Slide 1: 3rd quarter results 2011
3rd quarter results 2011 continued growth in a challenging environment revenue and earnings per share up 12% Robert-Jan van de Kraats, CFO Randstad Holding nv October 27, 2011
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 3 October 27, 2011 third quarter results 2011
Slide 4: performance
performance 4 October 27, 2011 third quarter results 2011
Slide 5: market trends
market trends quarterly market growth (YoY) 40% • growth in markets slowing, mainly due to stronger comparables 30% 20% • seasonal trends remain intact 10% 0% • industrial segments continued -10% Q3 Q4 Q1 Q2 Q3 to be main growth drivers 2010 2011 NL France Germany Belgium UK N-America • impact publi
Slide 6: Q3 2011: slowing growth, good performance
Q3 2011: slowing growth, good performance • revenue amounted to € 4,232 million (+7% YoY organically per wd) - organic growth per working day moved from 9% in July to 7% in September - Inhouse still strong at +18% (Q2 2011: +29%) - Staffing up 5% (Q2 2011: 10%) against a strong comparison base in la
Slide 7: the Netherlands: revenue growth improved
the Netherlands: revenue growth improved • organic revenue p/w +4% (vs + 3% in Q2) revenue & EBITA margin - Randstad continues to outperform market in Q3 800 7.5% - Tempo-Team still lagging - revenue decline at Yacht improved to low single digit rate 750 6.5% million € • decline public sector eased
Slide 8: France: gaining market share
France: gaining market share • organic revenue +9% in Q3 2011 (Q2: +16%) revenue & EBITA margin - ahead of market in Q3 900 4.0% - automotive & manufacturing main drivers in Staffing - improved growth in Professionals 800 3.0% - permanent placement up 23% YoY (Q2 2011: 38%) million € - strong growth
Slide 9: Germany: strong performance
Germany: strong performance • organic revenue +10% (Q2: +16%) revenue & EBITA margin - solid growth despite strong comparison base (Q3 ‘10:+40%) 550 10.0% - signs of tight labor market - more favorable mix: 500 8.0% - continued double-digit growth in Professionals 450 6.0% - Staffing more geared tow
Slide 10: Belgium: strong operating leverage
Belgium: strong operating leverage • organic revenue +3% (Q2: +10%) revenue & EBITA margin - slightly behind market due to focus on client profitability 400 7.0% - industrial segment main driver 350 6.0% - ahead of market in administrative 300 5.0% - Inhouse up 21% in Q3 2011 (vs +50% in Q3 2010) mi
Slide 11: UK: challenging environment
UK: challenging environment • organic revenue +2% revenue & EBITA margin - growth stable sequentially, September +3% 250 5.0% 4.0% - decline public sector eased slightly to -25% (vs -30% in Q2) 225 3.0% - private sector remains strong at +11% (vs +14% in Q2 ) 200 2.0% 1.0% million € 175 0.0% • Inhou
Slide 12: North America: strong growth Professionals
North America: strong growth Professionals • organic revenue +10% in Q3 2011 (Q2: +14%) revenue & EBITA margin - US at market, while US Professionals strongly outperformed 650 6.0% - Canada solid in staffing and professionals 600 5.0% - SFN contributed € 118 million to September revenues 550 4.0% mi
Slide 13: SFN Group: pro-forma Q3 2011
SFN Group: pro-forma Q3 2011 • SFN Group growth in line with Q2 2011 breakdown SFN Group revenues Q3 2011 - organic revenue growth amounted to -1% in Q3 2011 - EBITA margin up to 3.8% vs 2.7% LY 39% sector performance Q3 2011 9% 52% • Staffing down 1% YoY - focus on client profitability Staffing - E
Slide 14: strategic rationale for SFN acquisition
strategic rationale for SFN acquisition the combination creates the #3 in US providing scope for further growth Professional Services Staffing Services HRS (incl. RPO/MSP) Combination Share of group: 9% Share of group: 41% Share of group: 50% Professionals 39% 39% 39% 9% HRS 52% 9% HRS 10% Staffing
Slide 15: update: SFN integration process & synergies
update: SFN integration process & synergies - closing transaction within 6 weeks after announcement integration - consolidation results as of September 2, 2011 process - integration process is on track - integration costs in Q3 amounted to € 4.6 million annual synergies - synergy targets remain in p
Slide 16: segment performance
segment performance Staffing in € million Q3 2011 Q3 2010* % organic • industrial segments main drivers revenue 2,759.4 2,521.8 5% • growth slowing in largest countries EBITA 117.1 105.0 8% • transfers to Inhouse EBITA margin 4.2% 4.2% • focus on client profitability Inhouse in € million Q3 2011 Q3
Slide 17: revenue development per industry segment
revenue development per industry segment Segments USA Germany France Netherlands Manufacturing + + ++ + Automotive + ++ ++ ++ Food o o o o Transport + o + + Business services + + o + Financial services o - - o IT services ++ ++ ++ ++ Public sector o - o - Health & social work ++ ++ + - 17 October 27
Slide 18: update Professionals organic growth accelerator
