Slide 1: 3rd quarter 2015 results
3rd quarter 2015 results Solid profitable growth Jacques van den Broek, CEO Robert Jan van de Kraats, CFO Randstad Holding nv October 29, 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 October 29, 2015 3rd quarter results 2015
Slide 4: performance
performance 4 October 29, 2015 3rd quarter results 2015
Slide 5: Q3: Solid profitable growth
Q3: Solid profitable growth Revenue of € 4,977 million; Topline growth broadly Gross margin up 30 bp to organic growth +5.4%; stable across most 18.8%; gross profit up 5.8% countries Perm fees up 13%, now 10.5% of gross profit (vs. 9.8% last year) Underlying EBITA of € 249 Adjusted net income up DSO
Slide 6: 2015: profitability on track
2015: profitability on track € million Q3 ’15 Q3 ’14 % Org. L4Q ’15 L4Q ’14 % Org. revenue 4,977 4,516 +5% 18,720 17,032 +5% gross profit 934 835 +6% 3,492 3,125 +6% gross margin 18.8% 18.5% 18.7% 18.3% operating expenses* 685 625 +4% 2,676 2,460 +3% opex % 13.8% 13.8% 14.3% 14.4% EBITA* 249 210 +13
Slide 7: topline stable in most countries
topline stable in most countries YoY Randstad growth development 15% 5% -5% -15% Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Group Europe North America Rest of World stable growth in the majority of European countries; Netherlands & France (in line with ma
Slide 8: North America: stable growth in US Staffing
North America: stable growth in US Staffing revenue +4% (Q2: +5%) performance North America - quarterly - 3% tougher comparison base 1.200 7% - perm up 9% (Q2: +16%) 1.100 6% - GP up 9% (Q2: +10%) 1.000 5% 900 4% US Staffing & Inhouse, revenue growth 800 3% +6% (Q2: +7%) 700 Q3 2014 Q4 2014 Q1 2015
Slide 9: France: in line with market
France: in line with market performance France - quarterly revenue up 3% YoY (Q2: +4%) 800 6% - combined Staffing & Inhouse at +3% YoY 5% 700 - Professionals at +2% vs. Q2: +2% 4% - perm grew 23% (Q2: +6%) 600 3% 2% gross profit +2% YoY (Q2: +3%) 500 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 1% revenu
Slide 10: the Netherlands: solid growth on tougher comparables
the Netherlands: solid growth on tougher comparables performance the Netherlands - quarterly revenue at +10% (Q2: +15%) 800 8% - perm growth accelerated to +28% (Q2: 7% 700 +21%) 6% 600 5% - 4% tougher comparison base 4% 500 3% 400 2% combined Staffing & Inhouse Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 20
Slide 11: Germany: returning to growth
Germany: returning to growth performance Germany - quarterly revenue growth +2% YoY (Q2: 0%) 600 7% - perm growth of +15% (Q2: +26%) 6% 500 5% 400 4% gross profit up 2% (Q2: -/-1%) 300 3% - SME outgrowing large clients 200 2% Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 EBITA margin at 5.7% vs. 5.4% LY r
Slide 12: Belgium: focus on profitability
Belgium: focus on profitability performance Belgium - quarterly revenue +1% (Q2: +6%) 400 7% - Staffing and Inhouse growth at +1% (Q2: +7%) 6% 300 5% 4% gross profit up 6% YoY (Q2: +5%) 200 3% 100 2% EBITA margin up to 6.1% vs. 4.9% LY Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 revenue in € M EBITA mar
Slide 13: Iberia: stable growth
Iberia: stable growth performance Iberia - quarterly Iberia revenue stable; up 8% (Q2: 350 5% +8%) 300 4% 250 3% Spain 200 2% 150 - revenue growth +12% (Q2: +14%) 100 1% - Professionals grew 68% despite tough Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 comparables revenue in € M EBITA margin - perm grow
Slide 14: UK: improved profitability
UK: improved profitability performance UK - quarterly revenue up 1% YoY (Q2: 0%) 250 2,5% - gross profit up 2% (Q2: +5%) 2,0% 200 - good performance in Construction & 1,5% 150 Education 1,0% - perm fees up 4% (Q2: +5%) 100 0,5% 50 0,0% EBITA margin up to 2.0% vs. 1.4% LY Q3 2014 Q4 2014 Q1 2015 Q2 2
Slide 15: Other European countries: solid growth continues
Other European countries: solid growth continues performance ROE - quarterly overall revenue growth +11% (Q2: 500 6% +9%) 400 5% 300 4% Italy 200 3% 100 - revenue growth at 20% continued to accelerate (Q2: 16%) 0 2% Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 - focus on specialties and perm (+44%) payin
Slide 16: Rest of the world: stable growth
Rest of the world: stable growth overall revenue growth stable at +11% performance ROW - quarterly (Q2: +12%) 450 2,0% 400 1,5% Japan, growth at +6% YoY (Q2: +6%) 350 1,0% - perm grew 63% (Q2: +25%) 300 0,5% 250 Australia / New Zealand grew 11% 200 0,0% (Q2: +16%) Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3
Slide 17: financial results & outlook
financial results & outlook 17 October 29, 2015 3rd quarter results 2015
