Randstad N : Q4-2019-slides

4th quarter & FY 2019 results.

FY 2019: record high FCF and cash dividend, EBITA margin protected.

Jacques van den Broek, CEO

Henry Schirmer, CFO

Randstad N.V.

11 February 2020

disclaimer.

Certain statements in this document concern prognoses about the future financial condition, risks, investment plans and the results of operations of Randstad N.V. and its operating companies, as well as certain plans and objectives. Obviously, such prognoses involve risks and a degree of uncertainty, since they concern future events and depend on circumstances that will apply then. Many factors may contribute to the actual results and developments differing from the prognoses made in this document. These factors include, but are not limited to, general economic conditions, a shortage on the job market, changes in the demand for personnel (including flexible personnel), achievement of cost savings, changes in the

business mix, changes in legislation (particularly in relation to employment, Staffing and tax laws), the role of industry regulators, future currency and interest fluctuations, our ability to identify relevant risks and mitigate their impact, the availability of credit on financially acceptable terms, the successful completion of company acquisitions and their subsequent integration, successful disposals of companies, and the rate of technological developments. These prognoses therefore apply only on the date on which this document was compiled. The quarterly results as presented in the press release are unaudited.

© Randstad 2020	2

definitions.

EBITA:operating profit before amortization and impairment acquisition-related intangible assets and goodwill, integration costs and one-offs.

organic growthis measured excluding the impact of currency effects, acquisitions, disposals and reclassifications.

diluted EPSis measured before amortization and impairment acquisition-related intangible assets and goodwill, integration costs and one-offs.

© Randstad 2020	3

agenda.

performance		5
financial results & outlook		12
Q&A		18
appendices		19

© Randstad 2020		4

performance

moving forward.

© Randstad 2020		5

Q4 and FY 2019:performing today, preparing for tomorrow.

FY 2019

Q4 key financials*

growth drivers

achievements

resilient portfolio paying off

organic growth -2.8%

ROW up 9%

EBITA margin protection

gross margin +20bp YoY

successful digital progress

record high FCF: € 915m

EBITA € 292m, 4.9% margin

leading enterprise strategy

• all figures include IFRS 16, unless explicitly stated otherwise.

© Randstad 2020	6

north america		france
industrial slowdown, profs growing.		ahead of market at strong margins.

• revenue down 2% (Q3: down 1%)
• • perm down 1% (Q3: +4%)
• US Staffing & Inhouse revenue down 5% (Q3: down 4%)
• US Professionals revenue up 1% (Q3: +2%)
• Canada revenue up 1% (Q3: +3%)
• EBITA margin at 6.0% vs. 6.5% LY

• revenue up 1% (Q3: down 1%)
• • perm up 4% (Q3: +4%)
• Staffing & Inhouse down 2% (Q3: down 4%)
• Professionals up 10% (Q3: +9%)
• EBITA margin at 6.6% vs. 5.9% LY

© Randstad 2020	7

the netherlands		germany
sound margin in challenging conditions.		industrial weakness persists.

• revenue down 10% (Q3: down 5%)
• • perm down 5% (Q3: down 18%)
• Staffing & Inhouse down 11% (Q3: down 6%)
• Professionals up 1% (Q3: +3%)
• EBITA margin at 6.4% vs. 5.9% LY

• revenue down 15% (Q3: down 14%)
• Staffing & Inhouse down 16% (Q3: down 17%)
• Professionals down 12% (Q3: down 6%)
• EBITA margin at 1.4% vs. 3.9% LY

© Randstad 2020 | 8

belgium

robust profitability.

• revenue down 3% (Q3: down 4%)
• • impacted by automotive weakness
  • Professionals up 10%
• EBITA margin at 6.4% vs. 5.7% LY
• • diversified portfolio paying off

italy

ahead of market.

• revenue down 1% (Q3: down 2%)
• • market outperformance
  • sound perm growth at 20% (Q3: +21%)
• EBITA margin at 6.7% vs. 6.8% LY

© Randstad 2020	9

iberia

back to revenue growth.

• spain revenue up 4% (Q3: +1%)
• • strong pricing discipline
• portugal revenue down 6% (Q3: down 8%)
• EBITA margin at 5.9% vs. 6.1% LY

other european countries mixed trends.

• UK revenue down 2% (Q3: down 2%)
• nordics down 7% (Q3: down 7%)
• switzerland down 1% (Q3: stable)
• poland up 3% (Q3: down 7%)
• EBITA margin at 2.3% vs. 3.4% LY

© Randstad 2020 | 10

rest of the world

sound growth continues.

• japan growth up 7% (Q3: +8%)
• australia & new zealand up 3% (Q3: down 1%)
• china up 24% (Q3: +5%)
• latin america up 23% (Q3: +21%)
• EBITA margin at 3.8% vs. 4.8% LY

global businesses improved profitability.

