Slide 1: 2nd quarter results 2014
2nd quarter results 2014 gradual recovery continues Jacques van den Broek, CEO Robert Jan van de Kraats, CFO Randstad Holding nv July 31, 2014
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 3 July 31, 2014 second quarter results 2014
Slide 4: Performance
performance 4 July 31, 2014 second quarter results 2014
Slide 5: Gradual recovery continues
gradual recovery continues € million Q2 ’14 Q2 ’13 % Org. L4Q ’14 L4Q ’13 % Org. revenue 4,268 4,096 +5% 16,878 16,559 +2% gross profit 787 747 +6% 3,085 3,002 +4% gross margin 18.4% 18.2% 18.3% 18.1% operating expenses* 613 601 +2% 2,447 2,447 +1% opex margin 14.4% 14.7% 14.5% 14.8% EBITA* 174 146
Slide 6: Q2 2014: gradual recovery continues
Q2 2014: gradual recovery continues YoY Randstad growth development 15% 5% -5% -15% Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Group Europe North America Rest of World North America back to growth in Q2 (+2%), NL also back to growth in June gradual recovery in mo
Slide 7: Our priorities
our priorities Client total talent architecture Staffing Professionals Inhouse HRS leverage our expertise implementing global expand in white-collar grow in MSP and RPO in specialty staffing concept per segment and professionals support TTA approach: focus on permanent focus on permanent increase sh
Slide 8: Setting the ambition
setting the ambition profitable organic growth through activity-based field steering grow to 5-6% EBITA - profitable growth - improve margin - increase productivity activity-based field steering - market validation - funnel management (temp & perm) growth - weekly activity mgt management accelerator
Slide 9: North America: back to growth in Q2
North America: back to growth in Q2 performance North America - quarterly revenue + 2% (Q1: -/-1%) 1,000 6% 5% US staffing & inhouse, gross profit +10% 900 4% - improving revenue trend +6% in Q2, June +7% 3% 800 - strong manufacturing and logistics 2% - strong perm (+33%) and inhouse (+9%) 700 1% Q2
Slide 10: France: challenging market
France: challenging market incremental conversion ratio of 169% performance France - quarterly revenue -/-1% (Q1: -/-2%) 800 6% - combined staffing & inhouse at -/-1% YoY 5% 700 - growth in inhouse of 25% 4% - focus on client profitability 3% 600 2% - professionals at 0% vs. Q1: -/-7% 500 1% - perm
Slide 11: The Netherlands: back to growth in June
the Netherlands: back to growth in June incremental conversion ratio of 82% performance the Netherlands - quarterly revenue at 0% (Q1: -/-1%) 800 8% - RNL -/-1% YoY, growth in SME, June +2% 7% 700 6% - Tempo-Team growing, June +6% 600 5% - Yacht back to growth 4% 500 - professionals up 12% 3% 400 2%
Slide 12: Germany: challenging market
Germany: challenging market incremental conversion ratio of 36% performance Germany - quarterly revenue +5% (Q1: +11%) 600 7% - price effect easing (+7%) 6% 500 - perm growth of +37% (Q1: +1%) 5% 400 - good growth in IT, inhouse & Tempo-Team 4% 300 3% - focus on SME, perm & delivery models 200 2% -
Slide 13: Belgium: improved profitability
Belgium: improved profitability incremental conversion ratio of 259% performance Belgium - quarterly revenue +5% (Q1: +4%) 400 6% - inhouse back to growth at +11% (Q1: +3%) 5% 300 - good growth in white-collar 4% - professionals up by +10% (Q1: +4%) 200 3% costs down 10% YoY 100 Q2 2013 Q3 2013 Q4 2
Slide 14: UK: good growth in gross profit
UK: good growth in gross profit performance UK - quarterly revenue +3% (Q1: +5%) 250 2.5% - continued growth in professionals (up 8%) 2.0% 200 - led by MSP/RPO and construction 1.5% 150 - weak financial services impacting finance 1.0% 100 0.5% - focus on client profitability in staffing and inhouse
Slide 15: Iberia: strengthening growth
Iberia: strengthening growth performance Iberia - quarterly Spain 300 5% - solid revenue growth +11% (Q1: +4%) 250 4% - growth driven by automotive and manufacturing 200 3% - strong performance in professionals & perm 150 2% 100 - integration process completed 50 1% - strong operating leverage Q2 20
Slide 16: Other European countries: growth continues
Other European countries: growth continues performance ROE - quarterly Italy 400 5% - revenue growth stable at 15% (Q1: +14%) 300 4% - growth driven by industrial segment 200 3% - focus on specialties and perm 100 2% Switzerland 0 1% Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 - growth accelerated to +1
Slide 17: Rest of the world: a mixed picture
Rest of the world: a mixed picture performance ROW - quarterly Japan, growth stable at +10% YoY 400 2.0% - growth driven by logistics and retail 350 1.5% - administrative segment strengthening 300 1.0% Australia / New Zealand grew by 13% 250 0.5% - temp strengthened further, driven by business 200 0
Slide 18: Financial results & outlook
financial results & outlook 18 July 31, 2014 second quarter results 2014
Slide 19: Income statement Q2 2014
