Good morning, everybody. Welcome to the Randstad headquarters. I would like to welcome all the people here in the room, analysts, investors, our board members over here. I will also do a special welcome for the people on the phone, investors and analysts that couldn't make it over here. Welcome to you guys. I have a special request for the people from the press that are here. If you want to have an interview with one of our board members, please refer to Machteld Merens over there after this call. The agenda for today is as usual. First, our CEO, Jacques van den Broek, will start with an operational update, followed by Robert Jan van de Kraats, who will touch upon the financial performance. We go to the outlook and Q&A. With that, I hand over to Jacques for the introduction. Thank you, Jacques.
Yes. Good morning. New IR guy, shorter introduction, just finishing my coffee. Anyway. Good morning, everyone. Dear analysts, dear investors, people on the phone, also our colleagues. I was told there's no video streaming, which is not necessarily a big thing. You get the slides and you get the voice, which is good enough, I think. Second quarter results. We did a lot. You'll see in the presentation that there are quite some green shoots in terms of growth. I want to mention our US staffing business, really well-run business, is really picking up throughout the quarter and even into the third quarter. Our Belgium business, which we're going to touch later upon, which is actually growing a bit faster than mentioned in the press release. Of course, Belgium as a bellwether for Europe is good.
Also our Dutch business, very important for the company, also picking up through the quarter. Our Chinese business. We now have 300 people in perm professionals in China, which is our single biggest business already growing at 70%. A really impressive performance. Also very happy with the pickup of what we call activity-based field steering. We're a large company. We introduced this within the company in mid-March. If we look at, I'm going to talk about it later, the pickup in the company of this concept, we're really impressed with our people. Of course, it's not good news everywhere. Our French business, the French economy as such, of course, is still struggling. Our German business looks like economy is taking a bit of a pause there and growth is easing. Perm placement, also a green shoot.
We grew 13% globally in perm placement, this also in markets where the economy is not yet very hot, such as France, again, where we grow in permanent placement. Very happy with that result. What you will also see in the presentation is the balancing act, at least as far as we're concerned, between growth and profitable growth. Yes, we can grow faster, not always we like the growth. You will see this in quite a few markets that we made some deliberate choices here. Again, accelerating growth, which is good, 3.5% in Q1, 4.5% in the second quarter. Very important to mention, I think, the gross profit growth. In more and more countries, yes, we still talk about MPs working, we also talk about gross profit growth. Certainly in the Anglo-Saxon environments, the U.K., the U.S., also Australia.
I mentioned our Chinese business, a perm business, gross profit and the growth there is very important. There you see, like promised, a conversion rate of 70%. We were quite surprised by the fact that this was picked up as sort of an absolute target, where our conversion rate is not something we manage as a goal in itself. For us, this was an indicator of where we were as a company. Growth in Europe, high conversion rate, but already for long-term growth in America, slightly lower growth rate. That's sort of a balancing act, but 70% is 70%, and you see the EBITDA margin. The lines, pretty clear. Most of them are going upward. Rest of the world, of course, is a mixed bag. I'll comment on that one a bit later.
Europe going up nicely, you see the pickup in North America, which we like, and of course, as you know, this is our biggest business. Back to the slides we showed you in earlier quarters as the important slides on our priorities and the slides that are and should be above the bed of all our colleagues worldwide. On the right-hand side, you see Total Talent Architecture. What was that again? Our change in approach towards large clients. We don't go to large clients anymore. This is a bit black and white, of course. Like, we're Randstad, we're the second in the world. We're nice, we're everywhere. Why don't you do business with us? We now go to the client and we say, "We know you. We know your company.
We know your sector, and we can help you to become a better company with a better output of your people with more efficient HR processes. We've compared you against the benchmark. We can show you where we did this, and it's interesting for you to talk further on the topic." This business fuels our MSP and our RPO business, and this works. We have 30%, 3-0%, more spend on the management globally than we had last year. In the U.S., we have more than 40% more spent on the management. Very happy with that development. You also see the European market maturing very quickly in the field of MSP solutions. Again, our in-house business, again, a strong concept, still growing 15% globally. Very happy with that performance.
On the left-hand side, where we put most of our efforts in currently, and that is increasing the amount of activities in our markets, where markets are growing, to touch more clients either by phone, either by a physical visit, also to send out more candidates on perm jobs. That has definitely worked and that's picking up. It has a time lag. In all the interviews we had, the road shows we had, I talked about the fact that this normally takes two to three quarters to really get you going in a high speed. In some markets, we see that this is picking up a bit quicker. A bit more on this one. I mentioned the fact of the pickup of this system of activity-based field steering in our world, and it definitely is picking up.
We have some 30% more activities in the market compared to last year. If you make a weighted average on calls, on visits, and on what we call candidate sendouts. Candidate sendouts is the key operational indicator for your growth in perm. That has increased with 30%. Some companies, certainly the Dutch company, but also the German company, have higher increases than that. Very happy with that. Of course, it's not like from day one to day two that this gives you results. Still, there is a direct link in our company between the ability to do this and the results. Again, our Spanish business doing really well, became market leader, grows in perm. It works. Our U.S. staffing business, our Japanese business, Tempo-Team, okay, Stromer is in the room.
Tempo-Team, my second brand in the Netherlands, really strong on the pickup of activity-based field steering, and we see the performance. Countries, North America, back to growth in Q2. U.S. staffing and in-house, GP, gross profit, a growth of 10%, and an improving trend throughout the quarter and also in this quarter of growth. Perm, what can I say, +33%, and this was not a small business to begin with. Again, in-house, as a usual suspect, also growing in the U.S. U.S., when we call in-house, we also talk about Randstad Corporate Services, which is the in-house flavor for head offices. We're still on site, but we do all profiles, we do all perm. Very profitable part of in-house and also growing double-digit. U.S. Profs, a mixed portfolio, very happy with the return in IT. IT, our biggest business, around $1 billion.
Growth over 3% in June, on a good trend there. Our engineering business, a smaller business, growing double-digit. Our pharma business, smaller, growing double-digit. Our only headache still in the U.S. is our finance business. Our finance business historically is a mix of the three businesses we had in Vedior and the two businesses we acquired with SFN. It's a strong portfolio. We can provide every level for our clients, but it still needs to come together. This takes time. We have new leadership in place with Rebecca Callahan, who has a very successful track record in our SourceRight business. Absolutely convinced that she will turn the corner with this business. SourceRight, I mentioned. In the Americas, the Canadian business, but also the Canadian economy is not great, and we're seeing that.
