Earnings Call: Q2 2021

Jul 27, 2021

Hello, and welcome to the Randstad Second Quarter Results 2021. My name is Judy, and I'll be the coordinator for today's event. Please note that this call is being recorded. And for the duration of the call, your lines will be in listen only. However, you will have the opportunity to ask I will now hand you over to your host, Jacques van der Brooke, the CEO to begin today's conference. Thank you. Yes. Thank you very much. Good morning, everybody. So, Summer is here. So, the Q2 presentation. I'm here with Henry and Bijra and Akshay from Investor Relations to take you through our Q2. So going to slide 6 immediately. Positive momentum continued to across all our geographies in Q2 of 2021, and we think we delivered a strong above market group performance. We surpassed 2019. We already mentioned that last time for us 2019, a record year, dollars 23,700,000,000 of revenue. That is really the benchmark because 20 €1,000,000,000 of revenue, that is really the benchmark because 2020 was a bit of a funny year. So we surpassed 2019 Utilizing the full strength of our portfolio. We believe we made a good decision with introducing our Nu Waste program last year. Nu Waste, Both for our clients, our talent and ourselves, benefiting and utilizing virtual calls, virtual hangouts, Remote HR processes, that sort of thing. But for ourselves, we continued to invest in people and digital Yes, that gives us a position of strength today, and it enables us to further drive profitable growth. All our markets record significantly quarterly year over year revenue growth driven by increased demand for all our concepts on the back of a continued global market recovery. We are, however, seeing supply chain dynamics impacting some of our markets, such as France, Spain and Belgium, But we do think they are of a temporary nature. In the quarter, we've seen our perm revenue grow by 91% year on year, And that's also above 2019, which is a very strong recovery and well, a bit sooner even than we expected a few months Our experienced management teams, the diversified portfolio and focused investments contribute to outperformance in several markets, And we continue to gain market share in the U. S. And France, but also in Germany, Netherlands and Belgium. We achieved solid profitability, Whilst continuing to invest in new growth opportunities. As a result, we welcomed more than 2,400 new colleagues to our global workforce. And you might remember, We already put in 1,000 more in Q1. We're also continuing to invest in our global technology transformation With Monster showing positive year on year momentum, and we're excited to provide a better experience to both talent and employers using the combination Of Randstad and Monster Capabilities in the future. Something's changing, we think. Talent and employers Think significantly differently about work and their relationship to work today than they did before. And that means that those whose job it is to find other people jobs Busier than ever, and their help is in more demand than ever. A lot of talk, of course. We've had a lot of talk about Technology and how it will take over, we've always said it's support. And what we've seen in the last year is that people really supported by technology, But want to reach out to a human being, we also think that clients increasingly want to reach out to a human being providing data on the labor market. As markets begin to recover, pre pandemic trends such as talent scarcity are returning. We provide in-depth data, technology and integrated services We're playing an essential role for our clients by helping them to achieve a total talent management strategy. Our clients need to be increasingly aware That their workers, they have a different outlook. Our recent Randstad Employer Branding Research also showed that, Is that people want to continue a hybrid form of working from home. So we very much work with our clients on what does that mean, What are the demands of your people and how can you accommodate that? To take you through our full strategy, how are things how are we doing, The data strategy Monster Enterprise, we will organize the Capital Markets Day on 17th November this year, more to come in the coming months. However, having said all that, pandemic continues to touch the lives of many, and the well-being and health of our employees is our highest priority. This quarter, in particular, I'm very proud Of the active role we played in the pandemic humanitarian response to India, I would also like to thank all our global colleagues for the support they have shown in this initiative. Based on the strength of our performance in the first half, we're optimistic for the remainder of 2021, although we're still exercising caution With pandemic related instabilities and limited visibility remains. I think we can say overall lockdowns have been easing throughout Europe in the second quarter Vaccination rates are increasing. This is, of course, fueling some of the positive sentiment in the economy. Nonetheless, You need to be cautious and careful. Restrictions are still tentative, and there are concerns of the delta variant, how the holiday season unfolds, And finally, getting back to work. So let's see how the situation evolves in the coming weeks ahead of us. So let's take you to the next slide where we're