Randstad Nv · EURONEXT:RAND
Randstad Nv — Q2 2015 Earnings Presentation
37 slides from Randstad Nv's earnings presentation, Jul 30, 2015
Slide 1: 2nd quarter 2015 results
2nd quarter 2015 results Solid execution; Europe gaining momentum Jacques van den Broek, CEO Robert Jan van de Kraats, CFO Randstad Holding nv July 30, 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 July 30, 2015 2nd quarter results 2015
Slide 4: Performance
performance 4 July 30, 2015 2nd quarter results 2015
Slide 5: Q2: Solid execution; Europe gaining momentum
Q2: Solid execution; Europe gaining momentum Revenue ofof€ € Revenue 4,816 million; 4,816 million; Topline Topline Toplineaccelerated accelerated acceleratedin Europe in in Gross Gross Grossmargin margin margin upup3030 up bpbp 30 to bptoto organic growth +6.7%; organic growth +6.7%; gross Europe (t
Slide 6: Q2 2015: strong execution
Q2 2015: strong execution € million Q2 ’15 Q2 ’14 % Org. L4Q ’15 L4Q ’14 % Org. revenue 4,816 4,268 +7% 18,259 16,878 +5% gross profit 903 787 +7% 3,394 3,085 +6% gross margin 18.7% 18.4% 18.6% 18.3% operating expenses* 688 613 +4% 2,617 2,447 +3% opex % 14.3% 14.4% 14.3% 14.5% EBITA* 215 174 +16% 7
Slide 7: Europe picking up, North America stable
Europe picking up, North America stable YoY Randstad growth development 15% 5% -5% -15% Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Group Europe North America Rest of World growth expansion continues in Europe with majority of countries picking up; improve
Slide 8: Strong relative performance
strong relative performance 10,0% 15,0% USA* The Netherlands 10,0% 5,0% 5,0% 0,0% 0,0% -5,0% -5,0% Randstad Market (ASA) Randstad Market (ABU) -10,0% -10,0% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 * Randstad based on rev
Slide 9: North America: solid growth continues
North America: solid growth continues performance North America - quarterly revenue +5% (Q1: +5%) 1.200 6% perm up 16% (Q1: +8%) 1.100 5% GP up 10% (Q1: +10%) 1.000 4% 900 3% US Staffing & Inhouse, revenue growth 800 2% +7% (Q1: +8%) 700 1% Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 revenue in € M EBIT
Slide 10: France: above market growth
France: above market growth performance France - quarterly revenue up 4% YoY (Q1: 0%) 800 6% - growth after 13 quarters of decline 5% 700 - combined Staffing & Inhouse at +4% YoY 4% - Professionals at +2% vs. Q1: +4% 600 3% 2% - perm grew 6% 500 1% Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 gross profi
Slide 11: The Netherlands: growth acceleration continued into Q2
the Netherlands: growth acceleration continued into Q2 performance the Netherlands - quarterly revenue at +15% (Q1: +10%) 800 8% - perm growth stable at +21% (Q1: +21%) 7% 700 6% 600 5% Staffing businesses (Randstad & 500 4% 3% Tempo-Team) +15% YoY 400 2% - in line with the market Q2 2014 Q3 2014 Q4
Slide 12: Germany: subdued market
Germany: subdued market performance Germany - quarterly revenue growth flat YoY (Q1: -/-3%) 600 7% - volumes down 4% (Q1: -/-6%) 6% 500 - perm growth of +26% (Q1: +67%) 5% 400 4% 300 3% gross profit -/-1% (Q1: -/-6%); 200 2% - continues to be impacted by 13 week avg Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q
Slide 13: Belgium: stable growth
Belgium: stable growth performance Belgium - quarterly revenue +6% (Q1: +7%) 400 6% - Staffing and Inhouse growth at +7% (Q1: +6%) 5% 300 - narrowing the gap to market 4% 200 3% gross profit up 5% YoY (Q1: +9%) 100 2% Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 revenue in € M EBITA margin EBITA margin u
Slide 14: Iberia: Spain growth continues
Iberia: Spain growth continues performance Iberia - quarterly Iberia revenue up 8% 350 5% 300 4% 250 Spain 3% 200 - revenue growth +14% (Q1: +16%) 2% 150 - Professionals grew 54% despite tough 100 1% comparables Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 - perm growth +22% revenue in € M EBITA margin -
Slide 15: UK: improving profitability
UK: improving profitability performance UK - quarterly revenue flat YoY (Q1: +3%) 250 2,5% - gross profit stable at +5% (Q1: +5%) 2,0% 200 - strong performance in construction continues 1,5% 150 - perm fees up 5% (Q1: +15%) 1,0% 100 0,5% EBITA margin up to 2.0% vs. 1.8% LY 50 Q1 2014 Q2 2014 Q3 2014
Slide 16: Other European countries: growth continues
Other European countries: growth continues performance ROE - quarterly overall revenue growth +9% 400 5% 300 4% Italy 200 3% - revenue growth accelerated to +16% (Q1: 12%) 100 2% - focus on specialties and perm (+49%) paying off 0 1% Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Switzerland revenue in € M
Slide 17: Rest of the world: improving profitability
Rest of the world: improving profitability overall revenue growth stable at +12% performance ROW - quarterly 450 2,0% Japan, growth at +6% YoY (Q1: +2%) 400 1,5% - perm grew 25% (Q1: +51%) 350 1,0% 300 Australia / New Zealand grew 16% 250 0,5% - perm grew 31% (Q1: +25%) 200 0,0% Q2 2014 Q3 2014 Q4 2