We see some improvement throughout the quarter, optimistic that it will improve a bit into Q3. We have a good business there, we've got good people there, but there's some headwinds economically. France, when I talk about profitable growth and the choices we make, France, as you know, has been an example. Everybody talks about CICE, of course. In the early days, years ago, we already refused low-margin clients. It's definitely our ambition to create a better market in France, and the only way to do that as a leading player is to strive for good relationships, for profitable business relationships. Again, we've roughly sacrificed 2% of growth, which wasn't attractive. You do see where this is going, by the way. You see Create Synergy, mid-size players growing fast, we know where the business is going.
We don't think this is an attractive long-term strategy, and we're not doing it. Our targeted segments are in-house, 25%, and this is the promise for the French market because we got many more points of sale. If the market picks up, we'll take market share as we did in 2010, 2011, and 2012. Professionals at zero, I think, which in the market is pretty good, and perm fees, absolutely against market, happy there. You look at the EBITDA margin, which again, on the one hand is good, on the other hand, also driven by CICE, so you always have a bit of a mixed feeling about that result. Yeah, it's a result. The Dutch business, yeah, happy, really. Dutch business is the business which had the biggest from minus to plus development in the quarter globally.
Still negatively at the beginning and picking up rather quickly in June throughout the quarter. You see it here. Again, both Randstad and Tempo-Team into Q3 growing faster. Yacht back to growth since 2008. We call this the Chris Heutink effect because Yacht was in my portfolio for two years and now it's growing, so that helps. Thank you, Chris. The whole professionals, because it's not just Yacht, also Randstad and Tempo-Team have professionals in their mix. Growing 12%, which is definitely a sign of improvement in the market. Again, also here in the Dutch market, focus on client profitability. Probably a coincidence, but also roughly 2% of business we deliberately lost. There is in any market, also in the Dutch market, a trend whereby some companies in some sectors sell to the lowest bidder and we're not that.
Our gross profit up, and we're very happy with the result in the Dutch market. See the margin being stable and by the way, up. Again, perm 16% up. If we talk about the potential for permanent placement, certainly in the staffing businesses, then our benchmark is the U.S. In the U.S., that business went up from 3% of gross profit a few years ago to 8% now. Perm and staffing, selling the same profiles we sell in staffing, but then perm. Our large Northern European businesses, our German business, our Dutch business, our Belgian business, have roughly 3% of gross profit. The same starting point the U.S. has a few years ago. Their concept is now being adopted in the Dutch market, for example, and we see the growth. It works, and there's large potential for growth here. Germany, it's a challenging market.
A lot has happened in Germany, of course, already last year. There is an economic effect, there's a political effect, and of course, there's us. Price effect is easing. Last year, we started with this equal pay implementation. The price effect compared to last year is easing. Very happy again, consistent. This is about trying to manage a company worldwide. Perm growth of 37%, really picking up. The German business is now putting in 65% more activities in the market per person per week compared to last year. Again, the mix of calls, visits, and perm send-outs. You see the improvement there. It's off a small base, honestly speaking, but we're getting there. You know the German business has been a business which has grown with large clients.
They still and will always remain a large part of our business, but we now want to grow in white collar and into perm. Good growth in the IT business, in our in-house business, the Tempo-Team business. Again, SME, that's what we do with the 65% more activities. Regulatory changes. Equal pay. Yes. Equal pay didn't hit volume in 2013. It's hitting volume a bit now in Q2. There is a rule which is outside of a collective labor agreement where clients have said that after two years to their unions, they would do something with a temps. If he or she had been working two years at the company, the objective of the union is that, of course, these people are hired. We don't know if that's happening yet, but at least that's kicking in now.
Since that gentleman's agreement, you might call it, that two years has passed. We do see some pressure on temps working at the client to be sent home, by the way, sometimes, which we think is unfortunate, sometimes hired. The hiring is not the majority of this group of people, dampens our growth a bit. The decelerating growth throughout Q2 seems to be stabilizing into July, so that's good. A pretty stable gross margin. Belgium. Belgium is back on track. If you look at the earnings in Belgium, pretty good. I never compare with competition, but we always were, as a percentage, below USG in Belgium for years. I've looked at Belgium for 10 years. We're now above USG. For us, that's a small success. Also, growth is picking up.
The growth in June, you'll see the exit rates for Belgium, and it's actually higher. We had an unfortunately low cut-off from June into July, also bit estimates. Sorry, from April into June. We're actually growing a bit faster than you'll see in the exit rates. Current growth in Belgium is 67% into June, so that's quite a good pickup. U.K., a mixed business. This is definitely also a business where you need to look at gross profit and perm fees. Gross profit up 7%, perm fees up 13%, definitely driven by a few good businesses, education and construction, property, and engineering. We think, not coincidentally, the businesses that we invested in marketing in Q4, if you might remember. That helps. Again, here, focus on client profitability and staffing and in-house puts a damper on our top line, but improves our business over time.
Yes, doubled our profits, but we got a long way to go in the U.K. Iberia, very happy with our Spanish business, one of our most strongly led businesses. Made the integration of USG flawless, finished now. Our Spanish business is market leader, surpassed Adecco. That's a long-term goal. Also, focused on professionals, that's a very impressive story in Spain. They went from a player three years ago, probably number 7, 8, now to a top 3 position, we're looking up. We're not looking down. We're looking up probably want to catch at least the number 2 in this business. Grew organically from zero people to 80 consultants. That's a strong organic growth, professionals growth story. Portugal, change management there, at the same time, change in the business from low margin to mid or high margin.
François is working very hard with the new Portuguese management team on improving this business based on the strong market share we have, but also taking better business in this market. You see the result. Result in Spain has much improved, result in Portugal, less so. Very happy about Spain, Portugal is work in progress. Italy. Italy, I know, is one of the countries, a young market still, started in 1998, where penetration, which was below European levels, is rising because the economy is not that hot, but we're growing 15%, which is above market, but is definitely also more pickup of our product there. Italy also building a professionals business, a specialty business and RPO business. This is coming to be a EUR 600 million business and again, a richer portfolio over time. Switzerland, very happy with the business outperforming the market.
Poland, also the same story, and you do see the improvement in results. Japan, growth stable, 10% year-on-year. We do have some, call it legal headwinds, policy headwinds in Japan in our spot business. Robert Jan is the expert, so if there's any questions, he will be happy to answer them. Growth, good growth. Japan is a business where you can have good earnings and good margins in staffing, so very happy with our Japanese business. Australia, improving on the top line. Still not enough perm. Australia is a bit comparable with the U.K., but then probably a year back in development, internal development. Market's not too great. We got new leadership, very happy with Frank Ribuot, our new manager there, and I think we're improving our business. I know we're improving our business in Australia. We're not there yet, though. China, I mentioned, 67%.
