Snapshots of a Big Matchversion 5 - Vlerick

Frans Cornelis

the challenge:

rapid organic growth +major merger +major recession = ???

2

handling recent rapid growth AND a merger

10%10%

6%

5%

3%

2%

1%

23%40%

Netherlands Germany Belgium/Lux. France Spain UK Italy other* North America

16%11%

7%

6%

3%

3%

3%35%

16%

* including other Europe and Asia

2002

revenue € 5,444 mln. (YTD)

2006

Revenue € 8,186 mln. (YTD)

2002 2,154 528 549 343 288 170 86 73 1,255 (€mln.)

2006 2,912 1,307 924 532 498 249 253 240 1,271 (€ mln.)

3

combining Vedior and Randstad

4

outlets* by country 2004 - 2006

* branches and in-house locations

2,4112,670total

621Asia

64424

95430

other countriesNorth America

132150Italy

116126United Kingdom

165172Spain

170166France

227245Belgium/Luxembourg

288438Germany

819827the Netherlands

20052006end of period

2,320

0

56455

109

106

147

163

204

258

822

2004

5

outlets* of combined company 2007 - 2008

* branches and in-house locations

6

13,43015,380total

10260Asia

4502,370

5902,170

other countriesNorth America

440480Italy

450590United Kingdom

1,0601,110Spain

670710France

1,2301,400Belgium/Luxembourg

1,5702,280Germany

5,1805,790the Netherlands

20052006averages (YTD)

corporate, staffing employees by country

12,260

0

2702,190

380

440

950

620

1,100

1,380

4,930

2004

254,400312,300staffing employees 224,600

7

combined company 2007 - 2008

total own employees Q2 2008: 34,000

(total own employees Q1 2010: 25,500)

8

Randstad major brands

9

just some (!) of Vedior‘s brands

10

Volkskrant

Gekke koppeling van uitzendersACHTERGROND, Van onze verslaggever Xander van Uffelen

Amsterdam - Het uitzendbedrijf Vedior heeft een brochure van maar liefst 36 pagina’s nodig om al zijn merken op te sommen. Van het uitzendbureau

Promatica in Angola, via Expectra in Frankrijk naar Dactylo in Nederland. Randstad daarentegen hanteert slechts een handvol belangrijke uitzendmerken

en heeft zijn bekende blauwe logo in bijna alle landen geïntroduceerd.

De versnippering van de merken van Vedior tegenover de eenvormigheid van Randstad is slechts een van de vele grote verschillen tussen beide

bedrijven. Voor bedrijven die ervaring hebben met het aan elkaar koppelen van twee geschikte kandidaten, is de aangekondigde samenvoeging van

Vedior en Randstad op zijn minst opmerkelijk te noemen.

Randstad is ijzersterk in thuisland Nederland, maar heeft verder zijn activiteiten goed gespreid over vele landen. Vedior leunt zwaar op Frankrijk, waar 40

procent van de omzet vandaan komt, en kan zich in andere landen nergens marktleider noemen. Randstad richt zich primair op de algemene markt van

uitzendkrachten, waar Vedior allerlei gespecialiseerde uitzendkantoren voor werving en selectie heeft verzameld.

‘Je mag aannemen dat bij een geslaagde overname de koers van Randstad de boventoon gaat voeren’, zegt analist Johan van den Hooven van

zakenbank Theodoor Gilissen. ‘Het nieuwe bedrijf zal een duidelijke lijn aanbrengen in de bedrijfsvoering van Vedior en de winstmarge verbeteren.’ Ook

zal bij Vedior de bezem door het aantal merken gaan, iets wat de nieuwe baas Tex Gunning waarschijnlijk toch al van plan was. Bij zijn vorige werkgever

Unilever heeft hij ervaring opgedaan met het saneren van merken.

De geschiedenis van Randstad oogt ook meer als een rechte lijn. Oprichter en grootaandeelhouder Frits Goldschmeding zwoer bij een autonome groei.

