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Europe — Kelly Services Q2 revenue up by +18%

12 August 2010

Revenue was up by +18% to $1.2 billion year-on-year in Q2 2010 at Kelly Services Inc. (KELYA:NSQ), the US-quoted workforce solutions provider. On a constant currency basis, revenue increased by +17%. Kelly is ranked 5th largest staffing company in the world according to Staffing Industry Analyst's latest global ranking.

Earnings from operations for the second quarter of 2010 totalled $8.5 million, compared to losses from operations of $74.5 million reported for the second quarter of 2009. Included in the results from operations for the second quarter of 2010 are impairment charges of $1.5 million. The loss from operations in the second quarter of 2009 included impairment charges of $52.6 million and restructuring charges of $4.7 million.

 
The large impairment charges included adjustments to the value of goodwill for the Company's Americas Commercial, EMEA PT and APAC Commercial segments and the long-lived assets related to operations in Japan. The restructuring charge was for the consolidation and closure of branches in the UK during 2009. Excluding the impairment and restructuring charges, earnings from operations were $10.0 million in the second quarter of 2010 compared to a loss from operations of $17.2 million in 2009.

Diluted earnings per share from continuing operations in the second quarter of 2010 were $0.11 compared to second quarter 2009 losses of $1.89 per share.

The impairment charges were $0.03 per share in the second quarter of 2010 and the impairment and restructuring charges totalled $1.52 per share in the second quarter of 2009.

In France, Q2 revenue was up by +7.4% from $62.9 million in 2009 to $67.6 million in 2010. In constant currency, revenue was up by +15.1%.

In Switzerland, Q2 revenue was up by +25.4% from $32.5 million in 2009 to $40.7 million in 2010. In constant currency, revenue was up by +25%.

In the UK, Q2 revenue was down by -32% from $50.2 million in 2009 to $34.2 million in 2010. In constant currency, revenue was down by -29.6%. The Company consolidated and closed a number of branches during the course of 2009 and now operates through a network of approximately 30 offices.

In Portugal, Q2 revenue was up by +51.9% from $12.6 million in 2009 to $19.1 million in 2010. In constant currency, revenue was up by +63.7%.

In Germany, Q2 revenue was up by +5.1% from $15.5 million in 2009 to $16.2 million in 2010. In constant currency, revenue was up by +12.7%.

In Italy, Q2 revenue was down by -16.5% from $17.6 million in 2009 to $14.7 million in 2010. In constant currency, revenue was down by -10.1%.

In Norway, Q2 revenue was down by -6.9% from $15.1 million in 2009 to $14.1 million in 2010. In constant currency, revenue was down by -10.4%.

In Russia, Q2 revenue was up by +68.5% from $15.1 million in 2009 to $25.4 million in 2010. In constant currency, revenue was up by +59.6%.

In other EMEA countries (Belgium, Denmark, Hungary, Ireland, Luxembourg, Netherlands, Poland and Sweden), Q2 revenue was down by -37.7% from $27.1 million in 2009 to $16.9 million in 2010. In constant currency, revenue was down by -34.5%. Kelly exited the staffing business in Spain, Turkey, Ukraine and Finland during the course of 2009.

Carl T. Camden, President and Chief Executive Officer, stated, "we're pleased that global economic expansion continues and labour markets are slowly strengthening around the world. These trends had a positive impact on our second quarter earnings as demand for temporary staffing improved."

"Our efforts and discipline are clearly gaining traction. We're confident that we have realigned our strategy to take advantage of future opportunities within our industry and we'll continue to focus on improving profitability while holding expenses down, maintaining our commercial staffing stronghold, accelerating our PT (Professional & Technical) and OCG (Outsourcing & Consulting) growth, and winning new customers."

While the results beat analysts' forecasts, at the end of play in New York yesterday Kelly Services's shares were down by -7.52% to 13.04 US Dollars.

 

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