Slide 1: 4th quarter 2016 results
4th quarter 2016 results Improving momentum in Europe Jacques van den Broek, CEO Robert Jan van de Kraats, CFO Randstad Holding nv February 14, 2017
Slide 2: disclaimer & definitions
disclaimer & definitions Certain statements in this document concern prognoses about the future financial condition, risks, investment plans and the results of operations of Randstad Holding and its operating companies, as well as certain plans and objectives. Obviously, such prognoses involve risks
Slide 3: agenda
agenda performance financial results & outlook Q&A appendices
Slide 4: performance
performance 4 February 14th, 2017 fourth quarter results 2016
Slide 5: Q4 2016: improving momentum in Europe
Q4 2016: improving momentum in Europe Revenue of € 5,525 Topline growth accelerated Gross margin 20.0% (excl. million; organic in Europe and Rest of Monster: 18.8%, down growth +6.6%; gross the world, remained 10bp YoY); perm fees up profit up 5.5% positive in North America 4% Underlying EBITA of €
Slide 6: FY: strong topline finish of the year
FY : strong topline finish of the year € million Q4 ’16 Q4 ’15 % Org. FY ’16 FY ’15 % Org. revenue 5,525 4,995 + 7% 20,684 19,219 + 5% gross profit 1,106 943 + 6% 3,934 3,595 + 4% gross margin 20.0% 18.9% 19.0% 18.7% operating expenses* 838 699 + 4% 2,987 2,733 + 3% opex % 15.2% 14.0% 14.4% 14.2% EB
Slide 7: regional split: improving momentum in Europe in Q4
regional split: improving momentum in Europe in Q4 YoY Randstad growth development 15% 5% -5% -15% Group Europe North America Rest of World Europe grew 8% (vs. + 5% in Q3) North America grew 1% (vs. + 1% Q3) Rest of the world increased 10% (vs. + 8% in Q3) Group grew 7% (vs. + 4% in Q3) 7 February 1
Slide 8: North America: stable growth trends
North America: stable growth trends North America – historical organic growth 8% 8% revenue up 1% (Q3: + 1%) 6% 6% - Perm down 3% (Q3: 0%) 4% 4% 2% 2% US Staffing & Inhouse, revenue growth + 2% (Q3: + 2%) 0% Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 0% US Professionals, revenue down 4% EBITA % organic
Slide 9: the Netherlands: solid EBITA margin performance
the Netherlands: solid EBITA margin performance the Netherlands - historical organic growth 8% 10% revenue at + 2% (Q3: + 2%) 6% 8% - pricing pressure continues 6% 4% - SME growth outpacing large accounts 4% 2% 2% 0% 0% perm up 13% (Q3: + 26%) Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 EBITA % organic
Slide 10: France: accelerating topline growth
France: accelerating topline growth France - historical organic growth 8% 12% 10% 6% 8% revenue up 10% YoY (Q3: + 5%) 4% 6% 4% - combined Staffing & Inhouse at + 9% YoY 2% 2% - Professionals accelerated + 17% (Q3: 11%) 0% 0% Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 - perm grew 21%, fueled by Big Data
Slide 11: Germany: double-digit growth
Germany: double-digit growth Germany - historical organic growth 8% 12% 10% revenue growth + 10% YoY (Q3: + 5%) 6% 8% - SME outgrowing large clients 4% 6% 4% 2% 2% Staffing/Inhouse + 10%, Professionals 0% 0% + 11% Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 EBITA % organic growth % EBITA margin at 4.4%
Slide 12: Belgium: record profitability
Belgium: record profitability Belgium - historical organic growth 8% 8% revenue up 5% (Q3: + 5%) 6% 6% - Staffing/Inhouse up 5% (Q3: + 5%) 4% 4% 2% 2% 0% 0% EBITA margin at 7.6% vs. 6.5% LY -2% Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 -2% - higher release of social security accruals -4% EBITA % organ
Slide 13: Iberia: strong growth on higher margins
Iberia: strong growth on higher margins Iberia - historical organic growth 12% 12% 10% 10% Iberia revenue up 10% (Q3: + 6%) 8% 8% 6% 6% 4% 4% Spain 2% 2% 0% 0% - revenue growth at + 12% (Q3: + 6%) Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 - Staffing/Inhouse up 12% EBITA margin organic growth % - perm
Slide 14: UK: brexit impact continues to be limited
UK: brexit impact continues to be limited the UK - historical organic growth 6% 4% 4% 2% Q4 revenue up 2% (Q3: + 1%) 2% 0% - perm fees down -/- 9% (Q3: down 4%) 0% Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 -2% - CPE performing well -2% -4% -4% EBITA % organic sales growth EBITA margin at 2.1% vs. 3.6%
Slide 15: Other European countries: Italy outperforming
Other European countries: Italy outperforming overall revenue growth + 20% RoE - historical organic growth (Q3: + 10%) 8% 25% 20% Italy 6% 15% - organic revenue growth at 26% (Q3: + 15%) 4% 10% - Obiettivo Lavoro integration on track 2% 5% 0% 0% Switzerland Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 -
Slide 16: Rest of the world: growth picking up
Rest of the world: growth picking up RoW - historical organic growth overall revenue growth + 10% 8% 12% (Q3: + 8%) 6% 10% 8% 4% 6% Japan, growth at + 5% YoY (Q3: + 5%) 2% 4% - perm grew 8% 0% 2% - Careo performing well Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 EBITA % organic growth % Australia/New Z
Slide 17: Value components of Monster
