June 22, 2021 – Korn Ferry (NYSE:KFY) has posted 2021 fiscal year-end revenues of $1.81 billion, down six percent from a year ago. The Los Angeles-headquartered executive recruiter and leadership consultant – the largest globally and in the Americas as ranked by Hunt Scanlon Media – also reported fourth quarter revenue of $555.2 million, an increase of 26 percent. The increase in fee revenue when compared to last year was primarily due to the firm’s recovery from the coronavirus pandemic as well as the increasing relevance of the company’s solutions in helping businesses solve their organizational and human capital issues in today’s business environment. Net income attributable to Korn Ferry was $114.5 million in fiscal year 2021 as compared to $104.9 million in fiscal year 2020.
The year-over-year improvement in profitability was due to the increase in fee revenue and cost saving actions Korn Ferry took in response to the impact of COVID-19 in both Q4 fiscal year 2020 and Q1 fiscal year 2021, partially offset by an increase in compensation and benefits expense due to the search firm recording an accrual to fully reimburse colleagues for pay cuts taken in fiscal year 2021 that were not previously reimbursed and an increase in performance related bonus expense due to the revenue growth through the recovery combined with an increase in overall profitability.
Executive Recruiters & Talent Leaders
Reveal Market Forecast
The pandemic caused an unprecedented disruption to executive search activity in 2020. Executive recruiters spent the better part of last year resetting expectations in the midst of an unprecedented interruption to their business. But according to recruiting industry leaders interviewed for this report, the search business is turning a significant corner.
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“During the fiscal fourth quarter we generated $555 million in fee revenue, an all-time record, up 26 percent year-over-year,” said CEO Gary D. Burnison. “Our profitably was very strong, with earnings per share of $1.21, an all-time high and adjusted EBITDA margin at 20.3 percent.”
“I am extremely proud of our company and our accomplishments as we navigate through COVID-19,” Mr. Burnison said. “The diversity and relevance of our offerings and our ability to adapt to delivering our consulting services in a virtual world have helped companies achieve their organizational opportunities. Our Korn Ferry colleagues have truly shown their resilience, pivoting to the transformation and new ways of working that will emerge in a post-pandemic world, and I look forward to what the new fiscal year will bring to our firm and our clients.”
In May, Korn Ferry named Alexander Strahl as a senior client partner and co-leader of its EMEA global technology practice. He is based in the firm’s Brussels office. “We are excited to have Alexander´s experience and leadership on board,” said Sonamara Jeffreys, co-president, EMEA, Korn Ferry. “He brings to Korn Ferry and our clients a wealth of international experience and has been a well-trusted advisor to leading private, large public and private equity-backed companies.” Mr. Strahl joins Korn Ferry from Spencer Stuart where he was the technology, media and telecommunications practice leader in EMEA. Prior to this, he was working for Russell Reynolds Associates and Heidrick & Struggles as a core member of their technology practices.
Korn Ferry also recently appointed Charles Falcone as a senior client partner and global leader of its academic sector recruiting practice, including academic medicine and higher education. Based in Chicago, he also becomes director of the Korn Ferry Physician Leadership Institute. “Charlie has an exceptional reputation in the market and brings extensive advisory and search experience working on the successful recruitment of CEOs, chancellors, deans, presidents, chairs, chief medical officers and board-level assignments for academic institutions, health systems, and health-related associations and societies,” said Gregory Button, president of the firm’s global healthcare services practice. “He will be a great asset to our team.”
Korn Ferry appointed Michael Morcos as vice chairman of the firm’s CEO and board practice in EMEA. He is based between the Dubai and London offices. With more than 20 years of experience in international management consulting, recruiting and executive search, Mr. Morcos brings his expertise to clients on key issues such as board alignment, leadership development, post-merger integration and leadership assessment, and executive search. Mr. Morcos’ clients include global MNCs, ruling families, governments, SWFs, industrial conglomerates and financial institutions.
“Michael is a widely respected leader with vast executive search and consulting experience spanning multiple industries,” said Pascal Gibert, co-president, EMEA, Korn Ferry. “He brings strong passion and fresh perspectives to our firm that will benefit our clients across the EMEA region and our colleagues. Michael will be a key addition to the Korn Ferry team, and we’re thrilled to have him.”
Korn Ferry also named Henrik Maartensson as a senior leader in the firm’s global private equity and industrial practices. Mr. Maartensson joins Korn Ferry from Spencer Stuart, where he co-led the firm’s EMEA region, bringing his leadership advisory experience to a range of board and C-level engagements for international companies. Previously, he led the firm’s global transformation program and prior to that he served as global practice leader for the firm’s industrial and supply chain practices. “Henrik brings rich experience leading complex engagements while working with a broad scope of private equity and industrial organizations,” said Mr. Gibert. “He is a natural leader and trusted partner whose regional and industry experience will be an invaluable asset to our clients.”
Assuming no new major pandemic lockdowns, worldwide economic conditions, financial markets and foreign exchange rates remain steady, Korn Ferry foresees on a consolidated basis: Q1 fiscal year 2022 fee revenue is expected to be in the range of $535 million and $555 million and diluted earnings per share is expected to range between $1.04 to $1.14.
Shares of Korn Ferry were up about two percent in premarket trading today, after the consulting firm swung to a record fiscal fourth-quarter profit that beat expectations, and provided an upbeat outlook for the current quarter.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media