• global businesses down 4% (Q3: down 1%)
• monster stable revenue decline versus Q3
• • progress on new technology platforms
• sourceright down 1% (Q3: up 6%)
• • impacted by client uncertainty
  • RPO growth +2%, strong pipeline
• EBITA margin at 4.1% vs. 3.6% LY

© Randstad 2020 11

financial results

& outlook.

© Randstad 2020 12

Q4 2019solid performance in uncertain conditions.

Q4 performance

€ million	Q4 '19	Q4 '18	% org.
revenue	5,995	6,101	(3)%
gross profit	1,201	1,207	(2)%
gross margin	20.0%	19.8%
operating expenses*	909	891	1%
opex %	15.2%	14.6%
EBITA*	292	316	(10)%
EBITA margin*	4.9%	5.2%
integration costs & one-offs	-/-38	-/-27
amortization & impairment	-/-24	-/-127
net finance income/(costs)	-/-12	-/- 5
tax	-/-52	38
reported net income**	167	197	(15)%
adjusted net income	209	233	(10)%

* before integration costs & one-offs.

** including share of profit of associates.

Q4 key financials

• organic revenue down 2.8%
• EBITA margin 4.9% (Q4 2018: 5.2%)
• balanced opex steering

© Randstad 2020 13

Q4 2019continued sound pricing drives gross margin.

							Q4 highlights
	Q4 gross margin development YoY

•temp margin impact +40bp

•perm fees declined 5% YoY, no impact on gross margin

•HRS/other impact -20bp

© Randstad 2020 14

balanced cost management in Q4 and FY 2019.

			Q4 sequential opex bridge				Q4 cost management

•organic opex up 1% YoY, personnel expenses -2% YoY

•selective investments in growth areas, digital/IT spend up

•cost optimization program of € 120m in progress

© Randstad 2020 15

record high FCF generation in FY 2019.

improved FY free cash flow YoY

• Q4 FCF € 424m (vs. € 442m in Q4 2018)
• strong working capital inflow, confirming the counter cyclical nature
• DSO 53.5, down 0.4 days vs. Q4 2018

strong balance sheet

• net debt € 1,377m (down € 263m vs. LY) including lease liabilities (IFRS 16)
• leverage ratio pre IFRS 16: 0.7 (Q4 2018: 0.8)
• dividend proposal of € 4.32 per share, including a special dividend of € 2.23

© Randstad 2020 16

conclusion and outlook:navigating through uncertain times.

conclusion and outlook

• market share gains and EBITA margin protected
• record high FCF and cash dividend
• strategy progressing well

January 2020 trend slightly below Q4

NAM

FR

NL

GER

BEL

IBE

IT

RoE

	low single-digit growth/decline
RoW	mid single-digit growth/decline
GLO	high single or double-digit growth/decline

© Randstad 2020 17

questions

answers.

© Randstad 2020 | 18

randstad.

© Randstad 2020 19

outlets by region.

end of period	Q4 2019	Q3 2019	Q2 2019	Q1 2019	Q4 2018
North America	1,153	1,152	1,123	1,138	1,142
France	640	635	631	628	625
the Netherlands	653	661	656	660	658
Germany	582	577	580	589	601
Belgium & Luxembourg	327	334	333	329	326
Italy	259	259	262	264	265
Iberia	382	376	375	377	371
Other European countries	482	478	472	450	430
Rest of the world	244	246	244	239	241
Global businesses	139	138	131	127	134
total	4,861	4,856	4,807	4,801	4,793

© Randstad 2020 20

corporate staff by region.

average	Q4 2019	Q3 2019	Q2 2019	Q1 2019	Q4 2018
North America	5,830	5,660	5,600	5,680	5,840
France	4,690	4,640	4,580	4,540	4,540
the Netherlands	4,090	4,180	4,240	4,270	4,370
Germany	2,640	2,680	2,870	2,880	3,080
Belgium & Luxembourg	2,040	2,120	2,090	2,050	2,130
Italy	2,240	2,240	2,250	2,240	2,270
Iberia	2,140	2,170	2,180	2,200	2,220
Other European countries	3,710	3,730	3,700	3,710	3,780
Rest of the world	6,080	5,830	5,660	5,540	5,420
Corporate	260	250	240	250	250
Global businesses	4,650	4,750	4,830	4,910	5,010
total	38,370	38,250	38,240	38,270	38,910

© Randstad 2020 21

staffing employees by region.

average	Q4 2019	Q4 2018
North America	97,900	105,100
France	84,800	87,800
the Netherlands	75,200	85,400
Germany	37,800	43,600
Belgium & Luxembourg	46,500	49,700
Italy	53,800	54,900
Iberia	65,400	67,700
Other European countries	61,800	65,900
Rest of the world	120,800	112,100
Global businesses	11,600	12,500
total	655,600	684,700

© Randstad 2020 22