KELYA - Earnings call transcript Q1 2022

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Operator

Good morning, and welcome to Kelly Services' First Quarter Earnings Conference Call. All parties will be on listen-only until the question-and-answer portion of the presentation. Today's call is being recorded at the request of Kelly Services. If anyone has any objections, you may disconnect at this time. A first quarter webcast presentation is also available on Kelly's website for this morning's call. to meeting like host, to now Mr. would turn over the your I and Quigley, CEO. Peter President ahead, go Please sir.

Peter Quigley

today our Steve. to walk can quarter me be Kelly you, you Service's Olivier Thank Hello, harbor our first conference everyone, through our found call. language, who in Financial Officer, Chief and safe welcome is will Thirot, which With materials. presentation

Olivier Thirot

and good everyone. morning, Peter, you, Thank

obligation update risk for no a performance. have company's the any our that made we Q&A, filings refer the made our of call, the results to future performance. may expectations forward-looking reminder, factors on during Please this by comments a future call. materially including As description differ about SEC could include statements for statements suggested our to from Actual could influence the this those actual and comments,

financial In discussion discussed be basis basis. of data the organic items addition, on an our operations. acquisition growth insight References in on results to our exclude a non-GAAP designed certain the of adjusted adjusted during QX and on into XXXX certain our Discussion measures Softworld. in will an of trends today to give call, reported are

which about operating RocketPower our will complete we one-month first on While shortly, more lag. did in a the talk we'll quarter, results be acquisition their of Peter consolidating

we'll So while the seeing start positive acquisition, initial our in P&L the QX. balance sheet of of and the cash flows impact impact RocketPower include

using we deck And slide the call are back that today's Peter. now on is you, Finally, website. on available to our

Peter Quigley

achieved of five provided productive every is our substantial grew in Kelly's It's year, quarter an paying significant performance our and one revenue. improvement strategy exceptionally in Olivier. We the that to year-over-year GP been segments. Thanks, off. We start evidence first

improvements its doubled earnings structural Our highest and point our more than operations, we in business. than years to from all our broad-based which in level GP more of XX reached rate

Board's of confidence our strategic and in share, $X.XXX progress. to a pre-pandemic Kelly's our of its per We also level performance dividend restored sign

growth. SET double-digit Our segment line each year-over-year top education delivered OCG and constant currency

legislation in a in our of an operations. saw modest saw in GP the its decline and growth to growth grew in a And solid decline notwithstanding substantially led significant While revenue, overall European impact P&I we fees. Mexico's International, revenue

segments fees were hiring to companies higher continue fact, In across of all up as talent. their ramp full-time

more are As our the the quarter about we results. of approach in just Kelly's anniversary early new pleased entered in making first that we February, specialty model, year strategy. our investments we're we we $XXX operating in And with that then In we're that growth. higher-margin redeploy second capital million executing noncore XXXX, and the We financial excited progress advancing acquisitive committed growth bolder, said strategy. would our toward announced APAC to provided capital approximately of

wasted We time. haven't any

including an acquisitions or acquired completed Kelly's move the assets business fast-growing specialty we in in of Therapeutic week, Pediatric us week, last In a Services, strategy. our acquired market. diversifies And in able APAC. Valley equipped were decisively start-up that our We invest behavioral separate to monetize specialties. with occupational to for mental opportunities March, talent. connecting unprecedented assets attractive highly of inorganic high-growth, one PTS, expanding the high-margin strategy. in Kelly's Both physical speech in the businesses, with significant them growth of offer top and services, therapy, leadership Though both line and provision solutions firm workforce acquire services. a and synergies OCG, specialized X position strategic RocketPower, X provide RPO high-tech have presence to last clients by decision the to specialty act these therapy, in-school clearly clients we we because extends pathology, of capital our As growth in are in Both Silicon our the with other Education, quickly year. meet this our value and That in language acquisitions align K-XX amount right both that strengthens of to targeting acquisitions by noncore health goal

the $X.X upon considering transactions, high-growth we capacity, of acquisitions our a capital, As and structural our and in high-margin, had transactions, available of improvements more billion $XXX to APAC the Even quantitative continue and deliver pursue debt. that drive and business borrowing to reminder, capital completion results. we to will capital and carry PTS ample deploy RocketPower million, totaled after have no qualitative that than

