Randstad Nv · EURONEXT:RAND
Randstad Nv — Investor Day (November 2017)
33 slides from Randstad Nv's investor day presentation, Nov 21, 2017
Slide 1: Capital Markets Day 2017 London
capital markets day 2017 london. human forward.
Slide 2: Group strategy & vision
group strategy & vision jacques van den broek, CEO london | capital markets day | november 21 2017
Slide 3: Agenda
agenda our new brand positioning 6 strategic roadmap 7 ABFS 2018 9 tech as a differentiator 10 a structural growth industry 11 topline growth accelerating versus peers 12 tech & touch initiatives by Randstad 14 conclusion 16 © Randstad | 3
Slide 4: Our brand positioning: tech-driven but human
our brand positioning tech-driven but human personal. helpful. caring. relationship-focused. generic players traditional innovative authority via authority via legacy. change through data. professional players tech players more tech, algorithm driven. © Randstad | 4
Slide 5: Strategic roadmap
strategic roadmap best people, strong concepts, excellent execution & superior brands grow to 5-6% ebita profitable growth improve margin increase productivity our ultimate goal by 2030, we will touch the work life of 500 million people worldwide © Randstad | 5
Slide 6: Strategic roadmap
strategic roadmap best people, strong concepts, excellent execution & superior brands grow to 5-6% ebita • HR Tech opco initiatives profitable growth improve margin increase productivity • TTA -> enterprise clients • growth in MSP (+11%) & RPO (+30%) YTD 2017 our ultimate goal • productivity (GP/FTE
Slide 7: ABFS 2018: integrated tech approach is crucial
ABFS 2018 integrated tech approach is crucial © Randstad | 7
Slide 8: Tech as a differentiator: higher barriers to entry
tech as a differentiator: higher barriers to entry, favouring big players in a fragmented market where scale and proximity matter contingent workforce tech touch tech touch self-service platforms integrated talent management tech touch tech touch perm digital platforms talent engagement SME clients
Slide 9: A structural growth industry
a structural growth industry staffing penetration rates rise over time trends and growth drivers 3,3% 3,0% globalization 2,8% 2,5% 2,3% technology 2,0% 1,8% 1,5% demographics 1,3% 1,0% 0,8% 0,5% variety of work forms 0,3% 0,0% Belgium France Germany Netherlands Spain Japan US Italy 2007 2015 source:
Slide 10: Topline growth accelerating vs. peers
organic revenue pwd growth, 2017 YTD topline growth accelerating vs. peers france powered by integrated tech 15% 10% organic revenue pwd growth by quarter, 2012-2017 5% 10% 0% Randstad Peer 1 Peer 2 8% italy 6% 30% 4% 25% 2% 20% 0% 15% Randstad Peer 1 Peer 2 2012 2013 2014 2015 2016 2017 -2% iberia
Slide 11: Inhouse: strong growth continuing
inhouse: strong growth continuing future powered by tech 22,4% 4.500 21,9% 25% 21,0% 4.000 19,5% 17,9% 20% 3.500 3.000 14,1% 15,0% 15% 2.500 11,1% 11,0% 10,6% 4,6 2.000 9,1% 4,2 3,6 10% 1.500 3,1 3,2 2,6 1.000 1,9 1,9 2,0 5% 1,5 1,3 500 -- 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 In
Slide 12: Tech & touch initiatives
we are connecting the initiatives and scaling up successful concepts fast around the world. digital factory scale ups RIF (15 investments) data driven sales workforce scheduling external innovations tech & touch local innovations via M&A Sales Navigator Capabilities Horton (US) (eg. SEO) global conc
Slide 13: Experiment, focus, proof, scale up
experiment, focus, proof, scale up validate business cases on hard data & leading KPIs problem/solution fit product/market fit scale addressable market achievements so far growth potential group P&L impact tools pilot MVP roll-out © Randstad | 13
Slide 14: Conclusion
conclusion • integrated tech approach is crucial • higher barriers to entry, in favour of big players • riding the learning curve: experiment, focus, proof, scale up • large addressable market size identified ambition gain further market share driven by our differentiating tech & touch strategy © Ra
Slide 15: Agenda
agenda 10.30 – 11.00 financial strategy & trading update 14.00 – 15.00 data driven sales NL & France Robert Jan van de Kraats Dominique Hermans & Sébastien Hélaine 11.00 – 11.30 Q&A 15.00 – 15.15 coffee break 11.30 – 11.45 coffee break 15.15 – 16.00 workforce scheduling François Béharel 11.45 – 12.1
Slide 16: Human forward
eaesle human forward. WM
Slide 17: Financial strategy & trading update
financial strategy & trading update robert jan van de kraats, CFO london | capital markets day | november 21 2017
Slide 18: Agenda
