Randstad Nv · EURONEXT:RAND
Randstad Nv — Q2 2012 Earnings Presentation
36 slides from Randstad Nv's earnings presentation, Jul 26, 2012
Slide 1: 2nd quarter results 2012
2nd quarter results 2012 gradual slowdown continues Ben Noteboom, CEO Robert-Jan van de Kraats, CFO Randstad Holding nv July 26, 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 July 26, 2012 second quarter results 2012
Slide 4: performance
performance 4 July 26, 2012 second quarter results 2012
Slide 5: Q2 2012: gradual decline continues
Q2 2012: gradual decline continues YoY Randstad growth development 30% 25% 20% 15% 10% 5% 0% -5% -10% Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Group Europe North America Rest of World diverging trends continue seasonal trends remained visible across countries o
Slide 6: a challenging quarter
a challenging quarter € million Q2 2012 Q2 2011 % change % organic revenue 4,303 3,915 10% -2% gross profit 782 721 9% -5% gross margin 18.2% 18.4% operating expenses* 648 567 14% -1% opex as % of revenue 15.0% 14.5% EBITA* 135 154 -12% -20% EBITA margin* 3.1% 3.9% organic growth per working day rel
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: continued growth
North America: continued growth organic revenue +7% (Q1: +8%) - continued good growth US staffing & professionals - stable growth trend Canada performance North America - perm up 6% 1,000 6% 900 5% focus on profitability 800 4% 700 3% - incremental conversion & synergies 600 2% 500 1% US staffing &
Slide 9: SFN integration on track
SFN integration on track integration process is on track integration physical integration staffing business complete in Q3 process physical integration professionals will start in Q3 integration costs Q2: € 6.3M (total: € 25.3M) annual synergies full amount of synergies expected to be materialized i
Slide 10: France: inhouse key growth driver
France: inhouse key growth driver revenue down 3% (Q1: -/- 5%) - accelerated growth at inhouse - timing holidays and bridging days performance France - stable decline in staffing & professionals 950 4% - perm placements under pressure 900 3% 850 focus on costs and profitability 800 2% - FTEs -/-1% v
Slide 11: the Netherlands: ensuring adaptability
the Netherlands: ensuring adaptability revenue down 1% (Q1: -/-2%) - Tempo-Team ahead of market in June - Yacht at -/-6% performance the Netherlands - inhouse strong at +8% 800 8% 750 6% gross margin pressure persisted 700 4% - competitive environment more challenging - changed business mix: growth
Slide 12: Germany: challenging conditions
Germany: challenging conditions organic revenue down 2% (Q1: +3%) - seasonal pattern in volumes returned - inhouse at + 5%, staffing -/- 12% performance Germany - professionals +7%, led by IT 550 8% 6% gross margin pressure 500 4% - 1 working day less & impact bridging days 450 - price pressure 2% -
Slide 13: Belgium: stable decline
Belgium: stable decline revenue -/- 6% (Q1: -/-6%) - stable development through the quarter - moving closer to market in white collar performance Belgium - inhouse at -/- 5% (Q1: -/- 8%) 400 6% - solid performance in HRS, mainly outplacement - professionals +7% (Q1: +6%) 350 4% 300 2% focus on profi
Slide 14: UK: adjusting cost base
UK: adjusting cost base revenue -/- 8% (Q1: -/- 9%) - stable decline against a stronger comparison base - public holidays & bridging days performance UK - public sector eased to -/- 8% (Q1: -/- 16%) 220 1.0% - inhouse -/- 13% (Q2 2011: +35%) 210 0.5% - professionals gradually strengthening in temp 2
Slide 15: Iberia: tough environment
Iberia: tough environment Spain - revenue -/- 9% (Q1: -/- 10%) - food, automotive and logistics main drivers performance Iberia - professionals strengthened further 250 4% 3% Portugal 200 2% - revenue -/- 12% (Q1: -/- 6%) 150 - contact center business main growth driver, 1% manufacturing showed a st
Slide 16: revenue development per industry segment
revenue development per industry segment Segments USA Germany France Netherlands Manufacturing + - - - Automotive o - o o Food - o o o Transport o o + o Business services + - - o Financial services + -- - o IT services - ++ -- - Public sector + o o + Health & social work ++ ++ o - 16 July 26, 2012 s
Slide 17: upcoming CLA changes in the Netherlands & Germany
upcoming CLA changes in the Netherlands & Germany positive contribution to the image of the industry stability for the next 5 years Netherlands equal pay from day 1 as from Jan 5, 2015 1 year derogation only related to certain target groups until then, current CLA pay rates applicable +1.55% wage in
Slide 18: financial results & outlook
financial results & outlook 18 July 26, 2012 second quarter results 2012
Slide 19: income statement Q2 2012