Vedior daarentegen is een afsplitsing van het conglomeraat Vendex en heeft sinds zijn zelfstandige bestaan in 1997 uiteenlopende bedrijven opgekocht.

Naast de grote bedrijfs- en cultuurverschillen zullen er nog meer obstakels overwonnen moeten worden om Vedior en Randstad tot een geheel te

smeden. Zo zijn er de mogelijke bezwaren van de mededingingsautoriteiten. Randstad is met een marktaandeel in Nederland van 37 procent al veel te

sterk. De inlijving van de Nederlandse kantoren van Vedior (7 procent marktaandeel) zal daardoor op problemen stuiten. In andere landen spelen deze

bezwaren minder.

Het tweede probleem is de vraag hoe Randstad de overname kan betalen. Voor Vedior zal het bedrijf naar schatting 4 miljard euro moeten neertellen. Met

leningen en kasgeld kan het bedrijf zo’n 2 miljard euro opbrengen. Er zal dus voor 2 miljard euro aan nieuwe aandelen uitgegeven moeten worden, wat

door de kredietcrisis een dure zaak is. Die crisis, waardoor aandelen van uitzendbedrijven flink in waarde zijn gedaald, is ook een meevaller, zegt analist

Van den Hooven. ‘Vedior is nu wel een stuk goedkoper.’

Principles: how to tackle all this

12

what gets measured, gets done: basic measurement systems

(potential)customers - 58%

(potential)employees - 10%

(potential)investment - 14%

social/politicalimage - 12%

clear message stressing the satisfaction plus sufficient right image with the result(ad) spending components (experience!)20 to 25% 20 to 25% 50 to 60%

