Slide 1: 4th quarter and FY 2014 results
4th quarter and FY 2014 results solid performance in Q4 good start to 2015 Jacques van den Broek, CEO Robert Jan van de Kraats, CFO Randstad Holding nv February 19, 2015
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 February 19, 2015 4th quarter and annual results 2014
Slide 4: performance
performance 4 February 19, 2015 4th quarter and annual results 2014
Slide 5: continued profitable growth
continued profitable growth € million Q4 ’14 Q4 ’13 % Org. FY ’14 FY ’13 % Org. revenue 4,496 4,278 +3% 17,250 16,568 +4% gross profit 841 785 +5% 3,180 3,012 +6% gross margin 18.7% 18.4% 18.4% 18.2% operating expenses* 642 628 +0% 2,474 2,433 +2% opex % 14.3% 14.7% 14.3% 14.7% EBITA* 199 157 +25% 7
Slide 6: Q4 2014: emerging markets accelerating
Q4 2014: emerging markets accelerating YoY Randstad growth development 15% 5% -5% -15% Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Group Europe North America Rest of World growth during 2014 remained within the 3-5% bandwidth growth expansion in North America driv
Slide 7: strategic roadmap
strategic roadmap driven by best people, strong concepts, excellent execution and superior brands Shape the world of work • optimal workforces for clients M&A goals • the best jobs for candidates Tech Grow to 5-6% EBITA • profitable growth M&A, seamless fit • improve margin integrations • increase p
Slide 8: strategic roadmap: 2014 progress
strategic roadmap: 2014 progress Grow to 5-6% EBITA • profitable growth • improve margin M&A goals • increase productivity Tech Leverage ratio at 0.5 TTA Randstad Innovation Fund: 4 investments made in 2014 International project team set up Org Growth in MSP, RPO & Inhouse € 60-70 m cost s
Slide 9: North America: growth continues
North America: growth continues FY incremental conversion ratio of 49% performance North America - quarterly revenue +6% (Q3: +5%) 1,100 6% 5% 1,000 US staffing & inhouse, gross profit +8% 4% 900 - solid revenue growth +10% in Q4 (Q3: +10%) 3% - good performance in manufacturing and logistics 800 2%
Slide 10: France: improving profitability in difficult market
France: improving profitability in difficult market FY incremental conversion ratio of 188% performance France - quarterly revenue -/-8% (Q3: -/-4%) 800 6% - combined staffing & inhouse at -/-9% YoY 5% 700 - inhouse was stable 4% - professionals at -/-1% vs. Q3: +1% 600 3% 2% gross profit flat YoY 5
Slide 11: the Netherlands: ABFS paying off
the Netherlands: ABFS paying off FY incremental conversion ratio of 54% performance the Netherlands - quarterly revenue at +5% (Q3: +4%) 800 8% - Randstad +4% YoY (Q3: +3%), growth in SME 7% 700 6% - Tempo-Team growing at market, +8% 600 5% - overall professionals up 13% 4% 500 - perm accelerated to
Slide 12: Germany: continued market challenges
Germany: continued market challenges FY incremental conversion ratio of 70% performance Germany - quarterly revenue -/-1% (Q3: +2%) 600 7% - price effect (+4%) 6% 500 - labor demand hit by wage cost increases & 5% 400 regulatory changes 4% - perm growth of +20% (Q3: +29%) 300 3% - focus on SME & del
Slide 13: Belgium: focus on profitability
Belgium: focus on profitability FY incremental conversion ratio of 135% performance Belgium - quarterly revenue -/-1% (Q3: +6%) 400 6% - impacted by strikes in December 5% 300 - inhouse growth eased to +5% (Q3: +13%) 4% - growth in white-collar continues 200 3% - professionals up +7% (Q3: +14%) 100
Slide 14: UK: another step
UK: another step FY incremental conversion ratio of 71% performance UK - quarterly revenue +2% (Q3: -/-3%) 250 2.5% - gross profit up 9% (Q3: +8%) 2.0% 200 - strong performance in construction 1.5% 150 - finance & IT remain under pressure 1.0% 100 0.5% - perm fees up by 16% (Q3: +12%) 50 0.0% Q4 201
Slide 15: Iberia: stable growth
Iberia: stable growth FY incremental conversion ratio of 159% performance Iberia - quarterly Iberia revenue & gross profit up 9% 300 5% 250 4% 200 Spain 3% 150 - revenue growth +12% (Q3: +9%) 2% 100 - growth in automotive and manufacturing 50 1% - professionals (+98%) & perm (+54%) continue Q4 2013
Slide 16: Other European countries: growth continues
