Slide 1: 2nd quarter results 2009
2nd quarter results 2009 organic revenue decline stable through the quarter (-31%) operating costs 24% lower than Q2 2008 Ben Noteboom, CEO Robert-Jan van de Kraats, CFO Randstad Holding nv July 29, 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 presentation
structure of presentation • Q2 2009 results include the quarterly consolidated figures 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 -
Slide 4: Agenda
agenda • performance • financial results & outlook • summary 4 July 29, 2009 second quarter results 2009
Slide 5: Performance
performance 5 July 29, 2009 second quarter results 2009
Slide 6: Sustainability: flexibility: better employment for everyone
flexibility: better employment for everyone* Jetta Klijnsma, State Secretary of Social Affairs & Employment: close adaptation to activity “What we really need right fluctuation now, is flexibility. This is the moment for the sustainability & creation of staffing industry to profile itself. productiv
Slide 7: Revenue development
revenue development 30% market growth figures YoY 20% 10% • in previous quarters 0% market growth worsened -10% month by month -20% • in Q2 2009 the rate of -30% decline showed some -40% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 stability in most markets 2007 2008 2009 NL France Germany Belgium UK N-America 0% Ran
Slide 8: Q2 2009: organic revenue decline stable through quarter (-31%); operating costs 24% lower
Q2 2009: organic revenue decline stable through quarter (-31%); operating costs 24% lower • revenue amounted to € 2,987 (-33% YoY) - revenue per working day -31% YoY organically - US staffing & inhouse as well as our main European markets show some stabilization - professionals is still shrinking •
Slide 9: Integration successfully completed
integration successfully completed other DSO upside potential specialties professionals Randstad & Vedior 20XX inhouse Q2 2009 efficiency branches € 100 million realized head office tax € 40 million Vedior 2008 Randstad & 9 July 29, 2009 second quarter results 2009
Slide 10: Achievements so far
achievements so far head office branches efficiency • head office closures in: • integration completed in: • rebranding of 106 brands - NL - Netherlands worldwide to a Randstad - UK Randstad & Dactylo brand - FR Tempo-Team & Vedior - France Randstad & Vediorbis • all brands introduced to • implement
Slide 11: Achievements so far
achievements so far inhouse/IAM professionals specialties DSO • transfer process • Australia: • all Randstad • currently of former Vedior Select and 20 other specialties introduced implementing clients to inhouse brands rebranded to in France (copy the cash collection just started Randstad & paste s
Slide 12: Achievements so far
achievements so far strong concepts best people - staffing integration well on track - talent review in place - professionals best practices defined - global People Survey - further roll-out inhouse concept - share incentive programs aligned - management development system in place excellent executi
Slide 13: The Netherlands: good profitability in declining market
the Netherlands: good profitability in declining market • organic revenue p/wd* -23% in Q2 2009 - service oriented economy moves later in cycle revenue and EBITA margin 1000 9,5% - Randstad NL at market, Tempo-Team above market 8,5% • gross margins somewhat under pressure 900 - pressure on temp marg
Slide 14: France: approval of social plan needed to adjust organization
France: approval of social plan needed to adjust organization • organic revenue p/wd -36% in Q2 2009 - general staffing and inhouse stabilized at a revenue and EBITA margin very low level 1100 5,0% - healthcare and engineering outperformers 1000 4,0% • pricing remains rational 3,0% 900 million € • E
Slide 15: Germany: continued focus on productivity
Germany: continued focus on productivity • organic revenue p/wd -38% in Q2 2009 - rate of decline stabilizing revenue and EBITA margin 550 10,0% • some pressure on gross margin - competitive pricing 500 8,0% - idle time increasing but well manageable 450 6,0% million € • operating expenses 29% lower
Slide 16: UK: late cycle movement in professionals
