Slide 1: 1st quarter 2013
1st quarter 2013 good start of the year strong efficiency improvements Robert Jan van de Kraats, CFO Randstad Holding nv April 25, 2013
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 April 25, 2013 first quarter results 2013
Slide 4: performance
performance 4 April 25, 2013 first quarter results 2013
Slide 5: good start of the year, strong efficiency improvements
good start of the year, strong efficiency improvements € million Q1 2013 Q1 2012 % organic Q4 2012 revenue 3,832 4,152 -/-4% 4,234 gross profit 684 748 -/-7% 772 gross margin 17.8% 18.0% 18.2% operating expenses* 592 638 -/-6% 616 opex as % of revenue 15.5% 15.4% 14.5% EBITA* 92 110 -/ -16% 156 EBIT
Slide 6: Q1 2013: slightly improving trend through the quarter
Q1 2013: slightly improving trend through the quarter YoY Randstad growth development 30% 20% 10% 0% -10% -20% -30% -40% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 Group Europe North America Rest of World gr
Slide 7: North America: focus on profitability
North America: focus on profitability revenue -/-3% (Q4: +0%), March -/-3% - strong gross margin improvement in staffing & professionals - focus on client profitability - perm at +4% (vs. -/-5% in Q4) performance North America 1.100 6% 5% 1.000 US staffing & inhouse down 4% 4% 900 3% - good performa
Slide 8: SFN integration well on track: focus on IT migration
SFN integration well on track: focus on IT migration physical integration staffing & professionals completed migration towards 1 back-office IT system in US integration migration towards 1 front-office system in professionals process integration costs Q1: € 1.7M (total: € 39.5M) annualized cost-syne
Slide 9: France: ensuring adaptability
France: ensuring adaptability revenue down 12% (Q4: -/- 14%) - stable trend through the quarter - inhouse at +8% YoY performance France - professionals at -/-15%, impacted by perm 900 4% 3% 700 gross profit down 9% YoY 2% - GM up 80 bps, impact Finance act (CICE) 500 1% - mix: growth inhouse vs. dec
Slide 10: the Netherlands: gross margin pressure
the Netherlands: gross margin pressure revenue down 1% (Q4: -/-3%) - continued strong growth at inhouse & payroll - Yacht at -/-13%, but improving utilization rate performance the Netherlands 750 6% gross margin pressure 700 4% - higher social security charges - price increases in a competitive envi
Slide 11: Germany: easing decline
Germany: easing decline revenue down 4% (Q4: -/-9%) - improving trend through the quarter - significant price effect performance Germany - no reduced demand yet from equal pay 500 8% - professionals slowed, but good performance in IT 6% 450 4% gross margin pressure 2% - implementation equal pay 400
Slide 12: Belgium: challenging market
Belgium: challenging market revenue -/- 9% (Q4: -/-8%) - stable revenue/wd through the quarter performance Belgium focus on profitability 400 6% - client profitability 350 4% - field steering - focus on costs: 300 2% - FTEs down by 5% sequentially 250 0% - less marketing Q1 2012 Q2 2012 Q3 2012 Q4 2
Slide 13: UK: improved profitability
UK: improved profitability revenue -/- 1% (Q4: -/- 7%) - improving trend through the quarter - good growth in professionals: performance UK - Education +11%, Finance: +5%, IT +25% 230 2,0% - further decline inhouse, due to focus on client 210 1,5% profitability 190 1,0% - good growth in MSP and RPO
Slide 14: Iberia: improving trend
Iberia: improving trend Spain - revenue -/- 1% (Q4: -/- 12%), March +4% - trend positively impacted by Easter (hospitality) performance Iberia - improving trend driven by manufacturing 250 4% - professionals showed continued growth 3% 200 2% Portugal 150 1% - revenue -/- 8% (Q4: -/- 14%), March +1%
Slide 15: revenue development per industry
revenue development per industry Segments USA Germany France Netherlands Manufacturing -- -- -- - Automotive - -- -- ++ Food ++ + + + Transport -- + - ++ Business services - -- - o Financial services - -- o o IT services -- + -- o Public sector - ++ - + Health & social work + -- -- -- 15 April 25, 2
Slide 16: financial results & outlook
financial results & outlook 16 April 25, 2013 first quarter results 2013
Slide 17: income statement Q1 2013
income statement Q1 2013 € million Q1 2013 Q1 2012 % change % organic revenue 3,832 4,152 -/- 8% -/- 4% gross profit 684 748 -/- 9% -/- 7% gross margin 17.8% 18.0% operating expenses* 592 638 -/- 7% -/- 6% opex as % of revenue 15.5% 15.4% EBITA* 92 110 - / - 17% -/ - 16% EBITA margin* 2.4% 2.7% inte
Slide 18: Q1 2013: financial key points
Q1 2013: financial key points free cash flow amounted to € 42M vs. € 58M LY - lower profitability vs. LY - reinforced focus on collection of trade receivables, some impact Easter - timing effect CICE in France leverage ratio at 1.5, within our targeted range DSO improved by 1 day YoY issue preferenc
