Randstad N.V. (AMS:RAND)

CMD 2015

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Nov 17, 2015

Good afternoon, ladies and gentlemen. Thank you very much for attending. It's great to see you all here, also to see some of my esteemed older colleagues from my days in broking. My name is Tom Tyler. I'm the Head of Corporate and Investor Access here at Bloomberg. My team and I here, we aim to enhance transparency and communication between investors, brokers and corporates. And we do that through developing new technologies on the terminal, but also hosting events such as this. So we're delighted to be able to do this today. I was at last year's event and I sneakily thought that we could do just as good if not slightly better job from that location. And I hope that you've all appreciated the hospitality so far. So Jacques did a great job this morning on TV. I think all of the 350,000,000 viewers who have access to Bloomberg TV probably enjoyed his performance immensely. But without further ado, I would like to hand it over to Arun or is it just straight to Jack? To Arun, who will take you through the proceedings for the rest of the day. But thank you very much and have a great day. All right. Thanks, Tom. Thanks for the introduction. And before I welcome everybody, I want to thank Bloomberg for allowing us to host this Capital Markets Day. And also, of course, I want to welcome everybody in the hall for coming to this Capital Markets Day, the Dutch people that have flown over. There are around 100 people in the webcast, a lot of Randstad colleagues also welcome to them. So we have quite a busy agenda. And before I go to the program, I want to say a special welcome to one person who turns 50 today, Maarten Verbeek from the Netherlands. Congratulations with your birthday on behalf of everybody. So we have quite a busy agenda, but a condensed agenda as we did last year. What we try to address in this year Capital Markets Day is again talking about the changes in the HR landscape and then how our strategic roadmap is addressing these changes and how we try to capture these changes. It's basically a nice evolution of what we showed last year, and that is how our agenda looks. So last year, we had a lot of people from our businesses itself to talk about developments in the industry and our company. This year, we have 4 board members present to talk about their end responsibilities, but also giving examples of what is happening in the HR landscape. And we have an example, a demonstration of a product we developed, which we tried to roll out further. So that brings me to the agenda for today. We start with our CEO, Jacques van den Broek, who will give you a strategy update, talking about our road map. Then our CFO, Robert Jan van den Glaerts, will talk about the financial strategy. After that, we will combine those 2 presentations in a Q and A session. That's also after the Q and A session, the webcast will end. We have a coffee break. And then we continue with Board Member Linda Galipo to talk about how we go from staffing to integrated talent solutions. That's a new element in our strategic roadmap, the talent. Then we have Christophe Montagnon from France, who will show you and demonstrate a big data solution we've developed in France and how that makes life easier of our consultants in France and make them more productive. And then we end the presentation with Board member Chris Hoeiting who talks about trends in global clients and in central delivery and delivery models. And of course, he will also give you an update on the Netherlands. So that's the program for today. Before Chuck starts, I want to start with a short movie which shows you the way. Thank you. At Ramstad, we're passionate about making a real difference to the lives of people and businesses. Mariano from Philadelphia, a user experience professional, works from the comfort of his own home. Thanks to us. Area 360 in New Zealand, a mobile experience start up, was able to bring their content and stories to life. Due to us, Australia's Tyro Payments with over a 100 developers continues to deliver software solutions because of us. And these are just some of the lives we're impacting on a daily basis so that they can experience progress and achieve their best potential. The question is, how will we continue to make a difference in this ever changing world of work? A world speeded up by technology and globalization, making it transparent, connected and always on. The rise of the machine is creating new jobs and changing turn the tide to their advantage and progress. At Randstad, we have always been about supporting progress. We've always been here to fuel our client and talent's ambitions to create opportunity and to help realize their success. And in the future, we will continue to do so, but with different means and priorities. To support progress, we will need to take giant leaps ourselves. Technology will play an even greater role than ever before. Connecting talent in the digital age means our consultants will have fundamentally different roles. In a world where matching platforms and insightful applications will play an even greater role. Technology will allow us to offer new ways to connect talent from the totally automated to the very personal. We will offer pure online services to address different markets. We will offer data driven services to support career, life and business choices. Whatever the means, we will endeavor to be the platform that facilitates and enables connections, connecting talent with opportunity and engage with them in the way they'd expect in this digital age. Making the most of technology will allow us to be most human. So whilst there may be fewer moments of personal contact, each one will be richer. We will always be an invaluable career coach, an expert advisor, an objective and knowledgeable ally. And whilst the way we connect in the future might change, one thing remains the same. Our fundamental belief that it's the power of genuine interest and trust that will drive talent and businesses forward. While our ambition is clear, we need to ask ourselves, are we changing fast enough? Good afternoon. Great to see you all. For the people of Bloomberg, you've definitely outdone us in terms of location, like it very much. What you see here, what we just showed you is a movie we showed at our general management meeting just 2 months ago. And there are 2 statements which are crucial. 1 is, when making the most of technology by making the most of technology, we become the most human. That's crucial. We're aiming for the best match between tech and touch. And the second one is, are we changing fast enough? Because we do want to make also our own people a bit edgy. We sent them away, on the one hand, with a clear vision of where we want to go and on the other hand with, oh my god, I really need to step up. If you look back 2 years, we started with the first theme in 2014, which was improvement. We wanted to get back to basics. You remember our message? It's pretty basic. Get out there, sell more, connect more to clients, get to know your market better, be out there. The second one is excellence and execution. Speed up to the speed of growth in markets and where possible, excel market growth. In a way, that's where we are today. You've seen our performance. Will talk a bit more about it, but we're catching up. We're outperforming markets, sizable markets, tough markets such as France, and we're quite proud. But you know, that's today. And then the theme for next year and the years to come for us is exploitation and exploration. Exploitation, as in reinventing our core, reinventing staffing, and Chris is going to talk to you about that, by staying relevant, by toning down costs, by using technology and exploration, as in where can we lead the way in combining again tech and touch. And that's the journey we're going to take you on this afternoon, basically. So that's pretty much what we want to talk about. I thought the slides were on here, but it's lamps. So the world around us is changing. Whenever we do roadshows, people always say, well, is technology taking your space? What's happening? But it's a combination. But definitely, global talent, we always say, quote from Linda, there's no scarcity in personnel. They just live in the wrong place. We can play a role there. Demographics, Japan is a big market, they're already going down. They need more women. Those are demographics as in I talked about this morning at Bloomberg Immigration. Immigration of course is a very complex topic, but at the same time a lot of these people are employable. If you bring them to Germany, 3% unemployment, a lot of demand in mid level profiles and high level profiles. We need these people and we need the legal systems to accommodate that. How do people connect? We're going to talk about it. And we definitely feel that if we are ahead of the game, we can stay relevant. You also heard in the picture platform, a lot of people talk about we want to be the Uber. We are the Uber. We've been the Uber for 55 years, but it's relevant to stay the Uber, to stay relevant, to stay the platform of choice, to stay the platform where you go to, when you want to look at your employability, when you move and your partner needs another job, when you want to calculate the money you can make in another region and on the client side, of course, getting access to talent. And we want to play basically everywhere. So we've got the traditional agency model changing a lot. Chris will talk about that. More than 50% of our current business in the Netherlands doesn't come from the traditional agency anymore. And how is the agency model changing? Specialization, very much. Clients are getting increasingly worried about the access to talent. They see the increasing mismatch of their multi generational workforce that needs to work until they're 67 or 68 and at the same time getting new people in. MSP RPO in house, clients