Randstad N.V. (RANJF) Q4 2022 Earnings Call Transcript

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Randstad N.V. (OTCPK:RANJF) Q4 2022 Earnings Conference Call February 14, 2023 3:00 AM ET

Company Participants

Sander van 't Noordende - CEO

Henry Schirmer - CFO

Conference Call Participants

Suhasini Varanasi - Goldman Sachs

Sylvia Barker - JPMorgan

Marc Zwartsenburg - ING

Anvesh Agrawal - Morgan Stanley

Andy Grobler - BNP Paribas

Paul Sullivan - Barclays

Konrad Zomer - ABN AMRO-ODDO

Hans Pluijgers - Kepler Cheuvreux


Good day, and invited to Randstad Fourth Quarter and Annual Results 2022. Please statement this telephone is being recorded.

I will now manus complete to Sander van 't Noordende, CEO. Please spell ahead.

Sander van 't Noordende

Thank you very much, Marian, for that introduction. Good morning, everybody and Happy Valentine's Day. I'm present pinch Henry, and Bisera, and Akshay from Investor Relations. And I'm pleased to stock our Q4 and afloat twelvemonth results pinch you.

Overall, Randstad delivered an outstanding capacity successful 2022. Our business is much diversified coming than ever and we're really seeing nan benefits of a higher proportionality of Professionals, perm, and RPO successful our operation compared to historical levels. Our capacity successful nan afloat twelvemonth was underpinned by coagulated levels of request from clients and talent scarcity. The improvements we delivered successful profitability and separator are grounds of our patient attraction connected costs management, value-based pricing, and business mix.

The economical situation softened crossed our markets successful nan 4th fourth which translated into little hiring activities from our clients. Having said that, we person delivered a bully group of results successful nan 4th fourth pinch coagulated maturation and beardown profitability. Revenue maturation for nan 4th was 2.4%. Our Inhouse business grew by 6%, Professionals by 7%, and RPO by 17%. Gross profit grew by 3% and we delivered a beardown gross separator of 20.8% successful nan quarter. This was driven by pricing subject arsenic good arsenic nan changing business operation pinch astir 19% of gross profit generated by perm and RPO combined.

EBITA came successful astatine EUR364 cardinal for nan 4th pinch a beardown EBITA separator of 5.2%. The slowdown we knowledgeable successful customer activities successful nan 4th quarter continued into 2023. Our January integrated gross was modestly down year-over-year. Looking up to Q1, we stay vigilant astir nan macroeconomic business successful our markets. However, I'm assured that our heavy knowing of talent and clients, together pinch our marketplace insights and our operational agility and elasticity position america very good to navigate nan existent macroeconomic environment.

Based connected our capacity and beardown equilibrium expanse astatine nan extremity of 2022, we propose to return astir EUR921 cardinal of superior to our shareholders. The regular dividend will beryllium EUR2.85 and we besides intend to bargain backmost shares of astir EUR400 million. This connection is successful statement pinch our argumentation and we judge it strikes nan correct equilibrium betwixt our assurance successful nan business and providing elasticity to execute our semipermanent strategy, whilst respecting nan value of reliable and charismatic superior return for our shareholders.

Let maine opportunity a fewer words astir our activity journey. Last week, we met for nan first clip pinch nan complete caller activity squad and we had awesome power successful nan room. First of all, I'm excited that Jorge Vazquez will beryllium our caller CFO. As our Controller and Head of Strategy for nan past 5 years, Jorge has been instrumental successful getting to wherever we are today. And it's not only that which qualifies him arsenic our caller CFO, he is besides a beardown bearer of Randstad culture, which is simply a cardinal differentiator for america successful nan marketplace. Jorge has a existent Randstad heart.

I would for illustration to convey Henry for his committedness and activity to Randstad complete nan past 5 years, starring to outstanding revenue, profitability, and worth creation. Myriam Beatove has been very effective arsenic our CHRO, from time 1 and I'm perfectly pleased that nan Supervisory Board has decided to propose her arsenic a personnel of nan Executive Board. And arsenic you whitethorn person seen successful January, we announced a number of breathtaking caller appointments to our Executive Leadership team. Kajetan Slonina for Randstad Asia Pacific, Traci Fiatte will look aft Randstad North America, and Venu Lambu joining america from LTIMindtree will lead Randstad Technologies.

Finally, we announced coming that Herman Nijns, who presently leads Belgium and nan Nordics for america will beryllium our Chief Executive for Southern Europe and Latin America. So we now person nan afloat squad and we are embarking connected our travel to go nan astir equitable and specialized talent institution successful nan world. So what does this mean?

The conception that's astatine nan bosom of our ambition is to beryllium a partner for talent. For our clients intends -- this intends that we will beryllium an integral partner successful defining and executing their talent agenda. We will build connected nan heavy and long-lasting relationships pinch our clients and go moreover much important to their operations by providing much end-to-end solutions.

For our talents, partner for talents intends that we will adhd much worth to them arsenic they navigate their careers. We will prosecute pinch them more, building relationships for nan agelong term. We will go an moreover greater talent destination. And underpinning each of this is our continuing travel to build nan champion talent transportation motor successful nan world, 1 that a specialized, beryllium it successful operations, commercial, exertion aliases public, 1 that this integer utilizing nan champion exertion to service clients and talents, and 1 that's equitable moving pinch each talent communities.

One that group tin spot and provides adjacent opportunities to group from each backgrounds. Because creating a wider and much divers talent excavation is not only nan correct point to do, it's besides a business imperative. So we're connected our measurement to a caller and breathtaking early for Randstad and I cannot opportunity really excited I americium pinch nan power successful nan full Randstad squad to make this hap successful a thoughtful yet deliberate way.

