capital markets day 2017 london. human forward.

Transcription

1 capital markets day 2017 london. human forward.

2 group strategy & vision jacques van den broek, CEO london capital markets day november

3 agenda our new brand positioning 6 strategic roadmap 7 ABFS tech as a differentiator 10 a structural growth industry 11 topline growth accelerating versus peers 12 tech & touch initiatives by Randstad 14 conclusion 16 Randstad 3

4 our brand positioning tech-driven but human personal. helpful. caring. relationship-focused. generic players traditional authority via legacy. professional players tech players innovative authority via change through data. more tech, algorithm driven. Randstad 4

5 strategic roadmap best people, strong concepts, excellent execution & superior brands grow to 5-6% ebita profitable growth improve margin increase productivity our ultimate goal by 2030, we will touch the work life of 500 million people worldwide Randstad 5

6 strategic roadmap best people, strong concepts, excellent execution & superior brands productivity (GP/FTE) up 3% YTD prior cost savings programs on track new cost savings of M HR Tech opco initiatives TTA -> enterprise clients growth in MSP (+11%) & RPO (+30%) YTD 2017 grow to 5-6% ebita profitable growth improve margin increase productivity our ultimate goal by 2030, we will touch the work life of 500 million people worldwide inhouse growth 18% YTD 2017 professionals growth 4% YTD 2017 perm growth 9% YTD 2017 SME growth 10% YTD 2017 Randstad 6

7 ABFS 2018 integrated tech approach is crucial Randstad 7

8 perm contingent workforce tech as a differentiator: higher barriers to entry, favouring big players in a fragmented market where scale and proximity matter tech touch tech touch self-service platforms integrated talent management tech touch tech touch digital platforms talent engagement SME clients large Randstad 8

9 a structural growth industry staffing penetration rates rise over time trends and growth drivers 3,3% globalization 3,0% 2,8% 2,5% technology 2,3% 2,0% 1,8% 1,5% demographics 1,3% 1,0% variety of work forms governance of work 0,8% 0,5% 0,3% 0,0% Belgium France Germany Netherlands Spain Japan US Italy source: CIETT Randstad 9

10 topline growth accelerating vs. peers powered by integrated tech organic revenue pwd growth by quarter, organic revenue pwd growth, 2017 YTD france 15% 10% 5% 10% 0% Randstad Peer 1 Peer 2 8% 6% 4% italy 30% 25% 2% 20% 0% -2% -4% % iberia 15% Randstad Peer 1 Peer 2-6% -8% 10% Randstad Peer 1 Peer 2 5% Randstad Peer 1 Peer 2 Randstad 10

11 inhouse: strong growth continuing future powered by tech ,4% 21,0% 21,9% 19,5% 17,9% 14,1% 15,0% 11,1% 11,0% 10,6% 4,6 9,1% 4,2 3,6 3,1 3,2 2,6 1,9 1,9 2,0 1,5 1, % 20% 15% 10% 5% 0% Inhouse Rev ( B) share of total revenue what is inhouse services? 30% 20% 10% 0% -10% 25% 21% 18% 18% 15% 12% 9% 11% 10% 13% 9% 12% -2% 8% -3% 6% 5% -2% 4% % YTD high volume clients high productivity high customer intimacy (98% retention rate, often 100% market share) Average organic sales growth rate : c. 10% -20% -30% -29% -27% Inhouse organic growth group organic growth Randstad 11

12 we are connecting the initiatives and scaling up successful concepts fast around the world. digital factory scale ups RIF (15 investments) data driven sales workforce scheduling external innovations via M&A tech & touch local innovations Capabilities (eg. SEO) global concepts Sales Navigator Big Data France Horton (US) Ploy SourceRight RiseSmart Global Clients Solutions Randstad 12

13 group P&L impact experiment, focus, proof, scale up validate business cases on hard data & leading KPIs problem/solution fit product/market fit scale addressable market achievements so far growth potential tools pilot MVP roll-out Randstad 13

14 conclusion integrated tech approach is crucial higher barriers to entry, in favour of big players riding the learning curve: experiment, focus, proof, scale up large addressable market size identified ambition gain further market share driven by our differentiating tech & touch strategy Randstad 14

15 agenda financial strategy & trading update Robert Jan van de Kraats Q&A data driven sales NL & France Dominique Hermans & Sébastien Hélaine coffee break coffee break US staffing/professionals & Monster Linda Galipeau/Chris Kibarian Q&A workforce scheduling François Béharel enterprise clients Rebecca Henderson wrap up buffet lunch drinks and canapes digital strategy: deep dive Jacques van den Broek Randstad 15

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17 financial strategy & trading update robert jan van de kraats, CFO london capital markets day november