do want partners who handle these topics for them from a cost point of view, from a compliance point of view, from an employer branding point of view, and we're there. Outsourcing, not selling candidates, not selling hours, but selling solutions. We learn a lot. I think that's crucial in our company. What we're doing is we're trial, we do trials, we invent and then we take it to the other side of the Randstad world. U. S. Is a big place for us in the outsourcing space. Europe has been a big place for us in the staffing space. U. S. Again is a big place for us in the specialty space. And I think we're better at being agile and learning, and we'll show you some stuff. And then low cost disruption, most exciting journey, I think, Linn, has been the innovation fund. I'm not that well educated. I studied law a long time ago, but I've learned a lot about technology and what it does in our space. And Linda is going to talk a bit more about it. And of course, we've made quite some investments already. Our strategic roadmap, it's all there. And I wanted to do a quiz, and of course, but yes, Arun gave it away. So you cannot win the packages which are on there, sorry. Yes, for the people listening in, there are packages, there are little presents for the people who are in the room, sorry. So talent, talent, I'll talk more about it and why it's on there. We think it's crucial and that's why we've added it to our strategic roadmap. Let's go in them 1 by 1. ABFS, again, simple message, start in 2014. In our business, it's pretty clear. If you want to have so many people at work, you want to make so many people so many matches, sorry, you need to be doing so many phone calls, so many visits, you need to propose so many candidates on a job. It's as simple as that. But maybe not so simple because you need well qualified databases. You need warm databases where you go to the right clients at the right moment. You need management to really guide this. You need management to guide candidate inflow through social media. So it's been a journey. It's been a reeducation for some and an education for many. And we're not there yet, and we're never going to be where we want to be, but that's, of course, what makes it fun. So last year, we beefed up with 30%. And in many markets, we're still doing 30% more than last year. For example, France, certainly in the SME space, doing much more than we did last year. But the early movers, such as the U. S, for example, it's not about getting up to again 30%, it's more about then conversion because it's not just about the numbers. It's about effectiveness and is visits translating into matches and Canada's proposed again resulting into matches. So we're getting more, call it educated here. Perm 14% growth. Perm and staffing is really a success for us more than 20% growth. Again, learning from the U. S, they went from 3% to 7% of GP in perm and staffing. Talk about reeducation, we had local management who were in the business for 15 years who said there's no Perm in Tennessee. So translated this means there's no people being hired in Tennessee. Well, there are, right? So reeducation of management. Sometimes having experienced people is very good. Most of the time it is. Sometimes it's sort of a bit of a liability and you need to again, yes, people need to reinvent themselves. SME picking up in the Netherlands 20% to 30%, right, Chris, we are going to talk about it. Also France, we think definitely ahead of market. But also, this is for the first time in our industry, sorry, history, not in our industry, but in our history, our German business, as you know, is a large client business. And growing SME in Germany is really an education for our people, going out to small and midsize companies. We're not there yet, but the first signs are good. Organization, 60%, 70% a €1,000,000 cost savings. Robert Chan is going to talk about it. SourceWite EMEA. So again, learning from the U. S, as you know, Europe, many countries, many languages. And MSP and RPO is there's just a limited amount of people who can sell this, just a limited amount of people who can make a solutions design, a limited amount of people who can install a technical tool. So we created a European organization by using these people more effective. Don't underestimate what that means for us because we're basically a geographically organized company. And also at the same time, I'm going to talk about this a bit later, using a recruitment center, a remote recruitment center in the solution. It's new, but it shows growth in GP in Europe from a low base is probably around 40% currently in the RPO and to a lesser extent the MSP space. It's really a young market for us. Vertical approach in professionals, again, from the U. S. Chris is probably going to show you what the ruthless adoption because that's again copy paste. So the ruthless adoption of the U. S. Model in the Netherlands is bringing us in the growth in professionals. And you know, honestly speaking, that professionals has been a struggle for us, still is, but we're getting there. And in new IT strategy, we pay too much on the stuff that doesn't make a difference, and we don't pay we don't invest enough in stuff that does make a difference. That's roughly Robert John's explanation later on. That's good enough? He always says I'm quite superficial on financial data, but yes, that's why we are a team, right? TTA introduced it last year. It's now implemented in 10 countries. We definitely feel it fuels the growth in MSP and RPO. These are global numbers and in house past €1,000,000,000 revenue in the last quarter. This is still growing in mature markets. Clients really like this. It's going from blue collar into white collar. It's going from country to country. This is really still a successful traveling circuit circuits, if you will. So TTA, what is it? Well, we've without doing it in 10 countries, we've trained 130 people, which is our own top management and sales directors, already approached, but this slide is 2 weeks old, so it must have been 150 already. More than 100 plus clients approached and targeted. You might say just 100. Why is it not many more? Two reasons. 1, we're talking big clients. We're talking multiple tens of 1,000,000 of potential revenue and in many cases, in many countries. And we want to have the right people at the table. To all due respect for HR or purchasing, they need to be there, but we want our own peers at the table. And it's a very well prepared sales call, if you will. It takes time. So if there's not the right people at the table, we sort of postpone, which is tough for salespeople like me to postpone a sales call, which only have one shot. So better 100 plus now than 500 superficially. So what we try to do is really connect the clients' issues and opportunities to what we have to offer. Is it cost? Is it compliance? Is it better than competition? We really analyze the potential he or she has. We know sectors really well, as you know. Our global client space sells in sectors. So we know Life Sciences, we know financial, we know logistics, we know all sorts, we know finance. As I mentioned, where do you get in, align it to the business strategy. We're creating a massive database, creating a massive database on global movement of people, local labor markets, legislative, best practices. And from then on, we prepare ourselves to, well, surprise the client, if you will. Many times when we do this well, the client says, I've never been asked these questions before. Yes, by McKinsey, but that was a very costly exercise, not by you. And of course, at the end of the day, if it transpires into a solution, it heavily fuels MSP RPO and in house. It's different to markets. So in Europe, we really try to sort of entice the client to be more strategically thinking about outsourcing. In the U. S, we're already far ahead of the game. In the U. S, as you might know, MSP is about contingent. RPO is about recruitment. So in the U. S, our variance on this theme is what we call integrated talent management. Here, we really work with the client on potential data that shows the value of integrating these services and the providers with it to get a far more holistic view on his talent, his own talent, the talent he hires and the talent he is about to be hired. Again, that's a long term thing, right? Collecting or what is it, calculating a sales pipeline in ITM is really complicated, right? And we hedge our bets. We choose our battles here, but the potential is huge. And again, we are different. We're different from competition and that's what we are aiming to be, of course. So talent, why is this new? Well, we talked long and hard about it. And the heritage of our company is we're a staffing company. And a staffing company, what keeps them what kept us awake at night is the client because if you land the client, then the talent will follow. In the staffing space, low to mid level profiles, you will almost always supply 70% to 100% of the jobs if you do your job well. In the professional space, you might feel 5% or 10%. So getting access to talent in professionals where you want to go but also in perm, it's far more a candidate led business. And we've got some good stuff. We're not world class there. And it's getting it's heating up, mismatched labor market and what have you. So Linda is going to talk about that. Sourcing centers, we've set up 6 sourcing centers across the globe. And by also using our investments in our innovation funds, we want to create talent engagement programs. What does that mean? Run such sort of never let's go. We're always connecting to you by updating your profile, by taking tests, by looking at your employability, by meeting with your peers. It's relevant. You go back. And by the way, when we then connect to you, you're like, okay, hey, Randstad's calling. I might just additional calling on the phone. Randstad is connecting. Let's see what they have. And it's not a one time thing. It goes on and on and on. We also installing end to end marketing. What does that mean? That in every team level throughout the world, we can see where candidates are coming from. We spend a lot of money on job boards and the effectiveness of these job boards vary hugely. So we now educate our people on what they spend. So you got a subscription. And at the end of the day, if you get one client out of the subscription, then the price of 1 candidate is the price of the total subscription. So which are effective, which are not, and at the same time also beefing up our own database so that we need less job board spend. Our recruitment centers, the earliest example is the one in India. I call it the Knight Riders, right, without the K for the older people among you, because they work overnight. So they validate profiles for the American colleagues, predominantly in our IT space. So whenever they come in the morning, there's a batch of prescreened profiles that they can work on, hugely improve their productivity. Relative new ones are Kuala Lumpur for the Asia Pac region and Budapest for the Hungarian region for Europe, basically, sorry. 