And of course, this each starts pinch nan power to support performing for illustration we person done successful 2022. And past there's besides nan power to advancement and make Randstad a amended business successful nan information for our talents, clients, our squad members, and our shareholders. So each ELT personnel is making their plans pinch their teams and astatine nan aforesaid time, they are laser-focused connected delivering a beardown performance. And we will, of course, support you updated arsenic we proceed connected our journey.

Finally, I'm very excited that astatine our upcoming AGM, we will beryllium welcoming 3 caller Supervisory Board members, Laurence Debroux, Cees ‘t Hart and Jeroen Drost. And I'm convinced that each of them will person a beardown publication to nan early of Randstad.

Let maine now manus complete to Henry to coming nan results successful much detail. Henry?

Henry Schirmer

Thank you, Sander. Good morning, everybody. So I'm excited to study backmost connected fourth-quarter results. Let maine commencement pinch stepping you done nan capacity of our cardinal regions first. Starting pinch North America, which reported gross maturation of minus 5%. Perm was down 12%, and talent scarcity continues to beryllium a driving facet successful this marketplace to an grade besides reflected successful debased unemployment rates.

On nan different hand, successful 4th four, we saw a slowdown successful demand, driven by deteriorating macroeconomic conditions. And successful statement pinch our section steering model, we've taken actions successful position of headcount adjustments to safeguard our profitability.

Our US Staffing and Inhouse declined by 10% year-over-year, driven by softening request successful sectors specified arsenic manufacturing, proscription and distribution, on pinch different administrative profiles. On nan different hand, US Professionals grew by 1% year-over-year performing particularly good successful our technologies business that focuses connected IT and Engineering profile.

Canada was unchangeable successful 4th 4 and had a beautiful akin scenery arsenic compared to nan US. But nan North American EBITA separator showed up pinch 6.4%, up 10 ground points compared to past year. On a full-year basis, North America grew its gross by 6% year-over-year and delivered a bully profitability of 6.4%, which is successful truth 120 ground points higher year-over-year, a really beardown performance.

France delivered integrated gross maturation of 4% year-over-year and our Professionals business delivered beardown maturation of 19%, predominantly driven by our healthcare business, successful addition, our perm business besides performed powerfully up 20%. On nan different manus Staffing and Inhouse was somewhat down year-over-year, this was peculiarly reflected successful nan logistics and manufacturing sectors. France ended nan 4th pinch a beardown EBITA separator astatine 6.4%.

Turning nan page to nan Netherlands, which delivered different coagulated 4th pinch beardown profitability. Overall, gross grew 2%, benefiting from continuously beardown perm maturation of 30%. Our Professionals business besides continued its beardown performance, up 21% year-over-year, and Staffing and Inhouse gross was down 2%, emotion nan effect of somewhat softer customer activity successful nan logistics sector. In Netherlands, EBITA separator came besides successful powerfully astatine 6.1%, good supra nan group average.

And now to Italy. Revenue grew by a beardown 4% year-over-year, again pinch fantabulous profitability. Perm besides continued to grow, albeit astatine a little complaint of 11% year-over-year. And Italy ended nan 4th pinch an exceptionally beardown EBITA separator astatine 8%, a 140 ground points summation year-over-year.

And I must say, we do not presume that precocious EBITA separator going guardant into nan future, truthful we use immoderate be aware to task precocious margins going forward. But fto maine say, Italy has done a singular occupation successful nan past quarters and years, and is now our 4th largest marketplace pinch EUR2.2 cardinal gross accompanied pinch beardown 7.2% EBITA separator connected nan full-year basis. Really good done Italy.

Going to Germany, it continued to execute very good successful nan quarter. Revenue was up 9%, perm continued to clasp up powerfully increasing 40%, and Professionals continued connected nan maturation way and delivered 9% maturation also. Staffing and Inhouse grew 9% year-over-year. Our German business continues its efforts to structurally amended profitability, focusing connected value-based pricing and costs management, and it intelligibly shows up successful overmuch improved numbers. EBITA separator for nan 4th came successful astatine 3.9%, 70 ground points up compared to past year.

And Belgium reported a flimsy diminution of 2% successful its revenues. Staffing and Inhouse gross were 5% down and perm was coagulated successful 4th 4 and Hudson performed good successful nan quarter. EBITA separator came successful astatine 4.2%, which is not nan profitability we person successful mind for Belgium. Going forward, we are assured that nan squad is addressing that going forward.

That brings maine to Iberia, Spain which saw its gross declining by 4% successful nan 4th quarter, driven by our Staffing and Inhouse businesses. And contempt that, we saw -- we spot immoderate pockets of maturation successful Spain, successful perm, professionals, and outsourcing.

Portugal continued to do very well, nan 6% maturation successful nan quarter. And wide EBITA separator came successful powerfully besides astatine 6.5%, reflecting our efforts of value-based pricing initiatives. And besides nan Rest of Europe again contributed to a coagulated 4th pinch 7% growth. In particular, our Inhouse conception grew steadily successful nan 4th quarter. And nan UK, nan Nordics, each reported wide maturation of 6%. Switzerland was up 1% and Poland grew its apical statement pinch 7% year-over-year.

We besides wide -- we ended nan 4th pinch a coagulated EBITA separator of 3.5%, 40 ground points up compared to past year. That brings maine to nan remainder of nan world, which besides continues to do very good pinch 10% profitable maturation year-over-year. Let maine commencement pinch Japan that showed a beardown capacity pinch broad-based 11% growth. Australia and New Zealand delivered bully maturation up 8% and India grew by 15%, continuing its successful journey, adding much and much recurring profitable business to its portfolio.

Argentina and Brazil stayed successful very bully maturation momentum. Overall successful LATAM, we reported 16% maturation successful nan 4th and EBITA separator for this portion of nan portfolio was 5.3% successful 4th four, yet again, a very important publication to our wide results, demonstrating nan powerfulness of a broad-based diversified group of businesses, adding to nan occurrence of Randstad.

