AI assistant
Randstad N.V. — Interim / Quarterly Report 2020
Apr 22, 2020
3880_iss_2020-04-22_8a004594-eb88-439d-8482-6e1466bc87ec.pdf
Interim / Quarterly Report
Open in viewerOpens in your device viewer
quarter results
2020.
human forward.
contents
Q1 2020: resiliency amidst Covid-19; more challenging Q2 ahead.
financial performance
performance
other information
Q1 2020: resiliency amidst Covid-19; more challenging Q2 ahead.
| Q1 2020 organic growth | ||
|---|---|---|
| -7.4% | ||
| Q1 2020 underlying EBITA | ||
| € 162m | ||
| Q1 2020 EBITA margin | ||
| 3.0% | ||
| first priority is the health and safety of our employees, candidates, and clients; seamless transition to work from home. |
revenue down 3%-4%, until mid-March; second half March down c.30% due to escalating Covid-19 impact. |
gross margin 19.4%, down 30bp YoY impacted by significant Covid-19 effects and slowing perm; EBITAmargindown100bp YoY to 3.0%. |
| strong liquidity and solvency position; 2019 dividend proposal withdrawnduetofocuson capital preservation. |
well positioned to further strengthen global market leadership; part of 'safely back to work alliance'. |
intensified country lockdown in April; aiming for a recovery ratio of 50% over time supported by cost measures and governmental schemes. |
"Given the unprecedented Covid-19 situation, Randstad's first priority is the health and safety of our employees, candidates, clients and other stakeholders," says CEO Jacques van den Broek. "I would also like to take this opportunity to thank my Randstad colleagues for their incredible commitment and dedication with which they are responding to these diicult times. Today, all our colleagues around the world are in remote daily contact with their clients and candidates, underpinning our state-of-the-art digital infrastructure."
"Trading conditions in the first quarter were initially in line with our expectations, with organic revenues per working day down by 3%-4% until the first half of March. Since then, the rapidly escalating impact of Covid-19 has driven an unprecedented deceleration in business activity. With Europe and the Americas recently following much of the Asia Pacific region into various stages of lockdown, we expect Q2 2020 to be more challenging with very limited visibility. We have instantly halted all non-essential spending, withdrawn or adjusted cash bonus schemes of senior management for 2020 in a large number of countries. Together with widespread governmental schemes, for which we are very grateful, this should drive our recovery ratio towards 50% going forward. The Executive Board will also not receive a cash bonus for 2020. Randstad has a strong liquidity and solvency position, and an experienced management team who have navigated the business through various international crises before. Randstad can rely on its 60-year track record as a company with high operational flexibility. On April 16, we launched the 'safely back to work alliance' initiated with Adecco and Manpower. We are convinced that, as an industry, we can contribute together with governments, employers, and trade unions to the safe and healthy return of people to the workplace."
financial performance.
core data
| in millions of €, unless otherwise indicated - underlying | Q1 2020 |
Q1 2019 |
yoy change |
% org. |
|---|---|---|---|---|
| Revenue | 5,414 | 5,718 | (5)% | (7)% |
| Gross profit | 1,052 | 1,128 | (7)% | (9)% |
| Operating expenses | 890 | 901 | (1)% | (2)% |
| EBITA, underlying1 | 162 | 227 | (29)% | (29)% |
| Integration costs and one-offs | (22) | (9) | ||
| EBITA | 140 | 218 | (36)% | |
| Amortization and impairment of intangible assets2 | (59) | (30) | ||
| Operating profit | 81 | 188 | ||
| Net finance (costs) / income | (15) | (7) | ||
| Share of profit of associates | 1 | 1 | ||
| Income before taxes | 67 | 182 | (63)% | |
| Taxes on income | (18) | (49) | ||
| Net income | 49 | 133 | (63)% | |
| Adj. net income for holders of ordinary shares3 | 106 | 158 | (33)% | |
| Free cash flow | (12) | (2) | (500)% | |
| Net debt | 1,437 | 1,640 | (12)% | |
| Leverage ratio (net debt/12-month EBITDA)4 | 1.1 | 1.2 | ||
| Leverage ratio (net debt/12-month EBITDA) excluding IFRS 165 | 0.7 | 0.8 | ||
| DSO (Days Sales Outstanding), moving average | 53.1 | 53.9 | ||
| Margins (in % of revenue) | ||||
| Gross margin | 19.4% | 19.7% | ||
| Operating expenses margin | 16.4% | 15.8% | ||
| EBITA margin, underlying | 3.0% | 4.0% | ||
| Share data | ||||
| Basic earnings per ordinary share (in €) | 0.26 | 0.71 | (63)% | |
| Diluted earnings per ordinary share, underlying (in €)3 | 0.58 | 0.86 | (33)% |
1 EBITA adjusted for integration costs and one-os.
2 Amortization and impairment of acquisition-related intangible assets and goodwill.
3 Before amortization and impairment of acquisition-related intangible assets and goodwill, integration costs and one-os. See table 'Earnings per share' on page 21.
