Randstad Nv · EURONEXT:RAND
Randstad Nv — Q2 2017 Earnings Presentation
30 slides from Randstad Nv's earnings presentation, Jul 25, 2017
Slide 1: 2nd quarter 2017 results
2nd quarter 2017 results Europe gaining further momentum Jacques van den Broek, CEO Robert Jan van de Kraats, CFO Randstad Holding nv July 25, 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 financial results & outlook Q&A appendices
Slide 4: Performance
performance -~c randstad
Slide 5: Q2 2017: Europe gaining further momentum
Q2 2017: Europe gaining further momentum Revenue of € 5,866 million; Topline grew 11% in Gross margin 20.4%; organic growth +9.3%; Europe, 1% in North underlying gross margin gross profit up 7.9% America and 12% in Rest stable YoY; perm fees up of the world 7% Organic opex up 5% (Q1 Underlying EBITA
Slide 6: Q2 17: Europe gaining further momentum
Q2 17: Europe gaining further momentum € million Q2 ’17 Q2 ’16 % Org. L4Q ’17 L4Q ’16 % Org. revenue 5,866 5,108 9% 22,298 19,782 7% gross profit 1,194 963 8% 4,434 3,706 6% gross margin 20.4% 18.9% 19.9% 18.7% operating expenses* 932 724 5% 3,425 2,803 5% opex % 15.9% 14.2% 15.4% 14.2% EBITA* 262 2
Slide 7: Regional split: strong momentum in Europe
regional split: strong momentum in Europe YoY Randstad organic revenue growth development 15% 5% -5% -15% Group Europe North America Rest of the world Europe grew 11% (vs. +8% in Q1) North America grew 1% flat sequentially Rest of the world increased 12% (vs. +9% in Q1) Group grew 9% (vs. +6% in Q1)
Slide 8: North America: stable topline growth
North America: stable topline growth North America – historical organic growth 8% 2% revenue up 1% flat sequentially - Perm up 3% (Q1: up 6%) 6% 1% 4% US Staffing & Inhouse, revenue growth 2% (Q1: +2%) 2% Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 0% US Professionals, revenue down 2% EBITA % organic gr
Slide 9: The Netherlands: continued focus on profitability
the Netherlands: continued focus on profitability the Netherlands - historical organic growth 8% 10% revenue at +2% (Q1: +1%) 8% - pricing pressure continues 6% 6% 4% 4% 2% combined Staffing & Inhouse businesses 2% 0% - up 3% (Q1: +2%) Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 EBITA % organic growth %
Slide 10: France: accelerating to double-digit growth
France: accelerating to double-digit growth France - historical organic growth 8% 16% 12% 6% revenue up 14% YoY (Q1: +9%) 8% 4% - Staffing & Inhouse at +13% YoY (Q1: +8%) 4% - Professionals accelerated 19% (Q1: +17%) 2% 0% Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 - perm grew 43%, fueled by tech (Q1:
Slide 11: Germany: sound growth continues
Germany: sound growth continues Germany - historical organic growth 8% 12% 10% revenue +9% YoY (Q1: +9%) 6% 8% - SME continues to outpace large clients 6% 4% 4% - perm: good growth continues 2% 2% 0% Staffing/Inhouse +8% (Q1: +8%), Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Professionals +13% (Q1: +11%
Slide 12: Belgium: accelerating topline with record profitability
Belgium: accelerating topline with record profitability Belgium - historical organic growth 16% 10% revenue +14% (Q1: +10%) 8% 12% - Staffing/Inhouse up 14% (Q1: +10%) 6% 8% - Professionals up 10% (Q1: +11%) 4% 2% 4% 0% 0% EBITA margin at 6.5% vs. 6.3% LY -2% Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
Slide 13: Iberia: strong topline trend
Iberia: strong topline trend Iberia - historical organic growth 8% 20% 15% Iberia revenue up 16% (Q1: +8%) 6% - Staffing/Inhouse up 16% (Q1: +8%) 10% 4% 5% 2% 0% Spain Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 - revenue growth 19% (Q1: +9%) EBITA margin organic growth % - perm up 15% (Q1: +24%) perfor
Slide 14: Italy: continued high revenue growth
Italy: continued high revenue growth Italy - historical organic growth 8% 35% 30% 25% 6% 20% Italy revenue +29% (Q1: +23%) 15% - integrated business performing well 4% 10% - strong growth driven by Inhouse 5% 2% 0% Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 EBITA margin at 5.8% vs. 5.2% LY EBITA % orga
Slide 15: Other European countries
Other European countries overall revenue growth at 11% (Q1: 5%) UK - organic revenue growth up by 2% (Q1: down 4%) Nordics - growth at 11% (Q1: up 4%) - Proffice integration continues to be on track Switzerland - growth at 22% (Q1: +21%) Poland - growth at 12% (Q1: +9%) EBITA margin at 2.6% vs. 3.3%