As our options and that employees foremost, are thoughtful safety and shared the also Russian After Russian region. making have of in to In taking portfolio first our well-being we were decisions businesses. we execute quarter, we Kelly's strategy, considering ensure the decided steps for growth careful to we consideration, of we operations. our long-term about first our transition operations, the

full We in operations an are committed transition local to with our laws. orderly compliance Russian and of international

turn I'll Now to closer Kelly's Olivier. of at details it for a look QX over results, the

Olivier Thirot

Peter. you, Thank

totaled XXXX, prior basis the unfavorable from billion, revenue up XXX $X.X of the For of including quarter X.X% year, impact. points currency first

XXXX currency. So acquisition increase in as well staffing impact in Softworld, unfavorable up from XXX Included the of resulting constant were the are legislation. revenues favorable a Mexican basis our that quarter points impact XXX in market from the X% changes for basis as points QX a

QX to experience While on significant additional Europe, did we economic situation any Ukraine not contributed in uncertainty the current revenues. our impact has in

we growth, our disruptions. by period impacted As quarter the at look XXXX still to as Education revenue comparable segment up report XX% COVID-related was year-over-year first significant segment, continues by

continued demand talent to strong as have experience new a challenging customer and through wins, even We we market. work

our have broadening see we has the meaningful and in been business fill Our successful improvement to rate. started supply in of talent, Education

on on product with growth partially continued the XX% revenue declined Industrial in first result to The environment. X% currency hours a year-over-year disruptions our revenue, business. year-over-year segment revenue growth segment constant in and and SET impact delivered the quarter, on specialty reduction X% the acquisition impacted talent currency technology was Mexico & outcome-based in higher pass has outcome-based when partially in to customer Softworld in the solutions demand chain our our Across an our the exits. of served. customers. segment up was year the as enacted the demand deliver demand the at challenges of from have directly Revenue OCG the by and and vary negatively of trajectory our talent placing legislation this reflect with has clients' meet strong double-digit a telecommunications well QX in XX% supply Permanent from the to business, XX% volume, demand as on from currency. basis customer results for call last declined impact was OCG for demand rates basis reflecting employment Revenue the a specialty, up in MSP trend growth and of track segment, as its currency we sequentially. the XXXX. specialty Softworld with in also And of reported, in on Revenue from in bill the continue continued, current outcome-based strong, revenue as more by been the in up than talent EMEA staffing growth. revenue continued pressure SET by specialties. which all market. experience the offset nominal of have declined revenue our X.X% a growth Recovery our segment continued XX% needs contraction showed remains Overall, which up down growth in in due Revenue Professional placement PPO upward the the And the region growth from by the top over have down revenue of International organic to results to other to up in center Our In fees X% current acquired in in in resulting we solid we product on including end fulfill growth, lower in trends the in growth year-over-year wages X% Softworld acquisition significant double-digit and results basis. of quarter. finally, we where quarter. positive, in product, custom delivered declines into a year-over-year is year-over-year constant in segments, offset we basis. RPO, X-year Organic line our anniversary XX% to a this was X.X% and on expected reported continued some constant talent our customers changing offset were continued

our from significant see does significant year-over-year. in in from more conversion International which includes a include a basis to to increase staffing SET, contingent as to its a share outlook. growth, change profit We from details also had that has and Asia. up I'll and heavy That million than reported was XX.X% XXX% labor on fees P&I more up currency. activity Overall it Greenwood customer on XX.X% later placement strategy $X acquisition fee constant gross in about continue hiring. decided Education, full-time or bearing

basis. increased currency Excluding Softworld, constant on an organic GP XX.X%

compared last improvement. year, basis Our the of profit point XX.X% a rate was quarter gross in XX.X% to XXX first

we a basis XXX did of result and fees costs GP favorable I coupled with Our contributed the basis lower points generates improvement combination large XX had points we XX first employee-related points point year-over-year as quarter, These customer, from acquisition for Included year mentioned, a basis XX Higher prior were in basis costs the a rate as onetime and XX favorable GP and margins. rate in we benefit factors improvement a of in by got quarter. business which of mix adjustment the various compensation workers' factors. was driven the conversion fee for points. higher another Softworld, operating basis with the of previously

