Randstad Nv · EURONEXT:RAND
Randstad Nv — Q1 2015 Earnings Presentation
37 slides from Randstad Nv's earnings presentation, Apr 30, 2015
Slide 1: 1st quarter 2015 results
1st quarter 2015 results continued improvement Jacques van den Broek, CEO Robert Jan van de Kraats, CFO Randstad Holding nv April 30, 2015
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 April 30, 2015 1st quarter results 2015
Slide 4: performance
performance 4 April 30, 2015 1st quarter results 2015
Slide 5: Q1 2015: continued profitable growth
Q1 2015: continued profitable growth € million Q1 ’15 Q1 ’14 % Org. L4Q ’15 L4Q ’14 % Org. revenue 4,431 3,970 +6% 17,712 16,706 +4% gross profit 815 717 +7% 3,277 3,045 +6% gross margin 18.4% 18.1% 18.5% 18.2% operating expenses* 662 594 +4% 2,541 2,435 +3% opex % 14.9% 15.0% 14.3% 14.6% EBITA* 153
Slide 6: Europe rebounded in Q1
Europe rebounded in Q1 YoY Randstad growth development 15% 5% -5% -15% Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Group Europe North America Rest of World growth expansion in Europe with majority of countries picking up; Netherlands & France both improving and cl
Slide 7: North America: solid growth
North America: solid growth L4Q incremental conversion ratio of 53% performance North America - quarterly revenue +5% (Q4: +6%) 1.100 6% 5% 1.000 US staffing & inhouse, revenue growth 4% +8% 900 3% - strong perm +21% (Q4: +23%) 800 2% 700 1% US professionals, gross profit up 6% Q1 2014 Q2 2014 Q3 20
Slide 8: France: strong rebound
France: strong rebound performance France - quarterly revenue flat YoY (Q4: -/-8%) 800 6% - combined staffing & inhouse at -/-1% YoY 5% 700 - inhouse grew 15% 4% - professionals at +4% vs. Q4: -/-1% 600 3% 2% - perm grew 15% 500 1% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 gross profit +1% YoY (Q4: 0%
Slide 9: the Netherlands: closed the gap
the Netherlands: closed the gap L4Q incremental conversion ratio of 66% performance the Netherlands - quarterly revenue at +10% (Q4: +5%) 800 8% - Randstad +8% YoY (Q4: +4%), growth in SME 7% 700 6% - Tempo-Team growing at market, +9% 600 5% - Yacht up 19% (Q4: 13%) 4% 500 - perm at +21% 3% 400 2% Q
Slide 10: Germany: continued market challenges
Germany: continued market challenges L4Q recovery ratio of 43% performance Germany - quarterly revenue -/-3% (Q4: -/-1%) 600 7% - price effect (+2%) 6% 500 - labor demand still subdued by wage cost 5% 400 increases & regulatory changes 4% - perm growth of +67% (Q4: +20%) 300 3% - focus on SME & deli
Slide 11: Belgium: returning to growth
Belgium: returning to growth L4Q incremental conversion ratio of 73% performance Belgium - quarterly revenue +7% (Q4: -/-1%) 400 6% - inhouse growth at +8% (Q4: +5%) 5% 300 - narrowing the gap to market 4% - professionals up 13% (Q4: +7%) 200 3% - 20% perm growth YoY 100 2% Q1 2014 Q2 2014 Q3 2014 Q
Slide 12: Iberia: continued growth
Iberia: continued growth L4Q incremental conversion ratio of 113% performance Iberia - quarterly Iberia revenue & gross profit up 12% 300 5% 250 4% 200 Spain 3% 150 - revenue growth +16% (Q4: +12%) 2% 100 - strong growth continues in professionals 50 1% (+87%), now a top 3 business Q1 2014 Q2 2014 Q
Slide 13: UK: improving profitability
UK: improving profitability L4Q incremental conversion ratio of 74% performance UK - quarterly revenue +3% (Q4: +2%) 250 2,5% - gross profit up 5% (Q4: +9%) 2,0% 200 - strong performance in construction 1,5% 150 - finance returning to growth 1,0% 100 0,5% - perm fees up 15% (Q4: +16%) 50 0,0% Q1 201
Slide 14: Other European countries: growth continues
Other European countries: growth continues performance ROE - quarterly overall revenue growth +12% 400 5% 300 4% Italy 200 3% - revenue growth at 12% (Q4: +8%) 100 2% - focus on specialties and perm (+42%) 0 1% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Switzerland revenue in € M EBITA margin - +9% gro
Slide 15: Rest of the world: improving profitability
Rest of the world: improving profitability overall revenue growth +12% performance ROW - quarterly 400 2,0% Japan, growth at +2% YoY (Q4: +8%) 350 1,5% - LY growth driven by VAT increase 300 1,0% - continue to invest for growth 250 0,5% Australia / New Zealand grew 21% 200 Q1 2014 Q2 2014 Q3 2014 Q4
Slide 16: financial results & outlook
financial results & outlook 16 April 30, 2015 1st quarter results 2015
Slide 17: income statement Q1 2015
income statement Q1 2015 € million Q1 ’15 Q1 ’14 % Org. L4Q ’15 L4Q ’14 % Org. revenue 4,431 3,970 +6% 17,712 16,706 +4% gross profit 815 717 +7% 3,277 3,045 +6% gross margin 18.4% 18.1% 18.5% 18.2% operating expenses* 662 594 +4% 2,541 2,435 +3% opex margin 14.9% 15.0% 14.3% 14.6% EBITA* 153 123 +1
Slide 18: Q1 2015: financial key points
