Heidrick & Struggles International, Inc. 233 South Wacker Drive, Suite 4900 Chicago, IL 60606 312 469 1200 www.heidrick.com WE HELP OUR CLIENTS CHANGE THE WORLD, ONE LEADERSHIP TEAM AT A TIME.® Our Worldwide Locations AMERICAS — Atlanta Boston Calgary Chicago Costa Mesa Dallas Florham Park Houston Los Angeles Menlo Park Mexico City Miami Minneapolis New York Philadelphia San Francisco São Paulo Toronto Washington, D.C. EUROPE — Amsterdam Bremen Brussels Copenhagen Dublin Düsseldorf Frankfurt Helsinki Istanbul Lisbon London Madrid Milan Moscow Munich Paris Stockholm Warsaw Zürich AFRICA / MIDDLE EAST — Johannesburg Dubai ASIA PACIFIC — Bangalore Bangkok Beijing Hong Kong Melbourne Mumbai New Delhi Perth Seoul Shanghai Singapore Sydney Tokyo H e d r i i c k & S t r u g g l e s 2 0 1 8 A n n u a l R e p o r t 2018 Annual Report accelerate+transform 97523_AR COV_a2.indd 1-3 4/9/19 5:08 PM Heidrick & Struggles 2018 Annual Report FELLOW SHAREHOLDERS: Leaders and organizations that are successful in today’s operating environment of constant change and uncertainty have the ability to ACCELERATE their business performance and TRANSFORM with agility. It doesn’t matter a company’s size or scope, leaders globally are navigating the same issues. We work alongside our clients’ as their trusted leadership advisors to help them build the leaders, teams, organizations, and cultures they need to thrive in this new era. We are continuously guided by our purpose – to help our clients change the world, one leadership team at a time. 2018 was a great year for Heidrick & Struggles and its shareholders on many levels. We were front and center on the most relevant leadership issues including succession planning, diversity and inclusion, and culture. We were the first firm in our industry to publicly commit to diversity in our board of director searches, recognizing that diverse leadership is a business imperative. Financially, we achieved a number of records and company milestones. We also made meaningful progress in accelerating our own transformation to become a data-driven leadership advisory firm, introducing new tech-enabled tools and services and further expanding our range of talent and human capital solutions. Net revenue of $716 million, up 15% compared to 2017, was a company record in our 65-year history. This was the sixth year in a row of year-over-year revenue growth. This growth was driven by our Executive Search business, where net revenue of $653 million increased 18% compared to last year. 2018 was a pivotal year for our other business, Heidrick Consulting, where we combined our former Leadership Consulting and Culture Shaping businesses and began offering clients a single, integrated line of advisory services. We reduced General and Administrative expenses to under 20% of net revenue, increased operating income to $68.9 million, achieved operating margin of 9.6%, and delivered diluted earnings per share of $2.52 – all of these the best in 11 years. Earlier this year, as a reflection of our strong cash position and confidence in the future, we increased our quarterly cash dividend to $0.15 cents per share, an increase of more than 15%. Key to having achieved these results in 2018 was our steadfast focus on four business priorities that we communicated last year - to increase the scale and impact of our two businesses, to increase cross-enterprise collaboration, to drive a premium, data-driven, tech-enabled service experience for our clients, and to maintain a focus on streamlining our cost structure. These four priorities will continue to drive our business strategy for 2019. We will continue to hire new consultants selectively, focusing on the growth markets and healthy economies where we want to have a larger presence, while maintaining our commitment to develop and promote internally. I am especially energized by our focus on further enhancing the premium service experience we deliver to our clients – one that differentiates us from our competitors. As part of these efforts, last year we finished rolling out new data- driven, tech-enabled assessment tools and platforms to better serve our clients and help them accelerate their performance. The response, internally and externally, has been incredibly positive. We are improving the efficiency of our searches and developing more in-depth assessments of candidates, while capturing a formidable collection of leadership data points. I am also excited about the growth opportunity for Heidrick Consulting. As a result of our training and development initiatives in 