GP year-over-year to constant XX% growth expenses our basis, basis. quarter from first include factors. of Expenses So XX.X% and operating amortization about of on Softworld, XXX expense XXXX on basis intangible rate points currency were SG&A the points year-over-year XXX basis a of came expenses these rate. the up added for XX points our other improvement a which of basis reported

grew XX.X% increase in our currency. expenses SG&A of So compensation-related for basis, reflects organic an expense majority on talent. in constant by full-time year-over-year the higher The

current We increases and is to as headcount meaningful client-facing base largely with growth have environment. in increases expense pay. cost adjustments and produce these well provided the as for GP the of in smaller This added Even incentive for retain attract growth our increase the business, with the the additional as leverage need quarter. teams -- revenue line in operating reflect increasing doing performance-based we talent exceeded compensation expenses to growth in

quarter $XX.X of amortization. for Softworld from the $X.X QX million million, $XX.X earned earnings than results asset intangible in for QX operating inclusive Included first million, of in more earnings were our operations XXXX. double the Our the are of

the the includes Holdings also Although of in Up to not taxes of of impact included gains in earnings from to the operations, Kelly each losses sale common recognized fair quarter. Persol related noncash we changes QX our in the earnings sale, value shares. and the market of investment date investment before and have the

the a in of to As compares noncash quarter, an $XX expenses. shares of sales we transaction, disclosed the loss in Persol discussed in XX-K, cost the Form in gain XXXX to including QX to our million XXXX date additional a the on related February the prior million recognized call related market and pretax on fees $XX in of value pretax quarter end and to the common earnings fourth and year. the the million $XX our stock the first we compared of This

of charges, Japan had for earnings we of favorably foreign U.S. exchange following other the interest $XX.X share. from the The million gain transactions. benefit exchange the We the tax at the foreign impact the Japan quarter joint to And expense a liquidity. held expense, related end quarter shares venture of $XXX sale in these significant. one until million in additional of the all a the most cash Persol of compared cash additional subsequent of PersolKelly below to and impacted the noncash cash quarter. our the Income transfer million of transactions $XX the $X.X reported liquidation subsidiary and was related Nonwithstanding the the sale recognized APAC the of Persol flow the we Although Kelly realized loss quarter was with our XXXX, in created after million operations first of impact income have our million. in not XXXX our of sale Persol for income noncash of to $XX the of the tax first

for $X.XX $X.XX Our per earnings quarter from XX.X%. The per rate effective the earnings share and of tax XXXX, was the $X.XX the adjusted transactions decrease almost Persol compared loss of for for reported tax. And share share $X.XX impact share QX of impact, was XXX%. net so and EPS per EPS Kelly to QX quarter in finally, Japan, of in XXXX compared to the Persol of share share per the resulted Adjusting related first was related liquidation XXXX XXXX. transaction of of in per up the

to of moving PersolKelly and of at income sheet transaction Persol of venture our net balance $XXX quarter. of million, joint of the of most generated investment Now the $XXX The in end generated approximately the in investment sale Holdings the sale cash taxes payable. taxes costs The expected the common share of our million net proceeds due. of