23 languages, around 120 people and they source. So they source for the European, the MSP and RPO programs and they source for the European Professionals businesses. This is still work in progress, by the way, because it also means that we need to reconfigure the way we set up our professionals teams in Europe. We need less recruiters because we got them in Hungary at half the cost. And by the way, because it's the only thing they do probably, they do it better. And Kuala Lumpur, same thing, but then for the Asia Pac region. Improving productivity, getting better access, more professional access to candidates, yes, and effectively grow and make more matches. So this is one that Linda is going to elaborate upon. But if you are in the top end of this graph, you're where everybody is. So you attract the candidates that are looking for a job and then you match them one time. Top end is like 30% of the total labor pool. The sweet spot is below the line. Sourcing the other 70% who is not looking and not just matching one time, but cultivate them, engage them, redeploy them. That's what we're really working on. And you'll see that in our technology investments, either the stuff we do ourselves or the stuff we buy or use from the innovation front, we're moving from the top space to the bottom space. Crucial already, but more important going forward. Tech, We created the innovation fund to well, we're a bit worried. Were we going to be disintermediated? Were we the travel industry? Were we the media industry? Were we whatever industry? Is something coming from the side hits us? We were too late. What we see is a lot of bright ideas. But these ideas are hard to scale because you got an idea, but you need legs. You need feet on the street to sell it. And that's where we come in. So combining technology and using it with our people, combining it in our way of work. I cannot say this enough. We're going to talk about IT, but it's not about the money you spend in IT. It's how you put the technological tool in the process of your people, where they use it every day, then it works. And that's very tough. That's not about money. That's about management. That's about being analytical. That's about reconfiguring the way you do business. I'm going to show you a few examples where we are doing this. And RySmart, very happy with the acquisition of RySmart. First of all, because it's a company that really shows what technology can do. This intermediating a €5,000,000,000 industry, we think. But also for me personally, I started semi illegal the outplacement business in Randstad. Fritz Goldsmithing didn't like it because we are a staffing company. Fritz Goldsmithing is our founder, by the way, for the uninformed. And I still did it. 1995, been trying to get a global offering for years, didn't work, and now we're taking a quantum leap by redefining the space. Very happy with it. And then the stuff we do ourselves, the sales navigator. Sales navigator is a tool we use in the Netherlands that scrapes information about our clients and every morning gives our consultants warm leads. Something's going on at clients XYZ in your region, you might want to contact them. It goes on and on. It's connected to their postal codes, their sector, their database. Big data matching tool, Christophe is going to show you what this is. And it's really beautiful because this is where you will physically see the combination of tech and the consultant, where the consultant can go to the client and say, you're looking for a welder in the Alsace region in France. Okay, well, there's 50 welders in our database. We've got 20% market share. Roughly, people are registered at 3 companies. So this is roughly 50%, 60% of all the welders. This is the demand for welders. This is what they're paying. Let's go in our database and look for the welders for you. I've got 3. This one is pretty good. You see he's done the tests, but he's, yes, 20% more expensive. You don't get him, someone else will. This is a great guy where he works 30 hours a week, which is still a lot in France because they work 35, but he's not a full timer. So is that good enough for you? And the third one is also okay ish, where he lives 50 kilometers away. Is that a risk? Which one are you choosing? You better choose now because I've shown you what the market looks like. Okay, you like this one? Let's connect. And you make the match where he is. I've done the demonstration, Christophe, or no? Sort of, yes. Well, you see it in life. And then hackathon. You probably know what a hackathon is. You lock up young people for 24 hours in a location you ask them to come up with an idea that sort of demolishes your business model. That's what we did in Amsterdam. We do it in more countries And this is what it looked like. So what happens is that 3 guys, 15, 15 16 years old, design something in 24 hours. This is going to disintermediate what we do. So their idea was to create a video registering tool, which we've now built in the Dutch marketplace. I put them on stage at my general manager's meeting half a year ago. One couldn't come because he wasn't allowed to go from school. Probably his grades weren't too good. That sounded familiar to me. But these people started talking, and my management went really silent because this is happening. And that goes back to what I stated earlier, are we changing fast enough? And of course, it's just a tool, but it goes very fast. We do these hackathons in many more regions. I want local management very much involved there. So in which space are we playing? This is sort of a redirection of the colorful slide I started with. So of course, we're in traditional staffing. This is still going to be a great business, as you see in our result in our press release this morning, it's growing. It's all good. But we think it has limited growth going forward. Limited for us is like 5 to 10%. Some businesses are still huge, but for us this is limited. So we want to move and we are towards hybrid models where you use a tool and you sort of reconfigure your people differently. Of course, that's what we're already doing in our MSP and our RPO space and in house still. In in house, we sell something totally different. We sell a best qualified high productive workforce at the lowest cost to handle with a planning tool, with a fingerprint registration tool so that you have full compliance. So it's a hybrid model. And that's and Linda will talk about this. This is also where the innovation fund comes in, not so much the business models these people have, but the capability to create automated reference checking, automated referrals, use well, manage a freelance database. And we're going to put that in our businesses, trial and error, going forward. And at the end of the day, we're also going to organize and run online platforms. What we yes, to a certain extent, is also in our current delivery models already. So this is roughly what you're going to see to a certain extent also in Christophe's presentation. There's a lot of, call it, tangible technique behind the consultant. The consultant still does it. We already experimented with a fully automated model in 2000, 15 years ago. Clients didn't like it. The technique was sluggish in those days, but they wanted a bit of touch. That's what we're trying to do. Where do you want to touch? Are you willing to pay for a consultant? And why, where and when? If not, no problem, we'll give you fully automated. So M and A. Yes, we're working on an M and A strategy. Well, our strategy is there. We're working on the pipeline. What does it tell us that we're working on the pipeline? Where are we working? Professionals. Scale, like USG 2 years ago, where geographically we become a bigger player. No additional geos, by the way. We sold Sri Lanka. Oh my God. So we're in 38 countries now. With this 90%, 95% of the world market. And niche additions to service offering portfolio and RySmart, of course, is a great example of those. And Robert John will elaborate where we are and what our going forward is. So RySmart, back to RySmart. What's RySmart? You lose your job. You lose your job in the U. S. And in the U. S, your employer is then not really obligated to give you a package. If you lose your job in Europe, you meet a consultant, you cry a bit, take time, you do a lot of stuff, takes weeks, quite costly, and then you might find a job. RySmart has someone to give you that creates the social media profile, gets jobs pushed to you, and then 65% quicker you find a job. We think that's the future of this business. Linda will tell more about it. But I want to finalize before giving over with Robert John to RySmart and what it does. John? Thank you. He used to work for your company. He really loved his job and he never thought that layoffs could affect him. That's why he wasn't prepared to