Slide 16: Rest of the world
Rest of the world overall revenue growth up 12% (Q1: +9%) Japan, growth up 6% YoY (Q1: +7%) Careo continues to perform well (+18%) Australia & New Zealand grew 14% (Q1:+12%) China growing 10% (Q1: +17%) overall Asia, growth at 8% (Q1: +6%) Latin America, up 21% (Q1: +12%) EBITA margin at 2.6% from 2
Slide 17: M&A activity fits our strategic agenda
M&A activity fits our strategic agenda aim to be top 3 in local strengthen Professionals accelerate progress towards EVA staffing market staffing business digital strategy after 3 years underway in line ahead ahead underway ahead underway 17 July 25, 2017 Q2 2017 Results
Slide 18: Value components of Monster
value components of Monster short term short-mid term mid-long-term USD 17M annually USD 7M restructuring, annually reinvestment, return to growth accelerating public revenue/ new products/ tax better Monster Randstad’s company performance services/business synergies Tech & Touch costs decline model
Slide 19: Financial results & outlook
financial results & outlook 19
Slide 20: Income statement Q2 2017
income statement Q2 2017 € million Q2 ’17 Q2 ’16 % Org. L4Q ’17 L4Q ’16 % Org. revenue 5,866 5,108 9% 22,298 19,782 7% gross profit 1,194 963 8% 4,434 3,706 6% gross margin 20.4% 18.9% 19.9% 18.7% operating expenses* 932 724 5% 3,425 2,803 5% opex margin 15.9% 14.2% 15.4% 14.2% EBITA* 262 240 7% 1,0
Slide 21: Performance by revenue category
performance by revenue category Staffing Q2 2017 Q2 2016 % organic* 6M 2017 6M 2016 % organic* in € M revenue 3,080 2,813 7% 5,966 5,373 5% EBITA 155 136 6% 271 232 10% EBITA margin 5.0% 4.8% 4.5% 4.3% Inhouse Services Q2 2017 Q2 2016 % organic* 6M 2017 6M 2016 % organic* in € M revenue 1,286 1,096
Slide 22: Q2 2017 gross margin bridge
Q2 2017 gross margin bridge temp margin -/-40bp impact perm fees grew 7% YoY organically HRS/others added 210bp, including the effect of Monster 22 July 25, 2017 Q2 2017 Results
Slide 23: Q2 2017 operating expenses bridge
Q2 2017 operating expenses bridge OPEX increased € 14M organically (sequentially) favorable sequential FX impact € 13M M&A relates to acquisition of Ausy 23 July 25, 2017 Q2 2017 Results
Slide 24: Net debt at € 1,556M
net debt at € 1,556M leverage ratio at 1.5 € million Q2 2017 Q2 2016 goodwill and acquisition-related intangible assets 3,582 2,730 operating working capital (OWC) 983 811 net tax assets 421 498 all other assets and liabilities* 515 365 invested capital 5,501 4,404 total equity 3,945 3,770 net debt
Slide 25: Q2 2017 free cash flow
Q2 2017 free cash flow € million Q2 ’17 Q2 ’16 L4Q ’17 L4Q ’16 EBITDA 274 252 1,019 941 change in OWC -/- 261 -/- 179 -/- 220 -/- 78 income taxes -/- 58 -/- 43 -/- 170 -/- 113 provisions & employee benefit obl. - 2 3 -/- 28 net capital expenditures -/- 22 -/- 21 -/- 101 -/- 71 other items -/- 30 -/-
Slide 26: Outlook
outlook organic revenue growth was 9.3% in Q2 Geo Exit Rate - June exit rate and volumes in early July indicate a continuation of Q2 trend NAM gross margin in Q3 is expected to be slightly down NL sequentially FR for Q3, operating expenses are expected to be lower GER sequentially on an organic basi
Slide 27: Appendices
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 28: Outlets by region
outlets* by region end of period Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 North America 1,087 1,094 1,149 1,134 1,135 the Netherlands 660 650 640 655 649 France 670 678 682 680 681 Germany 565 563 557 565 558 Belgium & Luxembourg 319 317 310 308 303 Iberia 352 349 339 339 332 Italy 286 290 313 311 20
Slide 29: Corporate staff by region
corporate staff by region average Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 North America 5,750 5,740 6,660 6,530 6,490 the Netherlands 4,210 4,160 4,290 4,380 4,320 France 4,140 3,790 3,650 3,580 3,530 Germany 2,720 2,640 2,710 2,700 2,640 Belgium & Luxembourg 2,030 1,950 1,990 2,010 1,900 Iberia 1,9
Slide 30: Staffing employees by region
staffing employees by region average Q2 2017 Q2 2016 North America 99,700 107,500 the Netherlands 83,500 86,300 France 87,900 84,000 Germany 49,100 47,900 Belgium & Luxembourg 44,900 40,600 Iberia 68,300 62,500 Italy 46,100 21,900 Other European countries* 65,800 63,700 Rest of the world 109,300 106