Slide 1: 4th quarter and annual results 2011
4th quarter and annual results 2011 strong growth in North America, gradual slowdown in Europe revenue up 13% and diluted earnings per share up 8% Ben Noteboom, CEO Robert-Jan van de Kraats, CFO Randstad Holding nv February 16, 2012
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 3 February 16, 2012 fourth quarter and annual results 2011
Slide 4: performance
performance 4 February 16, 2012 fourth quarter and annual results 2011
Slide 5: Growth North America strengthens
Growth North America strengthens quarterly market growth (YoY) 40% • growth in markets continued to 30% slow down 20% 10% • clear differences in trends between 0% North-America and Europe -10% Q4 Q1 Q2 Q3 Q4 2010 2011 • seasonal trends remain intact NL France Germany Belgium UK N-America quarterly R
Slide 6: Q4 2011: slowing growth, good cost control
Q4 2011: slowing growth, good cost control • revenue amounted to € 4,378 million (+4% YoY organically per wd) - organic growth per working day from 7% in September to 4% in December - inhouse up 6% (Q4 2010: 51%) - staffing was flat (Q3 2011: 5%), easing growth in main European countries - professio
Slide 7: FY 2011: good performance in a mixed year
FY 2011: good performance in a mixed year • strong growth in the first half of the year - revenue up 14% (9% organically) to € 16.2 bln - focus on client profitability and field steering - market share gains in France, US, Randstad NL and Italy • strong market position in North America by acquiring
Slide 8: the Netherlands: mixed picture
the Netherlands: mixed picture • revenue p/wd up 3% (Q3: +4%) revenue & EBITA margin - Randstad continues to gain market share 800 7.5% - Tempo-Team lagging - revenue decline at Yacht stable at low single digit rate 750 6.5% million € 700 • public sector related business flat YoY 5.5% - mainly due t
Slide 9: France: gaining market share
France: gaining market share • revenue up 5% p/wd (Q3: +10%) revenue & EBITA margin - continues to gain market share 900 4.0% - automotive & manufacturing main drivers in staffing - professionals slowing down, mainly in perm 800 3.0% - continued strong growth in Inhouse, increased share at million €
Slide 10: Germany: slowing volume growth
Germany: slowing volume growth • revenue up 8% p/wd (Q3: +10%) revenue & EBITA margin - significant price effect following changes in CLA 550 10.0% - volumes gradually slowing down (Q4 '10: +31%) 500 8.0% • professionals up 13% (vs +10% in Q3 2011) 450 6.0% million € - continued strong growth in IT
Slide 11: Belgium: focus on improving business mix
Belgium: focus on improving business mix • revenue p/wd -/-1% (Q3: +4%) revenue & EBITA margin - decline of -/-1% stable through the quarter 400 7.0% - inhouse down 9% against a strong comparison base 350 6.0% - Randstad gained market share in the administrative segment 300 5.0% - professionals incr
Slide 12: UK: challenging environment
UK: challenging environment • revenue -/- 7% p/wd (Q3: 0%) revenue & EBITA margin - decline increased throughout the quarter 225 4.0% 3.0% - decline public sector eased slightly to -16% (vs -25% in Q3) 200 2.0% - engineering showed good growth 1.0% 175 million € 0.0% • inhouse -/- 2% (Q4 2010: +84%)
Slide 13: North America: continued growth and solid profitability
North America: continued growth and solid profitability revenue & EBITA margin • organic revenue p/wd +10% (Q3: +10%) 1000 5.0% - US staffing & professionals strongly outperformed 950 900 - Canada very strong performance 850 4.0% 800 - Perm up 44% organically 750 3.0% million € 700 650 2.0% • US sta
Slide 14: SFN Group: ahead of expectations
SFN Group: ahead of expectations • strong performance breakdown SFN Group revenues Q4 2011 - revenue growth +2% (Q3 -/- 1%) - EBITA margin from 3.7% (incl. HireAct) to 5.0% 39% concept performance Q4 2011 9% • staffing up 1% YoY 52% - client wins in administrative segment - EBITA margin up to 3.3% v
Slide 15: SFN integration well on track