4 Leverage ratio including IFRS 16.
5 Leverage ratio excluding IFRS 16, based on best estimates.
revenue
Organic revenue per working day declined by 7.4% in Q1 resulting in revenue of € 5,414 million (Q4 2019: down 2.8%). Reported revenue was down 5.3% YoY, of which working days had a positive eect of 1.2% while FX had a positive eect of 0.6%. M&A contributed 0.3%.
In North America, revenue per working day decreased 3% (Q4 2019: down 2%). Growth in the US was down 3% (Q4 2019: down 3%), while Canada was down 2% YoY (Q4 2019: up 1%). In Europe, revenue per working day declined by 10% (Q4 2019: down 4%). Revenue in France was down 9% (Q4 2019: up 1%), while the Netherlands decreased 14% (Q4 2019: down 10%). Germany declined by 16% (Q4 2019: down 15%), while sales growth in Belgium was down 8% (Q4 2019: down 3%). Italy was down 8% (Q4 2019: down 1%), and revenue in Iberia was down 4% (Q4 2019: up 1%). In the 'Rest of the world' region, revenue increased 5% (Q4 2019: up 7%); Japan increased by 5% (Q4 2019: up 7%), while Australia & New Zealand increased by 3% (Q4 2019: up 3%).
Perm fees declined by 10% (Q4 2019: down 5%), with Europe down 13% (Q4 2019: down 5%) and North America down 3% (Q4 2019: down 1%). In the 'Rest of the world' region, perm fees declined by 11% (Q4 2019: down 11%). Perm fees made up 11.2% of gross profit.
gross profit
In Q1 2020, gross profit amounted to € 1,052 million. Organic growth was down 8.9% (Q4 2019: down 1.8%). Currency eects had a positive impact on gross profit of € 8 million compared to Q1 2019.
year-on-year gross margin development (%)
Gross margin was 19.4%, 30bp below Q1 2019 (as shown in the graph above). Temporary staing had a neutral impact on gross margin (Q4 2019: up 40bp), which included significant adverse Covid-19 related eects since mid March, such as higher sickness and idle time. Permanent placements had a 10bp negative impact while HRS/other had a 20bp negative impact.
operating expenses
On an organic basis, operating expenses decreased by € 18 million sequentially to € 890 million. This reflects instant cost measures taken and the first impact of government schemes related to Covid-19, partially oset by protecting employment and selective investments in our digital initiatives. Compared to last year, operating expenses were down 2% organically (Q4 2019: up 1%), while there was a € 7 million negative FX impact.
sequential OPEX development Q4 -> Q1 in € M
Personnel expenses were down 1% sequentially. Average headcount (in FTE) amounted to 37,080 for the quarter, organically down 3% both sequentially and YoY. Productivity (measured as gross profit per FTE) was down 5% YoY. We operated a network of 4,763 outlets (Q4 2019: 4,861).
Operating expenses in Q1 2020 were adjusted for a total of € 22 million one-os. This primarily reflects restructurings in several countries and software write-os.
EBITA
Underlying EBITA decreased organically by 29% to € 162 million. Currency eects had a € 1 million positive impact YoY. EBITA margin reached 3.0%, 100bp below Q1 2019, reflecting the unprecedented business impact of Covid-19 since mid March. Overall we achieved an 8% organic recovery ratio over the last four quarters.
net finance (costs)/income
In Q1 2020, net finance costs were € 15 million, compared to € 7 million net finance costs in Q1 2019. Interest expenses on our net debt position were € 4 million (Q1 2019: € 5 million), and interest expenses related to lease liabilities were € 4 million (Q1 2019: € 6 million). Foreign currency and other eects had a negative impact of € 7 million (Q1 2019: positive impact of €4 million).
tax
The underlying eective tax rate before amortization and impairment of acquisition-related intangibles and goodwill, integration costs and one-os amounted to 26.5% (Q1 2019: 27.0%), and is based on the estimated eective tax rate for the whole year 2020. For FY 2020, we expect an eective tax rate before amortization and impairment of acquisitionrelated intangibles and goodwill, integration costs and one-os of between 25% and 27%.
net income, earnings per share
In Q1 2020, adjusted net income was down 33% to € 106 million. Reported net income was adversely impacted by an additional amortization of € 29 million, reflecting acquisition-related intangibles in respect of Monster. Diluted underlying EPS amounted to € 0.58 (Q1 2019: € 0.86). The average number of diluted ordinary shares outstanding remained almost stable compared to Q1 2019 (183.7 versus 183.6 million).
