Slide 1: 4th quarter 2015 results
4th quarter 2015 results Strong operational performance Jacques van den Broek, CEO Robert Jan van de Kraats, CFO Randstad Holding nv February 18, 2016
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 18, 2016 4th quarter results 2015
Slide 4: performance
performance 4 February 18, 2016 4th quarter results 2015
Slide 5: Q4 2015: Strong operational performance
Q4 2015: Strong operational performance Revenue of € 4,995 million; Topline growth accelerated Gross margin up 20 bp to organic growth +6.6%; in France and remained 18.9%; Perm fees up 13%, gross profit up 6.9% stable in North America now 9.7% of gross profit (vs. 9.2% last year) Underlying EBITA of
Slide 6: 2015: margins improving…on track
2015: margins improving…on track € million Q4 ’15 Q4 ’14 % Org. FY ’15 FY ’14 % Org. revenue 4,995 4,496 +7% 19,219 17,250 +6% gross profit 943 841 +7% 3,595 3,180 +7% gross margin 18.9% 18.7% 18.7% 18.4% operating expenses* 699 642 +4% 2,733 2,474 +4% opex % 14.0% 14.3% 14.2% 14.3% EBITA* 245 199 +
Slide 7: topline stable in most countries
topline stable in most countries YoY Randstad growth development 15% 5% -5% -15% Group Europe North America Rest of World improving growth in many European countries; France accelerating ahead of market, strong growth continues in Netherlands, Italy & Spain stable growth in North America; above mark
Slide 8: North America: stable growth in US Staffing
North America: stable growth in US Staffing revenue +4% (Q3: +4%) North America – historical organic growth - perm up 10% (Q3: +9%) 12,00% - GP up 9% (Q3: +9%) 8,00% US Staffing & Inhouse, revenue growth +7% (Q3: +6%) 4,00% US Professionals, revenue flat YoY 0,00% Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2
Slide 9: the Netherlands: solid growth continues
the Netherlands: solid growth continues performance Vs. market (ABU)- quarterly revenue at +9% (Q3: +10%) 15% - perm growth at +3% 10% 5% combined Staffing & Inhouse 0% businesses -5% - up 7% YoY (Q3: +9%) ABU Market Randstad Professionals - up 21% (Q3: +20%) performance the Netherlands - annually -
Slide 10: France: accelerated growth ahead of market
France: accelerated growth ahead of market performance Vs. market (Prism)- quarterly revenue up 10% YoY (Q3: +3%) 12% - combined Staffing & Inhouse at +10% YoY 8% - Professionals at +10% vs. Q3: +2% 4% - perm grew 29% (Q3: +23%) 0% -4% gross profit +6% YoY (Q3: +2%) -8% -12% EBITA margin at 5.2% vs.
Slide 11: Germany: improving profitability trend
Germany: improving profitability trend EBITA margin performance Germany - quarterly revenue growth +1% YoY (Q3: +2%) 600 7% - perm growth of +8% (Q3: +15%) 6% 500 5% 400 4% gross profit up 13% (Q3: +2%) 300 3% - SME outgrowing large clients 200 2% - last year impacted by 13 week rule Q4 2014 Q1 2015
Slide 12: Belgium: accelerated growth and record profitability
Belgium: accelerated growth and record profitability performance Belgium - quarterly revenue +6% (Q3: +1%) 400 7% - Staffing and Inhouse growth at +8% (Q3: +1%) 6% 300 5% 4% gross profit up 8% YoY (Q3: +6%) 200 3% - focus on client profitability 100 2% Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 EBITA m
Slide 13: Iberia: strong growth on better margins
Iberia: strong growth on better margins Org. Revenue performance Iberia - quarterly Iberia revenue improved; up 11% (Q3: 14% 12% +8%) 10% 8% 6% Spain 4% 2% - revenue growth accelerated to +16% (Q3: 0% +12%) Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 - Professionals grew 61% despite continued tough Ib
