Slide 1: 4th quarter & FY 2017 results
4th. quarter & FY 2017 results strong conversion of robust topline. Jacques van den Broek, CEO Robert Jan van de Kraats, CFO Randstad Holding nv February 13, 2018
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 4 financial results & outlook 17 q&a 28 appendices 29 © randstad | 3
Slide 4: Performance moving forward
performance moving forward. © randstad | 4
Slide 5: Q4 & FY 2017: strong conversion of robust topline
Q4 & FY 2017: strong conversion of robust topline. revenue of € 5,978 million topline grew 11% in Europe gross margin 20.1% organic growth 8.7%1 1% in North America and 10% pricing climate stable in Rest of the world gross profit up 7.9%2 perm fees up 13% underlying EBITA of € 307 million FY 2017 FC
Slide 6: Q4 2017: strong conversion of robust topline
Q4 2017: strong conversion of robust topline. € million Q4 ’17 Q4 ’16 % org. FY ’17 FY ’16 % org. revenue 5,978 5,525 9% 23,273 20,684 8% gross profit 1,202 1,106 8% 4,708 3,934 7% gross margin 20.1% 20.0% 20.2% 19.0% operating expenses* 895 838 5% 3,643 2,987 5% opex % 15.0% 15.2% 15.7% 14.4% EBITA
Slide 7: Regional split: robust growth continues despite tougher comps
regional split: robust growth continues despite tougher comps. YoY Randstad organic revenue growth development 20% 10% 0% -10% Q4 2013 Q2 2014 Q4 2014 Q2 2015 Q4 2015 Q2 2016 Q4 2016 Q2 2017 Q4 2017 Group Europe North America Rest of the world • Europe grew 11% (vs. +11% in Q3) • North America grew
Slide 8: North America
north america improving conversion historical organic growth 8% 4% revenue up 1% (Q3: flat) 6% 3% • perm up 5% (Q3: up 2%) 2% 4% 1% US Staffing & Inhouse, revenue growth 1% (Q3: +1%) EBITA % 2% 0% organic growth % US Professionals, revenue down 1% (Q3: down 2%) Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 201
Slide 9: The Netherlands
the netherlands continued focus on client profitability historical organic growth 8% 8% revenue at +3% (Q3: +1%) 6% 6% • strong focus on client profitability 4% • SME growth of 6% 4% 2% EBITA % combined Staffing & Inhouse businesses 2% 0% organic growth % • up 2% (Q3: +2%) Q4 2016 Q1 2017 Q2 2017 Q3
Slide 10: France
france strong conversion of sound topline historical organic growth 8% 16% revenue at +12% (Q3: +14%), reflecting tougher comps 6% 12% • Staffing & Inhouse at +11% (Q3: +13%) 8% • Professionals up 18% (Q3: +19%) 4% 4% • perm grew 37%, continuing to be fueled by tech (Q3: EBITA % +37%) 2% 0% organic
Slide 11: Germany
germany outperformance continues historical organic growth 8% 12% revenue +10% (Q3: +10%) 6% 8% • SME continues to outpace large clients • perm: growth of 24% 4% 4% EBITA % Staffing/Inhouse +10% (Q3: +10%) 2% 0% organic growth % Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Professionals +11% (Q3: +11%) E
Slide 12: Belgium
belgium remains ahead of the market historical organic growth 8% 16% revenue +10% (Q3: +9%) 6% 12% • Staffing/Inhouse up 9% (Q3: +9%) 4% 8% • Professionals up 30% (Q3: +13%) 2% 4% EBITA % EBITA margin at 6.9% vs. 7.7% LY 0% 0% organic growth % • phasing of incidentals impact Q4 2016 Q1 2017 Q2 2017
Slide 13: Iberia
iberia robust momentum continues historical organic growth 6% 16% Iberia revenue up 15% (Q3: +14%) 5% 12% • Staffing/Inhouse up 15% (Q3: +14%) 3% 8% 2% Spain 4% EBITA % • revenue growth up 16% (Q3: +17%) 0% 0% organic growth % • perm up 16% (Q3: +23%) Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Portugal
Slide 14: Italy
italy strong topline and conversion historical organic growth 8% 30% Italy revenue +26% (Q3: +27%) 6% 20% • OL acquisition performing ahead of expectations • strong growth driven by Staffing & Inhouse 4% 10% EBITA % EBITA margin at 6.3%, vs. 5.7% LY 2% 0% organic growth % Q4 2016 Q1 2017 Q2 2017 Q3
Slide 15: Other European countries
other european countries overall revenue up 12% (Q3: up 13%) UK • organic revenue growth up by 11% (Q3: up 10%) Nordics • growth up 13% (Q3: up 12%) Switzerland • growth up 20% (Q3: up 21%) Poland • growth up 9% (Q3: up 14%) EBITA margin at 3.3%, stable vs. LY © randstad | 15
Slide 16: Rest of the world
rest of the world overall revenue up 10% (Q3: +10%) Japan • growth up 9% YoY (Q3: +6%) • significant increase in EBITA margin Australia & • grew 8% (Q3: +9%) New Zealand Asia • overall Asia, growth at 6% (Q3: +7%) • China down 10% (Q3: +18%) Latin America • up 27% (Q3: +19%) EBITA margin at 3.7% fro
