Randstad North America/media/Files/R/Randstad-IR/documents/... · US Staffing market Randstad North...
Transcript of Randstad North America/media/Files/R/Randstad-IR/documents/... · US Staffing market Randstad North...
Randstad North America
Gregory A Netland December 1, 2011 Analyst & Investor days 2011
Analyst & Investor days 2011 2
disclaimer
Certain statements in this document concern prognoses about the future financial condition, risks, investment plans and the results of operations of Randstad Holding and its operating companies as well as certain plans and objectives. Obviously, such prognoses involve risks and a degree of uncertainty since they concern future events and depend on circumstances that will apply then. Many factors may contribute to the actual results and developments differing from the prognoses made in this document. These factors include, but are not limited to, general economic conditions, a shortage on the job market, changes in the demand for (flexible) personnel, changes in legislation (particularly in relation to employment, staffing and tax laws), the role of industry regulators, future currency and interest fluctuations, our ability to identify relevant risks and mitigate their impact, the availability of credit on financially acceptable terms, the successful completion of company acquisitions and their subsequent integration, successful disposals of companies and the rate of technological developments. These prognoses therefore apply only on the date on which this document was compiled. Quarterly figures and underlying figures are unaudited.
December 1, 2011
US Staffing market
Randstad North America
SFN Group acquisition and integration update
agenda
December 1, 2011 Analyst & Investor days 2011 3
December 2, 2011 analyst & investor days 2011 4
US Staffing market
overview US market
-30%
-20%
-10%
0%
10%
20%
30%
40
50
60
70
80
90
100
110
120
130
140
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 E
Total market Market growth
December 1, 2011 Analyst & Investor days 2011 5
Recovery pattern continues to follow a classical pattern Share of Professionals continues to increase
Source: BLS data
share of Professionals significantly increased
Based upon Staffing Industry Analysts 2010 Contingent Buyer Survey, employers expect to increase their contingent workforce by 50% over the next two years.
Temp Volume Tracks GDP; Penetration May Expand
Large Staffing Market Shifting to Professional Skills
Shift to Professional Professional
Staffing
48% General Staffing
52%
Professional Staffing
58% General Staffing
42%
1995 Staffing Market
$50.2 billion
2010 Staffing Market
$90.6 billion
Historical High 2.03%
Temp Employment (000’s)
Temp Penetration
Temp Employment 20% Below Historical High
Professional Staffing
39% General Staffing
61%
Professional Staffing
52% General Staffing
48%
Peak Professional
mix 58% in
2008 & 2009
General Staffing
48%
Professional Staffing
52%
December 1, 2011 Analyst & Investor days 2011 6
penetration rate moving up again
December 1, 2011 Analyst & Investor days 2011 7
In 2010: penetration rate soared from 1.5% to 1.7% 1/3 of all jobs gained via temporary services
Outsourcing of HR tasks and need for flexibility have been important drivers Penetration rate increased to 1.8% in October 2011 Penetration rate in US still below European average
unemployment gradually reduced over time availability of candidates opportunity for Randstad Staffing & Professionals
Source: Bureau of Labor Statistics & Staffing Industry Analysts December 1, 2011 Analyst & Investor days 2011 8
unemployment gradually reduced over time, but still at a high level around 13.9 million workers involved unemployment in higher educated profiles significantly lower job creation continued, especially in (higher) skilled labor segments currently 2,200 vacancies online on our website
December 2, 2011 analyst & investor days 2011 9
Randstad North America
Greg Netland EB Member
Randstad US Professionals
Daniel J Foley President
Randstad US Staffing Linda Galipeau
President
Randstad Mexico Alejandro Alvarez Blanco
Managing Director
Randstad Canada Jan Hein Bax
Managing Director
US Shared Services Ron Fuccillo CFO, SVP
organization structure Randstad North America
December 1, 2011 Analyst & Investor days 2011 10
Randstad’s profile in North America
Continued strong performance in US and Canada
(LTM*) revenues of $2,886M with an EBITA-margin of 4.0%
Balanced portfolio of services covering a broad range of the market
leading positions in staffing & professionals segments
leader in RPO and larger scale in MSP through acquisition SFN
We work from 1,100 offices with around 6,500 corporate staff
Each week we have around 100,000 employees working
Randstad North America
Revenues LTM*: $ 2,886M
* last 12 months to 30 September 2011, SFN included since September 2, 2011
Analyst & Investor days 2011 December 1, 2011 11
51% 40%
9%
Revenue categories
Staffing & Inhouse Professionals HR Solutions
82%
18%
Geographic split
USA Canada
Randstad USA
