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Operational review
Cash flow from operating activities reduced to €114 million in 2004 from €134 million in 2003. Higher operating income was offset by additional working capital requirements to finance sales growth. Debtor days at the end of the year were 63 (2003: 64).
Organic sales trend by geography Year on year increase or decrease
We achieved strong growth across most of our major regions including the UK and US. In France, Vedior increased sales and improved profitability despite generally weak market conditions. In the Netherlands, we began to experience a turnaround in market conditions
with a notably strong performance from our Vedior brand in the second half of the year.
Organic sales trend by sector Year on year increase or decrease
All but one of Vedior’s major sectors of operation improved compared to 2003, with the most notable improvements coming from the IT, engineering and accounting sectors. The exception was education in the UK which remains profitable but was impacted by government initiatives and falling vacancies for teachers. Our policy of developing a diverse and balanced earnings stream by geography and across different recruitment sectors continues to prove an asset in a cyclical industry.
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 5%.
In France, Vedior provides traditional recruitment under the national VediorBis brand as well as through regional companies, Selpro and Atoll. The French market has experienced weak growth during 2004. More importantly given the Group’s objectives, profitability, productivity and efficiency have all improved strongly. At VediorBis, tertiary, high-skilled blue collar and construction segments experienced the strongest growth.
In the Dutch market, traditional recruitment is provided through the Vedior brand which targets large clients in the white-collar segment, Dactylo which provides blue collar labour to small and medium sized clients and ViaWerk, a smaller regional light industrial brand (Viawerk was subsequently disposed of in January 2005). After a protracted period of decline, the Dutch market began to recover during 2004. The Vedior brand outperformed the market and achieved good organic sales growth. The SME sector took longer to benefit from the recovery and, as a result, Dactylo experienced a small decline in sales in 2004.
In Belgium, Vedior provides traditional recruitment through two brands; Vedior Interim and Atoll. Belgium has been a good market during 2004 and our traditional businesses have more than doubled their profitability.
In Spain, Vedior Laborman and Select mainly operate in the traditional recruitment sector and both companies benefited from continued growth.
In the UK, Vedior provides traditional administrative recruitment through the Select brand and light industrial recruitment via Parkhouse both of which achieved growth in a highly competitive operating environment.
Elsewhere, traditional recruitment in our other markets achieved positive sales growth and improved operating results including Italy, Australia, Portugal, Germany, US, Argentina, Luxembourg and Brazil. |
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