UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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Hudson Global, Inc.
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Page 1
March 1, 2018
Hudson Global
Q4 2017 Earnings Call
Page 2
Forward-Looking Statements
Please be advised that except for historical information, the comments
made during this presentation and in these slides constitute forward-
looking statements under applicable securities laws. Such forward-looking
statements involve certain risks and uncertainties, including statements
regarding the company's strategic direction, prospects and future results.
Certain factors may cause actual results to differ materially from those
contained in the forward-looking statements, including global economic
fluctuations, risks related to fluctuations in our operating results, the ability
of clients to terminate their relationship at anytime, competition, limited
availability under our credit facilities and our ability to successfully achieve
our strategic initiatives and the other risks discussed in our filings made
with the Securities and Exchange Commission. These forward-looking
statements speak only as of the date of this presentation. The company
assumes no obligation, and expressly disclaims any obligation, to review
or confirm analysts' expectations or estimates or to update any forward-
looking statements, whether as a result of new information, future events
or otherwise.
Page 3
Strategic Update
• On Dec 17, 2017, Hudson announced definitive sale agreements to sell its
recruitment and talent management operations in Europe and Asia Pacific to
strategic buyers in three transactions
• Hudson intends to focus on its growing, global RPO business going forward
• Hudson will receive estimated proceeds of $41.2 million in cash, subject to
adjustment at closing
• Transactions are subject to the approval of the majority of the outstanding
HSON shares
• Hudson filed a definitive proxy statement with the SEC on February 13, 2018
seeking shareholder approval for the sale of substantially all of its assets as a
result of the proposed transactions
• Special meeting of shareholders scheduled for March 20, 2018 at 8:00 a.m. ET
to obtain such approval
• Expected close at the end of March 2018, subject to shareholder approval and
other customary closing conditions
Page 4
Q4 2017: Consolidated Financial Results
$US in Millions, except EPS
Revenue + 21% $121.6 $100.3
+ 16% CC (1)
Gross Margin + 14% $48.7 $42.8
+ 9% CC
SG&A - 12% $46.9 $41.9
- 7% CC
Adjusted EBITDA + 106% $1.9 $0.9
+ 69% CC
Net Income (Loss) (3) NM ($2.0) ($0.3)
Basic and Diluted EPS ($0.06) ($0.01)
(1) CC represents constant currency variance.
(2) B/W indicates whether the result was better (+) or worse (-) than the comparison period.
(3) 2017 Net Income includes $1.9M of goodwill impairment in China.
(4) NM: Not meaningful
Q4 2017 Q4 2016
B+ / W- (2)
Page 5
Q4 2017: Hudson Americas
$US in Millions
Revenue - 6% $3.7 $3.9
Gross Margin - 6% $3.2 $3.4
SG&A + 5% $2.7 $2.8
Adjusted EBITDA - 12% $0.5 $0.6
Adjusted EBITDA, as a % of Revenue 14.1% 15.0%
(1) B/W indicates whether the result was better (+) or worse (-) than the comparison period.
(2) NM: Not meaningful
Q4 2017 Q4 2016
B+ / W- (1)
Page 6
Q4 2017: Hudson Asia Pacific
$US in Millions
Revenue + 31% $77.3 $59.1
+ 28% CC (1)
Gross Margin + 22% $25.0 $20.5
+ 19% CC
SG&A - 12% $22.6 $20.2
- 10% CC
Adjusted EBITDA + 546% $2.4 $0.4
+ 478% CC
Adjusted EBITDA, as a % of Revenue 3.1% 0.6%
(1) CC represents constant currency variance.
(2) B/W indicates whether the result was better (+) or worse (-) than the comparison period.
Q4 2017 Q4 2016
B+ / W- (2)
Page 7
Q4 2017: Hudson Europe
$US in Millions
Revenue + 9% $40.6 $37.3
+ 1% CC (1)
Gross Margin + 9% $20.5 $18.9
+ 0% CC
SG&A - 6% $18.6 $17.5
+ 2% CC
Adjusted EBITDA + 43% $1.9 $1.3
+ 28% CC
Adjusted EBITDA, as a % of Revenue 4.6% 3.5%
(1) CC represents constant currency variance.
(2) B/W indicates whether the result was better (+) or worse (-) than the comparison period.
Q4 2017 Q4 2016
B+ / W- (2)
Page 8
FY 2017: Consolidated Financial Results
$US in Millions, except EPS
Revenue + 8% $456.7 $422.7
+ 8% CC (1)
Gross Margin + 7% $186.7 $174.4
+ 7% CC
SG&A - 2% $179.8 $175.9
- 2% CC
Adjusted EBITDA + 570% $6.9 ($1.5)
+ 768% CC
Net Income (Loss) (3) + 67% ($2.9) ($8.8)
+ 66% CC
Basic and Diluted EPS ($0.09) ($0.26)
(1) CC represents constant currency variance.
(2) B/W indicates whether the result was better (+) or worse (-) than the comparison period.
(3) 2017 Net Income includes $1.9M of goodwill impairment in China.
