Slide 1: 4th quarter & annual results 2010
4th quarter & annual results 2010 Strong final quarter of the year; revenue up 22% and EBITA up 52% Ben Noteboom, CEO Robert-Jan van de Kraats, CFO Randstad Holding nv February 17, 2011
Slide 2: Disclaimer & definitions
disclaimer & definitions 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
Slide 3: Agenda
agenda • performance • financial results & outlook • Q&A 3 February 17, 2011 fourth quarter & annual results 2010
Slide 4: Performance
performance Ben Noteboom 4 February 17, 2011 fourth quarter & annual results 2010
Slide 5: Strong market trends persist
strong market trends persist quarterly market growth (YoY) • market growth on average strong despite more difficult comparables • continued high growth in industrial segments 2008 2009 2010 • steady improvement in lagging markets such as NL quarterly Randstad growth* (YoY) and UK • administrative an
Slide 6: Q4 2010: strong final quarter of the year
Q4 2010: strong final quarter of the year • revenue amounted to € 3,891 million (+17% YoY organically) - organic growth per working day was 17% both in Oct/Nov and 16% in December - growth in inhouse strong at +51%, while professionals gradually strengthened to 9% YoY - growth in staffing (13%) unch
Slide 7: FY 2010: good performance in a strong year
FY 2010: good performance in a strong year • strong growth trend during the year - from a growth rate* of -1% in Q1 to +17% in Q4 - market share gains in almost all regions - gap with the market in France closed in September and outperforming in Q4 - NL behind market • EBITA up 61% to € 510 million
Slide 8: EBITA breakdown by geography spread significantly improved
EBITA breakdown by geography spread significantly improved 2010 2009 NL 2% 11% 6% -1% NL 4% France 3% 2% 34% France Germany 3% 1% Germany Belgium/Lux. 15% 11% Belgium/Lux. UK UK 55% Iberia Iberia ROE 14% 19% ROE N-America 16% N-America 3% ROW ROW 8 February 17, 2011 fourth quarter & annual results 2
Slide 9: The Netherlands: gradually improving
the Netherlands: gradually improving • organic revenue 4% (vs 0% in Q3 2010) revenue & EBITA margin - market growth improved in Q4 - late cyclical due to service oriented economy - growth driven by industrial & technical segment - Randstad moving closer to market - for Tempo-Team it takes a bit long
Slide 10: France: outperformance in Q4
France: outperformance in Q4 • organic revenue +21% in Q4 2010 revenue & EBITA margin - outperforming the market - growth broad based; manufacturing main driver - permanent placement up 18% (YoY) - growth professionals segment strenghtened - ongoing increase new clients & transfers within Inhouse •
Slide 11: Germany: continued strong performance
Germany: continued strong performance • organic revenue +32% in Q4 2010 revenue & EBITA margin - easing growth trend throughout the quarter due to tougher comparables • improving performance professionals - continued strong growth in IT - engineering somewhat improved, aerospace still difficult; tog
Slide 12: UK: continued growth despite challenging conditions
UK: continued growth despite challenging conditions • organic revenue +9% in Q4 2010 revenue & EBITA margin - inhouse continued to gain market share, showing strong growth during the quarter • professionals performance still varies across segments - gross profit growth in Engineering, Finance, ICT,
Slide 13: North America: improving business mix
North America: improving business mix • organic revenue +21% in Q4 2010 revenue & EBITA margin - continued outperformance - US staffing, US professionals & Canada grew at the same pace, implying an improvement in the business mix - perm fees up 34% organically (YoY) • continued good cost management
Slide 14: Revenue development per industry segment
revenue development per industry segment Segments USA Germany France Netherlands Manufacturing ++ ++ ++ ++ Automotive ++ ++ ++ ++ Food ++ ++ ++ - Transport ++ ++ + + Business services ++ ++ ++ + Financial services ++ + ++ - Public administration - ++ ++ -- Health & social work ++ ++ + -- 14 February
Slide 15: Execution of the field steering concept
