Slide 1: first quarter results 2010: back to growth in March
first quarter results 2010 back to growth in March Robert-Jan van de Kraats, CFO Randstad Holding nv April 28, 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 4 February 18, 2010 4th quarter & annual results 2009
Slide 5: revenue development
revenue development market growth YoY • growth in March •recovery is broad based • staffing & inhouse showed growth in most regions in March 2008 2009 2010 • professionals markets recovering slowly, US Randstad growth* YoY showed growth in March • time lag between growth in staffing and professional
Slide 6: Q1 2010: back to growth in March
Q1 2010: back to growth in March • revenue amounted to € 3,039 (-1% YoY organically per working day) - trend improving from -5% in January to +4% in March, not only due to easy comparables - inhouse and the industrial part of the staffing segment show clearest recovery - professionals segment recove
Slide 7: the Netherlands: late cyclical pattern visible
the Netherlands: late cyclical pattern visible • organic revenue p/wd* -14% in Q1 2010 revenue and EBITA margin - late cyclical market due to services 1000 9,5% oriented economy 8,5% - market circumstances slowly improving 900 - industrial segment showing growth in March 7,5% million € 800 - Tempo-T
Slide 8: France: improving momentum
France: improving momentum • organic revenue p/wd +1% in Q1 2010 (vs. -19% in Q4 2009) revenue and EBITA margin 1000 5,0% - gap with market decreased to 4% 900 4,0% - staffing and inhouse improved mostly in light industrial and automotive 3,0% 800 million € - permanent placement up c. 50% in March (
Slide 9: Germany: strong performance
Germany: strong performance • organic revenue p/wd +10% in Q1 2010 (vs. –18% in Q4 2009) revenue and EBITA margin 500 10,0% - outperforming the market in Q1 450 8,0% - revenue trend improved throughout the quarter - strong pickup across all industrial segments 400 6,0% million € • gross margin about
Slide 10: UK: strong growth inhouse and recovery in perm
UK: strong growth inhouse and recovery in perm • organic revenue p/wd -6% in Q1 2010 • inhouse showing strong growth (YoY) revenue and EBITA margin 300 5,0% - strong pipeline new clients 4,0% • general staffing slightly recovering 250 3,0% • strong recovery perm fees throughout Q1 million € 200 2,0%
Slide 11: North America: double digit growth in staffing & inhouse
North America: double digit growth in staffing & inhouse • organic revenue p/wd +9% in Q1 2010 (vs. -13% in Q4 2009) revenue and EBITA margin - strong outperformance of the market - over 20% growth in US staffing & inhouse (YoY) - decline at US professionals eased, growth in March - Canada slightly
Slide 12: Revenue development per industry segment
Revenue development per industry segment Q1 2010 vs Q1 2009 US Germany France Netherlands* Manufacturing ++ + + + Automotive ++ ++ ++ - Food na ++ - - Transport + ++ - + Business services + - - -- Financial services + - - - Public administration - na na - Health & social work + - + -- * Netherlands:
Slide 13: financial results & outlook
financial results & outlook 13 February 18, 2010 4th quarter & annual results 2009
Slide 14: Q1 2010: financial key points (1)
Q1 2010: financial key points (1) • revenue growth in March • gross margin sequentially flat since Q3 - gross profit € 575 million, down 6% YoY • underlying operating expenses in line with guidance of € 500 million - current trends give reason to maintain the network • EBITA* reached € 75 million vs
Slide 15: Q1 2010: financial key points (2)
Q1 2010: financial key points (2) • moving average DSO improved by 1 day to 57 days (YoY) • increased use of working capital • free cash flow in Q1 2010 amounts to € 39 million • net debt improved to € 996 vs. € 1,015 in Q4 2009 - leverage ratio at the end of Q1 2010 is 2.3 (1.8 Q1 2009, 2.5 ultimo
Slide 16: income statement Q1 2010
income statement Q1 2010 € million Q1 2010 Q1 2009 % change % organic revenue 3,039 3,056 -1% -1% gross profit 575 614 -6% -7% gross m argin 18.9% 20.1% operating expenses* 500 565 -12% -10% opex as % of revenue 16.4% 18.5% EBITA** 75 49 53% 26% EBI TA m argin 2.5% 1.6% amortization -40 -40 integrat
Slide 17: gross margin development Q1 2010
gross margin development Q1 2010 * + 0.3 • pressure on temp margins stabilized • negative impact perm fees fading • perm fees declined 7% organically (YoY) vs. -/- 46% in Q4 2009 - perm fees are now 9.2% of gross profit (9.1% Q1 2009) • parts of Dutch HR services business sold in summer 2009 • recla
