Slide 1: 3rd quarter 2016 results
3rd quarter 2016 results resilient trends Jacques van den Broek, CEO Robert Jan van de Kraats, CFO Randstad Holding nv October 25, 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 third quarter results 2016
Slide 5: Q3 2016: resilient trends
Q3 2016: resilient trends Revenue of € 4,702 5,349 million; Topline growth grew 5% of in 6% in Gross margin down 10bp organic million; growth organic +5.0%; growth Europe, +3% 1% ininNorth North YoY to 18.7%; perm fees gross +4.2%;profit gross up profit 3.8% up America and +5% 8% ininRest Restof up
Slide 6: L4Q: stable mid-single-digit growth
L4Q: stable mid-single-digit growth € million Q3 ’16 Q3 ’15 % Org. L4Q ’16 L4Q ’15 % Org. revenue 5,349 4,977 +4% 20,154 18,720 +5% gross profit 1,000 934 +3% 3,772 3,492 +4% gross margin 18.7% 18.8% 18.7% 18.7% operating expenses* 729 685 +2% 2,848 2,676 +3% opex % 13.6% 13.8% 14.1% 14.3% EBITA* 27
Slide 7: Regional split: resilient performance
regional split: resilient performance YoY Randstad growth development 15% 5% -5% -15% Group Europe North America Rest of World Europe grew 5% (vs. +4% in Q2) North America grew 1% (vs. flat in Q2) Rest of the world increased 8% (vs. +4% in Q2) Group grew 4% (vs. +3% in Q2) 7 October 25, 2016 third q
Slide 8: North America: solid profitability
North America: solid profitability North America – historical organic growth revenue up 1% (Q2: flat) 1.400 8% US Staffing & Inhouse, revenue growth 1.200 6% +2% (Q2: up 1%) 1.000 4% 800 2% US Professionals, revenue down 3% 600 0% Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Canada: revenue +5% (Q2: up 2
Slide 9: The Netherlands: still affected by payroll business
the Netherlands: still affected by payroll business performance the Netherlands - quarterly revenue at +2% (Q2: +3%) 850 8% - decline of government payrolling 750 6% - price pressure continues 650 4% 550 perm up 26% (Q2: +18%) 450 2% Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 revenue in € M EBITA margi
Slide 10: France: continued mid-single digit growth
France: continued mid-single digit growth performance France quarterly revenue up 5% YoY (Q2: +4%) 850 8% - combined Staffing & Inhouse at +4% YoY 750 6% - Professionals at +11% 650 4% - perm grew 31% 550 2% 450 0% EBITA margin at 5.9% vs. 5.8% LY Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 revenue in €
Slide 11: Germany: steady growth & improved profitability
Germany: steady growth & improved profitability performance Germany - quarterly revenue growth +5% YoY (Q2: +5%) 600 8% - SME outgrowing large clients 500 6% 400 4% Staffing/Inhouse +4%, Professionals 300 2% +8% 200 0% Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 EBITA margin at 5.9% vs. 5.7% LY revenue
Slide 12: Belgium: closing gap to market
Belgium: closing gap to market performance Belgium - quarterly revenue up 5% (Q2: -2%) 400 8% - Staffing/Inhouse up 5% (Q2: -2%) 6% 300 4% gross profit was +8% (Q2: +4%) 200 2% - focus on client profitability 100 0% Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 EBITA margin at 5.9% vs. 6.1% LY revenue in
Slide 13: Iberia: improving results
Iberia: improving results Org. revenue performance Iberia - quarterly Iberia revenue up 6% (Q2: +5%) 400 6% 5% Spain 300 4% - revenue growth at +6% (Q2: +5%) 200 3% 2% - Staffing/inhouse up 6% 100 1% - perm growth +23% Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 revenue in € M EBITA margin Portugal - re
Slide 14: UK: Brexit impact continues to be limited
UK: brexit impact continues to be limited performance UK - quarterly Q3 revenue up 1% (Q2: flat) 250 4% - perm fees down 4% (Q2: down 5%) 200 3% 150 2% EBITA margin at 1.8% vs. 2.0% LY 100 1% 50 0% Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 revenue in € M EBITA margin performance UK - annually 1.000 4%
Slide 15: Other European countries: sound Italy
Other European countries: sound Italy overall revenue growth +10% performance ROE - quarterly (Q2: +9%) 800 6% Italy 600 4% - revenue growth at 15% (Q2: +12%) 400 2% - focus on specialties and perm (+33%) paying off 200 0 0% Switzerland Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 - growth at +12% (Q2: +
Slide 16: Rest of the world: growth accelerated