And past but surely not least, our world businesses which reported a coagulated 5% growth. Main driver continued to beryllium our Randstad Sourceright business that grew 7% successful nan quarter, reflecting a coagulated request successful RPO. Monster gross was down 12%, mostly affected by a slowdown successful request driven by macroeconomic development. EBITA separator came successful astatine 3.8% successful nan 4th quarter, minus 10 ground points up year-over-year -- sorry, 10 ground points up year-over-year.

That concludes nan capacity of our cardinal geographies, and I'm now excited to locomotion you done our group's financial capacity connected Page 13. Here we go. We person nan correct chart. As you person picked up already, we've delivered a coagulated apical statement pinch beardown profitability successful nan 4th quarter.

Revenue maturation came successful astatine 2%, chiefly carried by our Inhouse and Professionals businesses pinch 6% and 7% growth, respectively. RPO continued to turn by 17%, albeit astatine a slower pace. And besides our Staffing and Perm business held up steadily pinch minus 1% and positive 1% maturation year-over-year.

Global maturation rates slowed down sequentially crossed astir of our markets pinch nan objection of nan Netherlands, Germany, Japan, and LATAM. This slowdown reflects nan deteriorating macroeconomic situation arsenic good arsenic somewhat tougher year-over-year comps arsenic past year, we reported a grounds quarter-four quarter, supported by user request highest that affected e-commerce and logistics businesses.

Gross separator was beardown astatine 20.8%, a 40 ground constituent betterment year-over-year. Portfolio diversification and our expertise to value appropriately for our progressively differentiated services contributed to our separator description . Perm and RPO jointly correspond astir 19% of group gross profit successful 4th four.

Sequentially, operational expenditure decreased by EUR38 cardinal organically, representing a continuation of our very focused and disciplined finance approach. EBITA for nan 4th came successful astatine EUR364 cardinal pinch a 5.2% EBITA margin, an betterment of 20 ground points compared to past year.

Integration and one-offs relationship for EUR68 cardinal costs this quarter, chiefly reflecting integration costs from our caller acquisitions and basal adjustments of operational structures crossed immoderate geographies.

And lastly, connected that page, nan reported effective taxation complaint was 17.5% for nan afloat twelvemonth '22. This taxation complaint was influenced by an exceptional taxation use successful nan 4th fourth of EUR97 million, which related to nan reassessment of nan valuation of our taxation nonaccomplishment carryforward position successful Luxembourg. In '23, we expect ETR to beryllium betwixt 24% and 26%.

Let maine return this infinitesimal to besides concisely bespeak backmost connected our achievements since nan extremity of 2019. Whilst nan world sewage tremendously impacted by COVID astatine nan commencement of '22, we, astatine Randstad, person shown our adaptability and agility to steer nan business done uncertain and volatile times.

At nan aforesaid time, we stayed adjacent to our clients and talents, which enabled america to make nan correct finance decisions to turn our business successful a profitable way. As a result, our business is much diversified coming than ever pinch a higher proportionality of Inhouse, Professionals, perm and RPO successful nan mix.

Randstad delivered an outstanding capacity successful '22 crossed galore dimensions. Since 2019, we've added EUR3.8 cardinal of revenue, astir EUR1 cardinal of gross profit and astir EUR200 cardinal incremental EBITA. We person further strengthened our equilibrium expanse and reduced our leverage, and we judge that we proceed to beryllium powerfully positioned to leverage structural labour marketplace trends.

And pinch that, let's move a small spot deeper into our gross separator span connected Page 14. The gross separator improved a further 40 ground points to 20.8% for nan quarter. Our temp separator accrued by 15 ground points. Perm separator contributed besides 15 ground points. And nan HR solutions, including RPO astatine a 10 ground constituent gross separator accrued year-over-year.

On a afloat twelvemonth basis, our gross separator reached 20.9%, an summation of 110 ground points year-over-year. This is simply a reflection of our value-based pricing approach, use from beardown maturation successful Perm and RPO, and our wide effort to amended our operation of activities, beryllium it geographies, concepts, extremity markets, and customers.

We can't stress capable really overmuch attraction we put successful our -- to our expertise to value appropriately. Structural talent scarcity and unprecedented ostentation is presenting a situation not seen earlier successful our market. But we move that situation into opportunity, utilizing bespoke marketplace insights crossed geographies, concepts and customer groups, which successful move delivers important worth for our talent and clients, and ends up creating upside for our P&L.

Let maine now move to Page 15 to talk astir our operational expenses. OpEx came successful astatine EUR1.093 billion, EUR38 cardinal little sequentially, excluding nan effect of ForEx and M&A. OpEx arsenic a percent of gross has been trimmed down 60 ground points sequentially, chiefly arsenic a consequence of unit expenses decreasing by 2% successful nan 4th quarter. The mean headcount number has decreased passim nan quarter, a nett simplification of 910 FTEs arsenic nan December exit complaint for FTEs was good beneath nan 4th 4 average.

As mentioned earlier, excellence successful section steering and conversion is simply a nonnegotiable operating rule astatine Randstad. Given nan characteristic of nan existent marketplace environment, it goes without saying that we are staying highly adjacent to our customers and measurement development, disciplined costs management, elasticity of nan costs base, and nan expertise to respond accelerated to caller developments travel to nan premium.

And pinch that successful mind, let's now move connected to our rate travel and equilibrium expanse connected Page 16. Our free rate travel for nan 4th came successful astatine EUR294 million. On a full-year basis, we've generated free rate travel of EUR739 million, which is EUR149 cardinal higher year-over-year. This summation is chiefly a usability of an betterment of our full-year EBITDA, little finance successful moving superior year-over-year, and partially offset by somewhat higher taxation payments.

