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Randstad holds Capital Markets Day

Jacques van den Broek (CEO) will kick off with how Randstad addresses the changing HR landscape in its strategic roadmap. He will discuss how an additional element on the roadmap is talent management, which combined with technology enables the company to improve its client/candidate proposition. This should result in improved productivity and fill rates.

Robert Jan van de Kraats (CFO) will provide an update on Randstad's financial strategy and the path towards achieving its strategic targets. He will reaffirm that Randstad's 5-6% EBITA margin target is within reach in 2016 assuming the mid-single digit sales growth and mix changes continue. He will state that the company is on track to achieve &euro60-70M cost savings in 2015-16. In order to secure the company's competitiveness, additional measures are being taken: IT expenses (making up 10% of our &euro2.5bn SG&A in 2014) should come down 20% over time with the creation of a global IT infrastructure SSC.

This project is another result of the ongoing benchmarking of all functions, which should continue to drive the cost base down. Finally, Robert Jan will discuss the company's capital allocation: As the company's leverage ratio is likely to end up below 0.5x (by the end of this year), it proposes an all cash dividend for 2015.

Linda Galipeau (Executive Board member) will talk about how MSP/RPO and technology strategies are driving integrated talent solutions, enabling us to gain profitable market share. Galipeau will also provide an update on the US market, both staffing and professionals.

Christophe Montagnon (France CIO) will demonstrate a "Big Data" solution that Randstad France has developed. The solution, based on the aggregation of data, improves decision-making by providing targeted real-time insight into the labor market. Randstad will state this is a prime example of internal innovation, helping to transform the way its consultants work.

Chris Heutink (Executive Board member) will discuss delivery models, using Randstad NL as an example where less than 50% of revenue is now generated through a traditional branch. Inhouse and central delivery continue to grow in importance. Heutink will also talk about trends in Global Clients (25% of Group sales), which has above average growth and profitability in line with the Group.

Trading update: 7.7% revenue growth in October

In October revenue per working day increased by 7.7% organically (vs. 5.4% in Q3) and volumes in November so far indicate a continuation of the trend. Gross profit growth in October was 8.4% (5.8% in Q3). Perm fees were up 9% in October (vs. 13% in Q3).

North America continued its solid performance with 5% sales growth (4% in Q3). Within North America overall US business grew 6% (vs. 5% in Q3). Europe grew 8% in October (vs. 5% in Q3). France accelerated to 8% revenue growth (vs. 3% in Q3) as did Iberia (up 14% in October vs. 8% in Q3), Italy (up 26% in Oct vs. 20% in Q3) and Belgium (up 10% in Oct vs. 1% in Q3). The Netherlands and Germany were stable vs. Q3, up 10% and 2%, respectively.

In Q4 2015 Randstad expect a minor sequential increase in operating expenses (on an organic basis).


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