Slide 18: Financial results & outlook
financial results & outlook 18 July 30, 2015 2nd quarter results 2015
Slide 19: Income statement Q2 2015
income statement Q2 2015 € million Q2 ’15 Q2 ’14 % Org. L4Q ’15 L4Q ’14 % Org. revenue 4,816 4,268 +7% 18,259 16,878 +5% gross profit 903 787 +7% 3,394 3,085 +6% gross margin 18.7% 18.4% 18.6% 18.3% operating expenses* -/- 688 -/- 613 +4% -/- 2,617 -/- 2,447 +3% opex margin 14.3% 14.4% 14.3% 14.5% E
Slide 20: Segment performance
segment performance Staffing Q2 Q2 *% L4Q L4Q *% strong execution with improving in € M 2015 2014 organic 2015 2014 organic productivity revenue 2,800 2,525 6% 10,696 10,104 4% French recovery gaining momentum EBITA 129 103 25% 456 387 18% EBITA margin 4.6% 4.1% 4.3% 3.8% Inhouse Q2 Q2 *% L4Q L4Q *%
Slide 21: Gross margin bridge
gross margin bridge YoY gross margin development + 0.3% + 0.2% -/- 0.2% 18.7% 18.4% temp margin impacted by mix and price perm fees grew 13% YoY organically 10.9% of GP (up from 10.0% LY) HRS/others improvement driven by growth of MSP/RPO (Sourceright) 21 July 30, 2015 2nd quarter results 2015
Slide 22: Operating expenses bridge
operating expenses bridge sequential OPEX development in € M +6 +1 +5 +3 +5 +6 688 662 OPEX up 3% organically (sequentially) FTE growth in North America, Iberia and Italy negative FX impact; driven by the weak euro continued investment in emerging markets 22 July 30, 2015 2nd quarter results 2015
Slide 23: Net debt at €575M
net debt at € 575M leverage ratio at 0.7 € million June 30, 2015 June 30, 2014 goodwill and intangible assets 2,592 2,609 operating working capital 762 670 net tax assets 597 487 other assets and liabilities 177 109 invested capital 4,128 3,874 equity 3,553 2,996 net debt 575 878 invested capital 4,
Slide 24: Q2 '15 free cashflow
Q2 ’15 free cashflow normal seasonal pattern; impacted by holiday allowances and working capital requirements € million Q2 ’15 Q2 ’14 L4Q ’15 L4Q ’14 EBITDA 229 189 792 657 change in OWC -/- 192 -/- 187 -/- 33 91 income taxes -/- 53 -/- 44 -/- 153 -/- 255 Provisions & employee benefit obl. -/- 9 -/-
Slide 25: Outlook
outlook organic revenue grew by 6.7% in Q2, June was up more than 6% - the positive volume trend has continued into July, which, so far, appears to be at least in line with the quarter average - continued significant FX impact (YoY) in Q3 remain on track to achieve cost reductions/efficiencies as pr
Slide 26: On track
on track growth & 26 July 30, 2015 2nd quarter results 2015
Slide 27: Q2: Solid execution; Europe gaining momentum
Q2: Solid execution; Europe gaining momentum Revenueofof€ 4,816 Revenue € 4,816 million; million; Toplineaccelerated Topline accelerated in in Europe Grossmargin Gross margin upup30 30 bp to bp to organic organicgrowth +6.7%; growth +6.7%;gross (the Netherlands Europe and France); (the Netherlands 1
Slide 28: Appendices
™- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 29: 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 30: 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 31: 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 32: 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 = 2.5% 2% average floating rate = 1.5% 1% 0% -1% July 2005 June 2015 we use floating interest rates as a natural hedge - spread above Euribor of 50-115 bps 32 July 30, 201
Slide 33: Revenue split Q2 2015
revenue split Q2 2015 geographical areas revenue categories 9% North America 20% 8% 24% France NL 6% Germany Belgium 5% 22% 58% UK 15% 7% Iberia RoE 10% RoW 16% staffing inhouse professionals 33 July 30, 2015 2nd quarter results 2015
Slide 34: EBITA breakdown by geography
EBITA breakdown by geography Q2 2015 Q2 2014 1% 0% 6% 6% North America 2% 4% 2% 5% France 24% 30% 9% 8% NL Germany 12% Belgium 9% 12% UK Iberia 21% 21% RoE 18% 21% RoW 22% 34 July 30, 2015 2nd quarter results 2015
Slide 35: Outlets by region
outlets* by region end of period Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 North America 1,084 1,065 1,084 1,074 1,087 France 741 739 741 743 766 the Netherlands 644 659 689 666 675 Germany 547 556 555 548 551 Belgium/Lux 303 306 310 314 313 United Kingdom 134 131 140 141 141 Iberia 302 295 292 288 29
Slide 36: Corporate staff by region
corporate staff by region average Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 North America 6,410 6,250 6,230 6,160 6,250 France 3,410 3,390 3,430 3,410 3,370 the Netherlands 4,050 4,120 4,430 4,420 4,320 Germany 2,560 2,570 2,620 2,610 2,600 Belgium/Lux 1,870 1,880 1,780 1,790 1,720 United Kingdom 1,53
Slide 37: Staffing employees by region
staffing employees by region average Q2 2015 Q2 2014 North America 106,800 105,300 France 77,600 74,300 the Netherlands 79,000 75,800 Germany 45,700 47,500 Belgium/Lux 39,800 39,400 United Kingdom 16,200 17,600 Iberia 60,200 58,800 Rest of Europe 58,200 53,700 Rest of the world 112,600 109,000 total