Slide 1: 3rd quarter results 2012
3rd quarter results 2012 costs down by € 18M versus previous quarter ensuring adaptability Robert Jan van de Kraats, CFO Randstad Holding nv October 25, 2012
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 25, 2012 third quarter results 2012
Slide 4: performance
performance 4 October 25, 2012 third quarter results 2012
Slide 5: Q3: cost base down by € 18M vs. Q2
Q3: cost base down by € 18M vs. Q2 € million Q3 2012 Q3 2011 % change % organic Q2 2012 revenue 4,397 4,232 4% -/-5% 4,303 gross profit 799 765 4% -/-6% 782 gross margin 18.2% 18.1% 18.2% operating expenses* 638 590 8% -/-4% 648 opex as % of revenue 14.5% 13.9% 15.0% EBITA* 161 175 -/- 8% -/-13% 135
Slide 6: Q3 2012: gradual decline continues
Q3 2012: gradual decline continues YoY Randstad growth development 30% 20% 10% 0% -10% -20% -30% -40% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 Group Europe North America Rest of World diverging trends continued continued
Slide 7: key priorities
key priorities focus on costs - field steering - aligning overhead and head office with field shifting focus from market share gains to profitability - optimizing delivery models - enhancing pricing policy - review client profitability capturing growth opportunities and improve business mix - contin
Slide 8: North America: capturing profitable growth
North America: capturing profitable growth organic revenue +4% (Q2: +7%) - continued growth US staffing & professionals - stable growth trend Canada performance North America - perm up 9% (vs. 6% in Q2) 6% 1,000 5% 900 focus on profitability 800 4% 700 3% -incremental conversion & synergies 600 2% 5
Slide 9: SFN integration
SFN integration physical integration staffing & professionals completed IT migration Staffing: completed in Q3 integration IT migration Inhouse: to be completed in Q4 process IT migration Professionals: will start in Q4 integration costs Q3: € 6.5M (total: € 31.8M) increase of synergies anticipated
Slide 10: France: increased uncertainty
France: increased uncertainty revenue down 11% (Q2: -/- 3%) - continued growth at inhouse - accelerating decline in staffing & professionals performance France - lower decline in perm placements due to strong 950 4% growth in healthcare 900 3% 850 ongoing focus on costs and profitability 800 2% - FT
Slide 11: the Netherlands: ensuring adaptability
the Netherlands: ensuring adaptability revenue down 3% (Q2: -/-1%) - continued growth at inhouse & payroll - Yacht at -/-6%, but improving utilization rate performance the Netherlands 800 8% gross margin sequentially stable 750 6% - competitive environment 700 4% - changed business mix: growth payro
Slide 12: Germany: challenging environment
Germany: challenging environment organic revenue down 5% (Q2: -/-2%) - deteriorating trend through the quarter - CLA: price increases as from November 1st performance Germany - growth inhouse at +2%, staffing at -/-13% 550 8% - solid growth professionals:+11% (Q2: +7%), 6% mainly due to IT 500 4% 45
Slide 13: Belgium: improving mix
Belgium: improving mix revenue -/- 7% (Q2: -/-6%) - stable development through the quarter - inhouse improved slightly to -/- 1% (Q2: -/- 5%) performance Belgium - solid performance in HRS, mainly outplacement 400 6% - professionals at +2% 350 4% focus on profitability 300 2% - client profitability
Slide 14: UK: adjusting cost base
UK: adjusting cost base revenue -/- 9% (Q2: -/- 8%) - revenue trend in line with Q2 - public sector moved to +2% (vs. -/-8% in Q2) performance UK - inhouse to -/-24%, focus on client profitability 220 1.0% - professionals growing 210 0.5% - perm fees at -/- 22% (Q2: -/- 14%) 200 190 0.0% 180 -0.5% f
Slide 15: Iberia: demonstrating resilience
Iberia: demonstrating resilience Spain - revenue -/- 12% (Q2: -/- 9%) - decline driven by manufacturing and logistics performance Iberia - professionals showed continued growth 250 4% 3% Portugal 200 2% - revenue -/- 13% (Q2: -/- 12%) 150 - contraction across all segments 1% - merger of Randstad and
Slide 16: revenue development per industry
revenue development per industry Segments USA Germany France Netherlands Manufacturing + -- -- -- Automotive + - -- o Food - - - o Transport - - - o Business services ++ -- - - Financial services ++ -- - + IT services o ++ -- -- Public sector o -- -- + Health & social work + + -- -- 16 October 25, 2
Slide 17: financial results & outlook
financial results & outlook 17 October 25, 2012 third quarter results 2012
Slide 18: income statement Q3 2012
income statement Q3 2012 € million Q3 2012 Q3 2011 % change % organic revenue 4,397 4,232 4% -/-5% gross profit 799 765 4% -/-6% gross margin 18.2% 18.1% operating expenses* 638 590 8% -/-4% opex as % of revenue 14.5% 13.9% EBITA* 161 175 - 8% -/-13% EBITA margin* 3.7% 4.1% reported EBITA 145 164 am
Slide 19: Q3 2012: financial key points
