Netherlands 37
France 37 Germany 38
Belgium & Luxembourg 39
United Kingdom 39
Iberia 40
Other European countries 40
North America 41
Rest of the world 42
Netherlands
in millions of € 2011 2010 Organic ∆%
Revenue 2,940.1 2,826.7 4
EBITA 180.7 180.7 0
EBITA margin 6.1% 6.4%
We remain the clear market leader in our home territory, where we provide clients with a full range of service concepts through Randstad, Tempo-Team and Yacht. Although the traditionally late-cyclical Dutch HR services market had a promising start in 2011, continued slow demand in the public sector and gradually slowing growth in the industrial sector towards the end of the year constrained market growth for the full year.
Randstad Netherlands outperformed the market in 2011.
Randstad Professionals showed strong growth, and inhouse, payroll services, and the technical segment all performed well. While the industrial segment showed strong growth in the first half of the year, this trend gradually slowed in the second half, partly due to a more challenging comparison base. Growth in the administrative segment remained relatively low, partly affected by lower demand in the public sector. Customer satisfaction continued to grow, and we introduced a number of new initiatives, including Randstad Student, Banenbedrijf, and Randstad Direct. Our ‘Randstad 50’ advertising campaign was well received, receiving a number of domestic awards.
Tempo-Team maintained its number two position in the Netherlands. Market share slipped slightly, which was in part due to our relatively high exposure to the public sector, which reduced its spending. Additionally, revenue came under pressure in the large account segment. Steering on productivity and cost control was further improved, and special attention was given to the utilization and productivity of the market units, which resulted in good progress in the SME segment. As in 2010, Tempo-Team Professionals remained impacted by lower demand in the public sector, but good traction was made in the finance and IT segments,
especially in the second half. By the end of the year, adjustments to the organization were implemented, mainly in management and head office staff.
Growth and profitability at Yacht, which operates in the professionals and interim management segment, were significantly impacted by lower demand in healthcare and the public sector. The exposure to the Dutch public sector decreased from 28% in Q4 2010 to 22% in Q4 2011, following a decline of 21% in revenue from the public sector. The negative impact from the public sector stabilized in the second half of the year. In Q4, Yacht grew by 10% in the private sector, mainly driven by strong demand for technology and IT professionals. Over the year we focussed on strengthening our organization and sales focus by reinforcing the field steering model.
Primarily because of the low contribution from the Dutch professionals businesses, the Dutch EBITA margin reached 6.1% compared to 6.4% in 2010.
France
in millions of € 2011 2010 Organic ∆%
Revenue 3,377.7 3,067.3 12
EBITA 104.3 90.0 19
EBITA margin 3.1% 2.9%
Randstad is the third-largest HR service provider in France, with leading positions in the inhouse, medical and perm segments. Following double-digit growth in 2010, the market continued to perform strongly in 2011, with all sectors returning to growth. Despite the gradual slowdown towards the end of the year, our French business grew by 12%, ahead of the market. In addition to the success of our inhouse concept, we also benefited from our unique specialties concept, established in 2009.
The industrial sector, and in particular the automotive segment, saw strong demand for temporary workers.
The construction sector, which accounts for around a quarter
Development in the main geographic markets, 2011
in millions of €
Average Average
Revenue Organic Market staffing employees corporate employees 2011 2010 growth % growth % ∆% 2011 2010 2011 2010
Netherlands 2,940.1 2,826.7 4 5 (1) 88,300 86,400 5,180 5,250 France 3,377.7 3,067.3 12 9 3 92,700 86,700 3,950 3,900 Germany 1,959.7 1,728.6 13 13 0 56,000 51,800 2,970 2,620 Belgium & Luxembourg 1,412.8 1,327.8 6 9 (3) 46,500 44,900 2,120 2,090 United Kingdom 788.6 802.3 0 3 (3) 24,000 23,400 1,950 2,040 Iberia 872.5 861.0 1 2 (1) 49,700 50,800 1,470 1,460 Other European countries 930.2 761.4 18 n.a. n.a. 39,200 33,600 1,800 1,560 North America 2,513.8 1,848.2 13 12 1 73,900 54,100 4,210 2,880 Rest of world 1,429.5 956.0 8 n.a. n.a. 106,500 89,600 4,880 3,730
annual report 2011 – Randstad Holding nv
of the market, saw growth of only 6%, due to a sluggish property market, pressure on public finances, and the fact that the year preceding national elections has historically been unfavorable for launching major new building projects.
Our combined professionals business grew by 7%. Healthcare and engineering led the way, while IT and finance slowed towards the end of the year. Permanent placements continued to grow solidly in 2011, despite a slow fourth quarter.
Our inhouse business was very successful in 2011, growing by 55%. We continued to transfer large clients from staffing to inhouse, enabling us to accelerate growth at these clients.
We had 104 inhouse locations up and running by year-end.
The transfer to inhouse also enabled our branches to focus on specialties and the SME segment.
At the end of 2010, the French government changed the calculation method for subsidies on low wage labor. Initially, this change had a significant negative impact on our French gross margin. In order to compensate for this, we successfully increased our prices and, as a result, the impact was around 0.4%. We reinforced our focus on client profitability.
Although this did not have an effect in 2011, it may impact growth and profitability in 2012.
Despite the negative impact from the subsidies and the relatively strong growth in inhouse, the French EBITA margin increased to 3.1%, which reflects strong operating leverage.
Germany
in millions of € 2011 2010 Organic ∆%
Revenue 1,959.7 1,728.6 13
EBITA 130.5 106.5 23
EBITA margin 6.7% 6.2%
Randstad is the market leader in Germany. In staffing and inhouse we operate as Randstad and Tempo-Team. Yacht Teccon and GULP are active in the professionals segment.
Randstad continued to grow solidly during the year, led by strong demand from the industrial and automotive sectors.
Randstad Managed Services was established to address increasing demand from our clients to manage their workforce. Tempo-Team benefited from its growth accelerator plan, started in 2010. Against a strong comparison base, the volume trend gradually slowed throughout 2011, and ended below the level of 2010 by the end of the year. Nevertheless, growth of our combined staffing and inhouse businesses reached 14%. In 2011, the collective labor agreement for our sector was revised twice, resulting in wage increases for our candidates.
The impact was successfully reflected in price increases.
The German government also agreed upon a minimum wage level for temporary agency work, which will support the image of our sector in Germany.
Yacht Teccon, which provides high-end solutions in the engineering and IT services segments, showed double-digit growth in these segments.
By the end of 2011, we had divested the aerospace business of Yacht Teccon as this business was no longer part of our core expertise offering. Our IT freelancer business GULP grew by 34%, and is now the most important source of IT project candidates among external specialists in Germany, and is the leading internet-based project brokerage.
Strong operating leverage was maintained and the German EBITA margin improved to 6.7%.
Main market positions, 2011
in billions in local currency
Regions Market Market Market
size 1 share in % position
Netherlands 13.1 22 1
France 19.4 17 3
Germany 19.8 10 1
Belgium & Luxembourg 5.0 28 1 United Kingdom 18.8 4 5 Spain (staffing only) 2.6 14 1 United States 113.5 2 3
1 Based on country data, 2010 figures, and estimated growth rates.