Slide 1: 1st quarter 2016 results
1st quarter 2016 results mid-single-digit growth trend continues Jacques van den Broek, CEO Robert Jan van de Kraats, CFO Randstad Holding nv April 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 3 April 26, 2016 1st quarter results 2016
Slide 4: Performance
performance 4 April 26, 2016 1st quarter results 2016
Slide 5: Q1 2016: mid-single-digit growth trend continues
Q1 2016: mid-single-digit growth trend continues Revenue of € 4,702 million; Topline growth of 6% in Gross margin stable YoY at organic growth +5.0%; Europe, +3% in North 18.4%; Perm perm fees fees up up 7%, gross profit up 3.8% America and +5% in Rest now 6.6%, x.x% nowof11.5% gross of profit gross
Slide 6: L4Q: stable mid-single-digit growth
L4Q: stable mid-single-digit growth € million Q1 ’16 Q1 ’15 % Org. L4Q ’16 L4Q ’15 % Org. revenue 4,702 4,431 +5% 19,489 17,712 +6% gross profit 865 815 +4% 3,645 3,277 +6% gross margin 18.4% 18.4% 18.7% 18.5% operating expenses* 697 662 +3% 2,767 2,541 +4% opex % 14.8% 14.9% 14.2% 14.3% EBITA* 169
Slide 7: Regional split converges
regional split converges YoY Randstad growth development 15% 5% -5% -15% Group Europe North America Rest of World Europe grew 6% (vs. +7% in Q4) North America up 3% (vs. +4% in Q4) Rest of the world increased 5% (vs. +7% in Q4) Group grew 5.0% (vs. 6.6% in Q4) on 2.2% tougher comparison base 7 April
Slide 8: North America: US Staffing gaining market share
North America: US Staffing gaining market share revenue +3% (Q4: +4%) North America – historical organic growth - slight impact from timing of Easter 12,00% - perm up 6% (Q4: +10%) - GP up 4% (Q4: +9%) 8,00% 4,00% US Staffing & Inhouse, revenue growth +6% (Q4: +7%) 0,00% Q2'14 Q3'14 Q4'14 Q1'15 Q2'1
Slide 9: The Netherlands: impacted by reduction of payrolling
the Netherlands: impacted by reduction of payrolling performance the Netherlands - quarterly revenue at +6% (Q4: +9%) 850 8% - loss of government payrolling 7% 750 6% - price pressure continues 650 5% 4% 550 3% combined Staffing & Inhouse 450 2% businesses Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 - u
Slide 10: France: growth continues ahead of market
France: growth continues ahead of market performance vs. market (Prism)- quarterly revenue up 9% YoY (Q4: +10%) 12% - combined Staffing & Inhouse at +8% YoY 8% - Professionals at +12% vs. Q4: +10% 4% - perm grew 27% (Q4: +29%) 0% -4% gross profit +5% YoY (Q4: +6%) -8% - impact of new insurance 40 bp
Slide 11: Germany: improving growth & profitability
Germany: improving growth & profitability performance Germany - quarterly revenue growth +5% YoY (Q4: +1%) 600 7% 6% 500 gross profit up 7% (Q4: +13%) 400 5% 4% - SME outgrowing large clients 300 3% 200 2% EBITA margin at 3.7% vs. 3.4% LY Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 - strong operating le
Slide 12: Belgium: improving profitability
Belgium: improving profitability performance Belgium - quarterly revenue -3% (Q4: +6%) 400 7% - Staffing and Inhouse growth at -2% (Q4: +8%) 6% 300 - volumes impacted by loss of some large accounts 5% 4% 200 3% gross profit was flat YoY (Q4: +8%) 100 2% - focus on client profitability Q1 2015 Q2 201
Slide 13: Iberia: improving margins
Iberia: improving margins Org. revenue performance Iberia - quarterly Iberia revenue up 8% (Q4: +11%) 14% 12% 10% 8% Spain 6% - revenue growth at +9% (Q4: +16%) 4% 2% - Professionals grew 19% on tough comparables 0% Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 - perm growth +36% (Q4: +39%) Iberia
Slide 14: UK: improving profitability
UK: improving profitability performance UK - quarterly revenue up 1% YoY (Q4: down 4%) 250 4,0% - gross profit 2% YoY (Q4: 0%) 200 3,0% - perm fees up 2% (Q4: +11%) 150 2,0% EBITA margin up to 3.1% vs. 2.1% LY 100 1,0% - improving operating leverage 50 0,0% Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 re
Slide 15: Other European countries: growth continues
Other European countries: growth continues overall revenue growth +10% (Q4: performance ROE - quarterly +13%) 500 6% 400 Italy 300 5% - revenue growth at 11% (Q4: 19%) 4% 200 - focus on specialties and perm (+26%) paying off 100 3% 0 2% Switzerland Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 - growth at
Slide 16: Rest of the world: moderated growth
Rest of the world: moderated growth overall revenue growth +5% (Q4: +7%) performance ROW - quarterly 450 2,0% Japan, growth at +3% YoY (Q4: +1%) 400 1,5% - perm grew 38% (Q4: +33%) 350 1,0% 300 Australia / New Zealand grew 5% (Q4: 250 0,5% +5%) 200 0,0% Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 - perm
Slide 17: Financial results & outlook
financial results & outlook 17 April 26, 2016 1st quarter results 2016
Slide 18: Income statement Q1 2016
