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Randstad confirms Its Targets

Randstad confirms Its Targets
Randstad Holding nv has held an analyst & investor conference at its head office in Diemen. In the morning session CEO Ben Noteboom provided an update on strategy and targets, while CFO Robert-Jan van de Kraats elaborated on how Randstad will manage through the cycle. New executive board members Brian Wilkinson and Greg Netland then presented updates on their areas of responsibility, including the UK and North America. Randstad said:
Targets The targets we set for Randstad stand-alone are from now on applicable for the new and combined company. We continue to target an average 5-6% EBITA margin through the cycle. The annualized EBITA margin can be above 6% in very good years and should not be below 4% in a normal downturn. In the context of the Vedior acquisition we explained our stress case scenario which assumes about 3 years of revenue declines according to the following pattern: -5/-10/-10/-5 . Our results are potentially slightly more sensitive in the case of revenue declines beyond the stress case assumptions. Mid-term targets by segment
We have set mid-term targets for our segments. These targets are: - Inhouse4-5%
- Staffing 5-7%
- Professionals 10-15%
These segment targets are not through the cycle-targets but the ambition levels we have set for our combined businesses in the next upturn. Professionals In order to preserve the value of the professionals businesses, we have decided not to make radical changes. The professionals businesses will mostly keep the existing brands, rebranding will only occur if opportune. However, in consultation with the major operating companies, a new professionals house style will be developed before year-end. Ultimately by the end of 2009, all professionals businesses should have the look & feel of this new Randstad Professionals brand family, while the brands will also be endorsed by the tagline a Randstad company. We expect considerable annual savings on production costs (some 25 million), which can be reinvested in marketing expenses to support market presence. DSO Realizing local Randstad DSO (Days Sales Outstanding) for the Vedior revenue mix would reduce Vedior DSO by 2-3 days potentially lowering working capital 50-70 million. Potential DSO reduction in France, due to legal changes subscribing a maximum of 60 days, may generate additional improvement potential.
Current trading
As stated in our Q3 2008 press release, the markets continue to weaken. On an organic basis Group revenue per working day declined 9.5% in October. Early November the trend has not turned yet. On the back of synergies and ongoing alignment of the cost base, profitability remains solid.


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