Slide 1: Q2 2018 results. Strong margin conversion
nd 2 quarter 2018 results. strong margin conversion. Jacques van den Broek, CEO Henry Schirmer, CFO Randstad N.V. 24 July 2018
Slide 2: Disclaimer
disclaimer. Certain statements in this document concern prognoses about the business mix, changes in legislation (particularly in relation to future financial condition, risks, investment plans and the results of employment, Staffing and tax laws), the role of industry operations of Randstad N.V. an
Slide 3: Definitions
definitions. EBITA: operating profit before amortization and impairment acquisition-related intangible assets and goodwill, integration costs and one-offs. organic growth is measured excluding the impact of currency effects, acquisitions, disposals and reclassifications. diluted EPS is measured befo
Slide 4: Agenda
agenda. performance 5 financial results & outlook 12 Q&A 18 appendices 19 © Randstad 2018 | 4
Slide 5: Performance moving forward
performance moving forward. © Randstad 2018 | 5
Slide 6: Q2 2018 strong margin conversion
Q2 2018 strong margin conversion. good all round broad-based digital strategy in full performance growth swing organic growth 5.0% inhouse up 12% workforce scheduling EBITA € 283M perm up 14% data-driven sales EBITA margin 4.7% strong contribution of ROW talent engagement © Randstad 2018 | 6
Slide 7: North America accelerating topline; the Netherlands focus on profitable growth
north america the netherlands accelerating topline. focus on profitable growth. ● revenue up 2% (Q1: +1%) ● revenue at +4% (Q1: +5%) ● US Staffing & Inhouse, revenue growth 5% (Q1: +2%) ● combined Staffing & Inhouse businesses up 2% (Q1: +4%) ● US Professionals, revenue down 1% (Q1: down 3%) ● Profe
Slide 8: France impacted by market slowdown; Germany sound growth continues
france germany impacted by market slowdown. sound growth continues. ● revenue at +3% (Q1: +10%) ● revenue +6% (Q1: +7%) ● Staffing & Inhouse at +2% (Q1: +10%) ● Staffing & Inhouse +6% (Q1: +6%) ● Professionals up 10% (Q1: +13%) ● Professionals up 7% (Q1: +9%) ● EBITA margin at 5.2% vs. 6.4% LY ● EBI
Slide 9: Belgium robust conversion of topline; Italy ongoing focus on profitability
belgium italy robust conversion of topline. ongoing focus on profitability. ● revenue +7% (Q1: +9%) ● revenue +10% (Q1: +19%) ○ perm up 35% (Q1: +47%) ○ strong perm growth at +44% (Q1: up 63%) ● Staffing & Inhouse up 7% (Q1: +9%) ● EBITA margin at 6.1% vs. 5.8% LY ● EBITA margin at 6.8% vs. 6.5% LY
Slide 10: Iberia facing tough topline comps; other European countries
iberia other european countries facing tough topline comps. mid single-digit sales growth. ● iberia revenue up 3% (Q1: +11%) ● UK organic revenue growth up by 7% (Q1: up 7%) ● spain revenue growth up 4% (Q1: +13%) ● nordics growth up 4% (Q1: up 11%) ● portugal revenue down 1% (Q1: +6%) ● switzerland
Slide 11: Rest of the world double-digit growth continues; global businesses
rest of the world global businesses double-digit growth continues. improving performance. ● japan growth up 9% YoY (Q1: +11%) ● sourceright global up 14% (Q1: +12%) ○ outperforming the market ● australia & new zealand grew 7% (Q1: +6%) ○ new strategic initiatives with monster ● china up 7% (Q1: up 5
Slide 12: Financial results & outlook
financial results & outlook. © Randstad 2018 | 12
Slide 13: Q2 2018 delivering on operational leverage
Q2 2018 delivering on operational leverage. Q2 performance Q2 highlights € million Q2 ’18 Q2 ’17 % org. revenue 6,022 5,866 5% • solid revenue growth on tougher comps gross profit 1,191 1,194 3% gross margin 19.8% 20.4% • EBITA margin up 20bp YoY operating expenses* 908 932 2% opex % 15.1% 15.9% • s
Slide 14: Q2 2018 gross margin: impacted by mix
Q2 2018 gross margin: impacted by mix. Q2 gross margin development YoY Q2 highlights • temp margin down 30bp: mix/price -20bp, CICE -10bp • perm fees grew 14% YoY organically, adding 10bp • HRS/Monster impact -40bp, driven primarily by Monster and FX © Randstad 2018 | 14
Slide 15: Further progression on productivity
further progression on productivity. Q2 sequential opex bridge Q2 productivity up • organic opex increase 1% vs. Q1 (+2% YoY) • productivity (GP/FTE) up 2% • on track to deliver cost savings program © Randstad 2018 | 15
Slide 16: Solid free cash flow and balance sheet
solid free cash flow and balance sheet. improved free cash flow YoY strong balance sheet • FCF € -10M (+ € 87M vs. Q2 2017) • net debt € 1,507M, €49m lower YoY • WC improvement € 148m YoY • leverage ratio 1.3x (Q2 2017: 1.5x) • DSO 54, up 2 days due to mix effects © Randstad 2018 | 16
Slide 17: Conclusion and outlook: driving for profitable growth
conclusion and outlook: driving for profitable growth. Q2 conclusion and outlook exit rate June +5% NAM NL FR • solid topline and strong margin conversion GER BEL • tech & touch strategy well underway IBE IT • confirming FY 2018 EBITA margin outlook RoE low single-digit growth RoW mid single-digit g
Slide 18: Questions & answers
questions & answers. © Randstad 2018 | 18
Slide 19: Appendices
appendices randstad. © Randstad 2018 | 19
Slide 20: Outlets by region
outlets by region. end of period Q2 2018 Q1 2018 Q4 2017 Q3 2017 Q2 2017 North America 1,090 1,091 1,111 1,099 1,087 the Netherlands 665 648 650 627 660 France 657 663 669 673 670 Germany 595 588 582 579 565 Belgium & Luxembourg 325 323 317 315 319 Italy 266 269 275 281 286 Iberia 365 360 354 349 35
Slide 21: Corporate staff by region
corporate staff by region. average Q2 2018 Q1 2018 Q4 2017 Q3 2017 Q2 2017 North America 5,720 5,660 5,690 5,700 5,750 the Netherlands 4,360 4,350 4,310 4,310 4,210 France 4,500 4,410 4,390 4,240 4,140 Germany 3,120 3,020 2,820 2,760 2,720 Belgium & Luxembourg 2,130 2,100 2,130 2,160 2,030 Italy 2,2
Slide 22: Staffing employees by region
staffing employees by region. average Q2 2018 Q2 2017 North America 98,900 99,700 the Netherlands 87,200 83,500 France 91,000 87,900 Germany 48,800 49,100 Belgium & Luxembourg 48,100 44,900 Italy 48,400 46,100 Iberia 68,700 68,300 Other European countries 63,600 65,800 Rest of the world 110,300 109,
Slide 23: Human forward
eaese human forward WM