leave. Fortunately, you offered him outplacement through RISE Smart. With RISE Smart, John didn't have to waste any time looking for a new job. In less than a week, a certified professional resume writer wrote him a unique and customized resume. One that showcased his experience specifically to hiring managers in his industry. He also got a transition coach who used to work as a recruiter. They worked together over the phone because RideSmart wanted to pair him with the right coach, not just the nearest one. They worked on networking and interviewing skills and John never had to travel to an office to do it. And when John wasn't working 1 on 1 with his coach, he logged in to RiseSmart's career transition platform, which helped him organize his job search in one place. Using an amazing technology called SmartMatch, RISE Smart and recommends the best ones based on John's resume and preferences in seconds. And for those jobs that might be hiding on niche job Rysmart's contact discovery engine showed John the people he should know to RISE Smart's contact discovery engine showed John the people he should know to help him get the job, as well as phone scripts and email templates to help him start that conversation. With Ridesmart, John got a new job 63% faster than the national average. A new job that gives him the opportunity to be one of your customers. He's told all of his friends and ex co workers how much he appreciated your taking care of him. And if the opportunity ever arises to work with you again, well, he'll be keeping that position in mind. It's a wonderful opportunity to copy paste throughout the world. I will say, hi, good afternoon. Can I get my presentation on the screen, please? Yeah. I'm going to talk to you about 3 items here. The current trading, the funnel update in terms of progress made, where do we stand, but also future opportunities as well as finally the capital allocation and the dividend policy. Talking about current trading, Arun, are you sure the numbers are the same on these 3 screens? Yes, okay. It's been a pretty good month here. I used to have a point of that. It did work, but it's not really coming through, okay. The month of October, 7.7% growth, not a bad month at all. Please note that our trends are typically erratic. It's never a real linear line. It goes up and back a little bit, but it's not bad at all. You can most of it yourself. You probably have seen it in the press release, but the volume trend in November is roughly equal to what we see in October. We said something similar in July. We do realize that. But please keep in mind that volumes and then taking into account mix and pricing arrives at revenues. So we'll see what comes out of it, but it's been a rather good month. And I think underlying what we see across the world is that things have slightly improved again. And we do see growth in the blue collar space also contributing here and continuing. In North American market, 5% versus 4% in Q3, the U. S. Business up, but it also tells us that the Canadian business is not deteriorating further. Countries up 8% versus 5% in Q3. France up 8% here versus 3%. And keep in mind that last year, Q3 was minus 4% and Q4 was minus 8%. So that should help us a little bit in the month to come as well. The Netherlands continues nicely double digit 10%, Belgium catching up and we always have this closing process at the end of the month with estimations. That's why it sometimes fluctuates a little bit. But it's clear that we're right track here. Iberia, Italy doing quite well, double digit as well. And Germany, in the positive space, but still very, very, very slow. In Q4, as we typically see, we expect a sequential small sequential increase in SG and A. That about that was about current training. This is the ball that we ended with last year, the ice ball, the bucket, the basket, whatever you want with the various balls in it. And I'll be talking about those. But before doing that, the header, it says targets within reach. And I said the same last year, targets within reach. That means the 5% to 6% range is within reach. But let me also make some statements here. We have no clue what will happen in 2016. Honestly, we have no clue. We have no contract pipeline whatsoever, which tells us what will happen next year. That's why we have invested a lot in building an organization that adapts quickly to whatever happens, that expands quickly, if growth accelerates, for example. But taking into account sort of certain numbers last year, we took into account the consensus that you provide us and calculated that into our models with sort of the proper incremental conversion ratios, and that made us arrive at the very low end of the scale, as I expressed at the time. Well, we have a bit higher growth this year than in your models than in our model based on your consensus. But the richness of that mix was a little different than it had been in the past. So we are clearly moving into the right direction, but it's very much dependent on what's happening there. That's why we also have added that in our press release. What is going to happen is depending on also on the sales mix and on the pricing. If you look at the normal cycle, by the way, in the past, and I'll have a slide on that, typically, what you would see normally is that things are accelerating, but what are normal cycles these days? So as a summary, I do understand your consensus, which makes you arrive at 4.9 at the moment for 2016. But if the 7.7 of October continues into 2016, and on top of that, we get sort of the enhancement coming through in the gross margin as a result of business mix improvements, and we plot the right incremental conversion ratios against it, then we will arrive at the low end of the scale, the 5% to 6%, the lower end of the scale clearly, but it brings us there. I'm going to address the various balls now in the bucket here. But before I do that, a few remarks here. More to come, it says here, over time, clearly. We're going to talk about activity based field steering, not just me, but also my colleagues. The assumptions I addressed already in terms of growth, perm and SME double digit opportunity in terms of growth. I'll address the perm. SME is in, for example, the presentation of Chris, so we'll get back to it as well. And now I'm going to move to one of the balls. So please keep this in mind, the colors here, because then you know where we are. You see to the right upper corner, this is about the growth ball. So this is organic growth in a historical context. What is the cycle? I don't know. I just know that in the old days, we thought that a downturn was around minus 10, but we found out here it's different. We just don't know. And this lasted like 6, 7 years. And maybe that's normal, but then we found out here that I don't know what's normal, but we thought we were on our way up and then we got this dip again. This is where we are now. This is 8 quarters of low single, mid single digit growth. So relatively low. If you look at the U. S, it's above peak and still growing. But keep in mind that our product also that our service also contains an outsourcing component. It means that we take over a lot of work of our clients and outsourcing is clearly something that is extremely popular. We have an opportunity in emerging markets that remains. But with the current pay levels in those markets, it starts to contribute, but it goes slow. It will take a few years before it makes a significant impact here. Europe, still significantly below the peak that we have seen in the past. So this is the growth in historical context. Again, still orange. Looking at growth here, in the U. S, blue is run stuff, orange, brown is market. So clearly recovered in the U. S, ahead of market now. I think professionals could even contribute a bit more. Very good solid returns here, excellent recovery. In the Netherlands, again, behind market for a while, we were ahead here. We recovered over here. Quite some pricing pressure in that market. Randstad has proactively adjusted the cost base in the Netherlands, which allows us to be more competitive in that space and clearly on market now. In France, in the French market, behind markets for a while and coming back here as well, also with pretty decent returns. So I think that shows quite a successful results coming from the strategy that we have implemented again. We look at activity based fields here in green ball here. The total cost base of the company is €2,500,000,000 €2,500,000,000 out of which roughly 60% relates to the personal expenses in the field and 40% is head office, back offices included, accommodation, IT, marketing and general costs. And if you look at the way we try to manage this is clearly activity based field steering. We have also implemented some other initiatives like management layer adjustments, span of control adjustments, support staff efficiencies and also further centralization of sourcing and delivery models, something that we'll talk about in the rest of our contributions. But zooming into activity based field steering, what has it brought us so far? This shows you the productivity trend. So the blue line is the change in gross profit and the green line shows you the change in personal expenses. And getting this sort of organized properly is important because then you have input and output directly linked to each other. And it's always difficult to get it right, but we tend to go up here normally. Because of activity based field steering, we have been able to control it very tightly and make sure that we improve our productivity levels in the meantime. So I would say this is quite a good return on the strategic initiative of activity based field setting. But we don't have it right everywhere, honestly, because I know a story gets more convincing if you also show where it doesn't go right well. This shows you where we still have improvements to go. These data points are our opcos, not identified