2018, we have a much stronger collaborative relationship between Search and Consulting and are bringing greater value to our clients seeking holistic leadership advisory services. Recent investments we made in thought leadership and new solutions in the areas of Digital Acceleration and Organizational Simplicity are in strong demand in the market. I want to thank our employees around the globe for their hard work and many contributions. I would also like to thank our Board of Directors for their continued support and guidance. Our vision is to serve our clients as their trusted leadership advisors, combining distinctive, diverse, data-driven and technology-enabled talent, leadership and culture solutions to accelerate their performance. We look forward to continuing our momentum in 2019 and are excited about the potential for our future. Sincerely, Krishnan Rajagopalan President and Chief Executive Officer EXECUTIVE OFFICERS BOARD OF DIRECTORS Krishnan Rajagopalan President and Chief Executive Officer Kamau Coar General Counsel and Corporate Secretary Michael M. Cullen Chief Operating Officer Mark R. Harris Chief Financial Officer Sarah Payne Chief Human Resources Officer Elizabeth L. Axelrod *(3) Vice President, Employee Experience, Airbnb, Inc. Clare M. Chapman *(2) (3+) Former Group People Director, BT Group Gary E. Knell *(2+) (3) Chairman, National Geographic Partners Lyle Logan *(1) (2) Lead Independent Director Executive Vice President and Managing Director, Global Financial Institutions Group, Northern Trust Company T. Willem Mesdag *(1+) (3) Founder and Managing Partner, Red Mountain Capital Partners Krishnan Rajagopalan President and Chief Executive Officer, Heidrick & Struggles Stacey Rauch *(1) Director (Senior Partner) Emeritus, McKinsey & Company Adam H. Warby *(1) Chief Executive Officer, Avanade Inc. Tracy R. Wolstencroft President and Chief Executive Officer, National Geographic Society * Independent Director (1) Member, Audit and Finance Committee (2)Member, Nominating and Board Governance Committee (3)Member, Human Resources and Compensation Committee + denotes committee chair Annual Meeting The annual meeting of shareholders will be held on Thursday, May 23, 2019 at 9 a.m. CDT, at Willis Tower, 233 South Wacker Drive, 34th Floor, Tower House Conference Center, Chicago, Illinois Stock Transfer Agent and Registrar For address changes, account consolidation, registration changes, stock holdings and lost stock certificates, please contact: Computershare / BNY Mellon Shareholder Services 480 Washington Boulevard Jersey City, NJ 07310–1900 866 892 5631 Shareholders can also obtain account information through Investor Service Direct at: www.bnymellon.com/shareowner/isd Independent Registered Public Accounting Firm RSM US LLP, Chicago, Illinois Exchange Listing Our common stock has been listed on the Nasdaq Global Select Market under the Symbol HSII since our initial public offering in April 1999. SEC Filings & Investor Contact Information Filings with the Securities and Exchange Commission and other investor information are available through our website at www.heidrick.com, or by request to the Investor Relations Department by mail at our corporate headquarters address, by email at investorrelations@heidrick.com or by telephone at 312 496 1774. Corporate Governance Visit the Who We Are section of our website at www.heidrick.com to see our corporate governance documents, including the Code of Business Conduct, Corporate Governance Guidelines, Director Independence Standards and Charters of our Audit and Finance Committee, Nominating and Board Governance Committee and Human Resources and Compensation Committee. Heidrick & Struggles® and We Help Our Clients Change The World One Leadership Team at a Time® are registered trademarks of Heidrick & Struggles International, Inc. o g a c i h C , n g i s e D z o W n g : i s e D Some statements in the Letter to Shareholders may be forward-looking statements for the purposes of the Private Securities Litigation Reform Act of 1995. Actual outcomes and results may differ materially from what is expressed, forecasted or implied in the forward-looking statements. For more information on the factors that could affect the outcome of forward-looking statements, refer to our Annual Report on Form 10-K for the year ended December 31, 2018, under Risk Factors in Item 1A and our quarterly filings with the SEC. We caution the reader that the list of factors may not be exhaustive. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. 97523_AR COV_a1.indd 4-6 4/9/19 2:51 PM