Randstad Nv · EURONEXT:RAND
Randstad Nv — Q1 2009 Earnings Presentation
36 slides from Randstad Nv's earnings presentation, Apr 24, 2009
Slide 1: First quarter results 2009
first quarter results 2009 very difficult quarter; strong cost and debt management whilst maintaining commercial strength Robert-Jan van de Kraats, CFO Randstad Holding nv April 24, 2009
Slide 2: Disclaimer
disclaimer Certain statements in this document comprise forecasts on Randstad Holding’s future financial condition and results from operations and certain plans and goals. By their nature, such forecasts generate risk and uncertainty because they concern events in the future and depend on circumstan
Slide 3: Structure of results presentation
structure of results presentation • Q1 2009 includes the acquisition of Vedior - consolidation as per 16 May, 2008 • from revenue up until EBITA: focus on the pro forma figures - best reflection of underlying operational performance - adjusted for integration charges and one-offs - with Vedior inclu
Slide 4: Agenda
agenda • performance • progress Vedior merger • financial results & outlook • summary 4 April 24, 2009 first quarter results 2009
Slide 5: Performance
performance 5 April 24, 2009 first quarter results 2009
Slide 6: Market development
market development market growth figures YoY 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% -30% -35% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2007 2008 2009 France the Netherlands Germany Belgium UK N-America 6 April 24, 2009 first quarter results 2009
Slide 7: Q1 2009: difficult market circumstances
Q1 2009: difficult market circumstances • current turmoil unfortunately negatively affecting all stakeholders • quick drop in revenue across all major regions and across all segments - revenue declined 28% YoY to € 3,056 million; trend deteriorating through the quarter - most difficult quarter in la
Slide 8: France: urgent need for approval social plan
France: urgent need for approval social plan • organic revenue -/-33% in Q1 2009 revenue and EBITA margin (vs. -/-19% in Q4 2008) 1100 5,0% - automotive most severely hit 4,0% • pricing rational 1000 3,0% • successful integration 900 million € 2,0% • EBITA margin -/-0.1% versus 3.4% LY 800 - profess
Slide 9: The Netherlands: market holding up relatively well, further cost reduction planned
the Netherlands: market holding up relatively well, further cost reduction planned • organic revenue -/-16% in Q1 2009 (vs. -/-8% in Q4 2008) revenue and EBITA margin 1100 9,5% - trend deteriorating through the quarter - Randstad NL at market, Tempo-Team above 8,5% 1000 • some gross margin pressure
Slide 10: Germany: strong market contraction in industry based economy
Germany: strong market contraction in industry based economy • organic revenue down 30% in Q1 2009 revenue and EBITA margin (vs. -/-14% in Q4 2008) 550 10,0% - no signs of improvement 500 • idle time increased somewhat YoY 8,0% 450 - is at a well manageable level 6,0% million € 400 • aligning costs
Slide 11: UK: education and healthcare support overall performance
UK: education and healthcare support overall performance • organic revenue -/-23% in Q1 2009 revenue and EBITA margin (vs. -/-16% in Q4 2008) 350 5,0% - weakening through quarter - staffing/inhouse segment weakest 300 4,0% • cost measures gained speed million € 250 3,0% • EBITA margin 2.3% from 4.8%
Slide 12: North America: focus on quick response to continued market decline
North America: focus on quick response to continued market decline • organic revenue -/-32% in Q1 2009 revenue and EBITA margin (vs. -/-18% in Q4 2008) 550 5,0% - US staffing & inhouse; rate of decline stable 500 4,0% through quarter at approx. -/-40% - US professionals and Canada worsening 3,0% 450