18 agenda current trading & outlook 21 revenue growth accelerating versus peers 22 perm: a major opportunity 24 cost savings update: consistent benchmarking 26 EBITA margin progression & outlook 27 M&A update & outlook 29 FCF stability through the cycle 31 capital allocation priorities 33 conclusion 34 Randstad 18

19 current trading outlook revenue growth in October in line with Q3 (+9%) volume trend in November so far appears to be in line with October robust growth in Europe continued, North America slightly improving there will be an adverse 2.4% comparison in Q4 gross margin in Q4 is expected to be stable sequentially for Q4, operating expenses are expected to be stable sequentially there will be an adverse 0.5 working day impact in Q Randstad 19

20 topline growth accelerating vs. peers driven by improving macro in europe and integrated tech organic revenue growth by quarter, % 8% 6% 4% 2% 0% -2% -4% -6% -8% Randstad Peer 1 Peer 2 france still c.15% below 2007 peak penetration rate in iberia (0.6%) and italy (1.2%) markedly below european average u.s. above peak and still growing Randstad 20

21 further improving relative performance france organic revenue growth pwd 16% 12% 8% 4% 0% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Randstad Peer 1 Peer 2 italy 40% 30% 20% 10% 0% -10% -20% organic revenue growth pwd Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Randstad Peer 1 Peer 2 north america organic revenue growth pwd 5% 0% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 iberia 30% 20% organic revenue growth pwd -5% % -10% Randstad Peer 1 Peer 2 0% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Randstad Peer 1 Peer 2 Randstad 21

22 DE NL BE group IT NAM ES IB FR UK AUS China perm: a major opportunity perm as % of GP, FY % 80% 2017 YTD perm growth avg. growth competitors 1 2 7% 9% 70% 60% 50% 40% In 2017 YTD perm made up 10% of group GP (~12% in 2007) We have the potential to double in established markets 30% previous group peak: 12% Strategic focus paying off as we outgrow our peer group average 20% 10% 1 Competitors; Page group, Hays, Adecco, Manpower 0% & Robert Half 2 Organic growth, excluding RPO Randstad 22

23 perm offers ample growth potential perm growth 2017 YTD 40% 30% 39% 16% 36% 24% 20% 10% 0% 9% 4% 5% 3% France Netherlands Germany Belgium % of perm in country gross profit perm organic growth Randstad 23

24 total upcoming cost savings 2018/19: M Randstad 24

25 adjusted EBITA margin progression in 2017: a balancing act adjusted for digital investments & working day effect 6% 5% 4% 4,7% 4,5% 5,0% 5,1% 4,9% 5,4% 3,6% 3,8% 3,8% 3% Q Q (reported) Q (adjusted) Q Q (reported) Q (adjusted) Q Q (reported) Q (adjusted) Randstad 25

26 ebita margin outlook 2017/18 topline growth consensus + 4.5% sales growth 2018 expected market outperformance topline growth business mix digital opex digital ongoing investments early signs of additional sales growth business mix focus on perm/profs/inhouse/sme; pricing opex M annual savings by 2019 consensus FY 2017 EBITA margin: 4.6% outlook 2018: further progression towards 5-6% EBITA margin Randstad 26

27 acquired companies well on track aim to be top 3 in local Staffing market strengthen Professionals business accelerate digital strategy progress towards EVA after 3 years in line ahead ahead underway ahead underway randstad 27

28 M&A outlook 2018 and beyond tech & touch strategy professionals staffing mainly organic through digital factory repair Monster & global roll-out acceleration through Ausy (organic & bolt-on M&A) over time: small to midsized M&A top position in most relevant markets, ex-japan, UK & Australia no priority focus on value creation on the basis of current footprint no large transformational M&A going forward limited M&A in 2018 Randstad 28

29 FCF stability over the past 10 years FCF ex-cice ( M) CICE ( M) leverage ratio 3,0 2,5 2,0 1,5 1,0 0,5 0,0 Randstad 29

30 for illustrative purposes, graph not to scale FCF outlook is consistent in various macro scenarios working capital movement is counter cyclical FCF outlook tested against 6 macro scenarios: bandwidth is only 20% FCF cumulative 2017 to FCF scenarios accumulated Randstad 30

31 capital allocation priorities & dividend policy old 1. investments in organic growth new sound FCF outlook 2. M&A activity investments in organic growth including digital 3. dividend maintain cash dividend policy with payout 40 50% 4. share buybacks* selective M&A when leverage ratio < 1.0 -> optional additional cash returns to shareholders 5. special dividend* more details H Randstad 31

32 long term value creation through tech & touch strategy optimizing EVA by steering on key levers Randstad 32

33 questions & answers