Randstad Holding analyst & investor days 2009 United Kingdom Brian Wilkinson, member Executive Board December 4, 2009
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 circumstances which then apply. Any number of factors can cause actual results and developments to deviate from those expressed in the forecasts stated here. Such factors can be, but are not limited to, general economic conditions, scarcity on the employment market, the variation in the demand for (flexible) personnel, changes in employment legislation, future currency exchange rates and interest rates, future corporate mergers, acquisitions and divestments and the speed of technical change. The forecasts speak only as at the date of this document. Quarterly figures and pro forma figures are unaudited.
agenda market overview business overview case study: integration Randstad staffing strategy update
UK: market information 20 Spread GDP by industry Weight 10 0-10 Q1 2006 Q2 Q3 Q4 Q1 2007 Q2 Q3 Q4 Q1 2008 Q2 Q3 Q4 Q1 2009 Q2 Agriculture 1% Oil & Gas 5% -20-30 -40 Manufacturing 15% Electricity/gas/water 3% Market growth employment industry (REC) % Revenue growth Randstad UK % Total production 24% Construction 5% Hospitality 10% 2007 2008 2009 2010 Growth GDP 3.0% 0.7% -3.6% 0.2% Unemployment rate 5.3% 5.8% 7.9% 9.7% Penetration rate 4.5% 4.5% 4.3% Transport 10% Business & financial services 30% Government 20% Total Services 76%
UK: our market position 2008 ( bn) Temp Perm Total Profs Staffing Total UK UK market 6.0 2.0 8 19 27 Randstad 0.6 0.1 0.7 0.2 0.9 our share 9% 1% 3% estimated number of players in the market is 14,000 professionals: Hays # 1; Randstad # 2; Sthree #3 staffing: Adecco # 1; Impellam # 2; Hays # 3; Randstad # 5
UK: competitive landscape rank company 2008 UK revenue ( m) 2007 revenue ( m) 1 Hays 1,571 1,413 2 Adecco 1,342 1,128 3 Manpower c. 1,100 875 4 Randstad 925 951 5 Impellam Group 895 788 6 SThree 486 479 7 MPS Group 458 474 8 Spring 424 393 9 Michael Page 365 360 10 Capita Resourcing 232 203 11 Robert Walters 133 133 12 Empresaria 86 81? Hudson N/A N/A? Reed N/A N/A Adecco pro forma 2008 revenue: 2,224 Hays very active in market compared to Adecco and Manpower large players reported Q2 2009 results: GP contraction of around 30%
revenue by sector 12% 16% 11% 9% 14% 14% 8% 16% IT engineering & Construction inhouse finance & Accounting healthcare education general staffing other specialist
case study: integration Randstad staffing integrated within 6 months combining the best of both worlds: - concepts - back office year on year cost savings in excess of 10 million
UK professionals businesses May 2008 seems a long time ago! UK businesses were operating entirely independently and separately under the old Vedior model our plan: to approach integration slowly and carefully so as not to destroy value (a change management approach) the result: good steady progress towards one company
how did we approach it? made relationships with Randstad- built trust and informed UK MDs sold the benefits of Randstad IAM and Randstad Institute in particular introduced expertise and ideas in Concept, HR, Marketing feasibility study shared services - provided opportunities to save money through synergies in IT, telecoms, benefits etc.
how did we build on it? UK strategy development process - open, inclusive process - included strategy education building skills for future - all MDs involved - no sacred cows, no prescribed outcome - building our future together - team led, with a core strategy group taking final decisions - facilitated by external strategy consultant chosen to be pragmatic, non-technical, and knowing our business
strategy project 2009 Phases Phase 1 Engagement Phase 2 Strategy Development Phase 3 Execution Month April May June September October November December (onwards) Stages Engagement Identification (1) Analysis (2) Feedback (3) Decision (4) Communication (5) Execution Outcomes MDs engaged Process agreed Feedback and ideas gathered Values and objectives agreed Strategic questions identified Answers and options created Options presented to all Feedback Options Selected Strategy formulated Strategy Communicated and discussed Action Plan created Action Plan Workshops 1-day 2-day Group Work Group work 2 - days 1-day Divergent thinking Convergent thinking
strategy Q3: How do we want to structure our offering? clients structure Q1: how are we perceived now by our C&Cs - and what would we need to do differently to create a more compelling proposition? Q4: how do we retain our key people? external internal environment environment candidates - value - business people proposition model Q5: how can we share best practice, knowledge and opportunities? competitors best practice Q2: how do we compare to our competitors how can we seek to out perform them in the next five years? innovation Q6: how do we become the most innovative recruiter in the UK?
key insights personal relationship specialist consolidation
our opportunity?? retain this consolidated strategy allows us to be here too value specialism professionals OpCo gap/opportunity mono brand generalists individual scale joined-up
can we make one + one = more than two? working hypothesis by coming together and working more closely as a Group, Randstad companies can improve performance individually and collectively Randstad in the UK can become greater than the sum of its parts opco s Randstad improved proposition strategy review: what we should do differently? 16
relationship, attitude and value add intelligence key differentiators mandatory desirable differentiator knowledge of our market deep client understanding properly vetted candidates good quality candidates value for money credibility with line manager relationship with individual consultants straight talking approach ability to positively represent client brand provision of valuable market intelligence
our proposition Randstad is the enabler. we know that specialisation is all important in recruitment. we deliver our services through separate businesses, each a specialist in its own area. our specialisms cover: - particular sectors or industries - particular job functions or professions - recruiting and managing flexible labour resources we know that relationships matter. Our scale, resources and shared knowledge empowers our people to ensure that clients and candidates always come first. we are bound together by the Randstad Way. the Randstad way means we: - share unique insights to the benefit of stakeholders - deliver best practice throughout the group - constantly innovate our thinking and approach to recruitment
our proposition
other initiatives introducing co-location centralised procurement of marketing, IT, telecoms, insurances, benefits etc new IT platform across business towards shared services
UK brand portfolio 2008/2009 Education Engineering Office/Blue Collar Accounting, Banking, Finance Executive Management Sales, Marketing, Retail IT HR Legal Healthcare Managed Services
UK brand portfolio 2009/2010 General Staffing Education Engineering Healthcare IT Accounting Managed Services HR Sales and Marketing Banking and Legal Executive Management
UK revenues by opco october YTD 1% 1% 4% 1% 3% 2% 2% 28% 9% 8% 1% 12% 15% 13% Randstad staffing Randstad Education Group Randstad CPE Randstad Care Randstad ME Abraxas Finance/Banking/Accounting Digby Morgan Qualitair Pareto Law Interim Management Mandeville Origin Major Players
how do people feel about all this? I am happy with the strategy development process that is being carried out Strongly agree 4% 22% Original survey Most recent survey Agree 29% 56% Not sure yet 17% 54% Disagree 5% 13% Strongly disagree 0 0
the result shared view of a joint future within Randstad key players engaged, excited and involved insights into the market and the strategic development of our business in the UK development of a strong market proposition to customers in UK opportunity to exploit synergies and become more effective
what made the difference? open honest and inclusive leadership the board with me, and me with my MDs to know, to serve, to trust we built understanding, and trust focusing on what the MDs needed simultaneous promotion of all interests we looked for win-win solutions striving for perfection we looked for better ways to do business
Q & A