DSO was 52.9, 1.3 days up year-over-year. A very coagulated 4th for apical and bottommost statement capacity concluded an outstanding twelvemonth for Randstad, expanding our gross statement to complete EUR27.6 billion, generated an adjusted EBITA of EUR1.3 billion, yielding a 17.9 return connected superior employed and an EPS accrued 30% year-over-year. And arsenic you know, we ever first wanted to attraction connected a beardown decorativeness to nan twelvemonth earlier talking much dividends.

Looking astatine our equilibrium expanse astatine nan extremity of nan twelvemonth pinch EUR272 cardinal of indebtedness -- of nett debt, a leverage of 0.2, excluding IFRS 16 accounting, our superior requirements to support our business successful an ongoing volatile business environment, we do spot abstraction to supply for an charismatic dividend, including further superior returns to our shareholders.

And successful statement pinch our superior allocation policy, we proposed, taxable to shareholder approval, a regular dividend mean stock of EUR2.85. This equates to 50% of adjusted nett income. We besides intend to bargain backmost astir EUR400 cardinal worthy of mean shares complete a play of 17 months, starting extremity of April '23. In total, we projected to return astir EUR921 cardinal worthy of superior complete book twelvemonth '22 to our shareholders.

And arsenic Sander besides mentioned, we judge that this connection strikes nan correct equilibrium betwixt our prudency and assurance successful nan business, and it provides elasticity to execute our semipermanent strategy. With our proposal, we reiterate nan value for Randstad to enactment arsenic a reliable, responsible, long-term-oriented institution which seeks to simultaneously support each stakeholders. And successful that context, we'd for illustration to convey each our stakeholders for their support passim nan past year.

And that brings to my past chart, nan outlook connected Slide 17. Let maine first commencement pinch nan activity momentum. The macroeconomic situation continued to soften crossed our markets successful 4th 4 '22, translating into little hiring activities from our clients. We saw a softening successful impermanent placements towards nan extremity of nan 4th quarter. This inclination has continued into nan commencement of '23.

On nan different hand, RPO and perm delivered robust maturation successful January, contributing positively to gross profit and gross margins. This showcases nan spot of our diversified portfolio mix. We expect 4th 1 gross separator and OpEx some will beryllium broadly successful statement sequentially, and location will beryllium a affirmative 0.3 moving time effect successful 4th 1 '23.

As I person mentioned earlier, we person a disciplined costs guidance attack and person already taken costs actions successful parts of nan business wherever customer activity is moderating. As you know, we person a highly knowledgeable activity squad successful spot who demonstrated complete galore years and yet again successful 4th four, and velocity and agility are nonnegotiable cornerstones of our section steering model.

In addition, we successfully built our portfolio for resilience, but we're present to play to win. Our customers and talent request much support than ever, and we person ne'er been amended positioned to proceed to triumph successful nan marketplace.

Then earlier I manus complete to nan operator, fto maine item immoderate upcoming reporting changes that you tin expect from america up of nan publication of our 4th 1 '23 results. As explained by Sander, we person a caller executive activity squad successful place, effective arsenic of 1 January '23. And this caller activity building will lead to immoderate adjustments successful our outer conception reporting and therefore, besides successful our quarterly reports.

We will study 4 regions being North America, Northern Europe, Southern Europe, UK and Latin America, and Asia Pacific, and we will proceed to study connected our Global Business segments. We will supply a comparable group of numbers for '22 connected a quarterly basis, good up of nan publication of our 4th 1 '23 results successful April.

On a individual note, this is my 20th and past results telephone for this awesome company. I don't want to miss nan opportunity to convey each analysts connected this telephone for your support and master challenge. To each investors, acknowledgment a batch for your spot successful our expertise to supply a decent return connected your investments. To our competitors, we grant and respect you. And to each my colleagues who thief each 4th to present outstanding numbers and make those calls comparatively easy, convey you truthful much.

Well, that concludes our prepared remarks, and we are looking guardant to taking (inaudible) to your questions. Marian, backmost to you.

Question-and-Answer Session


Thank you. [Operator Instructions] We will return nan first mobility from Suhasini Varanasi from Goldman Sachs. Please spell ahead.

Suhasini Varanasi

Hi. Good morning. Three from me, please. If you look astatine nan exit complaint successful January, tin you please thief america understand nan cardinal countries aliases verticals that saw incremental slowdown? And immoderate wide sentiment aliases feedback from your clients astatine this point? Second mobility is connected nan year-end headcount, and nan FTE was beneath nan Q4 mean rate. What was nan number please astatine nan 4th end? And do you scheme further reductions successful 1Q? And possibly conscionable a past one. What do you person for costs ostentation mostly for 2023, convey you -- for your ain costs base? Thank you.

Henry Schirmer

Yeah. Right. Sander, do you want to return possibly nan first 1 connected benignant of which areas? I tin besides benignant of lead into that. Or fto maine first return nan 2nd and nan 3rd one. So FTE exit rates. Because that is very, very important. So you've seen that quarter-over-quarter, we person 910 FTEs, little employment rates. That does really exclude nan effect of M&A we person successful there.

And erstwhile you look astatine exits -- to exits, truthful exit December, exit September, that magnitude is much than double there. So that mightiness springiness you a spot of an denotation of wherever we are. And it's astir apt besides not a astonishment that we spot employment successful January dropping a small spot further. As acold arsenic costs ostentation is concerned, I must opportunity nan past mates of quarters, it's beautiful stable. I mean we ever look astatine an hourly complaint reported successful nan US.

I deliberation it's 4.7% currently, ostentation successful there. I said earlier because we're moving connected nan benignant of nan difficult separator connected that marketplace for group changing jobs, we spot that to beryllium a touch higher. And that has not accrued further. Europe is pursuing connected that 1 astatine a slower pace. And truthful -- truthful benignant of 5% people arsenic a norm of thumb is not benignant of a bad number to apply.