invested capital
| mar 31 2020 |
dec 31 2019 |
sep 30 2019 |
jun 30 2019 |
mar 31 2019 |
restated dec 31 2018 |
|---|---|---|---|---|---|
| 3,146 | 3,219 | 3,247 | 3,226 | 3,270 | 3,280 |
| 1,055 | 1,011 | 1,105 | 1,352 | 1,145 | 1,009 |
| 656 | 575 | 585 | 572 | 616 | 574 |
| 1,068 | 1,045 | 1,001 | 1,030 | 595 | 1,224 |
| 5,925 | 5,850 | 5,938 | 6,180 | 5,626 | 6,087 |
| 4,488 | 4,473 | 4,343 | 4,154 | 3,986 | 4,447 |
| 799 | 756 | 961 | 1,394 | 994 | 985 |
| 638 | 621 | 634 | 632 | 646 | 655 |
| 1,437 | 1,377 | 1,595 | 2,026 | 1,640 | 1,640 |
| 5,925 | 5,850 | 5,938 | 6,180 | 5,626 | 6,087 |
| 53.1 | 53.5 | 53.7 | 53.9 | 53.9 | 53.9 |
| 4.5% | 4.3% | 4.6% | 5.7% | 4.8% | 4.2% |
| 1.1 | 1.0 | 1.1 | 1.5 | 1.2 | 1.2 |
| 13.8% | 15.2% | 15.5% | 15.0% | 14.6% | 13.6% |
1 Operating working capital: Trade and other receivables minus the current part of financial assets (including net investments in subleases), deferred receipts from disposed Group companies and interest receivable minus trade and other payables excluding interest payable.
2 Net tax assets: Deferred income tax assets and income tax receivables less deferred income tax liabilities and income tax liabilities.
3 All other assets/(liabilities), mainly containing property, plant & equipment, right of use assets, software plus financial assets (including net investments in subleases) and associates, less provisions and employee benefit obligations and other liabilities. As at September 30, 2019, June 30, 2019 and March 31, 2019, dividends payable are also included for € 203 million, € 203 million and € 632 million respectively.
4 Return on invested capital: underlying EBITA (last 12 months) less income tax paid (last 12 months) as percentage of invested capital.
Return on invested capital (ROIC) amounted to 13.8%, showing a decrease of 80bp year-on-year. This is a reflection of the significant adverse impact of Covid-19 on our EBITA since mid March and the adverse timing of tax payments.
The moving average of Days Sales Outstanding (DSO) came slightly down YoY to 53.1 (Q1 2019: 53.9).
Included in 'all other assets/(liabilities)' is the total CICE subsidy receivable amounting to € 389 million, including a current part of € 116 million.
At the end of Q1 2020, net debt including lease liabilities was € 1,437 million, compared to € 1,377 million at the end of Q4 2019. A further analysis of the cash flow is provided in the next section.
cash flow summary
| in millions of € | Q1 2020 | Q1 2019 | change |
|---|---|---|---|
| EBITA | 140 | 218 | (36)% |
| Depreciation, amortization and impairment of property, plant, equipment, right-of-use assets, and software |
88 | 69 | |
| EBITDA | 228 | 287 | (21)% |
| Operating working capital | (62) | (125) | |
| Provisions and employee benefit obligations | (7) | (5) | |
| All other items | 6 | 13 | |
| Income taxes | (94) | (88) | |
| Net cash flow from operating activities | 71 | 82 | (13)% |
| Net capital expenditures | (26) | (28) | |
| Repayments of lease liabilities | (57) | (56) | |
| Free cash flow | (12) | (2) | (500)% |
| Net (acquisitions)/disposals | (9) | - | |
| Net purchase of own ordinary shares | (10) | - | |
| Net finance costs | (4) | (2) | |
| Translation and other effects | (25) | 4 | |
| Net increase of net debt | (60) | - |
In the quarter, free cash flow amounted to negative € 12 million, broadly stable versus Q1 2019 (negative € 2 million). The adverse impact of Covid-19 on our EBITA was largely oset by favorable working capital movements, both year-onyear. The latter underpins the countercyclical dynamics of our working capital.
Income taxes paid were higher year-on-year, primarily reflecting the timing of payments, which is expected to reverse in Q2 2020.
performance.
performance by geography
split by geography
North America Belgium & Luxembourg Rest of the world Netherlands Italy Global Businesses France Iberia Germany Other European countries
| revenue in millions of € | Q1 2020 | Q1 2019 | organic ∆%1 |
|---|---|---|---|
| North America | 1,099 | 1,042 | (3)% |
| France | 812 | 879 | (9)% |
| Netherlands | 721 | 830 | (14)% |
| Germany | 418 | 533 | (16)% |
| Belgium & Luxembourg | 357 | 384 | (8)% |
| Italy | 357 | 389 | (8)% |
| Iberia | 339 | 352 | (4)% |
| Other European countries | 514 | 538 | (6)% |
| Rest of the world | 528 | 488 | 5% |
| Global businesses | 269 | 283 | (10)% |
| Revenue | 5,414 | 5,718 | (7)% |
1 Organic change is measured excluding the impact of currencies, acquisitions, disposals, and reclassifications. Forrevenue, the organic change has been adjusted forthe number of working days.
