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| 8-K - FORM 8-K - CDI CORP | d263133d8k.htm |
| EX-99.1 - NEWS RELEASE ISSUED BY CDI CORP. ON DECEMBER 8, 2011 - CDI CORP | d263133dex991.htm |
 CDI
Corporation Transformation:
Strategic Plan to Accelerate Profitable Growth
and Increase Shareholder Value
December 8, 2011
Copyright ©
2011 CDI Corp. All rights reserved.
Exhibit 99.2 |
 Caution
Concerning Forward-Looking Statements
2
Copyright ©
2011 CDI Corp. All rights reserved.
This presentation contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements that address expectations or projections
about the future, including, but not limited to, statements about our strategies for growth and
future financial results (such as revenues, cost savings and operating profit margins), are
forward-looking statements. Some of the forward-looking statements can be identified by
words like “anticipates,” “believes,” “expects,” “may,” “will,” “could,” “should,” “intends,” “plans,”
“estimates” and similar expressions. These statements are not guarantees of future
performance and involve a number of risks, uncertainties and assumptions that are difficult to
predict. Because these forward-looking statements are based on estimates and assumptions
that are subject to significant business, economic and competitive uncertainties, many of which
are beyond our control or are subject to change, actual outcomes and results may differ
materially from what is expressed or forecasted in these forward-looking statements. Important
factors that could cause actual results to differ materially from the forward-looking statements
include, but are not limited to: weakness in general economic conditions and levels of capital
spending by customers in the industries we serve; weakness in the financial and capital
markets, which may result in the postponement or cancellation of our customers’ capital
projects or the inability of our customers to pay our fees; the inability to successfully
implement our new strategic plan; the termination or non-renewal of a major customer contract or
project; our ability to maintain or expand our existing bank credit facility on satisfactory terms;
credit risks associated with our customers; competitive market pressures; the availability and
cost of qualified personnel; our level of success in attracting, training and retaining
qualified management personnel and other staff employees; changes in tax laws and other
government regulations; the possibility of incurring liability for our activities, including
the activities of the our temporary employees; our performance on customer contracts; negative
outcome of pending and future claims and litigation; and government policies, legislation or judicial
decisions adverse to our businesses. More detailed information about these and other
risks and uncertainties may be found in our filings with the SEC, particularly in the "Risk
Factors" section of our Form 10-K and the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section of our Form 10-K's and Form
10-Q's. Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. We assume no obligation to update such statements,
whether as a result of new information, future events or otherwise, except as required by law. |
 Agenda
3
Transformational
Strategy Overview
Paulett
Eberhart
–
President
&
CEO
Strategy Execution
Phil
Clark
–
Executive
Vice
President,
Business Development & Operations
Global Engineering &
Technology Solutions
Robert
Giorgio
–
Executive
Vice
President,
Global Engineering & Technology Solutions
Financial Review
Bob
Larney
–
Executive
Vice
President
&
CFO
Transformational
Strategy Summary
Paulett
Eberhart
–
President
&
CEO
Questions and
Answers
CDI Executive Team
Copyright ©
2011 CDI Corp. All rights reserved.
Topic
Presenter |
 Transformational
Strategy Overview
Paulett
Eberhart,
President
&
CEO
Copyright ©
2011 CDI Corp. All rights reserved. |
 CDI
Today 5
Copyright ©
2011 CDI Corp. All rights reserved.
•
US-centric staffing company with four stand-alone
business segments operating with separate
management, operations, sales, and support
functions
•
Go-to-market approaches are executed differently
in each business unit
•
Growth efforts are not sufficiently focused
•
Growth investments have been minimal in recent
years
•
Engineering & Technology business units serve
20+ industries
•
Staffing drives 70% of revenue |
 2011
Transition 6
Focus on
accountability
and deliver on
commitments
Copyright ©
2011 CDI Corp. All rights reserved.
Plan for the future
Rigorous
assessment
of corporate
strengths and
weaknesses
Personal
interaction
with clients,
employees,
and investors
New
executive
leadership
team |
 2011
Transition 7
•
Be more disciplined in choosing areas of focus and investment
•
Have greater accountability
•
Reorganize reporting units to break down “silos”
•
Lower cost structure
What CDI needs to do:
New strategy and plan for ONE CDI
We must execute
Copyright ©
2011 CDI Corp. All rights reserved.
Conclusions |
 CDI
Tomorrow 8
Copyright ©
2011 CDI Corp. All rights reserved.
CDI is an integrated market-leading Engineering and
Technology Services organization providing differentiated,
client-focused solutions in select global industries.