income statement Q1 2016 € million Q1 ’16 Q1 ’15 % Org. L4Q ’16 L4Q ’15 % Org. revenue 4,702 4,431 +5% 19,489 17,712 +6% gross profit 865 815 +4% 3,645 3,277 +6% gross margin 18.4% 18.4% 18.7% 18.5% operating expenses* 697 662 +3% 2,767 2,541 +4% opex margin 14.8% 14.9% 14.2% 14.3% EBITA* 169 153 +1
Slide 19: Performance by revenue category
performance by revenue category Staffing Q1 Q1 *% L4Q L4Q *% focus on delivery models – in € M 2016 2015 organic 2016 2015 organic central delivery revenue 2,691 2,570 3% 11,307 10,421 6% withdrawing from low margin/loss making business EBITA 97 82 4% 529 429 19% FTE investments in growth EBITA marg
Slide 20: Gross margin bridge
gross margin bridge YoY gross margin development 0.0% + 0.1% -/- 0.1% 18.4% 18.4% temp margin flat YoY with favorable mix offsetting ongoing challenging pricing environment perm fees grew 7% YoY organically, benefiting margin by 10bp 11.5% of GP (up from 11.3% LY) HRS/Others down 10bp, impacted by
Slide 21: Operating expenses bridge
operating expenses bridge sequential OPEX development in € M 720 +16 710 700 -/-7 +4 0 690 -/-5 -/-5 -/-5 680 699 697 670 660 650 OPEX down € 13M organically (sequentially) M&A relates to acquisitions of Proffice favorable FX impact € 5M investing in growth in RoW (Latin America) 21 April 26, 2016 1
Slide 22: Net debt at €296M
net debt at € 296M leverage ratio at 0.3 € million March 31, 2016 March 31, 2015 goodwill and intangible assets*** 2,736 2,614 operating working capital 633 590 net tax assets 498 594 other assets and liabilities 13 179 invested capital 3,880 3,977 equity 3,584 3,552 net debt 296 425 invested capita
Slide 23: Q1'16 free cash flow
Q1’16 free cash flow € million Q1 ’16 Q1 ’15 L4Q ’16 L4Q ’15 EBITDA 182 160 918 752 change in OWC -/- 28 -/- 59 -/- 91 -/- 28 income taxes -/- 54 -/- 36 -/- 123 -/- 143 provisions & employee benefit obl. -/- 7 0 -/- 39 9 net additions in PPE and software -/- 14 -/- 13 -/- 64 -/- 65 other items -/- 1
Slide 24: Outlook
outlook organic revenue growth was 5.0% in Q1; In March, revenue grew by 4.6% - volumes in early April indicate a continuation of the March trend. sequentially gross margin is expected to be seasonally higher there is expected to be a small positive working day impact on reported growth in Q2 (circa
Slide 25: Margin ambition
margin ambition 25 April 26, 2016 1st quarter results 2016
Slide 26: Revenue of €4,702 million; organic growth +5.0%; gross profit up 3.8%
Revenue of € 4,702 million; Topline growth of 6% in Gross margin stable YoY at organic growth +5.0%; Europe, +3% in North 18.4%; perm fees up gross profit up 3.8% America and +5% in Rest 6.6%, now 11.5% of gross of the world profit (vs. 11.3% last year) Underlying EBITA of Adjusted net income up DSO
Slide 27: Appendices
™- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 28: 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 29: 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 30: Growth drivers & strategy
growth drivers & strategy 30 April 26, 2016 1st quarter results 2016
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 = 2.2% 2% average floating rate = 1.4% 1% 0% -1% April 2006 March 2016 we use floating interest rates as a natural hedge - spread above Euribor of 50-115 bps 32 April 26,
Slide 33: Revenue split Q1 2016
revenue split Q1 2016 geographical areas revenue categories 8% North America 21% 10% 24% NL France 5% Germany Belgium 6% 57% Iberia 7% 16% 22% UK RoE 10% RoW 14% staffing inhouse professionals 33 April 26, 2016 1st quarter results 2016
Slide 34: EBITA breakdown by geography
EBITA breakdown by geography Q1 2016 Q1 2015 3% 4% 6% 6% North America 4% 3% 22% 26% NL 6% France 6% Germany 12% 9% 10% Belgium Iberia 10% UK 21% 9% 25% 19% RoE RoW 17% 15% 34 April 26, 2016 1st quarter results 2016
Slide 35: Outlets by region
outlets* by region end of period Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 North America 1,129 1,119 1,102 1,084 1,065 the Netherlands 661 644 648 644 659 France 700 728 729 741 739 Germany 546 550 547 547 556 Belgium/Lux 310 303 311 303 306 Iberia 331 306 303 302 295 United Kingdom 146 139 130 134 13
Slide 36: Corporate staff by region
corporate staff by region average Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 North America 6,440 6,610 6,460 6,410 6,250 the Netherlands 4,270 4,200 4,230 4,050 4,120 France 3,500 3,520 3,500 3,410 3,390 Germany 2,600 2,600 2,550 2,560 2,570 Belgium/Lux 1,840 1,890 1,910 1,870 1,880 Iberia 1,830 1,830
Slide 37: Staffing employees by region
staffing employees by region average Q1 2016 Q1 2015 North America 104,100 101,600 the Netherlands 76,200 66,000 France 71,100 70,900 Germany 43,100 43,000 Belgium/Lux 36,200 38,200 Iberia 58,100 56,600 United Kingdom 14,500 17,100 Rest of Europe* 65,800 55,800 Rest of the world 107,900 112,000 tota