| EBITA in millions of €, underlying | Q1 2020 | EBITA margin1 | Q1 2019 | EBITA margin1 | organic ∆%2 |
|---|---|---|---|---|---|
| North America | 46 | 4.1% | 49 | 4.7% | (10)% |
| France | 30 | 3.7% | 46 | 5.3% | (35)% |
| Netherlands | 36 | 5.0% | 43 | 5.2% | (17)% |
| Germany | 2 | 0.6% | 13 | 2.5% | (82)% |
| Belgium & Luxembourg | 16 | 4.5% | 23 | 6.0% | (30)% |
| Italy | 12 | 3.3% | 23 | 6.0% | (49)% |
| Iberia | 15 | 4.4% | 18 | 5.0% | (15)% |
| Other European countries | 7 | 1.3% | 15 | 2.7% | (54)% |
| Rest of the world | 20 | 3.8% | 21 | 4.2% | (3)% |
| Global businesses | (4) | (1.4)% | (5) | (1.8)% | (27)% |
| Corporate | (18) | (19) | |||
| EBITA before integration costs and one-offs3 | 162 | 3.0% | 227 | 4.0% | (29)% |
| Integration costs and one-offs | (22) | (9) | |||
| EBITA | 140 | 218 |
1 EBITA in % of total revenue per segment.
2 Organic change is measured excluding the impact of currencies, acquisitions, disposals, and reclassifications. Forrevenue, the organic change has been adjusted forthe number of working days.
3 Operating profit before amortization and impairment of acquisition-related intangible assets and goodwill, integration costs and one-os.
north america
In North America, revenue growth was down 3% (Q4 2019: down 2%). Perm fees were down 3% (Q4 2019: down 1%). In Q1 2020, revenue of our combined US businesses was down 3% (Q4 2019: down 3%). US Staing/Inhouse Services declined by 4% (Q4 2019: down 5%). US Professionals revenue was down 2% (Q4 2019: up 1%). In Canada, revenue was down 2% (Q4 2019: up 1%). EBITA margin for the region came in at 4.1%, compared to 4.7% last year.
france
In France, revenue was down 9% (Q4 2019: up 1%). Perm fees were down 10% compared to last year (Q4 2019: up 4%). Staing/Inhouse Services revenue declined 13% (Q4 2019: down 2%), while our Professionals business was up 3% (Q4 2019: up 10%). EBITA margin was 3.7% compared to 5.3% last year.
netherlands
In the Netherlands, revenue was down 14% YoY (Q4 2019: down 10%). Overall perm fees were down 23% (Q4 2019: down 5%). Our combined Staing and Inhouse Services business was down 17% (Q4 2019: down 11%), while our Professionals business was down 2% (Q4 2019: up 1%). EBITA margin in the Netherlands was 5.0%, compared to 5.2% last year, supported by tight cost control.
germany
In Germany, revenue per working day was down 16% YoY (Q4 2019: down 15%). Perm fees were down 14% compared to last year (Q4 2019: down 34%). Our combined Staing/Inhouse Services business was down 19% (Q4 2019: down 16%), while Professionals was down 7% (Q4 2019: down 12%). EBITA margin in Germany was 0.6%, compared to 2.5% last year.
belgium & luxembourg
In Belgium & Luxembourg, revenue was down 8% (Q4 2019: down 3%). Perm fees were down 18% compared to last year (Q4 2019: stable). Our Staing/Inhouse Services business was down 9% (Q4 2019: down 5%). Our EBITA margin was 4.5%, compared to 6.0% last year.
italy
Revenue per working day in Italy was down 8% compared to the prior year (Q4 2019: down 1%). Overall perm fees were down 10% (Q4 2019: up 20%). EBITA margin was 3.3%, compared to 6.0% last year.
iberia
In Iberia, revenue per working day was down 4% YoY (Q4 2019: up 1%). Perm fees were down 17% compared to last year (Q4 2019: down 5%). Staing/Inhouse Services combined was down 4% (Q4 2019: up 1%). Spain was down 3% (Q4 2019: up 4%), while in Portugal revenue was down 9% (Q4 2019: down 6%). Overall EBITA margin was 4.4%, compared to 5.0% last year.
other european countries
Across 'Other European countries', revenue per working day was down 6% (Q4 2019: down 1%). In the UK, revenue was down 8% (Q4 2019: down 2%), while in the Nordics, revenue was down 8% on an organic basis (Q4 2019: down 7%). Revenue in our Swiss business was down 2% YoY (Q4 2019: down 1%). Overall EBITA margin for the 'Other European countries' region was 1.3% compared to 2.7% last year.
rest of the world
Overall revenue in the 'Rest of the world' region1 grew by 5% organically (Q4 2019: up 7%). In Japan, revenue grew 5% (Q4 2019: up 7%). Revenue in Australia/New Zealand was up 3% (Q4 2019: up 3%), while revenue in China declined by 10% YoY (Q4 2019: up 24%). Our business in India was up 16% (Q4 2019: up 13%), while in Latin America revenue grew 9% (Q4 2019: up 10%), primarily driven by Brazil and Mexico. Overall EBITA margin in this region was 3.8%, compared to 4.2% last year.
global businesses
Overall organic revenue growth per working day was down 10% (Q4 2019: down 4%). Randstad Sourceright revenue decreased by 5% (Q4 2019: down 1%), while Monster revenue was down by 20% (Q4 2019: down 16%). Overall EBITA margin came in at -1.4% compared to -1.8% last year, reflecting tight cost control.
performance by revenue category
| revenue in millions of € | Q1 2020 | Q1 2019 | organic ∆%1 |
|---|---|---|---|
| Staffing | 2,627 | 2,897 | (10)% |
| Inhouse Services | 1,236 | 1,288 | (9)% |
| Professionals | 1,282 | 1,250 | (1)% |
| Global Businesses | 269 | 283 | (10)% |
| Revenue | 5,414 | 5,718 | (7)% |
1 Organic change is measured excluding the impact of currencies, acquisitions, disposals, and reclassifications. Forrevenue, the organic change has been adjusted forthe number of working days.