Class the of Persol, paid complete the this of We XXXX. taxes expected related agreement the pay with the cash arrangement of in owned million common transaction this generate of will $XXX QX $XX XXXX. the to shares transaction B shareholding million QX. QX of Persol taxes of to A by our we after to And approximately and in to unwinding majority repurchase cash in Holdings payment

repurchase common the impacting without share allowed us liquidity. addition, by our shares of outstanding In to X% shares reduce the

end accounts days completed taxes well available to We revenue in was PTS a the flows, have capacity available transaction already At QX our cash an early to strategic we deploy. of have reflecting with utilize as of acquisition quarter this in of the increase XX% XXXX. our acquisition in is DSO which the XXXX QX, no cash With and on end million balances the and of $X.X of our an at included end the the the continue had in completed our to recently $XXX the acquisition QX our we'll as credit facilities of of cash and $XXX At year-over-year, accelerate ample ago. increased to RocketPower, $XXX QX, quarter year-end Global at the first transformation, XXXX. and consistent and of in after million and billion We nearly started APAC X our totaled X PTS, QX. year-over-year compared days, to first the sheet million payment debt of debt, balance year capital receivable increase DSO. of the increase XX was of capital

includes reflecting million used in flow increasing $XXX in For under million of the the repay to cash payroll first approximately Free we CARES XXXX, working which $XX free outflows of tax federal quarter capital. used of investment cash flow, Act. we cash XXXX XXXX also balances deferred in

million expect balance paid And In January on XXXX. X, addition $XX pay now all remaining back we you, to in that, QX the million to with Peter. to $XX the XXXX, of

Peter Quigley

wins pipelines encouraged Olivier. first customer details, the the leaving quarter and and new those for demand, We're Thanks our by healthy sales increased we're momentum seeing.

to of and we each our which and with the we clients the high-quality are strategic adjust In this connect expect units and labor business environment deliver P&I, in We with require responding our performance. year's talent, to well-publicized speed agility. specialty of contributions current the dynamics Kelly to ways

how one model of As Olivier to we with a to needs. are meet we P&I direct our their changing staffing large clients mentioned, better work hire shifting

technology, local are half channel making agile. best talent for align organization to In ongoing enabling we or the made whether technology local said year. on the that inorganic we P&I's We improved on-site through SET service wanted investments. supply more organic clients drive deployment investments the deliver our the our to also returns teams of network and on productivity second In segment, calls, arrangement. be we previous local we've through meaningful us with throughout works P&I's see an our P&I that markets, local January, adjustments the with and alignment, our new we to Notwithstanding shortages to disruptions, expect coupled described and branch talent chain of will

QX for contributions QX adjacencies. Education expand drive our our the that within double-digit K-XX in PTS across from on to improve that and started Education, rates first which achieved this expect committed that quickly specialty another further acquisition high-margin, meaningful capture segment in the fill SET year, and with and XXXX Softworld we synergies yet we creates growth quarter, with growth market-leading Our client our without and growth high-demand beyond. the and And of we delivered our remainder In portfolio. expectation, of can

did RPO specialty. in leader also We fill the rates business of we innovative RocketPower, see business, precisely an K-XX what expect to RPO staffing throughout we OCG, improving our in quarter in that's XXXX. the fast-growing the with high-margin, In our said high-tech invest first would in we and acquisition

XXXX the of International and throughout wins GP our we continued sizable expected specialties. many in from addition, regional segment, begin And said growth produce MSP we will XXXX. local In to in

EMEA drive delivering X year. operations focused segment business capital, from and I'll top year our transition our use are for Our solid International expect growth of expect stakeholders nice ahead, strategies we our designed beyond. Olivier. growth first the the with in value what growth from to Kelly's and These quarter. Mexico about in Russia, aggressive more and share we Notwithstanding the XXXX the continue our of welcome remainder in delivered now line to To for segments, revenue back together

Olivier Thirot

Thank you, Peter.

are on to ahead, puts of look continuation with on ability demand we results There increase quarter of for currently a that we the many steady demand. seeing. fulfill and of continuation supply the As coupled a pressure trends expect first reflect talent is that talent, the in we our mismatch macro

impact may to rates that Kelly business We pressure industries all of expect and outlook. adapt. consumers levels the in expected unusual X wages our as And Specific events inflation interest certain half are second that skill on will the put into XXXX. at pressure continue on and recent trends upward increases in that