|
 ONE
CDI becomes a reality 9
Geographies
Copyright ©
2011 CDI Corp. All rights reserved.
MRI
Industry Verticals
•
Government Services
•
Infrastructure
•
Americas
•
EMEA
•
APAC
•
Global Engineering
and Technology
Solutions (GETS)
•
Professional
Services Staffing
(PSS)
Service Lines
•
Oil & Gas
•
Chemicals
•
Aerospace
•
Industrial Products
•
Hi-Tech |
 Accelerated Revenue Growth and Profitability to
Drive Increased Shareholder Value
10
•
Staffing and Solutions both expected to grow at higher
rates with new organizational model
•
Favorable changes to revenue mix anticipated
•
Reduced cost structure will boost profit margins
•
Investments will be made in leadership talent and
technology
Copyright ©
2011 CDI Corp. All rights reserved.
2014 Revenue Target Range: $1.3 to $1.4 Billion
2014 Operating Profit Margin Target Range: 3.5% to 4.5%
|
 Peggy Besand
Organizational
Development &
Communications
Organization Chart –
Executive Leadership Team
11
CDI Executive Leadership Team
Paulett Eberhart
President and CEO
Robert Giorgio
Global Engineering &
Technology Solutions
Bob Larney
Finance
CFO
Phil Clark
Global Business
Development &
Operations
Eric Moorehead
Americas
President
Brian Short
Legal &
Human Resources
Greg Thullner
Professional
Services
Staffing
Rob Romaine
MRI
Phil Clark
APAC
President
TBA
EMEA
President
Dirk Dent
Enterprise
Client
Executive |
 Transformational
Strategy Overview
Paulett
Eberhart,
President
&
CEO
Copyright ©
2011 CDI Corp. All rights reserved. |
 Strategy Execution
Phil
Clark,
Executive
Vice
President,
Business Development & Operations
Copyright ©
2011 CDI Corp. All rights reserved. |
 Five
guiding principles that drove CDI to its strategic objectives
CDI will
optimize
Professional
Services, of
which Staffing
is a critical
part
CDI will not
exit the
Staffing
business
CDI should
view Solutions
as “the end
game”
in its
focused
industries
CDI should
selectively
build its
presence in
Business
Advisory
Services
CDI must
develop a
portfolio that
has a mix of
longer term
and shorter
term offerings
14
Copyright ©
2011 CDI Corp. All rights reserved.
Become a recognized global market
leader in our chosen markets |
 New
CDI 15
Copyright ©
2011 CDI Corp. All rights reserved. |
 CDI
Multi-Dimensional Growth Strategy Matrix CDI’s Growth Strategy
16
Focuses on developing new offerings and capabilities allowing CDI to expand its
relevance to the targeted industries in both new and existing geographies
Copyright ©
2011 CDI Corp. All rights reserved.
The bulk of the strategy focuses on “one dimensional”
opportunities to accelerate profitable growth |
 Differentiated Formula
Deliver high value
engineering and
technology
solutions
that
incorporates
and
leverages
professional staffing,
proprietary software, technology,
methods and processes
Specialize in
attracting, training &
retaining top quality
engineering talent
Acquire proprietary
software,
technology, methods
& processes (IP)
to
sustain innovation
Provide cost
effective, high
quality engineering
services via a
global delivery
model
that
incorporates local,
onshore and
offshore resources
Establish a world
class
collaboration
network for
knowledge
management
Leverage
established
credentials
with
Fortune 100 clients
17
CDI will develop a differentiated formula that comprises the following elements:
talent, intellectual property, efficient delivery model, knowledge management
and credentials
Copyright ©
2011 CDI Corp. All rights reserved. |
 Strategic Client Engagement Model
18
Delivery Executive
Responsible for delivery of GETS and
PSS services
Industry Sales Executive
Sell across all offerings for Engineering,
IT, Staffing
Industry Executive
SME responsible for industry thought
leadership, consulting, demand creation
Client
Executive
Client Executive
Responsibility for client,
including financial performance,
growth, delivery excellence
Strategic
Client
Copyright ©
2011 CDI Corp. All rights reserved. |
 19
Professional Services Staffing
$25-26 Billion
•
All staffing combined, optimized and developed into a global strategic
offering
•
Provide a global staffing network to support clients, while focusing on
select engineering and technology functional competencies
•
Expand to select emerging countries
Strategy
New client engagement model to grow client business through
cross-selling, penetrating new clients, and driving higher value
solutions and professional staffing
Copyright ©
2011 CDI Corp. All rights reserved.
CDI Addressable Market: 2014 |
 20
Professional Services Staffing Strategy
$11-12 Billion
Copyright ©
2011 CDI Corp. All rights reserved.
•
Develop deep industry domain
knowledge
•
Recruit specific in-demand skill sets
for target industries
•
Leverage industry data to optimize
clients’
talent management
•
Focus on large, global managed
staffing contracts for Fortune 500
companies
•
Develop low-cost service model to
gain competitive advantage
Domain
Business Advisory
Function Outsource
Managed Services
Staff Augmentation
Contract Staffing
Managed Staffing Program |
 21
Global Engineering & Technology Solutions (GETS)
$11-13 Billion
•
Provide engineering and IT solutions within a single organization
•
Focus on service excellence and quality
•
Leverage all global delivery resources to deliver high quality services at
a competitive price point
•
Enhance CDI’s ability to grow globally in select markets
Strategy
Copyright ©
2011 CDI Corp. All rights reserved.
CDI Addressable Market: 2014 |
 22
Evolution to Growth
$11-12 Billion
•
Focused new vision and strategy for the entire company
•
Prioritized high potential industry sectors within leveraged service
offerings
and
select
geographic
markets
to
meet
the
global
needs
of
our
clients
•
New vision and strategy will improve revenue growth and profitability
Key Elements
Copyright ©
2011 CDI Corp. All rights reserved. |
 Global Engineering &
Technology Solutions
Robert
Giorgio,
Executive
Vice
President,
Global Engineering & Technology Solutions
Copyright ©
2011 CDI Corp. All rights reserved. |
 Global
Engineering & Technology Solutions (GETS) •
Scope and Key Strengths
•
Formation Process
•
Focus and Execution
•
Delivering Profitable Growth
24
Copyright ©
2011 CDI Corp. All rights reserved. |
 GETS
Scope and Key Strengths •
GETS
will
be
the
global
solutions
services
delivery
organization
for
the
geographic regions
•
GETS will provide unrivaled solution delivery through:
–
Centers of Excellence (COE) with skill sets required for larger projects in
centralized locations
–
Regional centers to service local needs and use of COE
resources for
required skill sets
–
Client-centered offices to deliver site specific services and identify larger
project opportunities
–
Offshore and near-shore engineering centers to leverage low cost design
resources
25
Copyright ©
2011 CDI Corp. All rights reserved.
Scope
Focus on high potential growth markets |
 •
Blue chip customer base
•
Multi-year client agreements in place
•
Track record of quality service delivery
•
Talented engineering and project management teams
•
Depth and breadth of skill sets equipped with industry
leading tool sets
•
Ability to scale quickly to meet client needs
GETS Scope and Key Strengths
26
Copyright ©
2011 CDI Corp. All rights reserved.
Key Strengths
Competitive advantage |
 GETS
Formation Process •
Identified high potential growth markets (verticals)
•
Evaluated current capabilities vs. customer needs
•
Needed to capitalize on growth in engineering solutions
27
Copyright ©
2011 CDI Corp. All rights reserved.
Growth market assessment
Evaluated CDI’s organizational structure and processes
•
Critical mass in some key areas lacking
•
Must leverage and centralize our skill sets better
•
Better access to low cost/off shore engineering sources needed
•
Higher level strategic customer relationships necessary
•
Process/structure
improvements
required
to
accelerate
ability
to
bring
skilled solutions to clients
•
Lower cost delivery structure needed |
 Up
to 35% of total global engineering spend projected to be outsourced by
2015
28
Copyright ©
2011 CDI Corp. All rights reserved.
75%
Focus
on
engineering
solutions
in
large,
fast
growing
industries
where
CDI
already has significant engineering capabilities
Engineering Global Market Forecast
2010
2012
2015
75%
25%
71%
29%
65%
35%
In House
Outsourced
GETS: Focus and Execution |
 29
Copyright ©
2011 CDI Corp. All rights reserved.
Industry focus on large fast growing industries where CDI already has
significant engineering capabilities
•
Addressable market 2014: $6-$7 billion
•
Estimated revenue CAGR 2010-2014: 10%-12%
Oil & Gas and Chemicals
•
Addressable market 2014: $5-$6 billion
•
Estimated revenue CAGR 2011-2014: 4%-6%
Aerospace and Industrial Products
GETS: Focus and Execution |
 30
Copyright ©
2011 CDI Corp. All rights reserved.
Oil & Gas and Chemicals Asset Lifecycle Services and Solutions
Go-to-Market Roadmap
GETS: Focus and Execution
Today
2014
Exploration
Onshore
production
Offshore production
Unconventional –
Upstream production
Wastewater
pre & post treatment
Pipeline
Tanks &
Terminals
Gas Processing
Oil Sands –
Upgrading
Refining
Petrochemicals |
 •
Pre-feasibility
screening studies
•
Business case &
concept
development
•
Technology
assessment
•
Feasibility studies &
conceptual design
•
Initial cost estimating
& contract planning
•
Tech. selection &
financial analysis
•
Preliminary
engineering
(FEED/FEL)