on this slide, but it clearly shows you that if we grow our activity levels up here, then typically the GP over per FTE is also improving. So over here, we're in the right space. And if you grow it with less activities, that's fine too. But on this side, we have more activities here, but no returns. That means probably we are addressing the wrong targets here. So we need to get it right here or our companies are just too inactive, not showing enough sales efforts. So this tells you that we are improving our activity levels. There is a direct correlation with the output. But in certain spaces in the company, we still have a way to go. This is art rather than science. This continuously requires leadership to focus on. Change in ball here, business mix. This is about perm. And this shows you the perm as a percentage of profit. Typically, in the more developing markets, for example, China here and this is the more established temp markets. For example, the U. S. Staffing here and the group as average. In 2014, Perm made up 10% of our gross profit at group level. Actually, in Q3 2015, it was 10.5%. If we add RPO, it's even 12.9%. And that compares to 12% in 2,007. In 2,007, our focus was solely on professionals. There was very little perm in the staffing space. Now we've built a concept that sets the standard for being successful in perm in the staffing space. And that is clearly contributing to our growth here. If you look at the year to date performance in perm growth, the average growth of our competitors arrive to 13%, Randstad is at 15%, but if we add RPO, it's at 16%. So this is clearly a success story that should continue. And if you look at the various markets in which we operate, then this is the growth over 3 years, 13% to 14%, 110% growth in Iberia. And today, it's 8% of local GP gross profit. In the Netherlands, growth of 54%, only 3% of gross profit. In France, 7%, low growth. Think about what happened in that market, it wasn't easy. In Germany, it's 4%. This tells you, we have been growing, but the potential is still very, very significant and it's clearly part of our focus. Costs, blue ball, €60,000,000 to €70,000,000 cost savings in 2015. That's what we told you last year. So far, we are at a level of roughly €50,000,000 savings, mainly in head office and back office functions. So we have gone through quite a few efforts, span of control and field support adjustments. We have an extensive internal head office benchmarking exercise, which I told you about last time. But what it contains, it shows us in each and every OpCo that we have, what percentage of the total population is active in, for example, application maintenance or in receivables management or payables. That means we can compare. And if you, for example, have a lot of people in receivables management, ND is always low, overdue is low, then typically you get a return on your investment. But if that's not the case, something is wrong. And that's what we are addressing here. So we're looking at sustainable reductions. Also size and location of branches, the digital support we get and procurement have us here. So on track clearly towards the €60,000,000 to €70,000,000 at the end of the year. But we need to move on. We are going to go a little further. So again, the 60% field staff, we continue to address it one way or the other because we have OpCos where the level of central delivery is lower, Chris will talk about it, than elsewhere. So we continue to have massive opportunities here, support staff, span of control, etcetera. Back office also continuously being addressed through the benchmarking exercises. We have quite a few opportunities there, which we still need to address. At the same time, we are going to create a global IT infrastructure shared service center. Actually, we are currently starting to put that in place. And so far, in the past, Randstad has been buying its sort of its data End user computing, clearly opportunities there. But even beyond that, we do develop our applications locally. And we think that over time, there are clearly opportunities in this space. But we're going to start with an IT shared service center for infrastructure. That we're going to put in place and we believe we're going to get savings of that, because we'll use our procurement power to realize those savings. We made the point that over time, we will have those savings coming in. You can see that at the top again. Now, in order to fill spreadsheets, it's helpful when you know when to put it in. I realize that. But that's this is something where we still have to work out quite a few details. But probably we're going to see some savings coming in next year. However, at the same time, we're going to make investments to ensure future savings as well. So in our calculations, we assume this is going to kick in over time. In a couple of years, we'll see the savings coming through. In the meantime, we'll realize savings, but we'll continue to invest in order to secure that we're really going to get the €50,000,000 into the box. In terms of increase in business systems, which drive GP, Jacques already referred to a few. Christophe is going to introduce you into the big data application that we have. These are examples and the idea here and we are testing it is to look if we can develop certain applications to support the front office in certain locations and then share it throughout the group. So have similar solutions across the company, €50,000,000 over time. So these are sort of the updates that I wanted to provide you in the context of the ICE Bowl and the balls that we have been addressing. Finally, capital allocation and dividend, Very proud of this slide here. It shows the Randstad free cash flow conversion. The average free cash flow expressed over EBITDA, 2,009, 2014. And you can clearly see that we have been rather successful here as a result of our interest policy, for example, but also working capital management and so forth, tax planning. This shows you the free cash flow conversion historically. And my attention is always drawn by this here, 2008, 2009. These were not the best years in our history. And this is what the company does in the bad times. It releases working capital and it clearly kicks in. If you look at it further, good development. Leverage ratio by now, Jacques mentioned it already at 0.5. Well, our capital allocation priorities are the ones that we set as priorities. We continue to invest in organic growth. These are very important investments that, for example, are in the space of technology. That's our first priority. Then M and A activities. I'll come back to it on my final slide. The final point or the next point is dividends. And that clearly has been a substantial part of our free cash flow. We have discussed anti dilution measures, which we have used with regards to performance shares, but not yet with regards to dividend. And we have decided that share buybacks and special dividend for the time should not be considered because our proposal will be to pay a full cash dividend for the year 2015. Instead of giving the option, script dividend, we have decided and then later on to repair that dilution through share repurchase, We try to follow the KISS principle, keep it simple, make sure that our people are focused on all the other things, don't spend too much time here. So for this time, for this situation, we have decided to propose that to the shareholders meeting. You might want to ask me right away, what about next year? Well, next year, I hope that our M and A strategy has resulted in some successful transactions. If not, we'll look at it again. So for now, 40% to 50% payout of the adjusted EPS. And of course, you'll challenge us to go to the high end of the scale, I'm aware of that. I'm sure there will be a question about it. We'll think about it carefully. Some key criteria when we're looking at acquisitions. It should strengthen our strategic position, the first point here. And Jacques already mentioned a few quite a few of these in the professional space, for example. We also like to look at a certain minimal size. I'm not sure if that will be sort of something we can hold on to in each and every situation, but that would be our preference at least. These are guidelines. It should provide significant value creation. We do use DCF calculations. We make multiple scenarios because if you don't know what your revenue stream will be next year, it's very difficult to make valuations here. And we like considerable cost synergies because it gives the best safety net in case of future bad scenarios. We typically leave tax and revenue synergies separately and it should be EVA positive within 3 years. We showed to you the last three transactions, SFN, Fuji Staff in Japan and USG. The 2 first were EVA positive in 2 years, the USG transaction in 2 weeks. So, so far we have been doing relatively well. And it should be manageable. It should really be something that we can handle right away. But having said that, it's not that easy. It's not that easy. There are quite some markets where we have an ambition. We're number 3 in the U. S. Space, number 6 in Japan, still a way to go, but better positions in these other geographies. So we clearly have a priority here. But I have to say, it's not that simple. So this is how the board feels sometimes, it's the candy shop. I couldn't find a man. So this is Linda, a few years ago, in the candy shop with a lot of money, looking for options to expand the company in the context that I just shared with you. And it's not easy. Summarizing, a lot of work. I think we've made a lot of progress. A way to look at our progress is also to use the Boston Consulting Matrix, where you look at the capability of a company to fund all its new initiatives by making sure the cash cows continue until eternity. And that's how we look at it. We are doing everything to make sure that our cash cows keep on running and that we are capable of making investments