Report of the Board of Management

 Business development

During 2004, Vedior made four acquisitions and continued its active programme of organic expansion. During this period, Vedior also took the opportunity to streamline its business portfolio through the disposal of two companies.

The number of countries the Group operates in increased from 33 in 2003 to 37 by the end of 2004.

Acquisitions

In May 2004, Vedior announced three acquisitions:-

	Ma Foi is the largest recruitment and HR outsourcing company in India. Over 80% of the Company’s sales are derived from the provision of professional and executive temporary and permanent personnel mostly in the IT, engineering, accounting and teleservices sectors as well as executive search. However, Ma Foi also played a leading role in pioneering HR outsourcing in India and currently provides a portfolio of sophisticated and complementary HR consulting services within a wide range of industries including pharmaceuticals, IT and telecommunications, food and beverages, manufacturing, logistics and supply chain management. The Company has grown quickly with an excellent reputation and has exciting long-term growth prospects given its leading market position and expertise in fulfilling the HR needs of companies looking to take advantage of outsourcing opportunities in the Indian sub-continent. Ma Foi has offices throughout India as well as overseas locations in London, Dubai, Singapore, Colombo and Malaysia.
	The acquisition of Active Plus complements Vedior’s existing operations in Poland as well as its growing presence in four of the Eastern European countries which were granted accession to the European Union on 1 May 2004. Active Plus’ largest sectors of operation are telebusiness, light industrial and office/clerical although the Company plans to expand into more highermargin professional/executive recruitment sectors including education and healthcare.

The acquisition of Platoforma strengthens our established call centre staffing brand in Portugal. With a headquarters in Lisbon, Platoforma also provides personnel to call centres in Brazil and the Cape Verde Islands.

In July 2004, Vedior acquired an initial 51% interest in Top Personnel, a provider of outsourcing and traditional office administration staffing services in Mexico. As the fifth largest recruitment company in Mexico, this acquisition provides a strategic gateway to the Group’s Latin American network also covering Argentina, Brazil and Chile.

Vedior’s acquisition process is both focussed and disciplined. The four acquisitions made in 2004 are the outcome of over 100 potential targets investigated during the course of the year. Vedior continues to maintain a healthy pipeline of acquisition opportunities.

Organic expansion

Within a number of established markets, Vedior continues to launch new niche professional/executive recruitment such as accounting, legal, sales/marketing, and scientific as well as HR consultancy.

These new niches broaden our service offering in local markets and also provide an excellent engine for long-term organic growth.

Disposals

Vedior disposed of two companies during 2004; Niscom in Japan (in which the Group held a 51% interest) and Sapphire in France which no longer met the Group’s overall strategic objectives. The proceeds from these disposals amounted to €42 million and the profit of €23 million has been included as a special item.