Slide 1: 4th quarter and annual results 2012
4th quarter and annual results 2012 solid final quarter of a challenging year strong cost control, good free cash flow Ben Noteboom, CEO Robert Jan van de Kraats, CFO Randstad Holding nv February 14, 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 February 14, 2013 fourth quarter and annual results 2012
Slide 4: Performance
performance 4 February 14, 2013 fourth quarter and annual results 2012
Slide 5: Q4: solid final quarter of a challenging year
Q4: solid final quarter of a challenging year € million Q4 2012 Q4 2011 % organic Q3 2012 revenue 4,234 4,378 -/-4% 4,397 gross profit 772 801 -/-5% 799 gross margin 18.2% 18.3% 18.2% operating expenses* 616 638 -/-5% 638 opex as % of revenue 14.5% 14.6% 14.5% EBITA* 156 163 -/ -5% 161 EBITA margin*
Slide 6: FY 2012: focus on key priorities
FY 2012: focus on key priorities diverging growth trends across regions: - growth in North America, Asia, Latin America, and Japan - gradual decline in Europe focus on key priorities: - focus on costs: - aligning overhead, head office and back-offices with field - cost savings materialized across mo
Slide 7: Focus on client profitability & diversification of portfolio
focus on client profitability & diversification of portfolio HR Solutions now 9.0% of group gross profit (7.6% in 2011) ensuring the right delivery model - transfer from Staffing to Inhouse focus on SME and specialties increase share perm in Staffing and Professionals capturing profitable growth in
Slide 8: Q4 2012: divergent trends continued
Q4 2012: divergent trends continued 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 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 Group Europe North America Rest of World continued growth in Japan, s
Slide 9: North America: focus on profitability
North America: focus on profitability organic revenue +0% (Q3: +4%), gross profit up 4% - focus on client profitability - easing demand in banking and finance - perm down 5% (vs. +9% in Q3) performance North America 1.100 6% 5% 1.000 US staffing & inhouse down 1% 4% 900 3% - good performance in admi
Slide 10: 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 Q4: € 6.0M (total: € 37.8M) annualized cost-syne
Slide 11: France: ensuring adaptability
France: ensuring adaptability revenue down 14% (Q3: -/- 11%) - stable trend throughout the quarter - inhouse decelerated, mainly affected by automotive performance France - perm placements flat YoY 900 4% 3% 800 gross profit down 7% 2% - calculation method subsidies: +100 bps YoY 700 1% - positive i
Slide 12: The Netherlands: anticipating gross margin pressure
the Netherlands: anticipating gross margin pressure revenue down 3% (Q3: -/-3%) - continued growth at inhouse & payroll - Yacht at -/-13%, but improving utilization rate performance the Netherlands 800 8% gross margin pressure 750 6% - competitive environment 700 4% - changed business mix: growth pa
Slide 13: Germany: challenging environment
Germany: challenging environment organic revenue down 9% (Q3: -/-5%) - price effect following voluntary implementation equal pay and CLA increase in November performance Germany - no impact yet from equal pay implementation in 550 8% November - growth professionals at +3% mainly due to IT 500 6% 4%
Slide 14: Belgium: focus on costs
Belgium: focus on costs revenue -/- 8% (Q3: -/-7%) - stable rate of decline performance Belgium focus on profitability 400 6% - client profitability 350 4% - field steering - restructuring program launched: 300 2% - higher efficiency and branch optimization 250 0% - combining Randstad and Tempo-Team
Slide 15: UK: improved profitability
UK: improved profitability revenue -/- 7% (Q3: -/- 9%) - improving trend throughout the quarter - education +9%, finance +17% performance UK - staffing & inhouse to -/-26%, focus on client 220 2,0% profitability 210 1,5% 1,0% - good growth in MSP and RPO 200 0,5% 190 - perm fees at -/- 16% (Q3: -/-