Russian operations the This revenues for by transition First will Kelly XXXX in intention about in International our our segment and basis to is XXX reduce market. total points. our

our on mentioned heavy instead rely Second Essentially, hiring customers today's -- is use customers talent of talent large as labor challenges direct label one changing staffing one full-time by strategy earlier. and directly our Kelly on will change of of its a with differently work decided to to that large -- in one address contingent employees.

this one secured to quarter, revenue to top expect to currency. large during from change year headwinds, has full nominal organically on in enough with number competitors continue QX those in of offset P&I impact this be the a be up fully the on-site to Even there not of a will transitions we While customer's X.X% basis in business. line X.X%

the Of our course, for we our we expect segment inorganic in XXX excluding the increasing acquisition recent of impact PTS. way, And non-Russian approximately additional OCG RocketPower XXX from are of Stated points PTS of business by and of in an revenue growth acquisitions Education our points. outlook basis segment. basis our and the finally, another RocketPower

revenue in, all So X% we year. growth the for expect to full X% of

reflects outlook changes material significant conditions. in or impact Our no deterioration the in COVID-XX-related macroeconomic

mentioned will impact the until on legislation by rate International's we growth to calls, the anniversary negatively prior change, As in continue revenue XXXX. be we impacted Mexico the half have of second

While than second But full half we factors we of move organic may the mentioned. as by year. quarterly the rate then expecting revenue be we the rate our into the of lower providing expectation, year that aren't growth QX I've driven expect do revenue are we increasing guidance, growth many

about reported we GP improvement include That's XXXX rate be basis full acquisitions. recent our year basis XX%. points for XX.X% a XXX our XXXX from on basis expect and the a We XX from to point

in to specialty lower improvement a reflect pace gradual our structural of more in expectations shift Our in mix fee-based growth business, GP growth a continued sustained continued margin our specialties. higher-margin in and rate

basis. to expenses X% adjusted X% SG&A organic be on expect We up to an

cost steps We continue drive savings our in and full additional to including calibrate expense, take actions taken many to QX.

to continuing attraction and However, there the pressure address is retention market. in talent current

opportunities variety full-time for higher and talent. is of We our that incentive compensation for space of equation on the are a focused part providing in initiatives

the of experience In productivity to the addition, the on workforce talent future and produces investment remain on units our all ensuring that business that we'll to enhance in initiatives our assignment. for We on continue necessary focus technology improving goals. talent replaced of committed

including acquisitions amortization We also points of impact expect that of will expense. our SG&A recent expense X approximately add XXX intangible the growth, basis

delivering inorganic and in effective you, credit, delivered As through on we tax organic progress on from utilizing which EBITDA points profitable teens, our we we finally, are XX the that, work has rate as EBITDA Based adjusted to for strategy, high XXXX. Peter. growth. of measures which basis we execute EBITDA adjusted tax the additional margin enacted income margin to outlook our expect expect the of adjusted and margin XX includes the been X.X% in XXXX. our to organic impact opportunity adjusted EBITDA XXXX, in And And with back an improve

Peter Quigley

to time, simultaneously value and wisely, promise confident improvement products can our on shareholders. delivering bring for specialties Thank welcome to disposal bold providing We capital a to newly signals high-quality in progress by and same and commitment investing opportunities innovative with to we're Kelly driving the We significant chosen talent XXXX At success. in high-margin XXXX for the use to ready speed effectiveness win market into We're accelerate that the that made needed which resources shared and our acts well-capitalized we leaning year organic with increase Kelly, to market and a and Olivier. accelerate and Kelly. at capital to and to started know to while bold to and we with a you, growth, entered specialization would work progress Kelly technology we impact. growth. enable to our that strategy of be we putting signaled our GP has PTS decisively pursues look optimism, unprecedented to RocketPower XXXX where our The thrilled one our energy forward with Kelly is our to started we growth, growth a value well-defined team, drive inorganic and shareholders. the

can our Steve, will shareholders open specialty suppliers As and the all execute of talent, we to continue Kelly for now stakeholders, to in you questions. strategy alike. XXXX, value our call clients, create against

Operator

come of first question Our line Research. of the Instructions] Kevin [Operator will from Barrington Steinke

Kevin Steinke

Congratulations morning. year. start to the Good the solid Hey. on

PeterQuigley

Thank you, Kevin. Good morning.

