Slide 1: 2nd quarter 2013: continuation of a stable trend
2nd quarter 2013 continuation of a stable trend Ben Noteboom, CEO Robert Jan van de Kraats, CFO Randstad Holding nv July 25, 2013
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 appendices 3 July 25, 2013 second quarter results 2013
Slide 4: Performance
performance 4 July 25, 2013 second quarter results 2013
Slide 5: Good progress on key strategic priorities
good progress on key strategic priorities excellent execution - field steering: continued productivity improvements - EBITA margin improvements - lower Days Sales Outstanding (DSO) improving client profitability across the board - implementing right delivery models - enhancing pricing policy - revie
Slide 6: Acquiring part of USG staffing businesses
acquiring part of USG staffing businesses attractive opportunity for value creation revenue FY 2012 Spain Italy Switzerland Austria Poland Luxembourg total Randstad 460 409 204 - 124 40 1,237 USG activities 200 112 22 50 34 8 426 total 660 521 226 50 158 48 1,663 stronger market positions in key mar
Slide 7: Continuation of a stable trend
continuation of a stable trend € million Q2 2013 Q2 2012 % organic Q1 2013 revenue 4,096 4,303 -/-4% 3,832 gross profit 747 782 -/-3% 684 gross margin 18.2% 18.2% 17.8% operating expenses* 601 648 -/-5% 592 opex as % of revenue 14.7% 15.0% 15.5% EBITA* 146 135 +10% 92 EBITA margin* 3.6% 3.1% 2.4% or
Slide 8: Q2 2013: stable trends across regions
Q2 2013: stable trends across regions YoY Randstad growth development divergent trends across countries in Europe continued focus on profitability in North America growth in Japan and emerging markets March -2.6%, April -5.2%, May -3.1%, June -2.6% 8 July 25, 2013 second quarter results 2013
Slide 9: North America: focus on revenue quality
North America: focus on revenue quality revenue -/-3% (Q1: -/-3%), -/-2% in June - strong gross margin improvements in staffing & professionals - ACA employer mandate delayed by 1 year performance North America US staffing & inhouse down 3% - good performance in admin and perm up 19% - focus on clie
Slide 10: France: continued strong market decline
France: continued strong market decline higher gross profit, supported by subsidies revenue down 13% (Q1: -/- 12%) - stable trend through the quarter - professionals at -/-14% (stable vs. Q1) performance France gross profit up 6% YoY - GM up 270 bps - higher impact Finance act (CICE) - part of subsi
Slide 11: The Netherlands: easing gross margin effects
the Netherlands: easing gross margin effects recovery ratio of 82% revenue down 4% (Q1: -/-1%) - continued growth at inhouse & payroll services - focus on client profitability performance the Netherlands - RNL flat YoY, Tempo-Team to -/-8%, - Yacht stable at -/-13% easing gross margin effects - high
Slide 12: Germany: growth in June
Germany: growth in June recovery ratio of 140% revenue at 0% (Q1: -/-4%) - significant price effect (+7%) - no reduced demand from equal pay performance Germany - professionals slightly improved with good growth in IT gross margin effects easing - implementation equal pay - impact sickness lower aft
Slide 13: Belgium: ensuring adaptability
Belgium: ensuring adaptability revenue -/- 8% (Q1: -/-9%) - stable rate of decline - administrative segment holding up well performance Belgium - inhouse at -/-23%, mainly automotive - improving trend in perm, up 14% focus on profitability - client profitability - field steering - FTEs down by 6% se
Slide 14: UK: improving trend, strong cost control
UK: improving trend, strong cost control revenue +2% (Q1: -/- 1%) - continued growth in professionals (+13%) - led by Education, IT and Engineering performance UK - decline inhouse persisted, due to focus on client profitability - good growth in MSP and RPO - perm fees at -/- 13% (Q1: -/- 9%) focus
Slide 15: Iberia: improving profitability
Iberia: improving profitability stronger demand ahead of summer Spain - revenue -/- 1% (Q1: -/- 1%), June +6% - improving trend in manufacturing performance Iberia - professionals showed continued growth Portugal - revenue -/- 2% (Q1: -/- 8%), June +7% - good performance in call centers - strengthen
Slide 16: Revenue development per industry
revenue development per industry Segments USA Germany France Netherlands Manufacturing - - -- o Automotive o o - ++ Food o o o o Transport + o -- ++ Business services o - -- o Financial services -- -- o - IT services - + - + Public sector -- o o ++ Health & social work o -- -- -- 16 July 25, 2013 se
Slide 17: Financial results & outlook
financial results & outlook 17 July 25, 2013 second quarter results 2013
Slide 18: Update transaction USG businesses
update transaction USG businesses transaction completed on June 25, 2013 revenue of combined activities show flat growth in Q2 2013, good growth in Spain financial consolidation: - balance sheet included at quarter-end Q2 2013 - P&L as from Q3 2013 - purchase price allocation in Q3 2013 significant