Slide 16: Iberia: demonstrating resilience
Iberia: demonstrating resilience Spain - revenue -/- 12% (Q3: -/- 12%) - decline driven by manufacturing and logistics performance Iberia - professionals showed continued growth 250 4% 3% 200 Portugal 2% - revenue -/- 14% (Q3: -/- 13%) 150 1% - contraction strongest in manufacturing and 100 0% autom
Slide 17: Rest of the World: mixed picture
Rest of the World: mixed picture Japan - revenue grew by 6% - strong growth in blue collar and performance Rest of World outplacement 400 2% - good profitability improvement 380 1% 360 0% Australia 340 -1% - deceleration in Q4, revenue down 11% 320 300 -2% - slowdown in banking & finance and busines
Slide 18: Revenue development per industry
revenue development per industry Segments USA Germany France Netherlands Manufacturing - -- -- - Automotive - -- -- + Food + - o o Transport o o - o Business services ++ -- - o Financial services o -- - + IT services o ++ -- o Public sector o o o o Health & social work + o -- -- 18 February 14, 2013
Slide 19: Financial results & outlook
financial results & outlook 19 February 14, 2013 fourth quarter and annual results 2012
Slide 20: Income statement Q4 2012
income statement Q4 2012 € million Q4 2012 Q4 2011 % change % organic revenue 4,234 4,378 -/- 3% -/-4% gross profit 772 801 -/- 4% -/-5% gross margin 18.2% 18.3% operating expenses* 616 638 -/- 3% -/-5% opex as % of revenue 14.5% 14.6% EBITA* 156 163 - 4% -/ -5% EBITA margin* 3.7% 3.7% one-offs 54 3
Slide 21: Q4 2012: financial key points
Q4 2012: financial key points free cash flow amounted to € 369M vs. € 216M LY - reinforced focus on collection of trade receivables - DSO down 2 days YoY - liability of € 131 million to Dutch tax authorities to be paid in 2013 leverage ratio at 1.7, within our targeted range, good progress in refina
Slide 22: Segment performance
segment performance Staffing in € M Q4 2012 Q4 2011 % organic continued growth in North America, revenue 2,607.5 2,827.2 -9 led by admin, perm and HRS good growth in RoW EBITA 103.0 111.0 -4 stable slowdown across Europe, EBITA margin 4.0% 3.9% mainly driven by industrial segments strong profitabili
Slide 23: Gross margin bridge
gross margin bridge YoY gross margin development + 0.1% -/- 0.2% 18,3% 18,2% 18,1% 18,1% Q4 2011 price/mix Q1 price/mix Q2 price/mix Q3 price/mix Q4 perm HRS/others Q4 2012 placements gross margin stable vs. Q3 and down 10 bps YoY HRS grew strongly YoY and contributed 10 bps temp margin affected by
Slide 24: Operating expenses down
operating expenses down sequential OPEX development in € M FTEs down by 660 sequentially - mainly across Europe +6 +2 -10 -1 -21 +2 additional synergies related to SFN of € 1M 616 continued investments in RoW +69 continuous focus on improving recovery ratio Q3 2012 FX synergies organic EU organic NA
Slide 25: Cost reduction initiatives
cost reduction initiatives field steering - supported by staff turnover > 20% Q2 2012: € 648M - optimizing distribution network FX: + € 8 M synergies SFN Q3 2012: € 638M implementation restructuring programs FX: - € 10 M - overhead & head office - back-offices Q4 2012: € 616M - branch consolidation
Slide 26: Net debt level reduced by €200M
net debt level reduced by € 200M €M December 31, 2012 December 31, 2011 trade and other receivables 2,871 3,109 less: trade and other payables -/- 2,343 -/- 2,478 operating working capital* 528 632 cash & cash equivalents 192 339 less: current borrowings -/- 83 -/- 39 less: ST part long-term borrowi
Slide 27: Refinancing process well on track
refinancing process well on track new financing size status uncommitted ~ € 300M available credit lines standby facilities € 275M available receivables forward-start syndicated credit € 1,420M available medium-term < 5 years facility Japanese syndicated credit ~ € 70M available facility other credit
Slide 28: Free cash flow up 70%