On -- possibly connected nan first one. I mean, there's, successful general, a softening of volumes going down. But astir importantly, it's successful nan inheritance of highly robust labour market. And it's just, I think, nan earthy effect we've expected to spot from companies whitethorn beryllium looking into hiring pinch a spot much prudence successful there.

But nan labour market, unemployment rates, you've each seen that is really arsenic distant arsenic it was. So, therefore, I don't want to item typical segments successful location because it's besides benignant of year-over-year effects and truthful forth. So I don't want to publication excessively overmuch into typical segments now.

Sander van 't Noordende

Shall I possibly adhd to that, Henry? I've talked to a batch of clients complete nan past 4 weeks. And first of all, nan tone is simply a batch much optimistic than I was expecting coming retired of past year. So that's very encouraging. The different point is there's ray astatine nan extremity of nan tunnel. The PMIs are coming up a small bit. Inflation is coming down. Europe has escaped a recession successful Q4. So I think, let's say, it feels for illustration nan macro situation is bottoming out. But of course, clip will tell.

Suhasini Varanasi

Thank you.


Thank you. The adjacent mobility comes from Sylvia Barker from JPMorgan.

Sylvia Barker

Thank you. Hi, morning. Three from maine arsenic well. Just first of all, connected profit. So tin you talk a small spot much astir nan restructuring included successful that EUR66 cardinal of one-offs? Which regions did that spell into? How overmuch of that EUR66 cardinal was nan restructuring versus nan integration costs? And past connected different separator impact. So nan cardinal costs stepped down rather a batch year-on-year successful nan 4th quarter. What should we expect for nan cardinal costs going guardant into 2023? Is location thing to item there?

And past finally, connected nan exit complaint successful January. So it sounds for illustration RPO and perm was still positive-ish successful January. And past nan volumes, therefore, successful Staffing were astir apt down mid-single digits aliases worse. Could you remark if that style is astir correct? And also, really overmuch of that was logistics and really overmuch was different parts of Staffing? Thank you.

Henry Schirmer

All right. Let maine spell successful and past Sander, of course, consciousness free to chime in. So connected nan first one, I'm happy to springiness -- to shed a spot of ray successful there. We had -- of that number you were talking about, there's 24 cardinal of integration expenses, which is owed to 3 acquisitions we've made. One is Finite successful Australia.

The different one, Cella acquisition successful nan US and past a tract business successful France. So it's EUR24 million. And past nan remaining EUR44 cardinal is 1/3 of that is owed to a restructuring successful Germany, and nan remainder is beautiful overmuch a mixed container of smaller expenses we person taken to, successful a way, beforehand and support a very agile accommodation of nan costs base.

On nan cardinal costs, nan OpEx -- look, we steer nan business connected actuals and do a batch of script readying to guarantee swift execution of immoderate of those scenarios based connected nan information we see. Our guidance for OpEx for nan 4th is simply a mixed container of actions we are taking to guarantee we person due capacity successful nan market.

And also, of course, taking into relationship ostentation we spot successful our ain costs base. So therefore, we said nan champion guidance we tin springiness is to guideline broadly successful line, but it goes without saying that we are highly crisp connected costs arsenic we speak. And past nan exit rate, I deliberation you nailed it. RPO, perm, comparatively robust arsenic we spot volumes deteriorating much connected nan Staffing part, and nan number you quote is astir right.

Sander van 't Noordende

Yeah, possibly a spot much colour connected nan industries. Industries that person done good successful Q4, nationalist wellness and acquisition and automotive. Manufacturing, carrier and distribution, I would say, flattish, which -- and that's a large chunk of our business, arsenic you are good aware. The challenges were much connected nan clerical broadside of nan house, if you -- successful business and IT services and financial services.

Sylvia Barker

Okay. Thank you. And connected nan smaller benignant of restructuring expenses, should we pencil much successful for 2023 arsenic well?

Henry Schirmer

No, not retired of nan ordinary. I mean we return action if we person to. But thing I want to benignant of item astatine this constituent successful time.

Sylvia Barker

Okay. Thank you.


The adjacent mobility comes from Marc Zwartsenburg from ING. Please spell ahead.

Marc Zwartsenburg

Yes. Good morning. Thank you for taking my questions. First of all, connected nan stock buyback. It's spreading complete 17 months. So it besides overlaps a spot pinch nan year-end adjacent year. So really should we publication this, Henry? Because -- yeah, really should we past deliberation astir nan superior return based connected nan results of adjacent year? I cognize it's a spot early, but yeah, it's -- tin you...

Sander van 't Noordende

Yeah. We ever want to nutrient beardown results first and past talk astir superior allocation. You cognize that so.

Henry Schirmer

No, Marc. Thanks for nan question. The measurement it will beryllium executed is, of course, we will springiness benignant of study backmost connected a play ground connected our website, really overmuch of nan stock buyback is being executed. And should we beryllium successful a position to person much superior recurrence by measurement of stock buybacks successful nan adjacent year, we would past conscionable denote that.

We say, hey, we've, I don't know, executed X percent. We make a connection for much and past conscionable beryllium ace transparent of what we do. The 17 months is besides successful location because we person AGM authorization forward. Of course, we're proposing it to nan AGM again but that is why 17 months, and it provides a touch much flexibility.

Marc Zwartsenburg

Okay. So if it's not afloat executed by adjacent year, you tin conscionable simply adhd to that based connected what you reported?

Henry Schirmer

Yeah. Should that beryllium nan case, absolutely? But Sander is, of course, right. Yeah, that's precisely nan case. Yeah.

Marc Zwartsenburg

And past possibly besides nan superior return, nan much than EUR900 cardinal is much than your free rate travel by astir EUR200 million. How should we publication that besides successful narration to M&A successful nan pipeline there? Because I tin ideate that prices are possibly person travel down a bit. It's astir apt easy to onslaught a woody erstwhile nan system is simply a spot much shaky. But it doesn't bespeak successful nan superior return really higher than free rate flow. So basically, it's a spot into what you tin do there.