Other European countries: growth continues performance ROE - quarterly overall revenue growth +11% 400 5% 300 4% Italy 200 3% - revenue growth at 8% (Q3: +12%) 100 2% - focus on specialties and perm 0 1% Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Switzerland revenue in € M EBITA margin - growth improve
Slide 17: Rest of the world: stable trends
Rest of the world: stable trends performance ROW - quarterly Japan, growth at +8% YoY (Q3: +6%) 400 2.0% - good growth in logistics and retail 350 1.5% - administrative growth continues 300 1.0% - investing in growth 250 0.5% Australia / New Zealand grew by 24% 200 0.0% Q4 2013 Q1 2014 Q2 2014 Q3 20
Slide 18: financial results & outlook
financial results & outlook 18 February 19, 2015 4th quarter and annual results 2014
Slide 19: income statement Q4 2014
income statement Q4 2014 € million Q4 ’14 Q4 ’13 % Org. FY ’14 FY ’13 % Org. revenue 4,496 4,278 +3% 17,250 16,568 +4% gross profit 841 785 +5% 3,180 3,012 +6% gross margin 18.7% 18.4% 18.4% 18.2% operating expenses* 642 628 +0% 2,474 2,433 +2% opex margin 14.3% 14.7% 14.3% 14.7% EBITA* 199 157 +25%
Slide 20: segment performance
segment performance Staffing in € M Q4 2014 Q4 2013 % organic* good growth in North America, Netherlands, Iberia and emerging revenue 2,645.0 2,578.2 +2% markets with focus retained on EBITA 117.3 100.3 +15% revenue quality Germany and France remain EBITA margin 4.4% 3.9% challenging markets, howeve
Slide 21: gross margin bridge
gross margin bridge YoY gross margin development + 0.1% + 0.3% -/- 0.1% 18.7% 18.4% margin expansion in United Kingdom, France & perm fees were 9.2% of GP (up from 7.8% LY) North America - organic growth of 21% YoY continued focus on client profitability 21 February 19, 2015 4th quarter and annual r
Slide 22: operating expenses bridge
operating expenses bridge sequential OPEX development in € M +4 +2 +2 +1 +8 642 625 negative FX impact FTE growth in North America, Iberia and Poland good cost control maintained continued investment in emerging markets seasonally higher marketing spend 22 February 19, 2015 4th quarter and annual re
Slide 23: net debt down 45% YoY
net debt down 45% YoY leverage ratio at 0.5 € million December 31, 2014 December 31, 2013 goodwill and intangible assets 2,597 2,665 operating working capital 488 459 net tax assets 527 497 other assets and liabilities 123 48 invested capital 3,735 3,669 equity 3,313 2,908 net debt 422 761 invested
Slide 24: Q4 free cashflow up 61%
Q4 free cashflow up 61% € million Q4 ’14 Q4 ’13 FY ’14 FY ’13 EBITDA 182 136 726 598 change in OWC 114 112 9 78 income taxes paid -/- 26 -/- 164 -/- 117 -/- 246 Provisions & employee benefit obl. 18 -/- 26 7 -/- 51 net additions in PPE and software -/- 23 -/- 23 -/- 63 -/- 45 other items -/- 12 -/-
Slide 25: solid free cash flow development
solid free cash flow development free cash flow of € 488M vs. + € 293M LY 15% growth normalized - growth has led to increase in working capital requirements, offset by a strong DSO performance - impact of payment of € 131 million to the Dutch tax authority in the prior year leverage ratio improved t
Slide 26: productivity trend; still room for improvement
productivity trend; still room for improvement productivity development on Group level (index) 130 120 110 100 90 GP/FTE 80 70 0 Q1 Q2 Q3 Q4 Q1 5 Q2 Q3 Q4 Q1 Q2 10 Q3 Q4 Q1 Q2 Q3 15 Q4 Q1 Q2 Q3 Q4 20 Q1 Q2 Q3 Q4 25 Q1 Q2 Q3 Q4 Q1 30 Q2 Q3 Q4 35 2007 2008 2009 2010 2011 2012 2013 2014 productivity ma
Slide 27: dividend proposal: record high
dividend proposal: record high proposed dividend payment over 2014 - payment of € 1.29 per ordinary share (+36%) - payout of 50% of adjusted net profit, reflecting strong financial position - choice between cash and shares, default cash Adjusted* dividend (€ cents per share) 1.40 1.20 1.00 0.80 0.60
Slide 28: outlook
outlook organic revenue/wd grew by 3.4% in Q4 2014, while it was up 6.5% in January - revenue growth stable in Q4 (December revenue impacted by timing of holidays – January benefiting) - February volume appears in line with January on a normalized basis - comparison base continues to strengthen (+2.
