Slide 1: 2nd quarter results 2011
2nd quarter results 2011 strong growth against a challenging comparison base revenue up 13% and net income up 36% Ben Noteboom, CEO Robert-Jan van de Kraats, CFO Randstad Holding nv July 28, 2011
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 July 28, 2011 second quarter results 2011
Slide 4: Performance
performance 4 July 28, 2011 second quarter results 2011
Slide 5: Market trends
market trends quarterly market growth (YoY) 40% • growth in markets slowing 30% due to stronger comparables 20% 10% 0% -10% • continued high growth in -20% industrial segments -30% -40% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 • public sector segment NL & UK 2009 2010 2011 NL France Germany Belgium UK N-America r
Slide 6: Q2 2011: strong performance
Q2 2011: strong performance • revenue amounted to € 3,915 million (+11% YoY organically per wd) - organic growth per working day reached 10% in June - Inhouse still very strong at +29% (Q1 2011: 41%) - Staffing up 10% (Q1 2011: 16%) against a strong comparison base in larger countries - Professional
Slide 7: The Netherlands: Randstad outperforms market
the Netherlands: Randstad outperforms market • organic revenue +7% (3% per wd) revenue & EBITA margin - Randstad outperformed market in Q2 800 7.5% - Tempo-Team still lagging - revenue decline at Yacht stable at single digit rate 750 6.5% - price pressure less pronounced million € 700 • exposure pub
Slide 8: France: holding up well
France: holding up well • organic revenue +16% in Q2 2011 (Q1: +22%) revenue & EBITA margin - performance in line with market 900 4.0% - stable growth throughout the quarter 3.0% - Staffing solid growth 800 - Professionals up YoY, IT & engineering main drivers 2.0% million € - permanent placement up
Slide 9: Germany: strong performance
Germany: strong performance • organic revenue +16% (Q1: +29%) revenue & EBITA margin - solid growth despite strong comparison base (June ‘10: 46%) 500 10.0% - signs of tight labor market - more favorable mix: 450 8.0% - continued double-digit growth in Professionals 400 6.0% - Staffing more geared t
Slide 10: Belgium: maintaining strong leverage
Belgium: maintaining strong leverage • organic revenue +10% (Q1: +20%) revenue & EBITA margin - Randstad & Tempo-Team in line with market 400 7.0% - industrial segment main driver 350 6.0% - Inhouse strong at +21% 300 5.0% - Professionals in line with Group at +7% million € 250 4.0% 200 • EBITA marg
Slide 11: UK: changing business mix
UK: changing business mix • organic revenue +2% (Q1: +4%) revenue & EBITA margin - decline public sector (-30%) partly offset by growth in 250 5.0% private sector (+14%) 225 4.0% 3.0% 200 • Inhouse continued to gain market share 2.0% million € 175 - maintains high growth rate and continues to add ne
Slide 12: North America: professionals in the lead
North America: professionals in the lead • organic revenue +14% in Q2 2011 (Q1: +19%) revenue & EBITA margin - US Staffing in line with market, while US Professionals 500 5,0% outperformed - Canada solid in staffing and professionals 450 4,0% 400 3,0% million € • US Staffing & Inhouse up 10% YoY 350
Slide 13: Segment performance
segment performance Staffing in € million Q2 2011 Q2 2010* % organic • driven by industrial clients revenue 2,563.5 2,318.4 10% • strong comparison base in largest EBITA 104.9 84.2 24% countries • administrative segment strengthened EBITA margin 4.1% 3.6% • strong operating leverage Inhouse in € mil
Slide 14: Revenue development per industry segment
revenue development per industry segment Segments USA Germany France Netherlands Manufacturing + ++ ++ ++ Automotive ++ ++ ++ ++ Food o o + + Transport ++ + + + Business services + + + o Financial services ++ o + + IT services ++ + ++ + Public sector o + o - Health & social work ++ ++ o o 14 July 28
Slide 15: Update Professionals organic growth accelerator
update Professionals organic growth accelerator Q1 launch of “Professionals organic growth accelerator plan” • further strengthen a leading position in countries and segments • aim to accelerate growth in next 2 years • gradually adding 500 FTEs (10%) based on field steering model progress Q2 • impl
Slide 16: Financial results & outlook
financial results & outlook 16 July 28, 2011 second quarter results 2011
Slide 17: Q2 2011: financial key points
Q2 2011: financial key points • good performance against a stronger comparison base • gross margin 0.3% up versus previous quarter • strong cost control maintained, limited sequential increase - 250 FTEs hired in Q2 based on field steering - marketing investments • EBITA up 28%, EBITA margin 3.9% -
