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PROFESSIONAL / EXECUTIVE
Healthcare | Vedior’s healthcare services can be divided into two broad categories; qualified medical staff to private and public hospitals, and professional social workers and care staff for home and residential care centres. While healthcare remains a market with very positive long-term growth potential, recruitment has been relatively weak during 2005 due to pressure on hospital finances and our sales declined organically by 4%. In France, L’Appel Médical once again operated in a difficult environment and sales declined slightly. During 2005, the company concentrated its efforts in the public sector to counteract the slowdown in the private sector. In the US, our nursing recruitment brand, Clinical One focuses primarily on the provision of travel and per diem staffing services. They experienced a slight decline in sales in 2005 but improved profitability as a result of good cost control and the diversification of revenues through the introduction of new, higher-margin niche services. Additionally, we added two new brands during the year; Locum and Delta. Locum provides physicians while Delta is a life sciences recruitment specialist. Both companies experienced strong growth during the year. In the UK, the care division of Beresford Blake Thomas, which mainly provides nurses and qualified social workers had a successful year with increased sales and developed a new niche in social housing. Our other UK care brand, Reliance, which operates in the domiciliary care market, had a difficult year but is now better positioned to benefit from the positive long-term trends in this sector. In Australia, MSSA Care Personnel, a provider of health and social care recruitment, grew sales and is now the largest specialist recruitment organisation servicing the community support sector in Australia. Newer healthcare recruitment operations in Belgium continued to gain traction, while Supernurse, our specialist nursing brand in Japan, took advantage of the newly deregulated market to grow sales and profits.
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PROFESSIONAL / EXECUTIVE
Engineering | Vedior provides qualified technical personnel to support both private and public sector infrastructure initiatives. We provide contractors with experience in many different engineering skills such as consulting, designing, drafting, manufacturing, constructing and field commissioning. Engineering recruitment sales grew organically by 12% benefiting from investments in public sector construction and increased demand for engineering specialists in the oil and gas industry, thereby making it one of the Group’s best performing sectors in 2005. In the UK, Vedior operates three engineering brands, Hill McGlynn, Beresford Blake Thomas and Qualitair all of which achieved good growth in sales and operating income. Both Hill McGlynn and Beresford Blake Thomas benefited from investment in major public sector projects and have already begun to see the potential for increased business as a result of the successful 2012 London Olympic bid. Satellite offices in Australia continued to develop during 2005, and our related HR consulting and recruitment business in Dubai has made substantial progress given the boom in commercial and leisure development within this market. In France, Spain and Germany, Expectra also benefited from increased demand for engineering personnel. Expectra France made particular progress in growing business within the aeronautics market in the west of France. Expectra Belgium diversified sales and improved margins. ATS Reliance, based in Canada, provides specialist personnel primarily to the oil and gas industries in Canada and also on an international basis. During 2005, the company made significant progress in both sales and profitability benefiting from a healthy local economy and the trend for US companies to ‘near-shore’ services in Canada. Engineering staffing sales also grew well in the Netherlands as well as in our Rest of World region.
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PROFESSIONAL / EXECUTIVE
Education | Vedior provides a full range of educators to public and private schools as well as higher educational establishments. Experienced personnel can be provided to teach nursery, infant, junior, special needs, further education and senior classes. Education recruitment sales increased by 1% on an organic basis. In the UK, Select Education remains the clear market leader and continues to outperform its peer group. Sales declined slightly but margins continued to be very strong. The company continues to diversify in order to take advantage of emerging niche opportunities within the Education sector as typified by the expansion of Areté, a specialist division supplying head teachers at attractive margins. In 2005, Supreme Education was launched under a unique business model that targets the provision of supply teachers sourced directly from Local Education Authorities across the UK, effectively doubling the size of our potential market. Select Education’s new international division made overseas placements in 15 different countries during 2005, including the Middle East, Far East and Europe. The Group has also established education recruitment offices in the US, Australia, the Netherlands, India, Canada and the United Arab Emirates. In Australia, Select Education continues to show excellent potential with a very strong increase in sales and profitability.
