Professional/Executive IT

Vedior’s IT consultants support clients at all stages of the IT product lifecycle, developing, installing or maintaining hardware and software. Expert technical personnel are provided in a full range of disciplines including software engineers, programmers, systems analysts, architects, testers, systems administrators and telecommunications professionals.

IT is Vedior’s largest professional/executive niche responsible for 10% of total Group sales. On an organic basis, IT recruitment operating income increased by 9% and sales increased by 6%.

Two important IT acquisitions were made during the year; Talisman, which provides services in several European countries, and CNC Global, the largest IT staffing firm in Canada. Our sales in this sector increased by 24% reflecting the impact of these acquisitions.

The US is Vedior’s largest market for IT recruitment which it provides mostly through the Sapphire Technologies brand. Sapphire is a market leader in the US, servicing a broad range of industries and government agencies through its national network of offices. In 2006, the business continued to expand in a healthy operating environment.

In the UK, our IT brands, Abraxas and MVM, experienced a difficult year. Significant pricing pressure reduced margins in the contract IT market.

IT staffing sales in continental Europe are mostly provided under the Expectra brand. We achieved particularly strong growth in sales and operating income in Spain, The Netherlands and Portugal. The Group also provides IT recruitment in Australia and India where we capitalised on very positive market trends.

Professional/Executive Engineering/Technical

Vedior provides qualified technical personnel to support both private and public sector infrastructure initiatives. We provide contractors with experience in many different engineering skills such as consulting, designing, drafting, manufacturing, constructing and field commissioning.

Engineering recruitment has grown to become Vedior’s second largest professional/executive recruitment sector responsible for 6% of Group sales. 2006 proved to be another very good year for this business. On an organic basis, engineering recruitment operating income grew by 17% while sales increased by 10%. The sector continued to benefit from investments in public sector construction and increased demand for engineering specialists in the oil and gas industry.

Engineering recruitment is our largest recruitment sector in the UK. In this market, Vedior operates three engineering brands, Hill McGlynn, Beresford Blake Thomas and Qualitair all of which achieved good growth in sales and operating income. Satellite offices in the Middle East continued to develop during the course of the year.

In continental Europe, our main engineering brand, Expectra, operating in Belgium, France, Germany, the Netherlands and Switzerland, also benefited from increased demand for engineering personnel.

ATS Reliance, based in Canada, provides specialist personnel primarily to the oil and gas industries in Canada and also on an international basis. During 2006, the company enjoyed strong demand for its services.

Professional/Executive Healthcare

Vedior’s healthcare services can be divided into two broad categories; qualified medical staff to private and public hospitals, and professional social workers and care staff for home and residential care centres. Healthcare recruitment is responsible for 6% of Vedior’s overall sales.

While healthcare remains a market with long-term growth potential, recruitment demand has been relatively weak in a number of markets during 2006 due to pressure on private and public care budgets and a shortage of qualified candidates. Organically, annual operating income reduced by 16% while sales declined by 1%.

L’Appel Médical is our main brand and is the market leader in healthcare staffing services in France, with a national network of offices. 2006 was a positive year for the company and one of recovery following two years of negative growth. The fourth quarter in particular was positive with an improved pricing environment.

In the US, our Clinical One brand provides nurse staffing services. In difficult market conditions, sales declined slightly but operating income improved. Also in the US, Locum provides physicians and Delta is a life sciences recruitment specialist; both of these companies achieved growth in sales and profits.

In the UK, the care division of Beresford Blake Thomas, which mainly provides nurses and qualified social workers and Reliance, which operates in the domiciliary care market experienced continuing pressure on margins in a market which is highly competitive.

In Australia, MSSA Care Personnel, a provider of health and social care recruitment, grew very strongly and improved operating income.

Supernurse, the specialist nursing brand we are developing in Japan, recorded its first operating profit in 2006.

Professional/Executive Accounting/Finance

Vedior provides both qualified and part-qualified accountants as well as all categories of financial personnel to accounting, finance, banking, consulting and other corporate clients. Accounting recruitment is responsible for 5% of Group sales. During 2006, operating income increased by 25% and sales by 13% on an organic basis.

In the US, the Group provides accounting recruitment services primarily through Accountants Inc., Acsys, and AccountPros. These brands took advantage of better market conditions, especially at the beginning of the year, to improve both sales and operating income.

In April 2006, Vedior increased its shareholding in the Blomfield Group, to a majority position. Joslin Rowe, which is Blomfield’s main operating brand and also one of the largest financial and insurance recruitment specialists in the UK, recorded a significant increase in profitability during 2006 boosted by strong demand in London’s financial market.

Andrew Farr Associates, a new company which is developing a regional accountancy recruitment network in the UK, also continues to make excellent progress, becoming profitable at the end of the year.

In the Netherlands, Rekenmeesters has achieved strong increases in sales and operating income. Elsewhere in Europe, our developing accounting recruitment businesses in France, Spain, Belgium and Luxembourg made encouraging progress.

Link, our Australian accounting specialist had a more challenging year but successfully grew sales.

Professional/Executive Education

Vedior provides a full range of teachers and support staff to public and private schools as well as higher educational establishments. Experienced personnel can be provided to teach nursery, infant, junior, special needs, further education and senior classes. Education is responsible for 1% of Group sales.