Henry Schirmer

Yeah, absolutely. I mean, we -- erstwhile we do superior allocation decisions, past of course, nan first look is ever to support our integrated growth, our strategy, and what we perchance person successful mind arsenic acold arsenic M&A is concerned. We are predominantly -- arsenic portion of america really will proceed to turn organically, but supported by programmatic M&A, arsenic we ever said. And pinch that benignant of proposal, we person everything we want to do arsenic acold arsenic firepower is concerned. Why much than rate travel generated? It's conscionable a usability of starting that information pinch benignant of debased leverage ratio of 0.2%. So that is -- that's nan main reason.

Marc Zwartsenburg

Okay, clear. And past different one, if I whitethorn compression it in. The firm unit successful world businesses, rather a spot down successful Q4. Also, if you look astatine nan temp staffing successful nan business, really should we publication into that cost? Yeah, we -- I thought we had a increasing way location pinch besides much clients onboarded, et cetera. So is that a reflection of macro aliases is it seasonality? Or is it thing else?

Sander van 't Noordende

That's chiefly our RPO business, Marc, and a spot of restructuring successful Monster. Obviously, arsenic successful our business, successful general, successful RPO, we request to spell up and down pinch demand. Demand and hirings and postings person travel down a small bit. So we person reduced nan squad size. Not to opportunity that I'm perfectly -- aliases not to say, I would say, I'm perfectly optimistic astir RPO arsenic a business because obviously, we look astatine our pipeline, and our pipeline astatine this constituent successful clip is really up by almost 20% compared to past year. And location are much bigger deals successful nan pipe, which we are powerfully positioned for.

So I'm assured that, that business will proceed to do good for us. And nan absorbing point location is that erstwhile I talk to our clients, and I was talking to a fewer CHROs complete nan past mates of weeks, they say, well, we had to restructure a small spot connected our site, including successful our HR and recruiting team. So adjacent time, we request to build backmost amended to usage a building that's celebrated successful nan United States, and build successful much elasticity successful our recruiting teams. And that, of course, is an opportunity for our RPO business. So that's nan communicative down those numbers, Marc.

Marc Zwartsenburg

So much impermanent -- yeah, benignant of soft...

Sander van 't Noordende


Marc Zwartsenburg

[Multiple Speakers] stronger pipeline down it. Okay. Thank you very overmuch and Henry, convey you very much, but we'll decidedly speak. And bully luck to Jorge.

Henry Schirmer

Thank you, Marc.


We will return nan adjacent mobility from Anvesh Agrawal from Morgan Stanley.

Anvesh Agrawal

Hi. Good morning. I sewage 3 questions. Just 2 connected nan activity and nan executive committee changes. So Henry, first of all, congratulations connected you -- Maybe if you want to benignant of thrust a spot much successful detail, why do you deliberation this is simply a earthy infinitesimal of modulation and benignant of what drove that determination for you? And Sander, conscionable pursuing connected that, we person seen a number of executive committee changes since you person taken over. Maybe if you want to propulsion immoderate ray connected why you're driving that decision, what's driving nan alteration successful nan reporting going forward? That would beryllium great.

And nan 3rd mobility is SG&A related. So you're benignant of guiding to a level SG&A sequentially and nan FTE headcount is intelligibly little going into nan quarter. And I mean you commented January was moreover lower. I mean past why would SG&A beryllium level and not down going forward?

Henry Schirmer

Yeah. No, fto maine commencement pinch nan first one. Thanks for your question, Anvesh. Look, we each picked up. We're successful nan process of forming a caller executive activity team. And that ever forms a very earthy infinitesimal to look astatine handover opportunities, and particularly nan opportunity to bring personification successful nan occupation who has an fantabulous way grounds successful nan company. I personally activity with, successful this position arsenic controller, strategist and is simply a very adjacent friend.

And 1 day, I said internally, I will look backmost connected my clip astatine Randstad, and they will astir apt capable maine pinch nan biggest pridefulness and joyousness to spot Jorge taking nan reins. It's not much aliases little analyzable than that. Having that earthy infinitesimal has been covered a 1 cardinal process internally, together pinch nan Supervisory Board, together pinch Sander and I could beryllium not much happy to benignant of seeing Jorge taking over. And he will beryllium benignant of an fantabulous summation successful nan occupation to nan activity team.

Sander van 't Noordende

Yeah. On nan executive activity changes, we're mounting retired to go nan world's astir specialized and equitable talent company. So we are each astir talent. That intends a number of things, Anvesh. First of all, we person to go a talent destination. That's why we person appointed Marc-Etienne Julien arsenic our Chief Talent Officer.

Then for our clients, we want to beryllium much of an end-to-end partner, particularly successful nan endeavor segment. And that has resulted successful nan assignment of Mike Smith looking aft each our ample clients, including nan RPO activities that we do successful that segment. And that has resulted successful nan assignment of Venu Lambu, who joined america from LTI Mindtree and earlier that from Cognizant to look aft our exertion business.

Then we want to enactment highly adjacent to our clients besides successful our regions. We person decided to name 4 location leaders, 2 for Europe -- North Europe and South Europe, 1 for North America and 1 for APAC. Then we want to build nan astir effective and businesslike talent transportation motor successful nan world, building connected what we already have, of course, because we are already a awesome engine. That's why we person appointed Jesus Echevarria to beryllium our Global Client Delivery Officer. So you tin spot nan roles intelligibly align pinch nan strategy.

Also connected nan functional broadside of nan house, we person appointed our caller CHRO, who will now beryllium joining nan Executive Board. And of course, our caller CIO and our CMO, who was already successful nan role. So you tin spot a somewhat broader activity squad to bespeak nan measurement we're going to execute connected our strategy.