FY 2017 FY 2016
B+ / W- (2)
Page 9
FY 2017: Hudson Americas
$US in Millions
Revenue + 4% $16.2 $15.6
Gross Margin + 6% $14.4 $13.6
SG&A - 2% $12.6 $12.4
Adjusted EBITDA + 52% $1.8 $1.2
Adjusted EBITDA, as a % of Revenue 11.3% 7.8%
(1) B/W indicates whether the result was better (+) or worse (-) than the comparison period.
FY 2017 FY 2016
B+ / W- (1)
Page 10
FY 2017: Hudson Asia Pacific
$US in Millions
Revenue + 19% $282.8 $236.8
+ 17% CC (1)
Gross Margin + 11% $93.6 $84.1
+ 9% CC
SG&A - 7% $86.9 $81.5
- 5% CC
Adjusted EBITDA + 158% $6.7 $2.6
+ 136% CC
Adjusted EBITDA, as a % of Revenue 2.4% 1.1%
(1) CC represents constant currency variance.
(2) B/W indicates whether the result was better (+) or worse (-) than the comparison period.
FY 2017 FY 2016
B+ / W- (2)
Page 11
FY 2017: Hudson Europe
$US in Millions
Revenue - 7% $157.7 $170.3
- 4% CC (1)
Gross Margin + 3% $78.7 $76.7
+ 3% CC
SG&A + 1% $71.6 $72.5
+ 0% CC
Adjusted EBITDA + 68% $7.1 $4.2
+ 61% CC
Adjusted EBITDA, as a % of Revenue 4.5% 2.5%
(1) CC represents constant currency variance.
(2) B/W indicates whether the result was better (+) or worse (-) than the comparison period.
FY 2017 FY 2016
B+ / W- (2)
Page 12
Gross Margin Growth in CC, +9% overall
Q4 2017 vs PY
China
Singapore
Australia
France
Poland
New Zealand
Spain
Belgium
UK
Americas
Hong Kong
Page 13
Gross Margin Growth in CC, +7% overall
FY 2017 vs PY
Hong Kong
China
Poland
New Zealand
Spain
Belgium
Singapore
France
Americas
Australia
UK
Page 14
Q4 2017 Global Services Split
Gross Margin
Temporary
Contracting
Talent
Management
Revenue
RPO
Permanent
Recruitment
RPO
Talent
Management
Permanent
Recruitment
Temporary
Contracting
Page 15
2017 Global Services Split
Gross Margin
Temporary
Contracting
Talent
Management
Revenue
RPO
Permanent
Recruitment
RPO
Talent
Management
Permanent
Recruitment
Temporary
Contracting
43%
17%
23%
17%18%
61%
13%
8%
Page 16
Q4 2017 Regional Split
Gross Margin
Europe
Asia Pacific
Americas
42%
51%
7%
Revenue
Europe
Asia Pacific
Americas
33%
64%
3%
Page 17
Balance Sheet: Selected Items
$US in Millions
December 31, December 31,
2017 2016
Cash $20.9 $21.3
Accounts Receivable $71.9 $58.5
December 31, December 31,
2017 2016
Short-term Borrowings $7.1 $7.8
Shareholders' Equity $43.2 $41.9
December 31, December 31,
2017 2016
Current Assets $97.0 $84.1
Current Liabilities $60.6 $50.6
Working Capital $36.5 $33.5
Selected Assets
Selected Liabilities
Working Capital
Page 18
Q4 2017: Cash Flow Summary
$US in Millions
Net income (loss) $ (2.0) $ (0.3)
Depreciation and amortization 0.7 0.8
Goodwill and other impairments 1.9 -
Stock-based compensation 0.4 0.2
Change in accounts receivable (0.2) 3.0
Change in accounts payable and other l iabilities 5.2 2.9
Other 0.0 (1.0)
Cash provided by (used in) operations 6.0 5.6
apital expenditures (0.8) (0.9)
Free cash flow 5.2 4.7
Change in net borrowings (repayments) (1.0) 0.2
Purchase of treasury stock (0.2) (0.2)
Effect of exchange rates 0.2 (0.8)
Change in cash $ 4.2 $ 3.9
QTD QTD
Dec-17 Dec-16
Page 19
FY 2017: Cash Flow Summary
$US in Millions
Net income (loss) $ (2.9) $ (8.8)
Depreciation and amortization 2.7 3.1
Goodwill and other impairments 1.9 -
Stock-based compensation 1.3 1.6
Change in accounts receivable (7.8) (0.6)
Change in accounts payable and other l iabilities 7.3 (3.3)
Other (0.2) (1.3)
Cash provided by (used in) operations 2.4 (9.4)
Capital expenditures (1.5) (2.8)
Free cash flow 0.9 (12.2)
Change in net borrowings (repayments) (1.6) 5.7
Purchase of treasury stock (0.9) (5.1)
Dividends paid - (3.4)
Effect of exchange rates 1.3 (1.3)
Change in cash $ (0.3) $ (16.3)
YTD YTD
Dec-17 Dec-16
Page 20
Flexible Liquidity
$US in Millions
Page 21
APPENDIX
Page 22
Q4 2017 Regional Gross Margin Mix
Approximate gross margin mix by product around the globe Temp Perm RPO Talent Mgmt
Americas 0% 0% 100% 0%
Asia Pacific 25% 45% 20% 10%
ANZ 30% 30% 25% 15%
ASIA 0% 80% 15% 5%
Europe 10% 50% 10% 30%
UK 30% 40% 25% 5%
Cont. Europe 5% 55% 0% 40%
Hudson Total 15% 45% 20% 20%
Page 23
Q4 EBITDA Reconciliation
EBITDA is a non-GAAP measure defined as earnings before interest, income taxes, depreciation and amortization. Adjusted
EBITDA is a non-GAAP measure defined as earnings before interest, income taxes, depreciation and amortization, non-operating
income, goodwill and other impairment charges, business reorganization expenses and other charges.