On an organic basis, Education recruitment operating income increased by 14% while sales grew by 11%.

In the UK, Select Education, our leading brand in the sector, returned to growth in the second half of the year. Also in the UK, we provide complementary education staffing services under a number of different brands: Areté (head teachers), Supreme Education (Local Education Authorities), and Special Agent (education support roles). These niche brands complement the range of services we provide to schools and further education colleges and help to maintain our leading position in the UK market.

Select Education’s international division, Teach Anywhere, benefited from very strong demand particularly in the Middle East, Asia and Europe.

The Group also provides education recruitment services in the US, Australia, the Netherlands and Canada. In Australia, Select Education has established a very strong market position in a relatively short period and, during 2006, more than doubled its operating income.

Vedior provides recruitment services in a number of other specialist sectors including audio-visual, catering/hospitality, executive, human resources, insurance, interim management, legal, sales & marketing, teleservices and travel/leisure. The Group also provides a number of complementary HR-related services including vendor management, outplacement, training and business process outsourcing.

These sectors of operation represented 7% of overall Group sales in 2006. While individually small, they are important in Vedior’s long-term strategy of improving the diversity of its revenue stream and increasing the proportion of sales derived from professional/executive recruitment. In 2006, these sectors grew operating income by 32% and sales by 14% organically.

The largest of these sectors is Teleservices which is provided in 17 international markets, primarily under the Teleresources brand. The most important markets are Portugal, Australia, the Netherlands, Poland, the UK and Spain, but newer teleservices divisions are also gaining traction in emerging markets.

Legal recruitment is provided in 9 countries, the largest of which are the US, Australia, the UK, the Netherlands and China. Our legal recruitment has a high proportion of permanent placement but also includes the provision of lawyers and paralegal staff on a temporary and contract basis.

During the course of the year, we established a leading market position in the provision of interim management in the UK. These services are provided under our established Albemarle brand and two newly acquired companies; Walker Cox which joined the Group in May and Armadillo which was acquired in October. We also provide interim management in the Netherlands under the brand Funktiemediair.

Managed service provision including vendor management and outsourcing solutions is increasingly seen as an attractive option for employers. Our Vedior1 and Global Managed Services (‘GMS’) brands consolidate the provision of our recruitment services across different markets and sectors. Managed services are an important component of our strategy to provide comprehensive outsourced solutions to key client accounts and good progress was made in a number of markets, most notably the US.

Other specialist sectors achieving strong growth during 2006 included executive recruitment and the recruitment of human resources professionals.

Traditional Office Administration & Light Industrial

Within the traditional recruitment sector, Vedior provides all categories of white-collar office support staff including 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. It is the Group’s largest sector of business representing 65% of sales and slightly less than half of our operating income.

On an organic basis, traditional recruitment operating income increased by 21% while sales increased by 8%.

In France, Vedior provides traditional recruitment under the national Vediorbis brand as well as through regional providers, Selpro and Atoll. Overall, the French recruitment market was more positive in 2006 with growth of 7% although the automotive sector, which represents 8% of our sales in France, remained weak. Vediorbis achieved sales growth during the year and a very strong improvement in operating income. We have been particularly successful in developing our permanent placement services following changes to regulations in 2005 and this has helped improve our margins in the French market.

In the Netherlands, traditional recruitment is provided through the Vedior brand which targets large and middle-sized clients in the white-collar segment and Dactylo which provides mainly blue collar labour to small and medium sized clients. While the Dutch market continued in strong recovery mode during 2006, the focus for both Vedior and Dactylo was improving profitability. As a result, sales growth lagged behind overall market growth, but both companies increased operating income in excess of 70%.

In Belgium, Vedior provides traditional recruitment through two brands; Vedior Interim which has a network of offices throughout the country and is mainly focused on blue-collar labour, while Atoll provides recruitment services to small and medium sized companies. Both companies increased sales and operating income strongly during 2006.

In Spain, Laborman and Select mainly operate in the traditional recruitment sector and both companies achieved solid growth and increased their operating margins in 2006.

In Portugal, we have a market leading position through the Vedior and Select brands and, once again, the country proved to be one of our best performing markets for traditional recruitment.

In Australia, Select, our well-established traditional brand, strengthened its market position and achieved a significant improvement in both sales and profitability.

In the UK, we provide traditional recruitment through the Select brand. Sales grew during the year but the market remained highly competitive, which reduced operating margins.

In Germany, Vedior supplies high-skilled blue-collar personnel to the aviation, electronics, auto and engineering sectors. Germany is one of the world’s best-performing recruitment markets benefiting from strong structural growth and a positive economic environment. Vedior achieved a strong improvement in sales and operating income during the course of the year and commenced an expansion programme. Further expansion in the network is planned in 2007.

Switzerland is another buoyant market and, during 2006, Vedior increased sales and operating profits strongly.

Our traditional recruitment business in the US, Placement Pros, continued to perform exceptionally well with its focus on higher margin segments.

In Latin America, we are experiencing rapid expansion. Argentina is our largest market in the region and our SESA Select brand expanded its operations during the year organically and also by acquiring Rest, a provider of engineers to the oil and gas industry.

We have also continued to strengthen our market position in the emerging markets of Central and Eastern Europe as we believe these markets will be important for Vedior’s longer-term development.