n =966 n=857 n=972

MerkTop of mind

bekendheid

Spontane

bekendheid

Geholpen

bekendheid

Top of mind

bekendheid

Spontane

bekendheid

Geholpen

bekendheid

Top of mind

bekendheid

Spontane

bekendheid

Geholpen

bekendheid

KPN 50% 72% * 46% 71% * 53% 76% *

KPN Telecom 4% 14% 98% 4% 10% 96% 3% 19% 96%

KPN Mobile 0% 5% 76% 0% 3% 86% 0% 12% 84%

PTT Telecom 12% 22% * 7% 10% * 8% 19% *

Hi 0% 5% 77% 0% 3% 79% 1% 10% 75%

Hi <34 jr 0% 6% 91% 0% 11% 92%

Libertel 10% 60% 96% 8% 49% 97% 7% 50% 96%

Telfort 3% 33% 93% 3% 26% 94% 3% 30% 91%

Dutchtone 2% 33% 86% 2% 28% 88% 2% 33% 86%

Ben 4% 54% 90% 7% 44% 91% 4% 51% 90%

Vodafone 0% 2% 51% 0% 3% 47%

Orange 0% 0% 26% 0% 1% 27%

Q 0% 0% 8% 0% 1% 8%

One.Tel 5% 17% 66% 3% 10% 67% 3% 16% 66%

Tele2 8% 23% 75% 15% 29% 85% 12% 33% 81%

Versatel 0% 3% 37% 0% 1% 43% 0% 5% 46%

Priority Telecom 0% 0% 17% 0% 0% 12% 0% 1% 14%

Scarlet 0% 1% 12% 0% 0% 12% 0% 1% 9%

Primus 1633 0% 2% 13% 0% 1% 7% 0% 1% 7%

okt-00 sep-01 okt-01

©C

opyr

igh

t 20

01 C

ons

ult

KPN Telecom, Siemens, Microsoft, HP en IBM are

the strongest brands

MCI Worldcom

0

50

100

50 100Brand Stature

Bra

nd V

italit

y

Iomega

Novell

Lotus

NECDigital

Dell

Fujitsu

Intel

Olivetti

Tulip

Toshiba

CompaqApple

IBM

Hewlett-Packard Microsoft

Lucent Technologies

BT/British Telecom

AT&T One.tel

Versatel

Telfort

Tele2

UPC

Ericsson

Nokia

Siemens

0

Ben

FlexiBelDutchtone

Hi

Libertel

KPN Telecom

Decision makers

Vaste Telecom

Mobiele Telecom

Computermarkt

2000

RepTrak

RepTrak

RepTrak RepTrak

RQ

RQ

RQ

RQ

TNSTNS

BAV

Share price

Press monitor, share of voice

RepTrak

“Rematch”-type rankings etc

Actual regulations, CLAs

Culture Survey

TNS

MM

Factiva/RQ

E.com

Interbrand Net promotor

scores

13

Culture — Six hard-earned core beliefs on cultural integration during the merger

1 4Start with a fact baseSecure insights on existing cultures of Randstad-Vedior; don‘t exaggerate culture differences to create a ―scapegoat‖ for underperformance

Deliver coherent program and make it a personalTrue behaviour change requires well-designed, coherent set of systemic interventions, and individual resolve to make a difference

3 6Design for leader-led programTop team alignment and role modelling is first and most critical step to success, and soon to be appointed business unit managers (N-1) have to take it forward

Let experts lead from behind to build capability to self-deliverUse proven experts to design and deliver initial steps of the program, and develop Randstad-Vedior managers to continue the journey independently

2 5Ensure value creation focus Don‘t just blend two cultures to a ―nice‖ mix, but use merger to boost daily performance, capture identified synergies and increase long term health

Integrate seamlessly with operational PMO initiativesDon‘t execute cultural program as separate ‗HR, Friday afternoon‖ effort, but integrate it with the ―hard‖ post-merger Randstad-Vedior integration initiatives

14

Integration buiding blocks to plan and execute the integration of Randstad & Vedior successfully

SAMPLE CHART

* Monitoring efforts included, specific efforts to keep the business momentum

to be executed by business owners

Source:Team analysis

Integration support

Program office project support

Communication & strategy story

People retention andredundancy

Synergy definition/tracking/baseline

Risk identification and mitigation

Active monitoring of ongoing businesses*

Central

Local

markets

Culture• Assessment• Target culture• Pre closure

intervention• Post closure

intervention

6

HQ integration (e.g. facilities)

3

Strategic topics• Branding• Prof.Service

strategy

Top structure and appointments/alignment

1

2

BelgiumFrance

Netherlands

Country integration• Support functions• Organization

structure• Branding• Branch network

integration• Rollout best

practice operating model

4

4Functional integration • HR• Marketing• Finance

– Investor Relations

– Tax– Reporting– Internal controls

& risks– Profit per-

formance management

– Internal controls– Insurance, Risk

& treasury• Legal• IT• Government

relations• Purchasing• Communications

5

Define blue print and implementing plan for after closure

2

1

3

4

5

6

(Re) Branding as a primary

strategic and central subject to

plan for BEFORE the closure of

the deal

15

master comms schedules with draft documents, contingency planning - prepared well in advance (Q2, Q4 2007)

Communication options

and planning

General press,

media

Own

shareholders

Target

shareholders

Own

analysts

Target

analysts

(EU) Works

council

Target (EU)

Works

council

Rough short term scenario 1:

(orderly process)

Announcement to other party secret SB only n/a secret n/a secret n/a

  Period of silence secret SB only n/a secret n/a secret n/a

Actions become public

(announcement of intentions or

informed leak, rumors)

Press release and

press conference,

factual EB interview

round as required

Press release

plus basic

Q&A

Press release

plus open letter

A

Press

release plus

ppt and

conference

call

Press

release plus

ppt and

conference

call

Press

release plus

letter B

Press

release plus

open letter B

or C

Period of intense (public)

attention to process, bidding

between parties and others

Press release and

press conference,

regular EB

interviews when

required

Press release

plus basic

Q&A

normal IR

contacts

additional IR

calls

Actions resulting in

announcement of final agreement

(or not)

Press release and

press conference,

background

interviews as

required

Press release,

letters, notices

Press release

and

shareholders

meeting?

