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Q1 2009 Earning Report of Heidrick & Struggles Inc.

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Information about Q1 2009 Earning Report of Heidrick & Struggles Inc.
Finance

Published on May 9, 2009

Author: earningreport

Source: slideshare.net

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2009 First Quarter Results April 28, 2009 0

Safe Harbor Statement The 2009 first quarter news release, conference call webcast and the following slides contain forward- looking statements. The forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry in which we operate and management’s beliefs and assumptions. Forward-looking statements may be identified by the use of words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “projects,” “forecasts,” and similar expressions. Forward-looking statements are not guarantees of future performance and involve certain known and unknown risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed, forecasted or implied in the forward-looking statements. Factors that may affect the outcome of the forward-looking statements include, among other things: our ability to attract and retain qualified executive search consultants; further declines in the global economy and our ability to execute successfully through business cycles; the timing, speed or robustness of any future economic recovery; social or political instability in markets where we operate; the impact of foreign currency exchange rate fluctuations; price competition; the ability to forecast, on a quarterly basis, variable compensation accruals that ultimately are determined based on the achievement of annual results; our ability to realize our tax loss carryforwards; the timing of the establishment or reversal of valuation allowance on deferred tax assets; the mix of profit and loss by country; an impairment of our goodwill and other intangible assets; delays in the development and/or implementation of new technology and systems; and, the ability to meet and achieve the expected savings resulting from cost-reduction initiatives and restructuring activities. Our reports filed with the U.S. Securities and Exchange Commission also include information on factors that may affect the outcome of forward-looking statements. We undertake no obligation to update publicly any forward- looking statements, whether as a result of new information, future events or otherwise. 1 8100448

Quarterly Net Revenue (excludes reimbursements) $ in millions $169.5 $158.3 $153.1 $134.9 $89.1 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2 8100448

Worldwide Confirmations - Quarterly Executive Search Only 1,600 1,400 1,200 1,000 800 600 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 3 8100448

Worldwide Confirmations – Monthly All Search & Projects 600 500 400 300 200 100 0 n n n n n v ov ct ct ec ec b g ep b ug ep b T ay ay il l il l ar ar ar Ju Ju Ju Au Ju No Ja Ja Ja pr r Fe Fe Fe ES O O Ap M M M D D N M S M A S A pr A 2009 2007 2008 4 8100448

Worldwide Consultant Headcount 419 Reflects: (37) Restructuring 416 (10) other 13 promotions 18 acquired or hired 408 408 403 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 5 8100448

Productivity $ in millions $1.5 $1.5 $1.4 $1.3 $1.5 $1.3 $1.4 $1.3 $1.3 $1.2 $0.9 $0.8 2004 2005 2006 2007 2008 1Q 09 Total net revenue per consultant Search revenue per consultant 6 8100448

Average Fee Per Executive Search Average fee per executive search $122,600 $114,900 $101,100 $98,900 $97,100 $91,400 2004 2005 2006 2007 2008 1Q 2009 7 8100448

Quarterly Operating Income/Loss (excluding restructuring charges) $ in millions $20.9 $18.7 $10.9 $5.1 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 -$19.0 8 8100448

Salaries & Employee Benefits $ in millions (except where stated) 1Q 09 1Q 08 Change Cash Compensation Expense Fixed salaries & employee benefits $63.4 $69.5 ($6.0) Bonus related $10.0 $34.5 ($24.5) $73.4 $104.0 ($30.5) Total Cash Compensation Expense Equity Compensation Expense All other RSU expense (prior year bonus, service & retention awards) $5.8 $6.4 ($0.6) All stock options $0.1 $0.3 ($0.1) $5.9 $6.6 ($0.7) Total Equity Compensation Expense Total Salaries and Employee Benefits Expense $79.3 $110.6 ($31.3) Fixed Compensation 87% 69% Discretionary Compensation 13% 31% Note: Numbers may not add properly due to rounding 9 8100448

General & Administrative $ in millions $40 35% 32.3% $35 30% $30 23.0% 25% 20.7% $25 19.8% 18.2% 20% $20 15% $33.5 1 $31.7 $31.0 $15 $28.8 $28.8 10% $10 5% $5 $0 0% Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 G&A dollars As a % of net revenue 10 8100448

Quarterly Net Income/Loss (excluding restructuring charges) $ in millions $14.0 $12.7 $7.1 $5.3 Q1 08 Q2 08 Q3 08 Q4 08 Q1 08 -$11.2 11 8100448

Quarterly Diluted Earnings/Loss per Share (excluding restructuring charges) US$ $0.80 $0.72 $0.38 $0.30 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 -$0.68 12 8100448

Talent Cycle Succession Planning Transitioning Leadership Pipeline Identifying Promotion and and Attracting Rotation Talent Management Recruiting and Hiring Engaging and Retaining Integration and Continuous Learning Onboarding and Development Experiences 13 9010475

Appendix 14

Americas 1Q ended 3/31 $ in millions 2009 2008 % Change Revenue $46.4 77.3 -40.0% Operating Income ($7.5) $11.7 -163.7% Operating Margin n/a 15.2% Number of consultants at quarter end 188 207 -9.2% Europe 1Q ended32/31 $ in millions 2009 2008 % Change Revenue $28.1 $52.9 -46.9% Operating Income ($2.6) $5.3 -150.1% Operating Margin n/a 10.0% Number of consultants at quarter end 128 131 -2.3% Asia Pacific 1Q ended 3/31 $ in millions 2009 2008 % Change Revenue $14.7 $22.9 -36.0% Operating Income ($1.1) $2.7 -139.2% Operating Margin n/a 11.9% Number of consultants at quarter end 87 70 24.3% 15 8100448

Broad Industry Group Mix (1) Professional Services 6% Life Sciences Education/ 12% Not for Profit 3% Real Estate Asset & 9% Technology Wealth 12% Management Private 23% Equity/VC Financial 15% Services 24% Insurance Consumer 17% Consumer Financial Invest 16% Services Banking & Cap 24% Mkts 12% Industrial 26% Industry practice revenue as percentage of total net revenue in 2009 1Q. Numbers may not add due to rounding. (1) 16 8100448

HSII Quarterly Revenue Trends The number above each column represents where that quarter ranked in terms of quarterly revenue in the year – 1 being the highest revenue quarter in that year, and 4 being the lowest revenue quarter in that year. $180 1 1 2 2 $160 3 3 4 4 $140 1 2 3 $120 1 22 44 13 $100 3 4 $80 $60 $40 $20 $0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 2004 2005 2006 2007 2008 2009 17 8100448

Julie Creed Vice President, Investor Relations 4200 Sears Tower, 233 S. Wacker Drive Chicago, Illinois 60614 +1(312)496-1774 jcreed@heidrick.com www.heidrick.com Copyright © 2008 Heidrick & Struggles. All rights reserved. Reproduction without permission is prohibited. 18

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