Slide 1: 3rd quarter results 2009
3rd quarter results 2009 revenue trend gradually turning; increased gross margin pressure largely offset by continued strong cost management Robert-Jan van de Kraats, CFO Randstad Holding nv October 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: Agenda
agenda • performance • financial results & outlook • summary 3 October 29, 2009 third quarter results 2009
Slide 4: Performance
performance 4 October 29, 2009 third quarter results 2009
Slide 5: Revenue development
revenue development 30% market growth figures YoY 20% 10% • main markets passed 0% the trough -10% -20% • staffing markets -30% -40% gradually improving Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2007 2008 2009 • professionals markets NL France Germany Belgium UK N-America 0% Randstad growth* figures YoY stabilizin
Slide 6: Q3 2009: revenue trend gradually turning; increased gross margin pressure
Q3 2009: revenue trend gradually turning; increased gross margin pressure largely offset by continued strong cost management • revenue amounted to € 3,178 (-28% YoY organically) - revenue trend gradually improved through the quarter - general staffing and inhouse services picking up slightly; in lin
Slide 7: The Netherlands: keeping up good profitability
the Netherlands: keeping up good profitability • organic revenue p/wd* -23% in Q3 2009 - late cyclical market is stabilizing revenue and EBITA margin 1000 9,5% - Tempo-Team & Randstad in line, Yacht below - contact centers continuously strong 8,5% 900 • gross margins under pressure 7,5% million € 80
Slide 8: France: executing social plan; ready to move forward
France: executing social plan; ready to move forward • organic revenue p/wd -31% in Q3 2009 - general staffing and inhouse improved revenue and EBITA margin somewhat vs. Q2 2009 1100 5,0% - professional segment lagging but healthcare 4,0% 1000 holding up well 3,0% - large marketing campaign started
Slide 9: Germany: volume improvement through the quarter
Germany: volume improvement through the quarter • organic revenue p/wd -33% in Q3 2009 - revenue improving through the quarter revenue and EBITA margin 550 10,0% - relative improvement in industrial segments including chemicals 500 8,0% • gross margin pressure not intensifying 450 6,0% million € - g
Slide 10: UK: market remains weak
UK: market remains weak • organic revenue p/wd -29% in Q3 2009 • revenue decline staffing/inhouse easing revenue and EBITA margin 350 5,0% - volume at new clients building at the end 300 4,0% of the quarter 3,0% • professionals segment continued to 250 million € 2,0% weaken 200 1,0% - healthcare sti
Slide 11: North America: outperforming the market, strong sequential profitability improvement
North America: outperforming the market, strong sequential profitability improvement • organic revenue p/wd -26% in Q3 2009 - US staffing & inhouse; revenue trend revenue and EBITA margin 500 5,0% improving through the quarter - US professionals and Canada at least 450 4,0% stabilized 3,0% 400 milli
Slide 12: Market share development Q3 2009
market share development Q3 2009 Q3 market growth* Randstad Group variance Q3 the Netherlands -22% -23% -1% France -26% -31% -5% Germany -32% -33% -1% United States** -29% -25% 4% Belgium -24% -25% -1% UK -29% -27% 2% Spain -40% -39% 1% Italy -36% -48% -12% • FR: approval of the social plan • IT: de
Slide 13: 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, automotive, financial services, energy business
Slide 14: Financial results & outlook
financial results & outlook 14 October 29, 2009 third quarter results 2009
Slide 15: Q3 2009: financial highlights
Q3 2009: financial highlights • gross margin mostly impacted by decline in temp margin & perm fees • underlying operating expenses improved by 25% to € 503 million (guidance € 520 million) - some cost reduction plans executed faster than initially planned • DSO improved (YoY) by 2 days to 57 days -
Slide 16: Income statement Q3 2009
income statement Q3 2009 € million Q3 2009 Q3 2008 % change % organic revenue 3,178 4,424 -28% -28% gross profit 596 913 -35% -34% gross margin 18.8% 20.6% operating expenses* 503 671 -25% -24% opex as % of revenue 15.8% 15.2% EBITA** 93 242 -61% -61% EBITA margin 2.9% 5.5% income before taxes 61 11
Slide 17: Gross margin development Q3 2009
gross margin development Q3 2009 21 20,5 20 -/- 1.1 19,5 19 20.6 -/-0.9 +0.1 + 0.1 18,5 18.8 18 17,5 Q3 2008 temp perm fees HRS/other temp mix Q3 2009 margin 20.9 • as expected, increasing pressure on temp margins • perm fees declined 55% organically (YoY) - perm fees are now 7.3% of gross profit vs
