Randstad Nv · EURONEXT:RAND
Randstad Nv — Q1 2014 Earnings Presentation
32 slides from Randstad Nv's earnings presentation, Apr 30, 2014
Slide 1: 1st quarter results 2014
1st quarter results 2014 profitable growth, strong cost control Jacques van den Broek, CEO Robert Jan van de Kraats, CFO Randstad Holding nv April 30, 2014
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 April 30, 2014 first quarter results 2014
Slide 4: Performance
performance 4 April 30, 2014 first quarter results 2014
Slide 5: Profitable growth, strong cost control
profitable growth, strong cost control € million Q1 ‘14 Q1 ‘13 % Org. L4Q ‘14 L4Q ‘13 % Org. revenue 3,970 3,832 +4% 16,706 16,766 0% gross profit 717 684 +6% 3,045 3,037 +2% gross margin 18.1% 17.8% 18.2% 18.1% operating expenses* 594 592 +1% 2,435 2,493 -/-1% opex margin 15.0% 15.5% 14.6% 14.9% EB
Slide 6: Q1 2014: continued gradual recovery
Q1 2014: continued gradual recovery YoY Randstad growth development 15% 5% -5% -15% Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Group Europe North America Rest of World growth in Germany, Belgium, Iberia, UK, Italy, Switzerland, Austria & Poland US back to growth in March
Slide 7: North America: US back to growth in March
North America: US back to growth in March revenue -/-1% (Q4: -/-2%) performance North America - quarterly - adverse impact of weather in early Q1 (~70bps) 1,000 6% 5% 900 4% US staffing & inhouse, gross profit +6% 3% - improving revenue trend +1% in Q1, March +5% 800 2% - strong perm (+12%) and inho
Slide 8: France: improved profitability
France: improved profitability revenue -/-2% (Q4: -/-2%) performance France - quarterly - improving trend through the quarter 800 6% - continued growth at inhouse at +27% YoY 5% 700 4% - good performance in SME 3% - professionals gradually improving to -/-7% 600 2% - perm fees down 4% 500 1% Q1 2013
Slide 9: The Netherlands: focus on profitable market share gains
the Netherlands: focus on profitable market share gains incremental conversion ratio of 95% performance the Netherlands - quarterly revenue -/-1% (Q4: 0%) 800 8% - RNL flat YoY (Q4: +3%), against strong Q1 ‘13 7% 700 6% - Tempo-Team easing rate of decline 600 5% - action plan to improve performance
Slide 10: Germany: stable volume trend
Germany: stable volume trend performance Germany - quarterly revenue +11% (Q4: +9%) 600 7% - significant price effect (+9%), stable volumes 6% 500 - good growth in IT, inhouse & Tempo-Team 5% 400 - new CLA implemented in November 2013 4% 300 3% - focus on SME, perm & delivery models 200 2% Q1 2013 Q
Slide 11: Belgium: back on track
Belgium: back on track performance Belgium - quarterly revenue +4% (Q4: +1%) 400 6% - inhouse back to growth at +3% (Q4: -/-14%) 5% 300 - Randstad ahead of market in administrative 4% - professionals up by +4% 200 3% 100 2% costs down 11% YoY Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 - benefit of savi
Slide 12: UK: improving performance
UK: improving performance performance UK - quarterly revenue +5% (Q4: +7%) 250 2.5% - continued growth in professionals (up 6%) 2.0% 200 - led by education and construction 1.5% 150 - slow start to the year in finance 1.0% 100 0.5% - inhouse at +15% against a soft Q1 ’13 50 0.0% - staffing -/-9% due
Slide 13: Iberia: strong performance
Iberia: strong performance incremental conversion ratio of 200% performance Iberia - quarterly Spain 300 5% - revenue +4% (Q4: +2%) 250 4% - growth driven by logistics and manufacturing 200 3% - strong performance in professionals & perm 150 2% 100 - integration process to be completed by end H1 50
Slide 14: Other European countries: strong growth
Other European countries: strong growth performance ROE - quarterly Italy 400 5% - revenue up by 14% (Q4: +7%) 300 4% - growth driven by industrial segment 200 3% - integration to be completed Q2 2014 100 2% 0 1% Switzerland Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 - growth improved to +6% (Q4: +2%)
Slide 15: Rest of the world: investing in profitable growth
Rest of the world: investing in profitable growth performance ROW - quarterly Japan grew by 11% YoY (Q4: +4%) 400 2.0% - growth driven by logistics and retail 350 1.5% 300 1.0% Australia / New Zealand grew by 15% 250 0.5% - temp strengthened further, driven by business support and industrial 200 0.0
Slide 16: Financial results & outlook
financial results & outlook 16 April 30, 2014 first quarter results 2014
Slide 17: Income statement Q1 2014
income statement Q1 2014 € million Q1 2014 Q1 2013 % change % organic revenue 3,970 3,832 +4% +4% gross profit 717 684 +5% +6% gross margin 18.1% 17.8% operating expenses* 594 592 +0% +1% opex as % of revenue 15.0% 15.5% EBITA* 123 92 +34% +38% EBITA margin* 3.1% 2.4% integration costs & one-offs 5
Slide 18: Q1 2014: financial key points
Q1 2014: financial key points free cash flow amounted to € 74M vs. € 42M LY - lower working capital requirements than LY - improved profitability leverage ratio improved to 1.1 (Q4: 1.2) effective tax rate* amounted to 31% (FY 2013: 32%) - guidance full year 2014: 31% diluted EPS* to € 0.45 vs. € 0.