SFN integration well on track - integration process is well on track integration - integration costs € 8 million (€ 12.6 millionYTD) process - total expected integration costs increased to around 100% of expected annual cost synergies annual synergies $40M - cost synergy target increased to at least
Slide 16: revenue development per industry segment
revenue development per industry segment Segments USA Germany France Netherlands Manufacturing + o + o Automotive ++ + ++ ++ Food + + - o Transport ++ o o + Business services ++ -- o + Financial services ++ -- -- o IT services ++ + o o Public sector ++ - o o Health & social work ++ + o o 16 February
Slide 17: randstad well positioned to meet strategic targets
randstad well positioned to meet strategic targets • atypical cyclical pattern • field steering ensures agility and adaptability • 3 possible scenarios • flat revenue improve profitability • continued growth strategic targets in reach • (limited) revenue decline focus on profit protection • so
Slide 18: financial results & outlook
financial results & outlook 18 February 16, 2012 fourth quarter and annual results 2011
Slide 19: income statement Q4 2011
income statement Q4 2011 € million Q4 2011 Q4 2010 % change % organic Revenue 4,378 3,891 13% 2% gross profit 801 737 9% -/- 4% gross margin 18.3% 18.9% operating expenses* 638 575 11% -/- 2% opex as % of revenue 14.6% 14.8% underlying EBITA 163 162 1% -/ - 13% underlying EBITA margin 3.7% 4.2% repo
Slide 20: Q4 2011: financial key points
Q4 2011: financial key points • underlying EBITA from € 162 million to € 163 million - adjusted for integration costs and one-offs of € 36.8 mln • impairment goodwill of € 125 million • effective tax rate* amounted to 30% - guidance 2012: 29-32% • diluted EPS* up 8% to € 0.69 vs. € 0.64 in Q4 2010 •
Slide 21: segment performance
segment performance Staffing in € million Q4 2011 Q4 2010* % organic • industrial segments main drivers revenue 2,827.2 2,556.5 0% • strong growth in North America EBITA 111.0 114.2 -/-12% • gradual slowdown across Europe EBITA margin 3.9% 4.5% • focus on client profitability • non-recurring items i
Slide 22: gross margin Q4 2011
gross margin Q4 2011 gross margin development temp margin development 22 February 16, 2012 fourth quarter and annual results 2011
Slide 23: gross margin Q4 2011
gross margin Q4 2011 temp margin development: Q2 2011 Q4 2011 • trend in temp margin reflecting continuous changes in mix 23 February 16, 2012 fourth quarter and annual results 2011
Slide 24: operating expenses: good cost control
operating expenses: good cost control sequential development operating expenses + 70 -/- 23 +4 + 0.2 18.5 -/- 3 • underlying operating expenses in line with previous quarter - synergies started to materialize - limited currency effects (FX) impact • overall FTEs in line with previous quarter • branc
Slide 25: balance sheet reflects consolidation of SFN
balance sheet reflects consolidation of SFN € million December 31, 2011 December 31, 2010 trade and other receivables 3,109 2,787 less: trade and other payables 2,477 2,261 operating working capital* 632 526 cash & cash equivalents 339 285 less: current borrowings 39 76 less: non-current borrowings
Slide 26: free cash flow up 7% to € 216 million
free cash flow up 7% to € 216 million € million Q4 2011 Q4 2010 cash flow from operations before OWC* 140 130 usage of OWC 114 95 net additions in PPE and software -/- 32 -/- 16 financial receivables/dividend associates -/- 5 -/- 5 disposals of PPE - - free cash flow 216 203 € million Q4 2011 free c
Slide 27: income statement FY 2011
income statement FY 2011 € million FY 2011 FY 2010 % organic revenue 16,225 14,179 9% gross profit 2,957 2,659 5% gross margin 18.2% 18.8% operating expenses* 2,357 2,149 3% opex as % of revenue 14.5% 15.2% underlying EBITA 601 510 11% underlying EBITA margin 3.7% 3.6% one-offs -/- 48 -/- 4 reported
Slide 28: FY 2011: good performance in a mixed year
FY 2011: good performance in a mixed year • strong revenue growth, however easing in the second half • underlying EBITA up 18 % to € 601 million - organically up 11% - good cost control • underlying diluted EPS up 18% to € 2.32 per share • moving average DSO from 55 days in Q4 2010 to 54 days in Q4
Slide 29: focussed on maintaining a solid financial position