income statement Q2 2012 € million Q2 2012 Q2 2011 % change % organic revenue 4,303 3,915 10% -2% gross profit 782 721 9% -5% gross margin 18.2% 18.4% operating expenses* 648 567 14% -1% opex as % of revenue 15.0% 14.5% EBITA* 135 154 - 12% -20% EBITA margin* 3.1% 3.9% reported EBITA 112 154 amortiz
Slide 20: Q2 2012: financial key points
Q2 2012: financial key points effective tax rate* amounted to 33% (Q2 2011: 31%) - guidance full year 2012 unchanged: 29-32% diluted EPS* down to € 0.51 vs. € 0.59 in Q2 2011 DSO improved by 1 day to 53 days free cash flow amounted to -/- € 167M in Q2 vs. -/- € 106M LY - annual payment of holiday al
Slide 21: segment performance
segment performance Staffing in € M Q2 2012 Q2 2011 % organic industrial segments main drivers revenue 2,662.7 2,563.5 -6 strong growth in North America gradual slowdown across Europe EBITA 80.7 104.9 -35 addition of SFN with below average EBITA margin 3.0% 4.1% EBITA margin Inhouse in € M Q2 2012 Q
Slide 22: gross margin bridge
gross margin bridge YoY gross margin development +0.3% -/- 0.2% + 0.1% -/- 0.2% -/- 0.2% 18.4% 18.1% 18.1% 18.1% 18.2% Q2 2011 SFN Group price/mix price/mix price/mix price/mix perm HRS/others Q2 2012 Q3 Q4 Q1 Q2 placements gross margin up 0.2% vs. Q1 (LY Q1>Q2 +0.3%) SFN contributes 30 bps to Q2 20
Slide 23: operating expenses organically down
operating expenses organically down YoY OPEX development in € M +24 -6 +3 +3 +24 -6 +13 +69 -19 642 645 648 0 +69 629 629 567 Q2 2011 SFN Group FX disposals synergies organic EU organic NA organic organic Q2 2012 SFN RoW corp. SFN Group added € 69M to the cost base FTE reduction 550 vs. Q1 2012, mai
Slide 24: selected balance sheet items
selected balance sheet items €M June 30, 2012 June 30, 2011 trade and other receivables 3,169 2,846 less: trade and other payables -/- 2,263 -/- 2,127 operating working capital* 906 719 cash & cash equivalents 242 250 less: current borrowings -/- 102 -/- 95 less: ST part long-term borrowings -/- 1,7
Slide 25: consolidated cash flow statement
consolidated cash flow statement €M Q2 2012 Q2 2011 EBITDA 133 173 usage of OWC -/- 240 -/- 206 income taxes (paid)/received -/- 55 -/- 56 provisions and other 9 - net additions in PPE and software -/- 16 -/- 17 financial receivables/dividend associates 2 - free cash flow -/- 167 -/- 106 €M Q2 2012
Slide 26: outlook
outlook continued focus on costs and profitability: - field steering - stringent cost control - aligning overhead and head office with field - client profitability growth per working day moved from +1% in March to 0% in June despite easier comparison base - seasonal patterns noticeable across countr
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 33% (vs. 31% in Q1 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 1,524 revolver 316 135 135 140 Nov - 2012 May - 2013 Net cash end Q2 2012 covenant; net debt/EBITDA* of max. 3.5 - at the end of Q2 2012 the net debt/EBITDA ratio was 2.4 syndicated credi
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 = 3.4% 3% average floating rate = 2.4% 2% 1% 0% June 2002 June 2012 we use floating interest rates as a natural hedge - spread above Euribor of 50-115 bps 31 July 26, 2012 s
Slide 32: revenue split Q2 2012
revenue split Q2 2012 geographical area revenue categories 9% North America 5% 21% 23% France 5% NL 5% Germany Belgium 7% UK 17% 19% 62% Iberia 11% RoE RoW 16% staffing inhouse professionals 32 July 26, 2012 second quarter results 2012
Slide 33: EBITA breakdown by geography
EBITA breakdown by geography Q2 2012 Q2 2011 2% 1% 1% 1% 2% 1% 4% 5% North America 12% 9% France 30% 10% NL Germany 12% 19% 13% Belgium UK 20% Iberia 21% 16% RoE 25% RoW 29% 33 July 26, 2012 second quarter results 2012
Slide 34: outlets by region
outlets* by region end of period Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 North America 1,055 1,074 1,089 1,090 485 France 864 862 882 896 889 the Netherlands 683 696 717 734 739 Germany 548 557 554 555 530 Belgium/Lux 350 350 359 363 367 United Kingdom 243 246 255 283 275 Iberia 274 273 277 278 272
Slide 35: corporate employees by region
corporate employees by region average Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 North America 6,400 6,440 6,450 4,310 3,070 France 3,930 3,960 4,010 4,000 3,910 the Netherlands 4,770 4,870 5,150 5,220 5,170 Germany 2,830 2,940 3,020 3,020 2,940 Belgium/Lux. 1,980 2,030 2,120 2,180 2,110 United Kingdom
Slide 36: staffing employees by region
staffing employees by region averages Q2 2012 Q2 2011 North America 106,400 56,000 France 89,500 91,100 the Netherlands 87,700 87,200 Germany 52,900 54,600 Belgium/Lux. 40,600 44,300 United Kingdom 21,100 24,500 Iberia 45,400 48,900 Other Europe 35,800 38,000 Rest of world 110,500 104,100 total 589,