Our Chinese colleagues always say, "Yeah, we're doing well, but we're not going to continue that way." Which is okay, because they still do. We bring in a lot of people at the same time. Being Asia, you have also high turnover of people, but still growing into now a more than 500 people business overall. As mentioned, 300 in perm placement. Latin America, we grow absolutely, but certainly in Brazil, we want to change the business from a staffing business into a perm business, which is a much more attractive part of that business. That's me, and then I turn to Robert Jan or RJ as we call him.
Thank you, Jacques.
Okay.
A few additional remarks from a financial perspective. First of all, Q2 is always an improvement compared to Q1. Sequentially, Q2 is the stronger quarter, but compared to Q3, it's not as good as Q3 can be. That's typically the trend throughout the year. Q3 the best, Q4 a little below that, Q2 below Q4, and Q1 being the softest quarter. This is the P&L. Underlying, I'd just like to point out that the growth throughout the quarter in revenues was 4.5%. June came in at 3.6%. If you look at the value underlying at the gross profit development, gross profit improvement in Q2 was 6%. The gross profit improvement in June was also 6%, and this is very much the focus that we have. We're looking for revenues for sure, but it needs to be of good quality. There is a challenge.
There's clearly a challenge in the French market. I'll show you the exit rates later on so you can see the June revenue rate being suppressed by the developments in the French market. The gross profit also includes a contribution from perm. Jacques just referred to it. It's 10% of gross profit right now, which is sort of coming back to historical levels, but it's quite a while ago. It goes back to 2008. Operating expenses here, seasonal pattern. We are including some sort of temping in our cost base, some additional marketing expense, but I'll get back to that. EBITA, the margin, EUR 174 million. If you look at the countries, I'll just flip through it. There are now five of the largest operations that we have which are either returning at or just above 5%. That is quite a quality improvement, I would say.
Reported EBITA is EUR 173 million. Net finance expenses, as you can see, relatively low. It does include a release of a provision due to the fact that we have negotiated a pretty favorable deal on acquiring a minority interest. Extremely helpful. You look at the key financial points for the second quarter. Free cash flow arrived at EUR 82 million. It's always a minus here because it's a challenging quarter always because of dividend payout, holiday allowances. This is nothing different from the regular seasonal pattern that we see here, but I'll get back to it at the cash flow statement. Leverage ratio, solid, improved to 1.3. Dividend of EUR 0.95, just I think 66 or 67 million euros of dividend paid out. The effective tax rate at 30%, roughly stable. That includes the French business tax. EPS at EUR 0.64 and the USG integration completed.
Synergy is in line with expectations. Remember, we acquired a EUR 400 million revenue book. We paid EUR 20 million roughly. We added the integration expenses of around EUR 20 million, and we are now generating EUR 4 million quarterly synergies, which adds up to EUR 16 million a year. We probably have a little upside to go here. On top of that, we had one-off tax synergies of around EUR 10 million. You don't have to be an expert in economic calculations to find out that this economically is party time. This is the final time we report on it because this is considered to be completed and very much in line with the underlying ambitions. Looking at the various segments, you can see the focus on delivery models.
You can see that we have been very selective in making sure that we move, as we have done before, move business as much as possible to in-house, where we by now have a 5.1% return. Very, very high. It's always an art to allocate costs properly. We look at that gives us the number of 5.1%. In the staffing business, you can see that although we only had 1% organic revenue growth, the EBITDA was up by 22%. Also professionals, it's closing the gap 4.5% in in-house. Last year, equal to professionals 4.5%. This time the gap has been reduced from 0.6% to only 0.3% between professionals and in-house. That's the way it should be. We should see, of course, professionals passing by the return on in-house over time. Looking at the gross margin bridge, 18.2% moving to 18.4% this quarter.
We clearly see margin improvement also due to what Jacques elaborated on the focus in our business. The perm fees, we can see margin expansion in North America, the Netherlands. Very strong focus on client profitability. Again, 6% GP growth, that is our key focus because there's a lot of business in selected markets available, but not at the right price or at the right conditions. We mentioned in the press release there are a few payroll-related favorable items, which is like sort of a regular event. There's always estimates in here. We always have some releases. They were a little bigger this time, a few EUR million more, and that is included here as well. Operating expenses reconciling EUR 613 this quarter with last year's EUR 495. Some impact from foreign exchange, an adverse impact, but also the USG People benefits coming through an additional EUR 1 million compared with the previous quarter.
This is sequential comparison now. Marketing, we have invested more. That's the typical seasonal pattern. We have some additional expenses due to commissions, but also due to some temp labor in our own organization to support the somewhat higher level of business in Q2 compared to Q1. We continue to invest in our rest of the world business, including the emerging markets. Looking at net debt, down by EUR 235 million year-on-year. Solid leverage ratio. Not going to go through it, but an attractive return by now of 13.3%. DSO, by the way, also improved slightly. That's a very strong focus we have on overages here. That's a challenge in the market.
You might read some articles about extended payment terms and supply chain finance, typically, these are not the solutions, the real solutions for the problems, because it generates a huge amount of work, a lot of contracting legalities and so forth. We are very much on top of steering the real underlying DSO. Free cash flow, I mentioned it at the beginning at minus EUR 82. There's nothing very specific here. If you look at the last four quarters to the right-hand side of the slide, you can see that the last four quarters in 2013 were better than the last four quarters in 2014. That relates mainly to the fact that we paid off the Dutch tax authorities. This was a long-lasting item that was dealt with, we should add to the EUR 323, we should add EUR 131 million.
You can also see that provisions sort of flipped from positive to negative. We have been using over the last 4 quarters the provisions in Belgium and in France, which leads to a negative cash development here of EUR 53 million. A rather sort of stable pattern if you take that into account. We have refinanced the multicurrency syndicated credit facility. This is very opportunistic. I want to be very clear about this. This is not announcing, pre-announcing any other ambition at this point in time. It's just not the case. We have financing in place. We always look at our competitors, which are typically capital market financed, which is typically more expensive. If you look at the net finance expenses of comparable players, even outside our industry, you typically see high rates.