focussed on maintaining a solid financial position net debt & leverage ratio development 1700 3 net debt (€ m) leverage ratio (rhs) 1500 2.5 1300 2 strategic target 1100 1.5 900 1 700 0.5 500 0 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 • strong focus on cash flow genera
Slide 30: dividend policy
dividend policy 1 • aiming at consistent dividend growth through the cycle • aiming at a floor in the dividend of € 1.25 objective • if earnings capacity and the financing policy allow for it • flexible payout ratio • indicative range: minimum payout 30% - maximum payout 60% • dividend > € 1.25 if p
Slide 31: outlook
outlook • growth per working day from 7% in September to 4% in December • growth per working day 0% in January • growth in North America accelerated in January - US staffing + 13% - US professionals + 15% - SFN +6% • gradual slow down in Europe continued in January - Germany +6% - France -/-3.5% - N
Slide 32: Q&A
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services Q&A
Slide 33: appendices
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 34: geographic performance 2011
geographic performance 2011 revenue EBITA margin € million 2011 2010 organic growth 2011 2010 the Netherlands 2,940 2,827 4% 6.1% 6.4% France 3,378 3,067 12% 3.1% 2.9% Germany 1,960 1,729 13% 6.7% 6.2% Belgium/Lux 1,413 1,328 6% 4.6% 4.7% United Kingdom 789 802 0% 0.4% 0.8% Iberia 873 861 1% 2.5% 2.
Slide 35: drivers effective tax rate
drivers effective tax rate effective tax rate* was up to 30% in line with guidance (vs. 29% in 2010) - change in geographical mix: high growth in countries with above average tax rates - as our results improve, the relative effect of the tax planning measures decreases driver effective* cash tax exp
Slide 36: debt facilities & repayment schedule existing facility
debt facilities & repayment schedule existing facility repayment schedule net cash December 2011 1500 135 135 1300 term 1100 revolver € x million 900 700 ~1,320 1,255 500 300 100 300 135 -100 • covenant; net debt/EBITDA* of max. 3.5 - at the end of Q4 2011 the net debt/EBITDA ratio was 1.8 • syndica
Slide 37: financing: fixed vs. floating interest rates
financing: fixed vs. floating interest rates 10 year historical interest rates comparison 1M vs 5Y 6% 5% 4% average fixed rate = 3.5% 3% average floating rate = 2.5% 2% 1% 0% December 2001 December 2011 1M Float 5Y Fixed • we use floating interest rates as a natural hedge - spread above Euribor of 5
Slide 38: revenue split FY 2011
revenue split FY 2011 geographical area sectors NL France 9% 18% Germany 19% 15% Belgium/Lux. 65% UK 6% 16% 21% 5% Iberia 5% ROE 9% 12% N-America ROW staffing inhouse professionals 38 February 16, 2012 fourth quarter and annual results 2011
Slide 39: EBITA breakdown by geography
EBITA breakdown by geography FY 2011 FY 2010 NL 2% NL 2% France France 16% 11% Germany 28% Germany 4% 3% 33% 4% 1% Belgium/Lux. 3% Belgium/Lux. UK 1% 11% UK 10% Iberia Iberia 16% ROE 19% 16% 20% ROE N-America N-America ROW ROW 39 February 16, 2012 fourth quarter and annual results 2011
Slide 40: outlets by country
outlets* by country end of period Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 the Netherlands 717 734 739 746 733 France 882 896 889 896 905 Germany 554 555 530 516 503 Belgium/Lux 359 363 367 367 374 United Kingdom 255 283 275 278 289 Iberia 277 278 272 268 257 Other Europe 333 332 330 322 316 North Am
Slide 41: corporate employees by country
corporate employees by country average Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 the Netherlands 5,150 5,220 5,170 5,190 5,280 France 4,010 4,000 3,910 3,870 3,920 Germany 3,020 3,020 2,940 2,880 2,890 Belgium/Lux. 2,120 2,180 2,110 2,080 2,130 United Kingdom 1,930 1,930 1,960 1,990 2,060 Iberia 1,470
Slide 42: staffing employees by country
staffing employees by country averages Q4 2011 Q4 2010 the Netherlands 89,500 91,200 France 91,300 90,900 Germany 56,900 56,200 Belgium/Lux. 45,500 46,700 United Kingdom 23,300 25,100 Iberia 48,900 54,000 Other Europe 40,100 38,000 North America 115,700 59,600 Rest of world 110,900 103,400 total 622