Kevin Steinke

Good to what doing like RocketPower. a bring they sense start in morning. acquisition, process before outsourcing? Seems nice off Kelly to additive about that really I to were is you just give what asking as recruitment but by to wanted can you a us

Peter Quigley

We're Yes. add practice, participates really acquisition. in the significant high-margin, Thanks, think existing RPO excited about not demand. experiencing our Kevin. another and that participated RocketPower It's high-quality, property Kelly is RocketPower will has in. considerably which also growth to we high-growth Kelly high-tech industry that significantly

the that There of have in no broadens financial produce Latin they to America be it was and and customers customer Kelly our practice Kelly we RPO leveraging model deployed literally and between that advantage think customers base. returns. legacy delivery the our can resources overlap in meaningful in So our also RocketPower some a includes

Olivier Thirot

Maybe, numbers. a I add Kevin, few can

you If call want we little pro year bit to full a expectations. forma about what tell you more

RocketPower million. in about of was $XX that revenue know XXXX you So

expectations temporaries our year, we again, the about going date. full the acquisition based to think rata on you are basically If that pro and not recognize

$XX We expect of a million to for region year. in revenue the close the

XXXX, very EBITDA XX%. region that if the of so already say, margin, with XXXX would seen GP the high rate compare that and XXXX. So high in growth, versus million have very, and very of you $XX region margin we in in I gross XX%, in

remarks. high-growth, So his was engine, really during high-value I as a Peter, prepared think, describing

Kevin Steinke

Pediatric you both well space. on as can as synergies, just sense in can Therapeutic quickly give to from RocketPower And helpful. revenue Services very as capitalize how your a education the you us latest That's Great. acquisition

Peter Quigley

we synergies think Yes, case both the it's opportunity, RocketPower I Kevin, in we've other exposure for exposure high-quality RocketPower their a of thesis PTS. parts we that case lot to that top the And as delivery which the to believe of in of in is it's their portfolio. of that the don't and our at market, it a been looking one said, with PTS, the of PTS. property line priority, customers. the a leverage an to We In bring we the high-tech add for investment K-XX to, to found have adjacency there's

We our therapies that PTS just districts districts platform a with of provides, leading to K-XX that and we have provides, we business that the that PTS are core scale. to in school support natural it's and need school able to complement the be our believe therapies it's a can

Kevin Steinke

strong just the want we your last attract you in quarter at fill my And shortages that meaningful talent least I have a that to expectations, segment, results, Great. about you gaining and ask are traction. and been efforts relative to improvement really to about noted Education talking labor rates in market.

Education little talk So to a just momentum bit your the you and can the talent. about segment, more there ability attract

Peter Quigley

schools behind, rates. There are masking. vaccines are more of health by Education requiring exceeding levels of individuals no concerns the in, levels we're are fill We're talked some as in what we QX and showing are we encouraged care come them at QX but longer saw pre-pandemic that that improvement or of off quarter. Yes. and really even the fill terms participates are that sidelines, in and geographies and in by open about We're Kelly still leave some last rates in the -- all in regions improvement of the lessened

year, large the encouraged of rates So as by the wins, And We're number pipeline even we've school this we're and encouraged. of we're also fill demand. 'XX, 'XX to school to the we improved by new look a year. encouraged the increased of added portfolio districts combination

Olivier Thirot

wage we And continuing. add that, in terms I -- see we attraction, of that on inflation would

inflation Education, on our QX at course, you impact the was same of which, X-X, look the in XX%, about If wage bill rate.