update Professionals organic growth accelerator Q1 launch of “Professionals organic growth accelerator plan” • further strengthen a leading position in countries and segments • aim to accelerate growth in next 2 years • gradually adding 500 FTEs based on field steering model progress Q3 • continued
Slide 19: financial results & outlook
financial results & outlook 19 October 27, 2011 third quarter results 2011
Slide 20: Q3 2011: financial key points
Q3 2011: financial key points • reported EBITA up 7% to € 164 million - includes integration costs and one-offs of € 10.7 mln • effective tax rate* amounted to 31% - in line with guidance for 2011 between 29-32% • diluted EPS* up 12% to € 0.66 vs. € 0.59 in Q3 2010 • moving average DSO improved by 1
Slide 21: income statement Q3 2011
income statement Q3 2011 € million Q3 2011 Q3 2010 % change % organic revenue 4,232 3,781 12% 7% gross profit 765 698 10% 4% gross margin 18.1% 18.5% operating expenses* 590 545 8% 2% opex as % of revenue 13.9% 14.4% underlying EBITA 175 153 14% 8% underlying EBITA margin 4.1% 4.0% reported EBITA 16
Slide 22: gross margin Q3 2011
gross margin Q3 2011 gross margin development 19 18.5 -/- 0.5 -/- 0.1 18 + 0.2 18.5 18.1 17.5 Q3 2010 temp French perm fees HRS/other SFN Q3 2011 margin subsidies • temp margin affected by continued high growth in Inhouse and changed geographic mix • no impact of change in French subsidies • perm fe
Slide 23: selected balance sheet items
selected balance sheet items € million September 30, 2011 September 30, 2010 trade and other receivables 3,160 2,707 less: trade and other payables 2,418 2,111 operating working capital* 742 595 cash & cash equivalents 238 259 less: current borrowings 95 120 less: non-current borrowings 1,630 1,086
Slide 24: consolidated cash flow statement
consolidated cash flow statement € million Q3 2011 Q3 2010 cash flow from operations before OWC* 124 128 usage of OWC 86 62 net additions in PPE and software -/- 17 -/- 17 financial receivables - - disposals of PPE - - free cash flow 194 173 € million Q3 2011 free cash flow 194 net (acquisition)/dis
Slide 25: outlook
outlook • organic growth per working day decreased to 7% in September - gradual slowdown in growth continued into Q4 - focus on client profitability may impact growth going forward • underlying OPEX expected to remain in line with Q3 • SFN will be fully consolidated in Q4 - integration costs in Q4 e
Slide 26: save the dates: Randstad analyst & investor days
save the dates: Randstad analyst & investor days analyst & investor days 2011 dates: 1 & 2 December venue: Group HQ (Diemen) 26 October 27, 2011 third quarter results 2011
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* was up to 31% in line with guidance (vs. 29% in 2010) - 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 driver effective* cash tax exp
Slide 30: debt facilities & repayment schedule existing facility
debt facilities & repayment schedule existing facility repayment schedule (excluding current borrowings) net cash September 2011 1400 135 1200 term 1000 revolver € x million 800 1,255 600 400 200 105 135 143 0 • covenant; net debt/EBITDA* of max. 3.5 - at the end of Q3 2011 the net debt/EBITDA ratio
Slide 31: financing: fixed vs. floating interest rates
financing: fixed vs. floating interest rates 10 year historical interest rates comparison 1M vs 5Y 6% 5% 4% average fixed rate = 3.6% 3% average floating rate = 2.6% 2% 1% 0% September 2001 September 2011 1M Float 5Y Fixed • we use floating interest rates as a natural hedge - spread above Euribor of
Slide 32: revenue split Q3 2011
revenue split Q3 2011 geographical area sectors NL France 9% 18% Germany 15% 19% Belgium/Lux. 65% 6% 16% UK 21% 5% Iberia 5% ROE 9% 12% N-America ROW staffing inhouse professionals 32 October 27, 2011 third quarter results 2011
Slide 33: EBITA breakdown by geography
EBITA breakdown by geography Q3 2011 Q3 2010 NL 2% NL 1% France France 11% 16% 26% 3% 4% Germany Germany 30% 2% Belgium/Lux. 5% Belgium/Lux. 4% 10% UK 0% UK 9% Iberia 17% Iberia 20% 19% ROE ROE 21% N-America N-America ROW ROW 33 October 27, 2011 third quarter results 2011
Slide 34: outlets by country
outlets* by country end of period Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 the Netherlands 734 739 746 733 739 France 896 889 896 905 896 Germany 555 530 516 503 475 Belgium/Lux 363 367 367 374 387 United Kingdom 283 275 278 289 297 Iberia 278 272 268 257 266 Other Europe 332 330 322 316 351 North Am
Slide 35: corporate employees by country
corporate employees by country average Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 the Netherlands 5,220 5,170 5,190 5,280 5,300 France 4,000 3,910 3,870 3,920 3,940 Germany 3,020 2,940 2,880 2,890 2,740 Belgium/Lux. 2,180 2,110 2,080 2,130 2,150 United Kingdom 1,930 1,960 1,990 2,060 2,050 Iberia 1,500
Slide 36: staffing employees by country
staffing employees by country averages Q3 2011 Q3 2010 the Netherlands 89,000 87,800 France 97,300 93,300 Germany 58,000 56,400 Belgium/Lux. 51,700 51,000 United Kingdom 23,700 22,400 Iberia 52,200 52,700 Other Europe 40,700 35,700 North America 67,800 55,700 Rest of world 106,800 87,300 total 587,2