Slide 13: Financial results & outlook
financial results & outlook 13 April 24, 2009 first quarter results 2009
Slide 14: Q1 2009: financial highlights
Q1 2009: financial highlights • organic revenue decline of 27% YoY - disposals had an impact of -/-0.7% • gross margin impacted most by decline perm fees (-/-44% YoY) - firm action on idle time management • underlying operating expenses adjusted downwards by 19% YoY - 15% organic decline in outlets
Slide 15: Market share development Q1 2009
market share development Q1 2009 Q1 market growth* Randstad Group variance France -/- 31% -/- 33% -/- 2% the Netherlands -/- 18% -/- 16% 2% Germany -/- 30% -/- 30% 0% Belgium -/- 21% -/- 25% -/- 4% UK -/- 26% -/- 23% 3% Italy -/- 36% -/- 41% -/- 5% Spain -/- 50% -/- 45% 5% United States** -/- 23% -/
Slide 16: Income statement Q1 2009
income statement Q1 2009 € million Q1 2009 Q1 2008 % change % organic revenue 3,056 4,221 -/-28% -/- 27% gross profit 614 874 -/-30% -/- 29% gross margin 20.1% 20.7% operating expenses* 565 694 -/-19% -/-18% opex as % of revenue 18.5% 16.4% EBITA** 49 180 -/-73% -/-72% EBITA margin 1.6% 4.3% income
Slide 17: Gross margin development Q1 2009
gross margin development Q1 2009 21 20,5 -/- 0.3 + 0.3 -/- 0.6 20 +0.3 20.7 -/- 0.3 + 0.3 20.1 19,5 19 Q1 2008 temp perm fees Yacht HRS/other temp mix Q1 2009 margin 20.9 • perm fees declined 44% organically (YoY) - perm fees are 9.6% of gross profit vs. 12.7% LY • accelerated termination of contrac
Slide 18: Development in corp. employees & outlets
development* in corp. employees & outlets indexed organic development in corporate FTEs dec-07 110 index: September 2007 = 100 dec-08 105 mar-09 100 95 90 85 80 75 70 Group FR NL GE BE UK US indexed organic development in outlets index: September 2007 = 100 dec-07 115 110 dec-08 105 mar-09 100 95 90
Slide 19: Restructuring
restructuring charges Q4 2008 Q1 2009 Q2 2009 (€* million) expected France - 25.4 - the Netherlands 12.3 15.6 - Germany 6.4 1.0 - Belgium 3.6 - - Italy - 5.0 - Spain 1.7 3.5 - Japan 3.5 - - United States 3.5 2.7 - Australia 0.5 total 31.0 53.7 limited savings Q4 2008 Q1 2009 Q2 2009 (€* million) exp
Slide 20: Consolidated cash flow statement
consolidated cash flow statement € million Q1 2009 Q1 2008 cash flow from operations before OWC 32 107 release / (usage) of OWC 204 20 additions of PPE -/-6 -/-8 additions of software -/-7 -/-9 financial receivables 2 0 disposals of PPE 2 1 free cash flow 228 111 € million Q1 2009 free cash flow 228
Slide 21: Tracking synergies / integration costs
tracking synergies / integration costs synergies and integration costs (€ million) ~ 40 12 months forward rolling cash tax 25 realized since Q2 2008 savings 40 benefits target cost 80 42 synergies 90 integration costs - non 6 cash 10 costs integration 64 costs - cash 70 21 April 24, 2009 first quart
Slide 22: Progress on re-branding general staffing
progress on re-branding general staffing geography former brand new brand Europe • Vediorbis France • Dactylo NL • Select UK • Vedior Germany • Select Spain • Vedior Spain • Select Cyprus • Vedior Italy • Vedior Switzerland • Vedior Poland (various brands) • Select Greece • AYS Czech Republic • Vedi
Slide 23: Debt facilities & repayment schedule
debt facilities & repayment schedule repayment schedule 1800 revolver term cash mar 09 1600 1400 1200 € x million 1000 135 800 ~1.0 600 billion 400 585 200 135 135 135 135 135 135 135 0 - 09 -1 0 - 10 -1 1 - 11 -1 2 - 12 -1 3 09 n ov ay n ov ay n ov ay n ov ay ar m m m m m h c as • no refinancing be
Slide 24: Outlook
outlook • organic revenue per working day -/-31% in March 2009 • markets remain challenging • pricing mostly rational, perm fees declining • reducing costs at full speed - expect operating expenses to be around €540 million in Q2 2009 • no significant restructuring charges expected for Q2 2009 • fas
