Kelly Services (KELYA) 16th Annual East Coast IDEAS Conference summary

Company overview and strategy

• Operates across three segments: Enterprise Talent Management (ETM), Science, Engineering & Technology (SET), and Education, with a focus on specialization and higher-value services.

• Recent leadership changes include a new CEO from outside the company and a refreshed board, aiming to drive transformation and profitable growth.

• Significant investments in specialty areas and global capabilities, with a shift toward a more client-centric, integrated operating model.

• Maintains a strong balance sheet, low debt, and healthy free cash flow, supporting ongoing capital allocation to growth and shareholder returns.

• Recognized as a top staffing provider, including being named #2 in the U.S. by Forbes.

Segment performance and market positioning

• ETM represents about half of revenue ($2B), Education $1B, and SET $1.2B, each with distinct margin profiles and growth opportunities.

• Holds leading positions in RPO, MSP, K-12 substitute teaching, and is a top provider in life sciences and engineering staffing.

• Education segment has grown from 6% to 24% of the portfolio in five years, mainly through organic growth, with significant white space remaining.

• Therapy services in education offer higher margins and are a key area for further expansion.

• SET and ETM segments benefit from investments and acquisitions, with ongoing integration to drive efficiency and scale.

Financial transformation and capital allocation

• Divested low-margin international and non-core assets, raising $500M and redeploying $900M into seven acquisitions, mainly in SET.

• Gross profit increased from $730M to $853M (like-for-like), with gross margin rising above 20%.

• EBITDA margin improved from historical 1.5–1.7% to 2.6%, driven by SG&A rationalization and portfolio actions.

• Share repurchases totaled $70M over five years, with a $30M authorization open through year-end and a recurring $0.30/share dividend.

• Focus remains on organic and opportunistic inorganic growth, with strong cash flow and disciplined capital deployment.