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USG People adjusts dividend policy & debt target & further executes online strategy

Trading update: USG People revenue grew 3% in the October-November period

USG People further defines its online strategy with the acquisition of 51% of the shares in Connecting-Expertise, a Belgian provider of advanced Vendor Management System (VMS) solutions.

The strategic net debt target of two times EBITDA1 has been achieved. The strategic net debt target has now been adjusted to no more than one time EBITDA to further strengthen the balance sheet.

The dividend policy is being adjusted:

- as from the 2014 financial year all dividend payments will be made solely in cash

- once the new net debt target (of one time EBITDA) has been reached, the distribution of

dividend will be increased from one-third to 40% of net profit before amortisation of

acquisition-related intangible fixed assets.

Trading update for October and November: group revenue rose 3% in these months compared to the same months last year (September: 2%) revenue in the Netherlands increased by 3% in these months compared to a year earlier (September: -1%).

Shareholding in Connecting-Expertise

Connecting-Expertise is a dynamic Belgian online software services provider of advanced Vendor Management System (VMS) solutions including an online marketplace. A VMS structures the entire process of doing business between clients and different providers of flexible labour, such as temporary employment agencies, self-employed people with no staff (ZZP-ers) and consultancies. The solution supports the entire chain from the client's request, vacancy or project placement, to the invoicing. The online marketplace gives clients the opportunity to make assignments, projects or vacancies accessible on the open market in an automated way.

The Software-as-a-Service (SaaS) platform can be implemented internationally and will continue to operate independently while facilitating the USG People star brands. In the past few years USG People has worked together successfully with Connecting-Expertise in Belgium, resulting in several large deals such as the contract with the government of Flanders which won a Supply Chain Award last week for its innovative approach to making the hiring process of the Flemish government – for which Connecting-Expertise created the online marketplace – lean and flexible.

Connecting-Expertise gives USG People the opportunity to expand and further develop its services in the field of more comprehensive online business solutions. The Solvus business solutions concept was launched earlier this year and it is already operating very successfully in the Belgian market. The Solvus concept is mainly focused on Managed Service Providers (MSPs), Recruitment Process Outsourcing (RPO), career transition and performance & development management in close cooperation with the star brands. The shareholding in Connecting-Expertise means that Solvus can now make integrated offers independently with regard to MSP processes that are more competitive than solutions provided in cooperation with external VMS providers.

By investing in these technology-driven concepts USG People is strengthening its innovative potential within its organisation and laying the foundation for the next stage of its development. In addition to growing independently, the newly acquired activities will also be a business enabler for the

USG People star brands, which can use and offer the business platform. Furthermore, the newly acquired activities play a supporting role in the digital transformation of USG People and its star brands. For further information, see the annex to this press release: USG People’s online business solutions. The newly acquired activities are aimed at organising labour in a smart way by making extensive use of technology. This also provides opportunities to develop new earnings models in which new services have unlimited scalability at marginal incremental costs.

In doing so USG People is investing both in operational excellence within its existing activities and in the development of solutions with increased added value for its clients in the shape of business solutions.

Changes to debt target and dividend policy

IIn recent years net debt has come down to a level within our strategic target, i.e. a total leverage ratio of no more than 2.0 (net debt / EBITDA). Now that this milestone has been reached USG People aims to continue to reduce its net debt in order to further strengthen its balance sheet. The strategic target for the total leverage ratio has now been brought back to 1.0 (net debt / EBITDA).

This stricter target for net debt coincides with a change in the dividend policy. This policy currently stipulates a dividend distribution of one-third of net profit before amortisation of acquisition-related intangible fixed assets after allocation to the legal reserves. In the past it was decided on an annual basis whether the dividend would be distributed in cash or in a choice of either cash or ordinary shares. As from 2014 the dividend proposal will only be made in cash. Once the new debt target is achieved the distribution of dividend will be raised to 40% of net profit before amortisation of acquisition-related intangible fixed assets after allocation to the legal reserves.

This change in the dividend policy will be addressed at the next General Meeting of Shareholders, October and November results

USG People revenue rose 3% in the October-November period compared to the same period last year (September: 2%). Revenue in the Netherlands increased by 3% compared to a year earlier (September: -1%) and revenue in Belgium grew 8% (September: 7%). Revenue was down 3% yearon-year in France (September: 2%) and was slightly lower in Germany, down 1% (September: 2%).



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