Highlights for Q1 2007

* All growth percentages quoted in this media release have been calculated on an organic basis which excludes the impact of currency effects, acquisitions and disposals. Currency effects decreased both sales and operating income by 1%.

• Operating income increased by 34%
  - Traditional staffing up 48%
  - Engineering staffing up 44%
  - Education staffing up 13%
• Conversion ratio strong at 19.6% (Q1 2006: 16.3%)
• Increase in gross margin to 19.3% (Q1 2006: 18.4%)
• 29% increase in permanent placement fees
• Global network extended to 50 markets following expansion into Thailand 
   

CEO’s Statement

Zach Miles said, “These quarterly results are the best ever achieved in Q1, reflecting the progress we have made in implementing the Group’s strategy and taking us closer towards our margin targets.”
We experienced strong growth in profits and sales within many of our traditional staffing markets. In addition, we have seen very good performances this quarter in a number of our professional/ executive sectors.

Change to Reporting Analysis

In order to better reflect the successful development of Group activities, we have expanded the scope of our geographic reporting to include a number of additional markets, namely Belgium, Spain, Australia & New Zealand, and Canada. The results for the equivalent quarter in the prior year have been provided for comparison purposes.
With a focus on improving profitability rather than market share, we have also decided to disclose the percentage increase in our gross profit within each major market.
These refinements to our reporting analysis will enable investors to better monitor our progress towards achieving our strategic objectives.

Q1 2007 Review

Sales increased overall this quarter by 9%, with strong increases across key markets worldwide. Gross profit was up 13% and operating income increased by 34%.
Demand for permanent placement grew during the quarter resulting in a 29% organic increase in placement fees. Permanent placement fees more than doubled in France. Permanent placement now represents 3.8% of Group sales compared to 2.9% in Q1 2006.
Gross profit was €373.7 million compared to €316.8 million in Q1 2006. Our focus on higher margin business and increased permanent placement fees helped to improve gross margin to 19.3% from 18.4% in Q1 2006. The gross margin earned from the supply of temporary staffing also increased.
We continue to deliver greater operational efficiencies. As a result, our conversion ratio (operating income divided by gross profit) increased to 19.6% from 16.3%. As a percentage of sales, costs were 15.5% (Q1 2006: 15.4%).
Operating income was €73.4 million, an increase of 34%. This strong growth in profit was led by our brands in the traditional, engineering, education and legal sectors. The Group operating margin (operating income as a percentage of sales) was 3.8% - an improvement of 80 basis points over Q1 2006. 
 

In France, our largest market, all traditional business segments performed well. Demand within the professional/executive sector is continuing to accelerate with double digit sales growth achieved in Q1 2007. The successful development of our permanent placement activities has contributed to our improvement in profitability.

In the UK, our education staffing brands continued to benefit from a leading market position and a better operating environment. The engineering/technical and teleservices sectors both recorded good growth in sales and operating income. Our interim management business goes from strength to strength given strong organic growth and recent acquisitions. These positive trends have offset more challenging conditions in the traditional and IT sectors of the market.

The Netherlands reported strong growth in gross profit and even stronger growth in operating profit, reflecting our focus on higher margin business and improved operating leverage. Belgium also continued to make excellent progress.

Our Spanish network performed especially well this quarter in a favourable market and supported by a very strong increase in permanent placement fees. Both of our traditional Spanish staffing brands, Laborman and Select, achieved significantly higher levels of operating income.

Our operations across other parts of Europe are also performing very well, resulting in a considerable profit increase. Significant contributors were Germany, Portugal, Switzerland, Italy and Scandinavia, as well as Central and Eastern Europe.

Within the US, we increased sales by 7% in our professional/executive sectors. Operating profit in the US was lower due to slower growth in permanent placement, new office openings and weakness in the traditional sector.

Our brands in Australia and New Zealand continue to perform exceptionally well across all parts of the market. In particular, during this quarter, our accounting/finance, IT and education brands achieved high growth in operating income.

In Canada, the IT and engineering/technical sectors both performed exceptionally well. The organic growth given in the table above does not include the results of CNC Global, Canada’s largest IT staffing company, which Vedior acquired during Q2 2006. On an actual basis, including CNC Global, our sales in Canada increased by €42 million and operating income by €3.0 million in Q1 2007.
Elsewhere in the world, our Latin American and Indian operations have, once again, achieved excellent results and we continue to make good progress with the investments we have made in the Japanese market.

Business Development

In Q1 2007, we completed the acquisition of Major Players, a leading provider of marketing/media and creative recruitment services in the UK.
During the quarter, we also continued our active organic growth programme including expansion of existing operations in France, Australia, Latin America, mainland China and Thailand. The addition of Thailand to our network means that Vedior is now active in 50 countries worldwide. Compared to the same quarter last year, the Group’s network has been extended by 187 offices to a total of 2,486 offices worldwide.

Management Outlook

Trends in April have continued to reflect the positive environment we experienced in Q1 2007 and we expect to see another strong performance in Q2, especially in continental Europe.
The social security authorities in France have recently issued additional guidance on the calculation of certain social security charges relating to temporary workers, with retroactive effect from 1 January 2006. Detailed calculations are in the course of preparation but we estimate at this stage that the impact will be to increase operating margin in France by between 1% to 1.5% for 2006 and the first quarter of 2007.
We will continue to focus on improving the mix of our business and developing our leading market position in the professional/executive recruitment sectors.

For further information on these results, please join today’s conference call starting at 3.00pm (CET). Details can be found on our website at www.vedior.com.

Zach Miles, Chief Executive
Frits Vervoort, CFO
Jelle Miedema, Company Secretary
Investor Information at: www.vedior.com/investor-relations.html

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.
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. We also have a significant global network providing administrative/secretarial and light industrial recruitment.

Financial Agenda

Safe Harbour

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 long- term 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.