Slide 18: Development in corporate employees & outlets
development* in corp. employees & outlets indexed organic development in corporate FTEs dec-07 index: September 2007 = 100 mar-09 120 jun-09 sep-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 mar-09 jun-09 110 sep-0
Slide 19: Restructuring
restructuring charges Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 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 2.1 Japan 3.5 - 0.8 - North America 3.5 2.7 0.9 1.1 tota
Slide 20: Consolidated cash flow statement
consolidated cash flow statement € million Q3 2009 Q3 2008 cash flow from operations before OWC 214 198 release / (usage) of OWC 157 127 additions of PPE -10 -19 additions of software -4 -8 financial receivables - - dividend - - disposals of PPE 2 6 free cash flow 359 304 € million Q3 2009 free cash
Slide 21: Debt facilities & repayment schedule
debt facilities & repayment schedule repayment schedule 1400 revolver term cash Sep 09 1200 1000 135 € x million 800 600 ~1.1 400 billion 567 200 135 135 135 135 135 135 135 0 9 0 0 1 1 12 2 3 09 -0 -1 -1 -1 -1 - -1 -1 N ov ay N ov ay N ov ay N ov ay Se p m m m m a sh c • covenant; net debt/EBITDA*
Slide 22: Outlook
outlook • organic revenue per working day improved from -30% in July to -26% in September • gradual recovery in staffing/inhouse, stabilization in professionals • trends are continued into October • visibility remains limited • gross margin to remain under pressure • continuing to align cost base wh
Slide 23: Summary
summary • revenue trend gradually turning • pressure on gross margin • strong cash flow • continued focus on - cost management, - productivity, - marketing campaigns & market share, - DSO 23 October 29, 2009 third quarter results 2009
Slide 24: Save the date: analyst & investor days 2009
save the date: analyst & investor days 2009 Randstad analyst & investor days 2009 • date: December 3 & 4, 2009 • location: Paris 24 October 29, 2009 third quarter results 2009
Slide 25: Q&A
Q&A ™c randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services
Slide 26: Appendices
™c randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 27: 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 28: Geographic performance Q3 2009
geographic performance Q3 2009 € million Q3 2009 Q3 2008 organic growth revenue: the Netherlands 740 961 -23% France 714 1,030 -31% Germany 342 510 -33% Belgium/Luxembourg 317 420 -25% United Kingdom 182 286 -29% Iberia 215 304 -28% North America 358 463 -26% EBITA margin: the Netherlands 7.1% 8.8%
Slide 29: Segment performance Q3 2009
segment performance Q3 2009 € million Q3 2009 Q3 2008 organic growth revenue: staffing 2,222 3,092 -28% inhouse services 342 487 -30% professionals 614 846 -26% 29 October 29, 2009 third quarter results 2009
Slide 30: Consolidated balance sheet
consolidated balance sheet € million September 30, December 31, September 30, 2009 2008 2008 property, plant & equipment 159 191 199 intangible assets 3,246 3,315 3,940 deferred tax assets 460 422 373 other assets 3,117 3,795 4,450 group equity 2,481 2,421 2,700 non-current liabilities 2,226 2,937 3
Slide 31: Revenue split Q3 2009
revenue split Q3 2009 geographies segments 5% 11% 19% 23% 5% 7% 11% 69% 6% 22% 10% 11% NL France Germany staffing Belgium/Lux. UK Iberia inhouse ROE N-America ROW professionals 31 October 29, 2009 third quarter results 2009
Slide 32: Outlets by country
outlets¹ by country end of period September 30, 2009 September 30, 2008 France 993 1,186 the Netherlands 761 1,078 Germany 431 591 Belgium/Lux 332 390 United Kingdom 294 412 Iberia 266 376 Other Europe 341 476 North America 504 655 Rest of world 259 382 total 4,181 5,546 1) branches and inhouse loca
Slide 33: Staffing employees by country
staffing employees by country averages Q3 2009 Q3 2008 France 81,500 119,600 the Netherlands 89,400 120,500 Germany 38,100 56,800 Belgium/Lux. 45,000 53,900 United Kingdom 19,100 27,400 Iberia 52,200 68,900 Other Europe 28,900 39,900 North America 44,700 56,900 Rest of world 74,600 85,000 total 473,
Slide 34: Corporate employees by country
corporate employees by country average Q3 2009 Q3 2008 France 4,270 5,060 the Netherlands 5,870 7,800 Germany 2,290 3,280 Belgium/Lux. 2,010 2,540 United Kingdom 2,230 3,180 Iberia 1,530 2,200 Other Europe 1,480 2,300 North America 2,960 4,120 Rest of world 3,680 4,780 Holding 150 170 total 26,470 3