attract So talents. good also that's for good that's but to Kelly,

Peter Quigley

stress sector Education. pool for rates Kelly and the the health from care high, districts, are to said, seeing Olivier positive space, an of as education we're pay school for which very to talent are labor is And individuals the the migrating which adds inflow as COVID-induced

Kevin Steinke

you right. All out interesting Yes, called dynamic an there. that that's

Okay, great.

fairly think when this So you I to large hire market. talk mean, reflects across a approach sustainability the like eventually happening to trend in sounds or talent? talked hiring your your direct they a revert your do of to just places to old sense shift about the Or in you model might it? model? and think permanent back Just you that customers, you market with other shift what's their the the customer, do that's it attracting P&I on

Peter Quigley

don't it trend, I call Yes. think -- a I Kevin. wouldn't

to contingent are where I at penetration COVID workers time, customers according customers And the the hiring models strategy. high isolated have provides. But support by situation, realize their with contingent is have the a to contingent benefits few rate. decided flexibility that all-time shortage talent come strategy moving at are, an think the they of due Staffing a to the permanent American to labor demand in to instances there business terms the to deal Association from same of numbers the for worker the

So contingent it'd X it these back as are to to to customers our or to long-term X using impact predict see revert workers, that's we going a a going on hard trend whether be but have don't business.

Kevin Steinke

Okay. helpful. Good. That's

couple a Just more here.

with seeing? retain fulfill that and You you feel retain higher you higher to need expenses compensation Do a you're demand like the position attract to the and increases compensation all in workforce. those own noted talent related the good you're now SG&A customer attract to your to

Peter Quigley

have which know, answer. proposition the market, Well, contributions workforce you compelling to a business. is it's our to addressing talent only a efforts recognize that mean, we're inclusive our and employees' a underway that to provide it's ensure that to can Kevin, we're And doing workplace the we at we value as of strategy. competitive to and and welcoming But have compensation, increased we to is need of and flexible, But need our a and Kelly. a on is that's We to success that case ensure the that, the capabilities some through competitive I important employees provide not deliver labor the our everything -- it's environment. we

Kevin Steinke

Okay.

we should Just consistent quarter first the throughout -- XX the gross XX about lastly, for the you're being should we in quarter-to-quarter, from margin as about the move we think think as year. full pretty and that that X year,

beyond? we consistent or relatively that should just the is quarters about second So in anything quarter, think

Olivier Thirot

for percent confident we recent our the year, acquisitions. including No, I are XX-plus would the say X on

business bill rate that think been years, of our I higher set we a our in I has at we now improvement, rate. say, The SET see still XX%. up we for mix a where see, fee pay especially that start is dynamics have, pace moving to than spread would that useful the solid

as we're were we since improve for margin our a see all -- looking where and at right? quite in basically market was the to in XXXX, now. single we challenging. XXXX, gross recently year And including we been continuing So at those Kelly XX.X, XXXX total have So able gross every I extremely dynamics have margin conditions just seen our while

also So a structural this I to would say it's see long-term expect that year. we but this beyond year, continue to improvement

Kevin Steinke

for taking Thank Great. you the questions.

Peter Quigley

Thanks Kevin.

Operator

of Our of from line Instructions] the Joe will [Operator next Gomes NOBLE come Capital. question

Joe Gomes

the Good morning. Thanks for questions. taking

just GP increased us GP So rate to even lower wonder revenues if I the both. there as for could first is the if you face allowing little one business, here increase that's is your I revenues the but a business X remarks, look you bit some of noted the I the think a what in at both to on going color you lower and little segments? had more those you the give on dollars -- International in believe, P&I rates, and

Peter Quigley

primarily. we X%. was the headwind saw EMEA, revenue there -- increase Well, International In segment in the is Mexico

to of I during us In -- there. we're to those as the business earnings segments. growth acquiring. though, focus on good in both Joe, of focus that is our said to cases, business call, business higher-margin So the the of allows And improve the last staffing both quality that