We are bank financed, that is a bit opportunistic, we take out the risk by having long-term financing in place. We were discussing a couple of the elements in the documentation. We did see an opportunity to refinance the whole picture, we said, "Let's put it at EUR 1.8 billion." We could get a little more, but we sort of took it down to EUR 1.8 billion. We currently pay 1%, but it's floating. It's floating because that's the best hedge with the cash flows of our business. This is not an entrepreneurial vision. This is just very factual, trying to hedge the developments in our business. We were also looking at more favorable conditions. We have been able to reduce the rates slightly. It is still attractive.
We also invest a little money all the time in having standby facilities available in case something happens so that you can sell receivables. We've now been able to get an arrangement which allows us to go beyond 3.5 times EBITDA. Our internal target is two, but externally it is 3.5 times EBITDA, we have been allowed now in the new documentations to go to 4.25. Just in case we have another 2009 that repeats itself, we want to be on the safe side. Again, there is no major or no relevant acquisition in the pipeline as we speak. Very happy with this opportunity, we just took it when it came along. That brings me to the outlook for Q3. Organic revenue growth was 4.5%. In June, it was 3.6%. I already mentioned the gross profit growth.
We do see the gradual improvements continuing. First time growth September last year, it improved. It's not very much the comps that play a role here in the first half of the year because last year was kind of stable at almost -4% in both quarters. We do see the foreign exchange impact continuing at the bottom line. It's a limited impact. It was only sort of EUR 3 million in the second quarter. The gradual recovery continues, we don't see an acceleration of growth yet. We also don't see it getting weaker, I think that is the conclusion that should not be in place. This has to do with a strong focus on the quality of the business, that's what's leading us in our activities.
Same number of working days. Again, a moderate increase of the cost base because that's the sequential pattern. Somewhat higher revenues always in Q3 when comparing to Q2. Looking at the exit rates for the month of June. We already mentioned June at 3.6. If you round it up, it's 4. The Netherlands at +4, France at -3. This is the gross profit focus here. Germany at +1. That's a bit understated. Germany, we always have to make estimates at the end of the quarter. In the course of July, you then find out what the real invoicing was. It was a little higher. I think this is a bit understated. The same applies to Belgium at +3. Should have been a little higher. The U.K. at +3, Iberia at +6.
North America continues at +3, the rest of Europe at +3, and the rest of the world at +8. Total rounded at +4. That completes the presentation. We're now moving to Q&A. Arun?
Okay. Thank you. We have the normal procedure. We start with questions in the room. Please wait for the mic, and after we finish here, we go to the webcast. Thank you. First, David, please.
Yeah, thanks a lot.
Please refrain yourself to two questions. Thanks.
On the trend of Tempo-Team, maybe not easy to quantify, but could you, let's say, something about the impact of the improving end markets, for example, the public sector and also the efforts, your own, let's say, efforts internally then it paying off, seeing into the improving top line. Then secondly, looking at the Netherlands, the gross margin is up, or the gross profit is up 8% on flat sales. Your gross margin is apparently up. Could you say a little bit more on, let's say, what the impact has been of the odds, perm, and also the pricing impact? Have we seen some positive pricing impact, for example, or at least no negative?
Tempo-Team is improving throughout the quarter. This is very much an operational effort. What Kees has done with his people is they sat down and they started calling in a call center environment, so a very condensed environment. All clients or ex-clients that were in their database to just mention the fact that, well, they're there and if there was any demand. Of course, we announced that. We had the feeling that demand was coming back. Tempo-Team is doing that, and the improvement in activities then pays off. Not so much in sectors as such. Tempo-Team sees a downward trend with large clients. Tempo-Team also sacrificed business with large clients because of profitability reasons. They compensate that with different business, with better business.
As you know, the challenge is always you get a better margin, but then you need to match that with a higher productivity. The good news, of course, is when you start growing, you get a better conversion and then you immediately get a better result. It's very much a business mix thing, David. Tempo-Team also grows again in perm, which has an effect. The total growth in perm falls directly to the margin because in the staffing businesses, so in Tempo-Team but also in Randstad, we do this with the same people. The conversion of that gross margin is absolutely good. Yeah.
There is an underlying in the gross margin of the Netherlands.
Yeah. Well, there is pressure in pricing. As what I mentioned also in the Netherlands, we've sacrificed close to 2% growth with clients we didn't want to continue with, both at Tempo-Team and in Randstad. That has been going on for a long time. It's nothing special. There are clients who
Yeah, that's their appreciation for the service we deliver. They think it's a commodity. They have companies buying it from them, and the only thing that they do is just chop down the margin, and the lowest one gets it. We're never that.
Yes, Hans Pluijgers, Kepler Cheuvreux. I have two questions from my side. First of all, on your presentation on page eight, with respect to the activity, you were indicating that the activity was up about 30% year-on-year. First of all, was it referring purely to perm or to the total business? Secondly, if that increase is so significant, what was first of all at end of Q1, and how do you see it really converting into sales? How long will it take, and why not we're seeing already more from all the measures you have been, let's say, implementing with respect to increasing activity. Secondly, a small question on Germany. Deceleration of growth, you already said that the price impact from the equal pay is diminishing. If you could split out the development in sales by volume and price, please.
First of all, to the activities. As I mentioned, we introduced this in the company mid-March. In mid-March, we had our general managers meeting. We worked for two days with our general managers with the guidance of the companies that were ahead in this segment, which again, as I mentioned, in those days was U.S. staffing and Spain. They taught their colleagues on how to do this. Also in perm in staffing specifically, again, based on the success we've had in the U.S., but also in Canada, by the way. These colleagues taught their colleagues how to do this. They went back to their markets, and they started implementing this. You might say that as of April, May, this started to have an impact in the activity level. It's always difficult because then you talk about conversion.
Conversion has to do with the market as such, which is difficult of different market to market. It has to do with our top of mind, since some companies you need to do more phone calls to get a visit than in others. In some markets, we got quite a good return. In the Netherlands, we have one in three, so three phone calls for one visit. When you have a visit and the market is growing, you easily get an order. We call this a very rich funnel, an easy funnel. Whereas, for example, in the U.S., it's a tougher funnel. You need to call more. This goes back to investments in marketing that we talked a lot about in Q4. It's a matter of time, but certainly permanent placement is a business which is very transactional.
It has to do with visiting a client. It has to do with one transaction, finding the client that needs to hire a temp. Here we see a quite quick return on our activity levels. In temping, it's more gradual. It's keeping it up, and we're keeping it up. We're quite confident that this will have an effect. At the same time, you do have in some markets or large clients just wanting less. They have less demand, and sometimes you sacrifice them. Of course, if you sacrifice one client, you want to replace this with a few small ones. That takes time. That's the game we're currently playing. There's a lot of things going on in the company in a good sense of the word. Development volume of sales.