going to have a closer look Our North American business continued its growth path, up 23% year on year And they're above 2019, 1%. Perm revenue was up 9% against 2019, which is a remarkable achievement. The U. S. Market in particular was impacted by talent scarcity. We still see a bit of friction of, call it, Unemployment scheme is unwinding, and we hope that more people will get back to work again in September as some of these schemes will be adjusted. U. S. Staffing and Inhouse grew 33%, outperforming the market with the staffing business performing particularly well As all sectors bounce back versus 2020. U. S. Profits up 6% year on year, but of course, this was a business That had low single digit declines as opposed to the staffing and in house business, yes? So way more way tougher comparisons. But definitely kudos to the Randstad Technologies team on a very strong performance, but also the engineering company, smaller company, they're doing very well. Canada grew, that's roughly 10% of our North American portfolio, grew 50% in Q2 and 12% versus 2019, A very, very strong performance of market share and its team. EBITDA 4.7 percent, up 60 basis points compared to last year, And the margin reflects the ongoing investments for future growth. We see that we're able to onboard people faster, which contributes to an improved productivity. Our French market competitive performance or we think market leading performance, again, above market, The business continued to perform well in still a challenging economic environment driven by the severity of the lockdown. We expect ongoing improvement given that the majority of the restrictions have been lifted towards the end of the second quarter. However, We also experienced supply chain constraints in the quarter, and I mentioned earlier on this call, up 63% year on year, But still down 5% versus 2019. Good recovery in perm fees, 94% growth year on year, But again, still down 6% in compared to 2019. Staffing and in house is up 71%, Very strong demand across all sectors given the comparison with COVID-nineteen, of course. Food, Retail, Healthcare and Logistics Continue to perform strongly. Profs turned into growth territory in the Q1 and continued to perform very well in the 2nd quarter, mainly driven by the Healthcare business. OZ, our solutions business in IT and Engineering, has seen a remarkable improvement in profitability Due to operational excellence, improved utilization rates of the people we have on our payroll and no longer on the bench for the vast majority And focus on key accounts, obviously, longer project, and we supply the right expertise. So the result, of course, is a strong improvement in profitability driven by this top line recovery. Our Dutch business on the next slide, it accelerated in Q2, And the Netherlands is now up 37% year on year and 4% versus 2019. Very strong performance in the second quarter. And at the end of the Q2, the Dutch business was also above the market. Dutch market continued to perform throughout the quarter, and we saw revenue of all 3 brands Above 2019 levels. In the Netherlands, unlike France, for example, the economy has remained relatively more open throughout the pandemic. Lockdowns have been less severe. There's also been a lot of government support and relief packages to strengthen the economy. Additionally, Netherlands, as we also flagged in our Q1 call, did significantly benefit from COVID related activities, so vaccinations, people in call centers, testing. 2nd quarter, that was the 2nd quarter. This is an example how we can bring solutions at speed and scale to help clients and communities at large. Staffing and in house was up 44% with a broad based recovery again amongst all sectors and ongoing momentum in food, e commerce and logistics. Our Pross business, Yacht, was already above 2019 in Q1 and continued its solid performance. EBITA came in exceptionally strong at 6.4%, benefiting from the demand momentum and productivity gains. Our German business, 46% growth year on year, reflecting a strong recovery through the quarter despite talent scarcity and supply chain constraints. There's a bit of a difference between German automotive and French Spanish automotive. I've shared this with you a few times. And in the financial crisis, German automotive was strong because they sold worldwide. And Europe was way more subdued and that hit the French business. We see that to a certain extent again, very strong demand for Asian brands Asian cars sorry, German cars in Asia, and that fuels the growth in Germany despite The supply chain issues. We see early signs of the automotive industry picking up. Order books are full as demand for premium and electric cars is picking up. What we also see in Germany, but of course, that's across the board, is that manufacturers seeking more flexibility, Which we think will drive demand for temp labor and increase penetration rates. EBITA came in at 1.7. What's important to mention in Germany is this is a business which already is for 3 years in decline, now picking up. Fortunately, they are at 2019 level. But we decided to leave most of the infrastructure in Germany in place. So compared to other businesses, they still have a lower conversion rate. But for us, this is a deliberate investment in the biggest economy in Europe. And we do expect EBITDA to improve