Commercial HR Solutions Professional
IT Randstad
B2B Workforce Sapphire Solutions
Technisource
Engineering Randstad
Healthcare
Randstad Clinical One
Locum Medical
Acct/Finance Randstad
Mergis Tatum
HR
Randstad
Master Service Provider (MSP)
RMS RMS
RPO
SourceRight RMS
Payrolling
RMS RMS
HR Consulting
RMS SourceRight
RMS Outplacement
Staffing Randstad
Placement Pros Today’s Office
Spherion
Vendor on Premise (VOP)
Randstad In-house (RIS) Randstad Corporate (RCS) Spherion Master Vendor
Payrolling
Corporate Accounts
Corporate Recruiting NDEC & NRC
group sales
Shared Service Center Tax, Treasury, Risk, Benefits, IAD, RFP’s
Corporate Service Center HR, Marketing, IT (FE/BE/ON), FR, Risk, IP
Pay-bill, Benefits & Collections
Field Service Center HR, Marketing, IT (BE), FR, Risk, IP
Pay-bill, Benefits & Collections
group sales
December 1, 2011 12 Analyst & Investor days 2011
group sales
Randstad Canada
Randstad entered Canada in 1997
#1 HR Services provider in Canada
Randstad and SFN operate from 85 branches across 8 provinces with over 800 FTE
Strong performance throughout 2011
* last 12 months to 30 September 2011, SFN included since September 2, 2011
Analyst & Investor days 2011 December 1, 2011 13
94%
5% 1%
Payrolling RPO RMS
54% 46%
Blue collar White Collar
79%
17%
2% 2%
IT Engineering F&A Other
56% 35%
9%
Professionals Staffing&Inhouse HRS
Staffing Services Professional Services HRS (incl. RPO/MSP) Randstad Canada
LTM* $ 533M
classical recovery pattern continues in North America
December 1, 2011 Analyst & Investor days 2011 14
Classical recovery pattern in US and Canada maintained
Growth trend in early-cyclical Staffing & Inhouse impacted by comparison base and
reinforced focus on client profitability
Continued strong growth in Professionals, especially in IT and Engineering
Solid performance in Canada maintained
-30%
-20%
-10%
0%
10%
20%
30%
40%
Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011
US Staffing US Professionals Canada
December 2, 2011 analyst & investor days 2011 15
SFN Group Acquisition & integration update
strong concepts best people excellent execution superior brands
need for flexibility
demographics
deregulation
clients looking for total offering
no. 3 position in US
leading positions in Staffing &
Professionals segments
efficiency improvements and other cost synergies
sharing of best practices
leverage ratio expected to remain below 2 by the end of the year
acquisition SFN Group creates unique strategic fit
EBITA-margin targets
continuous market share gains
sound financial position
the acquisition of SFN Group offers Randstad
leader in RPO; scale MSP
increased density
cross-sell opportunities
16 Analyst & Investor days 2011 December 1, 2011
strategic rationale for SFN acquisition the combination creates the #3 in US providing scope for further growth
number 2 player in
clerical segment
top-5 in light
industrial segment
increased density in
staffing network
Staffing Services Share of group: 52%
Professional Services Share of group: 39%
HRS (incl. RPO/MSP) Share of group: 9%
number 2 player in
IT segment
number 3 in Finance
& Accounting
leader in RPO
enhanced platform for
growth in MSP
HRS 10%
52%
39% HRS9%
Combination
Pro forma revenue $ 4.5bn
39% 9% Professionals
Staffing & Inhouse
comparable service
offerings
enhanced geographic
coverage
reinforcement market
leadership in Canada
52% 39%
17 December 1, 2011 Analyst & Investor days 2011
SFN Family of Specialized Businesses
Professional Services General Staffing
December 1, 2011 Analyst & Investor days 2011 18
SFN Group business profile
Outsourced talent solutions
Business description Executive services
Professional recruiting and staffing
General staffing Technology staffing and solutions
Skills
Profile
2010 Revenue
2010 Revenue Mix
All skills RPO MSP ICC
$ 200M $ 90M $ 200M $ 1100M $ 500M
Finance Technology
Technology Finance Administration Legal HR
Clerical Light Industrial Customer service
68% 4%
28%
Payrolling
MSP
RPO
20,500 end-to-end hires Top 10 MSP provider Fortune 500 customer base
Largest executive service provider 325+ billable employees Average bill rate $ 190/hour
6th largest IT company 4,400+ billable consultants 66 locations across US
Leading specialty staffing company 3,500+ billable employees Retail focus Perm mix 10%
4th largest admin staffing company 44,000+ billable employees Mid-size and SMB target market
15%
85%
CIO office
CFO office
22%
78%
Solutions
Staffing & recruiting
7%
27% 52%
5%
9%
Administration
Accounting
Legal
HR
Other
45% 55%
Light Industrial
Clerical
19 December 1, 2011 Analyst & Investor days 2011
Industry leading positions
Outsourced Talent Solutions Higher Margin Services
Central Recruiting & Social Media Variable Cost for Sourcing and Delivery
December 1, 2011 Analyst & Investor days 2011 20
Industry leading positions
Employment Trends and Attitudes Increased Loyalty of Candidates and Clients
3,774,14
4,6
0
1
2
3
4
5
Industry Average SFN Clients SFN Candidates
Our Satisfaction Survey Results The Ultimate Question…
Would you recommend us?