agenda current trading & outlook 21 revenue growth accelerating versus peers 22 perm: a major opportunity 24 cost savings update: consistent benchmarking 26 EBITA margin progression & outlook 27 M&A update & outlook 29 FCF stability through the cycle 31 capital allocation priorities 33 conclusion 34
Slide 19: Current trading & outlook
current trading outlook • revenue growth in October in line with • there will be an adverse 2.4% Q3 (+9%) comparison in Q4 • volume trend in November so far appears • gross margin in Q4 is expected to be to be in line with October stable sequentially • robust growth in Europe continued, • for Q4, op
Slide 20: Topline growth accelerating vs. peers
topline growth accelerating vs. peers driven by improving macro in europe and integrated tech organic revenue growth by quarter, 2012-2017 10% 8% 6% 4% 2% 0% 2012 2013 2014 2015 2016 2017 -2% -4% Randstad Peer 1 Peer 2 -6% • france still c.15% below 2007 peak -8% • penetration rate in iberia (0.6%)
Slide 21: Further improving relative performance
further improving relative performance france organic revenue growth pwd italy organic revenue growth pwd 40% 16% 12% 30% 8% 20% 4% 10% 0% 0% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 -10% 2015 2016 2017 2015 2016 2017 -20% Randstad Peer 1 Peer 2 Randstad Peer 1 Peer 2 north america organic re
Slide 22: Perm: a major opportunity
perm: a major opportunity perm as % of GP, FY 2016 2017 YTD perm growth 1 avg. growth competitors 7% 90% 2 80% 9% 70% China 60% • In 2017 YTD perm made up 10% of 50% group GP (~12% in 2007) • We have the potential to double in 40% established markets AUS UK 30% • Strategic focus paying off as we out
Slide 23: Perm offers ample growth potential
perm offers ample growth potential perm growth 2017 YTD 39% 36% 40% 24% 30% 16% 20% 10% 9% 5% 3% 4% 0% France Netherlands Germany Belgium % of perm in country gross profit perm organic growth © Randstad | 23
Slide 24: Total upcoming cost savings 2018/19: €90-100M
total upcoming cost savings 2018/19: € 90-100M © Randstad | 24
Slide 25: Adjusted EBITA margin progression in 2017
adjusted EBITA margin progression in 2017: a balancing act adjusted for digital investments & working day effect 6% 5% 5,4% 4% 5,0% 5,1% 4,9% 4,7% 4,5% 3,8% 3,8% 3,6% 3% Q1 2016 Q1 2017 Q1 2017 Q2 2016 Q2 2017 Q2 2017 Q3 2016 Q3 2017 Q3 2017 (reported) (adjusted) (reported) (adjusted) (reported) (ad
Slide 26: EBITA margin outlook 2017/18
ebita margin outlook 2017/18 topline business topline growth growth mix digital opex digital • consensus + 4.5% • ongoing investments sales growth 2018 • early signs of additional • expected market sales growth outperformance business mix opex • focus on perm/profs/inhouse/SME; • € 90-100M annual pr
Slide 27: Acquired companies well on track
acquired companies well on track aim to be top 3 in strengthen Professionals accelerate progress towards local Staffing business digital strategy EVA after 3 years market in line ahead ahead underway ahead underway © randstad | 27
Slide 28: M&A outlook 2018 and beyond
M&A outlook 2018 and beyond tech & touch strategy professionals staffing • mainly organic through • acceleration through Ausy • top position in most relevant digital factory (organic & bolt-on M&A) markets, ex-Japan, UK & Australia • repair Monster & global • over time: small to mid- • no priority r
Slide 29: FCF stability over the past 10 years
FCF stability over the past 10 years 800 3,0 700 2,5 600 2,0 500 400 1,5 300 1,0 200 0,5 100 0 0,0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 FCF ex-CICE (€ M) CICE (€ M) leverage ratio © Randstad | 29
Slide 30: FCF outlook is consistent in various macro scenarios
FCF outlook is consistent in various macro scenarios working capital movement is counter cyclical 3.000 FCF outlook 2017 – 2020 tested against 6 macro scenarios: bandwidth is only 20% 2.500 for illustrative purposes, graph not to scale 2.000 1.500 1.000 500 - 1 2017 FCF cumulative 2 3 4 5 6 to 2020
Slide 31: Capital allocation priorities & dividend policy
capital allocation priorities & dividend policy old new 1. investments in organic growth sound FCF outlook 2. M&A activity investments in organic growth including digital 3. dividend maintain cash dividend policy with payout 40 – 50% 4. share buybacks* when leverage ratio < 1.0 -> selective M&A opti
Slide 32: Long term value creation through tech & touch strategy
long term value creation through tech & touch strategy optimizing EVA by steering on key levers © Randstad | 32
Slide 33: Questions & answers
questions TW & answers