Korn Ferry 2Q17 Earnings Call Notes

Korn/Ferry’s (KFY) CEO Gary Burnison on Q2 2017 Results

Pick up after the election

” November, in Europe, we had our best month of new business in probably two years. Asia was also incredibly strong. And when you look at North America, we did see a pause around October 2015 or so. We saw pause in kind of the level of new business. And as Bob indicated, that seem to pick-up a little bit after the election. So, overall, if you were to look at North America in November — and the level of new business was essentially, it was almost flat with a year ago which was a very strong month. And the other thing that’s encouraging is that we’ve seen an uptick in energy. And energy is today about 6% of the portfolio. And prior to the transaction, energy was about 7%; it went down to 3, 3.5%. So that’s another good sign.”

Conversations are definitely more optimistic than in May and June

“Well, I think there is certainly — it’s hard to generalize. But I would say that the conversation is certainly more optimistic than it was in May and June, no doubt about that. Now, we’ll see if that turns into increasing levels of business in early calendar 2017.”

Bob Rozek

Mixed business trends

“Now, turning to new business trends. First, for Executive Search, on a global basis, monthly new business trends in the second quarter were mixed. We saw strong August and September followed by a weakening in October. At actual foreign exchange rates global Executive Search new business in the second quarter was down approximately 3% year-over-year but up approximately 7% sequentially.”

New business ramped after the date of the election

“To start the third quarter up through the date of the election, global November new business remained slow. But after the date of the election, we saw new business ramp up in both North America and in Europe. Globally, total new business in November finished up 2% year-over-year. If historical patterns remain consistent with prior years, December new business is expected to be seasonally weaker and should be followed by a stronger January.”

Korn Ferry FY 4Q16 Earnings Call Notes

Korn/Ferry International’s (KFY) CEO Gary Burnison on Q4 2016 Results

The reality is that there are conflicting economic signals

“Now to the other side of the coin, the reality is, if you look around the world today, there are conflicting economic signals and it’s particularly tough to read given next Thursday’s vote in Britain in addition to the normal summer seasonality”

The Breaxit vote has definitely impacted clients making decisions in Europe

“It’s very difficult to reiterate now and it’s hard to say with the typical summer malaise or whether there is something that is broader than that. Certainly the vote next week in Britain has impacted not proposal activity but it has impacted clients making decisions. We have absolutely seen that in Europe and to some extent we’ve seen that in North America. Now I cannot attribute the North America directly to Brexit but it’s very difficult to read the tea leaves today.”

Robert Rozek

Seeing sluggish business globally for executive search

“So in Executive Search, new business in May was down from March and April levels, which is the consistent pattern that we see on a historical basis. However, with approximately one-half of the month of June behind us, we are seeing sluggish new business globally for Executive Search.”

Korn Ferry FY 3Q16 Earnings Call Notes

Gary Burnison

A little concerned about financial services vertical

“Look, I think there is some concern about financial services. When we look year-over-year there’s growth in the business for us that was driven by asset management, wealth management, private equity. But, yes, we certainly are hearing some concern. The flipside of that will be the energy market which has been decimated. That will be probably be poised to turn around here. It may not be this quarter, but it will happen at some point.”

February was very, very strong

“I would say February looked very good in North America. I mean, it looked very, very strong, whether it’s the Futurestep business or our Executive Search business. Asia has obviously been challenged for sure. You can see that in the numbers. Europe was in line with my expectations. So, very positive in North America. South America, very challenged, obviously. Europe was good. Asia, challenged.”

The CEO lives at the intersection of strategy and talent

“it’s hard to believe I’m really saying this, but this is a multi billion-dollar opportunity. This intersection of business strategy and talent is what a CEO lives and breathes every day. So, this is an organization that creates real impact for our clients. “