Slide 1: 2nd quarter 2016 results
2nd quarter 2016 results solid incremental conversion Jacques van den Broek, CEO Robert Jan van de Kraats, CFO Randstad Holding nv July 26, 2016
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 second quarter results 2016
Slide 5: Q2 2016: solid incremental conversion
Q2 2016: solid incremental conversion Revenue of € 4,702 5,108 million; Topline growth grew 4% of in 6% in Gross margin up 20bp YoY organic million; growth organic +5.0%; growth Europe, +3% 0% ininNorth North to 18.9%; perm fees up gross +3.1%;profit gross up profit 3.8% up America and +5% 4% ininRe
Slide 6: L4Q: stable mid-single-digit growth
L4Q: stable mid-single-digit growth € million Q2 ’16 Q2 ’15 % Org. L4Q ’16 L4Q ’15 % Org. revenue 5,108 4,816 +3% 19,782 18,259 +5% gross profit 963 903 +2% 3,706 3,394 +5% gross margin 18.9% 18.7% 18.7% 18.6% operating expenses* 724 688 +3% 2,803 2,617 +3% opex % 14.2% 14.3% 14.2% 14.3% EBITA* 240
Slide 7: regional split
regional split YoY Randstad growth development 15% 5% -5% -15% Group Europe North America Rest of World Europe grew 4% (vs. +6% in Q1) North America was stable (vs. +3% in Q1) Rest of the world increased 4% (vs. +5% in Q1) Group grew 3% (vs. 5% in Q1) 7 July 26, 2016 second quarter results 2016
Slide 8: North America: stable revenue, record profitability
North America: stable revenue, record profitability revenue stable (Q1: +3%) North America – historical organic growth - GP flat (Q1: +4%) 12% US Staffing & Inhouse, revenue growth 8% +1% (Q1: +6%) 4% US Professionals, revenue down 2% 0% Randstad Sourceright driving NA MSP Q3'14 Q4'14 Q1'15 Q2'15 No
Slide 9: the Netherlands: good underlying growth
the Netherlands: good underlying growth performance the Netherlands - quarterly revenue at +3% (Q1: +6%) 850 8% - decline of government payrolling 750 6% - price pressure continues 650 4% 550 Perm up 18% (Q1 -/- 19%) 450 2% Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 revenue in € M EBITA margin combined
Slide 10: France: growth impacted by strikes
France: growth impacted by strikes performance Franc e quarterly revenue up 4% YoY (Q1: +9%) 1,000 7% - growth impacted by strikes (~2%) 800 6% 600 5% - combined Staffing & Inhouse at +3% YoY 400 4% - Professionals at +10% 200 3% - perm grew 37% (Q1: +27%) 0 2% Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 201
Slide 11: Germany: improving growth & profitability
Germany: improving growth & profitability performance Germany - quarterly revenue growth +5% YoY (Q1: +5%) 600 7% - SME outgrowing large clients 6% 500 5% 400 4% volume trend positive 300 3% 200 2% EBITA margin at 5.0% vs. 4.6% LY Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 - Solid operating lev
Slide 12: Belgium: improving profitability
Belgium: improving profitability performance Belgium - quarterly revenue -2% (Q1: -2%) 400 7% - Staffing and Inhouse growth at -2% (Q1: -2%) 6% 300 - Impacted by attacks and strikes 5% 4% 200 3% gross profit was +4% (Q1: 0%) 100 2% - focus on client profitability Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2
Slide 13: Iberia: improving margins
Iberia: improving margins Org. revenue performance Iberia - quarterly Iberia revenue up 5% (Q1: +8%) 400 7% 6% Spain 300 5% - revenue growth at +5% (Q1: +9%) 200 4% 3% - Professionals gross profit up 13% 100 2% - perm growth +42% (Q1: +36%) Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 revenue in
Slide 14: UK: Brexit impact limited so far
UK: Brexit impact limited so far performance UK - quarterly Q2 revenue stable (Q1: +1%) 250 4.0% - gross profit -/- 2% YoY (Q1: +2%) 200 3.0% - perm fees down 5% (Q1: +2%) 150 2.0% 100 1.0% EBITA margin up to 3.0% vs. 2.0% LY 50 0.0% - improving operating leverage Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1
Slide 15: Other European countries: growth continues
Other European countries: growth continues overall revenue growth +9% (Q1: performance ROE - quarterly +10%) 500 6% 400 Italy 300 5% - revenue growth at 12% (Q1: 11%) 4% 200 - focus on specialties and perm (+27%) paying off 100 3% 0 2% Switzerland Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 - gr
Slide 16: Rest of the world: mid-single-digit growth
Rest of the world: mid-single-digit growth overall revenue growth +4% (Q1: +5%) performance ROW - quarterly 450 2.0% Japan, growth at +4% YoY (Q1: +3%) 400 1.5% - perm grew 65% (Q1: +38%) 350 1.0% 300 Australia / New Zealand grew 4% (Q1: 250 0.5% +5%) 200 0.0% Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
Slide 17: financial results & outlook
financial results & outlook 17 second quarter results 2016
Slide 18: income statement Q2 2016