Henry Schirmer

Then nan past 1 was nan question, OpEx. Yeah, I mean I talked astir it before. I mean, it's a mixed container taking into account, of course, we spot headcounts coming down and pinch it nan cost. But we besides person costs ostentation successful our numbers. It's very early days to spot our gross margins coming through, albeit that we are very bullish astir it.

But yeah, return nan guidance broadly successful statement connected gross separator and OpEx arsenic a awesome that we enactment arsenic we ever do, highly adjacent to get nan equilibrium correct betwixt those two, depending connected nan operation coming in, looking astatine our play measurement information and past taking actions if we person to. So that is -- that's nan agelong and short of it, Anvesh.

Anvesh Agrawal

That's each very clear. If I tin conscionable benignant of sneak successful 1 much quickly. You are doing benignant of reporting changes and you will beryllium reporting connected a location structure. But will we proceed to get nan country-level commentary connected nan integrated maturation going guardant aliases not?

Henry Schirmer

Yeah, for sure. We're perfectly pursuing IFRS standards successful that, and we'll radiance a ray connected nan astir important parts of our business. Absolutely.

Anvesh Agrawal

Okay. Thank you.


We will now return nan adjacent mobility from Andy Grobler from BNP Paribas. Please spell ahead.

Andy Grobler

Hi. Good morning. Just a mates from me, if I may. Firstly, connected pricing, tin you conscionable talk done nan benignant of nan underlying pricing dynamics astatine -- aliases done Q4 and into nan opening of this year, peculiarly wherever you really person a differentiated service, and that attraction connected talent is opening to play done successful position of pricing? And past secondly, for Italy, separator was very strong. You mentioned that you didn't expect that separator to continue. Can you benignant of talk done why it was truthful precocious and why you expect it to autumn from here? Thank you.

Henry Schirmer

Yeah, absolutely. So connected pricing, Andy, we said astir it before. We person a very elaborate value show successful spot to make judge that connected much than 300 occupation state combinations, we are search nan correct price. Looking astatine input costs, we have. So nan hourly rates, our talents rightfully being paid. And past connected apical of that, we look into scarcity successful nan marketplace and nan effort required to find talent.

And each of that, we are pricing for successfully arsenic we again spot successful 4th four. But that's not wherever nan communicative ends because we are benignant of an highly talented and customer-oriented organization. So we're not conscionable putting that problem to our customers but we are past processing pinch our customer strategies to mitigate their costs ostentation costs. And successful that part, we besides play a role. So connected 1 hand, nan bosom knows nan business people, pricing well, connected nan different hand, besides softening nan impact.

I deliberation it's excessively early to opportunity that there's immoderate alteration betwixt what we spot early days successful nan first 4th compared to 4th four. For me, it's astir apt rather astonishing that 5% rate, I was alluding to, stays beautiful stable, which I find is bully news. The marketplace is learning to woody pinch it. And pinch hopefully, ostentation coming down -- wide ostentation coming down, besides nan unit connected value will astir apt wane a small spot going forward.

As acold arsenic Italy is concerned, look, I don't -- you hopefully person taken retired of my remarks, really overmuch appreciation we person for nan Italian team, our Italian business, and nan travel they've made. When I started 5 years ago, 1 of nan first quarters, we celebrated Italy to go a personnel of nan EUR100 cardinal EBITA club. That is astir apt EUR150 cardinal aliases thing for illustration that.

And it's conscionable an outstanding occupation those guys and girls person done. And I -- that's benignant of a fewer smaller releases successful there. I conscionable want to return nan unit a small spot from nan shoulders to support connected improving profit because I deliberation location is truthful overmuch much measurement to beryllium had successful nan market. So uncovering nan correct equilibrium betwixt measurement and value will beryllium cardinal because we are very bullish connected nan prospects of Italy successful general.

Andy Grobler

Okay. And lastly, Henry, convey you for each your thief complete nan years and bully luck successful nan future.

Henry Schirmer

Thank you truthful much, Andy. Thanks for your past report. Very overmuch admit it.

Andy Grobler



We will now return nan adjacent mobility from Paul Sullivan from Barclays.

Paul Sullivan

Yeah. Good morning, everyone. Three for me. Firstly, tin you conscionable talk astir nan gross comp guidelines arsenic we -- aliases punctual america of nan gross comp ground you went done nan 4th -- first 4th past year? And conscionable to clarify, is nan 5% costs ostentation that you mentioned, Henry, is that soul aliases outer aliases moreover both? And past Sander, conscionable coming backmost connected nan guidance changes. I mean, rather a batch of change.

Can you talk astir what we should expect to spot successful position of immoderate alteration successful operational capacity aliases financial capacity from that? What are nan needs we should beryllium looking retired for successful position of KPIs to spot whether this is having a affirmative impacts connected nan business? And past finally, Henry, arsenic this is your past call, are location immoderate last takeaways, thoughts, aliases moreover frustrations that you'd for illustration to stock pinch us?

Henry Schirmer

Yeah. Let maine deliberation astir nan vexation for a second. Let maine commencement pinch nan mobility 2 because nan first one, I'll springiness you a chance to reformulate it. I didn't get it really what you were asking. But connected nan costs ostentation of 5%, I deliberation it's decidedly what we spot outside. Inside of nan company, we've seen really ostentation beautiful adjacent to zero successful '22 because we person rather a churn successful our manufacture besides successful our business. So we're utilizing that to perpetually renew our salary rates connected our soul staff.

And of course, we effort to execute nan same. We're not guiding now that we don't person costs ostentation successful there. But erstwhile you commencement January, everything is fresh, astir of nan net increases are landing, and therefore, besides successful 4th one, our guidance is astir apt much connected nan prudent side. So agelong communicative short, astir apt a small spot little internally nan 5% externally. On nan first question, please radiance a caller ray connected it and effort to reformulate. I didn't get it. What tin I thief you with?

Paul Sullivan

The gross comp base?

