Randstad Nv · EURONEXT:RAND
Randstad Nv — Q4 2009 Earnings Presentation
41 slides from Randstad Nv's earnings presentation, Feb 18, 2010
Slide 1: 4th quarter & annual results 2009
4th quarter & annual results 2009 classical recovery patterns in final quarter of a difficult year Ben Noteboom, CEO Robert-Jan van de Kraats, CFO Randstad Holding nv February 18, 2010
Slide 2: Disclaimer
disclaimer Certain statements in this document comprise forecasts on Randstad Holding’s future financial condition and results from operations and certain plans and goals. By their nature, such forecasts generate risk and uncertainty because they concern events in the future and depend on circumstan
Slide 3: Agenda
agenda • performance • financial results & outlook • summary 3 February 18, 2010 4th quarter & annual results 2009
Slide 4: Performance
performance Ben Noteboom 4 February 18, 2010 4th quarter & annual results 2009
Slide 5: Revenue development
revenue development 30% market growth figures YoY 20% 10% • main markets passed 0% the trough -10% -20% • staffing markets -30% -40% improving Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2007 2008 2009 • professionals markets NL France Germany Belgium UK N-America 0% Randstad growth* figures YoY on average recoverin
Slide 6: Q4 2009: classical recovery patterns visible
Q4 2009: classical recovery patterns visible • revenue amounted to € 3,179 (-18% YoY organically per working day) - revenue trend improving through the quarter to -13% in December (easier comparison base) - inhouse and the industrial part of the staffing segment show clearest recovery - professional
Slide 7: The Netherlands: late cyclical character visible
the Netherlands: late cyclical character visible • organic revenue p/wd* -21% in Q4 2009 revenue and EBITA margin - late cyclical market is stabilizing 1000 9,5% - Tempo-Team & Randstad in line with market 8,5% 900 • gross margins under pressure 7,5% - most impact at large account segment million €
Slide 8: France: trending the right way
France: trending the right way • organic revenue p/wd -19% in Q4 2009 - staffing, inhouse and perm. revenue recovered revenue and EBITA margin - professional segment bottomed out vs. LY 1000 5,0% - healthcare business shows growth (YoY) 900 4,0% - marketing campaign boosted brand awareness - focus a
Slide 9: Germany: strong productivity improvement
Germany: strong productivity improvement • organic revenue p/wd -18% in Q4 2009 - revenue improving through the quarter revenue and EBITA margin 500 10,0% • gross margin pressure remains - pressure mostly commercial 450 8,0% - good idle time management 400 6,0% • operating expenses 26% lower YoY mil
Slide 10: UK: mixed picture
UK: mixed picture • organic revenue p/wd -19% in Q4 2009 • inhouse growing again YoY revenue and EBITA margin • general staffing is slightly recovering 300 5,0% • professionals mixed picture 4,0% 250 - recovery in finance, HR 3,0% - continued challenging market in million € 200 2,0% engineering/cons
Slide 11: North America: back to growth in general staffing
North America: back to growth in general staffing • organic revenue p/wd -13% in Q4 2009 - US staffing & inhouse returned to growth (YoY) revenue and EBITA margin halfway Q4 after 3 years of decline 500 5,0% - revenue trend at US professionals eased 450 4,0% - Canada later in cycle than US 3,0% • gr
Slide 12: Market share development Q4 2009
market share development Q4 2009 Q4 market growth* Randstad Group variance Q4 the Netherlands -21% -21% 0% France -14% -19% -5% Germany -20% -18% 2% United States** -12% -11% 1% Belgium -14% -16% -2% UK -18% -19% -1% Spain -18% -16% 2% Italy -24% -34% -10% • FR: aftermath difficulties social plan, t
Slide 13: FY 2009: good operational performance in a very difficult environment
FY 2009: good operational performance in a very difficult economical environment • revenue down € 4.6 billion to € 12,400 (-27% YoY) - on average 145,000 staffing employees less YoY - no loss of any strategic clients - many new clients due to combined offering with Vedior • increasing pressure on gr
Slide 14: Integration Vedior: achievements so far