such as, for example, Rysmart in the technology space, in the professional space and so forth. And that is what will be top priority for us. Thank you. And Arun, you're taking over now. Thank you. So we now go to Q and A before we go to the coffee break. We have around 20, twenty minutes. So please feel free to fire on. David, please wait for the mic before you ask your questions. Thanks, Davide and Gravel. First question on your top line trends. Could you elaborate a little bit more on the trends you have been seeing in terms of volume and in terms of pricing and mix because you at group level in the last month. You have been guiding for flat volume growth October versus September. Now it's on top line on sales, 2% more. So maybe a little bit more color on what's happening underneath and how volatile that can be. For example, is the trend in pricemix more positive? And is it also be expected for November and the months around? And then secondly, if you look at the number of branches you have right now, when you talk about technology development, etcetera, would you agree that the number of branches looks a bit high and that you maybe could or should be more aggressive in reducing the number of branches. I'm talking about in house. Under the branches? Okay. The development in the market in terms of volume is clear, I think, in terms of pricing. My summary would be that we do see a few markets where pricing is good. I think in the U. S, typically one could say pricing is solid, it's good. If you look at Southern Europe, it's not bad at all. In the French market, it's a bit more competitive, but still the returns, if you look at the 3 top players, are pretty good too. If you look at the Dutch market, at the German market, I would say there's clear pricing pressure across the board. And we've been able to deal with it, as we just showed you, for example, in Netherlands and still maintaining a good return at the bottom line. But I would say that's what we see happening across the globe. Okay. Maybe a quick follow-up on what you if the volume growth is stable, but your sales growth is accelerating, then the price mix effect has been more positive in October than September. Is that indeed an upward trend in your view? Or can it be quite volatile also in the coming months? No, I think what we see in October is in line. My summary that I just gave you is the same summary as we have seen in September and actually in Q3. This is how the markets are behaving. So that's not really a change. In the meantime, you've seen our contribution from perm that has been good. It has been a little lower in Q4, so that might have some impact. Yes. And again, David, so November looks pretty solid. That's still, in fuel, a normal month. December is always tough, whereas Christmas, what are people going to do? Is the company going to close down for 2 weeks, 1.5 weeks, that makes an impact. It's tough to calculate. And the second one is that this year, we saw quite an uplift from Q4 into Q1, predominantly also in France. So in that sense, yes, nothing new. It's good as far as we're seeing. We're very happy with the fact that we are above market and then the visibility is limited. On branches, on one hand, it's not that we have too many branches because the almost the only increase in branches that you're seeing is in house branches. So we opened up more than 50 in France, and we booked them as branches. So probably in the future, we probably need to think about shifting that a bit as in in house branches and regular branches. In big cities, absolutely, yes, you've seen the French, well, process from 260 something branches into 70 in the cities. Chris can also tell you about what we've done in Amsterdam, what we're doing in Rotterdam and in the bigger cities in the Netherlands, less branches, absolutely. Midsize cities, that's always that's a challenge for us because it's historically, it was about the candidate also. It's not anymore about the candidate. Candidates, we capture in a totally different way, but it's about being part of the local fabric. We sell a lot, and we've seen that through the local fabric by being part of the local community. It's quite risky, and we've seen that in some markets. If you close your branch, you lose that business. So funny enough, it's about sales far more than candidates. Definitely, we're going to experiment a bit. It's too early to say that it's going to lead to a massive amount of branches less. But certainly in new markets like China, in Shanghai, we have 2 branches, 1 with 150 people and the other with 250. That was last month, so I don't know. So that's a reset. But in the Europeans, yes, it's a change, organic, we think. Yes. And adding to what Jacques said, it is part of our benchmarking exercise, also the accommodation costs. So we are looking at where are we, how many square meters do we use and what do we pay. And hopefully, we're going to find some opportunities there too. It's 2 rigs from Morgan Stanley. I've got a couple as well. The first is on TTA. You showed how many clients you've targeted and approached. Could you give us any more sort of guess metrics around how successful that's been? And then the second is on the margin. You gave us the parameters to get to the bottom of the range. Could you give us the parameters to get to the middle and then the top of the range, please? I'll do the TTA one for you. Yes. Well, TTA is a long term thing. It's far less transactional. That's also something that our people needed to get used to. You're trained to go out and make a sell. And now TTA is about creating what we call a road map for the client going forward. The as far as we're concerned, the proof is already in the growth we see in MSP, RPO and in house because by and large, that's a TTA sell. We talk about improvement. We talk about improvement in productivity of field staff, improvement in employer branding, improvement in recruitment processes. And then clients buy it from us because we tell a compelling story and we make an interesting business case around it. So that's the early signs. But honestly speaking, we're still in the let's try this out for size. Again, the U. S, totally different market, slightly more elaborate and therefore, more complex approach because this is really about solutions design. We're talking about redesigning a couple of €100,000,000 project for the client that's totally different than, oh, well, you tell a great story about recruitment, why don't you come over and talk about it in Europe. So early days, and I've said it before, but I'll say it again, this is going to be part of the way we go to market for the years to come. And in order to keep your work as challenging as possible, I won't give you the outcomes, the results, I'll give you the input, okay? Because this is a difficult one. If we continue to see growth, for example, in a market that has been growing rapidly like the U. S. Over the last 5 years, Linda, sort of, then returns, incremental conversion ratios are starting to get a little lower. In Japan, the same. But if we get growth in other parts of our system, if for example, Germany would start to contribute, we'll get it in at a very high incremental conversion ratio. And that blend is relevant. But let me give you some additional perspective. If we look at the companies that have been growing for a longer period of time, then we see that this incremental conversion ratio of around 50, which is sort of the push we give, the ambition we set, is feasible for a longer period of time, for multiple years. So typically, in the 1st year, we are aiming at a much higher incremental conversion, north of 50%. Clearly, you've seen us arriving at in the 70s in the first phase of growth. But that phase lasts for like a year. And then you move into the 2nd phase where you really have to add people. Phase 1, you only add marketing costs, commissions, bonuses. But in Phase 2, you're really adding a lot of people. And that phase, it's not going to last for a year or 2 years. It lasts longer. How long? That depends on the rate of growth. It's different in every country. Only in Phase III, we'll be starting to add branches, apart from in house and head office people and systems and so forth. So I think these are the ingredients. And if you then plot various scenarios, you'll end up in the range from the low end up into the middle even, if growth really goes up dramatically. But then it needs to From the 7. From the 7, certainly. I was very clear, I think. The 7 brings us only to the very low end of the range. No doubt about it. And then we have to work hard, clearly. I want to be perfectly clear about that. Two points to make on this one. It's easy for us to grow faster than we're doing because we've talked about this 1 or 2 years ago. It's profitable growth. We can lend many more clients. We have a role to play here. In many markets, we're a leader. And you've seen what happened in France when the leaders beat each other up over the head for 20 years on pricing. It's going nowhere. To a certain extent, the UK market is also a result of that. So we have a role to play here. That's one. The second one is, don't concentrate on the EBITDA percentage, right? Again, our founder, Fritz Goldsmithing, always said profit is the accidental result of doing a lot of things right. And we've heard someone in the sector, if you concentrate too much on just the bottom line, you underinvest in the business. At the end of the day, growth, profitable growth, outgrowing markets, please remember, our worldwide market share is around 5%. That's really our challenge. Balancing that and constantly putting people in and growing is crucial. Also because our people want to make a career within the company, right? 