It was +9 in Q1, and now it's +7. Germany. The price was 9% higher than volume in Q1. It's now 7%, volume has gone down a bit. Volume was slightly above zero in Q1. It's now slightly below zero in Q2. As we see, it's now a stabilizing picture.
Okay, next question, Marc.
Marc Zwartsenburg, ING. First of all, a question on the gross margin trends. Going from Q2 to Q3, last year, I think it was on quite flat trends, also the USG came into the equation. Can you give us a little bit of a feel for how the seasonal trend would now pan out with the movements that you see in your higher margin business and also taking into account the timing of the acquisition of USG? First question.
I'd like to answer your question, Marc, the answer is no, because when we talk about margin, we need at least one month full report on margins. In July, we don't have a month reporting yet. As you know, there is a seasonal trend that, for example, is very pronounced in Belgium. It's less pronounced in the rest of the markets. We expect it at least compared to Q3 last year to have roughly the same development. I don't see a reason why this should change. Sequentially, that's a bit tough to say at this moment in time.
Did you have a big impact on that or 10 basis points or so in the group level?
It was at the slide of which is 22. You can see it was 0.1% impact in Q2. There is no reason to think that it's going to be very different. Underlying, of course, it was consolidated, but that's the impact of the consolidated USG business.
Yeah, in the comps that will fall out.
Yeah, we have shed some business, so underlying it might even improve a little bit.
Another question on France, actually. The trend there in June going to minus 3. What are you seeing in the market? You see different trends at your peers, I would say. Is there any explanation for that? How do you see that continuing into July?
I have an expert in the room.
You are speaking about the trend in June. Yes, the market is still negative. As Jacques mentioned, we are below the market due to our strategy to focus on profitability. We continue to consider discussion with customer without CICE effect. In the past, we decided to have hard discussion and to continue even if we are able to improve our profitability. It's still the same strategy. We think that it's probably very dangerous to share part of CICE with customer. The trend is still negative. We will hope an improvement probably in the market. CICE represents an opportunity for our customer to improve profitability, but we are not seeing new investment. Probably they are waiting for the new 10 additional to CICE, 10 billion additional wages allowance, sorry.
Probably they are waiting for the arrêté, the decree to be sure about the next investment. That's what they have to do.
Now you're saying that because of your price discipline on CICE and your gap with your peers, that the others are less disciplined? Is that what you're saying?
No, CICE, we stabilize our price in temping.
Oh, the answer is yes.
Even if we have the CICE back.
The answer is yes.
Yes.
The answer is yes.
The trend is.
It's a pity of course, because this is for the historians in the room. The is also a subsidy part in bill rate in France. Competition, this is like 20 years ago, also competed this away. Again, we're bent on creating a better French market, and I hope we're not the only one. I think Adecco is okay-ish. The rest is questionable. Trend will not bend in July. Excuse me?
The trends in revenues will not change in July.
No. France is the outlier economically and both from a policy point of view. Our earnings are okay. We would like to grow faster. We will if the market picks up because of all the points of sales we have in in-house with a good leverage then.
Okay.
Okay. Next question.
Thanks.
Thanks. Good morning. Yves Franco, KBC Securities. Two questions from my side. Can you maybe give a guidance on the OPEX or maybe on the incremental conversion ratio targeted in the next quarter? Will it go down a bit? Second question, do you have some kind of targeted divisional split regarding SME and large accounts in the Netherlands? Can you tell us where you are right now at that split, maybe?
On your first question on the incremental conversion ratio for Q3, we don't have a target that we are sharing with you. We only gave it last time to give you some indication. We have, however, explained sort of the phases in conversion, in incremental conversion. In our business, if we have the first phase where growth just comes in, we typically have incremental conversion ratios of around 80%. 20% is then spent on additional marketing, on bonuses, commissions. Then over time, after a while, it typically declines towards 50%. Then only in phase 3, in phase 2, you start adding people, that's why it goes to 50. In phase 3, you start adding branches, not being in-house, and then it goes down, of course, gradually towards the regular level of EBITA.
You have to look at it country by country. The U.S. has been growing for quite a while. You cannot expect a very high incremental conversion ratio after many, many years. Same in Japan. The blend this time was 70%, and it very much depends on the blend of the total portfolio. It will be high again. It will be north of 50, but we'll see how much that will be.
On your SME thing or question, our target is pretty simple. We want to work with as many clients as possible, and within the clients, we want to have the highest market share possible. At the price we think is agreeable for both the client and ourselves. What you see economically is that if you see more growth is that the SME part picks up. Yesterday, in our meeting with Supervisory Board, we had our Spanish operating manager, Rodrigo Martín. Although, for example, the Spanish market is also growing, he doesn't see much demand yet in the SME, but we monitor it. In the Netherlands, we do see it. In Belgium, we see it. There we see the pickup. In Germany, we've never been there.
This is a bit black and white, there we need to fight ourselves in because there's a long tail of small German competitors in the SME space. The only way to fight yourself in is to be there and to contact them and to visit them frequently. This doesn't happen after the first call or the first visit, you can imagine. This takes time. In Germany, the SME part will definitely increase, and the white collar part will increase. We're not targeting a certain percentage here.
Maybe on the pricing pressure in the Netherlands. USG yesterday reported it was hard but stabilizing quarter-on-quarter a bit. Do you see the same trends? You gave up some market share in the Netherlands, regarding pricing pressure, you think it's now at the bottom and pricing pressure will become less from now on?
Pricing pressure is anecdotal. This is clients doing a tender, and these are large clients, then everyone sort of jumps on these clients. Because we're market leader, sometimes here is our clients. This is not easing. This is not getting more or less. This is again, anecdotal. You can see in the Netherlands, looking at our margin in the Netherlands, is that we take the right steps to compensate for this and more. We're okay.
Thank you, Yves. Now we move to Konrad.
Hi. Konrad Zomer, ABN AMRO. First question on Germany. Am I right in thinking that you provisioned for the working impact throughout the year, which might explain your really good margins in Germany in the second quarter? The second question is on a slide that's gone missing, I think, is your view on the different segments around the countries.
Can you share with us what you see in the automotive business in Germany, whether your growth rates come down? Automotive, yeah. If I can squeeze a quick one in. In Japan, your EBITDA margin that you generate in Japan, is that above or below the group average?