integration Vedior: achievements so far strong concepts best people - staffing integration completed - talent review in place - professionals best practices defined - global People Survey and integration ahead of plan - share incentive programs aligned - further roll-out inhouse concept - management
Slide 15: Growth drivers & strategy
growth drivers & strategy 15 February 18, 2010 4th quarter & annual results 2009
Slide 16: Extracting the value of the new Randstad
extracting the value of the new Randstad • continue copy & paste best practices - proven track record in general staffing, specialties and inhouse services - extend copy & paste into our professionals segment • inhouse services offering significant early potential as economies recover - at least 15%
Slide 17: Financial results & outlook
financial results & outlook Robert-Jan van de Kraats 17 February 18, 2010 4th quarter & annual results 2009
Slide 18: Q4 2009: financial key points
Q4 2009: financial key points • gross margin mostly impacted by decline in temp margin - gross profit € 606, down 26% YoY • underlying operating expenses in line with guidance of € 500 million - current trends give reason to maintain the network • diluted EPS down 35% to €0.47 • DSO improved by 1 da
Slide 19: Income statement Q4 2009
income statement Q4 2009 € million Q4 2009 Q4 2008 % change % organic revenue 3,180 3,906 -19% -17% gross profit 606 819 -26% -24% gross m argin 19.1% 21.0% operating expenses* 500 641 -22% -19% opex as % of revenue 15.7% 16.4% EBITA** 106 178 -40% -39% EBI TA m argin 3.3% 4.6% income before taxes 4
Slide 20: Gross margin development Q4 2009
gross margin development Q4 2009 21 20,5 -/- 1.2 20 19,5 -/- 0.7 + 0.1 -/- 0.1 21.0 19 18,5 19.1 18 17,5 Q4 2008 temp perm fees HRS/other country mix Q4 2009 margin 20.9 • increasing pressure on temp margins • perm fees declined 46% organically (YoY) vs. -/- 55% in Q3 2009 - perm fees are now 7.1% o
Slide 21: Restructuring
restructuring charges Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 (€* million) France - 25.4 - - -/-3.8 the Netherlands 12.3 15.6 1.5 - 12.6 Germany 6.4 1.0 - - -/-0.4 Belgium 3.6 - - - - UK - - 2.8 - 3.4 Italy - 5.0 - - - Spain 1.7 3.5 -/-1.2 - - ROW - 0.5 2.8 2.1 1.6 Japan 3.5 - 0.8 - - North America
Slide 22: Consolidated cash flow statement
consolidated cash flow statement € million Q4 2009 Q4 2008 cash flow from operations before OWC 129 143 release / (usage) of OWC 52 185 additions of PPE -/-10 -/-17 additions of software 0 -/-10 financial receivables -/-8 -/-20 dividend - - disposals of PPE 5 1 free cash flow 168 280 € million Q4 20
Slide 23: FY 2009: good financial performance in a very difficult environment
FY 2009: good financial performance in a very difficult economical environment • satisfied with managing through the cycle • timely adaption of cost structure • net debt reduced by € 626 million YoY - leverage ratio at 2.5, safe below covenant of max. 3.5 - successful cash flow management - unwindin
Slide 24: FY 2009: timely adaption of cost structure
FY 2009: timely adaption of cost structure adjustment corporate FTE vs. development employees working Randstad performance: YoY development 120 10% 110 5% 100 0% -5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 90 2008 2009 -10% 80 -15% -20% 70 -25% 60 -30% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 -35% 2007 2008 2009 corpora
Slide 25: Geographic performance FY 2009
geographic performance FY 2009 € million FY 2009 FY 2008 organic growth revenue: the Netherlands 2,963 3,757 -21% France 2,692 3,889 -31% Germany 1,321 1,881 -30% Belgium/Luxembourg 1,191 1,563 -24% United Kingdom 753 1,150 -26% Iberia 796 1,144 -28% North America 1,450 1,888 -26% EBITA margin: the
Slide 26: Managing through the cycle
managing through the cycle growth phase decline phase stabilization phase growth phase • market share • market share • market share gains • market share gains gains gains • productivity levels • productivity mgt • productivity mgt • productivity mgt allow for growth, through unit through unit throug
Slide 27: Dividend proposal