•
Detailed cost
estimating
•
Execution planning
•
Detailed engineering
•
Regulatory
compliance
•
HSE services
•
Upgrade projects &
process optimization
•
Technology
integration
•
Ops and
maintenance support
31
Copyright ©
2011 CDI Corp. All rights reserved.
Oil & Gas and Chemicals: Lifecycle Optimization Framework
GETS: Focus and Execution
CDI Services
Identify
Evaluate
Define
Operate
Execute
CDI’s CORE BUSINESS
Project Management and Consulting
Asset Lifecycle |
 32
Copyright ©
2011 CDI Corp. All rights reserved.
Aerospace and Industrial Products Asset Lifecycle Services and Solutions
Go-to-Market
Roadmap
GETS: Focus and Execution
Tier 1 and Tier 2 Manufacturers
OEMs
MROs
Depots
Operators/Airlines
Today
2014 |
 •
Airframe design
•
Tooling
assessment and
design
•
Engineering
design analysis
•
Analytical
validation
•
FAA certification
•
Embedded
systems test &
validation
•
Supplier
evaluation &
management
•
Procurement
optimization
•
Embedded
systems test &
validation
•
Quality
management
•
Source
inspection
•
FAI
•
Embedded
systems test &
validation
•
Sustaining
engineering
•
Logistics
•
Life cycle
management
•
Technical
documentation
•
Value
engineering
•
Maintenance
cost analysis
•
Product support
analysis
33
Copyright ©
2011 CDI Corp. All rights reserved.
Aerospace and Industrial Products: Lifecycle Optimization
Framework
CDI Services
CDI’s CORE BUSINESS
Project Management and Consulting
Asset Lifecycle
GETS: Focus and Execution
Design
Analyze
Build
Deliver
Support
Optmize |
 GETS
Summary •
Improved service excellence model that includes providing
services and solutions
in select global markets
•
Increased efficiencies and lower operating costs to become
more competitive
•
Increasing solutions market share by combining high value-
added services to better meet client needs
•
A focus on higher growth markets that match our capabilities
and strengths
34
Copyright ©
2011 CDI Corp. All rights reserved.
Delivering Profitable Growth |
 Financial
Review
Bob Larney,
Executive Vice President &
CFO Copyright ©
2011 CDI Corp. All rights reserved. |
 Restructuring Charge and Cost Savings
•
$8-$9 million pre-tax charge to be taken in 4th quarter
2011 for employee severance and related costs; cash
outlay in 2012
•
200 employee headcount reduction
•
Net savings of approximately $18.5 million in 2012
•
Portion of savings to be spent on investments to
accelerate growth, employee benefits and technology
upgrades
•
At least half of the net savings to benefit operating
profits and earnings per share
36
Copyright ©
2011 CDI Corp. All rights reserved. |
 37
Segment Reporting
Americas
•
Global Engineering & Technology Solutions
•
Professional Services Staffing
EMEA
•
Global Engineering & Technology Solutions
•
Professional Services Staffing
APAC
•
Global Engineering & Technology Solutions
•
Professional Services Staffing
Management Recruiters International, Inc.
Copyright ©
2011 CDI Corp. All rights reserved. |
 38
*Normalized
Revenue & Margin Targets
$1.0 billion
1.0%*
$1.3-1.4 billion
3.5-4.5%
12 months ended
9/30/11
Target 2014
(Organic)
Copyright ©
2011 CDI Corp. All rights reserved.
Revenue
Operating Profit Margin |
 Strategy to Bottom Line Results
•
Measureable objectives
•
Organizational alignment
•
Competitive cost structure
•
Internal metrics
•
Cash flow generation
39
Copyright ©
2011 CDI Corp. All rights reserved.
•
Accelerate growth in revenue, operating margins and
earnings
•
Improve EBITDA and RONA
•
Deploy cash to increase shareholder value
Focus on Improving Shareholder Value |
 Transformational
Strategy Summary
Paulett
Eberhart,
President
&
CEO
Copyright ©
2011 CDI Corp. All rights reserved. |
 Transformational Strategy
•
Establish new geographic organization and rigorous client
engagement model
•
Create solutions that establish CDI as a market leader in our
chosen markets
•
Consolidate and optimize delivery of staffing and solution
offerings
•
Use acquisitions, alliances and partnerships judiciously to
increase skills, expand geographic footprint and accelerate
growth
•
Create a culture of accountability
•
Maintain a rigorous focus on execution and client
satisfaction
41
Copyright ©
2011 CDI Corp. All rights reserved.
Key Elements |
 CDI
Corporation Transformation:
Strategic Plan to Accelerate Profitable Growth
and Increase Shareholder Value
December 8, 2011
Copyright ©
2011 CDI Corp. All rights reserved. |