free cash flow up 70% €M Q4 2012 Q4 2011 EBITDA 126 148 release of OWC 269 114 income taxes paid -/- 24 -/- 29 provisions and other 20 20 net additions in PPE and software -/- 15 -/- 32 financial receivables/dividend associates -/- 7 -/- 5 free cash flow 369 216 €M Q4 2012 free cash flow 369 net acq
Slide 29: Income statement FY 2012
income statement FY 2012 € million FY 2012 FY 2011 % organic revenue 17,087 16,225 -/-3% gross profit 3,102 2,957 -/-4% gross margin 18.2% 18.2% operating expenses* 2,539 2,357 -/-3% opex as % of revenue 14.9% 14.5% underlying EBITA 563 601 -/ -11% underlying EBITA margin 3.3% 3.7% one-offs -/- 99 -
Slide 30: FY 2012: financial key points
FY 2012: financial key points gradual revenue decline throughout the year productivity (GP/FTE) up 2% YoY (Q4: +5%) strong recovery ratio in HY2 2012 underlying EBITA down 6%: - strong cost control in HY2 2012 - focus on client profitability - investments in Latin America and Asia underlying diluted
Slide 31: Dividend policy 2012
dividend policy 2012 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
Slide 32: Outlook
outlook stable growth trend: from -/- 6% in October to -/- 5% in Nov/Dec and January - signs stabilization visible in Europe - easier comparison base - continued growth in gross profit in North America - working day impact of 1.8 in Q1 2013 vs. Q1 2012 - Germany 3 days less - limited organic cost de
Slide 33: Q&A
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services Q&A
Slide 34: Appendices
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 35: Drivers effective tax rate
drivers effective tax rate effective tax rate* was up to 31.6% (vs. 30.4% in 2011) - 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 effect
Slide 36: Net debt & repayment schedule existing facility
net debt & repayment schedule existing facility repayment schedule in € M 135 135 net cash 135 ~1,258 1,255 term revolver 1.070 316 135 109 May - 2013 Net cash end Q3 2012 covenant; net debt/EBITDA* of max. 3.5 - at the end of Q4 2012 the net debt/EBITDA ratio was 1.7 syndicated credit facility amou
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 = 3.1% 3% average floating rate = 2.1% 2% 1% 0% December 2002 December 2012 we use floating interest rates as a natural hedge - spread above Euribor of 50-115 bps 37 Februar
Slide 38: Revenue split Q4 2012
revenue split Q4 2012 geographical area revenue categories 10% North America 20% 6% 23% France 4% NL Germany 5% Belgium 8% 18% UK 17% 62% Iberia 10% RoE RoW 17% staffing inhouse professionals 38 February 14, 2013 fourth quarter and annual results 2012
Slide 39: EBITA breakdown by geography
EBITA breakdown by geography Q4 2012 Q4 2011 -4% 0% -1% 4% 4% 7% North America 4% 2% France 24% 31% 11% NL 8% Germany 12% Belgium 13% UK 19% 14% Iberia 21% 15% RoE RoW 23% 26% 39 February 14, 2013 fourth quarter and annual results 2012
Slide 40: Outlets by region
outlets* by region end of period Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 North America 1,041 1,041 1,055 1,074 1,089 France 868 864 864 862 882 the Netherlands 634 672 683 696 717 Germany 558 551 548 557 554 Belgium/Lux 344 350 350 350 359 United Kingdom 203 231 243 246 255 Iberia 266 264 274 273 27
Slide 41: Corporate employees by region
corporate employees by region average Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 North America 6,300 6,360 6,400 6,440 6,450 France 3,740 3,890 3,930 3,960 4,010 the Netherlands 4,560 4,720 4,770 4,870 5,150 Germany 2,610 2,690 2,830 2,940 3,020 Belgium/Lux. 1,980 2,070 1,980 2,030 2,120 United Kingdom
Slide 42: Staffing employees by region
staffing employees by region average Q4 2012 Q4 2011 North America 108,300 115,700 France 76,100 91,300 the Netherlands 87,000 89,500 Germany 47,100 56,900 Belgium/Lux. 41,000 45,500 United Kingdom 19,400 23,300 Iberia 44,500 48,900 Other Europe 37,400 40,100 Rest of world 116,400 110,900 total 577,