Slide 25: Summary
summary • market share and high density important to manage through the cycle - profitability in the Netherlands and Belgium holding up relatively well - France dependent on acceptance of social plan - confirmation of the drivers behind Vedior acquisition • integration process well on track • solid
Slide 26: Appendices
™c randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 27: Randstad & Vedior 20XX
significant synergies & cross/up selling …. opportunities DSO upside specialties potential professionals Randstad & Vedior 20XX inhouse efficiency EVA € 90 million accretive branches 2010 head office tax € 40 million Vedior 2008 Randstad & strong concepts best people excellent execution superior bra
Slide 28: Geographic performance Q1 2009
geographic performance Q1 2009 € million Q1 2009 Q1 2008 organic growth revenue: France 636 954 -/-33% the Netherlands 771 921 -/-16% Germany 318 450 -/-30% Belgium/Luxembourg 286 382 -/-25% United Kingdom 200 310 -/-23% Iberia 180 300 -/-35% North America 365 483 -/-32% EBITA margin: France -/-0.1%
Slide 29: Segment performance Q1 2009
segment performance Q1 2009 € million Q1 2009 Q1 2008 organic growth revenue: staffing 2,071 2,920 -/-29% inhouse services 294 458 -/-36% professionals 692 844 -/-14% 29 April 24, 2009 first quarter results 2009
Slide 30: Consolidated balance sheet
consolidated balance sheet € million March 31, 2009 March 31, 2008 property, plant & equipment 180 130 intangible assets 3,306 432 deferred tax assets 474 269 other assets 3,145 2,442 group equity 2,405 1,247 non-current liabilities 2,466 705 current liabilities 2,234 1,321 balance sheet total 7,105
Slide 31: Revenue split Q1 2009
revenue split Q1 2009 geographies segments 5% 12% 23% 25% 5% 6% 10% 67% 7% 21% 9% 10% NL France Germany staffing Belgium/Lux. UK Iberia inhouse ROE N-America ROW professionals 31 April 24, 2009 first quarter results 2009
Slide 32: Outlets by country
outlets¹ by country end of period March 31, 2008 March 31, 2007 France 1,060 1,127 the Netherlands 830 1,146 Germany 493 572 Belgium/Lux 342 393 United Kingdom 368 403 Iberia 282 410 Other Europe 366 463 North America 563 664 Rest of world 368 366 total 4,672 5,544 1) branches and inhouse locations
Slide 33: Staffing employees by country
staffing employees by country averages Q1 Q1 2009 Q1 2008 France 73,400 116,300 the Netherlands 96,400 121,500 Germany 34,800 54,000 Belgium/Lux. 38,200 45,400 United Kingdom 21,200 28,700 Iberia 44,000 69,900 Other Europe 27,300 40,500 North America 40,800 60,900 Rest of world 76,000 76,200 total 4
Slide 34: Corporate employees by country
corporate employees by country average Q1 2009 Q1 2008 France 4,570 5,000 the Netherlands 6,780 7,880 Germany 2,710 3,340 Belgium/Lux. 2,140 2,500 United Kingdom 2,710 3,130 Iberia 1,690 2,500 Other Europe 1,910 2,240 North America 3,530 4,300 Rest of world 4,340 4,580 Holding 160 270 total 30,540 3
Slide 35: 2000-2003 downturn statistics
2000-2003 downturn statistics revenue variance 2000 2001 2002 2003 total 00-03 comments (%) NL -3 -5 -7 -4 -19 gradual decline Yacht -5 -14 -8 -27 more pronounced Belgium -3 -2 -5 little decline Germany -15 -15 one big drop North America -16 -2 -2 -20 pronounced decline Total Group -6 -6 -3 -15 grad
Slide 36: Randstad revenue growth: industry development
Randstad revenue growth: industry development revenue development within the largest industries of Randstad’s operating companies revenue growth (YTD) better than average worse than average France construction, food metal, chemical Randstad NL government, finance, transport retail, metal Germany fin