Slide 14: UK: improved profitability
UK: improved profitability EBITA Margin performance UK - quarterly revenue down 4% YoY (Q3: +1%) 250 4,0% - gross profit flat YoY (Q3: +2%) 200 3,0% - specialities businesses doing well despite 150 2,0% increasingly challenging market environment - perm fees up 11% (Q3: +4%) 100 1,0% 50 0,0% EBITA m
Slide 15: Other European countries: strong growth continues
Other European countries: strong growth continues overall revenue growth +13% (Q3: performance ROE - quarterly +11%) 500 6% 400 Italy 300 5% - revenue growth stable at 19% (Q3: 20%) 4% 200 - focus on specialties and perm (+54%) paying off 100 3% 0 2% Switzerland Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 20
Slide 16: Rest of the world: growth in challenging markets
Rest of the world: growth in challenging markets overall revenue growth was +7% (Q3: performance ROW - quarterly +11%) 450 2,0% 400 1,5% Japan, growth at +1% YoY (Q3: +6%) 350 1,0% - perm grew 33% (Q3: +63%) 300 0,5% 250 Australia / New Zealand grew 5% (Q3: 200 0,0% +11%) Q4 2014 Q1 2015 Q2 2015 Q3
Slide 17: financial results & outlook
financial results & outlook 17 February 18, 2016 4th quarter results 2015
Slide 18: income statement Q4 2015
income statement Q4 2015 € million Q4 ’15 Q4 ’14 % Org. FY ’15 FY ’14 % Org. revenue 4,995 4,496 +7% 19,219 17,250 +6% gross profit 943 841 +7% 3,595 3,180 +7% gross margin 18.9% 18.7% 18.7% 18.4% operating expenses* 699 642 +4% 2,733 2,474 +4% opex margin 14.0% 14.3% 14.2% 14.3% EBITA* 245 199 +18%
Slide 19: performance by revenue category
performance by revenue category Staffing Q4 Q4 *% FY FY *% focus on delivery models – in € M 2015 2014 organic 2015 2014 organic central delivery revenue 2,898 2,645 6% 11,186 10,203 6% FTE investments in growth markets EBITA 153 117 19% 515 421 17% EBITA margin 5.3% 4.4% 4.6% 4.1% Inhouse Q4 Q4 *%
Slide 20: gross margin bridge
gross margin bridge YoY gross margin development + 0.1% + 0.1% + 0.0% 18.9% 18.7% temp margin up 10 bp, benefiting from favourable mix, however price pressure evident in a number of markets perm fees grew 13% YoY organically, benefiting margin by 10bp 9.7% of GP (up from 9.2% LY) 20 February 18, 2
Slide 21: operating expenses bridge
operating expenses bridge sequential OPEX development in € M +6 +1 +5 +3 +2 -/-3 699 685 OPEX up € 12M organically (sequentially) FTE growth in North America and Europe marginally negative FX impact; USD strength lower commission than expected paid in emerging against the euro markets 21 February 18
Slide 22: net debt at € 173M
net debt at € 173M leverage ratio at 0.2 € million December 31, 2015 December 31, 2014 goodwill and intangible assets 2,649 2,597 operating working capital 621 488 net tax assets 517 527 other assets and liabilities 248 123 invested capital 4,035 3,735 equity 3,862 3,313 net debt 173 422 invested ca
Slide 23: Q4 ’15 free cashflow
Q4 ’15 free cashflow € million Q4 ’15 Q4 ’14 FY ’15 FY ’14 EBITDA 250 182 897 726 change in OWC 99 114 -/- 122 9 income taxes 16 -/- 26 -/- 105 -/- 117 provisions & employee benefit obl. -/- 11 18 -/- 32 7 net additions in PPE and software -/- 21 -/- 23 -/- 63 -/- 63 other items -/- 14 -/- 12 -/- 71
Slide 24: outlook
outlook organic revenue growth was 6.6% in Q4 - January growth was up 6.6% - Q1 comparison base 2.2% tougher - volumes in early February indicate a continuation of the trend sequentially gross margin is expected to be seasonally lower there is no significant working day impact in Q1. However it shou
Slide 25: dividend proposal: a record high