PROFESSIONAL / EXECUTIVE
Other sectors
Vedior provides recruitment services in a number of other niche sectors including audio-visual, catering/hospitality, executive, human resources, insurance, interim management, legal, sales & marketing, teleservices and travel/leisure. The Group also provides a number of complementary HR-related services such as vendor management, outplacement, training and business process outsourcing. These sectors of operation represented 6% of overall Group sales in 2005. However, while individually relatively small, they are important in Vedior’s long-term strategy of improving the diversity of its revenue stream and increasing the proportion of sales derived from professional/executive recruitment. In 2005, these sectors grew organically by 22%. The largest of these sectors is Teleservices which is provided in 17 different markets, primarily under the Teleresources brand. The most important markets are Portugal, the UK, Poland, Spain, Australia and the Netherlands but newer teleservices divisions are also gaining traction in emerging markets such as Argentina and Greece. Overall, our Teleservices staffing businesses grew sales by 29%. Legal recruitment is provided in 9 countries, the largest of which are the UK, Australia, the US and the Netherlands. Legal recruitment tends to have a high proportion of permanent placement and it is one of the more economically sensitive sectors within the Group. During 2005, legal recruitment sales grew by 6%. Other sectors achieving notable growth during 2005 were executive recruitment, human resources and interim management.
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TRADITIONAL
Office Administration & Light Industrial | Within the traditional recruitment sector, Vedior provides all categories of white-collar office support staff such as secretaries, word processor operators, data entry personnel and administrative clerks. Also within this sector, Vedior provides blue-collar personnel to help manufacturers meet peak seasonal workloads in a number of disciplines including assembly, driving, picking and packing, warehouse services, equipment handling, shipping and receiving. Traditional recruitment sales increased organically by 6%. In France, Vedior provides traditional recruitment under the national Vediorbis brand as well as through regional companies, Selpro and Atoll. Profitability, productivity and efficiency all continued to improve in a stable market. All business segments within Vediorbis achieved sales growth during the year. Vediorbis’ construction segment achieved good growth and increased gross margins through focusing on retail sales rather than large accounts. The tertiary segment successfully launched call-centre services while the industry professionals segment made good progress in developing business within the naval, aeronautics and maintenance sectors. A new temporary relationship management system was launched providing enhanced online functionality to Vediorbis’ contractors. Following changes to legislation, new permanent placement activity developed encouragingly during 2005. In the Dutch market, traditional recruitment is provided through the Vedior brand which targets large clients in the white-collar segment and Dactylo which provides mainly blue collar labour to small and medium sized clients. The recovery in the Dutch market which began in the second half of 2004 really took hold as 2005 progressed. In order to best benefit from the recovery, our operations took the opportunity to develop their commercial strength through improved training and staff retention, investment in higher-margin business, and better co-ordination of brands for joint sales initiatives. The Vedior brand outperformed the market and achieved high organic sales growth. Within their segmented structure, Vedior achieved particularly high growth within the public sector, finance and tertiary segments. The SME sector took longer to benefit from the recovery and, as a result, Dactylo’s sales declined in the first half of the year but saw business pick up in the second half of the year with an improving trend throughout the twelve months. In Belgium, Vedior provides traditional recruitment through two brands; Vedior Interim and Atoll. Belgian sales increased slightly during 2005 with higher growth occurring towards the end of the year. Our strategy of focusing on higher-margin niches led to improved operating margins. In Spain, Vedior Laborman and Select mainly operate in the traditional recruitment sector and both companies grew sales and profitability strongly in 2005. In the UK, Vedior provides traditional administrative recruitment through the Select brand and light industrial recruitment via Parkhouse. The performance of both companies was hampered by worsening market conditions during the course of 2005, despite which, Select did achieve sales growth. Select benefited from its focus on the public sector where it achieved particularly good results from the provision of secretarial and clerical staff. The company also successfully revised and extended its franchise programme. Parkhouse was restructured in the third quarter of 2005, as part of which its back-office was consolidated with that of Select. As a result, the company is now consistently profitable for the first time in several years. This restructuring resulted in some one-off costs but will provide greater operating efficiencies in the future. In Portugal, we have a market leading position through the Vedior and Select brands which continued to generate good returns. In Australia, Select, our well-established traditional brand once again achieved a substantial improvement in sales and profitability, with particularly high returns for this sector. In Germany, Vedior supplies high-skilled personnel to the aviation, electronics, auto and engineering sectors and achieved very healthy growth in sales during 2005. Vedior Switzerland achieved strong growth in the traditional market particularly in the construction and food sectors as well as the booming Swiss watch industry. In Central/Eastern Europe, we have extended our presence into the Balkans and seen our operations in Poland strengthening. Traditional recruitment in other markets also achieved positive sales growth and improved operating results including the US, Luxembourg and Latin America. |