Yeah. It's roughly in line with the group average. It typically is a little higher, but Jacques explained that we have some additional enforcement of compliance in the spot field, and that is suppressing the growth a little bit in a very attractive segment. By the way, this is painful in Japan. The real scarcity is not clients but candidates, and these people are then moving to smaller players where compliance is not as sensitive. Of course, we are fully compliant. That is a challenge. You asked about Germany. I'll take that one right away.
We take it as it comes. We don't make adjustments. We just follow the reality here. Yeah. We're not provisioning. On the sectors, we had the slide, but it's not so scientific in a way. Automotive is not too bad. BMW is having record years. They're a good client of ours. By the way, they also are the most attractive employer, they won the Randstad Award. People around the world, some 200,000 people, voted BMW as the most attractive employer. They also sell a lot of cars, that helps. It's been from slightly up to slightly down. It's not like anything is plummeting in Germany or any sectors are really plummeting. It looks like a bit of a pause in a way. Policy-wise, we're not so happy with Germany.
What you now see is a very active and a bit dogmatic Social Democratic Party, which again is chasing the unproven scenarios of squeezing flexibility, they think this will turn into fixed jobs, which is not the case. We issued a study, Flexibility@work, where we have scientifically proven, or at least the universities we asked to do that, is that when you squeeze flexibility, it doesn't become fixed work. It becomes badly regulated flexibility. That's not the way to go. What we also find worrying is we totally approve a minimum wage as such, what you now see is that the minimum wage in the eastern part of Germany is going to EUR 8.50. Poland, which is 40 kilometers to the east, is EUR 2.65. This is an educated workforce with a good infrastructure. We think this is dangerous.
We talk to the Social Democratic Party, so far, they have their own policy. We think this is not the way to go. Okay. A face in the crowd. We're lobbying actively, yeah. Again. Konrad, we now move to the online questions. Please take over. Thank you.
Ladies and gentlemen on the phone lines, please press star one to ask a question or star two to remove. Our first question is from Paul Sullivan of Barclays. Paul, please go ahead.
Thank you. Yes, good morning, everybody. Just a couple of questions. Firstly, on U.S. professional, can you give us a sense of timing or any timetable of the improvement that you're trying to get through in finance at the moment and just what the market is doing in that particular vertical as the first one? Secondly, in the U.K., it did seem that contract terminations stepped up quite a bit. As you can see, the sort of renewal pipeline through the second half of the year, do you think that is going to remain an ongoing drag through the second half in the U.K., or was there a specific spike in the second quarter? Thanks.
Yeah. I'll take your U.K. question, Linda Galipeau will take your U.S. question. Yeah, we are actively shedding business in the U.K. Certainly in our in-house portfolio, we do have a group of clients that is not necessarily willing to pay what we would like them to pay, we say goodbye. This is not a specific drag on Q2 or Q3. By the way, we advocate looking at gross profit development and perm development in the U.K. because this is by far the most important part of our business we're focusing on. It's less on pure top line.
On the F&A business in U.S. Professional, first, U.S. Professional's exit rate in June was flat, slight improvement. It's a quarter. The F&A business is significant but certainly not the largest business in the U.S. The U.S. Professional numbers are very much driven by the IT segment. I think that's important to note.
The F&A business underperformed, their performance in June was in line with the quarter. We've not seen an improvement yet. Certainly, the business is forecasting a solid improvement, given the new leadership, I have every reason to believe that's going to occur but has yet to come through in the numbers. It's certainly the segment that has been most affected by the slowdown in the mortgage sector. That is a big user of flexible staffing. I think at this point, it's internal issues that are driving the low performance, and that's good because that's easier to correct.
Great. Just following up on the U.K., this low single digit you're reporting, is that likely to continue through the third quarter?
I didn't understand your question. Can you repeat?
Sorry. The low single digit that you're seeing in the U.K., is that likely to continue in the third quarter? Do you see any sort of major shifts?
Top line or gross profit?
Top line.
Top line. Okay. Yeah. Again, I don't know. Probably, because there's not much going on there. Our high single-digit growth in gross profit.
Yeah
We expect to continue, and that's good.
That's clear. Thank you.
The next question is from Chris Gallagher of JP Morgan. Chris, please go ahead.
Good morning. I just had a quick question on the rest of the world. I was wondering when you would expect the margin to start improving in that segment.
Yeah. Rest of the world is quite a cocktail. It's a portfolio of countries. We have significant investments in Brazil, for example, where we expect to see the returns improving. That means the investments on a net basis will start to decline. We have ongoing investments in India. It's quite a large operation. We run an operation with more than 1,000 people in India and will continue to invest for the next couple of quarters. In China, actually, we're making too much profit. We need to speed up investments. You can imagine having been growing at the rate of 60%, 70%, 80% over the last quarters, an organization cannot continue that too easily or accelerate beyond that level. We might continue to make a bit of a good return here.
The Japanese business, it has the challenge in the spot field, but at the same time, it continues to grow in other fields. No investments going on here. Jacques mentioned Australia, where we are focused on the firm business, and that should start to give us returns. On a net basis, gradually, we should see this improving going forward in the next couple of quarters.
Great. Thanks.
The next question is from Toby Reeks of Morgan Stanley. Toby, please go ahead.
Hi there, guys. Can I ask a couple as well? The first is on leverage in the capital structure. It looks like you're going to have pretty much no debt by the end of 2015. You've got an internal target of 2x net debt to EBITDA, and there aren't any acquisitions in the pipeline. Can you talk around your thought process of how that will pan out, particularly around returns?
Yeah. These assumptions are not illogical, so to say. It's a matter of scenarios testing. If you would follow a continued growth scenario, then indeed, at the end of 2015, there will be either little or no debt left. We don't know if that will happen, first of all. Secondly, we don't have any relevant M&A in the pipeline as we speak, but we might be looking at it in the course of the next quarters. We might start to look at it again. Again, strategically, we're not cooking something sizable, very sizable. That's not the ocean as per today. The point is just, if you can get this kind of facility at a relatively low cost, if you, again, compare our financial expenses with the market, it's very low. We're making an investment here, which is very acceptable. It's rather opportunistic. It's there.
If we need it, we'll use it. If not, we're not going to use it. Getting to underlying potential assumptions, this is not arranged in order to repurchase shares. That's not the intention here. No pending sizable acquisitions, nothing in the cooks in terms of global changing transactions, no repurchasing of shares being prepared. That is sort of the underlying argument here, but rather opportunistically refinance ourselves for the next five years.
The question isn't around the covenants being four and a half. It's just that your internal target is 2, and then you're going to be 0 in 2015, and you don't have any M&A, and you're not going to repurchase shares. Is there scope for the dividend to increase? What's the thought process around that internally?