Total revenue of permanent placements in the revenue categories 'Staing', 'Inhouse', and 'Professionals', amounted to € 119 million (Q1 2019: € 131 million).
other information.
outlook
Revenue decreased by around 30% in the second half of March 2020. In the first weeks of April, Covid-19 related lockdowns have intensified in most of our geographies.
We are aiming for a recovery ratio of 50% over time.
There will be no working day impact in Q2 2020.
other items
This year's Annual General Meeting of shareholders, initially scheduled for 24 March 2020, will now be held on 18 June 2020. The notice and agenda for the meeting will be published on 7 May 2020.
As previously announced, François Béharel, who was appointed to the Executive Board in January 2013, will not be nominated for reappointment for a third consecutive term. Since his second term formally expired on 31 March 2020, he is no longer a member of the Executive Board as of 1 April. We thank him for his contribution as a member of the Executive Board.
working days
| Q1 | Q2 | Q3 | Q4 | |
|---|---|---|---|---|
| 2020 | 63.6 | 61.8 | 65.2 | 63.9 |
| 2019 | 62.7 | 61.8 | 65.0 | 63.2 |
| 2018 | 63.5 | 62.1 | 64.1 | 63.4 |
financial calendar
| Annual General Meeting of Shareholders | June 18, 2020 |
|---|---|
| Publication of second quarter results 2020 | July 21, 2020 |
| Publication of third quarter results 2020 | October 21, 2020 |
| Publication of fourth quarter and annual results 2020 | February 9, 2021 |
analyst and press conference call
Today (April 22, 2020), at 09.00 AM CEST, Randstad N.V. will be hosting an analyst conference call. The dial-in numbers are:
-
International: +44 20 3003 2666
-
Netherlands: +31 20 794 8426
To gain access to the conference please tap or state the password 'Randstad'
You can listen to the call through a real-time audio webcast. You can access the webcast and presentation at https:// www.randstad.com/results-and-reports/quarterly-results. A replay of the presentation and the Q&A will be available on our website by the end of the day.
Watch also our CEO's video on this quarter's news.
For more information please contact:
David Tailleur - Director Investor Relations [email protected] or (mobile) +31 (0)6 1246 2133
Steven Vriesendorp - Investor Relations Officer [email protected] or (mobile) +31 (0)6 2692 8529
Karl Hanuska - Media Relations Manager a.i. [email protected] or (mobile) +31 (0)6 1322 5136
disclaimer
Certain statements in this document concern prognoses about the future financial condition, risks, investment plans, and the results of operations of Randstad N.V. 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 diering 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 personnel (including flexible personnel), achievement of cost savings, changes in the business mix, changes in legislation (particularly in relation to employment, staing 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. The quarterly results as presented in this press release are unaudited.
randstad profile
Randstad is the global leader in the HR services industry. We support people and organizations in realizing their true potential by combining the power of today's technology with our passion for people. We call it Human Forward. In 2019, we helped more than two million candidates find a meaningful job with our 280,000 clients. Furthermore, we trained more than 350,000 people. Randstad is active in 38 markets around the world and has top 3 positions in almost half of these. In 2019, Randstad had on average 38,280 corporate employees and generated revenue of € 23.7 billion. Randstad was founded in 1960 and is headquartered in Diemen, the Netherlands. Randstad N.V. is listed on the NYSE Euronext (symbol: RAND.AS). For more information, see https://www.randstad.com/.
interim
financial
statements Q1 2020.