UK: late cycle movement in professionals • organic revenue p/wd -29% in Q2 2009 - rate of decline in staffing/inhouse easing revenue and EBITA margin - professionals segment continues to weaken 350 5,0% - healthcare and education still best performers 4,0% 300 • further cost reduction planned 3,0% m
Slide 17: North America: improvement in staffing, not in professionals
North America: improvement in staffing, not in professionals • organic revenue p/wd -33% in Q2 2009 - US staffing & inhouse; revenue trend revenue and EBITA margin improving through the quarter 500 5,0% - US professionals and Canada worsening 450 4,0% through the quarter 3,0% 400 • gross margin stil
Slide 18: Market share development Q2 2009
market share development Q2 2009 Q2 market growth* Randstad Group variance Q2 variance Q1 Spain -47% -44% 3% 5% UK -32% -29% 3% 3% the Netherlands -24% -23% 1% 2% Germany -40% -38% 2% 0% France -34% -36% -2% -2% Belgium -27% -28% -1% -4% United States** -32% -33% -1% -9% Italy -43% -50% -7% -5% * no
Slide 19: Randstad revenue growth: industry development
Randstad revenue growth: industry development revenue development within the largest industries of Randstad’s operating companies revenue growth better than average worse than average (YTD) Randstad NL public admin, food, communications, manufacturing, transport, financial services, health & social
Slide 20: Financial results & outlook
financial results & outlook 20 July 29, 2009 second quarter results 2009
Slide 21: Q2 2009: financial highlights
Q2 2009: financial highlights • revenue trend stabilizing, gross margin still in decline • gross margin mostly impacted by decline in temp margin & perm fees • operating expenses € 543.7 million, underlying € 531.1 million - integration costs € 5.0 million, - restructuring charges € 7.6 million, mai
Slide 22: Income statement Q2 2009
income statement Q2 2009 € million Q2 2009 Q2 2008 % change % organic revenue 2,987 4,440 -33% -33% gross profit 598 934 -36% -36% gross margin 20.0% 21.0% operating expenses* 531 700 -24% -24% opex as % of revenue 17.8% 15.8% EBITA** 67 234 -71% -71% EBITA margin 2.2% 5.3% income before taxes 1 132
Slide 23: Gross margin development Q2 2009
gross margin development Q2 2009 21 -/- 0.6 20,5 20 21.0 -/- 1.0 +0.2 19,5 + 0.4 20.0 19 Q2 2008 temp perm fees HRS/other temp mix Q2 2009 margin 20.9 • as expected, increasing pressure on temp margins • perm fees declined 56% organically (YoY) - perm fees are now 8.3% of gross profit vs. 12.6% LY •
Slide 24: Development in corporate employees & outlets
development* in corp. employees & outlets indexed organic development in corporate FTEs dec-07 index: September 2007 = 100 jun-08 120 mar-09 jun-09 110 100 90 80 70 60 Group FR NL GE BE UK N-America indexed organic development in outlets dec-07 120 index: September 2007 = 100 jun-08 mar-09 110 jun-0
Slide 25: Unit steering model (USM) in practice
unit steering model (USM) in practice 20% Randstad: organic growth development (YoY) 10% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 -10% 2007 2008 2009 -20% corporate employees -30% outlets -40% revenue • in the previous cycle, without USM, we invested too long and we cut too deep in several markets • this cy
Slide 26: Group productivity development
group productivity development 120 employees working/corporate FTE 110 1998 index = 100 100 90 some 30% more upside compared to 80 the peak in 1998 70 60 50 1998 2002 2006 2009 Group NL GE US staffing 26 July 29, 2009 second quarter results 2009
Slide 27: Restructuring
restructuring charges Q4 2008 Q1 2009 Q2 2009 Q3 2009 (€* million) expected France - 25.4 - the Netherlands 12.3 15.6 1.5 Germany 6.4 1.0 - Belgium 3.6 - - UK - - 2.8 Italy - 5.0 - Spain 1.7 3.5 -/-1.2 Australia - 0.5 2.8 Japan 3.5 - 0.8 North America 3.5 2.7 0.9 total 31.0 53.7 7.6 limited savings
Slide 28: Consolidated cash flow statement
consolidated cash flow statement € million Q2 2009 Q2 2008 cash flow from operations before OWC 58 116 release / (usage) of OWC -105 -136 additions of PPE -7 -13 additions of software -4 -7 financial receivables 0 0 dividend 0 9 disposals of PPE 2 8 free cash flow -56 -23 € million Q2 2009 free cash
Slide 29: Tracking synergies / integration costs
