TrueBlue (TBI) 8-KTrueblue Reports First Quarter 2024 Results

Investor Roadshow Presentation MAY 2024

 

Forward-Looking Statements This presentation contains forward-looking statements relating to our plans and expectations including, without limitation, statements regarding the future performance and operations of our business, expectations regarding stabilization in demand, and expected growth from our digital investments, all of which are subject to risks and uncertainties. Such statements are based on management’s expectations and assumptions as of the date of this presentation and involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied in our forward-looking statements including: (1) national and global economic conditions which can be negatively impacted by factors such as rising interest rates, inflation, political instability, epidemics and global trade uncertainty, (2) our ability to maintain profit margins, (3) our ability to successfully execute on business strategies and further digitalize our business model, (4) our ability to attract sufficient qualified candidates and employees to meet the needs of our clients, (5) our ability to attract and retain clients, (6) our ability to access sufficient capital to finance our operations, including our ability to comply with covenants contained in our revolving credit facility, (7) new laws, regulations, and government incentives that could affect our operations or financial results, (8) any reduction or change in tax credits we utilize, including the Work Opportunity Tax Credit, and (9) the timing and amount of common stock repurchases, if any, which will be determined at management’s discretion and depend upon several factors, including market and business conditions, the trading price of our common stock and the nature of other investment opportunities. Other information regarding factors that could affect our results is included in our Securities Exchange Commission (SEC) filings, including the company’s most recent reports on Forms 10-K and 10-Q, copies of which may be obtained by visiting our website at www.trueblue.com under the Investor Relations section or the SEC’s website at www.sec.gov. We assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. Any other references to future financial estimates are included for informational purposes only and subject to risk factors discussed in our most recent filings with the SEC. Any comparisons made herein to other periods are based on a comparison to the same period in the prior year unless otherwise stated.

 

Investment Highlights Return of Capital Market leader in U.S. industrial staffing and global RPO with increasingly diverse service offerings to meet evolving client needs Highly fragmented industry with strong secular growth drivers Strong balance sheet and cash flow to support future growth opportunities and the return of excess capital to shareholders Advancing technology applications and expanding in high-growth end markets with a simplified structure to deliver long-term, profitable growth Experienced Leadership Team Deep human capital expertise with proven success driving growth and delivering value to stakeholders

 

Our Mission: Connecting People and Work Returning Value to Shareholders 2023 Revenue (Share repurchases last 5 years) $203M $1.9B 67,000 Clients served annually with strong diversity1 464,000 People connected to work during 2023 One of the largest U.S. industrial staffing providers One of the largest global RPO providers HRO Today magazine repeatedly recognizes PeopleScout as a global market leader Thousands of veterans hired each year via internal programs as well as Hiring Our Heroes and Wounded Warriors Recognized for breakthrough board practices that promote greater diversity and inclusion All segments earned the Top Workplaces USA Award issued by Energage 1 No single client accounted for more than 4% of total revenue for FY 2023

 

Solving Workforce Challenges Workforce Complexity Many factors, including globalization, the “gig” economy and diversity are changing the world of work requiring a disciplined approach to hiring. Artificial Intelligence Companies are seeking ways to become more nimble and efficient Deploying AI to source human capital will be a competitive differentiator. Digital Engagement The worker supply chain is becoming increasingly decentralized. TrueBlue’s digital strategy connects people anywhere at any time. Companies turn to human capital experts with innovative workforce solutions to solve growing talent challenges A robust value proposition with high-touch, specialized, digital solutions for industrial staffing and recruitment process outsourcing.

 

PeopleReady PeopleScout PeopleManagement Incremental Segment profit margin2 15 – 20% 27 – 32% 8 – 13% Revenue mix1 Segment profit mix1 1 Revenue and segment profit calculations based on FY 2023. We evaluate performance based on segment revenue and segment profit. Segment profit includes revenue, related cost of services, and ongoing operating expenses directly attributable to the reportable segment. Segment profit excludes depreciation and amortization expense, unallocated corporate general and administrative expense, interest expense, other income, income taxes, and other adjustments not considered to be ongoing. ² Average, estimated margin associated with additional organic revenue. 58% 44% 12% 45% 30% 11% PeopleReady PeopleScout PeopleManagement Three specialized segments meet diverse client needs On-demand general and skilled labor for industrial jobs Talent solutions for outsourcing the recruiting process for permanent employees Contingent, on-site industrial staffing and commercial driver services

 

7 US Industrial Staffing: A Large and Attractive Market Why Industrial Staffing?  One of the largest segments of the U.S. staffing industry ($34B in 2023)  Highly fragmented with no dominant competition  Digital adoption by the industry can expand growth opportunity, like rideshare companies did for the taxi industry  Unique growth opportunity to fill key skilled trades positions as baby boomers retire  The Biden Administration’s infrastructure and clean energy plans are expected to inject billions into the labor market  The industry rebounds quickly in the early stages of a recovery Represents ~30% of $640B global staffing market United States Staffing Market ~$200B1 One of the largest U.S. segments (~20%) Industrial temporary staffing ($34B) Skilled Trades On-site Hourly General On Demand Labor On-site Cost Per Unit Trucking 1 Source: Staffing Industry Analysts Note, industrial temporary staffing includes various occupations such as: laborers, packers, construction workers, skilled trades, machinists, janitors, etc.