in the coming years. Belgium, a solid performer as always, Continued to improve in Q2. Revenue 37%, but again, one of the markets which is still 3% below 2019. Lockdowns were slowly lifted. We have some specific businesses that were affected. We have a business of Subsidized cleaning ladies, a few thousand. And we do see that the angst around COVID affects This specifically Belgium part of the business. Food, Retail, Healthcare and Logistics, again, performing strongly. Our Belgian Professionals business, part of OC, performed very well and is also already above 2019. An improvement in profitability as the utilization rates also there continue to improve. Italy, yes, it's the gift that keeps on giving. Italy is 15% above 2019. We mentioned this before, given The low penetration in Italy, although going up, this is a very, very promising market. They invested well ahead of the cycle and that's now paying off. Let's all be reminded, of course, that Italy was the 1st country hit by COVID. And if we see where they are now, We're very happy and we're very proud of our Italian business at a very strong 6.3% EBITA margin driven by productivity gains and at the same time Investing in growth. This is still a market by the way. We are still opening branches in regions where we think we are underrepresented. Iberia, Spain continued to recover, still 1% above 2019, and the bets out if they can beat that in the Q3. Still impacted by supply chain constraint, as mentioned. Nonetheless, momentum has improved since Q1, and we have a great pipeline for the second half of the year in this business. Solid profitability with 5.5%. The Rest of Europe, a mixed picture, but overall Improvement across the board. U. K. 12% above 2019 good and strong growth in food and logistics again And Poland even 28% above 2019. The rest of the world, 16% in the total portfolio above 2019. I would like to remind you that our Latin American business already grew last year, so no 2020 easy comps here. Biggest market Japan, predominantly in blue collar staffing growing 5%, 3% above 2019. Latam, we celebrated our 10 years in Brazil this quarter actually. So congratulations, Colleagues in Brazil, close to 700 people already in Brazil. So one of our more promising markets given the size of this economy and the fact that this is still a young market. Australia and New Zealand, very strong growth at 33%, 24% above 2019. And then India, I mentioned it already, one of the countries heavily, heavily touched by COVID, also our own colleagues, flex workers, hence the support, But still, continue to grow. Remarkable achievement, 21% above 2019. Well done, India. And overall, as you can see, A strong and stable profitability. Finally, our Global Businesses. RSR doing extremely well, up 19% above This is driven by RPO, recruitment process outsourcing, predominantly in North America, the very strong pipeline for new and existing clients. This strong performance is also supporting the overall improvement of profitability in the global business concept. Rismarck, a mixed picture here, down in the U. S. But overall, very strong growth last year here. You see Momentum in the economy, that business goes down. But in Europe, where we are on a rollout for our career transition business, Still strong numbers there. Then on Monster, as you know, we've been rolling out our new job board platform across our geographies. First half year, we worked on the seeker part, so the candidate part. We see applies going up. We also see Way more job postings. So we do see on the one hand more job postings. But as a general term, not so much Monster, but also Randstad, less Traffic. So that's a sign, of course, of the market heating up. Second half of the year, we're going to roll out the customer part Now it's more pay per click, pay for performance and e commerce for small client functionalities. And that means that at the end of 20 21 will be the job board in the world with the newest technology. And more on that on our Capital Markets Day, but great to see That they have a little bit of growth in May June, early days still below 2019, but well done, Monster team. A lot of hard work. So that's it for the markets. Henri, the numbers. Thank you so much, Jack. Good morning, everybody. Yes, quite excited to report back on another strong quarter, Not just expressed in the P and L balance sheet and cash flow statement, but also with regards to the creation of growth capacity and digital enablement for our company. Our group revenue already surpassed 2019 levels, and we are very well positioned to continue to benefit from strong demand in recovering markets As well as further strengthening our market position in key geographies. Revenue growth in quarter 2 came in at 38.2% year over year and 3% above The recovery of volume and revenue is broad based in all countries, so we continue to see regional differences Due to ongoing COVID related restrictions, we continue to gain market share in significant parts of our portfolio without compromising Our overall pricing discipline and gross margins in the period came in strongly, up 30 basis points sequentially and 80 basis points up year over year. We will go more into detail on the next page. With regards to the OpEx, as we've mentioned in our earlier calls, we are pushing hard to invest well ahead of the curve, While safeguarding