Slide 1: 2nd quarter results 2010
2nd quarter results 2010 Randstad generates 16% growth in Q2 2010, boosted by accelerating global staffing markets Ben Noteboom, CEO Robert-Jan van de Kraats, CFO Randstad Holding nv July 29, 2010
Slide 2: Disclaimer
disclaimer Certain statements in this document comprise forecasts on Randstad Holding’s future financial condition and results from operations and certain plans and goals. By their nature, such forecasts generate risk and uncertainty because they concern events in the future and depend on circumstan
Slide 3: Agenda
agenda • performance • financial results & outlook • summary 3 February 18, 2010 4th quarter & annual results 2009
Slide 4: Performance
performance 4 February 18, 2010 4th quarter & annual results 2009
Slide 5: Strong growth in our markets
strong growth in our markets market growth YoY 30% • growth trends persist 20% in all markets 10% • staffing markets 0% showed continued growth -10% mainly driven by the -20% industrial segment -30% -40% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 • administrative and 2008 2009 2010 professionals segments NL Fran
Slide 6: Q2 2010: accelerating growth (1)
Q2 2010: accelerating growth (1) • revenue amounted to € 3,468 (+14% YoY organically*) - organic growth per working day improving from +11% in April to +15% in June - inhouse and the industrial part of the staffing segment show improving growth rates - professionals segment shows slight growth, howe
Slide 7: Q2 2010: accelerating growth (2)
Q2 2010: accelerating growth (2) • EBITA* reached € 120 million vs. € 67 million in Q2 2009 - EBITA margin amounted to 3.5% vs. 2.2% in Q2 2009 • based on current trends we expect to be able to pay dividend over 2010 * EBITA: operating profit before amortization and impairment acquisition-related in
Slide 8: The Netherlands: late cyclical market recovering
the Netherlands: late cyclical market recovering • organic revenue -5% in Q2 2010 - market shows slight growth in Q2 revenue and EBITA margin 1000 9,5% - late cyclical due to service oriented economy - growth driven by industrial segment 8,5% 900 - Tempo-Team at market, Randstad below market 7,5% mi
Slide 9: France: closing the gap
France: closing the gap • organic revenue +18% in Q2 2010 (vs. +1% in Q1 2010) revenue and EBITA margin - gap with market closed in June 1000 5,0% - growth carried by all segments; mainly driven by 4,0% manufacturing and automotive 900 - permanent placement up c. 50% in June (YoY), 3,0% 800 million
Slide 10: Germany: impressive performance
Germany: impressive performance • organic revenue +40% in Q2 2010 revenue and EBITA margin (vs. +10% in Q1 2010) 500 10,0% - strong outperformance of the market in Q2 based 450 8,0% on strong execution and unit steering - improving growth trend throughout the quarter 400 6,0% million € • gross margi
Slide 11: UK: continued growth inhouse and perm, professionals still lagging
UK: continued growth inhouse and perm, professionals still lagging • organic revenue +1% in Q2 2010 (vs. -6% in Q1 2010) revenue and EBITA margin 300 5,0% • inhouse continues strong growth 4,0% 250 throughout the quarter (YoY) 3,0% million € - strong pipeline new clients 200 2,0% • perm fees keep im
Slide 12: North America: accelerated growth across the board
North America: accelerated growth across the board • organic revenue +22% in Q2 2010 (vs. +9% in Q1 2010) revenue and EBITA margin - strong outperformance of the US market 500 5,0% - US staffing & inhouse well above 30% growth (YoY) 4,0% 450 - US professionals improved through Q2 showing 3,0% double
Slide 13: Revenue development per industry segment
revenue development per industry segment Q2 2010 vs Q2 2009 US Germany France Netherlands* Manufacturing ++ ++ ++ ++ Automotive ++ ++ ++ ++ Food ++ ++ + - Transport ++ ++ 0 ++ Business services ++ 0 + - Financial services + 0 ++ - Public administration 0 n/a n/a - Health & social work ++ 0 + -- * Ne
Slide 14: Financial results & outlook
financial results & outlook 14 February 18, 2010 4th quarter & annual results 2009
Slide 15: Q2 2010: financial key points (1)
Q2 2010: financial key points (1) • positive trend improved through the quarter • underlying gross margin sequentially flat since Q3 2009 - gross profit amounted to € 649 million, up 9% YoY • underlying operating expenses sequentially 6% up to 529 million - currency impact: ~ € 10 mln - commissions
Slide 16: Q2 2010: financial key points (2)
Q2 2010: financial key points (2) • moving average DSO improved by 1 day to 57 days (YoY) • free cash flow in Q2 2010 amounted to € 105 million negative vs. € 56 million negative in Q2 2009 - regular pattern; increased use of working capital caused by continued revenue growth and payment of holiday
Slide 17: Income statement Q2 2010
income statement Q2 2010 € million Q2 2010 Q2 2009 % change % organic revenue 3,468 2,987 16% 14% gross profit 649 598 9% 6% gross m argin 18.7% 20.0% operating expenses* 529 531 0% -1% opex as % of revenue 15.3% 17.8% underlying EBITA** 120 67 79% 66% underlying EBI TA m argin 3.5% 2.2% actual EBIT
Slide 18: Gross margin development Q2 2010
gross margin development Q2 2010 21 20,5 20 19,5 * -/- 1.3 19 +0.1 20.0 18,5 -/- 0.4 +0.3 18 18.7 17,5 Q2 2009 temp margin perm fees HRS/other French tax Q2 2010 • commercial pressure on temp margins stabilized - geographical & segmental mix shifts • perm fees increased by 16% organically (YoY) - pe
Slide 19: Gross margin development