 

Recruitment Process Outsourcing: High margin plus double-digit revenue growth Why RPO?  Nascent market with no single dominant player  Traditionally sticky business model with high client retention and engagement  Industry produced double-digit annual revenue growth historically and recovered swiftly from recent recession  Industry poised for growth as companies seek new solutions to increasing labor challenges Global RPO Market ~$6B1 1 Source: Everest Group Strong history of growth with a 2017-2023 market CAGR of ~10% North America represents ~50% followed by EMEA (~30%) and APAC (~20%) Further market expansion expected largely driven by first-generation buyers representing ~90% of new deals

 

Strong position to capitalize on growth opportunities PEOPLE 5,000+ talented, dedicated and mission driven people EXPERIENCE > 30 years of industry experience and deep client relationships TECHNOLOGY Sophisticated technology providing a differentiated user experience MARKET PRESENCE Significant scale and expansive local market presence Tremendous strengths and assets to drive our success, capitalizing on growth opportunities, enhancing shareholder value and advancing our mission to connect people and work

 

Focused strategy, leveraging our strengths to deliver long-term, profitable growth  Position our contingent staffing business to compete in a digital-forward future  Provide a differentiated experience with proprietary technology  Drive efficiencies to optimize our reach and engagement  Increase focus on operational excellence, cross-selling and innovation  Drive efficiencies and bring our teams closer to clients and associates  Leverage strengths and synergies to deliver profitable growth  Expand in high-growth, less- cyclical and underpenetrated end markets  Capitalize on secular growth opportunities to deliver long- term, sustainable growth  Diversify our business to increase market share and revenue potential DIGITAL TRANSFORMATION MARKET EXPANSION SIMPLIFIED STRUCTURE

 

Digitally transform our business model 11  Position our contingent staffing business to compete in a digital-forward future o We control our roadmap with new, proprietary JobStack app o Advancement of our digital capabilities through competitive enhancements and quick response to evolving user needs  Provide a differentiated experience with proprietary technology o Meeting our clients and associates where they are, with a customized experience combining the power of our technology and local market expertise o Connecting clients and candidates using AI, machine learnings, predictive analytics and a superior candidate experience with Affinix  Drive efficiencies to optimize our reach and engagement o Digitalization enables operational efficiencies, allowing for more time focused on engaging with clients to drive results

 

Expand our share in attractive end markets  Expand in high-growth, less-cyclical and underpenetrated end markets o Strong position to capture further growth opportunities with a proven track record in renewable energy work o Focused growth in attractive end markets like healthcare  Capitalize on secular growth opportunities to deliver long-term, sustainable growth o Well-positioned to fill structural staffing shortages in areas like skilled trades o Powerful secular forces that play to our strengths  Diversify our business to increase market share and revenue potential o Targeting RPO expansion in higher skill placements and more attractive product offerings SECULAR GROWTH UNDERPENETRATED DIVERSIFY

 

 

ESG principles help us make sound decisions AAA Rating Risk Ranking: Low Risk Exposure: Low Risk Management: Average Key Statistics:  78% of board members are women or racially diverse  50% of senior management are women  88% of voting shareholders approved executive compensation How ESG guides our decision making:  Code of conduct and business ethics framework  Board of directors oversight & governance  Executive compensation structure  Enterprise risk management program External ESG Ratings

 

 

Focused capital strategy Investing in technology and returning excess capital to shareholders 18% 47% 35% (2019 - 2023) Net debt reductions Share repurchases Capital expenditures Historical use of capitalCapital allocation priorities  Strategic technology investments to further digitalize our business model  Return excess capital to shareholders through share repurchases  Disciplined acquisition strategy to supplement organic revenue growth

 

TARYN OWEN PRESIDENT AND CEO Leadership with Deep Expertise 20+ years of industry experience 10+ years as business leader TrueBlue President since 2022 CARL SCHWEIHS EVP AND CFO 10+ years of industry experience 10+ years of finance experience TrueBlue CFO since 2023 KRISTY WILLIS EVP AND PRESIDENT, PEOPLEREADY 20+ years of industry experience RICK BETORI EVP AND PRESIDENT. PEOPLESCOUT 20+ years of industry experience JERRY WIMER SVP AND ACTING PRESIDENT. PEOPLEMANAGEMENT 20+ years of industry experience

 

TrueBlue Highlights Mission Driven Connecting People and Work

 

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