Slide 1: 3rd quarter 2017 results
3rd. quarter 2017 results strong topline momentum continues. Jacques van den Broek, CEO Robert Jan van de Kraats, CFO Randstad Holding nv October 24, 2017
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 18 q&a 26 appendices 27 © randstad | 3
Slide 4: Performance moving forward
performance moving forward. © randstad | 4
Slide 5: Q3 2017: strong topline momentum continues
Q3 2017: strong topline momentum continues. revenue of € 5,872 million topline grew 11% in Europe gross margin 20.1% organic growth +9.0% stable in North America and 10% pricing climate stable in Rest of the world gross profit up 7.7% perm fees up 10% organic opex up 5% (Q2 2017: up underlying EBITA
Slide 6: Q3 17: strong topline momentum continues
Q3 17: strong topline momentum continues. € million Q3 ’17 Q3 ’16 % org. L4Q ’17 L4Q ’16 % org. revenue 5,872 5,349 9% 22,820 20,154 8% gross profit 1,178 1,000 8% 4,611 3,772 6% gross margin 20.1% 18.7% 20.2% 18.7% operating expenses* 890 729 5% 3,586 2,848 6% opex % 15.2% 13.6% 15.7% 14.1% EBITA*
Slide 7: Regional split: Europe leading the way
regional split: europe leading the way. YoY Randstad organic revenue growth development 20% 10% 0% -10% Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016 Q3 2016 Q1 2017 Q3 2017 Group Europe North America Rest of the world • Europe grew 11% (vs. +11% in Q2) • North America flat (vs. +1% in Q2) • Rest
Slide 8: North America
north america stable topline historical organic growth 8% 8% revenue flat (Q2: +1%) 6% 6% • perm up 2% (Q2: up 3%) 4% 4% 2% US Staffing & Inhouse, revenue growth 1% (Q2: +2%) EBITA % 2% 0% organic growth % Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 US Professionals, revenue down 2% (Q2: down 2%) • IT +
Slide 9: The Netherlands
the netherlands continued focus on profitability historical organic growth 8% 8% revenue at +1% (Q2: +2%) 6% 6% • strong focus on client profitability 4% 4% 2% combined Staffing & Inhouse businesses EBITA % • up 2% (Q2: +3%) 2% 0% organic growth % Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Professional
Slide 10: France
france market outperformance continues historical organic growth 8% 16% revenue at +14% (Q2: +14%) 6% 12% • Staffing & Inhouse at +13% (Q2: +13%) 8% • Professionals up 19% (Q2: +19%) 4% 4% • perm grew 37%, fueled by tech (Q2: +43%) EBITA % 2% 0% organic growth % Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 20
Slide 11: Germany
germany accelerating to double digit growth historical organic growth 8% 12% 10% revenue +10% (Q2: +9%) 6% 8% • SME continues to outpace large clients 6% • perm: growth accelerating to 57% (Q2: up 19%) 4% 4% 2% EBITA % Staffing/Inhouse +10% (Q2: +8%) 2% 0% organic growth % Q3 2016 Q4 2016 Q1 2017 Q2
Slide 12: Belgium
belgium strong topline impacted by tough comps historical organic growth 8% 16% revenue +9% (Q2: +14%) 6% 12% • 7% tougher comps vs. Q2 4% 8% • Staffing/Inhouse up 9% (Q2: +14%) 2% 4% • Professionals up 13% (Q2: +10%) EBITA % 0% 0% organic growth % Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 EBITA margi
Slide 13: Iberia
iberia robust momentum continues historical organic growth 6% 16% Iberia revenue up 14% (Q2: +16%) 5% 12% • Staffing/Inhouse up 14% (Q2: +16%) 3% 8% 2% Spain 4% EBITA % • revenue growth up 17% (Q2: +19%) 0% 0% organic growth % Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 • perm up 23% (Q2: +15%) Portugal
Slide 14: Italy
italy continued high revenue growth historical organic growth 8% 30% Italy revenue +27% (Q2: +29%) 6% 25% • OL acquisition performing ahead of expectations 20% • strong growth driven by Staffing & Inhouse 4% 15% EBITA % EBITA margin at 5.9%, vs. 5.0% LY 2% 10% organic growth % Q3 2016 Q4 2016 Q1 201
Slide 15: Other European countries
other european countries overall revenue up 13% (Q2: up 11%) UK • organic revenue growth up by 10% (Q2: up 2%) Nordics • growth up 12% (Q2: up 11%) Switzerland • growth up 21% (Q2: up 22%) Poland • growth up 14% (Q2: up 12%) EBITA margin at 3.3% vs. 3.5% LY © randstad | 15