Slide 18: timely adaption cost structure, improving productivity
timely adaption cost structure, improving productivity development employees working and corporate FTE vs Randstad performance: YoY development productivity 130 10% 120 5% 110 0% 100 -5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 -10% 2008 2009 2010 90 -15% 80 -20% 70 -25% 60 -30% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 19: 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 20: consolidated balance sheet
consolidated balance sheet € million March 31, 2010 March 31, 2009 property, plant & equipment 143 180 intangible assets 3,151 3,306 deferred tax assets 480 474 other assets 2,827 3,145 total equity 2,544 2,405 non-current liabilities 1,883 2,466 current liabilities 2,175 2,234 balance sheet total 6
Slide 21: consolidated cash flow statement
consolidated cash flow statement € million Q1 2010 Q1 2009 cash flow from operations before OWC 108 32 release / (usage) of OWC -/-57 204 additions of PPE -/-5 -/-6 additions of software -/-7 -/-7 financial receivables - 2 dividend - - disposals of PPE 1 2 free cash flow 39 228 € million Q1 2010 fre
Slide 22: debt facilities & repayment schedule
debt facilities & repayment schedule repayment schedule 1400 revolver term cash March 2010 1200 135 1000 € x million 800 1013 600 400 200 392 135 135 105 135 0 -1 1 -1 1 -1 2 -1 2 -1 3 10 y v y v y 20 m a no m a no m a ch ar m sh ca • covenant; net debt/EBITDA* of max. 3.5 - in Q1 2010 the net debt/
Slide 23: 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 24: outlook
outlook • April better than March • positive trend expected to proceed during Q2 2010 - growth in all inhouse businesses, mainly due to manufacturing and logistics - staffing on the rebound in most regions - professionals recovers slowly, however showing growth in some regions in March - perm fees s
Slide 25: summary
summary • growth is back in March • recovery is broad based - mainly visible in inhouse and industrial part of staffing - professionals segment shows slow recovery, growth visible in some regions at the end of Q1 • gross margin sequentially flat - commercial pressure eases, less impact perm fees • m
Slide 26: Q&A
Q&A ™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services
Slide 27: appendices
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 28: 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 march 2010 1M Float 5Y Fixed • we use floating interest rates as a natural hedge - spread above Euribor of 50-115
Slide 29: geographic performance
geographic performance € million Q1 2010 Q1 2009 organic growth revenue: the Netherlands 654 771 -14% France 644 636 1% Germany 351 318 10% Belgium/Luxembourg 280 286 -2% United Kingdom 191 200 -6% Iberia 193 180 7% North America 390 365 9% EBITA margin: the Netherlands 6.2% 5.8% France 0.0% -0.1% G
Slide 30: segment performance
segment performance € million Q1 2010 Q1 2009 organic growth revenue: staffing 2,051 2,071 -2% inhouse services 380 294 30% professionals 608 692 -11% 30 April 28, 2010 first quarter results 2010
Slide 31: revenue split Q1 2010
revenue split Q1 2010 geographies segments 6% 13% 20% 22% 5% 13% 67% 6% 6% 21% 9% 12% NL France Germany staffing Belgium/Lux. UK Iberia inhouse ROE N-America ROW professionals 31 April 28, 2010 first quarter results 2010
Slide 32: outlets by country
outlets* by country end of period Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009 the Netherlands 726 754 761 786 830 France 966 988 993 988 1,060 Germany 433 428 431 436 493 Belgium/Lux 392 329 332 331 342 United Kingdom 289 292 294 301 368 Iberia 261 265 266 274 282 Other Europe 340 340 341 349 366 North
Slide 33: corporate employees by country
corporate employees by country average Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009 the Netherlands 5,260 5,610 5,870 6,210 6,780 France 3,870 4,000 4,270 4,390 4,570 Germany 2,370 2,320 2,290 2,330 2,710 Belgium/Lux. 2,020 2,050 2,010 1,970 2,140 United Kingdom 2,040 2,110 2,230 2,470 2,710 Iberia 1,470
Slide 34: staffing employees by country
staffing employees by country averages Q1 2010 Q1 2009 the Netherlands 79,700 96,400 France 73,800 73,400 Germany 42,300 34,800 Belgium/Lux. 37,500 38,200 United Kingdom 23,100 21,200 Iberia 46,700 44,000 Other Europe 28,600 27,300 North America 47,900 40,800 Rest of world 82,500 76,000 total 462,10