Slide 19: Segment performance, focus on delivery models
segment performance, focus on delivery models Staffing in € M Q1 2014 Q1 2013 % organic* focus on revenue quality in revenue 2,352.4 2,333.5 0% North America stable performance in Europe, with EBITA 74.4 48.0 53% strong focus on client profitability EBITA margin 3.2% 2.1% perm +6% Inhouse in € M Q1
Slide 20: Gross margin bridge
gross margin bridge YoY gross margin development + 0.2% + 0.2% -/- 0.1% 18% 18% 18.2% 18.1% 17.8% margin expansion North America, NL perm fees were 10.0% of GP (flat to LY) - organic growth of 9% YoY CICE benefits in France - negative impact FX continued focus on client profitability 20 April 30, 20
Slide 21: Operating expenses bridge
operating expenses bridge sequential OPEX development in € M -4 -1 -1 +1 592 -17 -9 601 -2 -1 628 594 594 beneficial FX impact completion of Belgium restructuring USG synergies strong cost control maintained reduced marketing and bonus costs 628 investment in emerging markets 21 April 30, 2014 first
Slide 22: Net debt down by €216M
net debt down by € 216M leverage ratio at 1.1 and improved working capital management € million March 31, 2014 March 31, 2013 goodwill and intangible assets 2,627 2,908 operating working capital 474 563 net tax assets 482 359 dividend payable 0 -/-222 other assets and liabilities 73 5 invested capit
Slide 23: Free cash flow to €74M
free cash flow to € 74M € million Q1 ‘14 Q1 ‘13 L4Q ’14 L4Q ‘13 EBITDA 135 106 626 530 (release)/addition of OWC -/- 22 -/- 33 89 80 income taxes paid -/- 10 -/- 16 -/- 240 -/- 138 provisions -/- 2 -/- 8 -/- 44 20 net additions in PPE and software -/- 12 -/- 3 -/- 53 -/- 52 other items -/- 15 -/- 8
Slide 24: Outlook Q2
outlook Q2 organic revenue/wd grew by 3.6% in Q1 2014, while it was 3.5% in March - gradual improvement throughout Q1 2014 - significant FX impact gradual recovery continues but we do not see an acceleration of growth yet - intensify our focus on activity-based field steering across all countries sa
Slide 25: Q&A
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services Q&A
Slide 26: Appendices
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 27: 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 = 2.9% 2% average floating rate = 1.8% 1% 0% April 2004 March 2014 we use floating interest rates as a natural hedge - spread above Euribor of 50-115 bps 27 April 30, 2014
Slide 28: Revenue split Q1 2014
revenue split Q1 2014 geographical area revenue categories 8% North America 20% 8% 22% France NL 6% Germany 5% Belgium UK 16% 20% 60% 7% Iberia RoE 12% RoW 16% staffing inhouse professionals 28 April 30, 2014 first quarter results 2014
Slide 29: EBITA breakdown by geography
EBITA breakdown by geography Q1 2014 Q1 2013 1% 3% 3% 3% 7% 3% 17% North America 3% 6% France 26% 9% NL Germany 12% 10% Belgium 18% 13% UK Iberia 21% 10% 14% RoE RoW 24% 30% 29 April 30, 2014 first quarter results 2014
Slide 30: Outlets by region
outlets* by region end of period Q1 2014 Q4 2013 Q3 2013 Q2 2013 Q1 2013 North America 1,075 1,055 1,067 1,060 1,053 France 794 791 849 863 866 the Netherlands 675 672 662 679 688 Germany 550 557 553 547 539 Belgium/Lux 314 307 319 321 320 United Kingdom 142 147 155 155 160 Iberia 283 405 416 252 25
Slide 31: Corporate staff by region
corporate staff by region average Q1 2014 Q4 2013 Q3 2013 Q2 2013 Q1 2013 North America 6,230 6,320 6,260 6,230 6,160 France 3,370 3,480 3,630 3,620 3,630 the Netherlands 4,240 4,260 4,300 4,270 4,360 Germany 2,610 2,620 2,520 2,480 2,500 Belgium/Lux 1,700 1,800 1,840 1,770 1,890 United Kingdom 1,52
Slide 32: Staffing employees by region
staffing employees by region average Q1 2014 Q1 2013 North America 99,600 100,300 France 67,000 69,900 the Netherlands 72,300 79,700 Germany 45,700 45,500 Belgium/Lux 37,000 36,300 United Kingdom 18,400 18,200 Iberia 52,400 47,900 Rest of Europe 52,300 41,200 Rest of World 110,800 109,800 total 555,