execution of the field steering concept Randstad excl. FujiStaff 40% 160 outlets FTE 30% 140 revenue 20% 120 GP/FTE 10% 100 0% 80 -10% 60 -20% 40 -30% 20 -40% - Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (YoY growth) 2009 2010 (index productivity) Q1 2009 = 100 • field steering enables us to quickly adapt capacity whe
Slide 16: Financial results & outlook
financial results & outlook Robert-Jan van de Kraats 16 February 17, 2011 fourth quarter & annual results 2010
Slide 17: Q4 2010: financial key points (1)
Q4 2010: financial key points (1) • revenues up 17% organically in Q4 • gross profit up 15% organically YoY • operating expenses up 10% organically YoY • productivity based on GP/FTE enhanced by 15% YoY • effective tax rate* amounted to 29% in Q4 2010 - one-off upward revaluation of deferred tax ass
Slide 18: Q4 2010: financial key points (2)
Q4 2010: financial key points (2) • free cash flow in Q4 2010 € 203 million vs. € 168 million in Q4 2009 - underlying improvement based on lower DSO and higher operating result • net debt amounted to € 899 million in Q4 2010 vs. € 1.015 million LY - leverage ratio at the end of Q4 2010 is 1.5 (vs. 1
Slide 19: Income statement Q4 2010
income statement Q4 2010 € million Q4 2010 Q4 2009 % change % organic revenue 3,891 3,180 22% 17% gross profit 737 606 22% 15% gross margin 18.9% 19.1% operating expenses* 575 500 15% 10% opex as % of revenue 14.8% 15.7% underlying EBITA 161 106 52% 39% underlying EBITA margin 4.2% 3.3% one-offs -/-
Slide 20: Income statement FY 2010
income statement FY 2010 € million Q4 2010 Q4 2009 % change % organic revenue 14,179 12,400 14% 12% gross profit 2,659 2,414 10% 7% gross margin 18.8% 19.5% operating expenses* 2149 2098 2% 1% opex as % of revenue 15.2% 16.9% underlying EBITA 510 316 61% 39% underlying EBITA margin 3.6% 2.5% one-off
Slide 21: Gross margin Q4 2010
gross margin Q4 2010 gross margin development -/- 0.3 +0.1 -/- 0.2 +0.3 19.1 • commercial pressure on temp margins stabilized - geographical & segmental mix shifts and renewed contracts • perm fees increased by 20% organically (YoY) - perm fees are now 7.6% of gross profit (vs. 7.1% Q4 2009) • mix s
Slide 22: Consolidated balance sheet
consolidated balance sheet € million December 31, 2010 December 31, 2009 property, plant & equipment 156 151 intangible assets 3,162 3,158 deferred tax assets 520 465 financial assets & associates 76 83 current assets 3,125 2,601 total equity 2,852 2,493 non-current liabilities 1,689 1,865 current l
Slide 23: Consolidated cash flow statement
consolidated cash flow statement € million Q4 2010 Q4 2009 cash flow from operations before OWC 130 129 release of OWC 95 52 additions of PPE and software -/- 19 -/- 11 financial receivables - 1 held-to-maturity investments -/- 6 -/- 9 disposals of PPE 3 5 free cash flow 203 168 € million Q4 2010 fr
Slide 24: FY 2010: good performance in a strong year
FY 2010: good performance in a strong year • strong revenue growth • strong operating leverage - gross profit up 7% organically - OPEX up 1% organically - approximately 80% incremental conversion • moving average DSO from 58 days in Q4 2009 to 55 days in Q4 2010 • strong cash generation : FY free ca
Slide 25: Geographic performance 2010
geographic performance 2010 revenue EBITA margin € million 2010 2009 organic growth 2010 2009 the Netherlands 2,827 2,963 -4% 6.4% 6.8% France 3,067 2,692 15% 2.9% 0.4% Germany 1,729 1,321 31% 6.2% 4.2% Belgium/Lux 1,328 1,191 11% 4.7% 4.4% United Kingdom 802 753 3% 0.8% 0.8% Iberia 861 796 8% 2.1%
Slide 26: Randstad revenue development through the year
Randstad revenue development* through the year early movers in the recovery 50% Germany 40% • early moving regions confirm 30% US Professionals classical pattern of the recovery 20% US Staffing and 10% Inhouse • time gap narrowed Services 0% -10% • solid growth throughout the year -20% -30% Oct Dec
Slide 27: Leverage ratio within target range
leverage ratio within target range net debt & leverage ratio development 1200 3 net debt (€ m) leverage ratio (rhs) 1100 2.5 1000 2 900 strategic target 1.5 800 1 700 600 0.5 500 0 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 • net debt & leverage ratio significantly reduced in 2010 based on solid profit
Slide 28: Tax guidance changed