actuals
consolidated income statement
| in millions of €, unless otherwise indicated | Q1 2020 | Q1 2019 |
|---|---|---|
| Revenue | 5,414 | 5,718 |
| Cost of services | 4,365 | 4,590 |
| Gross profit | 1,049 | 1,128 |
| Selling expenses | 606 | 623 |
| General and administrative expenses | 303 | 287 |
| Operating expenses | 909 | 910 |
| Amortization and impairment of acquisition-related intangible assets and goodwill | 59 | 30 |
| Total operating expenses | 968 | 940 |
| Operating profit | 81 | 188 |
| Net finance costs | (15) | (7) |
| Share of profit of associates | 1 | 1 |
| Income before taxes | 67 | 182 |
| Taxes on income | (18) | (49) |
| Net income | 49 | 133 |
| Net income attributable to: | ||
| Holders of ordinary shares Randstad N.V. | 47 | 130 |
| Holders of preference shares Randstad N.V. | 2 | 3 |
| Equity holders | 49 | 133 |
| Earnings per share attributable to the holders of ordinary shares of Randstad N.V. (in € per share): | ||
| Basic earnings per share | 0.26 | 0.71 |
| Diluted earnings per share | 0.26 | 0.71 |
| Diluted earnings per share before amortization and impairment of acquisition-related intangible assets and goodwill, integration costs and one-offs |
0.58 | 0.86 |
information by geographical area and revenue category
revenue by geographical area
| in millions of € | Q1 2020 | Q1 2019 |
|---|---|---|
| North America | 1,099 | 1,042 |
| France | 812 | 879 |
| Netherlands | 722 | 831 |
| Germany | 418 | 533 |
| Belgium & Luxembourg | 359 | 385 |
| Italy | 357 | 389 |
| Iberia | 339 | 352 |
| Other European countries | 516 | 540 |
| Rest of the world | 528 | 489 |
| Global Businesses | 271 | 285 |
| Elimination of intersegment revenue | (7) | (7) |
| Revenue | 5,414 | 5,718 |
EBITA by geographical area
| Q1 2020 | Q1 2019 |
|---|---|
| 38 | 49 |
| 27 | 45 |
| 36 | 43 |
| 2 | 13 |
| 16 | 23 |
| 12 | 23 |
| 15 | 18 |
| 4 | 15 |
| 19 | 21 |
| (5) | (13) |
| (24) | (19) |
| 140 | 218 |
1 Operating profit before amortization and impairment of acquisition-related intangible assets and goodwill
revenue by revenue category
| in millions of € | Q1 2020 | Q1 2019 |
|---|---|---|
| Staffing | 2,632 | 2,902 |
| Inhouse | 1,236 | 1,288 |
| Professionals | 1,282 | 1,250 |
| Global businesses | 271 | 285 |
| Elimination of intersegment revenue | (7) | (7) |
| Revenue | 5,414 | 5,718 |
consolidated balance sheet
| in millions of € | march 31, 2020 | december 31, 2019 | march 31, 2019 |
|---|---|---|---|
| assets | |||
| Property, plant and equipment | 152 | 157 | 157 |
| Right-of-use assets | 551 | 531 | 556 |
| Intangible assets | 3,266 | 3,347 | 3,381 |
| Deferred income tax assets | 598 | 579 | 595 |
| Financial assets and associates | 478 | 478 | 579 |
| Non-current assets | 5,045 | 5,092 | 5,268 |
| Trade and other receivables | 4,515 | 4,711 | 4,925 |
| Income tax receivables | 200 | 130 | 170 |
| Cash and cash equivalents | 587 | 225 | 263 |
| Current assets | 5,302 | 5,066 | 5,358 |
| Total assets | 10,347 | 10,158 | 10,626 |
| equity and liabilities | |||
| Issued capital | 26 | 26 | 26 |
| Share premium | 2,287 | 2,287 | 2,286 |
| Reserves | 2,174 | 2,159 | 1,673 |
| Shareholders' equity | 4,487 | 4,472 | 3,985 |
| Non-controlling interests | 1 | 1 | 1 |
| Total equity | 4,488 | 4,473 | 3,986 |
| Borrowings (including lease liabilities) | 977 | 417 | 943 |
| Deferred income tax liabilities | 35 | 38 | 42 |
| Provisions and employee benefit obligations | 228 | 226 | 180 |
| Other liabilities | 9 | 10 | 7 |
| Non-current liabilities | 1,249 | 691 | 1,172 |
| Borrowings (including lease liabilities) | 1,047 | 1,185 | 960 |
| Trade and other payables | 3,339 | 3,580 | 3,671 |
| Dividends | - | - | 632 |
| Income tax liabilities | 107 | 96 | 107 |
| Provisions and employee benefit obligations | 111 | 119 | 96 |
| Other liabilities | 6 | 14 | 2 |
| Current liabilities | 4,610 | 4,994 | 5,468 |
| Total liabilities | 5,859 | 5,685 | 6,640 |
| Total equity and liabilities | 10,347 | 10,158 | 10,626 |
consolidated statement of cash flows
| in millions of € | Q1 2020 | Q1 2019 |
|---|---|---|
| Operating profit | 81 | 188 |
| Amortization and impairment of acquisition-related intangible assets and goodwill | 59 | 30 |
| EBITA | 140 | 218 |
| Depreciation, amortization and impairment of property, plant, equipment, right-of-use assets, and software | 88 | 69 |
| EBITDA | 228 | 287 |
| Provisions and employee benefit obligations | (7) | (5) |
| Share-based compensations | 8 | 10 |
| Other items | (2) | 3 |
| Cash flow from operations before operating working capital and income taxes | 227 | 295 |
| Operating working capital assets | 162 | (22) |
| Operating working capital liabilities | (224) | (103) |
| Operating working capital | (62) | (125) |
| Income taxes | (94) | (88) |
| Net cash flow from operating activities | 71 | 82 |
| Net additions in property, plant and equipment, and software | (26) | (28) |
| Acquisition of subsidiaries, associates and equity investments | (9) | (2) |
| Disposal of subsidiaries/activities and equity investments | - | 2 |
| Net cash flow from investing activities | (35) | (28) |
| Net purchase of own ordinary shares | (10) | - |
| Net drawings on non-current borrowings | 550 | - |
| Net decrease of current borrowings | (149) | (8) |
| Repayments of lease liabilities | (57) | (56) |
| Net financing | 334 | (64) |
| Net finance costs paid | (4) | (2) |