Value components of Monster Short Term Short-Mid Term Mid-Long Term restructuring, reinvestment, return to growth accelerating corporate revenue/ new products/ tax fixing monster Randstad’s costs performance services/business synergies (reorg plan) tech & touch synergies decline models strategy *Mon
Slide 18: Why Monster? Strategic rationale
Why Monster? Strategic rationale Leverage the disruptive potential of HR technology and online marketplaces Build businesses that compete with traditional business models, while lifting Monster in the process Accelerate the digitization of our traditional business models Monster platform and tec
Slide 19: financial results & outlook
financial results & outlook 19 February 14th, 2017 fourth quarter results 2016
Slide 20: income statement Q4 2016
income statement Q4 2016 € million Q4 ’16 Q4 ’15 % FY ’16 FY ’15 % Org. Org. revenue 5,525 4,995 +7% 20,684 19,219 +5% gross profit 1,106 943 +6% 3,934 3,595 +4% gross margin 20.0% 18.9% 19.0% 18.7% operating expenses* 838 699 +4% 2,987 2,733 +3% opex margin 15.2% 14.0% 14.4% 14.2% EBITA* 268 245 +4
Slide 21: performance by revenue category
performance by revenue category Staffing Q4 Q4 *% FY FY *% in € M 2016 2015 organic 2016 2015 organic revenue 3,265 2,898 5% 12,065 11,186 3% EBITA 162 153 -/- 4% 567 515 0% EBITA margin 5.0% 5.3% 4.7% 4.6% Inhouse Q4 Q4 *% FY FY *% Services 2016 2015 organic 2016 2015 organic in € M revenue 1,254 1
Slide 22: Q4 gross margin bridge
Q4 gross margin bridge temp margin -/- 40bp impact perm fees grew 4% YoY organically HRS/others added 150bp including the effect of Monster 22 February 14th, 2017 fourth quarter results 2016
Slide 23: operating expenses bridge
operating expenses bridge OPEX increased € 24M organically (sequentially) Unfavorable sequential FX impact € 5M M&A relates to acquisition of Monster 23 February 14th, 2017 fourth quarter results 2016
Slide 24: net debt at € 793M
net debt at € 793M leverage ratio at 0.8 € million Q4, 2016 Q4, 2015 goodwill and acquisition-related intangible assets 3,286 2,603 operating working capital (OWC) 712 621 net tax assets 480 517 all other assets and liabilities* 456 293 invested capital 4,934 4,035 total equity 4,141 3,862 net debt
Slide 25: Q4'16 free cash flow
Q4’16 free cash flow € million Q4 ’16 Q4 ’15 FY ’16 FY ’15 EBITDA 252 250 966 897 change in OWC 37 99 -/- 170 -/- 122 income taxes -/- 30 16 -/- 160 -/- 105 provisions & employee benefit obl. 4 -/- 11 - -/- 32 net capital expenditures -/- 32 -/- 21 -/- 94 -/- 63 other items -/- 17 -/- 14 -/- 77 -/-
Slide 26: outlook
outlook organic revenue growth was 6.6% in Q4 Geo Exit Rate -January growth was up 5%-6% NAM -Q1 comparison base is 1.6% easier -Volumes in early February indicate a continuation of January trend NL FR gross margin in Q1 is expected to slightly decline YoY (on GER an organic basis)* BEL for Q1 we ex
Slide 27: dividend proposal: a record high
dividend proposal: a record high proposed dividend payment over 2016 - payment of € 1.89 per ordinary share (+ 13% YoY) - payout of 50% of adjusted net profit, reflecting strong financial position - full cash dividend 2.00 1.80 Dividend (Cents per share) 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00
Slide 28: proposal 2016 dividend and fine-tuned dividend policy
proposal 2016 dividend and fine-tuned dividend policy amended dividend policy 2017: payout of 40-50% of adjusted EPS leverage ratio < 1.0x: all-cash dividend leverage ratio between 1.0x – 2.0x: optional dividend leverage ratio between 2.0x – 2.5x: optional dividend with premium on stock divide
Slide 29: Q4 2016: improving momentum in Europe
Q4 2016: improving momentum in Europe Revenue of € 5,525 Topline growth accelerated Gross margin 20.0% (excl. million; organic in Europe and Rest of Monster: 18.8%, down growth +6.6%; gross the world, remained 10bp YoY); perm fees up profit up 5.5% positive in North America 4% Underlying EBITA of €
Slide 30: appendices
appendices February 14th, 2017 fourth quarter results 2016
Slide 31: outlets* by region
outlets* by region end of period Q4 2016 Q3 2016 Q2 2016 Q1 2016 Q4 2015 North America 1,149 1,134 1,135 1,129 1,119 the Netherlands 640 655 649 661 644 France 682 680 681 700 728 Germany 557 565 558 546 550 Belgium & Luxembourg 310 308 303 310 303 Iberia 339 339 332 331 306 United Kingdom 129 132 1
Slide 32: corporate staff by region
corporate staff by region average Q4 2016 Q3 2016 Q2 2016 Q1 2016 Q4 2015 North America 6,660 6,530 6,490 6,440 6,610 the Netherlands 4,290 4,380 4,320 4,270 4,200 France 3,650 3,580 3,530 3,500 3,520 Germany 2,710 2,700 2,640 2,600 2,600 Belgium & Luxembourg 1,990 2,010 1,900 1,840 1,890 Iberia 1,9
Slide 33: staffing employees by region
staffing employees by region average Q4 2016 Q4 2015 North America 116,600 118,600 the Netherlands 85,800 80,900 France 79,700 77,800 Germany 49,200 47,200 Belgium & Luxembourg 44,100 42,900 Iberia 66,300 63,500 United Kingdom 14,800 15,500 Other European Countries 95,800 62,600 Rest of the world 11