Randstad annual report 2020

1 # report 2020human at a glancemanagement reportgovernancefinancial statementssupplementary informationannual report at a glance4key figures 20206message from the CEO8#newways10about randstad16our global presence17geographic spread18safely back to work alliancemanagement report21how we create value26integrated reporting framework28the world around us34our strategy and progress39our value for clients and talent45our value for employees51our value for investors57our value for society63sustainability basics76performance92risk & opportunity managementgovernance108executive board110supervisory board112report of the supervisory board122remuneration report137corporate governancefinancial statements144contents financial statements145consolidated financial statements149main notes to the consolidated financial statements176notes to the consolidated income statement180notes to the consolidated statement of financialposition195notes to the consolidated statement ofcash flows198other notes to the consolidated financial statements205company financial statements207notes to the company financial statements211other informationsupplementary information226ten years of randstad228tax disclosures235about this report237 GRI content index241global compact index242sustainable development goals243memberships and partnerships244certifications, rankings.

2 And awards246highest Randstad positions in industry associations247glossary253financial calendar254history timelinera ndstadat a at a glancemanagement reportgovernancefinancial statementssupplementary informationannual report 202034key figures 20206message from the CEO8#newways10about randstad16our global presence17geographic spread18safely back to work alliancecontentsrandstad at a glancemanagement reportgovernancefinancial statementssupplementary informationannual report 20204key figures in millions 20,718 78underlying EBITA margin 78adjusted net incomein millions 470 82number of candidatesworking (on a daily basis) 568,800 76global HR services leader# 1 78free cash flow in millions 1,132 78employee 50proposed dividendper ordinary share 54number of permanentplacements202,800 76number of employeestrained32,000 65number of candidatestrained313,600 57women in seniorleadership positions51% 46contentsrandstad at a glancemanagement reportgovernancefinancial statementssupplementary informationannual report 20205key millions of , unless otherwise indicated20202019 Underlying1 Revenue20,71823,676(12%)Gross profit3,9704,726(16%)EBITA26921,094(36%) ActualRevenue20,71823,676(12%)Gross profit3,9484,705(16%)EBITA2579977(41%)Ne t income304606(50%)Free cash flow31,13291524%Net debt, excluding lease liabilities4(333)756 Net debt, including lease liabilities2551,377 Leverage ratio (net debt/12-month EBITDA) equity4,6694,4734%Ratios (in % of revenue)

3 Underlying1 Gross income dataBasic earnings per ordinary share (in ) (50%)Basic earnings per ordinary share, underlying (in ) (39%)Diluted earnings per ordinary share, underlying (in ) (39%)Dividend per ordinary share (in ) per ordinary share (in %)6126--Closing price, year-end (in ) (2%)Market capitalization, year-end9,7599,979(2%)Enterprise value, year-end79,42610,735(12%)Employees/outle tsAverage number of candidates working568,800649,000(12%)Average number of corporate employees34,68038,280(9%)Number of branches, year-end2,7522,761(0%)Number of Inhouse locations, year-end1,9632,100(7%)1 Underlying: actual gross profit and EBITA adjusted for one-offs, such as restructuring costs, integration costs, and acquisition-related : operating profit before amortization and impairment of acquisition-related intangible assets and Free cash flow: sum of net cash from operating and investing activities, excluding the acquisition and disposal of subsidiaries and associates and equity investments, anddividends from associates; including repayment of lease Net debt, excluding lease liabilities: cash and cash equivalents minus Before amortization and impairment of acquisition-related intangible assets and goodwill, integration costs, acquisition-related expenses, and Payout per ordinary share in %: dividend per ordinary share on basic earnings per ordinary share adjusted for the net effect of amortization and impairment of acquisition-related intangible assets and goodwill, integration costs, acquisition-related costs, and Enterprise value: the total of market capitalization and (net cash)/net debt (net debt excluding lease liabilities).

4 Contentsrandstad at a glancemanagement reportgovernancefinancial statementssupplementary informationannual report 20206 Dear Stakeholder,2020 was a year like no other. When the pandemic hitthe world, our first priority was the health and safety ofour employees and candidates. Within a very short time,most of our colleagues were working remotely, with fullaccess to our client and candidate base. We helped tensof thousands who had lost their jobs to find employmentagain. We also supported clients to bring their workersback on site safely or to new remote locations. Throughall the uncertainty, we provided assurance and practicalsupport. The unprecedented challenges thatconfronted us in 2020, and the lessons we learned,helped to further reaffirm our market leadership. We arenow even more agile, flexible, and committed to gettingpeople back to work and businesses operating at theirfull we had embraced digital transformation wellbefore the pandemic, COVID-19 accelerated the use ofdigital platforms and environments.