| Net reimbursement to financiers | (4) | (2) |
| Net cash flow from financing activities | 330 | (66) |
| Net increase/(net decrease) in cash, and cash equivalents | 366 | (12) |
| Cash, and cash equivalents at beginning of period | 225 | 273 |
| Net movement | 366 | (12) |
| Translation and currency (losses)/gains | (4) | 2 |
| Cash, and cash equivalents at end of period | 587 | 263 |
| Free cash flow | (12) | (2) |
consolidated statement of changes in total equity and consolidated statement of total comprehensive income
| january 1 - march 31 | ||
|---|---|---|
| in millions of € | 2020 | 2019 |
| Begin of period | ||
| Shareholders' equity | 4,472 | 4,446 |
| Non-controlling interests1 | 1 | 1 |
| Total equity | 4,473 | 4,447 |
| Net income for the period | 49 | 133 |
| Items that subsequently may be reclassified to the income statement | (31) | 30 |
| Items that will never be reclassified to the income statement | (1) | 1 |
| Total other comprehensive income, net of taxes | (32) | 31 |
| Total comprehensive income | 17 | 164 |
| Other changes in period | ||
| Dividend payable on ordinary shares | - | (619) |
| Dividend payable on preference shares | - | (13) |
| Share-based compensations | 8 | 10 |
| Tax on share-based compensations | - | (3) |
| Net purchase of ordinary shares | (10) | - |
| Total other changes in period | (2) | (625) |
| End of period | 4,488 | 3,986 |
| Shareholder's equity | 4,487 | 3,985 |
| Non-controlling interests1 | 1 | 1 |
| Total equity | 4,488 | 3,986 |
1 Changes in 'Non-controlling interests', expressed in millions of euro, are negligible for all periods involved.
notes to the consolidated interim financial statements
reporting entity
Randstad N.V. is a public limited liability company incorporated and domiciled in the Netherlands and listed on Euronext Amsterdam.
The consolidated interim financial statements of Randstad N.V. as at and for the three month period ended March 31, 2020 include the company and its subsidiaries (together called 'the Group').
significant accounting policies
These consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards and its interpretations issued by the International Accounting Standards Board (IASB), as adopted by the European Union (hereinafter: IFRS).
The accounting policies applied by the Group in these consolidated interim financial statements are unchanged from those applied by the Group in its consolidated financial statements as at and for the year ended December 31, 2019.
basis of presentation
These consolidated interim financial statements have been condensed and prepared in accordance with (IFRS) IAS 34 'Interim Financial Reporting'; they do not include all the information required for full (i.e., annual) financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended December 31, 2019.
The consolidated financial statements of the Group as at and for the year ended December 31, 2019 are available upon request at the Company's oice or on www.randstad.com.
estimates
The preparation of consolidated interim financial statements requires the Group to make certain judgments, estimates, and assumptions that aect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may dier from these estimates.
In preparing these consolidated interim financial statements, the significant judgments, estimates, and assumptions are the same as those applied to the consolidated financial statements as at and for the year ended December 31, 2019.
We have performed an assessment of the impact of the current health and related economic crisis on the valuation of certain assets in our balance sheet such as goodwill, intangible assets, deferred tax assets, and various financial assets. Based on our limited visibility on the structural impact of the current situation on our results going forward, we have concluded that these assets are not impaired as of March 31, 2020.
seasonality
The Group's activities are aected by seasonal patterns. The volume of transactions throughout the year fluctuates per quarter, depending on demand as well as on variations in items such as the number of working days, public holidays and holiday periods. The Group usually generates its strongest revenue and profits in the second half of the year, while the cash flow in the second quarteris usually negative due to the timing of payments of dividend and holiday allowances; cash flow tends to be strongest in the second half of the year.
effective tax rate
The eective tax rate for the three month period ended March 31, 2020 is 26.0% (Q1 2019: 26.8%), and is based on the estimated tax rate for the whole year 2020 (actual FY 2019: 26.0%).
acquisition and disposal of group companies, equity investments and associates
In Q1 2020 we had a cash outflow of € 9 million (Q1 2019: € 2 million), of which € 8 million related to payments in respect of acquisitions in prior years and € 1 million to equity investments.
In Q1 2020 we had no disposal of Group companies (Q1 2019: € 2 million cash-in).
shareholders' equity
| Issued number of ordinary shares | 2020 | 2019 |
|---|---|---|
| January 1 | 183,303,552 | 183,301,821 |
| Share-based compensations | - | 1,731 |
| March 31 | 183,303,552 | 183,303,552 |
As at March 31, 2020 the Group held 25,402 treasury shares (March 31, 2019: 21,834), compared to 361,775 as at December 31, 2019. The average number of (diluted) ordinary shares outstanding has been adjusted for these treasury shares.