Slide 17: Financial results & outlook
financial results & outlook. © randstad | 17
Slide 18: Income statement Q4 2017
income statement Q4 2017 € million Q4 ’17 Q4 ’16 % org. FY ’17 FY ’16 % org. revenue 5,978 5,525 9% 23,273 20,684 8% gross profit 1,202 1,106 8% 4,708 3,934 7% gross margin 20.1% 20.0% 20.2% 19.0% operating expenses* 895 838 5% 3,643 2,987 5% opex margin 15.0% 15.2% 15.7% 14.4% EBITA* 307 268 14% 1,
Slide 19: Performance by revenue category
performance by revenue category € million Q4 2017 Q4 20161 % organic2 FY 2017 FY 20161 % organic2 Staffing revenue 3,112 3,017 6% 12,184 11,400 6% EBITA 179 154 18% 623 547 11% EBITA margin3 5.7% 5.1% 5.1% 4.8% Inhouse services revenue 1,380 1,208 18% 5,185 4,461 18% EBITA 68 68 3% 251 223 13% EBITA
Slide 20: Q4 2017 gross margin bridge
Q4 2017 gross margin bridge • temp margin no impact • perm fees grew 13% YoY organically • HRS/others added 10bp, including the effect of Monster • pricing climate stable © randstad | 20
Slide 21: Q4 2017 operating expenses bridge
Q4 2017 operating expenses bridge • OPEX increased by € 8M organically (sequentially) • favorable sequential FX impact € 3M © randstad | 21
Slide 22: Net debt at €1,026M
net debt at €1,026M leverage ratio at 0.9, versus guidance of 1.0 € million Q4 2017 Q4 2016 goodwill and acquisition-related intangible assets 3,476 3,286 operating working capital (OWC) 889 712 net tax assets 357 480 all other assets and liabilities* 556 456 invested capital 5,277 4,934 total equit
Slide 23: Q4 2017 free cash flow, up 82% YoY
Q4 2017 free cash flow, up 82% YoY € million Q4 2017 Q4 2016 FY ’17 FY ’16 EBITDA 313 252 1,081 966 change in OWC 96 37 -/-175 -/-170 income taxes -/-27 -/-30 -/-186 -/-160 provisions & employee benefit obl. -/-5 4 8 - net capital expenditures -/-32 -/-32 -/-96 -/-94 other items 47 -/-17 -/-39 -/-77
Slide 24: Outlook
outlook • organic revenue growth was 8.7% in Q4 Geo Exit Rate • in January, revenue grew at around 7%. The NAM development of volumes in early February indicates a NL continuation of the January growth rate FR • Q1 2018 gross margin is expected to be broadly stable GER sequentially BEL • for Q1 2018
Slide 25: M&A outlook 2018 and beyond
M&A outlook 2018 and beyond tech & touch strategy professionals staffing • mainly organic through • acceleration through Ausy • top position in most relevant digital factory (organic & bolt-on M&A) markets, ex-Japan, UK & Australia • repair Monster & global • over time: small to mid- • no priority r
Slide 26: Adjusted capital allocation strategy
adjusted capital allocation strategy adjusted capital allocation strategy impact on FY 2017 payout in 2018 maintain cash dividend policy with regular cash dividend: €2.07 per payout 40 – 50%; implement floor share, based on 50% payout ratio cash dividend of € 1.62 per share when leverage ratio < 1.0
Slide 27: Cash dividend proposal: up 46% including special dividend
cash dividend proposal: up 46% including special dividend • proposed cash dividend payment over 2017 • payment of € 2.76 per ordinary share (+ 46% YoY) • regular dividend of € 2.07 based on payout of 50% of adjusted net profit • special dividend of € 0.69 based on proposed adjusted capital allocatio
Slide 28: Questions & answers
questions & answers © randstad | 28
Slide 29: Appendices
appendices randstad. © randstad | 29
Slide 30: Outlets by region
outlets* by region end of period Q4 2017 Q3 2017 Q2 2017 Q1 2017 Q4 2016 North America 1,111 1,099 1,087 1,094 1,149 the Netherlands 650 627 660 650 640 France 669 673 670 678 682 Germany 582 579 565 563 557 Belgium & Luxembourg 317 315 319 317 310 Iberia 354 349 352 349 339 Italy 275 281 286 290 31
Slide 31: Corporate staff by region
corporate staff by region average Q4 2017 Q3 2017 Q2 2017 Q1 2017 Q4 2016 North America 5,690 5,700 5,750 5,740 6,660 the Netherlands 4,310 4,310 4,210 4,160 4,290 France 4,390 4,240 4,140 3,790 3,650 Germany 2,820 2,760 2,720 2,640 2,710 Belgium & Luxembourg 2,130 2,160 2,030 1,950 1,990 Iberia 2,1
Slide 32: Staffing employees by region
staffing employees by region average Q4 2017 Q4 2016 North America 105,300 116,600 the Netherlands 83,900 85,800 France 91,700 79,700 Germany 51,500 49,200 Belgium & Luxembourg 47,200 44,100 Iberia 71,200 66,300 Italy 53,100 41,900 Other European countries* 69,600 68,700 Rest of the world 113,200 11
Slide 33: eaese
eaese human forward. MW