income statement Q2 2014 € million Q2 ’14 Q2 ’13 % Org. L4Q ’14 L4Q ’13 % Org. revenue 4,268 4,096 +5% 16,878 16,559 +2% gross profit 787 747 +6% 3,085 3,002 +4% gross margin 18.4% 18.2% 18.3% 18.1% operating expenses* 613 601 +2% 2,447 2,447 +1% opex margin 14.4% 14.7% 14.5% 14.8% EBITA* 174 146 +2
Slide 20: Q2 2014: financial key points
Q2 2014: financial key points free cash flow of -/- € 82M vs. -/- € 81M LY - holiday allowances in the Netherlands and Belgium - improved profitability (higher income tax paid impacting cashflow) leverage ratio improved to 1.3 (Q2 2013: 1.8) dividend of € 0.95 per ordinary share paid (LY: € 1.25 per
Slide 21: Segment performance, focus on delivery models
segment performance, focus on delivery models Staffing in € M Q2 2014 Q2 2013 % organic* good growth in North America, Iberia and emerging markets with revenue 2,524.9 2,477.8 1% continued focus on revenue quality. EBITA 102.6 85.1 22% mixed picture in Europe, with focus retained on client profitabi
Slide 22: Gross margin bridge
gross margin bridge YoY gross margin development + 0.1% + 0.3% -/- 0.1% -/- 0.1% 18.4% 18.2% margin expansion in North America & Netherlands perm fees were 10.0% of GP (up from 9.7% LY) - organic growth of 13% YoY continued focus on client profitability - negative impact FX 22 July 31, 2014 second q
Slide 23: Operating expenses bridge
operating expenses bridge sequential OPEX development in € M +3 +4 +1 +6 +1 +5 592 -1 601 594 613 adverse FX impact FTE growth in Iberia, Poland USG synergies strong cost control maintained seasonal increases in marketing costs 628 continued investment in emerging markets 23 July 31, 2014 second qua
Slide 24: Net debt down by €235M YoY
net debt down by € 235M YoY leverage ratio at 1.3 and improved working capital management € million June 30, 2014 June 30, 2013 goodwill and intangible assets 2,608 2,820 operating working capital 667 751 net tax assets 487 356 other assets and liabilities 112 17 invested capital 3,874 3,944 equity
Slide 25: Free cash flow at -€82M
free cash flow at -/- € 82M € million Q2 ‘14 Q2 ‘13 L4Q ’14 L4Q ‘13 EBITDA 189 159 657 556 change in OWC -/- 187 -/- 189 91 130 income taxes paid -/- 44 -/- 29 -/- 255 -/- 112 provisions -/- 6 2 -/- 53 20 net additions in PPE and software -/- 16 -/- 8 -/- 61 -/- 44 other items -/- 18 -/- 16 -/- 49 -
Slide 26: Refinancing of multi-currency syndicated credit facility
refinancing of multi-currency syndicated credit facility ensuring sufficient long term committed financing under favorable market conditions existing syndicated credit facility amended and extended - maturity extended to 5 years, extension option to extend to 7 years - revolving facility allowing fo
Slide 27: Outlook Q3
outlook Q3 organic revenue/wd grew by 4.5% in Q2 2014, while it was 3.6% in June - gradual improvement throughout first half 2014 - July appears to be in line with Q2 - significant FX impact - strengthening comparison base gradual recovery continues but no acceleration of growth - continued focus on
Slide 28: Q&A
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services Q&A
Slide 29: Appendices
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 30: Financing: fixed vs. floating interest rates
financing: fixed vs. floating interest rates 10 year historic interest rates comparison 1M vs. 5Y 6% 5% 4% 3% average fixed rate = 2.7% 2% average floating rate = 1.7% 1% 0% July 2004 June 2014 we use floating interest rates as a natural hedge - spread above Euribor of 50-115 bps 30 July 31, 2014 se
Slide 31: Revenue split Q2 2014
revenue split Q2 2014 geographical area revenue categories 8% North America 20% 8% 21% France NL 7% Germany 5% Belgium UK 17% 21% 59% 7% Iberia RoE 11% RoW 16% staffing inhouse professionals 31 July 31, 2014 second quarter results 2014
Slide 32: EBITA breakdown by geography
EBITA breakdown by geography Q2 2014 Q2 2013 0% 1% 1% 3% 2% 6% 4% 4% North America 24% 6% France 30% 9% NL Germany 13% 12% Belgium 12% UK Iberia 21% 21% RoE 21% 21% 22% RoW 32 July 31, 2014 second quarter results 2014
Slide 33: Outlets by region
outlets* by region end of period Q2 2014 Q1 2014 Q4 2013 Q3 2013 Q2 2013 North America 1087 1,075 1,055 1,067 1,060 France 766 794 791 849 863 the Netherlands 675 675 672 662 679 Germany 551 550 557 553 547 Belgium/Lux 313 314 307 319 321 United Kingdom 141 142 147 155 155 Iberia 290 283 405 416 252
Slide 34: Corporate staff by region
corporate staff by region average Q2 2014 Q1 2014 Q4 2013 Q3 2013 Q2 2013 North America 6,250 6,230 6,320 6,260 6,230 France 3,370 3,370 3,480 3,630 3,620 the Netherlands 4,320 4,240 4,260 4,300 4,270 Germany 2,600 2,610 2,620 2,520 2,480 Belgium/Lux 1,720 1,700 1,800 1,840 1,770 United Kingdom 1,51
Slide 35: Staffing employees by region
staffing employees by region average Q2 2014 Q2 2013 North America 105,300 101,700 France 74,300 78,000 the Netherlands 75,800 82,200 Germany 47,500 48,500 Belgium/Lux 39,400 38,100 United Kingdom 17,600 19,200 Iberia 58,800 44,800 Rest of Europe 53,700 37,700 Rest of world 109,000 108,800 total 581