Slide 29: January exit rates
January exit rates revenue growth per working Q4, 2014 January, 2015 day North America + 6% + 6% France -/- 8% -/- 1% Netherlands + 5% + 11% Germany -/- 1% -/- 2% Belgium (incl. Luxembourg) -/- 1% + 8% Iberia + 9% + 20% United Kingdom + 2% + 4% Rest of Europe + 11% + 11% Rest of the world + 15% + 13
Slide 30: on track
on track 30 February 19, 2015 4th quarter and annual results 2014
Slide 31: ™- randstad
™- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services SA
Slide 32: appendices
™- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 33: our priorities
our priorities Client total talent architecture Staffing Professionals Inhouse HRS leverage our expertise implementing global expand in white-collar grow in MSP and RPO in specialty staffing concept per segment and professionals support TTA approach: focus on permanent focus on permanent increase sh
Slide 34: setting the ambition
setting the ambition profitable organic growth through activity-based field steering grow to 5-6% EBITA - profitable growth - improve margin - increase productivity activity-based field steering - market validation - funnel management (temp & perm) growth - weekly activity mgt management accelerator
Slide 35: portfolio Executive Board
portfolio Executive Board Executive Board member Country Responsibility Functional Areas Jacques van den Broek, Germany, Australia, New Business Concept Development; Global Client chairman & CEO Zealand, China, Hong Kong, Solutions; HR; Marketing & Communications; Singapore & Malaysia Public Affairs
Slide 36: financing: fixed vs. floating interest rates
financing: fixed vs. floating interest rates 10 year historic interest rates comparison 1M vs. 5Y 6% 5% 4% 3% average fixed rate = 2.6% 2% average floating rate = 1.6% 1% 0% January 2005 December 2014 we use floating interest rates as a natural hedge - spread above Euribor of 50-115 bps 36 February
Slide 37: revenue split Q4 2014
revenue split Q4 2014 geographical areas revenue categories 9% North America 20% 8% 23% France NL 6% Germany Belgium 5% UK 15% 21% 59% 7% Iberia RoE 10% RoW 17% staffing inhouse professionals 37 February 19, 2015 4th quarter and annual results 2014
Slide 38: EBITA breakdown by geography
EBITA breakdown by geography Q4 2014 Q4 2013 1% 1% 8% 6% North America 1% 5% 2% 6% 24% 26% France NL 9% 9% Germany 12% Belgium 10% 7% UK 21% 15% Iberia 17% RoE RoW 24% 29% 38 February 19, 2015 4th quarter and annual results 2014
Slide 39: outlets by region
outlets* by region end of period Q4 2014 Q3 2014 Q2 2014 Q1 2014 Q4 2013 North America 1,084 1,074 1,087 1,075 1,055 France 741 743 766 794 791 the Netherlands 689 666 675 675 672 Germany 555 548 551 550 557 Belgium/Lux 310 314 313 314 307 United Kingdom 140 141 141 142 147 Iberia 292 288 290 283 40
Slide 40: corporate staff by region
corporate staff by region average Q4 2014 Q3 2014 Q2 2014 Q1 2014 Q4 2013 North America 6,230 6,160 6,250 6,230 6,320 France 3,430 3,410 3,370 3,370 3,480 the Netherlands 4,430 4,420 4,320 4,240 4,260 Germany 2,620 2,610 2,600 2,610 2,620 Belgium/Lux 1,780 1,790 1,720 1,700 1,800 United Kingdom 1,55
Slide 41: staffing employees by region
staffing employees by region average Q4 2014 Q4 2013 North America 114,900 105,600 France 66,100 73,300 the Netherlands 79,400 82,600 Germany 45,500 47,700 Belgium/Lux 40,100 40,900 United Kingdom 17,000 18,500 Iberia 60,000 53,900 Rest of Europe 59,000 52,100 Rest of the world 113,000 114,200 total