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World - Kelly Services back in profit but struggles in UK

12 May 2011

Revenues were up by +18.5% from $1.13 billion in Q1 2010 to $1.34 billion in Q1 2011 at staffing agency group Kelly Services Inc. (KELYA:NSQ). Interim results for the 13 weeks ended 3 April 2011 reveal that gross profit was up by +18.7% from $180 million in Q1 2010 to $213.7 million in Q1 2011.

Net earnings were up from a loss of -$2 million in Q1 2010 to a profit of $1.1 million in Q1 2011.

Europe, Middle East and Africa (EMEA) revenues were up by +14% from $244.1 million in Q1 2010 to $23.2 million in Q1 2011 (up +11.3% in constant currency). EMEA represents approximately a fifth of the Company’s total revenues.

Revenues generated in EMEA by the commercial division were up by +13% from $204.9 million in Q1 2010 to $231.5 million in Q1 2011 (up +10.1% in constant currency). Gross profit in the EMEA commercial division was up by +13.7% from $32.8 million in Q1 2010 to $37.3 million in Q1 2011 (up +10.8% in constant currency). Earnings from operations in the EMEA commercial division were up from a loss of -$2.3 million in Q1 2010 to a reduced loss of -$2 million in Q1 2011. Excluding restructuring charges, earnings from operations in the EMEA commercial division were up from $0.4 million in Q1 2010 to $2 million in Q1 2011.

EMEA revenues generated by the professional and technical division were up by +18.6% from $34.9 million in Q1 2010 to $41.4 million in Q1 2011 (up +16.3% in constant currency). Gross profit in the EMEA professional and technical division was up by +16.6% from $9.4 million in Q1 2010 to $11 million in Q1 2011 (up +14.4% in constant currency).

Earnings from operations in the EMEA professional and technical division were up from a loss of -$0.1 million in Q1 2010 to a profit of $0.3 million in Q1 2011.

Revenues generated in France were up by +4% from $67.3 million in Q1 2010 to $70 million in Q1 2011 (up +4.9% in constant currency).

Revenues generated in Switzerland were up by +50.6% from $31.4 million in Q1 2010 to $47.2 million in Q1 2011 (up +33.5% in constant currency).

Revenues generated in Russia were up by +46.8% from $23.3 million in Q1 2010 to $34.2 million in Q1 2011 (up +43.6% in constant currency).

Revenues generated in UK were down by -17.4% from $37.6 million in Q1 2010 to $31.1 million in Q1 2011 (down -19.9% in constant currency). The UK business comprises staffing in the following sectors; office, call centre, industrial, engineering, scientific, IT, education and accounting.

Revenues generated in Portugal were up by +12.3% from $18.4 million in Q1 2010 to $20.6 million in Q1 2011 (up +12.8% in constant currency).

Revenues generated in Germany were up by +24.7% from $16.3 million in Q1 2010 to $20.3 million in Q1 2011 (up +25.5% in constant currency).

Revenues generated in Italy were down by -0.8% from $16.7 million in Q1 2010 to $16.6 million in Q1 2011 (down -0.5% in constant currency).

Revenues generated in Norway were up by +8.8% from $13.9 million in Q1 2010 to $15.1 million in Q1 2011 (up +6.1% in constant currency).

Revenues generated in other EMEA countries were up by +20.7% from $19.2 million in Q1 2010 to $23.2 million in Q1 2011 (up +20.3% in constant currency).

President and CEO, Carl T. Camden, commented "we continue to see evidence of a solid, sustainable economic recovery. Kelly's revenue growth for the period certainly confirms that we are on track for a profitable year."

"Until full confidence is restored, and employers remain cautious about ramping up too aggressively, this environment seems to favour the staffing industry, and we intend to capitalise on the opportunities presented."

"Going forward, Kelly is committed to improving our competitive position and enhancing shareholder value by delivering customer-focused workforce solutions, spanning traditional staffing, professional and technical offerings, and outsourcing and consulting services, and maintaining talent excellence throughout our company."

Although the Company exceeded Analyst’s expectations, at close of play in New York yesterday Kelly's shares were down by -1.79% to $19.24

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