Press

release,

conference

call

Press

release,

conference

call

Press

release plus

meeting

Press

release plus

meeting

Initial communication of actions

resulting from above

Press release,

letters, notices

Press release,

letters, notices

Road show Road show management

meetings,

set up new

structure

management

meetings

Longer term communication of

actions resulting from above

Press release when

required

business as

usual

n/a business as

usual

n/a business as

usual

n/a

Rough short term scenario 2:

(heavy resistance or

rebuttal)

Announcement to other party secret SB only n/a secret n/a secret n/a

Period of silence secret SB only n/a secret n/a secret n/a

Actions become public

(announcement of intentions or

informed leak, rumors)

Press release and

press conference,

factual EB interview

round as required

Press release

plus basic

Q&A

Press release

plus open letter

A

Press

release plus

ppt and

conference

call

Press

release plus

ppt and

conference

call

Press

release plus

letter B

Press

release plus

open letter B

or C

Period of intense (public)

attention to process between

parties and others

Press release and

press conference,

regular EB

interviews when

required

Press release

plus basic

Q&A

normal IR

contacts

additional IR

calls

Actions to disentangle and start

up second project (again scenario

1 or 2, until stable state is

reached)

Press release and

press conference,

factual EB interview

round as required

Press release

plus basic

Q&A

Press release

plus open letter

E

Press

release plus

ppt and

conference

call

Press

release plus

ppt and

conference

call

Press

release plus

letter F

Press

release plus

open letter F

or G

Own

employees

Target

employees

Own top

management

Target top

management

Authorities

(Nma?)

General

public &

flexworkers

Own Clients Target

clients

EB and MT,

MD networks

Friendly

independent

consultant(s)

secret n/a secret n/a tbd secret secret secret secret secret

secret n/a secret n/a tbd secret secret secret secret secret

Internal

communication

message plus

basic Q&A

Open letter C

or D

Internal

conference call

tbd Public

message in all

branches

Press release

plus letter

Informal letter

Internal memo

as required

open letter if

required

internal memo

if required

Feed with info

they can

dessiminate

Open letter

and

announcement

of next steps

Ad in major

papers if

required

Press release

plus letter,

individual

contact IAM

Informal letter

plus

announcment

at events

Feed with info

they can

dessiminate

Town hall

meetings

Town hall

meetings

Informal letter

plus

announcment

at events

Feed with info

they can

dessiminate

Adjust I/C

media, systems,

then business as

usual

n/a (temporized!)m

eetings with

new

colleagues

(temporized!)m

eetings with

new

colleagues

Public

messages in

all branches,

other means

Letters and

individual

contact new

IAM

secret n/a secret n/a tbd secret secret secret secret secret

secret n/a secret n/a tbd secret secret secret secret secret

Internal

communication

message plus

basic Q&A

Open letter C

or D

Internal

conference call

tbd Public

message in all

branches

Press release

plus letter

Informal letter

Internal memo

as required

open letter if

required

internal memo

if required

Ad in main

paper as

required

Feed with info

they can

dessiminate

Internal

communication

message plus

basic Q&A

Open letter G

or H

Internal

conference call

tbd Public

message in all

branches, ad

in main

papers

Press release

plus letter

Informal letter Feed with info

they can

dessiminate

generic communications materials for all

stakeholders in most scenarios already

prepared with fake names long before the

merger… even before the start of talks –

massive time savings and stress avoidance

later later

16

communication aspects/highlights

integrated Marketing & Communications- capacity- implementation- ‖stuff‖

involved from the beginning in acquisition strategy- hit the ground running- ―the leak‖

Speed, Momentum, Initiative- involvement vs. democracy

small, own team- located next to EB offices

17

communications actions and timing (2008)

Q1 2008 Q2 2008 Q3/4 2008

Preparation Integration

Internal brandingIntroduction integration communication channels:

• Big Match Bulletin

• Web casts Tex (Vedior)

• Joint intranet content

• Management Match

• Joint top management ―Elephant‖ session (GTKY)

Day-to-day communications

• Randstad@work

• E-link

• Opco magazines & intranets

• Bighug.com

• E-memo management

• Opco magazines & intranets

Personal integration communication

is leading, fed by:

• Management Match

• Regular GMMs (both sides)

• Management communications workshop

• Communication toolkits

• Big Match Kick-off event

• Big Match Breakfasts

• Chat sessions / town hall meetings

• Joint top 50 or top 100 management ―Elephant‖ session

Supported by Integration communication channels

• Big Match Bulletin

• Joint intranet content

• Big Match welcome package

• Cultural interventions GTKY process)

Day-to-day communications continued

Integration communication channels

replaced by

New communications infrastructure

• Joint intranet

• Joint e-newsletter

• Joint national magazines

Internal branding

• Joint cascade of ―GTKY‖ sessions

• Internal branding campaign

• Continued plans until end 2010

2009

2010

18

communications actions and timing (2009)

Q3/4 2008

Integration

Internal branding

Integration communication channels

replaced by

New communications infrastructure

• Joint intranet

• Joint e-newsletter

• Joint national magazines

Internal branding

• Joint cascade of ―GTKY‖ sessions

• Internal branding campaign

• Refine Continuation plans until end 2010

• Joint culture session in Madrid

• New profesionals house styledeveloped

2010 2009

Rebranding processes external and internal

• 106 rebranding projects

• 95% of company done by end 2009

• New professionals house style approved, roll out by ―trailblazer companies‖

• Adjust global PA strategy

Day-to-day communications

• Active profiling new management

• Joint history recording project

• New TV campaign-derivedinternal comms materials available

• New Opco magazines & intranets

• Startup of Randstad 50 project

Management-led intiatives

• Value reconnection program kick-off(with HR)

• Group Management Meetings in new style with heavy emphasis on cultureand behaviour

• Setup of renewed global Communications and Marketing communities, new KPIs etc

Internal branding

• Execute global all-year Randstad 50 program(successor to Randstad 45)

6/11/201018

19

external visibility in press and media:

Competitive Volume Analysis: Europe

(September 2005 – August 2006)

20

advertising campaigns… the smart way

merging 2 organizations = 2 budgets- cut all functional duplication immediately- cut campaign for the disappearing brand immediately- use free budget for extra media during transfer

use existing brand equity to leverage new brand equity- name the disappearing brand in the ads for the new brand for a while- phase out gradually as soon as possible, avoid prolonging ―two names‖

be aware of the strategic options- make the choice between boosting share or realizing synergies

a name change is an opportunity too – example:- the rebranded TT organizations gained share and margin faster than

the average of the company in the applicable countries

21

22

one common intranet live in May 2008

€ 20.56 +0.24 (+1.15%)

23

new ―mission theme‖ development…

shaping the world of work

25

8

core values

know

serve

trust

simultaneouspromotion ofall interests

striving forperfection

We are experts. We know our clients, their companies, our candidates and our business. In our business it ’s often the details which count the most.

We achieve through a spirit of excellent service, exceeding the core requirements of our industry.

We are respectful. We value our relationships, and treat people well.

We see the bigger picture. Our business must always benefit society as a whole.

We always seek to improve and innovate. We ’re here to delight our clients and candidates in everything we do, right down to the smallest detail. This gives us the edge.

6/11/201025

26

professionals,staffing and internal examples

internal lauch campaigns (example ANZ)

6/11/201026

27

28

29

video material

6/11/201029

summary of overall lessons learned

- prepare, prepare, prepare

- IF you are prepared: faster, faster, faster

- at the start, use some limited number of the bestadvisors and concepts possible

- then get the external advisors out as fast as possible

- do not allow outsiders to lead sensitive projects

- recession almost distracted us for a few months,stay the course