5 At the same time,we were proactive in helping companies adapt tochanging regulations and pandemic-related supported employers in preparing for the future ofwork and helping their workforce acquire critical also turned to Randstad to redeploy talentinternally and externally. Our Randstad RiseSmartbusiness provided compassionate care and careertransition services to a growing number of employersfacing reductions in force in 2020. Our services werealso instrumental in coaching workers and helping themfind new employment. This fits well into our integratedapproach to managing people's entire career life cycleand helps build longstanding 2020, we also celebrated our 60th anniversary. OnSeptember 29, an online interactive show was held in sixdifferent time zones around the globe to kick off a wholerange of fun and inspirational Randstad 60 activities forall of our employees. We are now even more agile, flexible,and committed to getting people backto work and businesses operating attheir full potential.

6 Messagefrom the at a glancemanagement reportgovernancefinancial statementssupplementary informationcontentsrandstad at a glancemanagement reportgovernancefinancial statementssupplementary informationmessage from the CEOannual report 20207 Financially, we delivered a solid and competitiveperformance in an exceptional year. Trading conditionsreached a low point in April, when country lockdownswere most intensified. Since then, our revenuerecovered gradually month-by-month into our Group revenue was down 12% organicallyyear-on-year, we outperformed the market in several keygeographies, such as the US, France, and Belgium. Thestrong operational agility of our highly experiencedmanagement teams, our diversified portfolio, anddisciplined cost management have all contributed toour recovery. As a result, we achieved an EBITA marginof , driven by a sound recovery ratio of 44%, and wegenerated a strong free cash flow of 1,132 the back of our overall solid performance, and as webalance the needs of all our stakeholders, we proposeto our shareholders a cash dividend of perordinary share for 2020.

7 This consists of a regular floordividend of and a special cash dividend of ordinary share. The decision to pay a specialdividend over the year 2020 should be seen inconnection with our decision to withdraw 2019 dividendproposal in March 2020, which was a are bringing a laser-sharp focus on talent into a quickly changing world of work, continuousupskilling and reskilling of talent will be critical to avoidmassive redundancies and skills gaps in the labormarket. As the global leader in HR services, we willsupport clients and talent in this regard by launching agrowing range of development and , I am very grateful for having such dedicated andexceptional people advancing our mission. They werethe reason for our resilience in 2020 and will also be thekey to our success in the years ahead. On behalf of theExecutive Board, I want to thank all of our employees, aswell as our clients, talent and shareholders, for theircontinued support and regards,Jacques van den Broekcandidates placed in jobstemporary placements (average per day)permanent placements (annually)201820192020300,000400,000500, 000600,000700,0000100,000200,000300,0004 00,000revenue in millions of 12,44112,04310,0425,3005,3054,9544,9295, 1644,7321,1421,164990staffinginhouseprof essionalsglobal businessesrevenue 2018: 23,812revenue 2019: 23,676revenue 2020.

8 20,71805,00010,00015,00020,00025,000cont entsrandstad at a glancemanagement reportgovernancefinancial statementssupplementary informationannual report 20208In 2020, the world around us changedbeyond recognition at an incredible the leading global HR services provider, Randstad quickly mobilized to respond toour customers needs, recognizing thatthere are new ways of serving our clientsand talent. Our #newways program, whichwe initiated in the second quarter, aims tohelp us all navigate the new situation we refinding ourselves in, and builds on the workdone for the 'Safely Back to Work' s advanced digital transformationimmediately proved extremely valuable. When thepandemic hit, the entire office-based workforceseamlessly went virtual, with employees working fromhome and interacting with clients and talent throughdigital platforms. We also managed to quickly set uptemporary workers to work remotely for our clients.

9 Inaddition, we were able to identify and fill new roles, suchas medical screeners and roles in testing and also offered free job listings on Monster for healthcare at a glancemanagement reportgovernancefinancial statementssupplementary informationcontentsrandstad at a glancemanagement reportgovernancefinancial statementssupplementary informationannual report 20209 online sales program and trainingFrom a business perspective, #newways consists of afully digitalized sales and marketing program thatsupports our consultants in moving from traditionalface-to-face interactions to remote visits by videoconferencing and by phone. It offers relevant contentthat helps consultants to keep the conversation withclients going during the pandemic and beyond, andincludes supportive training for consultants and a newplatform to keep track of progress, called @BFS, theacronym for digital activity-based field steering.

10 How #newways benefits clientsIn the course of 2020, when countries were increasinglygoing into lockdown scenarios, Randstad consultantsquickly changed from face-to-face to online interactionwith clients, providing relevant content and supportthrough digital channels. As a trusted advisor, we builton our experience and expertise to help our clients tocontinue their business safely. For example, weprovided a free digital toolkit, safety protocols andprotocol scans, and helped them transition to a digitalwork environment where this was possible. how #newways benefits talentMany of our candidates were hard hit by the 2020, we supported talent in moving fromsectors that closed down to those experiencing asudden boom, such as online shopping, healthcare, anddistribution and delivery, providing training andreskilling services where necessary. Similarly, in thefinancial services industry, we were able to supply manycontract workers for governmental support, for instanceto help with the sudden rise in business loan andunemployment benefit continued changeImportantly, Randstad believes that there is no newnormal that s here to stay.