P&I, in our clip. where able customers outcome-based -- outsourcing higher operating offering new business a to in P&I business offer offer process the solutions they're the all at model of process customers higher-margin those we're those we're addition, case command solutions our and growing margin to and SPS that and able to good outcome-based of we're In our solution, to

to So P&I. that performance contributes the improved in GP

Joe Gomes

that I rate GP for mentioned year, movement insight. you think do XX% much on the years an this improvement Olivier, we'll is, you more there upside hopefully, over mean be -- Thanks is a you at be pulling that Okay. type leveraged, be rate? you Or GP is how rate. Great that here, there to like Softworld is it in other that? of continuing grow on more can to can just things continue to get the acquisitions? And

Peter Quigley

that And combination in our strategy businesses I in we PTS, think seeing. improving margins. and It's believe is also high-quality, legacy higher And like what cases, both GP improve solutions Kelly like Well, inorganic. RocketPower, but we a provide you're both of Joe, command can rate. organic that we our our Softworld, that's addition the of high-growth like the properties

and improve segments that Our upside margin, really is all business of believe in to rate. our solutions a command GP we our outcome-based higher there

much impact overall. stable If education an GP take Education example, have we the been on of commands a it's you relatively meaningful rate well as PTS, which Education, think the Kelly Kelly addition Kelly in margins, higher but as can as in

Olivier Thirot

Yes.

bit, So you when far, look... little back you when look a

Joe Gomes

Right. Go ahead.

Olivier Thirot

that opportunities GP from, back to rate we Joe, was XX about of describing. XXXX, XX lot organic. And look with still a organically, our you When is basis about was even say, average X/X let's points have as improvement, Peter basically purely

Joe Gomes

talked little the your about bit things talent of meet you you the demand. talked talent there. full-time you're to addressing And In customer supply doing some in on your presentation, that a

types try other are outside Just pay. can for obviously, attract being supply-demand? help increased of wondering offer talent to that things you so and able customers' your What more you you meet to

Peter Quigley

where of Today's work flexible aspects they environment Joe, their life. Well, as the adjust other can about proposition. it's their their around want a requirements value workers mentioned,

the today's is years to attractive started that We very have X workers. flexibility which we ago, a a of before program pandemic, level called think that Kelly we provides Anywhere,

of well a well welcome work connecting to support Today's with creating can with people individuals of as ways enrich as that improving potent they with. work that offers excited about be we that combination we want so feel workplace. people that talent all lives. coming attract to believe and the demographics as we that purpose, noble that So great groups, benefits of wellness their our as work sense in Kelly combination purpose of great workers combined companies the in and that to work the the and every day That's to in of our affinity feel a story plans, telling

Joe Gomes

shares where last shares just given market the you raised Okay. me, trading the I the if Or repurchased kind for be one you -- you been and may. for -- rather today of here environment? buying powder prefer more know dividend. you to Persol, has acquisitions? in dry this that But would hold or to And happening where on what's held going recently, in be interest some potential I by would the the Board stock of back

Peter Quigley

high-quality But Well, our regularly all reviewing do going We table, allocation, of do demonstrated that majority the is we're capital with possibility the to best considering whether be PTS. with like we've or properties of We dividends repurchase. it's of regularly respect Joe. and that the to to believe create Softworld and we're acquire for off capital with is the our how and nothing use the of RocketPower value shareholders. share the Board, options to

Operator

at in this time. no Mr. further are queue There questions continue, Please Quigley.

Peter Quigley

questions, further day. I no think call are a there if it we can Steve,

Operator

for of that June XX:XX today's today Ladies to which be teleconference day. midnight in call, available a.m. like at would thank and participation will until gentlemen, from your you XX replay we for

thank XXXXXXX. use XXX-XXXX using our our same number thank entering you of code Once for of And service. from in the access dialing the your and may if teleconference You an international dial-in XXX-XXXX today's and access you day. XXXXXXX. again, you're participation dialing replay a by of wonderful call, Have (XXX) the (XXX) location, for code like access and we'd to please

may You disconnect. now

Kelly Services (KELYA) 12 May 222022 Q1 Earnings call transcript