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Zach Miles, Vedior’s Chief Executive, said: “We have had a busy quarter, both in terms of acquisitions and organic developments. Vedior continued its organic investment in new businesses in Japan, the UK and US, as well as completing four acquisitions.

Profits in three of our key markets, France, the US and the Netherlands all showed a significant increase, driven by sales growth and improved operating efficiency. In the rest of the world, particularly strong performances were recorded in Latin America, Australasia and India. Profits in the UK were lower, mainly as a result of a slowdown in the traditional sector.

The business outlook in the majority of our markets is encouraging.”

HIGHLIGHTS FOR THE THIRD QUARTER

Sales up organically by 6% to €1,808 million

Operating income up organically by 7%* to €66 million

Professional/executive recruitment sales up 8% organically

Permanent placement fees up 18% organically

Net income increased by 25%* to €40 million

Net income per share up by 26% to €0.24 (Q3 2004: €0.19*)

New organic development initiatives in Japan

Strategic acquisitions in the US, UK and Eastern Europe

*Excluding special items. Special items in Q3 2004 included the disposal of the Group’s 51% interest in Niscom, Japan and the disposal of Sapphire, France. There were no special items recorded in Q3 2005.


N.B. Organic growth is measured by excluding the impact of currency effects, acquisitions/disposals and adjusting for the number of business days where appropriate. There is no adjustment for business days in Q3 2005.

Q3 2005 Financial Performance

Sales

Sales increased organically by 6% to €1,808 million from €1,728 million in the same quarter in 2004. Revenues from permanent placement increased by 18% organically compared to Q3 2004.
Professional/executive recruitment sales increased by 8% organically with good performances from the accounting and engineering recruitment sectors which grew organically by 14% and 10% respectively. IT recruitment sales grew by 6% organically. Traditional recruitment grew organically by 6% with the strongest growth achieved in the US and Netherlands.

Gross Margin

Gross margin was 17.4%, the same as Q3 2004. We did experience some pricing pressure however this was compensated by increased permanent placement fees. Permanent placement fees represented 2.5% of sales this quarter compared to 2.1% in Q3 2004.

Operating Costs

Operating costs were 6% higher on an organic basis at €249 million reflecting increases in personnel costs driven by sales growth, higher marketing expenses, investment in new business start-ups and some one-off reorganisation costs in the UK.

Our conversion ratio (operating income before special items divided by gross profit) increased from 20.5% in Q3 2004 to 20.8% demonstrating our continued focus on efficiency improvement.

Operating Income

Operating income (before interest and tax) was €66 million, a 7% organic increase from Q3 2004 excluding special items.

Net income and earnings per share

Net income increased by 25% to €40 million from €32 million in the third quarter of last year. Interest costs were lower reflecting lower debt levels and the expiry of interest rate swaps in November 2004. Earnings per share were €0.24, a 26% increase from €0.19 in Q3 2004 excluding special items.

Net Debt and Cash Flow

Net debt decreased to €559 million, a €33 million reduction compared to the same period in the prior year. A payment of €51 million was made at the beginning of July to redeem Vedior’s Preference A Shares. Cash flow from operating activities was €50 million compared to €37 million in Q3 2004 mainly due to lower working capital requirements.

Q3 2005 Operating Performance by Geography and Industry Sector

France

Organic sales increased by 6% compared to Q3 2004 with growth improving throughout the quarter.

Gross margins declined, mainly as a result of pricing pressure from large accounts but operating income improved by 13% organically assisted by good cost control.

All segments within VediorBis showed growth during the quarter with the strongest performance coming from the construction and high skilled blue-collar segments.

New permanent placement activity continues to develop encouragingly and will be expanded in the months ahead.

Engineering and accounting recruitment sectors grew sales by more than 10% and the decline in healthcare staffing sales eased.

United Kingdom

Overall organic sales were flat with a good performance from the engineering sector offset by a slowdown in the traditional and healthcare sectors which both declined by 6% organically.

Gross margins increased reflecting higher permanent placement fees.

Operating income decreased organically by 18%. Profitability was impacted by one-off reorganisation costs of €0.8 million arising from the combination of back-offices within our UK traditional businesses which will reduce future operating costs. Investment continues in new businesses in the accounting/finance and education sectors.

United States

Organic sales growth remains high at 12%.

Continuing strong increase in organic operating income; up 36% supported by higher placement fees and a higher gross margin on temporary billings.

Professional/executive recruitment sales up 11% organically compared to Q3 2004 led by accounting recruitment.

IT recruitment grew at a slower rate than prior quarters this year with 5% organic growth.

Once again, our traditional recruitment business grew well in advance of US market trends with an organic sales improvement of 20%.

Netherlands

Organic sales growth accelerated to 12%

Operating income increased organically by 62% due to continuing operational leverage and cost control.

Professional/executive sectors showed a strong improvement in performance with organic growth of 10%.

The Vedior brand, our largest operating company in the Dutch market, grew organically by 17%.

Other Countries

In the Rest of Europe, sales improved by 4% organically. However, despite good performances from Spain, Switzerland, Portugal and Luxembourg as well as emerging markets in Eastern and Central Europe, operating income declined due to lower profits in Belgium and Italy.