attractive ROIs, we continue to operate from a position of strength. Our incremental conversion ratio in the quarter was 53%, EBITA came in at EUR 260,000,000 at the margin of 4.3%, 60 basis points higher sequentially. The integration and one offs were €10,000,000 negative this quarter, which reflects some fine tuning of operational structures in a few businesses. Reported effective tax rate sits at 26% for the 1st 6 months of the year. And for the full year, we now expect an effective Tax rate between 25% 27%, a touch lower than what we've guided for last quarter. So let me now take you to the next Page to talk about the gross margin. Here we go already, Page 14. So the second blue bar on the left So the temp margin impact, which is up 30 basis points year over year. The temp margin impact reflects the annualization of COVID-nineteen related effect Like idle time and sickness, which is further benefiting from a bit of working day tailwind. Most importantly, we can confirm a broadly stable pricing environment across The board. The middle blue bar reflects our perm margin impact, which is 50 basis points up year over year as the economies are recovering. This also reflected in our firm business, which increased by 91% year over year and is up 1% versus 2019. And lastly, HR Solutions impact was broadly stable year over year. Whilst our gross margin path remains difficult to predict, We reiterate the importance of safeguarding attractive gross margins in all our business activities. Smart value based pricing is fully back on the agenda As a strategic mix management is winning must customize digital support. That brings me to the OpEx bridge on Page 15. Our active and disciplined OpEx management seeks to support full utilization of countless significant growth opportunities in our markets and an uncompromised investment strategy to further differentiate our market leading services. Hence, our decision to invest back into growth capacity quite early in the recovery as an acceleration of our investments into the digital enablement of the business. Our OpEx came in at €923,000,000 which is 15.2 percent of revenue. That compares to €858,000,000 Quarter 1 at an OpEx ratio of 15.5%. This represents a 30 basis points margin uplift from the OpEx line sequentially. As mentioned in my opening, we have added about 2,004 100 FDA throughout quarter 2, which will help us in our quest to further develop our market position Once those results are fully productive, please note that the cost of those hires will materialize fully in quarter 3, Which is also reflected in our quarter 3 OpEx outlook. As reported, also in the last quarters, we continue to work relentlessly to identify less Productive spend to support our investments into growth and winning capabilities. That productivity journey has become part of our DNA and will provide ongoing self help To secure sufficient fuel for growth and market leading profitability. With that in mind, let's now move on to our cash flow and balance sheet on Page 16. Whilst benefiting in the quarter from more than €300,000,000 higher EBITDA, we have also seen an expected swing back of working capital To support our strong growth. In quarter 2, we still managed to generate a free cash flow of €78,000,000 with solid fundamentals. Our DSO came down another 0.9 days year over year to 52.1 on last 4 quarters moving base. Our balance sheet remains to be very strong, showing EUR 160,000,000 net cash position at the leverage ratio of minus 0.2, excluding IFRS 16. As we've already mentioned, in April this year, we've paid a regular dividend of €1.62 per share And dividend on the preference shares totaling €306,000,000 This impacted our total net cash position at the end of the quarter. That brings me to my last chart, the conclusion and outlook on Slide 17. As stated before, the volume recovery sustained throughout the 2nd quarter And it's broad based across our portfolio. At the same time, visibility remains limited with ongoing macroeconomic uncertainty due to the COVID-nineteen pandemic. Quarter 2, 2021 organic revenue per working day increased 38% year over year and by 3% compared to quarter 2, 2019. The development of volumes in early July indicates continued positive momentum. 4 to 3 gross margin is expected to be flat sequentially. 43 operating expenses are expected to be slightly higher sequentially, reflecting the continued investments in line with our growth momentum in quarter 2. We're aiming for an incremental conversion ratio of 40% to 50% over time. For quarter 3, however, We expect an incremental conversion ratio of 30% to 40%, mainly due to the full materialization of Edith's Fuel capacity throughout quarter 2. And lastly, let me mention there is no significant working day expected or There is no working day impact in the Q3. We know that already. Well, that concludes our prepared remarks, and I'd like to give back to the operator. Thank you so much, Henry. Event. The first question in the queue is coming from the line of Scott Van Mas from JPMorgan. Oscar, you're unmuted and may now go ahead. Hi, good morning, everyone. Three quick questions from me. The first one on the exit rate. I think in April, you said that April was close to 2019 levels. Is it fair to assume then that June July are above 3%? That's the first question. And then the second question, in