening in Americas Commercial revenue and a 130 basis point impact from foreign exchange • Total revenue grew by 0.6% on a constant currency basis • OCG revenue growth
Slide 7: Gross Profit Growth
Second Quarter 2016 Gross Profit Growth 7 • Americas Commercial and PT staffing, and OCG comprise 80% of total company GP • GP growth in the Americas represents increasing GP rate on declining revenue • OCG GP growth reflects strong GP rate improvement on a single digit revenue increase • EMEA GP re
Slide 8: Gross Profit Rate
16.1% 16.8% 15.0% 15.2% 15.4% 15.6% 15.8% 16.0% 16.2% 16.4% 16.6% 16.8% 17.0% Q2 2015 GP Rate EMEA/APAC GP Rate AMER GP Rate OCG GP Rate FX Q2 2016 GP Rate Second Quarter 2016 Gross Profit Rate 8 • Overall GP rate improvement from improving GP rates in both the Americas Staffing and global OCG busin
Slide 9: SG&A
Second Quarter 2016 SG&A 9 • OCG expense growth results from increasing salaries and performance-based compensation as well as costs related to additional sales resources • Corporate expenses reflect one-time costs of $1.2 million related to the expansion of the TS Kelly Asia Pacific Joint Venture,
Slide 10: Conversion Rate
Second Quarter 2016 Conversion Rate 10 ----- (1)Conversion rate represents earnings from operations as a percent of gross profit, or return on gross profit. • Second quarter total company conversion rate reflects the impact of the $3.4 million of restructuring charges, which more than offset the con
Slide 11: Conversion Rate (Excluding Restructuring)
Second Quarter 2016 Conversion Rate (Excluding Restructuring) 11 • Conversion rate improved across most businesses • Second quarter total company conversion rate reflects continued progress against our goal to improve conversion rate on an ongoing basis $ in Millions ----- (1) Excludes $3.4 million
Slide 12: Balance Sheet Data
$1,130 $1,135 $1,140 $1,145 $1,150 $1,155 2015 Q2 2015 2016 Q2 Accounts Receivable Second Quarter 2016 Balance Sheet Data 12 • DSO improved three days versus the same period last year • Debt-to-equity ratio at 2.8% continues to improve from the same period a year ago $ in Millions DSO 56 54 53 Debt-
Slide 13: 2016 Outlook – Third Quarter
2016 Outlook – Third Quarter • Revenue down 3% to 4% YOY in constant currency, 50 basis points of unfavorable foreign exchange impact – Excluding the impact of the APAC JV, revenue is up 1.5% to 2.5% in constant currency • Gross profit rate up 50 to 70 basis points YOY – Includes 20 basis points of
Slide 14: 2016 Outlook – Full Year
2016 Outlook – Full Year • Revenue down 1% to 2% YOY in constant currency, 100 basis points of unfavorable foreign currency impact – Excluding the impact of the APAC JV, revenue is up 1.5% to 2.5% in constant currency • Gross profit rate up 40 to 60 basis points YOY – Includes 10 basis points of fav
Slide 15: Appendix: TS Kelly Asia Pacific Joint Venture
APPENDIX: TS KELLY ASIA PACIFIC JOINT VENTURE 15
Slide 16: Highlights – TS Kelly Asia Pacific
• Joint Venture capitalizes on the strong reputation of Kelly Services as a leading talent provider in the region and on Temp Holdings’ regional presence – Provides accelerated growth opportunities, larger workforce solutions presence, and enhanced competitive positioning – Expands on 14-year strate
Slide 17: Highlights – TS Kelly Asia Pacific
• Expands scope from four geographies to twelve, with headquarters in Singapore • Brings together established businesses with approximately $500 million in revenue and 1,600 employees – TS Kelly North Asia – China, Hong Kong, Taiwan, South Korea – Kelly Services – Singapore, Malaysia, Australia, New
Slide 18: TS Kelly Asia Pacific transaction closing and accounting
• Transaction closed on July 4, 2016 and the JV was formed through asset transfers from Kelly and Temp Holdings and an $36.5 million cash payment to Kelly (subject to a cash true- up calculation) • Temp Holdings owns 51%, Kelly owns 49% • As of our second quarter balance sheet, the assets subsequent