Q3 2012: financial key points effective tax rate* amounted to 32% (Q3 2011: 31%) - guidance full year 2012 unchanged: 29-32% diluted EPS* down to € 0.62 vs. € 0.66 in Q3 2011 DSO improved by 1 day vs. LY to 53 days free cash flow amounted to € 207M in Q3 vs. € 194M LY - improved DSO & lower growth -
Slide 20: segment performance
segment performance Staffing in € M Q3 2012 Q3 2011 % organic strong growth in North America, revenue 2,732.8 2,759.4 -9 led by admin & perm gradual slowdown across Europe, EBITA 100.3 117.1 -19 mainly driven by industrial segments EBITA margin 3.7% 4.2% addition of SFN with below average EBITA marg
Slide 21: gross margin bridge
gross margin bridge YoY gross margin development +0.2% + 0.3% -/- 0.2% -/- 0.2% 18.1% 18.2% 17.9% 17.9% 17.9% Q3 2011 SFN Group price/mix price/mix price/mix price/mix perm HRS/others Q3 2012 Q4 Q1 Q2 Q3 placements gross margin stable vs. Q2 and up 10 bps YoY SFN contributes 20 bps to Q3 2012 season
Slide 22: operating expenses down
operating expenses down YoY OPEX development in € M SFN Group added € 53M to the cost base +28 -6 -7 +2 +5 in Europe costs down € 26M, investing in -26 -1 profitable growth in NA/RoW +53 638 FTE reduction of 1,980 YoY (pro forma) +69 590 number of branches & inhouse locations reduced across the boar
Slide 23: cost reduction initiatives
cost reduction initiatives € 70 – 100M annualized, ending H1 2013, assuming mid-single digit decline field steering - supported by staff turnover > 20% - optimizing distribution network synergies SFN restructuring programs - overhead & head office - back offices - branch closures cost saving Q2 -> Q
Slide 24: balance sheet items
balance sheet items €M September 30, 2012 September 30, 2011 trade and other receivables 3,119 3,160 less: trade and other payables -/- 2,310 -/- 2,418 operating working capital* 809 742 cash & cash equivalents 199 238 less: current borrowings -/- 89 -/- 95 less: ST part long-term borrowings -/- 1,5
Slide 25: consolidated cash flow statement
consolidated cash flow statement €M Q3 2012 Q3 2011 EBITDA 165 184 release of OWC 85 85 income taxes paid -/- 44 -/- 56 provisions and other 12 -/- 3 net additions in PPE and software -/- 15 -/- 16 financial receivables/dividend associates 4 - free cash flow 207 194 €M Q3 2012 free cash flow 207 net
Slide 26: outlook
outlook key priorities: - capturing profitable growth in North America, Asia & Latin America - field steering - focus on costs - aligning overhead and head office with field - client profitability growth per working day moved from 0% in June to -/- 3% in September - continued gradual decline in Euro
Slide 27: randstad
™- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services SA
Slide 28: appendices
™- 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 32% (vs. 31% in Q3 2011) - 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 2012 guidance unchanged: 29%-32% driv
Slide 30: net debt & repayment schedule existing facility
net debt & repayment schedule existing facility repayment schedule in € M 135 135 135 net cash ~1,258 1,255 term 1,412 revolver 316 135 110 May - 2013 Net cash end Q3 2012 covenant; net debt/EBITDA* of max. 3.5 - at the end of Q3 2012 the net debt/EBITDA ratio was 2.2 syndicated credit facility amou
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 = 3.3% 3% average floating rate = 2.3% 2% 1% 0% September 2002 September 2012 we use floating interest rates as a natural hedge - spread above Euribor of 50-115 bps 31 Octob
Slide 32: revenue split Q3 2012
revenue split Q3 2012 geographical area revenue categories 9% North America 5% 20% 23% France 5% NL 5% Germany Belgium 8% 18% UK 18% 62% Iberia 11% RoE RoW 16% staffing inhouse professionals 32 October 25, 2012 third quarter results 2012
Slide 33: EBITA breakdown by geography
EBITA breakdown by geography Q3 2012 Q3 2011 3% 2% 2% 0% 4% 0% 5% North America 4% 16% 8% France 30% 9% NL Germany 12% Belgium 18% 18% UK 21% Iberia 21% 12% RoE RoW 24% 26% 33 October 25, 2012 third quarter results 2012
Slide 34: outlets by region
outlets* by region end of period Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 North America 1,041 1,055 1,074 1,089 1,090 France 864 864 862 882 896 the Netherlands 672 683 696 717 734 Germany 551 548 557 554 555 Belgium/Lux 350 350 350 359 363 United Kingdom 231 243 246 255 283 Iberia 264 274 273 277 27
Slide 35: corporate employees by region
corporate employees by region average Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 North America 6,360 6,400 6,440 6,450 4,310 France 3,890 3,930 3,960 4,010 4,000 the Netherlands 4,720 4,770 4,870 5,150 5,220 Germany 2,690 2,830 2,940 3,020 3,020 Belgium/Lux. 2,070 1,980 2,030 2,120 2,180 United Kingdom
Slide 36: staffing employees by region
staffing employees by region average Q3 2012 Q3 2011 North America 104,600 67,800 France 87,400 97,300 the Netherlands 85,300 89,000 Germany 52,100 58,000 Belgium/Lux. 47,500 51,700 United Kingdom 19,500 23,700 Iberia 46,400 52,200 Other Europe 37,200 40,700 Rest of world 112,800 106,800 total 592,8