income statement Q2 2016 € million Q2 ’16 Q2 ’15 % Org. L4Q ’16 L4Q ’15 % Org. revenue 5,108 4,816 +3% 19,782 18,259 +5% gross profit 963 903 +2% 3,706 3,394 +5% gross margin 18.9% 18.7% 18.7% 18.6% operating expenses* -/- 724 -/- 688 +3% -/- 2,803 -/- 2,617 +3% opex margin 14.2% 14.3% 14.2% 14.3% E
Slide 19: performance by revenue category
performance by revenue category Staffing Q2 Q2 *% L4Q L4Q *% focus on delivery models – in € M 2016 2015 organic 2016 2015 organic central delivery revenue 2,956 2,800 2% 11,463 10,696 4% withdrawing from low margin/loss making business EBITA 141 129 4% 541 456 15% FTE investments in growth EBITA ma
Slide 20: gross margin bridge
gross margin bridge temp margin up 10bp YoY with favorable mix and M&A offsetting ongoing challenging pricing environment perm fees grew 11% YoY organically, benefiting margin by 20bp HRS/Others down 10bp, impacted by loss of NL government payrolling and RPO mix 20 July 26, 2016 second quarter resul
Slide 21: operating expenses bridge
operating expenses bridge OPEX up € 25.0M organically (sequentially) favorable FX impact € 3,6M M&A relates to acquisition of Proffice 21 July 26, 2016 second quarter results 2016
Slide 22: net debt at € 634M
net debt at € 634M leverage ratio at 0.7 € million June 30, 2016 June 30, 2015 goodwill and intangible assets*** 2,730 2,553 operating working capital 811 762 net tax assets 498 597 all other assets and liabilities**** 365 216 invested capital 4,404 4,128 equity 3,770 3,553 net debt 634 575 invested
Slide 23: Q2'16 free cash flow
Q2’16 free cash flow € million Q2 ’16 Q2 ’15 L4Q ’16 L4Q ’15 EBITDA 252 229 941 792 change in OWC -/- 179 -/- 192 -/- 78 -/- 33 income taxes -/- 42 -/- 53 -/- 112 -/- 153 provisions & employee benefit obl. 2 -/- 9 -/- 28 5 net additions in PPE and software -/- 21 -/- 13 -/- 71 -/- 63 other items -/-
Slide 24: outlook
outlook organic revenue growth was 3% in Q2; In June, revenue grew by 2% - volumes in early July indicate a continuation of the Q2 growth rate. for Q3 operating expenses are expected to remain stable sequentially on an organic basis as of Q3 the acquisitions of Obiettivo Lavoro (Italy), Careo (Japan
Slide 25: Q2 2016 highlights
Revenue of € 4,702 5,108 million; Topline growth grew 4% of in 6% in Gross margin up 20bp YoY organic million; growth organic +5.0%; growth Europe, +3% 0% ininNorth North to 18.9%; perm fees up gross +3.1%;profit gross up profit 3.8% up America and +5% 4% ininRest Restof 11% 2.4% of theWorld world U
Slide 26: appendices
™- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 27: 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 28: 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 29: growth drivers & strategy
growth drivers & strategy 29 July 26, 2016 second quarter results 2016
Slide 30: strategic roadmap
strategic roadmap driven by best people, strong concepts, excellent execution and superior brands shape the world of work • optimal workforces for clients M&A goals • the best jobs for candidates Tech grow to 5-6% EBITA • profitable growth M&A, seamless fit • improve margin integrations • increase p
Slide 31: revenue split Q2 2016
revenue split Q2 2016 geographical areas revenue categories 8% North America 20% 23% NL 11% France 4% Germany Belgium 6% 22% 58% Iberia 16% 7% UK RoE 10% RoW 16% staffing inhouse professionals 31 July 26, 2016 second quarter results 2016
Slide 32: EBITA breakdown by geography
EBITA breakdown by geography Q2 2016 3% 8% North America 3% 27% NL 6% France Germany 8% Belgium 21% Iberia 10% UK 17% RoE RoW 18% 32 July 26, 2016 second quarter results 2016
Slide 33: outlets by region
outlets* by region end of period Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 the Netherlands 649 661 644 648 644 France 681 700 728 729 741 Germany 558 546 550 547 547 Belgium/Lux 303 310 303 311 303 United Kingdom 138 146 139 130 134 Iberia 332 331 306 303 302 Other European Countries** 517 507 406 374
Slide 34: corporate staff by region
corporate staff by region average Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 the Netherlands 4,320 4,270 4,200 4,230 4,050 France 3,530 3,500 3,520 3,500 3,410 Germany 2,640 2,600 2,600 2,550 2,560 Belgium/Lux. 1,900 1,840 1,890 1,910 1,870 United Kingdom 1,540 1,580 1,590 1,610 1,530 Iberia 1,840 1,83
Slide 35: staffing employees by region
staffing employees by region average Q2 2016 Q2 2015 the Netherlands 86,300 83,400 France 84,000 77,600 Germany 47,900 45,700 Belgium/Lux. 40,600 39,800 United Kingdom 15,600 16,200 Iberia 62,500 60,200 Other European Countries* 70,100 58,200 North America 107,500 106,800 Rest of the world 106,200 1