Slide 18: income statement Q3 2015
income statement Q3 2015 € million Q3 ’15 Q3 ’14 % Org. L4Q ’15 L4Q ’14 % Org. revenue 4,977 4,516 +5% 18,720 17,032 +5% gross profit 934 835 +6% 3,492 3,125 +6% gross margin 18.8% 18.5% 18.7% 18.3% operating expenses* 685 625 +4% 2,676 2,460 +3% opex margin 13.8% 13.8% 14.3% 14.4% EBITA* 249 210 +1
Slide 19: performance by revenue category
performance by revenue category Staffing Q3 Q3 *% L4Q L4Q *% continued focus on activity- in € M 2015 2014 organic 2015 2014 organic based field steering revenue 2,918 2,681 5% 10,934 10,136 4% FTE investments in growth markets EBITA 151 127 20% 479 404 21% EBITA margin 5.2% 4.7% 4.4% 4.0% Inhouse Q
Slide 20: gross margin bridge
gross margin bridge YoY gross margin development + 0.1% + 0.2% + 0.0% 18.8% 18.5% temp margin stable, mix offsetting price perm fees grew 13% YoY organically 10.5% of GP (up from 9.8% LY) HRS/others improvement driven by growth of MSP/RPO (Sourceright) 20 October 29, 2015 3rd quarter results 2015
Slide 21: operating expenses bridge
operating expenses bridge sequential OPEX development in € M +2 +2 +2 -/-6 -/-2 -/-1 688 685 OPEX up € 3M organically (sequentially) FTE growth in North America and Europe favorable FX impact; slight euro rebound continued investment in emerging markets 21 October 29, 2015 3rd quarter results 2015
Slide 22: net debt at € 453M
net debt at € 453M leverage ratio at 0.5 € million September 30, 2015 September 30, 2014 goodwill and intangible assets 2,637 2,617 operating working capital 708 601 net tax assets 567 514 other assets and liabilities 216 137 invested capital 4,129 3,869 equity 3,676 3,208 net debt 453 661 invested
Slide 23: Q3 ’15 free cashflow
Q3 ’15 free cashflow € million Q3 ’15 Q3 ’14 L4Q ’15 L4Q ’14 EBITDA 257 220 829 680 change in OWC 30 103 -/- 106 7 income taxes -/- 32 -/- 37 -/- 147 -/- 255 provisions & employee benefit obl. -/- 12 -/- 4 -/- 3 -/- 38 net additions in PPE and software -/- 16 -/- 13 -/- 65 -/- 63 other items -/- 21
Slide 24: outlook
outlook organic revenue growth was 5.4% in Q3 and in September 5.7% - volumes in October so far indicate a continuation of the trend gross margin is expected to be stable sequentially there is no significant working day impact in Q4 for Q4 we expect a minor increase in operating expenses (on an orga
Slide 25: on track
on track growth & 25 October 29, 2015 3rd quarter results 2015
Slide 26: Revenue of € 4,977 million; organic growth +5.4%; gross profit up 5.8%
Revenue of € 4,977 million; Topline Topline growth growth broadly broadly Gross Gross margin margin up up 30 30 bp bp to to organic growth +5.4%; stable stable across across most most 18.8%; 18.8%; Perm fees up 13%, gross profit up 5.8% countries countries now Perm10.5% fees upof13%, grossnow profit
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: 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 31: 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 = 2.4% 2% average floating rate = 1.5% 1% 0% -1% October 2005 September 2015 we use floating interest rates as a natural hedge - spread above Euribor of 50-115 bps 31 Octo
Slide 32: revenue split Q3 2015
revenue split Q3 2015 geographical areas revenue categories 8% North America 19% 8% 24% France NL 5% Germany 6% Belgium 22% 59% Iberia 7% 15% UK RoE 11% RoW 16% staffing inhouse professionals 32 October 29, 2015 3rd quarter results 2015
Slide 33: EBITA breakdown by geography
EBITA breakdown by geography Q3 2015 Q3 2014 2% 2% 1% 2% 7% 8% North America France 6% 25% 28% 6% NL 8% 12% 8% Germany Belgium Iberia 12% 11% 21% UK 19% 17% RoE RoW 18% 20% 33 October 29, 2015 3rd quarter results 2015
Slide 34: outlets by region
outlets* by region end of period Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 North America 1,102 1,084 1,065 1,084 1,074 France 729 741 739 741 743 the Netherlands 648 644 659 689 666 Germany 547 547 556 555 548 Belgium/Lux 311 303 306 310 314 United Kingdom 130 134 131 140 141 Iberia 303 302 295 292 28
Slide 35: corporate staff by region
corporate staff by region average Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 North America 6,460 6,410 6,250 6,230 6,160 France 3,500 3,410 3,390 3,430 3,410 the Netherlands 4,230 4,050 4,120 4,430 4,420 Germany 2,550 2,560 2,570 2,620 2,610 Belgium/Lux 1,910 1,870 1,880 1,780 1,790 United Kingdom 1,61
Slide 36: staffing employees by region
staffing employees by region average Q3 2015 Q3 2014 North America 107,800 105,900 France 76,800 74,400 the Netherlands 75,300 74,900 Germany 47,100 47,700 Belgium/Lux 44,500 43,300 United Kingdom 15,300 15,900 Iberia 63,700 61,000 Rest of Europe 63,800 57,900 Rest of the world 115,200 107,800 total