Again, we try to disconnect transactions and financing as much as we can. We did see an opportunity in the market because we typically spend a little money to keep insurance options in the air, and we could combine it now. If we save a few 100K, then we just go for it, and now we could move the insurance options into the overall arrangement. That is why we did it. Again, this is a financing that is going to carry us for the next five years into 2019, and then it has two expansion options that brings us into 2021. Something might happen in these years, but nothing in the cooks right now.
To put the question another way, I should just assume in my model that you turn cash positive in 2016. I shouldn't be assuming that you use that cash flow on-- You have sort of ruled out buybacks. You are saying there is nothing in the pipeline, I shouldn't assume that you will look to return some of that if you go cash positive in a special dividend or something like that?
Well, we have studied it once more. If you go back to economic theory, share buybacks are not adding economic value unless the money is in the balance sheet for a long period of time, and that is a statement we have made before. If Randstad arrives at a net cash position and it lasts for a while, then we will certainly reconsider this at that point in time because we are not going to keep cash in the balance sheet forever. But that is not the case at the moment. That will take a little while, and then we will come back to it.
Clear. The second one is, you touched on-
I think we have to move on, Toby. Next question, please. Thank you for your questions.
The next question is from Tom Sykes of Deutsche Bank. Tom, please go ahead.
I just wondered if you could detail the growth rate in the in-house business in North America, please. It looks like it was growing at about 15% in Q4 last year, and it's sort of about 7% now. I just wondered whether that was due to a lower level of transfers, Canada, or what's happening to the underlying, if you give a view on the industrial, maybe manufacturing business in the U.S. Then also, you just made the comment on MSP in Europe maturing quickly. I was just wondering whether you could expand on that and maybe which countries you thought were adopting an MSP model more quickly than others, please.
On the U.S., the numbers we report are not net of transfers. In the RIS, what you're seeing is actually the underlying organic growth rate is improving. It's accelerating fairly significantly. That has to do with two things, lots of new wins, new programs, and a robust, and many are saying renaissance of the manufacturing sector in the U.S. The growth of the RIS segment in the U.S. is very positive. The comparative growth rates throw us off a little bit because they include transfers. Last year, the growth rates were primarily driven by transfers. This year, the growth rate is driven by new wins. If you saw also the branch growth rate in U.S. general staffing is also up. I think that the interpretation is actually an acceleration, not a deceleration, though I understand why that's a bit confusing.
Okay. Is that bottoming out now? The in-house North America should start re-accelerating again?
It's not not accelerating. The number is confusing because it includes transfers. You have to look at the overall general staffing number to look at the health of the segment because we move things back and forth between the branch segment and the RIS segment.
Fine. Okay. Thank you.
Do you want to do the MSP one also or not? Shall I do the MSP one?
You do it because I missed the question.
Good morning also to you, Tom. MSP, we have a great team in the U.S., an experienced team, and they're doing well, and they're selling more programs. We sold a lot of new programs into Q1, and they're maturing into Q2, that helps. As you know our company well, when we have a strong concept, we multiply it across the world. We now have a global team on MSP and RPO, a SourceRight team, and they share experiences. In our GCS team, of course, we sell around the world. That fuels our growth. MSP is still, certainly in continental Europe, a pretty immature market, but landing ThyssenKrupp in Germany, EUR 150 million spent on the management, 33 locations, is really a benchmark success. Yeah, this business feeds on one client telling the other ones that they made a good choice.
You get sort of a speed up. Pretty happy with the development there. We think it's crucial because if you look at the U.S., probably 85% of all corporates have a program in place, either MSP, RPO, or both. We want to be ahead of the curve in that development, certainly in Europe, and ideally also keep up with this development in Asia.
Do you feel like the speed of acceptance is moving up a little, obviously given the reference client there? In continental Europe, obviously ex-U.K. and Europe, where certainly the RPO model or then maybe the MSP model has been there for a while. Has MSP in continental Europe, there's a bit more traction there?
Yeah. In our total talent architecture approach, we don't talk about MSP as a means. We talk about managing workforces. We talk about managing suppliers. We talk about compliance. We talk about a long-term HR visibility based on transparency and spend. Then you get to MSP. Yeah, it's being picked up. In Europe, if you look at the conferences, where we are and where we present, in the HR community, it's becoming more and more logical to start contemplating this. Again, there's more and more clients who already have adopted a similar model. You get the speed up.
Okay. Many thanks. Thank you.
Okay.
The next question is from Laurent Grenu of Exane BNP Paribas. Laurent, please go ahead.
Yes, good morning. Just a couple from me. Firstly, in Australia, could you elaborate a bit more on your good performance, which contrasts with your competitors' numbers? Is it the results of your Salesforce initiative? Secondly, on France, do you expect similar performance in Q3 versus Q2, despite the CICE and the weak July? Where do you see in the construction segment, please?
François will do the question on France. The first question, I heard good performance, thank you. Which sector were you specifically aiming?
Sorry, in Australia.
Australia?
Yeah.
I think good performance is between brackets. Yes, we grow relatively fast in large blue-collar clients. We've not implemented in-house yet in Australia. We're doing that now in the second half of the year, I think we'll benefit more from that. Our growth in the top line, although it's always good to have that, doesn't translate yet into a great EBITDA performance. They know that. We have two strategies in Australia. One, as mentioned, moving large clients to in-house, and the second one is grow faster in perm. Definitely optimistic about what goes on in Australia. Not yet happy with the overall result. In France?
France, the trend about Q3. If we look at the trend in July, last week, professional union announced a downturn around for the week, -4%. I don't know if Q3 will be better. Probably, once again, companies are waiting for the EUR 10 billion additional CICE or subsidies to decide to invest or not. Aeronautics is doing very well. Automotive getting a bit better, but due to a bad effect on the construction segment is doing very bad. I don't know if Q3, but we hope, but we will see. We have no good sign right now.
Okay. Thank you. Can you just repeat the exit rate in June for rest of Europe? I've heard 8%, but I think it's a wrong number.
Just checking the data now. Of Europe was +3%.
+3%?
Yes.
Compared to +20% in Q2.
+20% in Q2?
I mean, for other European countries. Is that correct?
Yeah, we had an exit rate for Q1 of 18, now for Q2, it's +3, rest of Europe.
I'm a bit lost. When I look at your performance for other European countries, it was 20% up organic in Q2. You're talking about an exit rate of plus 3%?
We'll have a look at it and we'll come back to this item. Just hold on.