Transport and Logistics, you've previously said it's about 25% of the group. Is that end market still outperforming other parts of the group? And then the third question on just the vaccine and one off COVID. Could you quantify the impact in the Netherlands and maybe Italy as well? Should we think of vaccines helping to explain the outperformance versus the market? Yes, those are my three questions. Thank you. Well, the last one, we're not quantifying. It's small, but it doesn't It's way less than the outperformance in the market, fortunately. The outperformance very much the new waste program, Training our people, hiring more people. And yes, in the Netherlands, this is sizable, but on a global level, it's very small. Yes. Transport and Logistics is still outperforming, so absolutely. And then, Henri, on the exit rates? Yes. Exeter rates, look, we've said we've continued to post momentum throughout the quarter. That's where we like to leave it. There's many moving parts in there, but So please feel how positive we are in general, our guidance fell 4. We're in investment mode, but we like to leave it there. Okay. That's fine. Thank you very much. Thank you, Oscar for your questions. And the next question is coming from the line of Mark Zwartsenburg from ING. Mark, you're unmuted. I may now go ahead. Yes. Thank you for taking my questions. Good morning, everybody. I would also like to come back on the exoplanet. I know, Henry, you would like to leave it there. But can't you give any Yes. A bit more color, particularly given the Q2 has a tough comp, so let's compare it to 2019. Can you give a little bit more color How this last 4 months are evolving? Because it is also in your outlook statement a bit difficult because the grip on the top line. Can you give him maybe a little bit more color? Or are we not going to that discussion? Hi, Marc. Good morning. No, actually, I'd like to leave it there. I mean, we have I think we've been relatively clear as we can be that We have seen a positive momentum throughout quarter. Volumes are firmly above 2019 levels. And it would be probably more confusing than the rest. Just take our positive outlook in general, Marc. That's all the guidance. Yes. Because if I look to your outlook and take all the moving parts except for the guidance on the top line, but you can get some feel with the recovery ratio or the conversion ratio. It does seem to indicate that indeed the positive trend is continuing into July. Otherwise, I can't No, no, that's but that is That's definitely true, Mark. Of course, the positive trend. But of course, on the one hand, we're okay with the fact that this is all very tough to compare If you compare it to the more stable years we've had, but yes, it is what it is. Of course, the comparisons are getting a But we are, as we speak, continuing our outperformance versus 2019. That's what we're stating. Yes. Okay. That's good. And then maybe coming back to the OpEx line. What has triggered because we had this call in April. You guided for low to mid single digit increase in OpEx, and it came in quite a bit higher. What triggered that Strong investments in the second half maybe of the quarter. What are you seeing that triggered that you are investing even More aggressively than what we've seen in Q1 and what we heard a bit at the guidance at Q1 results? Yes. Well, this, of course, is The way we work, it's fuel steering. So you see that we grew faster than maybe we would have Expected when we did our guidance. And then we put in more people. It's you can look at the absolute numbers. You can also look at the percentage, yes? It's stable at 15.2%. Your consensus was 15.2%. And our cost is also 15.2%. So if we grow faster, we have more confidence Then we put in more people. For example, in perm, we're very happy we did that. Because if you would have asked me at the back of Q1 that perm was growing as it was now, I would probably have doubted that a bit. But we're very happy we aggressively put people into our perm businesses to benefit from that Because if you're not if you don't have it, you're too late. If you look at manpower, they were still negative In Q4 and also in Q1, yes. And then you can't pick up the growth. So yes, it's an art, but more people because of more growth. And then maybe last one on pricing. And you already mentioned the parity issues here and there. You see it everywhere. Do you already see something moving into the pricing that is moving up that you have easy discussions? Or is it more that this candidate scarcity is limiting your growth a So let me take that one. So in quarter 2, actually, we see overall really stable Pricing climate. Of course, there's some scarcity in there, and there's 4, first anecdotal views about Price increase, but quarter 2, it's a pretty clean quarter in that regard. There's probably 50% volume, 50% price in there. It's what you would expect it also. So there's no artificial pricing impact we would see. But also no acceleration already that you see that it's moving up a bit. Can you describe it? No, look, we're not Guiding on price going forward. But as a general statement, we benefit from labor scarcity in markets Because it drives the demand for our services, but also gives us a little bit more impact on pricing power, and we can Play out our value based pricing a little bit better. So in