dividend proposal: a record high proposed dividend payment over 2015 - payment of € 1.68 per ordinary share (+30% YoY) - payout of 50% of adjusted net profit, reflecting strong financial position - full cash dividend 1,80 Dividend (Cents per share) 1,60 1,40 1,20 1,00 0,80 0,60 0,40 0,20 0,00 25 Feb
Slide 26: on track
on track 26 February 18, 2016 4th quarter results 2015
Slide 27: Revenue of € 4,995 million; organic growth +6.6%; gross profit up 6.9%
Revenue of € 4,995 million; Topline Topline growth growth broadly accelerated Gross margin up 20 bp to organic growth +6.6%; stable in France across andmost remained 18.9%; Perm fees up 13%, gross profit up 6.9% countries stable in North America now 9.7% of gross profit (vs. 9.2% last year) Underlyi
Slide 28: appendices
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 29: 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 30: 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 31: growth drivers & strategy
growth drivers & strategy 31 February 18, 2016 4th quarter results 2015
Slide 32: 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 33: dividend policy
dividend policy a historical perspective proposal to pay full cash dividend for year 2015 dividend policy since 2013: payout of 40-50% of adjusted EPS optional dividend: leverage ratio < 2.0x: optional dividend leverage ratio < 2.5x: optional dividend with premium on stock dividend leverage ra
Slide 34: strategic target
solid free cash flow & conservative leverage ratio 800 3,00 700 2,50 600 2,00 500 400 1,50 strategic target 300 1,00 200 0,50 100 0 0,00 2008 2009 2010 2011 2012 2013 2014 2015 Free Cash Flow (€M) Leverage Ratio free cash flow adjusted for receipt and payment of a liability of € 131 million to the
Slide 35: 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 = 2.3% 2% average floating rate = 1.4% 1% 0% -1% January 2006 December 2015 we use floating interest rates as a natural hedge - spread above Euribor of 50-115 bps 35 Febru
Slide 36: revenue split Q4 2015
revenue split Q4 2015 geographical areas revenue categories 8% North America 19% 8% 25% NL France 5% Germany 6% Belgium 58% Iberia 7% 23% 16% UK RoE 10% RoW 15% staffing inhouse professionals 36 February 18, 2016 4th quarter results 2015
Slide 37: EBITA breakdown by geography
EBITA breakdown by geography Q4 2015 Q4 2014 2% 1% 3% 2% 8% 7% North America 26% NL 6% 26% 6% France Germany 9% 12% 9% Belgium Iberia 7% 11% UK 21% 21% RoE 24% RoW 17% 15% 37 February 18, 2016 4th quarter results 2015
Slide 38: outlets by region
outlets* by region end of period Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 North America 1,119 1,102 1,084 1,065 1,084 the Netherlands 644 648 644 659 689 France 728 729 741 739 741 Germany 550 547 547 556 555 Belgium/Lux 303 311 303 306 310 Iberia 306 303 302 295 292 United Kingdom 139 130 134 131 14
Slide 39: corporate staff by region
corporate staff by region average Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 North America 6,610 6,460 6,410 6,250 6,230 the Netherlands 4,200 4,230 4,050 4,120 4,430 France 3,520 3,500 3,410 3,390 3,430 Germany 2,600 2,550 2,560 2,570 2,620 Belgium/Lux 1,890 1,910 1,870 1,880 1,780 Iberia 1,830 1,790
Slide 40: staffing employees by region
staffing employees by region average Q4 2015 Q4 2014 North America 118,600 114,900 the Netherlands 80,900 79,400 France 77,800 66,100 Germany 47,200 45,500 Belgium/Lux 42,900 40,100 Iberia 63,500 60,000 United Kingdom 15,500 17,000 Rest of Europe 62,600 59,000 Rest of the world 112,500 113,000 total