$US in Millions
Q4 2017 Americas Asia Pacific Europe Corp Total Q4 2016 Americas Asia Pacific Europe Corp Total
Revenue 3.7$ 77.3$ 40.6$ -$ 121.6$ Revenue 3.9$ 59.1$ 37.3$ -$ 100.3$
Gross margin 3.2$ 25.0$ 20.5$ -$ 48.7$ Gross margin 3.4$ 20.5$ 18.9$ -$ 42.8$
Adjusted EBITDA (loss) 0.5$ 2.4$ 1.9$ (2.9)$ 1.9$ Adjusted EBITDA (loss) 0.6$ 0.4$ 1.3$ (1.4)$ 0.9$
Business reorg expenses (recovery) 0.0 - 0.1 - 0.1 Business reorg expenses (recovery) 0.0 (0.0) 0.6 0.0 0.6
Impairment of long-lived assets - 1.9 - - 1.9 Stock-based comp expense 0.0 (0.0) 0.0 0.1 0.2
Stock-based comp expense 0.0 0.0 0.1 0.3 0.4 Non-operating expenses (income) 0.1 0.4 0.4 (1.1) (0.2)
Non- perating expense (income), including corporate administration charges0.0 0.2 0.3 (0.5) - EBITDA (Loss) 0.5$ 0.0$ 0.3$ (0.5)$ 0.3$
EBITDA (loss) 0.5$ 0.2$ 1.5$ (2.7)$ (0.5)$ Depreciation and amortization 0.8
Depreciation and amortization 0.7 Interest expense (income) 0.1
Interest expense (income) 0.1 Provision for (benefit from) income taxes (0.5)
Provision for (benefit from) income taxes 0.8 Income (loss) from discontinued ops (0.2)
Income (loss) from discontinued ops 0.0 Net income (loss) (0.3)$
Net income (loss) (2.0)$
Hudson Hudson
Page 24
FY EBITDA Reconciliation
EBITDA is a non-GAAP measure defined as earnings before interest, income taxes, depreciation and amortization. Adjusted
EBITDA is a non-GAAP measure defined as earnings before interest, income taxes, depreciation and amortization, non-operating
income, goodwill and other impairment charges, business reorganization expenses and other charges.
$US in Millions
FY 2017 Americas Asia Pacific Europe Corp Total FY 2016 Americas Asia Pacific Europe Corp Total
Revenue 16.2$ 282.8$ 157.7$ 456.7$ Revenue 15.6$ 236.8$ 170.3$ -$ 422.7$
Gross margin 14.4$ 93.6$ 78.7$ 186.7$ Gross margin 13.6$ 84.1$ 76.7$ -$ 174.4$
Adjusted EBITDA (loss) 1.8$ 6.7$ 7.1$ (8.7)$ 6.9$ Adjusted EBITDA (loss) 1.2$ 2.6$ 4.2$ (9.5)$ (1.5)$
Business reorg expenses (recovery) (0.1) 0.0 0.8 (0.0) 0.7 Business reorg expenses (recovery) (0.0) 0.2 1.4 (0.0) 1.6
Impairment of long-lived assets - 1.9 - - 1.9 Stock-based compensation expense 0.1 0.2 0.2 1.0 1.4
Stock-based compensation expense 0.1 0.1 0.2 0.9 1.3 Non-operating expense (income) 0.4 2.5 1.5 (4.2) 0.2
Non-operating expense (income) 0.2 2.2 1.5 (3.4) 0.5 EBITDA (loss) 0.8$ (0.3)$ 1.1$ (6.2)$ (4.7)$
EBITDA (loss) 1.6$ 2.5$ 4.6$ (6.2)$ 2.5$ Depreciation and amortization 3.1
Depreciation and amortization 2.7 Interest expense (income), net 0.4
Interest expense (income) 0.4 Provision for (benefit from) income taxes 0.7
Provision for (benefit from) income taxes 2.3 Income (loss) from discontinued ops 0.1
Income (loss) from discontinued ops (0.0) Net income (loss) (8.8)$
Net income (loss) (2.9)$
Hudson Hudson
Divider Slides
You can also use these divider slides as a
“thank you” slide at the end of the
presentation
THANK YOU