general, we like to see a bit of in place. That's true. And is there any limit to growth in certain regions due to scarcity? Or are you expected to move back into the labor force after the summer? This goes back to our strategy, of course, Markus. So we have foreseen, if you just do the numbers that going to be less and less active job seekers. That's why we are creating this data lake where we can still, on behalf of our clients, get in and find them the people they need. But our clients also need to adjust. They need to adjust to what's not the ideal profile. So that's the core of the discussions we're going to have with clients To see what's out there and not so much what do you want. Also people want to work from home. Can you put work on a platform? Can you put work elsewhere? Can you automate? So those discussions are fully back. We're very well positioned to benefit from it. What I said earlier in my remarks is that the pure tech place can't cater for this because the labor market is an imperfect market, So it's Tech and Touch. So optimistic there on the role we can play. All right. Thank you very much. Thanks, Mark. Thank you so much, Mark, for your question. Event. The next question in the queue is coming from the line of Anvesh Agrawal from Morgan Stanley. Anvesh, you're unmuted. I may now go ahead. Thank you. So I got two questions, one on the gross margin and then on the FTEs. So just on the gross margin, while your sort of revenue line is back or above 2019 level now with BAM is also above, But the gross margins remain below 2019. I know there's a bit of a mix with in house growing faster, but maybe some comments there. Why is That and when do you expect and especially given the pricing environment is stable, when do you expect the gross margins to catch up with And then just on the FTEs, if I look the number of FTEs you ended at Q2, pretty much in line with where you were at the end of 2019. So with the growth running Well, in about 2019, should we expect further investment as we go in Q3, Q4? Or the guidance implies that the Q3 SG and A will move up only because there's a run rate impact, and you're not looking to add any further heads, just some thoughts there. Let me take the first one. Hi, Anders. Thanks for your question. Yes, so I think it's we're quite pleased to See the benefit of perm kicking in in quarter 2. We've quite suffered last year. You remember, we had quarters of minus So 50 minuteus 60 to see that kicking back in is really good and to see overall stable pricing is also good. So in a way, We're really taking a part of our business on a unit by unit base. We just make sure that we get the right conversion out of each of our business Fine. And going totally back to 2019 is probably not the right way of looking at it because our business is Quite changed in its composition. So we are upbeat about gross margin. It's Strong, but maybe we need to take the new business into account with much stronger in house growth and also other business lines kicking in. Yes. And a large part of the difference is still the negative growth of Monster compared to 2019. But if you take that out, then we have pretty stable Business, also given the fact that a lot of growth is in house. That takes me to the headcount thing. We do have slightly more people than we have in 2019 actually. But growing it in house is highly profitable business. So it has a profitable start Well, also profitable from a conversion point of view, but it's highly productive business. So that means that we actually need a little bit less people as opposed to SME or that kind of business To run that, so what we're now seeing is, yes, we've invested. We got a sequential uptick, seasonal into Q3. Let's wait and see. But I think what we've proven is that we can very quickly pivot in 2020 negatively, this year positively Whenever we see business opportunity. But rest assured, whenever we see more possibilities in markets, of Of course, we will add the required headcount. Yes. And just to follow-up on that, again, what you said on in house with higher productivity, higher profitability, means the conversion margin should be higher. And then obviously, the Q3 conversion margins are expected to be lower. So is the incremental growth now coming From more like SME players or smaller clients other than the big in house clients. That's why you have this temporary location between the growth and the conversion margin or Yes. Yes. Lots of moving parts, Of course. But as I mentioned, we put people in perm. That in the beginning, of course, comes at a lower productivity because Yes. It takes, let's say, 9 months for people to ramp up, and they start at a lower productivity. So that's one part. SME, in a way, is still a promise for half 2. So it could still be that we will see as, Call it confidence increases that we'll see more SME business. And again, we're set up to handle that, but time will tell. Okay. That's clear. Thank you. Thank you so much, Jan Fish. And the next question in the queue is coming from the line of George Gregory from Exane. George, you're unmuted. I may now go ahead. Good morning, gentlemen. Just one Follow-up, if I may, on digital. I'm just wondering when You would expect to have a fully end to end digital Offering, including Canada app in your main markets, sort of fully integrated, Is there a