dividend proposal conditions to re-instate payment of ordinary dividends: • capital structure must allow for it • aim for leverage ratio < 2 in order to be perceived investment grade - Q4 2009: leverage ratio is 2.5x • confidence in current trends and outlook - recovery is there, but still fragile a
Slide 28: Outlook
outlook • revenue trend improved during Q4 2009 - easier comparison base • positive trend set through at the start of 2010 - 5% organic revenue decline in January, further improvement early February - combined staffing and inhouse business showing growth in US, Germany, UK and France - professionals
Slide 29: Summary
summary • negative market development; fastest and deepest ever - very difficult to fully adapt - classical recovery trend visible but recovery still fragile • pressure on gross margin remains - commercial pressure still increasing • good cost control, timely adaption • EBITA under pressure due to a
Slide 30: Q&A
Q&A ™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services
Slide 31: Appendices
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 32: Development in corp. employees & outlets
development in corp. employees & outlets indexed organic development in corporate FTEs dec-07 index: September 2007 = 100 jun-09 120 sep-09 dec-09 110 100 90 80 70 60 Group FR NL GE BE UK N-America indexed organic development in outlets dec-07 120 index: September 2007 = 100 jun-09 sep-09 110 dec-09
Slide 33: Financing: fixed vs. floating interest rates
financing: fixed vs. floating interest rates 10 year historical interest rates comparison 1M vs. 5Y 6% 5% average fixed 4% rate = 4.0% 3% average floating rate = 3.0% 2% 1% 0% july 1999 dec 2009 1M Float 5Y Fixed • we use floating interest rates as a natural hedge - spread above Euribor of 50-115 bp
Slide 34: Tax
tax driver . effective* cash tax rate explanation ………………………… impact tax rate growth operating + + less impact of permanent companies differences growth opcos and mix + + higher weight countries effects with high CIT rate changes in corporate dependent on direction of + or -/- + or -/- income tax (CI
Slide 35: Geographic performance Q4 2009
geographic performance Q4 2009 € million Q4 2009 Q4 2008 organic growth revenue: the Netherlands 726 915 -20% France 682 846 -19% Germany 362 427 -15% Belgium/Luxembourg 307 366 -16% United Kingdom 182 248 -19% Iberia 213 237 -10% North America 375 473 -13% EBITA margin: the Netherlands 7.2% 9.4% Fr
Slide 36: Segment performance Q4 2009
segment performance Q4 2009 € million Q4 2009 Q4 2008 organic growth revenue: staffing 2,220 2,690 -17% inhouse services 374 422 -9% professionals 586 793 -23% 36 February 18, 2010 4th quarter & annual results 2009
Slide 37: Consolidated balance sheet
consolidated balance sheet € million December 31, 2009 December 31, 2008 property, plant & equipment 151 191 intangible assets 3,158 3,315 deferred tax assets 465 422 other assets 2,684 3,795 group equity 2,493 2,421 non-current liabilities 1,865 2,937 current liabilities 2,100 2,365 balance sheet t
Slide 38: Revenue split Q4 2009
revenue split Q4 2009 geographies segments 6% 12% 18% 23% 5% 12% 7% 70% 6% 21% 9% 11% NL France Germany staffing Belgium/Lux. UK Iberia inhouse ROE N-America ROW professionals 38 February 18, 2010 4th quarter & annual results 2009
Slide 39: Outlets by country
outlets¹ by country end of period December 31, 2009 December 31, 2008 France 988 1,182 the Netherlands 754 885 Germany 428 597 Belgium/Lux 329 380 United Kingdom 292 381 Iberia 265 362 Other Europe 340 453 North America 494 614 Rest of world 239 379 total 4,129 5,233 1) branches and inhouse location
Slide 40: Staffing employees by country
staffing employees by country averages Q4 2009 Q4 2008 France 79,500 101,800 the Netherlands 92,200 118,500 Germany 42,000 49,000 Belgium/Lux. 41,100 44,600 United Kingdom 20,800 26,600 Iberia 52,300 56,600 Other Europe 29,400 34,200 North America 50,800 53,900 Rest of world 76,500 84,000 total 484,
Slide 41: Corporate employees by country
corporate employees by country average Q4 2009 Q4 2008 France 4,000 4,800 the Netherlands 5,610 7,450 Germany 2,320 3,200 Belgium/Lux. 2,050 2,370 United Kingdom 2,110 3,000 Iberia 1,500 1,940 Other Europe 1,460 2,240 North America 2,870 3,950 Rest of world 3,510 4,680 Holding 150 170 total 25,580 3