Vedior

Gross margin improvement contributes to 38% increase in net income

Zach Miles, Vedior’s Chief Executive, said: “We continued to see profitable growth in all our major markets and sectors during the quarter led by strong performances in the US and Australia.

For the first time in four years, gross margins have increased primarily due to higher permanent placement revenues accompanied by an improvement in temporary margins. Our operating efficiency also improved with particularly strong increases in profitability in the US, Netherlands, and Rest of Europe region.

Our businesses in the UK and Netherlands exhibited a lower rate of sales growth compared to the first quarter of 2005, in line with the slower economic conditions in those countries.

During the quarter, we made good progress with Vedior’s strategy to diversify by geography and industry sector. Our global network has recently been extended from 37 to 43 countries as a result of both acquisitive and organic growth with continued emphasis on the development of professional/executive recruitment.”

HIGHLIGHTS FOR THE SECOND QUARTER

	Sales up organically by 7% to €1,718 million
	Operating income up organically by 11% to €60 million
	Professional/executive recruitment sales up 10% organically
	Permanent placement fees up 21% organically
	Efficiency improves with conversion ratio (operating income divided by gross profit) increasing to 19.6% from 18.6%
	Net income increased by 38% to €36 million excluding profit from the sale of investment (Q2 2004: €27 million)
	Net income per share was up strongly to €0.30, or €0.21 excluding profit from the sale of investment (Q2 2004: €0.16)
	Combination of acquisitions and internal expansion extends global network to 43 countries

HIGHLIGHTS FOR THE FIRST HALF YEAR

	Sales up 9% organically to €3,249 million
	Operating income up 15% organically to €98 million
	Net debt reduced by €99 million compared to 30 June 2004
	Net income per share was €0.42 or €0.33 excluding profit from the sale of investments (H1 2004: €0.26)

N.B. Organic growth is measured by excluding the impact of currency effects and acquisitions/disposals, and adjusting for the number of business days. There was, on average, one more business day in Q2 2005 compared to Q2 2004 due to the earlier Easter holiday but the impact varies by

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