600,000 Clients & Candidates Surveyed
December 1, 2011 Analyst & Investor days 2011 21
Service Excellence Quality differentiator
1,50
1,60
1,70
1,80
1,90
2,00
2,10
2,20
2,30
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
2002 2003 2004 2005 2006 2007 2008 2009 2010
% of SFN Revenue from Professional Services
Revenue ($ bn) % Professionals of Group revenue
SFN Group: building a different profile
2007 – Technisource, Todays and Resulte
Acquired
2010 – Tatum Acquired
2007 – Mergis Group Established
2009 – SourceRight Solutions Established
2001 – Recruitment Outsourcing
Business Established
December 1, 2011 Analyst & Investor days 2011 22
23
SFN Group in Q3 2011 well on its way to improve operational performance
• SFN Group growth in line with Q2 2011 - organic revenue growth amounted to -1% in Q3 2011 - EBITA margin up to 3.8% vs 2.7% LY
• Staffing down 1% YoY - focus on client profitability - EBITA margin up to 2.1% vs 1.7% LY
• Professionals +2% YoY - IT & Finance main drivers - strong growth of perm placement fees - EBITA margin amounted to 5.7% vs 3.6% LY
• HRS: improved mix - growth impacted by ending of payroll contracts - strong growth in RPO & MSP businesses - EBITA up to 5.8% vs 4.5% LY
Analyst & Investor days 2011 December 1, 2011
9%
52%
39%
sector performance Q3 2011
breakdown SFN Group revenues Q3 2011
52% 39%
9%
Staffing & Inhouse Professionals HR Solutions
EBITA margin expansion SFN Group
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
2007 2008 2009 Q1 10
Q2 10
Q3 10
Q4 10
Q1 11
Q2 11
Q3 11
EBITA margin LTM
Integration update: better together!
Staffing
Back office
Top Management up to branch management appointed
Joint sales approach
Integration process on track
First branch conversion as from January 1, 2012
Franchise business strategy developed
Professionals
$30M
$10M
Analyst & Investor days 2011 December 1, 2011 24
Top management appointed
Joint sales approach established
Integration plan in progress and on track: IT, Finance and HR Solutions as key business lines
SFN central backoffice split into Staffing and Professionals Randstad Professionals backoffice moves to SFN’s Professionals backoffice SFN Staffing backoffice to be integrated into Randstad Staffing
Functional groups reporting to country CFO (IT, pay/bill, F&A, legal)
HR and marketing allocated to Staffing or Professionals
Tax, Treasury, Benefits, Insurance integrated into Shared Services
significant synergies identified
Corporate HQ
Tax savings
overlapping HQ functions
Efficiency improvements
Marketing & IT
field optimization
productivity gains
based on Randstad’s unique
financing and tax structure
Tax savings
Cost synergies
at least $30M
$10M
annual synergies
Analyst & Investor days 2011 December 1, 2011 25
scope for upside potential
Staffing & Inhouse
Professionals
HRS
sharing of best practices from both companies
enhance top line growth:
provides higher competitiveness
cross-selling opportunities
well-positioned for clients looking for total offering
upside potential of Randstad’s Inhouse concept
leveraging operating models across both
companies
platform for growth in managed services
across all segments
26 Randstad to acquire SFN Group - creating a leading player in the HR services industry in North America
Thank you
Questions?