3 of the people here made a career from the branch into the board. If we don't grow, then these people will not stay with us. So there's lots of not just financial ratios for us to grow at a decent return. Is it 4.8%, 5.1%, 5.2% as long as we think it's the right balance between investing in long term growth and profitable growth, then we're happy, you're happy, we think. So if you look at the last years, we have made jumps of roughly 40 basis points from in 2014 relative to 2013, 40 basis points in 2013 relative to 2012, a little bit more. But if you then eliminate the additional subsidies also basically roughly 40 basis points. So that is a rather normal rhythm. On top of that, you get the enrichment of the mix, our drive for efficiencies on top of that. And that sort of brings us to, again, the low end of the space. If you then start to add in what by the way, in my model, you could see that typically sales growth accelerates in a cycle. If that would happen, then you get a lot of productivity gains and the leverage is pretty positive and that should help us to get a bit higher. That's not all we're currently seeing. Not at all. I thought I was managing that a bit. Hi. It's Konrad Zomer, ABN AMRO. A question on your global infrastructure shared service center. Can you share with us what you think the total investment will be in that system and will that be mainly OpEx or CapEx or what the split will be? And where do you think it places you compared to your competitors? Do you think you just had to do it because you were running behind developments a little bit? Will this give you a competitive advantage? How should we place this in relation to your competition? Yes. I think the answer to the second part of your question is that's a mix, clearly. I think we've seen a lot of sort of trials in the market and we have to make sure we get it right in one go. So I think some are ahead, some are behind. In terms of what's going to happen, amounts too early to share, clearly. But I guess, given the fact that we're trying to get away from buying and owning, we're moving to using, buying by the kilo, for example, the move from data centers into the cloud space, typically what you get is no CapEx, but much more operational expenses. But too early to share the details. Yes. And please take into account what we're talking about, right? IT, those are two letters. But we're talking about telco and database hosting. We got I don't know how many databases in the world with different levels of security and all that. So and then the benchmark is not our own industry, the benchmark is other industries. We're not going to centralize or put in a shared service center anything that's local, as in local payroll. At least that's not in scope now. It's the stuff which is readily available and we're through combining the way you buy it and using cloud and that sort of thing. Sort of an MSP, yes, in ours. But then so but it's not business critical. Of course, it needs to function, but it's not business critical. And the stuff itself doesn't make you better. What we're going to use in front of is effective investments, that's going to make us better. What we're going to show you later on, investments in the innovation fund and that sort of thing. So in the movie I showed you on the hackathon, Tijn, the boy that was he works for us, and he's still saying, why don't we have 500 software developers already for front end stuff? So it's not about 500 developers, but that's going to be an investment. And then we're going to pay a bit more, but that's going to set us up front. And we'll inform you on the stuff we're rolling out there. Paul Sykes from Deutsche Bank. Just following up on you speak up with Tom? Yes, sure. Tom. Yes, I know your call. Just on the comments you made on the tech spend, so you're obviously investing in tech and the acquisitions as well. I mean, whether you're putting it into depreciation through the CapEx line or you're putting it into goodwill through something like a RySmart, you're still investing in tech essentially there. Do you think your acquisitions will be as well as the innovation fund skewed towards technology a bit more? Do you think that the competition from kind of garage technology is cranking up as HR data becomes more digitized. Is that leading to a bit more competition for you? And then just on a couple of questions marks you made on the U. S. You said that your outsourcing business was growing quite quickly in the U. S. You said your outsourcing business was growing quite quickly in the U. S? No, I said it was a valuable addition to our portfolio. I don't it's also growing fast, right? It is outsourcing, outplacement. Outplacement? Yes. Not placement. No, Tom, I said something about outsourcing. And I said part of when we just provide staffing employees to our clients, the clients don't have to have a big HR department dealing with these people. That's a sort of an outsourcing mindset as well. That's the point I made. I don't know if you're referring to that, but No, it was just I was trying to work out whether there was any differentiation between kind of the growth of MSP RPO and what you might have seen in traditional staffing in the U. S. That was all I was trying to get at. And then also, when you consider your like for like gross margins now in the U. S. And you said pricing was strong, where are you versus the sort of previous peak in terms of pricing in the U. S. Now? We're going to talk to you about we're going to give you a presentation on the U. S. Markets to see if you can get your answers there. If I gather your question on tech, it's like how do you use tech? Do you get it through acquisitions? Do you get it through investment? Do you get it through own investment? Yes. It just seems to be increasing as a proportion of your spend, be it through the P and L or be it through CapEx. Okay. And is that something that you expect to continue? Because you've given a lot of presentations on tech this morning and not much on anything. Yes, you got the message. That's good. Well, that is what Robert John said. So we're freeing up costs, which we think is noncritical to at least use in the front end. But again, it's got to be money, right? But it's not about putting a massive amount of money in to compete in tech. For us, what keeps us awake at night is really end to end marketing is a very simple tool to, at the end of the day, diminish job board spend, for example. Developing your own database better and also the attractiveness of your database and the tools to get people engaged in your database, that's not really about money. So for us, it's far more a work in process point of view. So it's not well, I don't expect at least to see massive CapEx because that's when we're going to develop it ourselves, right? We don't feel that that's going to be huge. That's not our biggest challenge anyway. No, if you look at our plan next year, the additional CapEx coming from the IT side is just a few million. It's You know what the biggest challenge for me is? We're going to if you were my senior management, we need to put you all through a basic training on technology, social media and how to manage people in a digital age. So that's my biggest worry. If you've been with me for 15 20 years, and you've been managing a branch in the traditional sense of the word, that's really the biggest challenge out there for us, improving people or changing people. It's Nick Zelligrans from Merrill Lynch. Just a boring point of clarification, first off, and then one other question. Can someone put up the mics? I've had a medical test. I was okay for my age in hearing, but maybe I'm not great. Sorry, I'll bring it a bit closer. Okay. So two questions. The first one is just clarifying the well, it's not guidance for next year, but the building blocks to get to the margin and then one on M and A. The statement this morning said that you would need mid single digit organic growth next year to hit the bottom end of the guidance range. And then today in the state sorry, in the presentation, you've been talking more about 7% or kind of growth in line with October. I was wondering what you mean by mid single digit and whether we do need to see 7% all through the next quarter? No, it's clear October. Okay. And the second one is on and A. I mean, you've been talking about doing deals or seems to have been pretty open to doing deals for much of the last 18 months. You've done a few small ones. What makes you confident that over the next 12 months, the conversion of the pipeline will be higher? Because it sounded like certainly you were very hopeful that there will be more spend on M and A over the next 12 months. Thanks. Well, we have a radar screen on as we have for a long time. We have identified targets that are in the pipeline. There are a few that we believe if we could get to them that do give us positive EVA that is essential. So we have identified a few players that we believe would sort of fit that profile. And then we need to hope that we'll make it work. I mean, that is there's a lot of emotions involved there. There's expectations that might shift during a process. We need to look at it. But at least we have a pipeline that we're working on very concretely. And we're disciplined, right? We don't need to do acquisitions to get to become strategically relevant in a market where we're not competing. We've bought companies 2 years later at a lower price than when we first looked at them. So we'll see. Even in that context, this is a moment for clarifying something. Some of you remember the acquisition of Vidior. Some of you might find that we bought that a bit expensive, but we only bought it after the share price had halved. So we were completely ready to go when the share price was €23 And then we took our time, actually we shelved the whole file and only when video the banker of video gave us a call, we sort of cleaned the file, freshen it up and then the stock price was not 20 through €3, but €12, still after that came €209,000,000 If we would be good in predicting those cycles, we should be at your end, not here. And this is how the team works because if one of us is