tax guidance changed expected tax rates (%) effective* cash tax rate tax rate (compared to the effective tax rate*) 2011 29-32 in line estimated cash tax rate is 2012-2014 31-37 in line excl. € 131 m. tax repayment driver effective* cash tax explanation impact tax rate rate growth operating companie
Slide 29: Dividend policy
dividend policy 1 • aiming at consistent dividend growth through the cycle • aiming at a floor in the dividend of € 1.25 objective • if earnings capacity and the financing policy allow for it • flexible pay out ratio • indicative range: minimum pay out 30% - maximum pay out 60% • dividend > € 1.25 i
Slide 30: Managing through the cycle
managing through the cycle growth phase decline phase stabilization phase growth phase • market share • market share • market share gains • market share gains gains gains • productivity levels • productivity mgt • productivity mgt • productivity mgt allow for growth, through unit through unit throug
Slide 31: Outlook
outlook • trends witnessed in Q4 have continued into January • organic revenue growth per working day +14% in January • inhouse & staffing continue to show robust growth • professionals gradually strenghtening • focus on field steering, copy-pasting of specialties, roll out of professionals concept
Slide 32: Change investor relations department
change investor relations department will leave the investor relations department as Bart Gianotten of 1 March, 2011, to be promoted within the organization maintains his position as investor relations officer Pascal Sluijter contact information: pascal.sluijter@randstadholding.com T +31 (0)20 569 5
Slide 33: Q&A
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services Q&A
Slide 34: Appendices
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 35: Debt facilities & repayment schedule
debt facilities & repayment schedule repayment schedule (excluding current borrowings) 135 ~720 285 105 135 • covenant; net debt/EBITDA* of max. 3.5 - at the end of Q4 2010 the net debt/EBITDA ratio was 1.5 • syndicated facility amounts to € 1,995 million * EBITDA; 12 months rolling back, before int
Slide 36: Financing: fixed vs. floating interest rates
financing: fixed vs. floating interest rates 10 year historical interest rates comparison 1M vs 5Y average fixed rate = 4.0% average floating rate = 3.0% December 2000 December 2010 • we use floating interest rates as a natural hedge - spread above Euribor of 50-115 bps 36 February 17, 2011 fourth q
Slide 37: Geographic performance Q4
geographic performance Q4 revenue EBITA margin € million Q4 2010 Q4 2009 organic growth Q4 2010 Q4 2009 the Netherlands 754 726 4% 6.8% 7.2% France 806 682 21% 2.9% 0.1% Germany 480 362 32% 7.5% 7.1% Belgium/Lux 358 307 17% 6.3% 5.1% United Kingdom 209 182 9% -2.0% 0.8% Iberia 231 213 9% 3.3% 4.1% O
Slide 38: Segment performance
segment performance € million Q4 2010 Q4 2009 organic growth revenue: staffing 2,597 2,220 13% inhouse services 628 374 51% professionals 667 586 9% total 3,891 3,180 17% € million 2010 2009 organic growth revenue: staffing 9,582 8,615 10% inhouse services 2,003 1,311 45% professionals 2,595 2,474 1
Slide 39: Revenue split Q4 2010
revenue split Q4 2010 geographical area sectors 39 February 17, 2011 fourth quarter & annual results 2010
Slide 40: Outlets by country
outlets* by country end of period Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 the Netherlands 733 739 725 726 754 France 905 896 928 966 988 Germany 503 475 450 433 428 Belgium/Lux 374 387 388 392 329 United Kingdom 289 297 300 289 292 Iberia 257 266 264 261 265 Other Europe 316 351 346 340 340 North Am
Slide 41: Corporate employees by country
corporate employees by country average Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 the Netherlands 5,280 5,300 5,210 5,260 5,610 France 3,920 3,940 3,870 3,870 4,000 Germany 2,890 2,740 2,430 2,370 2,320 Belgium/Lux. 2,130 2,150 2,030 2,020 2,050 United Kingdom 2,060 2,050 2,040 2,040 2,110 Iberia 1,450
Slide 42: Staffing employees by country
staffing employees by country averages Q4 2010 Q4 2009 the Netherlands 91,200 92,200 France 90,900 79,500 Germany 56,200 42,000 Belgium/Lux. 46,700 41,100 United Kingdom 25,100 20,800 Iberia 54,000 52,300 Other Europe 38,000 29,400 North America 59,600 50,800 Rest of world 103,400 76,500 total 565,1