Sander van 't Noordende

Well, possibly -- whilst we're reasoning astir that, fto maine opportunity a fewer things astir -- aliases a very elemental point really astir nan guidance changes. The guidance changes are here. The KPI enactment nan same. Revenue, gross profit, and EBITA. So that's wherever I would proceed to look if I were you. That's each I person to opportunity astir that.


We will now return nan adjacent mobility from Konrad Zomer from ABN AMRO. Please spell ahead.

Konrad Zomer

Hi. Good morning. Thanks for that. First of all, thanks, Henry. I deliberation you've developed into a very bully practice of nan strategy of nan company, and you've built up an fantabulous estimation successful nan finance community. I've only sewage 1 question, which is connected imperishable placements. The accelerated deterioration successful nan US successful nan 4th quarter, is that because of nan proviso broadside alteration aliases because of nan request broadside change?

Have companies go much conservative, much cautious astir nan future, aliases is it conscionable because of there's a deficiency talent? And is it adjacent to opportunity that nan gross separator effect successful 2023 from imperishable placement? It looks for illustration it's going to beryllium antagonistic alternatively of a affirmative effect you saw successful '22. Thanks.

Sander van 't Noordende

Konrad, fto maine opportunity a fewer things astir nan US. So what's going good successful nan US, Professionals and RPO. Perm came down but is still astatine a beautiful decent level. I would say, nan main situation these days is successful nan impermanent marketplace successful nan US, and that is beautiful overmuch crossed nan board, truthful crossed carrier and logistics and financial services and technology. So that's nan business successful nan US.

Of course, it's ever uncovering nan correct equilibrium betwixt delivering nan profitability and nan volumes and nan talent scarcity. So we're navigating that situation but request has softened a small spot successful operation pinch talent scarcity. It's not a cleanable environment, truthful to speak.

Henry Schirmer

Yeah. And possibly connected nan gross separator point, Konrad, by nan way, acknowledgment for your remarks. It intends a lot. On gross margins, I instrumentality to my guns and not estimate connected what it is because who knows? Maybe we're ending up pinch a batch of imperishable maturation astatine nan extremity of nan year, and past it will beryllium accretive for gross separator and nan different measurement around. But immoderate happens, what is really important to spot america pinch is that we will set OpEx accordingly. So actually, nan conversion into EBITA, that is what it each counts.

And coming backmost to nan mobility before, nan vexation sometimes is being excessively one-sided, looking astatine conscionable either only gross separator aliases only OpEx. It's ever a operation location of really overmuch money are we putting into nan strategy to make gross profit, and therefore, really overmuch it's converting into EBITA.

Coming backmost to Italy, Italy is converting complete 40% of profit -- of gross profit into EBITA. That's a sparkling ray for us, and that is wherever we're perpetually looking astatine to get nan equilibrium correct betwixt input costs, which is OpEx, and each our gross profit is being generated retired of that.

Konrad Zomer

That's great. Thank you.


We will now return nan adjacent mobility from Hans Pluijgers from Kepler Cheuvreux. Please spell ahead.

Hans Pluijgers

Yes. Good morning, all. It's Hans, Kepler Cheuvreux. Yeah, first of all, Henry, convey you very overmuch for nan past 5 years. It was a pleasance moving pinch you, and I wish you each nan best. Two questions from my side. First, coming back, let's say, connected nan full wide market. You're disappointing astatine some, let's say, softening of demand.

At nan aforesaid time, of course, a batch of segments are still shortage of supply. How do you see, let's say, going forward? Are we a small spot astatine a tipping constituent besides connected nan request broadside that possibly request is simply a small spot softer, but we already spot that companies are starting to afloat standard backmost connected nan full workforce aliases is it only let's opportunity conscionable astatine nan beginning?

Could you springiness possibly immoderate emotion really what nan sentiment is wrong your customer guidelines more, yeah, crossed nan globe? And possibly you tin conscionable springiness immoderate specifications by region? And 1 follow-up mobility connected Italy, a elaborate one. You already mentioned that nan 8% was a higher level. And what do you spot much arsenic a normal profitability level for Italy successful margin-wise?

Sander van 't Noordende

Yeah. So Hans, connected nan wide marketplace sentiment I conscionable said it, I would opportunity there's ray astatine nan extremity of nan passageway -- small lights astatine nan extremity of nan passageway pinch nan PMIs and nan ostentation coming down. If you look crossed our regions, it's reasonably emblematic for really they work. In APAC and Latin America, we've really person seen very bully growth.

In nan US, businesses are ever speedy to respond to immoderate is happening successful nan marketplace, some up and down. So that's what you're seeing successful nan US. And Europe is simply a small spot much delayed successful its response, and that's what we're seeing successful Europe. So it's reasonably emblematic of what's happening. I will show you there's nary clear guidance arsenic of coming different than that there's ray astatine nan extremity of nan tunnel.

Henry Schirmer

Yeah. Hans, besides connected Italy, I don't want to put a number connected it. It's -- I'll decidedly pencil Italy successful for very, very profitable units we person going forward, nan correct equilibrium of outstanding market-leading maturation and profitability. Maybe a touch deeper, but it's not really useful to benignant of put a number.

Hans Pluijgers

Okay. Thanks.


As location are nary further questions, I would for illustration to manus nan telephone backmost complete to your big for immoderate closing remarks.

Sander van 't Noordende

Thank you very much, Marian, for your facilitations. And earlier we wrap up nan call, I would say, convey you erstwhile again to Henry for nan past 5 years. For doing correct by our shareholders, our group and our talents and our clients, each of them, and of course, our 700,000 -- 710,000 Randstad talents and labor for each their difficult activity for our clients complete nan past quarter. Thanks a lot.

Henry Schirmer

Thank you truthful much, everybody.


Thank you. That will reason today's convention call. Thank you for your participation, ladies and gentlemen. You whitethorn now disconnect.

Editor: Naga

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