Rest of the world: growth accelerated performance ROW - quarterly overall revenue growth +8% (Q2: +4%) 500 3% 400 2% Japan, growth at +5% YoY (Q2: +4%) - perm grew 44% 300 1% 200 0% Australia/New Zealand grew 8% Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 (Q2: +4%) revenue in € M EBITA margin - driven b
Slide 17: Financial results & outlook
financial results & outlook 17 third quarter results 2016
Slide 18: Income statement Q3 2016
income statement Q3 2016 € million Q3 ’16 Q3 ’15 % Org. L4Q ’16 L4Q ’15 % Org. revenue 5,349 4,977 +4% 20,154 18,720 +5% gross profit 1,000 934 +3% 3,772 3,492 +4% gross margin 18.7% 18.8% 18.7% 18.7% operating expenses* 729 685 +2% 2,848 2,676 +3% opex margin 13.6% 13.8% 14.1% 14.3% EBITA* 271 249
Slide 19: Performance by revenue category
performance by revenue category Staffing Q3 Q3 *% L4Q L4Q *% in € M 2016 2015 organic 2016 2015 organic focus on delivery models – central delivery revenue 3,153 2,918 3% 11,698 10,934 3% withdrawing from low EBITA 167 151 2% 557 479 9% margin/loss making business EBITA margin 5.3% 5.2% 4.8% 4.4% FT
Slide 20: Gross margin bridge
gross margin bridge temp margin -/-10bp impact perm fees grew 7% YoY organically immaterial impact from acquired companies 20 October 25, 2016 third quarter results 2016
Slide 21: Operating expenses bridge
operating expenses bridge OPEX down € 8M organically (sequentially) unfavorable FX impact € 1M M&A relates mainly to acquisition of Obiettivo Lavoro and Careo 21 October 25, 2016 third quarter results 2016
Slide 22: Net debt at €561M
net debt at € 561M leverage ratio at 0.6 € million Q3, 2016 Q3, 2015 goodwill and acquisition-related intangible assets 2,808 2,596 operating working capital 831 708 net tax assets 464 567 all other assets and liabilities* 400 257 invested capital 4,503 4,129 total equity 3,941 3,676 net debt 561 45
Slide 23: Q3'16 free cash flow
Q3’16 free cash flow € million Q3 ’16 Q3 ’15 L4Q ’16 L4Q ’15 EBITDA 281 257 964 829 change in OWC - 30 -/- 107 -/- 106 income taxes -/- 33 -/- 32 -/- 114 -/- 147 provisions & employee benefit obl. - -/- 12 -/- 16 -/- 3 net capital expenditures -/- 27 -/- 16 -/- 83 -/- 65 other items -/- 21 -/- 21 -/
Slide 24: Outlook
outlook organic revenue growth was 4.2% in Q3; In September, revenue grew by 4.0% - volumes in early October indicate a continuation of the Q3 growth rate. gross margin in Q4 is expected to remain at least stable sequentially for Q4 we expect a minor sequential increase of operating expenses (on an
Slide 25: Q&A
Q&A Revenue of € 4,702 5,349 million; Topline growth grew 5% of in 6% in Gross margin down 10bp organic million; growth organic +5.0%; growth Europe, +3% 1% ininNorth North YoY to 18.7%; perm fees gross +4.2%;profit gross up profit 3.8% up America and +5% 8% ininRest Restof up 7% 3.3% of theWorld wo
Slide 26: Appendices
™r- 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 October 25, 2016 third 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 Q3 2016
revenue split Q3 2016 geographical areas revenue categories 9% 19% North America 22% NL 12% France Germany 4% Belgium 6% 15% 22% 59% Iberia UK 7% RoE RoW 10% 15% staffing inhouse professionals 31 October 25, 2016 third quarter results 2016
Slide 32: EBITA breakdown by geography
EBITA breakdown by geography Q3 2016 4% 10% North America 1% 27% NL France 6% Germany 8% Belgium 21% Iberia UK 11% 16% RoE RoW 16% 32 October 25, 2016 third quarter results 2016
Slide 33: Outlets by region
outlets* by region end of period Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 North America 1,134 1,135 1,129 1,119 1,102 the Netherlands 655 649 661 644 648 France 680 681 700 728 729 Germany 565 558 546 550 547 Belgium & Luxembourg 308 303 310 303 311 Iberia 339 332 331 306 303 United Kingdom 132 138 1
Slide 34: Corporate staff by region
corporate staff by region average Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 North America 6,530 6,490 6,440 6,610 6,460 the Netherlands 4,380 4,320 4,270 4,200 4,230 France 3,580 3,530 3,500 3,520 3,500 Germany 2,700 2,640 2,600 2,600 2,550 Belgium & Luxembourg 2,010 1,900 1,840 1,890 1,910 Iberia 1,8
Slide 35: Staffing employees by region
staffing employees by region average Q3 2016 Q3 2015 North America 108,500 107,800 the Netherlands 81,600 75,300 France 78,000 76,800 Germany 48,000 47,100 Belgium & Luxembourg 46,600 44,500 Iberia 65,900 63,700 United Kingdom 13,800 15,300 Other European Countries 88,200 63,800 Rest of the world 11