As at March 31, 2020, December 31, 2019, and March 31, 2019 the number of issued preference shares was 25,200,000 (type B) and 50,130,352 (type C).
earnings per share
| in millions of €, unless otherwise indicated | Q1 2020 | Q1 2019 |
|---|---|---|
| Net income | 49 | 133 |
| Net income attributable to holders of preference shares | (2) | (3) |
| Net income attributable to holders of ordinary shares | 47 | 130 |
| Amortization of intangible assets1 | 59 | 30 |
| Integration costs, one-offs and impairments | 22 | 9 |
| Tax effect on amortization, integration costs, and one-offs | (22) | (11) |
| Adjusted net income for holders of ordinary shares | 106 | 158 |
| Average number of ordinary shares outstanding | 183.1 | 183.2 |
| Average number of diluted ordinary shares outstanding | 183.7 | 183.6 |
| Earnings per share attributable to the holders of ordinary shares of Randstad N.V. (in € per share): | ||
| Basic earnings per share | 0.26 | 0.71 |
| Diluted earnings per share | 0.26 | 0.71 |
| Diluted earnings per share before amortization and impairment of acquisition-related intangible assets and goodwill, integration costs, and one-offs2 |
0.58 | 0.86 |
1 Amortization and impairment of acquisition-related intangible assets and goodwill.
2 Diluted EPS underlying
net debt position
Net debt including lease liabilities at March 31, 2020 amounted to € 1,437 million, and was € 60 million higher compared to December 31, 2019 (€ 1,377 million). The net debt position excluding lease liabilities as at March 31, 2020 (€ 799 million) was € 43 million higher compared to the net debt position as at December 31, 2019 (€ 756 million).
Included in 'borrowings under current liabilities' is the current part of non-current borrowings in the amount of € 512 million as at March 31, 2020.
breakdown of operating expenses
| in millions of € | Q1 2020 | Q1 2019 |
|---|---|---|
| Personnel expenses | 657 | 677 |
| Other operating expenses | 252 | 233 |
| Operating expenses | 909 | 910 |
depreciation, amortization, impairment of property, plant, equipment, right-of-use assets and software
| in millions of € | Q1 2020 | Q1 2019 |
|---|---|---|
| Depreciation and impairment of property, plant and equipment | 13 | 13 |
| Amortization and impairment of software | 25 | 8 |
| Depreciation and amortization of software | 38 | 21 |
| Depreciation and impairment of right-of-use assets | 50 | 48 |
| Total | 88 | 69 |
During the quarter software write-os were recorded to an amount of € 13 million.
net additions to property, plant, equipment and software, statement of cash flows
| in millions of € | Q1 2020 | Q1 2019 |
|---|---|---|
| Additions | ||
| Property, plant and equipment | (11) | (13) |
| Software | (16) | (17) |
| (27) | (30) | |
| Disposals | ||
| Procreeds property, plant and equipment | 1 | 2 |
| (Profit)/Loss | - | - |
| 1 | 2 | |
| Statement of cash flows | (26) | (28) |
french competitive employment act ('CICE')
Included in the consolidated balance sheet under 'financial assets and associates' is an amount of € 273 million (December 31, 2019: € 273 million) relating to the non-current part of a receivable arising from tax credits under the French Competitive Employment Act ('CICE'). An amount of € 116 million (December 31, 2019: € 116 million) is included in 'Trade and other receivables' representing the current part of the CICE receivable.
total comprehensive income
Apart from net income for the period, total comprehensive income comprises translation dierences and related tax eects that subsequently may be reclassified to the income statement in a future reporting period, and fair value adjustments of equity investments and related tax eects, that will never be reclassified to the income statement.
amortization of acquisition-related intangible assets
The amortization of acquisition-related intangibles in respect of Monster was accelerated during this quarter resulting in additional amortization of € 29 million.
related-party transactions
There are no material changes in the nature, scope, and (relative) scale in this reporting period compared to last year. More information is included in notes 28, 29 and 30 to the consolidated financial statements as at and for the year ended December 31, 2019.
commitments
There are no material changes in the nature and scope of commitments compared to December 31, 2019.
events after balance sheet date
Subsequentto the date ofthe balance sheet, no events materialto the Group as a whole occurred thatrequire disclosure in this note.
change in presentation of consolidated statement of cash flows in 2019
In 2019 we have changed the presentation of the consolidated statement of cash flows, for the year 2019, as disclosed in note 27 to the consolidated financial statements 2019. This change in presentation also has its eects on the quarterly cash flow statements of the year 2019. For Q1, 2019 the financing cash flows have been restated by an amount of € (8) million. The table below discloses the details.
change in presentation of Q1 2019 consolidated statement of cash flows
| presentation | restated | ||
|---|---|---|---|
| in millions of € | reported Q1, 2019 | change | Q1, 2019 |
| Net cash flow from operating activities | 82 | - | 82 |
| Net cash flow from investing activities | (28) | - | (28) |
| Net cash flow from financing activities | (58) | - (8) |
- (66) |
| Net movement | (4) | (8) | (12) |
| "Cash for cash flow statement", at beginning of year | (491) | 764 | 273 |
| Net movement | (4) | (8) | (12) |
| Translation and currency losses | 2 | - | 2 |
| (2) | (8) | (10) | |
| "Cash for cash flow statement", at end of period | (493) | 756 | 263 |
| Free cash flow | (2) | - | (2) |