Slide 19: segment performance, focus on delivery models
segment performance, focus on delivery models Staffing in € M Q1 2013 Q1 2012 % organic* continued slowdown in North America, revenue 2,333.5 2,563.0 -5 due to focus on client profitability signs of improvement across Europe, EBITA 48.0 68.7 -30 mainly driven by industrial segments EBITA margin 2.1%
Slide 20: gross margin bridge
gross margin bridge YoY gross margin development + 0.2% -/- 0.2% 18,0% -/- 0.2% 17,8% 17,6% 17,6% Q1 2012 price/mix Q2 price/mix Q3 price/mix Q4 price/mix Q1 perm HRS/others Q1 2013 placements margin expansion North America HRS continued to grow YoY and contributed 20 bps CICE benefit in France perm
Slide 21: operating expenses down
operating expenses down sequential OPEX development in € M FTEs down by 890 sequentially - mainly across Europe additional synergies related to SFN of € 1M -9 -2 -1 -4 -8 616 +69 592 recovery ratio: 71% Q4 2012 FX disposals synergies organic organic organic organic Q1 2013 SFN EU NA RoW corp. YoY OP
Slide 22: cost reduction initiatives
cost reduction initiatives field steering - supported by staff turnover > 20% Q3 2012: € 638M - optimizing distribution network - impacted by wage inflation & bonus accruals FX: - € 10 M Q4 2012: € 616M synergies SFN FX: - € 9 M implementation restructuring programs - overhead & head office Q1 2013:
Slide 23: DSO down by 1 day
DSO down by 1 day €M March 31, 2013 March 31, 2012 trade and other receivables 2,854 2,941 less: trade and other payables -/- 2,291 -/- 2,291 operating working capital* 563 650 cash & cash equivalents 149 355 less: current borrowings -/- 113 -/- 39 less: long-term borrowings -/- 66 - less: ST part l
Slide 24: net debt level down € 165M sequentially
net debt level down € 165M sequentially supported by issue of preference shares C €M Q1 2013 Q1 2012 EBITDA 106 124 usage of OWC -/- 33 -/- 29 income taxes paid -/- 16 -/- 17 provisions and other -/- 8 -/- 11 net additions in PPE and software -/- 3 -/- 12 other non-cash items -/- 8 3 financial recei
Slide 25: outlook
outlook stable growth trend: from -/- 5% in January to -/- 3% in March - some signs of improvement in some countries - comparison base rather stable - positive working day impact of 0.4 in Q2 2013 vs. Q2 2012 - 1.6 days more in Germany and possible impact bridging days - well positioned for 2013 bas
Slide 26: Q&A
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services Q&A
Slide 27: appendices
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 28: drivers effective tax rate
drivers effective tax rate effective tax rate* was up to 31% (vs. 32% in FY 2012) - 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 - full year 2013 guidance: 28%-31% driver effecti
Slide 29: financing: fixed vs. floating interest rates
financing: fixed vs. floating interest rates 10 year historic interest rates comparison 1M vs. 5Y 6% 5% 4% average fixed rate = 3.0% 3% average floating rate = 2.0% 2% 1% 0% March 2003 March 2013 we use floating interest rates as a natural hedge - spread above Euribor of 50-115 bps 29 April 25, 2013
Slide 30: revenue split Q1 2013
revenue split Q1 2013 geographical area revenue categories 9% North America 21% 6% 23% France 5% NL Germany 5% Belgium 7% UK 18% 17% 61% Iberia 11% RoE RoW 17% staffing inhouse professionals 30 April 25, 2013 first quarter results 2013
Slide 31: EBITA breakdown by geography
EBITA breakdown by geography Q1 2013 Q1 2012 3% 3% 2% 2% 3% 3% 1% 5% North America 19% 26% France 9% 11% NL Germany 12% Belgium 12% 13% UK 17% 10% 21% Iberia RoE RoW 30% 31% 31 April 25, 2013 first quarter results 2013
Slide 32: outlets by region
outlets* by region end of period Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 North America 1,053 1,041 1,041 1,055 1,074 France 866 868 864 864 862 the Netherlands 688 634 672 683 696 Germany 539 558 551 548 557 Belgium/Lux 320 344 350 350 350 United Kingdom 160 203 231 243 246 Iberia 253 266 264 274 27
Slide 33: corporate employees by region
corporate employees by region average Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 North America 6,160 6,300 6,360 6,400 6,440 France 3,630 3,740 3,890 3,930 3,960 the Netherlands 4,360 4,560 4,720 4,770 4,870 Germany 2,500 2,610 2,690 2,830 2,940 Belgium/Lux. 1,890 1,980 2,070 1,980 2,030 United Kingdom
Slide 34: staffing employees by region
staffing employees by region average Q1 2013 Q1 2012 North America 100,400 104,200 France 69,900 80,700 the Netherlands 79,700 81,400 Germany 45,500 50,300 Belgium/Lux. 36,100 40,100 United Kingdom 18,200 21,700 Iberia 40,900 43,900 Other Europe 35,400 34,900 Rest of world 109,800 109,900 total 535,