Q1 2015: financial key points underlying EBITA margin up 40 bps to 3.5% L4Q organic incremental conversion ratio of 67% average DSO improved to 51.5 from 51.8 LY effective tax rate* amounted to 28.3% (FY 2014: 30.1%). - for 2015, we expect an effective tax rate of between 27% and 30%. diluted EPS* t
Slide 19: segment performance
segment performance Staffing in € M Q1 2015 Q1 2014 % organic* good growth in North America, Netherlands, Iberia with focus revenue 2,570.4 2,352.4 5% retained on revenue quality EBITA 82.4 74.4 9% Germany and France remain challenging markets, however EBITA margin 3.2% 3.2% profitability is stable
Slide 20: gross margin bridge
gross margin bridge YoY gross margin development + 0.2% + 0.3% -/- 0.2% 18.4% 18.1% temp margin down perm fees were 11.3% of GP (up from 10.0% LY) - primarily lower due to mix impact - organic growth of 16% YoY - minor decline in underlying margin continued focus on client profitability 20 April 30,
Slide 21: operating expenses bridge
operating expenses bridge sequential OPEX development in € M +25 +4 -/-7 -/-2 662 642 large negative FX impact; driven by FTE growth in North America, Iberia, Belgium weakening euro and Poland good cost control maintained completion of Netherlands restructure seasonally lower marketing spend continu
Slide 22: net debt at € 425M
net debt at € 425M leverage ratio at 0.5 € million March 31, 2015 March 31, 2014 goodwill and intangible assets 2,654 2,627 operating working capital 590 477 net tax assets 594 482 other assets and liabilities 139 71 invested capital 3,977 3,656 equity 3,552 2,942 net debt 425 714 invested capital 3
Slide 23: Q1 '15 free cashflow
Q1 ’15 free cashflow impacted by tax prepayments and working capital requirements € million Q1 ’15 Q1 ’14 L4Q ’15 L4Q ’14 EBITDA 160 135 752 626 change in OWC -/- 59 -/- 22 -/- 28 89 income taxes -/- 36 -/- 10 -/- 143 -/- 240 Provisions & employee benefit obl. 0 -/- 2 9 -/- 44 net additions in PPE a
Slide 24: outlook
outlook organic revenue grew by 5.6% in Q1, March was up 4.3% - volume trend in April (so far) a touch better than March - significant FX impact focus on profitable growth continues: - continue activity-based field steering (ABFS) development - remain on track to achieve cost reductions/efficiencies
Slide 25: March exit rates
March exit rates revenue growth per working Q1, 2015 March, 2015 day North America + 5% + 5% France 0% -/- 3% Netherlands + 10% + 10% Germany -/- 3% -/- 3% Belgium (incl. Luxembourg) + 7% + 3% Iberia + 12% + 8% United Kingdom + 3% + 3% Rest of Europe + 12% + 10% Rest of the world + 12% + 8% Group +
Slide 26: on track
on track 26 April 30, 2015 1st quarter results 2015
Slide 27: randstad
™- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services SA
Slide 28: appendices
™- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 29: 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 30: 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 31: 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 32: 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 = 2.5% 2% average floating rate = 1.6% 1% 0% -1% April 2005 March 2015 we use floating interest rates as a natural hedge - spread above Euribor of 50-115 bps 32 April 30,
Slide 33: revenue split Q1 2015
revenue split Q1 2015 geographical areas revenue categories 9% North America 21% 8% 24% France NL 6% Germany Belgium 5% 58% UK 14% 21% 7% Iberia RoE 11% RoW 16% staffing inhouse professionals 33 April 30, 2015 1st quarter results 2015
Slide 34: EBITA breakdown by geography
EBITA breakdown by geography Q1 2015 Q1 2014 1% 4% 7% 6% North America 17% 22% 6% 6% France 3% 3% NL Germany 12% 10% 10% Belgium 18% 15% UK Iberia 21% 9% 14% RoE RoW 25% 24% 34 April 30, 2015 1st quarter results 2015
Slide 35: outlets by region
outlets* by region end of period Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 North America 1,065 1,084 1,074 1,087 1,075 France 739 741 743 766 794 the Netherlands 659 689 666 675 675 Germany 556 555 548 551 550 Belgium/Lux 306 310 314 313 314 United Kingdom 131 140 141 141 142 Iberia 295 292 288 290 28
Slide 36: corporate staff by region
corporate staff by region average Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 North America 6,250 6,230 6,160 6,250 6,230 France 3,390 3,430 3,410 3,370 3,370 the Netherlands 4,120 4,430 4,420 4,320 4,240 Germany 2,570 2,620 2,610 2,600 2,610 Belgium/Lux 1,880 1,780 1,790 1,720 1,700 United Kingdom 1,51
Slide 37: staffing employees by region
staffing employees by region average Q1 2015 Q1 2014 North America 101,600 99,600 France 66,000 67,000 the Netherlands 70,900 72,300 Germany 43,000 45,700 Belgium/Lux 38,200 37,000 United Kingdom 17,100 18,400 Iberia 56,600 52,400 Rest of Europe 55,800 52,300 Rest of the world 112,000 110,800 total