Okay. Thank you.
We'll move to the next question, then we'll come back.
The next question is from Rajesh Kumar of HSBC. Rajesh, please go ahead.
Hi. Good morning. Could you just give us some clear indication on what July growth rate you are indicating? It says it's in line with the quarter. When you say in line with the quarter, are you talking about April or June? Second, you've talked about the funnel process in which people are taking decisions quicker. Which particular market is that happening, and what do you think it means for the conversion ratio?
On your first question, yeah, particularly guidance. The revenue level projected for July is roughly the same as for Q1. Yeah, I think that's pretty precise guidance. I cannot put any more light on that one. I didn't understand your second question, could you repeat that one?
You're saying July is in line with Q1, not Q2?
Yep.
Okay.
4.5%, something like that.
Okay. The second question is basically the speed of hiring. Which all markets have you seen-
Speed of hiring?
Yeah.
Okay. Yeah, well, speed of hiring certainly in the U.S., in U.K., it's picking up a bit. I would like to reiterate the fact that our growth in perm is also a deliberate effort, and not so much that the speed of hiring overall is increasing. We do see some meta markets, but also some markets where this is a result of deliberate sales effort.
Thanks.
Okay. Now I'm going to come back to the question on the exit rate for the other European countries. That was a typo, so thanks for identifying it. It doesn't change the total, by the way. As a compensation, I'm going to give you the exit rates of the underlying countries. Sorry, the exit rate was 19 for all Europe, and for Italy, it was 15. For Switzerland, it was just north of 13. For Austria, it was north of 15.
50.
50, yes. Poland, 25.
That's pretty good return on a mistake, isn't it?
Austria with the 5.0 growth, that's the part we bought from USG.
We have a follow-up question from Toby Reeks of Morgan Stanley. Toby, please go ahead.
Hi, guys. Looks like I get my second question after all. On the OpEx development that you're expecting as we go into the next quarter, could you just talk around the marketing side of things? How much do you think that's going to pick up by, and is that the primary driver of the increase in?
Spectacular as in marketing boost like Q4. A slight seasonal pickup certainly in September, because September is always when you start the year again, and then we have a lot of marketing offense plans to be in the market to support our people going out. Certainly also in the Netherlands, we'll again have what we call the Youth at Work project, where we're going to try and get a lot of unemployed youth back to work again, like we very successfully did last year. Very much looking forward to doing that again.
Okay. You sort of a similar progression that we saw into Q2, is that the sort of level we should be looking at?
Yeah.
Okay, cool.
Yeah.
Okay, thanks.
We have no further questions coming through on the telephone lines.
Okay, we go back to the room where we have 3 final questions. Please limit yourself to one or two questions, please. Thank you very much. Marc.
two final questions from my side. First of all, Robert Jan, can you give us an indication how much the interest costs will go down on the back of the renegotiated loans on an annual basis, based on current EBITDA and current floating rates? The other question is about Germany. What do you see going on there in July? Because you see some automotives working throughout the summer and expanding holidays. Is July getting a bit better because of companies not going on holiday?
No, not because of that. Companies not going to holiday, you see when they have a lot of demand. It's not that booming, they just do what they usually do. We do see the comps not decreasing in volume. That's good. Sorry. The volume development compared to the same period last year is flattening out. Where it was going one, two into the down volume.
Yeah.
Volume is now stabilizing in July.
Fair. Yeah.
You can't realize a lot of improvement on a relatively low amount of financial expenses. That's the starting point. The improvements have been marginal. If you take EUR 60 million as a base for now, then I guess we might be able to save EUR 1 million or so or EUR 1 million plus. It's very much dependent on the underlying base rates of course. That is key. These are very attractive as we speak.
Hi. Yeah.
Yes, one question from my side on Iberia. There you see year-over-year, only about EUR two and a half million improvement in your profitability, while you see organically a quite significant growth. At the same time, of course, you've saved about EUR 4 million on the USG integration. What's happening in the underlying, what's the reason for that? I haven't seen a better improvement in absolute profitability.
Yeah. It combines Spain and Portugal. Spain is a very steady, good improvement. In Portugal, we've made some adjustments to the portfolio, the client base. Portugal is a growing market, but also challenging. Typically, DSO is sort of very high levels. You have to think about 80, 90 days. Pricing can be unattractive. We have made some choices here in the portfolio. That's what you see coming through.
Thanks. Welcome back.
Thank you, Jacques. Piet Hein Lodewijks at SNS. Just I'll limit myself to one question, and that is regarding the permanent placement business. Of course, seeing a great growth there this quarter. Given the activity that you've been putting out, I expect that to grow further in the next coming quarters. Where do you see this business strategically go to as a percentage of your gross profit? I know that it's not an exact question that at 2016 I want to have 20%, but more on a broader level, how does it fit in your portfolio?
Yeah. There's two things, two developments here. One is the development of growing more in perm in the business mix in our more established countries. Comparison again, U.S. staffing going from 3% to 8%. The Dutch business, the German business, the Belgian business still at 3%. They could go up to 5%, 6%. The second development, of course, is that we have more companies who sell perm. The Chinese business being one of them. We're also changing our Brazilian business, which in hindsight, was too much built into, again, a staffing business, large clients, low margin. We don't want to go there. Certainly not in Brazil. Revamping that into a perm business. There's also a business effect. Our highest point was 12% perm fees in the gross margin in 2008.
I think over time, but again, rightly so, this is just a number, 15% could be feasible. Yeah. But again, depending on developments. You know how it works. Finally, I give the floor to Robert Jan.
I'd like to sort of finalize the Q&A. Thank you for joining us on the presentation. I'd like just to add one thing, and that is that the trends that we have seen now in Q2 and going into Q3 are very much also confirming the fact that we believe the 5%-6% EBITDA range is very feasible depending, of course I mean, it's a matter of timing very much depending on the speed of growth. That's also important in the context of my final point here, if I may, because we have one guy sitting here who's been with us. Jan-Pieter has been with us since 2004, for the last 10 years. He's been responsible for Investor Relations for the last three years. Actually, a predecessor of yourselves is here, Piet Hein, and your successor sits here, Arun.
Your two other predecessors are in Singapore and in Tempo-Team, and actually you're going to follow the same path. Jan-Pieter has been promoted to become the CFO of our Portuguese business. You just heard a question about it, work to do. We just, on behalf of everyone, wanted to say thanks a lot. We highly appreciated your conscientious work, your dedication, your passion. It was an excellent period of time over the last three years. Thanks a lot.