Slide 18: Q2 2011: financial key points
Q2 2011: financial key points • EBITA up 27% organically to € 153 million • effective tax rate* amounted to 31% - in line with guidance for 2011 between 29-32% • diluted EPS* up 31% to € 0.59 vs. € 0.45 in Q2 2010 • moving average DSO improved by 2 days to 54 days (YoY) and stable compared to previo
Slide 19: Income statement Q2 2011
income statement Q2 2011 € million Q2 2011 Q2 2010 % change % organic revenue 3,915 3,468 13% 12% gross profit 721 649 11% 10% gross margin 18.4% 18.7% operating expenses 567 529 7% 6% opex as % of revenue 14.5% 15.3% underlying EBITA 153 120 28% 27% underlying EBITA margin 3.9% 3.5% reported EBITA
Slide 20: Gross margin Q2 2011
gross margin Q2 2011 gross margin development 19.5 19 18.5 -/- 0.3 -/- 0.1 + 0.1 18.7 18 18.4 17.5 Q2 2010 temp margin French perm fees HRS/other Q2 2011 subsidies • price pressure on temp margins is less pronounced • improving business & country mix • perm fees increased by 14% organically (YoY) -
Slide 21: Selected balance sheet items
selected balance sheet items € million June 30, 2011 June 30, 2010 trade and other receivables 2,846 2,605 trade and other payables -/-2,127 -/-1,923 operating working capital* 719 682 cash & cash equivalents 250 250 current borrowings -/-95 -/-192 non-current borrowings -/-1,225 -/- 1,201 net debt
Slide 22: Consolidated cash flow statement
consolidated cash flow statement € million Q2 2011 Q2 2010 cash flow from operations before OWC* 117 98 usage of OWC -/- 206 -/- 193 additions of PPE and software -/- 18 -/- 12 financial receivables - 1 disposals of PPE 1 1 free cash flow -/- 106 -/- 105 € million Q2 2011 free cash flow -/- 106 net
Slide 23: Outlook
outlook • organic growth per working day was 10% in June - Staffing should continue at single digit rate in largest countries - Inhouse expected to remain double digit - Professionals expected to improve gradually • Q3 2010: organic growth p/wd at 16%, flat throughout the quarter • limited cost incr
Slide 24: Randstad
™- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services SA
Slide 25: Appendices
™- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 26: Drivers effective tax rate
drivers effective tax rate effective tax rate* was up to 31% in line with guidance (vs. 29% in 2010) - 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 driver effective* cash tax exp
Slide 27: Debt facilities & repayment schedule
debt facilities & repayment schedule repayment schedule (excluding current borrowings) 1400 net cash June 2011 term revolver 1200 1000 € x million 135 800 600 400 850 200 135 155 0 105 • covenant; net debt/EBITDA* of max. 3.5 - at the end of Q2 2011 the net debt/EBITDA ratio was 1.6 • syndicated cre
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% 4% average fixed rate = 3.6% 3% average floating rate = 2.6% 2% 1% 0% June 2001 June 2011 1M Float 5Y Fixed • we use floating interest rates as a natural hedge - spread above Euribor of 50-115 bp
Slide 29: Revenue split Q2 2011
revenue split Q2 2011 geographical area sectors NL France 9% 19% Germany 12% 18% Belgium/Lux. 6% 66% 16% UK 6% 22% Iberia 5% ROE 9% 12% N-America ROW staffing inhouse professionals 29 July 28, 2011 second quarter results 2011
Slide 30: EBITA breakdown by geography spread significantly improved
EBITA breakdown by geography spread significantly improved Q2 2011 Q2 2010 1% NL 2% NL France 3% France 13% 11% 2% Germany 29% Germany 2% 29% 5% 3% 1% Belgium/Lux. Belgium/Lux. UK 12% UK 10% Iberia Iberia 21% 19% ROE 17% ROE 20% N-America N-America ROW ROW 30 July 28, 2011 second quarter results 201
Slide 31: Outlets by country
outlets* by country end of period Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 the Netherlands 739 746 733 739 725 France 889 896 905 896 928 Germany 530 516 503 475 450 Belgium/Lux 367 367 374 387 388 United Kingdom 275 278 289 297 300 Iberia 272 268 257 266 264 Other Europe 330 322 316 351 346 North Am
Slide 32: Corporate employees by country
corporate employees by country average Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 the Netherlands 5,170 5,190 5,280 5,300 5,210 France 3,910 3,870 3,920 3,940 3,870 Germany 2,940 2,880 2,890 2,740 2,430 Belgium/Lux. 2,110 2,080 2,130 2,150 2,030 United Kingdom 1,960 1,990 2,060 2,050 2,040 Iberia 1,460
Slide 33: Staffing employees by country
staffing employees by country averages Q2 2011 Q2 2010 the Netherlands 87,200 83,100 France 91,100 81,100 Germany 54,600 47,300 Belgium/Lux. 44,300 40,900 United Kingdom 24,500 23,100 Iberia 48,900 48,200 Other Europe 38,000 30,200 North America 56,000 50,400 Rest of world 104,100 83,700 total 548,7