• Abstract and Figures
• Public Full-text

ANNUAL REPORT 2020 REIMAGINE A BRIGHTER FUTURE STOCKHOLDERS Our full fiscal year fee revenues were $1.93 billion, an all-time high, and we delivered $301 million of adjusted EBITDA.1 But it’s the last several months that have truly defined us. This has been a time unlike anything most of us have experienced in our lifetimes. Long-overdue calls for social equality, a persistent global pandemic, recovery curves—the only certainty these days is uncertainty. Amid all this change, I have never been prouder of how our firm has responded. I truly feel that over the next 2 years there will be more change than in the last 10 years. Different work needs to get done, and work needs to get done differently. That’s an opportunity for our company. As an organizational consulting firm, we are committed to enabling people and organizations to exceed their potential—and to exceed potential, people need an abundance of opportunity, development, and sponsorship, which is foundational to our service offerings. I believe that we are the right firm at the right time to help drive client performance through change. Calls for change across society have sparked an unprecedented catalyst to amplify our voice on diversity, equity, and inclusion— both within Korn Ferry and among our clients. We have quickly mobilized our colleagues, expertise, and offerings. We will continue to raise an active and intentional voice to strongly condemn racism and engage in candid dialogue to listen, understand, and then lead through action. Some of the key accomplishments of the last few months, showing the agility of our firm as we address the pandemic, social action, and more, include: • Adopting a framework of safety, caution, and agility to navigate the crisis, which included mobilizing almost all our global colleagues to a work-from-home environment in the course of days and adjusting our business to the current reality, while preserving tremendous muscle to accelerate through the economic turn. • Raising a strong voice in the world by hosting multiple COVID-19 webinars attended by thousands and “Race Matters” webinars for colleagues and clients that attracted more than 100,000 leaders from global organizations. We will continue to engage with clients in these discussions, given our large diversity and inclusion consulting business. 02 KORN FERRY | ANNUAL REPORT 2020 • Appointing Michael Hyter as our new Chief Diversity Finally, we must remind ourselves that out of devastation Officer, elevating our ongoing focus on and continuing will come hope and rebirth. Allow me to share a story. commitment to not only diversity, but inclusion. • Receiving recognition by Forbes Magazine as A couple of years ago, I witnessed first-hand the wildfires that America’s Best Executive Recruiting Firm for destroyed millions of acres in California and countless homes. the fourth consecutive year. One wildfire was perilously close to where I live, impacting thousands of people. Very late one night, as the air was thick As we look to the future, there is no question that the with smoke and flames were visible in the hills nearby, I tied magnitude of the humanitarian and economic impact brought a bandana over my face and went outside to hose down our on by the coronavirus pandemic far outweighs what anyone house. It was such a stupid, futile thing to do, but I couldn’t could have expected a few short months ago. The breadth, just sit there and wait. I had to pretend I was in control. At depth, and pace of the decline caused by this global health around midnight, my wife yelled to me, “We’re out of here!” She crisis are unprecedented. But make no mistake—there will be preceded the fire department’s evacuation by seconds. Minutes real, tangible opportunities for Korn Ferry. later we left, taking with us only photographs of our kids when they were younger; these were memories that could never be Getting through the crisis will require a triangulation of cash, replaced. Some houses in our neighborhood burned to the biology, and psychology. To the extent that a business or an ground, though several (including ours) were spared by a shift individual is fortunate enough to have cash, that’s an incredible in the wind. But that was not the end of the story. Heavy rains amount of freedom. Korn Ferry is blessed in that we have that followed the wildfires. Slowly, life returned. Nature, ever resilient, financial freedom, thanks to a solid balance sheet with high greened the canyons and flowers began to bloom where, not levels of cash and liquidity. Biology—treatments and vaccines long before, there had been only charred earth. Then one day, as —will determine the endpoint. In the middle is psychology. I drove to the beach, millions of butterflies filled the air. I couldn’t How do