In the Rest of the World, sales improved by 20% organically with operating income increasing by 26%.

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Vedior’s Australian operations continued to perform well with increased sales, profitability and efficiency. Strong growth was achieved in the IT, accounting, healthcare and traditional sectors and our education business is developing particularly well.

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All our operations in Latin America achieved excellent growth in sales and profitability.

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In India, where Vedior is market leader, sales have increased by 65% organically and we continue to identify promising synergies and sales opportunities with other parts of the Group.

Business Development

At the beginning of the quarter, we acquired the Mandeville Recruitment Group Ltd, a UK-based provider of permanent recruitment primarily in the sales and retail sectors, and the ConsulTeam Group of Companies, a market leader in the provision of temporary recruitment services, permanent placement, training and other HR related services from offices in Bulgaria, Romania, Croatia and Serbia & Montenegro.

In August, we acquired UK aviation engineering specialist, Qualitair Aviation Group Ltd with operations in the UK and The Netherlands and, in October, we acquired a US legal staffing and outsourcing firm, Compliance Inc. In each case, management have retained a minority equity position. These transactions bring the total number of acquisitions this year to six and we anticipate that more will be completed before the end of the year.

Two important organic initiatives have been launched this quarter in the Japanese market in co-operation with local partners. Vedior Career provides permanent recruitment services while Vedior Contec provides senior engineering personnel on a contract basis for construction projects.

Vedior now operates in 43 countries through a network of 2,270 offices.

Management Outlook

Latest developments in the majority of our markets are encouraging and we look forward to a continuation of positive trends in the final quarter of the year and into 2006. At the same time, we clearly face a more difficult operating environment in the UK. In this market, our costs are being reduced and other measures taken in order to protect our profitability.
Despite downward revisions, consensus GDP forecasts for 2006 are still at a higher level than for 2005 in most of Vedior’s major markets or, as is the case in the US, still at a relatively positive level. A healthier economic environment combined with continuing structural growth driven by demographic changes, deregulation and increasing skill shortages will enable Vedior to take advantage of its leading market position in professional/ executive recruitment and its diverse global network.



This media release includes forward-looking statements that reflect our intentions, beliefs or current expectations and projections about our future results of operations, financial condition, liquidity, performance, prospects, growth, strategies, opportunities and the industry in which we operate. Forward-looking statements include all matters that are not historical fact. We have tried to identify these forward-looking statements by using words including "may", "will", "should", "expect", "intend", "estimate", "project", "believe", "plan", "seek", "continue", "appears" and similar expressions or their negative.

These forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause our actual results of operations, financial condition, liquidity, performance, prospects or opportunities, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or suggested by these forward-looking statements. Important factors that could cause those differences include, but are not limited to our financial position and our ability to implement our business strategy and plans and objectives of management for future operations, our ability to develop, balance and expand our business, our ability to implement our longterm growth strategy (including through organic growth and acquisitions), our ability to make improvements to our capital structure, industry and market trends and volumes, including the speed and strength at which the staffing services industry and the sectors in which we operate, rebound from economic slowdowns and recessions, the effects of regulation (including employment and tax regulations), our ability to improve the efficiency of our operations and to reduce expenses in our operating companies and their network of offices, litigation and our ability to take advantage of new technologies.

In light of these risks, uncertainties, assumptions and other factors, the forward-looking events described in this media release might not occur. Additional risks that we may deem immaterial or that are not presently known to us could also cause the forward-looking events discussed in this media release not to occur. Except as otherwise required by applicable law, we undertake no obligations to update publicly or revise publicly any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason after the date of this media release.

Company Profile:

Vedior is one of the world’s largest recruitment companies and is a full-service recruitment provider with a diversified portfolio of brands targeting a broad range of industry sectors. Annual sales for 2004 were €6,467 million.

From its global network of offices spanning Europe, North America, Australasia, Asia, South America and Africa, Vedior offers temporary and permanent recruitment as well as a number of complementary employment-related services such as outplacement, HR outsourcing, payrolling and training.

Vedior has a leading market position in the provision of professional/executive recruitment in sectors such as information technology, healthcare, accounting, engineering and education. In order to meet client requirements for all categories of personnel, we also have a significant global network providing administrative/secretarial and light industrial recruitment.

Financial Agenda:

2 February 2006

Publication of annual results 2005*

27 April 2006

Publication of first quarter results*

28 April 2006

Annual General Meeting

27 July 2006

Publication of second quarter results*

26 October 2006

Publication of third quarter results*

*Conference calls to discuss financial results are scheduled for 9am (CET) on the day of publication.

For further information, please contact:

Amsterdam

Zach Miles, Chief Executive

+31 (0)20 573 5609

Frits Vervoort, CFO

Jelle Miedema, Company Secretary

London

Michael Berkeley, Citigate Dewe Rogerson

+44 (0)20 7638 9571

Patrick Toyne-Sewell, Citigate Dewe Rogerson

+44 (0)20 7638 9571

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