working on an acquisition, he gets really excited. He wants to do it. And then he comes in because he's just returned from the candy store. And then he comes in with his DCF and we'll say, well, we don't know yet. So we're always disappointing each other all the time. But then at the end of the day, you're disciplined on pricing. So let's hope we get ourselves excited, and then we do a few acquisitions, but we'll see. Andy Grogan from Credit Suisse. Just a couple of questions. The first one, you talked a lot about growth in online platforms that could grow 40 odd percent CAGR over the next few years. What areas of the industry, the market do you think that growth is really going to affect? Is it going to be professional, staffing, permanent, talent? Yes. And then the second one, a bit more mundane. France accelerated very nicely through October. Were there any particular parts of the market in terms of verticals that really picked up during October? Yes. Online platforms sees different forms. Certainly, in the professional space, We do see clients moving to portals, sometimes with qualified delivery, sometimes with unqualified delivery. They just put their jobs on. We see that a lot in the public sector in the Netherlands. And then any freelancer, there's 1,000,000 of them in the Netherlands can register. But online platforms is both a business model and it's a tool. For us, it's a tool, less than a business model. So Upwork, the biggest freelance company in the world, for them it's a business model, right? They need to live on what happens on the online platform. For us, we have, for example, Twago, which is also a freelancer marketplace. The business model is okay, but at the same time, we see that they got a lot of capabilities to manage a freelancer database. So for us, it might be the tool to get more candidates in. So we're playing on both ends here. What you do see with in this case, in Upwork, a freelancer platform is they got a lot of first time transactions, but then they don't have a second transaction. And that's a bit of a bother for their business model. These people sort of connect one time, pay Upwork, and then they connect the second time, and they don't pay Upwork. And that's a bit of a that's a drawback of this model. It's very anonymous. But the tools in our model can be very valuable. We got a Gopa company in Germany is already one of the first movers in a predominantly online IT contracting database. So yes. Improvements in France in the space of in house, blue collar industrial, that's where it happens. Jacques already referred to the additional in house locations that we have opened, that formula really is very successful in the French market. Yes. And the second one is that we still roughly 50%, a little bit less probably of the in house that we do our spins from the branches. And we've deliberately all through 2014 replaced the people who went with the in house client in the unit to get into the SME. It was an investment, but we're now seeing traction in that space. So that's why the SME is also growing in France. And that, yeah, works well for us in terms of outperformance in that market. And then taking that into an additional answer to a previous question. So if we do this, we spin off our clients into in house and then we retain the population in the branch to address the SME segment of the market, then the ICR, incremental conversion ratio gets under pressure. But it clearly sets us up for future growth. That's the choices we constantly have to make. And we're happy we did it in France. But if the market will still be flat, it was a wrong choice. So this is what proves you a bit what kind of a gut feel ABFS at the end of the day also is. Suhasini from Goldman Sachs. Hi. Just a couple of questions from me. You're focusing a lot on getting the higher growth from perm, MSP, RPO and other solutions based revenues. I'm curious to see how you see the revenue mix evolving over the medium term and perhaps the implications on margins. Would the benefits from these higher margin revenues basically just be used to offset the pricing pressure from temp staffing? Or would you use this to change the revenue mix totally and get higher margins medium term? And where do you see these margins medium term, steady state? That's a tough one to answer because we do see many different animals in MSP and RPO. So RPO is a pretty straightforward model. That you make good money. So our EBIT in our U. S. Business is quite high. It's above group average. We handle perm, right? In MSP, if you just handle the MSP, yes, you get a fee, but you won't get which of the fee. So that is well, do you deliver into the MSP, where you need to create a different delivery model to deliver into these MSP, highly productive. You don't need to do the sales anymore. So it's done through these recruitment solutions we have. The UK is a bit of split model. There you see MSPs, but you also have direct delivery into the MSPs. So there is a bit of a mix, but we're historically relatively small in the UK. We do see that while we the emerging model in Europe is more the direct delivery MSPmaster vendor model because we leverage this all far current contingent situation. Big difference between European staffing space and the American is just not fragmented. Well, so we are if we have 60% in staffing or 80% of market share, installing an MSP for staffing doesn't make sense. Installing it for professionals definitely makes sense. So that's where it fuels our growth. So yes, again, it's a mixed bag. So let's stay in touch in the coming years. Yes. And to help you with the model a little bit, my sort of summary at the end in thinking in this Boston Consulting matrix. We are very much aiming that all the efficiency improvements help us to address the pricing in those markets and that we can develop our sort of question marks into stars separately from that. So over time, we hope to see an enrichment there of the margin. So growing fast in European source rights, right, is costing us money. So this is a zero sum game. And then over time, because you've got all new programs, there are loss making in the 1st year, roughly, give or take. Yes, Mark Watsenberg. Yes. There it is. Mark Watsenberg, ING. To follow-up on margin and mix, I want to talk about professional mix. How should I see the strategy for the next, say, 3 years in terms of moving your mix more towards the spend of your clients? And of course, you have quite a challenging target for next year. You need 7% growth to get there. How do these investments probably needed in professionals bite you in terms of getting to a target? How should we see that in the next 3? That's a good question. That's again a balancing act. You invest in professionals by investing timely in the growth. You invest in professionals by learning from the successful way of organizing. So that's, in this case in the Netherlands, creating verticals, that's working for us. So we got an organic improvement. You also grow professionals by selling more MSPs and RPOs. That's definitely investments, creating source right APAC, creating recruitment centers. So that's the balancing act. And that's why we also always say, you can't really fully model it next year like growth is good and then it's a case. And if we firmly believe we need to invest more in building professionals, building recruitment models, getting more MSP contracts, I will let you know. But then it fuels into a bigger growth into 2017 to 2018. That is a balancing act, absolutely. For example, Spain, where we, from scratch, build a professionals offering, which is now number 3 or number 2 in the market, currently growing 65%. Well, we're making a bit of money, but not much because we're investing ahead of the curve. But that's one we allow. We're market leader in Spain. We want to go there. We don't do that in every market at the same speed, but that's what we're constantly juggling. Jacques, he challenges on having a target for next year. So I need to address that point. Our target is to gain market share and to have a solid ICR. In the models with the sort of input revenue growth that we have discussed here, that results and us arriving at the low end of that range. That's the point I've made. But we very much steer our companies on gaining market share and making sure that we have a good ICR that fits the face the companies are in. No, that's clear. But more the investments probably needed to actually Yes. The question would limit you there. Another question on M and A. And you mentioned some bolt on acquisitions looking out, say, 12 months, but I'm looking out a bit further. Was there any discussion in the boardroom when you put out, say, the dividend policy of putting out in full cash in relation to Fritz Goldsmithing's position as well? Did that form a discussion in the board, say, the longer term M and A plan and paying out 100% cash? No. That has not been the discussion. No. We came up with this view, and then we discussed it with his people in his personal holding company, so to say, and they quickly concluded that this was the right way to go. That's how it went. Okay. Thank you very much. This ends the Q and A for the first part and also the webcast. So thanks everybody for dialing in. We now go for the coffee break. And I realize a lot of you have still a lot of questions, so please feel free to contact the people involved at the coffee break. In my enthusiasm, I forgot to introduce a number of other Randstad colleagues which are around. Han Kuft, Head of Strategy is there. Baader Koning, Director of Treasury is in the back. Maarten Meirens, Director of Control. Please feel free to speak to him. Communication. Sorry, of communication is there as well. I know. You're right. So we have half an hour coffee break. Feel free to talk to our people. We have another Q and A session after the last presentation. See you back at 3. Thank you.

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