tracking synergies / integration costs synergies and integration costs (€ million) cash tax ~ 40 40 savings 40 benefits cost ~ 100 67 synergies 90 integration costs - non 6 cash 10 costs 12 months forward rolling integration realized since Q2 2008 69 costs - cash 70 target • more than expected benef
Slide 30: Tax issues
tax issues • positive cash flow effect of € 80 million in Q3 2009 - due to quarterly payment Dutch VAT instead of monthly payment • tax refund of € 150 million in Q3 2009 - based on fiscal loss in The Netherlands in 2008 due to revaluation of foreign subsidiaries - the amount will be paid back ultim
Slide 31: Tax example based on consensus FY 2009 EBITA
tax example based on consensus FY 2009 EBITA € million based on tax rate tax rate consensus FY 2009 16% 31% consensus EBITA 316 integration costs & one-offs -68 EBITA after one-offs 248 248 amortization -159 -159 financial charges & associates -60 -60 profit before tax 29 188 -159 effective tax rate
Slide 32: Debt facilities & repayment schedule
debt facilities & repayment schedule repayment schedule 1600 revolver term cash June 09 1400 1200 € x million 1000 135 800 600 ~1.0 400 billion 543 200 135 135 135 135 135 135 135 0 9 0 0 1 1 2 2 3 09 v -0 -1 v -1 -1 v -1 -1 v -1 -1 no ay no ay no ay no ay ne m m m m Ju sh ca • covenant; net debt/EB
Slide 33: Outlook
outlook • organic revenue per working day -31% in June 2009 • markets remain challenging, trend July in line with trend Q2 - difficult to forecast trend in holiday season because of changing comparisons • pricing remains somewhat under pressure • continuing to align cost base - expect operating expe
Slide 34: Summary
summary • challenging market showing some stabilization • operating costs and debt well under control • post-merger integration completed ahead of schedule and synergies higher than projected • all ingredients available to emerge stronger from the current trough • “shaping the world of work” 34 July
Slide 35: Appendices
™c randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 36: Geographic performance Q2 2009
geographic performance Q2 2009 € million Q2 2009 Q2 2008 organic growth revenue: the Netherlands 726 960 -24% France 660 1,059 -38% Germany 299 494 -40% Belgium/Luxembourg 282 396 -29% United Kingdom 190 307 -32% Iberia 188 303 -35% North America 352 470 -33% EBITA margin: the Netherlands 7.2% 9.0%
Slide 37: Segment performance Q2 2009
segment performance Q2 2009 € million Q2 2009 Q2 2008 organic growth revenue: staffing 2,050 3,086 -33% inhouse services 301 480 -38% professionals 636 874 -27% 37 July 29, 2009 second quarter results 2009
Slide 38: Consolidated balance sheet
consolidated balance sheet € million June 30, 2009 June 30, 2008 property, plant & equipment 168 201 intangible assets 3,313 4,006 deferred tax assets 481 353 other assets 3,039 4,536 group equity 2,449 2,445 non-current liabilities 2,456 3,626 current liabilities 2,096 3,025 balance sheet total 7,0
Slide 39: Revenue split Q2 2009
revenue split Q2 2009 geographies segments 5% 12% 21% 24% 5% 6% 10% 69% 6% 22% 10% 10% NL France Germany staffing Belgium/Lux. UK Iberia inhouse ROE N-America ROW professionals 39 July 29, 2009 second quarter results 2009
Slide 40: Outlets by country
outlets¹ by country end of period June 30, 2009 June 30, 2008 France 988 1,158 the Netherlands 786 1,140 Germany 436 583 Belgium/Lux 331 394 United Kingdom 301 409 Iberia 274 414 Other Europe 349 470 North America 513 657 Rest of world 354 377 total 4,332 5,602 1) branches and inhouse locations 40 J
Slide 41: Staffing employees by country
staffing employees by country averages Q2 2009 Q2 2008 France 76,400 124,500 the Netherlands 90,400 124,700 Germany 34,500 56,700 Belgium/Lux. 37,900 46,900 United Kingdom 21,300 26,500 Iberia 46,800 69,300 Other Europe 25,000 41,100 North America 41,700 59,900 Rest of world 76,900 83,000 total 450,
Slide 42: Corporate employees by country
corporate employees by country average Q2 2009 Q2 2008 France 4,390 5,070 the Netherlands 6,210 7,790 Germany 2,330 3,320 Belgium/Lux. 1,970 2,520 United Kingdom 2,470 3,210 Iberia 1,610 2,400 Other Europe 1,710 2,290 North America 3,120 4,260 Rest of world 3,960 4,670 Holding 160 260 total 27,930 3