road map with I'm sure there is a road map. When would you say that should be complete, please? Yes. George, 5 years ago, so yes, 5 or 7 years ago. So We have many fully digital things. But as we said on many calls, fully digital doesn't really scale. So we're experimenting. Again, we launched 1 in the U. S. Recently to see when fully digital is going to hit the road and really scale. In a way, I'm expecting the reverse. As I mentioned earlier, people in this imperfect labor market want to be supported To go into jobs, that's not the ideal profile. Clients don't get the ideal profiles anymore. They want to be supported in what is the ideal candidate. Having said that, and I said that a lot of times, if the business is going to move to fully digital, we're also going to be world market leader in fully digital. If you look at large clients, so large clients in e commerce, a very large part of the process is fully automated. So large parts of interviewing, large parts of scheduling, of course, the whole administration is fully automated. But the actual personal connection with the candidate, well, by the way, that could also be a chatbot. So you can debate whether that's tech or touch, But it's varying aspects of technology as much as clients allow us, as much as candidates or talent appreciate it. And yes, that's where we are. And just to clarify, Jack, if a client would like an end to end digital Service. They can get it without any additional any significant reintegration work? No, definitely. Yes, again, fully digital. About 110% of our clients I want to touch. So I don't want us to, in a way, have testimonials on the candidates. So Again, experimented a lot with it, but clients want to know who's in there. Clients want to know if credentials are checked. Clients want to know If people fit their culture, fit their process, so, so far always a touch moment. But if a client says no touch, I'll do it myself, happy to do so. Next week, you'll have it. Thank you. Thank you so much George for your question. If you would like to ask a question on today's call. Okay. We do have a follow-up question coming from the line of Anvesh Agrawal from Morgan Stanley. Anvesh, you're unmuted. I may now go ahead. Thank you. Just to follow-up on what George I was asking really on digital and you're saying that clients want to get in touch and want to know the candidates better. Does it differ between the blue collar and the white collar? Is there more sort of human touch needed in 1 or the other? Or is it sort of same across the board? Not really. I have a lot of discussions that people think that it's Tougher to select white collar than blue collar. I beg to differ. In blue collar, it's all about soft skills and personality, Because of course, purely a resume in blue color, that's not something to go on. So this is all about the touch, So to say. So no, not a lot of difference. And if so, maybe even more in blue color than it is in white color. Hence, The success of our in house, by the way, where we built a pool dedicated for a client that in today's labor market Fits availability, fits the right profiles and all the demands that clients have and all the wishes that candidates have. Okay. Thank you. Thank you, Anders. And the next question in the queue is coming from the line of Andy Grobler from Credit Suisse. Andy, you're unmuted. I may now go ahead. Hi, good morning. Just one quick one for me. You talked about Some supply chain dynamics in France and Spain impacting business to an extent. And then mentioned that you thought those would be temporary. Could you just go into a bit more detail about what you're seeing and why you think that those will not be Persistent. Thank you. Yes, sure. Good morning, Andy. Yes, so what you see is that a client at some point calls us And says I'm going to close for 2 days or I'm going to work without the temp pool for a few days because my amount of cars to be produced It's not as high as I would like to because, yes, I've got I don't have the chips to put in, very bluntly put. So that is what this is. I'm hoping that all the semiconductor producers are working in 5 or 6 shifts or however To churn out this stuff as quickly as possible and then hopefully, well, for us, but way more for the producers and also people waiting for cars, That will solve this issue. So it's not an economically driven thing. It has nothing to do with COVID. It's probably a hiccup of supply chain starting up Again, after putting the economy on pause for a year. And can I ask just a bit of a UK centric follow-up, but we've A lot of people are getting asked to self isolate in the UK at the moment through the track and trace system? When that happens to one of your temps, Does that person still get paid? Or how does that process work? That's very detailed. I was this morning educated on the fact that this is called pandemic. Yes. Yes. I couldn't tell you. Okay. I'll follow-up later. Yes. Yes. In general, of course, not, but yes. Okay. Thank you. Thank you so much, Andy. And there are no further questions in the queue. Okay. Good. Thank you for hosting. Thanks everybody for calling in. Thanks for your questions. And we're going to continue to grow and do our best. Thank you very much. Bye. Thank you very much. Thank you everyone for joining us on today's call. You may now disconnect your handsets.