Slide 16: Rest of the world
rest of the world overall revenue up 10% (Q2: +12%) Japan • growth up 6% YoY (Q2: +6%) • Careo continues to perform well (+19%) Australia & • grew 9% (Q2:+14%) New Zealand Asia • overall Asia, growth at 7% (Q2: +8%) • China growing 18% (Q2: +10%) Latin America • up 19% (Q2: +21%) EBITA margin at 3.3
Slide 17: M&A activity fits our strategic agenda
M&A activity fits our strategic agenda aim to be top 3 in strengthen Professionals accelerate progress towards local Staffing business digital strategy EVA after 3 years market integrated in line ahead ahead underway ahead underway © randstad | 17
Slide 18: Financial results & outlook
financial results & outlook. © randstad | 18
Slide 19: Income statement Q3 2017
income statement Q3 2017 € million Q3 ’17 Q3 ’16 % org. L4Q ’17 L4Q ’16 % org. revenue 5,872 5,349 9% 22,820 20,154 8% gross profit 1,178 1,000 8% 4,611 3,772 6% gross margin 20.1% 18.7% 20.2% 18.7% operating expenses* 890 729 5% 3,586 2,848 6% opex margin 15.2% 13.6% 15.7% 14.1% EBITA* 288 271 8% 1
Slide 20: Performance by revenue category
performance by revenue category € million Q3 2017 Q3 2016 % organic* 9M 2017 9M 2016 % organic* Staffing revenue 3,106 3,010 6% 9,072 8,383 6% EBITA 174 162 6% 444 394 8% EBITA margin 5.6% 5.4% 4.9% 4.7% Inhouse services revenue 1,328 1,154 19% 3,806 3,252 18% EBITA 70 59 19% 182 155 18% EBITA margi
Slide 21: Q3 2017 gross margin bridge
Q3 2017 gross margin bridge • temp margin -/- 40bp impact • perm fees grew 10% YoY organically • HRS/others added 180bp, including the effect of Monster • pricing climate stable © randstad | 21
Slide 22: Q3 2017 operating expenses bridge
Q3 2017 operating expenses bridge • OPEX decreased € 17M organically (sequentially) • favorable sequential FX impact € 25M © randstad | 22
Slide 23: Net debt at €1,389M
net debt at €1,389M leverage ratio at 1.4 € million Q3 2017 Q3 2016 goodwill and acquisition-related intangible assets 3,519 2,808 operating working capital (OWC) 991 831 net tax assets 404 464 all other assets and liabilities* 555 400 invested capital 5,469 4,503 total equity 4,080 3,941 net debt 1
Slide 24: Q3 2017 free cash flow
Q3 2017 free cash flow € million Q3 2017 Q3 2016 L4Q ’17 L4Q ’16 EBITDA 281 281 1,020 964 change in OWC -/- 14 - -/- 234 -/- 107 income taxes -/- 53 -/- 33 -/- 189 -/- 114 provisions & employee benefit obl. 14 - 17 -/- 16 net capital expenditures -/- 22 -/- 27 -/- 96 -/- 83 other items -/- 29 -/- 21
Slide 25: Outlook
outlook • organic revenue growth was 9.0% in Q3 Geo Exit Rate • September exit rate and volumes in early October NAM broadly indicate a continuation of Q3 trend NL • there will be an adverse 2.4% comparison in Q4 FR • gross margin in Q4 is expected to be stable sequentially GER • for Q4, operating e
Slide 26: Questions & answers
questions & answers © randstad | 26
Slide 27: Appendices
appendices randstad. © randstad | 27
Slide 28: Outlets by region
outlets* by region end of period Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 North America 1,099 1,087 1,094 1,149 1,134 the Netherlands 627 660 650 640 655 France 673 670 678 682 680 Germany 579 565 563 557 565 Belgium & Luxembourg 315 319 317 310 308 Iberia 349 352 349 339 339 Italy 281 286 290 313 31
Slide 29: Corporate staff by region
corporate staff by region average Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 North America 5,700 5,750 5,740 6,660 6,530 the Netherlands 4,310 4,210 4,160 4,290 4,380 France 4,240 4,140 3,790 3,650 3,580 Germany 2,760 2,720 2,640 2,710 2,700 Belgium & Luxembourg 2,160 2,030 1,950 1,990 2,010 Iberia 2,0
Slide 30: Staffing employees by region
staffing employees by region average Q3 2017 Q3 2016 North America 100,600 108,500 the Netherlands 78,900 81,600 France 87,400 78,000 Germany 50,600 48,000 Belgium & Luxembourg 50,400 46,600 Iberia 71,300 65,900 Italy 49,100 37,800 Other European countries* 67,700 64,200 Rest of the world 111,600 11
Slide 31: Human forward.
eaese human forward. MW