gross margin development 22% stabilization 20% 18% 16% Gross margin Temp margin 14% 12% 10% Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 deteriorating markets recovery started at Q4 2009 19 July 29, 2010 second quarter results 2010
Slide 20: Productivity development
productivity development employees working/corporate FTE 1998 index = 100 c. 10% more upside compared to 1998 level regained c.15% to LY 1998 2002 2006 2008 2010 • large variation in productivity developments per country • solid improvement potential across the board 20 July 29, 2010 second quarter
Slide 21: Productivity development
productivity development gross profit per FTE 1998 index = 100 1998 2002 2006 2008 2010 • ongoing improvements in various countries • limited growth when corrected for inflation • group performance influenced by geographic mix shifts 21 July 29, 2010 second quarter results 2010
Slide 22: Consolidated balance sheet
consolidated balance sheet € million June 30, 2010 June 30, 2009 property, plant & equipment 139 168 intangible assets 3,174 3,313 deferred tax assets 503 481 other assets 3,002 3,040 total equity 2,683 2,449 non-current liabilities 1,812 2,456 current liabilities 2,322 2,097 balance sheet total 6,8
Slide 23: Consolidated cash flow statement
consolidated cash flow statement € million Q2 2010 Q2 2009 cash flow from operations before OWC 98 58 release / (usage) of OWC -/- 194 -/- 105 additions of PPE and software -/- 12 -/- 11 financial receivables - - dividend 1 - disposals of PPE 1 2 free cash flow -/- 105 -/- 56 € million Q2 2010 free
Slide 24: Debt facilities & repayment schedule
debt facilities & repayment schedule repayment schedule 1400 revolver term cash June 2010 1200 135 1000 € x million 800 600 1017 400 200 250 105 135 0 2 2 3 10 y -1 v-1 y -1 0 2 m a no m a ne Ju sh ca • covenant; net debt/EBITDA* of max. 3.5 - in Q2 2010 the net debt/EBITDA ratio was 2.4 • syndicate
Slide 25: Managing through the cycle
managing through the cycle growth phase decline phase stabilization phase growth phase • market share • market share • market share gains • market share gains gains gains • productivity levels • productivity mgt • productivity mgt • productivity mgt allow for growth, through unit through unit throug
Slide 26: Outlook
outlook • positive trends throughout Q2 • growth level of June continued into July • we expect growth in all segments: - continued solid growth rates in inhouse in Q2 - staffing showed robust growth - professionals returned to growth • leverage ratio (net debt/EBITDA) expected to be below 2 by the e
Slide 27: Summary
summary • growth trends persist in all markets • accelerated growth in most regions - mainly visible in inhouse and industrial part of staffing - professionals segment as a whole showed slight growth through the quarter • gross margin sequentially flat - commercial pressure eases, positive impact pe
Slide 28: Q&A
Q&A ™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services
Slide 29: Appendices
™r- randstad Staffing | Professionals | Search & Selection | HR Solutions | Inhouse Services appendices
Slide 30: Financing: fixed vs. floating interest rates
financing: fixed vs. floating interest rates 10 year historical interest rates comparison 1M vs. 5Y 6% 5% average fixed 4% rate = 4.0% 3% average floating rate = 3.0% 2% 1% 0% july 1999 june 2010 1M Float 5Y Fixed • we use floating interest rates as a natural hedge - spread above Euribor of 50-115 b
Slide 31: Tax guidance unchanged
tax guidance unchanged driver . effective* cash tax explanation ………………………… impact tax rate rate growth operating companies + + less impact of permanent differences growth opcos and mix + + higher weight countries with high CIT rate effects changes in corporate income + or -/- + or -/- dependent on d
Slide 32: Geographic performance
geographic performance € million Q2 2010 Q2 2009 organic growth revenue: the Netherlands 683 726 -5% France 777 660 18% Germany 418 299 40% Belgium/Luxembourg 319 282 13% United Kingdom 195 190 1% Iberia 210 188 11% North America 470 352 22% EBITA margin: the Netherlands 5.7% 7.2% France 3.5% 0.8% G
Slide 33: Segment performance
segment performance € million Q2 2010 Q2 2009 organic growth revenue: staffing 2,363 2,050 13% inhouse services 456 301 50% professionals 649 636 1% 33 July 29, 2010 second quarter results 2010
Slide 34: Revenue split Q2 2010
revenue split Q2 2010 geographies segments 19% 13% 68% staffing inhouse professionals 34 July 29, 2010 second quarter results 2010
Slide 35: Outlets by country
outlets* by country end of period Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 the Netherlands 725 726 754 761 786 France 928 966 988 993 988 Germany 450 433 428 431 436 Belgium/Lux 388 392 329 332 331 United Kingdom 300 289 292 294 301 Iberia 264 261 265 266 274 Other Europe 346 340 340 341 349 North Am
Slide 36: Corporate employees by country
corporate employees by country average Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 the Netherlands 5,210 5,260 5,610 5,870 6,210 France 3,870 3,870 4,000 4,270 4,390 Germany 2,430 2,370 2,320 2,290 2,330 Belgium/Lux. 2,030 2,020 2,050 2,010 1,970 United Kingdom 2,040 2,040 2,110 2,230 2,470 Iberia 1,460
Slide 37: Staffing employees by country
staffing employees by country averages Q2 2010 Q2 2009 the Netherlands 83,100 90,400 France 81,100 76,400 Germany 47,300 34,500 Belgium/Lux. 40,900 37,900 United Kingdom 23,100 21,300 Iberia 48,200 46,800 Other Europe 30,200 25,000 North America 50,400 41,700 Rest of world 83,700 76,900 total 488,00