Slide 19: Income statement Q2 2013
income statement Q2 2013 € million Q2 2013 Q2 2012 % change % organic revenue 4,096 4,303 -/- 5% -/- 4% gross profit 747 782 -/- 5% -/- 3% gross margin 18.2% 18.2% operating expenses* 601 648 -/- 7% -/- 5% opex as % of revenue 14.7% 15.0% EBITA* 146 135 +8% +10% EBITA margin* 3.6% 3.1% integration c
Slide 20: Q2 2013: financial key points
Q2 2013: financial key points free cash flow amounted to -/- € 81M vs. -/- € 167M LY - typical seasonal pattern: negative free cash flow - regular annual payment of holiday allowances - Q2 typically more revenue than Q1: working capital investments required - YoY improvement: - higher profitability
Slide 21: Segment performance, focus on delivery models
segment performance, focus on delivery models Staffing in € M Q2 2013 Q2 2012 % organic* focus on revenue quality in North revenue 2,477.8 2,662.7 America stable trends across Europe EBITA 85.1 80.7 strong profit improvements in HRS EBITA margin 3.4% 3.0% (Q2 revenue: € 258M) positive impact CICE su
Slide 22: Gross margin bridge
gross margin bridge YoY gross margin development + 0.2% -/- 0.2% margin expansion North America small positive impact HRS in mix CICE benefits in France perm fees were 9.7% of GP (vs. 9.7% LY) legislative changes NL & Germany continued focus on client profitability 22 July 25, 2013 second quarter re
Slide 23: Operating expenses bridge
operating expenses bridge sequential OPEX development in € M FTEs down by 250 sequentially - mainly across Europe +0 additional marketing costs and bonus accruals +4 +3 +0 +0 +0 +2 592 recovery ratio: 132% 601 601 YoY OPEX development in € M in Europe costs down € 32M investing in profitable growth
Slide 24: DSO down by 1 day
DSO down by 1 day OWC including € 40M of USG activities €M June 30, 2013 June 30, 2012 trade and other receivables 3,068 3,169 less: trade and other payables -/- 2,317 -/- 2,263 operating working capital* 751 906 cash & cash equivalents 125 242 less: current borrowings -/- 191 -/- 102 less: long-ter
Slide 25: Seasonal net debt increase
seasonal net debt increase reflecting pay-out of cash dividend, holiday allowances and USG transaction €M Q2 2013 Q2 2012 EBITDA 159 133 usage of OWC -/- 189 -/- 240 income taxes paid -/- 29 -/- 55 provisions and other items 2 9 net additions in PPE and software -/- 8 -/- 16 other non-cash items -/-
Slide 26: Outlook
outlook revenue p/wd in June at -/-2.6% - continuing stable trend into July - comparison base easier in Q3 2013 (~ 3%) - 1 additional working day in Q3 2013 vs. Q3 2012 - € 15-20M marketing investments in H2 2013, including regular seasonality in spend - consolidation of USG activities and purchase
Slide 27: Q&A
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services Q&A
Slide 28: Appendices
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 29: Drivers effective tax rate
drivers effective tax rate effective tax rate* at 31% (vs. 32% in FY 2012) - 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 - full year 2013 guidance: 28%-31% driver effective* cas
Slide 30: Financing: fixed vs. floating interest rates
financing: fixed vs. floating interest rates 10 year historic interest rates comparison 1M vs. 5Y average fixed rate = 3.0% average floating rate = 1.9% July 2003 June 2013 we use floating interest rates as a natural hedge - spread above Euribor of 50-115 bps 30 July 25, 2013 second quarter results
Slide 31: Revenue split Q2 2013
revenue split Q2 2013 geographical area revenue categories 31 July 25, 2013 second quarter results 2013
Slide 32: EBITA breakdown by geography
EBITA breakdown by geography Q2 2013 Q2 2012 12% 21% 32 July 25, 2013 second quarter results 2013
Slide 33: Outlets by region
outlets* by region end of period Q2 2013 Q1 2013 Q4 2012 Q3 2012 Q2 2012 North America 1,060 1,053 1,041 1,041 1,055 France 863 866 868 864 864 the Netherlands 679 688 634 672 683 Germany 547 539 558 551 548 Belgium/Lux 321 320 344 350 350 United Kingdom 155 160 203 231 243 Iberia 252 253 266 264 27
Slide 34: Corporate employees by region
corporate employees* by region average Q2 2013 Q1 2013 Q4 2012 Q3 2012 Q2 2012 North America 6,230 6,160 6,300 6,360 6,400 France 3,620 3,630 3,740 3,890 3,930 the Netherlands 4,270 4,360 4,560 4,720 4,770 Germany 2,480 2,500 2,610 2,690 2,830 Belgium/Lux. 1,770 1,890 1,980 2,070 1,980 United Kingdo
Slide 35: Staffing employees by region
staffing employees* by region average Q2 2013 Q2 2012 North America 101,700 106,400 France 78,000 89,500 the Netherlands 82,200 87,700 Germany 48,500 52,900 Belgium/Lux. 38,100 40,600 United Kingdom 19,200 21,100 Iberia 44,800 45,400 Rest of Europe 37,700 35,800 Rest of world 108,800 110,500 total 5