you get work done differently? How do you motivate? believe what I was seeing at first—it didn’t seem real. I slowed How do you inspire? How do you develop people? How do the car and watched as they sailed over the windshield, never you pay? That’s exactly what Korn Ferry is all about—and striking it. It was a sea of butterflies, the ultimate symbol what we offer to clients. of metamorphosis. Today, we are a substantially different company with radically Now, as then, the devastation will pass. Slowly, with humility, different and more scaled capabilities than a decade ago. grace, and dignity, we will turn this page with a commitment In addition, our firm has faced this crisis from a position of to change and progress. I’d like to thank our colleagues around strength. As a result, our recovery could be substantially the globe for their resilience. I am also grateful to our leadership different, with a pronounced upswing based on the broader team and board of directors for their unwavering commitment to and deeper mix of our business. Almost every company on the Korn Ferry. At the end of the day, it’s our colleagues who make planet will have to reimagine their business. To get work done our business successful. With our colleagues, it won’t matter differently, companies will need to rethink their organizational what the world looks like in 2 or 10 years. We’ll have exactly structure, roles and responsibilities—how they compensate, what we need on the journey—as we reimagine, together. engage and develop their workforce. They will need to hire agile, diverse talent and do so in a virtual world, which we believe will depend to a greater extent on assessment. These are Korn Ferry’s businesses. Add to that, our M&A, change management, virtual sales effectiveness, and consumer experience services. We are also using this time of change as an opportunity to reimagine our own business. For example, we are moving from analog to digital delivery of our assessment and Gary D. Burnison learning business (23% of all fee revenue in FY’20) in a Chief Executive Officer way that makes our IP more relevant and scalable. On the recruiting side, we are refining our platform processes such as AI, video, and technology. And on the administrative front, we are looking to further consolidate our activities, adopting a One Korn Ferry approach to deliver greater efficiencies across the organization. 03 KORN FERRY | ANNUAL REPORT 2020 PERFORMANCE HIGHLIGHTS We made tremendous progress in the recently completed fiscal year, with the highest year fee revenue in our firm’s history and strong profitability. FEE $1.93 BILLION REVENUE Generated fee revenue of $1.93 billion, an all-time high. ADJUSTED $301 MILLION EBITDA Achieved $301 million of adjusted EBITDA and a 15.6% adjusted EBITDA margin.1 DIVERSE MIX OF REVENUE 19% RPO & Professional Search 38% Executive 15% Search Digital 28% Consulting [1] Adjusted EBITDA refers to earnings before interest, taxes, depreciation, and amortization, further adjusted to exclude integration/acquisition costs, restructuring charges, net, and separation costs. Adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures. See page 41 of the accompanying Form 10-K for the fiscal year ended April 30, 2020 for a presentation of the most directly comparable GAAP measures and a reconciliation to those measures. This document may contain certain statements that we believe are, or may be considered to be, “forward-looking statements” — that is, statements regarding future events, objectives, or plans that by their nature are uncertain. For details on the uncertainties that may cause our actual future results to materially differ from those expressed in our forward-looking statements, see our accompanying Form 10-K for the fiscal year ended April 30, 2020 and quarterly reports on Form 10- Q. We do not undertake to update our forward-looking statements. This document also includes certain forward-looking projected financial information that is based on currentestimates and forecasts. Actual results could differ materially. 04 KORN FERRY | ANNUAL REPORT 2020 FISCAL YEAR FEE REVENUE GROWTH TRAJECTORY (In millions)† $1,933 $1,767 $1,292 FY 2016 FY 2018 FY 2020 † Compounded Annual Growth Rate from fiscal year 2016 to fiscal year 2020 is 13.5% percent. 05 KORN FERRY | ANNUAL REPORT 2020 06 KORN FERRY | ANNUAL REPORT 2020 IMAGINING A BRIGHTER FUTURE We’re at the beginning of a new journey —a start-up mentality within a big brand. Every day is an opportunity for reinventing and reimagining. We’re motivated by the “why” and the “what” —the purpose and the vision—of changing people’s lives and helping people and organizations exceed their potential. 07 KORN FERRY | ANNUAL REPORT 2020 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.

Load more

  122

Copy Link